Mattersight 8-K Mattersight Announces First Quarter 2012 Results

Mattersight Q1 2012

Earnings Webinar

May 10, 2012

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 December 31, 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.

Business Update

•

Strong Revenue Performance

•

Significant Margin Improvement

•

Solid Bookings

•

Record Pilot Activity

•

20% Sequential Increase in Total Pipeline

•

Strong Interest in Predictive Routing in Predictive Models

•

Rapidly Growing Interest in Big Data Solutions

•

Pause in Revenue Growth in Q2

3

Q1 Highlights

•

Grew Subscription Revs 7% sequentially and 53% yr/yr to $7.2 million

•

Improved

Gross

Margins

500

bps

sequentially

and

900

bps

yr/yr

to

62%

•

Improved

operating

performance

by

500

bps

sequentially

and

3,600

bps

yr/yr

•

Closed a record 7 new Pilots

•

Converted 2 existing Pilots

•

Increased total Pilots to a record 13

•

Signed $8.0 million of Managed Services contracts, and ended Q1 with $94.6

million in Backlog

•

Continued growth in key pipeline metrics

•

Experienced strong demand for Predictive Models and Predictive Routing

4

Income Statement Analysis

Category

Q1                       

2011

Q1                       

2012

Change

Subscription

Revenues

$4.7m

$7.2m

53%

Total Revenues

$6.5m

$8.9m

37%

Gross Margin %

53%

62%

9%

Sales & Marketing

Expense %

25%

30%

(5%)

Development

Expense %

36%

21%

15%

G&A                  

Expense %

34%

17%

17%

EBITDA %

(42%)

(6%)

36%

5

Comments

•

57% of Q1 Subscription Revenue growth came from up-selling existing accounts

•

We remain <20% penetrated at existing accounts

•

Subscription GM was ~69% in Q1

•

We believe target gross margins can expand to 70%

•

Reviewing level of Sales/Marketing and Development expenses in light of market

opportunity and momentum

Year/Year

Significant Progress Ramping Up Our Sales and

Marketing Engine

•

Total Pipeline up ~3X

•

New Logo Pipeline up ~4X

•

Total Pilots up ~4X

•

New Logo Pilots up 5X

•

Predictive Model, Predictive Routing and Multi-Channel Pilots

up ~4X

•

Quota Carriers up from 7 to 17

•

Hired 2 strong RVP’s

6

Q1 Bookings Review

Deal                         

Type

Application

Customer       

Type

Industry

Comments

Pilot Conversion

Sales Analytics

Existing

P&C

Pilot Conversion

Back Office

Analytics

Existing

HMO

2

nd

Back Office

Deployment

Existing Account

Expansion

Predictive Routing

Existing

Pharma

1

st

Production Deployment

of Predictive Routing

New Pilot

Customer

Service

New Logo*

Mutual Fund

Top 3 Mutual Fund

Company

New Pilot

Enrollment

Analytics

New Logo*

Private Sector

University

Top 3 Private Sector

University

New Pilot

Customer Service

Existing

HMO

New Pilot

Predictive CSAT

Model

Existing

P&C

New Pilot

Predictive Attrition

Model

Existing

P&C

New Pilot

Predictive Promise

to Pay Model

Existing

Fin Services

New Pilot

Multi Channel

Analytics

Existing

HMO

1

st

Multi Channel Analytics

Pilot

7

*In addition, we have signed 2 new logos Q2 to date

Pilot Activity

8

*Includes signing of 2 new Pilots Q2 to date

Pilot Analysis

Pilot Type

Q2 to Date

2012

Q1                               

2012

2011

New Logos

Pilots

5

3

1

Predictive

Model Pilots

4

4

2

Predictive

Routing Pilots

1

1

0

Other Account

Expansion Pilots

5

5

1

Total

15

13

4

9

Q1

Pipeline Overview

10

Total Pipeline…January 2011 = 100

The 20% Q1 sequential pipeline increase is primarily driven by conversion

opportunities associated with new logo pilots

Backlog (in Millions)

11

$84.5

$80.1

$100.0

$102.3

$96.3

$94.6

$ -

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Predictive Models and Predictive Routing

•

Predictive Models

–

Overview

•

Predictive Models use our data to predict future customer behavior

•

Sample models:  CSAT; Attrition; Sales; Promise to Pay

–

Predictive Model Status

•

Signed Pilots to create 4 Predictive Models in Q1 for existing customers

•

Predictive Models are also embedded in 3 of our 5 New Logo Pilots

•

Predictive Routing

–

Overview

•

Predictive Routing uses our data to drive advanced call routing

•

Sample use cases:  route to the most efficient CSR;  route to the CSR with

the highest CSAT score/sales score; etc.

–

Predictive Routing Status

•

Signed 1  production deployment in Q1

•

Pursuing Pilot proposals at 4 other existing clients

•

Strategic Significance

–

Increases the value of our data

–

New products attack a complete green field opportunity/positioning

12

st

Emerging Interest in Big Data

•

What is Big Data?

High Volume

High Velocity…constantly streamed data

Variety…new kinds of data, e.g. calls, emails, desktop usage, other

structured/unstructured data

•

How to Make Big Data Valuable?

Most of this new data is of low value without structure and insight

Structure and insight is required to create value from big data

•

Mattersight Big Data Credentials

Capture

70

trillion

call

and

desktop

usage

data

attributes

daily

Apply

over

2

million

algorithms

to

every

interaction

Execute

250

billion

algorithmic

computations

daily

Process

350

TB

of

raw

and

analyzed

data

a

day

Invested

500

Man

Years

building

algorithms

and

a

robust

data

model

in

the

Cloud

Using Hadoop and Mongo DB

•

Our Emerging Big Data Solutions

Multi-Channel customer experience

Advanced Fraud detection

13

Splunk Discussion

Splunk

Mattersight

Comments

Target Application Area

System Performance

Customer Interactions

Target Market Size

$32B

$10B+

Product Overview

Analysis of Machine Data

Analysis of Customer

Interactions

Business Model

License/SaaS

SaaS+

Mattersight Business

Monitoring Teams Work 

Closely With Clients to

Drive Business Value

Target Buyer

IT

Business Executive

Proprietary Algorithms

No

2m-3m

Rev/Customer/Year

$30k

$1.5m

Indicative We Are Solving

a More Strategic Problem

Revenue Scale

$120m

$35m+

Gross Margins

90%

62%

At Similar Revenue Scale

as Splunk We Would

Expect to Be 70%+

Sales and Marketing

Expenses

61%

30%

Operating Margins

(4%)

(6%)

A Similar Revenue Scale

as Splunk We Would

Expect to Be 20%+

14

Q2 Revenue Growth Pause/Outlook

•

Q2 Revenue Growth Pause

Q2 Subscription Revenues are expected to decrease slightly

Q2 revenues will be adversely impacted by the non-renewal of one

contract and the timing of layering on of new revenues

•

Positive Outlook

Q2 Subscription revs are expected to up ~40% yr/yr

Record number of Pilots

Strong pipeline growth

Expect to regain sequential momentum in Q3 and Q4

90%+ customer retention and strong up-sell metrics rate

underscore value of our analytics and customer stickiness

•

Focus to Drive Consistent Growth

Pilot growth and conversions

Closing significant expansions at several existing accounts

Continuing to expand our sales team and marketing campaigns to

take advantage of the opportunity and our momentum

15

Q2 Guidance and Summary

16

Outlook

17

•

$7.0 million in Q2 Subscription Revenues

•

$8.4 million in Total Revenues

8K Filing

•

Earlier today we announced in a Form 8-K that we will be restating

our Statement of Operations for the three year period ending

December 31, 2011 to correct the calculation of Basic and Diluted

Earnings Per Share for Loss from Continuing Operations

•

We incorrectly omitted the impact of Series B Preferred dividends

and

other

distributions

related

to

the

Series

B

Preferred

shares

in

this calculation

•

All other previously reported Financial information is correct

•

The Earnings Per Share for Loss from Continuing Operations

included in our Earnings Release issued today correctly reflect the

impact of the Series B Preferred dividends

18

Large, Untapped Market

•

US TAM of $10b+ per year

•

<5% penetrated

Large Opportunity with Existing Customers

•

Existing

customer

opportunity

~$200

million

•

<20%

penetrated

Sticky Customer Relationships

•

Avg.

contract

term

of

3+

years

•

Leading

companies

across

numerous

verticals

•

90+%

revenue

retention

rate

•

Large

backlog

Investment Highlights

19

We Drive Significant Customer Value

•

Avg.

ROI

to

customers

of

3x

to

5x

•

Positive Current Developments

•

Approaching $40m revenue run rate

•

Increasing Pipeline and operating leverage

Unique Analytics, SaaS+ Model

•

Best

in

class

customer

interaction

analytics

•

Significant

value

on

top

of

traditional

SaaS

•

Emerging

leader

in

Big

Customer

Data

Up/Cross-sell driving 20%-30% rev growth

20

Thank You

•

Kelly Conway

–

847.582.7200

–

kelly.conway@mattersight.com

•

Bill Noon

–

847.582.7019

–

bill.noon@mattersight.com