Investor Presentation

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1 Investor Presentation January Actua Corporation / All Rights Reserved / 1

2 Forward-Looking Statements The statements contained in this presentation that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These forward-looking statements involve certain risks and uncertainties, including, but not limited to, risks associated with our ability to compete successfully in highly-competitive, rapidly-developing markets, the effect of economic conditions generally, capital spending by our customers, our ability to retain existing customer relationships and secure new ones, developments in the markets in which we operate and our ability to respond to those changes in a timely and effective manner, the availability, performance and security of our cloud-based technology, particularly in light of increased cybersecurity risks and concerns, our ability to retain key personnel, our ability to deploy capital effectively and on acceptable terms, our ability to successfully integrate any acquired business, the impact of any potential acquisitions, dispositions or other strategic transactions, our ability to have continued access to capital and to manage capital resources effectively, and other risks and uncertainties detailed in Actua's filings with the U.S. Securities and Exchange Commission. Those and other factors may cause actual results to differ materially from those projected Actua Corporation / All Rights Reserved / 2

3 Non-GAAP Financial Measures Non-GAAP net income (loss), non-gaap net income (loss) per diluted share, adjusted EBITDA, adjusted cost of revenue, adjusted sales and marketing, adjusted general and administrative and adjusted research and development are non-gaap financial measures and have no standardized measurement prescribed by GAAP. When referring to non-gaap financial measures, the term adjusted is used interchangeably with the term non-gaap by Actua s management, and the two have identical definitions. Non-GAAP net income (loss) is GAAP net income (loss) attributable to Actua, including acquired businesses deferred revenue and excluding share-based compensation, amortization of intangibles, impairment-related and other costs, transaction expenses, other (income) loss, net, equity loss, current noncash income tax benefit on discrete item and loss (income) from discontinued operations. Non-GAAP net income (loss) per diluted share is non-gaap net income (loss) divided by (1) GAAP shares, including the any impact of incremental dilutive securities (in the case of income) or (2) GAAP shares, excluding any impact of incremental dilutive securities (in the case of loss). Adjusted EBITDA is GAAP net income (loss) attributable to Actua, including acquired businesses deferred revenue and excluding share-based compensation, amortization of intangibles, impairment-related and other costs, transaction expenses, other (income) loss, net, equity loss, current non-cash income tax benefit on discrete item, loss (income) from discontinued operations, interest expense (income), net, current, cash income tax expense and depreciation expense. Adjusted cost of revenue is cost of revenue operating expenses, excluding share-based compensation. Adjusted sales and marketing is sales and marketing operating expenses, excluding share-based compensation. Adjusted general and administrative is general and administrative operating expenses, excluding share-based compensation. Adjusted research and development is research and development operating expenses, excluding share-based compensation. Actua's consolidated businesses are BOLT, FolioDynamix, GovDelivery and VelocityEHS (formerly MSDSonline) as of September 30, Please note the following: FolioDynamix became a consolidated business on November 3, 2014 and, therefore, is included in Actua s consolidated results beginning on November 1, The results of FolioDynamix for the first two days of November 2014 are insignificant for consolidation purposes. Channel Intelligence, Investor Force and Procurian were sold in Q1, Q1 and Q4 2013, respectively, and are presented as discontinued operations under GAAP. Actua's management believes these non-gaap financial measures provide useful information to investors and potential investors that enables them to view Actua s business in a similar manner as Actua's management and provide meaningful supplemental information regarding Actua s operating results as they exclude amounts that Actua excludes as part of its monitoring of operating results and assessment of the performance of its business Actua Corporation / All Rights Reserved / 3

4 Overview BRINGING THE POWER OF THE CLOUD TO INDUSTRY-SPECIFIC VERTICAL MARKETS 2016 Actua Corporation / All Rights Reserved / 4

5 Overview Multi-vertical cloud software platform Operate cloud software solutions in four sectors: Government Communications Environmental Health and Safety Wealth Management Property and Casualty Insurance Total addressable market = multi-billion dollar opportunity Leader in each market, and each market is at early stage of cloud adoption Investing for growth with emphasis on sales and marketing, product development and tuck-in acquisitions Management team has been at the forefront of building technology companies through every phase of technology over the last 30 years, with a focus on SaaS since Actua Corporation / All Rights Reserved / 5

6 Q Highlights Achieved 19% organic revenue growth in Q compared to Q Continued to see healthy operating leverage across our platform, particularly cash flow Operating cash flow was ($1.7) million in Q compared to ($8.5) million in Q Year-to-date operating cash flow improved by over $13.5 million compared to the same prior year period 2016 Actua Corporation / All Rights Reserved / 6

7 Evolution of Cloud Computing Space 1 ST WAVE 2 ND WAVE Emergence of SaaS Data and functionality moved to the cloud Business comfortable with the model Faster ramp, lower TCO, pay for what you use Rapid product evolution Dozens of examples of horizontal cloud companies: Salesforce, Concur, NetSuite, etc. Vertical SaaS Deep industry solutions with significant leverage More capital efficient Attractive competitive moats Few new market entrants Sticky customer relationships Automating areas outside the enterprise 2016 Actua Corporation / All Rights Reserved / 7

8 Actua Platform Advantage: The Intersection of Vertical IP and SaaS IP Being part of the Actua Platform provides: Public company advantage strong balance sheet provides solid foundation and stability Accelerated market share and adoption Over 800 experts in industryspecific vertical SaaS A core team with deep expertise in building technology companies by fueling growth, operating leverage Faster innovation cycles Ability to attract, grow and retain talent SaaS IP Vertical IP 2016 Actua Corporation / All Rights Reserved / 8

9 Actua Market Characteristics Attractive Market Size & Growth Opportunities > $ Billion + market, growing >20% Pursuing markets we can transform Highly fragmented, unautomated, slow to innovate Early Cloud Adoption Proven customers, yet < 10% total market penetration Attractive Competitive Dynamics Clear competitive moat via big data and network effect 2016 Actua Corporation / All Rights Reserved / 9

10 Figures shown in millions Revenue Growth $140.0 $110.0 Revised 2015 Guidance Range: $133.0M - $134.0M Original 2015 Guidance Range: $133.0M - $138.0M $80.0 $50.0 $ Actual 2014 Actual 2015 Guidance 2016 Actua Corporation / All Rights Reserved / 10

11 Non-GAAP Net Income (Loss)/Share ($0.20) ($0.30) Revised 2015 Guidance Range: $(0.33) - $(0.36) ($0.40) Original 2015 Guidance Range: $(0.36) - $(0.40) ($0.50) 2013 Actual 2014 Actual 2015 Guidance 2016 Actua Corporation / All Rights Reserved / 11

12 Figures shown in millions Cash Flow From Operations $0.0 ($5.0) ($10.0) Revised 2015 Guidance Range: $(3.0)M - $(5.0)M Original 2015 Guidance Range: $(5.0)M - $(9.0)M ($15.0) ($20.0) 2013 Actual 2014 Actual 2015 Guidance 2016 Actua Corporation / All Rights Reserved / 12

13 Financial Profile Q Long-Term Target Gross Margin 71% 72% 72% 75% Sales and Marketing 46% 45% 37% 25% - 30% General and Administrative 41% 32% 24% 10% - 12% Research and Development 15% 17% 21% 12% - 16% Adjusted EBITDA (17%) (9%) (4%) 20% - 30% %s of revenue determined excluding stock-based compensation and deferred revenue adjustments from purchase accounting 2016 Actua Corporation / All Rights Reserved / 13

14 Long-Term Target Model 5 year model Assumes 15-20% organic revenue growth in the out years Expect to see slow, steady improvement on the gross margin line to 75% (on an annual basis) Expect to see continued leverage in R&D and G&A (R&D uptick in 2015 and 2016 as we invest in platforms) Sales and marketing investment levels will be predicated on the return we can realize (difficult to predict timing; but expect it to decrease over time to 25-30%) Accretive tuck-ins are an important part of the strategy to help drive growth and leverage 2016 Exiting investment mode; entering profitable growth mode 2016 Actua Corporation / All Rights Reserved / 14

15 Actua s Verticals Government Communications Market Environmental, Health and Safety Market > $20 BILLION Total Addressable Market Insurance Market Wealth Management Market 2016 Actua Corporation / All Rights Reserved / 15

16 The Power of the Bolt Platform to Transform Insurance Back-end Broaden Distribution Leverage new distribution channels with the Bolt Platform to reach more customers Front-end Broaden Customer Relationships Always say yes to customers and meet all their needs with the Bolt Platform Maximize Revenue and CLV Flood Homeowners Homeowners Missed Rev. Pet Auto Increase Customer Retention 360 Degree View of customer Renters Products represented as share of wallet Broader distribution brings Insurers new customers they otherwise wouldn t see Broader customer relationships drive up customer/agent satisfaction, retention and customer lifetime value (CLV) 2016 Actua Corporation / All Rights Reserved / 16

17 Actua s Platforms Provides a multi-channel, multi-carrier software platform that enables insurance distributors to retain and grow revenue through a comprehensive insurance solution Important metrics:* Revenue Growth: 16% in Q compared to Q New Signings: Closed one new customer in Q3 (previously announced in Q2) and saw continued roll-out and broader utilization of the platform with all three of its largest customers Carriers on Platform: 77 Total Customers: Three top ten carriers, Citizens Insurance (State of Florida), 2,100 independent agents, four alternative distribution partners Pipeline: 12 potential deals are in the pipeline, three of which are in the final contracting stages TAM: Multi-billion $$ Added an additional $150 million of premiums on the platform, bringing the total premiums to $1.3 billion at quarter-end Competitive Moat: Platform is integrated into 77 of the largest insurance carriers and has 3,600 carrier connections which creates the largest source of insurance flow for direct carriers, agents, agencies and alternative insurance distributors Significantly improved operating losses in Q3 Multi-year/multi-million dollar contracts * As of 9/30/15 unless otherwise noted 2016 Actua Corporation / All Rights Reserved / 17

18 GovDelivery: Government Communication & Engagement Empowering government to create better lives for more people. More than 1,000 organizations worldwide use the GovDelivery platform and network to inform and engage over 100 million people Million Citizen Network Communicate -Networks -Overlays -Signups Teach Internal and External Training To Drive: Promotion and Transformation of Services Enhanced public awareness Improved citizen involvement Share Information (Open Civic) Workflow, Collaboration and Data Apps 2016 Actua Corporation / All Rights Reserved / 18

19 Actua s Platforms ** Digital communications and marketing platform that enables public sector organizations to effectively reach citizens and drive action Important metrics:* Revenue Growth: 29% in Q compared to Q New Signings: Closed 63 new deals in Q3 2015; new signings included six large program opportunities and more than 20 upsells (learning, texting, open data solutions) Total Customers: Serving 1,000+ federal, state, local and UK government agencies Pipeline: 15% higher than at the end of Q TAM: > $1 billion Competitive Moat: 100+ million citizen subscribers create a network effect, significantly expanding reach and audience for each customer Operating cash flow positive for 2015 Annual subscription revenue model * As of 9/30/15 unless otherwise noted 2016 Actua Corporation / All Rights Reserved / 19

20 FolioDynamix: End-to-End Wealth Management A unified end-to-end wealth management solution that enables advisors to drive growth and differentiation 2016 Actua Corporation / All Rights Reserved / 20

21 Actua s Platforms Enables the delivery of client-centric, innovative, scalable, wealth management solutions through secure, cloud-based, fully integrated, advisory products and services Important Metrics:* Revenue Growth: 15% in Q compared to Q New Signings: Signed five new customers in Q3, and one subsequent to quarter end, deals were a mix of small-to-medium size (five and six-figures annually); a large seven-figure a year RIA platform. These additions bring the total number of new deals signed in 2015 to 22. Total Customers: More than 200 banks, brokerage firms and large RIAs Pipeline: Continued to build in terms of quantity and velocity through pipeline; seeing strong interest from banking, broker dealer and RIA markets TAM: Multi-billion $$ Competitive Moat: Comprehensive, client-centric technology platform with integrated proprietary advisory products Operating cash flow positive for 2015 Multi-year/multi-million dollar contracts More than 97,000 advisors and users $4.4 billion in regulatory assets under management *As of 9/30/15 unless otherwise noted 2016 Actua Corporation / All Rights Reserved / 21

22 VelocityEHS: Automating the Desktop of the Safety Manager External Pressures: SDS/Chemical Mgmt. Incident Mgmt. & Reporting Significant Consequences: Complexity & Reporting Corporate Responsibility Regulatory Pressure Audit & Inspections Training Compliance Mgmt. & Education Mgmt. of Change Costly Fines (5-figure/day) Law Suits and Litigation Corporate Reputation Risk Analysis Green House Gas Sustainability Metrics & Reporting 2016 Actua Corporation / All Rights Reserved / 22

23 Actua s Platforms Environmental, Health and Safety compliance platform that enables organizations to meet stringent and costly OSHA requirements Important Metrics:* Revenue Growth: 34% in Q compared to Q New Signings: Added 577 new customers in Q3 2015, KMI added 14 new customers in Q3 (same number signed in first half of 2015) Total Customers: More than 11,000 companies; protecting more than 8 million employees in U.S. and Canada Pipeline: Growth is slightly ahead of revenue growth and is skewed towards large platform customers; seeing significant pipeline momentum across the board, with cross-sell team seeing increased activity TAM: > $3 billion Competitive Moat: Database of almost 9 million material safety data sheets is a comprehensive web-based library that ensures 100% compliance for companies and continues to expand as new customers come onto the platform Operating cash flow positive for year subscription revenue model * As of 9/30/15 unless otherwise noted Note: MSDSonline rebranded to VelocityEHS in September Actua Corporation / All Rights Reserved / 23

24 Investment Highlights Large market opportunity Clear market leader in each vertical market Strong recurring revenue base Demonstrated record of outstanding revenue growth Proven track record of successfully entering and scaling cloud-ready markets 2016 Actua Corporation / All Rights Reserved / 24

25 Investor Presentation January Actua Corporation / All Rights Reserved / 25