Slide 1: OpenText Investor Presentation
OpenText Investor Presentation November 2, 2023 NASDAQ: OTEX | TSX: OTEX
Slide 2: Safe Harbor and IP Statement
Safe Harbor and IP Statement This presentation contains forward-looking statements or information (forward-looking statements) within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act), Section 2
Slide 3: Our Business
Our Business © 2023 Open Text 3
Slide 4: OpenText Snapshot
OpenText Snapshot Global Leader in Information Management Information Management TAM opentext.ai Targets & Aspirations Total In Constant F’24 F’26 Information Management Addressable Currency(2) Targets Aspirations Market(1) Proven Content Key Management technology Process Enterprise Cloud Content Ma
Slide 5: OpenText Business System
OpenText Business System Expand Our Competitive Advantage: It’s Who We Are and How We Do What We Do Our Shared Purpose in Information Management To elevate every person and every organization to gain the information advantage Our System OpenText Fundamentals • Market leadership • Operational excelle
Slide 6: OpenText: We Power and Protect Information
OpenText: We Power and Protect Information The Most Comprehensive Information Management Platform Content Management AI and Analytics Business We make information more: Network ✓ Accessible ✓ Useful Public Public Internet Internet ✓ Valuable ✓ Secure Application Cybersecurity Automation IT Operation
Slide 7: Information Management is Essential for AI Disruption
Information Management is Essential for AI Disruption Automation and a Data Platform are Prerequisites for an AI Strategy Information Trusted Learning Models Automation Data & Algorithms © 2023 Open Text 7
Slide 8: Information Automation: Our Competitive Advantage
Information Automation: Our Competitive Advantage Customers Trust OpenText to Power and Protect their Data Data of Any Type Automation and Connectors Content Management Engines Large Data Sets 100s of Connectors Structured / Unstructured Governance and Retention Human / Machine Large trusted custome
Slide 9: Trusted Data
Trusted Data We Manage Some of the World’s Largest Data Sets Ingest All Data Types Manage Large Data Sets • Documents Vertica: 96 Trillion rows across multi-nodes • Video / Voice / Images Content: 1 Trillion Pages managed • Collaboration • Records Content: 1 Billion Pages processed a day • Archives
Slide 10: We are Positioned to Win in AI
We are Positioned to Win in AI Automation and a Data Platform are Prerequisites for an AI Strategy Data of Any Type Organized for Insight and Information Advantage Automation and 100s Customer Data Sets AI & Analytics Engines Insights LLMs OpenText Aviators of connectors 100s of connectors Visualiza
Slide 11: OpenText Aviator Offerings
OpenText Aviator Offerings Automation & AI Built To Work Together Now! Cloud Editions 23.4 Aviator Thrust and Cybersecurity IT Operations Aviator Platform DevOps Aviator Thrust Studio Aviator Aviator Cloud Editions 24.1 Business Network Content Aviator Experience Aviator IoT Aviator Aviator Search A
Slide 12: How We Create Value
How We Create Value © 2023 Open Text 12
Slide 13: How We Create Value
How We Create Value Shifting from Growth Driven by M&A to Growth from Product Innovation and Go-to-Market execution Expand our Competitive Advantage in Information Management Capital Growth Profitability Allocation • Expand customer consumption • Realize higher profits and • Return value to sharehol
Slide 14: Investments in Innovation Driving Cloud and ARR Organic Growth
Expand Our Competitive Advantage in Information Management Investments in Innovation Driving Cloud and ARR Organic Growth Growing Innovation Investment Organic Growth(1) F’26 Aspirations $1,000 16% Cloud Organic 5% 7% to 9% R&D (as % of Revenues) $900 Growth in CC(2) R&D (USD$ millions) $800 15% Org
Slide 15: 80% of Our Investments are in Cloud Technologies
Expand Our Competitive Advantage in Information Management 80% of Our Investments are in Cloud Technologies Platform for OpenText Cloud Offerings Cloudification of OpenText AI and Cloudification of Micro Focus Cloud Editions Titanium Titanium X 2020 2022 2023 90-day Release Cycles 7,500+ Engineers 3
Slide 16: Growth: Expand Customer Consumption
Growth: Expand Customer Consumption Unlock New Value in SaaS and AI Strategic Growth Initiatives Across Our Business Clouds Content Business Application IT Operations AI & Analytics Cybersecurity Management Network Automation Management Complete Customer deployment choice: Off-cloud, Private cloud,
Slide 17: Top Growth Drivers by Business and Leading Products
Growth: Expand Customer Consumption Top Growth Drivers by Business and Leading Products Business IT Operations Content Management Application Automation AI & Analytics Cybersecurity Network Management Product to platform GreenOps IDOL AI and LLMs Mid-market LLMs End-to-End monitoring IoT as a Servic
Slide 18: Growth: Through Expanded Go-To-Market
Growth: Through Expanded Go-To-Market TM OpenText L.O.V.E. Model Our Approach to Engaging Customers and Partners Our large Strategic Partners inclusive of SAP, Top Microsoft, Google, AWS, Accenture and more Strategic Accounts 250 Strategic Partners Enterprise Accounts G10K • MSP • Strategic Service
Slide 19: Realize Higher Profits and Cash Flows From Higher Revenues
Realize Higher Profits and Cash Flows From Higher Revenues Revenues A-EBITDA(1) Free Cash Flows(1) $6.2B to $1.5B+ 36% $2.5B $6.4B to 38% 38% to 40% 40% 36% • Efficiencies realized by scaled margin to 32.5% 38% operations $4.5B to 129% 67% 33.5% • Extreme automation $1.5B $655M • New AI opportunitie
Slide 20: Return Value to Shareholders via Capital Allocation
Return Value to Shareholders via Capital Allocation Approximately $2.2B returned to shareholders since F’13 (1) Dividends Paid (US$M) Historical Share Buybacks (US$M) Dividend Program $273 $260 • 20% of TTM Free Cash Flows(4) $238 $360M+ $211 $189 $169 Future Share $146 Cumulative F’13 to F’23 $121
Slide 21: Total Growth Model: Cloud and ARR growth
Total Growth Model: Cloud and ARR growth F’26 Aspirations in Constant Currency 15%+ Enterprise Cloud Bookings(1) Growth Cloud Organic Revenue Growth(2) Future Total 77% to 7% to 9% + M&A = Growth 79% ARR as % of Total ARR Growth(3) Revenues 2% to 4% + Margin Expansion + Dividend + Buyback = Return t
Slide 22: Financial Results
Financial Results © 2023 Open Text 22
Slide 23: Record Q1 F'24 Summary
Record Q1 F’24 Summary Total Cloud Annual Revenues Revenues Recurring Revenues(1) $1.43B $451M $1.15B +67% Y/Y +11% Y/Y +59% Y/Y Cloud Annual Recurring A-EBITDA Margin(2) Renewal Rate(3) Revenues(1) 34.7% 94% 81% +63% Y/Y % of revenues (in A-EBITDA $) (1), (2), (3), See Slide Notes © 2023 Open Text
Slide 24: Q1 F'24 and TTM Financial Highlights
Q1 F’24 and TTM Financial Highlights (with Y/Y comparisons) (1) Q1 Enterprise Cloud Bookings of $121M; TTM of $537M Q1 F’24 TTM for period ended Q1 F’24 $1.43B 67.3% $5.06B 44.0% Total Revenues (2) Total Revenues $1.41B in CC 65.4% in CC $5.14B in CC 46.2% in CC ARR(3) $1.15B 59.1% ARR $4.04B 39.6%
Slide 25: Q1 F'24 Customer Wins
Q1 F’24 Customer Wins IT Operations AI & Analytics AI & Analytics Application Automation Content IT Operations Management Management Global leader in aviation Major insurance corporation A New Delhi-based non-profit, State-owned development Leading exploration and Offers phone, internet and non-gove
Slide 26: Cash Flows and Balance Sheet
Cash Flows and Balance Sheet Debt Maturity Profile (USD$M)(1) (as of 09/30/23) Cash (USD$M) (as of 09/30/2023) Term Loan B Planned Debt Reduction of Acquisition Term Loan at least $175M/quarter 900 Total Cash $920 Senior Secured Notes Senior Notes Reflects $75M TTM Q1 F’24 (USD$M) Micro Focus Transa
Slide 27: Renewals and Customer Organization
Renewals and Customer Organization(1) Centralized & Highly-Focused Information Management Renewals Organization $4B 80% 90% 160K 600 Q1 TTM Annual Recurring ARR as a percent of Q1 Customer Support Agreements Renewal Professionals Revenues(2) TTM Total Revenues Non-GAAP Margins Bring Micro Focus to O
Slide 28: Outlook
Outlook © 2023 Open Text 28
Slide 29: Q2 F'24 Quarterly Factors
Q2 F’24 Quarterly Factors Externalities Company Specific • Geopolitical Expect Q2 Y/Y Revenues in constant currency: • Recession risk • Total revenues of $1.45B to $1.50B • Inflation • ARR(1) of $1.10B to $1.13B • FX tailwind of $10M to $15M Expect Q2 Y/Y A-EBITDA(2) in constant currency: • Margin b
Slide 30: F'24 Model and F'26 Target Model Aspirations
F’24 F’26 Target Model Aspirations (in constant currency) Medium-Term (1) (1) Updated F’23 F’23 Reported F’24E in CC(2) Reported F’24E in CC(2) $528 Ent. Cloud Bookings(3) (USD$M) and Growth Y/Y% 15%+ USD$M % of Rev % of Revenues Y/Y Growth 1.2% Organic CC(2) Growth(4) Y/Y% 1% to 2% $1,700 37.9% Clo
Slide 31: OpenText – Micro Focus Financial Integration Framework
OpenText – Micro Focus Financial Integration Framework(1) 2H F’23 1H F’24 2H F’24 1H F’25 2H F’25 F’26 Savings Workforce Adj. EBITDA reductions and Annualized Facilities $260M(3) Consolidation Cost Savings ($28M) FCF $400M Actioned A-EBITDA(2) Vendor consolidation, strategic procurement ($116M) Expe
Slide 32: F'26 Aspirations in Constant Currency
F’26 Aspirations in Constant Currency Enterprise Cloud Bookings Growth(1),(2) 15%+ Expanded Consumption, SaaS, AI and Titanium X Cloud Organic Revenue Growth(1),(3) 7% to 9% Continued Information Management momentum New ARR Organic Growth(4) 2% to 4% ARR 77% to 79% (of Total Revenues) Total Organic
Slide 33: Our 2030 Pledge: OpenText Zero-In
Our 2030 Pledge: OpenText Zero-In • Committed to climate innovation Zero • Zero waste from operations by 2030 Footprint • Science-based emissions reduction target of 50% net reduction by 2030/net-zero by 2040 • Advance Equity, Diversity and Inclusion (ED&I): • Majority Diverse Zero • 50/50 for key r
Slide 34: Executive Leadership Team (ELT)
Executive Leadership Team (ELT) Sales & Demand Products & Customers Corporate Operations Ted James Prentiss Muhi Paul Madhu Shannon Michael Harrison McGourlay Donohue Majzoub Duggan Ranganathan Bell Acedo EVP, Enterprise EVP, International EVP, Cybersecurity EVP, Chief EVP, Chief EVP, CFO EVP, Chief
Slide 35: Slide Notes
Slide Notes Throughout this presentation, certain numbers are approximate and may not foot due to rounding. Slide 23 ------------------------------------------------------------------------------------------------------- Slide 30 ----------------------------------------------------------------------
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Slide 37: Appendix A: Use of Non-GAAP Financial Measures
Appendix A Use of Non-GAAP Financial Measures In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-GAAP).These Non-GAAP financial measures have certain limitations in that they do not h
Slide 38: Summary of Quarterly Results with Constant Currency
Summary of Quarterly Results with Constant Currency (1) See reconciliation of GAAP-based measures to Non-GAAP-based measures at the end of this presentation. (2) Please also see Note 14 to the Company's Fiscal 2018 Consolidated Financial Statements on Form 10-K. Reflective of the amount of net tax b
Slide 39: Reconciliation of Selected Non-GAAP Measures | Q1 FY'24
Reconciliation of Selected Non-GAAP Measures | Q1 FY'24 © 2023 Open Text 39
Slide 40: Reconciliation of Selected Non-GAAP Measures | Q1 FY'24
Reconciliation of Selected Non-GAAP Measures | Q1 FY'24 FOOTNOTES 1 Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results. Adjustment relates to the exclusion of a
Slide 41: Reconciliation of Selected Non-GAAP Measures | Q1 FY'23
Reconciliation of Selected Non-GAAP Measures | Q1 FY'23 © 2023 Open Text 41
Slide 42: Reconciliation of Selected Non-GAAP Measures | Q1 FY'23
Reconciliation of Selected Non-GAAP Measures | Q1 FY'23 FOOTNOTES 1 Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results. Adjustment relates to the exclusion of a
Slide 43: Reconciliation of Adjusted EBITDA and Free Cash Flows
Reconciliation of Adjusted EBITDA and Free Cash Flows © 2023 Open Text 43
Slide 44: Reconciliation of Adjusted EBITDA and Free Cash Flows
Reconciliation of Adjusted EBITDA and Free Cash Flows © 2023 Open Text 44
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