PR Newswire
WATERLOO, ON, Aug. 3, 2023
Reports Record Total Revenues of $4.5 Billion with 28% Growth
Fiscal 2023 Annual Highlights Y/Y
Total Revenues (in millions) | Annual Recurring Revenues (in millions) | Cloud Revenues (in millions) | |||||
Reported | Constant | Reported | Constant | Reported | Constant | ||
$4,485 | $4,617 | $3,615 | $3,718 | $1,700 | $1,739 | ||
+28.4 % | +32.2 % | +26.2 % | +29.7 % | +10.8 % | +13.3 % | ||
Annual Recurring Revenues represent 81% of Total Revenues | |||||||
- Total revenues of $4.5 billion up 28.4% Y/Y or up 32.2% Y/Y in constant currency (CC)
- Annual Recurring Revenues (ARR) of $3.6 billion, up 26.2% Y/Y or up 29.7% Y/Y in CC
- Cloud revenues of $1.7 billion up 10.8% Y/Y or up 13.3% Y/Y in CC
- FY'23 enterprise cloud bookings(1) of $528 million, up 9.5% Y/Y
- 10 consecutive quarters of cloud and ARR organic growth in constant currency
- Operating cash flows were $779 million and free cash flows(2) were $655 million
- GAAP-based net income of $150 million, down 62.1% Y/Y, margin of 3.4%
- Adjusted EBITDA(2) of $1.5 billion, margin of 32.8% while making key investments in cloud, AI and Security
- Record capital returns of $260 million via dividends
- GAAP-based diluted earnings per share (EPS) of $0.56, Non-GAAP diluted EPS(2) of $3.29
- Increased annualized dividend to $1.00 per share, subject to quarterly Board approval. Declared quarterly dividend of $0.25 per share.
- Includes Micro Focus results from February 1, 2023 to June 30, 2023
Fiscal 2023 Fourth Quarter Highlights
Total Revenues (in millions) | Annual Recurring Revenues (in millions) | Cloud Revenues (in millions) | |||||
Reported | Constant | Reported | Constant | Reported | Constant | ||
$1,491 | $1,502 | $1,157 | $1,167 | $452 | $455 | ||
+65.2 % | +66.5 % | +56.4 % | +57.7 % | +9.7 % | +10.6 % | ||
Annual Recurring Revenues represent 78% of Total Revenues | |||||||
- Total revenues of $1.5 billion, up 65.2% Y/Y or up 66.5% in CC
- Annual recurring revenues of $1.2 billion, up 56.4% Y/Y or up 57.7% in CC
- Cloud revenues of $452 million, up 9.7% Y/Y or up 10.6% Y/Y in CC
- Quarterly enterprise cloud bookings(1) of $164 million, up 12.3%
- Operating cash flows were $115 million and free cash flows(2) were $91 million
- GAAP-based net loss of ($49) million, down (147.7)% Y/Y, margin of (3.3)%, due to acquisition expenses
- Adjusted EBITDA(2) of $463 million, margin of 31.0%
- GAAP-based diluted earnings per share (EPS) of ($0.18), Non-GAAP diluted EPS(2) of $0.91
WATERLOO, ON, Aug. 3, 2023 /PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced its financial results for the fourth quarter and year ended June 30, 2023.
"OpenText Fiscal 2023 progress and results are exceptional and record setting, with 28% total revenue growth. OpenText delivered record total revenues of $4.5 billion of which 81%, or $3.6 billion, is annually recurring," said Mark J. Barrenechea, OpenText CEO & CTO. "Our mission to empower individuals and organizations of all sizes to achieve the Information Advantage. Looking ahead, Fiscal 2024 will be another year of outstanding growth for OpenText led by Cloud and our expanded Information Management mission, with Micro Focus products contributing organic growth."
"OpenText holds a distinctive position as a leader in Information Management. Our comprehensive range of products, effective go-to-market strategies, and talented employees position us favorably for sustained growth and profitability," added Mr. Barrenechea. "Today we are announcing opentext.ai and OpenText Aviator™, our vision and initial AI products, to be the trusted partner for our customer's AI journey. I am extremely optimistic about the future of OpenText, and helping our customers unlock the value of their information."
"OpenText delivered an exceptional operating performance in Fiscal 2023 with adjusted EBITDA of $1.5 billion and free cash flows of $655 million. Our balance sheet and liquidity position remain strong with approximately $1.2 billion in cash as of June 30, 2023, and a net leverage ratio of 3.5x," said Madhu Ranganathan, OpenText EVP, CFO. "The value we are generating through the OpenText Business System of Total Growth is truly remarkable. We accelerated our initial integration of Micro Focus operations ahead of schedule, we remain on track to meet our near-term and long-term operating goals."
(1) | 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. |
(2) | Please see Note 2 "Use of Non-GAAP Financial Measures" to the consolidated financial statements below. |
Financial Highlights for Fiscal 2023 and Q4 with Year Over Year Comparisons
Summary of Annual Results | ||||||||
(In millions, except per share data) | FY'23 | FY'22 | $ Change | % Change | FY'23 | % Change | ||
Revenues: | ||||||||
Cloud services and subscriptions | $1,700.4 | $1,535.0 | $165.4 | 10.8 % | $1,739.1 | 13.3 % | ||
Customer support | 1,915.0 | 1,331.0 | $584.1 | 43.9 % | 1,978.8 | 48.7 % | ||
Total annual recurring revenues** | $3,615.5 | $2,866.0 | $749.5 | 26.2 % | $3,717.9 | 29.7 % | ||
License | 539.0 | 358.4 | $180.7 | 50.4 % | 555.4 | 55.0 % | ||
Professional service and other | 330.5 | 269.5 | $61.0 | 22.6 % | 344.1 | 27.7 % | ||
Total revenues | $4,485.0 | $3,493.8 | $991.1 | 28.4 % | $4,617.4 | 32.2 % | ||
GAAP-based operating income | $ 516.3 | $644.8 | ($128.5) | (19.9) % | N/A | N/A | ||
Non-GAAP-based operating income (1) | $1,365.3 | $1,176.9 | $188.4 | 16.0 % | $1,387.5 | 17.9 % | ||
GAAP-based net income attributable to OpenText | $150.4 | $397.1 | ($246.7) | (62.1) % | N/A | N/A | ||
GAAP-based EPS, diluted | $0.56 | $1.46 | ($0.90) | (61.6) % | N/A | N/A | ||
Non-GAAP-based EPS, diluted (1)(2) | $3.29 | $3.22 | $0.07 | 2.2 % | $3.37 | 4.7 % | ||
Adjusted EBITDA (1) | $1,472.9 | $1,265.0 | $207.9 | 16.4 % | $1,495.8 | 18.2 % | ||
Operating cash flows | $779.2 | $981.8 | ($202.6) | (20.6) % | N/A | N/A | ||
Free cash flows (1) | $655.4 | $888.7 | ($233.3) | (26.3) % | N/A | N/A |
Summary of Quarterly Results | ||||||||
(In millions, except per share data) | Q4 FY'23 | Q4 FY'22 | $ Change | % Change | Q4 FY'23 | % Change | ||
Revenues: | ||||||||
Cloud services and subscriptions | $451.7 | $411.6 | $40.1 | 9.7 % | $455.4 | 10.6 % | ||
Customer support | 705.3 | 328.3 | $376.9 | 114.8 % | 711.4 | 116.7 % | ||
Total annual recurring revenues** | $1,156.9 | $739.9 | $417.0 | 56.4 % | $1,166.8 | 57.7 % | ||
License | 228.8 | 94.7 | $134.1 | 141.6 % | 229.2 | 142.0 % | ||
Professional service and other | 105.1 | 67.8 | $37.3 | 54.9 % | 106.3 | 56.7 % | ||
Total revenues | $1,490.8 | $902.5 | $588.4 | 65.2 % | $1,502.3 | 66.5 % | ||
GAAP-based operating income | $121.3 | $137.6 | ($16.3) | (11.8) % | N/A | N/A | ||
Non-GAAP-based operating income (1) | $431.7 | $291.0 | $140.8 | 48.4 % | $421.5 | 44.9 % | ||
GAAP-based net income attributable to OpenText | ($48.7) | $102.2 | ($150.9) | (147.7) % | N/A | N/A | ||
GAAP-based EPS, diluted | ($0.18) | $0.38 | ($0.56) | (147.4) % | N/A | N/A | ||
Non-GAAP-based EPS, diluted (1)(2) | $0.91 | $0.80 | $0.11 | 13.8 % | $0.88 | 10.0 % | ||
Adjusted EBITDA (1) | $462.8 | $313.6 | $149.2 | 47.6 % | $452.7 | 44.3 % | ||
Operating cash flows | $115.3 | $251.9 | ($136.6) | (54.2) % | N/A | N/A | ||
Free cash flows (1) | $91.2 | $213.8 | ($122.5) | (57.3) % | 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. |
Dividend Program
As part of our quarterly, non-cumulative cash dividend program, the Board declared on August 2, 2023, a quarterly cash dividend of $0.25 per common share. The record date for this dividend is September 1, 2023, and the payment date is September 22, 2023. 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
- Key customer wins in the quarter include: BNP Paribas, Carl Zeiss AG, CNA Insurance, Daiken, DHL eCommerce Benelux, Elevance Health, Engie Italia, FEMA (US Department of Homeland Security), ID Logistics, Investors Heritage Life Insurance Company, Renesas, RS Component, Swedbank, TechMahindra, Warta
- OpenText and Anritsu Service Assurance signed a new deal for 5G network capabilities and next-generation architecture
- Today we are announcing opentext.ai, our AI strategy, and initial AI products including OpenText Aviator™ and IDOL, to be the trusted partner for our customers' AI journey
- OpenText powers organizations to achieve digital success in a multi-cloud world with Cloud Editions 23.3
- OpenText has been recognized as a Leader in the 2023 Gartner Magic Quadrant review for Application Security Testing (AST) for the 10th consecutive year
- OpenText received a 2023 SAP® Pinnacle Award in the Partner Solution Success category, which recognizes its outstanding contributions as an SAP partner
Summary of Annual Results | ||||
FY'23 | FY'22 | % Change | ||
Revenue (millions) | $4,485.0 | $3,493.8 | 28.4 % | |
GAAP-based gross margin | 70.6 % | 69.6 % | 105 | bps |
Non-GAAP-based gross margin (1) | 76.1 % | 75.6 % | 49 | bps |
GAAP-based EPS, diluted | $0.56 | $1.46 | (61.6) % | |
Non-GAAP-based EPS, diluted (1)(2) | $3.29 | $3.22 | 2.2 % |
Summary of Quarterly Results | |||||||
Q4 FY'23 | Q3 FY'23 | Q4 FY'22 | % Change (Q4 FY'23 vs | % Change (Q4 FY'23 vs | |||
Revenue (millions) | $1,490.8 | $1,244.7 | $902.5 | 19.8 % | 65.2 % | ||
GAAP-based gross margin | 71.4 % | 70.3 % | 70.2 % | 110 | bps | 120 | bps |
Non-GAAP-based gross margin (1) | 76.9 % | 75.8 % | 75.9 % | 110 | bps | 100 | bps |
GAAP-based EPS, diluted | ($0.18) | $0.21 | $0.38 | (185.7) % | (147.4) % | ||
Non-GAAP-based EPS, diluted (1)(2) | $0.91 | $0.73 | $0.80 | 24.7 % | 13.8 % |
(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. |
Conference Call Information
OpenText posted an investor presentation on its Investor Relations website at http://investors.opentext.com and invites the public to listen to the earnings conference call today at 5:00 p.m. ET (2:00 p.m. PT) by dialing 1-800-319-4610 (toll-free) or +1-604-638-5340 (international). Please dial-in 10 minutes ahead of time to ensure proper connection. Alternatively, a live webcast of the earnings conference call will be available on the Investor Relations section of the Company's website at http://investors.opentext.com/investor-events-and-presentations.
A replay of the call will be available beginning August 3, 2023, at 7:00 p.m. ET through 11:59 p.m. on August 17, 2023, and can be accessed by dialing 1-855-669-9658 (toll-free) or +1-604-674-8052 (international) and using passcode 0296 followed by the number sign.
Please see Note 2 "Use of Non-GAAP Financial Measures" to the consolidated financial statements below for a reconciliation of U.S. GAAP-based financial measures used in this press release to Non-GAAP-based financial measures.
About OpenText
OpenText, The Information Company™, enables organizations to gain insight through market leading information management solutions, powered by OpenText Cloud Editions. For more information about OpenText (NASDAQ: OTEX, TSX: OTEX) visit opentext.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release, including statements about the focus of Open Text Corporation ("OpenText" or "the Company") on growth, future cloud growth and market share gains, future organic growth initiatives and deployment of capital, intention to maintain a dividend program, including any targeted annualized dividend, the associated benefits of the Micro Focus acquisition, future tax rates, new platform and product offerings and associated benefits to customers, our announcement of opentext.ai and OpenText Aviator™, including our AI strategy, vision and initial AI products, scaling OpenText, and other matters, which may contain words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "may", "could", "would", "might", "will" and variations of these words or similar expressions are intended to identify forward-looking statements or information under applicable securities laws (forward-looking statements). In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements, and based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management's perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances, such as certain assumptions about the economy, as well as market, financial and operational assumptions. Management's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Future declarations of dividends are also subject to the final determination and discretion of the Board of Directors, and an annualized dividend has not been approved or declared by the Board. Forward-looking statements involve known and unknown risks and uncertainties such as those relating to: all statements regarding the expected future financial position, results of operations, cash flows, dividends, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management, including any anticipated synergy benefits; our ability to integrate successfully Micro Focus' operations and programs, including incurring unanticipated costs, delays or difficulties; and our ability to develop, protect and maintain our intellectual property and proprietary technology and to operate without infringing on the proprietary rights of others. For additional information with respect to risks and other factors which could occur, see the Company's Annual Report on Form 10-K, Quarterly Report on Form 10-Q and other securities filings with the Securities and Exchange Commission (SEC) and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Further, readers should note that we may announce information using our website, press releases, securities law filings, public conference calls, webcasts and the social media channels identified on the Investors section of our website (https://investors.opentext.com). Such social media channels may include the Company's or our CEO's blog, Twitter account or LinkedIn account. The information posted through such channels may be material. Accordingly, readers should monitor such channels in addition to our other forms of communication.
OTEX-F
Copyright ©2023 Open Text. OpenText is a trademark or registered trademark of Open Text. The list of trademarks is not exhaustive of other trademarks. Registered trademarks, product names, company names, brands and service names mentioned herein are property of Open Text. All rights reserved. For more information, visit: http://www.opentext.com/who-we-are/copyright-information.
OPEN TEXT CORPORATION | |||
June 30, 2023 | June 30, 2022 | ||
ASSETS | |||
Cash and cash equivalents | $ 1,231,625 | $ 1,693,741 | |
Accounts receivable trade, net of allowance for credit losses of $13,828 as of | 682,517 | 426,652 | |
Contract assets | 71,196 | 26,167 | |
Income taxes recoverable | 68,161 | 18,255 | |
Prepaid expenses and other current assets | 221,732 | 120,552 | |
Total current assets | 2,275,231 | 2,285,367 | |
Property and equipment | 356,904 | 244,709 | |
Operating lease right of use assets | 285,723 | 198,132 | |
Long-term contract assets | 64,553 | 19,719 | |
Goodwill | 8,662,603 | 5,244,653 | |
Acquired intangible assets | 4,080,879 | 1,075,208 | |
Deferred tax assets | 926,719 | 810,154 | |
Other assets | 342,318 | 256,987 | |
Long-term income taxes recoverable | 94,270 | ||
