Record Revenues, Nine Consecutive Quarters of
Cloud Organic Growth
Fiscal 2023 Third Quarter Highlights
Total
Revenues
(in
millions)
|
|
Annual Recurring
Revenues
(in
millions)
|
|
Cloud
Revenues
(in
millions)
|
Reported
|
Constant
Currency
|
|
Reported
|
Constant
Currency
|
|
Reported
|
Constant
Currency
|
$1,245
|
$1,278
|
|
$1,011
|
$1,036
|
|
$435
|
$444
|
+41.1 %
|
+44.9 %
|
|
+37.7 %
|
+41.1 %
|
|
+8.3 %
|
+10.4 %
|
Annual Recurring
Revenues represent 81% of Total Revenues
|
- Total revenues of $1.24 billion,
up 41.1% Y/Y or up 44.9% in constant currency
- Annual Recurring Revenues (ARR) of $1.01
billion, up 37.7% Y/Y or up 41.1% in constant currency
- Cloud revenues of $435 million,
up 8.3% Y/Y or up 10.4% in constant currency
- Nine consecutive quarters of cloud organic and ARR organic
growth in constant currency
- Quarterly enterprise cloud bookings(1) of
$108 million, constant Y/Y
- Operating cash flows of $337
million and free cash flows(3) of $306 million
- TTM operating cash flows(2) of $916 million and TTM free cash
flows(2)(3) of $778
million
- GAAP-based net income of $58
million, down 22.9% Y/Y, margin of 4.6%, down 390 basis
points Y/Y
- Adjusted EBITDA(3) of $365
million, margin of 29.3% and TTM Adjusted
EBITDA(2)(3) of $1.32
billion, margin of 34.0%
- GAAP-based diluted earnings per share (EPS) of $0.21, Non-GAAP diluted EPS(3) of
$0.73
- Includes Micro Focus results from February 1, 2023 to March
31, 2023
WATERLOO, ON, May 4, 2023
/CNW/ -- Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today
announced its financial results for the third quarter ended
March 31, 2023.
"The OpenText Total Growth Strategy and our expanded mission
with the Micro Focus acquisition delivered a record third quarter,
our ninth consecutive quarter of organic cloud revenue growth and
organic ARR growth in constant currency. Further, we are well
advanced and ahead of schedule on our Micro Focus milestones as we
have completed our talent integration and cloud roadmap," said
Mark J. Barrenechea, OpenText CEO
& CTO. "Total revenues were $1.24 billion, growing 41.1% year-over-year
or 44.9% in constant currency and Cloud revenues of
$435 million, growing 8.3% year-over-year or 10.4% in constant
currency. ARR was $1.01 billion, growing 37.7% year-over-year
or 41.1% in constant currency."
"With Titanium X, our new cloud roadmap, OpenText will help
customers accelerate their digital businesses through
information-led transformations to maximize the strategic benefits
of new rules and opportunities for growth, efficiency and
responsibility," added Mr. Barrenechea. "At OpenText, the heart of
our culture is the unwavering commitment to customer success. The
acquisition of Micro Focus expands the OpenText mission once again,
and places OpenText as the trusted company to power and protect
customer information. Our Q3 results demonstrate the potential for
our expanded business."
"OpenText's third quarter results demonstrated continued solid
execution, supporting our momentum in the Information Management
market. We are on the right path with the products, people and
customer focus to position OpenText for continued success," said
Madhu Ranganathan, OpenText EVP,
CFO. "We remain on track to realize our growth targets and
acquisition commitments, including $400
million cost savings plan, consolidated net leverage ratio
of less than 3x within eight full quarters and meet our free cash
flow plan."
(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, excluding the impact of
Carbonite and Zix.
(2) TTM is calculated as Q4FY'22, plus
year-to-date FY'23 included within our current and historical
filings on Forms 10-Q and 10-K.
(3) Please see Note 2 "Use of Non-GAAP Financial
Measures" to the consolidated financial statements
below.
|
Financial Highlights for Q3 Fiscal 2023 with Year Over Year
Comparisons
Summary of Quarterly
Results
|
|
|
|
|
|
|
|
|
(In millions, except
per share data)
|
Q3
FY'23
|
Q3
FY'22
|
$
Change
|
% Change
|
|
Q3
FY'23
in CC*
|
% Change
in CC*
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$435.4
|
$401.9
|
$33.5
|
8.3 %
|
|
$443.7
|
10.4 %
|
|
Customer
support
|
575.9
|
332.5
|
243.4
|
73.2 %
|
|
592.8
|
78.3 %
|
|
Total annual
recurring revenues**
|
$1,011.3
|
$734.5
|
$276.9
|
37.7 %
|
|
$1,036.5
|
41.1 %
|
|
License
|
139.7
|
80.6
|
59.1
|
73.3 %
|
|
145.0
|
79.9 %
|
|
Professional service
and other
|
93.6
|
67.2
|
26.4
|
39.4 %
|
|
96.8
|
44.1 %
|
|
Total
revenues
|
$1,244.7
|
$882.3
|
$362.4
|
41.1 %
|
|
$1,278.3
|
44.9 %
|
|
GAAP-based operating
income
|
$64.0
|
$131.6
|
($67.6)
|
(51.4) %
|
|
N/A
|
N/A
|
|
Non-GAAP-based
operating income (1)
|
$334.6
|
$262.2
|
$72.4
|
27.6 %
|
|
$336.4
|
28.3 %
|
|
GAAP-based net income
attributable to OpenText
|
$57.6
|
$74.7
|
($17.1)
|
(22.9) %
|
|
N/A
|
N/A
|
|
GAAP-based EPS,
diluted
|
$0.21
|
$0.28
|
($0.07)
|
(25.0) %
|
|
N/A
|
N/A
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$0.73
|
$0.70
|
$0.03
|
4.3 %
|
|
$0.73
|
4.3 %
|
|
Adjusted
EBITDA (1)
|
$365.1
|
$284.5
|
$80.6
|
28.3 %
|
|
$367.3
|
29.1 %
|
|
Operating cash
flows
|
$336.8
|
$323.6
|
$13.2
|
4.1 %
|
|
N/A
|
N/A
|
|
Free cash flows
(1)
|
$305.5
|
$306.0
|
($0.4)
|
(0.1) %
|
|
N/A
|
N/A
|
|
|
Summary of YTD
Results
|
|
|
|
|
|
|
|
|
(In millions, except
per share data)
|
FY'23 YTD
|
FY'22 YTD
|
$
Change
|
% Change
|
|
FY'23 YTD
in CC*
|
% Change
in CC*
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$1,248.8
|
$1,123.4
|
$125.4
|
11.2 %
|
|
$1,283.7
|
14.3 %
|
|
Customer
support
|
1,209.7
|
1,002.6
|
207.1
|
20.7 %
|
|
1,267.4
|
26.4 %
|
|
Total annual
recurring revenues**
|
$2,458.5
|
$2,126.0
|
$332.5
|
15.6 %
|
|
$2,551.0
|
20.0 %
|
|
License
|
310.2
|
263.7
|
46.6
|
17.7 %
|
|
326.2
|
23.7 %
|
|
Professional service
and other
|
225.4
|
201.7
|
23.7
|
11.8 %
|
|
237.8
|
17.9 %
|
|
Total
revenues
|
$2,994.2
|
$2,591.4
|
$402.8
|
15.5 %
|
|
$3,115.1
|
20.2 %
|
|
GAAP-based operating
income
|
$395.0
|
$507.2
|
($112.2)
|
(22.1) %
|
|
N/A
|
N/A
|
|
Non-GAAP-based
operating income (1)
|
$933.6
|
$886.0
|
$47.6
|
5.4 %
|
|
$966.0
|
9.0 %
|
|
GAAP-based net income
attributable to OpenText
|
$199.1
|
$294.9
|
($95.8)
|
(32.5) %
|
|
N/A
|
N/A
|
|
GAAP-based EPS,
diluted
|
$0.74
|
$1.08
|
($0.34)
|
(31.5) %
|
|
N/A
|
N/A
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$2.39
|
$2.43
|
($0.04)
|
(1.6) %
|
|
$2.50
|
2.9 %
|
|
Adjusted
EBITDA (1)
|
$1,010.1
|
$951.4
|
$58.7
|
6.2 %
|
|
$1,043.1
|
9.6 %
|
|
Operating cash
flows
|
$663.9
|
$729.9
|
($66.0)
|
(9.0) %
|
|
N/A
|
N/A
|
|
Free cash flows
(1)
|
$564.1
|
$674.9
|
($110.8)
|
(16.4) %
|
|
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.
|
Note: Individual line
items in tables may be adjusted by non-material amounts to enable
totals to align to published financial statements.
|
*CC: Constant currency
for this purpose is defined as the current period reported
revenues/expenses/earnings represented at the prior comparative
period's foreign exchange rate.
|
**Annual recurring
revenue is defined as the sum of Cloud services and subscriptions
revenue and Customer support revenue.
|
Dividend
As part of our quarterly, non-cumulative cash dividend program,
the Board declared on May 2, 2023, a cash dividend of
$0.24299 per common share. The record
date for this dividend is June 2, 2023 and the payment date is
June 23, 2023. OpenText believes strongly in returning value
to its shareholders and intends to maintain its dividend program.
Any future declarations of dividends and the establishment of
future record and payment dates are all subject to the final
determination and discretion of the Board of Directors.
Quarterly Business Highlights
- OpenText World EMEA unveils Cloud Editions 23.2 to help
customers accelerate their cloud-based digital transformation
- OpenText announced the latest technology innovations on its
Project Titanium X roadmap and the future of information management
in the cloud
- Key customer wins in the quarter include: Air Liquide,
Ascensus, Australia Post, California Employment Development
Department, Carrefour, Citibank, Conduent, Ireland Office of the
Government Chief Information Officer, MAN Energy Solutions,
Ministry of the Interior and Kingdom Relations of Netherlands, Pacific Life, Patelco Credit
Union and Wienerberger Group
- OpenText named a Leader in The Forrester Wave™: Content
Platforms, Q1 2023
- OpenText launched the latest version of ValueEdge, an
innovative modular, cloud-based DevOps and value stream management
(VSM) platform
Summary of Quarterly
Results
|
|
|
|
|
|
|
|
|
Q3
FY'23
|
Q2
FY'23
|
Q3
FY'22
|
% Change
(Q3 FY'23
vs Q2 FY'23)
|
|
% Change
(Q3 FY'23 vs
Q3 FY'22)
|
|
Revenue
(millions)
|
$1,244.7
|
$897.4
|
$882.3
|
38.7 %
|
|
41.1 %
|
|
GAAP-based gross
margin
|
70.3 %
|
70.8 %
|
68.9 %
|
(50)
|
bps
|
140
|
bps
|
Non-GAAP-based gross
margin (1)
|
75.8 %
|
76.0 %
|
74.5 %
|
(20)
|
bps
|
130
|
bps
|
GAAP-based earnings
(loss) per share, diluted
|
$0.21
|
$0.96
|
$0.28
|
(78.1) %
|
|
(25.0) %
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$0.73
|
$0.89
|
$0.70
|
(18.0) %
|
|
4.3 %
|
|
|
(1) Please
see Note 2 "Use of Non-GAAP Financial Measures" to the consolidated
financial statements below.
|
(2) Please
also see Note 14 to the Company's Fiscal 2018 Consolidated
Financial Statements on Form 10-K. Reflective of the amount of net
tax benefit arising from the internal reorganization assumed to be
allocable to the current period based on the forecasted utilization
period.
|
Conference Call Information
OpenText posted an investor presentation on its Investor
Relations website at http://investors.opentext.com and invites
the public to listen to the earnings conference call today at
5:00 p.m. ET (2:00 p.m. PT) by dialing 1-800-319-4610
(toll-free) or +1-604-638-5340 (international). Please dial-in 10
minutes ahead of time to ensure proper connection. Alternatively, a
live webcast of the earnings conference call will be available on
the Investor Relations section of the Company's website at
http://investors.opentext.com/investor-events-and-presentations.
A replay of the call will be available beginning May 4, 2023 at 7:00 p.m.
ET through 11:59 p.m. on
May 18, 2023 and can be accessed by
dialing 1-855-669-9658 (toll-free) or +1-604-674-8052
(international) and using passcode 9973 followed by the number
sign.
Please see below note (2) for a reconciliation of
U.S. GAAP-based financial measures used in this press release
to Non-GAAP-based financial measures.
About OpenText
OpenText, The Information Company™, enables organizations to
gain insight through market leading information management
solutions, powered by OpenText Cloud Editions. For more information
about OpenText (NASDAQ: OTEX, TSX: OTEX) visit opentext.com.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this press release, including statements
about the focus of Open Text Corporation ("OpenText" or "the
Company") in our fiscal year ending June 30,
2023 (Fiscal 2023) on growth, future cloud growth and market
share gains, future organic growth initiatives and deployment of
capital, intention to maintain a dividend program, the associated
benefits of the Micro Focus acquisition, future tax rates, new
platform and product offerings and associated benefits to
customers, scaling OpenText, 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
considered forward-looking statements or information under
applicable securities laws. In addition, any information or
statements that refer to expectations, beliefs, plans, projections,
objectives, performance or other characterizations of future events
or circumstances, including any underlying assumptions, are
forward-looking, and based on our current expectations, forecasts
and projections about the operating environment, economies and
markets in which we operate. Forward-looking statements reflect our
current estimates, beliefs and assumptions, which are based on
management's perception of historic trends, current conditions and
expected future developments, as well as other factors it believes
are appropriate in the circumstances, such as certain assumptions
about the economy, as well as market, financial and operational
assumptions. Management's estimates, beliefs and assumptions are
inherently subject to significant business, economic, competitive
and other uncertainties and contingencies regarding future events
and, as such, are subject to change. We can give no assurance that
such estimates, beliefs and assumptions will prove to be correct.
Such 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, cash
flows, dividends, financing plans, business strategy, budgets,
capital expenditures, competitive positions, growth opportunities,
plans and objectives of management, including any anticipated
synergy benefits; our ability to integrate successfully Micro
Focus' operations and programs, including incurring unanticipated
costs, delays or difficulties; duration and severity of the
COVID-19 pandemic, including any new strains or resurgence; 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. For additional information with
respect to risks and other factors which could occur, see the
Company's Annual Report on Form 10-K, Quarterly Report 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, 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 ©2023 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:
http://www.opentext.com/who-we-are/copyright-information.
OPEN TEXT
CORPORATION CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
|
|
|
March 31,
2023
|
|
June 30,
2022
|
ASSETS
|
(unaudited)
|
|
|
Cash and cash
equivalents
|
$
1,396,817
|
|
$
1,693,741
|
Accounts receivable
trade, net of allowance for credit losses of $16,550 as of
March 31, 2023 and $16,473 as of June 30, 2022
|
676,280
|
|
426,652
|
Contract
assets
|
61,374
|
|
26,167
|
Income taxes
recoverable
|
47,803
|
|
18,255
|
Prepaid expenses and
other current assets
|
250,661
|
|
120,552
|
Total current
assets
|
2,432,935
|
|
2,285,367
|
Property and
equipment
|
340,615
|
|
244,709
|
Operating lease right
of use assets
|
297,640
|
|
198,132
|
Long-term contract
assets
|
63,380
|
|
19,719
|
Goodwill
|
8,748,543
|
|
5,244,653
|
Acquired intangible
assets
|
4,221,885
|
|
1,075,208
|
Deferred tax
assets
|
889,143
|
|
810,154
|
Other assets
|
343,677
|
|
256,987
|
Long-term income taxes
recoverable
|
89,730
|
|
44,044
|
Total
assets
|
$
17,427,548
|
|
$
10,178,973
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
910,713
|
|
$
448,607
|
Current portion of
long-term debt
|
495,850
|
|
10,000
|
Operating lease
liabilities
|
94,015
|
|
56,380
|
Deferred
revenues
|
1,785,121
|
|
902,202
|
Income taxes
payable
|
198,371
|
|
51,069
|
Total current
liabilities
|
3,484,070
|
|
1,468,258
|
Long-term
liabilities:
|
|
|
|
Accrued
liabilities
|
64,120
|
|
18,208
|
Pension
liability
|
112,168
|
|
60,951
|
Long-term
debt
|
8,565,238
|
|
4,209,567
|
Long-term operating
lease liabilities
|
286,025
|
|
198,695
|
Long-term deferred
revenues
|
240,357
|
|
91,144
|
Long-term income taxes
payable
|
189,351
|
|
34,003
|
Deferred tax
liabilities
|
363,072
|
|
65,887
|
Total long-term
liabilities
|
9,820,331
|
|
4,678,455
|
Shareholders'
equity:
|
|
|
|
Share capital and
additional paid-in capital
|
|
|
|
270,479,181
and 269,522,639 Common Shares issued and
outstanding at
March 31, 2023 and June 30, 2022, respectively;
authorized Common Shares:
unlimited
|
2,130,343
|
|
2,038,674
|
Accumulated other
comprehensive income (loss)
|
(33,114)
|
|
(7,659)
|
Retained
earnings
|
2,163,338
|
|
2,160,069
|
Treasury stock, at
cost (3,216,394 and 3,706,420 shares at March 31, 2023 and
June 30, 2022, respectively)
|
(138,700)
|
|
(159,966)
|
Total OpenText
shareholders' equity
|
4,121,867
|
|
4,031,118
|
Non-controlling
interests
|
1,280
|
|
1,142
|
Total shareholders'
equity
|
4,123,147
|
|
4,032,260
|
Total liabilities
and shareholders' equity
|
$
17,427,548
|
|
$
10,178,973
|
OPEN TEXT
CORPORATION CONSOLIDATED STATEMENTS OF
INCOME (In thousands of U.S. dollars, except share and
per share data) (unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
Nine Months
Ended
March
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
435,449
|
|
$
401,947
|
|
$
1,248,774
|
|
$
1,123,422
|
Customer
support
|
575,884
|
|
332,514
|
|
1,209,743
|
|
1,002,626
|
License
|
139,722
|
|
80,641
|
|
310,230
|
|
263,663
|
Professional service
and other
|
93,619
|
|
67,181
|
|
225,403
|
|
201,679
|
Total
revenues
|
1,244,674
|
|
882,283
|
|
2,994,150
|
|
2,591,390
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
157,658
|
|
136,020
|
|
423,771
|
|
377,928
|
Customer
support
|
67,067
|
|
31,763
|
|
123,010
|
|
90,914
|
License
|
3,840
|
|
3,196
|
|
10,461
|
|
10,906
|
Professional service
and other
|
78,526
|
|
56,693
|
|
186,390
|
|
161,459
|
Amortization of
acquired technology-based intangible assets
|
62,639
|
|
46,564
|
|
146,139
|
|
152,333
|
Total cost of
revenues
|
369,730
|
|
274,236
|
|
889,771
|
|
793,540
|
Gross profit
|
874,944
|
|
608,047
|
|
2,104,379
|
|
1,797,850
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
210,731
|
|
117,730
|
|
430,629
|
|
321,517
|
Sales and
marketing
|
271,013
|
|
180,955
|
|
615,354
|
|
491,133
|
General and
administrative
|
127,047
|
|
88,137
|
|
282,724
|
|
231,127
|
Depreciation
|
30,577
|
|
22,370
|
|
76,609
|
|
65,535
|
Amortization of
acquired customer-based intangible assets
|
97,237
|
|
56,215
|
|
205,121
|
|
160,764
|
Special charges
(recoveries)
|
74,350
|
|
11,031
|
|
98,937
|
|
20,592
|
Total operating
expenses
|
810,955
|
|
476,438
|
|
1,709,374
|
|
1,290,668
|
Income from
operations
|
63,989
|
|
131,609
|
|
395,005
|
|
507,182
|
Other income (expense),
net
|
85,706
|
|
24,392
|
|
59,824
|
|
29,137
|
Interest and other
related expense, net
|
(104,502)
|
|
(40,238)
|
|
(183,599)
|
|
(117,538)
|
Income before income
taxes
|
45,193
|
|
115,763
|
|
271,230
|
|
418,781
|
Provision for (recovery
of) income taxes
|
(12,420)
|
|
41,041
|
|
71,979
|
|
123,757
|
Net income for the
period
|
$
57,613
|
|
$
74,722
|
|
$
199,251
|
|
$
295,024
|
Net (income) loss
attributable to non-controlling interests
|
(57)
|
|
(41)
|
|
(138)
|
|
(130)
|
Net income attributable
to OpenText
|
$
57,556
|
|
$
74,681
|
|
$
199,113
|
|
$
294,894
|
Earnings per
share—basic attributable to OpenText
|
$
0.21
|
|
$
0.28
|
|
$
0.74
|
|
$
1.09
|
Earnings per
share—diluted attributable to OpenText
|
$
0.21
|
|
$
0.28
|
|
$
0.74
|
|
$
1.08
|
Weighted average number
of Common Shares
outstanding—basic (in '000's)
|
270,441
|
|
270,693
|
|
270,143
|
|
271,623
|
Weighted average number
of Common Shares
outstanding—diluted (in '000's)
|
270,650
|
|
271,211
|
|
270,173
|
|
272,439
|
OPEN TEXT
CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
(In thousands of U.S.
dollars) (unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
Nine Months
Ended
March 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
|
$
57,613
|
|
$
74,722
|
|
$
199,251
|
|
$
295,024
|
Other comprehensive
income (loss)—net of tax:
|
|
|
|
|
|
|
|
Net foreign currency
translation adjustments
|
(28,640)
|
|
(13,073)
|
|
(25,587)
|
|
(44,512)
|
Unrealized gain (loss)
on cash flow hedges:
|
|
|
|
|
|
|
|
Unrealized gain (loss)
- net of tax expense (recovery) effect of $15 and $233 for the
three months ended March 31, 2023 and 2022, respectively; ($844)
and $(158) for the nine months ended March 31, 2023 and 2022,
respectively
|
38
|
|
648
|
|
(2,343)
|
|
(334)
|
(Gain) loss
reclassified into net income - net of tax (expense) recovery effect
of $252 and $79 for the three months ended March 31, 2023 and 2022,
respectively; $861 and $(24) for the nine months ended March 31,
2023 and 2022, respectively
|
699
|
|
219
|
|
2,388
|
|
(86)
|
Unrealized gain (loss)
on available-for-sale financial assets:
|
|
|
|
|
|
|
|
Unrealized gain (loss)
- net of tax expense (recovery) effect of $238 and $— for the three
months ended March 31, 2023 and 2022, respectively; $238 and $— for
the nine months ended March 31, 2023 and 2022,
respectively
|
(900)
|
|
—
|
|
(900)
|
|
—
|
Actuarial gain (loss)
relating to defined benefit pension plans:
|
|
|
|
|
|
|
|
Actuarial gain (loss) -
net of tax expense (recovery) effect of ($892) and $(579) for the
three months ended March 31, 2023 and 2022, respectively; $318 and
$(811) for the nine months ended March 31, 2023 and 2022,
respectively
|
(3,318)
|
|
(2,033)
|
|
878
|
|
(4,517)
|
Amortization of
actuarial (gain) loss into net income - net of tax (expense)
recovery effect of $25 and $66 for the three months ended March 31,
2023 and 2022, respectively; $76 and $134 for the nine months ended
March 31, 2023 and 2022, respectively
|
35
|
|
156
|
|
109
|
|
477
|
Total other
comprehensive income (loss) net
|
(32,086)
|
|
(14,083)
|
|
(25,455)
|
|
(48,972)
|
Total comprehensive
income
|
25,527
|
|
60,639
|
|
173,796
|
|
246,052
|
Comprehensive (income)
loss attributable to non-controlling interests
|
(57)
|
|
(41)
|
|
(138)
|
|
(130)
|
Total comprehensive
income attributable to OpenText
|
$
25,470
|
|
$
60,598
|
|
$
173,658
|
|
$
245,922
|
OPEN TEXT
CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY (In thousands of U.S. dollars and
shares) (unaudited)
|
|
|
Three Months Ended
March 31, 2023
|
|
Common Shares
and
Additional Paid in Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Non-Controlling
Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of
December 31, 2022
|
270,235
|
|
$
2,092,079
|
|
(3,295)
|
|
$
(142,126)
|
|
$
2,171,236
|
|
$
(1,028)
|
|
$
1,223
|
|
$
4,121,384
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock
option plans
|
16
|
|
479
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
479
|
Under employee stock
purchase plans
|
228
|
|
5,776
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,776
|
Share-based
compensation
|
—
|
|
36,505
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
36,505
|
Issuance of treasury
stock
|
—
|
|
(4,496)
|
|
79
|
|
3,426
|
|
—
|
|
—
|
|
—
|
|
(1,070)
|
Dividends
declared
($0.24299 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(65,454)
|
|
—
|
|
—
|
|
(65,454)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(32,086)
|
|
—
|
|
(32,086)
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
57,556
|
|
—
|
|
57
|
|
57,613
|
Balance as of
March 31, 2023
|
270,479
|
|
$
2,130,343
|
|
(3,216)
|
|
$
(138,700)
|
|
$
2,163,338
|
|
$
(33,114)
|
|
$
1,280
|
|
$
4,123,147
|
|
|
Three Months Ended
March 31, 2022
|
|
Common Shares
and
Additional Paid in Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Non-Controlling
Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of
December 31, 2021
|
271,006
|
|
$
1,990,913
|
|
(1,476)
|
|
$
(67,966)
|
|
$
2,174,467
|
|
$
31,349
|
|
$
1,062
|
|
$
4,129,825
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock
option plans
|
53
|
|
1,863
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,863
|
Under employee stock
purchase plans
|
172
|
|
7,003
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,003
|
Share-based
compensation
|
—
|
|
16,748
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
16,748
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(1,300)
|
|
(56,067)
|
|
—
|
|
—
|
|
—
|
|
(56,067)
|
Repurchase of Common
Shares
|
(1,000)
|
|
(6,381)
|
|
—
|
|
—
|
|
(38,702)
|
|
—
|
|
—
|
|
(45,083)
|
Dividends
declared
($0.2209 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(59,077)
|
|
—
|
|
—
|
|
(59,077)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(14,083)
|
|
—
|
|
(14,083)
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
74,681
|
|
—
|
|
41
|
|
74,722
|
Balance as of
March 31, 2022
|
270,231
|
|
$
2,010,146
|
|
(2,776)
|
|
$
(124,033)
|
|
$
2,151,369
|
|
$
17,266
|
|
$
1,103
|
|
$
4,055,851
|
OPEN TEXT
CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY (In thousands of U.S. dollars and
shares) (unaudited)
|
|
|
Nine Months Ended
March 31, 2023
|
|
Common Shares
and
Additional Paid in Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Non-Controlling
Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of June
30, 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
|
88
|
|
2,473
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,473
|
Under employee stock
purchase plans
|
868
|
|
22,997
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
22,997
|
Share-based
compensation
|
—
|
|
88,535
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
88,535
|
Issuance of treasury
stock
|
—
|
|
(22,336)
|
|
490
|
|
21,266
|
|
—
|
|
—
|
|
—
|
|
(1,070)
|
Dividends
declared
($0.72897 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(195,844)
|
|
—
|
|
—
|
|
(195,844)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(25,455)
|
|
—
|
|
(25,455)
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
199,113
|
|
—
|
|
138
|
|
199,251
|
Balance as of March
31, 2023
|
270,479
|
|
$
2,130,343
|
|
(3,216)
|
|
$
(138,700)
|
|
$
2,163,338
|
|
$
(33,114)
|
|
$
1,280
|
|
$
4,123,147
|
|
|
Nine Months Ended
March 31, 2022
|
|
Common Shares
and
Additional Paid in Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Non-Controlling
Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of June
30, 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
|
905
|
|
31,128
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31,128
|
Under employee stock
purchase plans
|
595
|
|
24,913
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
24,913
|
Share-based
compensation
|
—
|
|
45,091
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
45,091
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(1,700)
|
|
(75,660)
|
|
—
|
|
—
|
|
—
|
|
(75,660)
|
Issuance of treasury
stock
|
—
|
|
(21,013)
|
|
492
|
|
21,013
|
|
—
|
|
—
|
|
—
|
|
—
|
Repurchase of Common
Shares
|
(2,810)
|
|
(17,879)
|
|
—
|
|
—
|
|
(118,238)
|
|
—
|
|
—
|
|
(136,117)
|
Dividends
declared
($0.6627 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(178,613)
|
|
—
|
|
—
|
|
(178,613)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(48,972)
|
|
—
|
|
(48,972)
|
Distribution to
non-controlling interest
|
—
|
|
142
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(538)
|
|
(396)
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
294,894
|
|
—
|
|
130
|
|
295,024
|
Balance as of March
31, 2022
|
270,231
|
|
$
2,010,146
|
|
(2,776)
|
|
$
(124,033)
|
|
$
2,151,369
|
|
$
17,266
|
|
$
1,103
|
|
$
4,055,851
|
OPEN TEXT
CORPORATION CONSOLIDATED STATEMENTS OF CASH
FLOWS
(In thousands of U.S.
dollars) (unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
Nine Months
Ended
March
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income for the
period
|
$
57,613
|
|
$
74,722
|
|
$
199,251
|
|
$
295,024
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization of intangible assets
|
190,453
|
|
125,149
|
|
427,869
|
|
378,632
|
Share-based
compensation expense
|
36,368
|
|
16,748
|
|
88,398
|
|
45,091
|
Pension
expense
|
2,362
|
|
1,868
|
|
5,806
|
|
4,883
|
Amortization of debt
issuance costs
|
5,330
|
|
1,482
|
|
8,496
|
|
3,936
|
Write off of right of
use assets
|
3,344
|
|
—
|
|
7,119
|
|
—
|
Loss on extinguishment
of debt
|
21
|
|
—
|
|
8,152
|
|
27,413
|
Loss on sale and write
down of property and equipment
|
1,307
|
|
58
|
|
1,428
|
|
96
|
Deferred
taxes
|
(131,898)
|
|
22,440
|
|
(178,700)
|
|
43,332
|
Share in net (income)
loss of equity investees
|
4,724
|
|
(27,746)
|
|
11,547
|
|
(59,103)
|
Changes in financial
instruments
|
102,713
|
|
—
|
|
112,567
|
|
—
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
167,866
|
|
17,241
|
|
141,269
|
|
68,428
|
Contract
assets
|
(11,442)
|
|
(8,463)
|
|
(29,896)
|
|
(27,208)
|
Prepaid expenses and
other current assets
|
(62,121)
|
|
(4,501)
|
|
(65,186)
|
|
(15,722)
|
Income taxes
|
87,277
|
|
(14,011)
|
|
131,517
|
|
(11,235)
|
Accounts payable and
accrued liabilities
|
(146,638)
|
|
42,891
|
|
(137,674)
|
|
(65,738)
|
Deferred
revenue
|
(13,498)
|
|
76,335
|
|
(42,631)
|
|
25,642
|
Other assets
|
54,708
|
|
(386)
|
|
(5,998)
|
|
16,527
|
Operating lease assets
and liabilities, net
|
(11,714)
|
|
(270)
|
|
(19,430)
|
|
(128)
|
Net cash provided by
operating activities
|
336,775
|
|
323,557
|
|
663,904
|
|
729,870
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Additions of property
and equipment
|
(31,233)
|
|
(17,590)
|
|
(99,772)
|
|
(54,937)
|
Purchase of Micro Focus
International PLC, net of cash acquired
|
(5,655,606)
|
|
—
|
|
(5,655,606)
|
|
—
|
Purchase of Zix
Corporation, net of cash acquired
|
—
|
|
(18,602)
|
|
—
|
|
(856,175)
|
Purchase of Bricata
Inc.
|
—
|
|
—
|
|
—
|
|
(17,927)
|
Realized gain on
financial instruments
|
131,248
|
|
—
|
|
131,248
|
|
—
|
Other investing
activities
|
—
|
|
(651)
|
|
(873)
|
|
(3,922)
|
Net cash used in
investing activities
|
(5,555,591)
|
|
(36,843)
|
|
(5,625,003)
|
|
(932,961)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from issuance
of Common Shares from exercise of stock options and ESPP
|
9,399
|
|
10,788
|
|
25,172
|
|
56,476
|
Proceeds from
long-term debt and Revolver
|
3,927,450
|
|
—
|
|
4,927,450
|
|
1,500,000
|
Repayment of long-term
debt and Revolver
|
(11,463)
|
|
(2,500)
|
|
(16,463)
|
|
(857,500)
|
Debt extinguishment
costs
|
—
|
|
—
|
|
—
|
|
(24,969)
|
Debt issuance
costs
|
(65,559)
|
|
(1,812)
|
|
(77,209)
|
|
(17,159)
|
Repurchase of Common
Shares
|
—
|
|
(45,083)
|
|
—
|
|
(136,117)
|
Purchase of treasury
stock
|
—
|
|
(56,067)
|
|
—
|
|
(75,660)
|
Distribution to
non-controlling interest
|
—
|
|
—
|
|
—
|
|
(396)
|
Payments of dividends
to shareholders
|
(64,919)
|
|
(59,077)
|
|
(194,481)
|
|
(178,613)
|
Other financing
activities
|
(2,193)
|
|
—
|
|
(2,193)
|
|
—
|
Net cash provided by
(used in) financing activities
|
3,792,715
|
|
(153,751)
|
|
4,662,276
|
|
266,062
|
Foreign exchange gain
(loss) on cash held in foreign currencies
|
2,903
|
|
(11,207)
|
|
2,632
|
|
(36,920)
|
Increase (decrease) in
cash, cash equivalents and restricted cash during the
period
|
(1,423,198)
|
|
121,756
|
|
(296,191)
|
|
26,051
|
Cash, cash equivalents
and restricted cash at beginning of the period
|
2,822,918
|
|
1,514,095
|
|
1,695,911
|
|
1,609,800
|
Cash, cash equivalents
and restricted cash at end of the period
|
$ 1,399,720
|
|
$ 1,635,851
|
|
$ 1,399,720
|
|
$ 1,635,851
|
OPEN TEXT
CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
|
|
Reconciliation of
cash, cash equivalents and restricted cash:
|
March 31,
2023
|
|
March 31,
2022
|
Cash and cash
equivalents
|
$
1,396,817
|
|
$
1,633,702
|
Restricted cash
(1)
|
2,903
|
|
2,149
|
Total cash, cash
equivalents and restricted cash
|
$
1,399,720
|
|
$
1,635,851
|
|
|
|
|
(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 most recently 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.
|
|
|
|
The following charts
provide unaudited reconciliations of U.S. GAAP-based financial
measures to Non-GAAP-based financial measures for the following
periods presented.
|
Reconciliation of
selected GAAP-based measures to Non-GAAP-based
measures
for the three months
ended March 31, 2023
(In thousands,
except for per share data)
|
|
Three Months Ended
March 31, 2023
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-
based
Measures
|
Non-GAAP-
based
Measures
% of Total
Revenue
|
Cost of
revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
157,658
|
|
$ (2,943)
|
(1)
|
$
154,715
|
|
Customer
support
|
67,067
|
|
(1,157)
|
(1)
|
65,910
|
|
Professional service
and other
|
78,526
|
|
(1,884)
|
(1)
|
76,642
|
|
Amortization of
acquired technology-based intangible assets
|
62,639
|
|
(62,639)
|
(2)
|
—
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and
gross margin (%)
|
874,944
|
70.3 %
|
68,623
|
(3)
|
943,567
|
75.8 %
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
210,731
|
|
(10,801)
|
(1)
|
199,930
|
|
Sales and
marketing
|
271,013
|
|
(11,947)
|
(1)
|
259,066
|
|
General and
administrative
|
127,047
|
|
(7,636)
|
(1)
|
119,411
|
|
Amortization of
acquired customer-based intangible assets
|
97,237
|
|
(97,237)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
74,350
|
|
(74,350)
|
(4)
|
—
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
63,989
|
|
270,594
|
(5)
|
334,583
|
|
Other income (expense),
net
|
85,706
|
|
(85,706)
|
(6)
|
—
|
|
Provision for (recovery
of) income taxes
|
(12,420)
|
|
44,631
|
(7)
|
32,211
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
57,556
|
|
140,257
|
(8)
|
197,813
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted,
attributable to OpenText
|
$
0.21
|
|
$
0.52
|
(8)
|
$
0.73
|
|
|
|
(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 on our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately (27%) 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 (loss) to Non-GAAP-based net
income:
|
|
Three Months Ended
March 31, 2023
|
|
|
Per share
diluted
|
GAAP-based net income,
attributable to OpenText
|
$
57,556
|
$
0.21
|
Add:
|
|
|
Amortization
|
159,876
|
0.59
|
Share-based
compensation
|
36,368
|
0.13
|
Special charges
(recoveries)
|
74,350
|
0.28
|
Other (income) expense,
net
|
(85,706)
|
(0.32)
|
GAAP-based provision
for (recovery of) income taxes
|
(12,420)
|
(0.04)
|
Non-GAAP-based
provision for income taxes
|
(32,211)
|
(0.12)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
197,813
|
$
0.73
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
March 31, 2023
|
GAAP-based net income,
attributable to OpenText
|
$
57,556
|
Add:
|
|
Provision for (recovery
of) income taxes
|
(12,420)
|
Interest and other
related expense, net
|
104,502
|
Amortization of
acquired technology-based intangible assets
|
62,639
|
Amortization of
acquired customer-based intangible assets
|
97,237
|
Depreciation
|
30,577
|
Share-based
compensation
|
36,368
|
Special charges
(recoveries)
|
74,350
|
Other (income) expense,
net
|
(85,706)
|
Adjusted
EBITDA
|
$
365,103
|
|
|
GAAP-based net income
margin
|
4.6 %
|
Adjusted EBITDA
margin
|
29.3 %
|
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
March 31, 2023
|
GAAP-based cash flows
provided by operating activities
|
$
336,775
|
Add:
|
|
Capital expenditures
(1)
|
(31,233)
|
Free cash
flows
|
$
305,542
|
|
|
(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 nine months
ended March 31, 2023
(In thousands,
except for per share data)
|
|
Nine Months Ended
March 31, 2023
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-
based
Measures
|
Non-GAAP-
based
Measures
% of Total
Revenue
|
Cost of
revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
423,771
|
|
$ (7,788)
|
(1)
|
$
415,983
|
|
Customer
support
|
123,010
|
|
(2,414)
|
(1)
|
120,596
|
|
Professional service
and other
|
186,390
|
|
(5,172)
|
(1)
|
181,218
|
|
Amortization of
acquired technology-based intangible assets
|
146,139
|
|
(146,139)
|
(2)
|
—
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
2,104,379
|
70.3 %
|
161,513
|
(3)
|
2,265,892
|
75.7 %
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
430,629
|
|
(25,481)
|
(1)
|
405,148
|
|
Sales and
marketing
|
615,354
|
|
(28,243)
|
(1)
|
587,111
|
|
General and
administrative
|
282,724
|
|
(19,300)
|
(1)
|
263,424
|
|
Amortization of
acquired customer-based intangible assets
|
205,121
|
|
(205,121)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
98,937
|
|
(98,937)
|
(4)
|
—
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
395,005
|
|
538,595
|
(5)
|
933,600
|
|
Other income (expense),
net
|
59,824
|
|
(59,824)
|
(6)
|
—
|
|
Provision for income
taxes
|
71,979
|
|
33,021
|
(7)
|
105,000
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
199,113
|
|
445,750
|
(8)
|
644,863
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted,
attributable to OpenText
|
$
0.74
|
|
$
1.65
|
(8)
|
$
2.39
|
|
|
|
(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 on our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 27% 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 (loss) to Non-GAAP-based net
income:
|
|
Nine Months Ended
March 31, 2023
|
|
|
Per share
diluted
|
GAAP-based net income,
attributable to OpenText
|
$
199,113
|
$
0.74
|
Add:
|
|
|
Amortization
|
351,260
|
1.30
|
Share-based
compensation
|
88,398
|
0.32
|
Special charges
(recoveries)
|
98,937
|
0.37
|
Other (income) expense,
net
|
(59,824)
|
(0.22)
|
GAAP-based provision
for income taxes
|
71,979
|
0.27
|
Non-GAAP-based
provision for income taxes
|
(105,000)
|
(0.39)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
644,863
|
$
2.39
|
Reconciliation of
Adjusted EBITDA
|
|
|
Nine Months Ended
March 31, 2023
|
GAAP-based net income,
attributable to OpenText
|
$
199,113
|
Add:
|
|
Provision for income
taxes
|
71,979
|
Interest and other
related expense, net
|
183,599
|
Amortization of
acquired technology-based intangible assets
|
146,139
|
Amortization of
acquired customer-based intangible assets
|
205,121
|
Depreciation
|
76,609
|
Share-based
compensation
|
88,398
|
Special charges
(recoveries)
|
98,937
|
Other (income) expense,
net
|
(59,824)
|
Adjusted
EBITDA
|
$
1,010,071
|
|
|
GAAP-based net income
margin
|
6.7 %
|
Adjusted EBITDA
margin
|
33.7 %
|
|
Reconciliation of
Free cash flows
|
|
|
Nine Months Ended
March 31, 2023
|
GAAP-based cash flows
provided by operating activities
|
$
663,904
|
Add:
|
|
Capital expenditures
(1)
|
(99,772)
|
Free cash
flows
|
$
564,132
|
|
|
(1) Defined as
"Additions of property and equipment" in the Consolidated
Statements of Cash Flows.
|
Reconciliation of
selected GAAP-based measures to Non-GAAP-based
measures
for the three months
ended December 31, 2022
(In thousands,
except for per share data)
|
|
Three Months Ended
December 31, 2022
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-
based
Measures
|
Non-GAAP-
based
Measures
% of Total
Revenue
|
Cost of
revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
134,314
|
|
$ (2,812)
|
(1)
|
$
131,502
|
|
Customer
support
|
28,589
|
|
(690)
|
(1)
|
27,899
|
|
Professional service
and other
|
54,064
|
|
(1,763)
|
(1)
|
52,301
|
|
Amortization of
acquired technology-based intangible assets
|
40,863
|
|
(40,863)
|
(2)
|
—
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
635,747
|
70.8 %
|
46,128
|
(3)
|
681,875
|
76.0 %
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
109,700
|
|
(7,826)
|
(1)
|
101,874
|
|
Sales and
marketing
|
177,171
|
|
(9,437)
|
(1)
|
167,734
|
|
General and
administrative
|
77,603
|
|
(6,294)
|
(1)
|
71,309
|
|
Amortization of
acquired customer-based intangible assets
|
53,446
|
|
(53,446)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
10,306
|
|
(10,306)
|
(4)
|
—
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
184,663
|
|
133,437
|
(5)
|
318,100
|
|
Other income (expense),
net
|
163,349
|
|
(163,349)
|
(6)
|
—
|
|
Provision for income
taxes
|
50,774
|
|
(11,660)
|
(7)
|
39,114
|
|
GAAP-based net
income (loss) / Non-GAAP-based net income, attributable to
OpenText
|
258,486
|
|
(18,252)
|
(8)
|
240,234
|
|
GAAP-based earnings
(loss) per share / Non-GAAP-based earnings per share-diluted,
attributable to OpenText
|
$
0.96
|
|
$
(0.07)
|
(8)
|
$
0.89
|
|
|
|
(1)
|
Adjustment relates to
the exclusion of share-based compensation expense from our
Non-GAAP-based operating expenses as this expense is excluded from
our internal analysis of operating results.
|
(2)
|
Adjustment relates to
the exclusion of amortization expense from our Non-GAAP-based
operating expenses as the timing and frequency of amortization
expense is dependent on our acquisitions and is hence excluded from
our internal analysis of operating results.
|
(3)
|
GAAP-based and
Non-GAAP-based gross profit stated in dollars and gross margin
stated as a percentage of total revenue.
|
(4)
|
Adjustment relates to
the exclusion of special charges (recoveries) from our
Non-GAAP-based operating expenses as special charges (recoveries)
are generally incurred in the periods relevant to an acquisition
and include certain charges or recoveries that are not indicative
or related to continuing operations, and are therefore excluded
from our internal analysis of operating results.
|
(5)
|
GAAP-based and
Non-GAAP-based income from operations stated in dollars.
|
(6)
|
Adjustment relates to
the exclusion of other income (expense) from our Non-GAAP-based
operating expenses as other income (expense) generally relates to
the transactional impact of foreign exchange and is generally not
indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other
income (expense) also includes our share of income (losses) from
our holdings in investments as a limited partner. We do not
actively trade equity securities in these privately held companies
nor do we plan our ongoing operations based around any anticipated
fundings or distributions from these investments. We exclude gains
and losses on these investments as we do not believe they are
reflective of our ongoing business and operating results. Other
income (expense) also includes unrealized gains (losses) on our
derivatives which are not designated as hedges, that are related to
the financing of the Micro Focus Acquisition. We exclude gains and
losses on these derivatives as we do not believe they are
reflective on our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 16% and a Non-GAAP-based tax rate of approximately
14%; these rate differences are due to the income tax effects of
items that are excluded for the purpose of calculating
Non-GAAP-based adjusted net income. Such excluded items include
amortization, share-based compensation, special charges
(recoveries) and other income (expense), net. Also excluded are tax
benefits/expense items unrelated to current period income such as
changes in reserves for tax uncertainties and valuation allowance
reserves, and "book to return" adjustments for tax return filings
and tax assessments. Included is the amount of net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 assumed to be allocable to the current period based on the
forecasted utilization period. In arriving at our Non-GAAP-based
tax rate of approximately 14%, we analyzed the individual adjusted
expenses and took into consideration the impact of statutory tax
rates from local jurisdictions incurring the expense.
|
(8)
|
Reconciliation of
GAAP-based net income to Non-GAAP-based net income:
|
|
Three Months Ended
December 31, 2022
|
|
|
Per share
diluted
|
GAAP-based net income
(loss), attributable to OpenText
|
$
258,486
|
$
0.96
|
Add:
|
|
|
Amortization
|
94,309
|
0.35
|
Share-based
compensation
|
28,822
|
0.10
|
Special charges
(recoveries)
|
10,306
|
0.04
|
Other (income) expense,
net
|
(163,349)
|
(0.60)
|
GAAP-based provision
for income taxes
|
50,774
|
0.19
|
Non-GAAP-based
provision for income taxes
|
(39,114)
|
(0.15)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
240,234
|
$
0.89
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
December 31, 2022
|
GAAP-based net income
(loss), attributable to OpenText
|
$
258,486
|
Add:
|
|
Provision for income
taxes
|
50,774
|
Interest and other
related expense, net
|
38,715
|
Amortization of
acquired technology-based intangible assets
|
40,863
|
Amortization of
acquired customer-based intangible assets
|
53,446
|
Depreciation
|
22,858
|
Share-based
compensation
|
28,822
|
Special charges
(recoveries)
|
10,306
|
Other (income) expense,
net
|
(163,349)
|
Adjusted
EBITDA
|
$
340,921
|
|
|
GAAP-based net income
(loss) margin
|
28.8 %
|
Adjusted EBITDA
margin
|
38.0 %
|
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
December 31, 2022
|
GAAP-based cash flows
provided by operating activities
|
$
195,170
|
Add:
|
|
Capital expenditures
(1)
|
(32,215)
|
Free cash
flows
|
$
162,955
|
|
|
(1) Defined as
"Additions of property and equipment" in the Consolidated
Statements of Cash Flows.
|
Reconciliation of
selected GAAP-based measures to Non-GAAP-based
measures
for the three months
ended March 31, 2022
(In thousands,
except for per share data)
|
|
Three Months Ended
March 31, 2022
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-
based
Measures
|
Non-GAAP-
based
Measures
% of Total
Revenue
|
Cost of
revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
136,020
|
|
$ (1,268)
|
(1)
|
$
134,752
|
|
Customer
support
|
31,763
|
|
(501)
|
(1)
|
31,262
|
|
Professional service
and other
|
56,693
|
|
(907)
|
(1)
|
55,786
|
|
Amortization of
acquired technology-based intangible assets
|
46,564
|
|
(46,564)
|
(2)
|
—
|
|
GAAP-based gross
profit and gross margin (%) / Non-GAAP-based gross profit and gross
margin (%)
|
608,047
|
68.9 %
|
49,240
|
(3)
|
657,287
|
74.5 %
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
117,730
|
|
(4,350)
|
(1)
|
113,380
|
|
Sales and
marketing
|
180,955
|
|
(5,761)
|
(1)
|
175,194
|
|
General and
administrative
|
88,137
|
|
(3,961)
|
(1)
|
84,176
|
|
Amortization of
acquired customer-based intangible assets
|
56,215
|
|
(56,215)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
11,031
|
|
(11,031)
|
(4)
|
—
|
|
GAAP-based income
from operations / Non-GAAP-
based income from operations
|
131,609
|
|
130,558
|
(5)
|
262,167
|
|
Other income (expense),
net
|
24,392
|
|
(24,392)
|
(6)
|
—
|
|
Provision for income
taxes
|
41,041
|
|
(9,971)
|
(7)
|
31,070
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
74,681
|
|
116,137
|
(8)
|
190,818
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
0.28
|
|
$
0.42
|
(8)
|
$
0.70
|
|
|
|
(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.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 35% 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 adjusted 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, 2022
|
|
|
Per share
diluted
|
GAAP-based net income,
attributable to OpenText
|
$
74,681
|
$
0.28
|
Add:
|
|
|
Amortization
|
102,779
|
0.38
|
Share-based
compensation
|
16,748
|
0.06
|
Special charges
(recoveries)
|
11,031
|
0.04
|
Other (income) expense,
net
|
(24,392)
|
(0.09)
|
GAAP-based provision
for income taxes
|
41,041
|
0.15
|
Non-GAAP-based
provision for income taxes
|
(31,070)
|
(0.12)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
190,818
|
$
0.70
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
Three Months Ended
March 31, 2022
|
GAAP-based net income,
attributable to OpenText
|
$
74,681
|
Add:
|
|
Provision for income
taxes
|
41,041
|
Interest and other
related expense, net
|
40,238
|
Amortization of
acquired technology-based intangible assets
|
46,564
|
Amortization of
acquired customer-based intangible assets
|
56,215
|
Depreciation
|
22,370
|
Share-based
compensation
|
16,748
|
Special charges
(recoveries)
|
11,031
|
Other (income) expense,
net
|
(24,392)
|
Adjusted
EBITDA
|
$
284,496
|
|
|
GAAP-based net income
margin
|
8.5 %
|
Adjusted EBITDA
margin
|
32.2 %
|
|
Reconciliation of
Free cash flows
|
|
|
Three Months Ended
March 31, 2022
|
GAAP-based cash flows
provided by operating activities
|
$
323,557
|
Add:
|
|
Capital expenditures
(1)
|
(17,590)
|
Free cash
flows
|
$
305,967
|
|
|
(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 nine months
ended March 31, 2022
(In thousands,
except for per share data)
|
|
Nine Months Ended
March 31, 2022
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-based
Measures
|
Non-GAAP-
based
Measures
% of Total
Revenue
|
Cost of
revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
377,928
|
|
$ (3,072)
|
(1)
|
$
374,856
|
|
Customer
support
|
90,914
|
|
(1,631)
|
(1)
|
89,283
|
|
Professional service
and other
|
161,459
|
|
(2,275)
|
(1)
|
159,184
|
|
Amortization of
acquired technology-based intangible assets
|
152,333
|
|
(152,333)
|
(2)
|
—
|
|
GAAP-based gross
profit and gross margin (%) /Non-GAAP-based gross profit and gross
margin (%)
|
1,797,850
|
69.4 %
|
159,311
|
(3)
|
1,957,161
|
75.5 %
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
321,517
|
|
(9,936)
|
(1)
|
311,581
|
|
Sales and
marketing
|
491,133
|
|
(15,377)
|
(1)
|
475,756
|
|
General and
administrative
|
231,127
|
|
(12,800)
|
(1)
|
218,327
|
|
Amortization of
acquired customer-based intangible assets
|
160,764
|
|
(160,764)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
20,592
|
|
(20,592)
|
(4)
|
—
|
|
GAAP-based income
from operations / Non-GAAP-based income from
operations
|
507,182
|
|
378,780
|
(5)
|
885,962
|
|
Other income (expense),
net
|
29,137
|
|
(29,137)
|
(6)
|
—
|
|
Provision for income
taxes
|
123,757
|
|
(16,178)
|
(7)
|
107,579
|
|
GAAP-based net
income / Non-GAAP-based net income, attributable to
OpenText
|
294,894
|
|
365,821
|
(8)
|
660,715
|
|
GAAP-based earnings
per share / Non-GAAP-based earnings per share-diluted, attributable
to OpenText
|
$
1.08
|
|
$
1.35
|
(8)
|
$
2.43
|
|
|
|
(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.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 30% 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 adjusted 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:
|
|
Nine Months Ended
March 31, 2022
|
|
|
Per share
diluted
|
GAAP-based net income,
attributable to OpenText
|
$
294,894
|
$
1.08
|
Add:
|
|
|
Amortization
|
313,097
|
1.15
|
Share-based
compensation
|
45,091
|
0.17
|
Special charges
(recoveries)
|
20,592
|
0.08
|
Other (income) expense,
net
|
(29,137)
|
(0.11)
|
GAAP-based provision
for income taxes
|
123,757
|
0.45
|
Non-GAAP-based
provision for income taxes
|
(107,579)
|
(0.39)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
660,715
|
$
2.43
|
Reconciliation of
Adjusted EBITDA
|
|
|
Nine Months Ended
March 31, 2022
|
GAAP-based net income,
attributable to OpenText
|
$
294,894
|
Add:
|
|
Provision for income
taxes
|
123,757
|
Interest and other
related expense, net
|
117,538
|
Amortization of
acquired technology-based intangible assets
|
152,333
|
Amortization of
acquired customer-based intangible assets
|
160,764
|
Depreciation
|
65,535
|
Share-based
compensation
|
45,091
|
Special charges
(recoveries)
|
20,592
|
Other (income) expense,
net
|
(29,137)
|
Adjusted
EBITDA
|
$
951,367
|
|
|
GAAP-based net income
margin
|
11.4 %
|
Adjusted EBITDA
margin
|
36.7 %
|
|
|
Reconciliation of
Free cash flows
|
|
|
Nine Months Ended
March 31, 2022
|
GAAP-based cash flows
provided by operating activities
|
$
729,870
|
Add:
|
|
Capital expenditures
(1)
|
(54,937)
|
Free cash
flows
|
$
674,933
|
|
|
(1) Defined as
"Additions of property and equipment" in the Consolidated
Statements of Cash Flows.
|
(3) The following
tables provide a composition of our major currencies for revenue
and expenses, expressed as a percentage, for the three and nine
months ended March 31, 2023 and 2022:
|
|
|
Three Months Ended
March 31, 2023
|
|
Three Months Ended
March 31, 2022
|
Currencies
|
% of Revenue
|
% of Expenses(1)
|
|
% of Revenue
|
% of Expenses(1)
|
EURO
|
21 %
|
12 %
|
|
21 %
|
12 %
|
GBP
|
5 %
|
8 %
|
|
5 %
|
5 %
|
CAD
|
3 %
|
11 %
|
|
3 %
|
14 %
|
USD
|
61 %
|
50 %
|
|
63 %
|
53 %
|
Other
|
10 %
|
19 %
|
|
8 %
|
16 %
|
Total
|
100 %
|
100 %
|
|
100 %
|
100 %
|
|
|
|
Nine Months Ended
March 31, 2023
|
|
Nine Months Ended
March 31, 2022
|
Currencies
|
% of Revenue
|
% of Expenses(1)
|
|
% of Revenue
|
% of Expenses(1)
|
EURO
|
20 %
|
12 %
|
|
23 %
|
13 %
|
GBP
|
5 %
|
6 %
|
|
5 %
|
6 %
|
CAD
|
3 %
|
12 %
|
|
3 %
|
14 %
|
USD
|
63 %
|
53 %
|
|
61 %
|
52 %
|
Other
|
9 %
|
17 %
|
|
8 %
|
15 %
|
Total
|
100 %
|
100 %
|
|
100 %
|
100 %
|
|
(1) Expenses
include all cost of revenues and operating expenses included within
the Consolidated Statements of Income, except for amortization of
intangible assets, share-based compensation and special charges
(recoveries).
|
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SOURCE Open Text Corporation