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OpenText Reports First Quarter Fiscal Year 2025 Financial Results

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OpenText (OTEX) reported Q1 FY2025 financial results with total revenues of $1.27 billion, down 11.0% year-over-year. The company achieved its 15th consecutive quarter of cloud organic growth, with cloud revenues up 1.3% to $457 million. Annual recurring revenues reached $1.05 billion, representing 83% of total revenues. The company delivered a GAAP-based net income margin of 7% and Adjusted EBITDA margin of 35.0%. OpenText returned $154 million to shareholders through dividends and share repurchases, having purchased and canceled 7.72 million shares over the last two quarters.

OpenText (OTEX) ha riportato i risultati finanziari del primo trimestre dell'anno fiscale 2025, con ricavi totali di 1,27 miliardi di dollari, in calo dell'11,0% rispetto all'anno precedente. L'azienda ha raggiunto il suo quindicesimo trimestre consecutivo di crescita organica nel cloud, con ricavi cloud in aumento dell'1,3% a 457 milioni di dollari. I ricavi ricorrenti annuali hanno toccato 1,05 miliardi di dollari, rappresentando l'83% dei ricavi totali. L'azienda ha registrato un margine di utile netto basato su GAAP del 7% e un margine di EBITDA rettificato del 35,0%. OpenText ha restituito 154 milioni di dollari agli azionisti attraverso dividendi e riacquisti di azioni, avendo acquistato e cancellato 7,72 milioni di azioni negli ultimi due trimestri.

OpenText (OTEX) informó los resultados financieros del primer trimestre del año fiscal 2025, con ingresos totales de 1.27 mil millones de dólares, una disminución del 11.0% en comparación con el año anterior. La compañía logró su decimoquinto trimestre consecutivo de crecimiento orgánico en la nube, con ingresos en la nube que aumentaron un 1.3% a 457 millones de dólares. Los ingresos recurrentes anuales alcanzaron 1.05 mil millones de dólares, lo que representa el 83% de los ingresos totales. La empresa presentó un margen de utilidad neta basado en GAAP del 7% y un margen de EBITDA ajustado del 35.0%. OpenText devolvió 154 millones de dólares a los accionistas a través de dividendos y recompras de acciones, habiendo adquirido y cancelado 7.72 millones de acciones en los últimos dos trimestres.

OpenText (OTEX)는 2025 회계연도 1분기 재무 결과를 보고하며 총 매출이 12억 7천만 달러로 전년대비 11.0% 감소했다고 발표했습니다. 이 회사는 클라우드에서 15분기 연속으로 유기적인 성장을 달성하였으며, 클라우드 매출은 4억 5천7백만 달러로 1.3% 증가했습니다. 연간 반복 수익은 10억 5천만 달러에 도달하여 총 수익의 83%를 차지합니다. 이 회사는 GAAP 기준의 순이익 마진 7%와 조정 EBITDA 마진 35.0%를 기록했습니다. OpenText는 지난 두 분기 동안 772만 주를 구매 및 매입 취소하여 주주에게 1억 5천4백만 달러를 반환했습니다.

OpenText (OTEX) a annoncé les résultats financiers du premier trimestre de l'exercice 2025, avec des revenus totaux de 1,27 milliard de dollars, en baisse de 11,0% par rapport à l'année précédente. L'entreprise a atteint son quinzième trimestre consécutif de croissance organique dans le cloud, avec des revenus cloud en hausse de 1,3% à 457 millions de dollars. Les revenus récurrents annuels ont atteint 1,05 milliard de dollars, représentant 83% des revenus totaux. L'entreprise a enregistré une marge de bénéfice net basée sur GAAP de 7% et une marge EBITDA ajustée de 35,0%. OpenText a restitué 154 millions de dollars aux actionnaires par le biais de dividendes et de rachats d'actions, ayant acheté et annulé 7,72 millions d'actions au cours des deux derniers trimestres.

OpenText (OTEX) hat die finanziellen Ergebnisse des ersten Quartals des Geschäftsjahres 2025 veröffentlicht, mit Gesamterlösen von 1,27 Milliarden Dollar, was einem Rückgang von 11,0% im Jahresvergleich entspricht. Das Unternehmen erzielte das fünfzehnte aufeinanderfolgende Quartal organisches Wachstum im Cloud-Bereich, wobei die Cloud-Erlöse um 1,3% auf 457 Millionen Dollar stiegen. Die jährlichen wiederkehrenden Einnahmen erreichten 1,05 Milliarden Dollar, was 83% der Gesamteinnahmen entspricht. Das Unternehmen erzielte eine GAAP-basierte Nettogewinnmarge von 7% und eine bereinigte EBITDA-Marge von 35,0%. OpenText gab 154 Millionen Dollar an die Aktionäre in Form von Dividenden und Aktienrückkäufen zurück, nachdem in den letzten zwei Quartalen 7,72 Millionen Aktien gekauft und zurückgezogen wurden.

Positive
  • Cloud revenues increased 1.3% Y/Y to $457 million
  • Enterprise cloud bookings grew 10.3% Y/Y to $133 million
  • Strong Adjusted EBITDA margin of 35.0%
  • Returned $154 million to shareholders through dividends and buybacks
  • Annual recurring revenues represent 83% of total revenues
Negative
  • Total revenues declined 11.0% Y/Y to $1.27 billion
  • Operating cash flows negative at ($78) million
  • Free cash flows negative at ($117) million
  • Customer support revenue decreased 14.7% to $595 million
  • License revenue dropped 27.3% to $126 million

Insights

OpenText's Q1 FY25 results reveal mixed performance with notable headwinds and strategic initiatives. Total revenues declined 11.0% Y/Y to $1.27B, though only 1.8% down when adjusted for AMC divestiture. The bright spots include 1.3% growth in cloud revenues to $457M and 10.3% increase in enterprise cloud bookings to $133M.

The company maintained strong profitability with 35.0% Adjusted EBITDA margin, while executing significant shareholder returns through $154M in combined dividends and share repurchases. The negative operating cash flow of $78M was attributed to one-time tax payments from the AMC divestiture.

The transition towards cloud services continues to offset traditional license revenue declines, with annual recurring revenue now representing 83% of total revenues, providing stability despite broader revenue pressure.

The results demonstrate OpenText's strategic evolution in the enterprise information management space. The company's focus on cloud transformation and AI integration positions it well against market trends, evidenced by 15 consecutive quarters of cloud organic growth. The planned $570M return to shareholders in FY25 signals management's confidence in sustainable cash generation.

The successful AMC divestiture streamlines operations while maintaining profitability targets. Market recognition through IDC MarketScape leadership position and TIME Magazine ranking reinforces brand strength. The $300M share repurchase program and steady dividend policy should provide ongoing support for shareholder value.

Total Revenues of $1.27B, 15 Consecutive Quarters of Cloud Organic Growth
Delivers Net Income Margin of 7%, Robust Adjusted EBITDA Margin of 35.0%
GAAP EPS of $0.32, Non-GAAP EPS of $0.93
Purchased and Canceled 7.72M Shares Over the Last Two Quarters

Fiscal 2025 First Quarter Highlights

Total Revenues

(in millions)


Annual Recurring Revenues

(in millions)


Cloud Revenues

(in millions)

$1,269


$1,053


$457

(11.0) %


(8.4) %


+1.3 %

Annual Recurring Revenues represent 83% of Total Revenues

 


 

"In our first full quarter after the AMC divestiture, we delivered $1.27 billion in total revenues, 35% Adjusted EBITDA Margin, and our 15th consecutive quarter of organic cloud revenue growth," said Mark J. Barrenechea, OpenText CEO & CTO. "Further, we remain on track to return record capital to shareholders in Fiscal 2025, of approximately $570 million, and the company has purchased and canceled 7.72 million shares over the last two quarters."

 



Mr. Barrenechea added: "OpenText continues to invest in the future of Information Management, and we look forward to showcasing our exciting innovation roadmap at our upcoming OpenText World User Conference in Las Vegas. We will be highlighting strong progress in our trusted Business Clouds, Business AI and Business Technology including Cyber Security."



Mark J. Barrenechea, OpenText CEO & CTO










"The strength of the OpenText operating model has resulted in strong margin performance this quarter. We continue to focus on driving operational efficiencies across the organization and we have a defined path in place for future margin and cash flow growth," said Madhu Ranganathan, OpenText President, CFO and leader of Corporate Development. "Based on this foundation of operational excellence we continue to invest in our growth and have the capital flexibility to deliver on our Fiscal 2025 Targets."



                                                                                Madhu Ranganathan, OpenText President & CFO









 

WATERLOO, ON, Oct. 31, 2024 /PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced its financial results for the first quarter ended September 30, 2024.

First Quarter Financial Highlights Y/Y

  • Total revenues of $1.27 billion, down 11.0% Y/Y or down 1.8% when adjusted for the AMC divestiture
  • Annual recurring revenues (ARR) of $1.05 billion, or down 8.4% Y/Y or down 1.1% when adjusted for the AMC divestiture
  • Cloud revenues of $457 million, up 1.3% Y/Y
  • Quarterly enterprise cloud bookings(1) of $133 million, up 10.3% Y/Y
  • Operating cash flows of ($78) million and free cash flows(2) of ($117) million, reflecting expected one-time tax payment for the AMC divestiture
  • GAAP-based net income of $84 million, GAAP-based diluted earnings per share (EPS) of $0.32
  • Adjusted EBITDA(2) of $444 million, margin of 35.0%, above Company's Q1 targets
  • Non-GAAP diluted EPS(2) of $0.93
  • Returned $154 million of capital to shareholders consisting of $69 million of dividends and $85 million of share repurchases


(1)

Enterprise cloud bookings is defined as the total value from cloud services and subscription contracts, entered into in the period that are new, committed and incremental to our existing contracts, entered into with our enterprise based customers.

(2)

Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed consolidated financial statements below.

Financial Highlights for Q1 Fiscal 2025 with Year Over Year Comparisons

Summary of Quarterly Results









(In millions, except per share data)

Q1 FY'25

Q1 FY'24

$ Change 

% Change 


Q1 FY'25
 in CC*

% Change
in CC*


Revenues:









Cloud services and subscriptions

$457

$451

$6

1.3 %


$459

1.7 %


Customer support

595

698

($102)

(14.7) %


598

(14.3) %


Total annual recurring revenues**

$1,053

$1,149

($96)

(8.4) %


$1,057

(8.0) %


License

126

173

($47)

(27.3) %


126

(27.2) %


Professional service and other

91

104

($13)

(12.5) %


91

(12.5) %


Total revenues

$1,269

$1,425

($156)

(11.0) %


$1,273

(10.7) %


GAAP-based operating income

$206

$213

($7)

(3.1) %


N/A

N/A


Non-GAAP-based operating income (1)

$412

$461

($49)

(10.7) %


$410

(11.0) %


GAAP-based net income attributable to OpenText

$84

$81

$3

4.3 %


N/A

N/A


GAAP-based EPS, diluted

$0.32

$0.30

$0.02

6.7 %


N/A

N/A


Non-GAAP-based EPS, diluted (1)(2)

$0.93

$1.01

($0.08)

(7.9) %


$0.93

(7.9) %


Adjusted EBITDA (1)

$444

$495

($51)

(10.3) %


$442

(10.6) %


Operating cash flows

($78)

$47

($125)

(265.1) %


N/A

N/A


Free cash flows (1)

($117)

$10

($127)

(1,322.3) %


N/A

N/A




(1)

Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed consolidated financial statements below.

(2)

For periods prior to Fiscal 2025, this is reflective of the amount of net tax benefit arising from the internal reorganization assumed to be allocable to the period based on the forecasted utilization period. Please also see Note 14 to the Company's Fiscal 2018 Consolidated Financial Statements on Form 10-K.

Note: Items in tables may not add due to rounding. Percentages presented are calculated based on the underlying amounts.

*CC: Constant currency for this purpose is defined as the current period reported revenues/expenses/earnings represented at the prior comparative period's foreign exchange rate.

**Annual recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.

Dividend

As part of our quarterly, non-cumulative cash dividend program, the Board declared on October 29, 2024, a cash dividend of $0.2625 per common share. The record date for this dividend is November 29, 2024 and the payment date is December 20, 2024. OpenText believes strongly in returning value to its shareholders and intends to maintain its dividend program. Any future declarations of dividends and the establishment of future record and payment dates are all subject to the final determination and discretion of the Board of Directors.

Share Repurchase 

OpenText also announced that in the first quarter of Fiscal 2025, it repurchased $85 million of common shares for cancellation under the Fiscal 2025 Repurchase Plan. Under the Fiscal 2025 Repurchase Plan, for the period commencing August 7, 2024 until August 6, 2025, OpenText intends to purchase for cancellation in open market transactions, from time to time, up to US$300 million of its issued and outstanding common shares, subject to a maximum of 21,179,064 common shares.

Quarterly Business Highlights

  • Key customer wins in the quarter include: Alaska Airlines, Beyond ONE-Virgin Mobile, Bombardier, CHT Security, Dick's Sporting Goods, Digital Intelligence, European Medicines Agency, Fedex-DXC, Ford O'Brien Landy LLP, Linde Plc, National Bank, Nippon Gases, Raytheon Systems Limited, SICK AG, Standard
  • OpenText named a leader in IDC MarketScape: Worldwide Intelligent Content Services 2024
  • OpenText harnesses AI to revolutionize DevSecOps at Global Virtual Summit
  • OpenText IT Management Platform achieves FedRAMP® authorization
  • OpenText named one of the world's best companies by TIME Magazine for the second consecutive year

 

Summary of Quarterly Results









Q1 FY'25

Q4 FY'24

Q1 FY'24

% Change 

(Q1 FY'25 vs
Q4 FY'24)


% Change

(Q1 FY'25 vs
Q1 FY'24)


Revenue (millions)

$1,269

$1,362

$1,425

(6.8) %


(11.0) %


GAAP-based gross margin

71.7 %

72.5 %

71.4 %

(80)

bps

30

bps

Non-GAAP-based gross margin (1)

75.8 %

76.4 %

77.3 %

(60)

bps

(150)

bps

GAAP-based earnings (loss) per share, diluted

$0.32

$0.91

$0.30

(64.8) %


6.7 %


Non-GAAP-based EPS, diluted (1)(2)

$0.93

$0.98

$1.01

(5.1) %


(7.9) %




(1)

Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed consolidated financial statements below.

(2)

Please also see Note 14 to the Company's Fiscal 2018 Consolidated Financial Statements on Form 10-K. Reflective of the amount of net tax benefit arising from the internal reorganization assumed to be allocable to the current period based on the forecasted utilization period.

Conference Call Information

OpenText posted an investor presentation on its Investor Relations website and invites the public to listen to the earnings conference call webcast today at 9:00 a.m. ET (6:00 a.m. PT) from the Investor Relations section of the Company's website at https://investors.opentext.com. To join the webcast instantly, use this webcast link. A webcast replay will be available shortly following completion of the live call. 

Please see below note (2) for a reconciliation of U.S. GAAP-based financial measures used in this press release to Non-GAAP-based financial measures.

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 including stronger competitive advantage, accelerating cloud growth, driving margin expansion and executing the Company's capital allocation strategy, including expected return to shareholders; achieving Fiscal 2025 Financial Targets; level of performance through the fiscal year; cloud bookings, demand, scale and revenue growth; future organic growth initiatives and deployment of capital; innovation fueled by cloud, AI and security technologies; future revenues, operating expenses, margins, free cash flows, interest expense and capital expenditures; market share of our products; innovation road map; intention to maintain a dividend program, including any targeted annualized dividend; expected size and timing of the Fiscal 2025 Repurchase Plan, including execution thereof; future tax rates; renewal rates; new platform and product offerings, including OpenText AI products, and associated benefits to customers; internal automation and AI leverage, including our AI strategy, vision and growth; strategy to build shareholder value; and other matters, which may contain words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "may", "could", "would", "might", "will" and variations of these words or similar expressions are intended to identify forward-looking statements or information under applicable securities laws (forward-looking statements). In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements, and are based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management's perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances, such as certain assumptions about the economy, as well as market, financial and operational assumptions. Management's estimates, beliefs and assumptions, including statements regarding future targets and aspirations, are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change and are not considered guidance. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Future declarations of dividends are also subject to the final determination and discretion of the Board of Directors, and an annualized dividend has not been approved or declared by the Board. Forward-looking statements involve known and unknown risks and uncertainties such as those relating to: all statements regarding the expected future financial position, results of operations, revenues, expenses, margins, cash flows, dividends, share buybacks, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management, including any anticipated synergy benefits; incurring unanticipated costs, delays or difficulties, 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

CONDENSED CONSOLIDATED BALANCE SHEETS 

(In thousands of U.S. dollars, except share data)



September 30, 2024


June 30, 2024

ASSETS

(unaudited)



Cash and cash equivalents

$             1,000,219


$             1,280,662

Accounts receivable trade, net of allowance for credit losses of $14,509 as of

September 30, 2024 and $12,108 as of June 30, 2024

592,614


626,189

Contract assets

70,203


66,450

Income taxes recoverable

96,633


61,113

Prepaid expenses and other current assets

220,425


242,911

Total current assets

1,980,094


2,277,325

Property and equipment, net of accumulated depreciation of $768,438 as of

September 30, 2024 and $751,174 as of June 30, 2024

365,451


367,740

Operating lease right of use assets

219,514


219,774

Long-term contract assets

42,314


38,684

Goodwill

7,502,649


7,488,367

Acquired intangible assets

2,357,997


2,486,264

Deferred tax assets

954,813


932,657

Other assets

302,387


298,281

Long-term income taxes recoverable

54,072


96,615

Total assets

$          13,779,291


$          14,205,707

LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable and accrued liabilities

$                862,973


$                931,116

Current portion of long-term debt

35,850


35,850

Operating lease liabilities

75,312


76,446

Deferred revenues

1,450,456


1,521,416

Income taxes payable

74,948


235,666

Total current liabilities

2,499,539


2,800,494

Long-term liabilities:




Accrued liabilities

45,197


46,483

Pension liability, net

133,666


127,255

Long-term debt

6,353,277


6,356,943

Long-term operating lease liabilities

213,400


218,174

Long-term deferred revenues

162,397


162,401

Long-term income taxes payable

99,286


145,644

Deferred tax liabilities

135,642


148,632

Total long-term liabilities

7,142,865


7,205,532

Shareholders' equity:




Share capital and additional paid-in capital




265,545,938 and 267,800,517 Common Shares issued and outstanding at

September 30, 2024 and June 30, 2024, respectively; authorized Common

Shares: unlimited

2,290,191


2,271,886

Accumulated other comprehensive income (loss)

(74,456)


(69,619)

Retained earnings

2,065,221


2,119,159

Treasury stock, at cost (3,899,507 and 3,135,980 shares at September 30, 2024

and June 30, 2024, respectively)

(145,646)


(123,268)

Total OpenText shareholders' equity

4,135,310


4,198,158

Non-controlling interests

1,577


1,523

Total shareholders' equity

4,136,887


4,199,681

Total liabilities and shareholders' equity

$          13,779,291


$          14,205,707

 

OPEN TEXT CORPORATION

 CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands of U.S. dollars, except share and per share data)

(unaudited)



Three Months Ended September 30,


2024


2023

Revenues:




Cloud services and subscriptions

$                457,024


$                451,014

Customer support

595,490


697,713

License

125,813


173,026

Professional service and other

90,678


103,676

Total revenues

1,269,005


1,425,429

Cost of revenues:




Cloud services and subscriptions

175,257


171,412

Customer support

62,574


75,014

License

6,657


3,839

Professional service and other

66,915


79,922

Amortization of acquired technology-based intangible assets

47,244


76,824

Total cost of revenues

358,647


407,011

Gross profit

910,358


1,018,418

Operating expenses:




Research and development

190,693


226,231

Sales and marketing

245,882


280,007

General and administrative

106,730


131,211

Depreciation

32,171


34,091

Amortization of acquired customer-based intangible assets

81,504


120,192

Special charges (recoveries)

47,136


13,794

Total operating expenses

704,116


805,526

Income from operations

206,242


212,892

Other income (expense), net

(35,655)


20,170

Interest and other related expense, net

(84,282)


(141,764)

Income before income taxes

86,305


91,298

Provision for income taxes

1,883


10,352

Net income for the period

$                  84,422


$                  80,946

Net (income) attributable to non-controlling interests

(54)


(45)

Net income attributable to OpenText

$                  84,368


$                  80,901

Earnings per share—basic attributable to OpenText

$                      0.32


$                      0.30

Earnings per share—diluted attributable to OpenText

$                      0.32


$                      0.30

Weighted average number of Common Shares outstanding—basic (in '000's)

267,400


271,178

Weighted average number of Common Shares outstanding—diluted (in '000's)

267,821


271,902

 

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 

(In thousands of U.S. dollars)

(unaudited)



Three Months Ended September 30,


2024


2023

Net income for the period

$                  84,422


$                  80,946

Other comprehensive income (loss)—net of tax:




Net foreign currency translation adjustments

(5,190)


(14,583)

Unrealized gain (loss) on cash flow hedges:




Unrealized gain (loss) - net of tax (1)

654


(1,841)

(Gain) loss reclassified into net income - net of tax (2)

262


9

Unrealized gain (loss) on available-for-sale financial assets:




Unrealized gain (loss) - net of tax (3)

248


(221)

Actuarial gain (loss) relating to defined benefit pension plans:




Actuarial gain (loss) - net of tax (4)

(1,045)


(19)

Amortization of actuarial (gain) loss into net income - net of tax (5)

234


189

Total other comprehensive loss net

(4,837)


(16,466)

Total comprehensive income

79,585


64,480

Comprehensive income attributable to non-controlling interests

(54)


(45)

Total comprehensive income attributable to OpenText

$                  79,531


$                  64,435

______________________________

(1)  Net of tax expense (recovery) of $236 and ($664) for the three months ended September 30, 2024 and 2023, respectively.

(2)  Net of tax expense (recovery) of $94 and $3 for the three months ended September 30, 2024 and 2023, respectively.

(3)  Net of tax expense (recovery) of $207 and ($59) for the three months ended September 30, 2024 and 2023, respectively.

(4)  Net of tax expense (recovery) of ($43) and $19 for the three months ended September 30, 2024 and 2023, respectively.

(5)  Net of tax expense (recovery) of $92 and $75 for the three months ended September 30, 2024 and 2023, respectively.

 

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands of U.S. dollars and shares)

(unaudited)



Three Months Ended September 30, 2024


Common Shares and
Additional Paid in Capital


Treasury Stock


Retained

Earnings


Accumulated
Other

Comprehensive

Income


Non-
Controlling
Interests


Total


Shares


Amount


Shares


Amount


Balance as of June 30, 2024

267,801


$  2,271,886


(3,136)


($123,268)


$  2,119,159


($69,619)


$      1,523


$  4,199,681

Issuance of Common Shares
















Under employee stock option plans

5


141







141

Under employee stock purchase plans

389


9,863







9,863

Share-based compensation


29,446







29,446

Purchase of treasury stock



(824)


(25,010)





(25,010)

Issuance of treasury stock


(1,930)


60


2,632


(702)




Repurchase of Common Shares

(2,649)


(19,215)




(67,266)




(86,481)

Dividends declared

($0.2625 per Common Share)





(70,338)




(70,338)

Other comprehensive income (loss) - net






(4,837)



(4,837)

Net income for the period





84,368



54


84,422

Balance as of September 30, 2024

265,546


$  2,290,191


(3,900)


($145,646)


$  2,065,221


($74,456)


$      1,577


$  4,136,887



Three Months Ended September 30, 2023


Common Shares and
Additional Paid in Capital


Treasury Stock


Retained

Earnings


Accumulated
Other

Comprehensive

Income


Non-
Controlling
Interests


Total


Shares


Amount


Shares


Amount


Balance as of June 30, 2023

270,903


$  2,176,947


(3,536)


($151,597)


$  2,048,984


($53,559)


$      1,329


$  4,022,104

Issuance of Common Shares
















Under employee stock option plans

85


2,892







2,892

Under employee stock purchase plans

240


8,641







8,641

Share-based compensation


37,004







37,004

Purchase of treasury stock



(1,400)


(53,085)





(53,085)

Issuance of treasury stock


(8,563)


183


8,563





Dividends declared

($0.25 per Common Share)





(67,778)




(67,778)

Other comprehensive income (loss) - net






(16,466)



(16,466)

Net income for the period





80,901



45


80,946

Balance as of September 30, 2023

271,228


$  2,216,921


(4,753)


($196,119)


$  2,062,107


($70,025)


$      1,374


$  4,014,258

 

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

(In thousands of U.S. dollars)

(unaudited)



Three Months Ended September 30,


2024


2023

Cash flows from operating activities:




Net income

$                    84,422


$                    80,946

Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation and amortization of intangible assets

160,919


231,107

Share-based compensation expense

29,558


37,095

Pension expense

3,463


3,171

Amortization of debt discount and issuance costs

5,296


5,496

Write-off of right of use assets


4,715

Loss on sale and write down of property and equipment, net

2


458

Deferred taxes

(42,150)


(88,630)

Share in net (income) loss of equity investees

(455)


9,696

Changes in financial instruments

24,935


(17,895)

Changes in operating assets and liabilities:




Accounts receivable

57,607


31,304

Contract assets

(33,849)


(22,566)

Prepaid expenses and other current assets

22,151


19,326

Income taxes

(193,509)


29,597

Accounts payable and accrued liabilities

(107,520)


(124,214)

Deferred revenue

(76,531)


(150,476)

Other assets

(4,742)


4,104

Operating lease assets and liabilities, net

(7,403)


(6,113)

Net cash provided by (used in) operating activities

(77,806)


47,121

Cash flows from investing activities:




Additions of property and equipment

(39,316)


(37,539)

Purchase of Micro Focus, net of cash acquired


(9,272)

Proceeds from net investment hedge derivative contracts

2,519


1,966

Other investing activities

357


(5,554)

Net cash used in investing activities

(36,440)


(50,399)

Cash flows from financing activities:




Proceeds from issuance of Common Shares from exercise of stock options and ESPP

9,449


11,453

Repayment of long-term debt and Revolver

(8,963)


(186,463)

Net change in transition services agreement obligation

(4,295)


Debt issuance costs


(1,961)

Repurchase of Common Shares

(87,403)


Purchase of treasury stock

(25,000)


(53,085)

Payments of dividends to shareholders

(69,061)


(66,965)

Net cash used in financing activities

(185,273)


(297,021)

Foreign exchange gain (loss) on cash held in foreign currencies

19,136


(11,503)

Decrease in cash, cash equivalents and restricted cash during the period

(280,383)


(311,802)

Cash, cash equivalents and restricted cash at beginning of the period

1,282,793


1,233,952

Cash, cash equivalents and restricted cash at end of the period

$               1,002,410


$                  922,150


OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

(In thousands of U.S. dollars)

(unaudited) 


Reconciliation of cash, cash equivalents and restricted cash:

September 30, 2024


September 30, 2023

Cash and cash equivalents

$               1,000,219


$                  919,850

Restricted cash (1)

2,191


2,300

Total cash, cash equivalents and restricted cash

$               1,002,410


$                  922,150





(1) Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Consolidated Balance Sheets.

 

Notes

(1)

All dollar amounts in this press release are in U.S. Dollars unless otherwise indicated.



(2)

Use of Non-GAAP Financial Measures: In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-GAAP). These Non-GAAP financial measures have certain limitations in that they do not have a standardized meaning and thus the Company's definition may be different from similar Non-GAAP financial measures used by other companies and/or analysts and may differ from period to period. Thus it may be more difficult to compare the Company's financial performance to that of other companies. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of these Non-GAAP financial measures both in its reconciliation to the U.S. GAAP financial measures and its condensed consolidated financial statements, all of which should be considered when evaluating the Company's results.




The Company uses these Non-GAAP financial measures to supplement the information provided in its condensed consolidated financial statements, which are presented in accordance with U.S. GAAP. The presentation of Non-GAAP financial measures is not meant to be a substitute for financial measures presented in accordance with U.S. GAAP, but rather should be evaluated in conjunction with and as a supplement to such U.S. GAAP measures. OpenText strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure. The Company therefore believes that despite these limitations, it is appropriate to supplement the disclosure of the U.S. GAAP measures with certain Non-GAAP measures defined below.




Non-GAAP-based net income and Non-GAAP-based EPS, attributable to OpenText, are consistently calculated as GAAP-based net income (loss) or earnings (loss) per share, attributable to OpenText, on a diluted basis, excluding the effects of the amortization of acquired intangible assets, other income (expense), share-based compensation, and special charges (recoveries), all net of tax and any tax benefits/expense items unrelated to current period income, as further described in the tables below. Non-GAAP-based gross profit is the arithmetical sum of GAAP-based gross profit and the amortization of acquired technology-based intangible assets and share-based compensation within cost of sales. Non-GAAP-based gross margin is calculated as Non-GAAP-based gross profit expressed as a percentage of total revenue. Non-GAAP-based income from operations is calculated as GAAP-based income from operations, excluding the amortization of acquired intangible assets, special charges (recoveries), and share-based compensation expense.




Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) is consistently calculated as GAAP-based net income (loss), attributable to OpenText, excluding interest income (expense), provision for (recovery of) income taxes, depreciation and amortization of acquired intangible assets, other income (expense), share-based compensation and special charges (recoveries). Adjusted EBITDA margin is calculated as adjusted EBITDA expressed as a percentage of total revenue.




The Company's management believes that the presentation of the above defined Non-GAAP financial measures provides useful information to investors because they portray the financial results of the Company before the impact of certain non-operational charges. The use of the term "non-operational charge" is defined for this purpose as an expense that does not impact the ongoing operating decisions taken by the Company's management. These items are excluded based upon the way the Company's management evaluates the performance of the Company's business for use in the Company's internal reports and are not excluded in the sense that they may be used under U.S. GAAP.




The Company does not acquire businesses on a predictable cycle, and therefore believes that the presentation of Non-GAAP measures, which in certain cases adjust for the impact of amortization of intangible assets and the related tax effects that are primarily related to acquisitions, will provide readers of financial statements with a more consistent basis for comparison across accounting periods and be more useful in helping readers understand the Company's operating results and underlying operational trends. Additionally, the Company has engaged in various restructuring activities over the past several years, primarily due to acquisitions and in response to our return to office planning, that have resulted in costs associated with reductions in headcount, consolidation of leased facilities and related costs, all which are recorded under the Company's "Special charges (recoveries)" caption on the Consolidated Statements of Income. Each restructuring activity is a discrete event based on a unique set of business objectives or circumstances, and each differs in terms of its operational implementation, business impact and scope, and the size of each restructuring plan can vary significantly from period to period. Therefore, the Company believes that the exclusion of these special charges (recoveries) will also better aid readers of financial statements in the understanding and comparability of the Company's operating results and underlying operational trends.




In summary, the Company believes the provision of supplemental Non-GAAP measures allow investors to evaluate the operational and financial performance of the Company's core business using the same evaluation measures that management uses, and is therefore a useful indication of OpenText's performance or expected performance of future operations and facilitates period-to-period comparison of operating performance (although prior performance is not necessarily indicative of future performance). As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary Non-GAAP financial measures that exclude certain items from the presentation of its financial results. Information reconciling certain forward-looking GAAP measures to non-GAAP measures related to F'25 targets and F'27 aspirations, including A-EBITDA is not available without unreasonable effort due to high variability, complexity and uncertainty with respect to forecasting and quantifying certain amounts that are necessary for such reconciliations.




The following charts provide unaudited reconciliations of U.S. GAAP-based financial measures to Non-GAAP-based financial measures for the following periods presented. The Micro Focus Acquisition significantly impacts period-over-period comparability.

 

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures

for the three months ended September 30, 2024

(In thousands, except for per share data)


Three Months Ended September 30, 2024


GAAP-based
Measures

GAAP-based
Measures

% of Total
Revenue

Adjustments

Note

Non-GAAP-
based
Measures

Non-GAAP-
based
Measures

% of Total
Revenue

Cost of revenues







Cloud services and subscriptions

$  175,257


($2,186)

(1)

$   173,071


Customer support

62,574


(1,342)

(1)

61,232


Professional service and other

66,915


(1,314)

(1)

65,601


Amortization of acquired technology-based intangible assets

47,244


(47,244)

(2)


GAAP-based gross profit and gross margin (%) /

 Non-GAAP-based gross profit and gross margin (%)

910,358

71.7 %

52,086

(3)

962,444

75.8 %

Operating expenses







Research and development

190,693


(8,167)

(1)

182,526


Sales and marketing

245,882


(9,315)

(1)

236,567


General and administrative

106,730


(7,234)

(1)

99,496


Amortization of acquired customer-based intangible assets

81,504


(81,504)

(2)


Special charges (recoveries)

47,136


(47,136)

(4)


GAAP-based income from operations / Non-GAAP-based

 income from operations

206,242


205,442

(5)

411,684


Other income (expense), net

(35,655)


35,655

(6)


Provision for income taxes

1,883


76,693

(7)

78,576


GAAP-based net income / Non-GAAP-based net income,

 attributable to OpenText

84,368


164,404

(8)

248,772


GAAP-based earnings per share / Non-GAAP-based earnings

 per share-diluted, attributable to OpenText

$         0.32


$          0.61

(8)

$          0.93




(1)

Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

Adjustment relates to the exclusion of amortization expense from our Non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results.

(7)

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 2% and a Non-GAAP-based tax rate of approximately 24% ; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and "book to return" adjustments for tax return filings and tax assessments. Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included. In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8)

Reconciliation of GAAP-based income to Non-GAAP-based net income:



 


Three Months Ended September 30, 2024



Per share diluted

GAAP-based net income, attributable to OpenText

$                     84,368

$                          0.32

Add (deduct):



Amortization

128,748

0.47

Share-based compensation

29,558

0.11

Special charges (recoveries)

47,136

0.18

Other (income) expense, net

35,655

0.13

GAAP-based provision for income taxes

1,883

0.01

Non-GAAP-based provision for income taxes

(78,576)

(0.29)

Non-GAAP-based net income, attributable to OpenText

$                   248,772

$                          0.93

 

Reconciliation of Adjusted EBITDA



Three Months Ended September 30, 2024

GAAP-based net income, attributable to OpenText

$                                                          84,368

Add:


Provision for  income taxes

1,883

Interest and other related expense, net

84,282

Amortization of acquired technology-based intangible assets

47,244

Amortization of acquired customer-based intangible assets

81,504

Depreciation

32,171

Share-based compensation

29,558

Special charges (recoveries)

47,136

Other (income) expense, net

35,655

Adjusted EBITDA

$                                                       443,801



GAAP-based net income margin

6.6 %

Adjusted EBITDA margin

35.0 %


Reconciliation of Free cash flows



Three Months Ended September 30, 2024

GAAP-based cash flows provided by operating activities

($77,806)

Add:


Capital expenditures (1)

(39,316)

Free cash flows

($117,122)


(1) Defined as "Additions of property and equipment" in the Consolidated Statements of Cash Flows.

 

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures

for the three months ended 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

198,855


(5,312)

(1)

193,543


Sales and marketing

291,750


(9,278)

(1)

282,472


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 net 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 (deduct):


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 three months ended September 30, 2023

(In thousands, except for per share data)


Three Months Ended September 30, 2023


GAAP-based

Measures

GAAP-based
Measures

% of Total
Revenue

Adjustments

Note

Non-GAAP-
based

Measures

Non-GAAP-
based
Measures

% of Total
Revenue

Cost of revenues







Cloud services and subscriptions

$   171,412


($2,991)

(1)

$   168,421


Customer support

75,014


(1,058)

(1)

73,956


Professional service and other

79,922


(1,882)

(1)

78,040


Amortization of acquired technology-based intangible assets

76,824


(76,824)

(2)


GAAP-based gross profit and gross margin (%) /Non-GAAP-

 based gross profit and gross margin (%)

1,018,418

71.4 %

82,755

(3)

1,101,173

77.3 %

Operating expenses







Research and development

226,231


(11,734)

(1)

214,497


Sales and marketing

280,007


(11,807)

(1)

268,200


General and administrative

131,211


(7,623)

(1)

123,588


Amortization of acquired customer-based intangible assets

120,192


(120,192)

(2)


Special charges (recoveries)

13,794


(13,794)

(4)


GAAP-based income from operations / Non-GAAP-based income

 from operations

212,892


247,905

(5)

460,797


Other income (expense), net

20,170


(20,170)

(6)


Provision for income taxes

10,352


34,313

(7)

44,665


GAAP-based net income / Non-GAAP-based net income, attributable

 to OpenText

80,901


193,422

(8)

274,323


GAAP-based earnings per share / Non-GAAP-based earnings per

 share-diluted, attributable to OpenText

$          0.30


$          0.71

(8)

$          1.01




(1)

Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

Adjustment relates to the exclusion of amortization expense from our Non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results.

(7)

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 11% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and "book to return" adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at our Non-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8)

Reconciliation of GAAP-based net income to Non-GAAP-based net income:




Three Months Ended September 30, 2023



Per share diluted

GAAP-based net income, attributable to OpenText

$                     80,901

$                          0.30

Add (deduct):



Amortization

197,016

0.72

Share-based compensation

37,095

0.14

Special charges (recoveries)

13,794

0.05

Other (income) expense, net

(20,170)

(0.08)

GAAP-based provision for income taxes

10,352

0.04

Non-GAAP-based provision for income taxes

(44,665)

(0.16)

Non-GAAP-based net income, attributable to OpenText

$                   274,323

$                          1.01

 

Reconciliation of Adjusted EBITDA



Three Months Ended September 30, 2023

GAAP-based net income, attributable to OpenText

$                                                       80,901

Add (deduct):


Provision for income taxes

10,352

Interest and other related expense, net

141,764

Amortization of acquired technology-based intangible assets

76,824

Amortization of acquired customer-based intangible assets

120,192

Depreciation

34,091

Share-based compensation

37,095

Special charges (recoveries)

13,794

Other (income) expense, net

(20,170)

Adjusted EBITDA

$                                                     494,843



GAAP-based net income margin

5.7 %

Adjusted EBITDA margin

34.7 %


Reconciliation of Free cash flows



Three Months Ended September 30, 2023

GAAP-based cash flows provided by operating activities

$                                                           47,121

Add:


Capital expenditures (1)

(37,539)

Free cash flows

$                                                             9,582


(1) Defined as "Additions of property and equipment" in the Consolidated Statements of Cash Flows.

 



(3)

The following tables provide a composition of our major currencies for revenue and expenses, expressed as a percentage, for the three months ended September 30, 2024 and 2023:




Three Months Ended September 30, 2024


Three Months Ended September 30, 2023

Currencies

% of Revenue

% of Expenses(1)


% of Revenue

% of Expenses(1)

EURO

22 %

12 %


21 %

11 %

GBP

5 %

6 %


5 %

8 %

CAD

3 %

10 %


3 %

10 %

USD

59 %

49 %


60 %

50 %

Other

11 %

23 %


11 %

21 %

Total

100 %

100 %


100 %

100 %



(1)

Expenses include all cost of revenues and operating expenses included within the Consolidated Statements of Income, except for amortization of intangible assets, share-based compensation and special charges (recoveries).

 

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SOURCE Open Text Corporation

FAQ

What was OpenText's (OTEX) revenue in Q1 FY2025?

OpenText reported total revenues of $1.27 billion in Q1 FY2025, down 11.0% year-over-year.

How much did OpenText (OTEX) return to shareholders in Q1 FY2025?

OpenText returned $154 million to shareholders, consisting of $69 million in dividends and $85 million in share repurchases.

What was OpenText's (OTEX) cloud revenue growth in Q1 FY2025?

OpenText's cloud revenues grew 1.3% year-over-year to $457 million in Q1 FY2025.

What is OpenText's (OTEX) quarterly dividend for Q1 FY2025?

OpenText declared a quarterly cash dividend of $0.2625 per common share, payable on December 20, 2024.

Open Text Corp

NASDAQ:OTEX

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OTEX Latest News

OTEX Stock Data

7.89B
265.88M
2.1%
78.25%
1.7%
Software - Application
Services-computer Integrated Systems Design
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United States of America
ONTARIO CANADA