OpenText Reports First Quarter Fiscal Year 2019 Financial Results

WATERLOO, Ontario, Oct. 31, 2018 — (PRNewswire) — Open Text Corporation (NASDAQ/TSX: OTEX), "The Information Company," today announced its financial results for the first quarter ended September 30, 2018.

"OpenText delivered a strong Q1 and we are tracking to our Fiscal 2019 target model.  Our Q1 results included solid year-over-year growth: Annual Recurring Revenue (ARR) of $520 million, up 6%, Adjusted EBITDA of $246 million or 37% of revenues (up 250 bps), and Operating Cash Flows of $171 million, up 155%," said Mark J. Barrenechea, OpenText Vice Chair, CEO & CTO.  "OpenText Cloud revenues grew 7% to $208 million and delivered 58% margin while Customer Support grew 6% to $312 million and delivered 90% margin. I am proud of the team and pleased with our start to the new fiscal year."

Mr. Barrenechea added, "These results show the deep value and superior experience our customers receive. OpenText's vision and position as market leader in Content Services, B2B Network Services, and Cloud Services allows our customers to differentiate from their competition and win in the Digital Age."

"I am pleased with our Q1 Fiscal 2019 results, as OpenText expanded margins and strengthened its balance sheet," said OpenText EVP, CFO, Madhu Ranganathan. "We remain focused in our approach to scaling productivity and continuous improvement.  We are successfully executing towards our recently announced restructuring plan. Our balance sheet and liquidity position remain very strong with approximately $788 million of cash at the end of the quarter, a 1.7x consolidated net leverage ratio, giving us the flexibility to further support our Total Growth strategy."

OpenText to Acquire Liaison Technologies

Barrenechea further added, "Today we also announced signing a definitive agreement to acquire Liaison Technologies, for approximately $310 million in cash, subject to customary closing conditions over the next 90 days.  Liaison is a leading provider of cloud-based business to business integration, and I look forward to welcoming their customers, partners and employees to OpenText.  It is an exciting addition to the OpenText Cloud."  The financial details will be disclosed following closing and for further information please visit the OpenText investor website.

Financial Highlights for Q1 2019 with Year Over Year Comparisons

Summary of Quarterly Results









(in millions except per share data)

Q1 FY19

Q1 FY18

$ Change

% Change

(Y/Y)


Q1 FY19 in
CC*

% Change
in CC*


Revenues:









Cloud services and subscriptions

$208.1


$193.9


$14.2


7.3

%


$208.2


7.4

%


Customer support

311.6


295.4


16.1


5.5

%


311.4


5.4

%


Total annual recurring revenues**

$519.6


$489.3


$30.4


6.2

%


$519.6


6.2

%


License

76.9


78.2


(1.3)


(1.7)

%


77.6


(0.8)

%


Professional service and other

70.6


73.2


(2.6)


(3.5)

%


71.6


(2.2)

%


Total revenues

$667.2


$640.7


$26.5


4.1

%


$668.8


4.4

%


GAAP-based operating income

$99.2


$87.6


$11.6


13.2

%





Non-GAAP-based operating income (1)

$222.4


$201.7


$20.8


10.3

%


$220.6


9.4

%


GAAP-based EPS, diluted

$0.13


$0.14


($0.01)


(7.1)

%





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

$0.60


$0.54


$0.06


11.1

%


$0.59


9.3

%


GAAP-based net income attributable to OpenText

$36.3


$36.6


($0.3)


(0.7)

%





Adjusted EBITDA (1)

$246.3


$220.4


$25.8


11.7

%





Operating cash flows

$171.4


$67.2


$104.2


154.9

%






(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.



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