Prophecy Investor Presentation AGM 2021
Prophecy International Holdings Ltd | ASX: PRO Investor Presentation AGM November 2021 Prophecy International Holdings Ltd | 2 Prophecy International (ASX: PRO) >4,200 client sites | 5 offices | 85 employees We are a leading Australian designer and developer of innovative business software, with global operations and expertise in cybersecurity and big data analytics. We have developed a 40-year track record helping customers to secure the enterprise, repel cyber threats and deliver valuable business insights. We help companies make better decisions faster to protect and improve their operations. We are trusted by a broad spread of blue-chip clients across the banking, healthcare, government, defence, utilities, transport, manufacturing, retail and energy sectors. Our software products, eMite and Snare, are deployed at more than 4,000 sites globally, with a customer base including some of the world's most powerful brands. Denver (Sales/ Support ) Brazil (Sales/Dev) UK (Sales) Manila (Support) Adelaide (HO) (Dev/Support) Sydney (Sales/Dev/ Support) Indianapolis (Sales) 20 1 6 25 19 14 80% of FY21 revenue from USA Prophecy International Holdings Ltd | 3 FY21 Key Achievements • Group Revenue $12.8m • eMite Revenue +32% to $4.9m • Group ARR +39% to $10.7m Continued recurring revenue growth • > 200 active eMite customers and >4,200 active Snare customers • Strong growth in average deal size for both segments • Several significant new contract wins New client acquisition • eMite v 7.1, the largest release to date, in market July 2021 • Snare Central v 8.4 released to market with significant new features New product launches • Expanded and enhanced sales team • Increased quality and quantity of incoming leads • Leveraged global partners, chiefly Genesys, IBM and Amazon, Verizon, NTT Increased sales resources • $3.1m Cash at Bank • ($376k) FY21 Net Cash Flow • Zero debt Cash & Debt $ Prophecy International Holdings Ltd | 4 Key Statistics ASX Stock Code PRO FY21 Revenue $12.8M Cash Balance (31 October 21) $10.6M Debt Nil Share Price (26 November 21) $1.22 Shares on Issue 73.59M Fully Diluted Market Cap A$82.42M Key Management Personnel Brad Thomas Chief Executive Officer Stuart Geros VP Sales APAC Steve Challans Chief Information Security Officer Stephen Irecki VP of Customer Operations Peter Barzen VP Global Alliances John Pappas VP Sales Americas Jamie Lind VP Sales EMEA Shareholder Analysis (as at 26 Nov 2021) Other/Retail ~33% Other Top 20 Shareholders 20% Reyer Investments/Ed Reynolds 10% Institutional Investors ~30% Dunmore/Brian Calvert 7% 12-Month Share Price History and Volume Corporate Snapshot Prophecy International Holdings Ltd | 5 Commenced operations as “Computer Software Packages” in 1979 1991 name change to Prophecy International Floated on ASX 1997 Promadis and Intersect Alliance (Snare) acquired Basis2 acquired eMite acquired June – Basis2 sold July - Promadis sold Strong growth enabled dividend payment March Signs largest SaaS customer in the company’s history (US health insurer Humana, TCV $5.5m) 1979 1991 1997 2003 2009-11 2020 2017 2015 2021 Blue-Chip Repeat Customers, Attracted and Retained Over 40 Years Prophecy International Holdings Ltd | 6 • Our segment within the Cloud Contact Centre market, Contact Centre Analytics, is projected to be worth $2.9B by 2027 growing at a CAGR of 16.1% 3 Cloud-Based Contact Centre Market USD$10.3B CAGR 22% 1 Advanced Data Analytics, Visualisations, Correlation, KPI Management and Threshold Alerting 1: researchandmarkets . com https://www.researchandmarkets.com/reports/4804258/cloud-based-contact-center-global-market 2. Cybersecurity ventures https://cybersecurityventures.com/cybersecurity-market-report/ 3. Verified market research https://www.verifiedmarketresearch.com/product/global-contact-center-analytics-market-size-and-forecast-to-2025 4. marketsandmarkets https://www.marketsandmarkets.com/Market-Reports/security-analytics-market-1026.html#:~:text=The%20security%20analytics%20market%20size,18.2%25%20during%20the%20forecast%20period . 5. KBV Research https://www.kbvresearch.com/log-management-market/ Focused Product Suite Serving Large Markets Cyber Threat Detection, Security Information and Event Management (SIEM) and Log Management • Security Analytics Market will reach USD$18.1B by 2024 growing at an 18.2% CAGR 4 • Log Management Market is growing to USD$3.3B by 2025 at a CAGR of 11.2% 5 Cyber Security USD$170B CAGR 12.6 % 2 Prophecy International Holdings Ltd | 7 eMite is our Contact Centre Analytics solution that combines advanced analytics, data correlation, KPI management and threshold alerting into a single, out-of-the- box browser-based solution. Provides actionable insights that bring both real-time and historical data to life. eMite onboards data from many processes and systems then visualises it in an easily configurable interface. Our SaaS cloud-based / on-premise solution now has more than 200 active customers, generating $10.2 million in annualised recurring revenue (ARR ) for eMite as at 12 October 2021, along with upfront setup fee revenue. "Before eMite, in operations, they were doing all the occupancy codes manually. We replicated the dashboard and now they’ve taken it up another level with trending and charts, spreadsheets and formulas. It’s been a lifesaver for data polls and supporting our reports." – Director, Workforce Management, American Pharmaceutical Company eMite: Actionable Insights in Real Time Prophecy International Holdings Ltd | 8 eMite Progress and Growth Opportunities FY21 ARR +77% YoY to $7.6M Sales into 13 countries, split Americas 55%, APAC 30% and EMEA 15% New customers with 1st year contract value (1CV) of $3.2 million signed in FY22 to date, +800% YoY Customer Acquisition • Continue to grow eMite sales to large Enterprise customers through both Genesys and Amazon Connect • Leverage partnerships with major vendors • Establish and expand relationships with key deployment/reseller partners Organic • Retain and fully deploy all existing customers to maximise ARR • Achieved platinum status within Genesys AppFoundry, the industry’s largest marketplace for customer experience solutions. This allows new customers from all market segments to discover and rapidly acquire eMite New Partnerships • Launched eMite for customers in the Avaya ecosystem in FY21 • Establish vendor partnerships with other enterprise vendors – e.g. Twilio, Cisco Cloud Migrations • Migrations and multi- platform customers • Running analytics, reporting and alerting across multiple systems or migrate from legacy to cloud • Genesys to Genesys Cloud, Legacy On Premise to Amazon Connect or Genesys Cloud, running multiple cloud platforms Upsell • Upsell existing customers to multiple data sources • Salesforce, Service Desk, Survey, Sentiment analysis etc • Supported by a strong pipeline of product innovation already in progress We have continuously improved eMite's functionality as large enterprise and government have embraced cloud services. We forecast eMite’s market penetration and revenue to grow further in FY22. Prophecy International Holdings Ltd | 9 • Snare is our cybersecurity software product line, through which we provide security monitoring, threat detection, security information and event management (SIEM) and centralised log management. These are critical security controls recommended or mandated by various bodies including the Australian Government. • The rising financial and reputational consequences of data breaches, malware and ransomware was already driving rapid growth in the market for cybersecurity solutions prior to COVID-19. The rise of working from home has accelerated these trends. • Modular products that work well with others; perpetual license model with revenue increasingly generated through partners including Verizon, NTT, Secureworks and ATOS. • Subscription licensing launched in October and being well received by market Protect Systems Protect your systems from attacks, whether these be of a malicious, fraudulent or human error Meet Requirements Meet your organisation’s own audit requirements for data protection Achieve Compliance Comply with demands from stakeholders, investors, gov’t entities, customers or suppliers Adhere to Standards Adhere to all security standards Over 4,000 enterprise customers worldwide trust Snare to: Snare Central Reviews G2 Crowd Snare: Flexible Cybersecurity and Compliance Prophecy International Holdings Ltd | 10 Subscription Revenue • Snare sales to date have been primarily on a perpetual license basis • Convert the large legacy base of Snare opensource customers to Enterprise • Continue the managed transition of the Snare business to recurring subscription-based licensing Defense & Military • Strong and growing footprint with Military and Defense Prime Contractors • Significant new opportunities in US and globally • Investment in new sales resources to address the significant revenue growth opportunity in this segment Managed Service Providers/MSSP • Expand footprint with global MSSPs (currently NTT, Secureworks, Verizon, ATOS, Fujitsu, Cap Gemini, Vambrace etc) • Penetrate the top 100 MSSPs (we have 8 of the top 20 today as partners) • Increase Snare revenue from Security Services partners, Security Operation Centre (SOC) providers and Extended Detection and Response (XDR) platform providers Upsell • Sales of Snare Central +47.3% YoY in FY21, offering enhanced usability and functionality • 3000 addressable customers of Snare Central @AU$10K per server = AU$30M revenue opportunity Sales of Snare Central +47% YoY Sales into 62 countries, with key FY21 wins including US Dept of Treasury, QBE Group, UK Ministry of Defence, Raytheon, Metlife, Charles Schwab, Yum Brands and UPS Strong momentum into FY22, achieving $2.2m in new Snare sales in Q1 (+46% YoY) Snare Progress and Growth Opportunities Prophecy International Holdings Ltd | 12 2,359,804 2,836,481 2,808,438 2,652,582 3,624,772 606,586 1,061,592 2,261,759 4,251,766 7,632,610 10,514,892 667,994 661,983 656,634 457,635 640,000 - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 FY18 FY19 FY20 FY21 Current YTD Annualised Recurring Revenue (ARR) Growth Snare Maintenance ARR Snare Subscription ARR eMite ARR Legacy ARR Group ARR +43% in FY22 to $15.4M eMite ARR +38% in FY22 to $10.5M Snare Subscriptions now at $606K ARR Consistent and Sustainable Growth in Annualised Recurring Revenue $4.1m $15.4 m $10.7m $7.7m $5.8m Prophecy International Holdings Ltd | 13 Prominent US, EU and AU new client wins eMite Growth $3.4 million in new eMite sales eMite sales in FY22 YTD represent >94% of eMite sales across all of FY21 Snare Growth $3.7 million in new Snare sales YTD Average Snare deal size has tripled YoY ARR and Cash Flow eMite and Snare sales in FY22 to date have added $3.7m to Prophecy’s ARR, which now totals $15.4m Capital raise in October $7.7m to accelerate growth Looking Ahead eMite and Snare’s strong performance is expected to continue in FY22 Robust FY22 Pipeline: • eMite: approx. $13m • Snare: approx. $20m Strong Start to FY22 Sales growth has accelerated in FY22 to date, with a strong pipeline across eMite and Snare +800% +46% Prophecy International Holdings Ltd | 14 FY22 Operational and Strategic Outlook In cloud migration, eMite is riding a significant growth trend. We expect that COVID-19 will accelerate cloud migration for the next several years as enterprise customers seek to enable working from home. eMite continues to evolve and is now vendor-agnostic, allowing us to gain scale through indirect channels. We will add vendor partnerships similar to Genesys and Amazon. For Snare, focus on expanding MSSP partnerships beyond the US to EMEA & APAC. • Increase R&D for Snare & eMite in Australia & Manila • Increase sales & marketing for eMite in Denver, USA • Increase support to meet increased customer numbers We will continue to deliver new capabilities, accelerating both Snare and eMite product roadmaps as we develop new revenue streams to complement existing products. Continue our transition towards SaaS & subscription s as we focus on driving organic growth through renewal, retention, upsell and cross sell, while proactively scanning the Australian market for potential M&A opportunities. Prophecy International Holdings Ltd | 15 SA Business Australian Export Awards: Technology & Innovation Category Winner 2019 Austrade 57 th Australian Export Awards Technology & Innovation Category Finalist 2019 eMite - Finalist ARN Innovation Awards 2020 Genesys Global AppFoundry Partner of the Year 2019 2 nd year running Diverse revenue streams providing cloud and on-premise enterprise solutions, with a focus on essential service segments (cybersecurity and cloud contact centres) Large addressable target markets with clear strategy to boost penetration through new and existing customers across all industries Pursuing acquisition opportunities to accelerate growth and increase capability, capacity and coverage A global book of sticky business with a broad spread of blue-chip clients: $12.8M revenue in FY21, substantially recurring (and rising) Targeting scalable growth and margin expansion through continued focus on subscription- based SaaS licensing revenue Snare and eMite both benefit from strong market positions and multi-year industry tailwinds Investment Highlights Prophecy International Holdings Ltd | 16 Directors and key management Ed Reynolds Non-Executive Chairman Ed joined Prophecy as GM in 1987 and was appointed Chairman in 2006. Passion for technology and growing businesses with wide-ranging experience within the IT industry. Ed is the largest individual shareholder at 12.2%. Matt Michalewicz Non-Executive Director Expert in entrepreneurship, innovation and success psychology. Matt co- founded and grew SolveIT Software from zero to almost 180 employees and $20 million in revenue before selling to Schneider Electric in 2012. Limited Partner at early-stage VC firm Blackbird Ventures. Grant Miles Non-Executive Director & Company Secretary MD of Moore Stephens SA, a Chartered Accountant with 25+ years experience in the finance and business advisory sectors. Joined in 2013 as Company Secretary and appointed Non-Executive Director in 2015. Leanne Challans Non-Executive Director Appointed Director in 2006 and has held several executive roles within the group over the past 25 years in general management, software development, partner support and marketing. Brad Thomas OAM Chief Executive Officer 20+ years growing high tech businesses. 3-time Paralympian, experienced in strategy, sales, service delivery, business optimisation and marketing leadership. Ex-Microsoft, Novell, Lenovo, Telstra and Canon. Brad Thomas Chief Executive Officer Level 1, 76 Waymouth St Adelaide SA 5000 Australia The information in this document is published to inform you about Prophecy International Holdings Ltd and its activities. All reasonable effort has been made to provide accurate information but we do not warrant or represent its accuracy and we reserve the right to make changes to it at any time without notice. To the extent permitted by law, Prophecy International Holdings Ltd accepts no responsibility or liability for any losses or damages of any kind arising out of the use of any information contained in this document. The information is not an invitation to invest or deal in Prophecy International Holdings Ltd securities and you should seek independent professional advice before making any investment decisions. The information is copyright to Prophecy International Holdings Ltd. You may download the information for your own personal use but you may not reproduce it for any other purpose without our express permission. firstname.lastname@example.org +61 (08) 8213 1200 Adelaide, Sydney, Denver, Edinburgh, Manila Contact Us
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