Open Text Corporation · TSX:OTEX
Open Text — RBC Capital Markets Technology Conference 2014
39 slides from Open Text's conference presentation, Sep 3, 2014
Slide 1: RBC Keynote Presentation
Unleashing the Power of Information RBC KEYNOTE PRESENTATION FY14 | September 3, 2014 NASDAQ: OTEX TSX: OTC
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 Fiscal 2015 on growth in earnings and cash flows, creating value through investments in broader Enterprise Information Management (EIM) capabi
Slide 3: Scale and Momentum
Scale and Momentum ① $1.625 B+ global revenue, compelling operating margins, cash flow and quarterly dividend program ② 8,000 employees ③ Sales and service distribution network in 40 countries ④ Leader in Enterprise Information Management (EIM) market ⑤ EIM is a large, growing and relevant $20.9b ma
Slide 4: History of Growing Revenue
History of Growing Revenue Y/Y in $M: 7 Fiscal Years 7 Year CAGR 15.4%* $1,624.7 309.2 $1,363.3 $1,207.5 279.6 361.1 $1,033.3 293.7 173.8 $912.0 269.2 $785.7 $725.5 238.1 229.8 219.1 707.0 656.6 658.2 560.5 507.5 405.3 363.6 257.2 251.7 247.4 166.5 203.6 142.8 150.5 FY08 FY09 FY10 FY11 FY12 FY13 FY1
Slide 5: History of Growing Non-GAAP EPS & Cash Flow
History of Growing Non-GAAP EPS & Cash Flow 7 Year Non-GAAP 7 Year Cash Flow $448 M EPS CAGR 24.4%* $3.37 CAGR 22.1%** $2.79 $339 M $2.30 $287 M $2.04 $244 M $214 M $1.56 $186 M $166 M $1.26 $1.02 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY08 FY09 FY10 FY11 FY12 FY13 FY14 *FY07 non-GAAP EPS $0.73 *all his
Slide 6: Key Markets
Key Markets Information Compliance B2B Commerce Management Process Information Governance Business Network Applications Risk Management Trading Partners Platform Process Control Vertical Services Deployment Services | On-Premises | Managed Services | PaaS | SaaS 6
Slide 7: FY14 Financial Highlights
FY14 Financial Highlights Total Revenue Up 19% Y/Y Non-GAAP EPS Up 21% Y/Y Total revenue $1,624.7 million up 19% Y/Y Non-GAAP-based EPS was $3.37 compared Revenue by Geography: to $2.79 Y/Y* North America 54% GAAP–based EPS was $1.81 compared to $1.26 Y/Y EMEA 36% Non-GAAP-based operat
Slide 8: FY14 Revenue Breakdown
FY14 Revenue Breakdown F14 - License Total Revenue Total Revenue Mix Revenue by Industry by Geography 2% 4% 7% 16% 10% 15% 19% 7% 8% 15% 36% 54% 22% 13% 14% 44% 14% Services Financial Americas License Basic Materials Public Sector EMEA Cloud Services Technology Healthcare APJ Customer Support Consum
Slide 9: Demand Drivers
Demand Drivers ① Digitalization – “Digital Leaders are growing sales at an average of 2.5 times that of their sector peers…Digital Transformation can boost the bottom line by 50% over the next 5 years.” ② Compliance – “91% of companies plan to reorganize and reprioritize their approaches to risk man
Slide 10: Customer Wins
Customer Wins Creating digitized channels Digitized customer journey Information will find the next 100 years of Energy The compliance platform for those who know compliance best Digitized the Supply Chain . Accelerating Commerce 10
Slide 11: OpenText Intelligent Growth System (OTIGS)
OpenText Intelligent Growth System (OTIGS) Five core elements to our business system Customer & Partner Financial Performance Each element has clear outcomes and Loyalty measurements We lead with value and invest in the markets we feel we can win in Operational Operating principles are align
Slide 12: OpenText Business System in Action
OpenText Business System in Action Growth Leadership Value Product adoption and Vision innovation Shareholder return Expertise B2B Growth Growth Transformative Solutions Employee Leadership Compliance and Programs regulated industries Enriched Ecosystem Accelerated transition Product Upper Right to
Slide 13: OpenText Intelligent Growth System in Action (OTIGS)
OpenText Intelligent Growth System in Action (OTIGS) Key Markets OTIGS Financial Customer & Growth Performance Partner Loyalty Information B2B Compliance Management Commerce Process Applications Platform Information Governance Risk Management Process Control Business Network Trading Partners Vertica
Slide 14: FY15 Growth Initiatives
FY15 Growth Initiatives 1. Product adoption and innovation strong product cycle with our EIM suites and B2B services. “Blue Carbon,” features apps and analytics for the cloud 2. B2B Growth expand beyond large enterprises to enter the mid-market + opportunities in EMEA 3. Compliance and regulated ind
Slide 15: Acquisitions are Core to Our Business Model
Acquisitions are Core to Our Business Model GSX Group Inc. 2014 Acquisitions are core to our Cordys 2014 ICCM 2013 Resonate KT 2013 business model Easylink 2012 We operate strategic platforms vs. Systems Solutions 2012 optimizing individual assets Operitel Corporation 2012 Over the last 20 yea
Slide 16: Strategic Platforms
Strategic Platforms CONTENT INFO EXCH. EXPERIENCE PROCESS DISCOVERY • Content • EDI / B2B • Web Experience • Business Process • Search Management • The Grid • Customer Management • Content Analytics • Records • Capture & Communications • Dynamic Case • Unified Management Recognition • Digital Asset
Slide 17: Capital Allocation
Capital Allocation Acquisitions - Core to Our Business Model Over the last 20 years, we have completed 48 acquisitions and Dividend per put $3.4 billion in capital to work share* $0.1725 $0.1725 Estimate $3 billion in gross acquisition capacity over the next 5 years $0.15 $0.15 $0.15 $0.15 Debt
Slide 18: FY15 External Target Model
FY15 External Target Model* Revenue Type Fiscal 2015 Target Model As a % of revenue Product License 15 - 20% Cloud Services 28 - 33% Product Maintenance 35 - 40% Professional Services 10 - 15% Non-GAAP Gross Margin Product License 94 - 96% Cloud Services 58 - 60% Product Maintenance 85 - 87% Profess
Slide 19: Unleashing the Power of Information
Unleashing the Power of Information 19
Slide 20: References
References ECM, BPM: Gartner Forecast Enterprise Software Markets, 2012-2017 3Q13 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 21: Customer Wins
Customer Wins Del Monte Foods selected multiple solutions from the OpenText Suite for SAP® including Document Access for SAP® Solutions, Vendor Invoice Management for SAP® Solutions, and Invoice Del Monte Foods, Inc. Capture Center for SAP® Solutions. The City of Calgary has extended its investment
Slide 22: Pro forma Impact of GXS Deferred Revenue and Deferred Implementation Costs
Pro forma Impact of GXS Deferred Revenue and Deferred Implementation Costs In connection with the acquisition of GXS, acquired deferred revenue and deferred implementation cost amounts were adjusted to fair value as part of the valuation undertaken as of the date of acquisition. The deferred revenue
Slide 23: Summary of Quarterly Results
Summary of Quarterly Results % Change % Change Q4 FY14 Q3 FY14 Q4 FY13 (Q/Q) (Y/Y) Revenue (million) $494.0 $442.8 $347.3 11.6% 42.2% GAAP-based gross margin 69.1% 67.3% 66.0% 180 bps 310 bps GAAP-based operating margin 21.8% 15.1% 14.2% 670 bps 760 bps GAAP-based EPS, diluted* $0.72 $0.38 $0.36 89.
Slide 24: Summary of Year To Date Results
Summary of Year To Date Results % Change FY14 Q3 FY14 YTD FY13 (Y/Y) Revenue (million) $1,624.7 $1,130.7 $1,363.3 19.2% GAAP-based gross margin 68.5% 68.3% 64.4% 410 bps GAAP-based operating margin 18.5% 17.1% 14.5% 400 bps GAAP-based EPS, diluted* $1.81 $1.08 $1.26 43.7% Non-GAAP-based gross margin
Slide 25: Summary of Quarterly Revenue Results
Summary of Quarterly Revenue Results* % Change % Change In millions Q4 FY14 Q3 FY14 Q4 FY13 (Q/Q) (Y/Y) License $99.7 $73.1 $78.8 36.4% 26.5% Cloud services 148.9 128.4 41.9 16.0% 255.4%** Customer support 183.9 180.3 164.9 2.0% 11.5% Professional service and other 61.5 61.0 61.7 0.9% (0.2)% Total $
Slide 26: Summary of Year To Date Revenue Results
Summary of Year To Date Revenue Results* FY14 Q3 FY14 YTD FY13 % Change In millions (Y/Y) License $309.2 $209.6 $279.6 10.6% Cloud services 361.1 212.2 173.8 107.8%** Customer support 707.0 523.1 658.2 7.4% Professional service and other 247.4 185.8 251.7 (1.7)% Total $1,624.7 $1,130.7 $1,363.3 19.2
Slide 27: Appendix A: Use of Non-GAAP Financial Measures
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 28: Reconciliation of Selected Non-GAAP Measures | Q4 FY14
Reconciliation of Selected Non-GAAP Measures | Q4 FY14 (in ‘000s USD) Three months ended June 30, 2014 GAAP % Non- Non-GAAP GAAP Adjustments FN of Rev GAAP % of Rev COST OF REVENUES Cloud services $55,780 $(197) 1 $55,583 Customer support 24,195 (207) 1 23,988 Professional service and other 51,041 (
Slide 29: Reconciliation of Selected Non-GAAP Measures | Q4 FY14
Reconciliation of Selected Non-GAAP Measures | Q4 FY14 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 1 analysis of operating results. Adjustment relates to the exclusion of am
Slide 30: Reconciliation of Selected Non-GAAP Measures | Q4 FY14 YTD
Reconciliation of Selected Non-GAAP Measures | Q4 FY14 YTD (in ‘000s USD) Year ended June 30, 2014 GAAP % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Cloud services $135,472 $(342) 1 $135,130 Customer support 95,980 (754) 1 95,226 Professional service and other 196,939 (8
Slide 31: Reconciliation of Selected Non-GAAP Measures | Q4 FY14 YTD
Reconciliation of Selected Non-GAAP Measures | Q4 FY14 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 1 analysis of operating results. Adjustment relates to the exclusion o
Slide 32: Reconciliation of Selected Non-GAAP Measures | Q3 FY14
Reconciliation of Selected Non-GAAP Measures | Q3 FY14 (in ‘000s USD) Three months ended March 31, 2014 GAAP % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Cloud services $49,464 $(167) 1 $49,297 Customer support 25,206 (138) 1 25,068 Professional service and other 49,218
Slide 33: Reconciliation of Selected Non-GAAP Measures | Q3 FY14
Reconciliation of Selected Non-GAAP Measures | Q3 FY14 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 1 of operating results Adjustment relates to the exclusion of amo
Slide 34: Reconciliation of Selected Non-GAAP Measures | Q3 FY14 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 FY14 YTD (in ‘000s USD) Nine months ended March 31, 2014 GAAP % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Cloud services $79,692 $(145) 1 $79,547 Customer support 71,785 (547) 1 71,238 Professional service and other 145,
Slide 35: Reconciliation of Selected Non-GAAP Measures | Q3 FY14 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 FY14 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 1 analysis of operating results Adjustment relates to the exclusion of
Slide 36: Reconciliation of Selected Non-GAAP Measures | Q4 FY13
Reconciliation of Selected Non-GAAP Measures | Q4 FY13 (in ‘000s USD) Three months ended June 30, 2013 GAAP % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Cloud services $17,696 $(48) 1 $17,648 Customer support 25,351 (159) 1 25,192 Professional service and other 47,879 (2
Slide 37: Reconciliation of Selected Non-GAAP Measures | Q4 FY13
Reconciliation of Selected Non-GAAP Measures | Q4 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 1 of operating results Adjustment relates to the exclusion of amo
Slide 38: Reconciliation of Selected Non-GAAP Measures | Q4 FY13 YTD
Reconciliation of Selected Non-GAAP Measures | Q4 FY13 YTD (in ‘000s USD) Year ended June 30, 2013 GAAP % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Cloud services $72,365 $(128) 1 $72,237 Customer support 106,948 (434) 1 106,514 Professional service and other 196,874 (9
Slide 39: Reconciliation of Selected Non-GAAP Measures | Q4 FY13 YTD
Reconciliation of Selected Non-GAAP Measures | Q4 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 1 analysis of operating results Adjustment relates to the exclusion of
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