– Delivers Total Annual Revenues of
$5.8 Billion with
29% Growth –
– Announces New $300 Million Share Repurchase Program
–
– Increases Annualized Dividend By 5% –
Fiscal 2024 Annual Highlights Y/Y
|
Total
Revenues
(in
millions)
|
|
Annual Recurring
Revenues
(in
millions)
|
|
Cloud
Revenues
(in
millions)
|
|
Reported
|
Constant
Currency
|
|
Reported
|
Constant
Currency
|
|
Reported
|
Constant
Currency
|
|
$5,770
|
$5,729
|
|
$4,534
|
$4,506
|
|
$1,821
|
$1,816
|
|
+28.6 %
|
+27.7 %
|
|
+25.4 %
|
+24.6 %
|
|
+7.1 %
|
+6.8 %
|
|
Annual Recurring
Revenues represent 79% of Total Revenues
|
|
"OpenText delivered
solid Fiscal 2024 financial results with total revenues of $5.8
billion, representing a 29% year-over-year growth, we grew
organically, and delivered $2 billion in Adjusted EBITDA Dollars,
or 34%. Looking ahead into Fiscal 2025, we are focused on extending
our Information Management competitive advantage, expanding margin,
delivering a record year of capital return with our new $300
Million Share Repurchase program, and increasing our annualized
dividend from $1 per share to $1.05 per share. We expect to return
approximately $570 million during Fiscal 2025, via dividends
and share repurchases, the highest in our history. We are excited
about our differentiated products, as well as our business and
financial momentum."
|
|
|
Mark J. Barrenechea,
OpenText CEO & CTO
|
|
|
|
|
|
|
|
|
|
"We are incredibly
proud of our Fiscal 2024 performance. We delivered strong operating
results including our AMC divestiture, $808 million of free cash
flows, and reduced our net leverage ratio from 3.8x to
2.9x(1). Our focus is now on delivering to our Fiscal
2025 plans and targets, and the significant margin and FCF
opportunity in front of us."
|
|
|
Madhu Ranganathan, OpenText President & CFO
|
|
|
|
|
|
|
|
|
WATERLOO, ON, Aug. 1, 2024
/CNW/ -- Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today
announced its financial results for the fourth quarter and year
ended June 30, 2024.
Fiscal Year Financial Highlights Y/Y
- Total revenues of $5.8 billion up
28.6% Y/Y or up 27.7% Y/Y in constant currency (CC)
- Annual Recurring Revenues (ARR) of $4.5
billion, up 25.4% Y/Y or up 24.6% Y/Y in CC
- Cloud revenues of $1.8 billion up
7.1% Y/Y or up 6.8% Y/Y in CC
- Enterprise cloud bookings(2) of $701 million, up 32.9% Y/Y
- Operating cash flows were $968
million and free cash flows(3) were $808 million
- GAAP-based net income of $465
million, up 209.3% Y/Y, margin of 8.1%, primarily due to the
gain on AMC divestiture
- Adjusted EBITDA(3) of $2.0
billion, margin of 34.1% while making key investments in
cloud, security and AI
- Completed Divestiture of Application Modernization and
Connectivity (AMC) Business to Rocket Software for $2.275 billion
- Prepaid $2.766 billion of
aggregate outstanding debt, 30% since the January 2023 close of Micro Focus
acquisition
- Record capital returns of $417
million including $267 million
via dividends and $150 million of
share repurchases
- GAAP-based diluted earnings per share (EPS) of $1.71, Non-GAAP diluted EPS(3) of
$4.17
- Declared quarterly dividend of $0.2625 per share
Fiscal 2024 Fourth Quarter Highlights
|
Total
Revenues
(in
millions)
|
|
Annual Recurring
Revenues
(in
millions)
|
|
Cloud
Revenues
(in
millions)
|
|
Reported
|
Constant
Currency
|
|
Reported
|
Constant
Currency
|
|
Reported
|
Constant
Currency
|
|
$1,362
|
$1,367
|
|
$1,093
|
$1,097
|
|
$465
|
$466
|
|
(8.6) %
|
(8.3) %
|
|
(5.5) %
|
(5.2) %
|
|
+2.9 %
|
+3.3 %
|
|
Annual Recurring
Revenues represent 80% of Total Revenues
|
- Total revenues of $1.4 billion,
down (8.6)% Y/Y or down (8.3)% in CC, reflecting AMC divestiture
completed May 1, 2024
- Annual recurring revenues of $1.1
billion, down (5.5)% Y/Y or down (5.2)% in CC
- Cloud revenues of $465 million,
up 2.9% Y/Y or up 3.3% Y/Y in CC
- Quarterly enterprise cloud bookings(2) of
$180 million, up 10.3%
- Operating cash flows were $185
million and free cash flows(3) were $145 million
- GAAP-based net income of $248
million, up 609.4% Y/Y, margin of 18.2%, primarily due to
the gain on AMC divestiture
- Adjusted EBITDA(3) of $445
million, margin of 32.7%
- GAAP-based diluted earnings per share (EPS) of $0.91, Non-GAAP diluted EPS(3) of
$0.98
|
|
(1) As of
June 30, 2024, the consolidated Net Leverage Ratio, as calculated
using the bank covenant methodology, was 2.3x. Excluding the gain
from the divestiture of the AMC business, the consolidated Net
Leverage Ratio was 2.9x. As of March 31, 2024, the
consolidated Net Leverage Ratio, as calculated using bank covenant
methodology, was 3.8x.
|
|
(2) Enterprise cloud bookings is
defined as the total value from cloud services and subscription
contracts, entered into in the fiscal year that are new, committed
and incremental to our existing contracts, entered into with our
enterprise based customers.
|
|
(3) Please see Note 2 "Use of
Non-GAAP Financial Measures" to the consolidated financial
statements below.
|
|
Financial Highlights for Fiscal 2024 and Q4 with Year Over
Year Comparisons
|
Summary of Annual
Results
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share data)
|
FY'24
|
FY'23
|
$
Change
|
% Change
|
|
FY'24 in
CC*
|
% Change
in CC*
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$1,820.5
|
$1,700.4
|
$120.1
|
7.1 %
|
|
$1,815.6
|
6.8 %
|
|
|
Customer
support
|
2,713.3
|
1,915.0
|
$798.3
|
41.7 %
|
|
2,690.0
|
40.5 %
|
|
|
Total annual
recurring revenues**
|
$4,533.8
|
$3,615.5
|
$918.4
|
25.4 %
|
|
$4,505.5
|
24.6 %
|
|
|
License
|
834.2
|
539.0
|
$295.1
|
54.8 %
|
|
826.6
|
53.3 %
|
|
|
Professional service
and other
|
401.6
|
330.5
|
$71.1
|
21.5 %
|
|
396.9
|
20.1 %
|
|
|
Total
revenues
|
$5,769.6
|
$4,485.0
|
$1,284.6
|
28.6 %
|
|
$5,729.0
|
27.7 %
|
|
|
GAAP-based operating
income
|
$ 887.1
|
$516.3
|
$370.8
|
71.8 %
|
|
N/A
|
N/A
|
|
|
Non-GAAP-based
operating income (1)
|
$1,838.8
|
$1,365.3
|
$473.5
|
34.7 %
|
|
$1,808.3
|
32.4 %
|
|
|
GAAP-based net income
attributable to OpenText
|
$465.1
|
$150.4
|
$314.7
|
209.3 %
|
|
N/A
|
N/A
|
|
|
GAAP-based EPS,
diluted
|
$1.71
|
$0.56
|
$1.15
|
205.4 %
|
|
N/A
|
N/A
|
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$4.17
|
$3.29
|
$0.88
|
26.7 %
|
|
$4.08
|
24.0 %
|
|
|
Adjusted
EBITDA (1)
|
$1,970.2
|
$1,472.9
|
$497.3
|
33.8 %
|
|
$1,938.3
|
31.6 %
|
|
|
Operating cash
flows
|
$967.7
|
$779.2
|
$188.5
|
24.2 %
|
|
N/A
|
N/A
|
|
|
Free cash flows
(1)
|
$808.4
|
$655.4
|
$153.0
|
23.3 %
|
|
N/A
|
N/A
|
|
|
Summary of Quarterly
Results
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share data)
|
Q4
FY'24
|
Q4
FY'23
|
$
Change
|
% Change
|
|
Q4
FY'24 in
CC*
|
% Change
in CC*
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$464.9
|
$451.7
|
$13.2
|
2.9 %
|
|
$466.5
|
3.3 %
|
|
|
Customer
support
|
628.4
|
705.3
|
($76.9)
|
(10.9) %
|
|
630.2
|
(10.6) %
|
|
|
Total annual
recurring revenues**
|
$1,093.3
|
$1,156.9
|
($63.7)
|
(5.5) %
|
|
$1,096.7
|
(5.2) %
|
|
|
License
|
171.5
|
228.8
|
($57.3)
|
(25.0) %
|
|
172.3
|
(24.7) %
|
|
|
Professional service
and other
|
97.3
|
105.1
|
($7.8)
|
(7.4) %
|
|
97.6
|
(7.1) %
|
|
|
Total
revenues
|
$1,362.1
|
$1,490.8
|
($128.7)
|
(8.6) %
|
|
$1,366.6
|
(8.3) %
|
|
|
GAAP-based operating
income
|
$193.3
|
$121.3
|
$72.0
|
59.3 %
|
|
N/A
|
N/A
|
|
|
Non-GAAP-based
operating income (1)
|
$413.5
|
$431.7
|
($18.3)
|
(4.2) %
|
|
$414.3
|
(4.1) %
|
|
|
GAAP-based net income
attributable to OpenText
|
$248.2
|
($48.7)
|
$297.0
|
609.4 %
|
|
N/A
|
N/A
|
|
|
GAAP-based EPS,
diluted
|
$0.91
|
($0.18)
|
$1.09
|
605.6 %
|
|
N/A
|
N/A
|
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$0.98
|
$0.91
|
$0.07
|
7.7 %
|
|
$0.99
|
8.8 %
|
|
|
Adjusted
EBITDA (1)
|
$445.4
|
$462.8
|
($17.4)
|
(3.8) %
|
|
$446.1
|
(3.6) %
|
|
|
Operating cash
flows
|
$185.2
|
$115.3
|
$69.9
|
60.6 %
|
|
N/A
|
N/A
|
|
|
Free cash flows
(1)
|
$145.2
|
$91.2
|
$54.0
|
59.2 %
|
|
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.
|
|
Quarterly Business Highlights
- Key customer wins in the quarter include: California Department
of Employment Development, Export Development Bank Of Egypt, Ford
O'Brien Landy LLP, Grupo Marista, GS1 Australia, Johnson & Johnson, Nestle,
Rheinmetall AG, SICK AG, Taboola
- OpenText Completes Divestiture of Application Modernization and
Connectivity (AMC) Business to Rocket Software for $2.275 billion
- OpenText completes $2.0 billion
debt reduction
- OpenText buys Pillr, a cybersecurity MDR platform
- OpenText cloud for government solution achieves FedRAMP
authorization
- OpenText named a leader in two IDC MarketScapes for worldwide
unified endpoint management (UEM) software for small and
medium-sized businesses (SMBs) and client endpoint management for
Microsoft Windows devices
- OpenText's IDOL™ named a leader in document mining and
analytics platforms report
Dividend Program
As part of our quarterly,
non-cumulative cash dividend program, the Board declared on
July 31, 2024, a quarterly cash
dividend of $0.2625 per common share.
The record date for this dividend is August
30, 2024, and the payment date is September 20, 2024. 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.
Share Repurchase Plan/Normal Course Issuer
Bid
OpenText also announced today that, in order to align
its share repurchase plan to its fiscal year, it has terminated its
existing share repurchase plan (the "Fiscal 2024 Repurchase Plan")
and commenced a new share repurchase plan (the "Fiscal 2025
Repurchase Plan"), pursuant to which it intends to purchase for
cancellation in open market transactions, from time to time over
the next 12 months, if considered advisable, up to a maximum
of 21,179,064 common shares, subject to a maximum aggregate
value of US$300 million, on the
Toronto Stock Exchange (the "TSX"), the NASDAQ Global Select Market
and/or alternative trading systems in Canada and/or the
United States, if eligible, subject to applicable law and
stock exchange rules. The price that OpenText will pay for common
shares in open market transactions will be the market price at the
time of purchase or such other price as may be permitted by
applicable law or stock exchange rules.
Under the Fiscal 2024 Repurchase Plan, which was voluntarily
terminated by OpenText on July 31,
2024, OpenText purchased and cancelled 5,073,913 common
shares, through the facilities of the TSX or by such other
permitted means, out of the 13,643,472 common shares it was
authorized to repurchase, for an aggregate amount of approximately
US$150 million and at a
volume-weighted average purchase price of US$29.57 per common share. As a result of the
early termination of the Fiscal 2024 Repurchase Plan, the 5,073,913
Common Shares purchased under the Fiscal 2024 Repurchase Plan will
be deducted from the Fiscal 2025 Repurchase Plan's annual limit as
per the requirements of the TSX.
Under the Fiscal 2025 Repurchase Plan, during the course of
Fiscal 2025, OpenText intends to purchase for cancellation, from
time to time, up to US$300 million of
its issued and outstanding common shares, subject to a maximum of
21,179,064 common shares, representing 10% of the Company's public
float (calculated in accordance with TSX rules) as at July 24, 2024, less the 5,073,913 common shares
purchased under the Fiscal 2024 Repurchase Plan. Purchases
made under the Fiscal 2025 Repurchase Plan may commence on
August 7, 2024 and will expire on
August 6, 2025.
The Fiscal 2025 Repurchase Plan will be effected in accordance
with Rule 10b-18 under the U.S.
Securities Exchange Act of 1934, as amended. All common
shares purchased by OpenText pursuant to the Fiscal 2025 Repurchase
Plan will be cancelled.
The Company's decision to commence the Fiscal 2025 Repurchase
Plan to purchase up to US$300 million
of its issued and outstanding common shares, in addition to the
approximately US$150 million of
common shares purchased and cancelled under the Fiscal 2024
Repurchase Plan, for a total of approximately US$450 million of expected share repurchases over
five fiscal quarters, is indicative of its confidence in its
operational execution and expanding cash flows, with the Fiscal
2025 Repurchase Plan being part of the Company's previously
disclosed overall strategic capital allocation, complementing its
ongoing M&A activity and dividend program.
Normal Course Issuer Bid
The Company has voluntarily terminated its existing normal
course issuer bid (the "Fiscal 2024 NCIB") and commenced a new
normal course issuer bid (the "Fiscal 2025 NCIB") in order to
provide it with a means to execute purchases over the TSX during
the course of Fiscal 2025 as part of the overall Fiscal 2025
Repurchase Plan.
The TSX has approved the Company's voluntary termination of the
Fiscal 2024 NCIB. The TSX has also approved the Company's notice of
intention to commence the Fiscal 2025 NCIB pursuant to which the
Company may purchase common shares over the TSX for the period
commencing August 7, 2024 until
August 6, 2025 in accordance with the
TSX's normal course issuer bid rules, including that such purchases
are to be made at prevailing market prices or as otherwise
permitted. Under the rules of the TSX, the maximum number of shares
that may be purchased in this period is 21,179,064 common shares
(representing 10% of the Company's public float (calculated in
accordance with TSX rules) as at July 24,
2024, less the 5,073,913 common shares purchased under the
Fiscal 2024 NCIB), and the maximum number of shares that may be
purchased on a single day is 138,175 common shares, which is 25% of
552,700 (the average daily trading volume for the common shares on
the TSX for the six months ended March 31,
2024), subject to certain exceptions for block purchases,
subject in any case to the volume and other limitations under Rule
10b-18.
The purchases made under the Fiscal 2024 Repurchase Plan are the
only common shares purchased and cancelled under a normal course
issuer bid within the past 12 months.
|
Summary of Annual
Results
|
|
|
|
|
|
FY'24
|
FY'23
|
% Change
|
|
|
Revenue
(millions)
|
$5,769.6
|
$4,485.0
|
28.6 %
|
|
|
GAAP-based gross
margin
|
72.6 %
|
70.6 %
|
200
|
bps
|
|
Non-GAAP-based gross
margin (1)
|
77.3 %
|
76.1 %
|
120
|
bps
|
|
GAAP-based EPS,
diluted
|
$1.71
|
$0.56
|
205.4 %
|
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$4.17
|
$3.29
|
26.7 %
|
|
|
Summary of Quarterly
Results
|
|
|
|
|
|
|
|
|
Q4
FY'24
|
Q3
FY'24
|
Q4
FY'23
|
% Change
(Q4 FY'24 vs
Q3 FY'24)
|
|
% Change
(Q4 FY'24 vs
Q4 FY'23)
|
|
|
Revenue
(millions)
|
$1,362.1
|
$1,447.1
|
$1,490.8
|
(5.9) %
|
|
(8.6) %
|
|
|
GAAP-based gross
margin
|
72.5 %
|
73.0 %
|
71.4 %
|
(50)
|
bps
|
110
|
bps
|
|
Non-GAAP-based gross
margin (1)
|
76.4 %
|
76.7 %
|
76.9 %
|
(30)
|
bps
|
(50)
|
bps
|
|
GAAP-based EPS,
diluted
|
$0.91
|
$0.36
|
($0.18)
|
152.8 %
|
|
605.6 %
|
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$0.98
|
$0.94
|
$0.91
|
4.3 %
|
|
7.7 %
|
|
|
|
(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 and invites the public to listen to the earnings
conference call webcast today at 5:00 p.m.
ET (2:00 p.m. PT) from the
Investor Relations section of the Company's website at
https://investors.opentext.com. To join the webcast instantly,
use this webcast link. A webcast replay will be available shortly
following completion of the live call.
Please see Note 2 "Use of Non-GAAP Financial Measures" to the
consolidated financial statements below for a reconciliation
of U.S. GAAP-based financial measures used in this press release to
Non-GAAP-based financial measures.
About OpenText
OpenText is the leading Information Management software and
services company in the world. We help organizations solve
complex global problems with a comprehensive suite of Business
Clouds, Business AI, and Business Technology. For more
information about OpenText (NASDAQ/TSX: OTEX), please visit us at
www.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, profitability and future of Information Management,
including executing on strategic programs; cloud bookings, demand,
scale and revenue growth; future organic growth initiatives and
deployment of capital; innovation fueled by cloud, AI and security
technologies; raising margin targets and executing on Fiscal 2025
plans; future revenues, operating expenses, margins, free cash
flows, interest expense and capital expenditures; market share of
our products; intention to maintain a dividend program, including
any targeted annualized dividend; expected size and timing of the
Repurchase Plan, including execution thereof; execution of our
business optimization plan; the expected impact of the divestiture
of the AMC business; future tax rates; renewal rates; new platform
and product offerings, including OpenText AI
products, and associated benefits to customers;
internal automation and AI leverage, including our AI strategy,
vision and growth; strategy to build shareholder
value; 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, including
statements regarding future targets and
aspirations, are inherently subject to significant
business, economic, competitive and other uncertainties and
contingencies regarding future events and, as such, are subject to
change and are not considered guidance. 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: all
statements regarding the expected future financial position,
results of operations, revenues, expenses, margins, cash flows,
dividends, share buybacks, financing plans, business strategy,
budgets, capital expenditures, competitive positions, growth
opportunities, plans and objectives of management, including any
anticipated synergy benefits; incurring unanticipated costs, delays
or difficulties, including as a result of the integration of Micro
Focus, the divestiture of the AMC business or the execution of our
business optimization plan; 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)
|
|
|
|
June 30,
2024
|
|
June 30,
2023
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
1,280,662
|
|
$
1,231,625
|
|
Accounts receivable
trade, net of allowance for credit losses of $12,108 as of
June 30, 2024 and $13,828 as of June 30, 2023
|
626,189
|
|
682,517
|
|
Contract
assets
|
66,450
|
|
71,196
|
|
Income taxes
recoverable
|
61,113
|
|
68,161
|
|
Prepaid expenses and
other current assets
|
242,911
|
|
221,732
|
|
Total current
assets
|
2,277,325
|
|
2,275,231
|
|
Property and
equipment
|
367,740
|
|
356,904
|
|
Operating lease right
of use assets
|
219,774
|
|
285,723
|
|
Long-term contract
assets
|
38,684
|
|
64,553
|
|
Goodwill
|
7,488,367
|
|
8,662,603
|
|
Acquired intangible
assets
|
2,486,264
|
|
4,080,879
|
|
Deferred tax
assets
|
932,657
|
|
926,719
|
|
Other assets
|
298,281
|
|
342,318
|
|
Long-term income taxes
recoverable
|
96,615
|
|
94,270
|
|
Total
assets
|
$
14,205,707
|
|
$
17,089,200
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
931,116
|
|
$
996,261
|
|
Current portion of
long-term debt
|
35,850
|
|
320,850
|
|
Operating lease
liabilities
|
76,446
|
|
91,425
|
|
Deferred
revenues
|
1,521,416
|
|
1,721,781
|
|
Income taxes
payable
|
235,666
|
|
89,297
|
|
Total current
liabilities
|
2,800,494
|
|
3,219,614
|
|
Long-term
liabilities:
|
|
|
|
|
Accrued
liabilities
|
46,483
|
|
51,961
|
|
Pension liability,
net
|
127,255
|
|
126,312
|
|
Long-term
debt
|
6,356,943
|
|
8,562,096
|
|
Long-term operating
lease liabilities
|
218,174
|
|
271,579
|
|
Long-term deferred
revenues
|
162,401
|
|
217,771
|
|
Long-term income taxes
payable
|
145,644
|
|
193,808
|
|
Deferred tax
liabilities
|
148,632
|
|
423,955
|
|
Total long-term
liabilities
|
7,205,532
|
|
9,847,482
|
|
Shareholders'
equity:
|
|
|
|
|
Share capital and
additional paid-in capital
|
|
|
|
|
267,800,517 and
270,902,571 Common Shares issued and outstanding at June 30,
2024 and June 30, 2023, respectively; authorized Common
Shares: unlimited
|
2,271,886
|
|
2,176,947
|
|
Accumulated other
comprehensive income (loss)
|
(69,619)
|
|
(53,559)
|
|
Retained
earnings
|
2,119,159
|
|
2,048,984
|
|
Treasury stock, at
cost (3,135,980 and 3,536,375 shares at June 30, 2024 and
June 30, 2023, respectively)
|
(123,268)
|
|
(151,597)
|
|
Total OpenText
shareholders' equity
|
4,198,158
|
|
4,020,775
|
|
Non-controlling
interests
|
1,523
|
|
1,329
|
|
Total shareholders'
equity
|
4,199,681
|
|
4,022,104
|
|
Total liabilities
and shareholders' equity
|
$
14,205,707
|
|
$
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
June 30,
|
|
2024
|
|
2023
|
|
Revenues:
|
|
|
|
|
Cloud services and
subscriptions
|
$
464,891
|
|
$
451,659
|
|
Customer
support
|
628,381
|
|
705,277
|
|
License
|
171,535
|
|
228,796
|
|
Professional service
and other
|
97,342
|
|
105,098
|
|
Total
revenues
|
1,362,149
|
|
1,490,830
|
|
Cost of
revenues:
|
|
|
|
|
Cloud services and
subscriptions
|
175,799
|
|
166,394
|
|
Customer
support
|
69,706
|
|
86,695
|
|
License
|
9,017
|
|
6,184
|
|
Professional service
and other
|
71,691
|
|
90,498
|
|
Amortization of
acquired technology-based intangible assets
|
48,220
|
|
77,045
|
|
Total cost of
revenues
|
374,433
|
|
426,816
|
|
Gross profit
|
987,716
|
|
1,064,014
|
|
Operating
expenses:
|
|
|
|
|
Research and
development
|
205,253
|
|
249,958
|
|
Sales and
marketing
|
285,352
|
|
333,244
|
|
General and
administrative
|
126,639
|
|
136,866
|
|
Depreciation
|
31,984
|
|
31,152
|
|
Amortization of
acquired customer-based intangible assets
|
97,446
|
|
121,285
|
|
Special charges
(recoveries)
|
47,784
|
|
70,222
|
|
Total operating
expenses
|
794,458
|
|
942,727
|
|
Income from
operations
|
193,258
|
|
121,287
|
|
Other income (expense),
net
|
397,055
|
|
(25,355)
|
|
Interest and other
related expense, net
|
(102,461)
|
|
(145,829)
|
|
Income (loss) before
income taxes
|
487,852
|
|
(49,897)
|
|
Provision for (recovery
of) income taxes
|
239,578
|
|
(1,212)
|
|
Net income (loss) for
the period
|
$
248,274
|
|
$
(48,685)
|
|
Net (income)
attributable to non-controlling interests
|
(45)
|
|
(49)
|
|
Net income (loss)
attributable to OpenText
|
$
248,229
|
|
$
(48,734)
|
|
Earnings per
share—basic attributable to OpenText
|
$
0.92
|
|
$
(0.18)
|
|
Earnings per
share—diluted attributable to OpenText
|
$
0.91
|
|
$
(0.18)
|
|
Weighted average number
of Common Shares outstanding—basic (in '000's)
|
271,178
|
|
270,772
|
|
Weighted average number
of Common Shares outstanding—diluted (in '000's)
|
271,724
|
|
270,772
|
|
OPEN TEXT
CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(In thousands of
U.S. dollars, except share and per share data)
|
|
|
Year Ended June
30,
|
|
2024
|
|
2023
|
|
2022
|
|
Revenues:
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
1,820,524
|
|
$
1,700,433
|
|
$
1,535,017
|
|
Customer
support
|
2,713,297
|
|
1,915,020
|
|
1,330,965
|
|
License
|
834,162
|
|
539,026
|
|
358,351
|
|
Professional service
and other
|
401,594
|
|
330,501
|
|
269,511
|
|
Total
revenues
|
5,769,577
|
|
4,484,980
|
|
3,493,844
|
|
Cost of
revenues:
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
713,759
|
|
590,165
|
|
511,713
|
|
Customer
support
|
292,733
|
|
209,705
|
|
121,485
|
|
License
|
25,608
|
|
16,645
|
|
13,501
|
|
Professional service
and other
|
302,527
|
|
276,888
|
|
216,895
|
|
Amortization of
acquired technology-based intangible assets
|
243,922
|
|
223,184
|
|
198,607
|
|
Total cost of
revenues
|
1,578,549
|
|
1,316,587
|
|
1,062,201
|
|
Gross profit
|
4,191,028
|
|
3,168,393
|
|
2,431,643
|
|
Operating
expenses:
|
|
|
|
|
|
|
Research and
development
|
893,932
|
|
680,587
|
|
440,448
|
|
Sales and
marketing
|
1,133,665
|
|
948,598
|
|
677,118
|
|
General and
administrative
|
577,038
|
|
419,590
|
|
317,085
|
|
Depreciation
|
131,599
|
|
107,761
|
|
88,241
|
|
Amortization of
acquired customer-based intangible assets
|
432,404
|
|
326,406
|
|
217,105
|
|
Special charges
(recoveries)
|
135,305
|
|
169,159
|
|
46,873
|
|
Total operating
expenses
|
3,303,943
|
|
2,652,101
|
|
1,786,870
|
|
Income from
operations
|
887,085
|
|
516,292
|
|
644,773
|
|
Other income,
net
|
358,391
|
|
34,469
|
|
29,118
|
|
Interest and other
related expense, net
|
(516,180)
|
|
(329,428)
|
|
(157,880)
|
|
Income before income
taxes
|
729,296
|
|
221,333
|
|
516,011
|
|
Provision for income
taxes
|
264,012
|
|
70,767
|
|
118,752
|
|
Net income
|
$
465,284
|
|
$
150,566
|
|
$
397,259
|
|
Net (income)
attributable to non-controlling interests
|
(194)
|
|
(187)
|
|
(169)
|
|
Net income attributable
to OpenText
|
$
465,090
|
|
$
150,379
|
|
$
397,090
|
|
Earnings per
share—basic attributable to OpenText
|
$
1.71
|
|
$
0.56
|
|
$
1.46
|
|
Earnings per
share—diluted attributable to OpenText
|
$
1.71
|
|
$
0.56
|
|
$
1.46
|
|
Weighted average number
of Common Shares outstanding—basic
(in '000's)
|
271,548
|
|
270,299
|
|
271,271
|
|
Weighted average number
of Common Shares outstanding—diluted
(in '000's)
|
272,588
|
|
270,451
|
|
271,909
|
|
OPEN TEXT
CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
(In thousands of
U.S. dollars)
|
|
|
Year Ended June
30,
|
|
2024
|
|
2023
|
|
2022
|
|
Net income for the
period
|
$
465,284
|
|
$
150,566
|
|
$
397,259
|
|
Other comprehensive
income (loss)—net of tax:
|
|
|
|
|
|
|
Net foreign currency
translation adjustments
|
(15,646)
|
|
(40,798)
|
|
(78,724)
|
|
Unrealized gain (loss)
on cash flow hedges:
|
|
|
|
|
|
|
Unrealized gain (loss)
- net of tax (1)
|
(2,697)
|
|
(941)
|
|
(1,859)
|
|
(Gain) loss
reclassified into net income - net of tax
(2)
|
965
|
|
2,721
|
|
373
|
|
Unrealized gain (loss)
on available-for-sale financial assets:
|
|
|
|
|
|
|
Unrealized gain (loss)
- net of tax (3)
|
228
|
|
(602)
|
|
—
|
|
Actuarial gain (loss)
relating to defined benefit pension plans:
|
|
|
|
|
|
|
Actuarial gain (loss)
- net of tax (4)
|
640
|
|
(6,605)
|
|
5,595
|
|
Amortization of
actuarial (gain) loss into net income - net of tax
(5)
|
450
|
|
325
|
|
718
|
|
Total other
comprehensive loss net
|
(16,060)
|
|
(45,900)
|
|
(73,897)
|
|
Total comprehensive
income
|
449,224
|
|
104,666
|
|
323,362
|
|
Comprehensive income
attributable to non-controlling interests
|
(194)
|
|
(187)
|
|
(169)
|
|
Total comprehensive
income attributable to OpenText
|
$
449,030
|
|
$
104,479
|
|
$
323,193
|
|
|
|
______________________________
|
|
(1)
|
Net of tax expense
(recovery) of $(972), $(339), and $(671) for the year ended June
30, 2024, 2023 and 2022, respectively.
|
|
(2)
|
Net of tax expense
(recovery) of $347, $981 and $134 for the year ended June 30, 2024,
2023 and 2022, respectively.
|
|
(3)
|
Net of tax expense
(recovery) of $112, $(159), and $— for the year ended June 30,
2024, 2023 and 2022, respectively.
|
|
(4)
|
Net of tax expense
(recovery) of $765, $(1,961) and $1,866 for the year ended June 30,
2024, 2023 and 2022, respectively.
|
|
(5)
|
Net of tax expense
(recovery) of $193, $143 and $290 for the year ended June 30, 2024,
2023 and 2022, respectively.
|
|
OPEN TEXT
CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY
|
|
(In thousands of
U.S. dollars and shares)
|
|
|
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, 2021
|
271,541
|
|
$
1,947,764
|
|
(1,568)
|
|
$
(69,386)
|
|
$
2,153,326
|
|
$
66,238
|
|
$
1,511
|
|
$
4,099,453
|
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock
option plans
|
950
|
|
32,714
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
32,714
|
|
Under employee stock
purchase plans
|
842
|
|
33,806
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
33,806
|
|
Share-based
compensation
|
—
|
|
69,556
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
69,556
|
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(2,630)
|
|
(111,593)
|
|
—
|
|
—
|
|
—
|
|
(111,593)
|
|
Issuance of treasury
stock
|
—
|
|
(21,013)
|
|
492
|
|
21,013
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Common Shares
repurchased
|
(3,810)
|
|
(24,295)
|
|
—
|
|
—
|
|
(152,692)
|
|
—
|
|
—
|
|
(176,987)
|
|
Dividends
declared
($0.8836 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(237,655)
|
|
—
|
|
—
|
|
(237,655)
|
|
Other comprehensive
loss - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(73,897)
|
|
—
|
|
(73,897)
|
|
Distribution to
non-controlling interest
|
—
|
|
142
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(538)
|
|
(396)
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
397,090
|
|
—
|
|
169
|
|
397,259
|
|
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
|
245
|
|
7,830
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,830
|
|
Under employee stock
purchase plans
|
1,135
|
|
31,679
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31,679
|
|
Share-based
compensation
|
—
|
|
130,119
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
130,119
|
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(521)
|
|
(21,919)
|
|
—
|
|
—
|
|
—
|
|
(21,919)
|
|
Issuance of treasury
stock
|
—
|
|
(31,355)
|
|
691
|
|
30,288
|
|
—
|
|
—
|
|
—
|
|
(1,067)
|
|
Dividends
declared
($0.9720 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(261,464)
|
|
—
|
|
—
|
|
(261,464)
|
|
Other comprehensive
loss - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(45,900)
|
|
—
|
|
(45,900)
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
150,379
|
|
—
|
|
187
|
|
150,566
|
|
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
|
945
|
|
31,358
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31,358
|
|
Under employee stock
purchase plans
|
1,027
|
|
34,120
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
34,120
|
|
Share-based
compensation
|
—
|
|
139,779
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
139,779
|
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(1,400)
|
|
(53,085)
|
|
—
|
|
—
|
|
—
|
|
(53,085)
|
|
Issuance of treasury
stock
|
—
|
|
(76,178)
|
|
1,800
|
|
81,414
|
|
(5,236)
|
|
—
|
|
—
|
|
—
|
|
Common Shares
repurchased
|
(5,074)
|
|
(34,140)
|
|
—
|
|
—
|
|
(118,193)
|
|
—
|
|
—
|
|
(152,333)
|
|
Dividends declared
($1.00 per Common Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(271,486)
|
|
—
|
|
—
|
|
(271,486)
|
|
Other comprehensive
loss - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(16,060)
|
|
—
|
|
(16,060)
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
465,090
|
|
—
|
|
194
|
|
465,284
|
|
Balance as of June
30, 2024
|
267,801
|
|
$
2,271,886
|
|
(3,136)
|
|
$
(123,268)
|
|
$
2,119,159
|
|
$
(69,619)
|
|
$
1,523
|
|
$
4,199,681
|
|
OPEN TEXT
CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(In thousands of
U.S. dollars)
|
|
(unaudited)
|
|
|
Three Months Ended
June 30,
|
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income (loss) for
the period
|
$
248,274
|
|
$
(48,685)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization of intangible assets
|
177,650
|
|
229,482
|
|
Share-based
compensation expense
|
26,767
|
|
41,904
|
|
Pension
expense
|
4,302
|
|
3,401
|
|
Amortization of debt
discount and issuance costs
|
5,670
|
|
8,257
|
|
Write-off of right of
use assets
|
4,815
|
|
2,507
|
|
Loss on extinguishment
of debt
|
45,590
|
|
—
|
|
Gain on AMC
Divestiture
|
(429,102)
|
|
—
|
|
Loss on sale and write
down of property and equipment
|
1,995
|
|
903
|
|
Deferred
taxes
|
106,903
|
|
29,140
|
|
Share in net (income)
loss of equity investees
|
(819)
|
|
11,530
|
|
Changes in financial
instruments
|
(6,667)
|
|
16,274
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
57,075
|
|
27,335
|
|
Contract
assets
|
(23,917)
|
|
(43,643)
|
|
Prepaid expenses and
other current assets
|
(33,112)
|
|
42,151
|
|
Income taxes
|
36,421
|
|
(116,569)
|
|
Accounts payable and
accrued liabilities
|
7,000
|
|
10,582
|
|
Deferred
revenue
|
(57,312)
|
|
(85,764)
|
|
Other assets
|
18,981
|
|
(5,299)
|
|
Operating lease assets
and liabilities, net
|
(5,294)
|
|
(8,205)
|
|
Net cash provided by
operating activities
|
185,220
|
|
115,301
|
|
Cash flows from
investing activities:
|
|
|
|
|
Additions of property
and equipment
|
(39,979)
|
|
(24,060)
|
|
Micro Focus
acquisition
|
—
|
|
(2,357)
|
|
Proceeds from AMC
Divestiture
|
2,229,187
|
|
—
|
|
Other investing
activities
|
(9,291)
|
|
—
|
|
Net cash provided by
(used in) investing activities
|
2,179,917
|
|
(26,417)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from issuance
of Common Shares from exercise of stock options and ESPP
|
9,887
|
|
14,159
|
|
Repayment of long-term
debt and Revolver
|
(2,008,963)
|
|
(186,463)
|
|
Debt issuance
costs
|
(1,041)
|
|
(690)
|
|
Net change in
transition services agreement obligation
|
15,278
|
|
—
|
|
Repurchase of Common
Shares
|
(150,017)
|
|
—
|
|
Purchase of treasury
stock
|
—
|
|
(21,919)
|
|
Payments of dividends
to shareholders
|
(66,690)
|
|
(65,068)
|
|
Other financing
activities
|
—
|
|
758
|
|
Net cash used in
financing activities
|
(2,201,546)
|
|
(259,223)
|
|
Foreign exchange gain
(loss) on cash held in foreign currencies
|
(8,281)
|
|
4,571
|
|
Increase (decrease) in
cash, cash equivalents and restricted cash during the
period
|
155,310
|
|
(165,768)
|
|
Cash, cash equivalents
and restricted cash at beginning of the period
|
1,127,483
|
|
1,399,720
|
|
Cash, cash equivalents
and restricted cash at end of the period
|
$
1,282,793
|
|
$
1,233,952
|
|
OPEN TEXT
CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(In thousands of
U.S. dollars)
|
|
|
Reconciliation of
cash, cash equivalents and restricted cash:
|
June 30,
2024
|
|
June 30,
2023
|
|
Cash and cash
equivalents
|
$
1,280,662
|
|
$
1,231,625
|
|
Restricted cash
(1)
|
2,131
|
|
2,327
|
|
Total cash, cash
equivalents and restricted cash
|
$
1,282,793
|
|
$
1,233,952
|
|
OPEN TEXT
CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(In thousands of
U.S. dollars)
|
|
|
Year Ended June
30,
|
|
2024
|
|
2023
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income for the
period
|
$
465,284
|
|
$
150,566
|
|
$
397,259
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization of intangible assets
|
807,925
|
|
657,351
|
|
503,953
|
|
Share-based
compensation expense
|
140,079
|
|
130,302
|
|
69,556
|
|
Pension
expense
|
13,881
|
|
9,207
|
|
6,606
|
|
Amortization of debt
discount and issuance costs
|
25,257
|
|
16,753
|
|
5,422
|
|
Write-off of right of
use assets
|
20,056
|
|
9,626
|
|
17,707
|
|
Loss on extinguishment
of debt
|
56,393
|
|
8,152
|
|
27,413
|
|
Gain on AMC
divestiture
|
(429,102)
|
|
—
|
|
—
|
|
Loss on sale and write
down of property and equipment
|
3,710
|
|
2,331
|
|
294
|
|
Deferred
taxes
|
(142,271)
|
|
(149,560)
|
|
(36,088)
|
|
Share in net (income)
loss of equity investees
|
18,194
|
|
23,077
|
|
(58,702)
|
|
Changes in financial
instruments
|
(3,116)
|
|
128,841
|
|
—
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
108,562
|
|
168,604
|
|
81,841
|
|
Contract
assets
|
(95,403)
|
|
(73,539)
|
|
(37,966)
|
|
Prepaid expenses and
other current assets
|
(28,395)
|
|
(23,035)
|
|
(13,954)
|
|
Income taxes
|
112,097
|
|
14,948
|
|
34,589
|
|
Accounts payable and
accrued liabilities
|
(65,887)
|
|
(127,092)
|
|
(24,177)
|
|
Deferred
revenue
|
(42,974)
|
|
(128,395)
|
|
(5,236)
|
|
Other assets
|
24,849
|
|
(11,297)
|
|
17,297
|
|
Operating lease assets
and liabilities, net
|
(21,448)
|
|
(27,635)
|
|
(4,004)
|
|
Net cash provided by
operating activities
|
967,691
|
|
779,205
|
|
981,810
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Additions of property
and equipment
|
(159,295)
|
|
(123,832)
|
|
(93,109)
|
|
Purchase of Micro Focus
International PLC, net of cash acquired
|
(9,272)
|
|
(5,657,963)
|
|
—
|
|
Purchase of Zix
Corporation, net of cash acquired
|
—
|
|
—
|
|
(856,175)
|
|
Purchase of Bricata
Inc.
|
—
|
|
—
|
|
(17,753)
|
|
Proceeds from AMC
divestiture
|
2,229,187
|
|
—
|
|
—
|
|
Realized gain (loss) on
financial instruments
|
—
|
|
131,248
|
|
—
|
|
Proceeds from net
investment hedge derivative contracts
|
4,456
|
|
—
|
|
—
|
|
Other investing
activities
|
(9,759)
|
|
(873)
|
|
(3,922)
|
|
Net cash provided by
(used in) investing activities
|
2,055,317
|
|
(5,651,420)
|
|
(970,959)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Proceeds from issuance
of Common Shares from exercise of stock options and ESPP
|
66,914
|
|
39,331
|
|
67,215
|
|
Proceeds from
long-term debt and Revolver
|
—
|
|
4,927,450
|
|
1,500,000
|
|
Repayment of long-term
debt and Revolver
|
(2,568,352)
|
|
(202,926)
|
|
(860,000)
|
|
Debt extinguishment
costs
|
—
|
|
—
|
|
(24,969)
|
|
Debt issuance
costs
|
(3,833)
|
|
(77,899)
|
|
(17,159)
|
|
Net change in
transition services agreement obligation
|
15,278
|
|
—
|
|
—
|
|
Repurchase of Common
Shares
|
(150,017)
|
|
—
|
|
(176,987)
|
|
Purchase of treasury
stock
|
(53,085)
|
|
(21,919)
|
|
(111,593)
|
|
Distribution to
non-controlling interest
|
—
|
|
—
|
|
(396)
|
|
Payments of dividends
to shareholders
|
(267,362)
|
|
(259,549)
|
|
(237,655)
|
|
Other financing
activities
|
(1,447)
|
|
(1,435)
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
(2,961,904)
|
|
4,403,053
|
|
138,456
|
|
Foreign exchange gain
(loss) on cash held in foreign currencies
|
(12,263)
|
|
7,203
|
|
(63,196)
|
|
Increase (decrease) in
cash, cash equivalents and restricted cash during the
period
|
48,841
|
|
(461,959)
|
|
86,111
|
|
Cash, cash equivalents
and restricted cash at beginning of the period
|
1,233,952
|
|
1,695,911
|
|
1,609,800
|
|
Cash, cash equivalents
and restricted cash at end of the period
|
$
1,282,793
|
|
$
1,233,952
|
|
$
1,695,911
|
|
OPEN TEXT
CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(In thousands of
U.S. dollars)
|
|
(unaudited)
|
|
|
Reconciliation of
cash, cash equivalents and restricted cash:
|
June 30,
2024
|
|
June 30,
2023
|
|
June 30,
2022
|
|
Cash and cash
equivalents
|
$
1,280,662
|
|
$
1,231,625
|
|
$
1,693,741
|
|
Restricted cash
(1)
|
2,131
|
|
2,327
|
|
2,170
|
|
Total cash, cash
equivalents and restricted cash
|
$
1,282,793
|
|
$
1,233,952
|
|
$
1,695,911
|
|
|
|
|
|
|
|
(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'25 targets and F'27 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 June 30, 2024
(In thousands,
except for per share data)
|
|
Three Months Ended
June 30, 2024
|
|
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
|
$
175,799
|
|
$ (2,966)
|
(1)
|
$
172,833
|
|
|
Customer
support
|
69,706
|
|
(1,022)
|
(1)
|
68,684
|
|
|
Professional service
and other
|
71,691
|
|
(1,202)
|
(1)
|
70,489
|
|
|
Amortization of
acquired technology-based intangible assets
|
48,220
|
|
(48,220)
|
(2)
|
—
|
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
987,716
|
72.5 %
|
53,410
|
(3)
|
1,041,126
|
76.4 %
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
205,253
|
|
(5,312)
|
(1)
|
199,941
|
|
|
Sales and
marketing
|
285,352
|
|
(9,278)
|
(1)
|
276,074
|
|
|
General and
administrative
|
126,639
|
|
(6,987)
|
(1)
|
119,652
|
|
|
Amortization of
acquired customer-based intangible assets
|
97,446
|
|
(97,446)
|
(2)
|
—
|
|
|
Special charges
(recoveries)
|
47,784
|
|
(47,784)
|
(4)
|
—
|
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
193,258
|
|
220,217
|
(5)
|
413,475
|
|
|
Other income (expense),
net
|
397,055
|
|
(397,055)
|
(6)
|
—
|
|
|
Provision for income
taxes
|
239,578
|
|
(196,036)
|
(7)
|
43,542
|
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
248,229
|
|
19,198
|
(8)
|
267,427
|
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
0.91
|
|
$
0.07
|
(8)
|
$
0.98
|
|
|
|
|
(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 49% 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
June 30, 2024
|
|
|
Per share
diluted
|
|
GAAP-based net income,
attributable to OpenText
|
$
248,229
|
$
0.91
|
|
Add
(deduct):
|
|
|
|
Amortization
|
145,666
|
0.54
|
|
Share-based
compensation
|
26,767
|
0.10
|
|
Special charges
(recoveries)
|
47,784
|
0.18
|
|
Other (income) expense,
net
|
(397,055)
|
(1.47)
|
|
GAAP-based provision
for income taxes
|
239,578
|
0.88
|
|
Non-GAAP-based
provision for income taxes
|
(43,542)
|
(0.16)
|
|
Non-GAAP-based net
income, attributable to OpenText
|
$
267,427
|
$
0.98
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
June 30, 2024
|
|
GAAP-based net income,
attributable to OpenText
|
$
248,229
|
|
Add:
|
|
|
Provision for income
taxes
|
239,578
|
|
Interest and other
related expense, net
|
102,461
|
|
Amortization of
acquired technology-based intangible assets
|
48,220
|
|
Amortization of
acquired customer-based intangible assets
|
97,446
|
|
Depreciation
|
31,984
|
|
Share-based
compensation
|
26,767
|
|
Special charges
(recoveries)
|
47,784
|
|
Other (income) expense,
net
|
(397,055)
|
|
Adjusted
EBITDA
|
$
445,414
|
|
|
|
GAAP-based net income
margin
|
18.2 %
|
|
Adjusted EBITDA
margin
|
32.7 %
|
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
June 30, 2024
|
|
GAAP-based cash flows
provided by operating activities
|
$
185,220
|
|
Add:
|
|
|
Capital expenditures
(1)
|
(39,979)
|
|
Free cash
flows
|
$
145,241
|
|
|
|
(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 year ended
June 30, 2024
(In thousands,
except for per share data)
|
|
Year Ended June 30,
2024
|
|
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
|
$
713,759
|
|
$
(12,858)
|
(1)
|
$
700,901
|
|
|
Customer
support
|
292,733
|
|
(4,357)
|
(1)
|
288,376
|
|
|
Professional service
and other
|
302,527
|
|
(6,298)
|
(1)
|
296,229
|
|
|
Amortization of
acquired technology-based intangible assets
|
243,922
|
|
(243,922)
|
(2)
|
—
|
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
4,191,028
|
72.6 %
|
267,435
|
(3)
|
4,458,463
|
77.3 %
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
893,932
|
|
(40,612)
|
(1)
|
853,320
|
|
|
Sales and
marketing
|
1,133,665
|
|
(46,572)
|
(1)
|
1,087,093
|
|
|
General and
administrative
|
577,038
|
|
(29,382)
|
(1)
|
547,656
|
|
|
Amortization of
acquired customer-based intangible assets
|
432,404
|
|
(432,404)
|
(2)
|
—
|
|
|
Special charges
(recoveries)
|
135,305
|
|
(135,305)
|
(4)
|
—
|
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
887,085
|
|
951,710
|
(5)
|
1,838,795
|
|
|
Other income (expense),
net
|
358,391
|
|
(358,391)
|
(6)
|
—
|
|
|
Provision for income
taxes
|
264,012
|
|
(78,845)
|
(7)
|
185,167
|
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
465,090
|
|
672,164
|
(8)
|
1,137,254
|
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
1.71
|
|
$
2.46
|
(8)
|
$
4.17
|
|
|
|
|
(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 36% 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:
|
|
|
|
Year Ended June 30,
2024
|
|
|
Per share
diluted
|
|
GAAP-based net income,
attributable to OpenText
|
$
465,090
|
$
1.71
|
|
Add
(deduct):
|
|
|
|
Amortization
|
676,326
|
2.48
|
|
Share-based
compensation
|
140,079
|
0.51
|
|
Special charges
(recoveries)
|
135,305
|
0.50
|
|
Other (income) expense,
net
|
(358,391)
|
(1.32)
|
|
GAAP-based provision
for income taxes
|
264,012
|
0.97
|
|
Non-GAAP-based
provision for income taxes
|
(185,167)
|
(0.68)
|
|
Non-GAAP-based net
income, attributable to OpenText
|
$
1,137,254
|
$
4.17
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
Year Ended June 30,
2024
|
|
GAAP-based net income,
attributable to OpenText
|
$
465,090
|
|
Add:
|
|
|
Provision for income
taxes
|
264,012
|
|
Interest and other
related expense, net
|
516,180
|
|
Amortization of
acquired technology-based intangible assets
|
243,922
|
|
Amortization of
acquired customer-based intangible assets
|
432,404
|
|
Depreciation
|
131,599
|
|
Share-based
compensation
|
140,079
|
|
Special charges
(recoveries)
|
135,305
|
|
Other (income) expense,
net
|
(358,391)
|
|
Adjusted
EBITDA
|
$
1,970,200
|
|
|
|
GAAP-based net income
margin
|
8.1 %
|
|
Adjusted EBITDA
margin
|
34.1 %
|
|
Reconciliation of
Free cash flows
|
|
|
Year Ended June 30,
2024
|
|
GAAP-based cash flows
provided by operating activities
|
$
967,691
|
|
Add:
|
|
|
Capital expenditures
(1)
|
(159,295)
|
|
Free cash
flows
|
$
808,396
|
|
|
|
(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 March 31, 2024
(In thousands,
except for per share data)
|
|
Three Months Ended
March 31, 2024
|
|
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
|
$
186,400
|
|
$ (3,292)
|
(1)
|
$
183,108
|
|
|
Customer
support
|
74,639
|
|
(1,149)
|
(1)
|
73,490
|
|
|
Professional service
and other
|
75,455
|
|
(1,458)
|
(1)
|
73,997
|
|
|
Amortization of
acquired technology-based intangible assets
|
48,094
|
|
(48,094)
|
(2)
|
—
|
|
|
GAAP-based gross
profit and gross margin (%) /Non-GAAP-based gross profit and gross
margin (%)
|
1,055,774
|
73.0 %
|
53,993
|
(3)
|
1,109,767
|
76.7 %
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
234,022
|
|
(10,799)
|
(1)
|
223,223
|
|
|
Sales and
marketing
|
296,249
|
|
(12,260)
|
(1)
|
283,989
|
|
|
General and
administrative
|
145,924
|
|
(7,084)
|
(1)
|
138,840
|
|
|
Amortization of
acquired customer-based intangible assets
|
100,841
|
|
(100,841)
|
(2)
|
—
|
|
|
Special charges
(recoveries)
|
19,561
|
|
(19,561)
|
(4)
|
—
|
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
227,068
|
|
204,538
|
(5)
|
431,606
|
|
|
Other income (expense),
net
|
9,950
|
|
(9,950)
|
(6)
|
—
|
|
|
Provision for income
taxes
|
6,028
|
|
35,824
|
(7)
|
41,852
|
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
98,285
|
|
158,764
|
(8)
|
257,049
|
|
|
GAAP-based earnings
(loss) per share / Non-GAAP-based earnings per share-diluted,
attributable to OpenText
|
$
0.36
|
|
$
0.58
|
(8)
|
$
0.94
|
|
|
|
|
(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 6% 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
March 31, 2024
|
|
|
Per share
diluted
|
|
GAAP-based net income,
attributable to OpenText
|
$
98,285
|
$
0.36
|
|
Add
(deduct):
|
|
|
|
Amortization
|
148,935
|
0.55
|
|
Share-based
compensation
|
36,042
|
0.13
|
|
Special charges
(recoveries)
|
19,561
|
0.07
|
|
Other (income) expense,
net
|
(9,950)
|
(0.04)
|
|
GAAP-based provision
for income taxes
|
6,028
|
0.02
|
|
Non-GAAP-based
provision for income taxes
|
(41,852)
|
(0.15)
|
|
Non-GAAP-based net
income, attributable to OpenText
|
$
257,049
|
$
0.94
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
March 31, 2024
|
|
GAAP-based net income,
attributable to OpenText
|
$
98,285
|
|
Add
(deduct):
|
|
|
Provision for income
taxes
|
6,028
|
|
Interest and other
related expense, net
|
132,663
|
|
Amortization of
acquired technology-based intangible assets
|
48,094
|
|
Amortization of
acquired customer-based intangible assets
|
100,841
|
|
Depreciation
|
32,109
|
|
Share-based
compensation
|
36,042
|
|
Special charges
(recoveries)
|
19,561
|
|
Other (income) expense,
net
|
(9,950)
|
|
Adjusted
EBITDA
|
$
463,673
|
|
|
|
GAAP-based net income
margin
|
6.8 %
|
|
Adjusted EBITDA
margin
|
32.0 %
|
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
March 31, 2024
|
|
GAAP-based cash flows
provided by operating activities
|
$
384,697
|
|
Add:
|
|
|
Capital expenditures
(1)
|
(36,537)
|
|
Free cash
flows
|
$
348,160
|
|
|
|
(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 June 30, 2023
(In thousands,
except for per share data)
|
|
Three Months Ended
June 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
|
$
166,394
|
|
$ (2,876)
|
(1)
|
$
163,518
|
|
|
Customer
support
|
86,695
|
|
(1,213)
|
(1)
|
85,482
|
|
|
Professional service
and other
|
90,498
|
|
(1,826)
|
(1)
|
88,672
|
|
|
Amortization of
acquired technology-based intangible assets
|
77,045
|
|
(77,045)
|
(2)
|
—
|
|
|
GAAP-based gross
profit and gross margin (%) /Non-GAAP-based gross profit and gross
margin (%)
|
1,064,014
|
71.4 %
|
82,960
|
(3)
|
1,146,974
|
76.9 %
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
249,958
|
|
(13,584)
|
(1)
|
236,374
|
|
|
Sales and
marketing
|
333,244
|
|
(13,467)
|
(1)
|
319,777
|
|
|
General and
administrative
|
136,866
|
|
(8,938)
|
(1)
|
127,928
|
|
|
Amortization of
acquired customer-based intangible assets
|
121,285
|
|
(121,285)
|
(2)
|
—
|
|
|
Special charges
(recoveries)
|
70,222
|
|
(70,222)
|
(4)
|
—
|
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
121,287
|
|
310,456
|
(5)
|
431,743
|
|
|
Other income (expense),
net
|
(25,355)
|
|
25,355
|
(6)
|
—
|
|
|
Provision for (recovery
of) income taxes
|
(1,212)
|
|
41,240
|
(7)
|
40,028
|
|
|
GAAP-based net loss
/ Non-GAAP-based net income, attributable to
OpenText
|
(48,734)
|
|
294,571
|
(8)
|
245,837
|
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
(0.18)
|
|
$
1.09
|
(8)
|
$
0.91
|
|
|
|
|
(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 2% 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 loss to Non-GAAP-based net income:
|
|
|
|
Three Months Ended
June 30, 2023
|
|
|
Per share
diluted
|
|
GAAP-based net loss,
attributable to OpenText
|
$
(48,734)
|
$
(0.18)
|
|
Add
(deduct):
|
|
|
|
Amortization
|
198,330
|
0.73
|
|
Share-based
compensation
|
41,904
|
0.15
|
|
Special charges
(recoveries)
|
70,222
|
0.26
|
|
Other (income) expense,
net
|
25,355
|
0.10
|
|
GAAP-based recovery of
income taxes
|
(1,212)
|
—
|
|
Non-GAAP-based
provision for income taxes
|
(40,028)
|
(0.15)
|
|
Non-GAAP-based net
income, attributable to OpenText
|
$
245,837
|
$
0.91
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
June 30, 2023
|
|
GAAP-based net loss,
attributable to OpenText
|
$
(48,734)
|
|
Add
(deduct):
|
|
|
Recovery of income
taxes
|
(1,212)
|
|
Interest and other
related expense, net
|
145,829
|
|
Amortization of
acquired technology-based intangible assets
|
77,045
|
|
Amortization of
acquired customer-based intangible assets
|
121,285
|
|
Depreciation
|
31,152
|
|
Share-based
compensation
|
41,904
|
|
Special charges
(recoveries)
|
70,222
|
|
Other (income) expense,
net
|
25,355
|
|
Adjusted
EBITDA
|
$
462,846
|
|
|
|
GAAP-based net loss
margin
|
(3.3) %
|
|
Adjusted EBITDA
margin
|
31.0 %
|
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
June 30, 2023
|
|
GAAP-based cash flows
provided by operating activities
|
$
115,301
|
|
Add:
|
|
|
Capital expenditures
(1)
|
(24,060)
|
|
Free cash
flows
|
$
91,241
|
|
|
|
(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 year ended
June 30, 2023
(In thousands,
except for per share data)
|
|
Year Ended June 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
|
$
590,165
|
|
$
(10,664)
|
(1)
|
$
579,501
|
|
|
Customer
support
|
209,705
|
|
(3,627)
|
(1)
|
206,078
|
|
|
Professional service
and other
|
276,888
|
|
(6,998)
|
(1)
|
269,890
|
|
|
Amortization of
acquired technology-based intangible assets
|
223,184
|
|
(223,184)
|
(2)
|
—
|
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
3,168,393
|
70.6 %
|
244,473
|
(3)
|
3,412,866
|
76.1 %
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
680,587
|
|
(39,065)
|
(1)
|
641,522
|
|
|
Sales and
marketing
|
948,598
|
|
(41,710)
|
(1)
|
906,888
|
|
|
General and
administrative
|
419,590
|
|
(28,238)
|
(1)
|
391,352
|
|
|
Amortization of
acquired customer-based intangible assets
|
326,406
|
|
(326,406)
|
(2)
|
—
|
|
|
Special charges
(recoveries)
|
169,159
|
|
(169,159)
|
(4)
|
—
|
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
516,292
|
|
849,051
|
(5)
|
1,365,343
|
|
|
Other income (expense),
net
|
34,469
|
|
(34,469)
|
(6)
|
—
|
|
|
Provision for income
taxes
|
70,767
|
|
74,261
|
(7)
|
145,028
|
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
150,379
|
|
740,321
|
(8)
|
890,700
|
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
0.56
|
|
$
2.73
|
(8)
|
$
3.29
|
|
|
|
|
(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 32% 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:
|
|
|
|
Year Ended June 30,
2023
|
|
|
Per share
diluted
|
|
GAAP-based net income,
attributable to OpenText
|
$
150,379
|
$
0.56
|
|
Add
(deduct):
|
|
|
|
Amortization
|
549,590
|
2.03
|
|
Share-based
compensation
|
130,302
|
0.48
|
|
Special charges
(recoveries)
|
169,159
|
0.63
|
|
Other (income) expense,
net
|
(34,469)
|
(0.13)
|
|
GAAP-based provision
for income taxes
|
70,767
|
0.26
|
|
Non-GAAP-based
provision for income taxes
|
(145,028)
|
(0.54)
|
|
Non-GAAP-based net
income, attributable to OpenText
|
$
890,700
|
$
3.29
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
Year Ended June 30,
2023
|
|
GAAP-based net income,
attributable to OpenText
|
$
150,379
|
|
Add:
|
|
|
Provision for income
taxes
|
70,767
|
|
Interest and other
related expense, net
|
329,428
|
|
Amortization of
acquired technology-based intangible assets
|
223,184
|
|
Amortization of
acquired customer-based intangible assets
|
326,406
|
|
Depreciation
|
107,761
|
|
Share-based
compensation
|
130,302
|
|
Special charges
(recoveries)
|
169,159
|
|
Other (income) expense,
net
|
(34,469)
|
|
Adjusted
EBITDA
|
$
1,472,917
|
|
|
|
GAAP-based net income
margin
|
3.4 %
|
|
Adjusted EBITDA
margin
|
32.8 %
|
|
Reconciliation of
Free cash flows
|
|
|
Year Ended June 30,
2023
|
|
GAAP-based cash flows
provided by operating activities
|
$
779,205
|
|
Add:
|
|
|
Capital expenditures
(1)
|
(123,832)
|
|
Free cash
flows
|
$
655,373
|
|
|
|
(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 year ended June 30,
2024 and 2023:
|
|
|
|
Three Months Ended
June 30, 2024
|
|
Three Months Ended
June 30, 2023
|
|
Currencies
|
% of Revenue
|
% of Expenses(1)
|
|
% of Revenue
|
% of Expenses(1)
|
|
EURO
|
22 %
|
13 %
|
|
21 %
|
12 %
|
|
GBP
|
5 %
|
7 %
|
|
5 %
|
9 %
|
|
CAD
|
3 %
|
10 %
|
|
3 %
|
10 %
|
|
USD
|
59 %
|
49 %
|
|
60 %
|
48 %
|
|
Other
|
11 %
|
21 %
|
|
11 %
|
21 %
|
|
Total
|
100 %
|
100 %
|
|
100 %
|
100 %
|
|
|
|
Year Ended June 30,
2024
|
|
Year Ended June 30,
2023
|
|
Currencies
|
% of Revenue
|
% of Expenses(1)
|
|
% of Revenue
|
% of Expenses(1)
|
|
EURO
|
22 %
|
12 %
|
|
20 %
|
12 %
|
|
GBP
|
5 %
|
7 %
|
|
5 %
|
7 %
|
|
CAD
|
3 %
|
10 %
|
|
3 %
|
11 %
|
|
USD
|
59 %
|
50 %
|
|
62 %
|
51 %
|
|
Other
|
11 %
|
21 %
|
|
10 %
|
19 %
|
|
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