Presented by: Mark P. Cantaluppi, CFO Reis, Inc. Canaccord Genuity 37 th Annual Growth Conference Boston, MA August 9, 2017
DRAFT Disclaimer This presentation may include forward-looking statements which involve a number of risks and uncertainties that could cause actual results to differ materially from those described or implied in those forward-looking statements. These statements are based on currently available information and current management outlook or expectations. In addition, we do not plan to update any forward-looking statements to reflect subsequent events or circumstances or if our expectations change. For more information relating to the risks and uncertainties involved in our forward-looking statements and Reis generally, please see the Risk Factors and Cautionary Statement Regarding Forward-Looking Statements sections of our recent filings with the SEC, including our 2016 Annual Report on Form 10-K filed on March 9, 2017 and our June 30, 2017 Quarterly Report on Form 10-Q filed on August 1, 2017. 2
DRAFT Executive Summary Reis is a leading provider of U.S. commercial real estate ( CRE ) market and transaction-support information. Unique Proprietary Databases Diversified Customer Base Significant Growth Opportunities Subscription Business Model Attractive Financial Profile Compelling Industry Dynamics Strong Platform to Execute Growth Strategy 3
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DRAFT Executive Summary Subscription-based business model with high revenue visibility, significant cash generation and substantial growth potential. Delivers proprietary CRE market information and analytics. Unrivaled depth of proprietary data on approximately 7,700 market areas and segments. 37 year history of data collection and aggregation; difficult to replicate. Blue-chip client base across wide spectrum of CRE and financial sectors. Outstanding platform to capture logically adjacent opportunities (space leasing and marketplace sectors). 6
Products Reis Portfolio CRE DESCRIPTION Primary delivery platform Data on rents, vacancy rates, absorption, lease terms, property sales and new construction activity Market-based trends, comparable properties, valuation and credit analysis Repurposes Reis SE market data to prosumers and smaller businesses Provides subset of information available to Reis SE subscribers Property and loan-level analyses of cash flows, collateral values and default risk Property valuation, credit analysis, recurring stress testing and benchmarking Custom data deliverables Other advisory services CUSTOMERS Property owners, developers, managers, banks and nonbank lenders, equity investors and service providers Smaller enterprises and individuals, professional investors, brokers, appraisers and other service providers Available to new and existing customers as an add-on to Reis SE Banks and lending institutions seeking CRE risk Management tools CMBS and equity investors PRICING / CONTRACT Annual and multi-year subscriptions ($1,000 $1 million+) averaging in the mid- $40,000s Prices of individual reports typically range up to $999 Monthly subscriptions in the low hundreds of dollars Annual subscriptions are also available Varies by client and usage Annual and multi-year subscriptions Low tens of thousands of dollars into the hundreds of thousand of dollars per year 7
Key Databases Property Type Markets Apartment 275 Office 190 Retail 190 Warehouse/Distribution 47 Flex/R&D 47 Self Storage 50 Seniors Housing 110 Student Housing 200 Affordable Housing 110 Totals 1,219 8
Curated Databases Curated databases for CRE professionals Reis s databases are carefully constructed and maintained. Competitive inventories are coded and sub-property types are defined. Historical property-level performance data is archived at the record level. Consistent samples ensure disciplined market trends. Not repositories of land use records of low value to CRE professionals. Only precisely designed and populated databases will succeed in the emerging analytics marketplace... 9
Data Collection Thousands of sources are accessed on an ongoing basis. Primary Research Methodologies Proprietary lists of brokers, managers and owners Individual telephonic surveys (1M+ calls placed annually) List processing of brokerage feeds Websites and internet searches Extensive database of market sources must be maintained Other Research Sources Utilized Planning and Zoning Boards Public Records (Deed recorders and Tax assessors) Building Directories Business and Trade Press Visiting selected markets 10
Premier Brand Name Reis is a trusted source for many of the nation s most well respected news organizations. 11
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Client Composition 56% Debt Banks Non-Bank Lenders Investment Banks and Conduits Insurance Companies Government 83% Capital Providers 27% Equity Developers Real Estate Investment Trusts Investment Managers Opportunity Funds Pension Funds Private Investors 17% Service Providers Service Providers Appraisers Brokers Accountants Consultants Academia Government Note: Percentages in chart based on an analysis of Reis customers at December 31, 2016 13
Growth Opportunities Content Expansion Greater property granularity Most recently: Sales Transactions Expansion - Land Affordable Housing Expanded Industrial Coverage Warehouse/Distribution Flex/R&D Self Storage Potential additions: Medical Office Data Centers International markets Analytical Tools APIs Q2 2017 Market Analytics Q2 2017 CRE Portfolio monitoring CCAR DFAST CECL CRE-backed Securities: REITs CMBS Custom data Acquisitions Regional data vendors (roll-up strategy) Software providers: Property Mgmt. Cash flow Budgeting Valuation Appraisers 14
Application Programming Interface (API) Proprietary Reis Database Property Level Data Market & Submarket Forecasts Analytics Apartment Self Storage Office Retail Student Housing Seniors Housing Affordable Housing Flex/R&D Warehouse/Dist. Industrial Application Programming Interface API System to system interaction instead of users accessing www.reis.com Customer makes data request to Reis API After validation and authorization, API returns data to customer Customer can tailor requests to meet needs of its business and users Customer seamlessly distributes data directly within organization, or automatically populates forms and documentation Customer Customer Network 15
Financial Performance 16
Historical Reis Services Performance Fiscal Years 2007 to 2016 (in millions) $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 50.9 47.5 41.3 34.7 31.2 27.2 25.9 23.7 23.9 24.2 43.4% 40.8% 44.6% 44.9% 22.1 32.7% 39.3% 39.9% 40.9% 41.2% 35.9% 16.9 15.5 14.3 12.8 11.5 10.7 10.8 9.5 8.5 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Reis Services EBITDA Total Revenue Margin Note: Results relate to the Reis Services segment. Please see Reis s SEC filings for information relating to Reis s consolidated results. 17
Financial Performance Metrics Revenue ($ in thousands) (Unaudited) Revenue (1): For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 Increase 2017 2016 Increase / (Decrease) Subscription Revenue $ 11,429 $ 11,369 $ 60 0.5% $ 23,008 $ 22,797 $ 211 0.9% Other Revenue 280 245 35 14.3% 827 1,641 (814) (49.6)% Total Revenue $ 11,709 $ 11,614 $ 95 0.8% $ 23,835 $ 24,438 $ (603) (2.5)% (1) In order to provide insight into relative performance, we have disaggregated total revenue into two components: Subscription and Other. Other revenue specifically includes revenue related to contracts for one-time custom data deliverables and one-time fees for settlements of previous unauthorized usage of Reis data. Please see Item 2 of our June 30, 2017 Quarterly Report on Form 10-Q filed with the SEC on August 1, 2017 for more information on revenue. 18
Financial Performance Metrics Reis Services EBITDA / Consolidated Adjusted EBITDA ($ in thousands) (Unaudited) For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 (Decrease) 2017 2016 (Decrease) Reis Services EBITDA $ 3,501 $ 4,127 $ (626) (15.2)% $ 6,790 $ 9,509 $ (2,719) (28.6)% Reis Services EBITDA Margin 29.9% 35.5% 28.5% 38.9% Consolidated Adjusted EBITDA $ 3,091 $ 3,651 $ (560) (15.3)% $ 5,679 $ 8,280 $ (2,601) (31.4)% Consolidated Adjusted EBITDA Margin 26.4% 31.4% 23.8% 33.9% Note: EBITDA and Adjusted EBITDA are non-gaap measures that senior management of Reis uses to measure operational and management performance, and may be appropriate for investors to use as a supplement to reported GAAP basis financial information for the Reis Services segment and on a consolidated basis. Please see our June 30, 2017 Quarterly Report on Form 10-Q filed with the SEC on August 1, 2017 for cautionary language about the use of EBITDA and Adjusted EBITDA and reconciliations of income from continuing operations to EBITDA and Adjusted EBITDA for the Reis Services segment and on a consolidated basis. 19
Consolidated Balance Sheets Condensed Balance Sheet Data June 30, 2017 December 31, 2016 Assets Cash $ 18,883 $ 21,491 Accounts Receivable, Net 9,309 10,744 Prepaid and Other Current and Non-Current Assets 6,371 6,347 Goodwill and Intangible Assets 73,907 72,747 Deferred Tax Assets, Net 17,965 16,815 Total Assets $ 126,435 $ 128,144 Liabilities and Stockholders Equity Debt (A) $ $ Deferred Revenue (B) 24,183 25,031 Other Liabilities 5,928 5,933 Total Liabilities 30,111 30,964 Stockholders Equity 96,324 97,180 Total Liabilities and Stockholder s Equity $ 126,435 $ 128,144 Common Shares Outstanding 11,512 11,272 (A) (B) (In thousands) The Company previously had a $10 million credit revolving facility with an interest at a rate of LIBOR + 2.00% per annum, which was set to expire on October 16, 2015; however, the expiration dates were extended to January 31, 2016. On January 28, 2016, the Company entered into a new three-year agreement to renew and expand the revolving credit facility to $20 million, with terms substantially similar to the previous agreement and with an expiration date on January 28, 2019. Aggregate Revenue Under Contract (which is the sum of deferred revenue and future revenue under non-cancellable contracts for which we do not have the contractual right to bill) aggregated $48,346 and $50,959 at June 30, 2017 and December 31, 2016, respectively. At June 30, 2017, $33,136 relates to amounts under contract that will turn into revenue in the forward twelve month period through June 30, 2018. Please see our June 30, 2017 Quarterly Report on Form 10-Q, filed with the SEC on August 1, 2017, and our December 31, 2016 Annual Report on Form 10-K, filed with the SEC on March 9, 2017, for reconciliations to the most comparable GAAP financial measure. 20
DRAFT Investor Highlights Executive Summary Unique Proprietary Databases: Continuing development of three curated databases with a 37 year history of data. Growth Opportunities: The addition of new property types (affordable housing), the expansion of our sales transactions database (including the addition of land transactions), and the availability of the new API delivery platform will drive growth in 2017 and beyond. Excellent Revenue Visibility: Recurring revenue, digital delivery, subscription model (not ad-based). Strong Business Fundamentals: Our high renewal rates, strong margins and cost structure fuel significant cash flow creation. Predictable Dividend: Commenced a quarterly dividend program in May 2014. Current quarterly pay rate is $0.17 per common share or approximately a 3.5% yield. Significant Management Focus: Management and board members own approximately 22% of the Company. 21
Reis, Inc. 1185 Avenue of the Americas 30 th Floor New York, NY 10036 (212) 921-1122 www.reis.com investorrelations@reis.com Lloyd Lynford, CEO Mark P. Cantaluppi, CFO
SUPPLEMENTAL INFORMATION
Reconciliations of Net Income to EBITDA and Adjusted EBITDA We define EBITDA as earnings (net income) before interest, taxes, depreciation and amortization. We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization and stock based compensation. Although EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance with GAAP, senior management uses EBITDA and Adjusted EBITDA to measure operational and management performance. Management believes that EBITDA and Adjusted EBITDA are appropriate supplemental financial measures to be considered in addition to the reported GAAP basis financial information which may assist investors in evaluating and understanding: (1) the performance of the Reis Services segment, the primary business of the Company and (2) the Company s consolidated results, from year to year or period to period, as applicable. Further, these measures provide the reader with the ability to understand our operational performance while isolating non-cash charges, such as depreciation and amortization expenses, as well as other non-operating items, such as interest income, interest expense and income taxes and, in the case of Adjusted EBITDA, isolates non-cash charges for stock based compensation. Management also believes that disclosing EBITDA and Adjusted EBITDA will provide better comparability to other companies in the information services sector. However, because EBITDA and Adjusted EBITDA are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies. EBITDA and Adjusted EBITDA are presented both for the Reis Services segment and on a consolidated basis. We believe that these metrics, for Reis Services, provide the reader with valuable information for evaluating the financial performance of the core Reis Services business, excluding public company costs, and for making assessments about the intrinsic value of that standalone business to a potential acquirer. Management primarily monitors and measures its performance, and is compensated, based on the results of the Reis Services segment. EBITDA and Adjusted EBITDA, on a consolidated basis, allow the reader to make assessments about the current trading value of the Company s common stock, including expenses related to operating as a public company. However, investors should not consider these measures in isolation or as substitutes for net income (loss), operating income, or any other measure for determining operating performance that is calculated in accordance with GAAP. Reconciliations of EBITDA and Adjusted EBITDA to the most comparable GAAP financial measure, net income, follow for each identified period on a segment basis (including the Reis Services segment), as well as on a consolidated basis: (amounts in thousands) Reconciliation of Net Income to EBITDA and Adjusted EBITDA for the Three Months Ended June 30, 2017 By Segment Reis Services Other (A) Consolidated Net income... $ 397 Income tax expense... 141 Income (loss) before income taxes... $ 1,522 $ (984) 538 Add back: Depreciation and amortization expense... 1,947 1,947 Interest expense (income), net... 32 (1) 31 EBITDA... 3,501 (985) 2,516 Add back: Stock based compensation expense, net... 575 575 Adjusted EBITDA... $ 3,501 $ (410) $ 3,091 Reconciliation of Net Income to EBITDA and Adjusted EBITDA for the Three Months Ended June 30, 2016 By Segment Reis Services Other (A) Consolidated Net income... $ 941 Income tax expense... 580 Income (loss) before income taxes... $ 2,522 $ (1,001) 1,521 Add back: Depreciation and amortization expense... 1,583 3 1,586 Interest expense, net... 22 22 EBITDA... 4,127 (998) 3,129 Add back: Stock based compensation expense, net... 522 522 Adjusted EBITDA... $ 4,127 $ (476) $ 3,651 See footnotes on next page. i
(amounts in thousands) Reconciliation of Net Income to EBITDA and Adjusted EBITDA for the Six Months Ended June 30, 2017 By Segment Reis Services Other (A) Consolidated Net income... $ 932 Income tax (benefit)... (281) Income (loss) before income taxes... $ 2,871 $ (2,220) 651 Add back: Depreciation and amortization expense... 3,855 3,855 Interest expense (income), net... 64 (1) 63 EBITDA... 6,790 (2,221) 4,569 Add back: Stock based compensation expense, net... 1,110 1,110 Adjusted EBITDA... $ 6,790 $ (1,111) $ 5,679 Reconciliation of Net Income to EBITDA and Adjusted EBITDA for the Six Months Ended June 30, 2016 By Segment Reis Services Other (A) Consolidated Net income... $ 2,545 Income tax expense... 1,567 Income (loss) before income taxes... $ 6,402 $ (2,290) 4,112 Add back: Depreciation and amortization expense... 3,072 5 3,077 Interest expense, net... 35 35 EBITDA... 9,509 (2,285) 7,224 Add back: Stock based compensation expense, net... 1,056 1,056 Adjusted EBITDA... $ 9,509 $ (1,229) $ 8,280 (A) Includes interest and other income, depreciation expense and general and administrative expenses (including public company related costs) that are not associated with the Reis Services segment. Deferred Revenue and Aggregate Revenue Under Contract Two balance-sheet based metrics management utilizes are deferred revenue and Aggregate Revenue Under Contract. Analyzing these amounts can provide additional insight into Reis Services s future financial performance. Deferred revenue, which is a GAAP basis accounting concept and is reported by the Company on the consolidated balance sheet, represents revenue from annual or longer term contracts for which we have billed and/or received payments from our subscribers related to services we will be providing over the remaining contract period. Aggregate Revenue Under Contract is the sum of deferred revenue and future revenue under non-cancellable contracts for which we do not yet have the contractual right to bill and excludes any future revenues expected to be derived from subscribers currently being billed on a monthly basis. The following table reconciles deferred revenue to Aggregate Revenue Under Contract at June 30, 2017 and December 31, 2016, respectively. June 30, 2017 December 31, 2016 Deferred revenue (GAAP basis)... $ 24,183,000 $ 25,031,000 Amounts under non-cancellable contracts for which the Company does not yet have the contractual right to bill at the period end (A)... 24,163,000 25,928,000 Aggregate Revenue Under Contract... $ 48,346,000 $ 50,959,000 (A) Amounts are billable subsequent to June 30, 2017 and December 31, 2016, respectively, and represent (i) noncancellable contracts for subscribers with multi-year subscriptions where the future years are not yet billable, or (ii) subscribers with non-cancellable annual subscriptions with interim billing terms. ii