INTEGRATED RESEARCH LIMITED — AGM Information 2017

Nov 15, 2017

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Integrated Research Limited (IRI) FY2017 Annual General Meeting

16 November, 2017 ABN: 76 003 588 449

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6 of the
125+ of the Top 10
Fortune 500 Automotive
Companies
6 of the
Top 10
Fin Services
Companies
Globally
Innovation
Award Excellence Award Winner
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10 of the
125+ of the
Top 10
Fortune 500
US banks
7 of the 10
biggest
Telcos
Innovation
‘Top Value Vendor’ Award
Global Commerce Depends on IR
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Key Highlights

Financial Results

• Licence Sales up 17% to $53.4m

• • Total Revenue up 8% to $91.2m

• • Net Profit After Tax up 16% to $18.5m

• All regions growing

• All product lines growing

• 61% improvement in cashflow

• No debt

Recurring Revenue Growth

• Revenue base continues to build

• Less non-recurring perpetual business

• Strong UC renewals pipeline

• Doubling of Microsoft revenue over FY16

• Balanced portfolio of Cisco, Avaya & Microsoft

• Avaya emergence from Ch 11 imminent

• Additional 39 certified Microsoft partners

Results in Constant Currency

•	Licence Sales	up	22%
•	Total Revenue	up	13%
•	Net Profit After Tax	up	28%

• Prognosis 11.1 and 11.2 released

• CRA – speech detection

• Microsoft UC assessor

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	Financial Results • Revenue up 8% (13% Constant currency) • Strong performance from Payments and Infrastructure • Continuing investment in development • PAT up 16% (28% Constant currency) 3 30 June 2017 A$000’s 30 June 2016 A$000’s % change Licence fees 53,441 45,725 17% Maintenance fees 26,871 27,153 (1%) Testing solutions revenue 4,073 4,288 (5%) Consulting fees 6,784 7,366 (8%) Total revenue 91,169 84,532 8% R&D expenses net 14,862 13,582 9% Sales, consulting & marketing expenses 43,605 44,983 (3%) General & Administrative expenses 6,086 5,962 2% Total expenses 64,553 64,527 0% Profit before tax 25,881 21,386 21% Profit after tax 18,520 16,029 16% 15,000 35,000 55,000 75,000 95,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Revenue'000 AUD USD	Financial Results • Revenue up 8% (13% Constant currency) • Strong performance from Payments and Infrastructure • Continuing investment in development • PAT up 16% (28% Constant currency) 3 30 June 2017 A$000’s 30 June 2016 A$000’s % change Licence fees 53,441 45,725 17% Maintenance fees 26,871 27,153 (1%) Testing solutions revenue 4,073 4,288 (5%) Consulting fees 6,784 7,366 (8%) Total revenue 91,169 84,532 8% R&D expenses net 14,862 13,582 9% Sales, consulting & marketing expenses 43,605 44,983 (3%) General & Administrative expenses 6,086 5,962 2% Total expenses 64,553 64,527 0% Profit before tax 25,881 21,386 21% Profit after tax 18,520 16,029 16% 15,000 35,000 55,000 75,000 95,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Revenue'000 AUD USD

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		June	June
		2017	2016
		A$000’s	A$000’s
	Cash at bank	14,113	8,544
	Current receivables	35,998	29,017
	Noncurrent receivables	23,299	23,373
	Intangible assets	19,934	21,972
	Current deferred revenue	20,077	20,363
	Deferred consideration for
	acquisition (non current)	1,476	2,036
	Net assets	48,520	41,046

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Balance Sheet

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Dividends (cents)
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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Shareholder Returns

	2017	2016	2015
Basic earnings per share	10.86¢	9.42¢	8.41¢
Dividends per share	6.5¢	6.5¢	7.5¢
Franking percentage	85%	58%	35%
Return on equity	38%	39%	39%

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	Product Line Performance • Microsoft sales doubled over FY16 • Avaya Ch 11 softens UC growth Revenue by Product Line ($A) June 2017 A$000’s June 2016 A$000’s % change Constant currency % change Unified Communications 51,132 50,778 1% 6% Infrastructure 24,449 20,812 17% 22% Payments 8,804 5,576 58% 65% Consulting Services 6,784 7,366 (8%) (3%) Total Revenue 91,169 84,532 8% 13% ‐ 10,000 20,000 30,000 40,000 50,000 60,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Unified Communications Revenue '000 AUD USD 8year CAGR 21%	Product Line Performance • Microsoft sales doubled over FY16 • Avaya Ch 11 softens UC growth Revenue by Product Line ($A) June 2017 A$000’s June 2016 A$000’s % change Constant currency % change Unified Communications 51,132 50,778 1% 6% Infrastructure 24,449 20,812 17% 22% Payments 8,804 5,576 58% 65% Consulting Services 6,784 7,366 (8%) (3%) Total Revenue 91,169 84,532 8% 13% ‐ 10,000 20,000 30,000 40,000 50,000 60,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Unified Communications Revenue '000 AUD USD 8year CAGR 21%
		8year CAGR 21%
		• Microsoft sales doubled over FY16 • Avaya Ch 11 softens UC growth 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 AUD USD

Product Line Performance

• Strong Payments & Infrastructure sales

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Growth Strategy Update

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WHO WE ARE

IR

Capabilities

WHAT WE DO

IR is the leading global provider of user experience and performance management solutions for Unified Communications, Payments and IT Infrastructure.

Prognosis provides best in class performance management across unified communications, contact centers and payments ecosystems cloud, hybrid or on-premises.

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Value Proposition

Competitive Advantage

• Prognosis end-to-end Unified Communications, Payments and Infrastructure experience

• management software and testing services

• optimize operations of mission critical systems

• through insight into real time and historical events.

  • Prognosis is real-time, scalable, extensible & flexible

  • Prognosis supports multiple platforms, vendors and applications

  • IR has 1,200+ enterprise customers globally

• Intelligent analytics establish patterns and root

• causes speeding troubleshooting and problem resolution.

• IR has 125+ of the Fortune 500 customers

• Evolving prediction capabilities, automation and  IR has a world-class R&D capability

• self healing help Prognosis optimize operations and prevent issues occurring at all.

WHY CUSTOMERS

BUY

WHY WE SUCCEED

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Market & Technology Leadership

The Company: IR

• Global, publicly listed , profitable and growing

• Over 1,200 enterprise customers worldwide

• 125+ Fortune 500 customers

• 5 of the 6 ‘Leaders’ in the Gartner Communications Outsourcing Magic Quadrant are IR Customers

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• Microsoft Gold Communications Partner

The Solution: Prognosis

• UC & CC Market Leader 16+ million managed endpoints

• Only solution certified across current Microsoft, Cisco & Avaya platforms

• Avaya’s only Sponsored & Recommended solution

• Only Microsoft Skype for Business Online certified solution

• 4 of the top 5 Payment transaction acquirers worldwide

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• 3 of the top 5 Payment card schemes worldwide

• 100s of millions of Payments transactions monitored daily

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Prognosis architecture supports future growth

The core platform enables quick product line expansion

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Communications Customer Risk & Compliance Data Analytics
Experience Experience
Management Management • Call Recording • Benchmarking
Assurance • Anomaly Detection
•• Pre-DeploymentVoice Quality •• Pre-DeploymentIVR •• Trading TurretsUC Fraud • Intelligent Root Cause Analysis
•
• Video Quality • Voice Channel Business Intelligence
•
• Adoption • Omnichannel Multiple data sources
• Mobility • Outbound Dialler (Internet of Things)
• Work from home agent
Alerting
API Layer
Operational
Automation Testing Licensing and Billing
Reporting Collection
Layer
Core Platform (e.g. SSO, On Premises Agent, Security, etc.)
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“UCC has become a crucial technology for success in digital transformation initiatives, yet many organizations face performance issues and consequently, lower-thanoptimal user adoption, because they aren’t leveraging the right management tools”

~ Robin Gareiss President, Nemertes Research

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Top Value Vendor

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Market Recognition

“..we wanted to formally recognize those companies that demonstrated leadership in innovation and unwavering commitment to helping our mutual customers attain new successes in their respective business operations”

“IR was named as an IDC Innovator for its competitive advantage derived from its unique intellectual property and 100% software-based probeless design… Enterprises and Service Providers can deploy IR Prognosis to bring real-time visibility, insight and control to complex , multivendor UC and contact centers”

~ Eric Rossman VP Developer Relations, Avaya

~ Rich Costello Senior Analyst, IDC

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Excellence Award Winner

Top Innovator

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UC Growth: All routes covered

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• Cisco’s biggest customers and partners continue to choose Prognosis

• FedRamp upside still to be realised

• Deepening partnership between IR and Cisco

• SfB revenues double, growth continues

• 39 new Microsoft partners recruited to IR Global Partner Program

• Prognosis 11.3 released with significant new support for SfB

• Success with large enterprise customers

• Avaya’s Plan Support Agreement to emerge from Chapter 11

• New CEO, networking business sold, UC & CC will be sole focus

• Potentially a H2 story

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Thank you. Questions?

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