Investor Presentation · This presentation may contain forward-looking statements. These...

Investor Presentation

NASDAQ: OTEX | TSX: OTEX

August 6, 2020

OpenText Confidential. ©2020 All Rights Reserved. 2

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 the Securities Exchange Act of 1934, as amended, the Securities Act (Ontario) and Canadian securities legislation

in each of the provinces of Canada. All statements other than statements of historical facts are statements that could be deemed

forward-looking statements. When we use words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,”

“may,” “could,” “would”, “will” and variations of these words or similar expressions, we do so to identify forward-looking statements. In

addition, any statements that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of

future events or circumstances, including any underlying assumptions, are forward-looking statements, and are based on our current

expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking

statements reflect our current estimates, beliefs and assumptions, which are based on management’s perception of historic trends,

current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. These

forward-looking statements are based on certain assumptions and involve known and unknown risks as well as uncertainties, which

include actual and potential risks and uncertainties relating to the ultimate geographic spread of COVID-19, the severity of the disease

and the duration of the COVID-19 pandemic. The actual results that we achieve may differ materially from any forward-looking

statements, which reflect management's current expectations and projections about future results only as of the date hereof. We

undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements. A number of

factors may materially affect our business, financial condition, operating results and prospects. For additional information with respect to

risks and other factors which could occur, see our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities

filings with the Securities and Exchange Commission and other securities regulators. Any one of these factors may cause our actual

results to differ materially from recent results or from our anticipated future results. Readers are cautioned not to place undue reliance

upon any such forward-looking statements, which speak only as of the date made.

The worldruns oninformation

From the debate on truth, to a global

pandemic response, to a modern civil

rights movement, the fact is,

information is more important than

ever.


OpenText: The Information Management Leader

1. See slides titled “#1 in Business Network”, “#1 in Content Services” and “Leader in Digital Experience” in this presentation.

2. Annual Recurring Revenues (ARR) as a percentage of Total Revenues for the year ended June 30, 2020. ARR is defined as the sum of cloud services and

subscriptions revenue and customer support revenue.

3. Free Cash Flows = Operating Cash Flows minus Capital Expenditures (or “Additions to property & equipment” in the Statement of Cash Flow).

Value Creation PlaybookAbout OpenText

Leader in Information Management market

• #1 in Business Networks(1)

• #1 in Content Services(1)

• Leader in Cyber Resilience

• Leader in Digital Experience

Total Growth drives share gains

Durable, resilient, predictable business (78% ARR)(2)

Expanding EBITDA margins

Strong Free Cash Flows(3) and Balance Sheet

Historical dividend payout of ~20% of TTM OCF

Organic Growth

+

Accretive Acquisitions

+

Cloud Growth

+

ARR Growth

+

Margin Expansion

+

Cash Flow Growth

+

Dividends

Innovation

Reinvest for

Growth

Capital

Structure


The OpenText Business System

OpenTextThe Information

Company

Strategic Acquisitions

Disciplined Capital

Allocation

Operational Excellence

Key Metrics

Information

Management Systems, Tools, Methods

ARR, A-EBITDA $, FCFDividend,

Capital Investment,

Talent Investment

ROIC

Customer

Driven

Innovation

Best Teams

Win

Value

Orientation

Diligence

Total Growth

Integration


Driving Shareholder Returns

Continued

Investment

in Growth

Initiatives

• FY’20 78.2% ARR

• FY’21 Target Model of 80% to 82%

• High-teens ROIC - Upper Quartile(1)

• Self-funding M&A model

• Cloud Migration

• Cyber-Resilience - Bundle, Cross-Sell, Integrate

• Accelerated sales coverage and product innovation

We returned over $900 million in dividends since FY’13

Capital

Efficiency

Business

Predictability

1. Based on a group of 30 SaaS and Enterprise Software peers with data provided by Bloomberg


Security (Cloud and Edge)

Customer

Experience (Contactless and Direct)

Global Supply

Chain

Restructuring

Digital

Acceleration

Work From

Anywhere

Positioned To Gain Market Share

Demand

Drivers

1 2 3 4 5


Leadership in Information Management(1)

#1

#1Leader

Leader

Total Revenue Growth in CC

Consecutive

Years of Y/Y

Growth

6

1. IDC MarketScape: Worldwide Multi-Enterprise Supply Chain Commerce Network 2018 Vendor Assessment, Simon Ellis, December 2018,

Forrester Wave™: ECM Content Platforms, Q3 2019, Cheryl McKinnon, July 24, 2019

IDC MarketScape: Worldwide Customer Communications Management Vendor Assessment, March 2020

19.0% 2.8%

27.0%

19.7%3.8%

9.7%

0

500

1,000

1,500

2,000

2,500

3,000

FY'15 FY'16 FY'17 FY'18 FY'19 FY'20

89 of the world’s largest 100 companies are OpenText customers


Business Network

STRATEGIES

OpenText

SPS Commerce

Bamboo Rose

Vecco

Infor GT Nexus

E2open

One Network

LEADERS

MAJOR PLAYERS

CONTENDERS

PARTICIPANTS

TrueCommerce

#1 in Business Network

21 of the 25 largest supply chains in the world(1)

are OpenText Business Network customersIDC MarketScape: Worldwide Multi-Enterprise Supply Chain Commerce

Network 2018 Vendor Assessment, Simon Ellis, December 2018

1. Gartner Supply Chain Top 25 Results for 2020, Mike Griswold, June 26, 2020

Secular Growth Drivers:

• Supply chain restructuring, near-shoring,

optimization

• Active Invoice with Compliance (AIC)

• Sustainable, ethical supply chains

• “Zero-trust” supply chain


Customer Story: Business Network

Information helps Nestlé

optimize supply chain operations

“Nestlé has leveraged the OpenText Business Network for almost a decade to help

optimize our supply chain operations from an IT standpoint. Like many other companies,

Nestle is working through the COVID-19 crisis and appreciates the support and

willingness of OpenText to work diligently with us during these challenging times.”

Products:

OpenText B2B Managed Services Active Invoices with Compliance

Active Intelligence Active Orders

Ravindranath (Ravi) Arunasalam, Director Partner Productivity & Delivery,

Business Solution Integration, Nestle


OpenText’s Business Network

OpenText’s cloud platform that securely connects

data with people, systems and things and

manages messaging and data between trade

partners

KEY SOLUTIONS

Identity and Access Management

On-prem and hybrid fax

OpenText ANX Network

OpenText Covisint Connect

OpenText Easylink Trade Gateway

OpenText Information Exchange (Trading Grid)


#1 in Content Services

All the right data, in the right place, always

up-to-date, in the same context

Content Services

CURRENT

OFFERING

WEAK

STRONG

CHALLENGERS CONTENDERS LEADERS

WEAK STRATEGY STRONG

Forrester Wave™: ECM Content Platforms, Q3 2019, Cheryl McKinnon, July 24, 2019

Microsoft

Hyland

AlfrescoSoftware

Newgen Software

SER Group

Laserfiche Box

iManage

Nuxeo

IBM

M-Files

GRM Information

Management

Micro Focus

OpenText Secular Growth Drivers:

• Paper to Digital transformation

• Enables digital workers to work from anywhere

• Growing compliance & regulatory requirements

STRONG

PERFORMERS


Customer Story: Content Services

Information makes Agility

more responsive.

“Visibility into supply has been critical to helping us navigate

the disruption brought by the COVID-19 pandemic.

OpenText has helped us optimize customer service,

allowing us to focus on getting goods to market.”

Products:

OpenText Documentum

OpenText Documentum xCP

OpenText InfoArchive

OpenText Intelligent Capture

OpenText Professional Services

Deepak Sharma, Global IT Director,

Business Solutions & Support, Agility


OpenText’s Content Services

OpenText’s Content Services integrates with data

repositories to deliver content lifecycle

management, information access, governance,

document and records management, data capture,

indexing, version control, workflow management

and analytics.

KEY SOLUTIONS

OpenText Content Suite

OpenText Documentum

OpenText Extended ECM

OpenText InfoArchive

OpenText Intelligent Capture


1. https://www.pcmag.com/news/readers-choice-awards-2020-antivirus-security-suite-software

2. https://www.usnews.com/360-reviews/antivirus/best-antivirus-software

3. https://www.usnews.com/360-reviews/antivirus/best-antivirus-software-for-mac

Leader in Cyber Resilience

Backup &

Recovery

Cyber

ForensicsIntrusion

Prevention

Threat

Intelligence

The OpenText Cyber Resiliency Bundle Secular Growth Drivers:

• 5G

• Work From Anywhere

• Mobility

Winner of Readers' Choice Awards 2020: Security Suite Software by PCMag(1)

“Best Antivirus Software of 2020” by US News & World Report (2)

“Best Antivirus Software for Mac 2020” by US News & World Report (3)

https://www.pcmag.com/news/readers-choice-awards-2020-antivirus-security-suite-software

https://www.usnews.com/360-reviews/antivirus/best-antivirus-software

https://www.usnews.com/360-reviews/antivirus/best-antivirus-software-for-mac


Customer Story: Cyber Resilience

Information accelerates

digital transformation at Switch

“The OpenText solution has helped us categorize, streamline,

de-duplicate, thread, and then prioritize the data in a way that

would not otherwise be possible. OpenText has helped us deliver

50% faster than the other providers we used previously.”

Products:

OpenText Axcelerate OpenText Insight

OpenText EnCase eDiscovery OpenText Professional Services

Sam Castor, EVP, Policy and Deputy General Counsel, Switch


OpenText’s Cyber Resilience

OpenText’s Cyber Resilience products

empowers customers to prevent, detect, react

and recover from breaches and data loss.

KEY SOLUTIONS

BrightCloud Threat Detection

Carbonite Data Backup

OpenText Security Suite

Webroot Endpoint Protection


Leader in Digital Experience

Digital Experience - CCM

IDC MarketScape: Worldwide Customer Communications Management Vendor

Assessment, March 2020

LEADERS

MAJOR PLAYERS

CONTENDERS

PARTICIPANTS

ISIS Paryrus

Syncsort

Hyland

Smart CommunicationsMessagepoint

Nintex

Quadient

XMPie

OpenText

UnifiedpostCincom

Conga

AdobeStriata

STRATEGIES

CA

PA

BIL

ITIE

S

Secular Growth Drivers:

• Contactless retail and direct to consumer

• Physical to digital business

• Omni-channel customer engagement

• Digital asset management

Offers marketers greater insight and

understanding into their campaigns by capturing

data from interactions across web, social, mobile,

email, call centers, forms and surveys


Customer Story: Digital Experience

Information enables compelling

digital experiences at RBC

“We chose OpenText to deliver compelling digital experiences for our

customers and employees and AWS is a central plank of our cloud

infrastructure. It is great to see these companies working together to build

strong managed services and support options for their joint customers.”

Products:

OpenText TeamSite

OpenText LiveSite

Patrick Chiu, Director, Enterprise Content Services,

Digital Workplace Solutions, Corporate Systems, RBC


OpenText’s Digital Experiences Platform

OpenText’s Digital Experience platform

integrates with ERP and CRM systems to

create, manage and deliver individualized

customer experiences across all digital

channels.

KEY SOLUTIONS

OpenText Experience Platform

OpenText Exstream

OpenText Media Management

Daily open rate

Form submit by country


Information

Management

Total Growth Strategy

1. Customer Support renewal rate was 94% for FY’20 and Cloud services and subscriptions renewal rate was in the mid-90’s (does not include Carbonite).

Retain• 78.2% ARR (FY’20)

• Mid 90%’s Renewal Rates(1)

Grow

Acquire

• Growing Sales Breadth and Depth

• Product Innovation

• Accretive Acquisitions

• On OpenText’s operating model in

12 months


Retain: Our World Class Customer Base

96%Customer Satisfaction

90%Margin for Customer

Support

Key MetricsAnnual Recurring Revenue (ARR)

(US$ M)

FY'14FY'20

$1,080

$2,433

125%

1. As of June 30, 2020. Does not include Carbonite.

Renewal Rates(1):

Cloud: Mid 90%’s

Off Cloud CS: 94%

Retain


Continue Migration to the Cloud

Broaden and Deepen Sales Coverage

Leverage Cyber Resilience

Accelerate Product Innovation

FY’21 Key Growth Initiatives

Growth

Initiatives

1

2

3

4

Grow


Continue Migration to the Cloud

Digital

Experience

Cyber

Resilience

Business

Network

Content

Services

Advanced

Technology

Cloud(US$ M)

FY'14FY'20

$373

$1,158

210%

All OpenText products are cloud ready

Grow


Broaden & Deepen Sales Coverage

1. Target made on OpenText’s Investor Day 2019, Sept. 6, 2019

2,000+ Field Facing

Professionals

Direct Strategic Partners

Enterprise Solutions

Double coverage of Global 10K

from 40% to 80% in next 3 years

through Direct and Partners(1)

16,000+ Partners 7M+ Consumers

Channel Partners Online & Retail

SMB & Consumer Solutions

Grow the number of partners and

breadth of products offered

through the channelGOAL GOAL

Grow


Leverage Cyber Resilience

Bundle: Carbonite &

Webroot offerings

Cross-Sell: to our

Enterprise Customers

Grow: RMM and MSP

Partners(1)

Integrate: Carbonite on

Operating Model by

end of FY’21

1. RMM – Remote Monitoring and Management, MSP – Managed Service Provider

Grow


Accelerate Product Innovation

• Standardized services platform

• Simplified sales and customer engagement

• Improved speed of customer deployment

• Seamless upgrade

Business Network

Content Services

Cyber Resilience

Digital Experience

Past Recent Present

New Cloud

Editions 20.2

Product Releases Every 90 Days

Grow


Acquire: Our M&A Criteria

Leadership in

Key Markets

Value for

CustomersMission

Critical

Large Install

Base

Strong

IP PortfolioFinancially

Compelling

Solid Track Record of Operating Cash Flows and High-Teens ROIC

Information

Management

Acquire


Growing ARR While Expanding Margin

29.7% 29.1%31.1%

33.1% 33.7%36.8%

34.7%36.2%

38.4% 36.9%

54.2% 54.4%

61.5%

66.5%

72.2%73.9% 73.6% 73.2%

75.1%78.2%

26.1% 24.3%

20.0% 18.8%15.9% 15.6% 16.1% 15.5% 14.9%

13.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

0

FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20

ARR % of Total Revenues

License % of Total Revenues

A-EBITDA Margin

A-EBITDA Margin(1)(2)Growing ARR and Expanding Margin(1),(2)

1. Please see Appendix A “Use of Non-GAAP Financial Measures” in our Q4 FY20 Financial Business Results presentation for reconciliation of GAAP

to Non-GAAP measures.

2. Refer to note 1 of our Fiscal 2019 10-K for details on the impact of recently adopted accounting standards on prior period results.


Proven Durable Business Model

1. Please see Appendix A “Use of Non-GAAP Financial Measures” in our Q4 FY20 Financial Business Results presentation for reconciliation of GAAP to Non-

GAAP measures.

2. Refer to note 1 of our Fiscal 2019 10-K for details on the impact of recently adopted accounting standards on prior period results.

3. Free Cash Flows = Operating Cash Flows minus Capital Expenditures (or “Additions to property & equipment” in the Statement of Cash Flow).

Annual Recurring Revenue (ARR)(US$ M)

78% ARR in FY’20

FY'14FY'20

$1,080

$2,433

125%

A-EBITDA & Margin(1),(2)

(US$ M)

Free Cash Flows(3)

(US$ M)

Strong Annualized Performance

FY'14FY'20

$375

$882

135%

38.4%

113%

+380 bps since FY’14

36.8%

33.1%

FY'14FY'20

$538

$1,148

33.1%

36.9%


FY’21 Target Model

1. Please see Appendix A “Use of Non-GAAP Financial Measures” in our Q4 FY20 Financial Business Results presentation for reconciliation of GAAP to Non-GAAP measures.

2. Please refer to historical filings, including our Forms 10-K and 10-Q, regarding the company’s adjusted tax rate.

3. This model is not guidance.

Fiscal 2020 Model Fiscal 2020 Results Fiscal 2021 Model(3)

Revenue Type:

Annual Recurring Revenue (ARR) 76% - 78% 78.2% 80% - 82%

License 13% - 17% 13.0% 10% - 13%

Cloud Services and Subscriptions 34% - 38% 37.2% 41% - 43%

Customer Support 38% - 42% 41.0% 38% - 42%

Professional Services and Other 7% - 11% 8.8% 6% - 9%

Non-GAAP Gross Margin

License 96% - 98% 97.2% 96% - 98%

Cloud Services and Subscriptions 58% - 60% 61.3% 63% - 65%

Customer Support 89% - 91% 90.4% 89% - 91%

Professional Services and Other 18% - 20% 22.7% 18% - 20%

Non-GAAP Gross Margin(1) 73% - 75% 74.5% 74% - 76%

Non-GAAP Operating Expenses:

Research & Development 11% - 13% 11.7% 12% - 14%

Sales & Marketing 18% - 20% 18.5% 18% - 20%

General & Admin 6% - 8% 7.3% 6% - 8%

Depreciation 2% - 4% 2.9% 2% - 4%

A-EBITDA Margin(1) 35% - 36% 36.9% 37% - 38%

Interest and Other Related Expense USD million $147 - $152 $146.4 $157 - $162

Adjusted Tax Rate(2) 14% 14% 14%

Capital Expenditures $72 - $77 $73 $85 - $95


FY’21 OpenText Total Growth Strategy(1)

FY'14FY'20

$1,625

$3,110

11.4%

CAGR

Total Revenue Growth (US$ M)

New M&A

Cloud Low double-digit growth

1. As of August 6, 2020

Expected % Change y/y:

Total Revenue Constant

Customer Support Constant

Off Cloud (License & PS) Decline

ARR Mid-single digit growth

Additive


FY’23 Aspirations: Continued Upper Quartile Performance

Our 3-year aspirations remain constant during the pandemic crisis.

We plan to reinvest any margin gains above 40% into growth initiatives.

A-EBITDA

Margin

38%-40%

Free

Cash Flow

$0.9B-$1.0B


Strong Liquidity and Cash Position

Current Liquidity (US$ M)

1. Excludes restricted cash. Includes Cash and the Undrawn Revolver of $150m as of June 30, 2020.

Total Available & Committed

Liquidity(1)$1,843

A-EBITDA Margin(1)(2)Capital Expenditures as % of Total Revenue

(FY’14 to FY’20)

2.6%

4.2%

3.8%

3.5%3.7%

2.2% 2.3%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20

A-EBITDA Margin(1)(2)Debt Maturity Profile

10 10 10 10 10

933

600

150

850900 900

0

100

200

300

400

500

600

700

800

900

1000

CY'20 CY'21 CY'22 CY'23 CY'24 CY'25 CY'26 CY'27 CY'28 CY'29 CY'30

Mill

ion

s U

SD

Axis Title

TLB Drawn RCF Undrawn RCF Senior Notes

A-EBITDA Margin(1)(2)Cash Balance Trend

683 788

595

765

941 999

675

1,453

1,693

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q4 FY'18 Q1 FY'19 Q2 FY'19 Q3 FY'19 Q4 FY'19 Q1 FY'20 Q2 FY'20 Q3 FY'20 Q4FY'20

Mill

ion

s U

SD

Total cash & short-term investments at $1.693B (Jun 30/20)


Operating Cash Flows $955

Less: CapEx $73

$10Less: Principal

FY’20 (US$ M)

1. Consolidated Net Leverage Ratio (pro forma) is calculated using bank covenant methodology.

Cash Generated for M&A Trended Consolidated Net Leverage Ratio(1)

2.37x

2.61x

2.30x

2.01x1.86x

1.72x1.89x

1.70x1.53x 1.48x

2.28x 2.25x

2.04x

Q4 FY'17 Q1 FY'18 Q2 FY'18 Q3 FY'18 Q4 FY'18 Q1 FY'19 Q2 FY'19 Q3 FY'19 Q4 FY'19 Q1 FY'20 Q2 FY'20 Q3 FY'20 Q4 FY'20

Strong Cash Flow and Balance Sheet

Carbonite

Acquisition

Closing

Cash Generated

for M&A$683

$189Less: Dividends

Free Cash Flows $882


Track Record of Shareholder Returns

$74.7$87.6

$99.3

$120.6

$145.6

$168.9

$188.7

FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20

+153%

Dividends Paid(1)

(US$ million)

1. On August 5, 2020, the Board declared a cash dividend of $0.1746 per common share, unchanged from the prior year.

2. Dividend amount includes one quarter of dividends paid in Q4 FY’13.

We returned over $900 million in dividends back to shareholders.(2)


Mark J.

BarrenecheaCEO and CTO

Madhu

RanganathanEVP,

CFO

Muhi

MajzoubEVP,

Chief Product Officer

Gordon

DaviesEVP,

CLO & Corporate

Development

Ted

HarrisonEVP,

Sales

James

McGourlayEVP,

Customer Operations

Craig

StilwellEVP,

SMB & Consumer Sales

Savinay

BerrySVP,

Cloud Service Delivery

Lou

BlattSVP,

Chief Marketing Officer

Prentiss

DonohueSVP,

Partners & Alliances

Paul

DugganSVP,

Revenue Operations

David

JamiesonSVP,

CIO

Doug

ParkerSVP,

Corporate Development

Brian

SweeneySVP,

CHRO

Executive Leadership Team (ELT)


Information Makes Us More

Information fuels knowledge. When we know more, only then can we understand,

achieve, do and be more.


The Information Company

Thank you

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