First Quarter Results Ended March 31, 2016 Forward Looking - - PowerPoint PPT Presentation

First Quarter Results

Ended March 31, 2016

This presentation contains statements, including statements about future plans and expectations, which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of

• 1995. Such forward looking statements are generally stated in terms of the Company’s plans,

expectations and intentions. These statements are based on the current beliefs, expectations and assumptions of the Company’s management and the current economic environment. Forward looking statements are inherently subject to significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of management. The Company cautions that these statements are not guarantees of future performance. There are or will be important known and unknown factors and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward looking statements. These factors, include, but are not limited to, risks associated with the global economic environment on the Company’s customer base (particularly financial services firms) potentially impacting our business and financial condition; competition; changes in technology and market requirements; decline in demand for the Company's products; inability to timely develop and introduce new technologies, products and applications; difficulties or delays in absorbing and integrating acquired operations, products, technologies and personnel; loss of market share; an inability to maintain certain marketing and distribution arrangements; and the effect of newly enacted or modified laws, regulation or standards on the Company and its products; and other factors and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”). You are encouraged to carefully review the section entitled “Risk Factors” in our latest Annual Report on Form 20-F and in our

• ther relevant filings with the SEC for additional information regarding these and other factors and

uncertainties that could affect our future performance, and undue reliance should not be placed upon these statements. The forward-looking statements contained in this presentation are made as of the date hereof, and the Company undertakes no obligation to update or revise them, except as required by law.

Forward Looking Statements Disclaimer

Explanation of Non-GAAP measures

Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, re-organization expenses, restructures expenses, share-based compensation, certain business combination accounting entries, settlement and related expenses and tax adjustment re non-GAAP adjustments. The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and

• ther items that are considered by management to be outside of our core operating results.

Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Business combination accounting rules requires us to recognize a legal performance obligation related to a revenue arrangement of an acquired entity. The amount assigned to that liability should be based on its fair value at the date of acquisition. The non- GAAP adjustment is intended to reflect the full amount of such revenue. We believe this adjustment is useful to investors as a measure of the ongoing performance of our business. We believe these non-GAAP financial measures provide consistent and comparable measures to help investors understand our current and future operating cash flow performance. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income.

Q1 2016 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook

5

Gross margin increased to 70.6%; compared to 69.8% last year Operating profit increased to $58M; growth

• f 15%

Nexidia acquisition closed; at the end of March 2016

Q1 2016 Highlights*

Record

• perating cash

flow of $113M; compared to $104M last year Company increased FY16 EPS Guidance; to $3.41-$3.55 Operating margin of 25.6%; increase of 2.3pp from 23.3% last year Revenue of $226M; 4.3% growth EPS of $0.81, increase of 17%; above guidance range

* All numbers are Non-GAAP * All Q1 2015 comparable numbers exclude Intelligence and Physical Security divisions

Q1 2016 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook

Good Growth and Execution

Q1 REVENUES (Non-GAAP, $M) 217 226

Q1 15 Q1 16

4.3%

* All Q1 2015 comparable numbers exclude Intelligence and Physical Security divisions

0,69 0,81

Q1 15 Q1 16

17.4%

Q1 EARININGS PER SHARE (Non-GAAP, $)

• Continued growth reflects good execution
• Emphasis on innovation and potfolio

expansion leads to increase in number of 7- digit deals

• EPS came above guidance
• Strong growth in EPS due to improved gross

and operating margins

• Continued successful execution of operational

plan

8

GAAP and Non-GAAP Income Statement

$M (except EPS) Q1 2016 Q1 2015

GAAP revenue 226.0 216.6 Valuation adjustment on acquired deferred product revenue 0.08

• Valuation adjustment on acquired deferred service revenue

0.06 0.1 Non-GAAP revenues 226.1 216.7 GAAP Cost of revenue 74.5 73.1 Amortization of acquired intangible assets on cost of product (6.3) (6.8) Cost of product revenue adjustment (0.1) (0.1) Cost of services revenue adjustment (1.6) (0.8) Non-GAAP cost of revenue 66.5 65.4 GAAP gross profit 151.5 143.4 Gross profit adjustments 8.2 7.9 Non-GAAP gross profit 159.7 151.3 GAAP operating expenses 114.0 110.2 Research and development (2.0) (0.5) Sales and marketing (3.4) (2.6) General and administrative (4.3) (2.8) Amortization of acquired intangible assets (2.5) (3.5) Non-GAAP operating expenses 101.8 100.8

* Errors due to rounding

9

$M (except EPS) Q1 2016 Q1 2015

GAAP taxes on income 6.0 6.6 Tax adjustment re non-GAAP adjustments 6.0 3.5 Non-GAAP taxes on income 12.0 10.1 GAAP net income (loss) from continuing operations 35.3 28.6 Valuation adjustment on acquired deferred revenue 0.1 0.1 Amortization of acquired intangible assets 8.8 10.3 Share-based compensation 6.4 6.8 Re-organization expenses 1.3

• Acquisition related expenses

3.7

• Tax adjustments re non-GAAP adjustments

(6.0) (3.5) Non-GAAP net income from continuing operations 49.6 42.3 GAAP diluted earnings (loss) per share from continuing operations 0.58 0.47 Non-GAAP diluted earnings per share from continuing operations 0.81 0.69

* Errors due to rounding

GAAP and Non-GAAP Income Statement (cont.)

Revenue Breakdown by Region (Non-GAAP)

68%

* All Q1 2015 comparable numbers exclude Intelligence and Physical Security divisions

AMERICAS $155M, +0% YoY EMEA $45M, +12% YoY

20%

APAC $26M, +19% YoY

12% Q1 2016

Revenue Breakdown by Business Unit (Non-GAAP)

* All Q1 2015 comparable numbers exclude Intelligence and Physical Security divisions

Q1 2016

FINANCIAL CRIME & COMPLIANCE $54M, +8% YoY

24% 76%

CUSTOMER INTERACTIONS $172M, +3% YoY

Gross Margin

Q1 2016 (Non-GAAP)

Gross Margin 70.6%| +80bp

Gross Margin 69,8% Gross Margin 70,6%

Q1 15 Q1 16

Product GM

87.0%

Product GM 88.8%

Q1 15 Q1 16

Product Margin 88.8%| +180bp

Service Gross Margin 61,1% Service Gross Margin 63,3%

Q1 15 Q1 16

Services Margin 63.3%| +220bp

Gross margin expansion is the result of favorable product mix and more effective utilization of the services

• rganization

* All Q1 2015 comparable numbers exclude Intelligence and Physical Security divisions

Continued Operating Margin Improvement

(Non-GAAP)

Operating Margin 23,3% Operating Margin 25,6%

Q1 15 Q1 16

• Continued expansion of operating margin
• Improvement is a result of an increase in gross margin and continued cost discipline

* All Q1 2015 comparable numbers exclude Intelligence and Physical Security divisions

Cost Ratio – Increased Operating Efficiency

Q1 2016 (Non-GAAP)

R&D As % of revenue

R&D 13,7% R&D 13,5%

Q1 15 Q1 16

S&M 24,4% S&M 23,2%

Q1 15 Q1 16

S&M As % of revenue

G&A 8,5% G&A 8,3%

Q1 15 Q1 16

G&A As % of revenue

* All Q1 2015 comparable numbers exclude Intelligence and Physical Security divisions

Analytic Applications

As % of bookings

38% 45% 44% 47% 54% 58% 30% 40% 50% 60% 70%

Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

Series 1

• Analytics applications continue to be a growth driver
• Analytics are steadily growing and reached 58% of new bookings in Q1 2016

* All numbers exclude Physical Security division

Q1 2016 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook

17

Balance Sheet

March 31, 2016

Assets ($M) 03/31/2016 12/31/2015 Cash and cash equivalents 269.7 325.9 Short term investments 80.7 99.2 Trade receivables 149.0 177.3 Prepaid expenses and

• ther current assets

51.5 43.6 Current assets of discontinued operation 8.7 9.1 Total current assets 559.7 655.1 Long term Investments 414.7 403.2 Other long term assets 17.1 17.2 Property and equipment 45.0 39.2 Deferred tax assets 14.7 14.1 Other Intangible assets 142.7 69.6 Goodwill 734.4 651.1 Total Assets 1,928.4 1,849.6 Equity & Liabilities ($M) 03/31/2016 12/31/2015 Trade payables 15.0 11.7 Deferred revenue and advances from customers 196.4 151.3 Accrued expenses and other liabilities 219.1 223.3 Current liabilities of discontinued operation 13.1 12.7 Current liabilities 443.6 399.0 Deferred tax liabilities 25.4 15.0 Other long term liabilities 19.6 18.0 LT liabilities of discontinued

• peration

2.4 2.4 Total long term liabilities 47.5 35.4 Equity 1,437.3 1,415.1 Equity & Liabilities 1,928.4 1,849.6 * Errors due to rounding

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Strong Cash Flow From Operations

$M Q1 2016 Q1 2015

%∆

Cash flow from operations 112.8 104.1 8%

• Capital expenditure

7.1 3.2 122% Cash flow from operations after capex 105.7 100.9 5% Cash flow from operation after capex as % of revenue 46.7% 46.6% 0.1pp Cash conversion rate * 2.1 2.4 (13%) Days sales outstanding (DSO) 53 48 10%

* Cash Conversion Rate = (Cash Flow from Operations after CAPEX / Non-GAAP Net Income) ** Cash flow numbers include Intelligence and Physical Security divisions

19

Cash Movement and Liquidity

March 31, 2016

Total liquidity (1) 12/31/15

$828M

Operating CF

$113M

Acquisitions

• $150

Other

$14M

CAPEX

• $7M

Buyback

• $23M

Total liquidity (1) 03/31/16

$765M

1) Total Liquidity = Cash and Cash Equivalents + Current Investments + Long Term Investments

Dividend

• $10M

Q1 2016 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook

Outlook (Non-GAAP)

Q2 2016 Revenue ($M) 229-239 EPS ($) 0.72-0.78 FY 2016 Revenue ($M) 995-1,015 EPS ($) 3.41-3.55

The outlook is provided as of May 5, 2016. There is no guarantee that the Company will change or update these figures in this presentation should a need arise in the future to update the outlook. This is in addition to the forward-looking statements disclaimer at the beginning of the presentation.