Slide 1: Q2 Fiscal 2020 Financial & Business Results
Q2 Fiscal 2020 Financial & Business Results NASDAQ: OTEX | TSX: OTEX January 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, anticipated benefits of our partnerships and next generation product lines, the
Slide 3: Twenty Consecutive Quarters of Total Growth
Twenty Consecutive Quarters of Total Growth Total Revenue Growth in CC(1) (Y/Y) 800 6.3% 10.0% 32.6% 1.5% 7.7% 2.0% 20 10.8% 5.9% 700 39.6% 4.4% 29.3% Total Revenues (in millions USD) 36.2% 600 17.2% 500 6.8% 0.2% 14.3% 6.2% 8.1% 3.2% 1.7% 400 Consecutive 300 Quarters of 200 Y/Y Growth (1) 100 0 Qua
Slide 4: Q2 FY'20 Financial Highlights
Q2 FY’20 Financial Highlights With Y/Y Comparisons Q2 FY’20 Trailing Twelve Months (TTM) Ending Q2 FY’20 4.9% 3.2% Total Revenues $771.6M Total Revenues $2.93B 6.3% in CC 7.0% in CC $563.8M, $2.22B, 6.5% 5.5% ARR(1) 73.1% ARR(1) 75.6% 7.8% in CC 9.0% in CC of Total Revenue of Total Revenue 13.3% 13.
Slide 5: Q2 FY'20 Revenue Breakdown
Q2 FY’20 Revenue Breakdown Total Revenue by Total Revenue Mix ARR by Industry(1) Geography 3% 9% 9% 5% 18% 8% 25% 9% 33% 41% 58% 9% 32% 18% 11% 12% Financial Services License Consumer goods Americas Cloud Services & Subscriptions Technology EMEA Public Sector Customer Support Healthcare Professional
Slide 6: Q2 FY'20 Key Customer Wins
Q2 FY’20 Key Customer Wins • The Ministry of Justice in Germany, together with three other state judicial administrations, selected OpenText Intelligent Capture • Enables the digitization of 100 million pages of incoming paper documents in 1,000 workplaces as part of the introduction of electronic c
Slide 7: Carbonite Update and Revenue Impact
Carbonite Update and Revenue Impact • Expect revenue for the 2H of FY’20 to be $195m to $200m, after purchase price accounting (PPA) and disruption of up to 10% for typical integration activities • OpenText will recognize $171.5M of deferred revenue over the life of the contracts after PPA adjustmen
Slide 8: Q3 FY'20 Quarterly Factors
Q3 FY’20 Quarterly Factors:(1) Externalities Company Specific (including Carbonite) • Economy: • Our business is annual, and quarters will vary ◦ Global recession concerns • FY’20 FX headwind unchanged at ~$35 million ◦ Trade and tariff wars • Expect low double-digit revenue growth in Q3 ◦ Europe, U
Slide 9: FY'20 Target Model
FY’20 Target Model Fiscal 2019 Results Previous FY’20 Model Revised FY’20 Model(3) Revenue Type: Annual Recurring Revenue (ARR) 75.1% 74% - 76% 75% - 77% License 14.9% 13% - 17% 13% - 17% Cloud Services and Subscriptions 31.6% 31% - 35% 34% - 38% Customer Support 43.5% 40% - 44% 38% - 42% Profession
Slide 10: FY'22 Long-Term Aspirations
FY’22 Long-Term Aspirations A-EBITDA Margin(1)(2) Operating Cash Flows(2) 38%-40% $1.0B-$1.1B 38.1% $860M +500 bps 106% $417M 33.1% FY'14 Q2 FY'20 TTM FY'14 Q2 FY'20 TTM 1. Please see reconciliation of GAAP to Non-GAAP measures in our historical filings. OpenText Confidential. ©2020 All Rights Reser
Slide 11: Strong Liquidity & Balance Sheet
Strong Liquidity & Balance Sheet Cash Generated for M&A Trended Net Leverage 2.3x leverage post $1.4B acquisition of Carbonite TTM Q2 FY’20 (US$ M) Consolidated Net Leverage Ratio(1) OCF $860 Documentum Acquisition Closing Carbonite 2.6x Acquisition 2.5x Closing Less: Principal $10 2.4x 2.3x 2.3x 2.
Slide 12: Appendix A
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 13: Summary of Quarterly Results with Constant Currency
Summary of Quarterly Results with Constant Currency Q2 FY'20 in % Change (in millions except per share data) Q2 FY'20 Q2 FY'19 $ Change % Change CC* in CC* Revenues: Cloud services and subscriptions $248.3 $219.2 $29.1 13.3 % $250.2 14.1 % Customer support 315.5 310.4 5.2 1.7 % 320.6 3.3 % Total ann
Slide 14: Summary of Year to Date Results with Constant Currency
Summary of Year to Date Results with Constant Currency % Change FY'20 YTD in CC* (in millions except per share data) FY'20 YTD FY'19 YTD $ Change % Change in CC* Revenues: Cloud services and subscriptions $485.6 $427.3 $58.3 13.6 % $489.5 14.5 % Customer support 627.8 621.9 5.9 0.9 % 637.9 2.6 % Tot
Slide 15: Reconciliation of Selected Non-GAAP Measures
Reconciliation of Selected Non-GAAP Measures | Q2 FY'20 Three Months Ended December 31, 2019 (in ‘000s USD) GAAP % of Non-GAAP % of GAAP Total Adjustments FN Non- GAAP Total Revenue Revenue COST OF REVENUES Cloud services and subscriptions $ 103,644 $ (371) (1) $ 103,273 Customer support 29,788 (297
Slide 16: Footnotes
Reconciliation of Selected Non-GAAP Measures | Q2 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 17: Reconciliation of Selected Non-GAAP Measures
Reconciliation of Selected Non-GAAP Measures | FY’20 YTD Six Months Ended December 31, 2019 (in ‘000s USD) GAAP % of Non-GAAP % of GAAP Total Adjustments FN Non- GAAP Total Revenue Revenue COST OF REVENUES Cloud services and subscriptions $ 205,806 $ (754) (1) $ 205,052 Customer support 59,175 (613)
Slide 18: Footnotes
Reconciliation of Selected Non-GAAP Measures | FY’20 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 19: Reconciliation of Selected Non-GAAP Measures
Reconciliation of Selected Non-GAAP Measures | Q2 FY’19 Three Months Ended December 31, 2018 (in ‘000s USD) GAAP % of Non-GAAP % of GAAP Total Adjustments FN Non- GAAP Total Revenue Revenue COST OF REVENUES Cloud services and subscriptions $ 88,698 $ (265) (1) $ 88,433 Customer support 31,273 (271)
Slide 20: Footnotes
Reconciliation of Selected Non-GAAP Measures | Q2 FY’19 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 21: Reconciliation of Selected Non-GAAP Measures
Reconciliation of Selected Non-GAAP Measures | FY’19 YTD Six Months Ended December 31, 2018 (in ‘000s USD) GAAP % of Non-GAAP % of GAAP Total Adjustments FN Non- GAAP Total Revenue Revenue COST OF REVENUES Cloud services and subscriptions $ 176,401 $ (582) (1) $ 175,819 Customer support 61,738 (571)
Slide 22: Footnotes
Reconciliation of Selected Non-GAAP Measures | FY'19 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 23: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA (in '000s USD) FY'20 YTD Q2 FY'20 FY'19 YTD Q2 FY'19 GAAP-based Net income attributable to OpenText $ 181,868 $ 107,467 $ 140,756 $ 104,432 Add: Provision for (recovery of) income taxes 69,909 46,818 66,086 36,236 Interest and other related expense, net 64,586 32,37