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 FY13-Q4 | July 31, 2013
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation, including statements about the focus of Open Text Corporation (“OpenText” or “the Company”) in fiscal 2014 on growth in earnings and cash flows, creating value through investments in broader EIM capabilities, distribution, the Company’s
Slide 3: Scale and Momentum
Scale and Momentum (NASDAQ: OTEX, TSX: OTC) $1.3B+ global revenue EIM $13B market* (ECM, BPM, CEM, iX, Discovery) 20 years of proven innovation 31 country offices, 141 countries supported *as per notes on slide 6 3
Slide 4: Investment Highlights
Investment Highlights Demonstrated earnings power and operational discipline Grew organic licenses 6% for 2HFY13 over 2HFY12 Cloud services continue to perform well Non-cumulative quarterly dividend of US$0.30 per Common Share* Growth drivers: o Sales force expansion o Opportunities in fas
Slide 5: Information Transformation
Information Transformation EIM Today Information-Based Strategies Cloud Mobile 1 Year SAAS / Social Media 2 Years Web 2.0 3 Years Enterprise Resource Planning 5 Years Internet / World-wide Web Client / Server Technologies 10 Years Mainframe Computing 15 Years 20 Years 40 Years 1950 5
Slide 6: Enterprise Information Management
Enterprise Information Management $13 Billion Opportunity, 10% Growth* Customer win: Emergency Medicine Physicians ECM BPM CEM Information Discovery Exchange 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 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
Enterprise Information Management Enterprise Information Management Unleashing the Power of Information 8
Slide 9: 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 9
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: From 'on Premises' to 'the Cloud'
From ‘on Premises’ to ‘the Cloud’ • TempoBox • TempoSocial • Capture & OCR • EIM Cloud Services • ECM, BPM, CEM, iX, Discovery 11
Slide 12: Leaders Buy From Leaders
Leaders Buy From Leaders Enterprise Forrester WaveTM: Content Enterprise Management, Content October 2012 Management, Q4 ’11 Business Process Forrester WaveTM: Management Digital Asset Suites, October Management For 2011 Customer Experience, Q2 ’12 12
Slide 13: Diverse Customer Base
Diverse Customer Base GOVERNMENT ENERGY PHARMACEUTICAL FINANCIAL TRANSPORTATION MANUFACTURING LEGAL MEDIA FOOD INSURANCE 13
Slide 14: Customer Win | CONSOL Energy
Customer Win | CONSOL Energy CONSOL Energy, the leading diversified energy producer in the Appalachian basin, producing both natural gas and high-BTU coal, is a long standing customer of OpenText Content Server for document management. CONSOL Energy has extended their investment in OpenText, adding
Slide 15: Customer Win | The U.S. Department of Education
Customer Win | The U.S. Department of Education Through the Office of Federal Student Aid, the U.S. Department of Education (DoED) awards about $150 billion a year in grants, work-study funds, and low-interest loans to more than 14 million students. The DoED has extended its investment in the OpenTe
Slide 16: Customer Win | Wellington City Council
Customer Win | Wellington City Council Wellington City Council in New Zealand has invested in the OpenText Content Lifecycle Management Suite for its next generation electronic document and records management solution. It will provide the Council with seamless online discovery, access and use of inf
Slide 17: Customer Win | Apotex
Customer Win | Apotex Apotex Inc., the largest Canadian-owned pharmaceutical company, is a long time Enterprise Content Management customer, using OpenText solutions to distribute all GxP related documentation and procedures to their employees. Most recently, Apotex extended their strategic investme
Slide 18: Customer Win | MAN Diesel & Turbo
Customer Win | MAN Diesel & Turbo MAN Diesel & Turbo, the world market leader for large diesel engines for use in ships and power stations, and one of the three leading suppliers of turbo machines, has extended its investment in OpenText with the purchase of OpenText Email Management/ Archiving for
Slide 19: Customer Win | Hasbro
Customer Win | Hasbro A long time customer, Hasbro continues to accelerate their blueprint for growth by taking advantage of OpenText’s EIM Suite of technologies. Hasbro has invested in the full EIM suite of OpenText to service all of their content management platforms from Digital Assets to Marketi
Slide 20: Customer Win | Marvel Entertainment, LLC
Customer Win | Marvel Entertainment, LLC Marvel Entertainment, LLC, is undergoing initiatives to modernize their infrastructure of technologies, and has invested with OpenText to support a variety of technologies and use-cases. Starting with the modernization of their publishing operations, OpenText
Slide 21: Customer Win
Customer Win Daimler South East Asia Pte. Ltd., currently using OpenText Content Server for their DMS, has invested in OpenText Capture Centre (OCC), for their Optical Character Recognition (OCR) initiative. The OCR Process Automation project will automate one of the core business processes for Fina
Slide 22: History of Growing Revenue Y/Y
History of Growing Revenue Y/Y in $M: 7 Fiscal Years 1600 Service Customer Support Cloud License 1400 1200 7 Year CAGR 18.7%* 279.6 293.7 1000 173.8 269.2 800 238.1 229.8 600 219.1 656.6 658.2 182.5 560.5 400 507.5 405.3 363.6 287.6 200 257.2 251.7 166.5 203.6 125.6 142.8 150.5 0 FY07 FY08 FY09 FY10
Slide 23: History of Growing Non-GAAP EPS Y/Y
History of Growing Non-GAAP EPS Y/Y: 7 Fiscal Years $6.00 $5.00 7 Year CAGR 27.6%* $4.00 $3.00 $2.00 $1.00 $- FY07 FY08 FY09 FY10 FY11 FY12 FY13 $1.46 $2.03 $2.51 $3.12 $4.07 $4.60 $5.57 *FY06 non-GAAP EPS $1.01 COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 23
Slide 24: History of Growing Cash Flow
History of Growing Cash Flow: 7 Fiscal Years 400 350 7 Year CAGR 27.8%* 300 250 200 150 100 50 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 $111M $166M $186M $214M $244M $287M $339M *FY06 cash flow $61M 24 B**Before the impact of special charges
Slide 25: Q4 FY13 Overview (Y/Y)
Q4 FY13 Overview (Y/Y) OpenText delivered: 22.2% $1.43 $347.3 million $78.8 million Revenue License Up 13.6 percent Up 1.0 percent $1.17 $1.43 Non-GAAP-based Earnings Per Share – $84.7 million $65.2 million** Diluted* Non-GAAP-based Operating Cash Flow Up 22.2 percent Net Income* Down 18.3 percent U
Slide 26: FY13 – Q4 Financial Highlights
FY13 – Q4 Financial Highlights Total Revenue Up 14% Y/Y Non-GAAP EPS Up 22% Y/Y Total revenue $347.3 million up 14% Y/Y Non-GAAP-based EPS, diluted was $1.43 compared to $1.17 Y/Y(1) Revenue by Geography: GAAP–based EPS, diluted was $0.71 compared to Americas 54% $0.14 Y/Y EMEA 36% Non
Slide 27: FY13 – Q4 Revenue Breakdown
FY13 – Q4 Revenue Breakdown Total Revenue by Geography Q4 F13 - License Revenue by Industry 10% Services Americas 3% 2% EMEA 6% Public Sector 23% 36% 54% Asia Pac 7% Financial Technology 10% Basic Materials Consumer Goods 14% Healthcare Total Revenue Mix 10% Industrial Goods 11% 14% Utilities 18% 23
Slide 28: FY13 – Financial Highlights
FY13 – Financial Highlights Total Revenue Up 13% Y/Y Non-GAAP EPS Up 21% Y/Y Total revenue of $1.4 billion, up 13% Y/Y Non-GAAP-based EPS, diluted was $5.57 Revenue by geography: compared to $4.60 up 21.1% Y/Y(1) Americas 54% GAAP–based EPS, diluted was $2.51 compared to $2.13Y/Y EMEA 36
Slide 29: FY13 – Revenue Breakdown
FY13 –Revenue Breakdown Total Revenue by Geography F13 - License Revenue by Industry 10% Services Americas 5% 1% 36% 54% EMEA 6% Financial 20% Asia Pac 6% Technology Consumer Goods 10% Public Sector Basic Materials 16% Healthcare Total Revenue Mix 11% Industrial Goods 14% Utilities 18% 11% 21% Congl
Slide 30: Global Business
Global Business Fiscal 2013 Stockholm, SE EMEA HQ Grasbrunn, DE WW HQ Reading, UK Waterloo, ON Paris, FR Bellevue, WA Ottawa, ON San Francisco, Richmond Hill, ON CA Tokyo, JN New York, NY Tucson, AZ Washington, DC Atlanta, GA Austin, TX Hong Kong Mumbai IN Hyderabad, IN Singapore APJ HQ Sydney, AU S
Slide 31: Business Highlights
Business Highlights Services, public sector, financial and technology industries saw the most demand 5 license transactions over $1 million and 15 license transactions between $500K and $1 million Customer successes in the quarter include Apotex, CONSOL Energy, Daimler South East Asia Pte Ltd,
Slide 32: Dividend Program Highlights
Dividend Program Highlights To reward stockholders’ investments OpenText has adopted a policy to declare non-cumulative quarterly dividends The Board of Directors has declared a dividend of US$0.30 per Common Share* Payable to shareholders of record on August 30, 2013 Dividend to be paid on
Slide 33: FY14 External Target Model
FY14 External Target Model* Revenue Type Fiscal 2013 Target Model F13 Actual Fiscal 2014 Target Model As a % of revenue Product License 20 - 25% 20.5% 20 - 25% Cloud Services 10 - 15% 12.7% 10 - 15% Product Maintenance 44 - 49% 48.3% 44 - 49% Professional Services 17 - 22% 18.5% 17 - 22% Non-GAAP Gr
Slide 34: Summary
Summary • A leader in Enterprise Information Management (EIM) a large, growing and relevant market • Enhanced innovation and exciting product portfolio • Compelling operating margins, cash flow and quarterly dividend program • 7 years consistent growth: o 27.6% CAGR: non-GAAP EPS o 27.8% CAGR: Cash
Slide 35: Unleashing the Power of Information
Unleashing the Power of Information
Slide 36: References
References • ECM, BPM: Gartner Forecast Enterprise Software Markets, 2009-2016 1Q12 Update • InfoExchange: Research and Markets, Computer-based Fax Markets, 2010-2015 • Gartner Enterprise Software Markets, 2009-2016 • 1Q12 Update, Davidson Consulting, Fax Server Industry Forecast, 2011-2016 • CEM: G
Slide 37: Summary of Quarterly Results
Summary of Quarterly Results % Change % Change Q4 FY13 Q3 FY13 Q4 FY12 (Q/Q) (Y/Y) Revenue (million) $347.3 $337.7 $305.6 2.8% 13.6% GAAP gross margin 66.0% 63.9% 65.8% 210 bps 20 bps GAAP operating margin 14.2% 12.1% 13.0% 210 bps 120 bps GAAP EPS, diluted $0.71 $0.44 $0.14 61.4% 407.1% _ Non-GAAP
Slide 38: Summary of Year To Date Results
Summary of Year To Date Results % Change Q4 FY13 Q3 FY13 Q4 FY12 (Y/Y) Revenue (million) $1,363.3 $1,016.1 $1,207.5 12.9% GAAP gross margin 64.4% 63.8% 65.4% (100) bps GAAP operating margin 14.5% 14.6% 12.4% 210 bps GAAP EPS, diluted $2.51 $1.80 $2.13 17.8% Non-GAAP gross margin * 71.3% 70.8% 72.5%
Slide 39: Summary of Quarterly Revenue Results
Summary of Quarterly Revenue Results* % Change % Change In millions Q4 FY13 Q3 FY13 Q4 FY12 (Q/Q) (Y/Y) License $78.8 $69.0 $78.0 14.2% 1.0% Cloud services 41.9 43.2 N/A (3.0)% N/A Customer support 164.9 166.6 163.1 (1.0)% 1.1% Professional service and other 61.7 58.9 64.5 4.8% (4.3)% Total $347.3 $
Slide 40: Summary of Year To Date Revenue Results
Summary of Year To Date Revenue Results* % Change In millions Q4 FY13 Q3 FY13 Q4 FY12 (Y/Y) License $279.6 $200.8 $293.7 (4.8)% Cloud services 173.8 131.9 N/A N/A Customer support 658.2 493.3 656.6 0.2% Professional service and other 251.7 190.1 257.2 (2.1)% Total $1,363.3 $1,016.1 $1,207.5 12.9% *
Slide 41: Appendix A
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 42: Reconciliation of Selected Non-GAAP Measures | Q4 FY13
Reconciliation of Selected Non-GAAP Measures | Q4 FY13 (in ‘000s USD) Three months ended June 30, 2013 GAAP % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Cloud Services $17,696 $(48) 1 $17,648 Customer Support 25,351 (159) 1 25,192 Professional Service and Other 47,879 (2
Slide 43: Reconciliation of Selected Non-GAAP Measures | Q4 FY13
Reconciliation of Selected Non-GAAP Measures | Q4 FY13 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 44: Reconciliation of Selected Non-GAAP Measures | Q4 FY13 YTD
Reconciliation of Selected Non-GAAP Measures | Q4 FY13 YTD (in ‘000s USD) Year ended June 30, 2013 GAAP % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Cloud Services $72,365 $(128) 1 $72,237 Customer Support 106,948 (434) 1 106,514 Professional Service and Other 196,874 (9
Slide 45: Reconciliation of Selected Non-GAAP Measures | Q4 FY13 YTD
Reconciliation of Selected Non-GAAP Measures | Q4 FY13 YTD 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 46: Reconciliation of Selected Non-GAAP Measures | Q3 FY13
Reconciliation of Selected Non-GAAP Measures | Q3 FY13 (in ‘000s USD) Three months ended March 31, 2013 GAAP % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Cloud Services $18,741 $(50) 1 $18,691 Customer Support 27,497 (130) 1 27,367 Professional Service and Other 49,701 (
Slide 47: Reconciliation of Selected Non-GAAP Measures | Q3 FY13
Reconciliation of Selected Non-GAAP Measures | Q3 FY13 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 48: Reconciliation of Selected Non-GAAP Measures | Q3 FY13 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 FY13 YTD (in ‘000s USD) Nine months ended March 31, 2013 GAAP % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Cloud Services $54,669 $(80) 1 $54,589 Customer Support 81,597 (275) 1 81,322 Professional Service and Other 148,9
Slide 49: Reconciliation of Selected Non-GAAP Measures | Q3 FY13 YTD
Reconciliation of Selected Non-GAAP Measures | Q3 FY13 YTD 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 50: 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 % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Customer Support $27,780 $(58) 1 $27,722 Professional Service and Other 51,358 (239) 1 51,119 Amortization of acquired
Slide 51: 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 52: Reconciliation of Selected Non-GAAP Measures | Q4 YTD FY12
Reconciliation of Selected Non-GAAP Measures | Q4 YTD FY12 (in ‘000s USD) Year ended June 30, 2012 GAAP % Non-GAAP GAAP Adjustments FN Non- GAAP of Rev % of Rev COST OF REVENUES Customer Support $110,504 $(169) 1 $110,335 Professional Service and Other 204,909 (647) 1 204,262 Amortization of acquire
Slide 53: 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