Supplementary Materials. For use in conjunction with the November 2, 2016 Earnings Call

Transcription

1 Supplementary Materials For use in conjunction with the November 2, 2016 Earnings Call 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, 2016 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 both a GAAP and a non- GAAP basis. Non-GAAP projections include core operating income, adjusted EBITDA, core operating margin, core earnings per share and constant currency growth. A reconciliation of our historical non-gaap results to the most directly comparable GAAP results is included at the end of this document. 2

3 Guidance Package Contents We are pleased to provide these supplementary materials. The following pages detail: Q1 17 actual performance versus prior guidance on both a GAAP and non GAAP basis Detailed calcula ons of projected impacts of foreign exchange rates Reconcilia ons of FY17 Core guidance to GAAP guidance Reconcilia ons of historical non GAAP financial measures Defini ons of non GAAP financial measures Note: Financial results and projections in this document are presented on both a GAAP and a non GAAP basis. Non GAAP measures include core operating income, adjusted EBITDA, core operating margin, core earnings per share and constant currency (cc) growth rates. Definitions and a reconciliation of our non GAAP results to the most directly comparable GAAP results are included at the end of this document. 3

4 Total Bottomline Bottomline Technologies Actual Q1 17 GAAP Performance vs. Q1 17 GAAP Guidance (in millions, except for per share amounts and margin percentages) Q1 17 Q1 17 Actual GAAP Q1 17 GAAP Guidance Performance Variance Total revenue $84.6 $83.1 ($1.5) Subscription & transaction revenue $50.5 $52.1 $1.7 Subscription & transaction Y/Y growth % 9% 13% 4% Operating income ($3.7) ($5.9) ($2.2) Operating margin % (4.3%) (7.1%) (2.8%) EPS ($0.21) ($0.28) ($0.07) Established Products Total revenue $67.0 $64.9 ($2.1) Subscription & transaction revenue $37.0 $37.5 $0.5 Subscription & transaction Y/Y growth % 10% 11% 1% Transitioning Product (1) Total revenue $17.6 $18.2 $0.6 Subscription & transaction revenue $13.5 $14.6 $1.1 Subscription & transaction Y/Y growth % 8% 17% 9% 1) Transitioning product represents our Digital Banking Segment as defined in our SEC filings. 4

5 Total Bottomline Bottomline Technologies Actual Q1 17 Core Performance vs. Q1 17 Core Guidance (in millions, except for per share amounts and margin percentages) Q1 17 Q1 17 Actual Core Q1 17 Core Guidance Performance Variance Total revenue $84.6 $83.1 ($1.5) Subscription & transaction revenue $50.5 $52.1 $1.7 Subscription & transaction Y/Y growth % 9% 13% 4% Subscription & transaction Y/Y growth CC (1) 12% 16% 4% Core operating income (1) $12.3 $12.6 $0.3 Core operating margin % (1) 14.6% 15.2% 0.6% Core EPS (1) $0.17 $0.22 $0.05 Established Products Total revenue $67.0 $64.9 ($2.1) Subscription & transaction revenue $37.0 $37.5 $0.5 Subscription & transaction Y/Y growth % 10% 11% 1% Subscription & transaction Y/Y growth CC (1) 14% 16% 2% Core operating income (1) $12.3 $12.6 $0.2 Core operating margin % (1) 18.6% 19.4% 0.8% Transitioning Product (2) Total revenue $17.6 $18.2 $0.6 Subscription & transaction revenue $13.5 $14.6 $1.1 Subscription & transaction Y/Y growth % 8% 17% 9% Core operating income (1) $0.0 $0.0 $0.0 Core operating margin % (1) (0.0%) 0.1% 0.1% 1) Core operating income, adjusted EBITDA, core operating margin, core EPS and constant currency (CC) growth are non GAAP measures. Definitions and reconciliations to the most directly comparable GAAP measures are included at the end of this document. 2) Transitioning product represents our Digital Banking Segment as defined in our SEC filings. 5

6 Updated FY17 GAAP guidance to reflect Q1 actuals & FX Impact (in millions, except for per share amounts and margin percentages) Updated FY17 Guidance Adjusted for FX Impact & Q1 August FY17 Guidance Update for FX Rates as of October 26, 2016 Actual Results Total Bottomline Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 S&T Y/Y growth % 9% 12% 15% 12% 12% n/a (1%) (1%) (2%) (1%) 13% 10% 14% 11% 12% S&T revenue $ 50.5 $ 54.4 $ 57.1 $ 57.3 $ n/a $ (0.7) $ (0.7) $ (0.8) $ (2.2) $ 52.1 $ 53.7 $ 56.4 $ 56.5 $ Total revenue $ 84.6 $ 86.7 $ 90.0 $ 92.5 $ n/a $ (1.4) $ (1.5) $ (1.5) $ (4.4) $ 83.1 $ 85.3 $ 88.6 $ 91.0 $ Operating income $ (3.7) $ (2.5) $ (0.3) $ 2.2 $ (4.2) n/a $ (0.4) $ (0.4) $ (0.4) $ (1.2) $ (5.9) $ (2.9) $ (0.7) $ 1.8 $ (7.6) Operating margin % (4%) (3%) (0%) 2% (1%) n/a (7%) (3%) (0%) 2% (1%) EPS (2) $ (0.21) $ (0.18) $ (0.13) $ (0.06) $ (0.59) n/a $ (0.01) $ (0.01) $ (0.01) $ (0.03) $ (0.28) $ (0.19) $ (0.14) $ (0.07) $ (0.69) Established Products Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 S&T Y/Y growth % 10% 13% 16% 12% 13% n/a (2%) (2%) (2%) (1%) 11% 11% 14% 10% 12% S&T revenue $ 37.0 $ 40.6 $ 41.3 $ 41.5 $ n/a $ (0.7) $ (0.7) $ (0.8) $ (2.2) $ 37.5 $ 39.9 $ 40.6 $ 40.7 $ Total revenue $ 67.0 $ 69.0 $ 71.1 $ 73.5 $ n/a $ (1.4) $ (1.5) $ (1.5) $ (4.4) $ 64.9 $ 67.5 $ 69.7 $ 72.0 $ Transitioning Product Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 S&T Y/Y growth % 8% 9% 13% 13% 11% n/a 17% 9% 13% 13% 13% S&T revenue $ 13.5 $ 13.8 $ 15.8 $ 15.8 $ 58.9 n/a $ $ $ $ $ 14.6 $ 13.8 $ 15.8 $ 15.8 $ 60.0 Total revenue $ 17.6 $ 17.7 $ 18.9 $ 19.0 $ 73.2 n/a $ $ $ $ $ 18.2 $ 17.7 $ 18.9 $ 19.0 $ 73.8 Notes: 1) Q1 updated to reflect actual results. Updated GBP rate for Q2 Q4 from 1.30 USD/GBP to 1.22 USD/GBP. CHF and Euro rates are unchanged at 1.03 USD/CHF and 1.11 USD/Euro respectively. 2) Diluted shares used in earnings per shares above have been updated to reflect actual outstanding shares of 38.0 as of 9/30/16, but not for further share repurchases beyond that date. 6

7 FY17 Core guidance updated to reflect Q1 actuals & FX Impact (in millions, except for per share amounts and margin percentages) FY17 Guidance Adjusted for FX Impact & August FY17 Guidance Update for FX Rates as of October 26, 2016 Q1 Actual Results Total Bottomline Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 S&T Y/Y growth CC (1,2) 12% 16% 18% 15% 15% n/a 16% 16% 18% 15% 16% S&T revenue $ 50.5 $ 54.4 $ 57.1 $ 57.3 $ n/a $ (0.7) $ (0.7) $ (0.8) $ (2.2) $ 52.1 $ 53.7 $ 56.4 $ 56.5 $ Total revenue $ 84.6 $ 86.7 $ 90.0 $ 92.5 $ n/a $ (1.4) $ (1.5) $ (1.5) $ (4.4) $ 83.1 $ 85.3 $ 88.6 $ 91.0 $ Core operating income (1) $ 12.3 $ 12.9 $ 14.4 $ 15.6 $ 55.2 n/a $ (0.4) $ (0.4) $ (0.4) $ (1.2) $ 12.6 $ 12.6 $ 14.0 $ 15.1 $ 54.3 Core operating margin % (1) 15% 15% 16% 17% 16% n/a 15% 15% 16% 17% 16% Core EPS (3) $ 0.17 $ 0.18 $ 0.22 $ 0.26 $ 0.83 n/a $ (0.01) $ (0.01) $ (0.01) $ (0.03) $ 0.22 $ 0.17 $ 0.21 $ 0.25 $ 0.85 Established Products Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 S&T Y/Y growth CC (1,2) 14% 19% 20% 16% 17% n/a 16% 19% 20% 16% 17% S&T revenue $ 37.0 $ 40.6 $ 41.3 $ 41.5 $ n/a $ (0.7) $ (0.7) $ (0.8) $ (2.2) $ 37.5 $ 39.9 $ 40.6 $ 40.7 $ Total revenue $ 67.0 $ 69.0 $ 71.1 $ 73.5 $ n/a $ (1.4) $ (1.5) $ (1.5) $ (4.4) $ 64.9 $ 67.5 $ 69.7 $ 72.0 $ Core operating income (1) $ 12.3 $ 12.9 $ 14.4 $ 15.6 $ 55.2 n/a $ (0.4) $ (0.4) $ (0.4) $ (1.2) $ 12.6 $ 12.6 $ 14.0 $ 15.1 $ 54.3 Core operating margin % (1) 19% 19% 20% 21% 20% n/a 0% 0% 0% 0% 19% 19% 20% 21% 20% Transitioning Product Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 S&T Y/Y growth % 8% 9% 13% 13% 11% n/a 17% 9% 13% 13% 13% S&T revenue $ 13.5 $ 13.8 $ 15.8 $ 15.8 $ 58.9 n/a $ $ $ $ $ 14.6 $ 13.8 $ 15.8 $ 15.8 $ 60.0 Total revenue $ 17.6 $ 17.7 $ 18.9 $ 19.0 $ 73.2 n/a $ $ $ $ $ 18.2 $ 17.7 $ 18.9 $ 19.0 $ 73.8 Core operating income (1) $ (0.0) $ (0.0) $ 0.0 $ 0.0 $ 0.0 n/a $ $ $ $ $ 0.0 $ (0.0) $ 0.0 $ 0.0 $ 0.0 Core operating margin % (1) 0% 0% 0% 0% 0% n/a 0% 0% 0% 0% 0% Notes: 1) Core operating income, adjusted EBITDA, core operating margin, core EPS and constant currency (CC) growth are non GAAP measures. Definitions and a reconciliation to the most directly comparable GAAP measures are included at the end of this document. 2) Q1 updated to reflect actual results. Updated GBP rate for Q2 Q4 from 1.30 USD/GBP to 1.22 USD/GBP. CHF and Euro rates are unchanged at 1.03 USD/CHF and 1.11 USD/Euro respectively. 3) Diluted shares used in earnings per shares above have been updated to reflect actual outstanding shares of 38.0 as of 9/30/16, but not for further share repurchases beyond that date. 7

8 Reconciliation of FY17 Core Guidance to GAAP Guidance (in millions, except for per share amounts) Operating Income (Loss) Operating Margin as a Percent of Revenue Total Bottomline Q1 17 Q2 17 Q3 17 Q4 17 FY17 Q1 17 Q2 17 Q3 17 Q4 17 FY17 GAAP Operating Income (loss) $ (5.9) $ (2.9) $ (0.7) $ 1.8 $ (7.6) (7%) (3%) (1%) 2% (2%) Adjustments: Amortization of Intangible Assets % 7% 7% 6% 7% Equity Based Compensation % 8% 7% 7% 8% Global ERP system implementation costs % 2% 2% 1% 2% Acquisition and integration related expenses % 0% 0% 0% 0% Minimum pension liability adjustments % 0% 0% 0% 0% Core Operating Income $ 12.6 $ 12.6 $ 14.0 $ 15.1 $ % 15% 16% 17% 16% GAAP earnings per share $ (0.28) $ (0.19) $ (0.14) $ (0.07) $ (0.69) Adjustments: Amortization of Intangible Assets Equity Based Compensation Global ERP system implementation costs Acquisition and integration related expenses Minimum pension liability adjustments Amortization of debt issuance and debt discount costs Tax effect on non GAAP income (0.08) (0.12) (0.12) (0.11) (0.43) Core earnings per share $ 0.22 $ 0.17 $ 0.21 $ 0.25 $ 0.85 Notes: 1) 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 are included at the end of this document. 2) The table above presents a reconciliation of our GAAP guidance to our Core guidance. It is impracticable to separately reconcile GAAP guidance to Core guidance for the Established Products and Transitioning Product components of our business, because the non GAAP adjustments affecting such a reconciliation are excluded from our operating segment measures of profit or loss and therefore these amounts are not tracked in or allocated to any individual operating component of our business. 8

9 Reconciliations to the Most Directly Comparable GAAP Results and Definitions of Non-GAAP Financial Measures 9

10 Reconciliation of Non-GAAP Measures Three Months Ended September 30, 2016 Acquisition and Minimum Amortization of Global ERP System Tax Effect on Amortization of Equity-Based Integration- Pension Liability Debt Issuance and Implmentation Non-GAAP GAAP Intangible Assets Compensation Related Expenses Adjustments Debt Discount costs Costs Income Non-GAAP Revenues: % of Revenue Subscriptions and transactions $ 52,132 $ - $ - $ - $ - $ - $ - $ - $ 52,132 63% Software licenses 2, ,121 3% Service and maintenance 27, ,673 33% Other 1, ,158 1% Total revenues 83, , % Cost of revenues: Margins Subscriptions and transactions 23,886 - (367) (126) (14) ,379 55% Software licenses % Service and maintenance 13,285 - (849) - (104) ,332 55% Other % Total cost of revenues 38,177 - (1,216) (126) (118) ,717 Gross profit 44,907-1, ,367 56% Operating expenses: % of Revenue Sales and marketing 18,875 - (3,285) (20) (74) ,496 19% Product development 12,935 - (1,356) (6) (73) ,500 14% General and administrative 12,704 - (2,342) (1,097) (12) - (2,491) - 6,762 8% Amortization of intangible assets 6,285 (6,285) % Total operating expenses 50,799 (6,285) (6,983) (1,123) (159) - (2,491) - 33,758 41% Income (loss) from operations (5,892) 6,285 8,199 1, ,491-12,609 15% Other expense, net (3,935) , (563) -1% Income (loss) before income taxes (9,827) 6,285 8,199 1, ,372 2,491-12,046 14% Provision for income taxes ,978 3,659 4% Net Income (loss) (10,508) 6,285 8,199 1, ,372 2,491 (2,978) 8,387 10% 7.6% 9.9% 1.5% 0.3% 4.1% 3.0% -3.6% Basic net loss per share $ (0.28) Diluted net income (loss) per share $ (0.28) $ 0.22 Shares used in computing net income (loss) per share: Basic 37,940 Diluted 37,940 38,028 10

11 Reconciliation of Non-GAAP Measures Three Months Ended September 30, 2015 Acquisition and Minimum Amortization of Global ERP System Tax Effect on Amortization of Equity-Based Integration- Restructuring Pension Liability Debt Issuance and Implmentation Non-GAAP GAAP Intangible Assets Compensation Related Expenses Expenses Adjustments Debt Discount costs Costs Income Non-GAAP Revenues: % of Revenue Subscriptions and transactions $ 46,197 $ - $ - $ - $ - $ - $ - $ - $ - $ 46,197 56% Software licenses 4, ,115 5% Service and maintenance 30, ,784 37% Other 1, ,785 2% Total revenues 82, , % Cost of revenues: Margins Subscriptions and transactions 20,734 - (372) - 12 (2) ,372 56% Software licenses % Service and maintenance 12,978 - (636) - - (13) ,329 60% Other 1, ,335 25% Total cost of revenues 35,335 - (1,008) - 12 (15) ,324 Gross profit 47,546-1,008 - (12) ,557 59% Operating expenses: % of Revenue Sales and marketing 20,155 - (3,387) - 14 (9) ,773 20% Product development 11,260 - (1,189) - 3 (10) ,064 12% General and administrative 8,823 - (2,004) (110) (49) (2) - (257) - 6,401 8% Amortization of intangible assets 7,279 (7,279) % Total operating expenses 47,517 (7,279) (6,580) (110) (32) (21) - (257) - 33,238 40% Income from operations 29 7,279 7, ,319 18% Other expense, net (3,671) , (510) -1% Income (loss) before income taxes (3,642) 7,279 7, , ,809 18% Provision for income taxes ,011 5,622 7% Net Income (loss) (4,253) 7,279 7, , (5,011) 9,187 11% 8.8% 9.2% 0.1% 0.0% 0.0% 3.8% 0.3% -6.0% Basic net loss per share $ (0.11) Diluted net income (loss) per share $ (0.11) $ 0.24 Shares used in computing net income (loss) per share: Basic 38,004 Diluted 38,004 38,519 11

12 Reconciliation of Adjusted EBITDA Reconciliation of Adjusted EBITDA as a Reconciliation of Adjusted EBITDA percent of revenue Three Months Ended Three Months Ended 09/30/16 9/30/15 09/30/16 9/30/15 GAAP Net loss $ (10,508) $ (4,253) (13%) (5%) Adjustments: Other expense, net 3,935 3,671 5% 4% Provision for income taxes % 1% Depreciation and amortization 4,087 3,077 5% 4% Amortization of acquired intangible assets 6,285 7,279 8% 9% Stock-based compensation expense 8,199 7,588 10% 9% Acquisition and integration-related expenses 1, % 0% Restructuring expenses % 0% Minimum pension liability adjustments % 0% Global ERP system implementation costs 2, % 0% Adjusted EBITDA 16,696 18,396 20% 22% 12

13 Constant Currency Growth Rate Three Months Ended 09/30/16 9/30/15 GAAP % Increase Impact from Currency Constant Rates (1) Subscriptions and Transactions Revenues $ 52,132 $ 46,197 13% 3% 16% Total Revenues $ 83,084 $ 82,881 0% 5% 5% (1) Constant currency information is a non-gaap measure and compares results between periods assuming exchange rates had remained constant period-over-period. We calculate constant currency information by translating prior-period results using current-year GAAP foreign exchange rates. 13

14 Reconciliation of Diluted Core Earnings Per Share Three Months Ended 09/30/16 9/30/15 GAAP diluted net loss per share $ (0.28) $ (0.11) Plus: Amortization of acquired intangible assets Stock-based compensation expense Acquisition and integration-related expenses Restructuring expenses - - Global ERP system implementation costs Minimum pension liability adjustments Amortization of debt issuance and debt discount costs Tax effects on non-gaap income (0.08) (0.13) Diluted core net income per share $ 0.22 $ 0.24 Numerator: Three Months Ended 09/30/16 9/30/15 Core net income $ 8,387 $ 9,187 Denominator: Weighted average shares used in computing diluted earnings per share for GAAP 37,940 38,004 Impact of dilutive securities (stock options, restricted stock awards and employee stock purchase plan) (1) Weighted average shares used in computing diluted core earnings per share 38,028 38,519 (1) These securities are anti-dilutive on a GAAP basis as a result of our net loss, but are considered dilutive on a non-gaap basis in periods where we report non-gaap net income. 14

15 Definition of Non GAAP Financial Measures We have presented supplemental non GAAP financial measures. The presentation of this non GAAP financial information should not be considered in isolation from, or as a substitute for, our financial results presented in accordance with GAAP. Core operating income, core earnings per share and constant currency information are non GAAP financial measures. Core net income and core earnings per share exclude certain items, specifically amortization of acquired intangible assets, stock based compensation, acquisition and integration related expenses, restructuring related costs, minimum pension liability adjustments, non core charges associated with our convertible notes, global ERP system implementation costs and other non core or non recurring gains or losses that arise from time to time. Non core charges associated with our conver ble notes consist of the amor za on of debt issuance and debt discount costs. Acquisi on and integra on related expenses include legal and professional fees and other direct transaction costs associated with business and asset acquisitions, costs associated with integrating acquired businesses, including costs for transitional employees or services, integration related professional services costs and other incremental charges we incur as a direct result of acquisition and integration efforts. Global enterprise resource planning (ERP) system implementa on costs relate to direct and incremental costs incurred in connection with our implementation of a new, global ERP solution and the related technology infrastructure. Adjusted EBITDA represents our GAAP net income or loss, adjusted for charges related to interest expense, income taxes, depreciation and amortization, and other charges, as noted in the reconciliation that follows. 15