Slide 1: Quarter Supplemental Investor Presentation FY16-Q3
Quarter Supplemental Investor Presentation FY16-Q3 | April 27, 2016 NASDAQ: OTEX TSX: OTC
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation, including statements about the focus of Open Text Corporation (“OpenText” or “the Company”) in Fiscal 2016 on growth in earnings and cash flows, creating value through investments in broader Enterprise Information Management (EIM) capabi
Slide 3: Growing Cash Flow by Acquiring Strong Businesses
Growing Cash Flow by Acquiring Strong Businesses $600 $500 Operating Cash Flow ($ M) 25% CAGR $400 $300 $523M $200 $100 $0 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 OpenText Confidential. ©2015 All Rights Reserved. 3
Slide 4: We Have Four Different Revenue Streams
We Have Four Different Revenue Streams Total revenue $M License 1,852 7-yr CAGR 1,625 294 4.3% +14% p.a. 1,363 306 1,207 Maintenance 273 732 10.5% 1,033 912 294 707 786 269 726 238 658 6.4% 230 221 219 657 Services 561 238 508 364 405 252 605 83.2% 373 (over last 151 167 204 257 180 143 2 yrs only)
Slide 5: Summary of Quarterly Results with Constant Currency
Summary of Quarterly Results with Constant Currency Q3 FY16 in % Change Q3 FY16 Q3 FY15 $ Change % Change CC* in CC* Revenues (in millions): Cloud services and subscriptions $147.5 $147.5 $— — % $151.2 2.5 % Customer support 183.6 184.2 (0.6) (0.3) % 189.2 2.7 % Professional service and other 45.0 5
Slide 6: FY16 Q3 Business and Financial Highlights
FY16 Q3 Business and Financial Highlights • OpenText launches Release 16, delivering the most comprehensive digital platform for enterprise digital transformation License Revenue Total revenue $440.5 million down 2% Y/Y • OpenText signs definitive agreement to acquire certain customer experience U
Slide 7: FY16 Q3 Revenue Breakdown
FY16 Q3 Revenue Breakdown Q3 F16 Q3 F16 Q3 F16 License Revenue by Industry Total Revenue by Geography Total Revenue Mix 1% 1% 7% 9% 21% 10% 15% 7% 10% 33% 11% 16% 58% 42% 33% 11% 15% Financial Technology Public Sector Services Consumer Goods Industrial Goods Americas EMEA APJ License Cloud Services
Slide 8: Customer Wins
Customer Wins The Public Broadcasting Service (PBS) has expanded its use of OpenText Media Management by upgrading to the Enterprise Server of Media Management. This will provide PBS the flexibility to support its broad user base of 354 independently owned and operated local member stations with its
Slide 9: Customer Wins
Customer Wins Cameron LNG purchased OpenText Content Suite, Engineering Document Management, and Brava! annotation software for their new centralized Enterprise Content Management infrastructure. The OpenText ECM solution will help to ensure that Cameron business processes and information sources ar
Slide 10: Customer Wins
Customer Wins By leveraging OpenText Trading Grid Messaging Service, 7PSolutions will have the ability to grow their B2B trading community quickly. The Bank of Montreal (BMO) is using OpenText Analytics and Reporting solutions in BMO details Online®, its spend and payment management system for corpo
Slide 11: Customer Wins
Customer Wins arvato Systems invested in a strategic partnership with OpenText to offer tailored solutions precisely to fit the digital transformation demands of the media industry. arvato Systems calls these demands “Connecting Content & People”. Based on the OpenText Process Suite and Content Suit
Slide 12: Summary of Year To Date Results with Constant Currency
Summary of Year To Date Results with Constant Currency Q3 FY16 YTD % Change Q3 FY16 YTD Q3 FY15 YTD $ Change % Change in CC* in CC* Revenues (in millions): Cloud services and subscriptions $444.4 $456.3 ($11.9) (2.6) % $463.6 1.6 % Customer support 553.4 547.6 5.8 1.1 % 586.2 7.0 % Professional serv
Slide 13: Summary of Quarterly Results
Summary of Quarterly Results % Change (Q3 % Change (Q3 Q3 FY16 Q2 FY16 Q3 FY15 FY16 vs Q2 FY16 vs Q3 FY16) FY15) Revenue (million) $440.5 $465.3 $447.6 (5.3) % (1.6) % GAAP-based gross margin 67.9 % 70.0 % 66.0 % (210) bps 190 bps GAAP-based operating margin 20.1 % 23.6 % 11.8 % (350) bps 830 bps GA
Slide 14: Summary of Year To Date Results
Summary of Year To Date Results Q3 FY16 YTD Q3 FY15 YTD % Change Revenue (million) $1,340.4 $1,369.2 (2.1) % GAAP-based gross margin 68.6 % 67.3 % 130 bps GAAP-based operating margin 20.5 % 19.4 % 110 bps GAAP-based EPS, diluted $1.62 $1.35 20.0 % Non-GAAP-based gross margin(1) 72.9 % 71.7 % 120 bps
Slide 15: Summary of Quarterly Revenue Results
Summary of Quarterly Revenue Results % Change in % Change % Change Q3 FY16 CC* In millions Q3 FY16 Q2 FY16 Q3 FY15 (Q3 FY16 vs Q2 (Q3 FY16 vs Q3 in CC* (Q3 FY16 vs Q3 FY16) FY15) FY15) License $64.4 $81.9 $63.6 (21.3) % 1.3 % $67.4 6.0 % Cloud services and 147.5 149.1 147.5 (1.1) % — % 151.2 2.5 % s
Slide 16: Summary of Year To Date Revenue Results
Summary of Year To Date Revenue Results In millions Q3 FY16 YTD Q3 FY15 YTD Q3 FY16 % Change % Change YTD in CC* in CC* License $197.6 $197.1 0.2 % $213.2 8.1 % Cloud services and subscriptions 444.4 456.3 (2.6) % 463.6 1.6 % Customer support 553.4 547.6 1.1 % 586.2 7.0 % Professional service and ot
Slide 17: Key Financial Metrics
Key Financial Metrics 1. Foreign currency movements: Approximately 32.8% of total revenues are derived from EMEA in Q3 F16 Q3 F16 unfavourable FX impact of $14.6M for total revenue when compared to Q3 F15, and unfavourable $0.01 for adjusted EPS 2. Trailing twelve months growth rate on a constan
Slide 18: FY16 External Target Model
FY16 External Target Model* Revenue Type 2015 Target Model Fiscal 2015 Actuals Fiscal 2016 Target Model* Annual Recurring Revenue (ARR) 80 - 84% 84% 82 - 86% Product License 15 - 20 % 16% 14 - 18% Cloud Services 28 - 33% 33% 31 - 36% Product Maintenance 35 - 40% 40% 38 - 42% Professional Services 10
Slide 19: Path to 2020 with Target Model
Path to 2020 with Target Model Intelligent Cloud growth yields top-line and operating margin growth ▪ Continued focus on growing recurring 2020 revenue profile aspirations ▪ Unwavering focus on (includes acquisitions) margin improvement to maximize value 2016 ▪ Seven year revenue growth CAGR of 14%
Slide 20: 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 21: Reconciliation of Selected Non-GAAP Measures | Q3 F16
Reconciliation of Selected Non-GAAP Measures | Q3 F16 Three Months Ended March 31, 2016 (in ‘000s USD) GAAP % Non-GAAP GAAP of Rev Adjustments FN Non- GAAP % of Rev COST OF REVENUES Cloud services and subscriptions $ 61,298 $ (202) (1) $ 61,096 Customer support 22,427 (215) (1) 22,212 Professional s
Slide 22: Reconciliation of Selected Non-GAAP Measures | Q3 F16
Reconciliation of Selected Non-GAAP Measures | Q3 F16 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 amo
Slide 23: Reconciliation of Selected Non-GAAP Measures | Q3 F16 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 F16 YTD Nine Months Ended March 31, 2016 (in ‘000s USD) GAAP % Non-GAAP GAAP of Rev Adjustments FN Non- GAAP % of Rev COST OF REVENUES Cloud services and subscriptions $ 179,132 $ (641) (1) $ 178,491 Customer support 64,624 (631) (1) 63,993 Professio
Slide 24: Reconciliation of Selected Non-GAAP Measures | Q3 F16 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 F16 YTD 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
Slide 25: Reconciliation of Selected Non-GAAP Measures | Q2 F16
Reconciliation of Selected Non-GAAP Measures | Q2 F16 Three Months Ended December 31, 2015 (in ‘000s USD) GAAP % of Non-GAAP % GAAP Adjustments FN Non- GAAP Rev of Rev COST OF REVENUES Cloud services and subscriptions $ 58,918 $ (158) (1) $ 58,760 Customer support 21,689 (258) (1) 21,431 Professiona
Slide 26: Reconciliation of Selected Non-GAAP Measures | Q2 F16
Reconciliation of Selected Non-GAAP Measures | Q2 F16 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 amo
Slide 27: Reconciliation of Selected Non-GAAP Measures | Q3 F15
Reconciliation of Selected Non-GAAP Measures | Q3 F15 Three Months Ended March 31, 2015 (in ‘000s USD) GAAP % of Non-GAAP % GAAP Rev Adjustments FN Non- GAAP of Rev COST OF REVENUES Cloud services and subscriptions $ 60,776 $ (182) (1) $ 60,594 Customer support 24,084 (224) (1) 23,860 Professional s
Slide 28: Reconciliation of Selected Non-GAAP Measures | Q3 F15
Reconciliation of Selected Non-GAAP Measures | Q3 F15 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 amo
Slide 29: Reconciliation of Selected Non-GAAP Measures | Q3 F15 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 F15 YTD Nine Months Ended March 31, 2015 (in ‘000s USD) GAAP % of Non-GAAP % GAAP Rev Adjustments FN Non- GAAP of Rev COST OF REVENUES Cloud services and subscriptions $ 178,886 $ (581) (1) $ 178,305 Customer support 70,878 (632) (1) 70,246 Professio
Slide 30: Reconciliation of Selected Non-GAAP Measures | Q3 F15 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 F15 YTD 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