investor briefing - bottomline.com · consistently profitable model. also have $16 million of...

1

InvestorBriefingQ2 FY19

22

Safe HarborThis 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, 2018 and subsequently filed Form 10-Q’s and Form 8-K’s or amendments thereto.

Non-GAAP Financial InformationThe financial projections in this document are presented on a non-GAAP basis. Non-GAAP projections include core operating income, adjusted EBITDA, core operating margin, core earnings per share, and constant currency information. 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 www.bottomline.com/us/about/investors

33

About BottomlineBottomline Technologies makes business paymentssimple, smart and secure

Capitalizing on business payment leadershipposition 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)

• Leading payments and cash management platform

Leveraging product investment to drivesubscription and transaction growth

• Investment in market-leading solutionsfor large and growing markets

• Targeting 15-20% subscriptions & transactions revenue growth

• $285 million run rate subs and trans revenue

• 85% recurring revenue

44

Sources: Visa 2017 Investor Day research

T H E O P P O R T U N I T Y

B2B Payments Market

$20T+ $25T $23T+

MasterCard NAPCP Conference Presentation – March 6, 2018

Goldman Sachs Payment Ecosystems Research Report – August 3, 2017

55

295-298$M

Subscription & Transaction Revenue

71% of revenue

Organic growth of 15-20% per year

FY18 S&T revenue of $262 million

415-420$M

Revenue

87% recurring revenue

39% of revenue is international

FY18 revenue of $394 million

98-100$M

EBITDA

Consistently profitable model

FY18 EBITDA Margin 24%

FY18 EBITDA of $94 million

FY19 Financial Overview

Recurring Revenue

87%

SW/Services13%

55

85

118141

171195

223

262

295-298

0

50

100

150

200

250

300

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19G

4246

50

61

7175 75

9498-100

0

10

20

30

40

50

60

70

80

90

100


Projections for the fiscal year ended June 30, 2019. EBITDA refers to adjusted EBITDA which is a non-GAAP measure. A definition and reconciliation to the most directly comparable GAAP measure can be found in the Investors section of the Bottomline website.

66

PAYER PAYMENTRECIPIENT

Business Payment Complexity

77

Business Payment Complexity

PAYER’S BANK PAYMENTRECIPIENT’S BANK

CORRESPONDENT BANKS

CARD ISSUER BANK MERCHANT ACQUIRER’S BANK

CARD NETWORK

NATIONAL BANK NATIONAL BANK

PROPRIETARYNETWORK

Paper draft, ACH or wire transfer

Commercial card

SWIFTmessage


ACH or wire transfer


PAYER PAYMENTRECIPIENT

88

Investment Highlights

Large marketopportunity

Leading businesspayments product set

Driving subscription &transaction revenueQ2 = 14%(1) Growth

Winning newbusiness

$90 million last year

Attractive lifetimecustomer value

10-15 years or more

(1) S&T Normalized is the sum of S&T Reported, Increase from Currency, and 606 Impact

99

M A R K E T- L E A D I N G P R O D U C T S

10

The way businessespay and get paid

The Largest Electronic Payment Network for Businesses

385,000+Members in network

$200 Billionin payments processed annually

The Paper Problem

63%of organizations still make more than half of their payments by paper check

67%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

Paymode-X helps businesses easilytransition to electronic payments

PAYERS accelerate payment automation, improve payment security and monetize AP spend

VENDORS streamline receivables with convenient electronic payments and remittance

1 The State of ePayables 2018 by Ardent Partners2 2017 AFP Payment Fraud & Controls Survey

11

Innovative commercial bankingplatforms empower banks to win newcustomers and grow wallet share

Digital Banking

Market-leading Solution

Aité Survey of Cash Management Vendors

Best in Class

“The vendor to beat”

User Interface and Experience

Analytics

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• 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

Leadership Position

11

12

Legal Spend Management

The leading way insurancecompanies manage their legalspend 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

Leadership Position

Top-Tier Client Base

225+ Clients

175+ Insurance Companies

13,500+Law Firms

98%Retention Rate

12

1313

F I N A N C I A L H I G H L I G H T S

1414

Subscription & TransactionRevenue Growth

• Product investments driving 15 – 20%subscription and transaction growth

• Most recent quarter

- 17%(1) normalized growth in fully transitioned products

- 14%(1) normalized growth overall

• Current run rate of $285 million

• Targeting $295-298 million for FY19

55

85

118

141

171

195

223

262

295-298

0

50

100

150

200

250

300



1515

Consistent Profitability

• EBITDA of $93.7 million last fiscal year

• EBITDA Margin of 24%

• Targeting $98-100 million EBITDA in FY1942

4650

61

7175 75

9498-100

0

10

20

30

40

50

60

70

80

90

100


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.

1616

Driving Recurring Revenue

• Payment platforms are mission critical and yield long customer retention

• 68% of revenue is subscription and transaction

• 85% of revenue is recurring

Recurring Revenue

Subscription and Transaction Revenue

2009 2016 2017 2018

64% 80% 84% 85%

2009 2016 2017 2018

23% 57% 64% 67%

17

Established Products

Normalized Subscription and Transaction Revenue Growth 17%(1)

Subscription and Transaction Revenue $55.4M

Total Revenue $81.7M

Core Operating Income $18.1M

Core Operating Margin 22%

Subscription and Transaction Revenue Growth 7%





Normalized Subscription and Transaction Revenue Growth 14%(1)





Adjusted EBITDA $25.6M

Adjusted EBITDA Margin 24%

Core EPS $0.35

Strategic Plan

• Invest in market leading cloud business payment solutions

• Drive subscription and transaction revenue growth of 15-20% per year

• Leverage inherent attractive lifetime customer value of our solutions

• Continue to extend our product platform capabilities

• Establish Bottomline as the clear leader in business payments

Banking Solutions

Consolidated Bottomline

Within the 15-20% target range


Also have $16 million of annual subscriptions currently in implementation and not yet live

Margins will expand as new subscriptions go live

$25.6 million EBITDA, reflecting consistently profitable model

(1) Normalized for constant currency and change in accounting standards impacts, as shown on the following page. Core operating income, adjusted EBITDA, core operating margin, core EPS, and constant currency information are non-GAAP measures. Definitions and a reconciliation to the most directly comparable GAAP measures can be found at the end of this document.

Product investments driving subscription & transaction growth with 85% recurring revenue

Q2 Core Results

18

Investment Highlights

Large marketopportunity

Leading businesspayments product set

Driving subscription &transaction revenueQ2 = 14%(1) Growth

Winning newbusiness

$90 million last year

Attractive lifetimecustomer value

10-15 years or more


19

295-298$M

Subscription & Transaction Revenue

71% of revenue

Organic growth of 15-20% per year

FY18 S&T revenue of $262 million

415-420$M

Revenue

87% recurring revenue

39% of revenue is international

FY18 revenue of $394 million

98-100$M

EBITDA


FY18 EBITDA Margin 24%

FY18 EBITDA of $94 million

FY19 Financial Overview

Recurring Revenue

87%

SW/Services13%

55

85

118141

171195

223

262

295-298

0

50

100

150

200

250

300


4246

50

61

7175 75

9498-100

0

10

20

30

40

50

60

70

80

90

100


Projections for the fiscal year ended June 30, 2019. EBITDA refers to adjusted EBITDA which is a non-GAAP measure. A definition and reconciliation to the most directly comparable GAAP measure can be found in the Investors section of the Bottomline website.

investor briefing - bottomline.com · consistently profitable model. also have $16 million of...

Documents