Slide 1: Investor Presentation
Investor Presentation NASDAQ: OTEX | TSX: OTEX April 30, 2020
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 our fiscal year ending June 30, 2020 (Fiscal 2020) on growth, the financial and operational impact of COVID-19 and associated preemptive measu
Slide 3: About OpenText
About OpenText The Information Management (IM) Leader About OpenText Value Creation Play Book Leader in the Information Management (IM) market • #1 in Content Services and Business Networks(1) Total Growth Strategy • Cyber Resilience: a strategic and growing market + Recurring Revenue Growth INNOVAT
Slide 4: Well Positioned for Macro Trends
Well Positioned for Macro Trends • Content Services: Information sharing and analytics • Business Network: Supply chain digitalization • Cyber Resilience: Work from home, 5G (Edge), IoT, endpoint protection • Digital Experience: Information collaboration, online retail and media management OpenText
Slide 5: OpenText: Leader in Content Services
OpenText: Leader in Content Services #1 in Content Services (Platforms) All content is stored, machine readable, tagged and up-to-date CHALLENGERS LEADERS LEADERS OpenText OpenText Newgen Microsoft Software Microsoft Hyland Hyland IBM SER IBM Group Alfresco IM M-Files Nuxeo Alfresco Software Laserfi
Slide 6: OpenText: Leader in Business Networks
OpenText: Leader in Business Networks #1 in Business Networks Platform for Global Commerce and Business to Business Integration Customers OpenText LEADERS Infor GT Nexus SPS Commerce E2open Bamboo Rose TrueCommerce Vecco One Network IM Intelligent Trading Suppliers Information MAJOR PLAYERS Partners
Slide 7: Cyber Resilience – Large and Growing New Market
Cyber Resilience – Large and Growing New Market Most Complete Endpoint • Threat detection and prevention • Backup and recovery Security Platform • Forensic • 5G-unprecedented bandwidth at the edge Emerging Trends • IoT-sensors, laptops, phones • Adds SMB as new customer opportunity • Geographic expa
Slide 8: Most Trusted Companies Trust OpenText
Most Trusted Companies Trust OpenText e-Invoicing Digital Supply Chain Content & Collaboration Predictive Maintenance Government of Canada Communications & Compliance Digital Citizen Analytics / ML Connected Cars OpenText Confidential. ©2020 All Rights Reserved. 8
Slide 9: Total Growth Strategy
Total Growth Strategy • 77% ARR (Q3 FY’20 TTM) Retain • 90%+ renewal rates(1) • Complete Go-To-Market coverage Information ◦ Enterprise & Government Management Grow ◦ SMB & Consumer – New! • Accelerated Innovation ◦ $2B in R&D (next 5 years)(2) • Strategic Value-based Acquiror Acquire • Target 5 to
Slide 10: Retain: Our World Class Customer Base
Retain: Our World Class Customer Base Information Management Annual Recurring Revenue (ARR) (US$ M) Key Metrics Benefits & Opportunity 90% • Steady consumable stream $2,333 from our install base Margin for Customer • The Value Advantage: Support 116% ◦ 24 x 7, global support ◦ Product and service up
Slide 11: Grow: Through One Integrated Cloud Platform
Grow: Through One Integrated Cloud Platform Information Management Significant Business Model Benefits Content Services New Cloud Editions 20.2 Business Network Cyber Resilience • Standardized services platform • Simplified sales and customer engagement Digital Experience • Improved speed of custome
Slide 12: Grow: Through Cloud Migration
Grow: Through Cloud Migration Cloud Digital (US$ M) Advanced Experience Technology $1,067 Business 186% Network $373 Content Cyber Services Resilience FY'14 Q3 FY'20 TTM • Cloud was 42% of Total Revenues in Q3 FY’20 • Q3 FY’20 Cloud Gross Margin in the low 60%’s • Mid 90%’s renewal rate(1) 1. Exclud
Slide 13: Grow: Through Managed Services in the Cloud
Grow: Through Managed Services in the Cloud (1) Information Management • 3,000+ Cloud customers over 5 years 3,000+ • Cloud Edition 20.2 accelerates capabilities • Interoperability with hyperscalers 2015 2016 2017 2018 2019 1. Data excludes Carbonite OpenText Confidential. ©2020 All Rights Reserved.
Slide 14: Grow: Through Complete Go-To-Market
Grow: Through Complete Go-To-Market Information Management Enterprise Solutions SMB & Consumer Solutions Direct Strategic Partners Channel Partners Online & Retail 2,000+ Field Facing SAP, Google, AWS 16,000+ Partners 7M+ Consumers Professionals Double coverage of Global 10K Grow the number of partn
Slide 15: Grow: Strategic Partnership Momentum
Grow: Strategic Partnership Momentum Information Management “New OpenText Content “Google Cloud has “OpenText’s portfolio of Management Services selected OpenText as its IM solutions will now be to be delivered through preferred partner for available as fully SAP® Cloud Platform.” Enterprise Informa
Slide 16: Grow: SMB Partnerships
Grow: SMB Partnerships Information Management OpenText Confidential. ©2020 All Rights Reserved. 16
Slide 17: Acquire: Our M&A Criteria
Acquire: Our M&A Criteria Leadership in Value for Mission Key Markets Customers Critical Information Management Financially Large Install Strong Compelling Base IP Portfolio Solid Track Record of Operating Cash Flows and High-Teens ROIC OpenText Confidential. ©2020 All Rights Reserved. 17
Slide 18: Acquire: Track Record of Success
Acquire: Track Record of Success Average 2.1x Revenue multiple(2) 18.7% ROIC in FY ’19(3)) HP CEM & CCM Software(1) Enterprise Content Division Founded out of University OpenText IPO Joined of Waterloo on NASDAQ TSX60 1991 1996 2012 2014 2015 2016 2017 2018 2019 2020 Note: Timeline based on calendar
Slide 19: Proven Durable Business Model
Proven Durable Business Model Annual Recurring Revenue (ARR) A-EBITDA & Margin(2),(3) Operating Cash Flows(3) (US$ M) (US$ M) (US$ M) $2,333 $1,115 $904 116% 107% 36.8% 117% $1,080 $538 $417 33.1% 38.4% FY'14 FY'14 FY'14 Q3 FY'20 TTM Q3 FY'20 TTM Q3 FY'20 TTM 77% ARR in Q3 FY’20 TTM(1) +370 bps sinc
Slide 20: Growing ARR While Expanding Margin
Growing ARR While Expanding Margin (1),(2) OpenText ARR, License, and A-EBITDA A-EBITDA Margin(1)(2) Margin 80.0% 75.1% 77.0% 70.0% ARR 72.2% 73.9% 73.6% 73.2% % of Total Revenues 66.5% 60.0% 61.5% 54.2% 54.4% 50.0% 36.8% 34.7% 36.2% 38.4% 36.8% 40.0% A-EBITDA 33.1% 33.7% Margin 29.7% 29.1% 31.1% 30
Slide 21: Total Growth Strategy: FY’20
Total Growth Strategy: FY’20 Total Revenue Growth FY’20 Business Profile(1) (US$ M) Expect % change y/y: License Expect to decline $3,030 11% CAGR Cloud Low 20%’s growth $1,625 Customer Support Low single-digit growth Professional Services Expect to decline M&A Additive M&A revenues FY'14 Q3 FY'20 T
Slide 22: FY’20 Target Model
FY’20 Target Model Fiscal 2019 Results Revised Fiscal 2020 Model(3) Revenue Type: Annual Recurring Revenue (ARR) 75.1% 76% - 78% License 14.9% 13% - 17% Cloud Services and Subscriptions 31.7% 34% - 38% Customer Support 43.5% 38% - 42% Professional Services and Other 9.9% 7% - 11% Non-GAAP Gross Marg
Slide 23: Carbonite Update and Revenue Impact
Carbonite Update and Revenue Impact • Expect revenue for the 2H of FY’20 to be above the prior range given of $195m to $200m, after purchase price accounting (PPA) and disruption of up to 10% for typical integration activities • OpenText will recognize $171.0M of deferred revenue over the life of th
Slide 24: Strong Cash Flow and Balance Sheet
Strong Cash Flow and Balance Sheet Cash Generated for M&A Trended Consolidated Net Leverage Ratio(1) TTM Q3 FY’20 (US$ M) Documentum Acquisition Closing Carbonite Acquisition OCF $904 2.61x Closing 2.50x 2.37x 2.30x 2.28x 2.25x 2.01x Less: Principal $10 1.86x 1.89x 1.72x 1.70x 1.53x 1.48x Less: CapE
Slide 25: Strong Liquidity and Cash Position
Strong Liquidity and Cash Position Total cash & short-term investments at $1.453B (Mar 21/20) Current Liquidity (US$ M) CashA-EBITDA BalanceMarginTrend (1)(2) Total Available & Committed $1,603 1,800 Liquidity(1) 1,600 1,453 1,400 1,200 Millions USD 941 999 1,000 788 765 800 683 675 605 595 600 400
Slide 26: OpenText Business System Creates Strategic Value
OpenText Business System Creates Strategic Value Total Growth ROIC Information Management Systems, Tools, Methods Customer Integration Driven Innovation Strategic Operational Acquisitions Excellence OpenText The Information Company Best Teams Diligence Dividend, Win ARR, A-EBITDA $, OCF Capital Inve
Slide 27: Executive Leadership Team (ELT)
Executive Leadership Team (ELT) Mark J. Madhu Muhi Gordon Ted James Craig Barrenechea Ranganathan Majzoub Davies Harrison McGourlay Stilwell CEO and CTO EVP, EVP, EVP, EVP, EVP, EVP, CFO Chief Product Officer CLO & Corporate Sales Customer Operations SMB & Consumer Sales Development Prentiss Paul Br
Slide 28: Appendix
Appendix OpenText Confidential. ©2020 All Rights Reserved. 28
Slide 29: Content Services
● As the leader in Content Services, we offer a comprehensive view of all information within the organization. ● Cloud Editions, our newest cloud- native software can run anywhere, making it simple and cost-effective to implement, maintain, and update. ● By deploying Content Services in the cloud, o
Slide 30: Business Network
● 21 of the 25 world’s largest supply chains in the world as identified by Gartner use the OpenText Business Network. ● BN enables the seamless, secure flow of information in the cloud, across an extended business ecosystem of people, systems, & things (IoT). ● BN simplifies B2B, offers insights to
Slide 31: Cyber Resilience
● Cyber resilience is critical for protecting sensitive information ● Reduces risk, detects & responds to cyberthreats ● Webroot provides: o Endpoint security for consumers and businesses o Endpoint backup for protection 1. Sensors against ransomware 95M+ Customer and Partner nodes, real-time Global
Slide 32: Digital Experience
Form submit by country ● A set of solutions to create and Daily open rate track customer interactions throughout their journey, integrated with ERP and CRM. ● Capabilities to intelligently create, individualize, and deliver faster more personalized data driven customer experiences at scale. ● Empowe
Slide 33: Advanced Technology and AI
● AI technologies focus on improved decision making, automation and business optimization. ● Derive value through data-driven decisions using analytics, machine learning, text mining, big data processing and enterprise-class BI. ● Digital process automation transforms organizations into digital, dat
Slide 34: The Information Company
The Information Company OpenText Confidential. ©2020 All Rights Reserved. 34
Slide 35: Thank you
Thank you twitter.com/opentext linkedin.com/company/opentext opentext.com