Strong Results Include Record Cloud and Annual
Recurring Revenues
WATERLOO, ON, May 4,
2022 /CNW/ --
Third Quarter Highlights
Total Revenues
(in
millions)
|
|
Annual Recurring Revenues
(in
millions)
|
|
Cloud Revenues
(in
millions)
|
Reported
|
Constant Currency
|
|
Reported
|
Constant Currency
|
|
Reported
|
Constant Currency
|
$882.3
|
$899.4
|
|
$734.5
|
$747.7
|
|
$401.9
|
$406.6
|
+5.9%
|
+8.0%
|
|
+6.2%
|
+8.1%
|
|
+13.0%
|
+14.3%
|
Annual Recurring
Revenues represent 83% of Total Revenues
|
- Record Q3 revenues reflect strengthening market share and cloud
driven organic growth(1)
- Total revenues up 5.9% Y/Y or up 8.0% in constant currency
- Cloud revenues up 13.0% Y/Y or up 14.3% in constant
currency
- Continued investments in talent, innovation, digital marketing
and global sales coverage
- Operating cash flows were $323.6
million and free cash flows(2) were $306.0 million
- GAAP-based net income of $74.7
million, down 18.4% Y/Y, margin of 8.5%, down 250 basis
points Y/Y
- Adjusted EBITDA(2) of $284.5
million, margin of 32.2%
- GAAP-based diluted earnings per share (EPS) of $0.28, down 15.2% Y/Y
- Non-GAAP diluted EPS(2) of $0.70, down 6.7% Y/Y
- During the quarter, the Company repurchased and cancelled 1.0
million shares for $45.1 million
under our share repurchase plans
Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today
announced its financial results for the third quarter ended
March 31, 2022.
"OpenText delivered record Q3 revenues amidst the ever-changing
dynamics of the global macro environment," said Mark J. Barrenechea, OpenText CEO & CTO. "In
Q3, total revenues grew 5.9% year-over-year to $882.3 million, supported by record Cloud
revenues of $401.9 million, up 13.0%
year-over-year. Annual Recurring Revenues, which represent 83% of
total revenues, grew 6.2% year-over-year to a record $734.5 million. We have a unique opportunity to
increase our investments and accelerate our cloud business, and we
are planning on doing so."
"Customers are seeking information-led transformations and this
is reflective in the strength of our cloud bookings. We are seeing
the results of our efforts as we help our customers to digitize,
transform and grow. OpenText brings a complete and integrated suite
of Information Management solutions to customers of all sizes,
while providing the layers of defense needed to help organizations
secure their users, end points, and networks in the face of
ever-increasing cyber threats and ransomware. As we approach the
end of the fiscal year, we remain on track to meet our targets and
aspirations," said Mr. Barrenechea.
"OpenText delivered a solid Q3 with adjusted EBITDA of
$284.5 million and strong free cash
flows of $306.0 million," said
OpenText EVP, CFO, Madhu
Ranganathan. "Integration of the Zix acquisition is on track
and our balance sheet remains strong. We continue to invest in
talent, innovation, and technology to drive our growth strategy and
are making demonstrable progress towards our long-term aspirational
goals. With approximately $1.6
billion in cash as of March 31,
2022 and a net leverage ratio of 1.9x, we have the financial
flexibility to continue to drive growth through product innovation,
talent, go-to-market, and strategic acquisitions."
(1) Organic
revenue growth is calculated by removing the revenue contribution
from newly acquired companies for the first year post
acquisition.
|
(2)
Please see note 2 "Use of Non-GAAP Financial Measures" to the
condensed consolidated financial statements below.
|
Financial Highlights for Q3 Fiscal 2022 with Year Over Year
Comparisons
Summary of Quarterly Results
|
|
|
|
|
|
|
|
|
(In millions, except per share
data)
|
Q3 FY'22
|
Q3 FY'21
|
$ Change
|
% Change
|
|
Q3 FY'22
in CC*
|
% Change
in CC*
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Cloud services and subscriptions
|
$401.9
|
$355.8
|
$46.1
|
13.0%
|
|
$406.6
|
14.3%
|
|
Customer support
|
332.5
|
335.9
|
(3.4)
|
(1.0)%
|
|
341.1
|
1.5%
|
|
Total annual recurring
revenues**
|
$734.5
|
$691.8
|
$42.7
|
6.2%
|
|
$747.7
|
8.1%
|
|
License
|
80.6
|
76.3
|
4.3
|
5.7%
|
|
82.7
|
8.4%
|
|
Professional service and other
|
67.2
|
64.9
|
2.3
|
3.6%
|
|
69.0
|
6.4%
|
|
Total revenues
|
$882.3
|
$832.9
|
$49.4
|
5.9%
|
|
$899.4
|
8.0%
|
|
GAAP-based operating
income
|
$131.6
|
$152.4
|
($20.8)
|
(13.6)%
|
|
N/A
|
N/A
|
|
Non-GAAP-based
operating income (1)
|
$262.2
|
$275.2
|
($13.0)
|
(4.7)%
|
|
$270.1
|
(1.9)%
|
|
GAAP-based net income
attributable to OpenText
|
$74.7
|
$91.5
|
($16.8)
|
(18.4)%
|
|
N/A
|
N/A
|
|
GAAP-based EPS,
diluted
|
$0.28
|
$0.33
|
($0.05)
|
(15.2)%
|
|
N/A
|
N/A
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$0.70
|
$0.75
|
($0.05)
|
(6.7)%
|
|
$0.73
|
(2.7)%
|
|
Adjusted
EBITDA (1)
|
$284.5
|
$297.1
|
($12.6)
|
(4.3)%
|
|
$292.5
|
(1.5)%
|
|
Operating cash
flows
|
$323.6
|
$63.6
|
$260.0
|
409.0%
|
|
N/A
|
N/A
|
|
Free cash flows
(1)
|
$306.0
|
$50.3
|
$255.7
|
508.8%
|
|
N/A
|
N/A
|
|
Summary of YTD Results
|
|
|
|
|
|
|
|
|
(In millions, except per share
data)
|
FY'22 YTD
|
FY'21 YTD
|
$ Change
|
% Change
|
|
FY'22 YTD
in CC*
|
% Change
in CC*
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Cloud services and subscriptions
|
$1,123.4
|
$1,047.3
|
$76.1
|
7.3%
|
|
$1,124.8
|
7.4%
|
|
Customer support
|
1,002.6
|
999.8
|
2.8
|
0.3%
|
|
1,005.0
|
0.5%
|
|
Total annual recurring
revenues**
|
$2,126.0
|
$2,047.1
|
$79.0
|
3.9%
|
|
$2,129.8
|
4.0%
|
|
License
|
263.7
|
252.2
|
11.5
|
4.6%
|
|
265.8
|
5.4%
|
|
Professional service and other
|
201.7
|
193.3
|
8.4
|
4.3%
|
|
202.5
|
4.7%
|
|
Total revenues
|
$2,591.4
|
$2,492.6
|
$98.8
|
4.0%
|
|
$2,598.0
|
4.2%
|
|
GAAP-based operating
income
|
$507.2
|
$569.2
|
($62.0)
|
(10.9)%
|
|
N/A
|
N/A
|
|
Non-GAAP-based
operating income (1)
|
$886.0
|
$936.1
|
($50.1)
|
(5.4)%
|
|
$896.0
|
(4.3)%
|
|
GAAP-based net income
attributable to OpenText
|
$294.9
|
$129.4
|
$165.5
|
127.9%
|
|
N/A
|
N/A
|
|
GAAP-based EPS,
diluted
|
$1.08
|
$0.47
|
$0.61
|
129.8%
|
|
N/A
|
N/A
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$2.43
|
$2.59
|
($0.16)
|
(6.2)%
|
|
$2.46
|
(5.0)%
|
|
Adjusted
EBITDA (1)
|
$951.4
|
$1,000.2
|
($48.9)
|
(4.9)%
|
|
$961.4
|
(3.9)%
|
|
Operating cash
flows
|
$729.9
|
$579.9
|
$149.9
|
25.9%
|
|
N/A
|
N/A
|
|
Free cash flows
(1)
|
$674.9
|
$543.7
|
$131.3
|
24.1%
|
|
N/A
|
N/A
|
|
(1) Please
see note 2 "Use of Non-GAAP Financial Measures" to the condensed
consolidated financial statements below.
|
(2) Please
also see note 14 to the Company's Fiscal 2018 Consolidated
Financial Statements on Form 10-K. Reflective of the amount of net
tax benefit arising from the internal reorganization assumed to be
allocable to the current period based on the forecasted utilization
period.
|
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 May 3, 2022, a
cash dividend of $0.2209 per common
share. The record date for this dividend is June 3, 2022 and the payment date is June 24, 2022. 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 include: Bank of France, Booz Allen
Hamilton, Singapore Customs, Societe Generale, Ecopetrol,
Philippine National Service of
Investigation, Enedis, Lids Sports Group and Scale Computing
- OpenText announced Cloud Editions 22.1 featuring new and
enhanced innovations
- OpenText held its 2022 Investor Day
- OpenText announced the 2022 BrightCloud® Threat Report
- OpenText recipient of 2022 SAP Pinnacle Award in Partner
Solutions Success category
- OpenText showcased the latest eDiscovery innovations at
Legalweek New York 2022
- OpenText showcased the latest Content Cloud innovations at
AIIM2022
- OpenText hosted Supply Chain Summit 2022
- OpenText to host OpenText World Europe in-person on
June 21-22
Summary of Quarterly Results
|
|
|
|
|
|
|
|
|
Q3 FY'22
|
Q2 FY'22
|
Q3 FY'21
|
% Change
(Q3 FY'22 vs
Q2 FY'22)
|
|
% Change
(Q3 FY'22 vs
Q3 FY'21)
|
|
Revenue
(millions)
|
$882.3
|
$876.8
|
$832.9
|
0.6%
|
|
5.9%
|
|
GAAP-based gross
margin
|
68.9%
|
70.2%
|
68.6%
|
(130)
|
bps
|
30
|
bps
|
Non-GAAP-based gross
margin (1)
|
74.5%
|
76.4%
|
75.2%
|
(190)
|
bps
|
(70)
|
bps
|
GAAP-based EPS,
diluted
|
$0.28
|
$0.32
|
$0.33
|
(12.5)%
|
|
(15.2)%
|
|
Non-GAAP-based EPS,
diluted (1)(2)
|
$0.70
|
$0.89
|
$0.75
|
(21.3)%
|
|
(6.7)%
|
|
(1) Please
see note 2 "Use of Non-GAAP Financial Measures" to the condensed
consolidated financial statements below.
|
(2) Please
also see note 14 to the Company's Fiscal 2018 Consolidated
Financial Statements on Form 10-K. Reflective of the amount of net
tax benefit arising from the internal reorganization assumed to be
allocable to the current period based on the forecasted utilization
period.
|
Conference Call Information
OpenText posted a quarterly shareholder letter and investor
presentation on its Investor Relations website at
http://investors.opentext.com and invites the public to listen
to the earnings conference call today at 5:00 p.m. ET (2:00 p.m.
PT) by dialing 1-800-319-4610 (toll-free) or +1-604-638-5340
(international). Please dial-in 10 minutes ahead of time to ensure
proper connection. Alternatively, a live webcast of the earnings
conference call will be available on the Investor Relations section
of the Company's website at
http://investors.opentext.com/investor-events-and-presentations.
A replay of the call will be available beginning May 4, 2022 at 7:00 p.m.
ET through 11:59 p.m. on
May 18, 2022 and can be accessed by
dialing 1-855-669-9658 (toll-free) or +1-604-674-8052
(international) and using passcode 8697 followed by the number
sign.
Please see below note (2) for a reconciliation of
U.S. GAAP-based financial measures used in this press release
to Non-GAAP-based financial measures.
About OpenText
OpenText, The Information Companyâ„¢, enables organizations to
gain insight through market leading information management
solutions, powered by OpenText Cloud Editions. For more information
about OpenText (NASDAQ: OTEX, TSX: OTEX) visit opentext.com.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this press release, including statements
about the focus of Open Text Corporation ("OpenText" or "the
Company") in our fiscal year ending June 30,
2022 (Fiscal 2022) on growth, future cloud growth and market
share gains, future organic growth initiatives and deployment of
capital, intention to maintain a dividend program, potential share
repurchases pursuant to its share repurchase plans, future tax
rates, new platform and product offerings, scaling OpenText to new
levels in Fiscal 2022 and beyond, and other matters, which may
contain words such as "anticipates", "expects", "intends", "plans",
"believes", "seeks", "estimates", "may", "could", "would", "might",
"will" and variations of these words or similar expressions are
considered forward-looking statements or information under
applicable securities laws. In addition, any information or
statements that refer to expectations, beliefs, plans, projections,
objectives, performance or other characterizations of future events
or circumstances, including any underlying assumptions, are
forward-looking, and based on our current expectations, forecasts
and projections about the operating environment, economies and
markets in which we operate. Forward-looking statements reflect our
current estimates, beliefs and assumptions, which are based on
management's perception of historic trends, current conditions and
expected future developments, as well as other factors it believes
are appropriate in the circumstances, such as certain assumptions
about the economy, as well as market, financial and operational
assumptions. Management's estimates, beliefs and assumptions are
inherently subject to significant business, economic, competitive
and other uncertainties and contingencies regarding future events
and, as such, are subject to change. We can give no assurance that
such estimates, beliefs and assumptions will prove to be correct.
Such forward-looking statements involve known and unknown risks and
uncertainties such as those relating to the duration and severity
of the COVID-19 pandemic, including any new strains or resurgences,
as well as our ability to develop, protect and maintain our
intellectual property and proprietary technology and to operate
without infringing on the proprietary rights of others. For
additional information with respect to risks and other factors
which could occur, see the Company's Annual Report on Form 10-K,
Quarterly 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 ©2022 Open Text. OpenText is a trademark or registered
trademark of Open Text. The list of trademarks is not exhaustive of
other trademarks. Registered trademarks, product names, company
names, brands and service names mentioned herein are property of
Open Text. All rights reserved. For more information, visit:
http://www.opentext.com/who-we-are/copyright-information.
OPEN TEXT
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands of
U.S. dollars, except share data)
|
|
|
|
|
|
March 31, 2022
|
|
June 30, 2021
|
ASSETS
|
(unaudited)
|
|
|
Cash and cash
equivalents
|
$
1,633,702
|
|
$
1,607,306
|
Accounts receivable
trade, net of allowance for credit losses of $16,439 as of
March 31, 2022 and $22,151 as of
June 30, 2021
|
429,877
|
|
438,547
|
Contract
assets
|
25,481
|
|
25,344
|
Income taxes
recoverable
|
20,781
|
|
32,312
|
Prepaid expenses and
other current assets
|
122,616
|
|
98,551
|
Total current assets
|
2,232,457
|
|
2,202,060
|
Property and
equipment
|
227,830
|
|
233,595
|
Operating lease right
of use assets
|
217,684
|
|
234,532
|
Long-term contract
assets
|
20,049
|
|
19,222
|
Goodwill
|
5,265,189
|
|
4,691,673
|
Acquired intangible
assets
|
1,181,266
|
|
1,187,260
|
Deferred tax
assets
|
717,345
|
|
796,738
|
Other assets
|
257,301
|
|
208,894
|
Long-term income taxes
recoverable
|
43,518
|
|
35,362
|
Total
assets
|
$
10,162,639
|
|
$
9,609,336
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and accrued liabilities
|
$
404,545
|
|
$
423,592
|
Current portion of long-term debt
|
10,000
|
|
10,000
|
Operating lease liabilities
|
59,182
|
|
58,315
|
Deferred revenues
|
936,750
|
|
852,629
|
Income taxes payable
|
7,483
|
|
17,368
|
Total current
liabilities
|
1,417,960
|
|
1,361,904
|
Long-term
liabilities:
|
|
|
|
Accrued liabilities
|
16,631
|
|
28,830
|
Pension liability
|
76,364
|
|
74,511
|
Long-term debt
|
4,210,582
|
|
3,578,859
|
Long-term operating lease liabilities
|
203,101
|
|
224,453
|
Long-term deferred revenues
|
90,736
|
|
98,989
|
Long-term income taxes payable
|
35,206
|
|
34,113
|
Deferred tax liabilities
|
56,208
|
|
108,224
|
Total long-term
liabilities
|
4,688,828
|
|
4,147,979
|
Shareholders'
equity:
|
|
|
|
Share capital and additional paid-in capital
|
|
|
|
270,231,166 and 271,540,755 Common Shares issued and
outstanding at
March 31,
2022 and June 30, 2021, respectively; authorized Common
Shares:
unlimited
|
2,010,146
|
|
1,947,764
|
Accumulated other comprehensive income
|
17,266
|
|
66,238
|
Retained earnings
|
2,151,369
|
|
2,153,326
|
Treasury stock, at cost
(2,776,420 and 1,567,664 shares at March 31, 2022 and
June 30, 2021,
respectively)
|
(124,033)
|
|
(69,386)
|
Total OpenText
shareholders' equity
|
4,054,748
|
|
4,097,942
|
Non-controlling
interests
|
1,103
|
|
1,511
|
Total shareholders'
equity
|
4,055,851
|
|
4,099,453
|
Total liabilities and shareholders'
equity
|
$
10,162,639
|
|
$
9,609,336
|
OPEN TEXT
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(In thousands of
U.S. dollars, except share and per share data)
|
(unaudited)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues:
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
401,947
|
|
$
355,845
|
|
$
1,123,422
|
|
$
1,047,285
|
Customer support
|
332,514
|
|
335,915
|
|
1,002,626
|
|
999,806
|
License
|
80,641
|
|
76,299
|
|
263,663
|
|
252,170
|
Professional service and
other
|
67,181
|
|
64,872
|
|
201,679
|
|
193,327
|
Total
revenues
|
882,283
|
|
832,931
|
|
2,591,390
|
|
2,492,588
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
136,020
|
|
123,729
|
|
377,928
|
|
354,235
|
Customer support
|
31,763
|
|
30,953
|
|
90,914
|
|
89,815
|
License
|
3,196
|
|
2,810
|
|
10,906
|
|
9,601
|
Professional service and
other
|
56,693
|
|
50,321
|
|
161,459
|
|
143,521
|
Amortization of acquired
technology-based
intangible assets
|
46,564
|
|
53,453
|
|
152,333
|
|
165,581
|
Total cost of
revenues
|
274,236
|
|
261,266
|
|
793,540
|
|
762,753
|
Gross profit
|
608,047
|
|
571,665
|
|
1,797,850
|
|
1,729,835
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
117,730
|
|
110,071
|
|
321,517
|
|
304,212
|
Sales and marketing
|
180,955
|
|
158,687
|
|
491,133
|
|
438,984
|
General and
administrative
|
88,137
|
|
71,548
|
|
231,127
|
|
190,502
|
Depreciation
|
22,370
|
|
21,961
|
|
65,535
|
|
64,244
|
Amortization of acquired
customer-based
intangible assets
|
56,215
|
|
54,156
|
|
160,764
|
|
164,075
|
Special charges
(recoveries)
|
11,031
|
|
2,846
|
|
20,592
|
|
(1,404)
|
Total operating
expenses
|
476,438
|
|
419,269
|
|
1,290,668
|
|
1,160,613
|
Income from
operations
|
131,609
|
|
152,396
|
|
507,182
|
|
569,222
|
Other income (expense),
net
|
24,392
|
|
8,283
|
|
29,137
|
|
16,417
|
Interest and other
related expense, net
|
(40,238)
|
|
(37,333)
|
|
(117,538)
|
|
(114,017)
|
Income before income
taxes
|
115,763
|
|
123,346
|
|
418,781
|
|
471,622
|
Provision for income
taxes
|
41,041
|
|
31,818
|
|
123,757
|
|
342,121
|
Net income for the
period
|
$
74,722
|
|
$
91,528
|
|
$
295,024
|
|
$
129,501
|
Net (income) loss
attributable to non-controlling
interests
|
(41)
|
|
(38)
|
|
(130)
|
|
(112)
|
Net income attributable
to OpenText
|
$
74,681
|
|
$
91,490
|
|
$
294,894
|
|
$
129,389
|
Earnings per
share—basic attributable to OpenText
|
$
0.28
|
|
$
0.34
|
|
$
1.09
|
|
$
0.47
|
Earnings per
share—diluted attributable to OpenText
|
$
0.28
|
|
$
0.33
|
|
$
1.08
|
|
$
0.47
|
Weighted average number
of Common Shares
outstanding—basic (in '000's)
|
270,693
|
|
272,832
|
|
271,623
|
|
272,414
|
Weighted average number
of Common Shares
outstanding—diluted (in '000's)
|
271,211
|
|
273,924
|
|
272,439
|
|
273,312
|
OPEN TEXT
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
(In thousands of
U.S. dollars)
|
(unaudited)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income for the
period
|
$
74,722
|
|
$
91,528
|
|
$
295,024
|
|
$
129,501
|
Other comprehensive
income (loss)—net of tax:
|
|
|
|
|
|
|
|
Net
foreign currency translation adjustments
|
(13,073)
|
|
(12,568)
|
|
(44,512)
|
|
36,142
|
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
Unrealized gain (loss) -
net of tax expense
(recovery) effect
of $233 and $246 for the three
months ended
March 31, 2022 and 2021,
respectively;
($158) and $1,302 for the nine
months ended
March 31, 2022 and 2021,
respectively
|
648
|
|
681
|
|
(334)
|
|
3,608
|
(Gain) loss reclassified into
net income - net of
tax (expense)
recovery effect of $79 and ($399)
for the three
months ended March 31, 2022 and
2021,
respectively; ($24) and ($682) for the
nine months ended
March 31, 2022 and 2021,
respectively
|
219
|
|
(1,108)
|
|
(86)
|
|
(1,892)
|
Actuarial gain (loss) relating to defined benefit
pension plans:
|
|
|
|
|
|
|
|
Actuarial gain (loss) -
net of tax expense
(recovery) effect
of ($579) and $944 for the
three months
ended March 31, 2022 and 2021,
respectively;
($811) and ($413) for the nine
months ended
March 31, 2022 and 2021,
respectively
|
(2,033)
|
|
344
|
|
(4,517)
|
|
(2,342)
|
Amortization of actuarial
(gain) loss into net
income -
net of tax (expense) recovery effect of
$66 and $95 for
the three months ended March
31, 2022 and
2021, respectively; $134 and
$275 for the nine
months ended March 31,
2022 and 2021,
respectively
|
156
|
|
249
|
|
477
|
|
733
|
Total other
comprehensive income (loss) net, for the
period
|
(14,083)
|
|
(12,402)
|
|
(48,972)
|
|
36,249
|
Total comprehensive
income
|
60,639
|
|
79,126
|
|
246,052
|
|
165,750
|
Comprehensive (income)
loss attributable to non-
controlling interests
|
(41)
|
|
(38)
|
|
(130)
|
|
(112)
|
Total comprehensive
income attributable to OpenText
|
$
60,598
|
|
$
79,088
|
|
$
245,922
|
|
$
165,638
|
OPEN TEXT
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
|
(In thousands of
U.S. dollars and shares)
|
(unaudited)
|
|
|
|
Three Months Ended March 31,
2022
|
|
Common Shares and
Additional Paid in Capital
|
|
Treasury Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Non-
Controlling
Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of December 31,
2021
|
271,006
|
|
$
1,990,913
|
|
(1,476)
|
|
$
(67,966)
|
|
$
2,174,467
|
|
$
31,349
|
|
$
1,062
|
|
$
4,129,825
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock option plans
|
53
|
|
1,863
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,863
|
Under employee stock purchase plans
|
172
|
|
7,003
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,003
|
Share-based
compensation
|
—
|
|
16,748
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
16,748
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(1,300)
|
|
(56,067)
|
|
—
|
|
—
|
|
—
|
|
(56,067)
|
Repurchase of Common
Shares
|
(1,000)
|
|
(6,381)
|
|
—
|
|
—
|
|
(38,702)
|
|
—
|
|
—
|
|
(45,083)
|
Dividends
declared
($0.2209 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(59,077)
|
|
—
|
|
—
|
|
(59,077)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(14,083)
|
|
—
|
|
(14,083)
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
74,681
|
|
—
|
|
41
|
|
74,722
|
Balance as of March 31,
2022
|
270,231
|
|
$
2,010,146
|
|
(2,776)
|
|
$
(124,033)
|
|
$
2,151,369
|
|
$
17,266
|
|
$
1,103
|
|
$
4,055,851
|
|
Three Months Ended March 31,
2021
|
|
Common Shares and
Additional Paid in Capital
|
|
Treasury Stock
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Income
|
|
Non-Controlling Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of December 31,
2020
|
272,589
|
|
$
1,889,857
|
|
(1,101)
|
|
$
(47,555)
|
|
$
2,093,076
|
|
$
66,476
|
|
$
1,393
|
|
$
4,003,247
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock option plans
|
219
|
|
8,270
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,270
|
Under employee stock purchase plans
|
165
|
|
6,421
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,421
|
Share-based
compensation
|
—
|
|
12,357
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12,357
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(490)
|
|
(22,977)
|
|
—
|
|
—
|
|
—
|
|
(22,977)
|
Issuance of treasury
stock
|
—
|
|
(1,146)
|
|
23
|
|
1,146
|
|
—
|
|
—
|
|
—
|
|
—
|
Dividends
declared
($0.2008 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(54,519)
|
|
—
|
|
—
|
|
(54,519)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(12,402)
|
|
—
|
|
(12,402)
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
91,490
|
|
—
|
|
38
|
|
91,528
|
Balance as of March 31,
2021
|
272,973
|
|
$
1,915,759
|
|
(1,568)
|
|
$
(69,386)
|
|
$
2,130,047
|
|
$
54,074
|
|
$
1,431
|
|
$
4,031,925
|
OPEN TEXT
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
|
(In thousands of
U.S. dollars and shares)
|
(unaudited)
|
|
|
|
Nine Months Ended March 31,
2022
|
|
Common Shares and
Additional Paid in Capital
|
|
Treasury Stock
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Income
|
|
Non-Controlling Interests
|
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Balance as of June 30,
2021
|
271,541
|
|
$
1,947,764
|
|
(1,568)
|
|
$
(69,386)
|
|
$
2,153,326
|
|
$
66,238
|
|
$
1,511
|
|
$
4,099,453
|
Issuance of Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under employee stock option plans
|
905
|
|
31,128
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31,128
|
Under employee stock purchase plans
|
595
|
|
24,913
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
24,913
|
Share-based
compensation
|
—
|
|
45,091
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
45,091
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(1,700)
|
|
(75,660)
|
|
—
|
|
—
|
|
—
|
|
(75,660)
|
Issuance of treasury
stock
|
—
|
|
(21,013)
|
|
492
|
|
21,013
|
|
—
|
|
—
|
|
—
|
|
—
|
Repurchase of Common
Shares
|
(2,810)
|
|
(17,879)
|
|
—
|
|
—
|
|
(118,238)
|
|
—
|
|
—
|
|
(136,117)
|
Dividends
declared
($0.6627 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(178,613)
|
|
—
|
|
—
|
|
(178,613)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(48,972)
|
|
—
|
|
(48,972)
|
Distribution to
non-controlling interest
|
—
|
|
142
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(538)
|
|
(396)
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
294,894
|
|
—
|
|
130
|
|
295,024
|
Balance as of March 31,
2022
|
270,231
|
|
$
2,010,146
|
|
(2,776)
|
|
$
(124,033)
|
|
$
2,151,369
|
|
$
17,266
|
|
$
1,103
|
|
$
4,055,851
|
|
Nine Months Ended March 31,
2021
|
|
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
|
743
|
|
23,768
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
23,768
|
Under employee stock purchase plans
|
367
|
|
13,974
|
|
193
|
|
6,690
|
|
—
|
|
—
|
|
—
|
|
20,664
|
Share-based
compensation
|
—
|
|
38,619
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
38,619
|
Purchase of treasury
stock
|
—
|
|
—
|
|
(1,455)
|
|
(64,847)
|
|
—
|
|
—
|
|
—
|
|
(64,847)
|
Issuance of treasury
stock
|
—
|
|
(12,379)
|
|
316
|
|
12,379
|
|
—
|
|
—
|
|
—
|
|
—
|
Dividends
declared
($0.5762 per Common
Share)
|
—
|
|
—
|
|
—
|
|
—
|
|
(156,288)
|
|
—
|
|
—
|
|
(156,288)
|
Other comprehensive
income (loss) - net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
36,249
|
|
—
|
|
36,249
|
Net income for the
period
|
—
|
|
—
|
|
—
|
|
—
|
|
129,389
|
|
—
|
|
112
|
|
129,501
|
Balance as of March 31,
2021
|
272,973
|
|
$
1,915,759
|
|
(1,568)
|
|
$
(69,386)
|
|
$
2,130,047
|
|
$
54,074
|
|
$
1,431
|
|
$
4,031,925
|
OPEN TEXT
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands of
U.S. dollars)
|
(unaudited)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income for the
period
|
$
74,722
|
|
$
91,528
|
|
$
295,024
|
|
$
129,501
|
Adjustments to
reconcile net income to net cash
provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization of intangible assets
|
125,149
|
|
129,570
|
|
378,632
|
|
393,900
|
Share-based compensation expense
|
16,748
|
|
12,357
|
|
45,091
|
|
38,619
|
Pension expense
|
1,868
|
|
1,550
|
|
4,883
|
|
4,670
|
Amortization of debt issuance costs
|
1,482
|
|
1,141
|
|
3,936
|
|
3,395
|
Loss on extinguishment of debt
|
—
|
|
—
|
|
27,413
|
|
—
|
Loss on sale and write down of property and
equipment
|
58
|
|
1,026
|
|
96
|
|
1,979
|
Deferred taxes
|
22,440
|
|
447
|
|
43,332
|
|
80,844
|
Share in net (income) loss of equity investees
|
(27,746)
|
|
(11,765)
|
|
(59,103)
|
|
(20,020)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
17,241
|
|
54,345
|
|
68,428
|
|
87,072
|
Contract assets
|
(8,463)
|
|
(8,842)
|
|
(27,208)
|
|
(29,035)
|
Prepaid expenses and other current assets
|
(4,501)
|
|
(10,494)
|
|
(15,722)
|
|
(2,528)
|
Income taxes
|
(14,011)
|
|
(286,435)
|
|
(11,235)
|
|
(117,594)
|
Accounts payable and accrued liabilities
|
42,891
|
|
9,211
|
|
(65,738)
|
|
(27,327)
|
Deferred revenue
|
76,335
|
|
81,247
|
|
25,642
|
|
62,600
|
Other assets
|
(386)
|
|
2,232
|
|
16,527
|
|
765
|
Operating lease assets and liabilities, net
|
(270)
|
|
(3,546)
|
|
(128)
|
|
(26,910)
|
Net cash provided by
operating activities
|
323,557
|
|
63,572
|
|
729,870
|
|
579,931
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Additions of property and equipment
|
(17,590)
|
|
(13,311)
|
|
(54,937)
|
|
(36,267)
|
Purchase of Zix Corporation, net of cash acquired
|
(18,602)
|
|
—
|
|
(856,175)
|
|
—
|
Purchase of Bricata Inc.
|
—
|
|
—
|
|
(17,927)
|
|
—
|
Purchase of XMedius
|
—
|
|
—
|
|
—
|
|
444
|
Purchase of Dynamic Solutions Group Inc.
|
—
|
|
—
|
|
—
|
|
(371)
|
Other investing activities
|
(651)
|
|
(648)
|
|
(3,922)
|
|
(2,018)
|
Net cash used in
investing activities
|
(36,843)
|
|
(13,959)
|
|
(932,961)
|
|
(38,212)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from issuance of Common Shares from
exercise of stock
options and ESPP
|
10,788
|
|
16,603
|
|
56,476
|
|
45,780
|
Proceeds from long-term debt and Revolver
|
—
|
|
—
|
|
1,500,000
|
|
—
|
Repayment of long-term debt and Revolver
|
(2,500)
|
|
(2,500)
|
|
(857,500)
|
|
(607,500)
|
Debt extinguishment costs
|
—
|
|
—
|
|
(24,969)
|
|
—
|
Debt issuance costs
|
(1,812)
|
|
—
|
|
(17,159)
|
|
—
|
Repurchase of Common Shares
|
(45,083)
|
|
—
|
|
(136,117)
|
|
—
|
Purchase of treasury stock
|
(56,067)
|
|
(22,977)
|
|
(75,660)
|
|
(64,847)
|
Distribution to non-controlling interest
|
—
|
|
—
|
|
(396)
|
|
—
|
Payments of dividends to shareholders
|
(59,077)
|
|
(54,519)
|
|
(178,613)
|
|
(156,288)
|
Net cash provided by
(used in) financing activities
|
(153,751)
|
|
(63,393)
|
|
266,062
|
|
(782,855)
|
Foreign exchange gain
(loss) on cash held in foreign
currencies
|
(11,207)
|
|
(11,218)
|
|
(36,920)
|
|
22,553
|
Increase (decrease) in
cash, cash equivalents and
restricted cash during the period
|
121,756
|
|
(24,998)
|
|
26,051
|
|
(218,583)
|
Cash, cash equivalents
and restricted cash at beginning
of the period
|
1,514,095
|
|
1,503,678
|
|
1,609,800
|
|
1,697,263
|
Cash, cash equivalents
and restricted cash at end of the
period
|
$
1,635,851
|
|
$
1,478,680
|
|
$
1,635,851
|
|
$
1,478,680
|
OPEN TEXT
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands of
U.S. dollars)
|
(unaudited)
|
|
|
|
|
Reconciliation of cash, cash equivalents and
restricted cash:
|
March 31, 2022
|
|
March 31, 2021
|
Cash and cash
equivalents
|
$
1,633,702
|
|
$
1,475,626
|
Restricted cash
(1)
|
2,149
|
|
3,054
|
Total cash, cash
equivalents and restricted cash
|
$
1,635,851
|
|
$
1,478,680
|
|
|
|
|
(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 is not meant to be a substitute for financial measures
presented in accordance with U.S. GAAP, but rather should be
evaluated in conjunction with and as a supplement to such
U.S. GAAP measures. OpenText strongly encourages investors to
review its financial information in its entirety and not to rely on
a single financial measure. The Company therefore believes that
despite these limitations, it is appropriate to supplement the
disclosure of the U.S. GAAP measures with certain Non-GAAP
measures defined below.
|
|
Non-GAAP-based net
income and Non-GAAP-based EPS, attributable to OpenText, are
consistently calculated as GAAP-based net income or earnings per
share, attributable to OpenText, on a diluted basis, excluding the
effects of the amortization of acquired intangible assets, other
income (expense), share-based compensation, and special charges
(recoveries), all net of tax and any tax benefits/expense items
unrelated to current period income, as further described in the
tables below. Non-GAAP-based gross profit is the arithmetical sum
of GAAP-based gross profit and the amortization of acquired
technology-based intangible assets and share-based compensation
within cost of sales. Non-GAAP-based gross margin is calculated as
Non-GAAP-based gross profit expressed as a percentage of total
revenue. Non-GAAP-based income from operations is calculated as
GAAP-based income from operations, excluding the amortization of
acquired intangible assets, special charges (recoveries), and
share-based compensation expense.
|
|
Adjusted earnings
before interest, taxes, depreciation and amortization (Adjusted
EBITDA) is consistently calculated as GAAP-based net income,
attributable to OpenText, excluding interest income (expense),
provision for income taxes, depreciation and amortization of
acquired intangible assets, other income (expense), share-based
compensation and special charges (recoveries). Adjusted EBITDA
margin is calculated as adjusted EBITDA expressed as a percentage
of total revenue.
|
|
The Company's
management believes that the presentation of the above defined
Non-GAAP financial measures provides useful information to
investors because they portray the financial results of the Company
before the impact of certain non-operational charges. The use of
the term "non-operational charge" is defined for this purpose as an
expense that does not impact the ongoing operating decisions taken
by the Company's management. These items are excluded based upon
the way the Company's management evaluates the performance of the
Company's business for use in the Company's internal reports and
are not excluded in the sense that they may be used under U.S.
GAAP.
|
|
The Company does not
acquire businesses on a predictable cycle, and therefore believes
that the presentation of Non-GAAP measures, which in certain cases
adjust for the impact of amortization of intangible assets and the
related tax effects that are primarily related to acquisitions,
will provide readers of financial statements with a more consistent
basis for comparison across accounting periods and be more useful
in helping readers understand the Company's operating results and
underlying operational trends. Additionally, the Company has
engaged in various restructuring activities over the past several
years, primarily due to acquisitions and most recently in response
to our return to office planning, that have resulted in costs
associated with reductions in headcount, consolidation of leased
facilities and related costs, all which are recorded under the
Company's "Special charges (recoveries)" caption on the
Consolidated Statements of Income. Each restructuring activity is a
discrete event based on a unique set of business objectives or
circumstances, and each differs in terms of its operational
implementation, business impact and scope, and the size of each
restructuring plan can vary significantly from period to period.
Therefore, the Company believes that the exclusion of these special
charges (recoveries) will also better aid readers of financial
statements in the understanding and comparability of the Company's
operating results and underlying operational trends.
|
|
In summary, the Company
believes the provision of supplemental Non-GAAP measures allow
investors to evaluate the operational and financial performance of
the Company's core business using the same evaluation measures that
management uses, and is therefore a useful indication of OpenText's
performance or expected performance of future operations and
facilitates period-to-period comparison of operating performance
(although prior performance is not necessarily indicative of future
performance). As a result, the Company considers it appropriate and
reasonable to provide, in addition to U.S. GAAP measures,
supplementary Non-GAAP financial measures that exclude certain
items from the presentation of its financial results.
|
|
The following charts
provide unaudited reconciliations of U.S. GAAP-based financial
measures to Non-GAAP-based financial measures for the following
periods presented.
|
Reconciliation of selected GAAP-based measures to
Non-GAAP-based measures
for the three months ended March 31,
2022
(In thousands, except for per share
data)
|
|
Three Months Ended March 31,
2022
|
|
GAAP-based Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-based Measures
|
Non-GAAP-based Measures
% of Total Revenue
|
Cost of revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
136,020
|
|
$ (1,268)
|
(1)
|
$
134,752
|
|
Customer
support
|
31,763
|
|
(501)
|
(1)
|
31,262
|
|
Professional service
and other
|
56,693
|
|
(907)
|
(1)
|
55,786
|
|
Amortization of
acquired technology-based intangible assets
|
46,564
|
|
(46,564)
|
(2)
|
—
|
|
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross
margin
(%)
|
608,047
|
68.9%
|
49,240
|
(3)
|
657,287
|
74.5%
|
Operating expenses
|
|
|
|
|
|
|
Research and
development
|
117,730
|
|
(4,350)
|
(1)
|
113,380
|
|
Sales and
marketing
|
180,955
|
|
(5,761)
|
(1)
|
175,194
|
|
General and
administrative
|
88,137
|
|
(3,961)
|
(1)
|
84,176
|
|
Amortization of
acquired customer-based intangible
assets
|
56,215
|
|
(56,215)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
11,031
|
|
(11,031)
|
(4)
|
—
|
|
GAAP-based income from operations / Non-GAAP-
based income from
operations
|
131,609
|
|
130,558
|
(5)
|
262,167
|
|
Other income (expense),
net
|
24,392
|
|
(24,392)
|
(6)
|
—
|
|
Provision for income
taxes
|
41,041
|
|
(9,971)
|
(7)
|
31,070
|
|
GAAP-based net income / Non-GAAP-based net
income, attributable to
OpenText
|
74,681
|
|
116,137
|
(8)
|
190,818
|
|
GAAP-based earnings per share / Non-GAAP-based
earnings per share-diluted, attributable to
OpenText
|
$
0.28
|
|
$
0.42
|
(8)
|
$
0.70
|
|
(1)
|
Adjustment relates to
the exclusion of share-based compensation expense from our
Non-GAAP-based operating expenses as this expense is excluded from
our internal analysis of operating results.
|
(2)
|
Adjustment relates to
the exclusion of amortization expense from our Non-GAAP-based
operating expenses as the timing and frequency of amortization
expense is dependent on our acquisitions and is hence excluded from
our internal analysis of operating results.
|
(3)
|
GAAP-based and
Non-GAAP-based gross profit stated in dollars and gross margin
stated as a percentage of total revenue.
|
(4)
|
Adjustment relates to
the exclusion of special charges (recoveries) from our
Non-GAAP-based operating expenses as special charges (recoveries)
are generally incurred in the periods relevant to an acquisition
and include certain charges or recoveries that are not indicative
or related to continuing operations, and are therefore excluded
from our internal analysis of operating results.
|
(5)
|
GAAP-based and
Non-GAAP-based income from operations stated in dollars.
|
(6)
|
Adjustment relates to
the exclusion of other income (expense) from our Non-GAAP-based
operating expenses as other income (expense) generally relates to
the transactional impact of foreign exchange and is generally not
indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other
income (expense) also includes our share of income (losses) from
our holdings in investments as a limited partner. We do not
actively trade equity securities in these privately held companies
nor do we plan our ongoing operations based around any anticipated
fundings or distributions from these investments. We exclude gains
and losses on these investments as we do not believe they are
reflective of our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 35% and a Non-GAAP-based tax rate of approximately
14%; these rate differences are due to the income tax effects of
items that are excluded for the purpose of calculating
Non-GAAP-based adjusted net income. Such excluded items include
amortization, share-based compensation, special charges
(recoveries) and other income (expense), net. Also excluded are tax
benefits/expense items unrelated to current period income such as
changes in reserves for tax uncertainties and valuation allowance
reserves, and "book to return" adjustments for tax return filings
and tax assessments. Included is the amount of net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 assumed to be allocable to the current period based on the
forecasted utilization period. In arriving at our Non-GAAP-based
tax rate of approximately 14%, we analyzed the individual adjusted
expenses and took into consideration the impact of statutory tax
rates from local jurisdictions incurring the expense.
|
|
|
|
|
(8)
|
Reconciliation of
GAAP-based net income to Non-GAAP-based net income:
|
|
Three Months Ended March 31,
2022
|
|
|
Per share diluted
|
GAAP-based net income,
attributable to OpenText
|
$
74,681
|
$
0.28
|
Add:
|
|
|
Amortization
|
102,779
|
0.38
|
Share-based
compensation
|
16,748
|
0.06
|
Special charges
(recoveries)
|
11,031
|
0.04
|
Other (income) expense,
net
|
(24,392)
|
(0.09)
|
GAAP-based provision
for income taxes
|
41,041
|
0.15
|
Non-GAAP-based
provision for income taxes
|
(31,070)
|
(0.12)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
190,818
|
$
0.70
|
Reconciliation of
Adjusted EBITDA
|
|
|
|
Three Months Ended March 31,
2022
|
GAAP-based net income,
attributable to OpenText
|
$
74,681
|
Add:
|
|
Provision for income
taxes
|
41,041
|
Interest and other
related expense, net
|
40,238
|
Amortization of
acquired technology-based intangible assets
|
46,564
|
Amortization of
acquired customer-based intangible assets
|
56,215
|
Depreciation
|
22,370
|
Share-based
compensation
|
16,748
|
Special charges
(recoveries)
|
11,031
|
Other (income) expense,
net
|
(24,392)
|
Adjusted
EBITDA
|
$
284,496
|
|
|
GAAP-based net income
margin
|
8.5%
|
Adjusted EBITDA
margin
|
32.2%
|
Reconciliation of
Free cash flows
|
|
|
|
Three Months Ended March 31,
2022
|
GAAP-based cash flows
provided by operating activities
|
$
323,557
|
Add:
|
|
Capital expenditures
(1)
|
(17,590)
|
Free cash
flows
|
$
305,967
|
|
|
(1) Defined as "Additions of property
and equipment" in the Condensed Consolidated Statements of Cash
Flows.
|
Reconciliation of selected GAAP-based measures to
Non-GAAP-based measures
for the nine months ended March 31,
2022
(In thousands, except for per share
data)
|
|
Nine Months Ended March 31,
2022
|
|
GAAP-based
Measures
|
GAAP-based Measures
% of Total Revenue
|
Adjustments
|
Note
|
Non-GAAP-based
Measures
|
Non-GAAP-based Measures
% of Total Revenue
|
Cost of revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
377,928
|
|
$ (3,072)
|
(1)
|
$
374,856
|
|
Customer
support
|
90,914
|
|
(1,631)
|
(1)
|
89,283
|
|
Professional service
and other
|
161,459
|
|
(2,275)
|
(1)
|
159,184
|
|
Amortization of
acquired technology-based intangible
assets
|
152,333
|
|
(152,333)
|
(2)
|
—
|
|
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross
margin
(%)
|
1,797,850
|
69.4%
|
159,311
|
(3)
|
1,957,161
|
75.5%
|
Operating expenses
|
|
|
|
|
|
|
Research and
development
|
321,517
|
|
(9,936)
|
(1)
|
311,581
|
|
Sales and
marketing
|
491,133
|
|
(15,377)
|
(1)
|
475,756
|
|
General and
administrative
|
231,127
|
|
(12,800)
|
(1)
|
218,327
|
|
Amortization of
acquired customer-based intangible assets
|
160,764
|
|
(160,764)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
20,592
|
|
(20,592)
|
(4)
|
—
|
|
GAAP-based income from operations / Non-GAAP-
based income from
operations
|
507,182
|
|
378,780
|
(5)
|
885,962
|
|
Other income (expense),
net
|
29,137
|
|
(29,137)
|
(6)
|
—
|
|
Provision for income
taxes
|
123,757
|
|
(16,178)
|
(7)
|
107,579
|
|
GAAP-based net income / Non-GAAP-based net
income, attributable to
OpenText
|
294,894
|
|
365,821
|
(8)
|
660,715
|
|
GAAP-based earnings per share / Non-GAAP-based
earnings per share-diluted, attributable to
OpenText
|
$
1.08
|
|
$
1.35
|
(8)
|
$
2.43
|
|
(1)
|
Adjustment relates to
the exclusion of share-based compensation expense from our
Non-GAAP-based operating expenses as this expense is excluded from
our internal analysis of operating results.
|
(2)
|
Adjustment relates to
the exclusion of amortization expense from our Non-GAAP-based
operating expenses as the timing and frequency of amortization
expense is dependent on our acquisitions and is hence excluded from
our internal analysis of operating results.
|
(3)
|
GAAP-based and
Non-GAAP-based gross profit stated in dollars and gross margin
stated as a percentage of total revenue.
|
(4)
|
Adjustment relates to
the exclusion of special charges (recoveries) from our
Non-GAAP-based operating expenses as special charges (recoveries)
are generally incurred in the periods relevant to an acquisition
and include certain charges or recoveries that are not indicative
or related to continuing operations, and are therefore excluded
from our internal analysis of operating results.
|
(5)
|
GAAP-based and
Non-GAAP-based income from operations stated in dollars.
|
(6)
|
Adjustment relates to
the exclusion of other income (expense) from our Non-GAAP-based
operating expenses as other income (expense) generally relates to
the transactional impact of foreign exchange and is generally not
indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other
income (expense) also includes our share of income (losses) from
our holdings in investments as a limited partner. We do not
actively trade equity securities in these privately held companies
nor do we plan our ongoing operations based around any anticipated
fundings or distributions from these investments. We exclude gains
and losses on these investments as we do not believe they are
reflective of our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 30% and a Non-GAAP-based tax rate of approximately
14%; these rate differences are due to the income tax effects of
items that are excluded for the purpose of calculating
Non-GAAP-based adjusted net income. Such excluded items include
amortization, share-based compensation, special charges
(recoveries) and other income (expense), net. Also excluded are tax
benefits/expense items unrelated to current period income such as
changes in reserves for tax uncertainties and valuation allowance
reserves, and "book to return" adjustments for tax return filings
and tax assessments. Included is the amount of net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 assumed to be allocable to the current period based on the
forecasted utilization period. In arriving at our Non-GAAP-based
tax rate of approximately 14%, we analyzed the individual adjusted
expenses and took into consideration the impact of statutory tax
rates from local jurisdictions incurring the expense.
|
|
|
|
|
(8)
|
Reconciliation of
GAAP-based net income to Non-GAAP-based net income:
|
|
Nine Months Ended March 31,
2022
|
|
|
Per share diluted
|
GAAP-based net income,
attributable to OpenText
|
$
294,894
|
$
1.08
|
Add:
|
|
|
Amortization
|
313,097
|
1.15
|
Share-based
compensation
|
45,091
|
0.17
|
Special charges
(recoveries)
|
20,592
|
0.08
|
Other (income) expense,
net
|
(29,137)
|
(0.11)
|
GAAP-based provision
for income taxes
|
123,757
|
0.45
|
Non-GAAP-based
provision for income taxes
|
(107,579)
|
(0.39)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
660,715
|
$
2.43
|
Reconciliation of
Adjusted EBITDA
|
|
|
|
Nine Months Ended March 31,
2022
|
GAAP-based net income,
attributable to OpenText
|
$
294,894
|
Add:
|
|
Provision for income
taxes
|
123,757
|
Interest and other
related expense, net
|
117,538
|
Amortization of
acquired technology-based intangible assets
|
152,333
|
Amortization of
acquired customer-based intangible assets
|
160,764
|
Depreciation
|
65,535
|
Share-based
compensation
|
45,091
|
Special charges
(recoveries)
|
20,592
|
Other (income) expense,
net
|
(29,137)
|
Adjusted
EBITDA
|
$
951,367
|
|
|
GAAP-based net income
margin
|
11.4%
|
Adjusted EBITDA
margin
|
36.7%
|
Reconciliation of
Free cash flows
|
|
|
|
Nine Months Ended March 31,
2022
|
GAAP-based cash flows
provided by operating activities
|
$
729,870
|
Add:
|
|
Capital expenditures
(1)
|
(54,937)
|
Free cash
flows
|
$
674,933
|
|
|
(1) Defined as "Additions of property
and equipment" in the Condensed Consolidated Statements of Cash
Flows.
|
Reconciliation of selected GAAP-based measures to
Non-GAAP-based measures
for the three months ended December 31,
2021
(In thousands, except for per share
data)
|
|
Three Months Ended December 31,
2021
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-based
Measures
|
Non-GAAP-based Measures
% of Total Revenue
|
Cost of revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
122,129
|
|
$
(897)
|
(1)
|
$
121,232
|
|
Customer
support
|
29,668
|
|
(409)
|
(1)
|
29,259
|
|
Professional service
and other
|
53,041
|
|
(647)
|
(1)
|
52,394
|
|
Amortization of
acquired technology-based intangible
assets
|
52,602
|
|
(52,602)
|
(2)
|
—
|
|
GAAP-based gross profit and gross margin (%)
/Non-GAAP-based gross profit and gross
margin
(%)
|
615,618
|
70.2%
|
54,555
|
(3)
|
670,173
|
76.4%
|
Operating expenses
|
|
|
|
|
|
|
Research and
development
|
103,622
|
|
(2,652)
|
(1)
|
100,970
|
|
Sales and
marketing
|
163,938
|
|
(5,006)
|
(1)
|
158,932
|
|
General and
administrative
|
71,513
|
|
(4,798)
|
(1)
|
66,715
|
|
Amortization of
acquired customer-based intangible
assets
|
52,665
|
|
(52,665)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
9,217
|
|
(9,217)
|
(4)
|
—
|
|
GAAP-based income from operations / Non-GAAP-
based income from
operations
|
192,884
|
|
128,893
|
(5)
|
321,777
|
|
Other income (expense),
net
|
(25,037)
|
|
25,037
|
(6)
|
—
|
|
Provision for income
taxes
|
39,266
|
|
148
|
(7)
|
39,414
|
|
GAAP-based net income / Non-GAAP-based net
income, attributable to
OpenText
|
88,298
|
|
153,782
|
(8)
|
242,080
|
|
GAAP-based earnings per share / Non-GAAP-based
earnings per share-diluted, attributable to
OpenText
|
$
0.32
|
|
$
0.57
|
(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 31% 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,
2021
|
|
|
Per share diluted
|
GAAP-based net income,
attributable to OpenText
|
$
88,298
|
$
0.32
|
Add:
|
|
|
Amortization
|
105,267
|
0.39
|
Share-based
compensation
|
14,409
|
0.05
|
Special charges
(recoveries)
|
9,217
|
0.03
|
Other (income) expense,
net
|
25,037
|
0.09
|
GAAP-based provision
for income taxes
|
39,266
|
0.15
|
Non-GAAP-based
provision for income taxes
|
(39,414)
|
(0.14)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
242,080
|
$
0.89
|
Reconciliation of
Adjusted EBITDA
|
|
|
|
Three Months Ended December 31,
2021
|
GAAP-based net income,
attributable to OpenText
|
$
88,298
|
Add:
|
|
Provision for income
taxes
|
39,266
|
Interest and other
related expense, net
|
40,245
|
Amortization of
acquired technology-based intangible assets
|
52,602
|
Amortization of
acquired customer-based intangible assets
|
52,665
|
Depreciation
|
21,779
|
Share-based
compensation
|
14,409
|
Special charges
(recoveries)
|
9,217
|
Other (income) expense,
net
|
25,037
|
Adjusted
EBITDA
|
$
343,518
|
|
|
GAAP-based net income
margin
|
10.1%
|
Adjusted EBITDA
margin
|
39.2%
|
Reconciliation of
Free cash flows
|
|
|
|
Three Months Ended December 31,
2021
|
GAAP-based cash flows
provided by operating activities
|
$
216,644
|
|
Add:
|
|
Capital expenditures
(1)
|
(10,635)
|
Free cash
flows
|
$
206,009
|
|
|
(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 March 31,
2021
(In thousands, except for per share
data)
|
|
Three Months Ended March 31,
2021
|
|
GAAP-based
Measures
|
GAAP-based
Measures
% of Total
Revenue
|
Adjustments
|
Note
|
Non-GAAP-based
Measures
|
Non-GAAP-based Measures
% of Total Revenue
|
Cost of revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
123,729
|
|
$
(505)
|
(1)
|
$
123,224
|
|
Customer
support
|
30,953
|
|
(464)
|
(1)
|
30,489
|
|
Professional service
and other
|
50,321
|
|
(684)
|
(1)
|
49,637
|
|
Amortization of
acquired technology-based intangible
assets
|
53,453
|
|
(53,453)
|
(2)
|
—
|
|
GAAP-based gross profit and gross margin (%)
/Non-GAAP-based gross profit and gross
margin
(%)
|
571,665
|
68.6%
|
55,106
|
(3)
|
626,771
|
75.2%
|
Operating expenses
|
|
|
|
|
|
|
Research and
development
|
110,071
|
|
(2,146)
|
(1)
|
107,925
|
|
Sales and
marketing
|
158,687
|
|
(4,580)
|
(1)
|
154,107
|
|
General and
administrative
|
71,548
|
|
(3,978)
|
(1)
|
67,570
|
|
Amortization of
acquired customer-based intangible
assets
|
54,156
|
|
(54,156)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
2,846
|
|
(2,846)
|
(4)
|
—
|
|
GAAP-based income from operations / Non-GAAP-
based income from
operations
|
152,396
|
|
122,812
|
(5)
|
275,208
|
|
Other income (expense),
net
|
8,283
|
|
(8,283)
|
(6)
|
—
|
|
Provision for income
taxes
|
31,818
|
|
1,485
|
(7)
|
33,303
|
|
GAAP-based net income / Non-GAAP-based net
income, attributable to
OpenText
|
91,490
|
|
113,044
|
(8)
|
204,534
|
|
GAAP-based earnings per share / Non-GAAP-based
earnings per share-diluted, attributable to
OpenText
|
$
0.33
|
|
$
0.42
|
(8)
|
$
0.75
|
|
(1)
|
Adjustment relates to
the exclusion of share-based compensation expense from our
Non-GAAP-based operating expenses as this expense is excluded from
our internal analysis of operating results.
|
(2)
|
Adjustment relates to
the exclusion of amortization expense from our Non-GAAP-based
operating expenses as the timing and frequency of amortization
expense is dependent on our acquisitions and is hence excluded from
our internal analysis of operating results.
|
(3)
|
GAAP-based and
Non-GAAP-based gross profit stated in dollars and gross margin
stated as a percentage of total revenue.
|
(4)
|
Adjustment relates to
the exclusion of special charges (recoveries) from our
Non-GAAP-based operating expenses as special charges (recoveries)
are generally incurred in the periods relevant to an acquisition
and include certain charges or recoveries that are not indicative
or related to continuing operations, and are therefore excluded
from our internal analysis of operating results.
|
(5)
|
GAAP-based and
Non-GAAP-based income from operations stated in dollars.
|
(6)
|
Adjustment relates to
the exclusion of other income (expense) from our Non-GAAP-based
operating expenses as other income (expense) generally relates to
the transactional impact of foreign exchange and is generally not
indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other
income (expense) also includes our share of income (losses) from
our holdings in investments as a limited partner. We do not
actively trade equity securities in these privately held companies
nor do we plan our ongoing operations based around any anticipated
fundings or distributions from these investments. We exclude gains
and losses on these investments as we do not believe they are
reflective of our ongoing business and operating
results.
|
(7)
|
Adjustment relates to
differences between the GAAP-based tax provision rate of
approximately 26% and a Non-GAAP-based tax rate of approximately
14%; these rate differences are due to the income tax effects of
items that are excluded for the purpose of calculating
Non-GAAP-based adjusted net income. Such excluded items include
amortization, share-based compensation, special charges
(recoveries) and other income (expense), net. Also excluded are tax
benefits/expense items unrelated to current period income such as
changes in reserves for tax uncertainties and valuation allowance
reserves, and "book to return" adjustments for tax return filings
and tax assessments. Included is the amount of net tax benefits
arising from the internal reorganization that occurred in Fiscal
2017 assumed to be allocable to the current period based on the
forecasted utilization period. In arriving at our Non-GAAP-based
tax rate of approximately 14%, we analyzed the individual adjusted
expenses and took into consideration the impact of statutory tax
rates from local jurisdictions incurring the expense.
|
(8)
|
Reconciliation of
GAAP-based net income to Non-GAAP-based net income:
|
|
Three Months Ended March 31,
2021
|
|
|
Per share diluted
|
GAAP-based net income,
attributable to OpenText
|
$
91,490
|
$
0.33
|
Add:
|
|
|
Amortization
|
107,609
|
0.39
|
Share-based
compensation
|
12,357
|
0.05
|
Special charges
(recoveries)
|
2,846
|
0.01
|
Other (income) expense,
net
|
(8,283)
|
(0.03)
|
GAAP-based provision
for income taxes
|
31,818
|
0.12
|
Non-GAAP-based
provision for income taxes
|
(33,303)
|
(0.12)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
204,534
|
$
0.75
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
|
Three Months Ended March 31,
2021
|
GAAP-based net income,
attributable to OpenText
|
$
91,490
|
Add:
|
|
Provision for income
taxes
|
31,818
|
Interest and other
related expense, net
|
37,333
|
Amortization of
acquired technology-based intangible assets
|
53,453
|
Amortization of
acquired customer-based intangible assets
|
54,156
|
Depreciation
|
21,961
|
Share-based
compensation
|
12,357
|
Special charges
(recoveries)
|
2,846
|
Other (income) expense,
net
|
(8,283)
|
Adjusted
EBITDA
|
$
297,131
|
|
|
GAAP-based net income
margin
|
11.0%
|
Adjusted EBITDA
margin
|
35.7%
|
Reconciliation of
Free cash flows
|
|
|
|
Three Months Ended March 31,
2021
|
GAAP-based cash flows
provided by operating activities
|
$
63,572
|
Add:
|
|
Capital expenditures
(1)
|
(13,311)
|
Free cash
flows
|
$
50,261
|
|
|
(1) Defined as "Additions of property
and equipment" in the Condensed Consolidated Statements of Cash
Flows.
|
Reconciliation of selected GAAP-based measures to
Non-GAAP-based measures
for the nine months ended March 31,
2021
(In thousands, except for per share
data)
|
|
Nine Months Ended March 31,
2021
|
|
GAAP-based
Measures
|
GAAP-based Measures
% of Total Revenue
|
Adjustments
|
Note
|
Non-GAAP-based
Measures
|
Non-GAAP-based Measures
% of Total Revenue
|
Cost of revenues
|
|
|
|
|
|
|
Cloud services and
subscriptions
|
$
354,235
|
|
$ (2,484)
|
(1)
|
$
351,751
|
|
Customer
support
|
89,815
|
|
(1,405)
|
(1)
|
88,410
|
|
Professional service
and other
|
143,521
|
|
(1,867)
|
(1)
|
141,654
|
|
Amortization of
acquired technology-based intangible
assets
|
165,581
|
|
(165,581)
|
(2)
|
—
|
|
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross
margin
(%)
|
1,729,835
|
69.4%
|
171,337
|
(3)
|
1,901,172
|
76.3%
|
Operating expenses
|
|
|
|
|
|
|
Research and
development
|
304,212
|
|
(7,195)
|
(1)
|
297,017
|
|
Sales and
marketing
|
438,984
|
|
(13,594)
|
(1)
|
425,390
|
|
General and
administrative
|
190,502
|
|
(12,074)
|
(1)
|
178,428
|
|
Amortization of
acquired customer-based intangible
assets
|
164,075
|
|
(164,075)
|
(2)
|
—
|
|
Special charges
(recoveries)
|
(1,404)
|
|
1,404
|
(4)
|
—
|
|
GAAP-based income from operations / Non-GAAP-
based income from
operations
|
569,222
|
|
366,871
|
(5)
|
936,093
|
|
Other income (expense),
net
|
16,417
|
|
(16,417)
|
(6)
|
—
|
|
Provision for income
taxes
|
342,121
|
|
(227,030)
|
(7)
|
115,091
|
|
GAAP-based net income / Non-GAAP-based net
income, attributable to
OpenText
|
129,389
|
|
577,484
|
(8)
|
706,873
|
|
GAAP-based earnings per share / Non-GAAP-based
earnings per share-diluted, attributable to
OpenText
|
$
0.47
|
|
$
2.12
|
(8)
|
$
2.59
|
|
(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 73% 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 nine months ended March 31,
2021 includes an income tax provision charge from IRS settlements
partially offset by a tax benefit from the release of unrecognized
tax benefits due to the conclusion of relevant tax audits that was
recognized during the three months ended December 31,
2020.
|
(8)
|
Reconciliation of
GAAP-based net income to Non-GAAP-based net income:
|
|
Nine Months Ended March 31,
2021
|
|
|
Per share diluted
|
GAAP-based net income,
attributable to OpenText
|
$
129,389
|
$
0.47
|
Add:
|
|
|
Amortization
|
329,656
|
1.21
|
Share-based
compensation
|
38,619
|
0.14
|
Special charges
(recoveries)
|
(1,404)
|
(0.01)
|
Other (income) expense,
net
|
(16,417)
|
(0.06)
|
GAAP-based provision
for income taxes
|
342,121
|
1.26
|
Non-GAAP-based
provision for income taxes
|
(115,091)
|
(0.42)
|
Non-GAAP-based net
income, attributable to OpenText
|
$
706,873
|
$
2.59
|
Reconciliation of
Adjusted EBITDA
|
|
|
|
Nine Months Ended March 31,
2021
|
GAAP-based net income,
attributable to OpenText
|
$
129,389
|
Add:
|
|
Provision for income
taxes
|
342,121
|
Interest and other
related expense, net
|
114,017
|
Amortization of
acquired technology-based intangible assets
|
165,581
|
Amortization of
acquired customer-based intangible assets
|
164,075
|
Depreciation
|
64,244
|
Share-based
compensation
|
38,619
|
Special charges
(recoveries)
|
(1,404)
|
Other (income) expense,
net
|
(16,417)
|
Adjusted
EBITDA
|
$
1,000,225
|
|
|
GAAP-based net income
margin
|
5.2%
|
Adjusted EBITDA
margin
|
40.1%
|
Reconciliation of
Free cash flows
|
|
|
|
Nine Months Ended March 31,
2021
|
GAAP-based cash flows
provided by operating activities
|
$
579,931
|
Add:
|
|
Capital expenditures
(1)
|
(36,267)
|
Free cash
flows
|
$
543,664
|
|
|
(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 nine months
ended March 31, 2022 and 2021:
|
|
Three Months Ended March 31,
2022
|
|
Three Months Ended March 31,
2021
|
Currencies
|
% of Revenue
|
% of Expenses(1)
|
|
% of Revenue
|
% of Expenses(1)
|
EURO
|
21%
|
12%
|
|
24%
|
14%
|
GBP
|
5%
|
5%
|
|
5%
|
6%
|
CAD
|
3%
|
14%
|
|
3%
|
11%
|
USD
|
63%
|
53%
|
|
60%
|
53%
|
Other
|
8%
|
16%
|
|
8%
|
16%
|
Total
|
100%
|
100%
|
|
100%
|
100%
|
|
Nine Months Ended March 31,
2022
|
|
Nine Months Ended March 31,
2021
|
Currencies
|
% of Revenue
|
% of Expenses(1)
|
|
% of Revenue
|
% of Expenses(1)
|
EURO
|
23%
|
13%
|
|
23%
|
14%
|
GBP
|
5%
|
6%
|
|
5%
|
5%
|
CAD
|
3%
|
14%
|
|
3%
|
10%
|
USD
|
61%
|
52%
|
|
61%
|
55%
|
Other
|
8%
|
15%
|
|
8%
|
16%
|
Total
|
100%
|
100%
|
|
100%
|
100%
|
(1) Expenses
include all cost of revenues and operating expenses included within
the Condensed Consolidated Statements of Income, except for
amortization of intangible assets, share-based compensation and
special charges (recoveries).
|
View original
content:https://www.prnewswire.com/news-releases/opentext-reports-third-quarter-fiscal-year-2022-financial-results-301539969.html
SOURCE Open Text Corporation