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