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-Q1 | October 31, 2012
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties and other
Slide 3: Scale and Momentum
Scale and Momentum (NASDAQ: OTEX, TSX: OTC) $1.2B+ global revenue EIM $13B market* (ECM, BPM, CEM, iX, Discovery) #1 in ECM** Approximately 5,000 employees 20 years of proven innovation 31 country offices, 141 countries supported *as per notes on slide 11 **as per Gartner Group COPYRIGHT © 2012 OPEN
Slide 4: Global Business
Global Business Fiscal 2012 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 5: Investment Highlights
Investment Highlights Demonstrated earnings power and operational discipline TTM operating cash flow of $282.9* million Large recurring maintenance revenues Investing in new markets: - Business Process Management (BPM) - Information Exchange (iX) Growth opportunities: geographies, vertical
Slide 6: Growth Drivers
Growth Drivers Distribution EIM New Markets Expansion Product Cycle Cloud Services Acquisitions 6
Slide 7: OpenText is Focused on the Deep Web
OpenText is Focused on the Deep Web The Public Web Only 4% of Web content (~8 billion pages) is available via search engines like Google 7.9 Zettabytes The Deep Web Approximately 96% of digital content is on Deep Web sites inside the firewall COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERV
Slide 8: Why Customers Buy
Why Customers Buy Governance, litigation and regulatory compliance Security threats Process improvement Unstructured information consolidation and leverage Multi-channel leverage and communication Information lead business transformations Mobile, social, cloud COPYRIGHT © 2012 OPEN TEX
Slide 9: 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 10: Enterprise Information Management $13 Billion Opportunity
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 11: Enterprise Information Management $13 Billion Opportunity
Enterprise Information Management $13 Billion Opportunity, 10% Growth Customer win: Emergency Medicine Physicians ECM BPM CEM Information Discovery Exchange Content Management Business Process Web Content Fax & Document Search Management Management Distribution Legacy Semantic Navigation Decommissio
Slide 12: 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. 12
Slide 13: OpenText Cloud Services: Enterprise Information Management in the Cloud
OpenText Cloud Services Enterprise Information Management In The Cloud Information Exchange EasyLink, FDDG Data & Process Services ECM & BPM Social Services CEM Platform Services Managed Hosting COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 13
Slide 14: OpenText Cloud Services
OpenText Cloud Services OpenText Cloud Services OpenText Tempo: and Applications: Brings secure file sharing EasyLink: Fax, EDI, SMS, Voice and synchronization across eDOCS organizations Web Site Management Shares information across teams OpenText Video Services and with business partners OpenText M
Slide 15: About EasyLink
About EasyLink Headquarters in Atlanta, GA with ~530 employees Information Exchange: $3.2B market, 11.4% CAGR* Proven Cloud-based offerings: Fax (production, desktop, broadcast) and Messaging (email, telex, notifications, EDI) $40 million quarterly revenue run rate Revenue splits: 58% Amer
Slide 16: 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 COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS
Slide 17: 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 17
Slide 18: Corporate Growth Strategy Alignment
Corporate Growth Strategy Alignment ECM BPM CEM iX Discovery Cloud Services Product Development Market Expansion Strategic Acquisitions Integrate existing New software through Products common platform. INFO FUSION Industries Alliances Additional Opportunities Install Base Sales Force Expansion Share
Slide 19: Growth Drivers
Growth Drivers Sales force expansion Market expansion: Latin America, Emerging Europe, APJ Partner channel expansion New products New Cloud Services offering Competitive market share gains Install-base upsell / cross-sell Industries: Public Sector, Defense, Healthcare, Life Sciences
Slide 20: History of Growing Revenue Y/Y
History of Growing Revenue Y/Y in $M: 7 Fiscal Years 1400 Service Customer Support License 1200 7 Year CAGR 16.5%* 293.7 1000 269.2 800 238.1 229.8 600 219 656.6 182.5 560.5 507.5 400 122.5 405.3 363.6 287.6 200 183.9 257.2 166.5 203.6 125.6 142.8 150.5 103.2 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 $40
Slide 21: History of Growing Non-GAAP EPS Y/Y
History of Growing Non-GAAP EPS Y/Y: 7 Fiscal Years $5.00 $4.50 7 Year CAGR 29.6%* $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $- FY06 FY07 FY08 FY09 FY10 FY11 FY12 $1.01 $1.46 $2.03 $2.51 $3.12 $4.07 $4.60 *FY05 non-GAAP EPS $0.75 COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 21
Slide 22: FY13 – Q1 Financial Highlights
FY13 – Q1 Financial Highlights Total Revenue Up 13% Y/Y Non-GAAP EPS Up 27% Y/Y Total revenue $326.2 million up 13% Y/Y Non-GAAP-based EPS was $1.31 compared to $1.03 Y/Y* Revenue by Geography: GAAP–based EPS was $0.33 compared to $0.60 Y/Y Americas 55% Non-GAAP-based operating margin 28
Slide 23: FY13 – Q1 Revenue Breakdown
FY13 – Q1 Revenue Breakdown Total Revenue by Geography 10% License Revenue by Industry Americas Financial 55% EMEA 1% 35% 3% 3% Services Asia Pac 7% 18% Technology 9% Basic Materials Consumer Goods Public Sector 12% 18% Total Revenue Mix Healthcare Utilities 12% 14% 17% Industrial Goods 17% License
Slide 24: FY13 External Target Model
FY13 External Target Model* Revenue Type Fiscal 2013 Target Model As a % of revenue Product License 20 - 25% Cloud Services 11 - 14% Customer Support 44 - 48% Professional Services 17 - 22% Non-GAAP Gross Margin Product License 92 - 94% Cloud Services 58 - 60% Customer Support 83 - 85% Professional
Slide 25: Diverse Customer Base
Diverse Customer Base GOVERNMENT ENERGY PHARMACEUTICAL FINANCIAL TRANSPORTATION MANUFACTURING LEGAL MEDIA FOOD INSURANCE COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 25
Slide 26: Customer Win | Valero Energy Corporation
Customer Win | Valero Energy Corporation Valero Energy Corporation has chosen to extend their deployment to support enterprise wide information governance and asset management needs with Enterprise Content Management, Discovery, Information Exchange and Ecosystem solutions. The resultant framework w
Slide 27: Customer Win | WEL Networks Ltd
Customer Win | WEL Networks Ltd WEL Networks Ltd, based in Hamilton New Zealand, purchased a number of components from the OpenText ECM suite in September to assist them with their ECM replacement project. The project will deliver improved remote access and mobility solutions for staff as well as pr
Slide 28: Customer Win | National Savings and Investments
Customer Win | National Savings and Investments NS&I (National Savings and Investments), one of the largest savings organisations in the UK and an executive agency of HM Treasury, invested in document and records management from OpenText to support the continued expansion of their banking system. Th
Slide 29: Customer Win | Vattenfall
Customer Win | Vattenfall Vattenfall, a utility company serving the Swedish, German and Dutch markets, has expanded their existing ECM deployment to support their growing needs and ensure information governance for existing and new content types. 29
Slide 30: Summary
Summary 1. Compelling investment thesis 2. EIM: Large, growing and relevant market 3. 7 years consistent growth: 29.6% CAGR: non-GAAP EPS 24.6% CAGR: Cash Flow from Operations 16.5% CAGR: Revenue COPYRIGHT © 2012 OPEN TEXT CORPORATION. ALL RIGHTS RESERVED. 30
Slide 31: Summary: EIM Growth
Summary EIM Growth Leadership $19B TAM 2016. Revenue. License. Company. Products. 10% CAGR. EPS. CF. Customers. Consistency Doubled the company in six years. Year over Year execution. Acquisitions 31
Slide 32: Unleashing the Power of Information
Unleashing the Power of Information
Slide 33: 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 34: Summary of Quarterly Results
Summary of Quarterly Results % Change % Change Q1 FY13 Q4 FY12 Q1 FY12 (Q/Q) (Y/Y) Revenue (million) $326.2 $305.6 $288.0 6.7% 13.3% GAAP gross margin 63.0% 65.8% 64.8% (280) bps (180) bps GAAP operating income 12.3% 13.0% 9.4% (70) bps 290 bps margin GAAP EPS, diluted $0.33 $0.14 $0.60 135.7% (45.0
Slide 35: Summary of Quarterly Revenue Results
Summary of Quarterly Revenue Results* % Change % Change In millions Q1 FY13 Q4 FY12 Q1 FY12 (Q/Q) (Y/Y) License $55.7 $78.0 $65.0 (28.6%) (14.3%) Cloud services 44.9 N/A N/A N/A N/A Customer support 162.1 163.1 162.0 (0.6)% 0.1% Professional service and other 63.5 64.5 61.0 (1.6%) 4.1% Total $326.2
Slide 36: Reconciliation of Selected Non-GAAP Measures | Q1 FY13
Reconciliation of Selected Non-GAAP Measures | Q1 FY13 (in „000s USD) Three months ended September 30, 2012 GAAP Adjustments FN Non- GAAP COST OF REVENUES Customer support 25,823 (38) 1 25,785 Professional service and other 48,582 (177) 1 48,405 Amortization of acquired technology-based intangibles
Slide 37: Reconciliation of Selected Non-GAAP Measures | Q1 FY13
Reconciliation of Selected Non-GAAP Measures | Q1 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 38: 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 Adjustments FN Non- GAAP COST OF REVENUES Customer support $27,780 ($58) 1 $27,722 Professional service and other 51,358 (239) 1 51,119 Amortization of acquired technology-based intangibles 21
Slide 39: 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 40: Reconciliation of Selected Non-GAAP Measures | Q1 FY12
Reconciliation of Selected Non-GAAP Measures | Q1 FY12 (in „000s USD) Three months ended September 30, 2011 GAAP Adjustments FN Non- GAAP COST OF REVENUES Customer support $ 26,269 $ (24) 1 $ 26,245 Professional service and other 50,351 (99) 1 50,252 Amortization of acquired technology-based intangi
Slide 41: Reconciliation of Selected Non-GAAP Measures | Q1 FY12
Reconciliation of Selected Non-GAAP Measures | Q1 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