Slide 1: Investor Presentation
Investor Presentation November 3, 2022 NASDAQ: OTEX | TSX: OTEX OpenText ©2022 All rights reserved 1
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: Q1 Fiscal 2023 Financial Results
Q1 Fiscal 2023 Financial Results OpenText ©2022 All rights reserved 3
Slide 4: Q1 Fiscal 2023 Financial Highlights
Q1 Fiscal 2023 Financial Highlights with Y/Y comparisons Strong Quarterly Enterprise Cloud Bookings (1) of $112M up 37% Y/Y, TTM $496M up 36% Y/Y Q1 FY’23 Trailing Twelve Months (TTM) Ending Q1 FY’23 $852.0M 2.4% $3.51B 2.9% Total Revenues $891.8M in CC Total Revenues $3.61B in CC 7.1% in CC(2) 5.6%
Slide 5: Q1 FY'23 Customer Wins
Q1 FY’23 Customer Wins Business Content Network Services Water Board Hoogheemraadschap De Stichtse Rijnlanden is Fifth Third Bank is an Ohio-based financial institution with over a water board in the Netherlands maintaining dikes, clean $206 billion in assets. surface water and water levels. Product
Slide 6: Sustainable Growth Through Retention and Upgrades
Sustainable Growth Through Retention and Upgrades Annual Recurring Revenue Renewal Rate(1) (ARR) (US$M) $2,866 114% $1,337 Cloud Customer Support 94% 95% FY'15 FY'22 Customer satisfaction is a foundation for growth 1. For the quarter ended September 30, 2022. Excludes Carbonite and Zix. OpenText ©20
Slide 7: Strong Cash Flows and Balance Sheet
Strong Cash Flows and Balance Sheet Current Liquidity (US$) Trended Consolidated Net Leverage Ratio(2) Total Cash & Committed $2.45B Liquidity(1) Zix Acquisition Closing 2.1x 2.0x 1.9x 2.0x 1.8x TTM Q1 FY’23 (US$M) 1.6x 1.6x 1.5x 1.4x Operating Cash Flows $924 Less: CapEx $103 Q1 FY'21 Q2 FY'21 Q3 F
Slide 8: Outlook
Outlook OpenText ©2022 All rights reserved 8
Slide 9: Q2 FY'23 Quarterly Factors
Q2 FY’23 Quarterly Factors Externalities Company Specific(1) • Inflation, supply chain and macroeconomic • Expect Q2 Y/Y Revenue in constant currency: • Strength of US dollar • Total revenues up 4% to 5% • Cloud revenues up 12% to 14% • Geopolitical (Russia) • ARR up 6% to 7% • FX revenue headwind o
Slide 10: FY'23 OpenText Total Growth Strategy
FY’23 OpenText Total Growth Strategy Updated! Estimated F’23 FX revenue headwind of $160M to $170M F’22 Actual(1) Y-Y Expected Growth(3) in Constant Currency $465.8 Enterprise Cloud Bookings(2) 15%+ $1,535.0 Cloud Revenue 8% to 10% $1,331.0 Customer Support Revenue Constant $2,866.0 ARR 4% to 5% $35
Slide 11: FY'23 Target Model
FY’23 Target Model Updated! Fiscal 2022 Actuals Fiscal 2023 Model(3,4) Revenue Type: Cloud Services and Subscriptions 43.9% 46% - 48% Customer Support 38.1% 35% - 37% Annual Recurring Revenue (ARR) 82.0% 82% - 84% License 10.3% 8% - 10% Professional Services and Other 7.7% 7% - 9% Non-GAAP Gross Mar
Slide 12: FY'25 Medium-Term Aspirations Constant Currency
FY’25 Medium-Term Aspirations Constant Currency(1) Enterprise Cloud Bookings Growth(2) 15%+ Cloud Editions (CE), private cloud expertise, APIs, Titanium Organic Revenue Growth(3) 2% to 4% Strategic GROW with OpenText programs Cloud Organic Revenue Growth(3) 6% to 8% Efficient conversion of cloud boo
Slide 13: Strong Track Record of Shareholder Returns
Strong Track Record of Shareholder Returns Approximately $1.7B returned to shareholders since FY’13 Dividends Paid and Shares Repurchased (US$M) Shares Repurchased Dividends $177.0 Dividends Paid (CAGR(2)): 33% $119.1 $65.5 $237.7 $210.7 $188.7 $168.9 $145.6 $120.6 $87.6 $99.3 $74.7 $17.7 FY'13 FY'1
Slide 14: Free Cash Flow and Capital Allocation
Free Cash Flow and Capital Allocation(1) OpenText pre-acquisition FCF Dividend Program(4)(5) F’23E(2)(3) F’25E(2)(3) Approximately 20% of TTM Free Cash Flows $725M FCF(3) to $1.1B $1.35B returned to $750M shareholders since F’13 Continued high FCF as % conversion from Share buyback to be Low of Tota
Slide 15: Micro Focus Update
Micro Focus Update Commitments Closing Update As announced on August 25, 2022(1) Return Micro Focus to organic growth Micro Focus shareholders approved all cash acquisition by OpenText on October 18, 2022. Accelerate Micro Focus cloud growth and improve Micro Focus renewals The Acquisition is expect
Slide 16: Our Business
Our Business OpenText ©2022 All rights reserved 16
Slide 17: OpenText: The Information Company
OpenText: The Information Company A 30-Year Track Record of Market Expansion and Value Creation Our Mission: 2023 We power and protect information Micro Focus(1) 2021 Zix: a top Our Purpose: 2022 Microsoft SMB/C partner Titanium To elevate every person and every organization to Value creation gain t
Slide 18: OpenText ©2022 All rights reserved
OpenText ©2022 All rights reserved 18
Slide 19: Business 2030
Business 2030 Every Industry Digitally Transformed Through Information and Software Human Centric Work and Workforces Acceleration • Generation Y/Z will dominate the workforce • Financial Services, Retail, CPG, Bio Tech, and expectations Healthcare, Smart Cities, Manufacturing • Believe in work and
Slide 20: OpenText Information Vision for Business 2030
OpenText Information Vision for Business 2030 Bot People IoT Assets AR/VR INTERNAL INFORMATION EXTERNAL Mobile Connected PROCESSES PROCESSES Processes CORE Clouds Sales & Services Machines Innovation Customers, Suppliers, Eco-Systems Intelligent Connected Responsible OpenText ©2022 All rights reserv
Slide 21: Cloud Editions, Titanium and Business 2030
Cloud Editions, Titanium and Business 2030 Business 2030 Titanium • Information Company • Software Company • New Requirements Cloud • New Workforces Editions • Intelligent • AI • Connected • Responsible R11 R16 Digital Foundation • Business Cloud • 4 Ways to Consume • Business Data Integration Autom
Slide 22: Titanium: The OpenText Cloud Platform
Titanium: The OpenText Cloud Platform Developer Scaled Cloud OpenText Zone Ecosystems OpenText Zone | Single Sign-On | Learn, Try, Buy | Provision & Support | Resources & Enablement | Renewals Content APIs Run Anywhere | Off-Cloud | Private Cloud | Public Cloud | API Business Network APIs Digital Ex
Slide 23: Our Vision is Clear in Information Management
Our Vision is Clear in Information Management Business Clouds OpenText Zone Resources & Content Capture & Ecosystem Data Single Sign-On Digital Business Industrial IoT Enablement Management Archiving Integrations Management & Integration Solutions Security Identify & Collaboration & Industry Supply
Slide 24: Comprehensive Go-To-Market
Comprehensive Go-To-Market Target Organizations Go-to-Market Motions OpenText Large Direct Sales 3,000+ Enterprise Global Accounts field facing Enterprise Accounts professionals 1,000+ employees Corporate Accounts Mid-Market Strategic Partners Strategic partners Enterprise 1M+ trading partners 500-9
Slide 25: Partners and the OpenText Cloud Zone: Our Force Multiplier
Partners and the OpenText Cloud Zone: Our Force Multiplier 22,000+ • • MSPs Top cloud & Public cloud • Leading partnership off-cloud partner partnership with SMB/C • Highest growth • Joint GTM with cloud Workspace A new digital resource zone for OpenText customers New Evaluate > Use > Procure > Supp
Slide 26: Strong Track Record of Financial Performance
Strong Track Record of Financial Performance Annual Recurring Total Revenues Cloud Revenue A-EBITDA(1) Free Cash Flows(1) Revenue (US$M) (US$M) (US$M) (US$M) (US$M) $1,535 $889 $1,265 $3,494 $2,866 $0 to 189% 337% $1.5B 260% 269% $241 $1,207 $351 $657 $0 FY'12 FY'22 FY'12 FY'22 FY'12 FY'22 FY'12 FY'
Slide 27: How We Create Value
How We Create Value Proven Track Record of Above Market Growth, Upper Quartile Profitability and FCF Returns Total Revenue Model Value Creation Growth • Organic growth, led by cloud Total Revenue Growth • Acquired growth 11% • High recurring revenues 10-yr Revenue CAGR (FY’13-FY’22) Value Profitabil
Slide 28: OpenText Zero-In. Our 2030 Pledge.
OpenText Zero-In. Our 2030 Pledge. The future is inclusive and sustainable • Help our customers digitize Zero • Zero waste from operations by 2030 • Science-based emissions reduction target of Footprint 50% net reduction by 2030/net-zero by 2040 • Advance Equity, Diversity and Inclusion (ED&I): • Ma
Slide 29: Be a Climate Innovator
The 1% Challenge Be a Climate Innovator 3 Trillion Trees in the world A tree produces 10,000 pages of paper Information Management can save 1% of the world’s trees by 2030 … by eliminating 300 Trillion Printed Pages ! OpenText ©2022 All rights reserved 29
Slide 30: Deeply Talented and Experienced Leadership Team
Deeply Talented and Experienced Leadership Team Mark J. Madhu Muhi Ted James Prentiss Kristina Barrenechea Ranganathan Majzoub Harrison McGourlay Donohue Lengyel CEO & CTO EVP, CFO EVP, EVP, EVP, EVP, EVP, Menlo Park, CA Menlo Park, CA Chief Product Officer Enterprise Sales International Sales SMB/C
Slide 31: Appendix A: Use of Non-GAAP Financial Measures
Appendix A Use of Non-GAAP Financial Measures In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-GAAP).These Non-GAAP financial measures have certain limitations in that they do not h
Slide 32: Appendix
Appendix OpenText ©2022 All rights reserved 32
Slide 33: Organic Growth
Organic Growth Fiscal 2022 FX Headwind / In US$ billions (unless indicated otherwise) Reported CC(1) (Tailwind) Total Revenues $3.49 $0.04 $3.53 Less: Revenues from acquisitions(2) $0.09 $0.09 Organic revenues $3.40 $3.44 Growth (decline) in organic revenues over prior year(3) 0.5% 1.7% Annual Recur
Slide 34: Return on Invested Capital (ROIC)
Return on Invested Capital (ROIC) FY’20 FY’21 FY’22 Adj. Operating Income (after-tax) ROIC = ROIC 17.6% 19.0% 18.1% (OTEX Calculation) (Debt + Equity – Cash – Deferred Tax) (in US$M) Non-GAAP based income from operations $1,059 $1,230 $1,177 • We measure our ROIC annually. It is defined as our Adjus
Slide 35: Additional Information
Additional Information Disclosure requirements of the UK City Code on Takeovers and Mergers Under Rule 8.3(a) of the UK City Code on Takeovers and Mergers (the Code), any person who is interested in 1 percent or more of any class of relevant securities of an offeree company or of any securities exch
Slide 36: 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 37: Reconciliation of Selected Non-GAAP Measures | Q1 FY'23
Reconciliation of Selected Non-GAAP Measures | Q1 FY'23 OpenText ©2022 All rights reserved 37
Slide 38: 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 39: Reconciliation of Selected Non-GAAP Measures | Q1 FY'22
Reconciliation of Selected Non-GAAP Measures | Q1 FY'22 OpenText ©2022 All rights reserved 39
Slide 40: Reconciliation of Selected Non-GAAP Measures | Q1 FY'22
Reconciliation of Selected Non-GAAP Measures | Q1 FY'22 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 Adjusted EBITDA and Free Cash Flows
Reconciliation of Adjusted EBITDA and Free Cash Flows OpenText ©2022 All rights reserved 41
Slide 42: Reconciliation of Adjusted EBITDA and Free Cash Flows
Reconciliation of Adjusted EBITDA and Free Cash Flows OpenText ©2022 All rights reserved 42