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Press Release: OpenText Reports Second Quarter -6-

· 02/04/2021 16:01
Non-GAAP-based net income, attributable to OpenText $ 260,471 $ 0.95 *Weighted average number of Common Shares - diluted (in thousands) used in the calculation of Non-GAAP-based earnings per share for the three months ended December 31, 2020 were 273,183. Reconciliation of Adjusted EBITDA Three Months Ended December 31, 2020 GAAP-based net loss, attributable to OpenText $ (65,477) Add: Provision for (recovery of) income taxes 267,559 Interest and other related expense, net 37,595 Amortization of acquired technology-based intangible assets 54,091 Amortization of acquired customer-based intangible assets 54,926 Depreciation 20,280 Share-based compensation 14,526 Special charges (recoveries) (17,494) Other (income) expense, net (5,251) Adjusted EBITDA $ 360,755 GAAP-based net loss margin (7.7) % Adjusted EBITDA margin 42.2 % Reconciliation of Free cash flows Three Months Ended December 31, 2020 GAAP-based cash flows provided by operating activities $ 282,455 Add: Capital expenditures (1) (7,651) Free cash flows $ 274,804 (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 six months ended December 31, 2020. (In thousands, except for per share data) ------------------------------------------------------------------------------------------ Six Months Ended December 31, 2020 Non-GAAP- GAAP-based based Measures % Non-GAAP- Measures % GAAP-based of Total based of Total Measures Revenue Adjustments Note Measures Revenue Cost of revenues Cloud services and subscriptions $ 230,506 $ (1,979) (1) $ 228,527 Customer support 58,862 (941) (1) 57,921 Professional service and other 93,200 (1,183) (1) 92,017 Amortization of acquired technology-based intangible assets 112,128 (112,128) (2) -- GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%) 1,158,170 69.8% 116,231 (3) 1,274,401 76.8% Operating expenses Research and development 194,141 (5,049) (1) 189,092 Sales and marketing 280,297 (9,014) (1) 271,283 General and administrative 118,954 (8,096) (1) 110,858 Amortization of acquired customer-based intangible assets 109,919 (109,919) (2) -- Special charges (recoveries) (4,250) 4,250 (4) -- GAAP-based income from operations / Non-GAAP-based income from operations 416,826 244,059 (5) 660,885 Other income (expense), net 8,134 (8,134) (6) -- Provision for (recovery of) income taxes 310,303 (228,515) (7) 81,788 GAAP-based net income / Non-GAAP-based net income, attributable to OpenText 37,899 464,440 (8) 502,339 GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText $ 0.14 $ 1.70 (8) $ 1.84 (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 89% 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 six months ended December 31, 2020 includes an income tax provision charge from the IRS Settlement partially offset by a tax benefit from the release of unrecognized tax benefits due to the conclusion of relevant tax audits. (8) Reconciliation of GAAP-based net income to Non-GAAP-based net income: Six Months Ended December 31, 2020 Per share diluted GAAP-based net income, attributable to OpenText $ 37,899 $ 0.14 Add: Amortization 222,047 0.81 Share-based compensation 26,262 0.10 Special charges (recoveries) (4,250) (0.02) Other (income) expense, net (8,134) (0.03) GAAP-based provision for (recovery of) income taxes 310,303 1.14 Non-GAAP-based provision for income taxes (81,788) (0.30) Non-GAAP-based net income, attributable to OpenText $ 502,339 $ 1.84 Reconciliation of Adjusted EBITDA Six Months Ended December 31, 2020 GAAP-based net income, attributable to OpenText $ 37,899 Add: Provision for (recovery of) income taxes 310,303 Interest and other related expense, net 76,684 Amortization of acquired technology-based intangible assets 112,128 Amortization of acquired customer-based intangible assets 109,919 Depreciation 42,283 Share-based compensation 26,262 Special charges (recoveries) (4,250) Other (income) expense, net (8,134) Adjusted EBITDA $ 703,094 GAAP-based net income margin 2.3 % Adjusted EBITDA margin 42.4 % Reconciliation of Free cash flows Six Months Ended December 31, 2020 GAAP-based cash flows provided by operating activities $ 516,359 Add: Capital expenditures (1) (22,956) Free cash flows $ 493,403 (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 September 30, 2020. (In thousands, except for per share data) ------------------------------------------------------------------------------------------

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