Investor Briefing Q1 FY19

Transcription

1 Investor Briefing Q1 FY19 1

2 Safe Harbor This document contains forward-looking information and financial projections subject to risks, uncertainties and other factors that could materially affect our actual results. Any forward-looking statements or financial projections represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We do not assume any obligation to update any forward-looking statements or financial projections. Further, our financial projections do not consider the impact of any pending or future changes to accounting pronouncements under US Generally Accepted Accounting Principles. For additional discussion of factors that could impact our operational and financial results, please refer to our Form 10-K for the fiscal year ended June 30, 2018 and subsequently filed Form 10-Q s and Form 8-K s or amendments thereto. Non-GAAP Financial Information The financial projections in this document are presented on a non-gaap basis. Non-GAAP projections include core operating income, adjusted EBITDA, core operating margin and core earnings per share. A historical reconciliation of our non-gaap results to the most directly comparable GAAP result is available in the Investors section of Bottomline s website at 2

3 About Bottomline Bottomline Technologies makes business payments simple, smart and secure Capitalizing on business payment leadership position in large market opportunity Trusted brand in B2B payments Scale to execute, agile to innovate Large B2B payment network ($200 billion annual volume) Secure business payments (domestic and cross border) Leading payments and cash management platform Leveraging product investment to drive subscription and transaction growth Investment in market-leading solutions for large and growing markets Targeting 15-20% subscriptions & transactions revenue growth $279 million run rate subs and trans revenue 86% recurring revenue 3

4 THE OPPORTUNITY B2B Payments Market $ 20T+ $ 25T $ 23T+ Sources: Visa 2017 Investor Day research MasterCard NAPCP Conference Presentation March 6, 2018 Goldman Sachs Payment Ecosystems Research Report August 3,

5 FY19 Financial Overview Subscription & Transaction Revenue Revenue EBITDA 300$M 71% of revenue Organic growth of 15-20% per year FY18 S&T revenue of $262 million $M 87% recurring revenue 39% of revenue is international FY18 revenue of $394 million $M Consistently profitable model FY18 EBITDA Margin 24% FY18 EBITDA of $94 million SW/Services 13% Recurring Revenue 87% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19G 0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19G 0 Projections for the fiscal year ended June 30, EBITDA refers to adjusted EBITDA which is a non-gaap measure. A definition and reconciliation to the most directly comparable GAAP measure can be found in the Investors section of the Bottomline website. 5

6 Business Payment Complexity PAYER PAYMENT RECIPIENT 6

7 Business Payment Complexity NATIONAL BANK Paper draft, ACH or wire transfer SWIFT message NATIONAL BANK ACH or wire transfer PROPRIETARY NETWORK PAYER Commercial card PAYER S BANK Paper draft, ACH or wire transfer Paper draft, ACH or wire transfer PAYMENT RECIPIENT S BANK PAYMENT RECIPIENT CARD NETWORK CORRESPONDENT BANKS CARD ISSUER BANK MERCHANT ACQUIRER S BANK 7

8 Investment Highlights Large market opportunity Leading business payments product set Driving subscription & transaction revenue Q1 = 15% Growth Winning new business $90 million last year Attractive lifetime customer value years or more 8

9 MARKET-LEADING PRODUCTS 9

10 The Paper Problem The way businesses pay and get paid 63% 67% of organizations still make more than half of their payments by paper check of businesses say smarter systems that drive more efficiencies are necessary for AP s success1 75% of organizations that were victims of payment fraud experienced check fraud2 B2B Payments Made Simple, Smart & Secure The Largest Electronic Payment Network for Businesses Paymode-X helps businesses easily transition to electronic payments 385,000+ Members in network $200 Billion in payments processed annually PAYERS accelerate payment automation, improve payment security and monetize AP spend 1 2 VENDORS streamline receivables with convenient electronic payments and remittance The State of epayables 2018 by Ardent Partners 2017 AFP Payment Fraud & Controls Survey 10

11 Digital Banking Innovative commercial banking platforms empower banks to win new customers and grow wallet share Helping Banks Grow Organically & Defend vs. Digital Disruption BANKS GET Market-leading payments and cash management capabilities Mobile-first design, with flexible, modular customization Powerful customer engagement platform, with integrated sales and marketing tools Market-leading Solution Aité Survey of Cash Management Vendors Best in Class BANK S COMMERCIAL CUSTOMERS GET Integrated, market-leading payments and cash management solutions Tools to help manage their finances Easy-to-use and customizable digital interface Works with SMB business and accounting software Leadership Position The vendor to beat User Interface and Experience Analytics 11

12 Legal Spend Management Leadership Position The leading way insurance companies manage their legal spend and relationships Streamlining and Automating Relationships with Law Firms ,500+ Clients Law Firms % Insurance Companies Retention Rate LEGAL INVOICE AND SPEND MANAGEMENT Paid as a percentage of legal bill Top-Tier Bank Client Base Saves up to 8% of billings Reduces administrative expense by 30 50% PARTNERSELECT Choose the right lawyer for a right matter at the right rate Advanced analytics improve case outcomes 12

13 FINANCIAL HIGHLIGHTS 13

14 Subscription & Transaction Revenue Growth Product investments driving 15 20% subscription and transaction growth Most recent quarter - 20% growth in fully transitioned products - 15% growth overall Current run rate of $279 million Targeting $300 million for FY FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19G

15 Consistent Profitability EBITDA of $93.7 million last fiscal year EBITDA Margin of 24% Targeting $ million EBITDA in FY FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19G 0 Core operating income, adjusted EBITDA, core operating margin and core EPS are non-gaap measures. Definitions and a reconciliation to the most directly comparable GAAP measures can be found in the Investors section of the Bottomline website. 15

16 Driving Recurring Revenue Subscription and Transaction Revenue Payment platforms are mission critical and yield long customer retention 68% of revenue is subscription and transaction 23% 57% 64% 67% Recurring Revenue 86% of revenue is recurring 64% 80% 84% 85%

17 Q1 Core Results Subscription and Transaction Revenue Growth 20% Top end of 15-20% target Strategic Plan Established Products Subscription and Transaction Revenue Total Revenue Core Operating Income $54.1M $80.2M $17.4M Consistently profitable model Invest in market leading cloud business payment solutions Core Operating Margin 22% Drive subscription and transaction revenue growth of 15-20% per year Leverage inherent attractive lifetime customer value of our solutions Banking Solutions Subscription and Transaction Revenue Growth (1%) Subscription and Transaction Revenue $15.7M Total Revenue $22.3M Core Operating Income $2.1M Core Operating Margin 9% $16 million of annual subscriptions currently in implementation and not yet live Margins will expand as new subscriptions go live Continue to extend our product platform capabilities Establish Bottomline as the clear leader in business payments Consolidated Bottomline Subscription and Transaction Revenue Growth 15% Subscription and Transaction Revenue $69.8M Total Revenue $102.4M Core Operating Income $19.4M Core Operating Margin 19% Adjusted EBITDA $25.1M Adjusted EBITDA Margin 24% Product investments driving subscription & transaction growth with 86% recurring revenue $25.1 million EBITDA, reflecting consistently profitable model Core EPS $0.33 Core operating income, adjusted EBITDA, core operating margin and core EPS are non-gaap measures. Definitions and a reconciliation to the most directly comparable GAAP measures can be found in the Investors section of the Bottomline website. 17

18 Investment Highlights Large market opportunity Leading business payments product set Driving subscription & transaction revenue Q1 = 15% Growth Winning new business $90 million last year Attractive lifetime customer value years or more 18

19 FY19 Financial Overview Subscription & Transaction Revenue Revenue EBITDA 300$M 71% of revenue Organic growth of 15-20% per year FY18 S&T revenue of $262 million $M 87% recurring revenue 39% of revenue is international FY18 revenue of $394 million $M Consistently profitable model FY18 EBITDA Margin 24% FY18 EBITDA of $94 million SW/Services 13% Recurring Revenue 87% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19G 0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19G 0 Projections for the fiscal year ended June 30, EBITDA refers to adjusted EBITDA which is a non-gaap measure. A definition and reconciliation to the most directly comparable GAAP measure can be found in the Investors section of the Bottomline website. 19