Open Text Corporation · TSX:OTEX
Open Text — Investor Day (March 2021)
90 slides from Open Text's investor day presentation, Mar 11, 2021
Slide 1: Investor Day Presentation
Investor Day Presentation NASDAQ: OTEX | TSX: OTEX March 11, 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: Mark J. Barrenechea
Mark J. Barrenechea OpenText CEO & CTO OpenText Confidential. ©2021 All Rights Reserved. 3
Slide 4: Today's Speakers and Key Messages
Today’s Speakers and Key Messages Mark Muhi Ted James D Prentiss Gordon Madhu Barrenechea Majzoub Harrison McGourlay Donohue Davies Ranganathan EVP, EVP, EVP, EVP, EVP, CLO & Corporate CEO & CTO EVP, CFO Chief Product Officer Enterprise Sales Customer Operations SMB/C Sales Development Enterprise Re
Slide 5: 30 Years of Market Defining Leadership
30 Years of Market Defining Leadership 1994 2013 2017 2020 2024 Aspirations Web Search Market with Release 16 Documentum Cloud Edition Modern Total Revenue Yahoo! Introduction Cloud Platform Organic Growth of 2% - 4% ARR of 85% 1991 2005 2014 2019 2021 Foundation out of Established Content GXS Enter
Slide 6: OpenText Snapshot
OpenText Snapshot (NASDAQ/TSX:OTEX) 1 GLOBAL FOOTPRINT Financial Highlights 2Q FY’21 TTM EMEA $942m Americas Employees: Y/Y $1,904m 2,741 US$M Employees: Change 6,597 APJ $264m Employees: Cloud Revenue $1,364 +41% 5,006 Annual Recurring Revenue and employee data as of FY20 $2,675 +21% Revenue RECURR
Slide 7: Deeply Talented and Experienced Leadership Team
Deeply Talented and Experienced Leadership Team Mark J. Madhu Muhi Gordon Ted James Prentiss Barrenechea Ranganathan Majzoub Davies Harrison McGourlay Donohue CEO and CTO EVP, CFO EVP, Chief Product EVP, CLO & Corporate EVP, Enterprise Sales EVP, Customer EVP, SMB/C Tenure: 9 years Tenure: 3 years O
Slide 8: Highly Skilled Board of Directors
Highly Skilled Board of Directors Diverse Skills Industry Expertise Tom Mark Kate Steve Randy Debbie Technology Jenkins Barrenechea Stevenson Sadler Fowlie Weinstein Dye & Durham, Strategy OpenText OpenText CIBC Enghouse Systems LaBarge Weinstein Chair CEO & CTO Chair Chair Sapphire Health Law Firm
Slide 9: Our Competitive Advantage
Our Competitive • Our people, leadership and expertise Advantage • The largest Information Management cloud company and well positioned to grow and extend our lead • Modern cloud company • Our proven ability to deliver high-impact innovations that make a difference • Robust financial performance and
Slide 10: Information Management: A Modern Strategic Platform
Information Management: A Modern Strategic Platform Content Financials Management Human and more and more Capture Resources Resource Traditional Process Order Security & Modern Superior Planning Management Data Information Collaboration Applications Protection Applications Results Service & Supply C
Slide 11: The Information Management Market is Large and Growing
The Information Management Market is Large and Growing Total Addressable Market1 OpenText Well Positioned to Extend our Lead Total Revenue CY’21 to CY’24 CAGR • The largest Information Management company in a large and growing Content $24B +11% market • A modern cloud company Business $20B +7% $1.4B
Slide 12: Well Positioned to Grow - Driven by Market Needs
Well Positioned to Grow - Driven by Market Needs Sustainable Supply Modern Work Modern Experiences Chains Security & Data New cloud work-loads Cloud Migration Protection with API services Marquee New Customers & Industry Scale Install base Partners OpenText Confidential. ©2021 All Rights Reserved. 1
Slide 13: Well Positioned to Grow - Driven by Market Needs
Well Positioned to Grow - Driven by Market Needs Modern Work Modern Experiences Supply Chains Direct to Consumer Sustainability Digitalization Omni-Channel Connectivity Security & Data Protection Cloud Migration New Cloud Workloads eSignature Cyber Threats Private Cloud Collaboration Shift to Behavi
Slide 14: OpenText is a Modern Cloud Company
OpenText is a Modern Cloud Company Simplified Go-to-Market OpenText Information Management Platform The Foundation for the Intelligent, Secure and Connected Business Off Cloud, Private Cloud, Public Cloud • 5 Cloud Editions • Rapid innovation cycles (every Cloud Editions 90 days) • Easier to consume
Slide 15: Accelerating Growth: Scalable, High-Velocity, Low-Friction Business Model
Accelerating Growth: Scalable, High-Velocity, Low-Friction Business Model Digitization and Automation: • Automate renewals • Demand creation automation • Automate DevOps New Customer Engagement Model: • Automate routine R&D • Pre-sales • Self-sell - upsell, cross-sell Product is built for: • Post-sa
Slide 16: GROW with The Ultimate Cloud
GROW with The Ultimate Cloud™ The Intelligent, Secure and OpenText OpenText Cloud Editions Connected Businesses Cloud Advanced Editions Technology & Data Experts Protection & Security Digital All Points of Experience Business Departure Modern Network Work The Information Management Journey OpenText
Slide 17: GROW with OpenText – The Ultimate Cloud
GROW with OpenText – The Ultimate Cloud™ One technology platform. Four deployment choices. “GROW with OpenText is a set of programs that brings together everything you need to transform your business, accelerate your growth, engage your communities and stay ahead of the competition.” Off Cloud Priva
Slide 18: Comprehensive Go To Market
Comprehensive Complete and Direct G10K Building Eco-Systems Go To Market coverage by end of C23 (from SAP, Salesforce, Cerner, McKesson, AT&T) Delivering Unique and scaled reach with 3,000 dedicated customer Information MSP/RMM’s success professionals Management to businesses of all size and types w
Slide 19: Strong Track Record of Financial Performance
Strong Track Record of Financial Performance Total Revenue Annual Recurring Revenue Cloud A-EBITDA1 Free Cash Flow1 (US$ M) (US$ M) (US$ M) (US$ M) (US$ M) $3,301 $2,675 $1,280 $1,069 $1,364 103% 148% 265% 138% 185% $1,625 $1,080 $538 $375 $373 FY'14 Q2 FY'21 TTM FY'14 Q2 FY'21 TTM FY'14 Q2 FY'21 TT
Slide 20: Strategic Capital Allocation and Strong Liquidity
Strategic Capital Allocation and Strong Liquidity Historical Use of Capital Ability to grow and generate future returns Capital deployed on Dividends Paid CAPEX Acquisitions (US$ M) (US$ M) (US$ M) • $1.1B Generated FCF over the TTM $189 $169 $105 $2,107 $146 • $2.25B Total Available $121 $77 $80 $7
Slide 21: How We Create Value
How We Create Value • 12.5% Total Revenue CAGR (FY’13 to FY’20) • Our business is predictable at 80% + ARR Growth Growth • F’22 outlook of 1%-2% Total and 3%-4% Cloud organic growth • Strong M&A pipeline and new deals additive to our total growth • 2Q FY’21 TTM Adj EBITDA1 margin of 38.8% with long-
Slide 22: Our Financial Outlook
Our Financial Outlook 1 FY’21 Outlook Introducing Introducing Total Growth FY’22 Outlook FY’24 Long Term Aspirations Total Cloud Total Total Cloud ARR Free Cash Revenue Revenue Revenue A-EBITDA Revenue Revenue % of Total Flows Organic Organic Organic Margin Growth Growth Revenue (FCF) Growth Growth
Slide 23: We Strive To Do The Right Thing
We Strive To Do The Right Thing Our Customers Our Communities Rapid Radiology and OpenText Accelerate OpenText Donates OpenText Provides 4 Diagnostic Results to Help Improve Patient Care Jun 25, 2020 US $1M to Global Million Meals for 58 Food Banks Communities in 21 Dec 11, 2020 Countries Worldwide
Slide 24: Our Growth Agenda FY'24 Aspirations
Our Growth Agenda FY’24 Aspirations Deep expertise and talent New and compelling product cycle with OpenText Cloud Editions Marquee Customers: 75K Enterprise, 470K SMB Expanded investments in Products and Go-To- FY’24 Aspirations Market 2% to 4% $84B TAM growing at 8% Total Revenue Organic Growth 85
Slide 25: Muhi Majzoub
Muhi Majzoub OpenText EVP & Chief Product Officer OpenText Confidential. ©2021 All Rights Reserved. 25
Slide 26: Key Messages
Key Messages Unparalleled Information Management (IM) platform built for scale and performance OpenText Cloud platform enabling: • Business Network • Carbonite • Faster delivery of SaaS Applications (eSignature) • New path to market – developer cloud Cloud Editions ready for Modern Work Advanced AI
Slide 27: Acknowledged Leadership Across Information Management
Acknowledged Leadership Across Information Management Content Services Content Services Business Network Business Network Media Management Forrester Wave™: Enterprise Content Gartner Magic Quadrant for Content IDC MarketScape: Multi-Enterprise Gartner Magic Quadrant for Multi-enterprise Forrester Wa
Slide 28: Leadership in Information Management
Leadership in Information Management Growth Driver Submarket Leadership1 Selected Growth Opportunities • Document, Records & Archive • eSignature Modern Work Management • Collaboration • Capture Global Sustainable • Business Network Connectivity & Ethical Supply • Integration & data management • Glo
Slide 29: OpenText Cloud Editions: The Ultimate Cloud
OpenText Cloud Editions: The Ultimate Cloud™ OpenText Information Management Platform The Foundation for the Intelligent, Secure and Connected Business Off Cloud, Private Cloud, Public Cloud Cloud Editions The Ultimate Cloud™ is: • Global • Secure • Always on (99.99% Availability) • Compliant (GDPR,
Slide 30: OpenText Cloud Editions: The Ultimate Cloud
OpenText Cloud Editions: The Ultimate Cloud™ • Collaboration for Modern • Country expansion for • AI Image analysis in Media • EnCase in Azure and AWS • Developer Portal * Work supply chain * Management Marketplace • Administration Center and • Digital Signature* • More connectors to our • Analytics
Slide 31: Developer cloud: How We Grow
https://developer.opentext.com/ • Expand market awareness of our existing Developer business to spur new partnerships • Unique services for the next generation of SaaS products How We Grow • Create new opportunities outside our existing customer base • Expand our partnerships to create revenue multi
Slide 32: Customer Example - Benefits of Cloud
Customer Example - Benefits of Cloud Case study: • Chevron | Oil & Gas Results: • CE Upgrade in 3-4 weeks compared to 1-2 years • Upgrade cost savings now spent on innovation and value adds “Typical upgrades are 2 years long, and painful, and going into production in less than a month after OpenText
Slide 33: Information Management: Investing to Win
Information Management: Investing to Win R&DA-EBITDA Investment Margin (1)(2) 4,500+ ($ and in % of Total Revenue)1,2 Developers up 4x over 8 years R&D% 12-14% of Total Revenues R&D US$ 11.7% 11.0% 10.5% 194 M 317 M 365 M 1,000+ Patents FY’15 FY’19 FY’20 FY’21 $2.2B+ investment in R&D over the next
Slide 34: R&D Key Investments
R&D Key Investments Content Services Public Cloud 21.4 A Revolution in Business-to-Business Connection • SaaS Public Cloud Content • Expanded integrations with: • Ethical supply chain risk and • Immediate Partner Management • Salesforce reputation visibility • Discovery • Integrations with: • Micros
Slide 35: Our Growth Agenda
Our Growth Agenda • Cloud consumption • R&D key investments • Creating new routes to market OpenText Confidential. ©2021 All Rights Reserved. 35
Slide 36: Simon "Ted" Harrison
Simon “Ted” Harrison OpenText EVP, Enterprise Sales OpenText Confidential. ©2021 All Rights Reserved. 36
Slide 37: Key Messages
Key Messages Market Leadership in Information Management Organic growth driven by direct sales and strong partner ecosystem Growth is built into our go-to-market • Increasing G10K coverage • New cloud customers • Cloud upsell and cross-sell • Migration to Cloud Editions • Leverage strategic partners
Slide 38: The World's Leading Companies Trust OpenText
The World’s Leading Companies Trust OpenText 89 out of top 100 largest companies in the world1 Consumer Life Sciences Financial Technology Manufacturing Telecom 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 future growth 1. The top 100 is base
Slide 39: $24B TAM: How We Grow
• $24B TAM1 • Market growth rate1 : +11% • OpenText is a market leader1 • >10,000 enterprise customers • Growing cloud adoption How We Grow • Enabling Modern Work • Platform consolidation • Integration with SAP Salesforce and Microsoft • Public sector share gains • Accelerating cloud opportunities 1
Slide 40: $20B TAM: How We Grow
• $20B TAM1 • Market growth rate1 : +7% • OpenText is market leader1 • Fully cloud • 21 of 25 largest supply chains run OpenText • 2 million trading partners on our platform How We Grow • Supply chain disruption and optimization • International e-invoicing • New Trading Grid • SaaS applications 1. B
Slide 41: Supply Chain Leaders Agree
Supply Chain Leaders Agree OpenText Business Network Serves 21 of Gartner’s ‘Supply Chain Top 25’ for 20201 ✓ 1. Cisco 14. Diageo 25 ✓ 2. Colgate Palmolive ✓ 15. Lenovo Supply Chain Top 25 ✓ 3. Johnson & Johnson ✓ 16. Nike Rankings based on ✓ 4. Schneider Electric ✓ 17. Abbvie ✓ 5. Nestlé ✓ 18. BMW
Slide 42: $21B TAM: Leadership in omni-channel communications
• $21B TAM1 • Market growth rate1 : +7% • Leadership in omni-channel communications1 • Growing cloud adoption • Web Content Management • Digital Asset Management • Customer Experience Management platform How We Grow • Integrated DXP platform offering • Remote customer engagement model • High-availab
Slide 43: Complete Go-To-Market Coverage
Complete Go-To-Market Coverage Engage, service and support customers when, how and where they want Enterprise Solutions Direct Strategic Partners Web 2,000+ Digital Zone Field Facing Professionals OpenText Confidential. ©2021 All Rights Reserved. 43
Slide 44: The OpenText Go-to-Market Model
The OpenText Go-to-Market Model High touch model to increase our share of Global 10,000 (G10K) largest accounts spend Global Account Solution Managers Consultants Global Enterprise Accounts Account Value Engineers Executives Enterprise Accounts Corporate Business Inside Sales Accounts Development Re
Slide 45: The OpenText Digital Zone: Reducing Friction in Customer Engagement
The OpenText Digital Zone: Reducing Friction in Customer Engagement Personalized Self Try Digital Account Assets and Service Before Events Based Webinars Demos You Buy Platform Marketing • March 2020: all meetings became remote; all events became virtual • OpenText’s response: the Digital Zone; an o
Slide 46: New Customers: Broadening our G10K Coverage
New Customers: Broadening our G10K Coverage Current Coverage Europe North (66%) • Marquee customers with America transformative requirements (76%) Japan • Covering 58% of the G10K, (39%) increase of 18 percentage Emerging points since 2019 Markets (26%) • 4,500 covered in FY20, tracking 5,800 in FY2
Slide 47: Key Growth Opportunities
Key Growth Opportunities Cloud New Cloud Cloud Cloud Customers Expansion Cross-Sell Migration • Plan to achieve 100% • All G10K customers have • Complementary products • The opportunity for R16 coverage of G10K high-touch Enterprise AE’s arranged by BU customers to take advantage • Competitive displ
Slide 48: Key Growth Opportunities
Key Growth Opportunities Cloud New Cloud Cloud Cloud Customers Expansion Cross-Sell Migration OpenText Partnerships OpenText Confidential. ©2021 All Rights Reserved. 48
Slide 49: OpenText Strategic Partnerships - Examples
OpenText Strategic Partnerships - Examples Platform Partners Market Partners OpenText Confidential. ©2021 All Rights Reserved. 49
Slide 50: Our Growth Agenda
Our Growth Agenda • Go-to-market expansion • Full G10K coverage • Grow with OpenText program • Cloud Edition consumption OpenText Confidential. ©2021 All Rights Reserved. 50
Slide 51: James McGourlay
James McGourlay OpenText EVP, Customer Operations OpenText Confidential. ©2021 All Rights Reserved. 51
Slide 52: Key Messages
Key Messages Consistent growth and profitability driven by: • Satisfied customers • Proven renewals process • Pricing/packaging/contracting • Global team of customer operations professionals Clear path to growth through: • Proven value of our product and security updates • Expansion at time of renew
Slide 53: Customers' Satisfaction Drives Growth and Profitability
Customers’ Satisfaction Drives Growth and Profitability Customer 96% Satisfaction (CSAT) 11 Net Promoter Score (NPS) Highest High Complete Voice Expansion Rapid Quality Availability of Customer Opportunities Deployment OpenText Confidential. ©2021 All Rights Reserved. 53
Slide 54: The Digital Zone: Improving the Customer Experience
The Digital Zone: Improving the Customer Experience Reimagining Digitizing Renewals Harnessing AI Customer Support • Starting with the customer • Automated renewals • Renewal risk scoring experience • Customer outreach • Identifying expansion • Customer self-service opportunity • Predictive analytic
Slide 55: OpenText Renewals
OpenText Renewals Systems & Expansion Partners Business Reporting Intelligence Policy, Controls Upgrade & Community & Procedures Migrate Model Customer Sentiment Customer Trouble Ticket Renewal Feedback Analysis Satisfaction Information Behavior Data Data Magellan Advanced Analytics OpenText Confide
Slide 56: Sustainable Growth
Sustainable Growth Annual Recurring Revenue A-EBITDA Margin(1)(2) (ARR) ($US M) Off-Cloud Targeting Upper $2,433 94% Quartile Renewal 125% Renewal Rate1 Rates • Compelling product and security updates $1,080 Cloud • Proven highly effective model of Land, Adopt, Expand, Renew (LAER) 96% • Provide bes
Slide 57: Net Uplifts and Expansions
Net Uplifts and Expansions Off-Cloud Renewals Cloud Renewals 94% Renewal Rate 1 96% Renewal Rate 1 • Higher volume and workloads • Cross-sell/upsell at renewal Net Uplifts Net Uplifts • Expansion at the time of renewal, particularly BN • Expand product offerings at renewal • Early renewals at higher
Slide 58: Customer Success Story
Customer Success Story Case study: Documentum customer since 2001 • Over 20 business applications now leveraging Content Server Business Network client since 2009 • Utilizes the entire portfolio of OpenText’s Business Network products and services • 70% of all Nestle’s EDI traffic is conducted on th
Slide 59: Our Growth Agenda
Our Growth Agenda • Compelling product and security updates • Systematic value capture through pricing and packages • Expansion at time of renewal • Sustained high renewal rates OpenText Confidential. ©2021 All Rights Reserved. 59
Slide 60: Prentiss Donohue
Prentiss Donohue OpenText EVP, SMB/C Sales OpenText Confidential. ©2021 All Rights Reserved. 60
Slide 61: Key Messages
Key Messages Security & Data Protection Cloud=platform approach Partner model built for scale SMB product direct to buyer Grow Via: • RMM/MSP expansion • Reseller development • Expanding BrightCloud Threat Intelligence OEM • Unified Endpoint Platform OpenText Confidential. ©2021 All Rights Reserved.
Slide 62: Growing Cyber Threats
Growing Cyber Threats • Everything and everyone connected (Modern Work) • Vanishing network and security perimeter • SMBs under increasingly sophisticated attacks • Data migration to the cloud • Talent shortage • Data privacy and related protection requirements OpenText Confidential. ©2021 All Right
Slide 63: SMB Go-To-Market: Expansion Opportunity
SMB Go-To-Market: Expansion Opportunity Engage, service and support customers when, how and where they want Channels RMM & MSPs Resellers OEM Direct to Buyer 16,000+ 1,200+ 130+ Comprehensive route to market OpenText Confidential. ©2021 All Rights Reserved. 63
Slide 64: $19B TAM
• $19B TAM1 • Market growth rate1 : +6% • Leadership in Data Backup and Recovery1 • Fully cloud Partner Expansion2 • RMMs • Alliance • MSPs • OEMs • VARs • VSBs 1. Based on IDC and OpenText internal research. 2. RMM: Remote Monitoring and Management, MSP: Managed Service Provider, VAR: Value Added R
Slide 65: Information Management and Cyber Resilience Journey
Information Management and Cyber Resilience Journey Aspirational Growth via OpenText Products: Collaboration | eSignature | On-Demand Messaging OpenText Confidential. ©2021 All Rights Reserved. 65
Slide 66: SMB Customer and Cloud Scale
SMB Customer and Cloud Scale 130+ 470K 287M+ 500B 7M+ Threat Protected Data Objects Intelligence Endpoints Direct to Buyer Businesses Analyzed Daily Partners OpenText Confidential. ©2021 All Rights Reserved. 66
Slide 67: Competitive Advantage: Single End-to-End Platform
Competitive Advantage: Single End-to-End Platform Modern Work Webroot DNS Block Protection Webroot Business Protect Endpoint Protection Carbonite® • Endpoint Backup • Backup for Microsoft 365 • Server Backup Carbonite® Recover • Recover • Availability Investigate EnCase products OpenText Confidentia
Slide 68: Expanding Our Threat Intelligence Business
Expanding Our Threat Intelligence Business Targeting 1,000+ Technology Providers • Payment providers • Insurance 130 • Hyperscalers Networking Providers • General B2B • Systems vendors OpenText Confidential. ©2021 All Rights Reserved. 68
Slide 69: Broad Recognition from Customers and Partners
Broad Recognition from Customers and Partners Product Channel Other OpenText Confidential. ©2021 All Rights Reserved. 69
Slide 70: Our Growth Agenda
Our Growth Agenda • RMM/MSP expansion • Reseller development • Expanding BrightCloud Threat Intelligence OEM • Unified Endpoint Platform OpenText Confidential. ©2021 All Rights Reserved. 70
Slide 71: Gordon A. Davies
Gordon A. Davies OpenText EVP, Chief Legal Officer & Corporate Development OpenText Confidential. ©2021 All Rights Reserved. 71
Slide 72: Key Messages
Key Messages • Solid history of strategic, disciplined, value- based acquisitions • Strategic M&A has provided the foundation for our Information Management business • In-house, full suite, end-to-end acquisition and integration framework • Market opportunities across all core markets OpenText Confi
Slide 73: Strategic M&A: Foundation for Our Business
Strategic M&A: Foundation for Our Business Various HP Assets 2014 2016 2017 2019 OpenText Confidential. ©2021 All Rights Reserved. 73
Slide 74: Total Growth Acquisition Philosophy
Total Growth Acquisition Philosophy We are: Carbonite Case Study • Patient and disciplined Acquired • 12/24/19 for 2.8x revenue1 • Value-based • Returns driven Strategic • Critical mass in Security & Protection Rationale • Scaled SMB channel Target characteristics: • IM market leadership • Strong gr
Slide 75: Proven Successful M&A Process
Proven Successful M&A Process Source Engage Diligence Acquire Integrate Pipeline Generation Sales and Product Market Financial Analysis Pre-Integration and and Deal Execution Analysis Segmentation and Strategy Integration 25 dedicated professionals • 5 GTM deal teams aligned • Support product, • Pro
Slide 76: Corporate Citizenship Reflects our Culture
Corporate Citizenship Reflects our Culture Progress We’ve Made: • First Corporate Citizenship Report published • Identified ESG reporting gaps and increased disclosure • ESG ratings improvement • Disclosure gap analysis • OpenText Acts of Kindness • Voyager Fund Where We’re Going: • Implementing rep
Slide 77: Our Growth Agenda
Our Growth Agenda • Focus on value-based, returns driven opportunities • We expect to deploy capital in CY’21 • Lead by example in Corporate Citizenship OpenText Confidential. ©2021 All Rights Reserved. 77
Slide 78: Madhu Ranganathan
Madhu Ranganathan OpenText EVP, Chief Financial Officer OpenText Confidential. ©2021 All Rights Reserved. 78
Slide 79: Key Messages
Key Messages • How we create value • Strategic and continuous investments to drive organic growth • A profitable and predictable business • Financial strength for returns-driven capital allocation • Operating and DnA 2.0 (Digital and Automation) initiatives • FY’21 outlook and long-term growth aspir
Slide 80: How We Create Value
How We Create Value • 12.5% Total Revenue CAGR (FY’13 to FY’20) • Our business is predictable at 80% + ARR Growth Growth • F’22 outlook of 1%-2% Total and 3%-4% Cloud organic growth • Strong M&A pipeline and new deals additive to our total growth • 2Q FY’21 TTM Adj EBITDA1 margin of 38.8% with long-
Slide 81: Strategic & Continuous Investments to Drive Organic Growth
Strategic & Continuous Investments to Drive Organic Growth Fiscal 2019 Fiscal 2020 Fiscal 2021 Investing in Growth Results Results Model(2) Revenue Type: • TTM R&D = ~$400M & +$2.2 B investment over Cloud Services and Subscriptions 31.6% 37.2% 41% - 43% the next 5 years Customer Support 43.5% 41.0%
Slide 82: A Profitable and Predictable Business Model
A Profitable and Predictable Business Model Growing ARR, Expanding Margin and Free Cash Flows 1,2 A-EBITDA Margin(1)(2) 78.2% ARR 72.2% 73.9% 73.6% 73.2% 75.1% FY’21 Model: % of Total 81%-83% Revenues 66.5% 61.5% 54.2% 54.4% 1 FY’21 Model: A-EBITDA 36.9% 37%-38% % Margin 29.7% 28.4% 18.1% 1 FCF TTM
Slide 83: Financial Strength for Returns Driven Capital Allocation
Financial Strength for Returns Driven Capital Allocation Consolidated Net Leverage Ratio1 Highlights TTM Q2 FY’21 (US$ M) Solid De-leverage Guidance + Operating Cash Flows $1,126 ECD Covisant 2.50x 2.61x Less: CapEx $57 From ECD ($1.6B), 1.72x Guidance & Free Cash Flows $1,069 Covisint ($306M), redu
Slide 84: Operating Framework to Drive Growth
Operating Framework to Drive Growth Renewals and Support Research and Development General and Administrative • Radical automation – • Returns based R&D • Non-linear resource growth vs. Cloud/Off-Cloud • Higher automation across R&D linear revenue growth • Sell more product and value • Self-service a
Slide 85: DnA 2.0 – Digital and Automation Initiatives
DnA 2.0 – Digital and Automation Initiatives • Digitization to support long terms aspirations for growth, margin and free cash flows • Drive non-linear growth of resources for linear growth in revenues • Leadership at all levels will become Digital Sponsors & Program Managers, leveraging OpenText so
Slide 86: GROW with The Ultimate Cloud
GROW with The Ultimate Cloud™ The Intelligent, Secure and OpenText OpenText Cloud Editions Connected Businesses Cloud Advanced Editions Technology & Data Experts Protection & Security Digital All Points of Experience Business Departure Modern Network Work The Information Management Journey OpenText
Slide 87: FY'21 OpenText Total Growth Strategy
FY’21 OpenText Total Growth Strategy Confirming FY’21 Outlook FY’20 Actual2 Y/Y Expected % Growth1 $1,157.7 Cloud High teens $1,275.6 Customer Support Low single-digit $2,433.3 ARR High single to low-double digit $402.9 License Decline $273.6 Professional Service Decline $3,109.7 Total Revenues Mid
Slide 88: Our Financial Outlook
Our Financial Outlook 1 FY’21 Outlook Introducing Introducing Total Growth FY’22 Outlook FY’24 Long Term Aspirations Total Cloud Total Total Cloud ARR Free Cash Revenue Revenue Revenue A-EBITDA Revenue Revenue % of Total Flows Organic Organic Organic Margin Growth Growth Revenue (FCF) Growth Growth
Slide 89: Our Growth Agenda
Our Growth Agenda Creating Value Through Growth, Profitability and Capital Efficiency Higher Annual Cloud revenues Net uplifts & Operating Excellence, Recurring Revenue driven by The expansion will drive in all its elements, will (ARR) will drive Ultimate Cloud™ will Growth in our drive Growth, pred
Slide 90: Thank you
Thank you twitter.com/opentext linkedin.com/company/opentext opentext.com