Slide 1: FY2023 Half-Year Financial Results
Integrated Research Limited (ASX:IRI) FY2023 Half-Year Financial Results 16 February 2023 John Ruthven, CEO Matthew Walton, CFO
Slide 2: We are IR
We are IR A leading global software company, providing performance and experience management solutions for the world's mission critical ecosystems. Real-time analytics, fast troubleshooting, dynamic alerts, comprehensive reporting and customizable dashboards delivers a seamless user experience acros
Slide 3: Our Competitive Advantage
Our Competitive Advantage Why we win Position Market Fit Capabilities Competition Value proposition Market Specifically Expertise in Few direct Attractive ROI Collaborate transformation designed for collecting and competitors and measured against (hybrid evolution) Collaboration analysing big data,
Slide 4: Company Overview
Company Overview 30+ years performance management ~600 enterprise customers & >25% Fortune 500 customers through experience service providers globally direct and Tier 1 channel partners 600m monitored transactions daily ~60 countries and four offices 20% growth on pcp across North America, LATAM, Eu
Slide 5: Blue Chip Customer Base
Blue Chip Customer Base Long-term, high value relationships based on mission critical solutions Tech | Telco BFSI Health | Gov | Edu Retail |Industrial | Other 10/25 Fortune 500 top 6/20 largest Australian 8/10 top US telcos 7/10 top US banks companies companies (market cap) 5
Slide 6: CEO Key Messages
CEO Key Messages Transition underway – building a stronger IR with an expanded product set and enhanced market opportunity 1. Strong start to the new financial year with total sales and renewals (measured on a total contract value basis) up 22% compared to H1 FY22. 2. Average contract length increas
Slide 7: Half-Year Performance Review: Statutory (A$M)
Half-Year Performance Review: Statutory (A$M) Strong TCV growth drives statutory revenue and profits 38.4 37.7 32.3 31.7 CASH RECEIPTS FROM REVENUE 19% CUSTOMERS 16% Dec-21 Dec-22 Dec-21 Dec-22 8.5 8.7 6.7 NET OPERATING EBITDA 26% CASHFLOW 1.0 88% Dec-21 Dec-22 Dec-21 Dec-22 12.3 9.3 NPAT 1.8 3.2 80
Slide 8: Half-Year Performance Review: Proforma (A$M)
Half-Year Performance Review: Proforma (A$M) TCV is a lead indicator for the future direction of key proforma metrics 73.0 38.9 67.5 31.7 TOTAL CONTRACT ANNUAL RECURRING VALUE (TCV) 22% REVENUE 1 7% Dec-21 Dec-22 Dec-21 Dec-22 34.4 34.1 PROFORMA PROFORMA 14.8 8.2 SUBSCRIPTION REVENUE 1% EBITDA 45% D
Slide 9: H1 FY23 Progress Report
H1 FY23 Progress Report Strong foundation from which to grow Priority Status Notes 1. Returning the Americas and Europe to Europe TCV +19% on pcp, Americas broadly growth on-plan flat on pcp, underwritten by strong renewals 2. Increasing new product adoption and Percent of TCV from new products trai
Slide 10: Financials
Financials
Slide 11: Interim Revenue Analysis: TCV, Statutory, Proforma and RR
Interim Revenue Analysis: TCV, Statutory, Proforma and RR TCV is a lead indicator of future recurring revenues through new sales and price growth 60.0 • H1’20 results benefitted from positive FX impact 49.7 50.0 43.9 44.0 • Cloud related sales started in 2021, 40.4 40.9 reason why TCV and statutory
Slide 12: Geographic and Product Interim Revenue Analysis
Geographic and Product Interim Revenue Analysis TCV recovery in H1 means improvement in future recurring revenues Geographic* Asia Pacific revenue - A$M Europe revenue - £M Americas - US$M 14 6 30 12 25 10 4 20 8 15 6 4 2 10 2 5 0 0 0 H1' 18 H1' 19 H1' 20 H1' 21 H1' 22 H1' 23 H1' 18 H1' 19 H1' 20 H1
Slide 13: Half-Year Performance Review: Key Metrics
Half-Year Performance Review: Key Metrics Recurring proforma revenue >80% Proforma Revenue Contract Life TCV Renewal & New * 16% 11% 33% 32% 50% 57% 32% 84% 89% 34% 68% 35% 43% 16% Dec-21 Dec-22 Dec-21 Dec-22 Dec-21 Dec-22 1 & 2 Yrs 3 & 4 yrs 5 yrs Recu rring Non Recu rring Renewal New & Capacity •
Slide 14: Operating Costs
Operating Costs Continued commitment to innovation with disciplined overhead controls Product and Technology - A$M Sales and marketing - A$M General and administration - A$M 25 50% 25 53% 60%25 30% 51% 20 40% 20 50%20 25% 20.9 20.2 31% 40% 20% 15 27% 30% 15 15 30% 15% 11% 10 12.0 20% 10 10 10.9 20%
Slide 15: Net Cash Flow Analysis
Net Cash Flow Analysis Lower cash conversion - a timing issue 50 31.7 29.9 40 30 A$M 20 0.8 12.3 4.5 0.4 9.3 10 0 Net cash Cash r eceipts fr om Cash paid to su pplies Income tax Development spend FX, Interest & other Net cash 30 Jun e 22 cu stomer s and employees 31 Dec 22 • Cashflow was negatively
Slide 16: EBITDA Cash Flow Bridge
EBITDA Cash Flow Bridge Debtor factoring in run-off 10 8.5 8.2 2.5 0.3 3.9 A$M Running-off in December 2023 0.8 1.0 0 EBITDA - statutory Over-time revenue 1 Proforma EBITDA Historical debtor Working capital Income taxes paid Net cash from operations conv ersion * factoring (receivables) * Over-time
Slide 17: Balance Sheet
Balance Sheet Supporting self-funded organic growth Period Ended (as at) Dec 22 Jun 22 YoY A$M A$M Cash and cash equivalents Strong balance sheet with 9.3 12.3 (24%) Trade and other receivables net cash of $9.3M and no 74.7 68.8 9% Intangible assets debt carried forward. 30.6 31.3 (2%) Right-of-use
Slide 18: Strategy & Product
Strategy & Product
Slide 19: Strategy
Strategy continue to continue to build long- transition business to term recurring combination of support revenue on-premise enterprise streams and hybrid users’ evolving needs expand into adjacent focus on key leverage areas and industry structural higher value verticals shift in our segments marke
Slide 20: Phased Strategy
Phased Strategy Currently in execution phase of strategic plan Phase II Phase I Phase III execution innovation scale new business new products grow market share Extend Promote value proposition Customer solution product suite beyond vendor tools extension Multi environment Expand integrations & supp
Slide 21: Transact Customer Wins
Transact Customer Wins Ensuring reliability in today’s complex payments environments Customer: Commercial Bank Customer: Large Financial Institution Location: Africa Location: UK Term: 5 years Term: 5 years Type: New Customer Type: Renewal Solution: Card Payments + ATM and 24x7 Solution: Transact an
Slide 22: Collaborate Customer Wins
Collaborate Customer Wins Providing assurance for the mission critical services of our customers Name: LANcom Customer: Private non-profit healthcare company Location: Taiwan Location: US Term: 5 years Term: 3 years Type: New Customer [service provider] Type: Renewal Solution: Monitoring for all Cis
Slide 23: Innovation - Investment H1 FY23
Innovation - Investment H1 FY23 Pro-active cloud/hybrid-based innovation pipeline to support customers H1 FY23 34% spend $4.5M* 76% of R&D spend on 20% investment SaaS/Hybrid based 24% 42% products and dedicated to platform 22% enhanced cloud products focused on performance Cloud Collaborate Cloud T
Slide 24: Transact – innovation through collaboration
Transact – innovation through collaboration Reduced development cycles through closer customer engagement Product Gen II Updates Traction Core Integration Toolkit, Growing demand in developing markets. 18 UI Refresh renewals, 3 new customers wins YTD transact Real-time AnyID, Request for Pay, Target
Slide 25: Collaborate – innovation through collaboration
Collaborate – innovation through collaboration Reduced development cycles through closer customer engagement Product Gen II updates Traction Core Direct Routing & SBC* Phase 1 market development, signed foundation collaborate Support customer – service provider (Ribbon) Cloud Collaboration EQ360 Acc
Slide 26: FY23 Key Priorities
FY23 Key Priorities
Slide 27: FY23 Key Priorities
FY23 Key Priorities Markets – continue growth momentum in the Americas and Europe New customers – win more new business and grow product footprint Existing customers – improve customer retention and renewal yield Product innovation – collaborate with customers to reduce development cycles and valida
Slide 28: Disclaimer
Disclaimer SUMMARY INFORMATION FORWARD LOOKING STATEMENTS NOT AN OFFER This document and the associated transcript (together “the presentation”) has The presentation contains certain "forward-looking statements”. The words The presentation is for information purposes only and is not a prospectus, be
Slide 29: Appendix
Appendix
Slide 30: Proforma Subscription Revenue
Proforma Subscription Revenue Purpose: To provide an alternate view of underlying performance by restating term licence and maintenance revenues on a recurring subscription basis. How: • All licence sales from FY2012 to FY2023 were analysed for each region in their natural currencies (the historic a
Slide 31: Interim proforma subscription revenue
Interim proforma subscription revenue Reconciliation of statutory to proforma revenue Interim revenue H1’20 H1’21 H1’22 H1’23 H1’20 H1’21 H1’22 H1’23 A$M A$M A$M Infrastructure 10.6 9.7 9.1 9.4 7% (9%) (7%) 4% Transact 4.9 5.0 5.3 5.5 33% 1% 7% 3% Collaborate 24.1 22.1 20.1 19.2 9% (8%) (9%) (4%) Pr
Slide 32: Total Contract Value (TCV) by Product
Total Contract Value (TCV) by Product Strong renewals in Transact and Infrastructure Collaborate – A$M Transact – A$M Infrastructure – A$M 17.6 17.0 8.6 8.1 2.1 1.4 7.4 12.2 4.5 3.2 1.3 6.5 6.7 0.8 9.6 5.4 2.4 3.2 Dec-21 Dec-22 Dec-21 Dec-22 Dec-21 Dec-22 Renewal New & Capacity Renewal New & Capacit
Slide 33: Total Contract Value (TCV) by Geography
Total Contract Value (TCV) by Geography* Recent leadership changes implemented in Americas and Europe APAC – A$M Americas – US$M Europe - £M 11.7 9.6 9.0 7.3 7.3 2.0 5.8 4.4 4.2 7.6 3.0 4.4 1.1 3.9 2.9 3.2 1.9 Dec-21 Dec-22 Dec-21 Dec-22 Dec-21 Dec-22 Renewal New & Capacity Renewal New & Capacity Re
Slide 34: Proforma Subscription Revenue
Proforma Subscription Revenue Subscription revenue impacted by 2H FY22 contract losses APAC – A$M Americas – US$M Europe - £M 15.7 3.3 7.3 14.8 6.7 2.7 1.0 6.2 -2% +5% 6.1 1.0 0% 4.1 3.9 2.3 9.5 8.7 1.7 2.8 3.2 +14% -8% -25% Dec-21 Dec-22 Dec-21 Dec-22 Dec-21 Dec-22 Collaborate T&I Collaborate T&I C
Slide 35: Glossary
Glossary Annual Recurring Revenue (ARR) equals to the monthly proforma subscription revenue at the end of the period multiplied by 12. Cash conversion rate equals cash receipts divided by proforma revenue. Customer retention equals the opening customer count for the reporting period less customers w