OpenText Reports Second Quarter Fiscal Year 2018 Financial Results

WATERLOO, Ontario, Jan. 31, 2018 — (PRNewswire) —  Open Text Corporation (NASDAQ: OTEX, TSX: OTEX), "The Information Company," today announced its financial results for the second quarter ended December 31, 2017.

"OpenText's Fiscal Year 2018 Q2 results represent the power of the OpenText Business System: our strategic focus on M&A, functional integration, operational excellence and innovation.  The company delivered 35% year-over-year revenue growth, adjusted operating margin of 36.5%, and operating cash flows of $167 million," said Mark Barrenechea, OpenText Vice Chairman, CEO & CTO.  "Our Annual Recurring Revenues (ARR) were strong at $516 million or 31% year-over-year growth; we also had solid organic growth within the quarter."

"With ECD now on our adjusted operating model and the integration complete, our energy turns to our go-to-market initiatives for calendar year 2018.  These go-to-market initiatives include cross-selling, expanded partner footprint and new offerings.  We also see increasing demand in our Enterprise Information Management (EIM) product suite, including Security and AI products," said Barrenechea.  "Mergers and Acquisitions continue to be our leading growth driver and by utilizing the OpenText Business System, we are well positioned for future M&A opportunities within the EIM market."

Barrenechea further added, "We are introducing a 2021 adjusted operating margin target range of 36% to 40%, up from our previously stated 2020 target range of 34% to 38%."

Financial Highlights for Q2 Fiscal 2018 with Year Over Year Comparisons

Summary of Quarterly Results









(in millions except per share data)

Q2 FY18

Q2 FY17

$ Change

% Change
(Y/Y)


Q2 FY18 in
CC*

% Change
in CC*


Revenues:









Cloud services and subscriptions

$208.1


$175.1


$33.1


18.9

%


$207.2


18.3

%


Customer support

308.1


219.7


88.4


40.3

%


301.2


37.1

%


Total annual recurring revenues**

$516.2


$394.7


$121.5


30.8

%


$508.4


28.8

%


License

135.2


97.8


37.5


38.3

%


130.6


33.6

%


Professional service and other

83.0


50.2


32.7


65.2

%


80.9


61.0

%


Total revenues

$734.4


$542.7


$191.7


35.3

%


$719.8


32.6

%


GAAP-based operating income

$166.6


$107.2


$59.5


55.5

%





Non-GAAP-based operating income (1)

$267.9


$184.5


$83.4


45.2

%


$262.0


42.0

%


GAAP-based operating margin

22.7

%

19.7

%

n/a


300


bps




Non-GAAP-based operating margin (1)

36.5

%

34.0

%

n/a


250


bps

36.4

%

240


bps

GAAP-based EPS, diluted (2)

$0.32


$0.18


$0.14


77.8

%





Non-GAAP-based EPS, diluted (1)(3)

$0.76


$0.54


$0.22


40.7

%


$0.74


37.0

%


GAAP-based net income attributable to OpenText (2)

$85.1


$45.0


$40.1


89.0

%





Adjusted EBITDA (1)

$290.1


$199.8


$90.3


45.2

%





Operating cash flows

$166.6


$107.0


$59.6


55.7

%






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