JMP SECURITIES TECHNOLOGY CONFERENCE - FEBRUARY 2018 - Telaria
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JMP SECURITIES TECHNOLOGY CONFERENCE FEBRUARY 2018
SAFE HARBOR STATEMENT
This presentation is for informational purposes only and is not an offer to sell securities or a solicitation of an offer
to buy any securities, and may not be related upon in connection with the purchase or sale of any security. Sales
and offers to sell Telaria, Inc. securities will only be made in accordance with the Securities Act of 1933, as
amended, and applicable SEC regulations, including written prospectus requirements.
This presentation contains forward-looking statements that involve risks, uncertainties, assumptions and other
factors that could cause actual results and the timing of certain events to differ materially from those set forth in
or implied by such forward-looking statements. All statements other than statements of historical fact contained
in this presentation are forward-looking statements, including, but not limited to, statements related to Telaria’s
future financial results, growth potential, or future profitability, including financial guidance, statements with
respect to the growth of the industry or market in which Telaria participates, and statements with respect to the
development or adoption of the company’s solutions. In some cases, you can identify forward-looking statements
by terminology such as “may,” “will,” should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential,” or “continue” or the negative of these terms or other comparable terminology.
These statements are only current predictions and are subject to known and unknown risks, uncertainties and
other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements
to be materially different from those anticipated by the forward-looking statements. These forward-looking
statements are subject to a number of risks, including those described under the heading “Risk Factors” and
elsewhere in Telaria’s filings with the Securities and Exchange Commission (the “SEC”), including its Annual Report
on form 10-K for the year ended December 31, 2017. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or
achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking
statements, whether as a result of new information, future events or otherwise, after the date of this presentation.
2
NYSE: TLRA
STRATEGY OVERVIEW CEO: Mark Zagorski
OUR MISSION
To become the single, essential seller platform
for the monetization and management
of premium video anywhere.
4
NYSE: TLRA
A MISSION DRIVEN BY CONVERGING TRENDS
*
THE LEADER TO OWN
THIS OPPORTUNITY
5
Source: MAGNA ADVERTISING FORECAST WINTER UPDATE (DEC. 4, 2017), DIGITAL TV RESEARCH OTT AND PAID TV FORECAST REPORT (December 2017) NYSE: TLRA
VIDEO CONSUMPTION | THE DAWN OF DIGITAL
Linear declines. Digital accelerates. Cord cutting proliferates. Demographics drive
M ED I A
11:50
12:09 CTV benefits. the future.
CON SUMPTION
(Units inhours:minutes) CAGR (2014-2019)
Decrease in Linear TV Viewing 2012 - 16
Total 1%
3:47 Q’2’12-Q2’16
4:20
Traditional TV: 3%
33.2% -24%
2-11
-38%
12-17
Mobile Video: 13%
0:39 Increase in pay-TV
101mins 0:24 Desktop Video:
0:21 1% cancellations in 2017
63mins 0:23 0:38 Age Range
CTV: 15% 22mm total
77%
0:19
-3%
65+
of TV households Total US
4:01 4:35 e
-14% -37%
have a pay-TV 18-24
subscription -6%
Other Digital: 3%
69% 50-64
of all digital
2:26
2:06 Non-Digital: 3%
viewers have an -18% -30%
OTT subscription 35-49 25-34
2014 2019
DesktopVideo MobileVideo TraditionalTV
(1)
Non-Digital OtherDigital CTV
Source: Bank of America Merrill Lynch Research Source: eMarketer July 2017 Source: BI intelligence
6
NYSE: TLRAVIDEO MONETIZATION | AD DOLLARS FUEL THE REVENUE FIRE
Digital video ad spend grows OTT/CTV becomes the focus Programmatic accelerates
the trend
Digital Video Ad Spend
48% of agency buyers plan to shift 74% of digital video ad spend is
US Global TV dollars into OTT Is going programmatic
(CAGR ‘16-’20: 17%) (CAGR ‘16-’20: 25%)
74%
$12B in OTT global ad spend in 69%
2016; $29B in 2022 – increase of 60%
39%
142%
12%
$42.0 2014 2015 2016 2017 2018
$10.7 $17.1 $19.8
% of total digital
2016 2020 video ad spending
Source: eMarketer (August 2017) Sources: Digital TV Research 2017, Advertiser Perceptions 2017 Source: eMarketer (October 2017)
THE NEXT WAVE OF OTT MONETIZATION WILL BE ADS, NOT SUBSCRIPTIONS
7
NYSE: TLRAAD TECH HAS EVOLVED, AND SO HAVE WE
Tremor Video Telaria
Highlights
Highlights
CTV SOLUTION Independent Video
Ad network LAUNCHED 2017 Monetization Platform (focus
30 billionth on OTT and Tier-1 video
High-function buying
publishers)
DSP & SSP SSP video
Sept. 2017 impression 136 employees across 10
340 employees across 16
Rebranded monetized global offices
global offices
2016 as Telaria Streamlined overhead
High touch sales, high comp First $1
overhead, driven by scale, not 2015 million Transparent SSP transaction
margin First $1 fees
spend day
Broad competitive set million PRIVATE MARKET Revenue reported net
2014 spend
First SSP MAJORITY OF Narrow competitive set
Strategy month
video REVENUE
monetized Strategy
Programmatic marketplace; BUYER
two platforms servicing both Focused self-serve
buyers / sellers of video in PLATFORM
programmatic platform
open marketplaces SOLD FOR tailored to private
OPEN
$50M marketplaces and CTV
MARKETPLACE
Core Clients 100% OF REVENUE Core Clients
Buyers and sellers of Sellers of premium video
premium video NEW BRAND, CLEAR STRATEGY, SINGULAR FOCUS
8
NYSE: TLRACONNECTING ECOSYSTEM TO MAXIMIZE PROGRAMMATIC RETURN
Publishers DSPs Agencies
& Advertisers
90 OF COMSCORE TOP ALL LEADING VIDEO
100 PUBLISHERS BUYERS
TELARIA IS PAID ON
EACH TRANSACTION
Management
Yield Optimization
Insights & Analytics
Diagnostics
9
95% RETENTION RATE OF SELLERS & BUYERS NYSE: TLRAWHY WE WIN
Tech Team Traction
+ Tailwinds
Differentiated for CTV; Industry leaders who drive Leading the trends that are
efficient scaling. growth and outcomes. transforming tech.
Wins head-to-head Minimal HC expansion to Well positioned to take
contests support revenue advantage of OTT momentum.
acceleration.
10
NYSE: TLRATECHNOLOGY | LEADING SOFTWARE THAT SCALES
PRODUCT Flexible system built to manage “TV
style” viewing surges with 260ms avg
Volatility
Exceeds core demands Management response time
of video publishers
Brand safety tools Cloud based backbone
Exclusive real-time diagnostics that manages 5 billion+
of daily requests with
minimal capital costs
API–driven platform plugged
Live performance data into dozens of ecosystem
AI-driven analysis of partners (DMPs / Ad Servers /
billions of data points DSPs / Bidders / Tags / etc.)
Yield
ARCHITECTURE
Industry’s only Buyer UI Manages volatility and
Multiple deal options to drive results scales for tomorrow
11
NYSE: TLRATEAM | SEASONED LEADERS, BILLIONS IN VALUE CREATION
CEO: Mark Zagorski CFO: John Rego CSO: Doug Campbell COO: Katie Evans CRO: Rick Song
CMO: Jen Catto GC: Aaron Saltz VP, Product: VP, Engineering:
Craig Berlingo Rama Roberts
BRINGING +170 YEARS OF COLLECTIVE PUBLIC AND PRIVATE EXPERIENCE
12
NYSE: TLRATRACTION | AT THE FOREFRONT OF KEY TRENDS
Quality &
CTV Consolidation
Transparency
Big and getting bigger. A massive run to premium. Creating client conflict.
Clear, transactional SaaS fees.
Telaria’s tech is Opportunity for
optimized for it. It’s in our DNA. independent players.
13
NYSE: TLRABEST POSITIONED TO SEIZE MARKET OPPORTUNITY
Independent
CTV / Video Focused
14
NYSE: TLRABEATING MARKET COMPS | EFFICIENT GROWTH FORTIFIES LEADERSHIP
Growth - 2017 Net Revenue Growth
50.4% 51.9%
Median : 38.3%
46.7%
38.6% 38.0% 27.1%
25.5%
($ in 000’s)
$432.3
Productivity - 2017 Net Revenue per Employee
$319.7
$296.5 Median: $238.0
$266.7
$209.3
$209.0
$180.5
(1)
15
NYSE: TLRAOUR FOCUSED STRATEGY | A 2020 PERSPECTIVE
Execute Expand EBITDA
Continue to deliver
• Premium, fraud-free • Software extensions to
bottom-line results
inventory drive sticky SaaS
• CTV penetration • Ecosystem partnerships
• International growth in • Acquisitions: Accretive
high value markets or bolt on tech
16
NYSE: TLRAEBITDA | THE PAYOFF IS PROFIT
+ We become ESSENTIAL to our partners
+ We build SCALE & MOMENTUM as the industry goes programmatic
+ We LEAD the race to capitalize on massive global digital video ad spend
= We build EXCEPTIONAL VALUE for our stakeholders & shareholders
17
NYSE: TLRAFINANCIALS CFO: John S. Rego
A SUCCESSFUL SOFTWARE PLATFORM
Exponential Growth
Net Revenue Reporting
High Gross Margins
Lean Headcount
Stable, Predictable Overhead
Low Capital Expenditures
High EBITDA Margins
19
NYSE: TLRAEXCEPTIONAL GROWTH
Yearly Revenue Growth Quarterly Revenue Growth
(2015-2017) (2015-2017)
$15.0
$43.8
$12.7
$9.9 $10.4
$29.1
$7.6
$6.1 $5.7
$5.4 $4.8
$2.8
$9.6
$1.3
$0.8
2015 2016 2017 Q1 '15 Q1 '16 Q1 '17 Q2 '15 Q2 '16 Q2 '17 Q3 '15 Q3 '16 Q3'17 Q4 '15 Q4 '16 Q4'17
($ in millions) 2015 2016 2017
20
NYSE: TLRAHIGH GROSS MARGINS
Millions All historical periods are pro-forma
$50.0
45,000 92.5%
$45.0
40,000 92.0% 92.0%
92.0%
$40.0
35,000
$35.0 91.5%
30,000
$30.0
25,000 91.0%
$25.0
20,000 90.5%
$20.0
15,000
$15.0
90.0%
90.0%
10,000
$10.0
$5.0
89.5%
5,000
$0.0
- 89.0%
2015 2016 2017
Gross Profit
Gross Margin
21
Revenue
NYSE: TLRASTABLE, PREDICTABLE, OVERHEAD
136 Heads
2% 4% People
3% 8%
Marketing
7% Public Company Costs
4%
IT
73%
Professional fees
Office Overhead
General overhead
Excludes non-cash items
22
NYSE: TLRASIGNIFICANT OPERATING LEVERAGE
$20.0
$15
$15.0
$13
$10
$10.0
Adjusted
Millions
$6
EBITDA (1)
20% EBITDA Margin
$5.0
3% EBITDA Margin
Revenue
$0.0
($5.0)
($10.0)
Q1 '17 Q2 '17 Q3 '17 Q4 '17
(1) Adjusted EBITDA is a non-GAAP financial measure. Please see the discussion in the section called ”Non-GAAP Financial
Measures” and the reconciliations included at the end of this presentation.
23
NYSE: TLRASTRONG LIQUIDITY & CAPITAL RESOURCES
Millions December 31, 2017
Cash & Cash equivalents $76.3
Total Current Assets $138.1
Total Current Liabilities $60.9
Working Capital $77.2
(1)
Unused Credit Facility $25.0
Capital Resources $102.2
24 (1) Reflects Company’s amended credit line with SVB which was effective on January 26, 2018
NYSE: TLRAMINIMAL WORKING CAPITAL REQUIREMENTS
85
80
75
Days
70
65
60
55
50
Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17
DSO’s 61 70 61 65 84 73 76 73
DPO’s 52 51 61 61 69 71 80 75
25
NYSE: TLRA2018 GUIDANCE
Millions Q1’18 FYE ‘18
Revenue $8.5 - $10.0 $58.0 - $62.0
Adjusted EBITDA
(1) $(4.5) - $(3.5) $5.0 - $8.0
EBITDA Margin 9% - 13%
(1) Adjusted EBITDA is a non-GAAP financial measure. Please see the discussion in the section
called ”Non-GAAP Financial Measures” and the reconciliations included at the end of this
presentation.
26
NYSE: TLRAMAINTAINING LONG-TERM FINANCIAL TARGETS
3 YR. TARGET
Revenue (CAGR) 30%-35% Exponential Growth
Gross Margin (average) 90% High Margins
Adjusted EBITDA Margin 25%-30% High EBITDA Margins
(average) (1)
Headcount 160-180 Lean Headcount
Net Operating Loss (NOL)
Carry Forward $101 million
Capital Expenditures Approx $500K/ Yr Low Capital Expenditures
(1) Adjusted EBITDA is a non-GAAP financial measure. Please see the discussion in the section called ”Non-GAAP
Financial Measures” and the reconciliations included at the end of this presentation.
27
NYSE: TLRAINVESTMENT HIGHLIGHTS
The Right Strategy & Market Position
Independent, seller platform with execution, expansion and EBITDA
Scale and Stickiness with sellers and buyers of premium video
Laser focused on premium, CTV partners
The Right Tech
Speed, control, and analytics, mission-critical sellers demand
Scalability required to efficiently grow
The Right Team
A proven track record of value building
Committed, supportive and in it to win
The Right Financials
High gross margin (90%+), high growth business
28 Operating leverage that delivers EBITDA (+20%) strength
NYSE: TLRAAPPENDIX
29
NYSE: TLRANON-GAAP FINANCIAL MEASURE
To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally
accepted accounting principles (“GAAP”), Telaria reports Adjusted EBITDA, which is a non-GAAP financial measure. We
define Adjusted EBITDA as net loss before total interest expense and other income (expense), net, provision for income
taxes, and depreciation and amortization expense, and adjusted to eliminate the impact of non-cash stock-based
compensation expense, acquisition related costs, mark-to-market expense, executive severance, retention and recruiting
costs, disposition related costs, expenses for transitional services and other adjustments. We use Adjusted EBITDA for
financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe that the
use of Adjusted EBITDA provides useful information about our operating results, enhances the overall understanding of our
past financial performance and future prospects, and allows for greater transparency with respect to a key metric that is
used by management in its financial and operational decision making. Non-GAAP financial measures should be considered
in addition to results and guidance prepared in accordance with GAAP, but should not be considered a substitute for, or
superior to, GAAP results. The non-GAAP financial measure included in this presentation has been reconciled to the nearest
GAAP measure in the table following the financial statements attached to this presentation. With respect to our
expectations under “Guidance” above, reconciliation of Adjusted EBITDA guidance to the closest corresponding GAAP
measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and
low visibility with respect to the costs and charges excluded from this non-GAAP measure, in particular, the measures and
effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by
unpredictable fluctuations in our stock price. We expect the variability of these costs and charges to have a significant, and
potentially unpredictable, impact on our future GAAP financial results.
30
NYSE: TLRANON-GAAP RECONCILIATION
Telaria, Inc.
Reconciliation of Net Loss from Continuing Operations to Adjusted EBITDA
(in thousands)
(unaudited)
Q1 17 Q2 17 Q3 17 Q4 17
Net loss from continuting operations (9,561) (6,803) (3,273) (63)
Adjustments:
Depreciation and amortization 1,021 990 984 1,591
Interest and other expense (income), net 27 78 (651) (646)
Provision for income taxes 9 76 (29) (403)
Stock-based compensation expense 744 752 1,534 1,691
Acquisition-related costs (1) 825 985 - -
Mark-to-market expense (2) 55 93 - -
Executive severance, retention and recruiting costs 30 302 887 202
Disposition related costs (3) - 300 600 129
Expenses for transitional services (4) - - 364 541
Other adjustments (5) 102 - - -
Total adjustments 2,813 3,576 3,689 3,105
Adjusted EBITDA (6,748) (3,227) 416 3,042
(1) Reflects acquisition-related costs incurred in connection with our acquisition of TVN. Includes compensation-related expenses related to contingent consideration payments that were paid to certain TVN sellers that are subject to
continued employment.
(2) Reflects expense incurred based on the Company’s re-measurement of the estimated fair value of earn-out payments that were paid in connection with the acquisition of TVN and which are not conditioned on continued employment
with the Company.
(3) Professional fees incurred in connection with the Company’s sale of its buyer platform in August 2017.
31 (4) In connection with the sale of the Company’s buyer platform, the Company entered into a transitional services agreement with the acquirer. Reflects cost incurred providing such transitional services.
(5) Reflects amounts accrued in connection with a one-time change in the Company’s employee vacation policy. NYSE: TLRAYou can also read
