q1 fy2021 investor presentation...7 the way businesses pay and get paid the largest electronic...
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Investor BriefingNovember 2020
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W H A T W E D O
We make complex business payments simple, smart and secure.
Pay and get paid Engage and innovate Predict and protect Connect and manageStreamline payment processes
across global business for efficiency, security and visibility
A comprehensive suite of solutions created to acquire, strengthen and
grow profitable relationships
User monitoring and behavioral analysis combine to detect
fraud and reduce risk
A full suite of connectivity solutions to lower complexity, improve
visibility and promote innovation and growth
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PAYER PAYMENTRECIPIENT
Business Payment Complexity
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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
Paper draft, ACH or wire transfer
ACH or wire transfer
Paper draft, ACH or wire transfer
PAYER PAYMENTRECIPIENT
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Investment Highlights
$360 million SaaS business masked by $100 million traditional revenue
Market-leading provider of cloud-based business payments market
Massive market opportunity with accelerating adoption and strong market tailwinds
Large, diverse customer base with high retention and significant up-sell traction
Multiple drivers of sustainable, long-term growth with upside to model
Exceptional financial profile with tremendous embedded revenue opportunity and high visibility
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Well Positioned for $25B+ Revenue Opportunity
Banking Platforms$2-3B
Legal Spend Management$0.5B
Treasury & Receivables$1-2B
$15-20B
Total$20-25B+
Business Payments$15-20B
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The way businessespay and get paid
The Largest Electronic Payment Network for Businesses
425,000+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 easilyautomate accounts payable
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
BANKS provide clients with innovative payment capabilities, grow market share and expand revenue opportunities
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Market-leading commercial banking & payments platform empowers banks to engage intelligently with customers, deliver a unified experience and acquire, deepen and grow profitable relationships.
Digital Banking IQ
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• Intelligent engagement platform, with integrated insights & analytics
• Market-leading payments and cash management capabilities
• Embedded intelligence, simplicity & usability
BANK’S COMMERCIAL CUSTOMERS GET• Proactive insights and engagement from their banking relationship managers
• 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
8Best Partner
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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
300+ Clients
200+ Insurance Companies
13,500+Law Firms
98%Retention Rate
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O U R B U S I N E S S M O D E L
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$189
$224
$255
$301
$331 $343 $349
$394
$422
$442
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
• Building a scale subscription based SaaS business
• Focus and investments – both product and GTM – are aligned with SaaS subscription imperative
• Deemphasize non-subscription revenue streams
A Growing SaaS Business
Total revenues
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$134 $139 $137
$159 $160 $148
$126 $132 $126
$103
$55
$85
$118
$141
$171 $195 $223
$262
$296
$339
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Non-Subscription revenue
• Revenue mix is increasingly SaaS and subscription based
• Some traditional revenues remain and will continue based on product set and customer profile
• Five-year CAGR of (8%) for traditional revenues to some degree masks overall strong growth in more valuable subscription revenue
A Growing SaaS Business
Subscription revenue
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$134 $139 $137
$159 $160 $148
$126 $132 $126
$103
$55
$85
$118
$141
$171
$195
$223
$262
$296
$339
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Non-Subscription streams
• Current run rate of over $360 million in subscription revenue
• Executing on plan to drive consistent 15-20% subscription growth and achieve $500 million subscription revenue in 2-3 years
• Focused product and GTM investments to expand TAM and drive future growth
A Growing SaaS Business15-20% Growth
Subscription revenuesTargeting 15-20% Growth
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Strong SaaS Financial & Operational Metrics
Subscription ARR Scale $362MRun Rate
High Margin 76%Incremental Margin
Total Addressable Market $20-25BAnd growing
EBITDA Margin 21%
Subscription Growth 15-20%Target
Gross Retention 97%
Revenue Visibility 93% Net Retention 100%+
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FY21 Value Creation
Enterprise value assumes a 2.5x multiple on non-SaaS revenues.
SaaS Revenue Multiples 6.0x 7.0x 8.0x 9.0x 10.0x
Enterprise Value $2.6B $3.0B $3.4B $3.8B $4.2B
Stock price $63 $72 $82 $91 $101
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SaaS Revenue Multiples 6.0x 7.0x 8.0x 9.0x 10.0x
Enterprise Value $3.2B $3.7B $4.2B $4.7B $5.2B
Stock price $74 $85 $97 $108 $120
Value realization at $500 million in SaaS Revenues
Enterprise value assumes a 2.5x multiple on non-SaaS revenues.
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Sustained Value Creation
Revenue Visibility• Visibility into 93% of future revenues
• 97% customer retention
Growth & Momentum• 15% five-year CAGR on subscription revenues
• Multiple near-term opportunities to drive meaningful growth in large $20-25B TAM
Attractive Profitability• Attractive subscription incremental gross margins of 76%
• 21% EBITDA margins
Strong Free Cash Flow• Strong cashflow & balance sheet
• Flexibility for strategic M&A
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Investment Highlights
$360 million SaaS business masked by $100 million traditional revenue
Market-leading provider of cloud-based business payments market
Massive market opportunity with accelerating adoption and strong market tailwinds
Large, diverse customer base with high retention and significant up-sell traction
Multiple drivers of sustainable, long-term growth with upside to model
Exceptional financial profile with tremendous embedded revenue opportunity and high visibility
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T H A N K Y O U
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