Slide 1: FY2023 Full Year Financial Results
Integrated Research Limited (ASX:IRI) FY2023 Full Year Financial Results 25 August 2023 John Ruthven, CEO Matthew Walton, CFO
Slide 2: We are IR
We are IR A leading global software company providing performance and experience management solutions for the world's mission critical ecosystems. Real-time analytics, fast troubleshooting, dynamic alerts, comprehensive reporting and customizable dashboards delivers a seamless user experience across
Slide 3: Blue Chip Customer Base
Blue Chip Customer Base Long-term, high value relationships based on mission critical solutions Tech | Telco BFSI Health | Gov | Edu Retail |Industrial | Other 5/20 largest Australian companies 5/10 top US telcos 7/10 top US banks 5/25 Fortune 500 top companies (market cap) 3
Slide 4: CEO Key Messages
CEO Key Messages Transition underway – building a stronger IR with an expanded product set to meet market demand 1. Improved FY23 performance across all geographies and products on stronger renewals cycle. Business is steady on new customer wins, however, execution challenges remain across Collabora
Slide 5: Full-Year Performance Review: Statutory (A$M)
Full-Year Performance Review: Statutory (A$M) Strong TCV growth drives statutory revenue 75.5 76.3 69.8 62.9 CASH RECEIPTS FROM REVENUE 11% CUSTOMERS 1% Jun-22 Jun-23 Jun-22 Jun-23 16.9 12.1 13.8 8.5 NET OPERATING EBITDA 42% CASHFLOW 18% Jun-22 Jun-23 Jun-22 Jun-23 18.6 2.6 9.3 1.5 NPAT (Excl impair
Slide 6: Full-Year Performance Review: Proforma (A$M)
Full-Year Performance Review: Proforma (A$M) TCV is a sales indicator, together with ARR, of the future direction of key proforma metrics 68.5 68.1 67.5 56.7 TOTAL CONTRACT ANNUAL RECURRING VALUE (TCV) 21% REVENUE 1 1% Jun-22 Jun-23 Jun-22 Jun-23 68.4 68.3 PROFORMA PROFORMA 24.5 17.6 SUBSCRIPTION RE
Slide 7: FY23 Progress Report
FY23 Progress Report Priority Status Notes 1. Returning the Americas and Europe to on plan Europe TCV +18% on pcp, Americas TCV growth +5% pcp, underwritten by strong renewals 2. Increasing new product adoption and behind Percent of TCV from new products trailing traction plan plan; 3. High customer
Slide 8: Financials
Financials
Slide 9: Revenue Analysis: TCV, Statutory, Proforma and ARR
Revenue Analysis: TCV, Statutory, Proforma and ARR TCV is a sales indicator, together with ARR, of the future direction of key proforma metrics 120.0 • Cloud related sales started in 2021, reason why TCV and statutory revenue gap narrowed from 2021 100.0 • Proforma revenue includes recurring and non
Slide 10: Geographic and Product Revenue Analysis
Geographic and Product Revenue Analysis APAC and Transact show steady period on period growth Geographic* Asia Pacific revenue - A$M Europe revenue - £M Americas - US$M 25 12 60 20 10 50 8 40 15 6 30 10 4 20 5 2 10 0 0 0 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021
Slide 11: Revenue Analysis: ARR Summary
Revenue Analysis: ARR Summary Headwinds offsetting growth and tailwinds 80 2.0 10.3 3.1 70 A$M 68.1 67.5 4.3 0.3 60 ARR Jun 2022 New logos Upsell Collaborate Downsell Collaborate New logos T&I FX gains ARR Jun 2023 Collaborate • Total ARR decline of 1% on pcp to $67.5m • FX translation benefit of 6%
Slide 12: Operating Costs (ex Impairment)
Operating Costs (ex Impairment) Cost control improved through FY23 containing increase to 2% Product and Technology - A$M Sales and marketing - A$M General and administration - A$M 50 60%50 50 50% 54% 30% 45 52% 45 45 40 50% 25% 40 40% 41.1 40.9 40 31% 35 35 40%35 20% 29% 30 30% 30 30 25 25 30%25 15
Slide 13: Full-Year Performance Review: Key Metrics
Full-Year Performance Review: Key Metrics Recurring proforma subscription revenue >80% Proforma Revenue Contract Life TCV Renewal & New 79.8m 68.5m 75.6m 14% 10% 56.6m 35% 42% 60% 44% 35% 28% 86% 90% 38% 30% 30% 30% 18% 10% Jun-22 Jun-23 Jun-22 Jun-23 Jun-22 Jun-23 Recurring Non Recurring 1 & 2 Yrs
Slide 14: Net Cash Flow Analysis
Net Cash Flow Analysis Improved cash conversion - a timing issue 100 90 76.3 60.7 80 70 60 50 A$M 40 1.7 30 7.5 0.1 18.6 20 12.3 10 0 Net cash Cash receipts from Cash paid to supplies Income tax Development spend FX, Interest & other Net cash 30 June 22 customers and employees 30 Jun 23 • Cash paid
Slide 15: EBITDA Cash Flow Bridge
EBITDA Cash Flow Bridge Debtor factoring in run-off and Working capital improvement 20 5.4 17.5 2.7 0.6 1.7 Running-off in 13.8 December 2023 12.1 A$M 10 0 EBITDA - statutory Over-time revenue Proforma EBITDA Historical debtor Working capital change Income taxes paid Net cash from operations convers
Slide 16: Balance Sheet
Balance Sheet Supporting self-funded organic growth Period Ended (as at) Jun 22 Jun 23 YoY A$M A$M Strong balance sheet with Cash and cash equivalents 12.3 18.6 50% Trade and other receivables net cash of $18.6M and no 68.8 63.5 (8%) Intangible assets debt carried forward. 31.3 0.0 (100%) Right-of-u
Slide 17: Strategy & Product
Strategy & Product
Slide 18: Product strategy
Product strategy Execution phase extended Phase II Phase I execution Phase III innovation new business scale new products grow market share Collaborate Transact and Infrastructure extend product target institutions converting customer solution focus on large enterprises suite to SWIFT ISO20022 stand
Slide 19: Collaborate – Strategy & Roadmap
Collaborate – Strategy & Roadmap Strategy Drivers Challenges Addressing challenges Customers – Customer success High single digit growth in Cloud-based vendors – GTM re-focused on – Renewal yield Collaboration market limiting API access to data large multi-vendor – Upsell seats customers & prospects
Slide 20: Transact & Infrastructure – Strategy & Roadmap
Transact & Infrastructure – Strategy & Roadmap Strategy Drivers Challenges Addressing challenges Customers – Customer success Double digit market Customer inertia - slow to Re-balanced GTM across – Renewal yield growth adopt new products customers and new – Upsell capacity prospects – Upsell new pro
Slide 21: Collaborate Customer Wins
Collaborate Customer Wins Providing assurance for the mission critical services of our customers Sutter Health (USA) Cigna Healthcare (USA) LANcom (Taiwan) 3-year term 3-year term 5-year term New customer Renewal & expansion New customer [service provider] 53,000 users 135,000 users 250,000 Solution
Slide 22: Transact Customer Wins
Transact Customer Wins Ensuring reliability in today’s complex payments environments Qatar Central Bank Evertec, Inc. Middle East Central America 5-year term 5-year term New customer Renewal Solution: Transact and Infrastructure Solution: Transact and Infrastructure Customer challenge: The central b
Slide 23: Innovation - Investment FY23
Innovation - Investment FY23 FY24 focus on customer driven solutions for near term opportunities FY24 28% innovation budget reduced by FY23 ~50% R&D 15% R&D spend investment $7.5M* 67% of 33% spend on SaaS/Hybrid 25% based products and platform Cloud Collaborate Cloud Transact Cloud Platform On-prem
Slide 24: FY24 Key Priorities and Outlook
FY24 Key Priorities and Outlook
Slide 25: FY24 Key Priorities
FY24 Key Priorities Markets – continue growth momentum in the Americas and Europe New customers – win more new business and grow product footprint Existing customers – improve customer retention and renewal yield Product innovation – collaborate with customers to reduce development cycles and valida
Slide 26: FY24 Observations
FY24 Observations Having commenced FY24, Integrated Research makes the following observations regarding the current trading year: • Customer sentiment appears to have normalised to pre-COVID levels. Customer budgets not presently impacted by current economic conditions, reinforcing the cautious opti
Slide 27: Disclaimer
Disclaimer SUMMARY INFORMATION FORWARD LOOKING STATEMENTS NOT AN OFFER This document and the associated transcript (together “the presentation”) has The presentation contains certain "forward-looking statements”. The words The presentation is for information purposes only and is not a prospectus, be
Slide 28: Appendix
Appendix
Slide 29: Annual Recurring Revenue - Analysis
Annual Recurring Revenue - Analysis All Products APAC AUD Americas USD Europe GBP Consolidated AUD Growth • Overall FX tailwind of 6%. Opening ARR 14.4 30.3 5.9 68.1 • APAC the only region with FX gain/(loss) 1 0.65 0.52 4.3 6% wins exceeding losses. New logos Upsell 1.9 0.1 0.9 1.2 0.1 0.0 3.5 2.0
Slide 30: Proforma Subscription Revenue
Proforma Subscription Revenue Purpose: To provide an alternate view of underlying performance by restating term licence and maintenance revenues on a recurring subscription basis. How: • All licence sales from FY2012 to FY2023 were analysed for each region in their natural currencies (the historic a
Slide 31: Full Year proforma subscription revenue
Full Year proforma subscription revenue Reconciliation of statutory to proforma revenue Interim revenue 2020 2021 2022 2023 2020 2021 2022 2023 A$M A$M A$M A$M Infrastructure 21.5 18.3 17.8 18.6 6% -15% -2% 4% Transact 10.5 10.0 10.9 11.5 25% -5% 10% 5% Collaborate 49.3 41.4 39.6 38.3 9% -16% -4% -3
Slide 32: Product TCV
Product TCV Strong renewals across all products, steady new business Collaborate – A$M Transact – A$M Infrastructure – A$M 34.8 27.0 15.5 16.5 13.7 12.8 11.9 3.0 1.9 19.3 7.5 2.1 10.5 2.7 9.8 9.8 11.8 4.8 Jun-22 Jun-23 Jun-22 Jun-23 Jun-22 Jun-23 Renewal New & Capacity Renewal New & Capacity Renewal
Slide 33: Product TCV by Geography
Product TCV by Geography Growth across all regions APAC – A$M Americas – US$M Europe - £M 19.8 21.3 18.5 4.8 14.0 12.3 8.0 5.2 7.4 3.8 16.5 10.5 1.6 4.7 6.6 7.5 2.2 Jun-22 Jun-23 Jun-22 Jun-23 Jun-22 Jun-23 Renewal New & Capacity Renewal New & Capacity Renewal New & Capacity APAC, up 40%: Americas,
Slide 34: Proforma Subscription Revenue
Proforma Subscription Revenue APAC – A$M Americas – US$M Europe - £M 30.9 29.3 12.4 12.3 -1% 14.0 15.0 6.5 5.4 8.1 8.0 -0% 18.5 2.0 17.0 2.0 +2% -8% 5.9 6.9 +17% 4.5 3.4 -23% Jun-22 Jun-23 Jun-22 Jun-23 Jun-22 Jun-23 Collaborate T&I Collaborate T&I Collaborate T&I Collaborate – A$M Infrastructure –
Slide 35: Glossary
Glossary Annual Recurring Revenue (ARR) equals to the monthly recurring revenue at the end of the period multiplied by 12. Cash conversion rate equals cash receipts divided by proforma revenue. Customer retention equals the opening customer count for the reporting period less customers who are deeme