Slide 1: Unleashing the Power of Information
Unleashing the Power of Information I N V E S TO R P R E S E N TAT I O N FY13-Q3 | April 24, 2013
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties and other
Slide 3: Scale and Momentum
Scale and Momentum (NASDAQ: OTEX, TSX: OTC) $1.2B+ global revenue EIM $13B market* (ECM, BPM, CEM, iX, Discovery) #1 in ECM** 5,164 employees 20 years of proven innovation 31 country offices, 141 countries supported *as per notes on slide 11 **as per Gartner Group COPYRIGHT © 2012 OPEN TEXT CORPORAT
Slide 4: Global Business
Global Business Fiscal 2012 Stockholm, SE EMEA HQ Grasbrunn, DE WW HQ Reading, UK Waterloo, ON Paris, FR Bellevue, WA Ottawa, ON San Francisco, Richmond Hill, ON CA Tokyo, JN New York, NY Tucson, AZ Washington, DC Atlanta, GA Austin, TX Hong Kong Mumbai IN Hyderabad, IN Singapore APJ HQ Sydney, AU S
Slide 5: Investment Highlights
Investment Highlights Demonstrated earnings power and operational discipline TTM operating cash flow of $333.1* million Large recurring maintenance revenues Growth opportunities: geographies, verticals and partners Market share gains over IBM and EMC The OpenText cloud services continue
Slide 6: Growth Drivers
Growth Drivers Distribution EIM New Markets Expansion Product Cycle Cloud Services Acquisitions 6
Slide 7: OpenText is Focused on the Deep Web
OpenText is Focused on the Deep Web The Public Web Only 4% of Web content (~8 billion pages) is available via search engines like Google 7.9 Zettabytes The Deep Web Approximately 96% of digital content is on Deep Web sites inside the firewall COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERV
Slide 8: Why Customers Buy
Why Customers Buy Governance, litigation and regulatory compliance Security threats Process improvement Unstructured information consolidation and leverage Multi-channel leverage and communication Information leads business transformations Mobile, social, cloud COPYRIGHT © 2012 OPEN TE
Slide 9: Why OpenText Will Lead the EIM Market
Why OpenText Will Lead the EIM Market 1. Market Evolution The market evolving from ECM to Enterprise Information Management (EIM) 2. Well Positioned OpenText is well positioned in EIM with market leading product offerings and industry expertise 3. Trusted Vendor A world class customer base and stron
Slide 10: Enterprise Information Management: $13 Billion Opportunity
Enterprise Information Management $13 Billion Opportunity, 10% Growth* Customer win: Emergency Medicine Physicians ECM BPM CEM Information Discovery Exchange 2012 2012 2012 2012 2012 $4.6B Market $2.6B Market $1.35B Market $3.2B Market $1.4B Market 7.2% Growth 7.9% Growth 14% Growth 11.4% Growth 14%
Slide 11: Enterprise Information Management: $13 Billion Opportunity
Enterprise Information Management $13 Billion Opportunity, 10% Growth Customer win: Emergency Medicine Physicians ECM BPM CEM Information Discovery Exchange Content Management Business Process Web Content Fax & Document Search Management Management Distribution Legacy Semantic Navigation Decommissio
Slide 12: OpenText Cloud Services
OpenText Cloud Services 2 Billion Transactions a year 1.5 Million Users 25,000 Customers Enterprise, Social, Secure COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 12
Slide 13: OpenText Cloud Services: Enterprise Information Management In The Cloud
OpenText Cloud Services Enterprise Information Management In The Cloud Information Exchange EasyLink, FDDG Data & Process Services ECM & BPM Social Services CEM Platform Services Managed Hosting COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 13
Slide 14: OpenText Cloud Services
OpenText Cloud Services OpenText Cloud Services OpenText Tempo: and Applications: Brings secure file sharing EasyLink: Fax, EDI, SMS, Voice and synchronization across eDOCS organizations Web Site Management Shares information across teams OpenText Video Services and with business partners OpenText M
Slide 15: About EasyLink
About EasyLink Headquarters in Atlanta, GA with ~500 employees Information Exchange: $3.2B market, 11.4% CAGR* Proven Cloud-based offerings: Fax (production, desktop, broadcast) and Messaging (email, telex, notifications, EDI) $40 million quarterly revenue run rate Revenue splits: 58% Amer
Slide 16: Leaders Buy From Leaders
Leaders Buy From Leaders Enterprise Forrester WaveTM: Content Enterprise Management, Content October 2012 Management, Q4 ’11 Business Process Forrester WaveTM: Management Digital Asset Suites, October Management For 2011 Customer Experience, Q2 ’12 COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS
Slide 17: Growth and Opportunity
Distribution Model Direct Sales Force AE, ISR, Specialists Growth and Opportunity Strategic Alliances System Integrators SI / FSI VARs Distributors OEM Technology Alliances 17
Slide 18: Corporate Growth Strategy Alignment
Corporate Growth Strategy Alignment ECM BPM CEM iX Discovery Cloud Services Product Development Market Expansion Strategic Acquisitions Integrate existing New software through Products common platform. INFO FUSION Industries Alliances Additional Opportunities Install Base Sales Force Expansion Share
Slide 19: Growth Drivers
Growth Drivers Sales force expansion Market expansion: Latin America, Emerging Europe, APJ Partner channel expansion New products New Cloud Services offering Competitive market share gains Install-base upsell / cross-sell Industries: Public Sector, Defense, Healthcare, Life Sciences
Slide 20: History of Growing Revenue Y/Y: 7 Fiscal Years
History of Growing Revenue Y/Y in $M: 7 Fiscal Years 1400 Service Customer Support License 1200 7 Year CAGR 16.5%* 293.7 1000 269.2 800 238.1 229.8 600 219 656.6 182.5 560.5 507.5 400 122.5 405.3 363.6 287.6 200 183.9 257.2 166.5 203.6 125.6 142.8 150.5 103.2 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 $40
Slide 21: History of Growing Non-GAAP EPS Y/Y: 7 Fiscal Years
History of Growing Non-GAAP EPS Y/Y: 7 Fiscal Years $5.00 $4.50 7 Year CAGR 29.6%* $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $- FY06 FY07 FY08 FY09 FY10 FY11 FY12 $1.01 $1.46 $2.03 $2.51 $3.12 $4.07 $4.60 *FY05 non-GAAP EPS $0.75 COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 21
Slide 22: History of Growing Cash Flow: 7 Fiscal Years
History of Growing Cash Flow: 7 Fiscal Years 350 300 7 Year CAGR 25.9%* 250 200 150 100 50 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 $61M $111M $166M $186M $214M $244M $287M *FY05 cash flow $57M 22 B**Before the impact of special charges
Slide 23: Q3 FY13 Overview (Y/Y)
Q3 FY13 Overview (Y/Y) OpenText delivered: 24.8% $1.26 $337.7 million $69.0 million Revenue License Up 15.5 percent Up 13.3 percent $1.01 $1.26 Non-GAAP-based Adjusted Earnings $74.2 million $117 million Per Share Non-GAAP-based Operating Cash Up 24.8 percent Adjusted Net Income* Flow Up 25.3 percen
Slide 24: FY13 – Q3 Financial Highlights
FY13 – Q3 Financial Highlights Total Revenue Up 16% Y/Y Non-GAAP EPS Up 25% Y/Y Total revenue $337.7 million up 16% Y/Y Non-GAAP-based EPS was $1.26 compared to $1.01 Y/Y* Revenue by Geography: GAAP–based EPS was $0.44 compared to $0.59 Y/Y Americas 53% Non-GAAP-based operating margin 27
Slide 25: FY13 – Q3 Revenue Breakdown
FY13 – Q3 Revenue Breakdown Total Revenue by Geography License Revenue by Industry 10% Services Americas 2% 5% 3% 19% Technology 37% 53% EMEA Asia Pac 6% Consumer Goods Financial 10% Public Sector Basic Materials 18% Total Revenue Mix 10% Utilities Industrial Goods 17% 21% 12% Healthcare 15% License
Slide 26: Business Highlights
Business Highlights Services, technology and consumer goods saw the most demand 8 license transactions over $1 million and 13 license transactions between $500K and $1 million Customer successes in the third quarter include Enbridge, The Planning Inspectorate, Freescale, RS Components, Toray,
Slide 27: New - Dividend Program Highlights
New - Dividend Program Highlights To reward stockholders’ investments OpenText has adopted a policy to declare non-cumulative quarterly dividends The Board of Directors has declared a dividend of US$0.30 per common share* Payable to shareholders of record on May 31, 2013 Dividend will be pai
Slide 28: FY13 External Target Model
FY13 External Target Model* Revenue Type Fiscal 2013 Target Model As a % of revenue Product License 20 - 25% Cloud Services 11 - 14% Customer Support 44 - 48% Professional Services 17 - 22% Non-GAAP Gross Margin Product License 92 - 94% Cloud Services 58 - 60% Customer Support 83 - 85% Professional
Slide 29: Diverse Customer Base
Diverse Customer Base GOVERNMENT ENERGY PHARMACEUTICAL FINANCIAL TRANSPORTATION MANUFACTURING LEGAL MEDIA FOOD INSURANCE COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 29
Slide 30: Customer Win | Freescale
Customer Win | Freescale Freescale is extending their deployment with our Information Exchange solutions to build a Virtual Desktop Infrastructure (VDI) which will allow for a centralized, virtualized infrastructure for worldwide EDA Application access. This has, and will further result in enhanced
Slide 31: Customer Win | The Planning Inspectorate
Customer Win | The Planning Inspectorate The Planning Inspectorate is a UK Government agency responsible for handling over 20,000 planning cases every year. Planning Inspectorate has invested in OpenText Content Server, OpenText Template Workspaces, and OpenText Streamserve, which has enabled them t
Slide 32: Customer Win | RS Components
Customer Win | RS Components RS Components is the trading brand of Electrocomponents plc, the world’s leading high service distributor of electronics and maintenance products. RS Components has invested in OpenText Archiving for SAP Solutions and Data Archiving for SAP Solutions for robust, secure a
Slide 33: Summary
Summary 1. Compelling investment thesis 2. EIM: Large, growing and relevant market 3. 7 years consistent growth: 29.6% CAGR: non-GAAP EPS 25.9% CAGR: Cash Flow from Operations* 16.5% CAGR: Revenue B*Before the impact of special charges COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 33
Slide 34: Summary
Summary EIM Growth Leadership $19B TAM 2016. Revenue. License. Company. Products. 10% CAGR. EPS. CF. Customers. Consistency Doubled the company in six years. Year over Year execution. Acquisitions 34
Slide 35: Unleashing the Power of Information
Unleashing the Power of Information
Slide 36: References
References • ECM, BPM: Gartner Forecast Enterprise Software Markets, 2009-2016 1Q12 Update • InfoExchange: Research and Markets, Computer-based Fax Markets, 2010-2015 • Gartner Enterprise Software Markets, 2009-2016 • 1Q12 Update, Davidson Consulting, Fax Server Industry Forecast, 2011-2016 • CEM: G
Slide 37: Summary of Quarterly Results
Summary of Quarterly Results % Change % Change Q3 FY13 Q2 FY13 Q3 FY12 (Q/Q) (Y/Y) Revenue (million) $337.7 $352.2 $292.3 (4.1)% 15.5% GAAP gross margin 64.2% 65.2% 63.6% (100) bps 60 bps GAAP operating margin 12.1% 19.1% 9.3% (700) bps 280 bps GAAP EPS, diluted $0.44 $1.04 $0.59 (57.7)% (25.4)% Non
Slide 38: Summary of Year To Date Results
Summary of Year To Date Results % Change Q3 FY13 Q2 FY13 Q3 FY12 (Y/Y) Revenue (million) $1,016.1 $678.4 $901.8 12.7% GAAP gross margin 64.2% 64.1% 65.2% (100) bps GAAP operating income 14.6% 15.8% 12.2% 240 bps margin GAAP EPS, diluted $1.80 $1.37 $2.00 (10.0)% Non-GAAP gross margin * 71.2% 71.1% 7
Slide 39: Summary of Quarterly Revenue Results
Summary of Quarterly Revenue Results* % Change % Change In millions Q3 FY13 Q2 FY13 Q3 FY12 (Q/Q) (Y/Y) License $69.0 $76.1 $61.0 (9.3)% 13.3% Cloud services 44.4 46.2 N/A (3.7)% N/A Customer support 166.6 164.7 166.0 1.2% 0.3% Professional service and other 57.7 65.2 65.3 (11.6)% (11.8)% Total $337
Slide 40: Summary of Year To Date Revenue Results
Summary of Year To Date Revenue Results* % Change In millions Q3 FY13 Q2 FY13 Q3 FY12 (Y/Y) License $200.8 $131.8 $215.7 (6.9%) Cloud services 135.5 91.0 N/A N/A Customer support 493.3 326.8 493.4 (0.0%) Professional service and other 186.5 128.8 192.7 (3.3)% Total $1,016.1 $678.4 $901.8 12.7% * Ind
Slide 41: Reconciliation of Selected Non-GAAP Measures | Q3 FY13
Reconciliation of Selected Non-GAAP Measures | Q3 FY13 (in ‘000s USD) Three months ended March 31, 2013 GAAP Adjustments FN Non- GAAP COST OF REVENUES Cloud Services 18,891 (50) 1 18,841 Customer Support 27,497 (130) 1 27,367 Professional Service and Other 48,252 (295) 1 47,957 Amortization of acqui
Slide 42: Reconciliation of Selected Non-GAAP Measures | Q3 FY13
Reconciliation of Selected Non-GAAP Measures | Q3 FY13 FOOTNOTES 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 1 results Adjustment relates to the exclusion of amo
Slide 43: Reconciliation of Selected Non-GAAP Measures | Q3 FY13 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 FY13 YTD (in ‘000s USD) Nine months ended March 31, 2013 GAAP Adjustments FN Non- GAAP COST OF REVENUES Cloud Services 55,435 (80) 1 55,355 Customer Support 81,597 (275) 1 81,322 Professional Service and Other 144,498 (660) 1 143,838 Amortization of
Slide 44: Reconciliation of Selected Non-GAAP Measures | Q3 FY13 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 FY13 YTD FOOTNOTES 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 1 results Adjustment relates to the exclusion of
Slide 45: Reconciliation of Selected Non-GAAP Measures | Q2 FY13
Reconciliation of Selected Non-GAAP Measures | Q2 FY13 (in ‘000s USD) Three months ended December 31, 2012 GAAP Adjustments FN Non- GAAP COST OF REVENUES Cloud Services 18,261 (30) 1 18,231 Customer Support 28,277 (107) 1 28,170 Professional Service and Other 47,664 (188) 1 47,476 Amortization of ac
Slide 46: Reconciliation of Selected Non-GAAP Measures | Q2 FY13
Reconciliation of Selected Non-GAAP Measures | Q2 FY13 FOOTNOTES 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 1 results Adjustment relates to the exclusion of amo
Slide 47: Reconciliation of Selected Non-GAAP Measures | Q2 FY13 YTD
Reconciliation of Selected Non-GAAP Measures | Q2 FY13 YTD (in ‘000s USD) Six months ended December 31, 2012 GAAP Adjustments FN Non- GAAP COST OF REVENUES Cloud Services 36,544 (30) 1 36,514 Customer Support 54,100 (145) 1 53,955 Professional Service and Other 96,246 (365) 1 95,881 Amortization of
Slide 48: Reconciliation of Selected Non-GAAP Measures | Q2 FY13 YTD
Reconciliation of Selected Non-GAAP Measures | Q2 FY13 YTD FOOTNOTES 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 1 results Adjustment relates to the exclusion of
Slide 49: Reconciliation of Selected Non-GAAP Measures | Q3 FY12
Reconciliation of Selected Non-GAAP Measures | Q3 FY12 (in ‘000s USD) Three months ended March 31, 2012 GAAP Adjustments FN Non- GAAP COST OF REVENUES Customer Support $ 27,987 ($53) 1 $ 27,934 Professional Service and Other 52,596 (203) 1 52,393 Amortization of acquired technology-based intangibles
Slide 50: Reconciliation of Selected Non-GAAP Measures | Q3 FY12
Reconciliation of Selected Non-GAAP Measures | Q3 FY12 FOOTNOTES 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 1 results Adjustment relates to the exclusion of amo
Slide 51: Reconciliation of Selected Non-GAAP Measures | Q3 FY12 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 FY12 YTD (in ‘000s USD) Nine months ended March 31, 2012 GAAP Adjustments FN Non- GAAP COST OF REVENUES Customer Support $ 82,724 $ (112) 1 $ 82,612 Professional Service and Other 153,551 (408) 1 153,143 Amortization of acquired technology-based inta
Slide 52: Reconciliation of Selected Non-GAAP Measures | Q3 FY12 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 FY12 YTD FOOTNOTES 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 1 results Adjustment relates to the exclusion of