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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Open Text Corporation | NASDAQ:OTEX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-5.18 | -14.61% | 30.2885 | 30.15 | 30.29 | 30.5799 | 28.19 | 30.44 | 3,706,318 | 00:49:43 |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Canada | 98-0154400 | ||||
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
275 Frank Tompa Drive, | N2L 0A1 | ||||||||||||||||||||||
Waterloo, | Ontario | Canada | |||||||||||||||||||||
(Address of principal executive offices) | (Zip code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common stock without par value | OTEX | NASDAQ Global Select Market |
Page No | ||||||||
Part I Financial Information | ||||||||
Item 1. | Financial Statements | |||||||
Condensed Consolidated Balance Sheets as of March 31, 2022 (unaudited) and June 30, 2021 | ||||||||
Condensed Consolidated Statements of Income - Three and Nine Months Ended March 31, 2022 and 2021 (unaudited) | ||||||||
Condensed Consolidated Statements of Comprehensive Income - Three and Nine Months Ended March 31, 2022 and 2021 (unaudited) | ||||||||
Condensed Consolidated Statements of Shareholders' Equity - Three and Nine Months Ended March 31, 2022 and 2021 (unaudited) | ||||||||
Condensed Consolidated Statements of Cash Flows - Nine Months Ended March 31, 2022 and 2021 (unaudited) | ||||||||
Notes to Condensed Consolidated Financial Statements (unaudited) | ||||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |||||||
Item 4. | Controls and Procedures | |||||||
Part II Other Information | ||||||||
Item 1A. | Risk Factors | |||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||||
Item 6. | Exhibits | |||||||
Signatures |
March 31, 2022 | June 30, 2021 | ||||||||||
ASSETS | (unaudited) | ||||||||||
Cash and cash equivalents | $ | 1,633,702 | $ | 1,607,306 | |||||||
Accounts receivable trade, net of allowance for credit losses of $16,439 as of March 31, 2022 and $22,151 as of June 30, 2021 (note 4) | 429,877 | 438,547 | |||||||||
Contract assets (note 3) | 25,481 | 25,344 | |||||||||
Income taxes recoverable (note 15) | 20,781 | 32,312 | |||||||||
Prepaid expenses and other current assets (note 9) | 122,616 | 98,551 | |||||||||
Total current assets | 2,232,457 | 2,202,060 | |||||||||
Property and equipment (note 5) | 227,830 | 233,595 | |||||||||
Operating lease right of use assets (note 6) | 217,684 | 234,532 | |||||||||
Long-term contract assets (note 3) | 20,049 | 19,222 | |||||||||
Goodwill (note 7) | 5,265,189 | 4,691,673 | |||||||||
Acquired intangible assets (note 8) | 1,181,266 | 1,187,260 | |||||||||
Deferred tax assets (note 15) | 717,345 | 796,738 | |||||||||
Other assets (note 9) | 257,301 | 208,894 | |||||||||
Long-term income taxes recoverable (note 15) | 43,518 | 35,362 | |||||||||
Total assets | $ | 10,162,639 | $ | 9,609,336 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued liabilities (note 10) | $ | 404,545 | $ | 423,592 | |||||||
Current portion of long-term debt (note 11) | 10,000 | 10,000 | |||||||||
Operating lease liabilities (note 6) | 59,182 | 58,315 | |||||||||
Deferred revenues (note 3) | 936,750 | 852,629 | |||||||||
Income taxes payable (note 15) | 7,483 | 17,368 | |||||||||
Total current liabilities | 1,417,960 | 1,361,904 | |||||||||
Long-term liabilities: | |||||||||||
Accrued liabilities (note 10) | 16,631 | 28,830 | |||||||||
Pension liability (note 12) | 76,364 | 74,511 | |||||||||
Long-term debt (note 11) | 4,210,582 | 3,578,859 | |||||||||
Long-term operating lease liabilities (note 6) | 203,101 | 224,453 | |||||||||
Long-term deferred revenues (note 3) | 90,736 | 98,989 | |||||||||
Long-term income taxes payable (note 15) | 35,206 | 34,113 | |||||||||
Deferred tax liabilities (note 15) | 56,208 | 108,224 | |||||||||
Total long-term liabilities | 4,688,828 | 4,147,979 | |||||||||
Shareholders’ equity: | |||||||||||
Share capital and additional paid-in capital (note 13) | |||||||||||
270,231,166 and 271,540,755 Common Shares issued and outstanding at March 31, 2022 and June 30, 2021, respectively; authorized Common Shares: unlimited | 2,010,146 | 1,947,764 | |||||||||
Accumulated other comprehensive income (note 20) | 17,266 | 66,238 | |||||||||
Retained earnings | 2,151,369 | 2,153,326 | |||||||||
Treasury stock, at cost (2,776,420 and 1,567,664 shares at March 31, 2022 and June 30, 2021, respectively) | (124,033) | (69,386) | |||||||||
Total OpenText shareholders' equity | 4,054,748 | 4,097,942 | |||||||||
Non-controlling interests | 1,103 | 1,511 | |||||||||
Total shareholders’ equity | 4,055,851 | 4,099,453 | |||||||||
Total liabilities and shareholders’ equity | $ | 10,162,639 | $ | 9,609,336 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenues (note 3): | |||||||||||||||||||||||
Cloud services and subscriptions | $ | 401,947 | $ | 355,845 | $ | 1,123,422 | $ | 1,047,285 | |||||||||||||||
Customer support | 332,514 | 335,915 | 1,002,626 | 999,806 | |||||||||||||||||||
License | 80,641 | 76,299 | 263,663 | 252,170 | |||||||||||||||||||
Professional service and other | 67,181 | 64,872 | 201,679 | 193,327 | |||||||||||||||||||
Total revenues | 882,283 | 832,931 | 2,591,390 | 2,492,588 | |||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||
Cloud services and subscriptions | 136,020 | 123,729 | 377,928 | 354,235 | |||||||||||||||||||
Customer support | 31,763 | 30,953 | 90,914 | 89,815 | |||||||||||||||||||
License | 3,196 | 2,810 | 10,906 | 9,601 | |||||||||||||||||||
Professional service and other | 56,693 | 50,321 | 161,459 | 143,521 | |||||||||||||||||||
Amortization of acquired technology-based intangible assets (note 8) | 46,564 | 53,453 | 152,333 | 165,581 | |||||||||||||||||||
Total cost of revenues | 274,236 | 261,266 | 793,540 | 762,753 | |||||||||||||||||||
Gross profit | 608,047 | 571,665 | 1,797,850 | 1,729,835 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | 117,730 | 110,071 | 321,517 | 304,212 | |||||||||||||||||||
Sales and marketing | 180,955 | 158,687 | 491,133 | 438,984 | |||||||||||||||||||
General and administrative | 88,137 | 71,548 | 231,127 | 190,502 | |||||||||||||||||||
Depreciation | 22,370 | 21,961 | 65,535 | 64,244 | |||||||||||||||||||
Amortization of acquired customer-based intangible assets (note 8) | 56,215 | 54,156 | 160,764 | 164,075 | |||||||||||||||||||
Special charges (recoveries) (note 18) | 11,031 | 2,846 | 20,592 | (1,404) | |||||||||||||||||||
Total operating expenses | 476,438 | 419,269 | 1,290,668 | 1,160,613 | |||||||||||||||||||
Income from operations | 131,609 | 152,396 | 507,182 | 569,222 | |||||||||||||||||||
Other income (expense), net (note 22) | 24,392 | 8,283 | 29,137 | 16,417 | |||||||||||||||||||
Interest and other related expense, net | (40,238) | (37,333) | (117,538) | (114,017) | |||||||||||||||||||
Income before income taxes | 115,763 | 123,346 | 418,781 | 471,622 | |||||||||||||||||||
Provision for income taxes (note 15) | 41,041 | 31,818 | 123,757 | 342,121 | |||||||||||||||||||
Net income for the period | $ | 74,722 | $ | 91,528 | $ | 295,024 | $ | 129,501 | |||||||||||||||
Net (income) loss attributable to non-controlling interests | (41) | (38) | (130) | (112) | |||||||||||||||||||
Net income attributable to OpenText | $ | 74,681 | $ | 91,490 | $ | 294,894 | $ | 129,389 | |||||||||||||||
Earnings per share—basic attributable to OpenText (note 23) | $ | 0.28 | $ | 0.34 | $ | 1.09 | $ | 0.47 | |||||||||||||||
Earnings per share—diluted attributable to OpenText (note 23) | $ | 0.28 | $ | 0.33 | $ | 1.08 | $ | 0.47 | |||||||||||||||
Weighted average number of Common Shares outstanding—basic (in '000's) | 270,693 | 272,832 | 271,623 | 272,414 | |||||||||||||||||||
Weighted average number of Common Shares outstanding—diluted (in '000's) | 271,211 | 273,924 | 272,439 | 273,312 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income for the period | $ | 74,722 | $ | 91,528 | $ | 295,024 | $ | 129,501 | |||||||||||||||
Other comprehensive income (loss)—net of tax: | |||||||||||||||||||||||
Net foreign currency translation adjustments | (13,073) | (12,568) | (44,512) | 36,142 | |||||||||||||||||||
Unrealized gain (loss) on cash flow hedges: | |||||||||||||||||||||||
Unrealized gain (loss) - net of tax expense (recovery) effect of $233 and $246 for the three months ended March 31, 2022 and 2021, respectively; ($158) and $1,302 for the nine months ended March 31, 2022 and 2021, respectively | 648 | 681 | (334) | 3,608 | |||||||||||||||||||
(Gain) loss reclassified into net income - net of tax (expense) recovery effect of $79 and ($399) for the three months ended March 31, 2022 and 2021, respectively; ($24) and ($682) for the nine months ended March 31, 2022 and 2021, respectively | 219 | (1,108) | (86) | (1,892) | |||||||||||||||||||
Actuarial gain (loss) relating to defined benefit pension plans: | |||||||||||||||||||||||
Actuarial gain (loss) - net of tax expense (recovery) effect of ($579) and $944 for the three months ended March 31, 2022 and 2021, respectively; ($811) and ($413) for the nine months ended March 31, 2022 and 2021, respectively | (2,033) | 344 | (4,517) | (2,342) | |||||||||||||||||||
Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $66 and $95 for the three months ended March 31, 2022 and 2021, respectively; $134 and $275 for the nine months ended March 31, 2022 and 2021, respectively | 156 | 249 | 477 | 733 | |||||||||||||||||||
Total other comprehensive income (loss) net, for the period | (14,083) | (12,402) | (48,972) | 36,249 | |||||||||||||||||||
Total comprehensive income | 60,639 | 79,126 | 246,052 | 165,750 | |||||||||||||||||||
Comprehensive (income) loss attributable to non-controlling interests | (41) | (38) | (130) | (112) | |||||||||||||||||||
Total comprehensive income attributable to OpenText | $ | 60,598 | $ | 79,088 | $ | 245,922 | $ | 165,638 |
Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
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 December 31, 2021 | 271,006 | $ | 1,990,913 | (1,476) | $ | (67,966) | $ | 2,174,467 | $ | 31,349 | $ | 1,062 | $ | 4,129,825 | |||||||||||||||||||||||||||||||||
Issuance of Common Shares | |||||||||||||||||||||||||||||||||||||||||||||||
Under employee stock option plans | 53 | 1,863 | — | — | — | — | — | 1,863 | |||||||||||||||||||||||||||||||||||||||
Under employee stock purchase plans | 172 | 7,003 | — | — | — | — | — | 7,003 | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | 16,748 | — | — | — | — | — | 16,748 | |||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | (1,300) | (56,067) | — | — | — | (56,067) | |||||||||||||||||||||||||||||||||||||||
Repurchase of Common Shares | (1,000) | (6,381) | — | — | (38,702) | — | — | (45,083) | |||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.2209 per Common Share) | — | — | — | — | (59,077) | — | — | (59,077) | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) - net | — | — | — | — | — | (14,083) | — | (14,083) | |||||||||||||||||||||||||||||||||||||||
Net income for the period | — | — | — | — | 74,681 | — | 41 | 74,722 | |||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2022 | 270,231 | $ | 2,010,146 | (2,776) | $ | (124,033) | $ | 2,151,369 | $ | 17,266 | $ | 1,103 | $ | 4,055,851 |
Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
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 December 31, 2020 | 272,589 | $ | 1,889,857 | (1,101) | $ | (47,555) | $ | 2,093,076 | $ | 66,476 | $ | 1,393 | $ | 4,003,247 | |||||||||||||||||||||||||||||||||
Issuance of Common Shares | |||||||||||||||||||||||||||||||||||||||||||||||
Under employee stock option plans | 219 | 8,270 | — | — | — | — | — | 8,270 | |||||||||||||||||||||||||||||||||||||||
Under employee stock purchase plans | 165 | 6,421 | — | — | — | — | — | 6,421 | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | 12,357 | — | — | — | — | — | 12,357 | |||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | (490) | (22,977) | — | — | — | (22,977) | |||||||||||||||||||||||||||||||||||||||
Issuance of treasury stock | — | (1,146) | 23 | 1,146 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.2008 per Common Share) | — | — | — | — | (54,519) | — | — | (54,519) | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) - net | — | — | — | — | — | (12,402) | — | (12,402) | |||||||||||||||||||||||||||||||||||||||
Net income for the period | — | — | — | — | 91,490 | — | 38 | 91,528 | |||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2021 | 272,973 | $ | 1,915,759 | (1,568) | $ | (69,386) | $ | 2,130,047 | $ | 54,074 | $ | 1,431 | $ | 4,031,925 |
Nine Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
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 | 905 | 31,128 | — | — | — | — | — | 31,128 | |||||||||||||||||||||||||||||||||||||||
Under employee stock purchase plans | 595 | 24,913 | — | — | — | — | — | 24,913 | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | 45,091 | — | — | — | — | — | 45,091 | |||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | (1,700) | (75,660) | — | — | — | (75,660) | |||||||||||||||||||||||||||||||||||||||
Issuance of treasury stock | — | (21,013) | 492 | 21,013 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Repurchase of Common Shares | (2,810) | (17,879) | — | — | (118,238) | — | — | (136,117) | |||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.6627 per Common Share) | — | — | — | — | (178,613) | — | — | (178,613) | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) - net | — | — | — | — | — | (48,972) | — | (48,972) | |||||||||||||||||||||||||||||||||||||||
Distribution to non-controlling interest | — | 142 | — | — | — | — | (538) | (396) | |||||||||||||||||||||||||||||||||||||||
Net income for the period | — | — | — | — | 294,894 | — | 130 | 295,024 | |||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2022 | 270,231 | $ | 2,010,146 | (2,776) | $ | (124,033) | $ | 2,151,369 | $ | 17,266 | $ | 1,103 | $ | 4,055,851 |
Nine Months Ended March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 | 271,863 | $ | 1,851,777 | (622) | $ | (23,608) | $ | 2,159,396 | $ | 17,825 | $ | 1,319 | $ | 4,006,709 | |||||||||||||||||||||||||||||||||
Adoption of - cumulative effect, net | — | — | — | — | (2,450) | — | — | (2,450) | |||||||||||||||||||||||||||||||||||||||
Issuance of Common Shares | |||||||||||||||||||||||||||||||||||||||||||||||
Under employee stock option plans | 743 | 23,768 | — | — | — | — | — | 23,768 | |||||||||||||||||||||||||||||||||||||||
Under employee stock purchase plans | 367 | 13,974 | 193 | 6,690 | — | — | — | 20,664 | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | 38,619 | — | — | — | — | — | 38,619 | |||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | (1,455) | (64,847) | — | — | — | (64,847) | |||||||||||||||||||||||||||||||||||||||
Issuance of treasury stock | — | (12,379) | 316 | 12,379 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.5762 per Common Share) | — | — | — | — | (156,288) | — | — | (156,288) | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) - net | — | — | — | — | — | 36,249 | — | 36,249 | |||||||||||||||||||||||||||||||||||||||
Net income for the period | — | — | — | — | 129,389 | — | 112 | 129,501 | |||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2021 | 272,973 | $ | 1,915,759 | (1,568) | $ | (69,386) | $ | 2,130,047 | $ | 54,074 | $ | 1,431 | $ | 4,031,925 |
Nine Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income for the period | $ | 295,024 | $ | 129,501 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization of intangible assets | 378,632 | 393,900 | |||||||||
Share-based compensation expense | 45,091 | 38,619 | |||||||||
Pension expense | 4,883 | 4,670 | |||||||||
Amortization of debt issuance costs | 3,936 | 3,395 | |||||||||
Loss on extinguishment of debt | 27,413 | — | |||||||||
Loss on sale and write down of property and equipment | 96 | 1,979 | |||||||||
Deferred taxes | 43,332 | 80,844 | |||||||||
Share in net (income) loss of equity investees | (59,103) | (20,020) | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 68,428 | 87,072 | |||||||||
Contract assets | (27,208) | (29,035) | |||||||||
Prepaid expenses and other current assets | (15,722) | (2,528) | |||||||||
Income taxes | (11,235) | (117,594) | |||||||||
Accounts payable and accrued liabilities | (65,738) | (27,327) | |||||||||
Deferred revenue | 25,642 | 62,600 | |||||||||
Other assets | 16,527 | 765 | |||||||||
Operating lease assets and liabilities, net | (128) | (26,910) | |||||||||
Net cash provided by operating activities | 729,870 | 579,931 | |||||||||
Cash flows from investing activities: | |||||||||||
Additions of property and equipment | (54,937) | (36,267) | |||||||||
Purchase of Zix Corporation, net of cash acquired | (856,175) | — | |||||||||
Purchase of Bricata Inc. | (17,927) | — | |||||||||
Purchase of XMedius | — | 444 | |||||||||
Purchase of Dynamic Solutions Group Inc. | — | (371) | |||||||||
Other investing activities | (3,922) | (2,018) | |||||||||
Net cash used in investing activities | (932,961) | (38,212) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of Common Shares from exercise of stock options and ESPP | 56,476 | 45,780 | |||||||||
Proceeds from long-term debt and Revolver | 1,500,000 | — | |||||||||
Repayment of long-term debt and Revolver | (857,500) | (607,500) | |||||||||
Debt extinguishment costs (note 22) | (24,969) | — | |||||||||
Debt issuance costs | (17,159) | — | |||||||||
Repurchase of Common Shares | (136,117) | — | |||||||||
Purchase of treasury stock | (75,660) | (64,847) | |||||||||
Distribution to non-controlling interest | (396) | — | |||||||||
Payments of dividends to shareholders | (178,613) | (156,288) | |||||||||
Net cash provided by (used in) financing activities | 266,062 | (782,855) | |||||||||
Foreign exchange gain (loss) on cash held in foreign currencies | (36,920) | 22,553 | |||||||||
Increase (decrease) in cash, cash equivalents and restricted cash during the period | 26,051 | (218,583) | |||||||||
Cash, cash equivalents and restricted cash at beginning of the period | 1,609,800 | 1,697,263 | |||||||||
Cash, cash equivalents and restricted cash at end of the period | $ | 1,635,851 | $ | 1,478,680 |
Reconciliation of cash, cash equivalents and restricted cash: | March 31, 2022 | March 31, 2021 | |||||||||
Cash and cash equivalents | $ | 1,633,702 | $ | 1,475,626 | |||||||
Restricted cash (1) | 2,149 | 3,054 | |||||||||
Total cash, cash equivalents and restricted cash | $ | 1,635,851 | $ | 1,478,680 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Total Revenues by Geography: | |||||||||||||||||||||||
Americas (1) | $ | 560,969 | $ | 507,892 | $ | 1,615,967 | $ | 1,533,400 | |||||||||||||||
EMEA (2) | 252,888 | 258,010 | 764,707 | 754,966 | |||||||||||||||||||
Asia Pacific (3) | 68,426 | 67,029 | 210,716 | 204,222 | |||||||||||||||||||
Total revenues | $ | 882,283 | $ | 832,931 | $ | 2,591,390 | $ | 2,492,588 |
Total Revenues by Type of Performance Obligation: | |||||||||||||||||||||||
Recurring revenues (4) | |||||||||||||||||||||||
Cloud services and subscriptions revenue | $ | 401,947 | $ | 355,845 | $ | 1,123,422 | $ | 1,047,285 | |||||||||||||||
Customer support revenue | 332,514 | 335,915 | 1,002,626 | 999,806 | |||||||||||||||||||
Total recurring revenues | $ | 734,461 | $ | 691,760 | $ | 2,126,048 | $ | 2,047,091 | |||||||||||||||
License revenue (perpetual, term and subscriptions) | 80,641 | 76,299 | 263,663 | 252,170 | |||||||||||||||||||
Professional service and other revenue | 67,181 | 64,872 | 201,679 | 193,327 | |||||||||||||||||||
Total revenues | $ | 882,283 | $ | 832,931 | $ | 2,591,390 | $ | 2,492,588 | |||||||||||||||
Total Revenues by Timing of Revenue Recognition: | |||||||||||||||||||||||
Point in time | $ | 80,641 | $ | 76,299 | $ | 263,663 | $ | 252,170 | |||||||||||||||
Over time (including professional service and other revenue) | 801,642 | 756,632 | 2,327,727 | 2,240,418 | |||||||||||||||||||
Total revenues | $ | 882,283 | $ | 832,931 | $ | 2,591,390 | $ | 2,492,588 |
As of March 31, 2022 | As of June 30, 2021 | ||||||||||
Short-term contract assets | $ | 25,481 | $ | 25,344 | |||||||
Long-term contract assets | $ | 20,049 | $ | 19,222 | |||||||
Short-term deferred revenues | $ | 936,750 | $ | 852,629 | |||||||
Long-term deferred revenues | $ | 90,736 | $ | 98,989 |
Capitalized costs to obtain a contract as of June 30, 2021 | $ | 72,900 | |||
New capitalized costs incurred | 27,324 | ||||
Amortization of capitalized costs | (18,903) | ||||
Impact of foreign exchange rate changes | (2,312) | ||||
Capitalized costs to obtain a contract as of March 31, 2022 | $ | 79,009 |
Balance as of June 30, 2021 | $ | 22,151 | |||
Credit loss expense (recovery) | (2,295) | ||||
Write-off / adjustments | (3,417) | ||||
Balance as of March 31, 2022 | $ | 16,439 |
As of March 31, 2022 | |||||||||||||||||
Cost | Accumulated Depreciation | Net | |||||||||||||||
Furniture and fixtures | $ | 42,009 | $ | (38,021) | $ | 3,988 | |||||||||||
Office equipment | 2,755 | (1,359) | 1,396 | ||||||||||||||
Computer hardware | 324,998 | (221,842) | 103,156 | ||||||||||||||
Computer software | 137,423 | (114,266) | 23,157 | ||||||||||||||
Capitalized software development costs | 142,631 | (97,926) | 44,705 | ||||||||||||||
Leasehold improvements | 105,733 | (86,684) | 19,049 | ||||||||||||||
Land and buildings | 48,757 | (16,378) | 32,379 | ||||||||||||||
Total | $ | 804,306 | $ | (576,476) | $ | 227,830 |
As of June 30, 2021 | |||||||||||||||||
Cost | Accumulated Depreciation | Net | |||||||||||||||
Furniture and fixtures | $ | 38,541 | $ | (32,500) | $ | 6,041 | |||||||||||
Office equipment | 2,533 | (1,244) | 1,289 | ||||||||||||||
Computer hardware | 313,946 | (212,448) | 101,498 | ||||||||||||||
Computer software | 129,690 | (104,654) | 25,036 | ||||||||||||||
Capitalized software development costs | 127,697 | (86,466) | 41,231 | ||||||||||||||
Leasehold improvements | 106,656 | (81,135) | 25,521 | ||||||||||||||
Land and buildings | 48,537 | (15,558) | 32,979 | ||||||||||||||
Total | $ | 767,600 | $ | (534,005) | $ | 233,595 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Operating lease cost | $ | 16,158 | $ | 16,065 | $ | 47,121 | $ | 47,327 | |||||||||||||||
Short-term lease cost | 223 | 222 | 532 | 724 | |||||||||||||||||||
Variable lease cost | 891 | 852 | 2,056 | 2,152 | |||||||||||||||||||
Sublease income | (3,087) | (1,569) | (6,945) | (4,762) | |||||||||||||||||||
Total lease cost | $ | 14,185 | $ | 15,570 | $ | 42,764 | $ | 45,441 |
As of March 31, 2022 | As of June 30, 2021 | ||||||||||
Weighted-average remaining lease term | 6.17 years | 6.47 years | |||||||||
Weighted-average discount rate | 2.83 | % | 2.82 | % |
Nine Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 53,200 | $ | 56,645 | |||||||
Right of use assets obtained in exchange for new operating lease liabilities (1) (2) | $ | 24,880 | $ | 59,762 | |||||||
(1) The nine months ended March 31, 2022 excludes the impact of $8.1 million of right of use (ROU) assets obtained through the acquisition of Zix Corporation. See note 19 “Acquisitions” for further details including expected finalization of preliminary purchase price allocation. | |||||||||||
(2) The nine months ended March 31, 2021 excludes the release of $22.3 million of lease liabilities relating to office space that was abandoned during the fourth quarter of Fiscal 2020 and has since been early terminated or assigned to a third party. These recoveries were recorded in “Special charges (recoveries)” in the Condensed Consolidated Statements of Income. Please see note 18 “Special Charges (Recoveries)”. |
Fiscal years ending June 30, | |||||
2022 (three months ended) | $ | 17,431 | |||
2023 | 62,747 | ||||
2024 | 51,449 | ||||
2025 | 40,519 | ||||
2026 | 27,712 | ||||
Thereafter | 85,329 | ||||
Total lease payments | $ | 285,187 | |||
Less: Imputed interest | (22,904) | ||||
Total | $ | 262,283 | |||
Reported as: | |||||
Current operating lease liabilities | $ | 59,182 | |||
Non-current operating lease liabilities | 203,101 | ||||
Total | $ | 262,283 |
Balance as of June 30, 2021 | $ | 4,691,673 | |||
Acquisition of Zix Corporation (note 19) | 585,443 | ||||
Acquisition of Bricata Inc. (note 19) | 10,257 | ||||
Impact of foreign exchange rate changes | (22,184) | ||||
Balance as of March 31, 2022 | $ | 5,265,189 |
As of March 31, 2022 | |||||||||||||||||
Cost | Accumulated Amortization | Net | |||||||||||||||
Technology assets | $ | 1,001,167 | $ | (694,088) | $ | 307,079 | |||||||||||
Customer assets | 1,599,646 | (725,459) | 874,187 | ||||||||||||||
Total | $ | 2,600,813 | $ | (1,419,547) | $ | 1,181,266 | |||||||||||
As of June 30, 2021 | |||||||||||||||||
Cost | Accumulated Amortization | Net | |||||||||||||||
Technology assets | $ | 1,003,730 | $ | (635,965) | $ | 367,765 | |||||||||||
Customer assets | 1,386,533 | (567,038) | 819,495 | ||||||||||||||
Total | $ | 2,390,263 | $ | (1,203,003) | $ | 1,187,260 |
Fiscal years ending June 30, | |||||
2022 (three months ended) | $ | 102,692 | |||
2023 | 348,540 | ||||
2024 | 268,185 | ||||
2025 | 156,819 | ||||
2026 | 113,316 | ||||
Thereafter | 191,714 | ||||
Total | $ | 1,181,266 |
As of March 31, 2022 | As of June 30, 2021 | ||||||||||
Deposits and restricted cash | $ | 6,101 | $ | 3,027 | |||||||
Capitalized costs to obtain a contract | 25,181 | 22,601 | |||||||||
Short-term prepaid expenses and other current assets | 91,334 | 72,923 | |||||||||
Total | $ | 122,616 | $ | 98,551 |
As of March 31, 2022 | As of June 30, 2021 | ||||||||||
Deposits and restricted cash | $ | 7,264 | $ | 11,577 | |||||||
Capitalized costs to obtain a contract | 53,828 | 50,299 | |||||||||
Investments | 176,767 | 121,777 | |||||||||
Long-term prepaid expenses and other long-term assets | 19,442 | 25,241 | |||||||||
Total | $ | 257,301 | $ | 208,894 |
As of March 31, 2022 | As of June 30, 2021 | ||||||||||
Accounts payable—trade | $ | 87,242 | $ | 57,500 | |||||||
Accrued salaries, incentives and commissions | 156,678 | 214,884 | |||||||||
Accrued liabilities | 103,578 | 82,204 | |||||||||
Accrued sales and other tax liabilities | 22,267 | 31,583 | |||||||||
Accrued interest on Senior Notes | 29,912 | 31,161 | |||||||||
Amounts payable in respect of restructuring and other special charges | 1,716 | 4,396 | |||||||||
Asset retirement obligations | 3,152 | 1,864 | |||||||||
Total | $ | 404,545 | $ | 423,592 |
As of March 31, 2022 | As of June 30, 2021 | ||||||||||
Amounts payable in respect of restructuring and other special charges | $ | 3,150 | $ | 4,359 | |||||||
Other accrued liabilities | 699 | 10,681 | |||||||||
Asset retirement obligations | 12,782 | 13,790 | |||||||||
Total | $ | 16,631 | $ | 28,830 |
As of March 31, 2022 | As of June 30, 2021 | ||||||||||
Total debt | |||||||||||
Senior Notes 2031 | $ | 650,000 | $ | — | |||||||
Senior Notes 2030 | 900,000 | 900,000 | |||||||||
Senior Notes 2029 | 850,000 | — | |||||||||
Senior Notes 2028 | 900,000 | 900,000 | |||||||||
Senior Notes 2026 | — | 850,000 | |||||||||
Term Loan B | 960,000 | 967,500 | |||||||||
Total principal payments due | 4,260,000 | 3,617,500 | |||||||||
Premium on Senior Notes 2026 (1) | — | 4,070 | |||||||||
Debt issuance costs (1) | (39,418) | (32,711) | |||||||||
Total amount outstanding | 4,220,582 | 3,588,859 | |||||||||
Less: | |||||||||||
Current portion of long-term debt | |||||||||||
Term Loan B | 10,000 | 10,000 | |||||||||
Total current portion of long-term debt | 10,000 | 10,000 | |||||||||
Non-current portion of long-term debt | $ | 4,210,582 | $ | 3,578,859 | |||||||
(1) During the nine months ended March 31, 2022, we recorded $17.2 million of debt issuance costs relating to the issuance of Senior Notes 2031 and Senior Notes 2029 (both defined below). Additionally, upon redemption of Senior Notes 2026 (defined below), $6.2 million of unamortized debt issuance costs and ($3.8) million of the unamortized premium were included in the loss on debt extinguishment. See note 22 “Other Income (Expense), Net”. |
As of March 31, 2022 | |||||||||||||||||
Total benefit obligation | Current portion of benefit obligation(1) | Non-current portion of benefit obligation | |||||||||||||||
CDT defined benefit plan | $ | 27,158 | $ | 867 | $ | 26,291 | |||||||||||
GXS GER defined benefit plan | 19,545 | 968 | 18,577 | ||||||||||||||
GXS PHP defined benefit plan | 12,071 | 86 | 11,985 | ||||||||||||||
Other plans | 20,126 | 615 | 19,511 | ||||||||||||||
Total | $ | 78,900 | $ | 2,536 | $ | 76,364 |
As of June 30, 2021 | |||||||||||||||||
Total benefit obligation | Current portion of benefit obligation(1) | Non-current portion of benefit obligation | |||||||||||||||
CDT defined benefit plan | $ | 32,865 | $ | 880 | $ | 31,985 | |||||||||||
GXS GER defined benefit plan | 23,861 | 1,058 | 22,803 | ||||||||||||||
GXS PHP defined benefit plan | 10,973 | 42 | 10,931 | ||||||||||||||
Other plans | 9,594 | 802 | 8,792 | ||||||||||||||
Total | $ | 77,293 | $ | 2,782 | $ | 74,511 |
As of March 31, 2022 | As of June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
CDT | GXS GER | GXS PHP | Total | CDT | GXS GER | GXS PHP | Total | ||||||||||||||||||||||||||||||||||||||||
Benefit obligation—beginning of fiscal year | $ | 32,865 | $ | 23,861 | $ | 10,973 | $ | 67,699 | $ | 32,851 | $ | 24,105 | $ | 10,270 | $ | 67,226 | |||||||||||||||||||||||||||||||
Service cost | 273 | 126 | 1,420 | 1,819 | 473 | 206 | 1,822 | 2,501 | |||||||||||||||||||||||||||||||||||||||
Interest cost | 326 | 232 | 457 | 1,015 | 505 | 364 | 469 | 1,338 | |||||||||||||||||||||||||||||||||||||||
Benefits paid | (625) | (743) | (183) | (1,551) | (800) | (1,027) | (19) | (1,846) | |||||||||||||||||||||||||||||||||||||||
Actuarial (gain) loss | (3,110) | (2,072) | 268 | (4,914) | (1,976) | (1,118) | (1,853) | (4,947) | |||||||||||||||||||||||||||||||||||||||
Foreign exchange (gain) loss | (2,571) | (1,859) | (864) | (5,294) | 1,812 | 1,331 | 284 | 3,427 | |||||||||||||||||||||||||||||||||||||||
Benefit obligation—end of period | 27,158 | 19,545 | 12,071 | 58,774 | 32,865 | 23,861 | 10,973 | 67,699 | |||||||||||||||||||||||||||||||||||||||
Less: Current portion | (867) | (968) | (86) | (1,921) | (880) | (1,058) | (42) | (1,980) | |||||||||||||||||||||||||||||||||||||||
Non-current portion of benefit obligation | $ | 26,291 | $ | 18,577 | $ | 11,985 | $ | 56,853 | $ | 31,985 | $ | 22,803 | $ | 10,931 | $ | 65,719 |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Pension expense: | CDT | GXS GER | GXS PHP | Total | CDT | GXS GER | GXS PHP | Total | |||||||||||||||||||||||||||||||||||||||
Service cost | $ | 88 | $ | 41 | $ | 520 | $ | 649 | $ | 117 | $ | 51 | $ | 404 | $ | 572 | |||||||||||||||||||||||||||||||
Interest cost | 105 | 75 | 164 | 344 | 125 | 90 | 104 | 319 | |||||||||||||||||||||||||||||||||||||||
Amortization of actuarial (gains) losses | 117 | 6 | (22) | 101 | 175 | 28 | — | 203 | |||||||||||||||||||||||||||||||||||||||
Net pension expense | $ | 310 | $ | 122 | $ | 662 | $ | 1,094 | $ | 417 | $ | 169 | $ | 508 | $ | 1,094 |
Nine Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Pension expense: | CDT | GXS GER | GXS PHP | Total | CDT | GXS GER | GXS PHP | Total | |||||||||||||||||||||||||||||||||||||||
Service cost | $ | 273 | $ | 126 | $ | 1,420 | $ | 1,819 | $ | 354 | $ | 155 | $ | 1,245 | $ | 1,754 | |||||||||||||||||||||||||||||||
Interest cost | 326 | 232 | 457 | 1,015 | 378 | 272 | 299 | 949 | |||||||||||||||||||||||||||||||||||||||
Amortization of actuarial (gains) losses | 363 | 18 | (68) | 313 | 529 | 85 | — | 614 | |||||||||||||||||||||||||||||||||||||||
Net pension expense | $ | 962 | $ | 376 | $ | 1,809 | $ | 3,147 | $ | 1,261 | $ | 512 | $ | 1,544 | $ | 3,317 |
As of March 31, 2022 | As of June 30, 2021 | ||||||||||||||||||||||||||||||||||
CDT | GXS GER | GXS PHP | CDT | GXS GER | GXS PHP | ||||||||||||||||||||||||||||||
Assumptions: | |||||||||||||||||||||||||||||||||||
Salary increases | 1.50% | 1.50% | 6.00% | 1.50% | 1.50% | 5.00% | |||||||||||||||||||||||||||||
Pension increases | 1.50% | 1.50% | N/A | 1.50% | 1.50% | N/A | |||||||||||||||||||||||||||||
Discount rate | 2.10% | 2.10% | 5.50% | 1.39% | 1.39% | 5.00% | |||||||||||||||||||||||||||||
Normal retirement age | 65-67 | 65-67 | 60 | 65-67 | 65-67 | 60 | |||||||||||||||||||||||||||||
Employee fluctuation rate: | |||||||||||||||||||||||||||||||||||
to age 20 | —% | —% | 13.98% | —% | —% | 13.98% | |||||||||||||||||||||||||||||
to age 25 | —% | —% | 7.10% | —% | —% | 7.10% | |||||||||||||||||||||||||||||
to age 30 | 1.00% | —% | 3.00% | 1.00% | —% | 3.00% | |||||||||||||||||||||||||||||
to age 35 | 0.50% | —% | 2.44% | 0.50% | —% | 2.44% | |||||||||||||||||||||||||||||
to age 40 | —% | —% | 2.59% | —% | —% | 2.59% | |||||||||||||||||||||||||||||
to age 45 | 0.50% | —% | 1.15% | 0.50% | —% | 1.15% | |||||||||||||||||||||||||||||
to age 50 | 0.50% | —% | —% | 0.50% | —% | —% | |||||||||||||||||||||||||||||
from age 51 | 1.00% | —% | —% | 1.00% | —% | —% |
Fiscal years ending June 30, | |||||||||||||||||
CDT | GXS GER | GXS PHP | |||||||||||||||
2022 (three months ended) | $ | 203 | $ | 244 | $ | — | |||||||||||
2023 | 886 | 965 | 116 | ||||||||||||||
2024 | 959 | 966 | 130 | ||||||||||||||
2025 | 1,002 | 989 | 175 | ||||||||||||||
2026 | 1,036 | 977 | 287 | ||||||||||||||
2027 to 2031 | 5,997 | 4,743 | 2,894 | ||||||||||||||
Total | $ | 10,083 | $ | 8,884 | $ | 3,602 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Stock options | $ | 3,442 | $ | 3,460 | $ | 12,457 | $ | 11,329 | |||||||||||||||
Performance Share Units (issued under LTIP) | 2,980 | 2,447 | 10,151 | 7,486 | |||||||||||||||||||
Restricted Share Units (issued under LTIP) | 1,694 | 1,697 | 5,790 | 5,655 | |||||||||||||||||||
Restricted Share Units (other) | 6,482 | 2,807 | 9,229 | 7,877 | |||||||||||||||||||
Deferred Share Units (directors) | 915 | 813 | 3,069 | 2,626 | |||||||||||||||||||
Employee Stock Purchase Plan | 1,235 | 1,133 | 4,395 | 3,646 | |||||||||||||||||||
Total share-based compensation expense | $ | 16,748 | $ | 12,357 | $ | 45,091 | $ | 38,619 |
Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (years) | Aggregate Intrinsic Value ($’000's) | ||||||||||||||||||||
Outstanding at June 30, 2021 | 8,113,574 | $ | 40.16 | 4.88 | $ | 86,297 | |||||||||||||||||
Granted | 2,427,510 | 48.69 | |||||||||||||||||||||
Exercised | (904,645) | 34.41 | |||||||||||||||||||||
Forfeited or expired | (626,854) | 44.60 | |||||||||||||||||||||
Outstanding at March 31, 2022 | 9,009,585 | $ | 42.73 | 4.88 | $ | 21,827 | |||||||||||||||||
Exercisable at March 31, 2022 | 2,580,100 | $ | 36.87 | 3.27 | $ | 15,360 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Weighted–average fair value of options granted | $ | 8.31 | $ | 8.86 | $ | 9.08 | $ | 8.41 | |||||||||||||||
Weighted-average assumptions used: | |||||||||||||||||||||||
Expected volatility | 26.06 | % | 26.59 | % | 26.37 | % | 26.20 | % | |||||||||||||||
Risk–free interest rate | 1.54 | % | 0.32 | % | 1.06 | % | 0.21 | % | |||||||||||||||
Expected dividend yield | 1.94 | % | 1.54 | % | 1.75 | % | 1.54 | % | |||||||||||||||
Expected life (in years) | 4.14 | 4.14 | 4.15 | 4.63 | |||||||||||||||||||
Forfeiture rate (based on historical rates) | 7 | % | 7 | % | 7 | % | 7 | % | |||||||||||||||
Average exercise share price | $ | 44.45 | $ | 48.74 | $ | 48.69 | $ | 45.57 |
Payments due between | |||||||||||||||||||||||||||||
Total | April 1, 2022 - June 30, 2022 | July 1, 2022 - June 30, 2024 | July 1, 2024 - June 30, 2026 | July 1, 2026 and beyond | |||||||||||||||||||||||||
Long-term debt obligations (1) | $ | 5,358,547 | $ | 38,290 | $ | 321,232 | $ | 1,218,025 | $ | 3,781,000 | |||||||||||||||||||
Purchase obligations for contracts not accounted for as lease obligations (2) | 70,931 | 28,555 | 42,376 | — | — | ||||||||||||||||||||||||
$ | 5,429,478 | $ | 66,845 | $ | 363,608 | $ | 1,218,025 | $ | 3,781,000 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Interest expense | $ | 336 | $ | 1,315 | $ | 803 | $ | 45,422 | |||||||||||||||
Penalties expense | 245 | 506 | 418 | 889 | |||||||||||||||||||
Total | $ | 581 | $ | 1,821 | $ | 1,221 | $ | 46,311 |
As of March 31, 2022 | As of June 30, 2021 | ||||||||||
Interest expense accrued (1) | $ | 5,751 | $ | 5,166 | |||||||
Penalties accrued (1) | $ | 2,553 | $ | 2,605 |
March 31, 2022 | June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Fair Market Measurements using: | Fair Market Measurements using: | ||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2022 | Quoted prices in active markets for identical assets/ (liabilities) | Significant other observable inputs | Significant unobservable inputs | June 30, 2021 | Quoted prices in active markets for identical assets/ (liabilities) | Significant other observable inputs | Significant unobservable inputs | ||||||||||||||||||||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||||||||||||||||||||||
Financial Assets (Liabilities): | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts designated as cash flow hedges (note 17) | $ | 559 | $ | — | $ | 559 | $ | — | $ | 1,131 | $ | — | $ | 1,131 | $ | — | |||||||||||||||||||||||||||||||
Total | $ | 559 | $ | — | $ | 559 | $ | — | $ | 1,131 | $ | — | $ | 1,131 | $ | — |
As of March 31, 2022 | As of June 30, 2021 | |||||||||||||
Derivatives | Balance Sheet Location | Fair Value Asset (Liability) | Fair Value Asset (Liability) | |||||||||||
Foreign currency forward contracts designated as cash flow hedges | Prepaid expenses and other current assets (Accounts payable and accrued liabilities) | $ | 559 | $ | 1,131 |
Three and Nine Months Ended March 31, 2022 | |||||||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | Amount of Gain or (Loss) Recognized in OCI (Loss) on Derivatives (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Loss) (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Loss) (Effective Portion) | ||||||||||||||||||||||||||
Three Months Ended March 31, 2022 | Nine Months Ended March 31, 2022 | Three Months Ended March 31, 2022 | Nine Months Ended March 31, 2022 | ||||||||||||||||||||||||||
Foreign currency forward contracts | $ | 881 | $ | (455) | Operating expenses | $ | (298) | $ | 117 | ||||||||||||||||||||
Three and Nine Months Ended March 31, 2021 | |||||||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | Amount of Gain or (Loss) Recognized in OCI (Loss) on Derivatives (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Loss) (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Loss) (Effective Portion) | ||||||||||||||||||||||||||
Three Months Ended March 31, 2021 | Nine Months Ended March 31, 2021 | Three Months Ended March 31, 2021 | Nine Months Ended March 31, 2021 | ||||||||||||||||||||||||||
Foreign currency forward contracts | $ | 927 | $ | 4,910 | Operating expenses | $ | 1,507 | $ | 2,574 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Fiscal 2022 Restructuring Plan | $ | 464 | $ | — | $ | 464 | $ | — | |||||||||||||||
COVID-19 Restructuring Plan | (495) | 153 | (1,310) | (7,581) | |||||||||||||||||||
Fiscal 2020 Restructuring Plan | 3 | (727) | (145) | 475 | |||||||||||||||||||
Restructuring Plans prior to Fiscal 2020 Restructuring Plan | 15 | 10 | (64) | 11 | |||||||||||||||||||
Acquisition-related costs | 1,302 | 3,145 | 5,967 | 4,593 | |||||||||||||||||||
Other charges (recoveries) | 9,742 | 265 | 15,680 | 1,098 | |||||||||||||||||||
Total | $ | 11,031 | $ | 2,846 | $ | 20,592 | $ | (1,404) |
Fiscal 2022 Restructuring Plan | Workforce reduction | Total | |||||||||
Balance payable as of June 30, 2021 | $ | — | $ | — | |||||||
Accruals and adjustments | 464 | 464 | |||||||||
Cash payments | (111) | (111) | |||||||||
Foreign exchange and other non-cash adjustments | 2 | 2 | |||||||||
Balance payable as of March 31, 2022 | $ | 355 | $ | 355 |
COVID-19 Restructuring Plan | Workforce reduction | Facility charges | Total | ||||||||||||||
Balance payable as of June 30, 2021 | $ | 255 | $ | 4,010 | $ | 4,265 | |||||||||||
Accruals and adjustments | (101) | (1,462) | (1,563) | ||||||||||||||
Cash payments | (144) | 318 | 174 | ||||||||||||||
Foreign exchange and other non-cash adjustments | (10) | (302) | (312) | ||||||||||||||
Balance payable as of March 31, 2022 | $ | — | $ | 2,564 | $ | 2,564 |
Fiscal 2020 Restructuring Plan | Workforce reduction | Facility charges | Total | ||||||||||||||
Balance payable as of June 30, 2021 | $ | 2,217 | $ | 1,866 | $ | 4,083 | |||||||||||
Accruals and adjustments | (226) | 44 | (182) | ||||||||||||||
Cash payments | (1,864) | (264) | (2,128) | ||||||||||||||
Foreign exchange and other non-cash adjustments | (127) | 7 | (120) | ||||||||||||||
Balance payable as of March 31, 2022 | $ | — | $ | 1,653 | $ | 1,653 |
Current assets (inclusive of cash acquired of $38.3 million) | $ | 76,170 | |||
Non-current tangible assets | 13,736 | ||||
Intangible customer assets | 213,600 | ||||
Intangible technology assets | 92,050 | ||||
Liabilities assumed | (86,539) | ||||
Total identifiable net assets | 309,017 | ||||
Goodwill | 585,443 | ||||
Net assets acquired | $ | 894,460 |
Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | Cash Flow Hedges | Defined Benefit Pension Plans | Accumulated Other Comprehensive Income | |||||||||||||||||||||||
Balance as of December 31, 2021 | $ | 43,969 | $ | (457) | $ | (12,163) | $ | 31,349 | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | (13,073) | 648 | (2,033) | (14,458) | ||||||||||||||||||||||
Amounts reclassified into net income, net of tax | — | 219 | 156 | 375 | ||||||||||||||||||||||
Total other comprehensive income (loss) net, for the period | (13,073) | 867 | (1,877) | (14,083) | ||||||||||||||||||||||
Balance as of March 31, 2022 | $ | 30,896 | $ | 410 | $ | (14,040) | $ | 17,266 |
Nine Months Ended March 31, 2022 | ||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | Cash Flow Hedges | Defined Benefit Pension Plans | Accumulated Other Comprehensive Income | |||||||||||||||||||||||
Balance as of June 30, 2021 | $ | 75,408 | $ | 830 | $ | (10,000) | $ | 66,238 | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | (44,512) | (334) | (4,517) | (49,363) | ||||||||||||||||||||||
Amounts reclassified into net income, net of tax | — | (86) | 477 | 391 | ||||||||||||||||||||||
Total other comprehensive income (loss) net, for the period | (44,512) | (420) | (4,040) | (48,972) | ||||||||||||||||||||||
Balance as of March 31, 2022 | $ | 30,896 | $ | 410 | $ | (14,040) | $ | 17,266 |
Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | Cash Flow Hedges | Defined Benefit Pension Plans | Accumulated Other Comprehensive Income | |||||||||||||||||||||||
Balance as of December 31, 2020 | $ | 81,678 | $ | 2,007 | $ | (17,209) | $ | 66,476 | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | (12,568) | 681 | 344 | (11,543) | ||||||||||||||||||||||
Amounts reclassified into net income, net of tax | — | (1,108) | 249 | (859) | ||||||||||||||||||||||
Total other comprehensive income (loss) net, for the period | (12,568) | (427) | 593 | (12,402) | ||||||||||||||||||||||
Balance as of March 31, 2021 | $ | 69,110 | $ | 1,580 | $ | (16,616) | $ | 54,074 |
Nine Months Ended March 31, 2021 | ||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | Cash Flow Hedges | Defined Benefit Pension Plans | Accumulated Other Comprehensive Income | |||||||||||||||||||||||
Balance as of June 30, 2020 | $ | 32,968 | $ | (136) | $ | (15,007) | $ | 17,825 | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | 36,142 | 3,608 | (2,342) | 37,408 | ||||||||||||||||||||||
Amounts reclassified into net income, net of tax | — | (1,892) | 733 | (1,159) | ||||||||||||||||||||||
Total other comprehensive income (loss) net, for the period | 36,142 | 1,716 | (1,609) | 36,249 | ||||||||||||||||||||||
Balance as of March 31, 2021 | $ | 69,110 | $ | 1,580 | $ | (16,616) | $ | 54,074 |
Nine Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash paid during the period for interest | $ | 115,097 | $ | 117,359 | |||||||
Cash received during the period for interest | $ | 2,382 | $ | 3,116 | |||||||
Cash paid during the period for income taxes (1) | $ | 88,259 | $ | 369,246 | |||||||
(1) Included for the nine months ended March 31, 2021 is cash paid of $290.0 million relating to settlements with the IRS. |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Foreign exchange gains (losses) | $ | (3,443) | $ | (3,248) | $ | (2,900) | $ | (3,258) | |||||||||||||||
OpenText share in net income of equity investees (1) | 27,746 | 11,765 | 59,103 | 20,020 | |||||||||||||||||||
Loss on debt extinguishment (2) | — | — | (27,413) | — | |||||||||||||||||||
Other miscellaneous income (expense) | 89 | (234) | 347 | (345) | |||||||||||||||||||
Total other income (expense), net | $ | 24,392 | $ | 8,283 | $ | 29,137 | $ | 16,417 | |||||||||||||||
(1) Represents our share in net income of equity investees, which approximates fair value and subject to volatility based on market trends and business conditions, based on our interest in certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4% to below 20% and these investments are accounted for using the equity method (see note 9 “Prepaid Expenses and Other Assets” for more details). | |||||||||||||||||||||||
(2) On December 9, 2021, we redeemed Senior Notes 2026 in full, which resulted in a loss on debt extinguishment of $27.4 million. Of this, $25.0 million related to the early termination call premium, $6.2 million related to unamortized debt issuance costs and ($3.8) million related to unamortized premium (see note 11 “Long-Term Debt” for more details). |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Basic earnings per share | |||||||||||||||||||||||
Net income attributable to OpenText | $ | 74,681 | $ | 91,490 | $ | 294,894 | $ | 129,389 | |||||||||||||||
Basic earnings per share attributable to OpenText | $ | 0.28 | $ | 0.34 | $ | 1.09 | $ | 0.47 | |||||||||||||||
Diluted earnings per share | |||||||||||||||||||||||
Net income attributable to OpenText | $ | 74,681 | $ | 91,490 | $ | 294,894 | $ | 129,389 | |||||||||||||||
Diluted earnings per share attributable to OpenText | $ | 0.28 | $ | 0.33 | $ | 1.08 | $ | 0.47 | |||||||||||||||
Weighted-average number of shares outstanding (in '000's) | |||||||||||||||||||||||
Basic | 270,693 | 272,832 | 271,623 | 272,414 | |||||||||||||||||||
Effect of dilutive securities | 518 | 1,092 | 816 | 898 | |||||||||||||||||||
Diluted | 271,211 | 273,924 | 272,439 | 273,312 | |||||||||||||||||||
Excluded as anti-dilutive (1) | 5,271 | 3,691 | 4,264 | 4,222 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Total Revenues by Product Type: | |||||||||||||||||||||||||||||||||||
Cloud services and subscriptions | $ | 401,947 | $ | 46,102 | $ | 355,845 | $ | 1,123,422 | $ | 76,137 | $ | 1,047,285 | |||||||||||||||||||||||
Customer support | 332,514 | (3,401) | 335,915 | 1,002,626 | 2,820 | 999,806 | |||||||||||||||||||||||||||||
License | 80,641 | 4,342 | 76,299 | 263,663 | 11,493 | 252,170 | |||||||||||||||||||||||||||||
Professional service and other | 67,181 | 2,309 | 64,872 | 201,679 | 8,352 | 193,327 | |||||||||||||||||||||||||||||
Total revenues | 882,283 | 49,352 | 832,931 | 2,591,390 | 98,802 | 2,492,588 | |||||||||||||||||||||||||||||
Total Cost of Revenues | 274,236 | 12,970 | 261,266 | 793,540 | 30,787 | 762,753 | |||||||||||||||||||||||||||||
Total GAAP-based Gross Profit | 608,047 | 36,382 | 571,665 | 1,797,850 | 68,015 | 1,729,835 | |||||||||||||||||||||||||||||
Total GAAP-based Gross Margin % | 68.9 | % | 68.6 | % | 69.4 | % | 69.4 | % | |||||||||||||||||||||||||||
Total GAAP-based Operating Expenses | 476,438 | 57,169 | 419,269 | 1,290,668 | 130,055 | 1,160,613 | |||||||||||||||||||||||||||||
Total GAAP-based Income from Operations | $ | 131,609 | $ | (20,787) | $ | 152,396 | $ | 507,182 | $ | (62,040) | $ | 569,222 | |||||||||||||||||||||||
% Revenues by Product Type: | |||||||||||||||||||||||||||||||||||
Cloud services and subscriptions | 45.6 | % | 42.7 | % | 43.4 | % | 42.0 | % | |||||||||||||||||||||||||||
Customer support | 37.7 | % | 40.3 | % | 38.7 | % | 40.1 | % | |||||||||||||||||||||||||||
License | 9.1 | % | 9.2 | % | 10.2 | % | 10.1 | % | |||||||||||||||||||||||||||
Professional service and other | 7.6 | % | 7.8 | % | 7.7 | % | 7.8 | % | |||||||||||||||||||||||||||
Total Cost of Revenues by Product Type: | |||||||||||||||||||||||||||||||||||
Cloud services and subscriptions | $ | 136,020 | $ | 12,291 | $ | 123,729 | $ | 377,928 | $ | 23,693 | $ | 354,235 | |||||||||||||||||||||||
Customer support | 31,763 | 810 | 30,953 | 90,914 | 1,099 | 89,815 | |||||||||||||||||||||||||||||
License | 3,196 | 386 | 2,810 | 10,906 | 1,305 | 9,601 | |||||||||||||||||||||||||||||
Professional service and other | 56,693 | 6,372 | 50,321 | 161,459 | 17,938 | 143,521 | |||||||||||||||||||||||||||||
Amortization of acquired technology-based intangible assets | 46,564 | (6,889) | 53,453 | 152,333 | (13,248) | 165,581 | |||||||||||||||||||||||||||||
Total cost of revenues | $ | 274,236 | $ | 12,970 | $ | 261,266 | $ | 793,540 | $ | 30,787 | $ | 762,753 | |||||||||||||||||||||||
% GAAP-based Gross Margin by Product Type: | |||||||||||||||||||||||||||||||||||
Cloud services and subscriptions | 66.2 | % | 65.2 | % | 66.4 | % | 66.2 | % | |||||||||||||||||||||||||||
Customer support | 90.4 | % | 90.8 | % | 90.9 | % | 91.0 | % | |||||||||||||||||||||||||||
License | 96.0 | % | 96.3 | % | 95.9 | % | 96.2 | % | |||||||||||||||||||||||||||
Professional service and other | 15.6 | % | 22.4 | % | 19.9 | % | 25.8 | % | |||||||||||||||||||||||||||
Total Revenues by Geography: (1) | |||||||||||||||||||||||||||||||||||
Americas (2) | $ | 560,969 | $ | 53,077 | $ | 507,892 | $ | 1,615,967 | $ | 82,567 | $ | 1,533,400 | |||||||||||||||||||||||
EMEA (3) | 252,888 | (5,122) | 258,010 | 764,707 | 9,741 | 754,966 | |||||||||||||||||||||||||||||
Asia Pacific (4) | 68,426 | 1,397 | 67,029 | 210,716 | 6,494 | 204,222 | |||||||||||||||||||||||||||||
Total revenues | $ | 882,283 | $ | 49,352 | $ | 832,931 | $ | 2,591,390 | $ | 98,802 | $ | 2,492,588 | |||||||||||||||||||||||
% Revenues by Geography: | |||||||||||||||||||||||||||||||||||
Americas (2) | 63.6 | % | 61.0 | % | 62.4 | % | 61.5 | % | |||||||||||||||||||||||||||
EMEA (3) | 28.7 | % | 31.0 | % | 29.5 | % | 30.3 | % | |||||||||||||||||||||||||||
Asia Pacific (4) | 7.7 | % | 8.0 | % | 8.1 | % | 8.2 | % | |||||||||||||||||||||||||||
Other Metrics: | |||||||||||||||||||||||||||||||||||
GAAP-based gross margin | 68.9 | % | 68.6 | % | 69.4 | % | 69.4 | % | |||||||||||||||||||||||||||
Non-GAAP-based gross margin (5) | 74.5 | % | 75.2 | % | 75.5 | % | 76.3 | % | |||||||||||||||||||||||||||
Net income, attributable to OpenText | $ | 74,681 | $ | 91,490 | $ | 294,894 | $ | 129,389 | |||||||||||||||||||||||||||
GAAP-based EPS, diluted | $ | 0.28 | $ | 0.33 | $ | 1.08 | $ | 0.47 | |||||||||||||||||||||||||||
Non-GAAP-based EPS, diluted (5) | $ | 0.70 | $ | 0.75 | $ | 2.43 | $ | 2.59 | |||||||||||||||||||||||||||
Adjusted EBITDA (5) | $ | 284,496 | $ | 297,131 | $ | 951,367 | $ | 1,000,225 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Cloud Services and Subscriptions: | |||||||||||||||||||||||||||||||||||
Americas | $ | 303,183 | $ | 38,906 | $ | 264,277 | $ | 844,761 | $ | 64,782 | $ | 779,979 | |||||||||||||||||||||||
EMEA | 72,773 | 7,370 | 65,403 | 199,886 | 8,905 | 190,981 | |||||||||||||||||||||||||||||
Asia Pacific | 25,991 | (174) | 26,165 | 78,775 | 2,450 | 76,325 | |||||||||||||||||||||||||||||
Total Cloud Services and Subscriptions Revenues | 401,947 | 46,102 | 355,845 | 1,123,422 | 76,137 | 1,047,285 | |||||||||||||||||||||||||||||
Cost of Cloud Services and Subscriptions Revenues | 136,020 | 12,291 | 123,729 | 377,928 | 23,693 | 354,235 | |||||||||||||||||||||||||||||
GAAP-based Cloud Services and Subscriptions Gross Profit | $ | 265,927 | $ | 33,811 | $ | 232,116 | $ | 745,494 | $ | 52,444 | $ | 693,050 | |||||||||||||||||||||||
GAAP-based Cloud Services and Subscriptions Gross Margin % | 66.2 | % | 65.2 | % | 66.4 | % | 66.2 | % | |||||||||||||||||||||||||||
% Cloud Services and Subscriptions Revenues by Geography: | |||||||||||||||||||||||||||||||||||
Americas | 75.4 | % | 74.3 | % | 75.2 | % | 74.5 | % | |||||||||||||||||||||||||||
EMEA | 18.1 | % | 18.4 | % | 17.8 | % | 18.2 | % | |||||||||||||||||||||||||||
Asia Pacific | 6.5 | % | 7.3 | % | 7.0 | % | 7.3 | % |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Customer Support Revenues: | |||||||||||||||||||||||||||||||||||
Americas | $ | 185,660 | $ | (325) | $ | 185,985 | $ | 555,758 | $ | (4,252) | $ | 560,010 | |||||||||||||||||||||||
EMEA | 119,556 | (2,908) | 122,464 | 362,468 | 3,989 | 358,479 | |||||||||||||||||||||||||||||
Asia Pacific | 27,298 | (168) | 27,466 | 84,400 | 3,083 | 81,317 | |||||||||||||||||||||||||||||
Total Customer Support Revenues | 332,514 | (3,401) | 335,915 | 1,002,626 | 2,820 | 999,806 | |||||||||||||||||||||||||||||
Cost of Customer Support Revenues | 31,763 | 810 | 30,953 | 90,914 | 1,099 | 89,815 | |||||||||||||||||||||||||||||
GAAP-based Customer Support Gross Profit | $ | 300,751 | $ | (4,211) | $ | 304,962 | $ | 911,712 | $ | 1,721 | $ | 909,991 | |||||||||||||||||||||||
GAAP-based Customer Support Gross Margin % | 90.4 | % | 90.8 | % | 90.9 | % | 91.0 | % | |||||||||||||||||||||||||||
% Customer Support Revenues by Geography: | |||||||||||||||||||||||||||||||||||
Americas | 55.8 | % | 55.4 | % | 55.4 | % | 56.0 | % | |||||||||||||||||||||||||||
EMEA | 36.0 | % | 36.5 | % | 36.2 | % | 35.9 | % | |||||||||||||||||||||||||||
Asia Pacific | 8.2 | % | 8.1 | % | 8.4 | % | 8.1 | % |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
License Revenues: | |||||||||||||||||||||||||||||||||||
Americas | $ | 40,678 | $ | 11,256 | $ | 29,422 | $ | 124,257 | $ | 18,769 | $ | 105,488 | |||||||||||||||||||||||
EMEA | 32,358 | (7,462) | 39,820 | 114,831 | (5,132) | 119,963 | |||||||||||||||||||||||||||||
Asia Pacific | 7,605 | 548 | 7,057 | 24,575 | (2,144) | 26,719 | |||||||||||||||||||||||||||||
Total License Revenues | 80,641 | 4,342 | 76,299 | 263,663 | 11,493 | 252,170 | |||||||||||||||||||||||||||||
Cost of License Revenues | 3,196 | 386 | 2,810 | 10,906 | 1,305 | 9,601 | |||||||||||||||||||||||||||||
GAAP-based License Gross Profit | $ | 77,445 | $ | 3,956 | $ | 73,489 | $ | 252,757 | $ | 10,188 | $ | 242,569 | |||||||||||||||||||||||
GAAP-based License Gross Margin % | 96.0 | % | 96.3 | % | 95.9 | % | 96.2 | % | |||||||||||||||||||||||||||
% License Revenues by Geography: | |||||||||||||||||||||||||||||||||||
Americas | 50.4 | % | 38.6 | % | 47.1 | % | 41.8 | % | |||||||||||||||||||||||||||
EMEA | 40.1 | % | 52.2 | % | 43.6 | % | 47.6 | % | |||||||||||||||||||||||||||
Asia Pacific | 9.5 | % | 9.2 | % | 9.3 | % | 10.6 | % |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Professional Service and Other Revenues: | |||||||||||||||||||||||||||||||||||
Americas | $ | 31,448 | $ | 3,240 | $ | 28,208 | $ | 91,191 | $ | 3,268 | $ | 87,923 | |||||||||||||||||||||||
EMEA | 28,201 | (2,122) | 30,323 | 87,522 | 1,979 | 85,543 | |||||||||||||||||||||||||||||
Asia Pacific | 7,532 | 1,191 | 6,341 | 22,966 | 3,105 | 19,861 | |||||||||||||||||||||||||||||
Total Professional Service and Other Revenues | 67,181 | 2,309 | 64,872 | 201,679 | 8,352 | 193,327 | |||||||||||||||||||||||||||||
Cost of Professional Service and Other Revenues | 56,693 | 6,372 | 50,321 | 161,459 | 17,938 | 143,521 | |||||||||||||||||||||||||||||
GAAP-based Professional Service and Other Gross Profit | $ | 10,488 | $ | (4,063) | $ | 14,551 | $ | 40,220 | $ | (9,586) | $ | 49,806 | |||||||||||||||||||||||
GAAP-based Professional Service and Other Gross Margin % | 15.6 | % | 22.4 | % | 19.9 | % | 25.8 | % | |||||||||||||||||||||||||||
% Professional Service and Other Revenues by Geography: | |||||||||||||||||||||||||||||||||||
Americas | 46.8 | % | 43.5 | % | 45.2 | % | 45.5 | % | |||||||||||||||||||||||||||
EMEA | 42.0 | % | 46.7 | % | 43.4 | % | 44.2 | % | |||||||||||||||||||||||||||
Asia Pacific | 11.2 | % | 9.8 | % | 11.4 | % | 10.3 | % |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Amortization of acquired technology-based intangible assets | $ | 46,564 | $ | (6,889) | $ | 53,453 | $ | 152,333 | $ | (13,248) | $ | 165,581 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Research and development | $ | 117,730 | $ | 7,659 | $ | 110,071 | $ | 321,517 | $ | 17,305 | $ | 304,212 | |||||||||||||||||||||||
Sales and marketing | 180,955 | 22,268 | 158,687 | 491,133 | 52,149 | 438,984 | |||||||||||||||||||||||||||||
General and administrative | 88,137 | 16,589 | 71,548 | 231,127 | 40,625 | 190,502 | |||||||||||||||||||||||||||||
Depreciation | 22,370 | 409 | 21,961 | 65,535 | 1,291 | 64,244 | |||||||||||||||||||||||||||||
Amortization of acquired customer-based intangible assets | 56,215 | 2,059 | 54,156 | 160,764 | (3,311) | 164,075 | |||||||||||||||||||||||||||||
Special charges (recoveries) | 11,031 | 8,185 | 2,846 | 20,592 | 21,996 | (1,404) | |||||||||||||||||||||||||||||
Total operating expenses | $ | 476,438 | $ | 57,169 | $ | 419,269 | $ | 1,290,668 | $ | 130,055 | $ | 1,160,613 | |||||||||||||||||||||||
% of Total Revenues: | |||||||||||||||||||||||||||||||||||
Research and development | 13.3 | % | 13.2 | % | 12.4 | % | 12.2 | % | |||||||||||||||||||||||||||
Sales and marketing | 20.5 | % | 19.1 | % | 19.0 | % | 17.6 | % | |||||||||||||||||||||||||||
General and administrative | 10.0 | % | 8.6 | % | 8.9 | % | 7.6 | % | |||||||||||||||||||||||||||
Depreciation | 2.5 | % | 2.6 | % | 2.5 | % | 2.6 | % | |||||||||||||||||||||||||||
Amortization of acquired customer-based intangible assets | 6.4 | % | 6.5 | % | 6.2 | % | 6.6 | % | |||||||||||||||||||||||||||
Special charges (recoveries) | 1.3 | % | 0.3 | % | 0.8 | % | (0.1) | % |
Change between Three Months Ended March 31, 2022 and 2021 | Change between Nine Months Ended March 31, 2022 and 2021 | ||||||||||
(In thousands) | increase (decrease) | increase (decrease) | |||||||||
Payroll and payroll-related benefits | $ | 5,639 | $ | 20,156 | |||||||
Contract labour and consulting | 1,364 | 1,319 | |||||||||
Share-based compensation | 2,204 | 2,741 | |||||||||
Travel and communication | 19 | 72 | |||||||||
Facilities | (1,805) | (7,644) | |||||||||
Other miscellaneous | 238 | 661 | |||||||||
Total change in research and development expenses | $ | 7,659 | $ | 17,305 |
Change between Three Months Ended March 31, 2022 and 2021 | Change between Nine Months Ended March 31, 2022 and 2021 | ||||||||||
(In thousands) | increase (decrease) | increase (decrease) | |||||||||
Payroll and payroll-related benefits | $ | 13,813 | $ | 37,928 | |||||||
Commissions | 3,755 | 10,585 | |||||||||
Contract labour and consulting | (175) | 139 | |||||||||
Share-based compensation | 1,181 | 1,783 | |||||||||
Travel and communication | 1,051 | 1,941 | |||||||||
Marketing expenses | 4,079 | 8,385 | |||||||||
Facilities | (711) | (3,681) | |||||||||
Credit loss expense (recovery) | (2,426) | (7,551) | |||||||||
Other miscellaneous | 1,701 | 2,620 | |||||||||
Total change in sales and marketing expenses | $ | 22,268 | $ | 52,149 |
Change between Three Months Ended March 31, 2022 and 2021 | Change between Nine Months Ended March 31, 2022 and 2021 | ||||||||||
(In thousands) | increase (decrease) | increase (decrease) | |||||||||
Payroll and payroll-related benefits | $ | 14,382 | $ | 35,992 | |||||||
Contract labour and consulting | 1,954 | 5,061 | |||||||||
Share-based compensation | (17) | 726 | |||||||||
Travel and communication | 1,444 | 3,606 | |||||||||
Facilities | (70) | (70) | |||||||||
Other miscellaneous | (1,104) | (4,690) | |||||||||
Total change in general and administrative expenses | $ | 16,589 | $ | 40,625 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Depreciation | $ | 22,370 | $ | 409 | $ | 21,961 | $ | 65,535 | $ | 1,291 | $ | 64,244 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Amortization of acquired customer-based intangible assets | $ | 56,215 | $ | 2,059 | $ | 54,156 | $ | 160,764 | $ | (3,311) | $ | 164,075 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Special charges (recoveries) | $ | 11,031 | $ | 8,185 | $ | 2,846 | $ | 20,592 | $ | 21,996 | $ | (1,404) |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Foreign exchange gains (losses) | $ | (3,443) | $ | (195) | $ | (3,248) | $ | (2,900) | $ | 358 | $ | (3,258) | |||||||||||||||||||||||
OpenText share in net income (loss) of equity investees (1) | 27,746 | 15,981 | 11,765 | 59,103 | 39,083 | 20,020 | |||||||||||||||||||||||||||||
Loss on debt extinguishment (2) | — | — | — | (27,413) | (27,413) | — | |||||||||||||||||||||||||||||
Other miscellaneous income (expense) | 89 | 323 | (234) | 347 | 692 | (345) | |||||||||||||||||||||||||||||
Total other income (expense), net | $ | 24,392 | $ | 16,109 | $ | 8,283 | $ | 29,137 | $ | 12,720 | $ | 16,417 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Interest expense related to total outstanding debt (1) | $ | 37,993 | $ | 2,391 | $ | 35,602 | $ | 111,971 | $ | 1,917 | $ | 110,054 | |||||||||||||||||||||||
Interest income | (851) | (71) | (780) | (2,382) | 734 | (3,116) | |||||||||||||||||||||||||||||
Other miscellaneous expense | 3,096 | 585 | 2,511 | 7,949 | 870 | 7,079 | |||||||||||||||||||||||||||||
Total interest and other related expense, net | $ | 40,238 | $ | 2,905 | $ | 37,333 | $ | 117,538 | $ | 3,521 | $ | 114,017 |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
(In thousands) | 2022 | Change increase (decrease) | 2021 | 2022 | Change increase (decrease) | 2021 | |||||||||||||||||||||||||||||
Provision for income taxes | $ | 41,041 | $ | 9,223 | $ | 31,818 | $ | 123,757 | $ | (218,364) | $ | 342,121 |
Three Months Ended March 31, 2022 | ||||||||||||||||||||
GAAP-based Measures | GAAP-based Measures % of Total Revenue | Adjustments | Note | Non-GAAP-based Measures | Non-GAAP-based Measures % of Total Revenue | |||||||||||||||
Cost of revenues | ||||||||||||||||||||
Cloud services and subscriptions | $ | 136,020 | $ | (1,268) | (1) | $ | 134,752 | |||||||||||||
Customer support | 31,763 | (501) | (1) | 31,262 | ||||||||||||||||
Professional service and other | 56,693 | (907) | (1) | 55,786 | ||||||||||||||||
Amortization of acquired technology-based intangible assets | 46,564 | (46,564) | (2) | — | ||||||||||||||||
GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%) | 608,047 | 68.9% | 49,240 | (3) | 657,287 | 74.5% | ||||||||||||||
Operating expenses | ||||||||||||||||||||
Research and development | 117,730 | (4,350) | (1) | 113,380 | ||||||||||||||||
Sales and marketing | 180,955 | (5,761) | (1) | 175,194 | ||||||||||||||||
General and administrative | 88,137 | (3,961) | (1) | 84,176 | ||||||||||||||||
Amortization of acquired customer-based intangible assets | 56,215 | (56,215) | (2) | — | ||||||||||||||||
Special charges (recoveries) | 11,031 | (11,031) | (4) | — | ||||||||||||||||
GAAP-based income from operations / Non-GAAP-based income from operations | 131,609 | 130,558 | (5) | 262,167 | ||||||||||||||||
Other income (expense), net | 24,392 | (24,392) | (6) | — | ||||||||||||||||
Provision for income taxes | 41,041 | (9,971) | (7) | 31,070 | ||||||||||||||||
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText | 74,681 | 116,137 | (8) | 190,818 | ||||||||||||||||
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText | $ | 0.28 | $ | 0.42 | (8) | $ | 0.70 |
(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. See note 18 “Special charges (recoveries)” to our Condensed Consolidated Financial Statements for more details. | ||||
(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 35% 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. |
(8) | Reconciliation of GAAP-based net income to Non-GAAP-based net income: |
Three Months Ended March 31, 2022 | ||||||||
Per share diluted | ||||||||
GAAP-based net income, attributable to OpenText | $ | 74,681 | $ | 0.28 | ||||
Add: | ||||||||
Amortization | 102,779 | 0.38 | ||||||
Share-based compensation | 16,748 | 0.06 | ||||||
Special charges (recoveries) | 11,031 | 0.04 | ||||||
Other (income) expense, net | (24,392) | (0.09) | ||||||
GAAP-based provision for income taxes | 41,041 | 0.15 | ||||||
Non-GAAP-based provision for income taxes | (31,070) | (0.12) | ||||||
Non-GAAP-based net income, attributable to OpenText | $ | 190,818 | $ | 0.70 |
Three Months Ended March 31, 2022 | |||||
GAAP-based net income, attributable to OpenText | $ | 74,681 | |||
Add: | |||||
Provision for income taxes | 41,041 | ||||
Interest and other related expense, net | 40,238 | ||||
Amortization of acquired technology-based intangible assets | 46,564 | ||||
Amortization of acquired customer-based intangible assets | 56,215 | ||||
Depreciation | 22,370 | ||||
Share-based compensation | 16,748 | ||||
Special charges (recoveries) | 11,031 | ||||
Other (income) expense, net | (24,392) | ||||
Adjusted EBITDA | $ | 284,496 |
Three Months Ended March 31, 2021 | ||||||||||||||||||||
GAAP-based Measures | GAAP-based Measures % of Total Revenue | Adjustments | Note | Non-GAAP-based Measures | Non-GAAP-based Measures % of Total Revenue | |||||||||||||||
Cost of revenues | ||||||||||||||||||||
Cloud services and subscriptions | $ | 123,729 | $ | (505) | (1) | $ | 123,224 | |||||||||||||
Customer support | 30,953 | (464) | (1) | 30,489 | ||||||||||||||||
Professional service and other | 50,321 | (684) | (1) | 49,637 | ||||||||||||||||
Amortization of acquired technology-based intangible assets | 53,453 | (53,453) | (2) | — | ||||||||||||||||
GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%) | 571,665 | 68.6% | 55,106 | (3) | 626,771 | 75.2% | ||||||||||||||
Operating expenses | ||||||||||||||||||||
Research and development | 110,071 | (2,146) | (1) | 107,925 | ||||||||||||||||
Sales and marketing | 158,687 | (4,580) | (1) | 154,107 | ||||||||||||||||
General and administrative | 71,548 | (3,978) | (1) | 67,570 | ||||||||||||||||
Amortization of acquired customer-based intangible assets | 54,156 | (54,156) | (2) | — | ||||||||||||||||
Special charges (recoveries) | 2,846 | (2,846) | (4) | — | ||||||||||||||||
GAAP-based income from operations / Non-GAAP-based income from operations | 152,396 | 122,812 | (5) | 275,208 | ||||||||||||||||
Other income (expense), net | 8,283 | (8,283) | (6) | — | ||||||||||||||||
Provision for income taxes | 31,818 | 1,485 | (7) | 33,303 | ||||||||||||||||
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText | 91,490 | 113,044 | (8) | 204,534 | ||||||||||||||||
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText | $ | 0.33 | $ | 0.42 | (8) | $ | 0.75 |
(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. See note 18 “Special charges (recoveries)” to our Condensed Consolidated Financial Statements for more details. | ||||
(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 26% 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. |
(8) | Reconciliation of GAAP-based net income to Non-GAAP-based net income: |
Three Months Ended March 31, 2021 | ||||||||
Per share diluted | ||||||||
GAAP-based net income, attributable to OpenText | $ | 91,490 | $ | 0.33 | ||||
Add: | ||||||||
Amortization | 107,609 | 0.39 | ||||||
Share-based compensation | 12,357 | 0.05 | ||||||
Special charges (recoveries) | 2,846 | 0.01 | ||||||
Other (income) expense, net | (8,283) | (0.03) | ||||||
GAAP-based provision for income taxes | 31,818 | 0.12 | ||||||
Non-GAAP-based provision for income taxes | (33,303) | (0.12) | ||||||
Non-GAAP-based net income, attributable to OpenText | $ | 204,534 | $ | 0.75 |
Three Months Ended March 31, 2021 | |||||
GAAP-based net income, attributable to OpenText | $ | 91,490 | |||
Add: | |||||
Provision for income taxes | 31,818 | ||||
Interest and other related expense, net | 37,333 | ||||
Amortization of acquired technology-based intangible assets | 53,453 | ||||
Amortization of acquired customer-based intangible assets | 54,156 | ||||
Depreciation | 21,961 | ||||
Share-based compensation | 12,357 | ||||
Special charges (recoveries) | 2,846 | ||||
Other (income) expense, net | (8,283) | ||||
Adjusted EBITDA | $ | 297,131 |
Nine Months Ended March 31, 2022 | ||||||||||||||||||||
GAAP-based Measures | GAAP-based Measures % of Total Revenue | Adjustments | Note | Non-GAAP-based Measures | Non-GAAP-based Measures % of Total Revenue | |||||||||||||||
Cost of revenues | ||||||||||||||||||||
Cloud services and subscriptions | $ | 377,928 | $ | (3,072) | (1) | $ | 374,856 | |||||||||||||
Customer support | 90,914 | (1,631) | (1) | 89,283 | ||||||||||||||||
Professional service and other | 161,459 | (2,275) | (1) | 159,184 | ||||||||||||||||
Amortization of acquired technology-based intangible assets | 152,333 | (152,333) | (2) | — | ||||||||||||||||
GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%) | 1,797,850 | 69.4% | 159,311 | (3) | 1,957,161 | 75.5% | ||||||||||||||
Operating expenses | ||||||||||||||||||||
Research and development | 321,517 | (9,936) | (1) | 311,581 | ||||||||||||||||
Sales and marketing | 491,133 | (15,377) | (1) | 475,756 | ||||||||||||||||
General and administrative | 231,127 | (12,800) | (1) | 218,327 | ||||||||||||||||
Amortization of acquired customer-based intangible assets | 160,764 | (160,764) | (2) | — | ||||||||||||||||
Special charges (recoveries) | 20,592 | (20,592) | (4) | — | ||||||||||||||||
GAAP-based income from operations / Non-GAAP-based income from operations | 507,182 | 378,780 | (5) | 885,962 | ||||||||||||||||
Other income (expense), net | 29,137 | (29,137) | (6) | — | ||||||||||||||||
Provision for income taxes | 123,757 | (16,178) | (7) | 107,579 | ||||||||||||||||
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText | 294,894 | 365,821 | (8) | 660,715 | ||||||||||||||||
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText | $ | 1.08 | $ | 1.35 | (8) | $ | 2.43 |
(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. See note 18 “Special charges (recoveries)” to our Condensed Consolidated Financial Statements for more details. | ||||
(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 30% 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. |
(8) | Reconciliation of GAAP-based net income to Non-GAAP-based net income: |
Nine Months Ended March 31, 2022 | ||||||||
Per share diluted | ||||||||
GAAP-based net income, attributable to OpenText | $ | 294,894 | $ | 1.08 | ||||
Add: | ||||||||
Amortization | 313,097 | 1.15 | ||||||
Share-based compensation | 45,091 | 0.17 | ||||||
Special charges (recoveries) | 20,592 | 0.08 | ||||||
Other (income) expense, net | (29,137) | (0.11) | ||||||
GAAP-based provision for income taxes | 123,757 | 0.45 | ||||||
Non-GAAP-based provision for income taxes | (107,579) | (0.39) | ||||||
Non-GAAP-based net income, attributable to OpenText | $ | 660,715 | $ | 2.43 |
Nine Months Ended March 31, 2022 | |||||
GAAP-based net income, attributable to OpenText | $ | 294,894 | |||
Add: | |||||
Provision for income taxes | 123,757 | ||||
Interest and other related expense, net | 117,538 | ||||
Amortization of acquired technology-based intangible assets | 152,333 | ||||
Amortization of acquired customer-based intangible assets | 160,764 | ||||
Depreciation | 65,535 | ||||
Share-based compensation | 45,091 | ||||
Special charges (recoveries) | 20,592 | ||||
Other (income) expense, net | (29,137) | ||||
Adjusted EBITDA | $ | 951,367 |
Nine Months Ended March 31, 2021 | ||||||||||||||||||||
GAAP-based Measures | GAAP-based Measures % of Total Revenue | Adjustments | Note | Non-GAAP-based Measures | Non-GAAP-based Measures % of Total Revenue | |||||||||||||||
Cost of revenues | ||||||||||||||||||||
Cloud services and subscriptions | $ | 354,235 | $ | (2,484) | (1) | $ | 351,751 | |||||||||||||
Customer support | 89,815 | (1,405) | (1) | 88,410 | ||||||||||||||||
Professional service and other | 143,521 | (1,867) | (1) | 141,654 | ||||||||||||||||
Amortization of acquired technology-based intangible assets | 165,581 | (165,581) | (2) | — | ||||||||||||||||
GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%) | 1,729,835 | 69.4% | 171,337 | (3) | 1,901,172 | 76.3% | ||||||||||||||
Operating expenses | ||||||||||||||||||||
Research and development | 304,212 | (7,195) | (1) | 297,017 | ||||||||||||||||
Sales and marketing | 438,984 | (13,594) | (1) | 425,390 | ||||||||||||||||
General and administrative | 190,502 | (12,074) | (1) | 178,428 | ||||||||||||||||
Amortization of acquired customer-based intangible assets | 164,075 | (164,075) | (2) | — | ||||||||||||||||
Special charges (recoveries) | (1,404) | 1,404 | (4) | — | ||||||||||||||||
GAAP-based income from operations / Non-GAAP-based income from operations | 569,222 | 366,871 | (5) | 936,093 | ||||||||||||||||
Other income (expense), net | 16,417 | (16,417) | (6) | — | ||||||||||||||||
Provision for income taxes | 342,121 | (227,030) | (7) | 115,091 | ||||||||||||||||
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText | 129,389 | 577,484 | (8) | 706,873 | ||||||||||||||||
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText | $ | 0.47 | $ | 2.12 | (8) | $ | 2.59 |
(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. See note 18 “Special charges (recoveries)” to our Condensed Consolidated Financial Statements for more details. | ||||
(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 73% 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 nine months ended March 31, 2021 includes an income tax provision charge from IRS settlements partially offset by a tax benefit from the release of unrecognized tax benefits due to the conclusion of relevant tax audits that was recognized during the three months ended December 31, 2020. |
(8) | Reconciliation of GAAP-based net income to Non-GAAP-based net income: |
Nine Months Ended March 31, 2021 | ||||||||
Per share diluted | ||||||||
GAAP-based net income, attributable to OpenText | $ | 129,389 | $ | 0.47 | ||||
Add: | ||||||||
Amortization | 329,656 | 1.21 | ||||||
Share-based compensation | 38,619 | 0.14 | ||||||
Special charges (recoveries) | (1,404) | (0.01) | ||||||
Other (income) expense, net | (16,417) | (0.06) | ||||||
GAAP-based provision for income taxes | 342,121 | 1.26 | ||||||
Non-GAAP-based provision for income taxes | (115,091) | (0.42) | ||||||
Non-GAAP-based net income, attributable to OpenText | $ | 706,873 | $ | 2.59 |
Nine Months Ended March 31, 2021 | |||||
GAAP-based net income, attributable to OpenText | $ | 129,389 | |||
Add: | |||||
Provision for income taxes | 342,121 | ||||
Interest and other related expense, net | 114,017 | ||||
Amortization of acquired technology-based intangible assets | 165,581 | ||||
Amortization of acquired customer-based intangible assets | 164,075 | ||||
Depreciation | 64,244 | ||||
Share-based compensation | 38,619 | ||||
Special charges (recoveries) | (1,404) | ||||
Other (income) expense, net | (16,417) | ||||
Adjusted EBITDA | $ | 1,000,225 |
(In thousands) | As of March 31, 2022 | Change increase (decrease) | As of June 30, 2021 | ||||||||||||||
Cash and cash equivalents | $ | 1,633,702 | $ | 26,396 | $ | 1,607,306 | |||||||||||
Restricted cash (1) | 2,149 | (345) | 2,494 | ||||||||||||||
Total cash, cash equivalents and restricted cash | $ | 1,635,851 | $ | 26,051 | $ | 1,609,800 | |||||||||||
(1) Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Condensed Consolidated Balance Sheets (see note 9 “Prepaid Expenses and Other Assets” to our Condensed Consolidated Financial Statements for more details). |
Nine Months Ended March 31, | |||||||||||||||||
(In thousands) | 2022 | Change | 2021 | ||||||||||||||
Cash provided by operating activities | $ | 729,870 | $ | 149,939 | $ | 579,931 | |||||||||||
Cash used in investing activities | $ | (932,961) | $ | (894,749) | $ | (38,212) | |||||||||||
Cash provided by (used in) financing activities | $ | 266,062 | $ | 1,048,917 | $ | (782,855) |
Fiscal years ending June 30, | |||||||||||||||||
CDT | GXS GER | GXS PHP | |||||||||||||||
2022 (three months ended) | $ | 203 | $ | 244 | $ | — | |||||||||||
2023 | 886 | 965 | 116 | ||||||||||||||
2024 | 959 | 966 | 130 | ||||||||||||||
2025 | 1,002 | 989 | 175 | ||||||||||||||
2026 | 1,036 | 977 | 287 | ||||||||||||||
2027 to 2031 | 5,997 | 4,743 | 2,894 | ||||||||||||||
Total | $ | 10,083 | $ | 8,884 | $ | 3,602 |
Payments due between | |||||||||||||||||||||||||||||
Total | April 1, 2022 - June 30, 2022 | July 1, 2022 - June 30, 2024 | July 1, 2024 - June 30, 2026 | July 1, 2026 and beyond | |||||||||||||||||||||||||
Long-term debt obligations (1) | $ | 5,358,547 | $ | 38,290 | $ | 321,232 | $ | 1,218,025 | $ | 3,781,000 | |||||||||||||||||||
Operating lease obligations (2) | 285,187 | 17,431 | 114,196 | 68,231 | 85,329 | ||||||||||||||||||||||||
Purchase obligations for contracts not accounted for as lease obligations | 70,931 | 28,555 | 42,376 | — | — | ||||||||||||||||||||||||
$ | 5,714,665 | $ | 84,276 | $ | 477,804 | $ | 1,286,256 | $ | 3,866,329 |
(In thousands) | U.S. Dollar Equivalent at March 31, 2022 | U.S. Dollar Equivalent at June 30, 2021 | |||||||||
Euro | $ | 373,391 | $ | 331,974 | |||||||
British Pound | 53,428 | 78,140 | |||||||||
Canadian Dollar | 24,916 | 26,632 | |||||||||
Swiss Franc | 53,841 | 44,900 | |||||||||
Other foreign currencies | 141,421 | 128,879 | |||||||||
Total cash and cash equivalents denominated in foreign currencies | 646,997 | 610,525 | |||||||||
U.S. Dollar | 986,705 | 996,781 | |||||||||
Total cash and cash equivalents | $ | 1,633,702 | $ | 1,607,306 |
Period | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1) | |||||||||||||||||||||||||
01/01/22 to 01/31/22 | — | $ | — | — | — | ||||||||||||||||||||||||
02/01/22 to 02/28/22 | (2) | 1,934,321 | $ | 44.11 | 1,000,000 | 10,950,924 | |||||||||||||||||||||||
03/01/22 to 03/31/22 | (3) | 365,679 | $ | 43.29 | — | 10,950,924 | |||||||||||||||||||||||
Total | 2,300,000 | $ | 43.98 | 1,000,000 | 10,950.924 |
Exhibit Number | Description of Exhibit | |||||||
2.1 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | XBRL instance document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | Inline XBRL taxonomy extension schema. | |||||||
101.CAL | Inline XBRL taxonomy extension calculation linkbase. | |||||||
101.DEF | Inline XBRL taxonomy extension definition linkbase. | |||||||
101.LAB | Inline XBRL taxonomy extension label linkbase. | |||||||
101.PRE | Inline XBRL taxonomy extension presentation. |
By: | /s/ MARK J. BARRENECHEA | ||||
Mark J. Barrenechea Vice Chair, Chief Executive Officer and Chief Technology Officer (Principal Executive Officer) | |||||
/s/ MADHU RANGANATHAN | |||||
Madhu Ranganathan Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||||
/s/ HOWARD ROSEN | |||||
Howard Rosen Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) |
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