Integrated Research Limited (IRI) FY2015 Annual Financial Results August, 2015 ABN: 76 003 588 449 4 of the world’s 10 largest companies 9 of the top 10 US banks 7 of the 10 biggest telcos 6 of the 10 biggest stock exchanges 4 out of 10 biggest oil and gas companies Global Commerce Depends on IR 1 Key Highlights Financial Results UC Growth • New Licence Sales up 46% to $41.0m  Revenue up 45% • Total Revenue up 32% to $70.3m  Enterprise & Service Provider growth • Net Profit After Tax up 68% to $14.3m  Skype for Business adoption growing • No debt  Maintenance retention at 96% Payments Growth Profit Margin Improvement  Revenue up 28% • Higher recurring revenue  Fraud Management adoption growing • Product margin improvement  New payment types driving sales • Depreciating Australian Dollar  ACI partnership supporting growth Infrastructure Results in Constant Currency • New Licence Sales up 37% • Total Revenue up 24% • Net Profit after Tax up 41% • Effective US$ Exchange Rate FY14 • Effective US$ Exchange Rate FY15  Revenue up 19%  Consistent revenue performer  High Profit margins Product Development $A0.92 $A0.83  Four new products added to portfolio  Microsoft Lync/Skype Inflight Voice Quality  Voice Quality 360© & Avaya IP Office  Contact Center & Call Recording Assurance 2 Financial Results 3 Financial Results 30 June 2015 A$000’s 30 June 2014 A$000’s % change Licence fees 41,031 28,048 46% Maintenance fees 23,700 20,562 15% Consulting fees 5,548 4,633 20% Total revenue 70,279 53,243 32% R&D expenses - net 12,431 11,067 12% Sales, consulting & marketing expenses 35,161 26,836 31% General & Administrative expenses 5,220 4,707 11% Total expenses 52,812 42,610 24% Profit before tax 19,266 10,653 81% Profit after tax 14,251 8,489 68% % change in constant currency 24% 19% 41% • All regions growing • All product lines growing • Continuing investment in Product Development 4 Key Profit Metrics 30 June 2015 A$000’s 30 June 2014 A$000’s % change Licence fees 41,031 28,048 46% Maintenance fees 23,700 20,562 15% Consulting fees 5,548 4,633 20% Total revenue 70,279 53,243 32% Net operating expenses (ex D&A) 42,196 35,419 19% • Revenue growing faster than cost EBITDA 28,083 17,824 58% • 40% 33% Currency tailwind benefiting IR 18,969 10,269 85% • EBIT margin 27% 19% Continuing move to recurring license model Profit after tax 14,251 8,489 68% • PAT margin 20% 16% PAT Margin increased from 16% to 20% EBITDA margin EBIT 5 Balance Sheet Dividends (cents) 8.0 6.0 30 June 2015 A$000’s 30 June 2014 A$000’s Cash at bank 15,323 13,300 Receivables 38,272 22,857 Capitalised Development 17,020 16,257 Deferred Revenue 22,523 16,369 Net assets 36,132 30,747 4.0 2.0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Final Special Interim Shareholder Returns 2015 2014 2013 Basic earnings per share 8.41¢ 5.03¢ 5.40¢ Dividends per share 7.5¢ 5.0¢ 5.0¢ Franking percentage 35% 33% 36% Return on equity 39% 28% 30% 6 Product Line Performance 10 year CAGR 24% Revenue by Product Line ($A) June 2015 June 2014 % change A$000’s A$000’s Unified Communications 36,485 25,118 45% Infrastructure 23,177 19,530 19% Payments 5,069 3,962 28% Consulting Services 5,548 4,633 20% Total Revenue 70,279 53,243 32% • Strong growth across all product lines • 10+ years of consecutive UC growth • Six years of consecutive consulting growth 7 Regional Performance Revenue by region 50,000 40,000 Strong and diversified Americas growth 30,000 20,000 10,000 ‐ Americas represents 75% of Company revenue 2006 2007 2008 Europe (GBP) 2015 30 June 2015 $000’s 30 June 2014 $000’s % change Americas ($US) 43,621 34,759 25% Asia Pacific ($A) 8,866 8,100 9% Europe (£GBP) 5,338 4,415 21% Revenue by Geographic region (In local currency) Europe and APAC momentum building 2009 2010 2011 2012 2013 2014 Americas (USD) Asia Pacific (AUD) 95% of revenue earned offshore 95% renewal rate 8 Growth Strategy Update 9 WHO WE ARE WHAT WE DO IR IR is the leading global provider of performance management solutions for Unified Communications, Payments and IT Infrastructure Value Proposition Prognosis increases technology performance, minimizes outages, reduces cost, optimizes operations, delivers business critical insight and ensures user and customer satisfaction WHY CUSTOMERS BUY Capabilities Prognosis provides availability & performance management, diagnostics and actionable business insight for mission critical systems Competitive Advantage  Prognosis is real-time, scalable, extensible & flexible  Prognosis supports multiple platforms, vendors and applications  IR has 1,000+ enterprise customers globally  IR has 120+ of the Fortune 500 customers  IR has a world-class R&D capability  IR is profitable and debt-free WHY WE SUCCEED 10 Market & Technology Leadership The Company: IR • Global, publically listed, profitable and growing • Over 1,000 enterprise customers worldwide • 120+ Fortune 500 customers • 5 of 6 ‘Leaders’ in the Gartner Communications Outsourcing Magic Quadrant The Solution: Prognosis • UC & CC Market Leader -13+ million managed endpoints • Avaya Sponsored & Recommended solution • Microsoft Gold Partner for Communications • Cisco Certified Management Solution • Multiple 300,000+ user deployments 11 IR Strategic Initiatives 12 FY15 Four Pillars of Growth New Subscription Pricing • Lower Approval Levels • Easier Access to Budget Approval by lower levels of management No CapEx approval required Innovation (new and expanded solutions) • Four new products added to portfolio Contact Center, Call Recording Assurance, StressTest® & Heartbeat® • Microsoft Skype for Business (formerly Lync) • Voice Quality 360© • Service Provider Solution 10 year CAGR 24% Strategic Marketing • Pipeline Building • Thought Leadership • Building Momentum • Broader Market Reach Setting the tone for industry innovation Market becoming aware of IR and its industry leadership Expanding Demand Generation deeper and wider Strategic Partner Engagement • Leveraged Pipeline • Access to Power & Budget Owners • Leveraged Marketing Through large Partner contacts Using Partner channels and funding 13 IR grows with UC Cloud Providers UC Service Providers are aggressively building cloud-based Unified Communications as a Service (UCaaS) offerings “In the North American UC market over the next five years, Gartner estimates that: UCaaS will experience compound annual growth rate (CAGR) of 20% to 25%”1 Communications Outsourcing & Professional Services 2014 Magic Quadrant CHALLENGERS LEADERS 5 out of 6 ‘Leaders’ rely on to power their Communications Outsourcing Services NICHE PLAYERS 1. VISIONARIES Source: Gartner, Tech Go‐to‐Market: Selling Unified Communications in a Highly Disrupted Market, June 2014 14 New Customers Increasing number of New Customers using multiple solutions UK 15 IQ Services Acquisition Acquisition Summary Effective 1 July 2015 US$1.5m Cash + Earn-Out capped at US$3.5m FY16 projections EPS accretive Integration Project well progressed Joint Execution underway Virtual Customer® Solution Methodology Market Growth Opportunity Automated army of “secret shoppers” testing Unified Communications and Contact Centers to ensure high quality customer experience • Expanded access to two major markets with a unique and market leading solution • Cloud based experience engine • StressTest® • HeartBeat® • Patented methodologies using Virtual ® Customer process Enables fully automated outside-in testing Load testing on systems Ensure they can handle peak season or Go-Live Regular (hourly, daily) testing to ensure customer experience is always performing as designed Contact Center : US$ 1.7 billion annual spend1 Unified Communications : US$ 13.7 billion annual spend1 • First complete Communications Experience Management solution covering both proactive testing and real-time performance insight • Leadership in testing new WebRTC, projected by 2019 to be utilized for 15% of enterprise voice & video communication, up from less than 1% today • Expansion from current American market to Europe and Asia Pacific 1 Source : Gartner Forecast: Enterprise Communications Applications, Worldwide, 2012-2019, 2Q 2015 Update 16 Summary Financial Results UC Growth • New Licence Sales up 46% to $41.0m  Revenue up 45% • Total Revenue up 32% to $70.3m  Enterprise & Service Provider growth • Net Profit After Tax up 68% to $14.3m  Skype for Business adoption growing • No debt  Maintenance retention at 96% Payments Growth Profit Margin Improvement  Revenue up 28% • Higher recurring revenue  Fraud Management adoption growing • Product margin improvement  New payment types driving sales • Depreciating Australian Dollar  ACI partnership supporting growth Infrastructure Results in Constant Currency • New Licence Sales up 37% • Total Revenue up 24% • Net Profit after Tax up 41% • Effective US$ Exchange Rate FY14 • Effective US$ Exchange Rate FY15  Revenue up 19%  Consistent revenue performer  High Profit margins Product Development $A0.92 $A0.83  Four new products added to portfolio  Microsoft Lync/Skype Inflight Voice Quality  Voice Quality 360© & Avaya IP Office  Contact Center & Call Recording Assurance 17 Thank you. Questions? 18