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Fiscal Year 2017 Corporate Strategy

Fiscal Year 2016 was an extraordinary and foundational year for OpenText.  We demonstrated strong financial results; defined and delivered on an acquisition growth strategy; and continued our history of innovation in Enterprise Information Management (EIM) with Release 16. With a solid foundation in place, Fiscal 2017 is shaping up to be a year of growth and opportunity for OpenText.

Fiscal 2016 – A Foundational Year

We finished the fiscal year with strong financial performance. Operational excellence remains at our core. We manage to our budgets, have defined controls, and implement approvals and authorities that ensure we can achieve our bottom line results. We believe the best measure of our financial performance is our operating cash flow.

Supporting our strong financial growth is the continuous focus to improve efficiency in our business. As we entered into Fiscal 2017, we took the initiative to consolidate our intellectual property into Canada. This furthers our goal of operational effectiveness through consolidated ownership, management, and development of our intellectual property.

Acquisitions and Efficient Capital Allocation Drives Shareholder Value

In Fiscal 2016 we outlined our acquisition strategy as our leading growth driver, and have delivered on this initiative. Driven by the OpenText Business System, we announced five acquisitions this fiscal year: Daegis Inc., ANXe Business, HP Inc’s CEM assets, Recommind and HP Inc’s CCM assets. With these acquisitions we expect to onboard approximately $300 million in annualized revenues. Each acquisition brings integral technology, partners and customers to fuel our innovation in EIM as we continue to enable the digital transformation for our customers and drive shareholder value.

A strong balance sheet and efficient capital allocation policy supports our acquisition strategy. Our liquidity position remains solid with approximately $1.3 billion of available cash at the end of June 30, 2016. Further strengthening our balance sheet, and providing added flexibility, we issued $600 million of bonds in May 2016 with a 5.875% coupon and a 10-year maturity.

Also, in the fourth quarter of Fiscal 2016, we increased our quarterly cash dividend by fifteen percent from $0.20 to $0.23 per share. Since its inception in Fiscal 2013, our dividend per share has increased 53% and we’ve paid out a total cash distribution of $279 million.

Release 16 – Largest Product Launch in Company History

Fiscal 2016 saw the biggest product launch in the Company’s history with OpenText Release 16, the world’s most complete and integrated platform specifically designed to enable Digital Transformation automating workflows from Customer Engagement to Business Insights. Release 16 offers customers an expanded portfolio of EIM solutions with integrated analytics, available both on-premises and in the Cloud and we expect it to be a key driver of organic growth for Fiscal 2017.

We continue to see the world as hybrid, allowing customers to pick the form of deployment best suited to their needs: on-premises or in the Cloud. Since introducing cloud services and subscriptions revenue in FY13, we have grown our Cloud revenue 233% from $180 million to $601 million. We believe the recurring nature of this profitable cloud revenue stream, balanced with the increasing efficiency of our operating model, will continue to translate into shareholder value for many years to come.

OpenText Business System

Key to our success is the Open Text Business System. This system unlocks value through our approach to market strategy, accelerating market share through acquisitions, and innovation.  The OpenText Business System is differentiated from other business systems by its focus on integration: an integrated sales force, integrated engineering and integrated operations. The outcome creates superior value by growing our large recurring revenue base while expanding adjusted operating margin and generating exceptional operating cash flow. We attain this while executing to a policy of disciplined capital allocation.

In Fiscal 2016 we laid the foundation for growth and expansion. We couldn’t be more proud of what the OpenText team, and its partners, has accomplished in FY16.  In many ways, OpenText is in the trust and relationship business, and the customer is at the heart of our thinking.  Building that relationship and earning that trust fuels our collective drive to put the customer first as we focus on our EIM vision.

Legal Disclaimer:

The materials contained in the Investor Relations section of this website may contain forward-looking statements. None of the forward-looking statements, which speak only as of the date they were made, should be considered as the current expectations of OpenText. OpenText assumes no obligation to publicly update or revise any such forward-looking statement to reflect any change in its expectations or in events, conditions, or circumstances on which such statements may be based. Unless otherwise indicated, (i) all stock information relates to OpenText shares as traded on NASDAQ; and (ii) all currencies refer to U.S. dollars. For additional information with respect to forward looking statements and risks or other factors which could occur, please refer to OpenText public filings.