OpenText Reports Fourth Quarter and Fiscal Year 2021 Financial Results

 
 

Record Annual Total Revenues with Cloud Revenue Growth of 21.6%

 

Repurchases 2.5 Million Common Shares and Increases Dividend by 10%

 

-

 

   Fiscal 2021 Fourth Quarter Highlights Y/Y   

 
 
                              
 

   Total Revenues   

 

  (in millions)  

 		 
 

   Annual Recurring Revenues   

 

  (in millions)  

 		 
 

   Cloud Revenues   

 

  (in millions)  

 
 

   Reported   

 		 

   Constant Currency   

 		 
 

   Reported   

 		 

   Constant Currency   

 		 
 

   Reported   

 		 

   Constant Currency   

 
 

  $893.5  

 		 

  $859.4  

 		 
 

  $694.4  

 		 

  $671.8  

 		 
 

  $360.2  

 		 

  $352.7  

 
 

  +8.1%  

 		 

  +4.0%  

 		 
 

  +5.6%  

 		 

  +2.2%  

 		 
 

  +8.3%  

 		 

  +6.0%  

 
 

  Annual Recurring Revenues represent 78% of Total Revenues  

 
 
 

 

 
  • Operating cash flows were $296.2 million and free cash flows were $268.8 million  
    •  
  • GAAP-based net income of $181.3 million , up 586.9% Y/Y, margin of 20.3%, up 1,710 basis points Y/Y
    •  
  • Adjusted EBITDA of $314.8 million , down 0.8%, margin of 35.2%, down 320 basis points Y/Y
    •  
  • GAAP-based diluted EPS of $0.66 , up 560.0% Y/Y
    •  
  • Non-GAAP diluted EPS of $0.80 , constant Y/Y
    •  
  • During the quarter, the company repurchased and cancelled 2.5 million common shares for $119.1 million under our Share Repurchase Plan
    •  
  • Quarterly cash dividend increased by 10%
    •  

 

 

   Fiscal 2021 Annual Highlights Y/Y   

 
 
                              
 

   Total Revenues   

 

  (in millions)  

 		 
 

   Annual Recurring Revenues   

 

  (in millions)  

 		 
 

   Cloud Revenues   

 

  (in millions)  

 
 

   Reported   

 		 

   Constant Currency   

 		 
 

   Reported   

 		 

   Constant Currency   

 		 
 

   Reported   

 		 

   Constant Currency   

 
 

  $3,386.1  

 		 

  $3,304.8  

 		 
 

  $2,741.5  

 		 

  $2,686.6  

 

 
 

  $1,407.4  

 		 

  $1,389.7  

 
 

  +8.9%  

 		 

  +6.3%  

 		 
 

  +12.7%  

 		 

  +10.4%  

 		 
 

  +21.6%  

 		 

  +20.0%  

 
 

  Annual Recurring Revenues represent 81% of Total Revenues  

 
 
 

 

 
  • Operating cash flows were $876.1 million and free cash flows were $812.4 million , which include the IRS settlement payment of $299.6 million  
    •  
  • GAAP-based net income of $310.7 million , up 32.6% Y/Y, margin of 9.2%, up 170 basis points Y/Y
    •  
  • Adjusted EBITDA of $1,315.0 million , up 14.5%, margin of 38.8%, up 190 basis points Y/Y
    •  
  • GAAP-based diluted EPS of $1.14 , up 32.6% Y/Y
    •  
  • Non-GAAP diluted EPS of $3.39 , up 17.3% Y/Y
    •  

Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced its financial results for the fourth quarter and year ended June 30, 2021.

 

"Our robust fourth quarter results contributed to a record fiscal year, as we successfully helped our customers navigate the challenges of an evolving market and workforce," said Mark J. Barrenechea , OpenText CEO & CTO.  "In Fiscal 2021, OpenText delivered a record $3.39 billion in total revenues, up 8.9% year-over-year, supported by record Cloud revenues of $1.4 billion , up 21.6% from a year ago. Annual Recurring Revenues (ARR) reached a record $2.7 billion , up 12.7% year-over-year, representing 81% of total revenues."

 

"Information Management's time has come, and OpenText is perfectly positioned to lead the market as we digitally empower many of the most innovative global organizations, in nearly every vertical and line of business.  OpenText Cloud Editions enables customers to accelerate growth and stay ahead of the competition by maximizing the value of their information through our cloud-based Information Management platform."

 

"I am very pleased with our fourth quarter and Fiscal 2021 results," said Madhu Ranganathan , OpenText EVP, CFO.  "In Fiscal 2021, we excelled in our operational performance, generating a record $1.3 billion of adjusted EBITDA, up 14.5% year-over-year, and free cash flows of $812.4 million which includes the IRS settlement payment of $299.6 million .  With approximately $1.6 billion of cash as of June 30, 2021 , and a net leverage ratio of 1.5x, our balance sheet and liquidity position remain strong.  We are well positioned to drive our organic growth initiatives and to deploy capital that meet OpenText's growth and returns based metrics."

 
 
  
 

    Financial Highlights for Q4 and Fiscal 2021 with Year Over Year Comparisons    

 
 
 
 
 
                                                                                                                                                                                                                                             
 

    Summary of Quarterly Results    

 		 
 
 
 
 
 
 
 
 

   (In millions, except per share data)   

 		 

   Q4 FY'21   

 		 

   Q4 FY'20   

 		 

   $ Change   

 		 

   % Change   

 		 
 

   Q4 FY'21 in CC*   

 		 

   % Change in CC*   

 		 
 

   Revenues:   

 		 
 
 
 
 
 
 
 
 

  Cloud services and subscriptions  

 		 

  $360.2  

 		 
 

  $332.6  

 		 
 

  $27.5  

 		 
 

  8.3  

 		 

  %  

 		 
 

  $352.7  

 		 
 

  6.0  

 		 

  %  

 		 
 

  Customer support  

 		 

  334.3  

 		 
 

  324.9  

 		 
 

  9.3  

 		 
 

  2.9  

 		 

  %  

 		 
 

  319.1  

 		 
 

  (1.8)  

 		 

  %  

 		 
 

   Total annual recurring revenues**   

 		 

   $694.4   

 		 
 

   $657.5   

 		 
 

   $36.9   

 		 
 

   5.6   

 		 

   %   

 		 
 

   $671.8   

 		 
 

   2.2   

 		 

   %   

 		 
 

  License  

 		 

  132.5  

 		 
 

  105.8  

 		 
 

  26.7  

 		 
 

  25.3  

 		 

  %  

 		 
 

  124.6  

 		 
 

  17.8  

 		 

  %  

 		 
 

  Professional service and other  

 		 

  66.6  

 		 
 

  63.3  

 		 
 

  3.3  

 		 
 

  5.2  

 		 

  %  

 		 
 

  63.0  

 		 
 

  (0.4)  

 		 

  %  

 		 
 

   Total revenues   

 		 

   $893.5   

 		 
 

   $826.6   

 		 
 

   $66.9   

 		 
 

   8.1   

 		 

   %   

 		 
 

   $859.4   

 		 
 

   4.0   

 		 

   %   

 		 
 

  GAAP-based operating income  

 		 

  $171.7  

 		 
 

  $91.2  

 		 
 

  $80.5  

 		 
 

  88.2  

 		 

  %  

 		 
 

  N/A  

 		 
 

  N/A  

 		 
 
 

  Non-GAAP-based operating income (1)  

 		 

  $293.9  

 		 
 

  $293.8  

 		 
 

  $0.1  

 		 
 

  —  

 		 

  %  

 		 
 

  $285.7  

 		 
 

  (2.7)  

 		 

  %  

 		 
 

  GAAP-based net income attributable to OpenText  

 		 

  $181.3  

 		 
 

  $26.4  

 		 
 

  $154.9  

 		 
 

  586.9  

 		 

  %  

 		 
 

  N/A  

 		 
 

  N/A  

 		 
 
 

  GAAP-based EPS, diluted  

 		 

  $0.66  

 		 
 

  $0.10  

 		 
 

  $0.56  

 		 
 

  560.0  

 		 

  %  

 		 
 

  N/A  

 		 
 

  N/A  

 		 
 
 

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

 		 

  $0.80  

 		 
 

  $0.80  

 		 
 

  $—  

 		 
 

  —  

 		 

  %  

 		 
 

  $0.78  

 		 
 

  (2.5)  

 		 

  %  

 		 
 

  Adjusted EBITDA (1)  

 		 

  $314.8  

 		 
 

  $317.4  

 		 
 

  ($2.6)  

 		 
 

  (0.8)  

 		 

  %  

 		 
 

  $306.3  

 		 
 

  (3.5)  

 		 

  %  

 		 
 

  Operating cash flows  

 		 

  $296.2  

 		 
 

  $280.3  

 		 
 

  $15.9  

 		 
 

  5.7  

 		 

  %  

 		 
 

  N/A  

 		 
 

  N/A  

 		 
 
 

  Free cash flows (1)  

 		 

  $268.8  

 		 
 

  $262.5  

 		 
 

  $6.2  

 		 
 

  2.4  

 		 

  %  

 		 
 

  N/A  

 		 
 

  N/A  

 		 
 
 
 

 

 
 
                                                                                                                                                                                                                                             
 

    Summary of Annual Results    

 		 
 
 
 
 
 
 
 
 

   (In millions, except per share data)   

 		 

   FY'21   

 		 

   FY'20   

 		 

   $ Change   

 		 

   % Change   

 		 
 

   FY'21 in CC*   

 		 

   % Change in CC*   

 		 
 

   Revenues:   

 		 
 
 
 
 
 
 
 
 

  Cloud services and subscriptions  

 		 

  $1,407.4  

 		 
 

  $1,157.7  

 		 
 

  $249.8  

 		 
 

  21.6  

 		 

  %  

 		 
 

  $1,389.7  

 		 
 

  20.0  

 		 

  %  

 		 
 

  Customer support  

 		 

  1,334.1  

 		 
 

  1,275.6  

 		 
 

  58.5  

 		 
 

  4.6  

 		 

  %  

 		 
 

  1,297.0  

 		 
 

  1.7  

 		 

  %  

 		 
 

   Total annual recurring revenues**   

 		 

   $2,741.5   

 		 
 

   $2,433.3   

 		 
 

   $308.2   

 		 
 

   12.7   

 		 

   %   

 		 
 

   $2,686.6   

 		 
 

   10.4   

 		 

   %   

 		 
 

  License  

 		 

  384.7  

 		 
 

  402.9  

 		 
 

  (18.1)  

 		 
 

  (4.5)  

 		 

  %  

 		 
 

  368.1  

 		 
 

  (8.6)  

 		 

  %  

 		 
 

  Professional service and other  

 		 

  259.9  

 		 
 

  273.6  

 		 
 

  (13.7)  

 		 
 

  (5.0)  

 		 

  %  

 		 
 

  250.0  

 		 
 

  (8.6)  

 		 

  %  

 		 
 

   Total revenues   

 		 

   $3,386.1   

 		 
 

   $3,109.7   

 		 
 

   $276.4   

 		 
 

   8.9   

 		 

   %   

 		 
 

   $3,304.8   

 		 
 

   6.3   

 		 

   %   

 		 
 

  GAAP-based operating income  

 		 

  $740.9  

 		 
 

  $503.5  

 		 
 

  $237.4  

 		 
 

  47.1  

 		 

  %  

 		 
 

  N/A  

 		 
 

  N/A  

 		 
 
 

  Non-GAAP-based operating income (1)  

 		 

  $1,230.0  

 		 
 

  $1,058.8  

 		 
 

  $171.2  

 		 
 

  16.2  

 		 

  %  

 		 
 

  $1,193.9  

 		 
 

  12.8  

 		 

  %  

 		 
 

  GAAP-based net income attributable to OpenText  

 		 

  $310.7  

 		 
 

  $234.2  

 		 
 

  $76.4  

 		 
 

  32.6  

 		 

  %  

 		 
 

  N/A  

 		 
 

  N/A  

 		 
 
 

  GAAP-based EPS, diluted  

 		 

  $1.14  

 		 
 

  $0.86  

 		 
 

  $0.28  

 		 
 

  32.6  

 		 

  %  

 		 
 

  N/A  

 		 
 

  N/A  

 		 
 
 

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

 		 

  $3.39  

 		 
 

  $2.89  

 		 
 

  $0.50  

 		 
 

  17.3  

 		 

  %  

 		 
 

  $3.28  

 		 
 

  13.5  

 		 

  %  

 		 
 

  Adjusted EBITDA (1)  

 		 

  $1,315.0  

 		 
 

  $1,148.1  

 		 
 

  $167.0  

 		 
 

  14.5  

 		 

  %  

 		 
 

  $1,278.2  

 		 
 

  11.3  

 		 

  %  

 		 
 

  Operating cash flows  

 		 

  $876.1  

 		 
 

  $954.5  

 		 
 

  ($78.4)  

 		 
 

  (8.2)  

 		 

  %  

 		 
 

  N/A  

 		 
 

  N/A  

 		 
 
 

  Free cash flows (1)  

 		 

  $812.4  

 		 
 

  $881.8  

 		 
 

  ($69.4)  

 		 
 

  (7.9)  

 		 

  %  

 		 
 

  N/A  

 		 
 

  N/A  

 		 
 
 
 
 
                     
 
 
 
 

   (1)  

 		 
 

  Please see note 2 "Use of Non-GAAP Financial Measures" below.  

 
 

   (2)  

 		 
 

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

 
 

  Note:  

 		 
 

  Individual line items in tables may be adjusted by non-material amounts to enable totals to align to published financial statements.  

 
 
 
 
 

  *CC:  

 		 
 

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

 
 

  **  

 		 
 

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

 
 
 

 

 

   Dividend and Share Repurchases   

 

As part of our quarterly, non-cumulative cash dividend program, the Board declared on August 4, 2021, a cash dividend increase of 10% to $0.2209 per common share. The record date for this dividend is September 3, 2021 and the payment date is September 24, 2021. 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.

 

"Since Fiscal 2013, OpenText has delivered approximately $1.3 billion to shareholders through our dividend and share repurchase programs. In Fiscal 2021 we repurchased and cancelled 2.5 million common shares through our share repurchase plan, and in the next fiscal year, we expect to increase shareholder returns by allocating approximately 33% of free cash flows towards both our dividend and share repurchase programs," said Mark J. Barrenechea .

 

   Quarterly Business Highlights   

 
  • Key customer wins in the quarter included VMware, Wells Fargo, EDF, Cerner, Raytheon, Revlon, Froneri, DHL, Transport for London , Big Cart Holdings, California Department of State Hospitals, Enercon, Multibank Panama, Netherlands Police, Rapid Radiology and Services Australia
    •  
  • Cloud Editions 21.3 strengthens Information Management in the cloud at scale
    •  
  • OpenText partners with Google Cloud to extend availability of solution extensions for SAP® applications to the Asia Pacific Japan region
    •  
  • Industry-leading solutions from OpenText Complement RISE with SAP
    •  
  • OpenText launches Managed Detection and Response (MDR) Service
    •  
  • OpenText named a leader in Content Platforms by Forrester
    •  
  • OpenText recognized as an overall leader for fourth consecutive year in the 2021 Customer Communications Management Aspire Leaderboard
    •  
  • OpenText World Asia Pacific showcases OpenText Cloud Editions
    •  
  • Published our second Corporate Citizenship Report confirming our commitment to ESG
    •  

 

 
 
                                                                               
 

    Summary of Quarterly Results    

 		 
 
 
 
 
 
 

   Q4 FY'21   

 		 

   Q3 FY'21   

 		 

   Q4 FY'20   

 		 

   % Change   

 

   (Q4 FY'21 vs Q3 FY'21)   

 		 
 

   % Change   

 

   (Q4 FY'21 vs Q4 FY'20)   

 		 
 

  Revenue (millions)  

 		 

  $893.5  

 		 
 

  $832.9  

 		 
 

  $826.6  

 		 
 

  7.3  

 		 

  %  

 		 
 

  8.1  

 		 

  %  

 		 
 

  GAAP-based gross margin  

 		 

  69.6  

 		 

  %  

 		 

  68.6  

 		 

  %  

 		 

  68.5  

 		 

  %  

 		 

  100  

 		 
 

  bps  

 		 

  110  

 		 
 

  bps  

 
 

  Non-GAAP-based gross margin (1)  

 		 

  75.8  

 		 

  %  

 		 

  75.2  

 		 

  %  

 		 

  75.8  

 		 

  %  

 		 

  60  

 		 
 

  bps  

 		 

  —  

 		 
 

  bps  

 
 

  GAAP-based EPS, diluted  

 		 

  $0.66  

 		 
 

  $0.33  

 		 
 

  $0.10  

 		 
 

  100.0  

 		 

  %  

 		 
 

  560.0  

 		 

  %  

 		 
 

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

 		 

  $0.80  

 		 
 

  $0.75  

 		 
 

  $0.80  

 		 
 

  6.7  

 		 

  %  

 		 
 

  —  

 		 

  %  

 		 
 
 

 

 
 
                                                  
 

    Summary of Annual Results    

 		 
 
 
 
 
 

   FY'21   

 		 

   FY'20   

 		 

   % Change   

 		 
 

  Revenue (millions)  

 		 

  $3,386.1  

 		 
 

  $3,109.7  

 		 
 

  8.9  

 		 

  %  

 		 
 

  GAAP-based gross margin  

 		 

  69.4  

 		 

  %  

 		 

  67.7  

 		 

  %  

 		 

  170  

 		 
 

  bps  

 
 

  Non-GAAP-based gross margin (1)  

 		 

  76.1  

 		 

  %  

 		 

  74.5  

 		 

  %  

 		 

  160  

 		 
 

  bps  

 
 

  GAAP-based EPS, diluted  

 		 

  $1.14  

 		 
 

  $0.86  

 		 
 

  32.6  

 		 

  %  

 		 
 

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

 		 

  $3.39  

 		 
 

  $2.89  

 		 
 

  17.3  

 		 

  %  

 		 
 
 
 
      
 
 
 

   (1)  

 		 

  Please see note 2 "Use of Non-GAAP Financial Measures" 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   

 

The public is invited 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   https://investors.opentext.com/investor-events-and-presentations   .

 

A replay of the call will be available beginning August 5, 2021 at 7:00 p.m. ET through 11:59 p.m. on August 19, 2021 and can be accessed by dialing 1-855-669-9658 (toll-free) or +1-604-674-8052 (international) and using passcode 7298 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. Additionally, "off-cloud" is a term we use to describe license transactions.

 

   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, 2022 (Fiscal 2022) on growth, future cloud growth and market share gains, future organic growth initiatives and deployment of capital, declaration of quarterly dividends, potential share repurchases pursuant to its Repurchase Plan, future tax rates, new platform and product offerings, scaling OpenText to new levels in Fiscal 2022 and beyond, and other matters, 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, uncertainties and other factors and assumptions that may cause the actual results, performance or achievements to differ materially which include, but are not limited to, actual and potential risks and uncertainties relating to the ultimate spread of COVID-19, the severity of the disease and the duration of the COVID-19 pandemic. 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.

 

OTEX-F

 

  For more information, please contact:  

 

   Harry E. Blount  
 Senior Vice President, Global Head of Investor Relations
Open Text Corporation
415-963-0825
  investors@opentext.com   

 

Copyright ©2021 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/who-we-are/copyright-information .  

 

 

 
 
                                                                                                                                                                                                                                                                    
 

   OPEN TEXT CORPORATION
  CONSOLIDATED BALANCE SHEETS
  (In thousands of U.S. dollars, except share data)   

 
 
 
 

   June 30, 2021   

 		 
 

   June 30, 2020   

 
 

   ASSETS   

 		 
 
 
 

  Cash and cash equivalents  

 		 

  $  

 		 

  1,607,306  

 		 
 
 

  $  

 		 

  1,692,850  

 		 
 

  Accounts receivable trade, net of allowance for credit losses of $22,151 as of June 30, 2021 and $20,906 as of June 30, 2020  

 		 

  438,547  

 		 
 
 

  466,357  

 		 
 

  Contract assets  

 		 

  25,344  

 		 
 
 

  29,570  

 		 
 

  Income taxes recoverable  

 		 

  32,312  

 		 
 
 

  61,186  

 		 
 

  Prepaid expenses and other current assets  

 		 

  98,551  

 		 
 
 

  136,436  

 		 
 

  Total current assets  

 		 

  2,202,060  

 		 
 
 

  2,386,399  

 		 
 

  Property and equipment  

 		 

  233,595  

 		 
 
 

  244,555  

 		 
 

  Operating lease right of use assets  

 		 

  234,532  

 		 
 
 

  207,869  

 		 
 

  Long-term contract assets  

 		 

  19,222  

 		 
 
 

  15,427  

 		 
 

  Goodwill  

 		 

  4,691,673  

 		 
 
 

  4,672,356  

 		 
 

  Acquired intangible assets  

 		 

  1,187,260  

 		 
 
 

  1,612,564  

 		 
 

  Deferred tax assets  

 		 

  796,738  

 		 
 
 

  911,565  

 		 
 

  Other assets  

 		 

  208,894  

 		 
 
 

  154,467  

 		 
 

  Long-term income taxes recoverable  

 		 

  35,362  

 		 
 
 

  29,620  

 		 
 

   Total assets   

 		 

  $  

 		 

  9,609,336  

 		 
 
 

  $  

 		 

  10,234,822  

 		 
 

   LIABILITIES AND SHAREHOLDERS' EQUITY   

 		 
 
 
 

  Current liabilities:  

 		 
 
 
 

  Accounts payable and accrued liabilities  

 		 

  $  

 		 

  423,592  

 		 
 
 

  $  

 		 

  373,314  

 		 
 

  Current portion of long-term debt  

 		 

  10,000  

 		 
 
 

  610,000  

 		 
 

  Operating lease liabilities  

 		 

  58,315  

 		 
 
 

  64,071  

 		 
 

  Deferred revenues  

 		 

  852,629  

 		 
 
 

  812,218  

 		 
 

  Income taxes payable  

 		 

  17,368  

 		 
 
 

  44,630  

 		 
 

  Total current liabilities  

 		 

  1,361,904  

 		 
 
 

  1,904,233  

 		 
 

  Long-term liabilities:  

 		 
 
 
 

  Accrued liabilities  

 		 

  28,830  

 		 
 
 

  34,955  

 		 
 

  Pension liability  

 		 

  74,511  

 		 
 
 

  73,129  

 		 
 

  Long-term debt  

 		 

  3,578,859  

 		 
 
 

  3,584,311  

 		 
 

  Long-term operating lease liabilities  

 		 

  224,453  

 		 
 
 

  217,165  

 		 
 

  Long-term deferred revenues  

 		 

  98,989  

 		 
 
 

  94,382  

 		 
 

  Long-term income taxes payable  

 		 

  34,113  

 		 
 
 

  171,200  

 		 
 

  Deferred tax liabilities  

 		 

  108,224  

 		 
 
 

  148,738  

 		 
 

  Total long-term liabilities  

 		 

  4,147,979  

 		 
 
 

  4,323,880  

 		 
 

  Shareholders' equity:  

 		 
 
 
 

  Share capital and additional paid-in capital  

 		 
 
 
 

  271,540,755 and 271,863,354 Common Shares issued and outstanding at June 30, 2021 and June 30, 2020, respectively; authorized Common Shares: unlimited  

 		 

  1,947,764  

 		 
 
 

  1,851,777  

 		 
 

  Accumulated other comprehensive income  

 		 

  66,238  

 		 
 
 

  17,825  

 		 
 

  Retained earnings  

 		 

  2,153,326  

 		 
 
 

  2,159,396  

 		 
 

  Treasury stock, at cost (1,567,664 and 622,297 shares at June 30, 2021 and June 30, 2020, respectively)  

 		 

  (69,386)  

 		 
 
 

  (23,608)  

 		 
 

  Total OpenText shareholders' equity  

 		 

  4,097,942  

 		 
 
 

  4,005,390  

 		 
 

  Non-controlling interests  

 		 

  1,511  

 		 
 
 

  1,319  

 		 
 

  Total shareholders' equity  

 		 

  4,099,453  

 		 
 
 

  4,006,709  

 		 
 

   Total liabilities and shareholders' equity   

 		 

  $  

 		 

  9,609,336  

 		 
 
 

  $  

 		 

  10,234,822  

 		 
 
 

 

 
 
                                                                                                                                                                                                                        
 

   OPEN TEXT CORPORATION
  CONSOLIDATED STATEMENTS OF INCOME
  (In thousands of U.S. dollars, except share and per share data)
  (unaudited)   

 
 
 
 

   Three Months Ended June 30,   

 
 
 

   2021   

 		 
 

   2020   

 
 

  Revenues:  

 		 
 
 
 

  Cloud services and subscriptions  

 		 

  $  

 		 

  360,160  

 		 
 
 

  $  

 		 

  332,618  

 		 
 

  Customer support  

 		 

  334,256  

 		 
 
 

  324,915  

 		 
 

  License  

 		 

  132,541  

 		 
 
 

  105,803  

 		 
 

  Professional service and other  

 		 

  66,570  

 		 
 
 

  63,276  

 		 
 

  Total revenues  

 		 

  893,527  

 		 
 
 

  826,612  

 		 
 

  Cost of revenues:  

 		 
 
 
 

  Cloud services and subscriptions  

 		 

  127,583  

 		 
 
 

  116,569  

 		 
 

  Customer support  

 		 

  32,938  

 		 
 
 

  32,568  

 		 
 

  License  

 		 

  4,315  

 		 
 
 

  3,404  

 		 
 

  Professional service and other  

 		 

  53,662  

 		 
 
 

  48,435  

 		 
 

  Amortization of acquired technology-based intangible assets  

 		 

  53,215  

 		 
 
 

  59,719  

 		 
 

  Total cost of revenues  

 		 

  271,713  

 		 
 
 

  260,695  

 		 
 

  Gross profit  

 		 

  621,814  

 		 
 
 

  565,917  

 		 
 

  Operating expenses:  

 		 
 
 
 

  Research and development  

 		 

  117,235  

 		 
 
 

  100,766  

 		 
 

  Sales and marketing  

 		 

  183,237  

 		 
 
 

  152,882  

 		 
 

  General and administrative  

 		 

  73,019  

 		 
 
 

  62,574  

 		 
 

  Depreciation  

 		 

  21,021  

 		 
 
 

  23,649  

 		 
 

  Amortization of acquired customer-based intangible assets  

 		 

  52,469  

 		 
 
 

  58,998  

 		 
 

  Special charges (recoveries)  

 		 

  3,152  

 		 
 
 

  75,849  

 		 
 

  Total operating expenses  

 		 

  450,133  

 		 
 
 

  474,718  

 		 
 

  Income from operations  

 		 

  171,681  

 		 
 
 

  91,199  

 		 
 

  Other income (expense), net  

 		 

  45,017  

 		 
 
 

  7,790  

 		 
 

  Interest and other related expense, net  

 		 

  (37,550)  

 		 
 
 

  (40,529)  

 		 
 

  Income before income taxes  

 		 

  179,148  

 		 
 
 

  58,460  

 		 
 

  Provision for (recovery of) income taxes  

 		 

  (2,215)  

 		 
 
 

  32,037  

 		 
 

  Net income for the period  

 		 

  $  

 		 

  181,363  

 		 
 
 

  $  

 		 

  26,423  

 		 
 

  Net (income) loss attributable to non-controlling interests  

 		 

  (80)  

 		 
 
 

  (31)  

 		 
 

  Net income attributable to OpenText  

 		 

  $  

 		 

  181,283  

 		 
 
 

  $  

 		 

  26,392  

 		 
 

  Earnings per share—basic attributable to OpenText  

 		 

  $  

 		 

  0.66  

 		 
 
 

  $  

 		 

  0.10  

 		 
 

  Earnings per share—diluted attributable to OpenText  

 		 

  $  

 		 

  0.66  

 		 
 
 

  $  

 		 

  0.10  

 		 
 

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

 		 

  272,892  

 		 
 
 

  271,717  

 		 
 

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

 		 

  273,981  

 		 
 
 

  272,367  

 		 
 
 

 

 
 
                                                                                                                                                                                                                                                                                                                                  
 

   OPEN TEXT CORPORATION
  CONSOLIDATED STATEMENTS OF INCOME
  (In thousands of U.S. dollars, except share and per share data)   

 
 
 
 

   Year Ended June 30,   

 
 
 

   2021   

 		 
 

   2020   

 		 
 

   2019   

 
 

  Revenues:  

 		 
 
 
 
 
 

  Cloud services and subscriptions  

 		 

  $  

 		 

  1,407,445  

 		 
 
 

  $  

 		 

  1,157,686  

 		 
 
 

  $  

 		 

  907,812  

 		 
 

  Customer support  

 		 

  1,334,062  

 		 
 
 

  1,275,586  

 		 
 
 

  1,247,915  

 		 
 

  License  

 		 

  384,711  

 		 
 
 

  402,851  

 		 
 
 

  428,092  

 		 
 

  Professional service and other  

 		 

  259,897  

 		 
 
 

  273,613  

 		 
 
 

  284,936  

 		 
 

  Total revenues  

 		 

  3,386,115  

 		 
 
 

  3,109,736  

 		 
 
 

  2,868,755  

 		 
 

  Cost of revenues:  

 		 
 
 
 
 
 

  Cloud services and subscriptions  

 		 

  481,818  

 		 
 
 

  449,940  

 		 
 
 

  383,993  

 		 
 

  Customer support  

 		 

  122,753  

 		 
 
 

  123,894  

 		 
 
 

  124,343  

 		 
 

  License  

 		 

  13,916  

 		 
 
 

  11,321  

 		 
 
 

  14,347  

 		 
 

  Professional service and other  

 		 

  197,183  

 		 
 
 

  212,903  

 		 
 
 

  224,635  

 		 
 

  Amortization of acquired technology-based intangible assets  

 		 

  218,796  

 		 
 
 

  205,717  

 		 
 
 

  183,385  

 		 
 

  Total cost of revenues  

 		 

  1,034,466  

 		 
 
 

  1,003,775  

 		 
 
 

  930,703  

 		 
 

  Gross profit  

 		 

  2,351,649  

 		 
 
 

  2,105,961  

 		 
 
 

  1,938,052  

 		 
 

  Operating expenses:  

 		 
 
 
 
 
 

  Research and development  

 		 

  421,447  

 		 
 
 

  370,411  

 		 
 
 

  321,836  

 		 
 

  Sales and marketing  

 		 

  622,221  

 		 
 
 

  585,044  

 		 
 
 

  518,035  

 		 
 

  General and administrative  

 		 

  263,521  

 		 
 
 

  237,532  

 		 
 
 

  207,909  

 		 
 

  Depreciation  

 		 

  85,265  

 		 
 
 

  89,458  

 		 
 
 

  97,716  

 		 
 

  Amortization of acquired customer-based intangible assets  

 		 

  216,544  

 		 
 
 

  219,559  

 		 
 
 

  189,827  

 		 
 

  Special charges (recoveries)  

 		 

  1,748  

 		 
 
 

  100,428  

 		 
 
 

  35,719  

 		 
 

  Total operating expenses  

 		 

  1,610,746  

 		 
 
 

  1,602,432  

 		 
 
 

  1,371,042  

 		 
 

  Income from operations  

 		 

  740,903  

 		 
 
 

  503,529  

 		 
 
 

  567,010  

 		 
 

  Other income (expense), net  

 		 

  61,434  

 		 
 
 

  (11,946)  

 		 
 
 

  10,156  

 		 
 

  Interest and other related expense, net  

 		 

  (151,567)  

 		 
 
 

  (146,378)  

 		 
 
 

  (136,592)  

 		 
 

  Income before income taxes  

 		 

  650,770  

 		 
 
 

  345,205  

 		 
 
 

  440,574  

 		 
 

  Provision for (recovery of) income taxes  

 		 

  339,906  

 		 
 
 

  110,837  

 		 
 
 

  154,937  

 		 
 

  Net income  

 		 

  $  

 		 

  310,864  

 		 
 
 

  $  

 		 

  234,368  

 		 
 
 

  $  

 		 

  285,637  

 		 
 

  Net (income) loss attributable to non-controlling interests  

 		 

  (192)  

 		 
 
 

  (143)  

 		 
 
 

  (136)  

 		 
 

  Net income attributable to OpenText  

 		 

  $  

 		 

  310,672  

 		 
 
 

  $  

 		 

  234,225  

 		 
 
 

  $  

 		 

  285,501  

 		 
 

  Earnings per share—basic attributable to OpenText  

 		 

  $  

 		 

  1.14  

 		 
 
 

  $  

 		 

  0.86  

 		 
 
 

  $  

 		 

  1.06  

 		 
 

  Earnings per share—diluted attributable to OpenText  

 		 

  $  

 		 

  1.14  

 		 
 
 

  $  

 		 

  0.86  

 		 
 
 

  $  

 		 

  1.06  

 		 
 

  Weighted average number of Common Shares outstanding—basic  

 

  (in '000's)  

 		 

  272,533  

 		 
 
 

  270,847  

 		 
 
 

  268,784  

 		 
 

  Weighted average number of Common Shares outstanding—diluted  

 

  (in '000's)  

 		 

  273,479  

 		 
 
 

  271,817  

 		 
 
 

  269,908  

 		 
 
 

 

 
 
                                                                                                                            
 

   OPEN TEXT CORPORATION
  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
  (In thousands of U.S. dollars)   

 
 
 
 

   Year Ended June 30,   

 
 
 

   2021   

 		 
 

   2020   

 		 
 

   2019   

 
 

  Net income  

 		 

  $  

 		 

  310,864  

 		 
 
 

  $  

 		 

  234,368  

 		 
 
 

  $  

 		 

  285,637  

 		 
 

  Other comprehensive income (loss)—net of tax:  

 		 
 
 
 
 
 

  Net foreign currency translation adjustments  

 		 

  42,440  

 		 
 
 

  (7,784)  

 		 
 
 

  (3,882)  

 		 
 

  Unrealized gain (loss) on cash flow hedges:  

 		 
 
 
 
 
 

  Unrealized gain (loss) - net of tax expense (recovery) effect of $1,532, ($599) and $6 for the year ended June 30, 2021, 2020 and 2019, respectively  

 		 

  4,246  

 		 
 
 

  (1,662)  

 		 
 
 

  16  

 		 
 

  (Gain) loss reclassified into net income - net of tax (expense) recovery effect of ($1,182), $355 and $539 for the year ended June 30, 2021, 2020 and 2019, respectively  

 		 

  (3,280)  

 		 
 
 

  985  

 		 
 
 

  1,494  

 		 
 

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

 		 
 
 
 
 
 

  Actuarial gain (loss) - net of tax expense (recovery) effect of $990, $1,219 and ($2,004) for the year ended June 30, 2021, 2020 and 2019, respectively  

 		 

  3,987  

 		 
 
 

  1,245  

 		 
 
 

  (7,421)  

 		 
 

  Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $379, $520 and $292 for the year ended June 30, 2021, 2020 and 2019, respectively  

 		 

  1,020  

 		 
 
 

  917  

 		 
 
 

  272  

 		 
 

  Total other comprehensive income (loss) net  

 		 

  48,413  

 		 
 
 

  (6,299)  

 		 
 
 

  (9,521)  

 		 
 

  Total comprehensive income  

 		 

  359,277  

 		 
 
 

  228,069  

 		 
 
 

  276,116  

 		 
 

  Comprehensive (income) loss attributable to non-controlling interests  

 		 

  (192)  

 		 
 
 

  (143)  

 		 
 
 

  (136)  

 		 
 

  Total comprehensive income attributable to OpenText  

 		 

  $  

 		 

  359,085  

 		 
 
 

  $  

 		 

  227,926  

 		 
 
 

  $  

 		 

  275,980  

 		 
 
 

 

 

  
 

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
 

   OPEN TEXT CORPORATION
  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
  (In thousands of U.S. dollars and shares)   

 
 
 
 

   Common Shares and
Additional Paid in Capital   

 		 
 

   Treasury Stock   

 		 
 

   Retained   

 

   Earnings   

 		 
 

   Accumulated  Other   

 

   Comprehensive   

 

   Income   

 		 
 

   Non-Controlling Interests   

 		 
 

   Total   

 
 
 

   Shares   

 		 
 

   Amount   

 		 
 

   Shares   

 		 
 

   Amount   

 		 
 

   Balance as of June 30, 2018   

 		 

   267,651   

 		 
 
 

   $   

 		 

   1,707,073   

 		 
 
 

   (691)   

 		 
 
 

   $   

 		 

   (18,732)   

 		 
 
 

   $   

 		 

   1,994,235   

 		 
 
 

   $   

 		 

   33,645   

 		 
 
 

   $   

 		 

   1,037   

 		 
 
 

   $   

 		 

   3,717,258   

 		 
 

  Issuance of Common Shares  

 		 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Under employee stock option plans  

 		 

  1,472  

 		 
 
 

  35,626  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  35,626  

 		 
 

  Under employee stock purchase plans  

 		 

  711  

 		 
 
 

  21,835  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  21,835  

 		 
 

  Share-based compensation  

 		 

  —  

 		 
 
 

  26,770  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  26,770  

 		 
 

  Purchase of treasury stock  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  (726)  

 		 
 
 

  (26,499)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (26,499)  

 		 
 

  Issuance of treasury stock  

 		 

  —  

 		 
 
 

  (16,465)  

 		 
 
 

  614  

 		 
 
 

  16,465  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 

  Dividends declared  

 

  ($0.6300 per Common Share)  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (168,859)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (168,859)  

 		 
 

  Cumulative effect of ASU 2016-16  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (26,780)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (26,780)  

 		 
 

  Cumulative effect of Topic 606  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  29,786  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  29,786  

 		 
 

  Other comprehensive income (loss) - net  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (9,521)  

 		 
 
 

  —  

 		 
 
 

  (9,521)  

 		 
 

  Non-controlling interest  

 		 

  —  

 		 
 
 

  (625)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  42  

 		 
 
 

  (583)  

 		 
 

  Net income  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  285,501  

 		 
 
 

  —  

 		 
 
 

  136  

 		 
 
 

  285,637  

 		 
 

   Balance as of June 30, 2019   

 		 

   269,834   

 		 
 
 

   $   

 		 

   1,774,214   

 		 
 
 

   (803)   

 		 
 
 

   $   

 		 

   (28,766)   

 		 
 
 

   $   

 		 

   2,113,883   

 		 
 
 

   $   

 		 

   24,124   

 		 
 
 

   $   

 		 

   1,215   

 		 
 
 

   $   

 		 

   3,884,670   

 		 
 

  Issuance of Common Shares  

 		 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Under employee stock option plans  

 		 

  1,530  

 		 
 
 

  41,282  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  41,282  

 		 
 

  Under employee stock purchase plans  

 		 

  499  

 		 
 
 

  17,757  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  17,757  

 		 
 

  Share-based compensation  

 		 

  —  

 		 
 
 

  29,532  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  29,532  

 		 
 

  Purchase of treasury stock  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  (300)  

 		 
 
 

  (12,424)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (12,424)  

 		 
 

  Issuance of treasury stock  

 		 

  —  

 		 
 
 

  (11,008)  

 		 
 
 

  481  

 		 
 
 

  17,582  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  6,574  

 		 
 

  Dividends declared  

 

  ($0.6984 per Common Share)  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (188,712)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (188,712)  

 		 
 

  Other comprehensive income (loss) - net  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (6,299)  

 		 
 
 

  —  

 		 
 
 

  (6,299)  

 		 
 

  Non-controlling interest  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (39)  

 		 
 
 

  (39)  

 		 
 

  Net income  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  234,225  

 		 
 
 

  —  

 		 
 
 

  143  

 		 
 
 

  234,368  

 		 
 

   Balance as of June 30, 2020   

 		 

   271,863   

 		 
 
 

   $   

 		 

   1,851,777   

 		 
 
 

   (622)   

 		 
 
 

   $   

 		 

   (23,608)   

 		 
 
 

   $   

 		 

   2,159,396   

 		 
 
 

   $   

 		 

   17,825   

 		 
 
 

   $   

 		 

   1,319   

 		 
 
 

   $   

 		 

   4,006,709   

 		 
 

  Adoption of ASU 2016-13 - cumulative effect, net  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (2,450)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (2,450)  

 		 
 

  Issuance of Common Shares  

 		 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Under employee stock option plans  

 		 

  1,605  

 		 
 
 

  49,565  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  49,565  

 		 
 

  Under employee stock purchase plans  

 		 

  573  

 		 
 
 

  22,307  

 		 
 
 

  193  

 		 
 
 

  6,690  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  28,997  

 		 
 

  Share-based compensation  

 		 

  —  

 		 
 
 

  51,969  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  51,969  

 		 
 

  Purchase of treasury stock  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  (1,455)  

 		 
 
 

  (64,847)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (64,847)  

 		 
 

  Issuance of treasury stock  

 		 

  —  

 		 
 
 

  (12,379)  

 		 
 
 

  316  

 		 
 
 

  12,379  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 

  Repurchase of Common Shares  

 		 

  (2,500)  

 		 
 
 

  (15,475)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (103,630)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (119,105)  

 		 
 

  Dividends declared  

 

  ($0.7770 per Common Share)  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (210,662)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  (210,662)  

 		 
 

  Other comprehensive income (loss) - net  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  48,413  

 		 
 
 

  —  

 		 
 
 

  48,413  

 		 
 

  Net income  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 
 

  310,672  

 		 
 
 

  —  

 		 
 
 

  192  

 		 
 
 

  310,864  

 		 
 

   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   

 		 
 
 

 

 
 
                                                                                                                                                                                                                                                              
 

   OPEN TEXT CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  (In thousands of U.S. dollars)
  (unaudited)   

 
 
 
 

   Three Months Ended June 30,   

 
 
 

   2021   

 		 
 

   2020   

 
 

  Cash flows from operating activities:  

 		 
 
 
 

  Net income for the period  

 		 

  $  

 		 

  181,363  

 		 
 
 

  $  

 		 

  26,423  

 		 
 

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

 		 
 
 
 

  Depreciation and amortization of intangible assets  

 		 

  126,705  

 		 
 
 

  142,366  

 		 
 

  Share-based compensation expense  

 		 

  13,350  

 		 
 
 

  8,002  

 		 
 

  Pension expense  

 		 

  1,946  

 		 
 
 

  1,479  

 		 
 

  Amortization of debt issuance costs  

 		 

  1,153  

 		 
 
 

  1,130  

 		 
 

  Accelerated amortization of right of use assets  

 		 

  —  

 		 
 
 

  36,864  

 		 
 

  Loss on sale and write down of property and equipment  

 		 

  792  

 		 
 
 

  9,714  

 		 
 

  Deferred taxes  

 		 

  (7,805)  

 		 
 
 

  14,677  

 		 
 

  Share in net (income) loss of equity investees  

 		 

  (42,877)  

 		 
 
 

  (2,225)  

 		 
 

  Changes in operating assets and liabilities:  

 		 
 
 
 

  Accounts receivable  

 		 

  (26,118)  

 		 
 
 

  (1,689)  

 		 
 

  Contract assets  

 		 

  (10,298)  

 		 
 
 

  (13,636)  

 		 
 

  Prepaid expenses and other current assets  

 		 

  40,261  

 		 
 
 

  458  

 		 
 

  Income taxes  

 		 

  (23,169)  

 		 
 
 

  (478)  

 		 
 

  Accounts payable and accrued liabilities  

 		 

  53,415  

 		 
 
 

  72,876  

 		 
 

  Deferred revenue  

 		 

  (23,305)  

 		 
 
 

  (12,974)  

 		 
 

  Other assets  

 		 

  11,149  

 		 
 
 

  (6,309)  

 		 
 

  Operating lease assets and liabilities, net  

 		 

  (373)  

 		 
 
 

  3,572  

 		 
 

  Net cash provided by operating activities  

 		 

  296,189  

 		 
 
 

  280,250  

 		 
 

  Cash flows from investing activities:  

 		 
 
 
 

  Additions of property and equipment  

 		 

  (27,408)  

 		 
 
 

  (17,704)  

 		 
 

  Purchase of Dynamic Solutions Group Inc.  

 		 

  (600)  

 		 
 
 

  —  

 		 
 

  Other investing activities  

 		 

  (2,550)  

 		 
 
 

  (2,783)  

 		 
 

  Net cash used in investing activities  

 		 

  (30,558)  

 		 
 
 

  (20,487)  

 		 
 

  Cash flows from financing activities:  

 		 
 
 
 

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

 		 

  34,287  

 		 
 
 

  13,493  

 		 
 

  Repayment of long-term debt and Revolver  

 		 

  (2,500)  

 		 
 
 

  (2,500)  

 		 
 

  Debt issuance costs  

 		 

  —  

 		 
 
 

  (3,636)  

 		 
 

  Repurchase of Common Shares  

 		 

  (119,105)  

 		 
 
 

  —  

 		 
 

  Payments of dividends to shareholders  

 		 

  (54,374)  

 		 
 
 

  (47,335)  

 		 
 

  Net cash provided by (used in) financing activities  

 		 

  (141,692)  

 		 
 
 

  (39,978)  

 		 
 

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

 		 

  7,181  

 		 
 
 

  19,882  

 		 
 

  Increase (decrease) in cash, cash equivalents and restricted cash during the period  

 		 

  131,120  

 		 
 
 

  239,667  

 		 
 

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

 		 

  1,478,680  

 		 
 
 

  1,457,596  

 		 
 

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

 		 

  $  

 		 

  1,609,800  

 		 
 
 

  $  

 		 

  1,697,263  

 		 
 
 
 
 
 

   Reconciliation of cash, cash equivalents and restricted cash:   

 		 

   June 30, 2021   

 		 
 

   June 30, 2020   

 
 

  Cash and cash equivalents  

 		 

  $  

 		 

  1,607,306  

 		 
 
 

  $  

 		 

  1,692,850  

 		 
 

  Restricted cash (1)  

 		 

  2,494  

 		 
 
 

  4,413  

 		 
 

  Total cash, cash equivalents and restricted cash  

 		 

  $  

 		 

  1,609,800  

 		 
 
 

  $  

 		 

  1,697,263  

 		 
 
 
 
  
 
 

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

 
 
 

 

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                        
 

   OPEN TEXT CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  (In thousands of U.S. dollars)   

 
 
 
 

   Year Ended June 30,   

 
 
 

   2021   

 		 
 

   2020   

 		 
 

   2019   

 
 

  Cash flows from operating activities:  

 		 
 
 
 
 
 

  Net income  

 		 

  $  

 		 

  310,864  

 		 
 
 

  $  

 		 

  234,368  

 		 
 
 

  $  

 		 

  285,637  

 		 
 

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

 		 
 
 
 
 
 

  Depreciation and amortization of intangible assets  

 		 

  520,605  

 		 
 
 

  514,734  

 		 
 
 

  470,928  

 		 
 

  Share-based compensation expense  

 		 

  51,969  

 		 
 
 

  29,532  

 		 
 
 

  26,770  

 		 
 

  Pension expense  

 		 

  6,616  

 		 
 
 

  5,802  

 		 
 
 

  4,624  

 		 
 

  Amortization of debt issuance costs  

 		 

  4,548  

 		 
 
 

  4,633  

 		 
 
 

  4,330  

 		 
 

  Accelerated amortization of right of use assets  

 		 

  —  

 		 
 
 

  36,864  

 		 
 
 

  —  

 		 
 

  Loss on extinguishment of debt  

 		 

  —  

 		 
 
 

  17,854  

 		 
 
 

  —  

 		 
 

  Loss on sale and write down of property and equipment  

 		 

  2,771  

 		 
 
 

  9,714  

 		 
 
 

  9,438  

 		 
 

  Deferred taxes  

 		 

  73,039  

 		 
 
 

  51,388  

 		 
 
 

  47,425  

 		 
 

  Share in net (income) loss of equity investees  

 		 

  (62,897)  

 		 
 
 

  (8,700)  

 		 
 
 

  (13,668)  

 		 
 

  Changes in operating assets and liabilities:  

 		 
 
 
 
 
 

  Accounts receivable  

 		 

  60,954  

 		 
 
 

  84,499  

 		 
 
 

  75,508  

 		 
 

  Contract assets  

 		 

  (39,333)  

 		 
 
 

  (40,301)  

 		 
 
 

  (37,623)  

 		 
 

  Prepaid expenses and other current assets  

 		 

  37,733  

 		 
 
 

  (6,897)  

 		 
 
 

  (819)  

 		 
 

  Income taxes  

 		 

  (140,763)  

 		 
 
 

  (35,086)  

 		 
 
 

  27,291  

 		 
 

  Accounts payable and accrued liabilities  

 		 

  26,088  

 		 
 
 

  30,613  

 		 
 
 

  (21,732)  

 		 
 

  Deferred revenue  

 		 

  39,295  

 		 
 
 

  25,306  

 		 
 
 

  (1,827)  

 		 
 

  Other assets  

 		 

  11,914  

 		 
 
 

  1,127  

 		 
 
 

  (4)  

 		 
 

  Operating lease assets and liabilities, net  

 		 

  (27,283)  

 		 
 
 

  (914)  

 		 
 
 

  —  

 		 
 

  Net cash provided by operating activities  

 		 

  876,120  

 		 
 
 

  954,536  

 		 
 
 

  876,278  

 		 
 

  Cash flows from investing activities:  

 		 
 
 
 
 
 

  Additions of property and equipment  

 		 

  (63,675)  

 		 
 
 

  (72,709)  

 		 
 
 

  (63,837)  

 		 
 

  Purchase of XMedius  

 		 

  444  

 		 
 
 

  (73,335)  

 		 
 
 

  —  

 		 
 

  Purchase of Carbonite, Inc., net of cash and restricted cash acquired  

 		 

  —  

 		 
 
 

  (1,305,097)  

 		 
 
 

  —  

 		 
 

  Purchase of Dynamic Solutions Group Inc.  

 		 

  (971)  

 		 
 
 

  (4,149)  

 		 
 
 

  —  

 		 
 

  Purchase of Catalyst Repository Systems Inc.  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  (70,800)  

 		 
 

  Purchase of Liaison Technologies, Inc.  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  (310,644)  

 		 
 

  Purchase of Guidance Software, Inc., net of cash acquired  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  (2,279)  

 		 
 

  Other investing activities  

 		 

  (4,568)  

 		 
 
 

  (14,127)  

 		 
 
 

  (16,966)  

 		 
 

  Net cash used in investing activities  

 		 

  (68,770)  

 		 
 
 

  (1,469,417)  

 		 
 
 

  (464,526)  

 		 
 

  Cash flows from financing activities:  

 		 
 
 
 
 
 

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

 		 

  80,067  

 		 
 
 

  66,600  

 		 
 
 

  57,889  

 		 
 

  Proceeds from long-term debt and Revolver  

 		 

  —  

 		 
 
 

  3,150,000  

 		 
 
 

  —  

 		 
 

  Repayment of long-term debt and Revolver  

 		 

  (610,000)  

 		 
 
 

  (1,713,631)  

 		 
 
 

  (10,000)  

 		 
 

  Debt extinguishment costs  

 		 

  —  

 		 
 
 

  (11,248)  

 		 
 
 

  —  

 		 
 

  Debt issuance costs  

 		 

  —  

 		 
 
 

  (21,806)  

 		 
 
 

  (322)  

 		 
 

  Repurchase of Common Shares  

 		 

  (119,105)  

 		 
 
 

  —  

 		 
 
 

  —  

 		 
 

  Purchase of treasury stock  

 		 

  (64,847)  

 		 
 
 

  (12,424)  

 		 
 
 

  (26,499)  

 		 
 

  Purchase of non-controlling interest  

 		 

  —  

 		 
 
 

  —  

 		 
 
 

  (583)  

 		 
 

  Payments of dividends to shareholders  

 		 

  (210,662)  

 		 
 
 

  (188,712)  

 		 
 
 

  (168,859)  

 		 
 

  Net cash provided by (used in) financing activities  

 		 

  (924,547)  

 		 
 
 

  1,268,779  

 		 
 
 

  (148,374)  

 		 
 

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

 		 

  29,734  

 		 
 
 

  (178)  

 		 
 
 

  (3,826)  

 		 
 

  Increase (decrease) in cash, cash equivalents and restricted cash during the period  

 		 

  (87,463)  

 		 
 
 

  753,720  

 		 
 
 

  259,552  

 		 
 

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

 		 

  1,697,263  

 		 
 
 

  943,543  

 		 
 
 

  683,991  

 		 
 

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

 		 

  $  

 		 

  1,609,800  

 		 
 
 

  $  

 		 

  1,697,263  

 		 
 
 

  $  

 		 

  943,543  

 		 
 
 

 

 
 
                                               
 

   OPEN TEXT CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  (In thousands of U.S. dollars)   

 
 
 

   Reconciliation of cash, cash equivalents and restricted cash:   

 		 

   June 30, 2021   

 		 
 

   June 30, 2020   

 		 
 

   June 30, 2019   

 
 

  Cash and cash equivalents  

 		 

  $  

 		 

  1,607,306  

 		 
 
 

  $  

 		 

  1,692,850  

 		 
 
 

  $  

 		 

  941,009  

 		 
 

  Restricted cash (1)  

 		 

  2,494  

 		 
 
 

  4,413  

 		 
 
 

  2,534  

 		 
 

  Total cash, cash equivalents and restricted cash  

 		 

  $  

 		 

  1,609,800  

 		 
 
 

  $  

 		 

  1,697,263  

 		 
 
 

  $  

 		 

  943,543  

 		 
 
 
 
 
 
 
 
 
 
 
 

   (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 or earnings 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, attributable to OpenText, excluding interest income (expense), provision for 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 the COVID-19 pandemic, 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 June 30, 2021    

 

    (In thousands, except for per share data)    

 
 
 

   Three Months Ended June 30, 2021   

 
 
 

   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  

 		 

  $  

 		 

  127,583  

 		 
 
 

  $  

 		 

  (935)  

 		 
 

  (1)  

 		 

  $  

 		 

  126,648  

 		 
 
 

  Customer support  

 		 

  32,938  

 		 
 
 

  (505)  

 		 
 

  (1)  

 		 

  32,433  

 		 
 
 

  Professional service and other  

 		 

  53,662  

 		 
 
 

  (698)  

 		 
 

  (1)  

 		 

  52,964  

 		 
 
 

  Amortization of acquired technology-based intangible assets  

 		 

  53,215  

 		 
 
 

  (53,215)  

 		 
 

  (2)  

 		 

  —  

 		 
 
 

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

 

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

 		 

  621,814  

 		 
 

  69.6%  

 		 

  55,353  

 		 
 

  (3)  

 		 

  677,167  

 		 
 

  75.8%  

 
 

   Operating expenses   

 		 
 
 
 
 
 
 

  Research and development  

 		 

  117,235  

 		 
 
 

  (2,664)  

 		 
 

  (1)  

 		 

  114,571  

 		 
 
 

  Sales and marketing  

 		 

  183,237  

 		 
 
 

  (4,718)  

 		 
 

  (1)  

 		 

  178,519  

 		 
 
 

  General and administrative  

 		 

  73,019  

 		 
 
 

  (3,830)  

 		 
 

  (1)  

 		 

  69,189  

 		 
 
 

  Amortization of acquired customer-based intangible assets  

 		 

  52,469  

 		 
 
 

  (52,469)  

 		 
 

  (2)  

 		 

  —  

 		 
 
 

  Special charges (recoveries)  

 		 

  3,152  

 		 
 
 

  (3,152)  

 		 
 

  (4)  

 		 

  —  

 		 
 
 

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

 		 

  171,681  

 		 
 
 

  122,186  

 		 
 

  (5)  

 		 

  293,867  

 		 
 
 

  Other income (expense), net  

 		 

  45,017  

 		 
 
 

  (45,017)  

 		 
 

  (6)  

 		 

  —  

 		 
 
 

  Provision for (recovery of) income taxes  

 		 

  (2,215)  

 		 
 
 

  38,099  

 		 
 

  (7)  

 		 

  35,884  

 		 
 
 

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

 		 

  181,283  

 		 
 
 

  39,070  

 		 
 

  (8)  

 		 

  220,353  

 		 
 
 

   GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText   

 		 

  $  

 		 

  0.66  

 		 
 
 

  $  

 		 

  0.14  

 		 
 

  (8)  

 		 

  $  

 		 

  0.80  

 		 
 
 
 
 
                                  
 
 
 

  (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 recovery rate of approximately 1% 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 June 30, 2021   

 
 
 
 

   Per share diluted   

 
 

  GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  181,283  

 		 
 

  $  

 		 

  0.66  

 		 
 

  Add:  

 		 
 
 

  Amortization  

 		 

  105,684  

 		 
 

  0.39  

 		 
 

  Share-based compensation  

 		 

  13,350  

 		 
 

  0.05  

 		 
 

  Special charges (recoveries)  

 		 

  3,152  

 		 
 

  0.01  

 		 
 

  Other (income) expense, net  

 		 

  (45,017)  

 		 
 

  (0.16)  

 		 
 

  GAAP-based provision for (recovery of) income taxes  

 		 

  (2,215)  

 		 
 

  (0.02)  

 		 
 

  Non-GAAP-based provision for income taxes  

 		 

  (35,884)  

 		 
 

  (0.13)  

 		 
 

  Non-GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  220,353  

 		 
 

  $  

 		 

  0.80  

 		 
 
 
 

 

 
 
                                              
 

   Reconciliation of Adjusted EBITDA   

 
 
 
 

   Three Months Ended June 30, 2021   

 
 

  GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  181,283  

 		 
 

  Add:  

 		 
 

  Provision for (recovery of) income taxes  

 		 

  (2,215)  

 		 
 

  Interest and other related expense, net  

 		 

  37,550  

 		 
 

  Amortization of acquired technology-based intangible assets  

 		 

  53,215  

 		 
 

  Amortization of acquired customer-based intangible assets  

 		 

  52,469  

 		 
 

  Depreciation  

 		 

  21,021  

 		 
 

  Share-based compensation  

 		 

  13,350  

 		 
 

  Special charges (recoveries)  

 		 

  3,152  

 		 
 

  Other (income) expense, net  

 		 

  (45,017)  

 		 
 

  Adjusted EBITDA  

 		 

  $  

 		 

  314,808  

 		 
 
 
 

  GAAP-based net income margin  

 		 

  20.3  

 		 

  %  

 
 

  Adjusted EBITDA margin  

 		 

  35.2  

 		 

  %  

 
 
 

 

 
 
                    
 

   Reconciliation of Free cash flows   

 
 
 
 

   Three Months Ended June 30, 2021   

 
 

  GAAP-based cash flows provided by operating activities  

 		 

  $  

 		 

  296,189  

 		 
 

  Add:  

 		 
 

  Capital expenditures (1)  

 		 

  (27,408)  

 		 
 

  Free cash flows  

 		 

  $  

 		 

  268,781  

 		 
 
 
 

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

 
 
 

 

 
 
                                                                                                                                                                                    
 

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

 

    for the year ended June 30, 2021    

 

    (In thousands, except for per share data)    

 
 
 

   Year Ended June 30, 2021   

 
 
 

   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  

 		 

  $  

 		 

  481,818  

 		 
 
 

  $  

 		 

  (3,419)  

 		 
 

  (1)  

 		 

  $  

 		 

  478,399  

 		 
 
 

  Customer support  

 		 

  122,753  

 		 
 
 

  (1,910)  

 		 
 

  (1)  

 		 

  120,843  

 		 
 
 

  Professional service and other  

 		 

  197,183  

 		 
 
 

  (2,565)  

 		 
 

  (1)  

 		 

  194,618  

 		 
 
 

  Amortization of acquired technology-based intangible assets  

 		 

  218,796  

 		 
 
 

  (218,796)  

 		 
 

  (2)  

 		 

  —  

 		 
 
 

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

 

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

 		 

  2,351,649  

 		 
 

  69.4%  

 		 

  226,690  

 		 
 

  (3)  

 		 

  2,578,339  

 		 
 

  76.1%  

 
 

   Operating expenses   

 		 
 
 
 
 
 
 

  Research and development  

 		 

  421,447  

 		 
 
 

  (9,859)  

 		 
 

  (1)  

 		 

  411,588  

 		 
 
 

  Sales and marketing  

 		 

  622,221  

 		 
 
 

  (18,312)  

 		 
 

  (1)  

 		 

  603,909  

 		 
 
 

  General and administrative  

 		 

  263,521  

 		 
 
 

  (15,904)  

 		 
 

  (1)  

 		 

  247,617  

 		 
 
 

  Amortization of acquired customer-based intangible assets  

 		 

  216,544  

 		 
 
 

  (216,544)  

 		 
 

  (2)  

 		 

  —  

 		 
 
 

  Special charges (recoveries)  

 		 

  1,748  

 		 
 
 

  (1,748)  

 		 
 

  (4)  

 		 

  —  

 		 
 
 

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

 		 

  740,903  

 		 
 
 

  489,057  

 		 
 

  (5)  

 		 

  1,229,960  

 		 
 
 

  Other income (expense), net  

 		 

  61,434  

 		 
 
 

  (61,434)  

 		 
 

  (6)  

 		 

  —  

 		 
 
 

  Provision for (recovery of) income taxes  

 		 

  339,906  

 		 
 
 

  (188,931)  

 		 
 

  (7)  

 		 

  150,975  

 		 
 
 

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

 		 

  310,672  

 		 
 
 

  616,554  

 		 
 

  (8)  

 		 

  927,226  

 		 
 
 

   GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText   

 		 

  $  

 		 

  1.14  

 		 
 
 

  $  

 		 

  2.25  

 		 
 

  (8)  

 		 

  $  

 		 

  3.39  

 		 
 
 
 
 
                                
 
 
 

  (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.  

 
 
 
 

  (7)  

 		 

  Adjustment relates to differences between the GAAP-based tax provision rate of approximately 52% 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. The GAAP-based tax provision rate for the year ended June 30, 2021 includes the income tax provision charge from the IRS settlement partially offset by a tax benefit from the release of unrecognized tax benefits due to the conclusion of relevant tax audits that was recognized during the second quarter of Fiscal 2021.  

 
 
 
 

  (8)  

 		 

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

 
 
 

 

 
 
                                                    
 
 

   Year Ended June 30, 2021   

 
 
 
 

   Per share diluted   

 
 

  GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  310,672  

 		 
 

  $  

 		 

  1.14  

 		 
 

  Add:  

 		 
 
 

  Amortization  

 		 

  435,340  

 		 
 

  1.59  

 		 
 

  Share-based compensation  

 		 

  51,969  

 		 
 

  0.19  

 		 
 

  Special charges (recoveries)  

 		 

  1,748  

 		 
 

  0.01  

 		 
 

  Other (income) expense, net  

 		 

  (61,434)  

 		 
 

  (0.22)  

 		 
 

  GAAP-based provision for (recovery of) income taxes  

 		 

  339,906  

 		 
 

  1.23  

 		 
 

  Non-GAAP-based provision for income taxes  

 		 

  (150,975)  

 		 
 

  (0.55)  

 		 
 

  Non-GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  927,226  

 		 
 

  $  

 		 

  3.39  

 		 
 
 

 

 
 
                                              
 

   Reconciliation of Adjusted EBITDA   

 
 
 
 

   Year Ended June 30, 2021   

 
 

  GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  310,672  

 		 
 

  Add:  

 		 
 

  Provision for (recovery of) income taxes  

 		 

  339,906  

 		 
 

  Interest and other related expense, net  

 		 

  151,567  

 		 
 

  Amortization of acquired technology-based intangible assets  

 		 

  218,796  

 		 
 

  Amortization of acquired customer-based intangible assets  

 		 

  216,544  

 		 
 

  Depreciation  

 		 

  85,265  

 		 
 

  Share-based compensation  

 		 

  51,969  

 		 
 

  Special charges (recoveries)  

 		 

  1,748  

 		 
 

  Other (income) expense, net  

 		 

  (61,434)  

 		 
 

  Adjusted EBITDA  

 		 

  $  

 		 

  1,315,033  

 		 
 
 
 

  GAAP-based net income margin  

 		 

  9.2  

 		 

  %  

 
 

  Adjusted EBITDA margin  

 		 

  38.8  

 		 

  %  

 
 
 

 

 
 
                   
 

   Reconciliation of Free cash flows   

 
 
 
 

   Year Ended June 30, 2021   

 
 

  GAAP-based cash flows provided by operating activities  

 		 

  $  

 		 

  876,120  

 		 
 

  Add:  

 		 
 

  Capital expenditures (1)  

 		 

  (63,675)  

 		 
 

  Free cash flows  

 		 

  $  

 		 

  812,445  

 		 
 
 
 
 
 
 
 

   (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, 2021    

 

    (In thousands, except for per share data)    

 
 
 

   Three Months Ended March 31, 2021   

 
 
 

   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  

 		 

  $  

 		 

  123,729  

 		 
 
 

  $  

 		 

  (505)  

 		 
 

  (1)  

 		 

  $  

 		 

  123,224  

 		 
 
 

  Customer support  

 		 

  30,953  

 		 
 
 

  (464)  

 		 
 

  (1)  

 		 

  30,489  

 		 
 
 

  Professional service and other  

 		 

  50,321  

 		 
 
 

  (684)  

 		 
 

  (1)  

 		 

  49,637  

 		 
 
 

  Amortization of acquired technology-based intangible assets  

 		 

  53,453  

 		 
 
 

  (53,453)  

 		 
 

  (2)  

 		 

  —  

 		 
 
 

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

 

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

 		 

  571,665  

 		 
 

  68.6%  

 		 

  55,106  

 		 
 

  (3)  

 		 

  626,771  

 		 
 

  75.2%  

 
 

   Operating expenses   

 		 
 
 
 
 
 
 

  Research and development  

 		 

  110,071  

 		 
 
 

  (2,146)  

 		 
 

  (1)  

 		 

  107,925  

 		 
 
 

  Sales and marketing  

 		 

  158,687  

 		 
 
 

  (4,580)  

 		 
 

  (1)  

 		 

  154,107  

 		 
 
 

  General and administrative  

 		 

  71,548  

 		 
 
 

  (3,978)  

 		 
 

  (1)  

 		 

  67,570  

 		 
 
 

  Amortization of acquired customer-based intangible assets  

 		 

  54,156  

 		 
 
 

  (54,156)  

 		 
 

  (2)  

 		 

  —  

 		 
 
 

  Special charges (recoveries)  

 		 

  2,846  

 		 
 
 

  (2,846)  

 		 
 

  (4)  

 		 

  —  

 		 
 
 

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

 		 

  152,396  

 		 
 
 

  122,812  

 		 
 

  (5)  

 		 

  275,208  

 		 
 
 

  Other income (expense), net  

 		 

  8,283  

 		 
 
 

  (8,283)  

 		 
 

  (6)  

 		 

  —  

 		 
 
 

  Provision for (recovery of) income taxes  

 		 

  31,818  

 		 
 
 

  1,485  

 		 
 

  (7)  

 		 

  33,303  

 		 
 
 

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

 		 

  91,490  

 		 
 
 

  113,044  

 		 
 

  (8)  

 		 

  204,534  

 		 
 
 

   GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText   

 		 

  $  

 		 

  0.33  

 		 
 
 

  $  

 		 

  0.42  

 		 
 

  (8)  

 		 

  $  

 		 

  0.75  

 		 
 
 
 
 
                                
 
 
 

  (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 26% 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, 2021   

 
 
 
 

   Per share diluted   

 
 

  GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  91,490  

 		 
 

  $  

 		 

  0.33  

 		 
 

  Add:  

 		 
 
 

  Amortization  

 		 

  107,609  

 		 
 

  0.39  

 		 
 

  Share-based compensation  

 		 

  12,357  

 		 
 

  0.05  

 		 
 

  Special charges (recoveries)  

 		 

  2,846  

 		 
 

  0.01  

 		 
 

  Other (income) expense, net  

 		 

  (8,283)  

 		 
 

  (0.03)  

 		 
 

  GAAP-based provision for (recovery of) income taxes  

 		 

  31,818  

 		 
 

  0.12  

 		 
 

  Non-GAAP-based provision for income taxes  

 		 

  (33,303)  

 		 
 

  (0.12)  

 		 
 

  Non-GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  204,534  

 		 
 

  $  

 		 

  0.75  

 		 
 
 

 

 
 
                                              
 

   Reconciliation of Adjusted EBITDA   

 
 
 
 

   Three Months Ended March 31, 2021   

 
 

  GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  91,490  

 		 
 

  Add:  

 		 
 

  Provision for (recovery of) income taxes  

 		 

  31,818  

 		 
 

  Interest and other related expense, net  

 		 

  37,333  

 		 
 

  Amortization of acquired technology-based intangible assets  

 		 

  53,453  

 		 
 

  Amortization of acquired customer-based intangible assets  

 		 

  54,156  

 		 
 

  Depreciation  

 		 

  21,961  

 		 
 

  Share-based compensation  

 		 

  12,357  

 		 
 

  Special charges (recoveries)  

 		 

  2,846  

 		 
 

  Other (income) expense, net  

 		 

  (8,283)  

 		 
 

  Adjusted EBITDA  

 		 

  $  

 		 

  297,131  

 		 
 
 
 

  GAAP-based net income margin  

 		 

  11.0  

 		 

  %  

 
 

  Adjusted EBITDA margin  

 		 

  35.7  

 		 

  %  

 
 
 

 

 
 
                   
 

   Reconciliation of Free cash flows   

 
 
 
 

   Three Months Ended March 31, 2021   

 
 

  GAAP-based cash flows provided by operating activities  

 		 

  $  

 		 

  63,572  

 		 
 

  Add:  

 		 
 

  Capital expenditures (1)  

 		 

  (13,311)  

 		 
 

  Free cash flows  

 		 

  $  

 		 

  50,261  

 		 
 
 
 
 
 
 
 

   (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, 2020    

 

    (In thousands, except for per share data)    

 
 
 

   Three Months Ended June 30, 2020   

 
 
 

   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  

 		 

  $  

 		 

  116,569  

 		 
 
 

  $  

 		 

  (490)  

 		 
 

  (1)  

 		 

  $  

 		 

  116,079  

 		 
 
 

  Customer support  

 		 

  32,568  

 		 
 
 

  (310)  

 		 
 

  (1)  

 		 

  32,258  

 		 
 
 

  Professional service and other  

 		 

  48,435  

 		 
 
 

  (377)  

 		 
 

  (1)  

 		 

  48,058  

 		 
 
 

  Amortization of acquired technology-based intangible assets  

 		 

  59,719  

 		 
 
 

  (59,719)  

 		 
 

  (2)  

 		 

  —  

 		 
 
 

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

 

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

 		 

  565,917  

 		 
 

  68.5  

 		 

  %  

 		 

  60,896  

 		 
 

  (3)  

 		 

  626,813  

 		 
 

  75.8  

 		 

  %  

 
 

   Operating expenses   

 		 
 
 
 
 
 
 

  Research and development  

 		 

  100,766  

 		 
 
 

  (1,590)  

 		 
 

  (1)  

 		 

  99,176  

 		 
 
 

  Sales and marketing  

 		 

  152,882  

 		 
 
 

  (2,575)  

 		 
 

  (1)  

 		 

  150,307  

 		 
 
 

  General and administrative  

 		 

  62,574  

 		 
 
 

  (2,660)  

 		 
 

  (1)  

 		 

  59,914  

 		 
 
 

  Amortization of acquired customer-based intangible assets  

 		 

  58,998  

 		 
 
 

  (58,998)  

 		 
 

  (2)  

 		 

  —  

 		 
 
 

  Special charges (recoveries)  

 		 

  75,849  

 		 
 
 

  (75,849)  

 		 
 

  (4)  

 		 

  —  

 		 
 
 

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

 		 

  91,199  

 		 
 
 

  202,568  

 		 
 

  (5)  

 		 

  293,767  

 		 
 
 

  Other income (expense), net  

 		 

  7,790  

 		 
 
 

  (7,790)  

 		 
 

  (6)  

 		 

  —  

 		 
 
 

  Provision for (recovery of) income taxes  

 		 

  32,037  

 		 
 
 

  3,416  

 		 
 

  (7)  

 		 

  35,453  

 		 
 
 

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

 		 

  26,392  

 		 
 
 

  191,362  

 		 
 

  (8)  

 		 

  217,754  

 		 
 
 

   GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText   

 		 

  $  

 		 

  0.10  

 		 
 
 

  $  

 		 

  0.70  

 		 
 

  (8)  

 		 

  $  

 		 

  0.80  

 		 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                
 
 
 

  (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 55% 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 June 30, 2020   

 
 
 
 

   Per share diluted   

 
 

  GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  26,392  

 		 
 

  $  

 		 

  0.10  

 		 
 

  Add:  

 		 
 
 

  Amortization  

 		 

  118,717  

 		 
 

  0.44  

 		 
 

  Share-based compensation  

 		 

  8,002  

 		 
 

  0.03  

 		 
 

  Special charges (recoveries)  

 		 

  75,849  

 		 
 

  0.28  

 		 
 

  Other (income) expense, net  

 		 

  (7,790)  

 		 
 

  (0.03)  

 		 
 

  GAAP-based provision for (recovery of) income taxes  

 		 

  32,037  

 		 
 

  0.12  

 		 
 

  Non-GAAP-based provision for income taxes  

 		 

  (35,453)  

 		 
 

  (0.14)  

 		 
 

  Non-GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  217,754  

 		 
 

  $  

 		 

  0.80  

 		 
 
 

 

 
 
                                              
 

   Reconciliation of Adjusted EBITDA   

 
 
 
 

   Three Months Ended June 30, 2020   

 
 

  GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  26,392  

 		 
 

  Add:  

 		 
 

  Provision for (recovery of) income taxes  

 		 

  32,037  

 		 
 

  Interest and other related expense, net  

 		 

  40,529  

 		 
 

  Amortization of acquired technology-based intangible assets  

 		 

  59,719  

 		 
 

  Amortization of acquired customer-based intangible assets  

 		 

  58,998  

 		 
 

  Depreciation  

 		 

  23,649  

 		 
 

  Share-based compensation  

 		 

  8,002  

 		 
 

  Special charges (recoveries)  

 		 

  75,849  

 		 
 

  Other (income) expense, net  

 		 

  (7,790)  

 		 
 

  Adjusted EBITDA  

 		 

  $  

 		 

  317,385  

 		 
 
 
 

  GAAP-based net income margin  

 		 

  3.2  

 		 

  %  

 
 

  Adjusted EBITDA margin  

 		 

  38.4  

 		 

  %  

 
 
 

 

 
 
                   
 

   Reconciliation of Free cash flows   

 
 
 
 

   Three Months Ended June 30, 2020   

 
 

  GAAP-based cash flows provided by operating activities  

 		 

  $  

 		 

  280,250  

 		 
 

  Add:  

 		 
 

  Capital expenditures (1)  

 		 

  (17,704)  

 		 
 

  Free cash flows  

 		 

  $  

 		 

  262,546  

 		 
 
 
 
 
 
 
 

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

 
 
 

 

 
 
                                                                                                                                                                                                     
 

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

 

    for the year ended June 30, 2020    

 

    (In thousands, except for per share data)    

 
 
 

   Year Ended June 30, 2020   

 
 
 

   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  

 		 

  $  

 		 

  449,940  

 		 
 
 

  $  

 		 

  (1,642)  

 		 
 

  (1)  

 		 

  $  

 		 

  448,298  

 		 
 
 

  Customer support  

 		 

  123,894  

 		 
 
 

  (1,207)  

 		 
 

  (1)  

 		 

  122,687  

 		 
 
 

  Professional service and other  

 		 

  212,903  

 		 
 
 

  (1,294)  

 		 
 

  (1)  

 		 

  211,609  

 		 
 
 

  Amortization of acquired technology-based intangible assets  

 		 

  205,717  

 		 
 
 

  (205,717)  

 		 
 

  (2)  

 		 

  —  

 		 
 
 

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

 

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

 		 

  2,105,961  

 		 
 

  67.7  

 		 

  %  

 		 

  209,860  

 		 
 

  (3)  

 		 

  2,315,821  

 		 
 

  74.5  

 		 

  %  

 
 

   Operating expenses   

 		 
 
 
 
 
 
 

  Research and development  

 		 

  370,411  

 		 
 
 

  (5,309)  

 		 
 

  (1)  

 		 

  365,102  

 		 
 
 

  Sales and marketing  

 		 

  585,044  

 		 
 
 

  (9,335)  

 		 
 

  (1)  

 		 

  575,709  

 		 
 
 

  General and administrative  

 		 

  237,532  

 		 
 
 

  (10,745)  

 		 
 

  (1)  

 		 

  226,787  

 		 
 
 

  Amortization of acquired customer-based intangible assets  

 		 

  219,559  

 		 
 
 

  (219,559)  

 		 
 

  (2)  

 		 

  —  

 		 
 
 

  Special charges (recoveries)  

 		 

  100,428  

 		 
 
 

  (100,428)  

 		 
 

  (4)  

 		 

  —  

 		 
 
 

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

 		 

  503,529  

 		 
 
 

  555,236  

 		 
 

  (5)  

 		 

  1,058,765  

 		 
 
 

  Other income (expense), net  

 		 

  (11,946)  

 		 
 
 

  11,946  

 		 
 

  (6)  

 		 

  —  

 		 
 
 

  Provision for (recovery of) income taxes  

 		 

  110,837  

 		 
 
 

  16,897  

 		 
 

  (7)  

 		 

  127,734  

 		 
 
 

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

 		 

  234,225  

 		 
 
 

  550,285  

 		 
 

  (8)  

 		 

  784,510  

 		 
 
 

   GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText   

 		 

  $  

 		 

  0.86  

 		 
 
 

  $  

 		 

  2.03  

 		 
 

  (8)  

 		 

  $  

 		 

  2.89  

 		 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                
 
 
 

  (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.  

 
 
 
 

  (7)  

 		 

  Adjustment relates to differences between the GAAP-based tax provision rate of approximately 32% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based 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:  

 
 
 

 

 
 
                                                    
 
 

   Year Ended June 30, 2020   

 
 
 
 

   Per share diluted   

 
 

  GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  234,225  

 		 
 

  $  

 		 

  0.86  

 		 
 

  Add:  

 		 
 
 

  Amortization  

 		 

  425,276  

 		 
 

  1.56  

 		 
 

  Share-based compensation  

 		 

  29,532  

 		 
 

  0.11  

 		 
 

  Special charges (recoveries)  

 		 

  100,428  

 		 
 

  0.37  

 		 
 

  Other (income) expense, net  

 		 

  11,946  

 		 
 

  0.04  

 		 
 

  GAAP-based provision for (recovery of) income taxes  

 		 

  110,837  

 		 
 

  0.41  

 		 
 

  Non-GAAP-based provision for income taxes  

 		 

  (127,734)  

 		 
 

  (0.46)  

 		 
 

  Non-GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  784,510  

 		 
 

  $  

 		 

  2.89  

 		 
 
 

 

 
 
                                              
 

   Reconciliation of Adjusted EBITDA   

 
 
 
 

   Year Ended June 30, 2020   

 
 

  GAAP-based net income, attributable to OpenText  

 		 

  $  

 		 

  234,225  

 		 
 

  Add:  

 		 
 

  Provision for (recovery of) income taxes  

 		 

  110,837  

 		 
 

  Interest and other related expense, net  

 		 

  146,378  

 		 
 

  Amortization of acquired technology-based intangible assets  

 		 

  205,717  

 		 
 

  Amortization of acquired customer-based intangible assets  

 		 

  219,559  

 		 
 

  Depreciation  

 		 

  89,458  

 		 
 

  Share-based compensation  

 		 

  29,532  

 		 
 

  Special charges (recoveries)  

 		 

  100,428  

 		 
 

  Other (income) expense, net  

 		 

  11,946  

 		 
 

  Adjusted EBITDA  

 		 

  $  

 		 

  1,148,080  

 		 
 
 
 

  GAAP-based net income margin  

 		 

  7.5  

 		 

  %  

 
 

  Adjusted EBITDA margin  

 		 

  36.9  

 		 

  %  

 
 
 

 

 
 
                   
 

   Reconciliation of Free cash flows   

 
 
 
 

   Year Ended June 30, 2020   

 
 

  GAAP-based cash flows provided by operating activities  

 		 

  $  

 		 

  954,536  

 		 
 

  Add:  

 		 
 

  Capital expenditures (1)  

 		 

  (72,709)  

 		 
 

  Free cash flows  

 		 

  $  

 		 

  881,827  

 		 
 
 
 
 
 
 
 

   (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 and year ended June 30, 2021 and 2020:  

 
 
 
 
 
 
                                                                                                                                             
 
 

   Three Months Ended June 30, 2021   

 		 
 

   Three Months Ended June 30, 2020   

 
 

   Currencies   

 		 

   % of Revenue   

 		 

   % of Expenses (1)   

 		 
 

   % of Revenue   

 		 

   % of Expenses (1)   

 
 

  EURO  

 		 

  24  

 		 

  %  

 		 

  14  

 		 

  %  

 		 
 

  22  

 		 

  %  

 		 

  13  

 		 

  %  

 
 

  GBP  

 		 

  5  

 		 

  %  

 		 

  5  

 		 

  %  

 		 
 

  4  

 		 

  %  

 		 

  5  

 		 

  %  

 
 

  CAD  

 		 

  3  

 		 

  %  

 		 

  13  

 		 

  %  

 		 
 

  3  

 		 

  %  

 		 

  8  

 		 

  %  

 
 

  USD  

 		 

  60  

 		 

  %  

 		 

  53  

 		 

  %  

 		 
 

  63  

 		 

  %  

 		 

  57  

 		 

  %  

 
 

  Other  

 		 

  8  

 		 

  %  

 		 

  15  

 		 

  %  

 		 
 

  8  

 		 

  %  

 		 

  17  

 		 

  %  

 
 

  Total  

 		 

  100  

 		 

  %  

 		 

  100  

 		 

  %  

 		 
 

  100  

 		 

  %  

 		 

  100  

 		 

  %  

 
 
 
 

   Year Ended June 30, 2021   

 		 
 

   Year Ended June 30, 2020   

 
 

   Currencies   

 		 

   % of Revenue   

 		 

   % of Expenses (1)   

 		 
 

   % of Revenue   

 		 

   % of Expenses (1)   

 
 

  EURO  

 		 

  23  

 		 

  %  

 		 

  14  

 		 

  %  

 		 
 

  22  

 		 

  %  

 		 

  14  

 		 

  %  

 
 

  GBP  

 		 

  5  

 		 

  %  

 		 

  5  

 		 

  %  

 		 
 

  5  

 		 

  %  

 		 

  6  

 		 

  %  

 
 

  CAD  

 		 

  3  

 		 

  %  

 		 

  11  

 		 

  %  

 		 
 

  3  

 		 

  %  

 		 

  9  

 		 

  %  

 
 

  USD  

 		 

  61  

 		 

  %  

 		 

  54  

 		 

  %  

 		 
 

  61  

 		 

  %  

 		 

  55  

 		 

  %  

 
 

  Other  

 		 

  8  

 		 

  %  

 		 

  16  

 		 

  %  

 		 
 

  9  

 		 

  %  

 		 

  16  

 		 

  %  

 
 

  Total  

 		 

  100  

 		 

  %  

 		 

  100  

 		 

  %  

 		 
 

  100  

 		 

  %  

 		 

  100  

 		 

  %  

 
 
 
 
    
 
 
 

   (1)  

 		 

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

 
 
 

 

 

 Cision View original content: https://www.prnewswire.com/news-releases/opentext-reports-fourth-quarter-and-fiscal-year-2021-financial-results-301349782.html  

 

SOURCE Open Text Corporation

 
 

News Provided by PR Newswire via QuoteMedia

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