INTEGRATED RESEARCH LIMITED — AGM Information 2018

Nov 14, 2018

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Integrated Research Limited (IRI) Annual General Meeting FY18

November 15 2018 ABN: 76 003 588 449

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6 of the
9 of the Top
125+ of the Top 10
10
Fortune 500 Automotive
US banks
Companies
6 of the
7 of the 10 Top 10
biggest Fin Services
Telcos Companies
Globally
Creating clarity and insight in a world of connected devices
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FY18 Key Highlights

Financial Performance

Financial Results

• UC continues to grow

•	Licence Sales	down	2%	to	$52.6m
•	Total Revenue	flat at			$91.2m
•	Net Profit After Tax	up	4%	to	$19.2m

• Cyclical downturn in infrastructure

• Europe underperformance

• Testing and Consulting growth

Recurring Revenue

Unified Communication

• Diversified portfolio

• Cisco licence growth >60%

• Less nonrecurring perpetual business

• Avaya licence decline of 20%

• Strong UC renewals pipeline

Results in Constant Currency

• Strong growth from service providers

• Reseller agreement signed with Cisco & Avaya

• Licence Sales down 1%

• • Total Revenue up 1%

• • Net Profit After Tax up 4%

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Product Development

• Major upgrades to all product lines

• AI driven speech analytics

• New Cloud Analytics platform in H2

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	FY18 30 June 2018 A$000’s 30 June 2017 A$000’s % change
	Licence fees 52,591 53,441 (2%)
	Maintenance fees 26,010 26,871 (3%)
	Testing solutions revenue 5,207 4,073 28%
	Consulting fees 7,367 6,784 9%
	Total revenue 91,175 91,169 0%
	R&D expenses net 15,335 14,862 3%
	Sales, consulting & marketing expenses 45,703 43,605 5%
	General & Administrative expenses 5,849 6,086 (4%)
	Total expenses 66,887 64,553 4%
	Profit before tax 26,271 25,881 2%
	Profit after tax 19,180 18,520 4%

FY18 Financial Results

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Revenue '000
95,000
75,000
55,000
35,000
15,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
AUD USD
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• Revenue flat in A$

• Testing & Consulting positive contributions

• Continuing investment in development

• Expenses up 4% (staff numbers up 16% to 260)

• Foreign currency gain

• PAT up 4%

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Financial Position & Performance

	June	June
	2018	2017
	A$000’s	A$000’s
Cash at bank	11,238	14,113
Current receivables	44,186	35,998
Noncurrent receivables	26,892	23,299
Intangible assets	21,938	19,934
Current deferred
revenue	22,643	20,077
Deferred consideration
for acquisition (non
current)	-	1,476
Net assets	57,838	48,520

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Dividends (cents)
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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Shareholder Returns

	2018	2017	2016
Basic earnings per share	11.19¢	10.86¢	9.42¢
Dividends per share	6.5¢	6.5¢	6.5¢
Franking percentage	100%	100%	58%
Return on equity	33%	38%	39%

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Business Highlights

Company Summary

Key Differentiators

• 1 Vendor in User Experience & Performance Management for UC, Payments & Infrastructure

• 1 Vendor in User Experience & Performance 1 Management for UC, Payments & Infrastructure Founded: 1988 Headquarters: Sydney 2. 2 Provide real-time clarity & insight into critical Employees: ~260 systems performance FY2018 Revenue: $91M (95% offshore) 3. 3 Maximise global market access through direct sales FY2018 NPAT: $19.2M (up 4%) & partner channels 4. 4 Differentiated, scalable technology based on single code base 5 5. Diversified product portfolio backed by deep R&D Tier One Global Customers Global Footprint 1200+ service providers and enterprise customers worldwide 17M endpoints under management Minneapolis London Dusseldorf High retention rates for all products Denver Washington, DC

• Maximise global market access through direct sales & partner channels

• 1200+ service providers and enterprise customers worldwide

• 17M endpoints under management

• High retention rates for all products

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• 125+ of Global Fortune 500

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Singapore
Sydney
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• 4/5 Top Global Card Schemes

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• 9/10 Top US Banks

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Global customer base in 60+ countries

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Our Leadership Team

We have invested in our leadership capability to execute our strategy and deliver growth for shareholders over the short and long term

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John Merakovsky Peter Adams
MD & CEO CFO
Andre Cuenin
Kevin Ryder
President,
Americas and Global Chief Marketing &
Customer Officer
Alliances
Greg Clancy Michael Tomkins
Chief Product Officer Head of Development
Jason Barker Vanessa Walker
SVP APAC & MEA GM People & Culture
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Our Customers

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Strong Foundation for Growth

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Our business fundamentals are strong:

• Sound business model

• Diverse sources of income

• Global customer base across many verticals/geographies

• High retention rates and 88% recurring revenue

• R&D investment driving innovation, new products and future growth

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FY19 Growth Drivers

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Multiple independent growth drivers
mitigate risk HCS-G
Cloud
Analytics
Payments
CRA
SolutionsPlus
Service
Providers
High Confidence Less Certainty
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Analyst View – UC and Collaboration Market

“Hybrid-cloud solutions with single pane of glass will succeed”

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44M UCaaS users Cloud Conferencing 16M Collaboration Users
23% CAGR +15% 38% CAGR
40%
90%
Highly fragmented market, Voice traffic is a Workforce rated QoS as
no-one >5% conference call highest requirement
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Source: Frost & Sullivan, Wainhouse & Nilson Research 2017

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Aggregation

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Benchmarking

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Correlation

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Predictive Analytics

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Cloud Analytics Direction

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Thank you.

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