Press Releases Details

Waterloo, ON - 2004-10-28 - Open Text Corporation (Nasdaq: OTEX; TSX: OTC), the world s largest provider of enterprise content management (ECM) software, today announced financial results for its first fiscal quarter ended September 30, 2004. (1)

Financial Highlights
Total revenue for the first quarter was $85.6 million, up 94% from the same period last year and license revenue of $23.9 million grew by 41% over the prior year.

Open Text reported total adjusted net income for the first quarter of $3.9 million, or adjusted earnings per share (EPS) of $0.07. This compares to adjusted net income of $4.9 million, or $0.12 adjusted EPS in the first quarter a year ago, marking the 23rd consecutive profitable quarter for the Company. (2)

Open Text reported total net income for the first quarter in accordance with U.S. generally accepted accounting principles (GAAP) of ($1.0) million, or ($0.02 EPS), compared to net income of $3.4 million, or $0.08 EPS in the first quarter a year ago.

We are pleased with the IXOS results this quarter. IXOS was profitable in the quarter with revenue of approximately $33 million and is now operating on the Open Text model," said Tom Jenkins, CEO of Open Text. We see the ECM market continuing to grow, especially as it relates to compliance solutions and we believe that growing profitably is the best route for our future success.

Total cash flow from operations in the quarter was $5.1 million. The total cash on hand at quarter end was $111.5 million or $2.07 per share (diluted). The cash balance reflects the use of cash for acquisitions made during the quarter (Artesia and Vista) as well as Open Text share repurchases.

At quarter end, total deferred revenue was $64.3 million, up $28.9 million or 82% over a year ago.

Revenue results were broadly based, with 41% derived from North America, 52% from Europe and 7% from the Middle East and Asia. (1)

As of March 1, 2004, Open Text began including the results of IXOS in its financial statements on a consolidated basis, and these results include a full quarter revenue and expense. Open Text owns approximately 89% of IXOS Software AG.

We are seeing traction from customers who want a full ECM suite that includes content management, collaboration and e-mail archiving, said John Shackleton, President of Open Text. Based on our current visibility into our pipeline, we reaffirm our guidance for the fiscal 2005 year.

Guidance
See accompanying Note (2)

The Company is establishing initial guidance for its second quarter, ending December 31st, 2004. For the second quarter Open Text expects revenue of $100 to $106 million with adjusted EPS of $0.18 to $0.26.

The Company is maintaining its previously announced guidance for fiscal year 2005, which commenced July 1, 2004. For fiscal year 2005, Open Text expects revenue of $420 to $450 million with adjusted EPS of $1.10 to $1.30.

Open Text s actual results for future periods may vary from the guidance presented and such variations may be material. Please see note (2) below for a discussion regarding net income per share in accordance with GAAP.

Recent Highlights

1. U.S. Office of Naval Research Implements Open Text s Livelink Software Suite

The U.S. Office of Naval Research has adopted the Open Text s Livelink software to improve collaboration and to better manage documents and data for the organization s research projects.

For more information use the following link: http://www.opentext.com/news/pr.html?id=1515

2. Open Text s Records Management Software Receives National Archives Approval from the UK Government

Open Text announced today that its records management software has been approved by the UK Government s National Archives electronic records management systems (ERMS) program.

For more information use the following link: http://www.opentext.com/news/pr.html?id=1516

3. Open Text Extends SAP® Solution Integration, Introduces New Version of IXOS Suite for SAP Solutions

The Company introduced a major extension of its suite of ECM products that integrate with the complete range of SAP® solutions, including financial, human resources and other business applications.

For more information use the following link: http://www.opentext.com/news/pr.html?id=1522

Upcoming Investor Events
Open Text announced plans to participate in the following financial conferences. Note that event dates and times are subject to change after the release of this announcement. To confirm a date or learn about Web cast availability, visit the Company's Web site closer to event date at: www.opentext.com/investor/investor_events/

November 9, 2004
Scotia Capital Technology Conference
Toronto, ON

November 16, 2004
Open Text Analyst Day
Phoenix, AZ

December 2, 2004
CSFB Technology Conference
Phoenix, AZ

December 9, 2004
Open Text Annual General Meeting
Toronto, ON

February 8-10, 2005
Merrill Lynch Computer Services & Software Conference 2005
Santa Monica, CA

February 16, 2005
MS Howells ECM Conference
Phoenix, AZ

Date: Thursday, October 28th, 2004
Time: 5:00 p.m. EST/2:00 p.m. PT
Length: 60 minutes
Phone: 416-640-1907

(a) The guidance assumes a fully diluted share count for the fiscal year ending June 30, 2005 of 57.6 million shares.
(b) Guidance for adjusted EPS and net income per share is calculated on a fully-diluted basis, giving effect to the exercise of the common share purchase warrants issued.
^© Income taxes are assumed at a rate of 25% on a GAAP net income basis.
(d) Assumptions have been made concerning revenue growth and income tax rates that will be in effect and which may change depending upon both the timing and jurisdiction of future revenues.

Forward-looking statements in this press release regarding the Company s total revenue, EPS on an adjusted basis and EPS on an GAAP basis, for the fiscal quarter ended September 30, 2004 and guidance for the Company s fiscal year ending June 30, 2005 are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. The Company cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Forward-looking statements relate to, among other things, the future performance of Open Text, the benefits of any acquisition, the strength of the Company s pipeline, the Company s growth and profitability prospects, the potential for growth in the ECM market and its estimated size, the Company s position in the market and future opportunities therein, the benefits of the Company s products to be realized by customers, the demand for and the extent of deployment of the Company s products. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. The risks and uncertainties that may affect forward-looking statements include, among others, risks involved in the completion and integration of acquisitions, the possibility of fluctuations in currency exchange rates, the possibility of technical, logistical or planning issues in connection with deployments, the continuous commitment of the Company's customers, demand for the Company s products and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Form 10-K for the year ended June 30, 2004. Forward-looking statements are based on management's beliefs and opinions at the time the statements are made, and the Company does not undertake any obligations to update forward-looking statements should circumstances or management's beliefs or opinions change.

Copyright © 2004 by Open Text Corporation. LIVELINK, LIVELINK MEETINGZONE, and OPEN TEXT are trademarks or registered trademarks of Open Text Corporation in the United States of America, Canada, the European Union and/or other countries. This list of trademarks is not exhaustive. Other trademarks, registered trademarks, product names, company names, brands and service names mentioned herein are property of Open Text Corporation or other respective owners.

Alan Hoverd
Chief Financial Officer
Open Text Corporation
+1-905-762-6222
ahoverd@opentext.com

Anne Marie K. Schwartz
Director, Investor Relations
Open Text Corporation
+1-617-378-3369
aschwartz@opentext.com

Greg Secord
Open Text Corporation
+1-519-888-7111 ext.2408
gsecord@opentext.com