Slide 1: FY12-Q3 Investor Presentation
FY12-Q3 INVESTOR PRESENTATION May 1, 2012 Copyright © Open Text Corporation. All rights reserved.
Slide 2: Disclaimer
Disclaimer 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 factors th
Slide 3: Reconciliation of Selected Non-GAAP Measures – Q3 FY11
Reconciliation of Selected Non-GAAP Measures – Q3 FY11 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 2 Adjustment relates to the exclusion of a
Slide 4: Why OpenText
Why OpenText Largest independent provider of Enterprise Content Management (ECM) Investing in new markets: Business Process Management (BPM) Demonstrated earnings power and operational discipline TTM cash flow of $238.6* million and large recurring maintenance revenues $508.9 million in cash* Strate
Slide 5: Why Customers Buy. Paths to Growth.
Why Customers Buy. Paths to Growth. Why Customers Buy Paths To Growth Compliance and Core ECM Share Gains Regulations Business Process Unstructured Data Management (BPM) Information Security Customer Experience Mobility Management (CEM) Cloud SAP and Microsoft Standardization and New Verticals Best
Slide 6: Diverse Global Customer Base
Diverse Global Customer Base Slide 6 Copyright © 2012 Open Text Corporation. All rights reserved. 6
Slide 7: Customer win: News International
Customer win: News International Largest newspaper publisher in the UK Extended its use of OpenText Semantic solutions, to become a key part of their Newsroom 360 transformation project Creates and distributes news content across all digital channels Slide 7 Copyright © 2012 Open Text Corporation. A
Slide 8: Customer Win: The Spanish National Lottery
Customer Win: The Spanish National Lottery Selected OpenText Web Experience Management to create their new website Will be the main communication channel for their organization in the future Copyright © Open Text Corporation. All rights reserved. Slide 8
Slide 9: Customer win: Trinity Mirror plc
Customer win: Trinity Mirror plc Over the next 18 months all Trinity Mirror image desks will be consolidated in to the single database All its published digital assets, pages, articles and video This will form a powerful and agile content hub - allows Trinity Mirror to leverage any digital asset aga
Slide 10: Customer win: Emergency Medicine Physicians
Customer win: Emergency Medicine Physicians Purchased OpenText Tempo™ Information securely available allowing users to work with it as they need, using desktop, laptops, tablets, and mobile devices. “Realizing that Dropbox did not meet our security requirements, EMP purchased OpenText Tempo for secu
Slide 11: OpenText Partner Ecosystem
OpenText Partner Ecosystem Applications SI / FSI Transformation Copyright © 2012 Open Text Corporation. All rights reserved. 11
Slide 12: The Value of Enterprise Information Management
The Value of Enterprise Information Management Information Information Information Information Governance Security Exchange Processes Meet growing Protect your Support productive, Make optimal use compliance and valuable business secure and of resources by regulatory information from engaging empowe
Slide 13: Enterprise Information Management
Enterprise Information Management $13 Billion Opportunity, 10% Growth Information ECM BPM CEM Discovery Exchange 2012 2012 2012 2012 2012 $4.6B Market $2.6B Market $3.2B Market 1.35B Market $1.4B Market 7.2% growth 7.9% Growth 11.4% Growth 14% Growth 14% Growth 2011 - 2016 2011-2016 2010-2015 2009 -
Slide 14: The Big Picture
The Big Picture 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 the digital universe is on Deep Web sites protected by passwords Source: The Deep Web: Semantic Search Takes Innovation to New Depths
Slide 15: Why OpenText Will Lead the Market
Why OpenText Will Lead the Market 1. Market evolving from Content Management to Enterprise Information Management 2. OpenText is well positioned to lead this category with broad product offerings and industry expertise 3. A trusted vendor - strong partner relationships with SAP and Microsoft/SharePo
Slide 16: FY12 – Q3 Business Highlights
FY12 – Q3 Business Highlights Technology, services, government and financial verticals saw the most demand Customer successes in the third quarter include Sumitomo Heavy Industry, NTT Comware, Conoco Phillips, News International, Trinity Mirror and The Spanish Lottery Integrated BPM sales force; now
Slide 17: FY12 – Q3 Financial Highlights
FY12 – Q3 Financial Highlights Total revenue for the period was $292.3 million, up 11.1% Y/Y License revenue was $61.0 million, down 10.1% Y/Y GAAP–based EPS was $0.59 compared to $0.61 Y/Y Non-GAAP-based EPS was $1.01 compared to $0.91 Y/Y* GAAP-based operating margin was 9.3% Non-GAAP-based operat
Slide 18: FY12 – Q3 Financial Stats
FY12 – Q3 Financial Stats Americas 53% of total revenue, EMEA 38% and Asia Pacific 9% License revenue 21%, customer support 57% and services/other 22% Partners contributed 52% of license revenue Average deal size: $227K Deals over $1 million: 1, compared to 5 Y/Y Deals between $500K and $1 million:
Slide 19: Summary of Quarterly Results
Summary of Quarterly Results % Change % Change Q3 FY12 Q2 FY12 Q3 FY11 (Q/Q) (Y/Y) Revenue (million) $292.3 $321.5 $263.0 (9.1%) 11.1% GAAP gross margin 63.6% 67.1% 66.5% (350) bps (290) bps GAAP operating 9.3% 17.2% 10.9% (790) bps (160) bps income margin GAAP EPS $0.59 $0.81 $0.61 (27.2%) (3.3%) N
Slide 20: Summary of Year To Date Results
Summary of Year To Date Results % Change Q3 FY12 Q2 FY12 Q3 FY11 (Y/Y) Revenue (million) $901.8 $609.5 $747.9 20.6% GAAP gross margin 65.2% 66.0% 67.1% (190) bps GAAP operating 12.2% 13.5% 15.2% (300) bps income margin GAAP EPS $2.00 $1.41 $1.63 22.7% Non-GAAP gross 72.3% 72.9% 73.8% (150) bps margi
Slide 21: Summary of Quarterly Revenue Results
Summary of Quarterly Revenue Results % Change % Change In millions Q3 FY12 Q2 FY12 Q3 FY11 (Q/Q) (Y/Y) License $61.0 $89.7 $67.8 (32.0%) (10.0%) Customer 166.0 165.4 143.1 0.4% 16.0% support Service and 65.3 66.4 52.1 (1.7%) 25.3% other Total $292.3 $321.5 $263.0 (9.1%) 11.1% Slide 21 Copyright © 20
Slide 22: Summary of YTD Revenue Results
Summary of YTD Revenue Results % Change % Change In millions Q3 FY12 Q2 FY12 Q3 FY11 (Q/Q) (Y/Y) License $215.7 $154.7 $189.6 39.4% 13.8% Customer 493.4 327.4 409.6 50.7% 20.5% support Service and 192.7 127.4 148.6 51.3% 29.7% other Total $901.8 $609.5 $747.8 48.0% 20.6% Slide 22 Copyright © 2012 Op
Slide 23: FY12 – Q3 Revenue Breakdown
FY12 – Q3 Revenue Breakdown Global Revenue by Geography Global Revenue Mix 9% 22% 21% 38% 53% 57% Service* Customer Support License EMEA Asia Pac Americas License Revenue by industry 4% 2% Technology 5% 19% Services 5% Public Sector 7% Financial Basic Materials 15% Healthcare 14% Consumer Goods Indu
Slide 24: Previously Announced Revenue Mix & Margin Internal Target Model
Previously Announced Revenue Mix & Margin Internal Target Model* Revenue Type Fiscal 2012 Target Three months Nine months ended Model ended Mar 31, 2012 Mar 31, 2012 (Actual) (Actual) Product License 25-30% 20.9% 23.9% Product Maintenance 52-57% 56.8% 54.7% Professional Services 18-23% 22.3% 21.4% N
Slide 25: About EasyLink
About EasyLink Public Company (Nasdaq ESIC) Cloud-based offerings Fax (production, desktop, broadcast) and Messaging (email, telex, notifications, EDI) TTM revenue of $186 million Operate profitably Revenue splits: 60% Americas, 23% APAC, 17% EMEA. Approximately 550 Employees Headquarters in Atlanta
Slide 26: Business Rationale
Business Rationale Secure Information Exchange: $3.2B market, 11.4% CAGR* Upon close, transaction will be immediately accretive Cloud platform for Fax and Messaging Scalable architecture Leverage platform for other OpenText software *InfoExchange: Research and Markets, Computer-based Fax Markets, 20
Slide 27: Transaction Details
Transaction Details All cash bid $7.25 per share in cash, purchase price of approximately $310 million, inclusive of debt Subject to customary closing conditions and approvals Expected to close in mid-to-late summer 2012 Copyright © 2011 Open Text Corporation. All rights reserved. 27
Slide 28: Thank You
Thank You Copyright © 2012 Open Text Corporation. All rights reserved. 28
Slide 29: 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 Adjustment FN Non- GAAP s Cost of Revenues: Customer support $ 27,987 $ (53) 1 $ 27,934 Service and other 52,596 (203) 1 52,393 Amortization of acquired technology-based intangibles 21,264 (2
Slide 30: Reconciliation of Selected Non-GAAP Measures – Q3 FY12
Reconciliation of Selected Non-GAAP Measures – Q3 FY12 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 2 Adjustment relates to the exclusion of a
Slide 31: Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY12
Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY12 (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 Service and other 153,551 (408) 1 153,143 Amortization of acquired technology-based intangibles 63,3
Slide 32: Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY12
Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY12 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 2 Adjustment relates to the exclusion
Slide 33: Reconciliation of Selected Non-GAAP Measures – Q2 FY12
Reconciliation of Selected Non-GAAP Measures – Q2 FY12 (in ‘000s USD) Three months ended December 31, 2011 GAAP Adjustment FN Non- GAAP s Cost of Revenues: Customer support $ 28,468 $ (34) 1 $ 28,434 Service and other 50,604 (106) 1 50,498 Amortization of acquired technology-based intangibles 21,253
Slide 34: Reconciliation of Selected Non-GAAP Measures – Q2 FY12
Reconciliation of Selected Non-GAAP Measures – Q2 FY12 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 2 Adjustment relates to the exclusion of a
Slide 35: Reconciliation of Selected Non-GAAP Measures – Q2 YTD FY12
Reconciliation of Selected Non-GAAP Measures – Q2 YTD FY12 (in ‘000s USD) Six months ended December 31, 2011 GAAP Adjustment FN Non- GAAP s Cost of Revenues: Customer support $ 54,737 $ (58) 1 $ 54,679 Service and other 100,955 (205) 1 100,750 Amortization of acquired technology-based intangibles 42
Slide 36: Reconciliation of Selected Non-GAAP Measures – Q2 YTD FY12
Reconciliation of Selected Non-GAAP Measures – Q2 YTD FY12 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 2 Adjustment relates to the exclusion
Slide 37: Reconciliation of Selected Non-GAAP Measures – Q3 FY11
Reconciliation of Selected Non-GAAP Measures – Q3 FY11 (in ‘000s USD) Three months ended March 31, 2011 GAAP Adjustment FN Non- GAAP s Cost of Revenues: Customer support $ 22,699 $ (16) 1 $ 22,683 Service and other 43,830 (116) 1 43,714 Amortization of acquired technology-based intangibles 17,677 (1
Slide 38: Reconciliation of Selected Non-GAAP Measures – Q3 FY11
Reconciliation of Selected Non-GAAP Measures – Q3 FY11 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 2 Adjustment relates to the exclusion of a
Slide 39: Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY11
Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY11 (in ‘000s USD) Nine months ended March 31, 2011 GAAP Adjustment FN Non- GAAP s Cost of Revenues: Customer support $ 63,597 $ (34) 1 $ 63,563 Service and other 120,101 (323) 1 119,778 Amortization of acquired technology-based intangibles 49,5
Slide 40: Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY11
Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY11 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 2 Adjustment relates to the exclusion