Mattersight 8-K Mattersight Announces Fourth Quarter 2011 Results

Mattersight Q4 2011

Earnings Webinar

February 15, 2012

1

Exhibit 99.2

2

Safe Harbor Language

During today’s call we will be making both historical and

forward-looking statements in order to help you better

understand our business.  These forward-looking statements

include references to our plans, intentions, expectations,

beliefs, strategies and objectives.  Any forward-looking

statements speak only as of today’s date.  In addition, these

forward-looking statements are subject to risks and

uncertainties that could cause actual results to differ

materially from those stated or implied by the forward-

looking statements.  The risks and uncertainties associated

with our business are highlighted in our filings with the SEC,

including our Annual Report filed on Form 10-K for the year

ended January 1, 2011, our quarterly reports on Form 10-Q,

as well as our press release issued earlier today.

Mattersight undertakes no obligation to publicly update or

revise any forward-looking statements in this call.  Also, be

advised that this call is being recorded and is copyrighted by

Mattersight Corporation.

3

Key Themes for Today’s Call

•

Strong Q4 Revenue Growth

•

Very Significant Improvement in Operating Performance

•

Increasing Pilot and Pipeline Activity

•

Releasing Exciting New Products

•

Positive Resolution of TCV Dispute

•

Bookings Continue to be Lumpy

Q4 Highlights

•

Revenues

Grew Subscription Revenues by 22% sequentially/30% year over year to $6.7

million

Grew Total revenues by 22% sequentially to $8.6 million

•

Bookings

Signed $2.3 million of Managed Services contracts

Ending Backlog was $96.3 million

•

Pilots

Signed three new pilots in Q4

Signed two new pilots Q1 to date

•

Operating Performance

Expanded Gross Margins by 300 bps

Improved operating performance by 1,800 bps

•

IGC Investment and TCV Settlement

Brought in Investor Growth Capital as a new strategic investor

Resolved dispute with TCV

4

Revenue Review

5

Revenue            

Type

Q4            

Actual

Sequential     

Change

Year/Year

Change

Subscription

Revenues

$6.7m

22%

30%

Amortized

Deployments

Fees and Add On

Consulting Revenues

$1.6m

24%

3%

Total

Behavioral

Analytics Revenues

$8.3m

23%

24%

Other Revenues

$0.3m

7%

-70%

Total

Revenues

$8.6m

22%

12%

Pilot Activity

6

*Includes two new pilots signed and existing pilot converted quarter to date

0

2

4

6

8

10

Q3                                  

2010

Q4                                 

2010

Q1                                   

2011

Q2                                 

2011

Q3                             

2011

Q4                                  

2011

Q1           

2012*

0

2

1

1

2

3

2

1

4

4

2

5

8

9

New Pilots

Total Pilots

7

Bookings and Pipeline Discussion

•

Q4 Commentary

Our Q4 bookings were adversely impacted by 3 contracts totaling ~$8.2 million which

were

approved,

but

for

which

we

did

not

complete

the

procurement

process

Two of these deals, totaling ~$6.0 million, have closed in Q1

•

Bookings Lumpiness

Our bookings

will

continue

to

be

lumpy

in

2012

based

on

the

size

and

maturity

of

our

team and the size of our deals

•

Pipeline Growth

Total Pipeline up 130%, year over year

New Logo Pipeline is up 300%, year over year

•

Salesforce Growth and Maturity

AE Tenure

# of AE’s

% of Pipeline

0-6 Months

4

4%

6 to 18 Months

7

40%

18 to 36 Months

2

13%

36+ Months

4

43%

Total

17

100%

Backlog (in Millions)

8

$58.9

$84.5

$80.1

$100.0

$102.3

$96.3

$-

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Revenue Retention rate is 95%

Average Term is 31 Months

New Product Overview:  Predictive CSAT and Predictive Routing

•

CSAT Predictive Analytics Product

Overview

Use Behavioral Analytics data to

create models to predict Customer

Satisfaction

•

Unique Technology

All interactions indexed to the

customer level

Leverage hundreds of new data

attributes automatically scored on

every interaction

•

Benefits/Positioning

Create CSAT score on all customer

interactions without the need for

customers to complete a survey

Produce large, statistically valid

samples

Drive actionable results down to the

employee level

•

Customer Activity

Sold a $1.3 million add-on at large

P&C client

Working on several other proposals

for new CSAT model pilots

•

Predictive Routing Product Overview

Use Behavioral Analytics to drive

customer routing decisions

•

Unique Technology

Leverage data in our Behavioral

Analytics Data Mart

Drive call routing using our Predictive

Routing Engine

•

Benefits/Positioning

Significantly improve efficiency by

routing customers to the best person

available based on performance data

Enhance the customer experience by

routing customers based on the data

from their previous interactions

•

Customer Activity

Successfully completed our initial pilot

project in Q4

Working on two deployment contracts

at existing clients

9

Discussion of Operating Results

10

Income Statement

Category

Q2                     

2011

Q3

2011

Q4   

2011

Target                        

Model

Comments

Subscription Revenues As a %

of Total Revenues

75%

78%

78%

90%

Subscription Revenues % Will

Continue to Grow in 2012

Gross Margin

52%

54%

57%

65%

Expect to See Further GM

Expansion in 2012

Sales and Marketing

31%

32%

30%

20%

Will Continue to Invest

Significantly in 2012

Development

27%

29%

21%

13%

Should Continue to Decrease as

% of Revs in 2012

Contribution Margin

-6%

-7%

6%

32%

G&A

29%

22%

17%

7%

Should Continue to Decrease as

% of Revs in 2012

Adjusted EBITDA

-35%

-29%

-11%

25%

Net of the IGC and TCV transactions, we generated ~$1.8 million in

cash in Q4

IGC Investment and TCV Settlement

•

IGC Investment

Bought $6 million in common stock from the company at $4.79/share

IGC also purchased 1.1 million shares of common stock directly from TCV

IGC currently own ~13% of Mattersight

IGC’s Investment Thesis

•

Large, nascent market

•

Strong customer references

•

Significant opportunity to build a rapidly growing SaaS analytics franchise

•

TCV Settlement

Mattersight purchased all of TCV’s Series B Preferred shares for $16.1 million

Paid

$12.5

million

of

this

amount

in

Q4;

the

remaining

amount

is

to

be

paid

by

the

end of 2012

•

Benefits of the Transactions

Settled the arbitration with TCV and eliminated the $18.1 million Restricted Cash

obligation

Reduced the number of fully diluted shares of Common Stock by 620,196 shares to

18,605,900

Eliminated $9.6 million of the $18.1 million liquidation preference relating to the

Series B Preferred Stock

Reduced the Company’s annual dividend obligation with respect to the Series B

Preferred Stock by approximately $675,000

Brought new capital into the Company from highly regarded, strategic investors

11

12

Q1 Guidance and Summary

Q1 Guidance

13

•

Subscription Revenues

6% Sequential growth

50% year over year growth

•

Total Revenues

5% sequential growth

37% year over year growth

14

Large, Untapped Market

•

US TAM of $5+ billion per year

•

<5% penetrated

Large Opportunity with Existing Customers

•

Existing customer opportunity ~$200 million

•

<15% penetrated

Sticky Customer Relationships

•

Avg. contract term of 3+ years

•

Top 3 retail bank, top 4 P&C companies, 3

of the top 5 HMOs, large Cable Co.

•

+95% revenue retention rate

•

Large backlog (~$100M)

Investment Highlights

We Drive Significant Customer Value

•

Avg. ROI to customers of 3x to 5x

•

Cross-sell/up-sell drives 30%+ rev growth

Positive Current Developments

•

Approaching $40 million revenue run rate

•

Added new, strategic investor

•

Increasing Pipeline and operating leverage

Unique Analytics, SaaS+ Model

•

Leader in conversational analytics

•

Significant value on top of traditional SaaS

•

We do all the heavy lifting for our clients

•

Our analytics teams are strategic advisors

•

Our data is used for comp and routing

15

Thank You

•

Kelly Conway

312.454.3579

•

Bill Noon

847.582.7019

bill.noon@mattersight.com

kelly.conway@mattersight.com