Integrated Research Limited · ASX:IRI
Integrated Research — H1 FY2021 Earnings Presentation
32 slides from Integrated Research's earnings presentation, Feb 18, 2021
Slide 1: FY2021 Half Year Financial Results
Integrated Research Limited (IRI) For personal use only FY2021 Half Year Financial Results February 2021 John Ruthven, CEO Peter Adams, CFO complexity simplified
Slide 2: Section 1 – Results Analysis
For personal use only Section 1 – Results Analysis
Slide 3: CEO key messages
CEO key messages IR is a company in transition, moving to a SaaS subscription business model For personal use only 1. The evolution of the business continued at pace; new SaaS products, cashflow solid; well positioned for move to subscription 2. Poor sales and profit result – impacted by deal deferr
Slide 4: Half-year performance review
Half-year performance review (A$M) Long term growth strategy intact despite first half results For personal use only 53.2 45.5 42.4 34.1 CASH RECEIPTS 36% FROM 7% REVENUE CUSTOMERS Dec-19 Dec-20 Dec-19 Dec-20 13.2 11.8 11.3 99% OPERATING 15% NPAT 0.1 CASH FLOW Dec-19 Dec-20 Dec-19 Dec-20 11.8 4.7 NP
Slide 5: Deal movement
Deal movement For personal use only 165Strong dealsbalance closed in sheet – net the first half $53.2 cash $4.7M (last year 195) 50 $4.9 $2.0 40 $34.1 $11.0 Commitment 30 term A$M $1.2 shortened 20 10 21 deals deferred to second half, of 0 which 3 closed in H1 FY20 Non renewals Reduced value Deferre
Slide 6: Revenue
Revenue Proforma subscription revenue and cash receipts steady in US dollars For personal use only Interim results (statutory) Dec 2020 Dec 2019 % change A$M A$M Revenue from licence fees 17.1 33.4 (49%) Revenue from maintenance fees 10.3 12.1 (15%) Revenue from SaaS fees 0.1 0.4 (68%) Revenue from
Slide 7: Interim revenue analysis – product
Interim revenue analysis – product Subscription revenue; stable performance in US dollars Statutory Revenue (First half series) For personal use only Collaborate $M Infrastructure $M Transact $M 35 14 10 30 12 8 25 10 20 8 6 15 6 4 10 4 2 5 2 0 0 0 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2
Slide 8: Interim revenue analysis – geographic
Interim revenue analysis – geographic Subscription revenue; growth in Asia Pacific and Europe Statutory Revenue (First half series) For personal use only Americas US$M Asia Pacific A$M Europe £M 30 10 6 25 8 20 4 6 15 4 2 10 2 5 0 0 0 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020
Slide 9: Operating expenses/other
Operating expenses/other Investment in product development continues For personal use only Interim results Dec 2020 Dec 2019 % change A$M A$M Gross research and development spend 10.1 11.0 (8%) Capitalisation of development expenses (6.2) (7.2) (15%) Amortisation of capitalised expenses 4.6 4.3 7% R
Slide 10: Net cash flow analysis
Net cash flow analysis Cash conversion rate 124% For personal use only Strong balance 20 Strongsheet – netflow cash cash $4.7M 11.3 from operations A$M 10 No debtor 6.2 factoring 4.7 1.7 6.4 Development 1.7 0 Opening net cash Cash from operations Development spend Final dividend FX, Interest & other
Slide 11: Balance sheet
Balance sheet Good liquidity to fund growth Dec 20 Jun 20 For personal use only A$M A$M Cash and cash equivalents 8.2 9.7 Strong Trade and other receivables 70.3 87.3 balance sheet – net cash Strong balance Intangible Assets 30.0 29.1 sheet – net $1.7M Right-of-use Assets 6.9 6.4 cash $4.7M All Othe
Slide 12: Section 2 – New Product Launches
For personal use only Section 2 – New Product Launches
Slide 13: Platform approach to product innovation
Platform approach to product innovation Drives access to larger market opportunity For personal use only Total Addressable Market Platform Transition to innovation SaaS enables enables higher growth in new value solutions Add SaaS customers and faster time support to market and leverage Maintain on
Slide 14: New product launches in 2020 and 2021
New product launches in 2020 and 2021 New products to capitalise on >A$1B in net-new addressable market and strengthening our competitive edge For personal use only Product Target Audience Release Product Line Date TAM Payments Analytics Payments providers processing >100M transactions p.a. FY20 Q4
Slide 15: Section 3 – Growth Strategy
For personal use only Section 3 – Growth Strategy
Slide 16: Accelerated move to cashless payments
Accelerated move to cashless payments IR well placed to benefit from cards growth and new real-time payments For personal use only Market Opportunity Expand with new switch vendors Card support Global Payments Non-Cash 737B 11.5% Cross-sell cloud delivered analytics Transactions Payments Launch new
Slide 17: Rapid growth in high value conferencing segment
Rapid growth in high value conferencing segment IR well placed to leverage home based working For personal use only Market1 Opportunity Protect existing customer environments On-premises Cross-sell new hybrid cloud solutions 550M 174M 14% New Teams, Zoom & Webex products conferencing UC users CAGR u
Slide 18: Quality customer base
Quality customer base Long-term, high value relationships based on mission critical solutions For personal use only Customer Tenure Contract Length New Logos Maintenance Retention Rate 100% 1H 90% 1H FY20 1H 98% FY21 80% FY20 1H 96% 90% FY21 87% 70% 60% 50% 50 70% 40% 60% 40 15 Years+ 50% 38 30% 40%
Slide 19: 2H action plan
2H action plan Steps being implemented to strengthen 2H performance For personal use only 1. Implemented a four point 'recovery' plan; a. Sales Execution – opportunity management b. Acceleration to SaaS – on-board foundational customers c. Cost management – cost out & containment d. Resourcing – re-
Slide 20: Key success drivers
Key success drivers Continuing IR's transition to a SaaS subscription business model For personal use only Customer growth & SaaS customer Business model Product innovation retention acquisition transition 1. 100 renewal & 1. On-board strategic 1. Coverage of the 3 1. Reliable and capacity deals in
Slide 21: Conclusions
Conclusions For personal use only 1. H2 recovery underway 2. New product launches strengthen competitive edge 3. Business model transition well advanced 4. Positioned for long-term growth; to benefit from structural market changes 21
Slide 22: Disclaimer
For personal use only Disclaimer
Slide 23: Disclaimer
Disclaimer SUMMARY INFORMATION FORWARD LOOKING STATEMENTS NOT AN OFFER For personal use only 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 i
Slide 24: Appendix
For personal use only Appendix
Slide 25: Who we are / What we do
For personal use only Who we are What we do IR Capabilities IR is the leading global provider of performance IR provides best in class performance management and analytics for enterprise management across collaboration and communications, collaboration, and payment payments transactions ecosystems,
Slide 26: Go-to-market model
Go-to-market model Customer “high touch” model For personal use only Sales Network Direct: Global coverage with Fortune 500 Distribution: Direct Sales Indirect Sales Service Provider Sales Alliance Partners Distribution Resellers Service Providers Customers 26
Slide 27: Platform approach to product innovation
Platform approach to product innovation For personal use only Collaborate Transact Infrastructure Solutions End user experience monitoring Card Transactions Hardware UC application monitoring Payments Application Health Operating System Network Troubleshooting Virtualization Capability Platform Capa
Slide 28: Stories from the field
Stories from the field Solving high value customer problems maintain grow new For personal use only CDW Sberbank American Water Managed Service Provider Increased call center Poor user experience with SLA commitments to volumes due to shift to across a multi vendor UC problem their customers. remote
Slide 29: Proforma subscription revenue
Proforma subscription revenue For personal use only 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 FY2021 were analysed for each region in their natural curre
Slide 30: Interim proforma subscription revenue
Interim proforma subscription revenue Interim revenue FY19 FY20 FY21 FY19 FY20 FY21 For personal use only A$M A$M A$M Infrastructure 9.9 10.6 9.7 (2%) 7% (9%) Transact 3.7 4.9 5.0 12% 33% 1% Collaborate 22.1 24.1 22.1 19% 9% (8%) Proforma subscription revenue 35.7 39.6 36.8 11% 11% (7%) Perpetual sa
Slide 31: Cash flow
Cash flow Dec-20 Dec-19 Change For personal use only A$M A$M Cash flows from operating activities Cash receipts from customers ex debtor factoring 42.4 44.4 (5%) Cash receipts from debtor factoring 0 1.1 (100%) Cash receipts from customers 42.4 45.5 (7%) Cash paid to suppliers and employees (28.3) (
Slide 32: Financial track record (interim results)
Financial track record (interim results) For personal use only Six months ending (A$M): Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Licence fees 12.3 10.8 13.8 19.7 19.5 23.9 25.6 31.3 33.4 17.1 Revenue 22.1 21.5 26.2 33.5 39.4 43.3 45.7 50.3 53.2 34.1 EBIT 4.2 2.8 5.5 9.9
Integrated Research — H1 FY2021 Earnings Presentation on 6ix