33 slides from Intelligent Protection Management's investor presentation, May 20, 2014
Slide 1: Snap Interactive, Inc.
INTERACTIVE Snap Interactive, Inc. (OTC
Slide 2: Disclaimer
_ Disclaimer ‘This presentation Is for discussion purposes only. The material is based upon information that we consider reliable, but we do not represent that itis accurate or complete, and it should not be relied upon as such, Certain statements in this presentation constitute “forward-looking sta
Slide 3: Table of Contents
5a Table of Contents 1. Company Overview 2. Investment Thesis 1: Competitive Advantages 3. Investment Thesis 2: Compelling Business Economics 4. Investment Thesis 3: Attractive Industry and Peer Comparisons 5. Financial and Investor Considerations 6. Contact Information
Slide 4: Company Overview
Company Overview
Slide 5: SNAP Company Snapshot
5a SNAP Company Snapshot * Stock Price at 5/16/14: $0.315 * Market Cap (at 5/16/14) : $12.3 million * High/Low (52 Weeks): $1.14 - $0.25 Cash (as of 3/31/14): $0.4 million * Average Daily Volume: 28,000 shares * Revenue (Q1 2014 and 2013): $3.3 * Shares Outstanding: 39.1 million million and $12.6 mi
Slide 6: Management Bios
Cliff Lerner CEO Alexander Harrington coo Management Bios Cliff Lerner has served as our President, Chief Executive Officer and Chairman of our Board of Directors since founding the Company in 2005. Mr. Lerner has a strong knowledge and understanding of the online dating and social dating industry a
Slide 7: SNAP's Core Product Is AYI
SNAP’s Core Product Is AYI
Slide 8: SNAP Timeline
SNAP Timeline * SNAP hasa history as an innovator in social dating, as one of the first to leverage the Facebook platform for user acquisition « After a rebuilding year in 2013, the Company’s premium subscriber count has. increased more than 20% in 2014 year-to-date 2005: ¥ eee MM in | Seis ne Faceb
Slide 9: SNAP Recent History
we. SNAP Recent History * 2013 investments in social feature-set and analytics yielded a turnaround in active subscriber count * STVI stock price has not correlated with subscriber gains over the last six months SNAP Stock Price vs. Subscriber Count $1.20 100,000 $1.00 95,000 $0.80 90,000 $0.60 85,0
Slide 10: SNAP Recent History
we. SNAP Recent History * 2013 investments in social feature-set and analytics yielded a turnaround in active subscriber count * STVI stock price has not correlated with subscriber gains over the last six months SNAP Stock Price vs. Subscriber Count oss ss.o00 S120 $1.00 oss | 0.000 $0.80, soso sous
Slide 11: Investment Highlights
5a Investment Highlights 1. Competitive Advantages * Scale of Social Data + Constant Experimentation Drives Innovation * World-Class Analytics 2. Compelling Business Economics * Recent Sequential Revenue Growth + Superior Marketing Efficiency + Targeting Q3 2014 Break-Even Cash Flow + Operating Leve
Slide 12: AYI.com Has Several Competitive Advantages
Investment Thesis 1 AYl.com Has Several Competitive Advantages 1. Scale of Social Data 2. Constant Experimentation Drives Innovation 3. World-Class Analytics
Slide 13: AYI Leverages Billions of Social Data Points
5a AYI Leverages Billions of Social Data Points * AYI’s Facebook linkage uniquely positions it as a “Social Dating” experience, featuring common friends and interests * 25 million+ Facebook connected users enables a robust friends-of- friends social graph * Interest Graph: 2.5 billion+ structured in
Slide 14: SNAP's Data-Driven Product Optimization
5a SNAP’s Data-Driven Product Optimization * SNAP has industry-leading application testing infrastructure — In QJ 2014, the company initiated ~80 product tests monthly — More than 3MM permutations of AYI are operated and measured simultaneously * Continuous product improvement based on live user dat
Slide 15: Case Study: Optimization of Message Replies
5a Case Study: Optimization of Message Replies ow The Goal w The Tests Initiated 124 product tests, 3.4MM permutations of AYI Background: message reply rates correlate strongly with revenue Dec 2013 SNAP internal w The Results goal: 400% increase in 55 tests produced verifiable improvements 400,000
Slide 16: Data-Driven Blog Driving Media Interest
ae Data-Driven Blog Driving Media Interest AYl.com “Data of Dating Blog” AYI's blog is driving tier 1 media hits and brand awareness AY! Recently Featured in Top Tier Publications Forbes Miris (ia ian DT] HUFFINGTON ANGWEVORK, NEW, YORK POS Tg POST DAILY*NEWS BUSINESS INSIDER BuzzFeep The Telegraph
Slide 17: Compelling Business Economics
Investment Thesis 2 Compelling Business Economics « Recent Sequential Revenue Growth ¢ Superior Marketing Efficiency ¢ Targeting Q3 2014 Break-Even Cash Flow * Operating Leverage
Slide 18: SNAP Revenue Growth
5a SNAP Revenue Growth * 2013 investment in product and technology infrastructure has fueled recent sequential revenue growth * 30% of new subscriptions are from repeat subscribers Snap Quarterly Revenue {Sin millions) lL in Dec-iO Marit Juni Sep-11 Decl Mart Jun-12 Sep-12 Dec-l2_ Mar-13 Jun-13. Sep
Slide 19: SNAP Revenue Growth
ae * 2013 investment in product and technology infrastructure has fueled recent sequential revenue growth SNAP Revenue Growth * 30% of new subscriptions are from repeat subscribers Snap Quarterly Revenue. (Sin millig 53.6 Zoom in on Last Five Quarters Dec-iO Marit Juni Sep-l1 Decl Mar-t2 _Jun-t2 s3a
Slide 20: Growth is Fueled By Mobile Activity
5a Growth is Fueled By Mobile Activity Contribution to user activity AY| is consistently a top ranked from mobile doubled in the last | iPhone app year Mobile Leuine ae % of Tosa! Lopine AYlis ranked #1 top grossing app in the = tf Lifestyle Category (updated 5/16/14) Tpp Grossing iPhone Apps BE Sag
Slide 21: Superior ROI
5a Superior ROI ¢ Recent marketing expense of $1 has generated nearly $3 of revenue SNAP Q1 2014 Economics 177% * SNAP’s overall revenue yield from marketing exceeds public competitors Networks Revenue $12.6 $178.2 $69.4 User Acquisition Costs $4.1 $128.7 $52.1 Revenue / User Acq. Lez 14x 13% Note:
Slide 22: Targeting Q3 2014 Breakeven Cash Flow
5a Targeting Q3 2014 Breakeven Cash Flow * SNAP cost controls are targeting Q3 2014 cash flow neutrality — Downsized headcount 27% from 48 in October 2013 to 35 in April 2014 — Reduced other expenses, including a 25% decrease in the monthly marketing and advertising expense Overhead Containment: Red
Slide 23: Operating Leverage: Incremental Revenue
5a Operating Leverage: Incremental Revenue * SNAP can scale subscriptions (yi) and revenue sources, such as advertising, with minimal increase in overhead - In December 2013, SNAP announced a business development partnership with Match.com - In April 2014, the partnership renewed, contributing $300k
Slide 24: Attractive Industry and Peer Comparisons
ae. Investment Thesis 3 Attractive Industry and Peer Comparisons ¢ Favorable Industry Dynamics * Valuation Discount to Peers
Slide 25: The Interactive Dating Market Opportunity
5a The Interactive Dating Market Opportunity A Large Addressable ..Going Increasingly Mainstream... Market... In 2013, 59% of Americans agreed that “online dating is a good way to meet people” (vs. 44% in US-based online dating was a $1.3Bin 2005)? market in 2012, with estimates of S4Bln for the glo
Slide 26: Snap in the Competitive Landscape
5a Snap in the Competitive Landscape AY"’s Position in the Online Dating Market * Our publicly traded competitors include: >» IAC (IACI) > MeetMe (MEET) > Spark Networks (LOV) » Jiayuan.com International Ltd. (DATE) Seniors match.com » Zoosk (filed $1, not yet public) Free i ® <— Freemium—> Premium
Slide 27: Attractive Valuation
5a Attractive Valuation (tins excert er bar) om Enerise Multiples nets Ouecat persue comoam sc Simba | stodercee S/o cash att vue Resense evenue Lube tac ac fon 22 Siooso S110 $5257 S300 Sasa 350600 | 17 7 S8H8 este eer) gia aa ss sag saza fs) D MR Spark Nets LOW Ma 239 seo $00 sae See zo) ae | 2a n
Slide 28: Financial and Investor Considerations
Financial and Investor Considerations
Slide 29: Investment Highlights
5a Investment Highlights 1. Competitive Advantages * Scale of Social Data + Constant Experimentation Drives Innovation * World-Class Analytics 2. Compelling Business Economics * Recent Sequential Revenue Growth + Superior Marketing Efficiency + Targeting Q3 2014 Break-Even Cash Flow + Operating Leve
Slide 30: Snap Interactive Goals for 2014
5a Snap Interactive Goals for 2014 * Diversify marketing channels to identify new growth opportunities * Enhance revenue generation opportunities from subscribers * Tight cost-controls to generate positive cash flow from Operations * Continue to grow mobile market share on iOS and Android platforms,
Slide 31: Financial Performance
oe Financial Performance INCOME STATEMENT (in Le Cy Poo foo fe oo fw fom | oo foe foo 7 oo | os | suvecagton revenue aie 3428 3.50 28ua 204 550 Sir) 4305-3000 (ET ‘avarsing ravens we 2 2 H ‘0 ion ara (d ‘Total revenue 3,282, 3470 352 2990 py 12,510) ‘S745 5215, 4332, 3957 Puurarnning hosiny-andtecin
Slide 32: Cap Table & Ownership
Cap Table & Ownership Unvested Total Shares ied Shares Outstanding Founders/Employees 24,971,956 | 64% 10,326,000 36,296,956 | 71%] Public Float 14,195,870 | 35%| : 14,185,870 | 29%] 39,157,826 100% 10,325,000 49,482,826 100% Warrants Outstanding 2,342,500 Options Outstanding 4,131,028 35,956,358 32
Slide 33: Contact Information
Contact Information Email: Cliff Lerner: Cliff@snap-interactive.com Alex Harrington: Alex@snap-interactive.com Investor Relations: IR@snap-interactive.com Investor Relations: Hart@haydenIR.com Company Address: 462 7th Avenue, 4" Floor New York, NY 10018 Phone: (212) 967-5120