Slide 1: Investor Presentation
Investor Presentation August 4, 2022 NASDAQ: OTEX | TSX: OTEX
Slide 2: Safe Harbor and IP Statement
Safe Harbor and IP Statement This presentation contains 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 other applicable securities laws of the United States and Canada. All state
Slide 3: Q4 Fiscal 2022 Financial Results
Q4 Fiscal 2022 Financial Results
Slide 4: Q4 Fiscal 2022 Financial Highlights
Q4 Fiscal 2022 Financial Highlights with Y/Y comparisons Reflects continued investments in talent, innovation and go-to-market to drive organic growth Q4 FY’22 FY’22 $902.5M 1.0% $3.49B 3.2% Total Revenues $935.4M in CC Total Revenues $3.53B in CC 4.7% in CC(1) 4.3% in CC $739.9M 6.6% $2.87B 4.5% AR
Slide 5: Strong Cash Flows and Balance Sheet
Strong Cash Flows and Balance Sheet Current Liquidity (US$) Trended Consolidated Net Leverage Ratio(2) Total Cash & Committed $2.44B Zix Acquisition Liquidity(1) Closing 2.0x 2.0x 2.0x 1.9x 1.8x FY’22 (US$M) 1.6x 1.6x 1.5x 1.4x Operating Cash Flows $982 Less: CapEx $93 Q4 FY'20 Q1 FY'21 Q2 FY'21 Q3
Slide 6: World's Largest Customers Trust OpenText
World’s Largest Customers Trust OpenText(1) Manufacturing 20 out of top 20 Companies Oil & Gas 20 out of top 20 97 Companies Telecom 20 out of top 20 Hydro Companies Québec Utilities 18 out of top 20 Companies Federal 20 out of top 20 Governments Financial Services 19 out of top 20 Companies Retail
Slide 7: Q1 FY'23 Quarterly Factors
Q1 FY’23 Quarterly Factors Externalities Company Specific Inflation, supply chain and macroeconomic Expect Q1 Y/Y Revenue in constant currency: Strength of US dollar • Cloud revenues up 13% to 15% • ARR up 6% to 8% Geopolitical (Russia) • Total revenues up 4% to 6% Continued pandemic effects FX reve
Slide 8: FY'23 OpenText Total Growth Strategy (Constant Currency)
FY’23 OpenText Total Growth Strategy (Constant Currency)(1) F’22 Actual(2) Y-Y Expected Growth(4) in Constant Currency $465.8 Enterprise Cloud Bookings(3) 15%+ $1,535.0 Cloud Revenue(1) 6% to 8% $1,331.0 Customer Support Revenue Constant to 2% $2,866.0 ARR(1) 3% to 4% $358.4 License Revenue 3% to 5%
Slide 9: FY'23 Target Model
FY’23 Target Model Fiscal 2022 Actuals Fiscal 2023 Model(3,4) Revenue Type: Cloud Services and Subscriptions 43.9% 44% - 46% Customer Support 38.1% 36% - 38% Annual Recurring Revenue (ARR) 82.0% 81% - 83% License 10.3% 9% - 11% Professional Services and Other 7.7% 7% - 9% Non-GAAP Gross Margin(1): C
Slide 10: FY'25 Medium-Term Aspirations Constant Currency
FY’25 Medium-Term Aspirations Constant Currency(1) Enterprise Cloud Bookings Growth(2) 15%+ Cloud Editions (CE), private cloud expertise, APIs, Titanium Organic Revenue Growth(3) 2% to 4% Strategic GROW with OpenText programs Cloud Organic Revenue Growth(3) 6% to 8% Efficient conversion of cloud boo
Slide 11: FY'22 FY'25 Free Cash Flows
FY’22 FY’25 Free Cash Flows(1) FY’22 Actuals FY’25 Aspirations Upside Opportunity 1. Stronger revenues & profitability 2. Improving currency 3. Higher benefits from tax structure optimization $889M $1.1B Baseline Assumptions Expect FCF as % of Total Revenue 1. US dollar strength to high 20%’s by F’2
Slide 12: Our Longer-Term Aspirations In Information Management
Our Longer-Term Aspirations In Information Management(1) To be the leading cloud-based Information Management company, enabling intelligent, secure and connected businesses for customers of all sizes Longer-Term Aspirations Double the #1 Company $6B+ in Every Cloud in Free Cash Up to 4% Organic Grow
Slide 13: Our Business
Our Business SS ———
Slide 14: OpenText Snapshot
Manufacturing OpenText Snapshot World’s Largest Customers Trust OpenText Manufacturing 20 out of 20 Retail 20 out of 20 97 of top 100 FY’13-FY’22 Upper Returned to largest Oil & Gas 20 out of 20 High-Tech 18 out of 20 Revenue quartile shareholders companies Telecom 20 out of 20 Automotive 20 out of
Slide 15: OpenText: The Information Company
Who We Are OpenText: The information Company Our Mission: We power and protect information To elevate every person and every organization to Our Purpose: gain the information advantage
Slide 16: Why Customers Need OpenText
Why Customers Need OpenText Shift to Cloud 80%+ of our investments in cloud technologies 16
Slide 17: Information Management Addressable Market
Information Management Addressable Market Small Medium Mid-Market Large CY’22 Market Size $B Business Business Enterprise Enterprise TAM(1) OpenText Total Revenue CY’22-25 CAGR % <100 employees 100-499 employees 500-999 employees 1000+ employees Content $4.3B $4.1B $2.6B $13.0B $24.0B Services 10% 1
Slide 18: OpenText Information Management Market Leadership
OpenText Information Management Market Leadership Market Market Leader Leader Master Modern Digitize the IDC MarketScape: Forrester Wave™: Work Content Platforms, Supply Chain Worldwide Multi-Enterprise Supply Chain Commerce Q2 2021 Networks, 2021 Market Market Leader Leader Power Modern IDC MarketS
Slide 19: Titanium: The OpenText Cloud Platform
Titanium: The OpenText Cloud Platform Developer Scaled Cloud OpenText Zone Ecosystems OpenText Zone | Single Sign-On | Learn, Try, Buy | Provision & Support | Resources & Enablement | Renewals Content APIs Run Anywhere | Off-Cloud | Private Cloud | Public Cloud | API Business Network APIs Digital Ex
Slide 20: GROW with OpenText
GROW with OpenText GROW top customers and Full Global 10K coverage Cross-sell / upsell across top supply chain accounts (80%) by end of CY’23 product portfolios Technology Ultimate Cloud: 4 ways to Best-in-class operational investments (internal) & consume cloud by support to accelerate automation c
Slide 21: How we Go-to-Market
How we Go-to-Market $92B TAM(1) Target Organizations Go-to-Market Motions Large OpenText Enterprise Direct Sales Global Accounts 1000+ employees Enterprise Accounts Corporate Accounts $56B Strategic Mid-Market Enterprise Partners 500-999 employees Channel Partners SMB/C $36B MSPs RMMs Distributors V
Slide 22: Partners and the OpenText Cloud Zone: Our Force Multiplier
Partners and the OpenText Cloud Zone: Our Force Multiplier 22,000+ • Top cloud & • Public cloud MSPs • Leading partnership off-cloud partner partnership with SMB/C • Highest growth • Joint GTM with cloud Workspace A new digital resource zone for OpenText customers New Evaluate > Use > Procure > Supp
Slide 23: Sustainable Growth Through Retention and Upgrades
Sustainable Growth Through Retention and Upgrades Annual Recurring Revenue Renewal Rate(1) (ARR) (US$M) $2,866 114% $1,337 Cloud Customer Support 94% 94% FY'15 FY'22 Customer satisfaction is a foundation for growth 1. For the quarter ended June 30, 2022. Excludes Carbonite and Zix. 23
Slide 24: $20B+ M&A Opportunity Aligned with TAM Segmentation
$20B+ M&A Opportunity Aligned with TAM Segmentation(1) Large fragmented market(1) with no scarcity of assets M&A Approach and Criteria CY’22 TAM(1) Potential M&A Acquirable CY’22-’25 CAGR % Targets Revenue $24B Lead with market segmentation Content Services >200 >$5B 11% $22B High adjacency within I
Slide 25: The OpenText Cloud will help Global Organizations deliver a new Green Ledger
The OpenText Cloud will help Global Organizations deliver a new Green Ledger and Green Bottom Line Net-zero Commitments per Sector 2030 Sustainability Pledges from the Global 10,000 Share of large companies with announced “We are empowering our "Apple will become entirely pledges to reach net-zero e
Slide 26: Corporate Citizenship Reflects our Culture
Corporate Citizenship Reflects our Culture Progress We’ve Made: 3rd Corporate Citizenship Report Published Canada’s • Introduced Zero-In Initiative Most Admired Corporate • Established science-based net- Cultures zero emissions targets • Established new ED&I targets Canada’s Top Employers Where We’r
Slide 27: Deeply Talented and Experienced Leadership Team
Deeply Talented and Experienced Leadership Team Mark J. Madhu Muhi Ted James Prentiss Kristina Barrenechea Ranganathan Majzoub Harrison McGourlay Donohue Lengyel CEO & CTO EVP, CFO EVP, EVP, EVP, EVP, EVP, Menlo Park, CA Menlo Park, CA Chief Product Officer Enterprise Sales International Sales SMB/C
Slide 28: Proven Value Creation Track Record
Proven Value Creation Track Record
Slide 29: The OpenText Business System
The OpenText Business System How We Create Value Our Operating Model Total Ecosystem | nnowatlon puilding Operating model profitability Disciplined strategic acquisitions Best Operational Excellence ] Capital efficiency & returns Inclusion Sustainability \ \ Cash based returns & ROIC opentext’ 29 Ou
Slide 30: How We Create Value
How We Create Value Model Value Creation Total Revenue • Organic growth Growth Total Revenue 11% Total Revenue • Acquired growth Growth 10-yr CAGR (FY’13-FY’22) • High recurring revenues • Targeting upper quartile A-EBITDA 36.2% A-EBITDA Profitability margin Value margin (FY’22)(1) • Growing free ca
Slide 31: Total Growth Strategy
Total Growth Strategy • Growing sales breadth and depth • Product innovation GROW • 82% ARR(1) • 94% Customer support Information renewals(2) Management • 94% Cloud renewals(2) • Drives organic growth • Gain market share • High free cash flow returns RETAIN 1. ARR as a percentage of Total Revenues f
Slide 32: Cloud Acceleration in a Proven Durable Business Model
Cloud Acceleration in a Proven Durable Business Model Growing Cloud and ARR While Delivering Upper Quartile Margin(1),(2) 82.0% FY’23 Model 81.0% (% of Total Revenues) ARR 82.0% % of Total Revenues ARR 81% - 83% 54.4% 54.4% 43.9% 43.9% Cloud % of Total Revenues Cloud 36.2% 44% - 46% 29.1% (1) A-EBIT
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) $1,535 $889 $1,265 $3,494 $2,866 $0 to 189% 337% $1.5B 260% 269% $241 $1,207 $351 $657 $0 FY'12 FY'22 FY'12 FY'22 FY'12 FY'22 FY'12 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’20 FY’21 FY’22 A-EBITDA and FCF Trends(1) FCF/Revenue(2) 28.4% 24.0% 25.4% FCF/Avg Total Assets(3) 9.7% 8.2% 9.0% FY’21 FCF FCF/Avg Invested Capital(4) 13.2% 10.8% 11.7% includes $299.6M WACC(5) 6.0% 7.4
Slide 35: Strong Track Record of Shareholder Returns
Strong Track Record of Shareholder Returns Approximately $1.7B returned to shareholders since FY’13 Dividends Paid and Shares Repurchased (US$M) Target Capital Allocation Strategy(1) Dividends and Shares Repurchased Available for anti-dilutive Dividends corporate purposes share buyback $177.0 Divide
Slide 36: Thank you
Thank you twitter.com/opentext linkedin.com/company/opentext opentext.com
Slide 37: Appendix
Appendix 4
Slide 38: OpenText Content Cloud: Master Modern Work
OpenText Content Cloud: Master Modern Work Agreements Product Information Drawings Internal Documents Invoices Plants Remote Financial Documents Suppliers Legal Documents Offices 3rd Parties End Points Partners Corporate Partner Agreements Client Information Office Field Workers Customers Office Cli
Slide 39: OpenText Business Network Cloud: Digitize Supply Chains
OpenText Business Network Cloud: Digitize Supply Chains E-commerce Banks Marketing Automation ERP Partners Contractors Unified Data Data On-Premises Visibility Partner Analytics Connectivity Connectivity CRM Data Services Customers Transport Management API Cloud Warehouse Capabilities Apps Managemen
Slide 40: OpenText Experience Cloud: Create Customer Centric Experiences
OpenText Experience Cloud: Create Customer Centric Experiences Native Journey Interactive and On- Orchestration Demand Communications Integrated Native Journey Insights Communication Automated Document Portal Generation (ADG) Journey Data Exports Customer Journey Customer Insights & Communication Ba
Slide 41: OpenText Security Cloud: Build a Resilient and Safer World
OpenText Security Cloud: Build a Resilient and Safer World Threat Intelligence Detect rapidly, respond Predictive Insights forensically, remediate threats Suppliers 3rd Parties End Points End Points Field Workers Your Customers Data Cyber Resilience Cyber Security 41
Slide 42: Use of Non-GAAP Financial Measures
Appendix A Use of Non-GAAP Financial Measures In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-GAAP).These Non-GAAP financial measures have certain limitations in that they do not h
Slide 43: Organic Growth
Organic Growth Fiscal 2022 FX Headwind / In US$ billions (unless indicated otherwise) Reported CC(1) (Tailwind) Total Revenues $3.49 $0.04 $3.53 Less: Revenues from acquisitions(2) $0.09 $0.09 Organic revenues $3.40 $3.44 Growth (decline) in organic revenues over prior year(3) 0.5% 1.7% Annual Recur
Slide 44: Return on Invested Capital (ROIC)
Return on Invested Capital (ROIC) FY’20 FY’21 FY’22 Adj. Operating Income (after-tax) ROIC = ROIC 17.6% 19.0% 18.1% (OTEX Calculation) (Debt + Equity – Cash – Deferred Tax) (in US$M) Non-GAAP based income from $1,059 $1,230 $1,177 operations(1) • We measure our ROIC annually. It is defined as our (2
Slide 45: Summary of Quarterly Results with Constant Currency
Summary of Quarterly Results with Constant Currency (1) See reconciliation of GAAP-based measures to Non-GAAP-based measures at the end of this presentation. (2) Please also see Note 14 to the Company's Fiscal 2018 Consolidated Financial Statements on Form 10-K. Reflective of the amount of net tax b
Slide 46: Summary of Annual Results with Constant Currency
Summary of Annual Results with Constant Currency (1) See reconciliation of GAAP-based measures to Non-GAAP-based measures at the end of this presentation. (2) Please also see Note 14 to the Company's Fiscal 2018 Consolidated Financial Statements on Form 10-K. Reflective of the amount of net tax bene
Slide 47: Reconciliation of Selected Non-GAAP Measures | Q4 FY'22
Reconciliation of Selected Non-GAAP Measures | Q4 FY'22 47
Slide 48: Reconciliation of Selected Non-GAAP Measures | Q4 FY'22
Reconciliation of Selected Non-GAAP Measures | Q4 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 49: Reconciliation of Selected Non-GAAP Measures | FY'22
Reconciliation of Selected Non-GAAP Measures | FY'22 49
Slide 50: Reconciliation of Selected Non-GAAP Measures | FY'22
Reconciliation of Selected Non-GAAP Measures | 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 amor
Slide 51: Reconciliation of Selected Non-GAAP Measures | Q4 FY'21
Reconciliation of Selected Non-GAAP Measures | Q4 FY'21 51
Slide 52: Reconciliation of Selected Non-GAAP Measures | Q4 FY'21
Reconciliation of Selected Non-GAAP Measures | Q4 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 53: Reconciliation of Selected Non-GAAP Measures | FY'21
Reconciliation of Selected Non-GAAP Measures | FY'21 53
Slide 54: Reconciliation of Selected Non-GAAP Measures | FY'21
Reconciliation of Selected Non-GAAP Measures | 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 amor
Slide 55: Reconciliation of Adjusted EBITDA and Free Cash Flows
Reconciliation of Adjusted EBITDA and Free Cash Flows 55
Slide 56: Reconciliation of Adjusted EBITDA and Free Cash Flows
Reconciliation of Adjusted EBITDA and Free Cash Flows 56