Icr conference 1.12.16 final

© 2015 XO GROUP INC. ALL RIGHTS RESERVED.

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This presentation may contain projections or other forward-looking statements regarding future events or our future financial performance or

estimates regarding third parties. These statements are only estimates or predictions and reflect our current beliefs and expectations. Actual

events or results may differ materially from those contained in the estimates, projections or forward-looking statements. It is routine for internal

projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and

beliefs upon which we base our expectations may change prior to the end of the quarter. Although these expectations may change, we will not

necessarily inform you if they do. Our policy is to provide expectations not more than once per quarter, and not to update that information until

the next quarter. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein

include, without limitation, (i) our online wedding-related and other websites, mobile and other digital properties may fail to generate sufficient

revenue to survive over the long term, (ii) we incurred losses for many years following our inception and may incur losses in the future, (iii) we

may be unable to adjust spending quickly enough to offset any unexpected revenue shortfall, (iv) efforts to launch new or upgrading existing

technology and features may not generate significant new revenue or may reduce revenue from existing services, (v) we may be unable to

develop solutions that generate revenue from advertising and other services delivered to mobile phones and wireless devices, (vi) the significant

fluctuation to which our quarterly revenue and operating results are subject, (vii) the seasonality of the wedding industry, (viii) our operations are

dependent on Internet search engine rankings, and our ability to influence those rankings is limited, (ix) the dependence of our registry and

commerce services business on third parties, (x) increased competition in our markets could reduce our market share, and (xi) other factors

detailed in documents we file from time to time with the Securities and Exchange Commission. Forward-looking statements in this release are

made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

This presentation includes certain "Non-GAAP financial information." A reconciliation of such information

the most directly comparable GAAP data can be found at the end of this presentation.

SAFE HARBOR


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• #1 online wedding property; growing baby property

• Replenishing audience in an attractive demographic

• Strong multi-platform brand built over 19 years

• Diversified revenue streams

• ~80% of the executive management team assembled

over the past 2.5 years

- ~50% of the broader leadership team assembled


• Revamped business operations

• Upgraded user products and underlying technology

• Expanding market opportunity with new offerings

• Balanced capital allocation while transforming business

• New double digit revenue growth target model

- Average revenue growth 2010 – YTD 9/30/2015 ~5%

• New adjusted EBITDA margin target of 20%+

- While investing in the company, delivered adjusted

EBITDA margin of 19% from 2014 - YTD 9/30/2015

INVESTMENT OPPORTUNITY


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TOGETHER.

transformative lifestages


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XO GROUP AT A GLANCE $103M YTD September 30, 2015 and Respective % of Revenue

*as of September 30, 2015

The Nest:

The Bump:

The Knot:

Local Online:

National Online:

Publishing + Other:

Guest and Commerce Transactions:

Merchandise (exited Q1 2015):

Full Year 2014 Revenue by Brand


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STRATEGIC TRANSFORMATION UNDERWAY

Focus, Leadership, Product & Operational Excellence

Revamped

executive &

leadership team

Evaluated & took

decisive action on

non-core assets

[Ijie (The Knot China) &

Merchandise operations]

Greatly improved

our product and

technology

Made capital

allocation a

priority and set

target financial

model


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MIKE STEIB Chief Executive Officer

Google Inc.

NBC Universal

McKinsey

GILLIAN MUNSON Chief Financial Officer

Allen & Co.

Symbol Technologies

Morgan Stanley

KRISTIN SAVILIA President, Local Marketplace

Linens ’n Things

Macy’s

NIC DI IORIO Chief Technology Officer

City 24/7 LLC

Interpublic Group

of Companies (IPG)

BRENT TWORETZKY EVP, Product

KATHY WU BRADY EVP, E-Commerce & Registry

DHANUSHA SIVAJEE EVP, Marketing

JENNIFER GARRETT EVP, National Enterprise

Viacom Inc.

Mayer Brown

AOL Brand Group

Bloomberg Mobile

HBO

Vente-Privee USA

AOL

NBC Universal

Udacity

Chegg

WebMD

MICHELLE DVORKIN EVP, Human Resources

AppNexus

Lot18

AOL

LEADERSHIP TEAM


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-10%

0%

10%

20%

2012 2013 2014 YTD 2015

Year-Over-Year Growth Rates

Revenue Non-GAAP Opex

In the midst of investment cycle:

operating expenses to grow at higher

rates than revenue growth rates

[2013-2014] Acqui-hired two award

winning mobile development teams (~$1M)

[2014] Acquired (~$5M)

[Q3 2015] Invested in & vendor

services company ($2.5M)

[Oct. 2015] Acquired (~$6M*)

INTERNAL

INVESTMENTS

STRATEGIC

ACQUISITIONS &

INVESTMENTS

OPPORTUNISTIC

STOCK

BUYBACKS

$20M authorization

Repurchased $1.6M during 2014

Repurchased $8.8 million year-to-date

through September 30, 2015

CAPITAL ALLOCATION PRIORITIES

* The total acquisition price for GigMasters is $8.5 million in cash for complete ownership of the company. Prior to the

acquisition, XO owned approximately 28 percent of GigMasters


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$14,006

$4,711

$4,350

$2,141

$1,973

$4,032

WEDDING MARKET

1 United States Census Bureau American Community Survey and The 2014 The Knot Market Intelligence’s Annual Real Weddings Survey 2 2014 Real Weddings Study

Avg. Cost Of A Wedding1

Includes engagement ring but does not include honeymoon

Local Wedding

Vendors

Annual Weddings

Per Year

Avg. Number Of

Guests Per Wedding

Wedding Industry

Market Size

Includes day -of wedding vendors, jewelry,

registry, honeymoon and other categories

Event/Wedding

Planner Venue

Band/

DJ

Photo/

Video

Florist

Avg. $ Spent In 2014 [Top 5 Wedding Verticals]2

Multiple Verticals


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THE KNOT: #1 IN WEDDINGS

Unique Visitor Source: comScore Multi Platform

0

0.6

0.7

1.9

2.3

4.3

10.0

Zola / Loverly / Appy Couple

Martha Stewart Weddings

MyWedding

Brides.com

Wedding Bee

Wedding Wire Network

The Knot Wedding Network

[+66%]

[(15%)]

[+53%]

[(19%)]

[+77%]

Does not meet minimum reporting requirements

Unique Visitors Monthly Average (In Millions) With Year-Over-Year % Growth [9 months ended September 30, 2015]


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IN ADDITION TO MAXIMIZING OUR MEDIA OPPORTUNITY, WE HAVE A LONG-TERM AMBITION TO UNLOCK A SIGNIFICANT

MARKET OPPORTUNITY WITH TRANSACTIONS.

Advertising

Market

Transactions

+ Advertising

* image is not intended reflect revenue projections or scale

Q3 Online Adverting Revenue Growth: +13% Y/Y

Q3 Transaction Revenue Growth: +40% Y/Y


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THE WEDDING OPPORTUNITY: TODAY

* image is not intended to reflect revenue projections or scale


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THE WEDDING OPPORTUNITY: TOMORROW


* Numbers reflect market size, not revenue projections

* Data based on internal projections and 2014 Real Weddings Study


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OUR 2015 PROGRESS The cost of love.


* Numbers reflect market size, not revenue projections

* Data based on internal projections and 2014 Real Weddings Study

* Leads data as of September 30, 2015


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THE BUMP: GROWING BABY PLATFORM

Unique Visitor Source: comScore Multi Platform;

*NCHS National Vital Health Statistics Reports and USDA report- expenditures on children **9 months ended as of September 30, 2015

9% of REVENUE Growing mobile user-base dramatically expands editorial and advertisers’ reach

with innovative products, services and expert advice


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The cost of love.

$MM 2008-

2013

FY

2014 2015 YTD Target Model

Net Revenue Y/Y Growth 5%

CAGR 7% (3%)*

Double digit

growth

Gross Margin % 81.0 %

avg. 85.2% 92.7% 90-95%

Adj. EBITDA Margin % 17.5%

avg. 17% 21% At least 20%

FINANCIAL MODEL

*2015 YTD Revenue Excluding Merchandise Operations, +10% Y/Y


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Revenue $34.7 $35.9

Gross Profit $32.7 $31.0

Margin 94.1% 86.4%

*Adjusted EBITDA $7.3 $7.1

Net Income $2.9 $2.1

Earnings per Diluted Share $0.11 $0.08

*Non-GAAP Earnings per Diluted Share $0.11 $0.09

Q3 UPDATE • Total revenue decreased 3% year-over-year

• Total revenue excluding exited Merchandise

operations increased 10.6% year-over-year

• Transactional businesses, including Registry

and Commerce, revenue increased 40%

year-over-year

• Non-GAAP operating expenses increased

2% year-over-year

• Adjusted EBITDA increased 2.9%

year-over-year; 21% Adj. EBITDA Margin

• $86.3 million in cash

• Used $2.5 million cash during the third quarter

to make investments in Jetaport, Inc. and a

vendor services company

*Non-GAAP, please see reconciliation at the end of this presentation

Cash and cash equivalents $86.3 $90.0

Other current assets 26.9 23.5

Total Assets 193.1 193.6

Debt --- ---

Current Liabilities 26.9 28.7

Total Liabilities 32.8 35.7

Total Liabilities and Stockholders’ Equity $193.1 $193.6


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• #1 online wedding property; growing baby property

• Replenishing audience in an attractive demographic

• Strong multi-platform brand built over 19 years

• Diversified revenue streams

• ~80% of the executive management team assembled


- ~50% of the broader leadership team assembled


• Revamped business operations

• Upgraded user products and underlying technology

• Expanding market opportunity with new offerings

• Balanced capital allocation while transforming business

• New double digit revenue growth target model

- Average revenue growth 2010 – YTD 9/30/2015 ~5%

• New adjusted EBITDA margin target of 20%+

- While investing in the company, delivered adjusted

EBITDA margin of 19% from 2014 - YTD 9/30/2015

INVESTMENT OPPORTUNITY


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Questions? Contact [email protected]


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Reconciliation of GAAP to NON-GAAP Financial Measures: Q3 2015 & YTD

9/30/2015

Icr conference 1.12.16 final

Investor Relations

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