1
Investor
BriefingQ3 FY20
22
Safe Harbor
This document contains “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, including financial projections subject to risks, uncertainties and other factors that
could materially affect our actual results. Actual results may differ materially from those indicated by such forward
looking statements as a result of various important factors including, among others, competition, market demand,
technological change, strategic relationships, recent acquisitions, international operations, general economic
conditions, and including the potential effects of the coronavirus pandemic on any of the foregoing 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, 2019 and subsequently filed Form 10-Qs and Form 8-Ks or
amendments thereto.
Non-GAAP Financial Information
The financial results and projections in this document are presented on a non-GAAP basis. Non-GAAP
results and projections include core operating income, adjusted EBITDA, adjusted EBITDA margin, core
operating margin, core earnings per share, and constant currency information. Reconciliations of our GAAP
results to the most directly comparable non-GAAP results and guidance are included at the end of this document.
Any non-GAAP outlook we provide has not been reconciled to the comparable GAAP outlook because of the
difficulty of predicting the amounts to be adjusted, including but not limited to acquisition-related charges,
minimum pension liability adjustments, stock compensation expense and weighted average shares outstanding.
Since we expect these factors to have a significant impact on our future GAAP results, a reconciliation is not
available on a forward looking basis without unreasonable effort.
33
About BottomlineBottomline Technologies makes business payments
simple, smart and secure
Capitalizing on business payment leadership
position 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 drive
subscription growth
• Investment in market-leading solutions
for large and growing markets
• Targeting 15-20% subscription revenue growth
• $350 million run rate subscription revenue
• 92% 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
PAYER PAYMENT
RECIPIENT
Business Payment Complexity
66
Business Payment Complexity
PAYER’S BANK PAYMENT
RECIPIENT’S BANK
CORRESPONDENT BANKS
CARD ISSUER BANK MERCHANT ACQUIRER’S BANK
CARD NETWORK
NATIONAL BANK NATIONAL BANK
PROPRIETARY
NETWORK
Paper draft, ACH
or wire transfer
Commercial card
SWIFT
message
Paper draft, ACH
or wire transfer
ACH or wire transfer
Paper draft, ACH
or wire transfer
PAYER PAYMENT
RECIPIENT
77
M A R K E T- L E A D I N G P R O D U C T S
8
The way businesses
pay and get paid
The Largest Electronic Payment Network for Businesses
400,000+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 easily
automate 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
9
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
9Best Partner
10
Legal Spend Management
The leading way insurance
companies manage their legal
spend 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
10
1111
F I N A N C I A L H I G H L I G H T S
1212
Investment Highlights
Large marketopportunity
Leading businesspayments product set
Driving subscription revenue
Target 15-20% growth
Attractive EBITDA Margin
Attractive lifetimecustomer value
10-15 years or more
1313
Subscription Revenue Growth 16%
Subscription Revenue $87.5M
Total Revenue $111.7M
Core Operating Income $16.0M
Core Operating Margin 14%
Adjusted EBITDA $23.2M
Adjusted EBITDA Margin 21%
Core EPS $0.27
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.
Strategic Plan
• Subscription revenue growth of
15-20% per year
• Leverage inherent attractive
lifetime customer value of our
solutions
• Continue to extend our product
platform capabilities and market
leadership
• Establish Bottomline as the clear
leader in business payments
Within target range of 15-20%
subscription revenue growth,
despite COVID
$23.2 million EBITDA, reflecting
consistently profitable model.
$350M annual run-rate
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Q3 Results
Q3 Results Commentary
1414
252$M
Subscription Revenue
76% of revenue
Growth of 17% on a constant currency
basis
332$M
Total Revenue
90% recurring revenue
37% of revenue is international
72$M
EBITDA
Consistently profitable model
$70M operating cash flow YTD’20
$31M free cash flow YTD’20
YTD FY’20 Financial Overview
90%
10%
55
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171
195
223
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296
252
0
50
100
150
200
250
300
4246
50
61
7175 75
94100
72
0
20
40
60
80
100
Data for the 9-months ending March 30, 2020. Constant currency growth, and EBITDA as referred to here as adjusted EBITDA, are non-GAAP measures. A definition and reconciliation to the most directly comparable GAAP measure can be found in the Investors
section of the Bottomline website.
1515
YTD Key Metrics
17% Subscription growth
76% Subscription revenue
90% Recurring revenue
20% Sales and Marketing
15% Development expense
(1) Subscription growth calculated on a YoY constant currency basis;
(2) Percentages are as % of total revenue
Subscription Gross Margin YTD FY20
Incremental Subscription Revenue $35.1
Incremental Cost ($8.2)
Incremental Gross Margin $26.9
Incremental GM % 77%
YTD FY20 Key Metrics
(1)
(2)
(2)
(2)
YTD FY20
YoY
+1pp
+2pp
+2%
+7%
+4pp
(2)
1616
Balance Sheet Highlights
Adjusted EBITDA is a non-GAAP measures. Definition is included at the end of this document.
Net cash on hand at 3/31/20 ($M) Actual Commentary
Cash and investments $ 182.3 $120 million additional borrowing capacity from
existing facility
$300 million credit facility matures July 2023Total borrowings $ 180.0
TTM results ($M) Actual Commentary
Adjusted EBITDA $ 96.6 Consistent predictable cashflow
Operating Cashflow $ 85.4
Free Cashflow $ 37.8
Covenant Compliance Actual Commentary
Consolidated Net Leverage Ratio 1.4x Credit agreement allows up to 3.75x leverage
Consolidated Interest Leverage Ratio 25.6x Credit agreement requires no less than 3.0x
coverage
1717
June Outlook, Updated for Pandemic
Subscription revenue $87.5 In the June quarter the normal ongoing growth from customer go-lives and expansion may be fully
offset by the impact of a full quarter’s reduced activity. While difficult to forecast with precision we
expect subscription revenues roughly equal to the $87.5 million in Q3, 12-13% constant currency
growth.Subscription Y/Y Growth CC (1) 16%
Total Revenue $111.7
In addition to the subscription revenue impact noted above, we expect a further $2-4 million of impact
to software, services and other revenues. Total revenue in the June quarter could be $2-4 million lower
than Q3.
Core operating income(1) $16.0Reduced revenues with ongoing costs could impact core operating income by up to $1-2 million versus
the levels seen in Q3. Core operating margin %(1) 14%
Adjusted EBITDA(1) $23.2Reduced transaction volumes and revenues could reduce adjusted EBITDA by up to $1-2 million
versus the levels seen in Q3.Adjusted EBITDA as a % of Revenue(1) 21%
Core EPS $0.27 Flow through effects could result in Core EPS in the range of $0.23 - $0.25.
1) Core operating income, adjusted EBITDA, core operating margin, core EPS and constant currency revenue growth are non-GAAP measures. Definitions are included at the end of this document.
2) Any non-GAAP outlook provided has not been reconciled to the comparable GAAP outlook because of the difficulty of predicting the amounts to be adjusted, including but not limited to acquisition-related charges, minimum pension
liability adjustments, stock compensation expense and weighted average shares outstanding. Since these factors have a significant impact on our future GAAP results, a reconciliation is not available on a forward looking basis
without unreasonable effort.
Bottomline is a well-positioned for the current economic challenges with a recurring revenue model and a product set that is mission critical. Like most
businesses however there will be some level of COVID impact, primarily in the following areas (i) transaction based revenue streams, (ii) go live dates for
existing backlog, (iii) software license and professional services revenues and (iv) new bookings.
While the exact impact is difficult to quantify with precision, shown below are the Q3 results with commentary regarding the likely impact of the economic
disruption on fiscal Q4. These results may be indicative of performance while the economy is largely shut down.
June quarter and quarters beyond in FY21 as long as disruption continuesQ3 Results
1818
• Sales & Marketing and Product investments
driving 15 – 20% subscription growth
• 16% growth in Q3’20
• Current run rate of $350 million
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FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Subscription Revenue Growth
1919
Normalized Outlook, Post-Pandemic
Subscription revenue In fiscal 20 year to date, subscription revenue growth accelerated to the
upper end of our 15-20% range. We expect to return to growth at these
levels, or even higher if (as we expect) demand increases as the
economy normalizes.
Non-subscription revenue Software and services revenues have been particularly impacted by the
current situation. As the economy normalizes we expect the customer
preference for our cloud solutions over on-premise applications to remain
strong. We would expect non-subscription revenues to continue to
decline but at a more modest rate.
EBITDA margin We would expect to operate at 21-22% EBITDA margins as we emerge
from the effects of the pandemic.
Results in fiscal 20 year-to-date and the continued and increasing relevance of our solutions suggest that Bottomline will be able to fairly quickly ramp back
up to a normalized level of performance as the economy recovers.
Commentary
1) Core operating income, adjusted EBITDA, core operating margin, core EPS and constant currency revenue growth are non-GAAP measures. Definitions are included at the end of this document.
2) Any non-GAAP outlook provided has not been reconciled to the comparable GAAP outlook because of the difficulty of predicting the amounts to be adjusted, including but not limited to acquisition-related charges, minimum pension
liability adjustments, stock compensation expense and weighted average shares outstanding. Since these factors have a significant impact on our future GAAP results, a reconciliation is not available on a forward looking basis
without unreasonable effort.
2020
Investment Highlights
Large marketopportunity
Leading businesspayments product set
Driving subscription revenue
Target 15-20% growth
Attractive EBITDA Margin
Attractive lifetimecustomer value
10-15 years or more
2121
APPENDIX
2222
27 30 3141
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171195
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296
0
50
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200
250
300
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
118 131 138158
189224
255
301331 343 349
394422
0
50
100
150
200
250
300
350
400
450
500
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
916 19
3442
46 50
61
71 75 75
94100
0
50
100
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
613 15
2937
40 43
53
61 6258
7477
0
50
100
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Financial Performance
$M
$M $M
Subscription Revenue
Adjusted EBITDA Operating Income
$M
Revenue
22% CAGR11% CAGR
22% CAGR
CAGR measured from FY07 to FY19
23% CAGR