Readytech Holdings Ltd. · ASX:RDY
Readytech — H1 2023 Earnings Presentation
36 slides from Readytech's earnings presentation, Feb 22, 2023
Slide 1: 1H FY23 Results Presentation
For personal use only ASX:RDY 1H FY23 RESULTS PRESENTATION 22 February 2023 Marc Washbourne – Co-Founder & CEO Nimesh Shah – Chief Financial Officer
Slide 2: Next Generation, People-Centric Software
For personal use only NEXT GENERATION, PEOPLE-CENTRIC SOFTWARE 1H FY23 Results 2
Slide 3: Sustainable revenue growth and strong margins
ReadyTech continues to deliver a combination of sustainable revenue growth and strong margins For personal use only Revenue* Recurring revenue Underlying EBITDA~ Major new enterprise contracts $47.9m $40.3m $15.6m $9m deal value^ contracts signed Growth rate of 13.4% on a Margin of 35.0%, including
Slide 4: Outstanding and sustained growth in recurring SaaS revenue
For personal use only 50.0 47.9 nue re v e w th l o 45.0 Tota AGR gr 42.3 7.6 % C 0 Outstanding 3 40.0 35.7 8.3 and sustained 35.0 5.4 growth in 30.0 28.2 recurring SaaS 25.0 4.3 $m 21.8 20.0 revenue 19.3 20.0 2.4 40.3 1.7 2.5 34.0 15.0 30.3 23.9 10.0 19.4 16.8 18.3 5.0 0.0 1H FY20 2H FY20 1H FY21 2
Slide 5: Focused enterprise strategy driving momentum in high value customers
For personal use only Focused enterprise strategy is driving momentum in growth of high value customers 1H FY23 Results 5
Slide 6: Highly attractive opportunity in enterprise market
Highly attractive opportunity in enterprise market for next generation technology across all segments For personal use only Compelling strategic rationale Acquire high value contracts with Strong moats sizeable technology budgets • Significant upfront R&D investment required to • Significant opportu
Slide 7: Successfully targeting large, high value enterprise customers
Successfully targeting large, high value enterprise customers across all segments For personal use only Executing well on enterprise strategic pillars Identify, select and expand Focus on enterprise Expand investment in Scale via enterprise strategic attractive enterprise markets product-market fit
Slide 8: Continued validation across enterprise landscape with landmark wins
Continued validation across enterprise landscape with recent landmark customer wins For personal use only 6 new enterprise contracts of $9 million combined deal value^ High conviction pipeline of new clients exceeding $27 million Phase 2 ^Deal value equals annualised subscription and implementation
Slide 9: 1H FY23 financial performance
For personal use only 1H FY23 financial performance 1H FY23 Results 9
Slide 10: Sustainable and strong revenue growth
ReadyTech continues to demonstrate sustainable and strong revenue growth For personal use only $ MILLIONS Highlights YoY % 1H FY23 1H FY22 change Total revenue up 34.2% to $47.9m: Subscription and licence revenue 40.3 30.3 33.0% • Up 13.4% on a like-for-like basis** • Subscription and licence revenu
Slide 11: Strong cashflow and balance sheet support growth initiatives
Strong cashflow and balance For personal use only sheet support growth initiatives NET DEBT AS AT 31 DECEMBER 2022 Highlights $ MILLIONS 31 Dec 2022 30 Jun 22 Bank debt 46.0 34.0 Available cash-for-use of $15.0m, including $11.0m cash and equivalents, and Bank guarantee 1.1 1.1 $4m debt facility hea
Slide 12: Workforce Solutions
For personal use only Workforce Solutions 1H FY23 Results 12
Slide 13: Workforce Solutions addressing a huge market of $2.4b
Workforce Solutions addressing Targeting initial industry verticals with all-in-one offering a huge market of $2.4b* For personal use only Mid-to-enterprise market focused SaaS solving complex payroll and workforce management in stand-up economy LOGISTICS HOTELS & AGED & ACCOMMODATION DISABILITY CAR
Slide 14: Unique all-in-one workforce management system
Unique all-in-one workforce management system Our all-in-one cloud offering is differentiated, meeting customer needs and driving growth For personal use only Employee Experience With the backdrop of a competitive talent market, employers are seeking advantages to engage and retain people. ReadyTech
Slide 15: Ready People offers highly strategic product expansion
Ready People offers highly strategic product expansion and growth opportunity For personal use only New employee experience gateway designed for the needs of the stand-up economy enabling them to work smarter in one place Gateway to the ecosystem of industry specific applications at an employee’s fi
Slide 16: Landmark wins increasing penetration of agriculture sector
Landmark wins are increasing penetration of agriculture sector Example of industry vertical strategy in action delivering new customer wins For personal use only Why we are winning Recent landmark wins Ready Workforce “As a seasonal recruiter of up to • Various clock-in/clock-out methods, e.g. timec
Slide 17: High profile wins increasing penetration of hotels and accommodation
High profile wins are increasing penetration “There are several reasons why of hotels and accommodation sector we chose to opt in for an all-in- For personal use only one payroll and HR system – we Example of industry vertical strategy in action showing strong results wanted a system that was cost-
Slide 18: Strong revenue growth underpinned by software subscription revenue
For personal use only Strong revenue growth underpinned by rapidly Highlights increasing software subscription Revenue growth of 18.3% to $13.6m, with software revenue growing at 20.5% to revenue $8.8m. This is driven by 33 new customer wins in 1H, with the majority in the all-in- one platform as we
Slide 19: Education & Work Pathways
For personal use only Education & Work Pathways 1H FY23 Results 19
Slide 20: ReadyTech delivering against growing education technology market needs
ReadyTech delivering against EXPANSION OF READYTECH'S UNIQUE EDUCATION growing education technology OPEN ECOSYSTEM For personal use only market needs • Complement ReadyTech's core and mission-critical Student Management System with innovative EdTech community technology partners. Demand for global E
Slide 21: Strong progress in the education enterprise market
Strong progress in the education enterprise market Driving growth across large addressable market ready for change For personal use only High-level of end-of-life Preference for enterprise Expectations of students for Need for interoperability in Strong macros – lifelong technology to be replaced wi
Slide 22: The next generation student management system
The next generation student management system Our product differentiators - why we are winning customers in a sector For personal use only ready for change Ecosystem Partnerships Expanding open ecosystem partnerships strategy, offering interoperability, new product value and STUDENT revenue share op
Slide 23: Expanding customer base with key enterprise wins
Expanding customer base with key enterprise wins For personal use only Enterprise Enterprise State Training Authority Student Management System Employment Services VET Administration Records System A world-class university pathway provider that Established enterprise employment services Largest Stat
Slide 24: Continued growth in revenue and earnings
For personal use only Highlights Continued growth in revenue and earnings 1H results demonstrated strong growth driven by new customer wins in Education and Work Pathways products and strong customer retention with robust and resilient customers providing sustainable revenue growth into 2H FY23 and
Slide 25: Government & Justice
For personal use only Government & Justice 1H FY23 Results 24
Slide 26: Government digital transformation tailwinds
Government digital transformation tailwinds Driving growth across large addressable market For personal use only Global digitisation of Estimate that over 75% of the Next generation public sector Community expectations government services and 530+ councils have purchased a employees driving customer
Slide 27: Ready to digitise Government
Ready to digitise Government Digital transformation for improved customer service and growing For personal use only community expectations New Capability Integrated WHY WE ARE WINNING CUSTOMERS Open Windows delivers market leading contracts and ASSET & procurement management to strengthen ERP offeri
Slide 28: IT Vision acquisition strategy being validated
IT Vision acquisition strategy being validated Strategic rationale for ReadyTech and IT Vision successfully brought together For personal use only Enhances ReadyTech’s local Consolidates leading market position in Accelerates path to cloud subscription Opportunity to upsell/cross-sell government cus
Slide 29: Justice is a major global growth opportunity
Justice is a major global growth opportunity Well positioned to capitalise on global digitisation trends For personal use only Large global market with strong portability to other Commonwealth justice geographies UK Ireland Canada New Zealand Pacific Islands Recent global successes are building trac
Slide 30: Momentum of Government enterprise wins
Momentum of Government enterprise wins validating integrated ReadyTech offerings For personal use only Enterprise Enterprise Local Government Local Government ERP Local Government ERP Source-to-Contract The Salisbury area is a progressive, sustainable and Local government body in Tasmania, and one o
Slide 31: Growing revenue and earnings with new customer wins flowing in 2H
For personal use only Growing revenue and earnings with benefit from new customer Highlights wins to flow through in 2H FY23 Revenue growth on a like-for-like basis of 9.1% to $12m underpinned by 85% recurring revenue to $10.2m. $ MILLIONS Expenses of $12.7m appropriate to deliver and support recent
Slide 32: FY23 outlook
FY23 outlook For personal use only Previous FY23 outlook provided in August 2022 and November 2022 (AGM) reaffirmed. Before the contribution of IT Vision, for FY23 ReadyTech expects: • Organic revenue growth in the mid-teens. • $2.0m incremental revenue contribution from FY22 acquisitions. • EBITDA
Slide 33: Long term outlook
For personal use only Long term outlook Ongoing momentum of enterprise customer wins with high conviction pipeline underpin future growth. FY26 organic revenue target of >$160m reaffirmed. 1H FY23 Results 33
Slide 34: Key take-outs
Key take-outs For personal use only GROWING MOMENTUM IN CONTINUED INVESTMENT IN ROBUST & GROWING ENTERPRISE WINS PRODUCT AND GO-TO-MARKET BUSINESS PIPELINE Focus on enterprise customer strategy Investment in R&D and listening closely Sizeable new business high conviction demonstrating strong demand
Slide 35: Disclaimer
Disclaimer For personal use only This presentation has been prepared by ReadyTech Holdings Limited for professional investors. The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial
Slide 36: For more information
For more information: For personal use only Ronn Bechler Automic Group t. +61 400 009 774 e. ronn.bechler@automicgroup.com.au About ReadyTech ReadyTech is a leading provider of mission-critical SaaS for the education and training, workforce management, government and justice sectors. Bringing togeth