Leading Global Provider of Supply Chain Management Solutions
Leading Global Provider of Supply Chain Management Solutions NASDAQ: AMSWA Allan Dow CEO © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential Vincent Klinges CFO Septemb er 2020
Forward Looking Statements This presentation may include statements that may constitute “forward-looking statements, ” including estimates of future business prospects or financial results and statements containing the words “believe, ” “expect, ” or similar expressions. Any forward-looking statements herein are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. There are many factors that could cause actual results of American Software to differ materially from those anticipated by forward-looking statements made herein. These factors include continuing economic uncertainty, the timing and degree of business recovery, unpredictability and the irregular pattern of future revenues, competitive pressures, delays and other risks associated with new product development, the unpredictability of the effectiveness and duration of third-party marketing agreements, undetected software errors, and risks associated with market acceptance of the Company’s products and services as well as a number of other risk factors that could affect the future performance of the Company. Please refer to a discussion of these factors and others in the Company's most recent Annual Report on Form 10 -K and in its Quarterly Reports on Form 10 -Q and other reports and documents subsequently filed with the Securities and Exchange Commission. For more information about risks the Company could face as well as other information, contact Vincent C. Klinges, Chief Financial Officer, American Software, Inc. , 470 East Paces Ferry Rd. , Atlanta, GA 30305, (800) 726 -2946 or (404) 2645477. FAX: (404) 264 -5206 INTERNET: www. amsoftware. com or E-mail: ask@amsoftware. com. © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 2
Company Overview NASDAQ: AMSWA © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential
Supply Chain Software Overview 50+ Years as a Best-of-Breed Provider of Supply Chain and Retail Optimization Solutions 1, 000+ Customers in over 80 Countries Attracted by Vertically Oriented Solutions and Functional Depth Multi-Brand Strategy Addresses Needs of Global 1000, Enterprise and SMB Companies Proven Results and Track Record of Innovation © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 4
Supply Chain Management Growth Market Forecast 2016 to 2022 The Supply Chain Management (SCM) market exceeded $15 billion in total software revenue in 2019 and reach nearly $20 billion by 2022. This represents a CAGR of 9. 7% through 2022. Supply Chain Planning represents approximately 25 -30% of the total supply chain market. © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 5
Logility: 2019 Gartner S&OP Magic Quadrant “Logility has a good understanding of the direction of the S&OP market. Its vision for a digital supply chain twin, the use of continuous planning and advanced analytics/AI is above average. ” “[Logility’s] reference customers reported above-average overall satisfaction levels with a strong likelihood to select Logility again. They also reported above-average satisfaction with the level of business benefits achieved. ” Tim Payne, Research Vice President S&OP Magic Quadrant, May 2019 © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 6
Digital Supply Chain Platform & Industry Verticals SCM Customer Base Service/Aftermarket Life Sciences 6% Chemical/Process 6% Apparel and Footwear 12% Food and Beverage 10% 14% Wholesale Distribution 9% 16% 13% Retail 14% Durable Goods © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 8 Other Consumer Goods Total Consumer Products 42%
Diversified Customer Base Consumer Goods Softgoods/ Apparel Durable Goods/ Service Parts © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential Retail 8 Life Sciences Process/Chemical
Forces Redefining Supply Chain and Business Planning Global Market Dynamics Talent Wars Convergence of Planning & Execution Real-time Insights Resiliency Digital Twin Speed & Agility Digital Natives © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 10
Powering the Digital Supply Chain from Concept to Customer © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential
Supply Chain Digital Twin for Continuous Planning 11 © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential
Automating Planning and Decision Support Automation that can be Over-ridden Opt-In Automation General Information Take responsibility for this task and don’t let me or anyone else interfere Automatic Reorder Points for Replenishment Advisory Guidance Specific Information Non-optional Automation Try Multiple Forecasting Models and recommend the best fit Automated Alerts (Planning Systems, Production Equipment) Statistical Forecasting Use of historical data (sales, production, etc. ) © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 12 Source: Gartner 2017
Our Transformation FROM SOFTWARE TO SERVICE © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 15 PROVIDER
Our Brand PROMISE A partner to help transform our customers businesses with our industry expertise and solutions to realize value within the first 6 months and start an innovation journey that delivers a digital decision support platform to MAKE OUR CUSTOMERS MORE SUCCESSFUL YEAR AFTER YEAR. © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 17
Financial Summary NASDAQ: AMSWA © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential
Revenue Contributions Three Business Segments Revenue by Segment ($MMs) $30, 6 0, 5 $29, 3 0, 7 $27, 3 $27, 4 $28, 0 $27, 4 $28, 2 0, 6 4, 5 0, 7 $26, 3 0, 7 0, 6 0, 5 0, 6 5, 0 0, 6 4, 2 5, 2 4, 4 5, 0 5, 4 4, 9 4, 5 2% 16% ERP [PERCENTAGE] Supply Chain Management IT Solutions TPM ERP © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 19 21, 5 22, 1 21, 5 21, 2 22, 3 1 Q 19 2 Q 19 3 Q 19 4 Q 19 1 Q 20 23, 5 2 Q 20 25, 6 3 Q 20 SCM 23, 6 4 Q 20 21, 7 1 Q 21
Transition to the Cloud 30, 0 Total ACV % of revenue 1 Q 16 2, 9 3% 2 Q 16 3, 1 3% 3 Q 16 3, 3 3% 4 Q 16 3, 8 3% 1 Q 17 4, 0 4% 2 Q 17 4, 4 4% 3 Q 17 4, 9 4% 4 Q 17 6, 1 6% 1 Q 18 7, 7 7% 2 Q 18 9, 9 9% 3 Q 18 10, 9 10% 4 Q 18 12, 7 11% 1 Q 19 13, 2 12% 2 Q 19 14, 5 13% 3 Q 19 16, 1 14% 4 Q 19 17, 3 16% 1 Q 20 20, 2 19% 25, 0 2 Q 20 22, 4 21% 3 Q 20 25, 5 +36% 23% Y-o-Y 4 Q 20 26, 4 23% 1 Q 21 [VALUE] 27, 6 24% 30% 25% [VALUE] 20, 0 20% 15, 0 15% 10, 0 10% 5, 0 5% - 0% © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 20
Rising Mix of Recurring Revenue Quarterly Revenue in $MMs 32, 4 27, 4 26, 7 27, 8 27, 7 14, 6 14, 9 14, 7 15, 4 30, 6 28, 0 27, 4 26, 4 18, 6 15, 9 31, 4 26, 3 27, 4 27, 3 14, 0 17, 8 13, 1 12, 7 14, 8 27, 0 29, 3 28, 2 11, 9 11, 6 11, 9 12, 6 10, 6 Non Recurring 11, 5 11, 8 11, 7 12, 4 12, 9 13, 8 1 Q 17 2 Q 17 3 Q 17 4 Q 17 1 Q 18 2 Q 18 3 Q 18 © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 13, 5 4 Q 18 14, 7 15, 0 15, 1 14, 7 15, 5 16, 3 16, 6 16, 7 1 Q 19 2 Q 19 3 Q 19 4 Q 19 1 Q 20 2 Q 20 3 Q 20 4 Q 20 1 Q 21 21
Growing Subscription Revenue Stream Subscription & Maintenance Revenue in $MMs 42% 45% 44% 46% 49% 54% 46% 53% 56% 56% 58% 16, 3 14, 7 13, 8 12, 4 11, 5 11, 8 11, 7 0, 9 1, 1 1, 2 1, 6 3, 2 2, 0 15, 1 3, 3 3, 7 2, 6 57% 16, 6 16, 7 5, 8 6, 3 6, 4 15, 5 14, 7 13, 5 12, 9 2, 6 15, 0 61% 54% 3, 8 4, 5 5, 5 % of revenue Total Recurring Subscription 10, 6 10, 7 10, 5 10, 8 11, 2 10, 9 1 Q 17 2 Q 17 3 Q 17 4 Q 17 1 Q 18 2 Q 18 3 Q 18 4 Q 18 © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 11, 5 1 Q 19 11, 6 2 Q 19 22 11, 4 3 Q 19 10, 8 11, 0 10, 8 10, 4 10, 3 4 Q 19 1 Q 20 2 Q 20 3 Q 20 4 Q 20 1 Q 21
Gross Margin Expansion Gross Profit in $MMs Non-GAAP Subscription Gross Margin* 57, 0% 50, 2% 52, 3% 14, 7 13, 8 54, 4% 52, 0% 14, 0 3, 2 2, 3 2, 1 2, 3 9, 4 1 Q 19 2 Q 19 3 Q 19 2, 3 53, 4% 54, 3% 53, 8% 17, 4 14, 3 3, 5 14, 6 3, 1 15, 2 73, 6% 52, 2% 4, 7 3, 8 3, 3 73, 5% 72, 5% 15, 9 8, 9 9, 2 9, 0 8, 7 8, 5 4 Q 19 1 Q 20 2 Q 20 3 Q 20 4 Q 20 1 Q 21 Maintenance Gross Profit Subscription Gross Profit License & Services Gross Profit Gross margin © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 4 Q 20 1 Q 21 4, 0 14, 2 2, 9 3, 5 4, 5 71, 7% 4, 6 71, 6% 4, 3 2, 1 3, 8 73, 9% 69, 5% 60, 6% 2, 3 1, 8 70, 2% 3, 1 2, 7 3, 6 2, 3 1 Q 19 2, 3 3 Q 19 4 Q 19 1 Q 20 Non-GAAP Subscription Gross Profit 2 Q 20 3 Q 20 Non-GAAP Subscription Gross Margin *Non-GAAP subscription gross profit and gross margin excludes amortization of capitalized software 23
Sustained Profitability Amidst Cloud Transition Adjusted EBITDA in $MMs 18, 1% 18, 0% 19, 8% 19, 1% 20, 3% 6, 1 13, 8% 12, 5% 10, 5% 17, 2% 16, 9% 15, 5% 13, 3% 12, 7% 10, 2% 5, 3 13, 3% 12, 5% 11, 4% 5, 3 5, 0 4, 8 4, 7 4, 6 4, 5 3, 9 3, 5 3, 4 3, 5 3, 1 2, 8 2, 7 1 Q 17 2 Q 17 3 Q 17 4 Q 17 1 Q 18 2 Q 18 3 Q 18 4 Q 18 1 Q 19 Adjusted EBITDA © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 2 Q 19 3 Q 19 Adjusted EBITDA Margin 24 4 Q 19 1 Q 20 2 Q 20 3 Q 20 4 Q 20 1 Q 21
Improved Visibility from Backlog Growth Remaining Performance Obligation (RPO) in $MMs 80 72 59 54 54 14 15 40 1 Q 19 17 76 62 30 27 30 77 75 25 31 18 39 42 45 45 45 2 Q 19 3 Q 19 4 Q 19 1 Q 20 2 Q 20 Short-term RPO 50 3 Q 20 50 46 4 Q 20 1 Q 21 Long-term RPO © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential In Q 1 2021 25 RPO grew 4% y/y Short-term +11% y/y Long-term -8% y/y
Current Valuation Metrics © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 26
Investment Highlights Supply Chain Software Leader Multi-Brand Strategy Innovative Technology Saa. S Transition Disciplined Capital Allocation Strong Financial Position © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential 24
NASDAQ: AMSWA www. amsoftware. com www. logility. com www. demandsolutions. com www. ngcsoftware. com © 2020 American Software, Inc. All rights reserved. | Proprietary & Confidential Septemb er 2020
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