Record Total Revenues of $1.535 billion Up 71% Y/Y
Record Enterprise Cloud Bookings
Fiscal 2024 Second Quarter Highlights
Total
Revenues
(in
millions)
|
|
Annual Recurring
Revenues
(in
millions)
|
|
Cloud
Revenues
(in
millions)
|
Reported
|
Constant
Currency
|
|
Reported
|
Constant
Currency
|
|
Reported
|
Constant
Currency
|
$1,535
|
$1,509
|
|
$1,146
|
$1,128
|
|
$450
|
$446
|
+71.0 %
|
+68.2 %
|
|
+58.0 %
|
+55.6 %
|
|
+10.1 %
|
+9.2 %
|
Annual Recurring
Revenues represent 75% of Total Revenues
|
- Record total revenues of $1.535 billion, up 71.0% Y/Y or up 68.2% in
constant currency (CC)
- Annual Recurring Revenues (ARR) of $1.146 billion, up 58.0% Y/Y or up 55.6% in
CC
- Cloud revenues of $450 million,
up 10.1% Y/Y or up 9.2% in CC
- Record quarterly enterprise cloud bookings(1) of
$236 million, up 62.8% Y/Y
- Operating cash flows of $351
million and free cash flows(2) of $305 million
- GAAP-based net income of $38
million
- Adjusted EBITDA(2) of $566
million, margin of 36.9%
- GAAP-based diluted earnings per share (EPS) of $0.14, Non-GAAP diluted EPS(2) of
$1.24
- Announced definitive agreement to divest the Application
Modernization and Connectivity (AMC) business to Rocket Software
for $2.275 billion, net proceeds to
reduce debt, applied to the Acquisition Term Loan and Term Loan
B
WATERLOO, ON, Feb. 1, 2024
/PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX), (TSX:
OTEX), today announced its financial results for the second quarter
ended December 31, 2023.
"OpenText demonstrated remarkable performance in the second
quarter achieving record total revenues of $1.535 billion, up 71% year-over-year," said
Mark J. Barrenechea, OpenText CEO
& CTO. "Driven by increased cloud demand, we saw record
quarterly enterprise cloud bookings of $236
million, up 63% year-over year, led by continued strong
enterprise content, Micro Focus cloud contribution and customers
beginning their AI journey. With continued strength in our
enterprise cloud businesses and our new Aviator ™ AI products, we
are raising our Cloud Booking outlook to 25% to 30% growth this
year."
Mr. Barrenechea further added: "In November 2023, we announced our intention to
divest the AMC business. This divestiture positions us to focus on
higher-growth opportunities within Information Management such as
Cloud and AI and we remain on track to closing the transaction in
the fourth quarter of Fiscal 2024, subject to regulatory approvals
and customary closing conditions."
"I am pleased with OpenText's solid business execution in Q2,"
said Madhu Ranganathan, OpenText
EVP, CFO. "We delivered $566 million
of adjusted EBITDA, up 66% year-over-year and free cash flows of
$305 million, up 87% year-over-year.
Our balance sheet and liquidity position remain strong with
approximately $1 billion in cash as
of December 31, 2023. We remain on track to grow Micro Focus
organically and bring Micro Focus on to the OpenText operating
model by the end of this fiscal year."
(1)
|
Enterprise cloud
bookings is defined as the total value from cloud services and
subscription contracts, entered into in the period that are new,
committed and incremental to our existing contracts, entered into
with our enterprise based customers.
|
(2)
|
Please see Note 2 "Use
of Non-GAAP Financial Measures" to the consolidated financial
statements below.
|
Financial Highlights for Q2 Fiscal 2024 with Year Over Year
Comparisons
Summary of Quarterly
Results
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share data)
|
Q2
FY'24
|
Q2
FY'23
|
$
Change
|
% Change
|
|
Q2
FY'24 in CC*
|
% Change
in CC*
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$450.1
|
$408.7
|
$41.4
|
10.1 %
|
|
$446.1
|
9.2 %
|
|
Customer
support
|
695.8
|
316.5
|
379.3
|
119.8 %
|
|
682.3
|
115.6 %
|
|
Total annual
recurring revenues**
|
$1,145.9
|
$725.2
|
$420.7
|
58.0 %
|
|
$1,128.4
|
55.6 %
|
|
License
|
289.2
|
108.0
|
181.3
|
167.9 %
|
|
283.6
|
162.7 %
|
|
Professional service
and other
|
99.8
|
64.3
|
35.5
|
55.2 %
|
|
97.3
|
51.3 %
|
|
Total
revenues
|
$1,534.9
|
$897.4
|
$637.4
|
71.0 %
|
|
$1,509.3
|
68.2 %
|
|
GAAP-based operating
income
|
$253.9
|
$184.7
|
$69.2
|
37.5 %
|
|
N/A
|
N/A
|
|
Non-GAAP-based
operating income (1)
|
$532.9
|
$318.1
|
$214.8
|
67.5 %
|
|
$517.0
|
62.5 %
|
|
GAAP-based net income
attributable to OpenText
|
$37.7
|
$258.5
|
($220.8)
|
(85.4) %
|
|
N/A
|
N/A
|
|
GAAP-based EPS,
diluted
|
$0.14
|
$0.96
|
($0.82)
|
(85.4) %
|
|
N/A
|
N/A
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$1.24
|
$0.89
|
$0.35
|
39.3 %
|
|
$1.20
|
34.8 %
|
|
Adjusted
EBITDA (1)
|
$566.3
|
$340.9
|
$225.3
|
66.1 %
|
|
$549.7
|
61.2 %
|
|
Operating cash
flows
|
$350.7
|
$195.2
|
$155.5
|
79.7 %
|
|
N/A
|
N/A
|
|
Free cash flows
(1)
|
$305.4
|
$163.0
|
$142.5
|
87.4 %
|
|
N/A
|
N/A
|
|
|
|
Summary of YTD
Results
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share data)
|
FY'24 YTD
|
FY'23 YTD
|
$
Change
|
% Change
|
|
FY'24 YTD
in
CC*
|
% Change
in CC*
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$901.1
|
$813.3
|
$87.8
|
10.8 %
|
|
$894.7
|
10.0 %
|
|
Customer
support
|
1,393.5
|
633.9
|
759.6
|
119.8 %
|
|
1,370.8
|
116.3 %
|
|
Total annual
recurring revenues**
|
$2,294.6
|
$1,447.2
|
$847.4
|
58.6 %
|
|
$2,265.4
|
56.5 %
|
|
License
|
462.3
|
170.5
|
291.8
|
171.1 %
|
|
454.2
|
166.4 %
|
|
Professional service
and other
|
203.5
|
131.8
|
71.7
|
54.4 %
|
|
199.1
|
51.1 %
|
|
Total
revenues
|
$2,960.3
|
$1,749.5
|
$1,210.8
|
69.2 %
|
|
$2,918.8
|
66.8 %
|
|
GAAP-based operating
income
|
$466.8
|
$331.0
|
$135.7
|
41.0 %
|
|
N/A
|
N/A
|
|
Non-GAAP-based
operating income (1)
|
$993.7
|
$599.0
|
$394.7
|
65.9 %
|
|
$964.4
|
61.0 %
|
|
GAAP-based net income
attributable to OpenText
|
$118.6
|
$141.6
|
($23.0)
|
(16.2) %
|
|
N/A
|
N/A
|
|
GAAP-based EPS,
diluted
|
$0.44
|
$0.52
|
($0.08)
|
(15.4) %
|
|
N/A
|
N/A
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$2.25
|
$1.66
|
$0.59
|
35.5 %
|
|
$2.17
|
30.7 %
|
|
Adjusted
EBITDA (1)
|
$1,061.1
|
$645.0
|
$416.1
|
64.5 %
|
|
$1,030.7
|
59.8 %
|
|
Operating cash
flows
|
$397.8
|
$327.1
|
$70.6
|
21.6 %
|
|
N/A
|
N/A
|
|
Free cash flows
(1)
|
$315.0
|
$258.6
|
$56.4
|
21.8 %
|
|
N/A
|
N/A
|
|
|
|
|
|
|
|
|
(1) Please
see Note 2 "Use of Non-GAAP Financial Measures" to the consolidated
financial statements below.
|
|
(2) Please
also see Note 14 to the Company's Fiscal 2018 Consolidated
Financial Statements on Form 10-K. Reflective of the amount of net
tax benefit arising from the internal reorganization assumed to be
allocable to the current period based on the forecasted utilization
period.
|
|
Note: Individual line
items in tables may be adjusted by non-material amounts to enable
totals to align to published financial statements.
|
|
*CC: Constant currency
for this purpose is defined as the current period reported
revenues/expenses/earnings represented at the prior comparative
period's foreign exchange rate.
|
|
**Annual recurring
revenue is defined as the sum of Cloud services and subscriptions
revenue and Customer support revenue.
|
Dividend
As part of our quarterly, non-cumulative cash dividend program,
the Board declared on January 31, 2024, a cash dividend of
$0.25 per common share. The record
date for this dividend is March 1, 2024 and the payment date
is March 20, 2024. OpenText believes strongly in returning
value to its shareholders and intends to maintain its dividend
program. Any future declarations of dividends and the establishment
of future record and payment dates are all subject to the final
determination and discretion of the Board of Directors.
Quarterly Business Highlights
- OpenText announced the release of Cloud Editions 24.1 and its
latest OpenText Aviator™ innovations
- OpenText announced divestment of its AMC business to Rocket
Software for $2.275 billion
- Key customer wins in the quarter include: Beyond One (Virgin
Mobile), BMW, Carl Zeiss, Coop
Danmark, Edward Don & Company,
F5 Networks, FedEx Express, Google, Harris County, Metropolitan
Utilities District, Nakit, Openbaar Ministerie, Philips Healthcare,
Preh GmbH, Turkcell and Zoho
- OpenText named a leader in Customer Communications Management
and Communications Experience Platforms in the 2023 Aspire
Leaderboard
- OpenText named a leader in the IDC MarketScape: Worldwide
Multi-Enterprise Supply Chain Commerce Network 2023 Vendor
Assessment
Summary of Quarterly
Results
|
|
|
|
|
|
|
|
|
Q2
FY'24
|
Q1
FY'24
|
Q2
FY'23
|
% Change
(Q2 FY'24 vs
Q1 FY'24)
|
|
% Change
(Q2 FY'24 vs
Q2 FY'23)
|
|
Revenue
(millions)
|
$1,534.9
|
$1,425.4
|
$897.4
|
7.7 %
|
|
71.0 %
|
|
GAAP-based gross
margin
|
73.6 %
|
71.4 %
|
70.8 %
|
220
|
bps
|
280
|
bps
|
Non-GAAP-based gross
margin (1)
|
78.6 %
|
77.3 %
|
76.0 %
|
130
|
bps
|
260
|
bps
|
GAAP-based earnings
(loss) per share, diluted
|
$0.14
|
$0.30
|
$0.96
|
(53.3) %
|
|
(85.4) %
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$1.24
|
$1.01
|
$0.89
|
22.8 %
|
|
39.3 %
|
|
|
(1) Please see Note 2 "Use of
Non-GAAP Financial Measures" to the consolidated financial
statements below.
|
|
(2) Please
also see Note 14 to the Company's Fiscal 2018 Consolidated
Financial Statements on Form 10-K. Reflective of the amount of net
tax benefit arising from the internal reorganization assumed to be
allocable to the current period based on the forecasted utilization
period.
|
Conference Call Information
OpenText posted an investor presentation on its Investor
Relations website at https://investors.opentext.com and invites the
public to listen to the earnings conference call today at
5:00 p.m. ET (2:00 p.m. PT). To join the call instantly, use
this Call Me Link. Alternatively, dial 1-800-319-4610 (toll-free)
or +1-604-638-5340 (international). Please dial-in 10 minutes ahead
of time to ensure proper connection. A live webcast of the earnings
conference call will be available on the Investor Relations section
of the Company's website at
https://investors.opentext.com/events-and-presentations.
A replay of the call will be available beginning February 1, 2024 at 7:00
p.m. ET through 11:59 p.m. on
February 15, 2024 and can be accessed
by dialing 1-855-669-9658 (toll-free) or +1-604-674-8052
(international) and using passcode 0620 followed by the number
sign.
Please see below note (2) for a reconciliation of
U.S. GAAP-based financial measures used in this press release
to Non-GAAP-based financial measures.
About OpenText
OpenText, The Information Company™, enables organizations to
gain insight through market leading information management
solutions, powered by OpenText Cloud Editions. For more information
about OpenText (NASDAQ: OTEX, TSX: OTEX) visit opentext.com.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this press release, including statements
about Open Text Corporation ("OpenText" or "the Company") on
growth; future cloud booking growth and cloud demand; future
organic growth initiatives and deployment of capital; intention to
maintain a dividend program, including any targeted annualized
dividend; organic growth of Micro Focus and timing to bring
Micro Focus onto OpenText's operating model; divestitures and their
expected impact, including in connection with the proposed
divestiture of the AMC business and the timing of closing thereof;
future tax rates; new platform and product offerings and associated
benefits to customers; continued strength in enterprise cloud
businesses and our new OpenText Aviator™ AI products, including our
AI strategy and vision; and other matters, which may contain words
such as "anticipates", "expects", "intends", "plans", "believes",
"seeks", "estimates", "may", "could", "would", "might", "will" and
variations of these words or similar expressions are intended to
identify forward-looking statements or information under applicable
securities laws (forward-looking statements). In addition, any
statements or information that refer to expectations, beliefs,
plans, projections, objectives, performance or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements, and are
based on our current expectations, forecasts and projections about
the operating environment, economies and markets in which we
operate. Forward-looking statements reflect our current estimates,
beliefs and assumptions, which are based on management's perception
of historic trends, current conditions and expected future
developments, as well as other factors it believes are appropriate
in the circumstances, such as certain assumptions about the
economy, as well as market, financial and operational assumptions.
Management's estimates, beliefs and assumptions are inherently
subject to significant business, economic, competitive and other
uncertainties and contingencies regarding future events and, as
such, are subject to change. We can give no assurance that such
estimates, beliefs and assumptions will prove to be correct. Future
declarations of dividends are also subject to the final
determination and discretion of the Board of Directors, and an
annualized dividend has not been approved or declared by the Board.
Forward-looking statements involve known and unknown risks and
uncertainties such as those relating to: receipt of regulatory
approvals and achievement of customary closing conditions for the
AMC divestiture; all statements regarding the expected future
financial position, results of operations, cash flows, dividends,
future share buybacks, financing plans, business strategy, budgets,
capital expenditures, competitive positions, growth opportunities,
plans and objectives of management, including any anticipated
synergy benefits; our ability to integrate successfully Micro
Focus' operations and programs, including incurring unanticipated
costs, delays or difficulties; our ability to successfully complete
the proposed divestiture of the AMC business, risks related to the
proposed divestiture and the impact of the divestiture on our
remaining business; and our ability to develop, protect and
maintain our intellectual property and proprietary technology and
to operate without infringing on the proprietary rights of others.
We rely on a combination of copyright, patent, trademark and trade
secret laws, non-disclosure agreements and other contractual
provisions to establish and maintain our proprietary rights, which
are important to our success. From time to time, we may also
enforce our intellectual property rights through litigation in line
with our strategic and business objectives. The actual results that
OpenText achieves may differ materially from any forward-looking
statements. For additional information with respect to risks and
other factors which could occur, see the Company's Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and other securities
filings with the Securities and Exchange Commission (SEC) and other
securities regulators. Readers are cautioned not to place undue
reliance upon any such forward-looking statements, which speak only
as of the date made. Unless otherwise required by applicable
securities laws, the Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Further,
readers should note that we may announce information using our
website, press releases, securities law filings, public conference
calls, webcasts and the social media channels identified on the
Investors section of our website (https://investors.opentext.com).
Such social media channels may include the Company's or our CEO's
blog, X, formerly known as Twitter, account or LinkedIn account.
The information posted through such channels may be material.
Accordingly, readers should monitor such channels in addition to
our other forms of communication.
OTEX - F
Copyright ©2024 Open Text. OpenText is a trademark or registered
trademark of Open Text. The list of trademarks is not exhaustive of
other trademarks. Registered trademarks, product names, company
names, brands and service names mentioned herein are property of
Open Text. All rights reserved. For more information, visit:
https://www.opentext.com/about/copyright-information.
OPEN TEXT
CORPORATION
|
CONSOLIDATED BALANCE
SHEETS
|
(In thousands of
U.S. dollars, except share data)
|
|
|
December 31,
2023
|
|
June 30,
2023
|
ASSETS
|
(unaudited)
|
|
|
Cash and cash
equivalents
|
$
1,003,134
|
|
$
1,231,625
|
Accounts receivable
trade, net of allowance for credit losses of $10,642 as of
December 31, 2023 and $13,828 as of June 30,
2023
|
735,346
|
|
682,517
|
Contract
assets
|
70,656
|
|
71,196
|
Income taxes
recoverable
|
8,342
|
|
68,161
|
Prepaid expenses and
other current assets
|
215,396
|
|
221,732
|
Assets held for
sale
|
2,051,116
|
|
—
|
Total current
assets
|
4,083,990
|
|
2,275,231
|
Property and
equipment
|
352,570
|
|
356,904
|
Operating lease right
of use assets
|
245,118
|
|
285,723
|
Long-term contract
assets
|
45,427
|
|
64,553
|
Goodwill
|
7,604,409
|
|
8,662,603
|
Acquired intangible
assets
|
2,773,220
|
|
4,080,879
|
Deferred tax
assets
|
925,282
|
|
926,719
|
Other assets
|
318,783
|
|
342,318
|
Long-term income taxes
recoverable
|
94,465
|
|
94,270
|
Total
assets
|
$
16,443,264
|
|
$
17,089,200
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
948,921
|
|
$
996,261
|
Current portion of
long-term debt
|
45,850
|
|
320,850
|
Operating lease
liabilities
|
86,868
|
|
91,425
|
Deferred
revenues
|
1,535,322
|
|
1,721,781
|
Income taxes
payable
|
119,400
|
|
89,297
|
Liabilities held for
sale
|
222,814
|
|
—
|
Total current
liabilities
|
2,959,175
|
|
3,219,614
|
Long-term
liabilities:
|
|
|
|
Accrued
liabilities
|
52,632
|
|
51,961
|
Pension liability,
net
|
129,238
|
|
126,312
|
Long-term
debt
|
8,474,599
|
|
8,562,096
|
Long-term operating
lease liabilities
|
236,481
|
|
271,579
|
Long-term deferred
revenues
|
170,273
|
|
217,771
|
Long-term income taxes
payable
|
152,046
|
|
193,808
|
Deferred tax
liabilities
|
238,473
|
|
423,955
|
Total long-term
liabilities
|
9,453,742
|
|
9,847,482
|
Shareholders'
equity:
|
|
|
|
Share capital and
additional paid-in capital
|
|
|
|
271,854,655
and 270,902,571 Common Shares issued and
outstanding at December 31, 2023 and June 30, 2023,
respectively; authorized Common Shares: unlimited
|
2,261,856
|
|
2,176,947
|
Accumulated other
comprehensive income (loss)
|
(83,499)
|
|
(53,559)
|
Retained
earnings
|
2,029,643
|
|
2,048,984
|
Treasury stock, at
cost (4,400,034 and 3,536,375 shares at December 31, 2023 and
June 30, 2023, respectively)
|
(179,089)
|
|
(151,597)
|
Total OpenText
shareholders' equity
|
4,028,911
|
|
4,020,775
|
Non-controlling
interests
|
1,436
|
|
1,329
|
Total shareholders'
equity
|
4,030,347
|
|
4,022,104
|
Total liabilities
and shareholders' equity
|
$
16,443,264
|
|
$
17,089,200
|
OPEN TEXT
CORPORATION
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(In thousands of
U.S. dollars, except share and per share data)
|
(unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Six Months
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
450,091
|
|
$
408,674
|
|
$
901,105
|
|
$
813,325
|
Customer
support
|
695,762
|
|
316,508
|
|
1,393,475
|
|
633,859
|
License
|
289,238
|
|
107,960
|
|
462,264
|
|
170,508
|
Professional service
and other
|
99,777
|
|
64,298
|
|
203,453
|
|
131,784
|
Total
revenues
|
1,534,868
|
|
897,440
|
|
2,960,297
|
|
1,749,476
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
180,148
|
|
134,314
|
|
351,560
|
|
266,113
|
Customer
support
|
73,374
|
|
28,589
|
|
148,388
|
|
55,943
|
License
|
5,983
|
|
3,863
|
|
9,822
|
|
6,621
|
Professional service
and other
|
75,459
|
|
54,064
|
|
155,381
|
|
107,864
|
Amortization of
acquired technology-based intangible assets
|
70,784
|
|
40,863
|
|
147,608
|
|
83,500
|
Total cost of
revenues
|
405,748
|
|
261,693
|
|
812,759
|
|
520,041
|
Gross profit
|
1,129,120
|
|
635,747
|
|
2,147,538
|
|
1,229,435
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
220,220
|
|
109,700
|
|
454,657
|
|
219,898
|
Sales and
marketing
|
280,263
|
|
177,171
|
|
552,064
|
|
344,341
|
General and
administrative
|
173,264
|
|
77,603
|
|
304,475
|
|
155,677
|
Depreciation
|
33,415
|
|
22,858
|
|
67,506
|
|
46,032
|
Amortization of
acquired customer-based intangible assets
|
113,925
|
|
53,446
|
|
234,117
|
|
107,884
|
Special charges
(recoveries)
|
54,166
|
|
10,306
|
|
67,960
|
|
24,587
|
Total operating
expenses
|
875,253
|
|
451,084
|
|
1,680,779
|
|
898,419
|
Income
from operations
|
253,867
|
|
184,663
|
|
466,759
|
|
331,016
|
Other income (expense),
net
|
(68,784)
|
|
163,349
|
|
(48,614)
|
|
(25,882)
|
Interest and other
related expense, net
|
(139,292)
|
|
(38,715)
|
|
(281,056)
|
|
(79,097)
|
Income
before income taxes
|
45,791
|
|
309,297
|
|
137,089
|
|
226,037
|
Provision for
income taxes
|
8,054
|
|
50,774
|
|
18,406
|
|
84,399
|
Net income for the
period
|
$
37,737
|
|
$
258,523
|
|
$
118,683
|
|
$
141,638
|
Net (income)
attributable to non-controlling interests
|
(62)
|
|
(37)
|
|
(107)
|
|
(81)
|
Net income attributable
to OpenText
|
$
37,675
|
|
$
258,486
|
|
$
118,576
|
|
$
141,557
|
Earnings per
share—basic attributable to OpenText
|
$
0.14
|
|
$
0.96
|
|
$
0.44
|
|
$
0.52
|
Earnings per
share—diluted attributable to OpenText
|
$
0.14
|
|
$
0.96
|
|
$
0.44
|
|
$
0.52
|
Weighted average number
of Common Shares outstanding—basic (in '000's)
|
271,568
|
|
270,189
|
|
271,373
|
|
269,997
|
Weighted average number
of Common Shares outstanding—diluted (in '000's)
|
272,141
|
|
270,189
|
|
272,019
|
|
270,009
|
OPEN TEXT
CORPORATION
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
(In thousands of
U.S. dollars)
|
(unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Six Months
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income for the
period
|
$
37,737
|
|
$
258,523
|
|
$
118,683
|
|
$
141,638
|
Other comprehensive
income (loss)—net of tax:
|
|
|
|
|
|
|
|
Net foreign currency
translation adjustments
|
(15,796)
|
|
39,419
|
|
(30,379)
|
|
3,053
|
Unrealized gain (loss)
on cash flow hedges:
|
|
|
|
|
|
|
|
Unrealized gain (loss)
- net of tax (1)
|
1,522
|
|
959
|
|
(319)
|
|
(2,381)
|
(Gain) loss
reclassified into net income - net of tax (2)
|
328
|
|
1,101
|
|
337
|
|
1,689
|
Unrealized gain (loss)
on available-for-sale financial assets:
|
|
|
|
|
|
|
|
Unrealized gain (loss)
- net of tax (3)
|
450
|
|
—
|
|
229
|
|
—
|
Actuarial gain (loss)
relating to defined benefit pension plans:
|
|
|
|
|
|
|
|
Actuarial gain (loss)
- net of tax (4)
|
(91)
|
|
32
|
|
(110)
|
|
4,196
|
Amortization of
actuarial (gain) loss into net income - net of tax
(5)
|
113
|
|
37
|
|
302
|
|
74
|
Total other
comprehensive income (loss) net
|
(13,474)
|
|
41,548
|
|
(29,940)
|
|
6,631
|
Total comprehensive
income
|
24,263
|
|
300,071
|
|
88,743
|
|
148,269
|
Comprehensive income
attributable to non-controlling interests
|
(62)
|
|
(37)
|
|
(107)
|
|
(81)
|
Total comprehensive
income attributable to OpenText
|
$
24,201
|
|
$
300,034
|
|
$
88,636
|
|
$
148,188
|
______________________________
(1)
|
Net of tax expense
(recovery) of $549 and $347 for the three months ended December 31,
2023 and 2022, respectively; $(115) and $(859) for the six months
ended December 31, 2023 and 2022, respectively.
|
(2)
|
Net of tax expense
(recovery) of $118 and $397 for the three months ended December 31,
2023 and 2022, respectively; $121 and $609 for the six months ended
December 31, 2023 and 2022, respectively.
|
(3)
|
Net of tax expense
(recovery) of ($119) and $— for the three months ended December 31,
2023 and 2022, respectively; ($60) and $— for the six months ended
December 31, 2023 and 2022, respectively.
|
(4)
|
Net of tax expense
(recovery) of $91 and $106 for the three months ended December 31,
2023 and 2022, respectively; $110 and $1,210 for the six months
ended December 31, 2023 and 2022, respectively.
|
(5)
|
Net of tax expense
(recovery) of $50 and $25 for the three months ended December 31,
2023 and 2022, respectively; $125 and $51 for the six months ended
December 31, 2023 and 2022, respectively.
|
OPEN TEXT
CORPORATION
|
CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY
|
(In thousands of
U.S. dollars and shares)
|
(unaudited)
|
|
|
Three Months Ended
December 31, 2023
|
|
Common Shares
and
Additional Paid in Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Non-
Controlling
Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of
September 30, 2023
|
271,228
|
|
$
2,216,921
|
|
(4,753)
|
|
$
(196,119)
|
|
$
2,062,107
|
|
$
(70,025)
|
|
$
1,374
|
|
$
4,014,258
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock
option plans
|
340
|
|
11,111
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,111
|
Under employee stock
purchase plans
|
287
|
|
8,370
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,370
|
Share-based
compensation
|
—
|
|
39,993
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
39,993
|
Issuance of treasury
stock
|
—
|
|
(14,539)
|
|
353
|
|
17,030
|
|
(2,491)
|
|
—
|
|
—
|
|
—
|
Dividends
declared
($0.25 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(67,648)
|
|
—
|
|
—
|
|
(67,648)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(13,474)
|
|
—
|
|
(13,474)
|
Net income (loss) for
the period
|
—
|
|
—
|
|
—
|
|
—
|
|
37,675
|
|
—
|
|
62
|
|
37,737
|
Balance as of
December 31, 2023
|
271,855
|
|
$
2,261,856
|
|
(4,400)
|
|
$
(179,089)
|
|
$
2,029,643
|
|
$
(83,499)
|
|
$
1,436
|
|
$
4,030,347
|
|
|
Three Months Ended
December 31, 2022
|
|
Common Shares
and
Additional Paid in Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Non-
Controlling
Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of
September 30, 2022
|
269,881
|
|
$
2,067,881
|
|
(3,586)
|
|
$
(154,792)
|
|
$
1,978,442
|
|
$
(42,576)
|
|
$
1,186
|
|
$
3,850,141
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock
purchase plans
|
354
|
|
8,042
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,042
|
Share-based
compensation
|
—
|
|
28,822
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
28,822
|
Issuance of treasury
stock
|
—
|
|
(12,666)
|
|
291
|
|
12,666
|
|
—
|
|
—
|
|
—
|
|
—
|
Dividends
declared
($0.24299 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(65,692)
|
|
—
|
|
—
|
|
(65,692)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
41,548
|
|
—
|
|
41,548
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
258,486
|
|
—
|
|
37
|
|
258,523
|
Balance as of
December 31, 2022
|
270,235
|
|
$
2,092,079
|
|
(3,295)
|
|
$
(142,126)
|
|
$
2,171,236
|
|
$
(1,028)
|
|
$
1,223
|
|
$
4,121,384
|
OPEN TEXT
CORPORATION
|
CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY
|
(In thousands of
U.S. dollars and shares)
|
(unaudited)
|
|
|
Six Months Ended
December 31, 2023
|
|
Common Shares
and
Additional Paid in Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Non-
Controlling
Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of June
30, 2023
|
270,903
|
|
$
2,176,947
|
|
(3,536)
|
|
$
(151,597)
|
|
$
2,048,984
|
|
$
(53,559)
|
|
$
1,329
|
|
$
4,022,104
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock
option plans
|
425
|
|
14,003
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14,003
|
Under employee stock
purchase plans
|
527
|
|
17,011
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
17,011
|
Share-based
compensation
|
—
|
|
76,997
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
76,997
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(1,400)
|
|
(53,085)
|
|
—
|
|
—
|
|
—
|
|
(53,085)
|
Issuance of treasury
stock
|
—
|
|
(23,102)
|
|
536
|
|
25,593
|
|
(2,491)
|
|
—
|
|
—
|
|
—
|
Dividends
declared
($0.50 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(135,426)
|
|
—
|
|
—
|
|
(135,426)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(29,940)
|
|
—
|
|
(29,940)
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
118,576
|
|
—
|
|
107
|
|
118,683
|
Balance as of
December 31, 2023
|
271,855
|
|
$
2,261,856
|
|
(4,400)
|
|
$
(179,089)
|
|
$
2,029,643
|
|
$
(83,499)
|
|
$
1,436
|
|
$
4,030,347
|
|
|
Six Months Ended
December 31, 2022
|
|
Common Shares
and
Additional Paid in Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Non-
Controlling
Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of
June 30, 2022
|
269,523
|
|
$
2,038,674
|
|
(3,706)
|
|
$
(159,966)
|
|
$
2,160,069
|
|
$
(7,659)
|
|
$
1,142
|
|
$
4,032,260
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock
option plans
|
72
|
|
1,994
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,994
|
Under employee stock
purchase plans
|
640
|
|
17,221
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
17,221
|
Share-based
compensation
|
—
|
|
52,030
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
52,030
|
Issuance of treasury
stock
|
—
|
|
(17,840)
|
|
411
|
|
17,840
|
|
—
|
|
—
|
|
—
|
|
—
|
Dividends
declared
($0.48598 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(130,390)
|
|
—
|
|
—
|
|
(130,390)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,631
|
|
—
|
|
6,631
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
141,557
|
|
—
|
|
81
|
|
141,638
|
Balance as of
December 31, 2022
|
270,235
|
|
$
2,092,079
|
|
(3,295)
|
|
$
(142,126)
|
|
$
2,171,236
|
|
$
(1,028)
|
|
$
1,223
|
|
$
4,121,384
|
OPEN TEXT
CORPORATION
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In thousands of
U.S. dollars)
|
(unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Six Months
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income for the
period
|
$
37,737
|
|
$
258,523
|
|
$
118,683
|
|
$
141,638
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization of intangible assets
|
218,124
|
|
117,167
|
|
449,231
|
|
237,416
|
Share-based
compensation expense
|
40,175
|
|
28,822
|
|
77,270
|
|
52,030
|
Pension
expense
|
3,212
|
|
2,057
|
|
6,383
|
|
3,444
|
Amortization of debt
discount and issuance costs
|
7,325
|
|
1,686
|
|
12,821
|
|
3,166
|
Write off of right of
use assets
|
6,248
|
|
948
|
|
10,963
|
|
3,775
|
Loss on extinguishment
of debt
|
—
|
|
8,131
|
|
—
|
|
8,131
|
Loss on sale and write
down of property and equipment
|
1,419
|
|
121
|
|
1,877
|
|
121
|
Deferred
taxes
|
(88,400)
|
|
(26,135)
|
|
(177,030)
|
|
(46,802)
|
Share in net loss of
equity investees
|
8,482
|
|
289
|
|
18,178
|
|
6,823
|
Changes in financial
instruments
|
38,117
|
|
(171,607)
|
|
20,222
|
|
9,854
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(91,589)
|
|
(86,091)
|
|
(60,285)
|
|
(26,597)
|
Contract
assets
|
(24,061)
|
|
(9,400)
|
|
(46,627)
|
|
(18,454)
|
Prepaid expenses and
other current assets
|
(15,337)
|
|
(131)
|
|
3,989
|
|
(3,065)
|
Income taxes
|
29,136
|
|
28,406
|
|
58,733
|
|
44,240
|
Accounts payable and
accrued liabilities
|
76,058
|
|
36,143
|
|
(48,156)
|
|
8,964
|
Deferred
revenue
|
107,974
|
|
24,646
|
|
(42,502)
|
|
(29,133)
|
Other assets
|
1,114
|
|
(12,957)
|
|
5,218
|
|
(60,706)
|
Operating lease assets
and liabilities, net
|
(5,081)
|
|
(5,448)
|
|
(11,194)
|
|
(7,716)
|
Net cash provided by
operating activities
|
350,653
|
|
195,170
|
|
397,774
|
|
327,129
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Additions of property
and equipment
|
(45,240)
|
|
(32,215)
|
|
(82,779)
|
|
(68,539)
|
Micro Focus
acquisition
|
—
|
|
—
|
|
(9,272)
|
|
—
|
Proceeds from net
investment hedge derivative contracts
|
—
|
|
—
|
|
1,966
|
|
—
|
Other investing
activities
|
(1,229)
|
|
(873)
|
|
(6,783)
|
|
(873)
|
Net cash used in
investing activities
|
(46,469)
|
|
(33,088)
|
|
(96,868)
|
|
(69,412)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from issuance
of Common Shares from exercise of stock options and ESPP
|
17,804
|
|
5,736
|
|
29,257
|
|
15,773
|
Proceeds from
long-term debt and Revolver
|
—
|
|
1,000,000
|
|
—
|
|
1,000,000
|
Repayment of long-term
debt and Revolver
|
(186,463)
|
|
(2,500)
|
|
(372,926)
|
|
(5,000)
|
Debt issuance
costs
|
(831)
|
|
(11,650)
|
|
(2,792)
|
|
(11,650)
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(53,085)
|
|
—
|
Payments of dividends
to shareholders
|
(66,414)
|
|
(64,864)
|
|
(133,379)
|
|
(129,562)
|
Net cash provided by
(used in) financing activities
|
(235,904)
|
|
926,722
|
|
(532,925)
|
|
869,561
|
Foreign exchange gain
(loss) on cash held in foreign currencies
|
15,042
|
|
27,831
|
|
3,539
|
|
(271)
|
Increase
(decrease) in cash, cash
equivalents and restricted cash during the period
|
83,322
|
|
1,116,635
|
|
(228,480)
|
|
1,127,007
|
Cash, cash equivalents
and restricted cash at beginning of the period
|
922,150
|
|
1,706,283
|
|
1,233,952
|
|
1,695,911
|
Cash, cash equivalents
and restricted cash at end of the period
|
$ 1,005,472
|
|
$ 2,822,918
|
|
$ 1,005,472
|
|
$ 2,822,918
|
OPEN TEXT
CORPORATION
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In thousands of
U.S. dollars)
|
(unaudited)
|
|
Reconciliation of
cash, cash equivalents and restricted cash:
|
December 31,
2023
|
|
December 31,
2022
|
Cash and cash
equivalents
|
$
1,003,134
|
|
$
2,820,927
|
Restricted cash
(1)
|
2,338
|
|
1,991
|
Total cash, cash
equivalents and restricted cash
|
$
1,005,472
|
|
$
2,822,918
|
|
|
|
|
(1)
Restricted cash is classified under the Prepaid expenses and other
current assets and Other assets line items on the Consolidated
Balance Sheets.
|
Notes
(1) All dollar amounts in this
press release are in U.S. Dollars unless otherwise indicated.
(2) Use of Non-GAAP Financial
Measures: In addition to reporting financial results in accordance
with U.S. GAAP, the Company provides certain financial
measures that are not in accordance with U.S. GAAP (Non-GAAP).
These Non-GAAP financial measures have certain limitations in that
they do not have a standardized meaning and thus the Company's
definition may be different from similar Non-GAAP financial
measures used by other companies and/or analysts and may differ
from period to period. Thus it may be more difficult to compare the
Company's financial performance to that of other companies.
However, the Company's management compensates for these limitations
by providing the relevant disclosure of the items excluded in the
calculation of these Non-GAAP financial measures both in its
reconciliation to the U.S. GAAP financial measures and its
Consolidated Financial Statements, all of which should be
considered when evaluating the Company's results.
The Company uses these Non-GAAP financial measures to supplement
the information provided in its Consolidated Financial Statements,
which are presented in accordance with U.S. GAAP. The presentation
of Non-GAAP financial measures is not meant to be a substitute for
financial measures presented in accordance with U.S. GAAP, but
rather should be evaluated in conjunction with and as a supplement
to such U.S. GAAP measures. OpenText strongly encourages
investors to review its financial information in its entirety and
not to rely on a single financial measure. The Company therefore
believes that despite these limitations, it is appropriate to
supplement the disclosure of the U.S. GAAP measures with
certain Non-GAAP measures defined below.
Non-GAAP-based net income and Non-GAAP-based EPS, attributable
to OpenText, are consistently calculated as GAAP-based net income
(loss) or earnings (loss) per share, attributable to OpenText, on a
diluted basis, excluding the effects of the amortization of
acquired intangible assets, other income (expense), share-based
compensation, and special charges (recoveries), all net of tax and
any tax benefits/expense items unrelated to current period income,
as further described in the tables below. Non-GAAP-based gross
profit is the arithmetical sum of GAAP-based gross profit and the
amortization of acquired technology-based intangible assets and
share-based compensation within cost of sales. Non-GAAP-based gross
margin is calculated as Non-GAAP-based gross profit expressed as a
percentage of total revenue. Non-GAAP-based income from operations
is calculated as GAAP-based income from operations, excluding the
amortization of acquired intangible assets, special charges
(recoveries), and share-based compensation expense.
Adjusted earnings before interest, taxes, depreciation and
amortization (Adjusted EBITDA) is consistently calculated as
GAAP-based net income (loss), attributable to OpenText, excluding
interest income (expense), provision for (recovery of) income
taxes, depreciation and amortization of acquired intangible assets,
other income (expense), share-based compensation and special
charges (recoveries). Adjusted EBITDA margin is calculated as
adjusted EBITDA expressed as a percentage of total revenue.
The Company's management believes that the presentation of the
above defined Non-GAAP financial measures provides useful
information to investors because they portray the financial results
of the Company before the impact of certain non-operational
charges. The use of the term "non-operational charge" is defined
for this purpose as an expense that does not impact the ongoing
operating decisions taken by the Company's management. These items
are excluded based upon the way the Company's management evaluates
the performance of the Company's business for use in the Company's
internal reports and are not excluded in the sense that they may be
used under U.S. GAAP.
The Company does not acquire businesses on a predictable cycle,
and therefore believes that the presentation of Non-GAAP measures,
which in certain cases adjust for the impact of amortization of
intangible assets and the related tax effects that are primarily
related to acquisitions, will provide readers of financial
statements with a more consistent basis for comparison across
accounting periods and be more useful in helping readers understand
the Company's operating results and underlying operational trends.
Additionally, the Company has engaged in various restructuring
activities over the past several years, primarily due to
acquisitions and in response to our return to office planning, that
have resulted in costs associated with reductions in headcount,
consolidation of leased facilities and related costs, all which are
recorded under the Company's "Special charges (recoveries)" caption
on the Consolidated Statements of Income. Each restructuring
activity is a discrete event based on a unique set of business
objectives or circumstances, and each differs in terms of its
operational implementation, business impact and scope, and the size
of each restructuring plan can vary significantly from period to
period. Therefore, the Company believes that the exclusion of these
special charges (recoveries) will also better aid readers of
financial statements in the understanding and comparability of the
Company's operating results and underlying operational trends.
In summary, the Company believes the provision of supplemental
Non-GAAP measures allow investors to evaluate the operational and
financial performance of the Company's core business using the same
evaluation measures that management uses, and is therefore a useful
indication of OpenText's performance or expected performance of
future operations and facilitates period-to-period comparison of
operating performance (although prior performance is not
necessarily indicative of future performance). As a result, the
Company considers it appropriate and reasonable to provide, in
addition to U.S. GAAP measures, supplementary Non-GAAP
financial measures that exclude certain items from the presentation
of its financial results. Information reconciling certain
forward-looking GAAP measures to non-GAAP measures related to F'24
targets and F'26 aspirations, including A-EBITDA is not available
without unreasonable effort due to high variability, complexity and
uncertainty with respect to forecasting and quantifying certain
amounts that are necessary for such reconciliations.
The following charts provide unaudited reconciliations of
U.S. GAAP-based financial measures to Non-GAAP-based financial
measures for the following periods presented. The Micro Focus
Acquisition significantly impacts period-over-period
comparability.
Reconciliation of
selected GAAP-based measures to Non-GAAP-based
measures
for the three months
ended December 31, 2023
(In thousands,
except for per share data)
|
|
Three Months Ended
December 31, 2023
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-
based
Measures
|
Non-GAAP-
based
Measures
% of Total
Revenue
|
Cost of
revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
180,148
|
|
$ (3,609)
|
(1)
|
$
176,539
|
|
Customer
support
|
73,374
|
|
(1,128)
|
(1)
|
72,246
|
|
Professional service
and other
|
75,459
|
|
(1,756)
|
(1)
|
73,703
|
|
Amortization of
acquired technology-based intangible assets
|
70,784
|
|
(70,784)
|
(2)
|
—
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
1,129,120
|
73.6 %
|
77,277
|
(3)
|
1,206,397
|
78.6 %
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
220,220
|
|
(12,767)
|
(1)
|
207,453
|
|
Sales and
marketing
|
280,263
|
|
(13,227)
|
(1)
|
267,036
|
|
General and
administrative
|
173,264
|
|
(7,688)
|
(1)
|
165,576
|
|
Amortization of
acquired customer-based intangible assets
|
113,925
|
|
(113,925)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
54,166
|
|
(54,166)
|
(4)
|
—
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
253,867
|
|
279,050
|
(5)
|
532,917
|
|
Other income (expense),
net
|
(68,784)
|
|
68,784
|
(6)
|
—
|
|
Provision for
income taxes
|
8,054
|
|
47,054
|
(7)
|
55,108
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
37,675
|
|
300,780
|
(8)
|
338,455
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
0.14
|
|
$
1.10
|
(8)
|
$
1.24
|
|
|
|
(1)
|
Adjustment relates to
the exclusion of share-based compensation expense from our
Non-GAAP-based operating expenses as this expense is excluded from
our internal analysis of operating results.
|
(2)
|
Adjustment relates to
the exclusion of amortization expense from our Non-GAAP-based
operating expenses as the timing and frequency of amortization
expense is dependent on our acquisitions and is hence excluded from
our internal analysis of operating results.
|
(3)
|
GAAP-based and
Non-GAAP-based gross profit stated in dollars and gross margin
stated as a percentage of total revenue.
|
(4)
|
Adjustment relates to
the exclusion of special charges (recoveries) from our
Non-GAAP-based operating expenses as special charges (recoveries)
are generally incurred in the periods relevant to an acquisition
and include certain charges or recoveries that are not indicative
or related to continuing operations and are therefore excluded from
our internal analysis of operating results.
|
(5)
|
GAAP-based and
Non-GAAP-based income from operations stated in dollars.
|
(6)
|
Adjustment relates to
the exclusion of other income (expense) from our Non-GAAP-based
operating expenses as other income (expense) generally relates to
the transactional impact of foreign exchange and is generally not
indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other
income (expense) also includes our share of income (losses) from
our holdings in investments as a limited partner. We do not
actively trade equity securities in these privately held companies
nor do we plan our ongoing operations based around any anticipated
fundings or distributions from these investments. We exclude gains
and losses on these investments as we do not believe they are
reflective of our ongoing business and operating results. Other
income (expense) also includes unrealized and realized gains
(losses) on our derivatives which are not designated as hedges. We
exclude gains and losses on these derivatives as we do not believe
they are reflective of our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 18% and a Non-GAAP-based tax rate of approximately
14%; these rate differences are due to the income tax effects of
items that are excluded for the purpose of calculating
Non-GAAP-based net income. Such excluded items include
amortization, share-based compensation, special charges
(recoveries) and other income (expense), net. Also excluded are tax
benefits/expense items unrelated to current period income such as
changes in reserves for tax uncertainties and valuation allowance
reserves and "book to return" adjustments for tax return filings
and tax assessments. Included is the amount of net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 assumed to be allocable to the current period based on the
forecasted utilization period. In arriving at our Non-GAAP-based
tax rate of approximately 14%, we analyzed the individual
adjusted expenses and took into consideration the impact of
statutory tax rates from local jurisdictions incurring the
expense.
|
(8)
|
Reconciliation of
GAAP-based income to Non-GAAP-based net income:
|
|
|
|
Three Months Ended
December 31, 2023
|
|
|
Per share
diluted
|
GAAP-based net income,
attributable to OpenText
|
$
37,675
|
$
0.14
|
Add
(deduct):
|
|
|
Amortization
|
184,709
|
0.68
|
Share-based
compensation
|
40,175
|
0.15
|
Special charges
(recoveries)
|
54,166
|
0.20
|
Other (income) expense,
net
|
68,784
|
0.24
|
GAAP-based provision
for income taxes
|
8,054
|
0.03
|
Non-GAAP-based
provision for income taxes
|
(55,108)
|
(0.20)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
338,455
|
$
1.24
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
December 31, 2023
|
GAAP-based net income,
attributable to OpenText
|
$
37,675
|
Add:
|
|
Provision for
income taxes
|
8,054
|
Interest and other
related expense, net
|
139,292
|
Amortization of
acquired technology-based intangible assets
|
70,784
|
Amortization of
acquired customer-based intangible assets
|
113,925
|
Depreciation
|
33,415
|
Share-based
compensation
|
40,175
|
Special charges
(recoveries)
|
54,166
|
Other (income) expense,
net
|
68,784
|
Adjusted
EBITDA
|
$
566,270
|
|
|
GAAP-based net income
margin
|
2.5 %
|
Adjusted EBITDA
margin
|
36.9 %
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
December 31, 2023
|
GAAP-based cash flows
provided by operating activities
|
$
350,653
|
Add:
|
|
Capital expenditures
(1)
|
(45,240)
|
Free cash
flows
|
$
305,413
|
|
|
(1) Defined
as "Additions of property and equipment" in the Consolidated
Statements of Cash Flows.
|
Reconciliation of
selected GAAP-based measures to Non-GAAP-based
measures
for the six months
ended December 31, 2023
(In thousands,
except for per share data)
|
|
Six Months Ended
December 31, 2023
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-
based
Measures
|
Non-GAAP-
based
Measures
% of Total
Revenue
|
Cost of
revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
351,560
|
|
$ (6,600)
|
(1)
|
$
344,960
|
|
Customer
support
|
148,388
|
|
(2,186)
|
(1)
|
146,202
|
|
Professional service
and other
|
155,381
|
|
(3,638)
|
(1)
|
151,743
|
|
Amortization of
acquired technology-based intangible assets
|
147,608
|
|
(147,608)
|
(2)
|
—
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
2,147,538
|
72.5 %
|
160,032
|
(3)
|
2,307,570
|
78.0 %
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
454,657
|
|
(24,501)
|
(1)
|
430,156
|
|
Sales and
marketing
|
552,064
|
|
(25,034)
|
(1)
|
527,030
|
|
General and
administrative
|
304,475
|
|
(15,311)
|
(1)
|
289,164
|
|
Amortization of
acquired customer-based intangible assets
|
234,117
|
|
(234,117)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
67,960
|
|
(67,960)
|
(4)
|
—
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
466,759
|
|
526,955
|
(5)
|
993,714
|
|
Other income (expense),
net
|
(48,614)
|
|
48,614
|
(6)
|
—
|
|
Provision for
income taxes
|
18,406
|
|
81,367
|
(7)
|
99,773
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
118,576
|
|
494,202
|
(8)
|
612,778
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
0.44
|
|
$
1.81
|
(8)
|
$
2.25
|
|
|
|
(1)
|
Adjustment relates to
the exclusion of share-based compensation expense from our
Non-GAAP-based operating expenses as this expense is excluded from
our internal analysis of operating results.
|
(2)
|
Adjustment relates to
the exclusion of amortization expense from our Non-GAAP-based
operating expenses as the timing and frequency of amortization
expense is dependent on our acquisitions and is hence excluded from
our internal analysis of operating results.
|
(3)
|
GAAP-based and
Non-GAAP-based gross profit stated in dollars and gross margin
stated as a percentage of total revenue.
|
(4)
|
Adjustment relates to
the exclusion of special charges (recoveries) from our
Non-GAAP-based operating expenses as special charges (recoveries)
are generally incurred in the periods relevant to an acquisition
and include certain charges or recoveries that are not indicative
or related to continuing operations and are therefore excluded from
our internal analysis of operating results.
|
(5)
|
GAAP-based and
Non-GAAP-based income from operations stated in dollars.
|
(6)
|
Adjustment relates to
the exclusion of other income (expense) from our Non-GAAP-based
operating expenses as other income (expense) generally relates to
the transactional impact of foreign exchange and is generally not
indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other
income (expense) also includes our share of income (losses) from
our holdings in investments as a limited partner. We do not
actively trade equity securities in these privately held companies
nor do we plan our ongoing operations based around any anticipated
fundings or distributions from these investments. We exclude gains
and losses on these investments as we do not believe they are
reflective of our ongoing business and operating results. Other
income (expense) also includes unrealized and realized gains
(losses) on our derivatives which are not designated as hedges. We
exclude gains and losses on these derivatives as we do not believe
they are reflective of our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 13% and a Non-GAAP-based tax rate of approximately
14%; these rate differences are due to the income tax effects of
items that are excluded for the purpose of calculating
Non-GAAP-based net income. Such excluded items include
amortization, share-based compensation, special charges
(recoveries) and other income (expense), net. Also excluded are tax
benefits/expense items unrelated to current period income such as
changes in reserves for tax uncertainties and valuation allowance
reserves and "book to return" adjustments for tax return filings
and tax assessments. Included is the amount of net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 assumed to be allocable to the current period based on the
forecasted utilization period. In arriving at our Non-GAAP-based
tax rate of approximately 14%, we analyzed the individual
adjusted expenses and took into consideration the impact of
statutory tax rates from local jurisdictions incurring the
expense.
|
(8)
|
Reconciliation of
GAAP-based net income to Non-GAAP-based net income:
|
|
|
|
Six Months Ended
December 31, 2023
|
|
|
Per share
diluted
|
GAAP-based net income,
attributable to OpenText
|
$
118,576
|
$
0.44
|
Add
(deduct):
|
|
|
Amortization
|
381,725
|
1.40
|
Share-based
compensation
|
77,270
|
0.29
|
Special charges
(recoveries)
|
67,960
|
0.25
|
Other (income) expense,
net
|
48,614
|
0.16
|
GAAP-based provision
for income taxes
|
18,406
|
0.07
|
Non-GAAP-based
provision for income taxes
|
(99,773)
|
(0.36)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
612,778
|
$
2.25
|
Reconciliation of
Adjusted EBITDA
|
|
|
Six Months Ended
December 31, 2023
|
GAAP-based net income,
attributable to OpenText
|
$
118,576
|
Add:
|
|
Provision for
income taxes
|
18,406
|
Interest and other
related expense, net
|
281,056
|
Amortization of
acquired technology-based intangible assets
|
147,608
|
Amortization of
acquired customer-based intangible assets
|
234,117
|
Depreciation
|
67,506
|
Share-based
compensation
|
77,270
|
Special charges
(recoveries)
|
67,960
|
Other (income) expense,
net
|
48,614
|
Adjusted
EBITDA
|
$
1,061,113
|
|
|
GAAP-based net income
margin
|
4.0 %
|
Adjusted EBITDA
margin
|
35.8 %
|
Reconciliation of
Free cash flows
|
|
|
Six Months Ended
December 31, 2023
|
GAAP-based cash flows
provided by operating activities
|
$
397,774
|
Add:
|
|
Capital expenditures
(1)
|
(82,779)
|
Free cash
flows
|
$
314,995
|
|
|
(1) Defined
as "Additions of property and equipment" in the Consolidated
Statements of Cash Flows.
|
Reconciliation of
selected GAAP-based measures to Non-GAAP-based
measures
for the three months
ended September 30, 2023
(In thousands,
except for per share data)
|
|
Three Months Ended
September 30, 2023
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-
based
Measures
|
Non-GAAP-
based
Measures
% of Total
Revenue
|
Cost of
revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
171,412
|
|
$ (2,991)
|
(1)
|
$
168,421
|
|
Customer
support
|
75,014
|
|
(1,058)
|
(1)
|
73,956
|
|
Professional service
and other
|
79,922
|
|
(1,882)
|
(1)
|
78,040
|
|
Amortization of
acquired technology-based intangible assets
|
76,824
|
|
(76,824)
|
(2)
|
—
|
|
GAAP-based gross
profit and gross margin (%) /Non-GAAP-based gross profit and gross
margin (%)
|
1,018,418
|
71.4 %
|
82,755
|
(3)
|
1,101,173
|
77.3 %
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
234,437
|
|
(11,734)
|
(1)
|
222,703
|
|
Sales and
marketing
|
271,801
|
|
(11,807)
|
(1)
|
259,994
|
|
General and
administrative
|
131,211
|
|
(7,623)
|
(1)
|
123,588
|
|
Amortization of
acquired customer-based intangible assets
|
120,192
|
|
(120,192)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
13,794
|
|
(13,794)
|
(4)
|
—
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
212,892
|
|
247,905
|
(5)
|
460,797
|
|
Other income (expense),
net
|
20,170
|
|
(20,170)
|
(6)
|
—
|
|
Provision for
income taxes
|
10,352
|
|
34,313
|
(7)
|
44,665
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
80,901
|
|
193,422
|
(8)
|
274,323
|
|
GAAP-based earnings
(loss) per share / Non-GAAP-based earnings per share-diluted,
attributable to OpenText
|
$
0.30
|
|
$
0.71
|
(8)
|
$
1.01
|
|
|
|
(1)
|
Adjustment relates to
the exclusion of share-based compensation expense from our
Non-GAAP-based operating expenses as this expense is excluded from
our internal analysis of operating results.
|
(2)
|
Adjustment relates to
the exclusion of amortization expense from our Non-GAAP-based
operating expenses as the timing and frequency of amortization
expense is dependent on our acquisitions and is hence excluded from
our internal analysis of operating results.
|
(3)
|
GAAP-based and
Non-GAAP-based gross profit stated in dollars and gross margin
stated as a percentage of total revenue.
|
(4)
|
Adjustment relates to
the exclusion of special charges (recoveries) from our
Non-GAAP-based operating expenses as special charges (recoveries)
are generally incurred in the periods relevant to an acquisition
and include certain charges or recoveries that are not indicative
or related to continuing operations and are therefore excluded from
our internal analysis of operating results.
|
(5)
|
GAAP-based and
Non-GAAP-based income from operations stated in dollars.
|
(6)
|
Adjustment relates to
the exclusion of other income (expense) from our Non-GAAP-based
operating expenses as other income (expense) generally relates to
the transactional impact of foreign exchange and is generally not
indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other
income (expense) also includes our share of income (losses) from
our holdings in investments as a limited partner. We do not
actively trade equity securities in these privately held companies
nor do we plan our ongoing operations based around any anticipated
fundings or distributions from these investments. We exclude gains
and losses on these investments as we do not believe they are
reflective of our ongoing business and operating results. Other
income (expense) also includes unrealized and realized gains
(losses) on our derivatives which are not designated as hedges. We
exclude gains and losses on these derivatives as we do not believe
they are reflective of our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 11% and a Non-GAAP-based tax rate of approximately
14%; these rate differences are due to the income tax effects of
items that are excluded for the purpose of calculating
Non-GAAP-based net income. Such excluded items include
amortization, share-based compensation, special charges
(recoveries) and other income (expense), net. Also excluded are tax
benefits/expense items unrelated to current period income such as
changes in reserves for tax uncertainties and valuation allowance
reserves and "book to return" adjustments for tax return filings
and tax assessments. Included is the amount of net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 assumed to be allocable to the current period based on the
forecasted utilization period. In arriving at our Non-GAAP-based
tax rate of approximately 14%, we analyzed the individual adjusted
expenses and took into consideration the impact of statutory tax
rates from local jurisdictions incurring the expense.
|
(8)
|
Reconciliation of
GAAP-based net income to Non-GAAP-based net income:
|
|
|
|
Three Months Ended
September 30, 2023
|
|
|
Per share
diluted
|
GAAP-based net income,
attributable to OpenText
|
$
80,901
|
$
0.30
|
Add
(deduct):
|
|
|
Amortization
|
197,016
|
0.72
|
Share-based
compensation
|
37,095
|
0.14
|
Special charges
(recoveries)
|
13,794
|
0.05
|
Other (income) expense,
net
|
(20,170)
|
(0.08)
|
GAAP-based provision
for income taxes
|
10,352
|
0.04
|
Non-GAAP-based
provision for income taxes
|
(44,665)
|
(0.16)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
274,323
|
$
1.01
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
September 30, 2023
|
GAAP-based net income,
attributable to OpenText
|
$
80,901
|
Add
(deduct):
|
|
Provision for
income taxes
|
10,352
|
Interest and other
related expense, net
|
141,764
|
Amortization of
acquired technology-based intangible assets
|
76,824
|
Amortization of
acquired customer-based intangible assets
|
120,192
|
Depreciation
|
34,091
|
Share-based
compensation
|
37,095
|
Special charges
(recoveries)
|
13,794
|
Other (income) expense,
net
|
(20,170)
|
Adjusted
EBITDA
|
$
494,843
|
|
|
GAAP-based net income
margin
|
5.7 %
|
Adjusted EBITDA
margin
|
34.7 %
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
September 30, 2023
|
GAAP-based cash flows
provided by operating activities
|
$
47,121
|
Add:
|
|
Capital expenditures
(1)
|
(37,539)
|
Free cash
flows
|
$
9,582
|
|
|
(1) Defined
as "Additions of property and equipment" in the Consolidated
Statements of Cash Flows.
|
Reconciliation of
selected GAAP-based measures to Non-GAAP-based
measures
for the three months
ended December 31, 2022
(In thousands,
except for per share data)
|
|
Three Months Ended
December 31, 2022
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-
based
Measures
|
Non-GAAP-
based
Measures
% of Total
Revenue
|
Cost of
revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
134,314
|
|
$ (2,812)
|
(1)
|
$
131,502
|
|
Customer
support
|
28,589
|
|
(690)
|
(1)
|
27,899
|
|
Professional service
and other
|
54,064
|
|
(1,763)
|
(1)
|
52,301
|
|
Amortization of
acquired technology-based intangible assets
|
40,863
|
|
(40,863)
|
(2)
|
—
|
|
GAAP-based gross
profit and gross margin (%) /Non-GAAP-based gross profit and gross
margin (%)
|
635,747
|
70.8 %
|
46,128
|
(3)
|
681,875
|
76.0 %
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
109,700
|
|
(7,826)
|
(1)
|
101,874
|
|
Sales and
marketing
|
177,171
|
|
(9,437)
|
(1)
|
167,734
|
|
General and
administrative
|
77,603
|
|
(6,294)
|
(1)
|
71,309
|
|
Amortization of
acquired customer-based intangible assets
|
53,446
|
|
(53,446)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
10,306
|
|
(10,306)
|
(4)
|
—
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
184,663
|
|
133,437
|
(5)
|
318,100
|
|
Other income (expense),
net
|
163,349
|
|
(163,349)
|
(6)
|
—
|
|
Provision for
income taxes
|
50,774
|
|
(11,660)
|
(7)
|
39,114
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
258,486
|
|
(18,252)
|
(8)
|
240,234
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
0.96
|
|
$
(0.07)
|
(8)
|
$
0.89
|
|
|
|
(1)
|
Adjustment relates to
the exclusion of share-based compensation expense from our
Non-GAAP-based operating expenses as this expense is excluded from
our internal analysis of operating results.
|
(2)
|
Adjustment relates to
the exclusion of amortization expense from our Non-GAAP-based
operating expenses as the timing and frequency of amortization
expense is dependent on our acquisitions and is hence excluded from
our internal analysis of operating results.
|
(3)
|
GAAP-based and
Non-GAAP-based gross profit stated in dollars and gross margin
stated as a percentage of total revenue.
|
(4)
|
Adjustment relates to
the exclusion of special charges (recoveries) from our
Non-GAAP-based operating expenses as special charges (recoveries)
are generally incurred in the periods relevant to an acquisition
and include certain charges or recoveries that are not indicative
or related to continuing operations and are therefore excluded from
our internal analysis of operating results.
|
(5)
|
GAAP-based and
Non-GAAP-based income from operations stated in dollars.
|
(6)
|
Adjustment relates to
the exclusion of other income (expense) from our Non-GAAP-based
operating expenses as other income (expense) generally relates to
the transactional impact of foreign exchange and is generally not
indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other
income (expense) also includes our share of income (losses) from
our holdings in investments as a limited partner. We do not
actively trade equity securities in these privately held companies
nor do we plan our ongoing operations based around any anticipated
fundings or distributions from these investments. We exclude gains
and losses on these investments as we do not believe they are
reflective of our ongoing business and operating results. Other
income (expense) also includes unrealized and realized gains
(losses) on our derivatives which are not designated as hedges. We
exclude gains and losses on these derivatives as we do not believe
they are reflective of our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 16% and a Non-GAAP-based tax rate of approximately
14%; these rate differences are due to the income tax effects of
items that are excluded for the purpose of calculating
Non-GAAP-based net income. Such excluded items include
amortization, share-based compensation, special charges
(recoveries) and other income (expense), net. Also excluded are tax
benefits/expense items unrelated to current period income such as
changes in reserves for tax uncertainties and valuation allowance
reserves and "book to return" adjustments for tax return filings
and tax assessments. Included is the amount of net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 assumed to be allocable to the current period based on the
forecasted utilization period. In arriving at our Non-GAAP-based
tax rate of approximately 14%, we analyzed the individual adjusted
expenses and took into consideration the impact of statutory tax
rates from local jurisdictions incurring the expense.
|
(8)
|
Reconciliation of
GAAP-based net income to Non-GAAP-based net income:
|
|
|
|
Three Months Ended
December 31, 2022
|
|
|
Per share
diluted
|
GAAP-based net income,
attributable to OpenText
|
$
258,486
|
$
0.96
|
Add
(deduct):
|
|
|
Amortization
|
94,309
|
0.35
|
Share-based
compensation
|
28,822
|
0.10
|
Special charges
(recoveries)
|
10,306
|
0.04
|
Other (income) expense,
net
|
(163,349)
|
(0.60)
|
GAAP-based provision
for income taxes
|
50,774
|
0.19
|
Non-GAAP-based
provision for income taxes
|
(39,114)
|
(0.15)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
240,234
|
$
0.89
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
December 31, 2022
|
GAAP-based net income,
attributable to OpenText
|
$
258,486
|
Add
(deduct):
|
|
Provision for
income taxes
|
50,774
|
Interest and other
related expense, net
|
38,715
|
Amortization of
acquired technology-based intangible assets
|
40,863
|
Amortization of
acquired customer-based intangible assets
|
53,446
|
Depreciation
|
22,858
|
Share-based
compensation
|
28,822
|
Special charges
(recoveries)
|
10,306
|
Other (income) expense,
net
|
(163,349)
|
Adjusted
EBITDA
|
$
340,921
|
|
|
GAAP-based net income
margin
|
28.8 %
|
Adjusted EBITDA
margin
|
38.0 %
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
December 31, 2022
|
GAAP-based cash flows
provided by operating activities
|
$
195,170
|
Add:
|
|
Capital expenditures
(1)
|
(32,215)
|
Free cash
flows
|
$
162,955
|
|
|
(1) Defined
as "Additions of property and equipment" in the Consolidated
Statements of Cash Flows.
|
Reconciliation of
selected GAAP-based measures to Non-GAAP-based
measures
for the six months
ended December 31, 2022
(In thousands,
except for per share data)
|
|
Six Months Ended
December 31, 2022
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-
based
Measures
|
Non-GAAP-
based
Measures
% of Total
Revenue
|
Cost of
revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
266,113
|
|
$ (4,845)
|
(1)
|
$
261,268
|
|
Customer
support
|
55,943
|
|
(1,257)
|
(1)
|
54,686
|
|
Professional service
and other
|
107,864
|
|
(3,288)
|
(1)
|
104,576
|
|
Amortization of
acquired technology-based intangible assets
|
83,500
|
|
(83,500)
|
(2)
|
—
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
1,229,435
|
70.3 %
|
92,890
|
(3)
|
1,322,325
|
75.6 %
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
219,898
|
|
(14,680)
|
(1)
|
205,218
|
|
Sales and
marketing
|
344,341
|
|
(16,296)
|
(1)
|
328,045
|
|
General and
administrative
|
155,677
|
|
(11,664)
|
(1)
|
144,013
|
|
Amortization of
acquired customer-based intangible assets
|
107,884
|
|
(107,884)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
24,587
|
|
(24,587)
|
(4)
|
—
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
331,016
|
|
268,001
|
(5)
|
599,017
|
|
Other income (expense),
net
|
(25,882)
|
|
25,882
|
(6)
|
—
|
|
Provision for
income taxes
|
84,399
|
|
(11,610)
|
(7)
|
72,789
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
141,557
|
|
305,493
|
(8)
|
447,050
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
0.52
|
|
$
1.14
|
(8)
|
$
1.66
|
|
|
|
(1)
|
Adjustment relates to
the exclusion of share-based compensation expense from our
Non-GAAP-based operating expenses as this expense is excluded from
our internal analysis of operating results.
|
(2)
|
Adjustment relates to
the exclusion of amortization expense from our Non-GAAP-based
operating expenses as the timing and frequency of amortization
expense is dependent on our acquisitions and is hence excluded from
our internal analysis of operating results.
|
(3)
|
GAAP-based and
Non-GAAP-based gross profit stated in dollars and gross margin
stated as a percentage of total revenue.
|
(4)
|
Adjustment relates to
the exclusion of special charges (recoveries) from our
Non-GAAP-based operating expenses as special charges (recoveries)
are generally incurred in the periods relevant to an acquisition
and include certain charges or recoveries that are not indicative
or related to continuing operations and are therefore excluded from
our internal analysis of operating results.
|
(5)
|
GAAP-based and
Non-GAAP-based income from operations stated in dollars.
|
(6)
|
Adjustment relates to
the exclusion of other income (expense) from our Non-GAAP-based
operating expenses as other income (expense) generally relates to
the transactional impact of foreign exchange and is generally not
indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other
income (expense) also includes our share of income (losses) from
our holdings in investments as a limited partner. We do not
actively trade equity securities in these privately held companies
nor do we plan our ongoing operations based around any anticipated
fundings or distributions from these investments. We exclude gains
and losses on these investments as we do not believe they are
reflective of our ongoing business and operating results. Other
income (expense) also includes unrealized and realized gains
(losses) on our derivatives which are not designated as hedges. We
exclude gains and losses on these derivatives as we do not believe
they are reflective of our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 37% and a Non-GAAP-based tax rate of approximately
14%; these rate differences are due to the income tax effects of
items that are excluded for the purpose of calculating
Non-GAAP-based net income. Such excluded items include
amortization, share-based compensation, special charges
(recoveries) and other income (expense), net. Also excluded are tax
benefits/expense items unrelated to current period income such as
changes in reserves for tax uncertainties and valuation allowance
reserves and "book to return" adjustments for tax return filings
and tax assessments. Included is the amount of net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 assumed to be allocable to the current period based on the
forecasted utilization period. In arriving at our Non-GAAP-based
tax rate of approximately 14%, we analyzed the individual adjusted
expenses and took into consideration the impact of statutory tax
rates from local jurisdictions incurring the expense.
|
(8)
|
Reconciliation of
GAAP-based net income to Non-GAAP-based net income:
|
|
|
|
Six Months Ended
December 31, 2022
|
|
|
Per share
diluted
|
GAAP-based net income,
attributable to OpenText
|
$
141,557
|
$
0.52
|
Add
(deduct):
|
|
|
Amortization
|
191,384
|
0.71
|
Share-based
compensation
|
52,030
|
0.19
|
Special charges
(recoveries)
|
24,587
|
0.09
|
Other (income) expense,
net
|
25,882
|
0.10
|
GAAP-based provision
for income taxes
|
84,399
|
0.31
|
Non-GAAP-based
provision for income taxes
|
(72,789)
|
(0.26)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
447,050
|
$
1.66
|
Reconciliation of
Adjusted EBITDA
|
|
|
Six Months Ended
December 31, 2022
|
GAAP-based net income,
attributable to OpenText
|
$
141,557
|
Add:
|
|
Provision for
income taxes
|
84,399
|
Interest and other
related expense, net
|
79,097
|
Amortization of
acquired technology-based intangible assets
|
83,500
|
Amortization of
acquired customer-based intangible assets
|
107,884
|
Depreciation
|
46,032
|
Share-based
compensation
|
52,030
|
Special charges
(recoveries)
|
24,587
|
Other (income) expense,
net
|
25,882
|
Adjusted
EBITDA
|
$
644,968
|
|
|
GAAP-based net income
margin
|
8.1 %
|
Adjusted EBITDA
margin
|
36.9 %
|
Reconciliation of
Free cash flows
|
|
|
Six Months Ended
December 31, 2022
|
GAAP-based cash flows
provided by operating activities
|
$
327,129
|
Add:
|
|
Capital expenditures
(1)
|
(68,539)
|
Free cash
flows
|
$
258,590
|
|
|
(1) Defined
as "Additions of property and equipment" in the Consolidated
Statements of Cash Flows.
|
(3)
The following tables provide a composition of our major currencies
for revenue and expenses, expressed as a percentage, for the three
and six months ended December 31,
2023 and 2022:
|
Three Months Ended
December 31, 2023
|
|
Three Months Ended
December 31, 2022
|
Currencies
|
% of Revenue
|
% of Expenses(1)
|
|
% of Revenue
|
% of Expenses(1)
|
EURO
|
23 %
|
12 %
|
|
19 %
|
12 %
|
GBP
|
4 %
|
7 %
|
|
4 %
|
5 %
|
CAD
|
3 %
|
9 %
|
|
3 %
|
13 %
|
USD
|
59 %
|
51 %
|
|
65 %
|
55 %
|
Other
|
11 %
|
21 %
|
|
9 %
|
15 %
|
Total
|
100 %
|
100 %
|
|
100 %
|
100 %
|
|
|
Six Months Ended
December 31, 2023
|
|
Six Months Ended
December 31, 2022
|
Currencies
|
% of Revenue
|
% of Expenses(1)
|
|
% of Revenue
|
% of Expenses(1)
|
EURO
|
22 %
|
11 %
|
|
20 %
|
11 %
|
GBP
|
5 %
|
8 %
|
|
4 %
|
5 %
|
CAD
|
3 %
|
10 %
|
|
3 %
|
14 %
|
USD
|
59 %
|
51 %
|
|
65 %
|
55 %
|
Other
|
11 %
|
20 %
|
|
8 %
|
15 %
|
Total
|
100 %
|
100 %
|
|
100 %
|
100 %
|
(1)
|
Expenses include all
cost of revenues and operating expenses included within the
Consolidated Statements of Income, except for amortization of
intangible assets, share-based compensation and special charges
(recoveries).
|
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SOURCE Open Text Corporation