Slide 1: Investor Presentation
Investor Presentation NASDAQ: OTEX | TSX: OTEX November 4, 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: Q1 Fiscal 2022 Financial Results
Q1 Fiscal 2022 Financial Results OpenText ©2021 All rights reserved 3
Slide 4: Q1 Fiscal 2022 Financial Highlights
Q1 Fiscal 2022 Financial Highlights with Y/Y comparisons Reflects continued investments in talent, innovation and go-to-market to drive organic growth Q1 FY’22 Trailing Twelve Months (TTM) Ending Q1 FY’22 3.5% 6.1% Total Revenues $832.3M Total Revenues $3.41B 2.0% in CC(1) 3.4% in CC $691.8M 3.2% $2
Slide 5: Q1 FY'22 Customer Wins
Q1 FY’22 Customer Wins Business Content Network Services JCB is a global payment brand based in Tokyo, Japan. BDO is the 5th largest global accounting firm providing professional services in 167 countries. Products: OpenText B2B Managed Services Products: OpenText Extended ECM for Microsoft Office 3
Slide 6: Q2 FY'22 Quarterly Factors
Q2 FY’22 Quarterly Factors Externalities Company Specific(1) • Expect Q2 Revenue Y/Y: • Continued COVID-19 crisis • Total Revenue and ARR slightly up • Global geopolitical and volatile macro environment • Slightly favorable FX • Inflation, supply chain and labor shortages • Expect Q2 Q/Q: • US stimu
Slide 7: FY'22 OpenText Total Growth Strategy
FY’22 OpenText Total Growth Strategy(1) FY’21 Actual(2) FY’22 Expected % Growth $1,407.4 Cloud 3%-4% $1,334.1 Customer Support Constant to slightly up $2,741.5 ARR Low single-digit $384.7 License Decline mid single-digit $259.9 Professional Service Constant $3,386.1 Total Revenues 1%-2% New M&A Addi
Slide 8: FY'22 Target Model
FY’22 Target Model Fiscal 2021 Actuals Fiscal 2022(3) Revenue Type: Cloud Services and Subscriptions 41.6% 41% - 43% Customer Support 39.4% 39% - 41% Annual Recurring Revenue (ARR) 81.0% 81% - 83% License 11.4% 9% - 11% Professional Services and Other 7.7% 7% - 9% Non-GAAP Gross Margin: Cloud Servic
Slide 9: Our Financial Aspirations
Our Financial Aspirations FY’24 Long Term Aspirations Total Revenue Organic ARR A-EBITDA Margin(2) Free Cash Flows(2) (FCF) Growth(1) % of Total Revenue 2% - 4% 85% 38% - 40% $1.2B+ M&A will be additive A-EBITDA margin over 40% to be re-invested in organic growth Target Capital Allocation Strategy:
Slide 10: Strong Liquidity and Cash Position
Strong Liquidity and Cash Position Current Liquidity (US$) Total Cash & Cash Equivalents 2,000 1,846 1,693 1,735 Total Cash & Committed Liquidity(1) $2.5B 1,453 1,501 1,476 1,607 1,500 Millions USD 1,000 Capital Expenditures as % of Total Revenue 500 4.0% 3.7% - 3.5% Q3 FY'20 Q4 FY'20 Q1 FY'21 Q2 FY
Slide 11: Strong Cash Flows and Balance Sheet
Strong Cash Flows and Balance Sheet TTM Q1 FY’22 (US$M) Trended Consolidated Net Leverage Ratio(1) Operating Cash Flows(2) $832 Carbonite Acquisition Closing Less: CapEx $75 2.28x 2.25x 2.04x 1.82x Free Cash Flows(2) $757 1.60x 1.57x 1.45x 1.36x Less: Principal(3) $10 Less: Dividends $223 Less: Shar
Slide 12: Strategy
Strategy OpenText ©2021 All rights reserved 12
Slide 13: Be Digital
Be Digital GROW with OpenText Information in the right hands knows no bounds. November 16-18 Growing ideas further, faster, wider. Virtual OpenText is at the center of that growth, helping businesses to expand everywhere and anywhere. OpenText ©2021 All rights reserved 13
Slide 14: OpenText Snapshot
OpenText Snapshot Leader in Large Growing Addressable Market with Marquee Customer Base $84B 89 24 75K 470K Total Addressable of the Top 100 of the 30 largest Enterprise SMB Market growing 8% companies supply chains Customers Customers Track Record of Growth, Profitability and Capital Efficiency 12%
Slide 15: How We Create Value
How We Create Value Model Value Creation Total Revenue • Organic growth Growth Total Revenue 12% Total Revenue • Acquired growth Growth CAGR (FY’13 to FY’21) • High recurring revenues • Upper quartile A-EBITDA margin Profitability 39% A-EBITDA (FY’21)(1) Value • Growing free cash flows Capital • Fre
Slide 16: Total Growth Strategy
Total Growth Strategy • Growing sales breadth and depth • Product innovation GROW Information • 83% ARR(1) • 94% Customer support renewals(2) Management • 93% Cloud renewals(2) • Drives organic growth • Gain market share ACQUIRE • High free cash flow returns RETAIN 1. ARR as a percentage of Total Re
Slide 17: Large and Growing Addressable Market
Large and Growing Addressable Market Information Management(1) Industry Trends OpenText Product CY21E to CY24E CAGR Content $24B +11% Master Modern Work Business Network $20B +7% Digitize Supply Chains Digital Experience $21B +7% Power Modern Experiences Security & $19B +6% Strengthen Cyber Resilien
Slide 18: 89 of the top 100 largest companies in the world
Marquee Customer Base 89 of the top 100 largest companies in the world(1) Life Consumer Financial Technology Manufacturing Telecom Sciences 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 growth 1. The top 100 is based on the Forbes Global 2000
Slide 19: FY'21 Revenue Breakdown
FY’21 Revenue Breakdown Total Revenue Mix Total Revenue by Geography ARR by Industry 3% 8% 8% 6% 7% 23% 11% 42% 9% 31% 61% 10% 16% 39% 11% 15% Financial Services Cloud Services & Subscriptions Consumer goods Americas Technology Customer Support Public Sector EMEA Healthcare License Basic materials a
Slide 20: Five Clouds on Modern, Scalable Cloud-based Architecture
Five Clouds on Modern, Scalable Cloud-based Architecture OpenText Cloud Editions: The Ultimate Cloud™ Global Secure Content | Business Network | Experience Always on Security & Protection | Developer (99.99% availability) Modern API services OT2 - Cloud API Services Compliant (GDPR, data zones, etc.
Slide 21: Comprehensive Go-to-Market
Comprehensive Go-to-Market Cross-sell and upsell Enterprise Solutions SMB & Consumer Solutions Direct Strategic Partners Channel Partners Online & Retail 2,000+ 16,000+ 7M+ Field Facing Professionals Partners Consumers OpenText Digital Zone OpenText ©2021 All rights reserved 21
Slide 22: The Information Management Journey
The Intelligent, Secure & Connected Business Cloud Power the API Editions Economy Be Cyber Resilient Power Modern Digital Experiences All Points of Business Departure Master Network Modern Work The Information Management Journey OpenText ©2021 All rights reserved 22
Slide 23: GROW with OpenText – Our Growth Plan
GROW with OpenText – Our Growth Plan Market leaders by industry GROW Top supply chains by industry our Strategic Accounts Grow long-term customer value and share of wallet Migrate and upgrade install base to Cloud Editions GROW our Cloud Editions New product releases every 90 days Full coverage of G
Slide 24: Accelerating Product Innovation
Accelerating Product Innovation Past Present + Future Many Products Five Clouds More efficient R&D spend Accelerates speed of delivering innovation Simplifies go-to-market – 5 clouds Content Solution selling versus point products Business Network Scales human capital via Experience customer self-ser
Slide 25: Investing in Organic Growth
Investing in Organic Growth Research & Development Sales & Marketing ($ and in % of Total Revenues)(1),(2) R&D% of Total Revenues Enterprise Sales Goal R&D US$ 12-14% • Full coverage of G10K by end of CY’23 12.2% SMB/C Goal • Grow SMB/C partners – RMMs, MSPs 10.5% Customer Engagement $194 M $417 M •
Slide 26: Continued Migration to the OpenText Cloud Editions
Continued Migration to the OpenText Cloud Editions All OpenText software launched as a service with APIs OpenText ©2021 All rights reserved 26
Slide 27: OpenText Digital Zone
OpenText Digital Zone A strategic investment in frictionless customer engagement Digital Room Developer New opentext.com Test-Drive Communities OpenText ©2021 All rights reserved 27
Slide 28: Scalable, High-Velocity, Frictionless Business Model
Scalable, High-Velocity, Frictionless Business Model Digitization and Automation: • Automate DevOps New Customer Engagement Model: • Automate routine R&D • Pre-sales – demand creation automation Product is built for: • Self-sell – upsell, cross-sell • Self-service • Post-sales – renewal automation •
Slide 29: Sustainable Growth Through Retention and Upgrades
Sustainable Growth Through Retention and Upgrades Annual Recurring Revenue Renewal Rate(1) (ARR) (US$M) $2,742 105% $1,337 Cloud Customer Support 93% 94% FY'15 FY'21 Customer satisfaction is a foundation for growth 1. For the quarter ended September 30, 2021. Excludes Carbonite. OpenText ©2021 All r
Slide 30: GROW with OpenText: Acquiring growth
GROW with OpenText: Acquiring growth M&A Strategy Key Drivers High adjacency within Information Management Expands market presence, customer base, technology position Contributes to organic growth On operating model in 12 months Free Cash Flows, returns-based, 5-7 year payback OpenText ©2021 All rig
Slide 31: Proven Track Record of Growth
Proven Track Record of Growth Total Revenue Growth in CC (US$M)(1) $3,305 $3,147 $2,922 $2,743 $2,318 $1,936 $1,904 19.2% 2.8% 27.0% 19.7% 3.8% 9.7% 6.3% FY'15 FY'16 FY '17 FY'18 FY'19 FY'20 FY'21 7 Consecutive Years of Y/Y Growth in CC(1) 1. CC: Constant currency for this purpose is defined as the
Slide 32: Proven Durable Business Model
Proven Durable Business Model Growing ARR and Upper Quartile Margin(1),(2) 81.0% ARR FY’22 Model: % of Total Revenues 81%-83% 54.4% (1) A-EBITDA 38.8% 38.8% FY’22 Model: Margin 37%-38% 29.1% 11.4% License 24.3% FY’22 Model: % of Total Revenues 9%-11% FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 F
Slide 33: Strong Track Record of Financial Performance
Strong Track Record of Financial Performance Annual Recurring Total Revenues Cloud Revenue A-EBITDA(1) Free Cash Flows(1) Revenue (US$M) (US$M) (US$M) (US$M) (US$M) $1,407 $1,315 $812 $2,742 $3,386 83% 105% 133% 111% 82% $445 $1,852 $1,337 $624 $605 FY'15 FY'21 FY'15 FY'21 FY'15 FY'21 FY'15 FY'21 FY
Slide 34: Proven Track Record of Value Creation
Proven Track Record of Value Creation We run a disciplined Free Cash Flows(1) return business FY’19 FY’20 FY’21 A-EBITDA and FCF Trends $1,350 FCF/Revenue(2) 28.3% 28.4% 24.0% $1,250 FY’21 FCF $1,150 includes FCF/Avg Total Assets(3) 10.4% 9.7% 8.2% $1,050 $299.6M USD in millions $950 IRS FCF/Avg Inv
Slide 35: Strong Track Record of Shareholder Returns
Strong Track Record of Shareholder Returns Dividends Paid and Shares Repurchased (US$M) Target Capital Allocation Strategy(1) Dividends and Shares Repurchased Available for anti-dilutive Dividends corporate purposes share buyback $119.1 Dividends Paid (7-year CAGR): 16% ~ 33% $65.5 TTM $210.7 Free C
Slide 36: Corporate Citizenship Reflects our Culture
Corporate Citizenship Reflects our Culture Progress We’ve Made: 2nd Corporate Citizenship Report published • Adopted GRI sustainability reporting $1 MILLION standards DONATION • New ED&I department, mandate and initiatives • Enhanced Human Rights Statement 65 FOOD • Expanded Supplier Code of Conduct
Slide 37: We Strive To Do The Right Thing
We Strive To Do The Right Thing Our Customers Our Communities Rapid Radiology and OpenText Accelerate Diagnostic OpenText Donates US OpenText Provides 4 Results to Help Improve Patient Care $1M to Global Food Million Meals for 58 Jun 25, 2020 Banks Communities in 21 Dec 11, 2020 Countries Worldwide
Slide 38: OpenText Products Enhance Global Sustainability
OpenText Products Enhance Global Sustainability Paperless Workflows Ethical Supply Chain Data Privacy and Protection Digitizes 26 billion Paper reduction saves 5.1 Paper reduction saves GHG transactions per year million trees emissions of 725,000 tonnes of CO2e OpenText ©2021 All rights reserved 38
Slide 39: Executive Leadership Team (ELT)
Executive Leadership Team (ELT) Mark J. Madhu Muhi Gordon Ted James Prentiss Barrenechea Ranganathan Majzoub Davies Harrison McGourlay Donohue CEO and CTO EVP, EVP, EVP, EVP, EVP, EVP, CFO Chief Product Officer CLO & Corporate Enterprise Sales International Sales SMB & Consumer Development Sales Kri
Slide 40: Thank you
Thank you twitter.com/opentext linkedin.com/company/opentext opentext.com
Slide 41: Appendix
Appendix OpenText ©2021 All rights reserved 41
Slide 42: Organic Growth
Organic Growth Fiscal 2021 FX Headwind / In US$ billions (unless indicated otherwise) Reported CC(1) (Tailwind) Total Revenues $3.39 ($0.08) $3.30 (2) Less: Revenues from acquisitions $0.26 $0.26 Organic revenues $3.13 $3.05 Growth (decline) in organic revenues over prior year(3) 0.5% (2.1)% Annual
Slide 43: 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 44: Summary of Quarterly Results with Constant Currency
Summary of Quarterly Results with Constant Currency Q1 FY'22 % Change (In millions U.S. dollars, except per share data) Q1 FY'22 Q1 FY'21 $ Change % Change in CC* in CC* Revenues: Cloud services and subscriptions $356.6 $341.0 $15.6 4.6 % $353.2 3.6 % Customer support 335.2 329.4 5.8 1.8 % 328.5 (0.
Slide 45: Reconciliation of Selected Non-GAAP Measures | Q1 FY'22
Reconciliation of Selected Non-GAAP Measures | Q1 FY'22 Three Months Ended September 30, 2021 (In ‘000's U.S. dollars, 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 $ 119,779 $ (907) (1) $ 118
Slide 46: Reconciliation of Selected Non-GAAP Measures | Q1 FY'22
Reconciliation of Selected Non-GAAP Measures | Q1 FY'22 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 47: Reconciliation of Selected Non-GAAP Measures | Q1 FY'21
Reconciliation of Selected Non-GAAP Measures | Q1 FY'21 Three Months Ended September 30, 2020 (In ‘000's U.S. dollars, except per share data) GAAP % of Non-GAAP % GAAP Adjustments FN Non-GAAP of Total Total Revenue Revenue COST OF REVENUES Cloud services and subscriptions $ 112,624 $ (836) (1) $ 111
Slide 48: Reconciliation of Selected Non-GAAP Measures | Q1 FY'21
Reconciliation of Selected Non-GAAP Measures | Q1 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 49: Reconciliation of Adjusted EBITDA and Free Cash Flows
Reconciliation of Adjusted EBITDA and Free Cash Flows (In '000's U.S. dollars) Q1 FY'22 Q1 FY'21 GAAP-based net income, attributable to OpenText $ 131,915 $ 103,376 Add: Provision for (recovery of) income taxes 43,450 42,744 Interest and other related expense, net 37,055 39,089 Amortization of acqui
Slide 50: Reconciliation of Adjusted EBITDA and Free Cash Flows
Reconciliation of Adjusted EBITDA and Free Cash Flows (In '000's U.S. dollars) FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 Adjusted EBITDA GAAP-based net income, attributable to OpenText $ 125,174 $ 148,520 $ 218,125 $ 234,327 $ 284,477 $ 1,025,659 $ 242,224 $ 285,501 $ 234,225 $ 310