FINEOS Corporation Holdings Plc · ASX:FCL
FINEOS — H1 2023 Earnings Presentation
24 slides from FINEOS's earnings presentation, Feb 24, 2023
Slide 1: 1H23 results presentation
For personal use only 1H23 results presentation Michael Kelly (Founder & CEO) and Ian Lynagh (CFO) 24 February 2023 © FINEOS Corporation Ltd 1
Slide 2: 1H23 – Strong growth in Subscription Revenue
For personal use only 1H23 – Strong growth in Subscription Revenue © FINEOS Corporation Ltd 2
Slide 3: Strong growth in Subscription Revenue and Gross Profit Margin
Strong growth in Subscription Revenue and Gross Profit Margin For personal use only Subscription ARR Total Revenue €59.4m Revenue €29.9m at 31 December ‘22 €61.5m Up 18.4% on 1H22 Up 14.7% on 31 December 2021 Down 6.0% on 1H22 Gross Profit EBITDA Loss Cash Position €41.2m €2.6m €24.0m GP margin 66.9
Slide 4: Operational platform to drive long-term growth
Operational platform to drive long-term growth For personal use only Large Client switching North America from Custom Services revenue 78.3% of model to Product total revenue, up Feature Investment from 45.0% in FY19 Services reduction will be compensated Large cross-sell opportunity over time by in
Slide 5: Growth in Subscription Revenue
Growth in Subscription Revenue For personal use only Total Revenue by half year €m 75m • Total Subscription revenue of 65.4 ▪ North America €29.9m Cloud grew Subscription by 18.4% 61.8 61.5 revenue up 21.3% to €20.7m 60m 55.8 • ARR of €59.4m up 14.7% on 31 52.5 ▪ >10December times since2021 the FINE
Slide 6: North America – adoption of FINEOS Cloud Platform continuing to drive strong Subscription growth
North America – adoption of FINEOS Cloud Platform continuing to drive strong Subscription growth For personal use only North America – Cloud Subscription Revenue €m 25m ▪ North America Cloud Subscription 20.7 revenue up 21.3% to €20.7m 19.7 20m 17.1 ▪ >10 times since the FINEOS IPO on the ASX in Aug
Slide 7: North America
North America Primary R&D investment focus on North America continues to deliver For personal use only significantly highest proportion of SaaS revenue by region at 78.3% of all revenue North America Revenue by half year €m ▪ North American SaaS 60m 82.0% • Total Subscription revenue of 52.3 revenue
Slide 8: R&D investment supports growth
R&D investment supports growth For personal use only FINEOS continues to dedicate significant resources and financial Investment being made in R&D to investment in research and development continue to drive revenue growth ▪ North American SaaS 30m R&D1 investment €m revenues continue to be ▪ 40.7% o
Slide 9: Our people – a key asset of the business
Our people – a key asset of the business For personal use only Employees by function 2.7% ▪ Average Product Consulting utilisation for 5.4% 35.9% Product Consulting the period was 86% (1H22 90%) 86% Cloud Ops ▪ Retention rate of over 90% Utilisation R&D ▪ Scaling of FINEOS India now underway 46.8% S
Slide 10: 1H23 – Shift to Subscription revenue and investment for long term growth
For personal use only 1H23 – Shift to Subscription revenue and investment for © FINEOS Corporation Ltd long term growth 10
Slide 11: Subscription revenue continues to increase
Subscription revenue continues to increase For personal use only Income Statement • Total Revenue €61.5m (1H22: €65.4m) 1H23 1H22 % Change €m €m Subscriptions 29.9 25.2 18.4% o Subscription revenue grew by 18.4% Services 30.2 39.5 (23.7%) Initial licence fees 1.4 0.7 121.8% o Services revenue down 2
Slide 12: Increasing investment to drive future growth
Increasing investment to drive future growth For personal use only Operating expenses • R&D costs are up €3.5m (36.3%) on 1H22 linked mainly to staff and 1H23 1H22 % Change software costs €m €m • Sales & marketing costs increased €1.0m (31.4%) on 1H22 mainly due to Research & development (13.0) (9.5
Slide 13: Balance sheet supports organic growth opportunities
Balance sheet supports organic growth opportunities For personal use only Statement of Financial Position 31 Dec 22 30 June 22 % Change • Cash at bank movement reflects investment in the period. €m €m Cash at bank 24.0 44.3 (45.9%) • Trade receivables fell 64.7% on 30 June 22 due to the issue of sig
Slide 14: Cashflow reflects short-term impact from investment and shift to Subscription revenues
Cashflow reflects short-term impact from investment and shift to Subscription revenues For personal use only Statement of Cash Flows • Net cash used in operating activities of €3.3m in 1H23 1H23 1H22 % Change primarily due to the decrease in revenues and increased cost base as a percent of revenues
Slide 15: Outlook
For personal use only Outlook © FINEOS Corporation Ltd 15
Slide 16: Priorities for 2H23
Priorities for 2H23 For personal use only 1. Close our pipeline of sales deals to new and existing clients. 2. Continue to scale existing clients on the FINEOS Platform to eliminate legacy core systems and enable business transformation. 3. Invest in R&D where we see the near-term new business oppor
Slide 17: Future Growth Strategy and Outlook
Future Growth Strategy and Outlook For personal use only 1. Our very strong sales pipeline has moved out due to decisions taking longer – this combined with the drop-off in Services from a major client who are moving more strategically to investing in product means FY23 revised revenue guidance of t
Slide 18: Thank you. Q&A
For personal use only Thank you. Q&A © FINEOS Corporation Ltd 18
Slide 19: Appendices
For personal use only Appendices © FINEOS Corporation Ltd 19
Slide 20: New York Life joint study case study
Ground-breaking joint study proving that the purpose-built FINEOS platform successfully met the business challenges of one of the largest North American group insurer Case Study For personal use only 9 $4bn 6 million managed replaced customers on one platform legacy systems © FINEOS Corporation Ltd
Slide 21: Geographic mix of revenues
Geographic mix of revenues For personal use only 1H23 revenue by region • Europe region up 12.7% on 4.5% 1H22 as new projects with existing and new customers commenced 17.2% • North American revenue is EMEA 78.3% of total revenue APAC which is down 7.9% on North America 1H22 due to resource need red
Slide 22: Detailed Statement of Financial Position
Detailed Statement of Financial Position Statement of Financial Position 1H23 FY22 % Change €m €m For personal use only Cash at bank 24.0 44.3 (45.9%) Trade receivables 9.1 25.7 (64.7%) Unbilled receivables 0.7 0.6 22.7% R&D tax credit 1.1 1.0 9.6% Prepayments and other receivables 4.8 4.2 15.5% Def
Slide 23: Disclaimer
Disclaimer For personal use only This presentation has been prepared by FINEOS Corporation Holdings PLC (Company or FINEOS). By accessing or attending this presentation, you acknowledge that you have read and understood the following statements. NO OFFER OF SECURITIES Nothing in this presentation sh
Slide 24: For personal use only
For personal use only © FINEOS Corporation Ltd 24
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