INTEGRATED RESEARCH LIMITED — AGM Information 2007

Nov 12, 2007

Integrated Research Limited 2007 Annual General Meeting

13 November 2007

ABN: 76 003 588 449

Performance monitoring software for business-critical systems

CFO’s Presentation

Stephen Rorie

Performance monitoring software for business-critical systems

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FY 2007 performance
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	30 June 2007 AUD$m’s	30 June 2006 AUD$m’s	% change
Licence fees	19.5	18.6	5%
Maintenance fees	15.9	15.4	3%
Other	1.0	0.5	100%
Total revenue	36.4	34.5	6%
R&D expenses	6.4	6.7	(4%)
Gross R&D spending	7.8	7.3	7%
SG&A expenses	23.0	20.3	13%
PBT	7.5	7.9	(5%)
PAT	5.4	*7.0	(23%)

• Includes $806k Franking Deficits Tax offsets

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R&D spending
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	2007 AUD$000’s	2006 AUD$000’s	% change
Gross spending	7,831	7,348	7%
Capitalised	5,454	4,657	17%
Capitalised %	70%	63%
Amortised	3,992	3,996
Net expense	6,369	6,687	(5%)
% of revenue	18%	19%

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Other key metrics
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	30 June 2007	30 June 2006	% Change
Basic EPS (cents)	3.3	4.2	(21%)
Return on Equity	22%	30%	(27%)
Dividend per share –	3.0	2.5	20%
unfranked (cents)
Net Cashflow from Operations	7,638	5,085	50%
(AUD$000’s)
DSO (days)	81	96	16%

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Balance sheet
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Key balance sheet items

	June 2007 AUD$000’s	June 2006 AUD$000’s
Cash	13,286	10,736
Receivables	11,301	13,615
Development Cap.	11,365	9,567
Deferred Revenue	10,279	10,163
Net assets	24,513	23,208

Performance monitoring software for business-critical systems

CEO’s Presentation

Mark Brayan

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2007 Results
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Revenue by platform over time (in AUD$ millions)

• Total revenue up 6% on 2006

• 44% of revenue recurring maintenance

• IP Telephony revenue up 80% on 2006

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Non-Stop Windows / Unix IP Telephony
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2007 Results
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Sales by platform (in AUD$ millions)

• Less dependence on Non-Stop sales

• Increase in IPT sales from 17% to 30% of total

Non-Stop Windows / Unix IP Telephony

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2007 Results
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New customers by platform

	2005	2006	2007
Non-Stop	15	15	14
IPT / Windows / Unix	43	51	72

• Non-Stop sales steady

• • IPT / Windows / Unix up 41% on 2006

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5-year revenue history
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US$ (millions)
Maintenance Licence Fees Other Revenue
35
30
25
20
15
10
5
0
2003 2004 2005 2006 2007
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A$ (millions)
Maintenance Licence Fees Other Revenue
40
35
30
25
20
15
10
5
0
2003 2004 2005 2006 2007
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80% growth 2003 to 2007

29% growth 2003 to 2007

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Sales by region - FY 2003 – 2007
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Americas – US$ millions

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UK/Europe – GBP millions

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Asia Pacific – US$ millions

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First 60 Days
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• Market conditions are favourable

• IP Telephony growing strongly

• We are recognised as leading ISV

• Strong customer and revenue base

• Enables investment in growth

• High customer retention and multi-product customers

• Sound strategy

• Based on core platform – competitive and sustainable

• Proven success with Non-Stop –replicating with Windows / Unix and IPT

• Success relies on execution and management

• Requires solid sales execution

• Improve communication and alignment

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Execution Depends on Employees
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• Employee Survey Results:

Do you understand our strategy?

Do you enjoy working at IR?

What are our strengths?

Performance monitoring software for business-critical systems

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IP Telephony Market Trends
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• IPT Deployments increasing

• Many companies have started pilots or

• deployment

• Deployments taking longer than expected

• Management requirements will grow

• Requirement for management tools as deployments scale

• Multi-vendor deployments growing

• Compelling ROI for IPT management

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• Analyst support for Prognosis

• Analysts praise Prognosis for multi-vendor support and functionality

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Looking Ahead
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• Core product architecture remains our competitive advantage

• As powerful and unique today as 19 years ago

• All products leverage core for speed to market

• Maintain leadership in Non-Stop

• Ongoing R&D

• Continued focus on sales

• Focus on cross-selling Windows / Unix

• Non-Stop customers value our products

• Benefit from single view of enterprise

• Drive IPT for growth

• Focus on sales execution and scale

• Invest in product enhancement and expansion

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Performance monitoring software for business-critical systems

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Focus Areas
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• Sales Execution

• Define and manage to a replicable process

• • Improve hiring and training

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• Process and scalability

• Improve efficiency in all areas

• CMMI project in R&D

• Leadership and management

• Improve communication and alignment

• Ensure consistent management practices

• Drive commitment and accountability

Performance monitoring software for business-critical systems

Integrated Research Limited 2007 Annual General Meeting

13 November 2007

ABN: 76 003 588 449

Performance monitoring software for business-critical systems