Investor Overview Q Slides updated as of February 21, 2018

Transcription

1 Investor Overview Q Slides updated as of February 21, 2018

2 Safe Harbor and Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of federal securities laws, which are based on our management s beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as may, will, should, might, expects, plans, anticipates, could, intends, target, projects, contemplates, believes, estimates, predicts, potential, or continue or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this presentation include, but are not limited to, statements concerning our future financial and operational performance; the impact of the network effects of our marketplace; our business and growth strategy; and our ability to effectively manage our growth and future expenses. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The known risks and uncertainties are discussed under the caption Risk Factors and elsewhere in our most recent Annual Report on Form 10-K, our subsequent Quarterly Reports on Form 10-Q, and will be discussed in other filings that we make with the SEC from time to time. We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this presentation. Forward-looking statements represent our management s beliefs and assumptions only as of the date of this presentation. Except as required by law we assume no obligation to update these forward-looking statements publicly, or to update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. You should read the documents that we have filed and may file from time to time with the SEC for more complete information about MINDBODY. You may get these documents for free by visiting EDGAR on the SEC website at or by visiting the SEC Filings section of the Investor Relations page of our website at investors.mindbodyonline.com. This presentation includes certain non-gaap financial measures as defined by the SEC rules. These non-gaap financial measures are in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-gaap financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-gaap financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-gaap financial measures as tools for comparison. As required by Regulation G, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the appendix. Note: All fourth quarter 2017 figures on the accompanying slides are unaudited. 2

3 Helping People Lead Healthier, Happier Lives by Connecting the World to Wellness

4 MINDBODY Highlights Leading SaaS Platform for Large and Growing Global Wellness Services Industry Loyal Customer Base Delivers Strong Unit Economics and Predictable Revenue Growth Powerful Consumer Marketplace Drives Customer Success Multi-billion Dollar Integrated Payments Platform Powerful Network Effects Create Sustainable Competitive Advantage Strong Management Team and Exceptional Company Culture 4

5 Our Strategy A company and brand people love Rapidly growing transaction-enabled marketplace Essential for businesses and consumers Ecosystem of choice for partners and competitors 5

6 We are a Platform For Consumers 8.3MM Registered App Users* For Businesses 59,000 Businesses 373,000 Practitioners 41MM Consumers 600MM Class and Appointment Bookings** in 2017 For Partners 750+ Registered API Integrations * Registered app users refer to the total number of registered consumer users of the MINDBODY app and branded apps as of December 31, ** Bookings refers to the action of reserving a spot in a class or an appointment time with a business. All data is presented as rounded numbers and is as of December 31,

7 Our Foundation: Integrated Cloud Software & Payments Platform Online Booking Staff Management CRM Point of Sale Payments Marketing Tools Scheduling Analytics 7

8 Integrated Payments Key to Value Proposition Point of Sale Purchases Recurring Memberships Web and Mobile Sales MINDBODY App Promotional Sales Network Partner Sales $7.9Bn Integrated Payments Volume 23% YoY Growth Note: Payments volume data for last twelve months ended December 31, 2017.

9 Tiered Software Packages Fuel Customer Success Essential Accelerate Ultimate Get the features you need to manage schedules, sell products and services, and streamline tasks. Expand your reach and increase engagement with advanced retention and marketing tools. Elevate your brand with custom mobile apps, extensive analytics and enterprise-grade features. $125/mo* $195/mo* $395/mo* *U.S. Prices 9

10 Scalable from Local Businesses to Large Enterprises Large Enterprises National Chains Local Businesses 10

11 Leveraging Neighborhood Network Effects Boutique Fitness Integrative Health Salon & Spa Union & Polk Streets San Francisco 11

12 MINDBODY Network Growing marketing platform promotes wellness businesses to consumers 4.9MM class and appointment sessions available each day* more than half go unsold *Average available inventory per day in Q

13 The MINDBODY App Featuring Intro Offers and Dynamic Pricing Intro Offers Dynamic Pricing Expanding our Consumer Reach & Driving Engagement 13

14 Flourishing Platform Partner Ecosystem 750+ REGISTERED API INTEGRATIONS bowtie.ai Former Platform Partners Acquired: February 2018 March 2017 September 2016 February

15 Performance tracking solutions drive consumer engagement and member retention 15

16 Transaction-enabled Marketplace Provides Multiple Growth Opportunities Promote Customer Inventory Grow High Value Customer base Broaden Payments Platform Deepen Customer Relationships Increase Consumer Adoption Refer to Form 10-K for customer and consumer definitions. 16

17 Our Clients Share Our Values Committed & Purpose Driven Humble & Helpful Caring & Happy Seeking Wellness: Mind, Body & Spirit v Environmentally Conscious Practicing Five C Leadership Continuously Evolving 17

18 Financial Highlights Strong Revenue Growth and Margin Expansion Recurring Subscription, Services and Payments Revenue Model Compelling Unit Economics Strong Dollar-Based Net Expansion Rates 18

19 High Visibility Revenue Model % of Q4 17 Revenue Multiple Pricing Packages (Monthly Subscription) Subscription & Services Branded Mobile Apps Platform Partners (Monthly Subscription) (Revenue Share / Transaction Fees) 60% Promoted Offers (Transaction-Based) Payments Recognized Net of Processing Fees Reflects Business to Consumer Engagement Recurring Relationships Drive Predictability 38% 19

20 Q4 17 Financial Highlights Total Revenue Payments Volume ARPS 1 Dollar-based Net Expansion 2 30% growth 23% growth 31% growth $38.2 MM $49.7 MM $1.7Bn $2.1Bn $212 $ % 107% Q vs Q ARPS (average monthly revenue per subscriber) is calculated by dividing the subscription and services and payments revenue generated in a given month by the number of subscribers at the end of the previous month. For periods greater than one month, ARPS is the sum of the average monthly revenue per subscriber for each month in the referenced time period, divided by the number of months in the period. 2 Dollar-based net expansion rate is measured at the end of the period. Dollar-based net expansion nets the effects of subscriber churn against the increasing value of subscribers retained, indicating the tendency of subscriber cohorts to gain value over time. 20

21 Consistently Strong Revenue Growth Annual ($MM) Quarterly ($MM) 30% YoY $49 $70 $101 $139 $183 $20 $18 $16 $17 $22 $25 $26 $28 $35 $34 $32 $38 $42 $44 $47 $50 $ YoY Growth 52% 44% 45% 37% 31% 21

22 Significant Payments Volume Expansion Annual ($Bn) Quarterly ($Bn) 23% YoY $7.9 $6.5 $2.1 $3.1 $4.1 $5.1 $1.0 $1.0 $1.0 $1.1 $1.2 $25 $2.1 $2.0 $1.9 $1.9 $1.7 $1.6 $1.6 $1.5 $1.3 $ YoY Growth 47% 33% 23% 28% 23% 22

23 Increasing Average Monthly Revenue Per Subscriber $278 $259 $244 $230 $201 $202 $204 $212 $154 $151 $152 $163 $174 $185 $182 $185 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 23

24 Strong Practitioner and Inventory Growth Number of Practitioners 1 (end of period in thousands) Q4'12 Q4'13 Q4'14 Q4'15 Q4'16 Q4'17 Available Inventory 2 per day (average of quarter in millions) 1 Practitioners are defined as the number of staff members/instructors/trainers/stylists with one or more bookings on the MINDBODY platform in the last month of the period. 2 Inventory is defined as the class and appointment spots available for booking within the MINDBODY platform (via online booking website or app, or in person with the business) in the period. 24

25 Subscriber Mix Shift Delivers Increasing Platform Value High Value Subscribers (in thousands) 600 Solo (Single Practitioners) (in thousands) 485 Total Bookings (in millions) Number of Subscribers on-board at period end (in thousands) 25

26 Innovative Mobile Apps Driving Strong Consumer Adoption Q1 '16 Q1 '16 Q1 '16 Q1 '16 Q1 '16 Q1 '16 Q1 '16 Q1 '16 Q1 '16 Q1 '16 Q1 '16 Q1 '16 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q1 '16 Q1 '16 Q3 17 Q1 '16 Q4 17 Consumer app bookings (in millions) MB App Branded Mobile Apps 26

27 Long-Term Financial Model Non-GAAP FY'14 FY 15 Q1'16 Q2'16 Q3'16 Q4 16 Q1 17 Q2'17 Q3'17 Q4 17 Long-Term Model Gross Margin 58% 64% 70% 69% 70% 71% 73% 73% 73% 74% 80% - 85% S&M as % of Revenue 44% 42% 40% 40% 40% 38% 37% 38% 38% 38% 30% - 35% R&D as % of Revenue 23% 22% 22% 21% 21% 18% 19% 18% 17% 16% 12% - 15% G&A as % of Revenue 25% 26% 22% 19% 18% 18% 18% 18% 17% 16% 8% - 10% Adjusted EBITDA Margin (27%) (20%) (7%) (6%) (3%) 2% 3% 4% 5% 7% ~30% Note: A reconciliation of non-gaap measures to GAAP measures is contained in the Appendix. For future periods, we are unable to provide a reconciliation of non-gaap financial measures without unreasonable effort as a result of the uncertainty regarding, and the potential variability of, stock-based compensation, and certain other infrequently occurring items, such as acquisition related costs, that may be incurred in the future. 27

28 Appendix 28

29 Reconciliation of Non-GAAP Figures Year Ended Three Months Ended Dec. 31, March 31, June 30, Sept. 30, Dec. 31, (in thousands) Total Revenue $70,010 $101,369 $139,021 $182,626 $32,006 $42,214 $33,561 $44,107 $35,262 $46,612 $38,191 $49,693 Gross profit, as reported $40,006 $64,179 $95,941 $130,756 $22,034 $30,195 $22,848 $31,369 $24,290 $33,489 $26,768 $35,703 Gross Margin, GAAP 57% 63% 69% 72% 69% 72% 68% 71% 69% 72% 70% 72% Plus: Amortization of acquired intangible assets , Plus: Stock-based compensation , Gross Profit, non-gaap $40,565 $65,167 $97,277 $133,491 $22,325 $30,630 $23,144 $32,142 $24,630 $34,186 $27,177 $36,533 Gross Margin, non-gaap 58% 64% 70% 73% 70% 73% 69% 73% 70% 73% 71% 74% Sales and marketing, as reported $30,922 $46,345 $56,460 $71,825 $13,229 $16,334 $13,706 $17,362 $14,599 $18,514 $14,926 $19,615 As percentage of revenue, GAAP 44% 46% 41% 39% 41% 39% 41% 39% 41% 40% 39% 39% Less: Stock-based compensation 196 3,533 2,059 2, Sales and marketing, non-gaap $30,726 $42,812 $54,401 $68,953 $12,646 $15,828 $13,266 $16,691 $13,986 $17,678 $14,503 $18,756 As percentage of revenue, non-gaap 44% 42% 39% 38% 40% 37% 40% 38% 40% 38% 38% 38% Research and development, as reported $16,167 $23,057 $30,316 $35,810 $7,417 $8,648 $7,594 $8,802 $7,747 $8,976 $7,558 $9,384 As percentage of revenue, GAAP 23% 23% 22% 20% 23% 20% 23% 20% 22% 19% 20% 19% Less: Stock-based compensation ,971 3, , ,190 Research and development, non-gaap $15,869 $22,155 $28,345 $31,946 $6,922 $8,121 $7,124 $7,822 $7,257 $7,809 $7,043 $8,194 As percentage of revenue, non-gaap 23% 22% 20% 17% 22% 19% 21% 18% 21% 17% 18% 16% General and administrative, as reported $18,422 $29,530 $30,497 $37,471 $7,523 $8,686 $7,681 $9,358 $7,346 $9,763 $7,947 $9,664 As percentage of revenue, GAAP 26% 29% 22% 21% 24% 21% 23% 21% 21% 21% 21% 19% Less: Stock-based compensation 1,023 3,289 3,823 6, ,203 1,253 1, , ,707 General and administrative, non-gaap $17,399 $26,241 $26,674 $31,440 $6,903 $7,483 $6,428 $7,862 $6,371 $8,138 $6,972 $7,957 As percentage of revenue, non-gaap 25% 26% 19% 17% 22% 18% 19% 18% 18% 17% 18% 16% 29

30 Reconciliation of Adjusted EBITDA Year Ended Three Months Ended Dec. 31, March 31, June 30, Sept. 30, Dec. 31, (in thousands) Net loss ($24,606) ($36,088) ($22,979) ($14,792) ($6,594) ($3,909) ($6,550) ($4,375) ($5,895) ($3,630) ($3,940) ($2,878) Year over year favorable/(unfavorable) % change (51)% (47)% 36% 36% 16% 41% 26% 33% 39% 38% 60% 27% Stock-based compensation expense $1,737 $8,375 $8,763 $14,101 $1,913 $2,497 $2,383 $3,513 $2,309 $3,915 $2,157 $4,176 Depreciation and amortization $4,574 $6,516 $7,755 $9,150 $1,848 $2,090 $1,810 $2,309 $2,013 $2,337 $2,084 $2,414 Change in fair value of contingent consideration ($1,434) ($11) Change in fair value of preferred stock warrant $283 $25 Impairment charges $426 Provision for income taxes $116 $246 $321 $167 $73 $142 $64 $118 $142 $83 $42 ($176) Other (income) expense, net $136 $1,075 $1,326 $275 $386 $294 $353 $104 $351 ($217) $235 $94 Adjusted EBITDA (unaudited) ($18,768) ($19,862) ($4,814) $ 8,901 ($2,374) $1,114 ($1,940) $1,669 ($1,080) $2,488 $578 $3,630 Adjusted EBITDA Margin (27)% (20)% (4)% 5% (7)% 3% (6)% 4% (3)% 5% 2% 7% Year over year favorable/(unfavorable) % change (63)% (6)% 76% 285% 55% 147% 62% 186% 79% 330% 113% 528% 30