Slide 1: FY2024 Half-Year Financial Results
Integrated Research Limited (ASX:IRI) FY2024 Half-Year Financial Results 22 February 2024 John Ruthven, CEO Matthew Walton, CFO
Slide 2: We are IR
We are IR A leading global software highly complex and company providing collaborate expanding communications performance and experience environments management solutions for the world’s mission increasingly complex and critical ecosystems. transact expanding global payments networks Real-time analy
Slide 3: Blue Chip Customer Base
Blue Chip Customer Base Long-term, high value relationships based on mission critical solutions Tech | Telco BFSI Health | Gov | Edu Retail |Industrial | Other 5/25 Fortune 500 top 5/20 largest Australian 5/10 top telcos 6/10 top US banks companies companies (market cap)
Slide 4: CEO Key Messages
CEO Key Messages Focus on growth leveraging improved working capital base 1. We have benefitted from the company’s strong renewal base and exercised cost discipline to improve profitability and cash. 2. Transact and Infrastructure performed strongly, up significantly on pcp bolstered by several larg
Slide 5: Half-Year Performance Review: Statutory (A$M)
Half-Year Performance Review: Statutory (A$M) TCV growth and expense reductions drive statutory results 38.4 40.8 31.7 32.4 CASH RECEIPTS FROM REVENUE 6% CUSTOMERS 2% Dec-22 Dec-23 Dec-22 Dec-23 11.0 8.5 NET OPERATING EBITDA 29% CASHFLOW 1.0 3.4 239% Dec-22 Dec-23 Dec-22 Dec-23 21.5 18.6 11.2 NPAT 3
Slide 6: Half-Year Performance Review: Proforma (A$M)
Half-Year Performance Review: Proforma (A$M) Proforma metrics are impacted by low new business and continued client/revenue churn 67.5 64.0 38.9 41.3 TOTAL CONTRACT ANNUAL RECURRING VALUE (TCV) 6% REVENUE 1 5% Dec-22 Dec-23 Dec-22 Dec-23 34.1 32.9 PROFORMA PROFORMA SUBSCRIPTION REVENUE 4% EBITDA 8.2
Slide 7: FY24 Key Priorities
FY24 Key Priorities YTD Summary Report Priority Status Notes Markets – continue growth momentum across all on plan YTD TCV is ahead of pcp, and growth expected for the regions full year. New business – win more new business and expand behind plan YTD, we have won 13 new customers, behind product foo
Slide 8: Financials
Financials
Slide 9: Revenue Analysis: TCV, Statutory, Proforma and RR
Revenue Analysis: TCV, Statutory, Proforma and RR High Collaborate churn weighing on recurring revenue 60.0 • Cloud related sales started in 2021, reason why TCV and statutory revenue gap narrowed from 2021 50.0 • Proforma subscription revenue 40.0 reflects recurring revenues • Continued decline in
Slide 10: Geographic and Product Revenue Analysis
Geographic and Product Revenue Analysis Transact shows steady period on period growth, regional growth impacted by Collaborate Geographic Asia Pacific revenue - A$M Europe revenue - £M Americas - US$M 20 10 30 15 8 20 6 10 4 10 5 2 0 0 0 H1'18 H1'19 H1'20 H1'21 H1'22 H1'23 H1'24 H1'18 H1'19 H1'20 H1
Slide 11: Revenue Analysis: ARR Summary
Revenue Analysis: ARR Summary Headwinds continue offsetting growth and tailwinds 80 70 0.4 0.7 A$M 67.5 4.3 2.1 1.9 0.7 64.0 60 ARR Jun 2023 New logos Upsell Collaborate Downsell Upsell T&I Downsell T&I Exchange rate ARR Dec 2023 Collaborate Collaborate • Total ARR decline of 5% to $64m driven by Co
Slide 12: Operating Costs
Operating Costs Disciplined cost management reduced total operating costs by 21% Product and Technology - A$M Sales and marketing - A$M General and administration - A$M 25 50% 25 53% 60% 25 30% 51% 20 40% 20 50% 20 25% 31% 20.2 19.0 40% 20% 15 30% 15 15 30% 15% 18% 11% 10 12.0 20% 10 10 20% 8% 10% 5
Slide 13: Half-Year Performance Review: Key Metrics
Half-Year Performance Review: Key Metrics High recurring revenue and long duration renewals Proforma Revenue Contract Life TCV Renewal & New 38.9m 41.3m 38.1m 37.3m 11% 51% 50% 12% 59% 79% 89% 88% 34% 35% 28% 11% 16% 15% 13% 10% Dec-22 Dec-23 Dec-22 Dec-23 Dec-22 Dec-23 Recurring Non Recurring 1 & 2
Slide 14: Net Cash Flow Analysis
Net Cash Flow Analysis Continued focus on disciplined cash management 60 32.4 27.7 50 40 30 1.3 A$M 0.5 21.5 20 18.6 10 0 Net cash Cash receipts from Cash paid to suppliers Income tax FX, Interest & other Net cash 30 June 2023 customers and employees 31 Dec 2023 • Cash paid to employees and • Cas •
Slide 15: EBITDA Cash Flow Bridge
EBITDA Cash Flow Bridge Debtor factoring complete and working capital improvement due to lower expenses and better collections 20 11.0 3.3 A$M Completed in 10 December 2023 7.7 2.1 0.9 1.3 3.4 0 EBITDA - statutory Over-time revenue Proforma EBITDA Historical debtor Working capital change Income taxe
Slide 16: Balance Sheet
Balance Sheet Strengthened cash balance Period Ended (as at) Jun 23 Dec 23 YoY A$M A$M Strong balance sheet with Cash and cash equivalents 18.6 21.5 16% Trade and other receivables net cash of $21.5M and no 63.5 68.1 7% Intangible assets debt. 0.0 0.0 - Right-of-use assets 0.0 0.3 - Trade receivable
Slide 17: Strategy & Product
Strategy & Product
Slide 18: Strategy progression
Strategy progression - embrace innovation: incubate new ideas, new technologies in a fast-fail environment - adjacent new products - enhance business model: & product enhancements optimise revenue model, GTM and development for high-growth - explore synergistic M&A opportunities - cash generation: $
Slide 19: Collaborate Customer Wins
Collaborate Customer Wins Providing assurance for the mission critical services of our customers Airbus (Europe) CDW SP (USA) 3-year term 3-year term New customer Renewal & expansion 110,000 users 135,000 users Solution: Collaborate UC Enterprise Server, Reporting Essentials, SBC, Solution: Full sui
Slide 20: Transact Customer Wins
Transact Customer Wins Ensuring reliability in today’s complex payments environments Fiserv Worldpay Network International LLC US, EU, LATAM, APAC United States Middle East 5-year term 5-year term 3-year term Renewal and Expansion Renewal Renewal and Expansion Solution: Transact and Infrastructure (
Slide 21: FY24 Key Priorities and Outlook
FY24 Key Priorities and Outlook
Slide 22: FY24 Observations
FY24 Observations Following the first half of FY24, IR makes the following observations regarding the current trading year: • Customer sentiment remains steady, reinforcing the cautious optimism around business growth. • Renewals book expected to exceed the prior year, weighted to the first half of
Slide 23: CEO Key Messages
CEO Key Messages Focus on growth leveraging improved working capital base 1. We have benefitted from the company’s strong renewal base and exercised cost discipline to improve profitability and cash. 2. Transact and Infrastructure performed strongly, up significantly on pcp bolstered by several larg
Slide 24: Disclaimer
Disclaimer SUMMARY INFORMATION FORWARD LOOKING STATEMENTS NOT AN OFFER This document and the associated transcript (together “the presentation”) has The presentation contains certain "forward-looking statements”. The words The presentation is for information purposes only and is not a prospectus, be
Slide 25: Appendix
Appendix
Slide 26: Annual Recurring Revenue - Analysis
Annual Recurring Revenue - Analysis APAC Americas Europe Consolidated YoY All Products AUD USD GBP AUD Growth • Overall FX headwind of 1%. Opening ARR 15.5 28.2 4.5 67.5 • All regions experienced FX gain/(loss) (0.7) -1% decline. New logos 0.2 0.1 0.0 0.4 1% Upsell 0.5 1.2 0.2 2.8 4% • Significant C
Slide 27: Interim proforma subscription revenue
Interim proforma subscription revenue Reconciliation of statutory to proforma revenue Interim revenue Dec-20 Dec-21 Dec-22 Dec-23 Dec-20 Dec-21 Dec-22 Dec-23 A$M A$M A$M A$M Infrastructure 9.7 9.1 9.4 9.3 (9%) (7%) 4% 0% Transact 5.0 5.3 5.5 6.2 1% 7% 3% 12% Collaborate 22.1 20.1 19.2 17.3 (8%) (9%)
Slide 28: Product TCV
Product TCV Strong renewals across all products, steady new business Collaborate – A$M Transact – A$M Infrastructure – A$M 17.0 14.5 7.4 2.3 10.9 11.8 12.2 8.1 9.6 8.6 0.7 1.3 2.1 1.4 10.2 10.5 6.5 6.7 Dec-22 Dec-23 Dec-22 Dec-23 Jun-22 Jun-23 Renewal New & Capacity Renewal New & Capacity Renewal Ne
Slide 29: Product TCV by Geography
Product TCV by Geography Growth in Americas APAC – A$M Americas – US$M Europe - £M 16.1 1.2 11.7 9.6 4.2 8.1 2.0 7.3 14.9 0.3 2.2 2.4 7.6 3.9 4.4 5.9 2.3 Dec-22 Dec-23 Dec-22 Dec-23 Dec-22 Dec-23 Renewal New & Capacity Renewal New & Capacity Renewal New & Capacity APAC, down 31%: Americas, up 68%: E
Slide 30: Proforma Subscription Revenue
Proforma Subscription Revenue APAC – A$M Americas – US$M Europe - £M 15.7 14.0 6.7 7.2 3.3 +0% 2.2 0% 6.1 6.2 1.1 4.1 4.1 1.0 -5% -3% 8.7 7.8 -10% 1.7 -32% 3.2 3.1 1.2 Dec-22 Dec-23 Dec-22 Dec-23 Dec-22 Dec-23 Collaborate T&I Collaborate T&I Collaborate T&I Collaborate – A$M Infrastructure – A$M Tra
Slide 31: Proforma Subscription Revenue
Proforma Subscription Revenue Purpose: To provide an alternate view of underlying performance by restating term licence and maintenance revenues on a recurring subscription basis. How: • All licence sales from FY2012 to FY2024 were analysed for each region in their natural currencies (the historic a
Slide 32: Glossary
Glossary Annual Recurring Revenue (ARR) equals to the monthly proforma subscription revenue at the end of the period multiplied by 12. Cash conversion rate equals cash receipts divided by proforma revenue. Customer retention equals the opening customer count for the reporting period less customers w