INTEGRATED RESEARCH LIMITED — AGM Information 2024

Nov 24, 2024

Integrated Research Ltd > ABN 76 003 588 449 Level 9, 100 Pacific Highway, North Sydney NSW 2060 Australia t: +61 (2) 9966 1066 e: InfoAP@ir.com

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25 November 2024

ASX Market Announcements Office Australian Securities Exchange

2024 Annual General Meeting

Integrated Research Limited (ASX: IRI) re-submits its presentation for today’s Annual General Meeting. There was an error on slide 7 of the presentation, which has now been corrected.

By authority of the Board.

Will Witherow Company Secretary Integrated Research Limited ABN 76 003 588 449

1 www.ir.com

Integrated Research Limited (ASX: IRI) FY2024 Annual General Meeting

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25 November 2024

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Disclaimer

SUMMARY INFORMATION

This document and the associated transcript (together “the presentation”) has been prepared by Integrated Research Limited (ABN 76 003 588 449) (IRI). The presentation provides general background information about IRI's activities current at the date of preparation. IRI is not responsible for updating, and does not undertake to update, the presentation. It contains information in a summary form and does not purport to be complete. It should be read in conjunction with IRI's other announcements released to ASX (available at www.asx.com au).

NOT INVESTMENT ADVICE

The information contained in the presentation does not constitute investment or financial product advice or a recommendation to acquire shares or other financial products. It does not take into account the investment objectives, financial situation or needs of any particular investor. Investors should consider these factors, with professional advice if appropriate, before making an investment decision.

FINANCIAL INFORMATION

All dollar values are in Australian Dollars (A$) unless stated otherwise. All financial information is presented in respect of the year ended 30 June 2022 unless stated otherwise. The presentation contains certain non-IFRS financial measures that IRI believes is relevant and appropriate to understanding its business. The presentation uses proforma subscription revenue, which is used consistently without bias year on year for comparability and to present a clear view of underlying results. The basis of preparation and a reconciliation to statutory results is provided in the appendix to this presentation. A number of figures, amounts and percentages in the presentation are subject to the effect of rounding.

FORWARD LOOKING STATEMENTS

The presentation contains certain "forward-looking statements”. The words “anticipate”, "believe", “expect”, "project", "forecast”, “estimate”, “likely”, "intend”, “should", “could", "may", "target", “plan” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. While due care and attention has been used in the preparation of forward-looking statements, they are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors, some of which are beyond the control of IRI, that may cause actual results, conduct, performance or achievements to differ materially from those expressed or implied in such statements. There can be no assurance that the actual outcomes will not differ materially from these statements. You are cautioned not to place undue reliance on forward-looking statements, particularly in light of the current economic climate and the significant volatility, uncertainty and disruption caused by the outbreak of COVID-19. Neither IRI nor any other person gives any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in the presentation will actually occur. All forward looking statements in the presentation reflect views only as at the date of this presentation. Except as required by applicable law or the ASX Listing Rules, IRI disclaims any obligation or undertaking to publicly update any forward-looking statements, whether as a result of new information or future events or otherwise.

PAST PERFORMANCE

Statements about past performance are not necessarily indicative of and should not be relied upon as an indication of, future performance.

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NOT AN OFFER

The presentation is for information purposes only and is not a prospectus, product disclosure statement or other disclosure or offering document under any law. The presentation does not constitute or contain an offer, invitation, solicitation, recommendation, advice or recommendation with respect to issue, purchase, or sale of any shares or financial products in any jurisdiction. The presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States or to any 'US person’ (as defined in Regulation S under the US Securities Act of 1933, as amended (Securities Act) (US Person)). Securities may not be offered or sold in the United States or to US Persons absent registration or an exemption from registration. IRI shares have not been, and will not be, registered under the Securities Act or the securities laws of any state or jurisdiction of the United States.

GENERAL

Each of IRI, its related bodies corporate and their respective affiliates, officers, employees, agents and advisers, to the maximum extent permitted by law, expressly disclaim any and all liability in respect of any expenses, losses, damages or costs (including indirect or consequential loss) arising from or in connection with this presentation or the information contained in or omitted from it, including, without limitation, any liability arising from fault, negligence or otherwise. No representation or warranty, express or implied, is made as to the fairness, currency, accuracy, reliability or completeness of information contained in the presentation. The information in the presentation remains subject to change without notice.

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How to ask a Question?

• To ask a written question select the Q & A icon

• Select the topic your question relates to from the drop-down list

• Type your question in the text box and press the send button

• To ask a verbal question, follow the instructions below the broadcast window

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How to Vote?

• When the poll is open, select the vote icon at the top of the screen

• To vote, select either For, Against or Abstain

• You will see a vote confirmation

• To change or cancel your vote “click here to change your vote” at any time until the poll is closed

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Items of Business
2A Re-elect Mr Sam Sample as a Director
FOR AGAINST ABSTAIN
2B Re-elect Ms Jane Citizen as a Director
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Chair’s Address Peter Lloyd

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CEO Address Ian Lowe

~~FY2~~ 4 Key Highlights

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A year of strong financial performance and people / strategy reset, designed to drive growth

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Strong Financials Robust Growth in Reset For Product Led
Americas Growth Strategy
TCV up 22% Americas TCV up ~70% Focus on customer led
Revenue up 19% Europe TCV down ~25% innovation and M&A
NPAT up 963% initiatives
Board Refresh Balance Sheet Re-instated
Flexibility Dividend
Growth oriented Board Net cash of $31.9m to Declared 2.0 cents per
appointed assist in driving growth share, fully franked,
strategy dividend
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*Jun-23 NPAT excludes $31.8M impairment of goodwill and intangible assets

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~~Ful~~ l-Year Performance Review: Statutory (A$M)

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Improving market dynamics and prudent cost management drives profits

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83.3
69.8 76.3 72.4
CASH RECEIPTS FROM
REVENUE
19% CUSTOMERS 5%
Jun-23 Jun-24 Jun-23 Jun-24
24.6
12.1 13.8 13.0
NET OPERATING
EBITDA 103% CASHFLOW 6%
Jun-23 Jun-24 Jun-23 Jun-24
31.9
27.1
18.6
NPAT * 2.6 963% NET CASH 72%
Jun-23 Jun-24 Jun-23 Jun-24
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*Jun-23 NPAT excludes $31.8M impairment of goodwill and intangible assets

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~~Ful~~ l-Year Performance Review: Proforma (A$M)

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Strong year for renewals

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83.9
68.5 67.5 66.6
TOTAL CONTRACT ANNUAL RECURRING
VALUE (TCV) 22% REVENUE [1] 1%
Jun-23 Jun-24 Jun-23 Jun-24
75.6 74.8
PROFORMA
17.5 16.7
PROFORMA REVENUE 1% EBITDA 5%
Jun-23 Jun-24 Jun-23 Jun-24
101% 97%
23% 22%
CASH CONVERSION
EBITDA MARGIN 1ppt RATE [2] 4ppt
Jun-23 Jun-24 Jun-23 Jun-24
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Note: Proforma revenue is a non-statutory alternate view of term licence and maintenance revenue (unaudited); refer to appendix for calculations 1. ARR (Annual Recurring Revenue) means monthly recurring revenue as of 30[th] of June multiplied by 12 2. Cash conversion rate equals cash receipts divided by proforma revenue

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Capital Management and Dividend

IR’s Capital Allocation Priorities:

1. Invest in innovation:

• Allocate up to an additional 10% of TCV annually to product innovation for new revenue streams

• M&A considered if right-sized, synergistic, in growth markets and supportive of product strategy

• Targeting 3 – 5-year payback

2. Contingency Reserves:

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• Maintain adequate working capital to support day-to-day operations and manage cash needs

3. Shareholder returns:

• Board declared a $0.02 dividend, fully franked

• Dividend policy as a minimum 25% of Free Cash Flow (with Board discretion), to provide flexibility & sustainability

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IR operates in the Observability market

What is ‘Observability’?

Real time observation of critical technology & infrastructure performance, including:

• Log management

• Application performance monitoring

• Infrastructure monitoring

Use cases include:

• Performance management/optimisation

• Security

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• Compliance

The market is moving:

• Data driven technology such as Machine Learning & AI is opening up a new wave of innovation

• Enterprise clients are looking for new products that create new value

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IR’s Observability Offering

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powered by Prognosis

Collaborate Transact Infrastructure Enterprise UC Cards NonStop Contact Center High Value Payments Service Provider Real-Time Payments

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Global, blue chip client base Long-term, high value relationships based on mission critical solutions

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|Tech | Telco|BFSI|Health | Gov | Edu|Retail |Industrial | Other
5/20 largest Australian
companies(market cap)|
|---|---|---|---|
||6/10 top USA banks|5/25 Fortune 500 top
companies||
|5/10 top telcos||||

Observability is a non-discretionary item

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40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Less than $25,000- $49,000- $100,000- $250,000- $500,000- $1 million
$25,000 $49,000 $99,999 $249,000 $499,999 $999,999 or more
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• For approximately 53% of revenue generating services, the cost for 1 hour of critical infrastructure downtime is greater than USD $100k

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Observability is a large and growing market… (USD investment in Observability solutions)

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• Adoption of cloud based solutions is driving market growth

• On-Premises remains a large market and holding ground

• Enterprise clients are moving to a hybrid model: combination of on-premises + cloud

• IR provides both on-premises and cloud solutions

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IR provides solutions for both the on-premises and cloud segments…

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• IR offering is well differentiated in the low growth ‘on-premises’ segment, but not well differentiated in the high growth ‘cloud’ segment

• Clear product differentiation aligned to the high growth cloud segment best positions the company for growth

• The market is evolving: enterprise clients are looking for new products to extract new value from their Observability data

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Growth in non-renewal revenue is central to sustained growth

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$100
$90 • YOY revenue contribution from
$80 contract renewals is variable,
$70 and was significant in FY24.
$60
$50 •
New products aligned with the
$40 high growth cloud segment:
$30 –
Maximises our growth
$20 opportunity
$10 –
Differentiates our cloud
- offering
FY18 FY19 FY20 FY21 FY22 FY23 FY24
Total Contract Value (excl Services) Renewal Contract Value (excl Services)
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What does it mean..?

We need to evolve for growth.

• Generate new revenue by creating the new products we know enterprise clients need:

• New revenue from existing clients

• New revenue from new clients

• Clearly differentiate our cloud based offering

• Focus the sales approach:

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• Target enterprise clients that meet our ideal client profile (ICP): enterprises of 10,000+ seats managing a hybrid technology ecosystem (on-prem + cloud)

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Evolve our value proposition with new products & capabilities

Future State

Current State

• What is going wrong in my technology ecosystem?

• What does it mean for my customers and my employees?

• What can I anticipate might go wrong in the future and how do I avoid it?

• I’ve identified the problem, how do I fix it?

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M REPORTING
O
N
ANALYTICS &
I
ALERTS
T
O
R PREDICTIVE
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EXPERIENTIAL
REMEDIATE
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User experience metrics: customers and employees

Remedy performance issues across the IT ecosystem directly from Prognosis.

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PREDICTIVE
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Advance predictive capabilities via machine learning and AI (IR Labs)

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Leveraging existing assets

• Utilise the data, IP and expertise we already have

• IR Labs capability (Machine Learning & AI)

• Global, blue chip client base

• Global sales organisation

powered by Prognosis IR Labs Collaborate Transact Infrastructure Enterprise UC Cards NonStop Big Data, Real Time Contact Center High Value Payments Machine Learning Service Provider Real-Time Payments AI

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In Summary…

• Observability is a large and growing market opportunity ($28B by 2027)

• IR has a proven, established offering and a global blue chip client base

• Generate more new client revenue by creating new capabilities

• Continue to focus the sales approach (ICP)

• Modernise & simplify

• Management discipline: execute within the existing budget framework

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FY25 Priorities & Observations

• New product capabilities to launch in 2H FY25 and ongoing

• Innovation via IR Labs to accelerate

• Value of FY25 contract renewals softer than FY24 and weighted to 2H

• Targeting improving renewal rate for Collaborate, to wash through off the back of

• focus on ICP

• Value of sales pipeline attributable to new clients/revenue expected to continue to lift

• Revenue contribution from new clients/revenue to improve in line with the current sales cycle

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• The effective tax rate is expected to normalise in FY25 given brought forward R&D tax credits utilised in FY24

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Our strengths are considerable…

• Foundational elements of IR’s business remain critically valuable:

• Independence : IR is a specialist monitoring technology provider, not a vendor

• Aggregation : the Enterprise technology supply chain is becoming more fragmented and more complicated - IR aggregates multiple vendors into a single view encompassing on-premises and cloud based solutions

• Vendor agnostic : IR remains vendor agnostic, compatible with dozens of global

  • technology vendors including those with the largest market share

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• IR has market leading knowledge and expertise (we can execute)

• IR has a superior client register (we are trusted)

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Vision…

To become the world’s leading independent provider of business critical technology & infrastructure intelligence.

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Peter Lloyd Chair

Ladies & Gentlemen: Voting is Now Closed

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Glossary

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Glossary
Annual Recurring Revenue (ARR)	equals to the monthly recurring revenue at the end of the period multiplied by 12.
Cash conversion rate	equals cash receipts divided by proforma revenue.
Customer retention	equals the opening customer count for the reporting period less customers who are deemed to cease purchasing from IR in the reporting period; this total is then divided by the opening balance and presented in percentage terms.
Proforma subscription revenue	provides an alternate view of underlying performance by restating term licence on a recurring subscription basis (i.e., over time) plus other recurring revenues such as maintenance fees and cloud services. Note: the current statutory model recognises licence fee revenue upfront at the commencement of the contract.
Net revenue retention	equals recurring revenue generated from existing customers over a set period.
Proforma revenue	equals proforma subscription revenueplus other non-recurring revenue streams such as perpetual licence fees, professional services and one-time through testing services
Total Contract Value (TCV)	means the total value of a revenue generating contract written in the period of performance less any residual value from a previous related contract. The value includes software licence and related maintenance, cloud, testing and consulting services bookings.
Capacity sell	existing products sold to existing customers due to increase in usage, sometimes referred to as upsell.

Full Year proforma subscription revenue

Reconciliation of statutory to proforma revenue

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Full Year Revenue 2021 2022 2023 2024 2021	2022 2023 2024
A$M A$M A$M A$M
Infrastructure 18.3 17.8 18.6 19.2 -15%	-2% 4% 4%
Transact 10.0 10.9 11.5 12.7 -5%	10% 5% 11%
Collaborate 41.4 39.6 38.3 34.9 -16%	-4% -3% -9%
Proforma subscription revenue 69.6 68.4 68.3 66.8 -14%	-2% 0% -2%
Perpetual sales 1.2 0.6 0.3 0.3 -73%	-53% -48% -7%
Testing Services 4.3 3.8 3.3 3.1 -22%	-11% -13% -7%
Professional Services 8.4 7.1 3.7 4.6 -3%	-16% -48% 25%
Proforma revenue(1) 83.5 79.8 75.6 74.8 -16%	-4% -5% -1%
Statutory revenue 78.5 62.9 69.8 83.3 -29%	-20% 11% 19%
Reconciliation to Statutory Accounts:
Proforma revenue 83.5 79.8 75.6 74.8
Deduct Amortised licence fees (51.2) (51.9) (51.1) (50.3)
Add term licence fees recognised upfront (excl perpetual licences) 46.2 34.9 45.3 58.9
Statutory revenue 78.5 62.9 69.8 83.3

(1) Proforma revenue provides a non-statutory alternate view of underlying performance by restating term license fee revenue to be on a recurring subscription basis (i.e., over time), rather than upfront at the commencement of a contract, per the statutory view. Other recurring revenues such as maintenance fees and cloud services, as well as other non-recurring revenue streams such as perpetual licenses, professional services and one-time testing services are consistently treated, as part of proforma and statutory revenue views.

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