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Press Release: OpenText Reports Second Quarter Fiscal Year 2021 Financial Results

· 02/04/2021 16:01
-- Key customer wins in the quarter included Auto Club Group, Autoriteit Persoonsgegevens, City of San Diego, UK Department for Work and Pensions, Evonik Industries AG, Froneri, Heraeus, McCain Foods, MedPro Group, Nestlé, Norwegian Labour and Welfare Administration, Region Skane, Revo Health, SaskPower -- OpenText Launches BrightCloud(R) Cloud Service Intelligence -- OpenText named a leader in 2020 Gartner Magic Quadrant for Content Services Platforms -- Launched OpenText(TM) Cloud Editions 20.4, designed to help customers get to the cloud, accelerate digital transformation, and rethink the future of work -- OpenText brings Digital Investigation to the Cloud with Microsoft Azure -- OpenText announced $1M USD donation to support food security Summary of Quarterly Results --------------- % Change % Change (Q2 FY'21 vs (Q2 FY'21 vs Q2 FY'21 Q1 FY'21 Q2 FY'20 Q1 FY'21) Q2 FY'20) Revenue (millions) $855.6 $804.0 $771.6 6.4 % 10.9 % GAAP-based gross margin 70.5 % 69.0 % 69.9 % 150 bps 60 bps GAAP-based earnings (loss) per share, diluted ($0.24) $0.38 $0.40 (163.2) % (160.0) % Non-GAAP-based gross margin (1) 77.1 % 76.5 % 75.5 % 60 bps 160 bps Non-GAAP-based EPS, diluted (1)(2) $0.95 $0.89 $0.84 6.7 % 13.1 % ((1) Please see note 2 "Use of Non-GAAP Financial Measures" below. (2) Please also see note 14 to the Company's Fiscal 2018 Consolidated Financial Statements on Form 10-K. Reflective of the amount of net tax benefit arising from the internal reorganization assumed to be allocable to the current period based on the forecasted utilization period.Summary of Quarterly Results ----------------------------------------------------------------------------- Q2 (In millions, FY'21 except per Q2 Q2 % Change in % Change share data) FY'21 FY'20 $ Change (Y/Y) CC* in CC* Revenues: Cloud services and subscriptions $350.5 $248.3 $102.1 41.1 % $346.7 39.6 % Customer support 334.5 315.5 19.0 6.0 % 326.9 3.6 % Total annual recurring revenues** $684.9 $563.8 $121.1 21.5 % $673.6 19.5 % License 107.3 138.1 (30.7) (22.3) % 104.1 (24.6)% Professional service and other 63.4 69.6 (6.3) (9.0) % 61.6 (11.4)% Total revenues $855.6 $771.6 $84.1 10.9 % $839.4 8.8 % GAAP-based operating income $234.5 $184.7 $49.7 26.9 % N/A N/A Non-GAAP-based operating income (1) $340.5 $296.4 $44.2 14.9 % $330.9 11.6 % GAAP-based earnings (loss) per share, diluted ($0.24) $0.40 ($0.64) (160.0)% N/A N/A Non-GAAP-based EPS, diluted (1)(2) $0.95 $0.84 $0.11 13.1 % $0.92 9.5 % GAAP-based net income (loss) attributable to OpenText ($65.5) $107.5 ($172.9) (160.9)% N/A N/A Adjusted EBITDA (1) $360.8 $317.0 $43.7 13.8 % $351.0 10.7 % Operating cash flows $282.5 $207.2 $75.2 36.3 % N/A N/A Free cash flows (1) $274.8 $187.6 $87.2 46.5 % N/A N/A Summary of YTD Results ---------------------------------------------------------------------------------- (In millions, FY'21 except per FY'21 FY'20 % Change YTD in % Change share data) YTD YTD $ Change (Y/Y) CC* in CC* Revenues: Cloud services and subscriptions $691.4 $485.6 $205.8 42.4 % $686.9 41.5 % Customer support 663.9 627.8 36.1 5.7 % 654.0 4.2 % Total annual recurring revenues** $1,355.3 $1,113.4 $241.9 21.7 % $1,341.0 20.4 % License 175.9 216.0 (40.1) (18.6) % 171.3 (20.7)% Professional service and other 128.5 139.0 (10.6) (7.6) % 125.2 (10.0)% Total revenues $1,659.7 $1,468.4 $191.2 13.0 % $1,637.4 11.5 % GAAP-based operating income $416.8 $317.3 $99.6 31.4 % N/A N/A Non-GAAP-based operating income (1) $660.9 $530.3 $130.6 24.6 % $644.8 21.6 % GAAP-based EPS, diluted $0.14 $0.67 ($0.53) (79.1) % N/A N/A Non-GAAP-based EPS, diluted (1)(2) $1.84 $1.48 $0.36 24.3 % $1.79 20.9 % GAAP-based net income attributable to OpenText $37.9 $181.9 ($144.0) (79.2) % N/A N/A Adjusted EBITDA (1) $703.1 $571.2 $131.9 23.1 % $686.7 20.2 % Operating cash flows $516.4 $344.7 $171.7 49.8 % N/A N/A Free cash flows (1) $493.4 $306.5 $186.9 61.0 % N/A N/A (1) Please see note 2 "Use of Non-GAAP Financial Measures" below. (2) Please also see note 14 to the Company's Fiscal 2018 Consolidated Financial Statements on Form 10-K. Reflective of the amount of net tax benefit arising from the internal reorganization assumed to be allocable to the current period based on the forecasted utilization period. Note: Individual line items in tables may be adjusted by non-material amounts to enable totals to align to published financial statements. *CC: Constant currency for this purpose is defined as the current period reported revenues/expenses/earnings represented at the prior comparative period's foreign exchange rate. ** Annual recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.Total Revenues Annual Recurring Revenues Cloud Revenues (in millions) (in millions) (in millions) Constant Constant Reported Currency Reported Constant Currency Reported Currency $855.6 $839.4 $684.9 $673.6 $350.5 $346.7 +10.9% +8.8% +21.5% +19.5% +41.1% +39.6% Annual Recurring Revenues represents 80% of Total Revenues -- Operating Cash Flows of $282.5 million in the quarter, up 36.3% Y/Y -- Free Cash Flows of $274.8 million in the quarter, up 46.5% Y/Y -- GAAP-based net income (loss) of ($65.5) million, down 160.9% Y/Y, margin of (7.7)% down 2,160 basis points Y/Y, primarily due to one-time IRS settlement charge of $299 million -- Adjusted EBITDA of $360.8 million, up 13.8%, margin of 42.2%, up 110 basis points Y/Y -- GAAP-based diluted earnings (loss) per share of ($0.24), down 160.0% Y/Y -- Non-GAAP diluted earnings per share of $0.95, up 13.1%, and $0.92 in constant currency, up 9.5% Y/Y

OpenText Reports Second Quarter Fiscal Year 2021 Financial Results

PR Newswire

WATERLOO, ON, Feb. 4, 2021

Record Annual Recurring Revenues (ARR), Record Cloud Revenues

WATERLOO, ON, Feb. 4, 2021 /PRNewswire/ --

Second Quarter Highlights

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

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

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

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

Financial Highlights for Q2 Fiscal 2021 with Year Over Year Comparisons

Dividend Program

As part of our quarterly, non-cumulative cash dividend program, the Board declared on February 3, 2021 a cash dividend of $0.2008 per common share. The record date for this dividend is March 5, 2021 and the payment date is March 26, 2021. OpenText believes strongly in returning value to its shareholders and intends to maintain its dividend program. Any future declarations of dividends and the establishment of future record and payment dates are all subject to the final determination and discretion of the Board of Directors.

Quarterly Business Highlights

Conference Call Information

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February 04, 2021 16:01 ET (21:01 GMT)