Investor Briefing Q4 FY18

Transcription

1 Investor Briefing Q4 FY18 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, 2017 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 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) Leveraging product investment to drive subscription and transaction growth Investment in market leading solutions for large and growing markets $284 million run rate subs and trans revenue 84% recurring revenue Leading payments and cash management platform 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 Bottomline by the Numbers More than 10,000 Corporate Customers More than 1,100 Banking Customers Operating in 92 countries across 6 continents 90% of the top U.S. banks use Bottomline solutions Billions of domestic and crossborder transactions completed each year 400k Corporate customers will be live on our payments and cash management platforms 385k Paymode-X vendors $200b Paymode-X network spend 5

6 $ 300m Subscription & Transaction Revenue 24% CAGR $ m Adjusted EBITDA 12% CAGR FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19G 0 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. CAGR measured to FY19 guidance 6

7 Business Payment Complexity PAYER PAYMENT RECIPIENT 7

8 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 8

9 Investment Highlights Large market opportunity Leading business payments product set Driving subscription & transaction revenue Q4 = 20% Growth Winning new business $90 million last year Attractive lifetime customer value years or more 9

10 MARKET- LEADING PRODUCTS 10

11 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 11

12 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 BANK S COMMERCIAL CUSTOMERS GET Market-leading Solution Aité Survey of Cash Management Vendors 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 Best Overall Partner Leadership Position Best User Experience Best Small Business Capabilities Most Open Architecture 12

13 Legal Spend Management The leading way insurance companies manage their legal spend and relationships Streamlining and Automating Relationships with Law Firms LEGAL INVOICE AND SPEND MANAGEMENT Paid as a percentage of legal bill 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 Top-Tier Client Base The Largest Electronic Bill Review Network , Clients Law Firms Insurance Companies 13

14 FINANCIAL HIGHLIGHTS 14

15 Subscription & Transaction Revenue Growth Product investments driving 15 20% organic subscription and transaction growth Most recent quarter - 24% growth in fully transitioned products - 20% growth overall Current run rate of $284 million Targeting $300 million for FY FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19G

16 Consistently Profitable Model 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. 16

17 Predictable, Profitable Revenue 67% of revenue is subscription and transaction 85% of revenue is recurring Subscription and transaction growth driving margin expansion Recurring Revenue Subscription and Transaction Revenue 64% 80% 84% 85% % 57% 64% 67%

18 Q4 FY18 Results Established Products Transitioning Products Consolidated Bottomline Subscription and Transaction Revenue Growth Subscription and Transaction Revenue Total Revenue Operating Income Margin Operating Income EBITDA EBITDA Margin EPS 24% $54.3M $79.8M 20% $16.0M % $16.8M $26.7M 18% $4.8M % $71.1M $106.5M 19% $20.7M $26.1M 24% $0.35 Well above 15-20% target $18 million of annual subscriptions currently in implementation & not yet live Top end of 15-20% target Attractive economic model Margins will expand as new subscriptions go live $26.1 million EBITDA is up 25% year-over-year, reflecting attractive business model 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. Increased 25% year-over-year 18

19 Investment Highlights Large market opportunity Leading business payments product set Driving subscription & transaction revenue Q4 = 20% Growth Winning new business $90 million last year Attractive lifetime customer value years or more 19

20 $ 300m Subscription & Transaction Revenue 24% CAGR $ m Adjusted EBITDA 12% CAGR FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19G 0 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. CAGR measured to FY19 guidance 20