Slide 1: Unleashing the Power of Information
Unleashing the Power of Information I N V E S TO R P R E S E N TAT I O N FY12-Q4 | August 9, 2012
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties and other
Slide 3: Scale and Momentum
Scale and Momentum (NASDAQ: OTEX, TSX: OTC) $1.2B+ global revenue EIM $13B market* (ECM, BPM, CEM, iX, Discovery) #1 in ECM** Approximately 5,000 employees 20 years of proven innovation 31 country offices, 141 countries supported *as per notes on slide 8 **as per Gartner Group COPYRIGHT © 2012 OPEN
Slide 4: Investment Highlights
Investment Highlights § Demonstrated earnings power and operational discipline § TTM operating cash flow of $266.5* million § Large recurring maintenance revenues § Investing in new markets: - Business Process Management (BPM) - Information Exchange (iX) § Growth opportunities: geographies, ver
Slide 5: OpenText is Focused on the Deep Web
OpenText is Focused on the Deep Web The Public Web Only 4% of Web content (~8 billion pages) is available via search engines like Google 7.9 Zettabytes The Deep Web Approximately 96% of digital content is on Deep Web sites inside the firewall COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERV
Slide 6: Why Customers Buy
Why Customers Buy § Governance, litigation and regulatory compliance § Security threats § Process improvement § Unstructured information consolidation and leverage § Multi-channel leverage and communication § Information lead business transformations § Mobile, social, cloud COPYRIGHT © 2012 O
Slide 7: Why OpenText Will Lead the EIM Market
Why OpenText Will Lead the EIM Market 1. Market Evolution The market evolving from ECM to Enterprise Information Management (EIM) 2. Well Positioned OpenText is well positioned in EIM with market leading product offerings and industry expertise 3. Trusted Vendor A world class customer base and stron
Slide 8: Enterprise Information Management $13 Billion Opportunity
Enterprise Information Management $13 Billion Opportunity, 10% Growth* Customer win: Emergency Medicine Physicians ECM BPM CEM Information Exchange Discovery 2012 2012 2012 2012 2012 $4.6B Market $2.6B Market $1.35B Market $3.2B Market $1.4B Market 7.2% Growth 7.9% Growth 14% Growth 11.4% Growth 14%
Slide 9: Enterprise Information Management $13 Billion Opportunity
Enterprise Information Management $13 Billion Opportunity, 10% Growth Customer win: Emergency Medicine Physicians ECM BPM CEM Information Exchange Discovery Content Management Business Process Web Content Fax & Document Search Management Management Distribution Legacy Semantic Navigation Decommissio
Slide 10: OpenText Cloud Services
OpenText Cloud Services 2 Billion Transactions a year 1.5 Million Users 25,000 Customers Enterprise, Social, Secure COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 10
Slide 11: OpenText Cloud Services: Enterprise Information Management In The Cloud
OpenText Cloud Services Enterprise Information Management In The Cloud Information Exchange EasyLink, FDDG Data & Process Services ECM & BPM Social Services CEM Platform Services Managed Hosting COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 11
Slide 12: OpenText Cloud Services
OpenText Cloud Services OpenText Cloud Services OpenText Tempo: and Applications: Brings secure file sharing EasyLink: Fax, EDI, SMS, Voice and synchronization across eDOCS organizations Web Site Management Shares information across teams OpenText Video Services and with business partners OpenText M
Slide 13: About EasyLink
About EasyLink § Headquarters in Atlanta, GA with ~550 employees § Information Exchange: $3.2B market, 11.4% CAGR* § Proven Cloud-based offerings: Fax (production, desktop, broadcast) and Messaging (email, telex, notifications, EDI) § $40 million quarterly revenue run rate § Revenue splits: 58%
Slide 14: Market Leadership
Market Leadership Enterprise Forrester WaveTM: Content Enterprise Management, Content October 2011 Management, Q4 ’11 Business Process Forrester WaveTM: Management Digital Asset Suites, October Management For 2011 Customer Experience, Q2 ’12 COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVE
Slide 15: Growth and Opportunity
Distribution Model Direct Sales Force AE, ISR, Specialists Growth and Opportunity Strategic Alliances System Integrators SI / FSI VARs Distributors OEM Technology Alliances 15
Slide 16: Corporate Growth Strategy Alignment
Corporate Growth Strategy Alignment ECM BPM CEM iX Discovery Cloud Services Product Development Market Expansion Strategic Acquisitions Integrate existing New software through Products common platform. INFO FUSION Industries Alliances Additional Opportunities Install Base Sales Force Expansion Share
Slide 17: Growth Drivers
Growth Drivers § Sales force expansion § Market expansion: Latin America, Emerging Europe, APJ § Partner channel expansion § New products § New Cloud Services offering § Competitive market share gains § Install-base upsell / cross-sell § Industries: Public Sector, Defense, Healthcare, Life S
Slide 18: History of Growing Revenue Y/Y: 7 Fiscal Years
History of Growing Revenue Y/Y in $M: 7 Fiscal Years 1400 Service Customer Support License 1200 7 Year CAGR 16.5%* 293.7 1000 269.2 800 238.1 229.8 600 219 656.6 182.5 560.5 507.5 400 122.5 405.3 363.6 287.6 200 183.9 257.2 166.5 203.6 125.6 142.8 150.5 103.2 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 $40
Slide 19: History of Growing Non-GAAP EPS Y/Y: 7 Fiscal Years
History of Growing Non-GAAP EPS Y/Y: 7 Fiscal Years $5.00 7 Year CAGR 29.6%* $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $- FY06 FY07 FY08 FY09 FY10 FY11 FY12 $1.01 $1.46 $2.03 $2.51 $3.12 $4.07 $4.60 *FY05 non-‐GAAP EPS $0.75 COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 1
Slide 20: FY12 – Q4 Financial Highlights
FY12 – Q4 Financial Highlights Total Revenue License RevenueUpUp7% 28% Q/Q Non-GAAP EPS Up 11% Y/Y § $78.0 million, up 28% Q/Q sequentially, down 2% Y/ § Non-GAAP-based EPS was $1.17 compared Y to $1.05 Y/Y* § License revenue from new accounts: 47% § GAAP–based EPS was $0.14 compared to $0.49 Y/
Slide 21: FY12 – Q4 Revenue Breakdown
FY12 – Q4 Revenue Breakdown Total Revenue By Geography License Revenue by Industry EMEA 38% 5% 1 Services Asia Pac 5% 53% 20% Financial Americas 7% Public Sector 9% Basic Materials 10% Consumer Goods Technology 18% Healthcare Total Revenue Mix 11% Industrial Goods Utilities 11% 12% Conglomerates 21%
Slide 22: FY12 – Financial Highlights
FY12 – Financial Highlights Total Revenue Up 17% Y/Y Non-GAAP EPS Up 13% Y/Y § Total revenue of $1.2 billion, up 17% Y/Y § Non-GAAP-based EPS, diluted was $4.60 § Revenue by geography: compared to $4.07up 13.0% Y/Y* § Americas 53% § GAAP–based EPS, diluted was $2.13 compared to $2.11 Y/Y § EME
Slide 23: FY12 – Revenue Breakdown
FY12 –Revenue Breakdown Total Revenue By Geography License Revenue by Industry EMEA 39% Services Asia Pac 4% 2 53% 4% 18% Financial Americas 8% Public Sector 8% Basic Materials 15% 15% Consumer Goods Technology Total Revenue Mix Healthcare 9% Industrial Goods 13% 12% Utilities 24% 21% Service Conglo
Slide 24: FY13 External Target Model
FY13 External Target Model* Revenue Type Fiscal 2013 Target Model As a % of revenue Product License 20 - 25% Cloud Services 11 - 14% Product Maintenance 44 - 48% Professional Services 17 - 22% Non-GAAP Gross Margin Product License 92 - 94% Cloud Services 58 - 60% Product Maintenance 83 - 85% Profess
Slide 25: Diverse Customer Base
Diverse Customer Base GOVERNMENT ENERGY PHARMACEUTICAL FINANCIAL TRANSPORTATION MANUFACTURING LEGAL MEDIA FOOD INSURANCE COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 25
Slide 26: Customer Win | McCain Foods Ltd
Customer Win | McCain Foods Ltd “McCain Foods is one of Canada's premium brands and are best known for being the global supplier of french fries to McDonald’s. They have chosen OpenText to help manage and secure their information as they transform their enterprise for the future.” 26
Slide 27: Customer Win | News International Limited
Customer Win | News International Limited “The leading media company in Australia, invested in OpenText software to consolidate and manage digital assets across all of their publications.” 27
Slide 28: Customer Win | Capricorn Investment
Customer Win | Capricorn Investment “Capricorn Investment Holdings, a banking group located in Namibia, Southern Africa selected OpenText for its enterprise-wide BPM and ECM requirements. The solution will empower CIH to improve the way they manage their internal process and content needs which will
Slide 29: Customer Win | Bendigo Bank of Australia
Customer Win | Bendigo Bank of Australia “Bendigo and Adelaide Bank is continuing their investment in OpenText technology to help them achieve further process automation and service efficiencies across their business units.” 29
Slide 30: Customer Win | The Polytechnic University of Hong Kong (PolyU)
Customer Win | The Polytechnic University of Hong Kong (PolyU) PolyU is using OpenText’s ECM suite and Content Lifecycle Management to create a single, consolidated platform for its various, departmental document management systems. 30
Slide 31: Summary
Summary 1. Compelling Investment thesis 2. EIM: Large, growing and relevant market 3. 7 years consistent growth: 29.6% CAGR: non-GAAP EPS 24.6% CAGR: Cash Flow from Operations 16.5% CAGR: Revenue COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 31
Slide 32: Unleashing the Power of Information
Unleashing the Power of Information 32
Slide 33: Summary of Quarterly Results
Summary of Quarterly Results % Change % Change Q4 FY12 Q3 FY12 Q4 FY11 (Q/Q) (Y/Y) Revenue (million) $305.6 $292.3 $285.5 4.6% 7.0% GAAP gross margin 65.8% 63.6% 66.7% 220 bps (90) bps GAAP operating income 13.0% 9.3% 13.0% 370 bps - bps margin GAAP EPS $0.14 $0.59 $0.49 (76.3%) (71.4%) Non-GAAP gro
Slide 34: Summary of Year to Date Results
Summary of Year to Date Results % Change Q4 FY12 Q3 FY12 Q4 FY11 (Y/Y) Revenue (million) $1,207.5 $901.8 $1,033.3 16.9% GAAP gross margin 65.4% 65.2% 67.0% (160) bps GAAP operating income 12.4% 12.2% 14.6% (220) bps margin GAAP EPS $2.13 $2.00 $2.11 0.9% Non-GAAP gross margin * 72.5% 72.3% 73.6% (11
Slide 35: Summary of Quarterly Revenue Results
Summary of Quarterly Revenue Results % Change % Change In millions Q4 FY12 Q3 FY12 Q4 FY11 (Q/Q) (Y/Y) License $78.0 $61.0 $79.6 27.9% (2.0%) Customer support 163.1 166.0 151.0 (1.7)% 8.0% Service and other 64.5 65.3 54.9 (1.2%) 17.5% Total $305.6 $292.3 $285.5 4.6% 7.0% COPYRIGHT © 2012 OPEN TEXT C
Slide 36: Summary of YTD Revenue Results
Summary of YTD Revenue Results % Change % Change In millions Q4 FY12 Q4 FY12 Q4 FY11 (Q/Q) (Y/Y) License $293.7 $215.7 $269.2 36.2% 9.1% Customer support 656.6 493.4 560.5 33.1% 17.1% Service and other 257.2 192.7 203.6 33.5% 26.3% Total $1,207.5 $901.8 $1,033.3 33.9% 16.9% COPYRIGHT © 2012 OPEN TEX
Slide 37: Reconciliation of Selected Non-GAAP Measures | Q4 FY12
Reconciliation of Selected Non-GAAP Measures | Q4 FY12 (in ‘000s USD) Three months ended June 30, 2012 GAAP Adjustments FN Non- GAAP COST OF REVENUES Customer support $27,780 ($58) 1 $27,722 Service and other 51,358 (239) 1 51,119 Amortization of acquired technology-based intangibles 21,265 (21,265)
Slide 38: Reconciliation of Selected Non-GAAP Measures | Q4 FY12
Reconciliation of Selected Non-GAAP Measures | Q4 FY12 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 of operating 1 results Adjustment relates to the exclusion of amo
Slide 39: Reconciliation of Selected Non-GAAP Measures | Q4 YTD FY12
Reconciliation of Selected Non-GAAP Measures | Q4 YTD FY12 (in ‘000s USD) Twelve months ended June 30, 2012 GAAP Adjustments FN Non- GAAP COST OF REVENUES Customer support $ 110,504 $ (169) 1 $ 110,335 Service and other 204,909 (647) 1 204,262 Amortization of acquired technology-based intangibles 84
Slide 40: Reconciliation of Selected Non-GAAP Measures | Q4 YTD FY12
Reconciliation of Selected Non-GAAP Measures | Q4 YTD FY12 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 of operating 1 results Adjustment relates to the exclusion of
Slide 41: Reconciliation of Selected Non-GAAP Measures | Q3 FY12
Reconciliation of Selected Non-GAAP Measures | Q3 FY12 (in ‘000s USD) Three months ended March 31, 2012 GAAP Adjustments FN Non- GAAP COST OF REVENUES Customer support $ 27,987 $ (53) 1 $ 27,934 Service and other 52,596 (203) 1 52,393 Amortization of acquired technology-based intangibles 21,264 (21,
Slide 42: Reconciliation of Selected Non-GAAP Measures | Q3 FY12
Reconciliation of Selected Non-GAAP Measures | Q3 FY12 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 of operating 1 results Adjustment relates to the exclusion of amo
Slide 43: Reconciliation of Selected Non-GAAP Measures | Q3 YTD FY12
Reconciliation of Selected Non-GAAP Measures | Q3 YTD FY12 (in ‘000s USD) Nine months ended March 31, 2012 GAAP Adjustments FN Non- GAAP COST OF REVENUES Customer support $ 82,724 $ (112) 1 $ 82,612 Service and other 153,551 (408) 1 153,143 Amortization of acquired technology-based intangibles 63,30
Slide 44: Reconciliation of Selected Non-GAAP Measures | Q3 YTD FY12
Reconciliation of Selected Non-GAAP Measures | Q3 YTD FY12 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 of operating 1 results Adjustment relates to the exclusion of
Slide 45: Reconciliation of Selected Non-GAAP Measures | Q4 FY11
Reconciliation of Selected Non-GAAP Measures | Q4 FY11 (in ‘000s USD) Three months ended June 30, 2011 GAAP Adjustments FN Non- GAAP COST OF REVENUES Customer support $ 23,237 $ (13) 1 $ 23,224 Service and other 47,753 (109) 1 47,644 Amortization of acquired technology-based intangibles 18,524 (18,5
Slide 46: Reconciliation of Selected Non-GAAP Measures | Q4 FY11
Reconciliation of Selected Non-GAAP Measures | Q4 FY11 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 of operating 1 results Adjustment relates to the exclusion of amo
Slide 47: Reconciliation of Selected Non-GAAP Measures | Q4 YTD FY11
Reconciliation of Selected Non-GAAP Measures | Q4 YTD FY11 (in ‘000s USD) Twelve months ended June 30, 2011 GAAP Adjustments FN Non- GAAP COST OF REVENUES Customer support $86,834 $ (47) 1 $ 86,787 Service and other 167,854 (432) 1 167,422 Amortization of acquired technology-based intangibles 68,048
Slide 48: Reconciliation of Selected Non-GAAP Measures | Q4 YTD FY11
Reconciliation of Selected Non-GAAP Measures | Q4 YTD FY11 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 of operating 1 results Adjustment relates to the exclusion of