Slide 1: Investor Presentation
Investor Presentation NASDAQ: OTEX | TSX: OTEX August 5, 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation may contain forward-looking statements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and created under the Securities Act of 1933, as amended (the Securities Act), and
Slide 3: Q4 and Fiscal 2021 Financial Results
Q4 and Fiscal 2021 Financial Results OpenText ©2021 All rights reserved 3
Slide 4: Q4 and Fiscal 2021 Financial Highlights
Q4 and Fiscal 2021 Financial Highlights with Y/Y comparisons Q4 FY’21 Fiscal 2021 8.1% 8.9% Total Revenues $893.5M Total Revenues $3.39B 4.0% in CC(1) 6.3% in CC $694.4M 5.6% $2.74B 12.7% ARR(2) 78% ARR(2) 81% of total revenues 2.2% in CC of total revenues 10.4% in CC 8.3% 21.6% Cloud Revenues $360.
Slide 5: FY'21 Organic Growth
FY’21 Organic Growth(1) Cloud Revenue ARR Total Revenue Organic Growth Organic Growth Organic Growth 3.2% 2.7% 0.5% 1. Please refer to Appendix A at the end of this presentation for the reconciliation of the FY’21 Organic Growth. OpenText ©2021 All rights reserved 5
Slide 6: Q4 FY'21 Revenue Breakdown
Q4 FY’21 Revenue Breakdown Total Revenue Mix Total Revenue by Geography ARR by Industry 3% 8% 9% 6% 7% 22% 15% 40% 10% 31% 60% 15% 10% 37% 12% 15% Financial Consumer goods Cloud Services & Subscriptions Services Americas Technology Customer Support Public Sector EMEA Healthcare License Basic materia
Slide 7: FY'21 Revenue Breakdown
FY’21 Revenue Breakdown Total Revenue Mix Total Revenue by Geography ARR by Industry 3% 8% 8% 6% 7% 23% 11% 42% 9% 31% 61% 10% 16% 39% 11% 15% Financial Services Cloud Services & Subscriptions Consumer goods Americas Technology Customer Support Public Sector EMEA Healthcare License Basic materials a
Slide 8: Q4 FY'21 Customer Wins
Q4 FY’21 Customer Wins Business Content Network Services EDF is a leading producer and supplier of electricity in Europe, Revlon is a multinational cosmetics, skin care, fragrance, and and the world's second largest electricity company. personal care company. Products: A 10-year contract for OpenTex
Slide 9: Q1 FY'22 Quarterly Factors
Q1 FY’22 Quarterly Factors Externalities Company Specific(1) • COVID-19, vaccines, health & financial crisis • Expect Q1 Revenue y/y: • Industry and supply chain disruption • Total Revenue up low single-digits • Global geopolitical and volatile macro • ARR up low single-digits environment • FX tailw
Slide 10: FY'22 OpenText Total Growth Strategy
FY’22 OpenText Total Growth Strategy(1) FY’21 Actual(2) FY’22 Expected % Growth $1,407.4 Cloud 3%-4% $1,334.1 Customer Support Constant to slightly up $2,741.5 ARR Low single-digit $384.7 License Decline mid single-digit $259.9 Professional Service Constant $3,386.1 Total Revenues 1%-2% New M&A Addi
Slide 11: FY'22 Target Model
FY’22 Target Model Fiscal 2021 Actuals Fiscal 2022(3) Revenue Type: Cloud Services and Subscriptions 41.6% 41%-43% Customer Support 39.4% 39%-41% Annual Recurring Revenue (ARR) 81.0% 81%-83% License 11.4% 9%-11% Professional Services and Other 7.7% 7%-9% Non-GAAP Gross Margin Cloud Services and Subs
Slide 12: Our Financial Aspirations
Our Financial Aspirations FY’24 Long Term Aspirations Total Revenue Organic ARR (2) Free Cash Flows(2) A-EBITDA Margin Growth(1) % of Total Revenue (FCF) 2% - 4% 85% 38% - 40% $1.2B+ New M&A will be additive A-EBITDA margin over 40% to be re-invested in organic growth Target Capital Allocation Strat
Slide 13: Strong Liquidity and Cash Position
Strong Liquidity and Cash Position Current Liquidity (US$) Total Cash & Cash Equivalents(2) 2,000 1,846 1,693 Total Cash & Committed Liquidity(1) $2.4B 1,501 1,476 1,607 1,453 1,500 Millions USD 1,000 Capital Expenditures as % of Total Revenue (FY’18 to FY’21) 500 4.0% 3.7% - Q3 FY'20 Q4 FY'20 Q1 FY
Slide 14: Strong Cash Flows and Balance Sheet
Strong Cash Flows and Balance Sheet FY’21 (US$M) Trended Consolidated Net Leverage Ratio(1) Operating Cash Flows(2) $876 Carbonite Acquisition Closing Less: CapEx $64 2.28x 2.25x 2.04x Free Cash Flows(2) $812 1.82x 1.60x 1.57x 1.45x Less: Principal(3) $10 Less: Dividends $211 Less: Share Buyback $11
Slide 15: Strategy
Strategy OpenText ©2021 All rights reserved 15
Slide 16: GROW with OpenText
GROW with OpenText Information in the right hands knows no bounds. Growing ideas further, faster, wider. OpenText is at the center of that growth, helping businesses to expand everywhere and anywhere. OpenText ©2021 All rights reserved 16
Slide 17: OpenText Snapshot
OpenText Snapshot Leader in Large Growing Addressable Market with Marquee Customer Base $84B 89 24 75K 470K Total Addressable of the Top 100 of the 30 largest Enterprise SMB Market growing 8% companies supply chains Customers Customers Track Record of Growth, Profitability and Capital Efficiency 12%
Slide 18: How We Create Value
How We Create Value 12% Total Revenue CAGR (FY’13 to FY’21) Revenue Growth Value A-EBITDA aspiration Capital 24% FCF to Profitability of 38% to 40%(1) Efficiency Total Revenue(1),(2) 1. Please refer to “Use of Non-GAAP Financial Measures” at the end of this presentation and “Reconciliation of select
Slide 19: Large and Growing Addressable Market
Large and Growing Addressable Market Information Management(1) Industry Trends OpenText Product CY21E to CY24E CAGR Content $24B +11% Master Modern Work Business Network $20B +7% Digitize Supply Chains Digital Experience $21B +7% Power Modern Experiences Security & $19B +6% Strengthen Cyber Resilien
Slide 20: The Information Management Journey
The Intelligent, Secure & Connected Business Cloud Power the API Editions Economy Be Cyber Resilient Power Modern Digital Experiences All Points of Business Departure Master Network Modern Work The Information Management Journey OpenText ©2021 All rights reserved 20
Slide 21: GROW with OpenText – Our Growth Plan
GROW with OpenText – Our Growth Plan Market leaders by industry GROW Top supply chains by industry our Strategic Accounts Grow long-term customer value and share of wallet Migrate and upgrade install base to Cloud Editions GROW our Cloud Editions New product releases every 90 days Full coverage of G
Slide 22: 89 of the top 100 largest companies in the world
Marquee Customer Base 89 of the top 100 largest companies in the world(1) Life Consumer Financial Technology Manufacturing Telecom Sciences Goods 10 of top 10 8 of top 10 10 of top 10 10 of top 10 10 of top 10 8 of top 10 Great foundation for future growth 1.The top 100 is based on the Forbes Global
Slide 23: Comprehensive Go-to-Market
Comprehensive Go-to-Market CROSS-SELL AND UPSELL OPPORTUNITIES Enterprise Solutions SMB & Consumer Solutions Direct Strategic Partners Channel Partners Online & Retail 2,000+ 16,000+ 7M+ Field Facing Professionals Partners Consumers DIGITAL ZONE OpenText ©2021 All rights reserved 23
Slide 24: OpenText Digital Zone
OpenText Digital Zone A strategic investment in frictionless customer engagement Digital Room Developer New opentext.com Test-Drive Communities OpenText ©2021 All rights reserved 24
Slide 25: Five Clouds on Modern, Scalable Cloud-based Architecture
Five Clouds on Modern, Scalable Cloud-based Architecture OpenText Cloud Editions: The Ultimate Cloud™ Global Secure Content | Business Network | Experience Always on Security & Protection | Developer (99.99% availability) Modern API services OT2 - Cloud API Services Compliant (GDPR, data zones, etc.
Slide 26: Accelerate Product Innovation
Accelerate Product Innovation Past Present + Future Many Products Five Clouds More efficient R&D spend Accelerates speed of delivering innovation Simplifies go-to-market – 5 clouds Content Solution selling versus point products Business Network Scales human capital via Experience customer self-servi
Slide 27: Continued Migration to the OpenText Cloud Editions
Continued Migration to the OpenText Cloud Editions All OpenText software launched as a service with APIs OpenText ©2021 All rights reserved 27
Slide 28: Investing in Future Organic Growth
Investing in Future Organic Growth Research & Development Sales & Marketing ($ and in % of Total Revenues)(1),(2) R&D% of Total Revenues Enterprise Sales Goal R&D US$ 12-14% • Full coverage of G10K by end of CY’23 12.2% SMB/C Goal • Grow SMB/C partners – RMMs, MSPs 10.5% Customer Engagement $194 M $
Slide 29: Scalable, High-Velocity, Low-Friction Business Model
Scalable, High-Velocity, Low-Friction Business Model Digitization and Automation: • Automate DevOps New Customer Engagement Model: • Automate routine R&D • Pre-sales – demand creation automation Product is built for: • Self-sell – upsell, cross-sell • Self-service • Post-sales – renewal automation •
Slide 30: Total Growth Strategy
Total Growth Strategy • Growing sales breadth and depth • Product innovation GROW Information • 81% ARR(1) • 94% Customer support renewals(2) Management • 93% Cloud renewals(2) • Drives future organic growth • Long-term competitive gains ACQUIRE • High cash returns RETAIN 1. ARR as a percentage of T
Slide 31: Sustainable Growth Through Retention and Upgrades
Sustainable Growth Through Retention and Upgrades Annual Recurring Revenue Renewal Rate(1) (ARR) (US$M) $2,742 105% $1,337 Customer Support Cloud 94% 93% FY'15 FY'21 Customer satisfaction is a foundation for future growth 1. For the fiscal year ended June 30, 2021. Excludes Carbonite. OpenText ©2021
Slide 32: Strategic M&A: Foundation for Our Business
Strategic M&A: Foundation for Our Business Various HP Assets 2014 2016 2017 2019 OpenText Cloud Editions OpenText ©2021 All rights reserved 32
Slide 33: Acquisition Philosophy: Carbonite Case Study
Acquisition Philosophy: Carbonite Case Study We are: Carbonite Case Study • Patient and disciplined • Growth & returns-based metrics Acquired • 12/24/19 for 2.8x revenue(1) Target characteristics: • IM market leadership Strategic • Critical mass in Security & Protection • Significant ARR Rationale •
Slide 34: Proven Track Record of Growth
Proven Track Record of Growth Total Revenue Growth in CC (US$M)(1) $3,305 $3,147 $2,922 $2,743 $2,318 $1,936 $1,904 19.2% 2.8% 27.0% 19.7% 3.8% 9.7% 6.3% FY'15 FY'16 FY '17 FY'18 FY'19 FY'20 FY'21 7 Consecutive Years of Y/Y Growth in CC(1) 1. CC: Constant currency for this purpose is defined as the
Slide 35: Proven Durable Business Model
Proven Durable Business Model Growing ARR and Upper Quartile Margin(1),(2) 81.0% ARR FY’22 Model: % of Total Revenues 81%-83% 54.4% (1) A-EBITDA 38.8% 38.8% FY’22 Model: Margin 37%-38% 29.1% 11.4% License 24.3% FY’22 Model: % of Total Revenues 9%-11% FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 F
Slide 36: Strong Track Record of Financial Performance
Strong Track Record of Financial Performance Annual Recurring Total Revenues Cloud Revenue A-EBITDA(1) Free Cash Flows(1) Revenue (US$M) (US$M) (US$M) (US$M) (US$M) $1,407 $1,315 $812 $2,742 $3,386 83% 105% 133% 111% 82% $445 $1,852 $1,337 $624 $605 FY'15 FY'21 FY'15 FY'21 FY'15 FY'21 FY'15 FY'21 FY
Slide 37: Strong Track Record of Shareholder Returns
Strong Track Record of Shareholder Returns New! Dividends Paid and Shares Repurchased (US$M) Target Capital Allocation Strategy(1) Dividends and Shares Repurchased Available for anti-dilutive Dividends corporate purposes share buyback $119.1 Dividends Paid (7-year CAGR): 16% ~ 33% $65.5 TTM $210.7 F
Slide 38: Corporate Citizenship Reflects our Culture
Corporate Citizenship Reflects our Culture Progress We’ve Made: 2nd Corporate Citizenship Report published • Adopted GRI sustainability reporting $1 MILLION standards DONATION • New ED&I department, mandate and initiatives • Enhanced Human Rights Statement 65 FOOD • Expanded Supplier Code of Conduct
Slide 39: We Strive To Do The Right Thing
We Strive To Do The Right Thing Our Customers Our Communities Rapid Radiology and OpenText Accelerate Diagnostic OpenText Donates US OpenText Provides 4 Results to Help Improve Patient Care $1M to Global Food Million Meals for 58 Jun 25, 2020 Banks Communities in 21 Dec 11, 2020 Countries Worldwide
Slide 40: OpenText Products Enhance Global Sustainability
OpenText Products Enhance Global Sustainability Paperless Workflows Ethical Supply Chain Data Privacy and Protection Digitizes 26 billion Paper reduction saves 5.1 Paper reduction saves GHG transactions per year million trees emissions of 725,000 tonnes of CO2e OpenText ©2021 All rights reserved 40
Slide 41: Executive Leadership Team (ELT)
Executive Leadership Team (ELT) Mark J. Madhu Muhi Gordon Ted James Prentiss Barrenechea Ranganathan Majzoub Davies Harrison McGourlay Donohue CEO and CTO EVP, EVP, EVP, EVP, EVP, EVP, CFO Chief Product Officer CLO & Corporate Enterprise Sales International Sales SMB & Consumer Development Sales Kri
Slide 42: Thank you
Thank you twitter.com/opentext linkedin.com/company/opentext opentext.com
Slide 43: Appendix
Appendix OpenText ©2021 All rights reserved 43
Slide 44: Appendix A: Use of Non-GAAP Financial Measures
Appendix A Use of Non-GAAP Financial Measures In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-GAAP).These Non-GAAP financial measures have certain limitations in that they do not h
Slide 45: Organic Growth
Organic Growth Fiscal 2021 FX Headwind / In US$ billions (unless indicated otherwise) Reported CC(1) (Tailwind) Total Revenues $3.39 ($0.08) $3.30 (2) Less: Revenues from acquisitions $0.26 $0.26 Organic revenues $3.13 $3.05 (3) Growth (decline) in organic revenues over prior year 0.5% (2.1)% Annual
Slide 46: Summary of Quarterly Results with Constant Currency
Summary of Quarterly Results with Constant Currency Q4 FY'21 % Change (In millions, except per share data) Q4 FY'21 Q4 FY'20 $ Change % Change in CC* in CC* Revenues: Cloud services and subscriptions $360.2 $332.6 $27.5 8.3 % $352.7 6.0 % Customer support 334.3 324.9 9.3 2.9 % 319.1 (1.8) % Total an
Slide 47: Summary of Annual Results with Constant Currency
Summary of Annual Results with Constant Currency % Change (In millions, except per share data) FY'21 FY'20 $ Change % Change FY'21 in CC* in CC* Revenues: Cloud services and subscriptions $1,407.4 $1,157.7 $249.8 21.6 % $1,389.7 20.0 % Customer support 1,334.1 1,275.6 58.5 4.6 % 1,297.0 1.7 % Total
Slide 48: Reconciliation of Selected Non-GAAP Measures | Q4 FY'21
Reconciliation of Selected Non-GAAP Measures | Q4 FY'21 Three Months Ended June 30, 2021 (In ‘000's USD, except per share data) GAAP % of Non-GAAP % of GAAP Adjustments FN Non-GAAP Total Revenue Total Revenue COST OF REVENUES Cloud services and subscriptions $ 127,583 $ (935) (1) $ 126,648 Customer
Slide 49: Reconciliation of Selected Non-GAAP Measures | Q4 FY'21
Reconciliation of Selected Non-GAAP Measures | Q4 FY'21 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 50: Reconciliation of Selected Non-GAAP Measures | FY'21
Reconciliation of Selected Non-GAAP Measures | FY'21 Year Ended June 30, 2021 (In ‘000's USD, except per share data) GAAP % of Non-GAAP % of GAAP Adjustments FN Non-GAAP Total Revenue Total Revenue COST OF REVENUES Cloud services and subscriptions $ 481,818 $ (3,419) (1) $ 478,399 Customer support 1
Slide 51: Reconciliation of Selected Non-GAAP Measures | FY'21
Reconciliation of Selected Non-GAAP Measures | FY'21 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 amor
Slide 52: Reconciliation of Selected Non-GAAP Measures | Q4 FY'20
Reconciliation of Selected Non-GAAP Measures | Q4 FY'20 Three Months Ended June 30, 2020 (In ‘000's USD, except per share data) GAAP % of Non-GAAP % of GAAP Adjustments FN Non-GAAP Total Revenue Total Revenue COST OF REVENUES Cloud services and subscriptions $ 116,569 $ (490) (1) $ 116,079 Customer
Slide 53: Reconciliation of Selected Non-GAAP Measures | Q4 FY'20
Reconciliation of Selected Non-GAAP Measures | Q4 FY'20 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 54: Reconciliation of Selected Non-GAAP Measures | FY'20
Reconciliation of Selected Non-GAAP Measures | FY'20 Year Ended June 30, 2020 (In ‘000's USD, except per share data) GAAP % of Non-GAAP % of GAAP Adjustments FN Non-GAAP Total Revenue Total Revenue COST OF REVENUES Cloud services and subscriptions $ 449,940 $ (1,642) (1) $ 448,298 Customer support 1
Slide 55: Reconciliation of Selected Non-GAAP Measures | FY'20
Reconciliation of Selected Non-GAAP Measures | FY'20 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 amor
Slide 56: Reconciliation of Adjusted EBITDA and Free Cash Flows
Reconciliation of Adjusted EBITDA and Free Cash Flows (In '000's USD) FY'21 Q4 FY'21 FY'20 Q4 FY'20 GAAP-based net income, attributable to OpenText $ 310,672 $ 181,283 $ 234,225 $ 26,392 Add: Provision for (recovery of) income taxes 339,906 (2,215) 110,837 32,037 Interest and other related expense,
Slide 57: Reconciliation of Adjusted EBITDA and Free Cash Flows FY'11-FY'20
Reconciliation of Adjusted EBITDA and Free Cash Flows FY'11-FY'20 (In '000's USD) FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 Adjusted EBITDA GAAP-based net income, attributable to OpenText $ 123,203 $ 125,174 $ 148,520 $ 218,125 $ 234,327 $ 284,477 $ 1,025,659 $ 242,224 $ 285,501 $