Mr. Mark Barrenechea reports

OPENTEXT REPORTS SECOND QUARTER FISCAL YEAR 2024 FINANCIAL RESULTS

Open Text Corp. today released its financial results for the second quarter ended Dec. 31, 2023.

• Record total revenues of $1,535-million, up 71.0 per cent year over year or up 68.2 per cent in constant currency (CC);
• Annual recurring revenues (ARR) of $1,146-million, up 58.0 per cent year over year or up 55.6 per cent in CC;
• Cloud revenues of $450-million, up 10.1 per cent year over year or up 9.2 per cent in CC;
• Record quarterly enterprise cloud bookings of $236-million, up 62.8 per cent year over year;
• Operating cash flows of $351-million and free cash flows of $305-million;
• Generally accepted accounting principles-based net income of $38-million;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $566-million, margin of 36.9 per cent;
• GAAP-based diluted earnings per share (EPS) of 14 cents, non-GAAP diluted EPS (earnings per share) of $1.24;
• Announced definitive agreement to divest the Application Modernization and Connectivity (AMC) business to Rocket Software for $2,275-million, net proceeds to reduce debt, applied to the acquisition term loan and term loan B.

"Open Text demonstrated remarkable performance in the second quarter achieving record total revenues of $1,535-million, up 71 per cent year over year," said Mark J. Barrenechea, Open Text chief executive officer and chief technology officer. "Driven by increased cloud demand, we saw record quarterly enterprise cloud bookings of $236-million, up 63 per cent year over year, led by continued strong enterprise content, Micro Focus cloud contribution and customers beginning their AI journey. With continued strength in our enterprise cloud businesses and our new Aviator AI products, we are raising our Cloud Booking outlook to 25-per-cent to 30-per-cent growth this year."

Mr. Barrenechea further added: "In November, 2023, we announced our intention to divest the AMC business. This divestiture positions us to focus on higher-growth opportunities within information management such as cloud and AI and we remain on track to closing the transaction in the fourth quarter of fiscal 2024, subject to regulatory approvals and customary closing conditions."

"I am pleased with Open Text's solid business execution in Q2," said Madhu Ranganathan, Open Text executive vice-president and chief financial officer. "We delivered $566-million of adjusted EBITDA, up 66 per cent year over year and free cash flows of $305-million, up 87 per cent year over year. Our balance sheet and liquidity position remain strong with approximately $1-billion in cash as of Dec. 31, 2023. We remain on track to grow Micro Focus organically and bring Micro Focus on to the Open Text operating model by the end of this fiscal year."

Dividend

As part of the company's quarterly, non-cumulative cash dividend program, the board declared on Jan. 31, 2024, a cash dividend of 25 cents per common share. The record date for this dividend is March 1, 2024, and the payment date is March 20, 2024. Open Text 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;

• Open Text announced the release of Cloud Editions 24.1 and its latest Open Text Aviator innovations;
• Open Text announced divestment of its AMC business to Rocket Software for $2,275-million;
• Key customer wins in the quarter include: Beyond One (Virgin Mobile), BMW, Carl Zeiss, Coop Danmark, Edward Don & Company, F5 Networks, FedEx Express, Google, Harris County, Metropolitan Utilities District, Nakit, Openbaar Ministerie, Philips Healthcare, Preh GmbH, Turkcell, and Zoho;
• Open Text named a leader in Customer Communications Management and Communications Experience Platforms in the 2023 Aspire Leaderboard;
• Open Text named a leader in the IDC MarketScape: Worldwide Multi-Enterprise Supply Chain Commerce Network 2023 Vendor Assessment.

Conference call information

Open Text posted an investor presentation on its investor relations website and invites the public to listen to the earnings conference call today at 5 p.m. ET (2 p.m. PT). Alternatively, dial 1-800-319-4610 (toll-free) or 1-604-638-5340 (international). Please dial in 10 minutes ahead of time to ensure proper connection. A live webcast of the earnings conference call will be available on the investor relations section of the company's website.

A replay of the call will be available beginning Feb. 1, 2024, at 7 p.m. ET through 11:59 p.m. on Feb. 15, 2024, and can be accessed by dialling 1-855-669-9658 (toll-free) or 1-604-674-8052 (international) and using pass code 0620 followed by the number sign.

About Open Text Corp.

Open Text, the information company, enables organizations to gain insight through market-leading information management solutions, powered by Open Text Cloud Editions.

We seek Safe Harbor.