Micro Focus International plc (MFGP) Q2 2022 Earnings Conference Call June 22, 2022 8:30 AM ET

Company Participants

Stephen Murdoch - Chief Executive Officer

Matt Ashley - Chief Financial Officer

Conference Call Participants

Charles Brennan - Jefferies

Will Wallace - Numis Securities

Operator

Good afternoon, and good morning everyone. Today's earnings call covers the Six Months Ended the 30th of April 2022. I am pleased to be joined today by both, Stephen Murdoch our Chief Executive and Matt Ashley, our Chief Financial Officer.

The slides for this presentation will be presented as part of the webcast facility accompanying this call. For those participating by phone, the webcast and the slides can both be accessed on the Micro Focus Investor Relations website. A recording of this call and the slides will be made available on this website shortly after the call finishes. After the presentation, we look forward to covering as many of your questions as we have time for.

I would now like to hand over to Stephen to provide an overview of the period.

Stephen Murdoch

Hello everyone, and welcome to our Interim Results Presentation. Summarizing progress in the half, we're in line with where we expect it to be. And within that, we're a little behind on revenue, ahead on cost, cash was strong and we delivered on our product innovation commitments.

We suspended operations in Russia in Q2 and this impacted revenue by just under half a point. Looking beyond the headline figures, there is clear evidence in the underlying portfolios that our efforts to grow in key areas and improve levels of high quality recurring SaaS and subscription revenue are gaining traction. For example, we're now on track in three of our four sub portfolios in cyber and we delivered another period of double-digit growth in mainframe modernization independent of our strategic partnership with AWS. Our license performance was disappointing as we are not yet able to smooth out the volatility that large transactions in our more mature portfolios can cause in any individual period.

Maintenance revenues remain a critical priority and whilst we still have much to do, our actions are beginning to deliver results with the rate of decline improving by approximately 2 percentage points from the FY ‘21 exit run rate. There is also growing evidence of improving trends in the underlying metrics in a number of our key focus areas. Overall, we're pleased with the progress on product, having delivered new solutions in every portfolio, including important SaaS capabilities in ITOM and in cyber.