OpenText Reports Second Quarter Fiscal Year 2021 Financial Results

 
 

Record Annual Recurring Revenues (ARR), Record Cloud Revenues

 

-

 

   Second Quarter Highlights   

 
 
                              
 

   Total Revenues   

 

  (in millions)  

 
 
 

   Annual Recurring Revenues   

 

  (in millions)  

 
 
 

   Cloud Revenues   

 

  (in millions)  

 
 

   Reported   

 
 

   Constant
Currency
 
 

 
 
 

   Reported   

 
 

   Constant Currency   

 
 
 

   Reported   

 
 

   Constant
Currency
 
 

 
 

  $855.6  

 
 

  $839.4  

 
 
 

  $684.9  

 
 

  $673.6  

 
 
 

  $350.5  

 
 

  $346.7  

 
 

  +10.9%  

 
 

  +8.8%  

 
 
 

  +21.5%  

 
 

  +19.5%  

 
 
 

  +41.1%  

 
 

  +39.6%  

 
 

  Annual Recurring Revenues represents 80 % of Total Revenues  

 
 
 
  • Operating Cash Flows of $282.5 million in the quarter, up 36.3% Y/Y
  •  
  • Free Cash Flows of $274.8 million in the quarter, up 46.5% Y/Y
  •  
  • GAAP-based net income (loss) of ($65.5) million , down 160.9% Y/Y, margin of (7.7)% down 2,160 basis points Y/Y, primarily due to one-time IRS settlement charge of $299 million  
  •  
  • Adjusted EBITDA of $360.8 million , up 13.8%, margin of 42.2%, up 110 basis points Y/Y
  •  
  • GAAP-based diluted earnings (loss) per share of ($0.24) , down 160.0% Y/Y
  •  
  • Non-GAAP diluted earnings per share of $0.95 , up 13.1%, and $0.92 in constant currency, up 9.5% Y/Y
  •  

Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), "The Information Company," today announced its financial results for the second quarter ended December 31, 2020.

 

"OpenText delivered another quarter of strong growth, reflecting the power of our business model and exceptional performance in all of our key metrics," said Mark J. Barrenechea , OpenText CEO & CTO. "Total revenues grew to $855.6 million , up 10.9% year-over-year, and Cloud Services and Subscriptions revenues grew to $350.5 million , up 41.1% year-over-year. Annual Recurring Revenues (ARR) grew to a record $684.9 million , up 21.5% year-over-year, now representing 80% of total revenues."

 

"Increasing demand for OpenText's Information Management cloud offerings strongly positions us to achieve market share gains through continued alignment with our customers' digital transformation and business needs," said Mr. Barrenechea.

 

"OpenText demonstrated strong operational excellence in our second quarter, generating free cash flows of $274.8 million , with a record Adjusted EBITDA of $360.8 million ", said OpenText EVP, CFO, Madhu Ranganathan .  "Our balance sheet and liquidity position of approximately $1.5 billion of cash at the end of the quarter and a 1.6x net leverage ratio, supports our goals to grow, generate cash and pursue our Total Growth strategy."

 

   Financial Highlights for Q2 Fiscal 2021 with Year Over Year Comparisons   

 
 
                                                                                                                                                                                                                                     
 

    Summary of Quarterly Results    

 
 

   (In millions, except per share data)   

 
 

   Q2 FY'21   

 
 

   Q2 FY'20   

 
 

   $ Change   

 
 

   % Change   

 

   (Y/Y)   

 
 
 

   Q2 FY'21
in CC*
 
 

 
 

   % Change
in CC*
 
 

 
 
 

   Revenues:   

 
 
 
 
 
 
 
 
 
 

  Cloud services and subscriptions  

 
 

  $350.5  

 
 
 

  $248.3  

 
 
 

  $102.1  

 
 
 

  41.1  

 
 

  %  

 
 
 

  $346.7  

 
 
 

  39.6  

 
 

  %  

 
 
 

  Customer support  

 
 

  334.5  

 
 
 

  315.5  

 
 
 

  19.0  

 
 
 

  6.0  

 
 

  %  

 
 
 

  326.9  

 
 
 

  3.6  

 
 

  %  

 
 
 

   Total annual recurring revenues**   

 
 

   $684.9   

 
 
 

   $563.8   

 
 
 

   $121.1   

 
 
 

   21.5   

 
 

   %   

 
 
 

   $673.6   

 
 
 

   19.5   

 
 

   %   

 
 
 

  License  

 
 

  107.3  

 
 
 

  138.1  

 
 
 

  (30.7)  

 
 
 

  (22.3)  

 
 

  %  

 
 
 

  104.1  

 
 
 

  (24.6)  

 
 

  %  

 
 
 

  Professional service and other  

 
 

  63.4  

 
 
 

  69.6  

 
 
 

  (6.3)  

 
 
 

  (9.0)  

 
 

  %  

 
 
 

  61.6  

 
 
 

  (11.4)  

 
 

  %  

 
 
 

   Total revenues   

 
 

   $855.6   

 
 
 

   $771.6   

 
 
 

   $84.1   

 
 
 

   10.9   

 
 

   %   

 
 
 

   $839.4   

 
 
 

   8.8   

 
 

   %   

 
 
 

  GAAP-based operating income  

 
 

  $234.5  

 
 
 

  $184.7  

 
 
 

  $49.7  

 
 
 

  26.9  

 
 

  %  

 
 
 

  N/A  

 
 
 

  N/A  

 
 
 
 

  Non-GAAP-based operating income (1)  

 
 

  $340.5  

 
 
 

  $296.4  

 
 
 

  $44.2  

 
 
 

  14.9  

 
 

  %  

 
 
 

  $330.9  

 
 
 

  11.6  

 
 

  %  

 
 
 

  GAAP-based earnings (loss) per share, diluted  

 
 

  ($0.24)  

 
 
 

  $0.40  

 
 
 

  ($0.64)  

 
 
 

  (160.0)  

 
 

  %  

 
 
 

  N/A  

 
 
 

  N/A  

 
 
 
 

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

 
 

  $0.95  

 
 
 

  $0.84  

 
 
 

  $0.11  

 
 
 

  13.1  

 
 

  %  

 
 
 

  $0.92  

 
 
 

  9.5  

 
 

  %  

 
 
 

  GAAP-based net income (loss) attributable to OpenText  

 
 

  ($65.5)  

 
 
 

  $107.5  

 
 
 

  ($172.9)  

 
 
 

  (160.9)  

 
 

  %  

 
 
 

  N/A  

 
 
 

  N/A  

 
 
 
 

  Adjusted EBITDA (1)  

 
 

  $360.8  

 
 
 

  $317.0  

 
 
 

  $43.7  

 
 
 

  13.8  

 
 

  %  

 
 
 

  $351.0  

 
 
 

  10.7  

 
 

  %  

 
 
 

  Operating cash flows  

 
 

  $282.5  

 
 
 

  $207.2  

 
 
 

  $75.2  

 
 
 

  36.3  

 
 

  %  

 
 
 

  N/A  

 
 
 

  N/A  

 
 
 
 

  Free cash flows (1)  

 
 

  $274.8  

 
 
 

  $187.6  

 
 
 

  $87.2  

 
 
 

  46.5  

 
 

  %  

 
 
 

  N/A  

 
 
 

  N/A  

 
 
 
 
 

 

 
 
                                                                                                                                                                                                                                     
 

    Summary of YTD Results    

 
 

   (In millions, except per share data)   

 
 

   FY'21 YTD   

 
 

   FY'20 YTD   

 
 

   $ Change   

 
 

   % Change   

 

   (Y/Y)   

 
 
 

   FY'21 YTD
in CC*
 
 

 
 

   % Change
in CC*
 
 

 
 
 

   Revenues:   

 
 
 
 
 
 
 
 
 
 

  Cloud services and subscriptions  

 
 

  $691.4  

 
 
 

  $485.6  

 
 
 

  $205.8  

 
 
 

  42.4  

 
 

  %  

 
 
 

  $686.9  

 
 
 

  41.5  

 
 

  %  

 
 
 

  Customer support  

 
 

  663.9  

 
 
 

  627.8  

 
 
 

  36.1  

 
 
 

  5.7  

 
 

  %  

 
 
 

  654.0  

 
 
 

  4.2  

 
 

  %  

 
 
 

   Total annual recurring revenues**   

 
 

   $1,355.3   

 
 
 

   $1,113.4   

 
 
 

   $241.9   

 
 
 

   21.7   

 
 

   %   

 
 
 

   $1,341.0   

 
 
 

   20.4   

 
 

   %   

 
 
 

  License  

 
 

  175.9  

 
 
 

  216.0  

 
 
 

  (40.1)  

 
 
 

  (18.6)  

 
 

  %  

 
 
 

  171.3  

 
 
 

  (20.7)  

 
 

  %  

 
 
 

  Professional service and other  

 
 

  128.5  

 
 
 

  139.0  

 
 
 

  (10.6)  

 
 
 

  (7.6)  

 
 

  %  

 
 
 

  125.2  

 
 
 

  (10.0)  

 
 

  %  

 
 
 

   Total revenues   

 
 

   $1,659.7   

 
 
 

   $1,468.4   

 
 
 

   $191.2   

 
 
 

   13.0   

 
 

   %   

 
 
 

   $1,637.4   

 
 
 

   11.5   

 
 

   %   

 
 
 

  GAAP-based operating income  

 
 

  $416.8  

 
 
 

  $317.3  

 
 
 

  $99.6  

 
 
 

  31.4  

 
 

  %  

 
 
 

  N/A  

 
 
 

  N/A  

 
 
 
 

  Non-GAAP-based operating income (1)  

 
 

  $660.9  

 
 
 

  $530.3  

 
 
 

  $130.6  

 
 
 

  24.6  

 
 

  %  

 
 
 

  $644.8  

 
 
 

  21.6  

 
 

  %  

 
 
 

  GAAP-based EPS, diluted  

 
 

  $0.14  

 
 
 

  $0.67  

 
 
 

  ($0.53)  

 
 
 

  (79.1)  

 
 

  %  

 
 
 

  N/A  

 
 
 

  N/A  

 
 
 
 

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

 
 

  $1.84  

 
 
 

  $1.48  

 
 
 

  $0.36  

 
 
 

  24.3  

 
 

  %  

 
 
 

  $1.79  

 
 
 

  20.9  

 
 

  %  

 
 
 

  GAAP-based net income attributable to OpenText  

 
 

  $37.9  

 
 
 

  $181.9  

 
 
 

  ($144.0)  

 
 
 

  (79.2)  

 
 

  %  

 
 
 

  N/A  

 
 
 

  N/A  

 
 
 
 

  Adjusted EBITDA (1)  

 
 

  $703.1  

 
 
 

  $571.2  

 
 
 

  $131.9  

 
 
 

  23.1  

 
 

  %  

 
 
 

  $686.7  

 
 
 

  20.2  

 
 

  %  

 
 
 

  Operating cash flows  

 
 

  $516.4  

 
 
 

  $344.7  

 
 
 

  $171.7  

 
 
 

  49.8  

 
 

  %  

 
 
 

  N/A  

 
 
 

  N/A  

 
 
 
 

  Free cash flows (1)  

 
 

  $493.4  

 
 
 

  $306.5  

 
 
 

  $186.9  

 
 
 

  61.0  

 
 

  %  

 
 
 

  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 Program   

 

As part of our quarterly, non-cumulative cash dividend program, the Board declared on February 3, 2021 a cash dividend of $0.2008 per common share. The record date for this dividend is March 5, 2021 and the payment date is March 26, 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.

 

   Quarterly Business Highlights   

 
  • Key customer wins in the quarter included Auto Club Group, Autoriteit Persoonsgegevens, City of San Diego , UK Department for Work and Pensions, Evonik Industries AG, Froneri, Heraeus, McCain Foods, MedPro Group, Nestlé, Norwegian Labour and Welfare Administration, Region Skane, Revo Health, SaskPower
  •  
  • OpenText Launches BrightCloud® Cloud Service Intelligence
  •  
  • OpenText named a leader in 2020 Gartner Magic Quadrant for Content Services Platforms
  •  
  • Launched OpenText™ Cloud Editions 20.4, designed to help customers get to the cloud, accelerate digital transformation, and rethink the future of work
  •  
  • OpenText brings Digital Investigation to the Cloud with Microsoft Azure
  •  
  • OpenText announced $1M USD donation to support food security
  •  
 
                                                                                 
 

    Summary of Quarterly Results    

 
 
 
 
 
 
 
 
 
 

   Q2 FY'21   

 
 

   Q1 FY'21   

 
 

   Q2 FY'20   

 
 

   % Change   

 

   (Q2 FY'21 vs
Q1 FY'21)
 
 

 
 
 

   % Change   

 

   (Q2 FY'21 vs
Q2 FY'20)
 
 

 
 
 

  Revenue (millions)  

 
 

  $855.6  

 
 
 

  $804.0  

 
 
 

  $771.6  

 
 
 

  6.4  

 
 

  %  

 
 
 

  10.9  

 
 

  %  

 
 
 

  GAAP-based gross margin  

 
 

  70.5  

 
 

  %  

 
 

  69.0  

 
 

  %  

 
 

  69.9  

 
 

  %  

 
 

  150  

 
 
 

  bps  

 
 

  60  

 
 
 

  bps  

 
 

  GAAP-based earnings (loss) per share, diluted  

 
 

  ($0.24)  

 
 
 

  $0.38  

 
 
 

  $0.40  

 
 
 

  (163.2)  

 
 

  %  

 
 
 

  (160.0)  

 
 

  %  

 
 
 

  Non-GAAP-based gross margin (1)  

 
 

  77.1  

 
 

  %  

 
 

  76.5  

 
 

  %  

 
 

  75.5  

 
 

  %  

 
 

  60  

 
 
 

  bps  

 
 

  160  

 
 
 

  bps  

 
 

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

 
 

  $0.95  

 
 
 

  $0.89  

 
 
 

  $0.84  

 
 
 

  6.7  

 
 

  %  

 
 
 

  13.1  

 
 

  %  

 
 
 
 
 
    
 

   ( 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 February 4, 2021 at 7:00 p.m. ET through 11:59 p.m. on February 18, 2021 and can be accessed by dialing 1-855-669-9658 (toll-free) or +1-604-674-8052 (international) and using passcode 5838 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, on-premises or in the cloud. 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, 2021 (Fiscal 2021) on growth, future cloud growth and market share gains, generating substantial long-term value for shareholders, the financial and operational impact of the COVID-19 pandemic, anticipated benefits of our partnerships and next generation product lines, the strength of our operating framework and balance sheet flexibility, continued investments in product innovation, go-to-market and strategic acquisitions, M&A continuing to be our leading growth contributor, our capital allocation strategy, creating value through investments in broader Information Management capabilities, the Company's presence in the cloud and in growth markets, expected growth in our revenue lines, total growth from acquisitions, innovation and organic initiatives, the focus on recurring revenues, improving operational efficiency, expanding cash flow and strengthening the business, adjusted operating income and cash flow, its financial condition, the adjusted operating margin target range, results of operations and earnings, announced acquisitions, ongoing tax matters, the integration of the acquired businesses, 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 2021 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   

 
 

   CONDENSED CONSOLIDATED BALANCE SHEETS   

 
 

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

 
 
 
 

   December 31, 2020   

 
 
 

   June 30, 2020   

 
 

   ASSETS   

 
 

   (unaudited)   

 
 
 
 

  Cash and cash equivalents  

 
 

  $  

 
 

  1,500,561  

 
 
 
 

  $  

 
 

  1,692,850  

 
 
 

  Accounts receivable trade, net of allowance for credit losses of $22,845 as of December 31, 2020 and $20,906 as of June 30, 2020  

 
 

  445,841  

 
 
 
 

  466,357  

 
 
 

  Contract assets  

 
 

  27,460  

 
 
 
 

  29,570  

 
 
 

  Income taxes recoverable  

 
 

  24,517  

 
 
 
 

  61,186  

 
 
 

  Prepaid expenses and other current assets  

 
 

  130,177  

 
 
 
 

  136,436  

 
 
 

  Total current assets  

 
 

  2,128,556  

 
 
 
 

  2,386,399  

 
 
 

  Property and equipment  

 
 

  227,434  

 
 
 
 

  244,555  

 
 
 

  Operating lease right of use assets  

 
 

  235,142  

 
 
 
 

  207,869  

 
 
 

  Long-term contract assets  

 
 

  18,175  

 
 
 
 

  15,427  

 
 
 

  Goodwill  

 
 

  4,696,349  

 
 
 
 

  4,672,356  

 
 
 

  Acquired intangible assets  

 
 

  1,402,928  

 
 
 
 

  1,612,564  

 
 
 

  Deferred tax assets  

 
 

  866,788  

 
 
 
 

  911,565  

 
 
 

  Other assets  

 
 

  164,238  

 
 
 
 

  154,467  

 
 
 

  Long-term income taxes recoverable  

 
 

  29,488  

 
 
 
 

  29,620  

 
 
 

   Total assets   

 
 

  $  

 
 

  9,769,098  

 
 
 
 

  $  

 
 

  10,234,822  

 
 
 

   LIABILITIES AND SHAREHOLDERS' EQUITY   

 
 
 
 
 

  Current liabilities:  

 
 
 
 
 

  Accounts payable and accrued liabilities  

 
 

  $  

 
 

  348,080  

 
 
 
 

  $  

 
 

  373,314  

 
 
 

  Current portion of long-term debt  

 
 

  10,000  

 
 
 
 

  610,000  

 
 
 

  Operating lease liabilities  

 
 

  59,874  

 
 
 
 

  64,071  

 
 
 

  Deferred revenues  

 
 

  798,340  

 
 
 
 

  812,218  

 
 
 

  Income taxes payable  

 
 

  320,084  

 
 
 
 

  44,630  

 
 
 

  Total current liabilities  

 
 

  1,536,378  

 
 
 
 

  1,904,233  

 
 
 

  Long-term liabilities:  

 
 
 
 
 

  Accrued liabilities  

 
 

  28,334  

 
 
 
 

  34,955  

 
 
 

  Pension liability  

 
 

  83,271  

 
 
 
 

  73,129  

 
 
 

  Long-term debt  

 
 

  3,581,565  

 
 
 
 

  3,584,311  

 
 
 

  Long-term operating lease liabilities  

 
 

  227,265  

 
 
 
 

  217,165  

 
 
 

  Long-term deferred revenues  

 
 

  97,083  

 
 
 
 

  94,382  

 
 
 

  Long-term income taxes payable  

 
 

  32,794  

 
 
 
 

  171,200  

 
 
 

  Deferred tax liabilities  

 
 

  179,161  

 
 
 
 

  148,738  

 
 
 

  Total long-term liabilities  

 
 

  4,229,473  

 
 
 
 

  4,323,880  

 
 
 

  Shareholders' equity:  

 
 
 
 
 

  Share capital and additional paid-in capital  

 
 
 
 
 

  272,588,542 and 271,863,354 Common Shares issued and outstanding at December 31, 2020 and June 30, 2020, respectively; authorized Common Shares: unlimited  

 
 

  1,889,857  

 
 
 
 

  1,851,777  

 
 
 

  Accumulated other comprehensive income  

 
 

  66,476  

 
 
 
 

  17,825  

 
 
 

  Retained earnings  

 
 

  2,093,076  

 
 
 
 

  2,159,396  

 
 
 

  Treasury stock, at cost (1,101,370 and 622,297 shares at December 31, 2020 and June 30, 2020, respectively)  

 
 

  (47,555)  

 
 
 
 

  (23,608)  

 
 
 

  Total OpenText shareholders' equity  

 
 

  4,001,854  

 
 
 
 

  4,005,390  

 
 
 

  Non-controlling interests  

 
 

  1,393  

 
 
 
 

  1,319  

 
 
 

  Total shareholders' equity  

 
 

  4,003,247  

 
 
 
 

  4,006,709  

 
 
 

   Total liabilities and shareholders' equity   

 
 

  $  

 
 

  9,769,098  

 
 
 
 

  $  

 
 

  10,234,822  

 
 
 
 

 

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 

   OPEN TEXT CORPORATION   

 
 

   CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)   

 
 

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

 
 

   (unaudited)   

 
 
 
 

   Three Months Ended December 31,   

 
 
 

   Six Months Ended December 31,   

 
 
 

   2020   

 
 
 

   2019   

 
 
 

   2020   

 
 
 

   2019   

 
 

  Revenues:  

 
 
 
 
 
 
 
 
 

  Cloud services and subscriptions  

 
 

  $  

 
 

  350,454  

 
 
 
 

  $  

 
 

  248,340  

 
 
 
 

  $  

 
 

  691,440  

 
 
 
 

  $  

 
 

  485,605  

 
 
 

  Customer support  

 
 

  334,492  

 
 
 
 

  315,508  

 
 
 
 

  663,891  

 
 
 
 

  627,806  

 
 
 

  License  

 
 

  107,348  

 
 
 
 

  138,095  

 
 
 
 

  175,871  

 
 
 
 

  215,993  

 
 
 

  Professional service and other  

 
 

  63,350  

 
 
 
 

  69,614  

 
 
 
 

  128,455  

 
 
 
 

  139,041  

 
 
 

  Total revenues  

 
 

  855,644  

 
 
 
 

  771,557  

 
 
 
 

  1,659,657  

 
 
 
 

  1,468,445  

 
 
 

  Cost of revenues:  

 
 
 
 
 
 
 
 
 

  Cloud services and subscriptions  

 
 

  117,882  

 
 
 
 

  103,644  

 
 
 
 

  230,506  

 
 
 
 

  205,806  

 
 
 

  Customer support  

 
 

  29,668  

 
 
 
 

  29,788  

 
 
 
 

  58,862  

 
 
 
 

  59,175  

 
 
 

  License  

 
 

  4,302  

 
 
 
 

  3,050  

 
 
 
 

  6,791  

 
 
 
 

  5,373  

 
 
 

  Professional service and other  

 
 

  46,619  

 
 
 
 

  53,604  

 
 
 
 

  93,200  

 
 
 
 

  107,942  

 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  54,091  

 
 
 
 

  42,299  

 
 
 
 

  112,128  

 
 
 
 

  82,597  

 
 
 

  Total cost of revenues  

 
 

  252,562  

 
 
 
 

  232,385  

 
 
 
 

  501,487  

 
 
 
 

  460,893  

 
 
 

  Gross profit  

 
 

  603,082  

 
 
 
 

  539,172  

 
 
 
 

  1,158,170  

 
 
 
 

  1,007,552  

 
 
 

  Operating expenses:  

 
 
 
 
 
 
 
 
 

  Research and development  

 
 

  100,238  

 
 
 
 

  80,283  

 
 
 
 

  194,141  

 
 
 
 

  161,461  

 
 
 

  Sales and marketing  

 
 

  147,897  

 
 
 
 

  137,310  

 
 
 
 

  280,297  

 
 
 
 

  265,928  

 
 
 

  General and administrative  

 
 

  62,765  

 
 
 
 

  54,595  

 
 
 
 

  118,954  

 
 
 
 

  106,130  

 
 
 

  Depreciation  

 
 

  20,280  

 
 
 
 

  20,712  

 
 
 
 

  42,283  

 
 
 
 

  40,989  

 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  54,926  

 
 
 
 

  51,460  

 
 
 
 

  109,919  

 
 
 
 

  100,618  

 
 
 

  Special charges (recoveries)  

 
 

  (17,494)  

 
 
 
 

  10,072  

 
 
 
 

  (4,250)  

 
 
 
 

  15,173  

 
 
 

  Total operating expenses  

 
 

  368,612  

 
 
 
 

  354,432  

 
 
 
 

  741,344  

 
 
 
 

  690,299  

 
 
 

  Income from operations  

 
 

  234,470  

 
 
 
 

  184,740  

 
 
 
 

  416,826  

 
 
 
 

  317,253  

 
 
 

  Other income (expense), net  

 
 

  5,251  

 
 
 
 

  1,972  

 
 
 
 

  8,134  

 
 
 
 

  (813)  

 
 
 

  Interest and other related expense, net  

 
 

  (37,595)  

 
 
 
 

  (32,376)  

 
 
 
 

  (76,684)  

 
 
 
 

  (64,586)  

 
 
 

  Income before income taxes  

 
 

  202,126  

 
 
 
 

  154,336  

 
 
 
 

  348,276  

 
 
 
 

  251,854  

 
 
 

  Provision for (recovery of) income taxes  

 
 

  267,559  

 
 
 
 

  46,818  

 
 
 
 

  310,303  

 
 
 
 

  69,909  

 
 
 

  Net income (loss) for the period  

 
 

  $  

 
 

  (65,433)  

 
 
 
 

  $  

 
 

  107,518  

 
 
 
 

  $  

 
 

  37,973  

 
 
 
 

  $  

 
 

  181,945  

 
 
 

  Net (income) loss attributable to non-controlling interests  

 
 

  (44)  

 
 
 
 

  (51)  

 
 
 
 

  (74)  

 
 
 
 

  (77)  

 
 
 

  Net income (loss) attributable to OpenText  

 
 

  $  

 
 

  (65,477)  

 
 
 
 

  $  

 
 

  107,467  

 
 
 
 

  $  

 
 

  37,899  

 
 
 
 

  $  

 
 

  181,868  

 
 
 

  Earnings (loss) per share—basic attributable to OpenText  

 
 

  $  

 
 

  (0.24)  

 
 
 
 

  $  

 
 

  0.40  

 
 
 
 

  $  

 
 

  0.14  

 
 
 
 

  $  

 
 

  0.67  

 
 
 

  Earnings (loss) per share—diluted attributable to OpenText  

 
 

  $  

 
 

  (0.24)  

 
 
 
 

  $  

 
 

  0.40  

 
 
 
 

  $  

 
 

  0.14  

 
 
 
 

  $  

 
 

  0.67  

 
 
 

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

 
 

  272,433  

 
 
 
 

  270,450  

 
 
 
 

  272,210  

 
 
 
 

  270,232  

 
 
 

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

 
 

  272,433  

 
 
 
 

  271,590  

 
 
 
 

  273,019  

 
 
 
 

  271,328  

 
 
 
 

 

 
 
                                                                                                                                                                         
 

   OPEN TEXT CORPORATION   

 
 

   CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)   

 
 

   (In thousands of U.S. dollars)   

 
 

   (unaudited)   

 
 
 
 

   Three Months Ended December 31,   

 
 
 

   Six Months Ended December 31,   

 
 
 

   2020   

 
 
 

   2019   

 
 
 

   2020   

 
 
 

   2019   

 
 

  Net income (loss) for the period  

 
 

  $  

 
 

  (65,433)  

 
 
 
 

  $  

 
 

  107,518  

 
 
 
 

  $  

 
 

  37,973  

 
 
 
 

  $  

 
 

  181,945  

 
 
 

  Other comprehensive income (loss)—net of tax:  

 
 
 
 
 
 
 
 
 

  Net foreign currency translation adjustments  

 
 

  26,065  

 
 
 
 

  4,875  

 
 
 
 

  48,710  

 
 
 
 

  (736)  

 
 
 

  Unrealized gain (loss) on cash flow hedges:  

 
 
 
 
 
 
 
 
 

  Unrealized gain (loss) - net of tax expense (recovery) effect of $751 and $301 for the three months ended December 31, 2020 and 2019, respectively; $1,056 and $95 for the six months ended December 31, 2020 and 2019, respectively  

 
 

  2,082  

 
 
 
 

  833  

 
 
 
 

  2,927  

 
 
 
 

  261  

 
 
 

  (Gain) loss reclassified into net income (loss) - net of tax (expense) recovery effect of ($227) and ($26) for the three months ended December 31, 2020 and 2019, respectively; ($283) and ($23) for the six months ended December 31, 2020 and 2019, respectively  

 
 

  (628)  

 
 
 
 

  (72)  

 
 
 
 

  (784)  

 
 
 
 

  (64)  

 
 
 

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

 
 
 
 
 
 
 
 
 

  Actuarial gain (loss) - net of tax expense (recovery) effect of ($441) and $1,308 for the three months ended December 31, 2020 and 2019, respectively; ($1,357) and $59 for the six months ended December 31, 2020 and 2019, respectively  

 
 

  (981)  

 
 
 
 

  3,698  

 
 
 
 

  (2,686)  

 
 
 
 

  614  

 
 
 

  Amortization of actuarial (gain) loss into net income (loss) - net of tax (expense) recovery effect of $93 and $97 for the three months ended December 31, 2020 and 2019, respectively; $180 and $243 for the six months ended December 31, 2020 and 2019, respectively  

 
 

  243  

 
 
 
 

  260  

 
 
 
 

  484  

 
 
 
 

  491  

 
 
 

  Total other comprehensive income (loss) net, for the period  

 
 

  26,781  

 
 
 
 

  9,594  

 
 
 
 

  48,651  

 
 
 
 

  566  

 
 
 

  Total comprehensive income (loss)  

 
 

  (38,652)  

 
 
 
 

  117,112  

 
 
 
 

  86,624  

 
 
 
 

  182,511  

 
 
 

  Comprehensive (income) loss attributable to non-controlling interests  

 
 

  (44)  

 
 
 
 

  (51)  

 
 
 
 

  (74)  

 
 
 
 

  (77)  

 
 
 

  Total comprehensive income (loss) attributable to OpenText  

 
 

  $  

 
 

  (38,696)  

 
 
 
 

  $  

 
 

  117,061  

 
 
 
 

  $  

 
 

  86,550  

 
 
 
 

  $  

 
 

  182,434  

 
 
 
 

 

 
 
                                                                                                                                                                                                                                                                                
 

   OPEN TEXT CORPORATION   

 
 

   CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY   

 
 

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

 
 

   (unaudited)   

 
 
 
 

   Three Months Ended December 31, 2020   

 
 
 

   Common Shares and
Additional Paid in Capital
 
 

 
 
 

   Treasury Stock   

 
 
 

   Retained   

 

   Earnings   

 
 
 

   Accumulated Other   

 

   Comprehensive   

 

   Income   

 
 
 

   Non-
Controlling
Interests
 
 

 
 
 

   Total   

 
 
 

   Shares   

 
 
 

   Amount   

 
 
 

   Shares   

 
 
 

   Amount   

 
 
 

   Balance as of September 30, 2020   

 
 

   272,174   

 
 
 
 

   $   

 
 

   1,872,411   

 
 
 
 

   (1,394)   

 
 
 
 

   $   

 
 

   (58,788)   

 
 
 
 

   $   

 
 

   2,213,053   

 
 
 
 

   $   

 
 

   39,695   

 
 
 
 

   $   

 
 

   1,349   

 
 
 
 

   $   

 
 

   4,067,720   

 
 
 

  Issuance of Common Shares  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Under employee stock option plans  

 
 

  213  

 
 
 
 

  6,893  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  6,893  

 
 
 

  Under employee stock purchase plans  

 
 

  202  

 
 
 
 

  7,260  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  7,260  

 
 
 

  Share-based compensation  

 
 

  

 
 
 
 

  14,526  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  14,526  

 
 
 

  Issuance of treasury stock  

 
 

  

 
 
 
 

  (11,233)  

 
 
 
 

  293  

 
 
 
 

  11,233  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 

  Dividends declared  

 

  ($0.2008 per Common Share)  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (54,500)  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (54,500)  

 
 
 

  Other comprehensive income - net  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  26,781  

 
 
 
 

  

 
 
 
 

  26,781  

 
 
 

  Net income (loss) for the quarter  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (65,477)  

 
 
 
 

  

 
 
 
 

  44  

 
 
 
 

  (65,433)  

 
 
 

   Balance as of December 31, 2020   

 
 

   272,589   

 
 
 
 

   $   

 
 

   1,889,857   

 
 
 
 

   (1,101)   

 
 
 
 

   $   

 
 

   (47,555)   

 
 
 
 

   $   

 
 

   2,093,076   

 
 
 
 

   $   

 
 

   66,476   

 
 
 
 

   $   

 
 

   1,393   

 
 
 
 

   $   

 
 

   4,003,247   

 
 
 
 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
 
 
 
 
 
 

   Three Months Ended December 31, 2019   

 
 
 

   Common Shares and
Additional Paid in Capital
 
 

 
 
 

   Treasury Stock   

 
 
 

   Retained   

 

   Earnings   

 
 
 

   Accumulated Other   

 

   Comprehensive   

 

   Income   

 
 
 

   Non-
Controlling
Interests
 
 

 
 
 

   Total   

 
 
 

   Shares   

 
 
 

   Amount   

 
 
 

   Shares   

 
 
 

   Amount   

 
 
 

   Balance as of September 30, 2019   

 
 

   270,190   

 
 
 
 

   $   

 
 

   1,791,689   

 
 
 
 

   (1,103)   

 
 
 
 

   $   

 
 

   (41,190)   

 
 
 
 

   $   

 
 

   2,141,278   

 
 
 
 

   $   

 
 

   15,096   

 
 
 
 

   $   

 
 

   1,241   

 
 
 
 

   $   

 
 

   3,908,114   

 
 
 

  Issuance of Common Shares  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Under employee stock option plans  

 
 

  231  

 
 
 
 

  6,783  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  6,783  

 
 
 

  Under employee stock purchase plans  

 
 

  188  

 
 
 
 

  6,532  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  6,532  

 
 
 

  Share-based compensation  

 
 

  

 
 
 
 

  7,783  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  7,783  

 
 
 

  Issuance of treasury stock  

 
 

  

 
 
 
 

  (9,124)  

 
 
 
 

  256  

 
 
 
 

  9,124  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 

  Dividends declared  

 

  ($0.1746 per Common Share)  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (47,092)  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (47,092)  

 
 
 

  Other comprehensive income - net  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  9,594  

 
 
 
 

  

 
 
 
 

  9,594  

 
 
 

  Net income for the quarter  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  107,467  

 
 
 
 

  

 
 
 
 

  51  

 
 
 
 

  107,518  

 
 
 

   Balance as of December 31, 2019   

 
 

   270,609   

 
 
 
 

   $   

 
 

   1,803,663   

 
 
 
 

   (847)   

 
 
 
 

   $   

 
 

   (32,066)   

 
 
 
 

   $   

 
 

   2,201,653   

 
 
 
 

   $   

 
 

   24,690   

 
 
 
 

   $   

 
 

   1,292   

 
 
 
 

   $   

 
 

   3,999,232   

 
 
 
 
 
 
 
 

   Six Months Ended December 31, 2020   

 
 
 

   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, 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  

 
 

  524  

 
 
 
 

  15,498  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  15,498  

 
 
 

  Under employee stock purchase plans  

 
 

  202  

 
 
 
 

  7,553  

 
 
 
 

  193  

 
 
 
 

  6,690  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  14,243  

 
 
 

  Share-based compensation  

 
 

  

 
 
 
 

  26,262  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  26,262  

 
 
 

  Purchase of treasury stock  

 
 

  

 
 
 
 

  

 
 
 
 

  (965)  

 
 
 
 

  (41,870)  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (41,870)  

 
 
 

  Issuance of treasury stock  

 
 

  

 
 
 
 

  (11,233)  

 
 
 
 

  293  

 
 
 
 

  11,233  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 

  Dividends declared  

 

  ($0.3754 per Common Share)  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (101,769)  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (101,769)  

 
 
 

  Other comprehensive income - net  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  48,651  

 
 
 
 

  

 
 
 
 

  48,651  

 
 
 

  Net income for the period  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  37,899  

 
 
 
 

  

 
 
 
 

  74  

 
 
 
 

  37,973  

 
 
 

   Balance as of December 31, 2020   

 
 

   272,589   

 
 
 
 

   $   

 
 

   1,889,857   

 
 
 
 

   (1,101)   

 
 
 
 

   $   

 
 

   (47,555)   

 
 
 
 

   $   

 
 

   2,093,076   

 
 
 
 

   $   

 
 

   66,476   

 
 
 
 

   $   

 
 

   1,393   

 
 
 
 

   $   

 
 

   4,003,247   

 
 
 
 
 
 
 
 

   Six Months Ended December 31, 2019   

 
 
 

   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, 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  

 
 

  415  

 
 
 
 

  11,359  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  11,359  

 
 
 

  Under employee stock purchase plans  

 
 

  360  

 
 
 
 

  12,540  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  12,540  

 
 
 

  Share-based compensation  

 
 

  

 
 
 
 

  14,674  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  14,674  

 
 
 

  Purchase of treasury stock  

 
 

  

 
 
 
 

  

 
 
 
 

  (300)  

 
 
 
 

  (12,424)  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (12,424)  

 
 
 

  Issuance of treasury stock  

 
 

  

 
 
 
 

  (9,124)  

 
 
 
 

  256  

 
 
 
 

  9,124  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 

  Dividends declared  

 

  ($0.3492 per Common Share)  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (94,098)  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  (94,098)  

 
 
 

  Other comprehensive income - net  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  566  

 
 
 
 

  

 
 
 
 

  566  

 
 
 

  Net income for the period  

 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  

 
 
 
 

  181,868  

 
 
 
 

  

 
 
 
 

  77  

 
 
 
 

  181,945  

 
 
 

   Balance as of December 31, 2019   

 
 

   270,609   

 
 
 
 

   $   

 
 

   1,803,663   

 
 
 
 

   (847)   

 
 
 
 

   $   

 
 

   (32,066)   

 
 
 
 

   $   

 
 

   2,201,653   

 
 
 
 

   $   

 
 

   24,690   

 
 
 
 

   $   

 
 

   1,292   

 
 
 
 

   $   

 
 

   3,999,232   

 
 
 
 

 

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
 

   OPEN TEXT CORPORATION   

 
 

   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS   

 
 

   (In thousands of U.S. dollars)   

 
 

   (unaudited)   

 
 
 
 

   Three Months Ended December 31,   

 
 
 

   Six Months Ended December 31,   

 
 
 

   2020   

 
 
 

   2019   

 
 
 

   2020   

 
 
 

   2019   

 
 

  Cash flows from operating activities:  

 
 
 
 
 
 
 
 
 

  Net income (loss) for the period  

 
 

  $  

 
 

  (65,433)  

 
 
 
 

  $  

 
 

  107,518  

 
 
 
 

  $  

 
 

  37,973  

 
 
 
 

  $  

 
 

  181,945  

 
 
 

  Adjustments to reconcile net income (loss) to net cash provided by operating activities:  

 
 
 
 
 
 
 
 
 

  Depreciation and amortization of intangible assets  

 
 

  129,297  

 
 
 
 

  114,471  

 
 
 
 

  264,330  

 
 
 
 

  224,204  

 
 
 

  Share-based compensation expense  

 
 

  14,526  

 
 
 
 

  7,783  

 
 
 
 

  26,262  

 
 
 
 

  14,674  

 
 
 

  Pension expense  

 
 

  1,615  

 
 
 
 

  1,459  

 
 
 
 

  3,120  

 
 
 
 

  2,895  

 
 
 

  Amortization of debt issuance costs  

 
 

  1,142  

 
 
 
 

  1,149  

 
 
 
 

  2,254  

 
 
 
 

  2,276  

 
 
 

  Loss on sale and write down of property and equipment  

 
 

  380  

 
 
 
 

  

 
 
 
 

  953  

 
 
 
 

  

 
 
 

  Deferred taxes  

 
 

  81,577  

 
 
 
 

  27,924  

 
 
 
 

  80,397  

 
 
 
 

  34,168  

 
 
 

  Share in net (income) loss of equity investees  

 
 

  (2,034)  

 
 
 
 

  (1,266)  

 
 
 
 

  (8,255)  

 
 
 
 

  (1,948)  

 
 
 

  Changes in operating assets and liabilities:  

 
 
 
 
 
 
 
 
 

  Accounts receivable  

 
 

  (42,115)  

 
 
 
 

  (55,833)  

 
 
 
 

  32,727  

 
 
 
 

  2,598  

 
 
 

  Contract assets  

 
 

  (10,355)  

 
 
 
 

  (10,458)  

 
 
 
 

  (20,193)  

 
 
 
 

  (17,659)  

 
 
 

  Prepaid expenses and other current assets  

 
 

  11,457  

 
 
 
 

  1,111  

 
 
 
 

  7,966  

 
 
 
 

  (501)  

 
 
 

  Income taxes  

 
 

  147,809  

 
 
 
 

  (7,944)  

 
 
 
 

  168,841  

 
 
 
 

  (891)  

 
 
 

  Accounts payable and accrued liabilities  

 
 

  14,891  

 
 
 
 

  29,744  

 
 
 
 

  (36,538)  

 
 
 
 

  (33,235)  

 
 
 

  Deferred revenue  

 
 

  22,621  

 
 
 
 

  (2,924)  

 
 
 
 

  (18,647)  

 
 
 
 

  (64,093)  

 
 
 

  Other assets  

 
 

  (2,016)  

 
 
 
 

  (3,327)  

 
 
 
 

  (1,467)  

 
 
 
 

  2,357  

 
 
 

  Operating lease assets and liabilities, net  

 
 

  (20,907)  

 
 
 
 

  (2,169)  

 
 
 
 

  (23,364)  

 
 
 
 

  (2,105)  

 
 
 

  Net cash provided by operating activities  

 
 

  282,455  

 
 
 
 

  207,238  

 
 
 
 

  516,359  

 
 
 
 

  344,685  

 
 
 

  Cash flows from investing activities:  

 
 
 
 
 
 
 
 
 

  Additions of property and equipment  

 
 

  (7,651)  

 
 
 
 

  (19,598)  

 
 
 
 

  (22,956)  

 
 
 
 

  (38,212)  

 
 
 

  Purchase of XMedius  

 
 

  444  

 
 
 
 

  

 
 
 
 

  444  

 
 
 
 

  

 
 
 

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

 
 

  

 
 
 
 

  (1,216,639)  

 
 
 
 

  

 
 
 
 

  (1,216,639)  

 
 
 

  Purchase of Dynamic Solutions Group Inc.  

 
 

  (371)  

 
 
 
 

  (4,149)  

 
 
 
 

  (371)  

 
 
 
 

  (4,149)  

 
 
 

  Other investing activities  

 
 

  867  

 
 
 
 

  (3,505)  

 
 
 
 

  (1,370)  

 
 
 
 

  (5,541)  

 
 
 

  Net cash used in investing activities  

 
 

  (6,711)  

 
 
 
 

  (1,243,891)  

 
 
 
 

  (24,253)  

 
 
 
 

  (1,264,541)  

 
 
 

  Cash flows from financing activities:  

 
 
 
 
 
 
 
 
 

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

 
 

  13,338  

 
 
 
 

  12,000  

 
 
 
 

  29,177  

 
 
 
 

  23,117  

 
 
 

  Proceeds from long-term debt and Revolver  

 
 

  

 
 
 
 

  750,000  

 
 
 
 

  

 
 
 
 

  750,000  

 
 
 

  Repayment of long-term debt and Revolver  

 
 

  (602,500)  

 
 
 
 

  (2,500)  

 
 
 
 

  (605,000)  

 
 
 
 

  (5,000)  

 
 
 

  Debt issuance costs  

 
 

  

 
 
 
 

  (979)  

 
 
 
 

  

 
 
 
 

  (979)  

 
 
 

  Purchase of treasury stock  

 
 

  

 
 
 
 

  

 
 
 
 

  (41,870)  

 
 
 
 

  (12,424)  

 
 
 

  Payments of dividends to shareholders  

 
 

  (54,500)  

 
 
 
 

  (47,092)  

 
 
 
 

  (101,769)  

 
 
 
 

  (94,098)  

 
 
 

  Net cash provided by (used in) financing activities  

 
 

  (643,662)  

 
 
 
 

  711,429  

 
 
 
 

  (719,462)  

 
 
 
 

  660,616  

 
 
 

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

 
 

  22,979  

 
 
 
 

  3,640  

 
 
 
 

  33,771  

 
 
 
 

  (4,071)  

 
 
 

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

 
 

  (344,939)  

 
 
 
 

  (321,584)  

 
 
 
 

  (193,585)  

 
 
 
 

  (263,311)  

 
 
 

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

 
 

  1,848,617  

 
 
 
 

  1,001,816  

 
 
 
 

  1,697,263  

 
 
 
 

  943,543  

 
 
 

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

 
 

  $  

 
 

  1,503,678  

 
 
 
 

  $  

 
 

  680,232  

 
 
 
 

  $  

 
 

  1,503,678  

 
 
 
 

  $  

 
 

  680,232  

 
 
 
 

 

 
 
                          
 

   Reconciliation of cash, cash equivalents and restricted cash:   

 
 

   December 31, 2020   

 
 
 

   December 31, 2019   

 
 

  Cash and cash equivalents  

 
 

  $  

 
 

  1,500,561  

 
 
 
 

  $  

 
 

  675,403  

 
 
 

  Restricted cash (1)  

 
 

  3,117  

 
 
 
 

  4,829  

 
 
 

  Total cash, cash equivalents and restricted cash  

 
 

  $  

 
 

  1,503,678  

 
 
 
 

  $  

 
 

  680,232  

 
 
 
 
 
 
 

   (1) Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Condensed 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 are not meant to be a substitute for financial measures presented in accordance with U.S. GAAP, but rather should be evaluated in conjunction with and as a supplement to such U.S. GAAP measures. OpenText strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure. The Company therefore believes that despite these limitations, it is appropriate to supplement the disclosure of the U.S. GAAP measures with certain Non-GAAP measures defined below.  

 
 
 
 
 

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

 
 
 
 
 

  Adjusted earnings (loss) before interest, taxes, depreciation and amortization (Adjusted EBITDA) is consistently calculated as GAAP-based net income (loss), attributable to OpenText, excluding interest income (expense), provision for 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, 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 (Loss). 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 December 31, 2020.    

 

    (In thousands, except for per share data)    

 
 
 

   Three Months Ended December 31, 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  

 
 

  $  

 
 

  117,882  

 
 
 
 

  $  

 
 

  (1,143)  

 
 
 

  (1)  

 
 

  $  

 
 

  116,739  

 
 
 
 

  Customer support  

 
 

  29,668  

 
 
 
 

  (499)  

 
 
 

  (1)  

 
 

  29,169  

 
 
 
 

  Professional service and other  

 
 

  46,619  

 
 
 
 

  (666)  

 
 
 

  (1)  

 
 

  45,953  

 
 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  54,091  

 
 
 
 

  (54,091)  

 
 
 

  (2)  

 
 

  

 
 
 
 

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

 

 

 

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

 

 

 

 

 

 

 
 

  603,082  

 
 
 

  70.5%  

 
 

  56,399  

 
 
 

  (3)  

 
 

  659,481  

 
 
 

  77.1%  

 
 

   Operating expenses   

 
 
 
 
 
 
 
 

  Research and development  

 
 

  100,238  

 
 
 
 

  (2,707)  

 
 
 

  (1)  

 
 

  97,531  

 
 
 
 

  Sales and marketing  

 
 

  147,897  

 
 
 
 

  (4,957)  

 
 
 

  (1)  

 
 

  142,940  

 
 
 
 

  General and administrative  

 
 

  62,765  

 
 
 
 

  (4,554)  

 
 
 

  (1)  

 
 

  58,211  

 
 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  54,926  

 
 
 
 

  (54,926)  

 
 
 

  (2)  

 
 

  

 
 
 
 

  Special charges (recoveries)  

 
 

  (17,494)  

 
 
 
 

  17,494  

 
 
 

  (4)  

 
 

  

 
 
 
 

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

 
 

  234,470  

 
 
 
 

  106,049  

 
 
 

  (5)  

 
 

  340,519  

 
 
 
 

  Other income (expense), net  

 
 

  5,251  

 
 
 
 

  (5,251)  

 
 
 

  (6)  

 
 

  

 
 
 
 

  Provision for (recovery of) income taxes  

 
 

  267,559  

 
 
 
 

  (225,150)  

 
 
 

  (7)  

 
 

  42,409  

 
 
 
 

   GAAP-based net income (loss) / Non-GAAP-based net income, attributable to OpenText   

 
 

  (65,477)  

 
 
 
 

  325,948  

 
 
 

  (8)  

 
 

  260,471  

 
 
 
 

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

 
 

  $  

 
 

  (0.24)  

 
 
 
 

  $  

 
 

  1.19  

 
 
 

  (8)  

 
 

  $  

 
 

  0.95  

 
 
 
 
 
 
                
 

  (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 132% 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 three months ended December 31, 2020 includes an 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.  

 
 

  (8)  

 
 

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

 
 
 

 

 
 
                                                    
 
 

   Three Months Ended December 31, 2020   

 
 
 
 

   Per share diluted*   

 
 

  GAAP-based net loss, attributable to OpenText  

 
 

  $  

 
 

  (65,477)  

 
 
 

  $  

 
 

  (0.24)  

 
 
 

  Add:  

 
 
 
 

  Amortization  

 
 

  109,017  

 
 
 

  0.40  

 
 
 

  Share-based compensation  

 
 

  14,526  

 
 
 

  0.05  

 
 
 

  Special charges (recoveries)  

 
 

  (17,494)  

 
 
 

  (0.06)  

 
 
 

  Other (income) expense, net  

 
 

  (5,251)  

 
 
 

  (0.02)  

 
 
 

  GAAP-based provision for (recovery of) income taxes  

 
 

  267,559  

 
 
 

  0.98  

 
 
 

  Non-GAAP-based provision for income taxes  

 
 

  (42,409)  

 
 
 

  (0.16)  

 
 
 

  Non-GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  260,471  

 
 
 

  $  

 
 

  0.95  

 
 
 
 
 
 
 

  *Weighted average number of Common Shares - diluted (in thousands) used in the calculation of Non-GAAP-based earnings per share for the three months ended December 31, 2020 were 273,183.  

 
 
 

 

 
 
                                               
 

   Reconciliation of Adjusted EBITDA   

 
 
 
 
 

   Three Months Ended December 31, 2020   

 
 

  GAAP-based net loss, attributable to OpenText  

 
 

  $  

 
 

  (65,477)  

 
 
 

  Add:  

 
 
 

  Provision for (recovery of) income taxes  

 
 

  267,559  

 
 
 

  Interest and other related expense, net  

 
 

  37,595  

 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  54,091  

 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  54,926  

 
 
 

  Depreciation  

 
 

  20,280  

 
 
 

  Share-based compensation  

 
 

  14,526  

 
 
 

  Special charges (recoveries)  

 
 

  (17,494)  

 
 
 

  Other (income) expense, net  

 
 

  (5,251)  

 
 
 

  Adjusted EBITDA  

 
 

  $  

 
 

  360,755  

 
 
 
 
 

  GAAP-based net loss margin  

 
 

  (7.7)  

 
 

  %  

 
 

  Adjusted EBITDA margin  

 
 

  42.2  

 
 

  %  

 
 
 

 

 
 
                      
 

   Reconciliation of Free cash flows   

 
 
 
 
 

   Three Months Ended December 31, 2020   

 
 

  GAAP-based cash flows provided by operating activities  

 
 

  $  

 
 

  282,455  

 
 
 

  Add:  

 
 
 

  Capital expenditures (1)  

 
 
 

  (7,651)  

 
 
 

  Free cash flows  

 
 

  $  

 
 

  274,804  

 
 
 
 
 

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

 
 
 

 

 
 
                                                                                                                                                                                    
 

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

 

    for the six months ended December 31, 2020.    

 

    (In thousands, except for per share data)    

 
 
 

   Six Months Ended December 31, 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  

 
 

  $  

 
 

  230,506  

 
 
 
 

  $  

 
 

  (1,979)  

 
 
 

  (1)  

 
 

  $  

 
 

  228,527  

 
 
 
 

  Customer support  

 
 

  58,862  

 
 
 
 

  (941)  

 
 
 

  (1)  

 
 

  57,921  

 
 
 
 

  Professional service and other  

 
 

  93,200  

 
 
 
 

  (1,183)  

 
 
 

  (1)  

 
 

  92,017  

 
 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  112,128  

 
 
 
 

  (112,128)  

 
 
 

  (2)  

 
 

  

 
 
 
 

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

 

 

 

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

 

 

 

 

 

 

 
 

  1,158,170  

 
 
 

  69.8%  

 
 

  116,231  

 
 
 

  (3)  

 
 

  1,274,401  

 
 
 

  76.8%  

 
 

   Operating expenses   

 
 
 
 
 
 
 
 

  Research and development  

 
 

  194,141  

 
 
 
 

  (5,049)  

 
 
 

  (1)  

 
 

  189,092  

 
 
 
 

  Sales and marketing  

 
 

  280,297  

 
 
 
 

  (9,014)  

 
 
 

  (1)  

 
 

  271,283  

 
 
 
 

  General and administrative  

 
 

  118,954  

 
 
 
 

  (8,096)  

 
 
 

  (1)  

 
 

  110,858  

 
 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  109,919  

 
 
 
 

  (109,919)  

 
 
 

  (2)  

 
 

  

 
 
 
 

  Special charges (recoveries)  

 
 

  (4,250)  

 
 
 
 

  4,250  

 
 
 

  (4)  

 
 

  

 
 
 
 

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

 
 

  416,826  

 
 
 
 

  244,059  

 
 
 

  (5)  

 
 

  660,885  

 
 
 
 

  Other income (expense), net  

 
 

  8,134  

 
 
 
 

  (8,134)  

 
 
 

  (6)  

 
 

  

 
 
 
 

  Provision for (recovery of) income taxes  

 
 

  310,303  

 
 
 
 

  (228,515)  

 
 
 

  (7)  

 
 

  81,788  

 
 
 
 

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

 
 

  37,899  

 
 
 
 

  464,440  

 
 
 

  (8)  

 
 

  502,339  

 
 
 
 

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

 
 

  $  

 
 

  0.14  

 
 
 
 

  $  

 
 

  1.70  

 
 
 

  (8)  

 
 

  $  

 
 

  1.84  

 
 
 
 
 
 
                
 

  (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 89% 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 six months ended December 31, 2020 includes an 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.  

 
 

  (8)  

 
 

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

 
 
 

 

 
 
                                                    
 
 

   Six Months Ended December 31, 2020   

 
 
 
 

   Per share diluted   

 
 

  GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  37,899  

 
 
 

  $  

 
 

  0.14  

 
 
 

  Add:  

 
 
 
 

  Amortization  

 
 

  222,047  

 
 
 

  0.81  

 
 
 

  Share-based compensation  

 
 

  26,262  

 
 
 

  0.10  

 
 
 

  Special charges (recoveries)  

 
 

  (4,250)  

 
 
 

  (0.02)  

 
 
 

  Other (income) expense, net  

 
 

  (8,134)  

 
 
 

  (0.03)  

 
 
 

  GAAP-based provision for (recovery of) income taxes  

 
 

  310,303  

 
 
 

  1.14  

 
 
 

  Non-GAAP-based provision for income taxes  

 
 

  (81,788)  

 
 
 

  (0.30)  

 
 
 

  Non-GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  502,339  

 
 
 

  $  

 
 

  1.84  

 
 
 
 

 

 
 
                                              
 

   Reconciliation of Adjusted EBITDA   

 
 
 
 

   Six Months Ended December 31, 2020   

 
 

  GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  37,899  

 
 
 

  Add:  

 
 
 

  Provision for (recovery of) income taxes  

 
 

  310,303  

 
 
 

  Interest and other related expense, net  

 
 

  76,684  

 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  112,128  

 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  109,919  

 
 
 

  Depreciation  

 
 

  42,283  

 
 
 

  Share-based compensation  

 
 

  26,262  

 
 
 

  Special charges (recoveries)  

 
 

  (4,250)  

 
 
 

  Other (income) expense, net  

 
 

  (8,134)  

 
 
 

  Adjusted EBITDA  

 
 

  $  

 
 

  703,094  

 
 
 
 
 

  GAAP-based net income margin  

 
 

  2.3  

 
 

  %  

 
 

  Adjusted EBITDA margin  

 
 

  42.4  

 
 

  %  

 
 
 

 

 
 
                 
 

   Reconciliation of Free cash flows   

 
 
 
 

   Six Months Ended December 31, 2020   

 
 

  GAAP-based cash flows provided by operating activities  

 
 

  $  

 
 

  516,359  

 
 
 

  Add:  

 
 
 

  Capital expenditures (1)  

 
 

  (22,956)  

 
 
 

  Free cash flows  

 
 

  $  

 
 

  493,403  

 
 
 
 
 
 
 

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

 
 
 

 

 
 
                                                                                                                                                                                    
 

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

 

    for the three months ended September 30, 2020.    

 

    (In thousands, except for per share data)    

 
 
 

   Three Months Ended September 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  

 
 

  $  

 
 

  112,624  

 
 
 
 

  $  

 
 

  (836)  

 
 
 

  (1)  

 
 

  $  

 
 

  111,788  

 
 
 
 

  Customer support  

 
 

  29,194  

 
 
 
 

  (442)  

 
 
 

  (1)  

 
 

  28,752  

 
 
 
 

  Professional service and other  

 
 

  46,581  

 
 
 
 

  (517)  

 
 
 

  (1)  

 
 

  46,064  

 
 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  58,037  

 
 
 
 

  (58,037)  

 
 
 

  (2)  

 
 

  

 
 
 
 

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

 

 

 

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

 

 

 

 

 

 

 
 

  555,088  

 
 
 

  69.0%  

 
 

  59,832  

 
 
 

  (3)  

 
 

  614,920  

 
 
 

  76.5%  

 
 

   Operating expenses   

 
 
 
 
 
 
 
 

  Research and development  

 
 

  93,903  

 
 
 
 

  (2,342)  

 
 
 

  (1)  

 
 

  91,561  

 
 
 
 

  Sales and marketing  

 
 

  132,400  

 
 
 
 

  (4,057)  

 
 
 

  (1)  

 
 

  128,343  

 
 
 
 

  General and administrative  

 
 

  56,189  

 
 
 
 

  (3,542)  

 
 
 

  (1)  

 
 

  52,647  

 
 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  54,993  

 
 
 
 

  (54,993)  

 
 
 

  (2)  

 
 

  

 
 
 
 

  Special charges (recoveries)  

 
 

  13,244  

 
 
 
 

  (13,244)  

 
 
 

  (4)  

 
 

  

 
 
 
 

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

 
 

  182,356  

 
 
 
 

  138,010  

 
 
 

  (5)  

 
 

  320,366  

 
 
 
 

  Other income (expense), net  

 
 

  2,883  

 
 
 
 

  (2,883)  

 
 
 

  (6)  

 
 

  

 
 
 
 

  Provision for (recovery of) income taxes  

 
 

  42,744  

 
 
 
 

  (3,365)  

 
 
 

  (7)  

 
 

  39,379  

 
 
 
 

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

 
 

  103,376  

 
 
 
 

  138,492  

 
 
 

  (8)  

 
 

  241,868  

 
 
 
 

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

 
 

  $  

 
 

  0.38  

 
 
 
 

  $  

 
 

  0.51  

 
 
 

  (8)  

 
 

  $  

 
 

  0.89  

 
 
 
 
 
 
                
 

  (1)  

 
 

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

 
 

  (2)  

 
 

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

 
 

  (3)  

 
 

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

 
 

  (4)  

 
 

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

 
 

  (5)  

 
 

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

 
 

  (6)  

 
 

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

 
 

  (7)  

 
 

  Adjustment relates to differences between the GAAP-based tax provision rate of approximately 29% 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 September 30, 2020   

 
 
 
 

   Per share diluted   

 
 

  GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  103,376  

 
 
 

  $  

 
 

  0.38  

 
 
 

  Add:  

 
 
 
 

  Amortization  

 
 

  113,030  

 
 
 

  0.41  

 
 
 

  Share-based compensation  

 
 

  11,736  

 
 
 

  0.04  

 
 
 

  Special charges (recoveries)  

 
 

  13,244  

 
 
 

  0.05  

 
 
 

  Other (income) expense, net  

 
 

  (2,883)  

 
 
 

  (0.01)  

 
 
 

  GAAP-based provision for (recovery of) income taxes  

 
 

  42,744  

 
 
 

  0.16  

 
 
 

  Non-GAAP-based provision for income taxes  

 
 

  (39,379)  

 
 
 

  (0.14)  

 
 
 

  Non-GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  241,868  

 
 
 

  $  

 
 

  0.89  

 
 
 
 

 

 
 
                                              
 

   Reconciliation of Adjusted EBITDA   

 
 
 
 

   Three Months Ended September 30, 2020   

 
 

  GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  103,376  

 
 
 

  Add:  

 
 
 

  Provision for (recovery of) income taxes  

 
 

  42,744  

 
 
 

  Interest and other related expense, net  

 
 

  39,089  

 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  58,037  

 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  54,993  

 
 
 

  Depreciation  

 
 

  22,003  

 
 
 

  Share-based compensation  

 
 

  11,736  

 
 
 

  Special charges (recoveries)  

 
 

  13,244  

 
 
 

  Other (income) expense, net  

 
 

  (2,883)  

 
 
 

  Adjusted EBITDA  

 
 

  $  

 
 

  342,339  

 
 
 
 
 

  GAAP-based net income margin  

 
 

  12.9  

 
 

  %  

 
 

  Adjusted EBITDA margin  

 
 

  42.6  

 
 

  %  

 
 
 

 

 
 
                 
 

   Reconciliation of Free cash flows   

 
 
 
 

   Three Months Ended September 30, 2020   

 
 

  GAAP-based cash flows provided by operating activities  

 
 

  $  

 
 

  233,904  

 
 
 

  Add:  

 
 
 

  Capital expenditures (1)  

 
 

  (15,305)  

 
 
 

  Free cash flows  

 
 

  $  

 
 

  218,599  

 
 
 
 
 
 
 

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

 
 
 

 

 
 
                                                                                                                                                                                      
 

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

 

    for the three months ended December 31, 2019.    

 

    (In thousands, except for per share data)    

 
 
 

   Three Months Ended December 31, 2019   

 
 
 

   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  

 
 

  $  

 
 

  103,644  

 
 
 
 

  $  

 
 

  (371)  

 
 
 

  (1)  

 
 

  $  

 
 

  103,273  

 
 
 
 

  Customer support  

 
 

  29,788  

 
 
 
 

  (297)  

 
 
 

  (1)  

 
 

  29,491  

 
 
 
 

  Professional service and other  

 
 

  53,604  

 
 
 
 

  (346)  

 
 
 

  (1)  

 
 

  53,258  

 
 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  42,299  

 
 
 
 

  (42,299)  

 
 
 

  (2)  

 
 

  

 
 
 
 

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

 

 

 

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

 

 

 

 

 

 

 
 

  539,172  

 
 
 

  69.9  

 
 

  %  

 
 

  43,313  

 
 
 

  (3)  

 
 

  582,485  

 
 
 

  75.5  

 
 

  %  

 
 

   Operating expenses   

 
 
 
 
 
 
 
 

  Research and development  

 
 

  80,283  

 
 
 
 

  (1,255)  

 
 
 

  (1)  

 
 

  79,028  

 
 
 
 

  Sales and marketing  

 
 

  137,310  

 
 
 
 

  (2,383)  

 
 
 

  (1)  

 
 

  134,927  

 
 
 
 

  General and administrative  

 
 

  54,595  

 
 
 
 

  (3,131)  

 
 
 

  (1)  

 
 

  51,464  

 
 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  51,460  

 
 
 
 

  (51,460)  

 
 
 

  (2)  

 
 

  

 
 
 
 

  Special charges (recoveries)  

 
 

  10,072  

 
 
 
 

  (10,072)  

 
 
 

  (4)  

 
 

  

 
 
 
 

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

 
 

  184,740  

 
 
 
 

  111,614  

 
 
 

  (5)  

 
 

  296,354  

 
 
 
 

  Other income (expense), net  

 
 

  1,972  

 
 
 
 

  (1,972)  

 
 
 

  (6)  

 
 

  

 
 
 
 

  Provision for (recovery of) income taxes  

 
 

  46,818  

 
 
 
 

  (9,861)  

 
 
 

  (7)  

 
 

  36,957  

 
 
 
 

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

 
 

  107,467  

 
 
 
 

  119,503  

 
 
 

  (8)  

 
 

  226,970  

 
 
 
 

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

 
 

  $  

 
 

  0.40  

 
 
 
 

  $  

 
 

  0.44  

 
 
 

  (8)  

 
 

  $  

 
 

  0.84  

 
 
 
 
 
 
                
 

  (1)  

 
 

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

 
 

  (2)  

 
 

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

 
 

  (3)  

 
 

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

 
 

  (4)  

 
 

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

 
 

  (5)  

 
 

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

 
 

  (6)  

 
 

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

 
 

  (7)  

 
 

  Adjustment relates to differences between the GAAP-based tax provision rate of approximately 30% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based adjusted net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves, and "book to return" adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at our Non-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.  

 
 

  (8)  

 
 

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

 
 
 

 

 
 
                                                    
 
 

   Three Months Ended December 31, 2019   

 
 
 
 

   Per share diluted   

 
 

  GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  107,467  

 
 
 

  $  

 
 

  0.40  

 
 
 

  Add:  

 
 
 
 

  Amortization  

 
 

  93,759  

 
 
 

  0.35  

 
 
 

  Share-based compensation  

 
 

  7,783  

 
 
 

  0.03  

 
 
 

  Special charges (recoveries)  

 
 

  10,072  

 
 
 

  0.04  

 
 
 

  Other (income) expense, net  

 
 

  (1,972)  

 
 
 

  (0.01)  

 
 
 

  GAAP-based provision for (recovery of) income taxes  

 
 

  46,818  

 
 
 

  0.17  

 
 
 

  Non-GAAP-based provision for income taxes  

 
 

  (36,957)  

 
 
 

  (0.14)  

 
 
 

  Non-GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  226,970  

 
 
 

  $  

 
 

  0.84  

 
 
 
 

 

 
 
                                              
 

   Reconciliation of Adjusted EBITDA   

 
 
 
 

   Three Months Ended December 31, 2019   

 
 

  GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  107,467  

 
 
 

  Add:  

 
 
 

  Provision for (recovery of) income taxes  

 
 

  46,818  

 
 
 

  Interest and other related expense, net  

 
 

  32,376  

 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  42,299  

 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  51,460  

 
 
 

  Depreciation  

 
 

  20,712  

 
 
 

  Share-based compensation  

 
 

  7,783  

 
 
 

  Special charges (recoveries)  

 
 

  10,072  

 
 
 

  Other (income) expense, net  

 
 

  (1,972)  

 
 
 

  Adjusted EBITDA  

 
 

  $  

 
 

  317,015  

 
 
 
 
 

  GAAP-based net income margin  

 
 

  13.9  

 
 

  %  

 
 

  Adjusted EBITDA margin  

 
 

  41.1  

 
 

  %  

 
 
 

 

 
 
                  
 

   Reconciliation of Free cash flows   

 
 
 
 

   Three Months Ended December 31, 2019   

 
 

  GAAP-based cash flows provided by operating activities  

 
 

  $  

 
 

  207,238  

 
 
 

  Add:  

 
 
 

  Capital expenditures (1)  

 
 
 

  (19,598)  

 
 
 

  Free cash flows  

 
 

  $  

 
 

  187,640  

 
 
 
 
 
 
 

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

 
 
 

 

 
 
                                                                                                                                                                                      
 

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

 

    for the six months ended December 31, 2019.    

 

    (In thousands, except for per share data)    

 
 
 

   Six Months Ended December 31, 2019   

 
 
 

   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  

 
 

  $  

 
 

  205,806  

 
 
 
 

  $  

 
 

  (754)  

 
 
 

  (1)  

 
 

  $  

 
 

  205,052  

 
 
 
 

  Customer support  

 
 

  59,175  

 
 
 
 

  (613)  

 
 
 

  (1)  

 
 

  58,562  

 
 
 
 

  Professional service and other  

 
 

  107,942  

 
 
 
 

  (589)  

 
 
 

  (1)  

 
 

  107,353  

 
 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  82,597  

 
 
 
 

  (82,597)  

 
 
 

  (2)  

 
 

  

 
 
 
 

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

 

 

 

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

 

 

 

 

 

 

 
 

  1,007,552  

 
 
 

  68.6  

 
 

  %  

 
 

  84,553  

 
 
 

  (3)  

 
 

  1,092,105  

 
 
 

  74.4  

 
 

  %  

 
 

   Operating expenses   

 
 
 
 
 
 
 
 

  Research and development  

 
 

  161,461  

 
 
 
 

  (2,476)  

 
 
 

  (1)  

 
 

  158,985  

 
 
 
 

  Sales and marketing  

 
 

  265,928  

 
 
 
 

  (4,499)  

 
 
 

  (1)  

 
 

  261,429  

 
 
 
 

  General and administrative  

 
 

  106,130  

 
 
 
 

  (5,743)  

 
 
 

  (1)  

 
 

  100,387  

 
 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  100,618  

 
 
 
 

  (100,618)  

 
 
 

  (2)  

 
 

  

 
 
 
 

  Special charges (recoveries)  

 
 

  15,173  

 
 
 
 

  (15,173)  

 
 
 

  (4)  

 
 

  

 
 
 
 

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

 
 

  317,253  

 
 
 
 

  213,062  

 
 
 

  (5)  

 
 

  530,315  

 
 
 
 

  Other income (expense), net  

 
 

  (813)  

 
 
 
 

  813  

 
 
 

  (6)  

 
 

  

 
 
 
 

  Provision for (recovery of) income taxes  

 
 

  69,909  

 
 
 
 

  (4,707)  

 
 
 

  (7)  

 
 

  65,202  

 
 
 
 

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

 
 

  181,868  

 
 
 
 

  218,582  

 
 
 

  (8)  

 
 

  400,450  

 
 
 
 

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

 
 

  $  

 
 

  0.67  

 
 
 
 

  $  

 
 

  0.81  

 
 
 

  (8)  

 
 

  $  

 
 

  1.48  

 
 
 
 
 
 
                
 

  (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 28% 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:  

 
 
 

 

 
 
                                                    
 
 

   Six Months Ended December 31, 2019   

 
 
 
 

   Per share diluted   

 
 

  GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  181,868  

 
 
 

  $  

 
 

  0.67  

 
 
 

  Add:  

 
 
 
 

  Amortization  

 
 

  183,215  

 
 
 

  0.68  

 
 
 

  Share-based compensation  

 
 

  14,674  

 
 
 

  0.05  

 
 
 

  Special charges (recoveries)  

 
 

  15,173  

 
 
 

  0.06  

 
 
 

  Other (income) expense, net  

 
 

  813  

 
 
 

  

 
 
 

  GAAP-based provision for (recovery of) income taxes  

 
 

  69,909  

 
 
 

  0.26  

 
 
 

  Non-GAAP-based provision for income taxes  

 
 

  (65,202)  

 
 
 

  (0.24)  

 
 
 

  Non-GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  400,450  

 
 
 

  $  

 
 

  1.48  

 
 
 
 

 

 
 
                                              
 

   Reconciliation of Adjusted EBITDA   

 
 
 
 

   Six Months Ended December 31, 2019   

 
 

  GAAP-based net income, attributable to OpenText  

 
 

  $  

 
 

  181,868  

 
 
 

  Add:  

 
 
 

  Provision for (recovery of) income taxes  

 
 

  69,909  

 
 
 

  Interest and other related expense, net  

 
 

  64,586  

 
 
 

  Amortization of acquired technology-based intangible assets  

 
 

  82,597  

 
 
 

  Amortization of acquired customer-based intangible assets  

 
 

  100,618  

 
 
 

  Depreciation  

 
 

  40,989  

 
 
 

  Share-based compensation  

 
 

  14,674  

 
 
 

  Special charges (recoveries)  

 
 

  15,173  

 
 
 

  Other (income) expense, net  

 
 

  813  

 
 
 

  Adjusted EBITDA  

 
 

  $  

 
 

  571,227  

 
 
 
 
 

  GAAP-based net income margin  

 
 

  12.4  

 
 

  %  

 
 

  Adjusted EBITDA margin  

 
 

  38.9  

 
 

  %  

 
 
 

 

 
 
                 
 

   Reconciliation of Free cash flows   

 
 
 
 

   Six Months Ended December 31, 2019   

 
 

  GAAP-based cash flows provided by operating activities  

 
 

  $  

 
 

  344,685  

 
 
 

  Add:  

 
 
 

  Capital expenditures (1)  

 
 

  (38,212)  

 
 
 

  Free cash flows  

 
 

  $  

 
 

  306,473  

 
 
 
 
 
 
 

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

 
 
 

 

 
 
  
 

  (3)  

 
 

  The following tables provide a composition of our major currencies for revenue and expenses, expressed as a percentage, for the three and six months ended December 31, 2020 and 2019:  

 
 
 
 
                                                                                                                                                     
 
 
 

   Three Months Ended December 31, 2020   

 
 
 

   Three Months Ended December 31, 2019   

 
 

   Currencies   

 
 

   % of Revenue   

 
 

   % of Expenses*   

 
 
 

   % of Revenue   

 
 

   % of Expenses*   

 
 

  EURO  

 
 

  24  

 
 

  %  

 
 

  14  

 
 

  %  

 
 
 

  25  

 
 

  %  

 
 

  15  

 
 

  %  

 
 

  GBP  

 
 

  5  

 
 

  %  

 
 

  5  

 
 

  %  

 
 
 

  5  

 
 

  %  

 
 

  6  

 
 

  %  

 
 

  CAD  

 
 

  3  

 
 

  %  

 
 

  10  

 
 

  %  

 
 
 

  3  

 
 

  %  

 
 

  10  

 
 

  %  

 
 

  USD  

 
 

  60  

 
 

  %  

 
 

  54  

 
 

  %  

 
 
 

  58  

 
 

  %  

 
 

  51  

 
 

  %  

 
 

  Other  

 
 

  8  

 
 

  %  

 
 

  17  

 
 

  %  

 
 
 

  9  

 
 

  %  

 
 

  18  

 
 

  %  

 
 

  Total  

 
 

  100  

 
 

  %  

 
 

  100  

 
 

  %  

 
 
 

  100  

 
 

  %  

 
 

  100  

 
 

  %  

 
 
 
 
 
 
 
 
 
 
 

   Six Months Ended December 31, 2020   

 
 
 

   Six Months Ended December 31, 2019   

 
 

   Currencies   

 
 

   % of Revenue   

 
 

   % of Expenses*   

 
 
 

   % of Revenue   

 
 

   % of Expenses*   

 
 

  EURO  

 
 

  23  

 
 

  %  

 
 

  14  

 
 

  %  

 
 
 

  23  

 
 

  %  

 
 

  14  

 
 

  %  

 
 

  GBP  

 
 

  5  

 
 

  %  

 
 

  5  

 
 

  %  

 
 
 

  5  

 
 

  %  

 
 

  6  

 
 

  %  

 
 

  CAD  

 
 

  3  

 
 

  %  

 
 

  10  

 
 

  %  

 
 
 

  3  

 
 

  %  

 
 

  10  

 
 

  %  

 
 

  USD  

 
 

  61  

 
 

  %  

 
 

  55  

 
 

  %  

 
 
 

  59  

 
 

  %  

 
 

  52  

 
 

  %  

 
 

  Other  

 
 

  8  

 
 

  %  

 
 

  16  

 
 

  %  

 
 
 

  10  

 
 

  %  

 
 

  18  

 
 

  %  

 
 

  Total  

 
 

  100  

 
 

  %  

 
 

  100  

 
 

  %  

 
 
 

  100  

 
 

  %  

 
 

  100  

 
 

  %  

 
 
 
 
 
 

  *Expenses include all cost of revenues and operating expenses included within the Condensed Consolidated Statements of Income (Loss), 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-second-quarter-fiscal-year-2021-financial-results-301222693.html  

 

SOURCE Open Text Corporation

 
 

News Provided by PR Newswire via QuoteMedia

The Conversation (0)
Gloved hand installing a CPU onto a circuit board, labeled "Tech 5" with network graphic.

Tech 5: US Lifts EDA Restrictions for China, Apple Explores Third Party AI for Siri

The stock markets had a dynamic start to the third quarter, pushing indices to new highs after earlier tariff concerns.

On Monday (June 30), markets generally saw strong gains, with the S&P 500 (INDEXSP:INX) and Nasdaq Composite (INDEXNASDAQ:.IXIC) reaching new record highs in the US while the S&P/TSX Composite Index (INDEXTSI:OSPTX) climbed higher after a last-minute policy reversal to rescind a planned digital services tax targeting US tech firms.

Tuesday (July 1), Canadian markets were closed for Canada Day. As for US markets, following two consecutive days of highs, the S&P and Nasdaq declined on Tuesday (July 1) after a renewed feud between Tesla (NASDAQ:TSLA) CEO Elon Musk and US President Donald Trump sent Tesla shares down by over 5 percent.

However, tech stocks boosted the performance of both Canadian and US markets on Wednesday (July 2) and Thursday (July 3) after export restrictions to China were lifted and the US labor market reported better-than-expected unemployment data.

US markets were closed on Friday (July 4) for a holiday, while Canadian markets ended the day slightly positive.

Keep reading...Show less
Syntheia (CSE:SYAI)

Syntheia


Keep reading...Show less
Logos of OpenAI and Microsoft with "Tech 5" on an abstract tech-themed background.

Tech 5: OpenAI/Microsoft Talks Get Tense, SoftBank Floats Arizona Robotics Hub

This week, Microsoft (NASDAQ:MSFT) and OpenAI's once tight alliance showed signs of strain, while Meta Platforms (NASDAQ:META) continued to source artificial intelligence (AI) talent from rival companies.

Meanwhile, SoftBank's (TSE:9434) CEO is considering a new chip and robotics venture in Arizona, and Google (NASDAQ:GOOGL) is looking to bring AI solutions to American cities.

Read on to dive deeper into this week's top tech stories.

Keep reading...Show less
Canadian flag waving in front of a mountain landscape.

Canada Makes Tech Leadership Moves: Axl Launches, Carney Shares Priorities at G7 Summit

Canada’s tech sector saw momentum this week, with announcements spanning venture capital and quantum computing, as well as global policy leadership news out of the G7 summit.

Keep reading...Show less
Hand touching AI hologram with tech circuit pattern.

Tech 5: Meta Plans Multibillion AI Bet, Apple Reveals iOS 26 at WWDC 2025

This week saw a flurry of activity in the tech world, from Apple's (NASDAQ:AAPL) new product announcements to Amazon's (NASDAQ:AMZN) massive infrastructure investment in Pennsylvania. 

Meanwhile, NVIDIA's (NASDAQ:NVDA) European expansion and its role as an artificial intelligence (AI) powerhouse were all but cemented after a series of announcements at the Paris VivaTech Conference, and Mark Zuckerberg's Meta Platforms (NASDAQ:META) made big moves in the AI startup space.

Read on to dive deeper into this week's top tech stories.

Keep reading...Show less
3D model of an intricate oil reservoir.

Why 3D Visualisation is a Game Changer for Resource Asset Management

Forget spreadsheets and static blueprints. The future of resource asset management is unfolding in three dimensions, and smart money is starting to take notice.

3D visualisation is no longer a niche tool; it's rapidly becoming the indispensable core of how resource companies — such as mining, oil and gas and utilities — are tackling their most pressing challenges, from optimising daily operations to achieving critical environmental, social and governance objectives. For investors, this isn't just a technological upgrade; it's a paradigm shift with significant implications for portfolio performance.

Keep reading...Show less

Latest Press Releases

Related News

×