OpenText Reports Fourth Quarter and Fiscal Year 2024 Financial Results, Raises Fiscal 2025 Margin Targets

Total Revenues

(in millions)

Annual Recurring Revenues

(in millions)

Cloud Revenues

(in millions)

Reported

Constant

Currency

Reported

Constant

Currency

Reported

Constant

Currency

$5,770

$5,729

$4,534

$4,506

$1,821

$1,816

+28.6 %

+27.7 %

+25.4 %

+24.6 %

+7.1 %

+6.8 %

Annual Recurring Revenues represent 79% of Total Revenues

Mark J. Barrenechea, OpenText CEO & CTO

"We are incredibly proud of our Fiscal 2024 performance. We delivered strong operating results including our AMC divestiture, $808 million of free cash flows, and reduced our net leverage ratio from 3.8x to 2.9x⁽¹⁾. Our focus is now on delivering to our Fiscal 2025 plans and targets, and the significant margin and FCF opportunity in front of us."

                                                                                Madhu Ranganathan, OpenText President & CFO

Total Revenues

(in millions)

Annual Recurring Revenues

(in millions)

Cloud Revenues

(in millions)

Reported

Constant

Currency

Reported

Constant

Currency

Reported

Constant

Currency

$1,362

$1,367

$1,093

$1,097

$465

$466

(8.6) %

(8.3) %

(5.5) %

(5.2) %

+2.9 %

+3.3 %

Annual Recurring Revenues represent 80% of Total Revenues

⁽¹⁾ As of June 30, 2024, the consolidated Net Leverage Ratio, as calculated using the bank covenant methodology, was 2.3x. Excluding the gain from the divestiture of the AMC business, the consolidated Net Leverage Ratio was 2.9x.  As of March 31, 2024, the consolidated Net Leverage Ratio, as calculated using bank covenant methodology, was 3.8x.

⁽²⁾ Enterprise cloud bookings is defined as the total value from cloud services and subscription contracts, entered into in the fiscal year that are new, committed and incremental to our existing contracts, entered into with our enterprise based customers.

⁽³⁾ Please see Note 2 "Use of Non-GAAP Financial Measures" to the consolidated financial statements below.

Summary of Annual Results

(In millions, except per share data)

FY'24

FY'23

$ Change 

% Change 

FY'24 in

CC*

% Change

in CC*

Revenues:

Cloud services and subscriptions

$1,820.5

$1,700.4

$120.1

7.1 %

$1,815.6

6.8 %

Customer support

2,713.3

1,915.0

$798.3

41.7 %

2,690.0

40.5 %

Total annual recurring revenues**

$4,533.8

$3,615.5

$918.4

25.4 %

$4,505.5

24.6 %

License

834.2

539.0

$295.1

54.8 %

826.6

53.3 %

Professional service and other

401.6

330.5

$71.1

21.5 %

396.9

20.1 %

Total revenues

$5,769.6

$4,485.0

$1,284.6

28.6 %

$5,729.0

27.7 %

GAAP-based operating income

$     887.1

$516.3

$370.8

71.8 %

N/A

N/A

Non-GAAP-based operating income ⁽¹⁾

$1,838.8

$1,365.3

$473.5

34.7 %

$1,808.3

32.4 %

GAAP-based net income attributable to OpenText

$465.1

$150.4

$314.7

209.3 %

N/A

N/A

GAAP-based EPS, diluted

$1.71

$0.56

$1.15

205.4 %

N/A

N/A

Non-GAAP-based EPS, diluted ⁽¹⁾⁽²⁾

$4.17

$3.29

$0.88

26.7 %

$4.08

24.0 %

Adjusted EBITDA ⁽¹⁾

$1,970.2

$1,472.9

$497.3

33.8 %

$1,938.3

31.6 %

Operating cash flows

$967.7

$779.2

$188.5

24.2 %

N/A

N/A

Free cash flows ⁽¹⁾

$808.4

$655.4

$153.0

23.3 %

N/A

N/A

Summary of Quarterly Results

(In millions, except per share data)

Q4 FY'24

Q4 FY'23

$ Change 

% Change 

Q4 FY'24 in

CC*

% Change

in CC*

Revenues:

Cloud services and subscriptions

$464.9

$451.7

$13.2

2.9 %

$466.5

3.3 %

Customer support

628.4

705.3

($76.9)

(10.9) %

630.2

(10.6) %

Total annual recurring revenues**

$1,093.3

$1,156.9

($63.7)

(5.5) %

$1,096.7

(5.2) %

License

171.5

228.8

($57.3)

(25.0) %

172.3

(24.7) %

Professional service and other

97.3

105.1

($7.8)

(7.4) %

97.6

(7.1) %

Total revenues

$1,362.1

$1,490.8

($128.7)

(8.6) %

$1,366.6

(8.3) %

GAAP-based operating income

$193.3

$121.3

$72.0

59.3 %

N/A

N/A

Non-GAAP-based operating income ⁽¹⁾

$413.5

$431.7

($18.3)

(4.2) %

$414.3

(4.1) %

GAAP-based net income attributable to OpenText

$248.2

($48.7)

$297.0

609.4 %

N/A

N/A

GAAP-based EPS, diluted

$0.91

($0.18)

$1.09

605.6 %

N/A

N/A

Non-GAAP-based EPS, diluted ⁽¹⁾⁽²⁾

$0.98

$0.91

$0.07

7.7 %

$0.99

8.8 %

Adjusted EBITDA ⁽¹⁾

$445.4

$462.8

($17.4)

(3.8) %

$446.1

(3.6) %

Operating cash flows

$185.2

$115.3

$69.9

60.6 %

N/A

N/A

Free cash flows ⁽¹⁾

$145.2

$91.2

$54.0

59.2 %

N/A

N/A

⁽¹⁾ Please see Note 2 "Use of Non-GAAP Financial Measures" to the 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.

Summary of Annual Results

FY'24

FY'23

% Change

Revenue (millions)

$5,769.6

$4,485.0

28.6 %

GAAP-based gross margin

72.6 %

70.6 %

200

bps

Non-GAAP-based gross margin ⁽¹⁾

77.3 %

76.1 %

120

bps

GAAP-based EPS, diluted

$1.71

$0.56

205.4 %

Non-GAAP-based EPS, diluted ⁽¹⁾⁽²⁾

$4.17

$3.29

26.7 %

Summary of Quarterly Results

Q4 FY'24

Q3 FY'24

Q4 FY'23

% Change 

(Q4 FY'24 vs

Q3 FY'24)

% Change

(Q4 FY'24 vs

Q4 FY'23)

Revenue (millions)

$1,362.1

$1,447.1

$1,490.8

(5.9) %

(8.6) %

GAAP-based gross margin

72.5 %

73.0 %

71.4 %

(50)

bps

110

bps

Non-GAAP-based gross margin ⁽¹⁾

76.4 %

76.7 %

76.9 %

(30)

bps

(50)

bps

GAAP-based EPS, diluted

$0.91

$0.36

($0.18)

152.8 %

605.6 %

Non-GAAP-based EPS, diluted ⁽¹⁾⁽²⁾

$0.98

$0.94

$0.91

4.3 %

7.7 %

⁽¹⁾ Please see Note 2 "Use of Non-GAAP Financial Measures" to the 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.

OPEN TEXT CORPORATION

CONSOLIDATED BALANCE SHEETS 

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

June 30, 2024

June 30, 2023

ASSETS

Cash and cash equivalents

$             1,280,662

$             1,231,625

Accounts receivable trade, net of allowance for credit losses of $12,108 as of June 30, 2024 and $13,828 as of June 30, 2023

626,189

682,517

Contract assets

66,450

71,196

Income taxes recoverable

61,113

68,161

Prepaid expenses and other current assets

242,911

221,732

Total current assets

2,277,325

2,275,231

Property and equipment

367,740

356,904

Operating lease right of use assets

219,774

285,723

Long-term contract assets

38,684

64,553

Goodwill

7,488,367

8,662,603

Acquired intangible assets

2,486,264

4,080,879

Deferred tax assets

932,657

926,719

Other assets

298,281

342,318

Long-term income taxes recoverable

96,615

94,270

Total assets

$          14,205,707

$          17,089,200

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$                931,116

$                996,261

Current portion of long-term debt

35,850

320,850

Operating lease liabilities

76,446

91,425

Deferred revenues

1,521,416

1,721,781

Income taxes payable

235,666

89,297

Total current liabilities

2,800,494

3,219,614

Long-term liabilities:

Accrued liabilities

46,483

51,961

Pension liability, net

127,255

126,312

Long-term debt

6,356,943

8,562,096

Long-term operating lease liabilities

218,174

271,579

Long-term deferred revenues

162,401

217,771

Long-term income taxes payable

145,644

193,808

Deferred tax liabilities

148,632

423,955

Total long-term liabilities

7,205,532

9,847,482

Shareholders' equity:

Share capital and additional paid-in capital

267,800,517 and 270,902,571 Common Shares issued and outstanding at June 30, 2024 and June 30, 2023, respectively; authorized Common Shares: unlimited

2,271,886

2,176,947

Accumulated other comprehensive income (loss)

(69,619)

(53,559)

Retained earnings

2,119,159

2,048,984

Treasury stock, at cost (3,135,980 and 3,536,375 shares at June 30, 2024 and June 30, 2023, respectively)

(123,268)

(151,597)

Total OpenText shareholders' equity

4,198,158

4,020,775

Non-controlling interests

1,523

1,329

Total shareholders' equity

4,199,681

4,022,104

Total liabilities and shareholders' equity

$          14,205,707

$          17,089,200

OPEN TEXT CORPORATION

 CONSOLIDATED STATEMENTS OF INCOME

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

(unaudited)

Three Months Ended June 30,

2024

2023

Revenues:

Cloud services and subscriptions

$                464,891

$                451,659

Customer support

628,381

705,277

License

171,535

228,796

Professional service and other

97,342

105,098

Total revenues

1,362,149

1,490,830

Cost of revenues:

Cloud services and subscriptions

175,799

166,394

Customer support

69,706

86,695

License

9,017

6,184

Professional service and other

71,691

90,498

Amortization of acquired technology-based intangible assets

48,220

77,045

Total cost of revenues

374,433

426,816

Gross profit

987,716

1,064,014

Operating expenses:

Research and development

205,253

249,958

Sales and marketing

285,352

333,244

General and administrative

126,639

136,866

Depreciation

31,984

31,152

Amortization of acquired customer-based intangible assets

97,446

121,285

Special charges (recoveries)

47,784

70,222

Total operating expenses

794,458

942,727

Income from operations

193,258

121,287

Other income (expense), net

397,055

(25,355)

Interest and other related expense, net

(102,461)

(145,829)

Income (loss) before income taxes

487,852

(49,897)

Provision for (recovery of) income taxes

239,578

(1,212)

Net income (loss) for the period

$                248,274

$                (48,685)

Net (income) attributable to non-controlling interests

(45)

(49)

Net income (loss) attributable to OpenText

$                248,229

$                (48,734)

Earnings per share—basic attributable to OpenText

$                       0.92

$                     (0.18)

Earnings per share—diluted attributable to OpenText

$                       0.91

$                     (0.18)

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

271,178

270,772

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

271,724

270,772

OPEN TEXT CORPORATION

 CONSOLIDATED STATEMENTS OF INCOME

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

Year Ended June 30,

2024

2023

2022

Revenues:

Cloud services and subscriptions

$        1,820,524

$        1,700,433

$        1,535,017

Customer support

2,713,297

1,915,020

1,330,965

License

834,162

539,026

358,351

Professional service and other

401,594

330,501

269,511

Total revenues

5,769,577

4,484,980

3,493,844

Cost of revenues:

Cloud services and subscriptions

713,759

590,165

511,713

Customer support

292,733

209,705

121,485

License

25,608

16,645

13,501

Professional service and other

302,527

276,888

216,895

Amortization of acquired technology-based intangible assets

243,922

223,184

198,607

Total cost of revenues

1,578,549

1,316,587

1,062,201

Gross profit

4,191,028

3,168,393

2,431,643

Operating expenses:

Research and development

893,932

680,587

440,448

Sales and marketing

1,133,665

948,598

677,118

General and administrative

577,038

419,590

317,085

Depreciation

131,599

107,761

88,241

Amortization of acquired customer-based intangible assets

432,404

326,406

217,105

Special charges (recoveries)

135,305

169,159

46,873

Total operating expenses

3,303,943

2,652,101

1,786,870

Income from operations

887,085

516,292

644,773

Other income, net

358,391

34,469

29,118

Interest and other related expense, net

(516,180)

(329,428)

(157,880)

Income before income taxes

729,296

221,333

516,011

Provision for income taxes

264,012

70,767

118,752

Net income

$           465,284

$           150,566

$           397,259

Net (income) attributable to non-controlling interests

(194)

(187)

(169)

Net income attributable to OpenText

$           465,090

$           150,379

$           397,090

Earnings per share—basic attributable to OpenText

$                  1.71

$                  0.56

$                  1.46

Earnings per share—diluted attributable to OpenText

$                  1.71

$                  0.56

$                  1.46

Weighted average number of Common Shares outstanding—basic

(in '000's)

271,548

270,299

271,271

Weighted average number of Common Shares outstanding—diluted

(in '000's)

272,588

270,451

271,909

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 

(In thousands of U.S. dollars)

Year Ended June 30,

2024

2023

2022

Net income for the period

$          465,284

$          150,566

$          397,259

Other comprehensive income (loss)—net of tax:

Net foreign currency translation adjustments

(15,646)

(40,798)

(78,724)

Unrealized gain (loss) on cash flow hedges:

Unrealized gain (loss) - net of tax ⁽¹⁾

(2,697)

(941)

(1,859)

(Gain) loss reclassified into net income - net of tax ⁽²⁾

965

2,721

373

Unrealized gain (loss) on available-for-sale financial assets:

Unrealized gain (loss) - net of tax ⁽³⁾

228

(602)

—

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

Actuarial gain (loss) - net of tax ⁽⁴⁾

640

(6,605)

5,595

Amortization of actuarial (gain) loss into net income - net of tax ⁽⁵⁾

450

325

718

Total other comprehensive loss net

(16,060)

(45,900)

(73,897)

Total comprehensive income

449,224

104,666

323,362

Comprehensive income attributable to non-controlling interests

(194)

(187)

(169)

Total comprehensive income attributable to OpenText

$          449,030

$          104,479

$          323,193

^{______________________________}

(1)

Net of tax expense (recovery) of $(972), $(339), and $(671) for the year ended June 30, 2024, 2023 and 2022, respectively.

(2)

Net of tax expense (recovery) of $347, $981 and $134 for the year ended June 30, 2024, 2023 and 2022, respectively.

(3)

Net of tax expense (recovery) of $112, $(159), and $— for the year ended June 30, 2024, 2023 and 2022, respectively.

(4)

Net of tax expense (recovery) of $765, $(1,961) and $1,866 for the year ended June 30, 2024, 2023 and 2022, respectively.

(5)

Net of tax expense (recovery) of $193, $143 and $290 for the year ended June 30, 2024, 2023 and 2022, respectively.

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

Common Shares and

Additional Paid in Capital

Treasury Stock

Retained

Earnings

Accumulated 

Other

Comprehensive

Income

Non-

Controlling

Interests

Total

Shares

Amount

Shares

Amount

Balance as of June 30, 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

950

32,714

—

—

—

—

—

32,714

Under employee stock purchase plans

842

33,806

—

—

—

—

—

33,806

Share-based compensation

—

69,556

—

—

—

—

—

69,556

Purchase of treasury stock

—

—

(2,630)

(111,593)

—

—

—

(111,593)

Issuance of treasury stock

—

(21,013)

492

21,013

—

—

—

—

Common Shares repurchased

(3,810)

(24,295)

—

—

(152,692)

—

—

(176,987)

Dividends declared

($0.8836 per Common Share)

—

—

—

—

(237,655)

—

—

(237,655)

Other comprehensive loss - net

—

—

—

—

—

(73,897)

—

(73,897)

Distribution to non-controlling interest

—

142

—

—

—

—

(538)

(396)

Net income

—

—

—

—

397,090

—

169

397,259

Balance as of June 30, 2022

269,523

$  2,038,674

(3,706)

$ (159,966)

$  2,160,069

$          (7,659)

$      1,142

$  4,032,260

Issuance of Common Shares

Under employee stock option plans

245

7,830

—

—

—

—

—

7,830

Under employee stock purchase plans

1,135

31,679

—

—

—

—

—

31,679

Share-based compensation

—

130,119

—

—

—

—

—

130,119

Purchase of treasury stock

—

—

(521)

(21,919)

—

—

—

(21,919)

Issuance of treasury stock

—

(31,355)

691

30,288

—

—

—

(1,067)

Dividends declared

($0.9720 per Common Share)

—

—

—

—

(261,464)

—

—

(261,464)

Other comprehensive loss - net

—

—

—

—

—

(45,900)

—

(45,900)

Net income

—

—

—

—

150,379

—

187

150,566

Balance as of June 30, 2023

270,903

$  2,176,947

(3,536)

$ (151,597)

$  2,048,984

$        (53,559)

$      1,329

$  4,022,104

Issuance of Common Shares

Under employee stock option plans

945

31,358

—

—

—

—

—

31,358

Under employee stock purchase plans

1,027

34,120

—

—

—

—

—

34,120

Share-based compensation

—

139,779

—

—

—

—

—

139,779

Purchase of treasury stock

—

—

(1,400)

(53,085)

—

—

—

(53,085)

Issuance of treasury stock

—

(76,178)

1,800

81,414

(5,236)

—

—

—

Common Shares repurchased

(5,074)

(34,140)

—

—

(118,193)

—

—

(152,333)

Dividends declared ($1.00 per Common Share)

—

—

—

—

(271,486)

—

—

(271,486)

Other comprehensive loss - net

—

—

—

—

—

(16,060)

—

(16,060)

Net income

—

—

—

—

465,090

—

194

465,284

Balance as of June 30, 2024

267,801

$  2,271,886

(3,136)

$ (123,268)

$  2,119,159

$        (69,619)

$      1,523

$  4,199,681

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(In thousands of U.S. dollars)

(unaudited)

Three Months Ended June 30,

2024

2023

Cash flows from operating activities:

Net income (loss) for the period

$                  248,274

$                  (48,685)

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

Depreciation and amortization of intangible assets

177,650

229,482

Share-based compensation expense

26,767

41,904

Pension expense

4,302

3,401

Amortization of debt discount and issuance costs

5,670

8,257

Write-off of right of use assets

4,815

2,507

Loss on extinguishment of debt

45,590

—

Gain on AMC Divestiture

(429,102)

—

Loss on sale and write down of property and equipment

1,995

903

Deferred taxes

106,903

29,140

Share in net (income) loss of equity investees

(819)

11,530

Changes in financial instruments

(6,667)

16,274

Changes in operating assets and liabilities:

Accounts receivable

57,075

27,335

Contract assets

(23,917)

(43,643)

Prepaid expenses and other current assets

(33,112)

42,151

Income taxes

36,421

(116,569)

Accounts payable and accrued liabilities

7,000

10,582

Deferred revenue

(57,312)

(85,764)

Other assets

18,981

(5,299)

Operating lease assets and liabilities, net

(5,294)

(8,205)

Net cash provided by operating activities

185,220

115,301

Cash flows from investing activities:

Additions of property and equipment

(39,979)

(24,060)

Micro Focus acquisition

—

(2,357)

Proceeds from AMC Divestiture

2,229,187

—

Other investing activities

(9,291)

—

Net cash provided by (used in) investing activities

2,179,917

(26,417)

Cash flows from financing activities:

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

9,887

14,159

Repayment of long-term debt and Revolver

(2,008,963)

(186,463)

Debt issuance costs

(1,041)

(690)

Net change in transition services agreement obligation

15,278

—

Repurchase of Common Shares

(150,017)

—

Purchase of treasury stock

—

(21,919)

Payments of dividends to shareholders

(66,690)

(65,068)

Other financing activities

—

758

Net cash used in financing activities

(2,201,546)

(259,223)

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

(8,281)

4,571

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

155,310

(165,768)

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

1,127,483

1,399,720

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

$               1,282,793

$               1,233,952

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(In thousands of U.S. dollars)

Reconciliation of cash, cash equivalents and restricted cash:

June 30, 2024

June 30, 2023

Cash and cash equivalents

$               1,280,662

$               1,231,625

Restricted cash ⁽¹⁾

2,131

2,327

Total cash, cash equivalents and restricted cash

$               1,282,793

$               1,233,952

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(In thousands of U.S. dollars)

Year Ended June 30,

2024

2023

2022

Cash flows from operating activities:

Net income for the period

$             465,284

$             150,566

$             397,259

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

Depreciation and amortization of intangible assets

807,925

657,351

503,953

Share-based compensation expense

140,079

130,302

69,556

Pension expense

13,881

9,207

6,606

Amortization of debt discount and issuance costs

25,257

16,753

5,422

Write-off of right of use assets

20,056

9,626

17,707

Loss on extinguishment of debt

56,393

8,152

27,413

Gain on AMC divestiture

(429,102)

—

—

Loss on sale and write down of property and equipment

3,710

2,331

294

Deferred taxes

(142,271)

(149,560)

(36,088)

Share in net (income) loss of equity investees

18,194

23,077

(58,702)

Changes in financial instruments

(3,116)

128,841

—

Changes in operating assets and liabilities:

Accounts receivable

108,562

168,604

81,841

Contract assets

(95,403)

(73,539)

(37,966)

Prepaid expenses and other current assets

(28,395)

(23,035)

(13,954)

Income taxes

112,097

14,948

34,589

Accounts payable and accrued liabilities

(65,887)

(127,092)

(24,177)

Deferred revenue

(42,974)

(128,395)

(5,236)

Other assets

24,849

(11,297)

17,297

Operating lease assets and liabilities, net

(21,448)

(27,635)

(4,004)

Net cash provided by operating activities

967,691

779,205

981,810

Cash flows from investing activities:

Additions of property and equipment

(159,295)

(123,832)

(93,109)

Purchase of Micro Focus International PLC, net of cash acquired

(9,272)

(5,657,963)

—

Purchase of Zix Corporation, net of cash acquired

—

—

(856,175)

Purchase of Bricata Inc.

—

—

(17,753)

Proceeds from AMC divestiture

2,229,187

—

—

Realized gain (loss) on financial instruments

—

131,248

—

Proceeds from net investment hedge derivative contracts

4,456

—

—

Other investing activities

(9,759)

(873)

(3,922)

Net cash provided by (used in) investing activities

2,055,317

(5,651,420)

(970,959)

Cash flows from financing activities:

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

66,914

39,331

67,215

Proceeds from long-term debt and Revolver

—

4,927,450

1,500,000

Repayment of long-term debt and Revolver

(2,568,352)

(202,926)

(860,000)

Debt extinguishment costs

—

—

(24,969)

Debt issuance costs

(3,833)

(77,899)

(17,159)

Net change in transition services agreement obligation

15,278

—

—

Repurchase of Common Shares

(150,017)

—

(176,987)

Purchase of treasury stock

(53,085)

(21,919)

(111,593)

Distribution to non-controlling interest

—

—

(396)

Payments of dividends to shareholders

(267,362)

(259,549)

(237,655)

Other financing activities

(1,447)

(1,435)

—

Net cash provided by (used in) financing activities

(2,961,904)

4,403,053

138,456

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

(12,263)

7,203

(63,196)

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

48,841

(461,959)

86,111

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

1,233,952

1,695,911

1,609,800

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

$          1,282,793

$          1,233,952

$          1,695,911

OPEN TEXT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(In thousands of U.S. dollars)

(unaudited)

Reconciliation of cash, cash equivalents and restricted cash:

June 30, 2024

June 30, 2023

June 30, 2022

Cash and cash equivalents

$        1,280,662

$        1,231,625

$        1,693,741

Restricted cash ⁽¹⁾

2,131

2,327

2,170

Total cash, cash equivalents and restricted cash

$        1,282,793

$        1,233,952

$        1,695,911

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

Notes

(1)

All dollar amounts in this press release are in U.S. Dollars unless otherwise indicated.

(2)

Use of Non-GAAP Financial Measures: In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-GAAP). These Non-GAAP financial measures have certain limitations in that they do not have a standardized meaning and thus the Company's definition may be different from similar Non-GAAP financial measures used by other companies and/or analysts and may differ from period to period. Thus it may be more difficult to compare the Company's financial performance to that of other companies. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of these Non-GAAP financial measures both in its reconciliation to the U.S. GAAP financial measures and its consolidated financial statements, all of which should be considered when evaluating the Company's results.

The Company uses these Non-GAAP financial measures to supplement the information provided in its consolidated financial statements, which are presented in accordance with U.S. GAAP. The presentation of Non-GAAP financial measures is not meant to be a substitute for financial measures presented in accordance with U.S. GAAP, but rather should be evaluated in conjunction with and as a supplement to such U.S. GAAP measures. OpenText strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure. The Company therefore believes that despite these limitations, it is appropriate to supplement the disclosure of the U.S. GAAP measures with certain Non-GAAP measures defined below.

Non-GAAP-based net income and Non-GAAP-based EPS, attributable to OpenText, are consistently calculated as GAAP-based net income (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 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 (recovery of) 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 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. Information reconciling certain forward-looking GAAP measures to non-GAAP measures related to F'25 targets and F'27 aspirations, including A-EBITDA is not available without unreasonable effort due to high variability, complexity and uncertainty with respect to forecasting and quantifying certain amounts that are necessary for such reconciliations.

The following charts provide unaudited reconciliations of U.S. GAAP-based financial measures to Non-GAAP-based financial measures for the following periods presented. The Micro Focus Acquisition significantly impacts period-over-period comparability.

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

for the three months ended June 30, 2024

(In thousands, except for per share data)

Three Months Ended June 30, 2024

GAAP-based

Measures

GAAP-based

Measures

% of Total

Revenue