Slide 1: Investor Presentation
Investor Presentation NASDAQ: OTEX | TSX: OTEX May 6, 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation may contain forward-looking statements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and created under the Securities Act of 1933, as amended (the Securities Act), and
Slide 3: Q3 Fiscal 2021 Financial Results
Q3 Fiscal 2021 Financial Results OpenText Confidential. ©2021 All Rights Reserved. 3
Slide 4: Q3 Fiscal 2021 Financial Highlights
Q3 Fiscal 2021 Financial Highlights With Y/Y Comparisons Q3 FY’21 Trailing Twelve Months (TTM) Ending Q3 FY’21 2.2% 9.5% Total Revenues $832.9M (1) Total Revenues $3.32B (0.8)% in CC 8.4% in CC $691.8M $2.70B 4.4% 15.9% ARR(2) 83% ARR(2) 81% 1.7% in CC 14.9% in CC of Total Revenues of Total Revenues
Slide 5: Q3 FY'21 Revenue Breakdown
Q3 FY’21 Revenue Breakdown Total Revenue by Total Revenue Mix ARR by Industry Geography 3% 8% 8% 5% 8% 22% 9% 10% 43% 31% 61% 15% 10% 40% 12% 15% Financial Consumer goods Cloud Services & Subscriptions Services Americas Customer Support Technology EMEA Public Sector License Healthcare Professional S
Slide 6: Q3 FY'21 Customer Wins
Q3 FY’21 Customer Wins Business Content Network Services Royal Bank of Canada (RBC) is Canada’s largest Maersk is a global leader in container shipping and bank and one of the largest banks in the world. integrated container logistics, working on connecting and simplifying its customers supply chain
Slide 7: Q4 FY'21 Quarterly Factors
Q4 FY’21 Quarterly Factors Externalities Company Specific • COVID-19, vaccines, health & financial crisis • Expect Q4 y/y (all comments include FX impact): • Industry and supply chain disruption • Q4 FX tailwind similar to Q3 • Global geopolitical and volatile macro • Total Revenue growth up to 2% e
Slide 8: FY'21 OpenText Total Growth Strategy
FY’21 OpenText Total Growth Strategy (1) FY’20 Actual(2) Prior Y/Y Expected % Growth New Y/Y Expected % Growth $1,157.7 Cloud High teens 18%-20% $1,275.6 Customer Support Low single-digit Low single-digit $2,433.3 ARR High-single to low-double digit High-single to low-double digit $402.9 License Dec
Slide 9: FY'21 Target Model
FY’21 Target Model Previous Fiscal 2021 Fiscal 2020 Results New Fiscal 2021 Model(3) Model(3) Revenue Type: Cloud Services and Subscriptions 37.2% 41% - 43% 41%-43% Customer Support 41.0% 38% - 42% 38%-42% Annual Recurring Revenue (ARR) 78.2% 81% - 83% 81%-83% License 13.0% 9% - 12% 9%-12% Professio
Slide 10: Our Financial Outlook
Our Financial Outlook (1) FY’21 Outlook FY’22 Outlook FY’24 Long Term Aspirations Total Growth Total Cloud Total Total Cloud ARR Free Cash Revenue Revenue Revenue A-EBITDA Revenue Revenue % of Total Flows Organic Organic Organic Margin Growth Growth Revenue (FCF) Growth Growth Growth Mid Single 18%-
Slide 11: Strong Liquidity and Cash Position
Strong Liquidity and Cash Position Total cash & short-term investments at $1.476B (Mar. 31, ‘21)(2) Current Liquidity (US$ M) CashA-EBITDA BalanceMarginTrend (1)(2) Total Available & Committed $2,226 2,000 1,846 Liquidity(1) 1,800 1,693 1,600 1,453 1,501 1,476 1,400 Millions USD 1,200 1,000 800 675
Slide 12: Strong Cash Flow and Balance Sheet
Strong Cash Flow and Balance Sheet Trended Consolidated Net Leverage Ratio(1) TTM Q3 FY’21 (US$ M) Carbonite Operating Cash Flows (2) $860 Acquisition Closing 2.28x 2.25x Less: CapEx $54 2.04x 1.82x Free Cash Flows(2) $806 1.60x 1.57x Less: Principal(3) $10 Less: Dividends $204 Cash Generated $592 f
Slide 13: Strategy
Strategy OpenText Confidential. ©2021 All Rights Reserved. 13
Slide 14: The world runs on information
The world runs on information From the debate on truth, to a global pandemic response, to a modern civil rights movement, the fact is, information is more important than ever.
Slide 15: OpenText Snapshot
OpenText Snapshot Growing, Profitable and Recurring Business • Large and growing addressable market • Investing in future organic growth • Leader in Information Management • Total Growth Strategy: Retain, Grow, Acquire • Modern, scalable, cloud-based architecture • GROW with OpenText initiative • Ma
Slide 16: Large and Growing Addressable Market
Large and Growing Addressable Market Information Management(1) OpenText Product OpenText Market Position CY’21 to CY’24 CAGR Content $24B +11% Established Market Leader Business Network $20B +7% Established Market Leader Digital Experience $21B +7% Future Growth Opportunity Security & Protection $19
Slide 17: Leadership in Information Management
Leadership in Information Management Growth Driver Submarket Leadership(1) Selected Growth Opportunities • Document, Records & • eSignature Modern Work Archive Management • Collaboration • Capture • Business Network Connecting Global Connectivity • Integration & data Ecosystems management • Global I
Slide 18: Proven Track Record of Growth
Proven Track Record of Growth Total Revenue Growth in CC 9.7% 3,000 3.8% 6 19.7% 2,500 27.0% 2,000 19.0% 2.8% Consecutive 1,500 Years of Y/Y 1,000 Growth 500 0 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 OpenText Confidential. ©2021 All Rights Reserved. 18
Slide 19: Modern, Scalable Cloud-based Architecture
Modern, Scalable Cloud-based Architecture OpenText Information Management Platform The Foundation for the Intelligent, Secure and Connected Business Off Cloud, Private Cloud, Public Cloud OpenText Cloud Editions: The Ultimate Cloud™ The Ultimate Cloud™ is: • Global • Secure • Always on (99.99% Avail
Slide 20: Marquee Customer Base
Marquee Customer Base 89 of the top 100 largest companies in the world(1) Consumer Life Sciences Financial Technology Manufacturing Telecom Goods 10 of top 10 8 of top 10 10 of top 10 10 of top 10 10 of top 10 8 of top 10 Great foundation for future growth 1. The top 100 is based on the Forbes Globa
Slide 21: Comprehensive and Growing Go-to-Market
Comprehensive and Growing Go-to-Market Enterprise Solutions SMB & Consumer Solutions Direct Strategic Partners Channel Partners Online & Retail 2,000+ Field Facing 16,000+ 7M+ Professionals Partners Consumers OpenText Confidential. ©2021 All Rights Reserved. 21
Slide 22: Investing in Future Organic Growth
Investing in Future Organic Growth R&DA-EBITDA Investment Margin (1)(2) SalesA-EBITDA Investment Margin (1)(2) ($ and in % of Total Revenue) (1),(2) R&D% of Total Revenues Enterprise Sales Goal R&D US$ 12-14% • Grow Global 10K sales coverage from 58% in March 2021 to full coverage by end of 11.7% CY
Slide 23: Total Growth Strategy
Total Growth Strategy • 83% ARR(1) Retain • 94% Customer Support renewals(2) Information • Growing sales breadth and depth Management Grow • Product innovation • Accretive acquisitions Acquire • On operating model in 12 months 1. ARR as a percentage of Total Revenues for the three months ended March
Slide 24: Sustainable Growth through Retention and Upgrades
Sustainable Growth through Retention and Upgrades Retain Annual Recurring Revenue A-EBITDA Margin(1)(2) (ARR) ($US M) Off-Cloud Targeting Upper $2,433 94% Quartile Renewal 125% Renewal Rate(1) Rates • Compelling product and security updates $1,080 Cloud • Proven highly effective model of Land, Adopt
Slide 25: Accelerate Product Innovation
Accelerate Product Innovation Grow Business Network Content Experience OpenText • Modern cloud-based microservices architecture Clouds • Simplified sales and customer engagement • Improved speed of customer deployment Security & Developer Protection • Seamless upgrade Product Releases Every 90 Days
Slide 26: GROW with The Ultimate Cloud
GROW with The Ultimate Cloud™ Grow OpenText OpenText Cloud Editions The Intelligent, Secure and Connected Businesses Cloud Advanced Editions Technology & Data Experts Protection & Security Digital All Points of Experience Business Departure Modern Network Work The Information Management Journey Open
Slide 27: Continued Migration to the OpenText Clouds
Continued Migration to the OpenText Clouds Grow Experience Developer Cloud is our largest revenue Business Network contributor Content Security & Protection All OpenText software launched as a service with APIs OpenText Confidential. ©2021 All Rights Reserved. 27
Slide 28: Strategic M&A: Foundation for Our Business
Strategic M&A: Foundation for Our Business Acquire Various HP Assets 2014 2016 2017 2019 OpenText Confidential. ©2021 All Rights Reserved. 28
Slide 29: Acquisition Philosophy
Acquisition Philosophy Acquire We are: Carbonite Case Study • Patient and disciplined Acquired • 12/24/19 for 2.8x revenue(1) • Value-based • Returns driven Strategic • Critical mass in Security & Protection Rationale • Scaled SMB channel Target characteristics: • IM market leadership • Strong growt
Slide 30: Scalable, High-Velocity, Low-Friction Business Model
Scalable, High-Velocity, Low-Friction Business Model Digitization and Automation: • Automate DevOps New Customer Engagement Model: • Automate routine R&D • Pre-sales – Demand creation automation Product is built for: • Self-sell - upsell, cross-sell • Self-service • Post-sales – renewal automation D
Slide 31: Strong Track Record of Financial Performance
Strong Track Record of Financial Performance Total Revenue Annual Recurring Revenue Cloud A-EBITDA(1) Free Cash Flow(1) (US$ M) (US$ M) (US$ M) (US$ M) (US$ M) $3,319 $2,705 $1,318 $806 $1,380 104% 150% 270% 145% 115% $1,625 $1,080 $375 $538 $373 FY'14 Q3 FY'21 TTM FY'14 Q3 FY'21 TTM FY'14 Q3 FY'21
Slide 32: Proven Durable Business Model
Proven Durable Business Model (1),(2) Growing ARR and Expanding Margin A-EBITDA Margin(1)(2) 80.0% 78.2% ARR 72.2% 73.9% 73.6% 73.2% 75.1% 70.0% FY’21 Model: % of Total 81%-83% 66.5% Revenues 60.0% 61.5% 54.2% 54.4% 50.0% (1) FY’21 Model: A-EBITDA 36.9% 40.0% 37%-38% Margin 29.7% 30.0% 20.0% 26.1% L
Slide 33: Track Record of Shareholder Returns
Track Record of Shareholder Returns Dividends PaidMargin A-EBITDA (US$(1)(2) million) $188.7 Q3 FY’21 $168.9 Dividend +153% $145.6 declared of $120.6 20.08 cents per $99.3 common share $87.6 $74.7 + Share Repurchase FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 Plan(1) Over $1 Billion in Dividends A-EBI
Slide 34: How We Create Value
How We Create Value 12.5% Total Revenue Growth CAGR (FY’13 to FY’20) Value A-EBITDA aspiration Capital Profitability 24.3% FCF conversion(2) of 38% to 40%(1) Efficiency 1. Please refer to “Use of Non-GAAP Financial Measures” at the end of this presentation and “Reconciliation of selected GAAP-based
Slide 35: Corporate Citizenship Reflects our Culture
Corporate Citizenship Reflects our Culture Progress We’ve Made: • First Corporate Citizenship Report published • Identified ESG reporting gaps and increased disclosure • ESG ratings improvement • Disclosure gap analysis • OpenText Acts of Kindness • Voyager Fund Where We’re Going: • Implementing rep
Slide 36: Deeply Talented and Experienced Leadership Team
Deeply Talented and Experienced Leadership Team Mark J. Madhu Muhi Gordon Ted James Prentiss Barrenechea Ranganathan Majzoub Davies Harrison McGourlay Donohue CEO and CTO EVP, CFO EVP, Chief Product EVP, CLO & Corporate EVP, Enterprise Sales EVP, Customer EVP, SMB/C Tenure: 9 years Tenure: 3 years O
Slide 37: Information Makes Us More
Information Makes Us More Information fuels knowledge. When we know more, only then can we understand, achieve, do and be more. OpenText Confidential. ©2021 All Rights Reserved. 37
Slide 38: Appendix
Appendix OpenText Confidential. ©2021 All Rights Reserved. 38
Slide 39: 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 40: Summary of Quarterly Results with Constant Currency
Summary of Quarterly Results with Constant Currency Q3 FY'21 % Change (In millions, except per share data) Q3 FY'21 Q3 FY'20 $ Change % Change in CC* in CC* Revenues: Cloud services and subscriptions $355.8 $339.5 $16.4 4.8 % $350.0 3.1 % Customer support 335.9 322.9 13.1 4.0 % 323.8 0.3 % Total ann
Slide 41: Summary of Year to Date Results with Constant Currency
Summary of Year to Date Results with Constant Currency % Change (In millions, except per share data) FY'21 YTD FY'20 YTD $ Change % Change FY'21 in CC* in CC* Revenues: Cloud services and subscriptions $1,047.3 $825.1 $222.2 26.9 % $1,036.9 25.7 % Customer support 999.8 950.7 49.1 5.2 % 977.9 2.9 %
Slide 42: Reconciliation of Selected Non-GAAP Measures | Q3 FY'21
Reconciliation of Selected Non-GAAP Measures | Q3 FY'21 Three Months Ended March 31, 2021 (In ‘000's USD, except per share data) Non-GAAP % GAAP % of GAAP Adjustments FN Non-GAAP of Total Total Revenue Revenue COST OF REVENUES Cloud services and subscriptions $ 123,729 $ (505) (1) $ 123,224 Customer
Slide 43: Reconciliation of Selected Non-GAAP Measures | Q3 FY'21
Reconciliation of Selected Non-GAAP Measures | Q3 FY'21 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 44: Reconciliation of Selected Non-GAAP Measures | FY'21 YTD
Reconciliation of Selected Non-GAAP Measures | FY'21 YTD Nine Months Ended March 31, 2021 (In ‘000's USD, except per share data) GAAP % of Non-GAAP % of GAAP Adjustments FN Non-GAAP Total Revenue Total Revenue COST OF REVENUES Cloud services and subscriptions $ 354,235 $ (2,484) (1) $ 351,751 Custom
Slide 45: Reconciliation of Selected Non-GAAP Measures | FY'21 YTD
Reconciliation of Selected Non-GAAP Measures | FY'21 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 46: Reconciliation of Selected Non-GAAP Measures | Q3 FY'20
Reconciliation of Selected Non-GAAP Measures | Q3 FY'20 Three Months Ended March 31, 2020 (In ‘000's USD, except per share data) GAAP % of Non-GAAP % of GAAP Adjustments FN Non-GAAP Total Revenue Total Revenue COST OF REVENUES Cloud services and subscriptions $ 127,565 $ (398) (1) $ 127,167 Customer
Slide 47: Reconciliation of Selected Non-GAAP Measures | Q3 FY'20
Reconciliation of Selected Non-GAAP Measures | Q3 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 48: Reconciliation of Selected Non-GAAP Measures | FY'20 YTD
Reconciliation of Selected Non-GAAP Measures | FY'20 YTD Nine Months Ended March 31, 2020 (In ‘000's USD, except per share data) GAAP % of Non-GAAP % of GAAP Adjustments FN Non-GAAP Total Revenue Total Revenue COST OF REVENUES Cloud services and subscriptions $ 333,371 $ (1,152) (1) $ 332,219 Custom
Slide 49: Reconciliation of Selected Non-GAAP Measures | FY'20 YTD
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 50: Reconciliation of Adjusted EBITDA and Free Cash Flows
Reconciliation of Adjusted EBITDA and Free Cash Flows (In '000's USD) FY'21 YTD Q3 FY'21 FY'20 YTD Q3 FY'20 GAAP-based net income, attributable to OpenText $ 129,389 $ 91,490 $ 207,833 $ 25,965 Add: Provision for (recovery of) income taxes 342,121 31,818 78,800 8,891 Interest and other related expen
Slide 51: Reconciliation of Adjusted EBITDA | F11-F20
Reconciliation of Adjusted EBITDA | F11-F20 (In '000's USD) FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 GAAP-based net income, attributable to OpenText $ 123,203 $ 125,174 $ 148,520 $ 218,125 $ 234,327 $ 284,477 $ 1,025,659 $ 242,224 $ 285,501 $ 234,225 Add: Provision for (recovery of) income
Slide 52: Thank you
Thank you twitter.com/opentext linkedin.com/company/opentext opentext.com