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OpenText Reports Fourth Quarter and Fiscal Year 2024 Financial Results, Raises Fiscal 2025 Margin Targets

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OpenText (NASDAQ/TSX: OTEX) reported its Fiscal 2024 financial results, showcasing strong performance with total annual revenues of $5.8 billion, reflecting a 29% year-over-year growth. Key metrics include:

  • Total Revenues: $5.8 billion, up 28.6% Y/Y
  • Annual Recurring Revenues: $4.5 billion, up 25.4% Y/Y
  • Cloud Revenues: $1.8 billion, up 7.1% Y/Y
  • Adjusted EBITDA: $2.0 billion, margin of 34.1%
  • GAAP-based Net Income: $465 million, up 209.3% Y/Y
  • Free Cash Flows: $808 million

OpenText also announced a new $300 million share repurchase program, a 5% dividend increase, and expects to return approximately $570 million to shareholders in Fiscal 2025. The company's quarterly results saw total revenues of $1.4 billion, down 8.6% Y/Y due to the AMC divestiture, but GAAP-based net income surged 609.4% Y/Y primarily due to gains from the divestiture.

OpenText (NASDAQ/TSX: OTEX) ha riportato i risultati finanziari per l'anno fiscale 2024, evidenziando una performance solida con ricavi annuali totali di 5,8 miliardi di dollari, che rappresentano una crescita del 29% rispetto all'anno precedente. I principali indicatori includono:

  • Ricavi Totali: 5,8 miliardi di dollari, in aumento del 28,6% anno su anno
  • Ricavi Ricorrenti Annuali: 4,5 miliardi di dollari, in aumento del 25,4% anno su anno
  • Ricavi da Cloud: 1,8 miliardi di dollari, in aumento del 7,1% anno su anno
  • EBITDA Rettificato: 2,0 miliardi di dollari, margine del 34,1%
  • Utile Netto secondo GAAP: 465 milioni di dollari, in aumento del 209,3% anno su anno
  • Flussi di Cassa Liberi: 808 milioni di dollari

OpenText ha inoltre annunciato un nuovo programma di riacquisto di azioni da 300 milioni di dollari, un aumento del 5% del dividendo e prevede di restituire circa 570 milioni di dollari agli azionisti nell'anno fiscale 2025. I risultati trimestrali dell'azienda hanno mostrato ricavi totali di 1,4 miliardi di dollari, in calo dell'8,6% anno su anno a causa della dismissione di AMC, ma l'utile netto secondo GAAP è aumentato del 609,4% anno su anno principalmente grazie ai guadagni derivanti dalla dismissione.

OpenText (NASDAQ/TSX: OTEX) informó sus resultados financieros del año fiscal 2024, mostrando un desempeño sólido con ingresos anuales totales de 5.8 mil millones de dólares, reflejando un crecimiento del 29% en comparación con el año anterior. Los indicadores clave incluyen:

  • Ingresos Totales: 5.8 mil millones de dólares, un aumento del 28.6% interanual
  • Ingresos Anuales Recurrentes: 4.5 mil millones de dólares, un aumento del 25.4% interanual
  • Ingresos en la Nube: 1.8 mil millones de dólares, un aumento del 7.1% interanual
  • EBITDA Ajustado: 2.0 mil millones de dólares, con un margen del 34.1%
  • Ingreso Neto según GAAP: 465 millones de dólares, un aumento del 209.3% interanual
  • Flujos de Efectivo Libres: 808 millones de dólares

OpenText también anunció un nuevo programa de recompra de acciones de 300 millones de dólares, un aumento del 5% en el dividendo y espera devolver aproximadamente 570 millones de dólares a los accionistas en el año fiscal 2025. Los resultados trimestrales de la compañía mostraron ingresos totales de 1.4 mil millones de dólares, una disminución del 8.6% interanual debido a la desinversión de AMC, pero el ingreso neto basado en GAAP se disparó un 609.4% interanual principalmente debido a las ganancias por la desinversión.

OpenText (NASDAQ/TSX: OTEX)는 2024 회계연도의 재무 결과를 발표하며 연간 총 수익이 58억 달러에 달해 전년 대비 29%의 강력한 성장률을 기록했다고 전했습니다. 주요 지표는 다음과 같습니다:

  • 총 수익: 58억 달러, 전년 대비 28.6% 증가
  • 연간 반복 수익: 45억 달러, 전년 대비 25.4% 증가
  • 클라우드 수익: 18억 달러, 전년 대비 7.1% 증가
  • 조정 EBITDA: 20억 달러, 34.1%의 마진
  • GAAP 기준 순이익: 4억 6500만 달러, 전년 대비 209.3% 증가
  • 자유 현금 흐름: 8억 800만 달러

OpenText는 또한 3억 달러 규모의 새로운 자사주 매입 프로그램과 5%의 배당금 인상을 발표했으며, 2025 회계연도에 약 5억 7000만 달러를 주주에게 환원할 예정입니다. 회사의 분기 결과는 14억 달러의 총 수익을 기록했으며, AMC의 매각으로 인해 전년 대비 8.6% 감소했지만, GAAP 기준 순이익은 매각으로 인한 이익 덕분에 전년 대비 609.4% 급증했습니다.

OpenText (NASDAQ/TSX: OTEX) a publié ses résultats financiers pour l'exercice 2024, montrant une performance solide avec des revenus annuels totaux de 5,8 milliards de dollars, ce qui représente une croissance de 29 % par rapport à l'année précédente. Les indicateurs clés comprennent :

  • Revenus Totaux : 5,8 milliards de dollars, en hausse de 28,6 % par rapport à l'année précédente
  • Revenus Répétitifs Annuels : 4,5 milliards de dollars, en hausse de 25,4 % par rapport à l'année précédente
  • Revenus Cloud : 1,8 milliard de dollars, en hausse de 7,1 % par rapport à l'année précédente
  • EBITDA Ajusté : 2,0 milliards de dollars, marge de 34,1 %
  • Résultat Net selon les normes GAAP : 465 millions de dollars, en hausse de 209,3 % par rapport à l'année précédente
  • Flux de Trésorerie Libres : 808 millions de dollars

OpenText a également annoncé un nouveau programme de rachat d'actions de 300 millions de dollars, une augmentation de 5 % du dividende et prévoit de restituer environ 570 millions de dollars aux actionnaires lors de l'exercice 2025. Les résultats trimestriels de l'entreprise ont vu des revenus totaux de 1,4 milliard de dollars, en baisse de 8,6 % par rapport à l'année précédente en raison de la cession d'AMC, mais le résultat net selon les normes GAAP a grimpé de 609,4 % par rapport à l'année précédente, principalement en raison des gains liés à la cession.

OpenText (NASDAQ/TSX: OTEX) hat die finanziellen Ergebnisse für das Geschäftsjahr 2024 veröffentlicht und dabei eine starke Leistung mit Gesamterlösen von 5,8 Milliarden Dollar gezeigt, was einem Wachstum von 29% im Vergleich zum Vorjahr entspricht. Wichtige Kennzahlen sind:

  • Gesamterlöse: 5,8 Milliarden Dollar, ein Anstieg von 28,6% im Jahresvergleich
  • Jährliche wiederkehrende Erlöse: 4,5 Milliarden Dollar, ein Anstieg von 25,4% im Jahresvergleich
  • Cloud-Erlöse: 1,8 Milliarden Dollar, ein Anstieg von 7,1% im Jahresvergleich
  • Bereinigtes EBITDA: 2,0 Milliarden Dollar, Marge von 34,1%
  • Nettoeinkommen nach GAAP: 465 Millionen Dollar, ein Anstieg von 209,3% im Jahresvergleich
  • Freie Cashflows: 808 Millionen Dollar

OpenText kündigte außerdem ein neues Aktienrückkaufprogramm über 300 Millionen Dollar, eine Erhöhung der Dividende um 5% und die Erwartung an, etwa 570 Millionen Dollar im Geschäftsjahr 2025 an die Aktionäre zurückzugeben. Die Quartalsergebnisse des Unternehmens zeigten Gesamterlöse von 1,4 Milliarden Dollar, was einem Rückgang von 8,6% im Jahresvergleich aufgrund der Veräußerung von AMC entspricht, aber das auf GAAP basierende Nettoeinkommen stieg um 609,4% im Jahresvergleich, hauptsächlich aufgrund der Gewinne aus der Veräußerung.

Positive
  • Total annual revenues of $5.8 billion, up 28.6% Y/Y
  • Annual recurring revenues of $4.5 billion, up 25.4% Y/Y
  • Cloud revenues of $1.8 billion, up 7.1% Y/Y
  • Adjusted EBITDA of $2.0 billion, margin of 34.1%
  • GAAP-based net income of $465 million, up 209.3% Y/Y
  • Free cash flows of $808 million
  • New $300 million share repurchase program
  • Increased annualized dividend by 5%
  • Net leverage ratio reduced from 3.8x to 2.9x
Negative
  • Quarterly revenues down 8.6% Y/Y, driven by AMC divestiture
  • Quarterly non-GAAP net income of $248 million, down from previous quarters

Insights

OpenText's Q4 and FY2024 results reveal a mixed financial picture. While annual revenues grew impressively by 28.6% to $5.8 billion, Q4 revenues declined 8.6% year-over-year to $1.36 billion, partly due to the divestiture of the AMC business. This divestiture, which brought in $2.275 billion, significantly boosted net income but impacted overall revenue.

The company's focus on recurring revenue streams is evident, with annual recurring revenues comprising 79% of total revenues. Cloud revenues showed modest growth of 7.1% annually and 2.9% in Q4, indicating steady progress in cloud adoption.

OpenText's profitability metrics are strong, with adjusted EBITDA margin at 34.1% for the year. The company's ability to generate free cash flow of $808 million is commendable, especially considering the investments in cloud, security and AI.

The announcement of a $300 million share repurchase program and a 5% dividend increase signals confidence in future cash flows. However, investors should note the significant debt prepayment of $2.766 billion, which reduced the net leverage ratio from 3.8x to 2.9x, indicating a focus on strengthening the balance sheet.

Overall, while the Q4 results show some challenges, the full-year performance and strategic moves position OpenText for potential growth, especially in cloud and AI-driven services.

OpenText's financial results reflect the ongoing transformation in the enterprise software industry. The company's strategic focus on cloud services and AI integration is evident in its product developments and financial priorities.

The 7.1% growth in cloud revenues, while modest, indicates a steady shift towards cloud-based solutions. This aligns with broader industry trends as enterprises increasingly adopt cloud technologies for information management. The 32.9% increase in enterprise cloud bookings is particularly noteworthy, suggesting strong future growth potential in this segment.

OpenText's acquisition of Pillr, a cybersecurity MDR platform, demonstrates the company's commitment to enhancing its security offerings. This move is timely, given the increasing importance of cybersecurity in enterprise IT strategies.

The company's recognition as a leader in IDC MarketScapes for unified endpoint management and client endpoint management for Microsoft Windows devices underscores its competitive position in key technology areas. Similarly, the FedRAMP authorization for OpenText cloud for government solution opens up significant opportunities in the public sector market.

The emphasis on AI, as seen in the IDOL™ platform's recognition in document mining and analytics, aligns with the industry's focus on AI-driven solutions. This positions OpenText well to capitalize on the growing demand for AI-enhanced information management tools.

While the divestiture of the AMC business may have impacted short-term revenues, it allows OpenText to focus on core growth areas in cloud and AI technologies, potentially driving long-term value creation in line with evolving market demands.

– 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 /PRNewswire/ -- 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).

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/opentext-reports-fourth-quarter-and-fiscal-year-2024-financial-results-raises-fiscal-2025-margin-targets-302212857.html

SOURCE Open Text Corporation

FAQ

What were OpenText's total annual revenues for Fiscal 2024?

OpenText reported total annual revenues of $5.8 billion for Fiscal 2024, representing a 28.6% year-over-year increase.

What is the growth rate of OpenText's annual recurring revenues for Fiscal 2024?

OpenText's annual recurring revenues grew by 25.4% year-over-year in Fiscal 2024, totaling $4.5 billion.

How much did OpenText's cloud revenues increase in Fiscal 2024?

OpenText's cloud revenues increased by 7.1% year-over-year in Fiscal 2024, reaching $1.8 billion.

What was OpenText's GAAP-based net income for Fiscal 2024?

OpenText's GAAP-based net income for Fiscal 2024 was $465 million, up 209.3% year-over-year.

What share repurchase program did OpenText announce?

OpenText announced a new $300 million share repurchase program for Fiscal 2025.

What dividend increase did OpenText announce?

OpenText announced a 5% increase in its annualized dividend, from $1 per share to $1.05 per share.

What was OpenText's net leverage ratio reduction?

OpenText reduced its net leverage ratio from 3.8x to 2.9x during Fiscal 2024.

What was OpenText's revenue decline in Q4 Fiscal 2024?

OpenText's Q4 Fiscal 2024 revenues declined by 8.6% year-over-year, primarily due to the AMC divestiture.

What impacted OpenText's Q4 GAAP-based net income?

OpenText's Q4 GAAP-based net income surged 609.4% year-over-year, primarily due to gains from the AMC divestiture.

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Open Text Corp

NASDAQ:OTEX

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Software - Application
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