second quarter | 2020 investor presentation...these non-gaap financial measures are in addition to,...

1

Second Quarter | 2020

Investor Presentation

2

Statements in this presentation regarding management’s future expectations, beliefs, intentions, goals, strategies, plans or prospects, including, withoutlimitation, the statements relating to Mimecast’s future financial performance on both a GAAP and non-GAAP basis, may constitute forward-looking statementswithin the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements, other than statements of historicalfact, are statements that could be deemed forward-looking statements, including statements containing the words "predicts," "plan," "expects," "anticipates,""believes," "goal," "target," "estimate," "potential," "may," "might," "could," "see," "seek," "forecast," and similar words. Mimecast intends all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act and the PrivateSecurities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including thoserisks, uncertainties and factors detailed in Mimecast’s filings with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors,Mimecast’s actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statementscontained herein. Mimecast is providing the information in this presentation as of this date and assumes no obligations to update the information included inthis press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In addition to GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not asubstitute for or superior to, measures of financial performance prepared in accordance with GAAP. Information regarding the non-GAAP financial measuresreferenced in this presentation, including the reconciliation to the nearest GAAP financial measures, can be found in the Appendix to this presentation. Pleaseconsider this as you review these non-GAAP financial measures.

This presentation contains statistical data that we obtained from industry publications and reports generated by third parties. Although we believe that thepublications and reports are reliable, we have not independently verified this statistical data.

The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed as anendorsement of the products or services of Mimecast.

This document may not be, reproduced or distributed, in whole or in part, by any means (including electronic without the prior written consent of Mimecast.

Safe Harbor for Forward-Looking Statements

3

Peter Bauer Co-Founder, Chairman and CEO

4

1. Unique technology platform

2. Large market opportunity

3. Favorable market drivers

4. Predictable business model

5. Strong track record

Mimecast Investment Highlights

Yearly Revenue

($ millions)$142

$187

$262

$340

2016 2017 2018 2019

Note: CAGR calculated on actual FX rates.

5

IPO November 2015

6

Accomplishments Since IPO Q4’16 – Q2’201

09

%

11

0%

11

1%

11

2%

11

1%

11

1%

11

1%

11

1%

11

0%

11

0%

11

0%

11

0%

11

1%

11

1%

11

0%

REV ENUE RETENTION RA TE

1,8

00

1,9

00

1,9

00

3,1

00

1,5

00

90

0

90

0 1,1

00

1,2

00

90

0

90

0

1,0

00

1,1

00

90

0

80

0

CUSTOMERS A D D S

42%

58%

Pre-IPO Since IPO

36,100 Total Customers

TTP Impersonation Protect

TTP Insider Protect

Sync and Recover

Mimecast AT

Mimecast Web Security

0

5,000

10,000

15,000

20,000

25,000

30,000

Q4

'16

Q1

'17

Q2

'17

Q3

'17

Q4

'17

Q1

'18

Q2

'18

Q3

'18

Q4

'18

Q1

'19

Q2

'19

Q3

'19

Q'4

19

Q1

'20

Q2

'20

29

% 32

% 38

%

39

% 45

%

43

%

41

%

36

%

33

%

31

%

32

%

33

%

32

%

32

%

29

%

GROWTH RA TE CC

25,700 TTP CUSTOMERS

Financial Performance Customer Growth Products Introductions

77

Tech Platform

8

Cloud Native Architecture

1. Multi-tenant

2. Multi-product

3. Microservices

9

Mimecast’s Architectureis Unique SINGLE

INTEGRATED CODE BASE

DISPARATE CODE BASE PER PRODUCT

CORE SINGLE TENANT CORE MULTI TENANT

• Richer, better integrated

solution for customers

• Scales better operationally

for massive mid-market

• Strong leverage in our

business model

10

Scalable Infrastructure

Data as of December 31, 2018

• 12 data centers /6 locations

• 603 million emails delivered daily

• 337 billion emails managed

• Real-time threat intelligence

11

Discrete Product Introduction and Adoption3

5,1

00

20

,30

0

15

,20

0

5,7

00

3,6

00

25

,70

0

5,5

00

3,6

00

1,4

00

Security Continuity Archiving Archive Add-Ons

Large FileSending

Targeted ThreatProtection

SecureMessaging

Internal EmailProtection

AwarenessTraining

.

2004 - 2005 2010 2013 2014 2015

Q2 FY20 Customers Rounded to the Nearest 100

2017 2018

12

Targeted Threat Security, URL Protect,Attachment Protect, Impersonation Protect

Compliance Security, Data Loss Protection,Document Services

Email Continuity with 58 day retention

Email Archiving with 99 year retention

Products are Modular or Bundled

Add Ons: LFS, SM, IEP, APT, AT Bundle Bundle

13

• Protecting Employees and Data

• Shielding Infrastructure

• D-Dos, Spam, Malware, DLP

• Message routing and tracking

Core Email Security

Inbound

Outbound

14

TargetedThreatProtection (TTP)

TTP – URL Protect

with URL rewriting and dynamic user awareness

TTP – Attachment Protect

with file transcription, on-demand and pre-emptive sandboxing

TTP – Impersonation Protect

with dedicated detection of whaling and malware-less phishing

TTP – Internal Email Protect

with detection of lateral movements of attacksfrom one internal user to another

• A significant risk vector

• Spear-phishing

• Ransomware

• Whaling

15

Email Continuity

• Reduces the impact of downtime

• Protects during:

• Tech Failure

• Security Incident

• Maintenance

16

Multipurpose Data Archive

• Long term data preservation

• Storage Management

• E-discovery and Compliance

• Employee Productivity

1717

Market Drivers

18

Growing Cybersecurity Threats

Risk

Mission critical 20192000

Data Employees Infrastructure

hackmalware

breach

phishing

spam

downtime

19

Point Solutions vs Suites

• Single pane of glass

• Best of breed functionality

• Easy to deploy and manage

20

IT Moving to the Cloud2015

Market Adoption of Office 365

Business Impact of Breach / Outage

100%

• Cloud Security responds faster and is

cheaper

• Office 365® drives demand for Cloud

Security, Archive, Continuity

• Highly concentrated single vendor

vulnerability risk

2121

Large Market Opportunity

22

Total Addressable Market (TAM): $20 Billion

2021

23

Substantial Mid Market Opportunity

Source: 451 Research, March 2015 | Note: Middle Market (10-499 employees)Source: The Radicati Group, April 2015

Source: U.S. Small Business Administration, Office of Advocacy based on data provided by the U.S. Census Bureau, Statistics of U.S. Businesses (2011)

• SMB market under attack

• Limited IT resources

• Rapidly adopting cloud

24

Strong Mid-Market Franchise

5,000+

100 - 5000

1-999%

74%

17%

% of Revenue Q2 2020

25

Rafe Brown

Chief Financial Officer

Dino DiMarino

Chief Revenue Officer

John Walsh

SVP Engineering & Technical Operations

Joined Mimecast in 2019

Previously CFO and head of services and support at SevOne, CFO & CAO at Pegasystems Inc.. SVP of Finance at Salesforce.com


Previously held leadership roles at RSA, EMC and DELL


Previously held SVP of Engineering and CTO roles at Constant Contact, CareCloud, Tremor Video and Avid.

Peter Bauer

Chief Executive Officer

Co-founded Mimecast in 2003.

Previously Founded FAB Technology, and worked as a Microsoft systems engineer specializing in corporate messaging systems

Bob Nault

General Counsel


Previously, SVP, General Counsel, at Constant Contact. Led the legal team though tremendous growth, IPO and several acquisitions. SVP, General Counsel, RSA Security

Janet Levesque

SVP Systems, Risk& Security


Previously Chief Information Security Officer at RSA the security division of Dell/EMC

Christina Van Houten

Chief Strategy Officer


Previously held leadership roles at Oracle, IBM, Infor Global Solutions, Netezza and ProfitLogic

World-Class Management Team

2626

Business Model

27

Financial Highlights

On average customers have 3.2 services

98% Recurring Revenue

Revenue Retention Rate 110%

Demonstrated Profitability

34% RevenueCAGR FY16-19

24% Customer growthCAGR FY16-19

28

Revenue GrowthYearly Revenue

($ millions)

Quarterly Revenue

($ millions)

$142

$187

$262

$340

2016 2017 2018 2019

$37$41

$44$48

$52$58

$63 $67

$73 $78

$82 $88

$92 $99

$103

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2016 2020Note: CAGR calculated on actual FX rates.

29

Highly Diverse Revenue BaseGeographic DiversityVertical Market Diversity

Note: Q2 FY2020 ended September 30, 2019

Professional Services14%

Finance and Insurance

14%

Legal Services10%

Manufacturing11%Health Care

9%

Construction6%

Government6%

Retail5%

Transportation 4%

Information4%

Real Estate 3%

Other14%

United States

52%

United Kingdom28%

Africa12%

Rest of World8%

30

Growing Customer Base With Multiple Services

Multiple services benefit customers

Customers and services they use Q2 2020

Customers (thousands)

14

%

40

%

27

%

20

%

31 2 4+

Number of services per customer Q2 2020

18.0

26.4

30.4

34.4

FY16 FY17 FY18 FY19

35

,10

0

25

,70

0

20

,30

0

15

,20

0

5,7

00

5,5

00

3,6

00

3,6

00

1,4

00

Secu

rity

TTP

Co

nti

nu

ity

Arc

hiv

ing

PT

SM LFS

IEP

AT

31

How We Sell

SMB and

MSPs

Channel Strategy

Frictionless High Velocity

Inside Sales

Larger Customer Coverage

National Partners

Channel Heavy

Direct & Channel

Leverage SIs

SalesStrategy

SaaS Fundamentals

5,000+

Employees

100-5,000

Employees

1-99

Employees9%

74%

17%

% of RevenueQ2 2020

ScalableEase of IntegrationSaaS ModelSubscription paymentAnnual Contracts Modular Product Offerings

32

Gross Margin

Adjusted EBITDA margin

70%

73%

72%

73%

74% 74% 74% 74%

73% 73% 73% 73% 73%

74%

75%


1.3%

4.5%6.2% 7.6% 6.8%

8.8%10.5%10.0% 9.8%

12.7%15.0%

18.2% 17.1%

13.6%

19.3%


20202016

2016 2020

• Attractive Financial Profile

• Investing In Growth

33

Significant Upsell Potential

Q2 2020 Revenue Retention Rate Annual Revenue Retention Rate

109%

111%

110%

111%

FY16 FY17 FY18 FY19

100%

(6%)

16% 110%

Note: Rounded to the nearest percent

34

FY16 FY17 FY18 FY19 Q1’20 Q2’20 Long-term

Gross Margin

71% 73% 73% 73% 74% 75% 72-75%

R&D % Rev. 12% 12% 15% 17% 20% 19%

S&M % Rev. 46% 52% 46% 41% 44% 40%

G&A % Rev. 14% 15% 14% 16% 16% 16%

Adj. EBITDA 11% 6% 10% 16% 14% 19% 20-22%

Note: Fiscal Year Ends March 31

Long-term Target Model

3-5 years from IPO at$350-$450 mill in revenue

35

Q2 FY 2020 Highlights

800 net new customers in Q2

Revenue retention rate 110%Constant currency revenue growth of 29% YoY to $103.4m

Gross profit 75%

Positive adjusted EBITDA of $20.0 million

Note: FY2019 ended March 31, 2019

36

Second Quarter | 2020

Investor Presentation

second quarter | 2020 investor presentation...these non-gaap financial measures are in addition to,...

Documents