Total Revenues of $1.335B, 16 Consecutive Quarters of Cloud Organic
Growth
Delivers Net Income Margin of 17%, Robust
Adjusted EBITDA Margin of 37.6%
GAAP EPS of $0.87, Non-GAAP EPS of $1.11
Operating Cash Flows of $348M and Free Cash Flows of $307M
Fiscal 2025 Second Quarter Highlights
|
Total
Revenues
(in
millions)
|
|
Annual Recurring
Revenues
(in
millions)
|
|
Cloud
Revenues
(in
millions)
|
|
$1,335
|
|
$1,053
|
|
$462
|
|
(13.1) %
|
|
(8.1) %
|
|
+2.7 %
|
|
Annual Recurring
Revenues represent 79% of Total Revenues
|
|
"OpenText's Q2 results
demonstrate the strength of our operating model, delivering $501
million of adjusted EBITDA, and 37.6% adjusted EBITDA margin, and
generating $307 million of Free Cash Flows (FCF). The Company's top
priorities remain total growth, competitive advantage, margin
expansion and FCF, while producing upper quartile capital returns,"
said Mark J. Barrenechea, OpenText CEO & CTO.
|
|
|
|
Mr. Barrenechea added:
"By helping customers adapt to the new world of multi-cloud, we are
making their businesses more resilient and future-ready. Our next
generation platform Titanium X (Cloud Editions 25.2) is on target
for Q4 delivery. With Titanium X as our foundation, we are
empowering organizations to seamlessly integrate cloud, security,
and AI, helping them adapt and thrive in this dynamic
ecosystem."
|
|
Mark J. Barrenechea,
OpenText CEO & CTO
|
|
|
|
"OpenText generated
solid adjusted EBITDA margin this quarter, reflecting our continued
focus on operational discipline, efficiency and margin expansion,"
said Madhu Ranganathan, OpenText President, CFO & Corporate
Development. "Our initiatives to drive efficiencies across the
business and our execution in the second half of fiscal 2025 will
put us in a position to deliver a strong fiscal 2026."
|
|
Madhu Ranganathan, OpenText President & CFO
|
|
|
|
|
|
|
WATERLOO, ON, Feb. 6, 2025
/PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX), (TSX:
OTEX), today announced its financial results for the second quarter
ended December 31, 2024.
Second Quarter Financial Highlights Y/Y
- Total revenues of $1.335 billion, down 13.1% Y/Y or down 4.9%
when adjusted for the AMC divestiture
- Annual recurring revenues (ARR) of $1.053 billion, down 8.1% Y/Y or down 0.8%
when adjusted for the AMC divestiture
- Cloud revenues of $462 million,
up 2.7% Y/Y
- Quarterly enterprise cloud bookings(1) of
$250 million, up 6.1% Y/Y
- Operating cash flows of $348
million and free cash flows(2) of $307 million
- GAAP-based net income of $230
million, up 510.1% Y/Y
- Adjusted EBITDA(2) of $501
million, margin of 37.6%
- GAAP-based diluted earnings per share (EPS) of $0.87, Non-GAAP-based diluted EPS(2)
of $1.11
- Returned $134 million of capital to shareholders
consisting of $68 million of
dividends and $66 million of share
repurchases
|
(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 condensed consolidated
financial statements below.
|
Financial Highlights for Q2 Fiscal 2025 with Year Over Year
Comparisons
|
Summary of Quarterly
Results
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share data)
|
Q2
FY'25
|
Q2
FY'24
|
$
Change
|
% Change
|
|
Q2
FY'25
in CC*
|
% Change
in CC*
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$462
|
$450
|
$12
|
2.7 %
|
|
$460
|
2.2 %
|
|
|
Customer
support
|
$591
|
$696
|
($105)
|
(15.1) %
|
|
$585
|
(15.9) %
|
|
|
Total annual
recurring revenues**
|
$1,053
|
$1,146
|
($93)
|
(8.1) %
|
|
$1,045
|
(8.8) %
|
|
|
License
|
$189
|
$289
|
($100)
|
(34.7) %
|
|
$188
|
(34.9) %
|
|
|
Professional service
and other
|
$93
|
$100
|
($7)
|
(7.1) %
|
|
$91
|
(8.6) %
|
|
|
Total
revenues
|
$1,335
|
$1,535
|
($200)
|
(13.1) %
|
|
$1,325
|
(13.7) %
|
|
|
GAAP-based operating
income
|
$296
|
$254
|
$42
|
16.5 %
|
|
N/A
|
N/A
|
|
|
Non-GAAP-based
operating income (1)
|
$470
|
$533
|
($63)
|
(11.9) %
|
|
$465
|
(12.8) %
|
|
|
GAAP-based net income
attributable to OpenText
|
$230
|
$38
|
$192
|
510.1 %
|
|
N/A
|
N/A
|
|
|
GAAP-based EPS,
diluted
|
$0.87
|
$0.14
|
$0.73
|
521.4 %
|
|
N/A
|
N/A
|
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$1.11
|
$1.24
|
($0.13)
|
(10.5) %
|
|
$1.09
|
(12.1) %
|
|
|
Adjusted
EBITDA (1)
|
$501
|
$566
|
($65)
|
(11.4) %
|
|
$497
|
(12.3) %
|
|
|
Operating cash
flows
|
$348
|
$351
|
($3)
|
(0.8) %
|
|
N/A
|
N/A
|
|
|
Free cash flows
(1)
|
$307
|
$305
|
$1
|
0.4 %
|
|
N/A
|
N/A
|
|
|
|
|
Summary of YTD
Results
|
|
|
|
|
|
|
|
|
|
(In millions, except
per share data)
|
FY'25 YTD
|
FY'24 YTD
|
$
Change
|
% Change
|
|
FY'25 YTD
in CC*
|
% Change
in CC*
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$919
|
$901
|
$18
|
2.0 %
|
|
$919
|
1.9 %
|
|
|
Customer
support
|
$1,186
|
$1,393
|
($207)
|
(14.9) %
|
|
$1,183
|
(15.1) %
|
|
|
Total annual
recurring revenues**
|
$2,105
|
$2,295
|
($189)
|
(8.2) %
|
|
$2,102
|
(8.4) %
|
|
|
License
|
$315
|
$462
|
($148)
|
(31.9) %
|
|
$314
|
(32.0) %
|
|
|
Professional service
and other
|
$183
|
$203
|
($20)
|
(9.9) %
|
|
$182
|
(10.6) %
|
|
|
Total
revenues
|
$2,604
|
$2,960
|
($357)
|
(12.1) %
|
|
$2,598
|
(12.2) %
|
|
|
GAAP-based operating
income
|
$502
|
$467
|
$35
|
7.6 %
|
|
N/A
|
N/A
|
|
|
Non-GAAP-based
operating income (1)
|
$881
|
$994
|
($112)
|
(11.3) %
|
|
$875
|
(11.9) %
|
|
|
GAAP-based net income
attributable to OpenText
|
$314
|
$119
|
$196
|
165.0 %
|
|
N/A
|
N/A
|
|
|
GAAP-based EPS,
diluted
|
$1.18
|
$0.44
|
$0.74
|
168.2 %
|
|
N/A
|
N/A
|
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$2.03
|
$2.25
|
($0.22)
|
(9.8) %
|
|
$2.02
|
(10.4) %
|
|
|
Adjusted
EBITDA (1)
|
$945
|
$1,061
|
($116)
|
(10.9) %
|
|
$939
|
(11.5) %
|
|
|
Operating cash
flows
|
$270
|
$398
|
($128)
|
(32.1) %
|
|
N/A
|
N/A
|
|
|
Free cash flows
(1)
|
$190
|
$315
|
($125)
|
(39.8) %
|
|
N/A
|
N/A
|
|
|
(1)
|
Please see Note 2 "Use
of Non-GAAP Financial Measures" to the condensed consolidated
financial statements below.
|
|
(2)
|
For periods prior to
Fiscal 2025, this is reflective of the amount of net tax benefit
arising from the internal reorganization assumed to be allocable to
the period based on the forecasted utilization period. Please also
see Note 14 to the Company's Fiscal 2018 Consolidated Financial
Statements on Form 10-K.
|
|
Note: Items in tables
may not add due to rounding. Percentages presented are
calculated based on the underlying amounts.
|
|
*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 February 5, 2025, a cash dividend of
$0.2625 per common share. The record
date for this dividend is March 7, 2025 and the payment date
is March 21, 2025. 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.
Share Repurchase
OpenText also announced that in the second quarter of Fiscal
2025, it repurchased $66 million of
common shares for cancellation under its share repurchase plan (the
Fiscal 2025 Repurchase Plan). In Fiscal 2025, $151 million of common shares have been
repurchased for cancellation. Under the Fiscal 2025 Repurchase
Plan, for the period commencing August 7,
2024 until August 6, 2025,
OpenText intends to purchase for cancellation in open market
transactions, from time to time, up to $300
million of its issued and outstanding common shares, subject
to a maximum of 21,179,064 common shares.
Quarterly Business Highlights
- Key customer wins in the quarter include: Aeven, Anglian Water
Services, BASF Catalysts, Bosch, Cencor, Domcura MLP, Ergon, Frost
Bank, GWC Qatar, H3C, Linde, MAN Energy Solutions, Mott MacDonald,
Sky Italia, ST Microelectronics,
Tucson Medical Center, University Health System, Wandera
- OpenText World 2024 unites industry leaders to tackle AI and
information management, elevate human potential with robust AI
masterclasses
- OpenText launches new Partner Enterprise Learning
Subscription
- OpenText expands partner ecosystem access across full OpenText
product suite
- OpenText makes multi-cloud work with Cloud Editions 24.4
- OpenText partners with Secure Code Warrior to deliver
comprehensive application security and customized developer risk
management
|
Summary of Quarterly
Results
|
|
|
|
|
|
|
|
|
Q2
FY'25
|
Q1
FY'25
|
Q2
FY'24
|
% Change
(Q2 FY'25 vs
Q1 FY'25)
|
|
% Change
(Q2 FY'25 vs
Q2 FY'24)
|
|
|
Revenue
(millions)
|
$1,335
|
$1,269
|
$1,535
|
5.2 %
|
|
(13.1) %
|
|
|
GAAP-based gross
margin
|
73.3 %
|
71.7 %
|
73.6 %
|
160
|
bps
|
(30)
|
bps
|
|
Non-GAAP-based gross
margin (1)
|
77.2 %
|
75.8 %
|
78.6 %
|
140
|
bps
|
(140)
|
bps
|
|
GAAP-based EPS,
diluted
|
$0.87
|
$0.32
|
$0.14
|
171.9 %
|
|
521.4 %
|
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$1.11
|
$0.93
|
$1.24
|
19.4 %
|
|
(10.5) %
|
|
|
(1)
|
Please see Note 2 "Use
of Non-GAAP Financial Measures" to the condensed 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 below note (2) for a reconciliation of
U.S. GAAP-based financial measures used in this press release
to Non-GAAP-based financial measures.
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 achieving total growth, competitive advantage, margin
expansion and free cash flow, and delivering upper quartile capital
returns; customer benefits from products; timing of next generation
platform; focus on operational discipline, efficiency and margin
expansion; executing the Company's capital allocation strategy,
including expected return to shareholders; achieving Fiscal 2025
financial targets; level of performance through the fiscal year;
cloud bookings, demand, scale and revenue growth; future organic
growth initiatives and deployment of capital; innovation fueled by
cloud, AI and security technologies; future revenues, operating
expenses, margins, free cash flows, interest expense and capital
expenditures; market share of our products; innovation road map;
intention to maintain a dividend program, including any targeted
annualized dividend; expected size and timing of the Fiscal 2025
Repurchase Plan, including execution thereof; 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; 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 ©2025 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.
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.
|
OPEN TEXT
CORPORATION
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(In thousands of
U.S. dollars, except share data)
|
|
|
December 31,
2024
|
|
June 30,
2024
|
|
ASSETS
|
(unaudited)
|
|
|
|
Cash and cash
equivalents
|
$
1,122,192
|
|
$
1,280,662
|
|
Accounts receivable
trade, net of allowance for credit losses of $14,641 as of
December 31, 2024 and $12,108 as of June 30,
2024
|
639,611
|
|
626,189
|
|
Contract
assets
|
68,487
|
|
66,450
|
|
Income taxes
recoverable
|
68,004
|
|
61,113
|
|
Prepaid expenses and
other current assets
|
186,763
|
|
242,911
|
|
Total current
assets
|
2,085,057
|
|
2,277,325
|
|
Property and equipment,
net of accumulated depreciation of $779,868 as of December 31,
2024 and $751,174 as of June 30, 2024
|
355,877
|
|
367,740
|
|
Operating lease right
of use assets
|
211,079
|
|
219,774
|
|
Long-term contract
assets
|
39,208
|
|
38,684
|
|
Goodwill
|
7,483,404
|
|
7,488,367
|
|
Acquired intangible
assets
|
2,229,087
|
|
2,486,264
|
|
Deferred tax
assets
|
982,567
|
|
932,657
|
|
Other assets
|
296,382
|
|
298,281
|
|
Long-term income taxes
recoverable
|
49,052
|
|
96,615
|
|
Total
assets
|
$
13,731,713
|
|
$
14,205,707
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
772,641
|
|
$
931,116
|
|
Current portion of
long-term debt
|
35,850
|
|
35,850
|
|
Operating lease
liabilities
|
74,699
|
|
76,446
|
|
Deferred
revenues
|
1,452,734
|
|
1,521,416
|
|
Income taxes
payable
|
65,145
|
|
235,666
|
|
Total current
liabilities
|
2,401,069
|
|
2,800,494
|
|
Long-term
liabilities:
|
|
|
|
|
Accrued
liabilities
|
38,974
|
|
46,483
|
|
Pension liability,
net
|
126,909
|
|
127,255
|
|
Long-term
debt
|
6,348,814
|
|
6,356,943
|
|
Long-term operating
lease liabilities
|
200,815
|
|
218,174
|
|
Long-term deferred
revenues
|
159,987
|
|
162,401
|
|
Long-term income taxes
payable
|
82,310
|
|
145,644
|
|
Deferred tax
liabilities
|
141,328
|
|
148,632
|
|
Total long-term
liabilities
|
7,099,137
|
|
7,205,532
|
|
Shareholders'
equity:
|
|
|
|
|
Share capital and
additional paid-in capital
|
|
|
|
|
263,727,502 and
267,800,517 Common Shares issued and outstanding at
December 31, 2024 and June 30, 2024, respectively;
authorized Common Shares: unlimited
|
2,275,583
|
|
2,271,886
|
|
Accumulated other
comprehensive income (loss)
|
(75,779)
|
|
(69,619)
|
|
Retained
earnings
|
2,174,514
|
|
2,119,159
|
|
Treasury stock, at
cost (4,225,850 and 3,135,980 shares at December 31, 2024 and
June 30, 2024, respectively)
|
(144,432)
|
|
(123,268)
|
|
Total OpenText
shareholders' equity
|
4,229,886
|
|
4,198,158
|
|
Non-controlling
interests
|
1,621
|
|
1,523
|
|
Total shareholders'
equity
|
4,231,507
|
|
4,199,681
|
|
Total liabilities
and shareholders' equity
|
$
13,731,713
|
|
$
14,205,707
|
|
OPEN TEXT
CORPORATION
|
|
CONDENSED
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,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
462,306
|
|
$
450,091
|
|
$
919,330
|
|
$
901,105
|
|
Customer
support
|
590,595
|
|
695,762
|
|
1,186,085
|
|
1,393,475
|
|
License
|
188,923
|
|
289,238
|
|
314,736
|
|
462,264
|
|
Professional service
and other
|
92,676
|
|
99,777
|
|
183,354
|
|
203,453
|
|
Total
revenues
|
1,334,500
|
|
1,534,868
|
|
2,603,505
|
|
2,960,297
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
172,288
|
|
180,148
|
|
347,545
|
|
351,560
|
|
Customer
support
|
62,656
|
|
73,374
|
|
125,230
|
|
148,388
|
|
License
|
6,336
|
|
5,983
|
|
12,993
|
|
9,822
|
|
Professional service
and other
|
68,041
|
|
75,459
|
|
134,956
|
|
155,381
|
|
Amortization of
acquired technology-based intangible assets
|
47,203
|
|
70,784
|
|
94,447
|
|
147,608
|
|
Total cost of
revenues
|
356,524
|
|
405,748
|
|
715,171
|
|
812,759
|
|
Gross profit
|
977,976
|
|
1,129,120
|
|
1,888,334
|
|
2,147,538
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
180,727
|
|
212,855
|
|
371,420
|
|
439,086
|
|
Sales and
marketing
|
273,929
|
|
287,628
|
|
519,811
|
|
567,635
|
|
General and
administrative
|
99,356
|
|
173,264
|
|
206,086
|
|
304,475
|
|
Depreciation
|
31,879
|
|
33,415
|
|
64,050
|
|
67,506
|
|
Amortization of
acquired customer-based intangible assets
|
81,048
|
|
113,925
|
|
162,552
|
|
234,117
|
|
Special charges
(recoveries)
|
15,238
|
|
54,166
|
|
62,374
|
|
67,960
|
|
Total operating
expenses
|
682,177
|
|
875,253
|
|
1,386,293
|
|
1,680,779
|
|
Income from
operations
|
295,799
|
|
253,867
|
|
502,041
|
|
466,759
|
|
Other income (expense),
net
|
68,615
|
|
(68,784)
|
|
32,960
|
|
(48,614)
|
|
Interest and other
related expense, net
|
(83,615)
|
|
(139,292)
|
|
(167,897)
|
|
(281,056)
|
|
Income before income
taxes
|
280,799
|
|
45,791
|
|
367,104
|
|
137,089
|
|
Provision for income
taxes
|
50,893
|
|
8,054
|
|
52,776
|
|
18,406
|
|
Net income for the
period
|
$
229,906
|
|
$
37,737
|
|
$
314,328
|
|
$
118,683
|
|
Net (income)
attributable to non-controlling interests
|
(44)
|
|
(62)
|
|
(98)
|
|
(107)
|
|
Net income attributable
to OpenText
|
$
229,862
|
|
$
37,675
|
|
$
314,230
|
|
$
118,576
|
|
Earnings per
share—basic attributable to OpenText
|
$
0.87
|
|
$
0.14
|
|
$
1.18
|
|
$
0.44
|
|
Earnings per
share—diluted attributable to OpenText
|
$
0.87
|
|
$
0.14
|
|
$
1.18
|
|
$
0.44
|
|
Weighted average number
of Common Shares outstanding—basic (in '000's)
|
265,099
|
|
271,568
|
|
266,252
|
|
271,373
|
|
Weighted average number
of Common Shares outstanding—diluted (in '000's)
|
265,193
|
|
272,141
|
|
266,505
|
|
272,019
|
|
OPEN TEXT
CORPORATION
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
|
(In thousands of
U.S. dollars)
|
|
(unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Six Months
Ended
December 31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income for the
period
|
$
229,906
|
|
$
37,737
|
|
$
314,328
|
|
$
118,683
|
|
Other comprehensive
income (loss)—net of tax:
|
|
|
|
|
|
|
|
|
Net foreign currency
translation adjustments
|
1,167
|
|
(15,796)
|
|
(4,023)
|
|
(30,379)
|
|
Unrealized gain (loss)
on cash flow hedges:
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
- net of tax (1)
|
(4,188)
|
|
1,522
|
|
(3,534)
|
|
(319)
|
|
(Gain) loss
reclassified into net income - net of tax (2)
|
1,010
|
|
328
|
|
1,272
|
|
337
|
|
Unrealized gain (loss)
on available-for-sale financial assets:
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
- net of tax (3)
|
436
|
|
450
|
|
684
|
|
229
|
|
Actuarial gain (loss)
relating to defined benefit pension plans:
|
|
|
|
|
|
|
|
|
Actuarial gain (loss)
- net of tax (4)
|
—
|
|
(91)
|
|
(1,045)
|
|
(110)
|
|
Amortization of
actuarial (gain) loss into net income - net of tax
(5)
|
252
|
|
113
|
|
486
|
|
302
|
|
Total other
comprehensive loss net, for the period
|
(1,323)
|
|
(13,474)
|
|
(6,160)
|
|
(29,940)
|
|
Total comprehensive
income
|
228,583
|
|
24,263
|
|
308,168
|
|
88,743
|
|
Comprehensive income
attributable to non-controlling interests
|
(44)
|
|
(62)
|
|
(98)
|
|
(107)
|
|
Total comprehensive
income attributable to OpenText
|
$
228,539
|
|
$
24,201
|
|
$
308,070
|
|
$
88,636
|
______________________________
|
(1)
|
Net of tax expense
(recovery) of $(1,510) and $549 for the three months ended December
31, 2024 and 2023, respectively; $(1,274) and $(115) for the six
months ended December 31, 2024 and 2023, respectively.
|
|
(2)
|
Net of tax expense
(recovery) of $364 and $118 for the three months ended December 31,
2024 and 2023, respectively; $458 and $121 for the six months ended
December 31, 2024 and 2023, respectively.
|
|
(3)
|
Net of tax expense
(recovery) of $18 and $119 for the three months ended December 31,
2024 and 2023, respectively; $225 and $60 for the six months ended
December 31, 2024 and 2023, respectively.
|
|
(4)
|
Net of tax expense
(recovery) of $— and $91 for the three months ended December 31,
2024 and 2023, respectively; $(43) and $110 for the six months
ended December 31, 2024 and 2023, respectively.
|
|
(5)
|
Net of tax expense
(recovery) of $92 and $50 for the three months ended December 31,
2024 and 2023, respectively; $184 and $125 for the six months ended
December 31, 2024 and 2023, respectively.
|
|
OPEN TEXT
CORPORATION
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
|
|
(In thousands of
U.S. dollars and shares)
|
|
(unaudited)
|
|
|
Three Months Ended
December 31, 2024
|
|
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, 2024
|
265,546
|
|
$
2,290,191
|
|
(3,900)
|
|
$
(145,646)
|
|
$
2,065,221
|
|
$
(74,456)
|
|
$
1,577
|
|
$
4,136,887
|
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock
option plans
|
65
|
|
1,739
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,739
|
|
Under employee stock
purchase plans
|
330
|
|
9,308
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,308
|
|
Share-based
compensation
|
—
|
|
30,355
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
30,355
|
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(1,363)
|
|
(40,013)
|
|
—
|
|
—
|
|
—
|
|
(40,013)
|
|
Issuance of treasury
stock
|
—
|
|
(39,906)
|
|
1,037
|
|
41,227
|
|
—
|
|
—
|
|
—
|
|
1,321
|
|
Repurchase of Common
Shares
|
(2,213)
|
|
(16,104)
|
|
—
|
|
—
|
|
(50,990)
|
|
—
|
|
—
|
|
(67,094)
|
|
Dividends
declared
($0.2625 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(69,579)
|
|
—
|
|
—
|
|
(69,579)
|
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,323)
|
|
—
|
|
(1,323)
|
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
229,862
|
|
—
|
|
44
|
|
229,906
|
|
Balance as of
December 31, 2024
|
263,728
|
|
$
2,275,583
|
|
(4,226)
|
|
$
(144,432)
|
|
$
2,174,514
|
|
$
(75,779)
|
|
$
1,621
|
|
$
4,231,507
|
|
|
|
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 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
|
|
OPEN TEXT
CORPORATION
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
|
|
(In thousands of
U.S. dollars and shares)
|
|
(unaudited)
|
|
|
Six Months Ended
December 31, 2024
|
|
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, 2024
|
267,801
|
|
$
2,271,886
|
|
(3,136)
|
|
$
(123,268)
|
|
$
2,119,159
|
|
$
(69,619)
|
|
$
1,523
|
|
$
4,199,681
|
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock
option plans
|
70
|
|
1,880
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,880
|
|
Under employee stock
purchase plans
|
719
|
|
19,171
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
19,171
|
|
Share-based
compensation
|
—
|
|
59,801
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
59,801
|
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(2,187)
|
|
(65,023)
|
|
—
|
|
—
|
|
—
|
|
(65,023)
|
|
Issuance of treasury
stock
|
—
|
|
(41,836)
|
|
1,097
|
|
43,859
|
|
(702)
|
|
—
|
|
—
|
|
1,321
|
|
Repurchase of Common
Shares
|
(4,862)
|
|
(35,319)
|
|
—
|
|
—
|
|
(118,256)
|
|
—
|
|
—
|
|
(153,575)
|
|
Dividends
declared
($0.525 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(139,917)
|
|
—
|
|
—
|
|
(139,917)
|
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(6,160)
|
|
—
|
|
(6,160)
|
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
314,230
|
|
—
|
|
98
|
|
314,328
|
|
Balance as of
December 31, 2024
|
263,728
|
|
$
2,275,583
|
|
(4,226)
|
|
$
(144,432)
|
|
$
2,174,514
|
|
$
(75,779)
|
|
$
1,621
|
|
$
4,231,507
|
|
|
|
|
|
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
|
|
OPEN TEXT
CORPORATION
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands of
U.S. dollars)
|
|
(unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Six Months
Ended
December
31,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income for the
period
|
$
229,906
|
|
$
37,737
|
|
$
314,328
|
|
$
118,683
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization of intangible assets
|
160,130
|
|
218,124
|
|
321,049
|
|
449,231
|
|
Share-based
compensation expense
|
30,361
|
|
40,175
|
|
59,919
|
|
77,270
|
|
Pension
expense
|
3,350
|
|
3,212
|
|
6,813
|
|
6,383
|
|
Amortization of debt
discount and issuance costs
|
5,499
|
|
7,325
|
|
10,795
|
|
12,821
|
|
Write-off of right of
use assets
|
1,385
|
|
6,248
|
|
1,385
|
|
10,963
|
|
Adjustment to gain on
AMC Divestiture
|
4,175
|
|
—
|
|
4,175
|
|
—
|
|
Loss on sale and write
down of property and equipment, net
|
437
|
|
1,419
|
|
439
|
|
1,877
|
|
Deferred
taxes
|
(10,827)
|
|
(88,400)
|
|
(52,977)
|
|
(177,030)
|
|
Share in net (income)
loss of equity investees
|
(1,538)
|
|
8,482
|
|
(1,993)
|
|
18,178
|
|
Changes in financial
instruments
|
(45,549)
|
|
38,117
|
|
(20,614)
|
|
20,222
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(15,728)
|
|
(91,589)
|
|
41,879
|
|
(60,285)
|
|
Contract
assets
|
(26,097)
|
|
(24,061)
|
|
(59,946)
|
|
(46,627)
|
|
Prepaid expenses and
other current assets
|
32,427
|
|
(15,337)
|
|
54,578
|
|
3,989
|
|
Income taxes
|
(3,218)
|
|
29,136
|
|
(196,727)
|
|
58,733
|
|
Accounts payable and
accrued liabilities
|
(20,590)
|
|
76,058
|
|
(128,110)
|
|
(48,156)
|
|
Deferred
revenue
|
5,124
|
|
107,974
|
|
(71,407)
|
|
(42,502)
|
|
Other assets
|
3,306
|
|
1,114
|
|
(1,436)
|
|
5,218
|
|
Operating lease assets
and liabilities, net
|
(4,561)
|
|
(5,081)
|
|
(11,964)
|
|
(11,194)
|
|
Net cash provided by
operating activities
|
347,992
|
|
350,653
|
|
270,186
|
|
397,774
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Additions of property
and equipment
|
(41,269)
|
|
(45,240)
|
|
(80,585)
|
|
(82,779)
|
|
Purchase of Micro
Focus, net of cash acquired
|
—
|
|
—
|
|
—
|
|
(9,272)
|
|
Adjustment to proceeds
from AMC Divestiture
|
(11,686)
|
|
—
|
|
(11,686)
|
|
—
|
|
Proceeds from net
investment hedge derivative contracts
|
—
|
|
—
|
|
2,519
|
|
1,966
|
|
Other investing
activities
|
5,535
|
|
(1,229)
|
|
5,892
|
|
(6,783)
|
|
Net cash used in
investing activities
|
(47,420)
|
|
(46,469)
|
|
(83,860)
|
|
(96,868)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of Common Shares from exercise of stock options and ESPP
|
8,291
|
|
17,804
|
|
17,740
|
|
29,257
|
|
Repayment of long-term
debt and Revolver
|
(8,963)
|
|
(186,463)
|
|
(17,926)
|
|
(372,926)
|
|
Net change in
transition services agreement obligation
|
26,233
|
|
—
|
|
21,938
|
|
—
|
|
Debt issuance
costs
|
(1,066)
|
|
(831)
|
|
(1,066)
|
|
(2,792)
|
|
Repurchase of Common
Shares
|
(66,003)
|
|
—
|
|
(153,406)
|
|
—
|
|
Purchase of treasury
stock
|
(40,023)
|
|
—
|
|
(65,023)
|
|
(53,085)
|
|
Payments of dividends
to shareholders
|
(68,313)
|
|
(66,414)
|
|
(137,374)
|
|
(133,379)
|
|
Net cash used in
financing activities
|
(149,844)
|
|
(235,904)
|
|
(335,117)
|
|
(532,925)
|
|
Foreign exchange gain
(loss) on cash held in foreign currencies
|
(28,930)
|
|
15,042
|
|
(9,794)
|
|
3,539
|
|
Increase (decrease) in
cash, cash equivalents and restricted cash during the
period
|
121,798
|
|
83,322
|
|
(158,585)
|
|
(228,480)
|
|
Cash, cash equivalents
and restricted cash at beginning of the period
|
1,002,410
|
|
922,150
|
|
1,282,793
|
|
1,233,952
|
|
Cash, cash equivalents
and restricted cash at end of the period
|
$ 1,124,208
|
|
$ 1,005,472
|
|
$ 1,124,208
|
|
$ 1,005,472
|
|
OPEN TEXT
CORPORATION
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands of
U.S. dollars)
|
|
(unaudited)
|
|
|
Reconciliation of
cash, cash equivalents and restricted cash:
|
December 31,
2024
|
|
December 31,
2023
|
|
Cash and cash
equivalents
|
$
1,122,192
|
|
$
1,003,134
|
|
Restricted cash
(1)
|
2,016
|
|
2,338
|
|
Total cash, cash
equivalents and restricted cash
|
$
1,124,208
|
|
$
1,005,472
|
|
(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
condensed 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 condensed 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 December 31, 2024
(In thousands,
except for per share data)
|
|
Three Months Ended
December 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
|
$
172,288
|
|
$ (2,796)
|
(1)
|
$
169,492
|
|
|
Customer
support
|
62,656
|
|
(1,139)
|
(1)
|
61,517
|
|
|
Professional service
and other
|
68,041
|
|
(1,273)
|
(1)
|
66,768
|
|
|
Amortization of
acquired technology-based intangible assets
|
47,203
|
|
(47,203)
|
(2)
|
—
|
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
977,976
|
73.3 %
|
52,411
|
(3)
|
1,030,387
|
77.2 %
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
180,727
|
|
(7,656)
|
(1)
|
173,071
|
|
|
Sales and
marketing
|
273,929
|
|
(11,223)
|
(1)
|
262,706
|
|
|
General and
administrative
|
99,356
|
|
(6,274)
|
(1)
|
93,082
|
|
|
Amortization of
acquired customer-based intangible assets
|
81,048
|
|
(81,048)
|
(2)
|
—
|
|
|
Special charges
(recoveries)
|
15,238
|
|
(15,238)
|
(4)
|
—
|
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
295,799
|
|
173,850
|
(5)
|
469,649
|
|
|
Other income (expense),
net
|
68,615
|
|
(68,615)
|
(6)
|
—
|
|
|
Provision for income
taxes
|
50,893
|
|
41,755
|
(7)
|
92,648
|
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
229,862
|
|
63,480
|
(8)
|
293,342
|
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
0.87
|
|
$
0.24
|
(8)
|
$
1.11
|
|
|
(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
24% ; 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. Beginning in Fiscal 2025, net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 have been fully utilized and are no longer included. In
arriving at our Non-GAAP-based tax rate of approximately 24%, 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, 2024
|
|
|
Per share
diluted
|
|
GAAP-based net income,
attributable to OpenText
|
$
229,862
|
$
0.87
|
|
Add
(deduct):
|
|
|
|
Amortization
|
128,251
|
0.49
|
|
Share-based
compensation
|
30,361
|
0.11
|
|
Special charges
(recoveries)
|
15,238
|
0.06
|
|
Other (income) expense,
net
|
(68,615)
|
(0.26)
|
|
GAAP-based provision
for income taxes
|
50,893
|
0.19
|
|
Non-GAAP-based
provision for income taxes
|
(92,648)
|
(0.35)
|
|
Non-GAAP-based net
income, attributable to OpenText
|
$
293,342
|
$
1.11
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
December 31, 2024
|
|
GAAP-based net income,
attributable to OpenText
|
$
229,862
|
|
Add:
|
|
|
Provision for
income taxes
|
50,893
|
|
Interest and other
related expense, net
|
83,615
|
|
Amortization of
acquired technology-based intangible assets
|
47,203
|
|
Amortization of
acquired customer-based intangible assets
|
81,048
|
|
Depreciation
|
31,879
|
|
Share-based
compensation
|
30,361
|
|
Special charges
(recoveries)
|
15,238
|
|
Other (income) expense,
net
|
(68,615)
|
|
Adjusted
EBITDA
|
$
501,484
|
|
|
|
GAAP-based net income
margin
|
17.2 %
|
|
Adjusted EBITDA
margin
|
37.6 %
|
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
December 31, 2024
|
|
GAAP-based cash flows
provided by operating activities
|
$
347,992
|
|
Add:
|
|
|
Capital expenditures
(1)
|
$
(41,269)
|
|
Free cash
flows
|
$
306,723
|
|
(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, 2024
(In thousands,
except for per share data)
|
|
Six Months Ended
December 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
|
$
347,545
|
|
$ (4,982)
|
(1)
|
$
342,563
|
|
|
Customer
support
|
125,230
|
|
(2,481)
|
(1)
|
122,749
|
|
|
Professional service
and other
|
134,956
|
|
(2,587)
|
(1)
|
132,369
|
|
|
Amortization of
acquired technology-based intangible assets
|
94,447
|
|
(94,447)
|
(2)
|
—
|
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
1,888,334
|
72.5 %
|
104,497
|
(3)
|
1,992,831
|
76.5 %
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
371,420
|
|
(15,823)
|
(1)
|
355,597
|
|
|
Sales and
marketing
|
519,811
|
|
(20,538)
|
(1)
|
499,273
|
|
|
General and
administrative
|
206,086
|
|
(13,508)
|
(1)
|
192,578
|
|
|
Amortization of
acquired customer-based intangible assets
|
162,552
|
|
(162,552)
|
(2)
|
—
|
|
|
Special charges
(recoveries)
|
62,374
|
|
(62,374)
|
(4)
|
—
|
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
502,041
|
|
379,292
|
(5)
|
881,333
|
|
|
Other income (expense),
net
|
32,960
|
|
(32,960)
|
(6)
|
—
|
|
|
Provision for income
taxes
|
52,776
|
|
118,448
|
(7)
|
171,224
|
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
314,230
|
|
227,884
|
(8)
|
542,114
|
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
1.18
|
|
$
0.85
|
(8)
|
$
2.03
|
|
|
(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 14% and a Non-GAAP-based tax rate of approximately
24%; 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. Beginning in Fiscal 2025, net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 have been fully utilized and are no longer included. In
arriving at our Non-GAAP-based tax rate of approximately 24%, 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, 2024
|
|
|
Per share
diluted
|
|
GAAP-based net income,
attributable to OpenText
|
$
314,230
|
$
1.18
|
|
Add
(deduct):
|
|
|
|
Amortization
|
256,999
|
0.96
|
|
Share-based
compensation
|
59,919
|
0.22
|
|
Special charges
(recoveries)
|
62,374
|
0.23
|
|
Other (income) expense,
net
|
(32,960)
|
(0.12)
|
|
GAAP-based provision
for income taxes
|
52,776
|
0.20
|
|
Non-GAAP-based
provision for income taxes
|
(171,224)
|
(0.64)
|
|
Non-GAAP-based net
income, attributable to OpenText
|
$
542,114
|
$
2.03
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
Six Months Ended
December 31, 2024
|
|
GAAP-based net income,
attributable to OpenText
|
$
314,230
|
|
Add:
|
|
|
Provision for income
taxes
|
52,776
|
|
Interest and other
related expense, net
|
167,897
|
|
Amortization of
acquired technology-based intangible assets
|
94,447
|
|
Amortization of
acquired customer-based intangible assets
|
162,552
|
|
Depreciation
|
64,050
|
|
Share-based
compensation
|
59,919
|
|
Special charges
(recoveries)
|
62,374
|
|
Other (income) expense,
net
|
(32,960)
|
|
Adjusted
EBITDA
|
$
945,285
|
|
|
|
GAAP-based net income
margin
|
12.1 %
|
|
Adjusted EBITDA
margin
|
36.3 %
|
|
Reconciliation of
Free cash flows
|
|
|
Six Months Ended
December 31, 2024
|
|
GAAP-based cash flows
provided by operating activities
|
$
270,186
|
|
Add:
|
|
|
Capital expenditures
(1)
|
(80,585)
|
|
Free cash
flows
|
$
189,601
|
|
|
|
(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, 2024
(In thousands,
except for per share data)
|
|
Three Months Ended
September 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
|
$
175,257
|
|
$ (2,186)
|
(1)
|
$
173,071
|
|
|
Customer
support
|
62,574
|
|
(1,342)
|
(1)
|
61,232
|
|
|
Professional service
and other
|
66,915
|
|
(1,314)
|
(1)
|
65,601
|
|
|
Amortization of
acquired technology-based intangible assets
|
47,244
|
|
(47,244)
|
(2)
|
—
|
|
|
GAAP-based gross
profit and gross margin (%) /Non-GAAP-based gross profit and gross
margin (%)
|
910,358
|
71.7 %
|
52,086
|
(3)
|
962,444
|
75.8 %
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
190,693
|
|
(8,167)
|
(1)
|
182,526
|
|
|
Sales and
marketing
|
245,882
|
|
(9,315)
|
(1)
|
236,567
|
|
|
General and
administrative
|
106,730
|
|
(7,234)
|
(1)
|
99,496
|
|
|
Amortization of
acquired customer-based intangible assets
|
81,504
|
|
(81,504)
|
(2)
|
—
|
|
|
Special charges
(recoveries)
|
47,136
|
|
(47,136)
|
(4)
|
—
|
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
206,242
|
|
205,442
|
(5)
|
411,684
|
|
|
Other income (expense),
net
|
(35,655)
|
|
35,655
|
(6)
|
—
|
|
|
Provision for income
taxes
|
1,883
|
|
76,693
|
(7)
|
78,576
|
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
84,368
|
|
164,404
|
(8)
|
248,772
|
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
0.32
|
|
$
0.61
|
(8)
|
$
0.93
|
|
|
(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
24%; 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. Beginning in Fiscal 2025, net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 have been fully utilized and are no longer included. In
arriving at our Non-GAAP-based tax rate of approximately 24%, 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, 2024
|
|
|
Per share
diluted
|
|
GAAP-based net income,
attributable to OpenText
|
$
84,368
|
$
0.32
|
|
Add
(deduct):
|
|
|
|
Amortization
|
128,748
|
0.47
|
|
Share-based
compensation
|
29,558
|
0.11
|
|
Special charges
(recoveries)
|
47,136
|
0.18
|
|
Other (income) expense,
net
|
35,655
|
0.13
|
|
GAAP-based provision
for income taxes
|
1,883
|
0.01
|
|
Non-GAAP-based
provision for income taxes
|
(78,576)
|
(0.29)
|
|
Non-GAAP-based net
income, attributable to OpenText
|
$
248,772
|
$
0.93
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
September 30, 2024
|
|
GAAP-based net income,
attributable to OpenText
|
$
84,368
|
|
Add
(deduct):
|
|
|
Provision for income
taxes
|
1,883
|
|
Interest and other
related expense, net
|
84,282
|
|
Amortization of
acquired technology-based intangible assets
|
47,244
|
|
Amortization of
acquired customer-based intangible assets
|
81,504
|
|
Depreciation
|
32,171
|
|
Share-based
compensation
|
29,558
|
|
Special charges
(recoveries)
|
47,136
|
|
Other (income) expense,
net
|
35,655
|
|
Adjusted
EBITDA
|
$
443,801
|
|
|
|
GAAP-based net income
margin
|
6.6 %
|
|
Adjusted EBITDA
margin
|
35.0 %
|
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
September 30, 2024
|
|
GAAP-based cash flows
provided by operating activities
|
$
(77,806)
|
|
Add:
|
|
|
Capital expenditures
(1)
|
(39,316)
|
|
Free cash
flows
|
$
(117,122)
|
|
|
|
(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, 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
|
212,855
|
|
(12,767)
|
(1)
|
200,088
|
|
|
Sales and
marketing
|
287,628
|
|
(13,227)
|
(1)
|
274,401
|
|
|
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 net 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
(deduct):
|
|
|
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
|
439,086
|
|
(24,501)
|
(1)
|
414,585
|
|
|
Sales and
marketing
|
567,635
|
|
(25,034)
|
(1)
|
542,601
|
|
|
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.
|
|
(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, 2024 and 2023:
|
|
|
Three Months Ended
December 31, 2024
|
|
Three Months Ended
December 31, 2023
|
|
Currencies
|
% of Revenue
|
% of Expenses(1)
|
|
% of Revenue
|
% of Expenses(1)
|
|
EURO
|
23 %
|
13 %
|
|
23 %
|
12 %
|
|
GBP
|
5 %
|
7 %
|
|
4 %
|
7 %
|
|
CAD
|
3 %
|
10 %
|
|
3 %
|
9 %
|
|
USD
|
58 %
|
46 %
|
|
59 %
|
51 %
|
|
Other
|
11 %
|
24 %
|
|
11 %
|
21 %
|
|
Total
|
100 %
|
100 %
|
|
100 %
|
100 %
|
|
|
Six Months Ended
December 31, 2024
|
|
Six Months Ended
December 31, 2023
|
|
Currencies
|
% of Revenue
|
% of Expenses(1)
|
|
% of Revenue
|
% of Expenses(1)
|
|
EURO
|
23 %
|
12 %
|
|
22 %
|
11 %
|
|
GBP
|
5 %
|
7 %
|
|
5 %
|
8 %
|
|
CAD
|
3 %
|
10 %
|
|
3 %
|
10 %
|
|
USD
|
59 %
|
48 %
|
|
59 %
|
51 %
|
|
Other
|
10 %
|
23 %
|
|
11 %
|
20 %
|
|
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
