☒
|
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)
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|
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
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Part I Financial Information
|
|
|
Item 1. Financial Statements
|
|
|
|
Condensed Consolidated Balance Sheets as of December 31, 2019 (unaudited) and June 30, 2019
|
|
|
Condensed Consolidated Statements of Income - Three and Six Months Ended December 31, 2019 and 2018 (unaudited)
|
|
|
Condensed Consolidated Statements of Comprehensive Income - Three and Six Months Ended December 31, 2019 and 2018 (unaudited)
|
|
|
Condensed Consolidated Statements of Shareholders' Equity - Three and Six Months Ended December 31, 2019 and 2018 (unaudited)
|
|
|
Condensed Consolidated Statements of Cash Flows - Six Months Ended December 31, 2019 and 2018 (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
|
|
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Item 1A. Risk Factors
|
||
Item 6. Exhibits
|
||
Signatures
|
|
December 31, 2019
|
|
June 30, 2019
|
||||
ASSETS
|
(unaudited)
|
|
|
||||
Cash and cash equivalents
|
$
|
675,403
|
|
|
$
|
941,009
|
|
Accounts receivable trade, net of allowance for doubtful accounts of $17,937 as of December 31, 2019 and $17,011 as of June 30, 2019 (note 4)
|
526,020
|
|
|
463,785
|
|
||
Contract assets (note 3)
|
22,794
|
|
|
20,956
|
|
||
Income taxes recoverable (note 15)
|
24,615
|
|
|
38,340
|
|
||
Prepaid expenses and other current assets
|
104,962
|
|
|
97,238
|
|
||
Total current assets
|
1,353,794
|
|
|
1,561,328
|
|
||
Property and equipment (note 5)
|
273,448
|
|
|
249,453
|
|
||
Operating lease right of use assets (note 6)
|
253,387
|
|
|
—
|
|
||
Long-term contract assets (note 3)
|
17,975
|
|
|
15,386
|
|
||
Goodwill (note 7)
|
4,656,492
|
|
|
3,769,908
|
|
||
Acquired intangible assets (note 8)
|
1,808,072
|
|
|
1,146,504
|
|
||
Deferred tax assets (note 15)
|
930,856
|
|
|
1,004,450
|
|
||
Other assets (note 9)
|
158,058
|
|
|
148,977
|
|
||
Long-term income taxes recoverable (note 15)
|
46,151
|
|
|
37,969
|
|
||
Total assets
|
$
|
9,498,233
|
|
|
$
|
7,933,975
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities (note 10)
|
$
|
417,611
|
|
|
$
|
329,903
|
|
Current portion of long-term debt (note 11)
|
913,631
|
|
|
10,000
|
|
||
Operating lease liabilities (note 6)
|
66,579
|
|
|
—
|
|
||
Deferred revenues (note 3)
|
718,861
|
|
|
641,656
|
|
||
Income taxes payable (note 15)
|
51,298
|
|
|
33,158
|
|
||
Total current liabilities
|
2,167,980
|
|
|
1,014,717
|
|
||
Long-term liabilities:
|
|
|
|
||||
Accrued liabilities (note 10)
|
14,977
|
|
|
49,441
|
|
||
Pension liability (note 12)
|
73,678
|
|
|
75,239
|
|
||
Long-term debt (note 11)
|
2,600,386
|
|
|
2,604,878
|
|
||
Long-term operating lease liabilities (note 6)
|
218,681
|
|
|
—
|
|
||
Deferred revenues (note 3)
|
77,335
|
|
|
46,974
|
|
||
Long-term income taxes payable (note 15)
|
180,507
|
|
|
202,184
|
|
||
Deferred tax liabilities (note 15)
|
165,457
|
|
|
55,872
|
|
||
Total long-term liabilities
|
3,331,021
|
|
|
3,034,588
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Share capital and additional paid-in capital (note 13)
|
|
|
|
||||
270,608,627 and 269,834,442 Common Shares issued and outstanding at December 31, 2019 and June 30, 2019, respectively; authorized Common Shares: unlimited
|
1,803,663
|
|
|
1,774,214
|
|
||
Accumulated other comprehensive income
|
24,690
|
|
|
24,124
|
|
||
Retained earnings
|
2,201,653
|
|
|
2,113,883
|
|
||
Treasury stock, at cost (847,369 shares at December 31, 2019 and 802,871 shares at June 30, 2019, respectively)
|
(32,066
|
)
|
|
(28,766
|
)
|
||
Total OpenText shareholders' equity
|
3,997,940
|
|
|
3,883,455
|
|
||
Non-controlling interests
|
1,292
|
|
|
1,215
|
|
||
Total shareholders’ equity
|
3,999,232
|
|
|
3,884,670
|
|
||
Total liabilities and shareholders’ equity
|
$
|
9,498,233
|
|
|
$
|
7,933,975
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues (note 3):
|
|
|
|
|
|
|
|
||||||||
License
|
$
|
138,095
|
|
|
$
|
132,756
|
|
|
$
|
215,993
|
|
|
$
|
209,643
|
|
Cloud services and subscriptions
|
248,340
|
|
|
219,233
|
|
|
485,605
|
|
|
427,316
|
|
||||
Customer support
|
315,508
|
|
|
310,354
|
|
|
627,806
|
|
|
621,905
|
|
||||
Professional service and other
|
69,614
|
|
|
72,888
|
|
|
139,041
|
|
|
143,524
|
|
||||
Total revenues
|
771,557
|
|
|
735,231
|
|
|
1,468,445
|
|
|
1,402,388
|
|
||||
Cost of revenues:
|
|
|
|
|
|
|
|
||||||||
License
|
3,050
|
|
|
3,655
|
|
|
5,373
|
|
|
7,527
|
|
||||
Cloud services and subscriptions
|
103,644
|
|
|
88,698
|
|
|
205,806
|
|
|
176,401
|
|
||||
Customer support
|
29,788
|
|
|
31,273
|
|
|
59,175
|
|
|
61,738
|
|
||||
Professional service and other
|
53,604
|
|
|
56,030
|
|
|
107,942
|
|
|
112,826
|
|
||||
Amortization of acquired technology-based intangible assets (note 8)
|
42,299
|
|
|
48,366
|
|
|
82,597
|
|
|
95,843
|
|
||||
Total cost of revenues
|
232,385
|
|
|
228,022
|
|
|
460,893
|
|
|
454,335
|
|
||||
Gross profit
|
539,172
|
|
|
507,209
|
|
|
1,007,552
|
|
|
948,053
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
80,283
|
|
|
75,753
|
|
|
161,461
|
|
|
153,223
|
|
||||
Sales and marketing
|
137,310
|
|
|
126,193
|
|
|
265,928
|
|
|
246,375
|
|
||||
General and administrative
|
54,595
|
|
|
52,198
|
|
|
106,130
|
|
|
103,122
|
|
||||
Depreciation
|
20,712
|
|
|
23,834
|
|
|
40,989
|
|
|
47,688
|
|
||||
Amortization of acquired customer-based intangible assets (note 8)
|
51,460
|
|
|
45,919
|
|
|
100,618
|
|
|
91,795
|
|
||||
Special charges (recoveries) (note 18)
|
10,072
|
|
|
9,380
|
|
|
15,173
|
|
|
32,691
|
|
||||
Total operating expenses
|
354,432
|
|
|
333,277
|
|
|
690,299
|
|
|
674,894
|
|
||||
Income from operations
|
184,740
|
|
|
173,932
|
|
|
317,253
|
|
|
273,159
|
|
||||
Other income (expense), net
|
1,972
|
|
|
378
|
|
|
(813
|
)
|
|
1,900
|
|
||||
Interest and other related expense, net
|
(32,376
|
)
|
|
(33,613
|
)
|
|
(64,586
|
)
|
|
(68,144
|
)
|
||||
Income before income taxes
|
154,336
|
|
|
140,697
|
|
|
251,854
|
|
|
206,915
|
|
||||
Provision for (recovery of) income taxes (note 15)
|
46,818
|
|
|
36,236
|
|
|
69,909
|
|
|
66,086
|
|
||||
Net income for the period
|
$
|
107,518
|
|
|
$
|
104,461
|
|
|
$
|
181,945
|
|
|
$
|
140,829
|
|
Net (income) loss attributable to non-controlling interests
|
(51
|
)
|
|
(29
|
)
|
|
(77
|
)
|
|
(73
|
)
|
||||
Net income attributable to OpenText
|
$
|
107,467
|
|
|
$
|
104,432
|
|
|
$
|
181,868
|
|
|
$
|
140,756
|
|
Earnings per share—basic attributable to OpenText (note 21)
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
$
|
0.67
|
|
|
$
|
0.52
|
|
Earnings per share—diluted attributable to OpenText (note 21)
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
$
|
0.67
|
|
|
$
|
0.52
|
|
Weighted average number of Common Shares outstanding—basic (in '000's)
|
270,450
|
|
|
268,524
|
|
|
270,232
|
|
|
268,276
|
|
||||
Weighted average number of Common Shares outstanding—diluted (in '000's)
|
271,590
|
|
|
269,400
|
|
|
271,328
|
|
|
269,396
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income for the period
|
$
|
107,518
|
|
|
$
|
104,461
|
|
|
$
|
181,945
|
|
|
$
|
140,829
|
|
Other comprehensive income (loss)—net of tax:
|
|
|
|
|
|
|
|
||||||||
Net foreign currency translation adjustments
|
4,875
|
|
|
(3,418
|
)
|
|
(736
|
)
|
|
(6,938
|
)
|
||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) - net of tax expense (recovery) effect of $301 and ($677) for the three months ended December 31, 2019 and 2018, respectively; $95 and ($496) for the six months ended December 31, 2019 and 2018, respectively
|
833
|
|
|
(1,877
|
)
|
|
261
|
|
|
(1,375
|
)
|
||||
(Gain) loss reclassified into net income - net of tax (expense) recovery effect of ($26) and $169 for the three months ended December 31, 2019 and 2018, respectively; ($23) and $301 for the six months ended December 31, 2019 and 2018, respectively
|
(72
|
)
|
|
467
|
|
|
(64
|
)
|
|
833
|
|
||||
Actuarial gain (loss) relating to defined benefit pension plans:
|
|
|
|
|
|
|
|
||||||||
Actuarial gain (loss) - net of tax expense (recovery) effect of $1,308 and ($519) for the three months ended December 31, 2019 and 2018, respectively; $59 and ($213) for the six months ended December 31, 2019 and 2018, respectively
|
3,698
|
|
|
(1,521
|
)
|
|
614
|
|
|
(324
|
)
|
||||
Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $97 and $72 for the three months ended December 31, 2019 and 2018, respectively; $243 and $145 for the six months ended December 31, 2019 and 2018, respectively
|
260
|
|
|
64
|
|
|
491
|
|
|
130
|
|
||||
Total other comprehensive income (loss) net, for the period
|
9,594
|
|
|
(6,285
|
)
|
|
566
|
|
|
(7,674
|
)
|
||||
Total comprehensive income
|
117,112
|
|
|
98,176
|
|
|
182,511
|
|
|
133,155
|
|
||||
Comprehensive (income) loss attributable to non-controlling interests
|
(51
|
)
|
|
(29
|
)
|
|
(77
|
)
|
|
(73
|
)
|
||||
Total comprehensive income attributable to OpenText
|
$
|
117,061
|
|
|
$
|
98,147
|
|
|
$
|
182,434
|
|
|
$
|
133,082
|
|
|
Three Months Ended December 31, 2019
|
||||||||||||||||||||||||||||
|
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 September 30, 2019
|
270,190
|
|
|
$
|
1,791,689
|
|
|
(1,103
|
)
|
|
$
|
(41,190
|
)
|
|
$
|
2,141,278
|
|
|
$
|
15,096
|
|
|
$
|
1,241
|
|
|
$
|
3,908,114
|
|
Issuance of Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Under employee stock option plans
|
231
|
|
|
6,783
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,783
|
|
||||||
Under employee stock purchase plans
|
188
|
|
|
6,532
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,532
|
|
||||||
Share-based compensation
|
—
|
|
|
7,783
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,783
|
|
||||||
Issuance of treasury stock
|
—
|
|
|
(9,124
|
)
|
|
256
|
|
|
9,124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared
($0.1746 per Common Share) |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,092
|
)
|
|
—
|
|
|
—
|
|
|
(47,092
|
)
|
||||||
Other comprehensive income (loss) - net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,594
|
|
|
—
|
|
|
9,594
|
|
||||||
Net income for the quarter
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107,467
|
|
|
—
|
|
|
51
|
|
|
107,518
|
|
||||||
Balance as of December 31, 2019
|
270,609
|
|
|
$
|
1,803,663
|
|
|
(847
|
)
|
|
$
|
(32,066
|
)
|
|
$
|
2,201,653
|
|
|
$
|
24,690
|
|
|
$
|
1,292
|
|
|
$
|
3,999,232
|
|
|
Three Months Ended December 31, 2018
|
||||||||||||||||||||||||||||
|
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 September 30, 2018
|
268,332
|
|
|
$
|
1,730,933
|
|
|
(992
|
)
|
|
$
|
(30,381
|
)
|
|
$
|
1,993,099
|
|
|
$
|
32,256
|
|
|
$
|
1,123
|
|
|
$
|
3,727,030
|
|
Issuance of Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Under employee stock option plans
|
62
|
|
|
1,740
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,740
|
|
||||||
Under employee stock purchase plans
|
175
|
|
|
5,696
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,696
|
|
||||||
Share-based compensation
|
—
|
|
|
6,885
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,885
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(370
|
)
|
|
(12,815
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,815
|
)
|
||||||
Issuance of treasury stock
|
—
|
|
|
(13,955
|
)
|
|
545
|
|
|
13,955
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends
($0.1518 per Common Share) |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,700
|
)
|
|
—
|
|
|
—
|
|
|
(40,700
|
)
|
||||||
Other comprehensive income (loss) - net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,285
|
)
|
|
—
|
|
|
(6,285
|
)
|
||||||
Net income for the quarter
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104,432
|
|
|
—
|
|
|
29
|
|
|
104,461
|
|
||||||
Balance as of December 31, 2018
|
268,569
|
|
|
$
|
1,731,299
|
|
|
(817
|
)
|
|
$
|
(29,241
|
)
|
|
$
|
2,056,831
|
|
|
$
|
25,971
|
|
|
$
|
1,152
|
|
|
$
|
3,786,012
|
|
|
Six Months Ended December 31, 2019
|
||||||||||||||||||||||||||||
|
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, 2019
|
269,834
|
|
|
$
|
1,774,214
|
|
|
(803
|
)
|
|
$
|
(28,766
|
)
|
|
$
|
2,113,883
|
|
|
$
|
24,124
|
|
|
$
|
1,215
|
|
|
$
|
3,884,670
|
|
Issuance of Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Under employee stock option plans
|
415
|
|
|
11,359
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,359
|
|
||||||
Under employee stock purchase plans
|
360
|
|
|
12,540
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,540
|
|
||||||
Share-based compensation
|
—
|
|
|
14,674
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,674
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(300
|
)
|
|
(12,424
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,424
|
)
|
||||||
Issuance of treasury stock
|
—
|
|
|
(9,124
|
)
|
|
256
|
|
|
9,124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared ($0.3492 per Common Share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(94,098
|
)
|
|
—
|
|
|
—
|
|
|
(94,098
|
)
|
||||||
Other comprehensive income (loss) - net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
566
|
|
|
—
|
|
|
566
|
|
||||||
Net income for the quarter
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181,868
|
|
|
—
|
|
|
77
|
|
|
181,945
|
|
||||||
Balance as of December 31, 2019
|
270,609
|
|
|
$
|
1,803,663
|
|
|
(847
|
)
|
|
$
|
(32,066
|
)
|
|
$
|
2,201,653
|
|
|
$
|
24,690
|
|
|
$
|
1,292
|
|
|
$
|
3,999,232
|
|
|
Six Months Ended December 31, 2018
|
||||||||||||||||||||||||||||
|
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, 2018
|
267,651
|
|
|
$
|
1,707,073
|
|
|
(691
|
)
|
|
$
|
(18,732
|
)
|
|
$
|
1,994,235
|
|
|
$
|
33,645
|
|
|
$
|
1,037
|
|
|
$
|
3,717,258
|
|
Adoption of ASU 2016-16 - cumulative effect
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,780
|
)
|
|
—
|
|
|
—
|
|
|
(26,780
|
)
|
||||||
Adoption of Topic 606 - cumulative effect
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,786
|
|
|
—
|
|
|
—
|
|
|
29,786
|
|
||||||
Issuance of Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Under employee stock option plans
|
556
|
|
|
14,171
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,171
|
|
||||||
Under employee stock purchase plans
|
362
|
|
|
11,265
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,265
|
|
||||||
Share-based compensation
|
—
|
|
|
13,440
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,440
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(674
|
)
|
|
(24,534
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,534
|
)
|
||||||
Issuance of treasury stock
|
—
|
|
|
(14,025
|
)
|
|
548
|
|
|
14,025
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared
($0.3036 per Common Share) |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81,166
|
)
|
|
—
|
|
|
—
|
|
|
(81,166
|
)
|
||||||
Other comprehensive income - net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,674
|
)
|
|
—
|
|
|
(7,674
|
)
|
||||||
Non-controlling interest
|
—
|
|
|
(625
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
(583
|
)
|
||||||
Net income for the year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140,756
|
|
|
—
|
|
|
73
|
|
|
140,829
|
|
||||||
Balance as of December 31, 2018
|
268,569
|
|
|
$
|
1,731,299
|
|
|
(817
|
)
|
|
$
|
(29,241
|
)
|
|
$
|
2,056,831
|
|
|
$
|
25,971
|
|
|
$
|
1,152
|
|
|
$
|
3,786,012
|
|
|
Six Months Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income for the period
|
$
|
181,945
|
|
|
$
|
140,829
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization of intangible assets
|
224,204
|
|
|
235,326
|
|
||
Share-based compensation expense
|
14,674
|
|
|
13,440
|
|
||
Pension expense
|
2,895
|
|
|
2,254
|
|
||
Amortization of debt issuance costs
|
2,276
|
|
|
2,157
|
|
||
Loss on sale and write down of property and equipment
|
—
|
|
|
9,428
|
|
||
Deferred taxes
|
34,168
|
|
|
8,909
|
|
||
Share in net (income) loss of equity investees
|
(1,948
|
)
|
|
(7,863
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
2,598
|
|
|
33,548
|
|
||
Contract assets
|
(17,659
|
)
|
|
(13,400
|
)
|
||
Prepaid expenses and other current assets
|
(501
|
)
|
|
12,532
|
|
||
Income taxes
|
(891
|
)
|
|
17,324
|
|
||
Accounts payable and accrued liabilities
|
(33,235
|
)
|
|
(29,748
|
)
|
||
Deferred revenue
|
(64,093
|
)
|
|
(69,151
|
)
|
||
Other assets
|
2,357
|
|
|
4,919
|
|
||
Operating lease assets and liabilities, net
|
(2,105
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
344,685
|
|
|
360,504
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions of property and equipment
|
(38,212
|
)
|
|
(33,464
|
)
|
||
Purchase of Carbonite, Inc., net of cash and restricted cash acquired
|
(1,216,639
|
)
|
|
—
|
|
||
Purchase of Dynamic Solutions Group Inc.
|
(4,149
|
)
|
|
—
|
|
||
Purchase of Liaison Technologies, Inc.
|
—
|
|
|
(311,285
|
)
|
||
Purchase of Guidance Software, Inc., net of cash acquired
|
—
|
|
|
(2,279
|
)
|
||
Other investing activities
|
(5,541
|
)
|
|
(6,373
|
)
|
||
Net cash used in investing activities
|
(1,264,541
|
)
|
|
(353,401
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of Common Shares from exercise of stock options and ESPP
|
23,117
|
|
|
24,286
|
|
||
Proceeds from long-term debt and Revolver
|
750,000
|
|
|
—
|
|
||
Repayment of long-term debt and Revolver
|
(5,000
|
)
|
|
(5,000
|
)
|
||
Debt issuance costs
|
(979
|
)
|
|
(322
|
)
|
||
Purchase of Treasury Stock
|
(12,424
|
)
|
|
(24,534
|
)
|
||
Purchase of non-controlling interests
|
—
|
|
|
(583
|
)
|
||
Payments of dividends to shareholders
|
(94,098
|
)
|
|
(81,166
|
)
|
||
Net cash provided by (used in) financing activities
|
660,616
|
|
|
(87,319
|
)
|
||
Foreign exchange gain (loss) on cash held in foreign currencies
|
(4,071
|
)
|
|
(5,901
|
)
|
||
Increase (decrease) in cash, cash equivalents and restricted cash during the period
|
(263,311
|
)
|
|
(86,117
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of the period
|
943,543
|
|
|
683,991
|
|
||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
680,232
|
|
|
$
|
597,874
|
|
Reconciliation of cash, cash equivalents and restricted cash:
|
December 31, 2019
|
|
December 31, 2018
|
||||
Cash and cash equivalents
|
$
|
675,403
|
|
|
$
|
595,069
|
|
Restricted cash included in Other assets
|
4,829
|
|
|
2,805
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
680,232
|
|
|
$
|
597,874
|
|
•
|
An increase in operating lease right of use assets of approximately $217.5 million;
|
•
|
An increase in total operating lease liabilities of approximately $253.5 million;
|
•
|
A decrease in prepaid expenses and other current assets of approximately $6.6 million in connection with lease fair value adjustments and prepaid rent;
|
•
|
A decrease in other assets of approximately $0.2 million in connection with lease fair value adjustments; and
|
•
|
A decrease in total accrued liabilities of approximately $42.8 million in connection with tenant allowances, deferred rent, lease fair value adjustments, and amounts payable in respect of restructured facilities.
|
•
|
ASU No. 2017-12 “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities” (ASU 2017-12)
|
•
|
ASU No. 2018-15 “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract”
|
•
|
the customer can benefit from the product or service either on its own or together with other resources that are readily available to the customer; and
|
•
|
our promise to transfer the product or service to the customer is separately identifiable from other promises in the contract.
|
Performance Obligation
|
When Performance Obligation is Typically Satisfied
|
License revenue:
|
|
Software licenses (Perpetual,Term, Subscription)
|
When software activation keys have been made available for download (point in time)
|
Cloud services and subscriptions revenue:
|
|
Outsourced Professional Services
|
As the services are provided (over time)
|
Managed Services / Ongoing Hosting / SaaS
|
Over the contract term, beginning on the date that service is made available (i.e. "Go live") to the customer (over time)
|
Customer support revenue:
|
|
When and if available updates and upgrades and technical support
|
Ratable over the course of the service term (over time)
|
Professional service and other revenue:
|
|
Professional services
|
As the services are provided (over time)
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Total Revenues by Geography:
|
|
|
|
|
|
|
|
||||||||
Americas (1)
|
$
|
450,691
|
|
|
$
|
420,696
|
|
|
$
|
870,401
|
|
|
$
|
810,036
|
|
EMEA (2)
|
252,268
|
|
|
243,937
|
|
|
462,435
|
|
|
458,412
|
|
||||
Asia Pacific (3)
|
68,598
|
|
|
70,598
|
|
|
135,609
|
|
|
133,940
|
|
||||
Total Revenues
|
$
|
771,557
|
|
|
$
|
735,231
|
|
|
$
|
1,468,445
|
|
|
$
|
1,402,388
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Total Revenues by Type of Performance Obligation:
|
|
|
|
|
|
|
|
||||||||
Recurring revenue (4)
|
|
|
|
|
|
|
|
||||||||
Cloud services and subscriptions revenue
|
$
|
248,340
|
|
|
$
|
219,233
|
|
|
$
|
485,605
|
|
|
$
|
427,316
|
|
Customer support revenue
|
315,508
|
|
|
310,354
|
|
|
627,806
|
|
|
621,905
|
|
||||
Total recurring revenues
|
$
|
563,848
|
|
|
$
|
529,587
|
|
|
$
|
1,113,411
|
|
|
$
|
1,049,221
|
|
License revenue (perpetual, term and subscriptions)
|
138,095
|
|
|
132,756
|
|
|
215,993
|
|
|
209,643
|
|
||||
Professional service and other revenue
|
69,614
|
|
|
72,888
|
|
|
139,041
|
|
|
143,524
|
|
||||
Total revenues
|
$
|
771,557
|
|
|
$
|
735,231
|
|
|
$
|
1,468,445
|
|
|
$
|
1,402,388
|
|
|
|
|
|
|
|
|
|
||||||||
Total Revenues by Timing of Revenue Recognition
|
|
|
|
|
|
|
|
||||||||
Point in time
|
138,095
|
|
|
132,756
|
|
|
215,993
|
|
|
209,643
|
|
||||
Over time (including professional service and other revenue)
|
633,462
|
|
|
602,475
|
|
|
1,252,452
|
|
|
1,192,745
|
|
||||
Total revenues
|
$
|
771,557
|
|
|
$
|
735,231
|
|
|
$
|
1,468,445
|
|
|
$
|
1,402,388
|
|
|
As of December 31, 2019
|
|
As of June 30, 2019
|
||||
Short-term contract assets
|
$
|
22,794
|
|
|
$
|
20,956
|
|
Long-term contract assets
|
$
|
17,975
|
|
|
$
|
15,386
|
|
Short-term deferred revenue
|
$
|
718,861
|
|
|
$
|
641,656
|
|
Long-term deferred revenue
|
$
|
77,335
|
|
|
$
|
46,974
|
|
Capitalized costs to obtain a contract as of June 30, 2019
|
$
|
48,284
|
|
New capitalized costs incurred
|
10,590
|
|
|
Amortization of capitalized costs
|
(7,715
|
)
|
|
Adjustments on account of foreign exchange
|
(228
|
)
|
|
Capitalized costs to obtain a contract as of December 31, 2019
|
$
|
50,931
|
|
Balance as of June 30, 2019
|
$
|
17,011
|
|
Bad debt expense
|
3,450
|
|
|
Write-off /adjustments
|
(2,524
|
)
|
|
Balance as of December 31, 2019
|
$
|
17,937
|
|
|
As of December 31, 2019
|
||||||||||
|
Cost
|
|
Accumulated
Depreciation
|
|
Net
|
||||||
Furniture and fixtures
|
$
|
45,392
|
|
|
$
|
(29,191
|
)
|
|
$
|
16,201
|
|
Office equipment
|
2,152
|
|
|
(1,244
|
)
|
|
908
|
|
|||
Computer hardware
|
286,043
|
|
|
(186,562
|
)
|
|
99,481
|
|
|||
Computer software
|
125,736
|
|
|
(95,262
|
)
|
|
30,474
|
|
|||
Capitalized software development costs
|
102,560
|
|
|
(62,420
|
)
|
|
40,140
|
|
|||
Leasehold improvements
|
125,155
|
|
|
(73,802
|
)
|
|
51,353
|
|
|||
Land and buildings
|
49,547
|
|
|
(14,656
|
)
|
|
34,891
|
|
|||
Total
|
$
|
736,585
|
|
|
$
|
(463,137
|
)
|
|
$
|
273,448
|
|
|
As of June 30, 2019
|
||||||||||
|
Cost
|
|
Accumulated
Depreciation
|
|
Net
|
||||||
Furniture and fixtures
|
$
|
40,260
|
|
|
$
|
(26,492
|
)
|
|
$
|
13,768
|
|
Office equipment
|
1,993
|
|
|
(1,576
|
)
|
|
417
|
|
|||
Computer hardware
|
258,802
|
|
|
(177,402
|
)
|
|
81,400
|
|
|||
Computer software
|
119,018
|
|
|
(87,240
|
)
|
|
31,778
|
|
|||
Capitalized software development costs
|
95,729
|
|
|
(56,205
|
)
|
|
39,524
|
|
|||
Leasehold improvements
|
113,510
|
|
|
(66,520
|
)
|
|
46,990
|
|
|||
Land and buildings
|
49,557
|
|
|
(13,981
|
)
|
|
35,576
|
|
|||
Total
|
$
|
678,869
|
|
|
$
|
(429,416
|
)
|
|
$
|
249,453
|
|
|
Three Months Ended December 31, 2019
|
|
Six Months Ended December 31, 2019
|
||||
Operating lease cost
|
$
|
15,955
|
|
|
$
|
32,102
|
|
Short-term lease cost
|
190
|
|
|
288
|
|
||
Variable lease cost
|
764
|
|
|
1,507
|
|
||
Sublease income
|
(1,583
|
)
|
|
(3,137
|
)
|
||
Total lease cost
|
$
|
15,326
|
|
|
$
|
30,760
|
|
|
|
|
|
||||
Weighted-average remaining lease term
|
6.05 years
|
|
|
6.05 years
|
|
||
|
|
|
|
||||
Weighted-average discount rate
|
3.28
|
%
|
|
3.28
|
%
|
|
Three Months Ended December 31, 2019
|
|
Six Months Ended December 31, 2019
|
||||
Cash paid for amounts included in the measurement of operating lease liabilities:
|
$
|
18,461
|
|
|
$
|
36,070
|
|
Right of use assets obtained in exchange for new operating lease liabilities
|
$
|
10,557
|
|
|
$
|
15,417
|
|
Fiscal years ending June 30,
|
|
||
2020 (six months ended June 30)
|
$
|
39,817
|
|
2021
|
66,295
|
|
|
2022
|
54,406
|
|
|
2023
|
41,187
|
|
|
2024
|
30,844
|
|
|
Thereafter
|
81,161
|
|
|
Total Lease payments
|
$
|
313,710
|
|
Less: Imputed interest
|
(28,450
|
)
|
|
Total
|
$
|
285,260
|
|
Reported as
|
|
||
Current operating lease liabilities
|
66,579
|
|
|
Non-current operating lease liabilities
|
218,681
|
|
|
Total
|
$
|
285,260
|
|
Fiscal years ending June 30,
|
|
||
2020
|
$
|
72,853
|
|
2021
|
59,451
|
|
|
2022
|
46,943
|
|
|
2023
|
33,871
|
|
|
2024
|
25,570
|
|
|
Thereafter
|
80,163
|
|
|
Total minimum lease payments (1)
|
$
|
318,851
|
|
Balance as of June 30, 2019
|
$
|
3,769,908
|
|
Acquisition of Carbonite (note 19)
|
885,547
|
|
|
Acquisition of The Fax Guys (note 19)
|
2,180
|
|
|
Adjustments relating to acquisitions prior to Fiscal 2020 that had open measurement periods (note 19)
|
842
|
|
|
Adjustments on account of foreign exchange
|
(1,985
|
)
|
|
Balance as of December 31, 2019
|
$
|
4,656,492
|
|
|
As of December 31, 2019
|
||||||||||
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
Technology assets
|
$
|
1,126,601
|
|
|
$
|
(431,856
|
)
|
|
$
|
694,745
|
|
Customer assets
|
1,951,617
|
|
|
(838,290
|
)
|
|
1,113,327
|
|
|||
Total
|
$
|
3,078,218
|
|
|
$
|
(1,270,146
|
)
|
|
$
|
1,808,072
|
|
|
|
|
|
|
|
||||||
|
As of June 30, 2019
|
||||||||||
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
Technology assets
|
$
|
835,498
|
|
|
$
|
(349,259
|
)
|
|
$
|
486,239
|
|
Customer assets
|
1,397,937
|
|
|
(737,672
|
)
|
|
660,265
|
|
|||
Total
|
$
|
2,233,435
|
|
|
$
|
(1,086,931
|
)
|
|
$
|
1,146,504
|
|
Fiscal years ending June 30,
|
|
||
2020 (six months ended June 30)
|
$
|
239,877
|
|
2021
|
424,138
|
|
|
2022
|
384,751
|
|
|
2023
|
299,585
|
|
|
2024
|
220,855
|
|
|
2025 and beyond
|
238,866
|
|
|
Total
|
$
|
1,808,072
|
|
|
As of December 31, 2019
|
|
As of June 30, 2019
|
||||
Deposits and restricted cash
|
$
|
13,527
|
|
|
$
|
13,671
|
|
Capitalized costs to obtain a contract
|
37,692
|
|
|
35,593
|
|
||
Investments
|
69,712
|
|
|
67,002
|
|
||
Long-term prepaid expenses and other long-term assets
|
37,127
|
|
|
32,711
|
|
||
Total
|
$
|
158,058
|
|
|
$
|
148,977
|
|
|
As of December 31, 2019
|
|
As of June 30, 2019
|
||||
Accounts payable—trade
|
$
|
45,285
|
|
|
$
|
46,323
|
|
Accrued salaries and commissions
|
113,901
|
|
|
131,430
|
|
||
Accrued liabilities(1)(2)
|
229,414
|
|
|
117,551
|
|
||
Accrued interest on Senior Notes
|
24,786
|
|
|
24,786
|
|
||
Amounts payable in respect of restructuring and other Special charges(1)
|
1,111
|
|
|
8,153
|
|
||
Asset retirement obligations
|
3,114
|
|
|
1,660
|
|
||
Total
|
$
|
417,611
|
|
|
$
|
329,903
|
|
|
As of December 31, 2019
|
|
As of June 30, 2019
|
||||
Amounts payable in respect of restructuring and other Special charges(1)
|
$
|
—
|
|
|
$
|
4,804
|
|
Other accrued liabilities(1)
|
2,186
|
|
|
30,338
|
|
||
Asset retirement obligations
|
12,791
|
|
|
14,299
|
|
||
Total
|
$
|
14,977
|
|
|
$
|
49,441
|
|
|
As of December 31, 2019
|
|
As of June 30, 2019
|
||||
Total debt
|
|
|
|
||||
Senior Notes 2026
|
$
|
850,000
|
|
|
$
|
850,000
|
|
Senior Notes 2023
|
800,000
|
|
|
800,000
|
|
||
Notes due 2022
|
143,750
|
|
|
—
|
|
||
Term Loan B
|
982,500
|
|
|
987,500
|
|
||
Revolver
|
750,000
|
|
|
—
|
|
||
Total principal payments due
|
3,526,250
|
|
|
2,637,500
|
|
||
|
|
|
|
||||
Premium on Senior Notes 2026
|
5,085
|
|
|
5,405
|
|
||
Make-whole premium on Notes due 2022(1)
|
9,881
|
|
|
—
|
|
||
Debt issuance costs
|
(27,199
|
)
|
|
(28,027
|
)
|
||
Total amount outstanding
|
3,514,017
|
|
|
2,614,878
|
|
||
|
|
|
|
||||
Less:
|
|
|
|
||||
Current portion of long-term debt
|
|
|
|
||||
Notes due 2022 including make-whole premium
|
153,631
|
|
|
—
|
|
||
Term Loan B
|
10,000
|
|
|
10,000
|
|
||
Revolver
|
750,000
|
|
|
—
|
|
||
Total current portion of long-term debt
|
913,631
|
|
|
10,000
|
|
||
|
|
|
|
||||
Non-current portion of long-term debt
|
$
|
2,600,386
|
|
|
$
|
2,604,878
|
|
|
As of December 31, 2019
|
||||||||||
|
Total benefit
obligation
|
|
Current portion of
benefit obligation*
|
|
Non-current portion of
benefit obligation
|
||||||
CDT defined benefit plan
|
$
|
35,221
|
|
|
$
|
700
|
|
|
$
|
34,521
|
|
GXS GER defined benefit plan
|
25,650
|
|
|
986
|
|
|
24,664
|
|
|||
GXS PHP defined benefit plan
|
7,113
|
|
|
93
|
|
|
7,020
|
|
|||
Other plans
|
7,964
|
|
|
491
|
|
|
7,473
|
|
|||
Total
|
$
|
75,948
|
|
|
$
|
2,270
|
|
|
$
|
73,678
|
|
|
As of June 30, 2019
|
||||||||||
|
Total benefit
obligation
|
|
Current portion of
benefit obligation*
|
|
Non-current portion of
benefit obligation
|
||||||
CDT defined benefit plan
|
$
|
35,836
|
|
|
$
|
675
|
|
|
$
|
35,161
|
|
GXS GER defined benefit plan
|
26,739
|
|
|
1,012
|
|
|
25,727
|
|
|||
GXS PHP defined benefit plan
|
6,904
|
|
|
124
|
|
|
6,780
|
|
|||
Other plans
|
8,052
|
|
|
481
|
|
|
7,571
|
|
|||
Total
|
$
|
77,531
|
|
|
$
|
2,292
|
|
|
$
|
75,239
|
|
|
As of December 31, 2019
|
|
As of June 30, 2019
|
||||||||||||||||||||||||||||
|
CDT
|
|
GXS GER
|
|
GXS PHP
|
|
Total
|
|
CDT
|
|
GXS GER
|
|
GXS PHP
|
|
Total
|
||||||||||||||||
Benefit obligation—beginning of period
|
$
|
35,836
|
|
|
$
|
26,739
|
|
|
$
|
6,904
|
|
|
$
|
69,479
|
|
|
$
|
32,651
|
|
|
$
|
25,382
|
|
|
$
|
3,853
|
|
|
$
|
61,886
|
|
Service cost
|
286
|
|
|
159
|
|
|
609
|
|
|
1,054
|
|
|
550
|
|
|
566
|
|
|
771
|
|
|
1,887
|
|
||||||||
Interest cost
|
229
|
|
|
168
|
|
|
173
|
|
|
570
|
|
|
642
|
|
|
489
|
|
|
300
|
|
|
1,431
|
|
||||||||
Benefits paid
|
(313
|
)
|
|
(472
|
)
|
|
(115
|
)
|
|
(900
|
)
|
|
(626
|
)
|
|
(996
|
)
|
|
(140
|
)
|
|
(1,762
|
)
|
||||||||
Actuarial (gain) loss
|
90
|
|
|
(269
|
)
|
|
(559
|
)
|
|
(738
|
)
|
|
3,365
|
|
|
1,872
|
|
|
1,957
|
|
|
7,194
|
|
||||||||
Foreign exchange (gain) loss
|
(907
|
)
|
|
(675
|
)
|
|
101
|
|
|
(1,481
|
)
|
|
(746
|
)
|
|
(574
|
)
|
|
163
|
|
|
(1,157
|
)
|
||||||||
Benefit obligation—end of period
|
35,221
|
|
|
25,650
|
|
|
7,113
|
|
|
67,984
|
|
|
35,836
|
|
|
26,739
|
|
|
6,904
|
|
|
69,479
|
|
||||||||
Less: Current portion
|
(700
|
)
|
|
(986
|
)
|
|
(93
|
)
|
|
(1,779
|
)
|
|
(675
|
)
|
|
(1,012
|
)
|
|
(124
|
)
|
|
(1,811
|
)
|
||||||||
Non-current portion of benefit obligation
|
$
|
34,521
|
|
|
$
|
24,664
|
|
|
$
|
7,020
|
|
|
$
|
66,205
|
|
|
$
|
35,161
|
|
|
$
|
25,727
|
|
|
$
|
6,780
|
|
|
$
|
67,668
|
|
|
Three Months Ended December 31,
|
||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
Pension expense:
|
CDT
|
|
GXS GER
|
|
GXS PHP
|
|
Total
|
|
CDT
|
|
GXS GER
|
|
GXS PHP
|
|
Total
|
||||||||||||||||
Service cost
|
$
|
144
|
|
|
$
|
80
|
|
|
$
|
310
|
|
|
$
|
534
|
|
|
$
|
136
|
|
|
$
|
140
|
|
|
$
|
159
|
|
|
$
|
435
|
|
Interest cost
|
115
|
|
|
84
|
|
|
88
|
|
|
287
|
|
|
159
|
|
|
121
|
|
|
72
|
|
|
352
|
|
||||||||
Amortization of actuarial (gains) and losses
|
235
|
|
|
61
|
|
|
(72
|
)
|
|
224
|
|
|
175
|
|
|
33
|
|
|
(139
|
)
|
|
69
|
|
||||||||
Net pension expense
|
$
|
494
|
|
|
$
|
225
|
|
|
$
|
326
|
|
|
$
|
1,045
|
|
|
$
|
470
|
|
|
$
|
294
|
|
|
$
|
92
|
|
|
$
|
856
|
|
|
Six Months Ended December 31,
|
||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
Pension expense:
|
CDT
|
|
GXS GER
|
|
GXS PHP
|
|
Total
|
|
CDT
|
|
GXS GER
|
|
GXS PHP
|
|
Total
|
||||||||||||||||
Service cost
|
$
|
286
|
|
|
$
|
159
|
|
|
$
|
609
|
|
|
$
|
1,054
|
|
|
$
|
277
|
|
|
$
|
285
|
|
|
$
|
335
|
|
|
$
|
897
|
|
Interest cost
|
229
|
|
|
168
|
|
|
173
|
|
|
570
|
|
|
324
|
|
|
247
|
|
|
140
|
|
|
711
|
|
||||||||
Amortization of actuarial (gains) and losses
|
469
|
|
|
122
|
|
|
(143
|
)
|
|
448
|
|
|
351
|
|
|
66
|
|
|
(279
|
)
|
|
138
|
|
||||||||
Net pension expense
|
$
|
984
|
|
|
$
|
449
|
|
|
$
|
639
|
|
|
$
|
2,072
|
|
|
$
|
952
|
|
|
$
|
598
|
|
|
$
|
196
|
|
|
$
|
1,746
|
|
|
As of December 31, 2019
|
|
As of June 30, 2019
|
||||||||
|
CDT
|
|
GXS GER
|
|
GXS PHP
|
|
CDT
|
|
GXS GER
|
|
GXS PHP
|
Assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
Salary increases
|
2.50%
|
|
2.50%
|
|
6.50%
|
|
2.50%
|
|
2.50%
|
|
6.50%
|
Pension increases
|
2.00%
|
|
2.00%
|
|
N/A
|
|
2.00%
|
|
2.00%
|
|
N/A
|
Discount rate
|
1.30%
|
|
1.30%
|
|
5.25%
|
|
1.32%
|
|
1.32%
|
|
5.00%
|
Normal retirement age
|
65-67
|
|
65-67
|
|
60
|
|
65-67
|
|
65-67
|
|
60
|
Employee fluctuation rate:
|
|
|
|
|
|
|
|
|
|
|
|
to age 20
|
—%
|
|
—%
|
|
12.19%
|
|
—%
|
|
—%
|
|
12.19%
|
to age 25
|
—%
|
|
—%
|
|
16.58%
|
|
—%
|
|
—%
|
|
16.58%
|
to age 30
|
1.00%
|
|
—%
|
|
13.97%
|
|
1.00%
|
|
—%
|
|
13.97%
|
to age 35
|
0.50%
|
|
—%
|
|
10.77%
|
|
0.50%
|
|
—%
|
|
10.77%
|
to age 40
|
—%
|
|
—%
|
|
7.39%
|
|
—%
|
|
—%
|
|
7.39%
|
to age 45
|
0.50%
|
|
—%
|
|
3.28%
|
|
0.50%
|
|
—%
|
|
3.28%
|
to age 50
|
0.50%
|
|
—%
|
|
—%
|
|
0.50%
|
|
—%
|
|
—%
|
from age 51
|
1.00%
|
|
—%
|
|
—%
|
|
1.00%
|
|
—%
|
|
—%
|
|
Fiscal years ending June 30,
|
||||||||||
|
CDT
|
|
GXS GER
|
|
GXS PHP
|
||||||
2020 (six months ended June 30)
|
$
|
331
|
|
|
$
|
493
|
|
|
$
|
31
|
|
2021
|
739
|
|
|
985
|
|
|
268
|
|
|||
2022
|
810
|
|
|
1,017
|
|
|
266
|
|
|||
2023
|
909
|
|
|
1,017
|
|
|
222
|
|
|||
2024
|
1,014
|
|
|
1,023
|
|
|
278
|
|
|||
2025 to 2029
|
5,851
|
|
|
5,171
|
|
|
2,890
|
|
|||
Total
|
$
|
9,654
|
|
|
$
|
9,706
|
|
|
$
|
3,955
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Stock options
|
$
|
2,667
|
|
|
$
|
2,319
|
|
|
$
|
4,677
|
|
|
$
|
4,921
|
|
Performance Share Units (issued under LTIP)
|
1,521
|
|
|
851
|
|
|
2,921
|
|
|
1,694
|
|
||||
Restricted Share Units (issued under LTIP)
|
1,309
|
|
|
1,626
|
|
|
2,969
|
|
|
3,011
|
|
||||
Restricted Share Units (other)
|
10
|
|
|
52
|
|
|
20
|
|
|
133
|
|
||||
Deferred Share Units (directors)
|
1,124
|
|
|
1,032
|
|
|
1,875
|
|
|
1,693
|
|
||||
Employee Share Purchase Plan
|
1,152
|
|
|
1,005
|
|
|
2,212
|
|
|
1,988
|
|
||||
Total share-based compensation expense
|
$
|
7,783
|
|
|
$
|
6,885
|
|
|
$
|
14,674
|
|
|
$
|
13,440
|
|
|
Options
|
|
Weighted-
Average Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual Term
(years)
|
|
Aggregate Intrinsic Value
($’000s)
|
|||||
Outstanding at June 30, 2019
|
7,102,753
|
|
|
$
|
31.82
|
|
|
|
|
|
||
Granted
|
982,440
|
|
|
39.33
|
|
|
|
|
|
|||
Exercised
|
(414,682
|
)
|
|
27.39
|
|
|
|
|
|
|||
Forfeited or expired
|
(158,906
|
)
|
|
34.48
|
|
|
|
|
|
|||
Outstanding at December 31, 2019
|
7,511,605
|
|
|
$
|
32.99
|
|
|
4.02
|
|
$
|
83,257
|
|
Exercisable at December 31, 2019
|
2,855,956
|
|
|
$
|
28.42
|
|
|
2.55
|
|
$
|
44,688
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Weighted–average fair value of options granted
|
$
|
6.74
|
|
|
$
|
7.37
|
|
|
$
|
6.49
|
|
|
$
|
8.55
|
|
Weighted-average assumptions used:
|
|
|
|
|
|
|
|
||||||||
Expected volatility
|
22.03
|
%
|
|
25.95
|
%
|
|
22.09
|
%
|
|
26.05
|
%
|
||||
Risk–free interest rate
|
1.55
|
%
|
|
2.97
|
%
|
|
1.65
|
%
|
|
2.82
|
%
|
||||
Expected dividend yield
|
1.64
|
%
|
|
1.73
|
%
|
|
1.67
|
%
|
|
1.49
|
%
|
||||
Expected life (in years)
|
4.11
|
|
|
4.32
|
|
|
4.11
|
|
|
4.32
|
|
||||
Forfeiture rate (based on historical rates)
|
7
|
%
|
|
6
|
%
|
|
7
|
%
|
|
6
|
%
|
||||
Average exercise share price
|
$
|
41.13
|
|
|
$
|
33.97
|
|
|
$
|
39.33
|
|
|
$
|
38.56
|
|
|
Payments due between
|
||||||||||||||||||
|
Total
|
|
January 1, 2020—
June 30, 2020 |
|
July 1, 2020—
June 30, 2022 |
|
July 1, 2022—
June 30, 2024 |
|
July 1, 2024
and beyond |
||||||||||
Long-term debt obligations (1)
|
$
|
3,449,651
|
|
|
$
|
223,222
|
|
|
$
|
277,680
|
|
|
$
|
1,031,371
|
|
|
$
|
1,917,378
|
|
Purchase obligations for contracts not accounted for as lease obligations (2)
|
60,978
|
|
|
23,135
|
|
|
32,843
|
|
|
5,000
|
|
|
—
|
|
|||||
|
$
|
3,510,629
|
|
|
$
|
246,357
|
|
|
$
|
310,523
|
|
|
$
|
1,036,371
|
|
|
$
|
1,917,378
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest expense (recoveries)
|
$
|
2,652
|
|
|
$
|
1,570
|
|
|
$
|
1,234
|
|
|
$
|
4,607
|
|
Penalties expense (recoveries)
|
(156
|
)
|
|
67
|
|
|
75
|
|
|
559
|
|
||||
Total
|
$
|
2,496
|
|
|
$
|
1,637
|
|
|
$
|
1,309
|
|
|
$
|
5,166
|
|
|
As of December 31, 2019
|
|
As of June 30, 2019
|
||||
Interest expense accrued *
|
$
|
65,870
|
|
|
$
|
64,530
|
|
Penalties accrued *
|
$
|
2,526
|
|
|
$
|
2,525
|
|
•
|
Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
|
•
|
Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
•
|
Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.
|
|
December 31, 2019
|
|
June 30, 2019
|
||||||||||||||||||||
|
|
|
Fair Market Measurements using:
|
|
|
|
Fair Market Measurements using:
|
||||||||||||||||
|
December 31, 2019
|
|
Quoted prices
in active
markets for
identical
assets/
(liabilities)
|
|
Significant
other
observable
inputs
|
|
Significant
unobservable
inputs
|
|
June 30, 2019
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts designated as cash flow hedges (note 17)
|
$
|
1,005
|
|
|
N/A
|
|
$
|
1,005
|
|
|
N/A
|
|
$
|
736
|
|
|
N/A
|
|
$
|
736
|
|
|
N/A
|
|
|
As of December 31, 2019
|
|
As of June 30, 2019
|
||||
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)
|
$
|
1,005
|
|
|
$
|
736
|
|
Three and Six Months Ended December 31, 2019
|
|||||||||||||||||
Derivatives in Cash Flow Hedging Relationship
|
Amount of Gain or (Loss)
Recognized in OCI on Derivatives (Effective Portion) |
|
Location of Gain or (Loss)
Reclassified from Accumulated OCI into Income (Effective Portion) |
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
||||||||||||
|
Three Months Ended December 31, 2019
|
|
Six Months Ended December 31, 2019
|
|
|
|
Three Months Ended December 31, 2019
|
|
Six Months Ended December 31, 2019
|
||||||||
Foreign currency forward contracts
|
$
|
1,134
|
|
|
$
|
356
|
|
|
Operating expenses
|
|
$
|
98
|
|
|
$
|
87
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three and Six Months Ended December 31, 2018
|
|||||||||||||||||
Derivatives in Cash Flow Hedging Relationship
|
Amount of Gain or (Loss)
Recognized in OCI on Derivatives (Effective Portion) |
|
Location of Gain or (Loss)
Reclassified from Accumulated OCI into Income (Effective Portion) |
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion) |
||||||||||||
|
Three Months Ended December 31, 2018
|
|
Six Months Ended December 31, 2018
|
|
|
|
Three Months Ended December 31, 2018
|
|
Six Months Ended December 31, 2018
|
||||||||
Foreign currency forward contracts
|
$
|
(2,554
|
)
|
|
$
|
(1,871
|
)
|
|
Operating expenses
|
|
$
|
(636
|
)
|
|
$
|
(1,134
|
)
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Fiscal 2019 Restructuring Plan
|
$
|
23
|
|
|
$
|
5,993
|
|
|
$
|
1,679
|
|
|
$
|
26,239
|
|
Fiscal 2018 Restructuring Plan
|
65
|
|
|
(25
|
)
|
|
86
|
|
|
510
|
|
||||
Restructuring Plans prior to Fiscal 2018 Restructuring Plan
|
(481
|
)
|
|
(79
|
)
|
|
(282
|
)
|
|
475
|
|
||||
Acquisition-related costs
|
7,779
|
|
|
3,197
|
|
|
10,445
|
|
|
3,704
|
|
||||
Other charges (recoveries)
|
2,686
|
|
|
294
|
|
|
3,245
|
|
|
1,763
|
|
||||
Total
|
$
|
10,072
|
|
|
$
|
9,380
|
|
|
$
|
15,173
|
|
|
$
|
32,691
|
|
Fiscal 2019 Restructuring Plan
|
Workforce reduction
|
|
Facility costs
|
|
Total
|
||||||
Balance payable as at June 30, 2019
|
$
|
1,819
|
|
|
$
|
5,288
|
|
|
$
|
7,107
|
|
Adjustment for Topic 842 (note 1 and note 6)
|
—
|
|
|
(5,288
|
)
|
|
(5,288
|
)
|
|||
Accruals and adjustments
|
589
|
|
|
1,090
|
|
|
1,679
|
|
|||
Cash payments
|
(1,555
|
)
|
|
(1,090
|
)
|
|
(2,645
|
)
|
|||
Foreign exchange and other non-cash adjustments
|
(211
|
)
|
|
—
|
|
|
(211
|
)
|
|||
Balance payable as at December 31, 2019
|
$
|
642
|
|
|
$
|
—
|
|
|
$
|
642
|
|
Fiscal 2018 Restructuring Plan
|
Workforce reduction
|
|
Facility costs
|
|
Total
|
||||||
Balance payable as at June 30, 2019
|
$
|
150
|
|
|
$
|
486
|
|
|
$
|
636
|
|
Adjustment for Topic 842 (note 1 and note 6)
|
—
|
|
|
(486
|
)
|
|
(486
|
)
|
|||
Accruals and adjustments
|
(62
|
)
|
|
148
|
|
|
86
|
|
|||
Cash payments
|
(39
|
)
|
|
(148
|
)
|
|
(187
|
)
|
|||
Foreign exchange and other non-cash adjustments
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||
Balance payable as at December 31, 2019
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
40
|
|
Current assets (inclusive of cash acquired of $62.9 million)
|
$
|
131,119
|
|
Non-current tangible assets (inclusive of restricted cash acquired of $2.4 million)
|
93,111
|
|
|
Intangible customer assets
|
549,000
|
|
|
Intangible technology assets
|
291,000
|
|
|
Liabilities assumed
|
(578,747
|
)
|
|
Total identifiable net assets
|
485,483
|
|
|
Goodwill
|
885,547
|
|
|
Net assets acquired
|
$
|
1,371,030
|
|
|
December 24, 2019 -
December 31, 2019
|
||
Revenues
|
$
|
9,511
|
|
Net Loss *
|
(3,654
|
)
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Supplemental Unaudited Pro Forma Information(1)
|
|
|
|
|
|
|
|
||||
Total Revenues
|
887,563
|
|
|
812,197
|
|
|
1,710,047
|
|
|
1,557,036
|
|
Net Income (loss) (2) (3)
|
78,571
|
|
|
76,024
|
|
|
117,789
|
|
|
(9,748
|
)
|
Current assets
|
$
|
9,699
|
|
Non-current tangible assets
|
5,754
|
|
|
Intangible customer assets
|
30,607
|
|
|
Intangible technology assets
|
11,658
|
|
|
Liabilities assumed
|
(17,891
|
)
|
|
Total identifiable net assets
|
39,827
|
|
|
Goodwill
|
30,973
|
|
|
Net assets acquired
|
$
|
70,800
|
|
Current assets
|
$
|
23,006
|
|
Non-current tangible assets
|
5,168
|
|
|
Intangible customer assets
|
68,300
|
|
|
Intangible technology assets
|
107,000
|
|
|
Liabilities assumed
|
(57,265
|
)
|
|
Total identifiable net assets
|
146,209
|
|
|
Goodwill
|
164,434
|
|
|
Net assets acquired
|
$
|
310,643
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cash paid during the period for interest
|
$
|
34,685
|
|
|
$
|
36,136
|
|
|
$
|
68,129
|
|
|
$
|
68,763
|
|
Cash received during the period for interest
|
$
|
3,474
|
|
|
$
|
2,624
|
|
|
$
|
7,423
|
|
|
$
|
3,359
|
|
Cash paid during the period for income taxes
|
$
|
23,037
|
|
|
$
|
31,445
|
|
|
$
|
33,372
|
|
|
$
|
39,812
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Basic earnings per share
|
|
|
|
|
|
|
|
||||||||
Net income attributable to OpenText
|
$
|
107,467
|
|
|
$
|
104,432
|
|
|
$
|
181,868
|
|
|
$
|
140,756
|
|
Basic earnings per share attributable to OpenText
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
$
|
0.67
|
|
|
$
|
0.52
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
||||||||
Net income attributable to OpenText
|
$
|
107,467
|
|
|
$
|
104,432
|
|
|
$
|
181,868
|
|
|
$
|
140,756
|
|
Diluted earnings per share attributable to OpenText
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
$
|
0.67
|
|
|
$
|
0.52
|
|
Weighted-average number of shares outstanding (in 000's)
|
|
|
|
|
|
|
|
||||||||
Basic
|
270,450
|
|
|
268,524
|
|
|
270,232
|
|
|
268,276
|
|
||||
Effect of dilutive securities
|
1,140
|
|
|
876
|
|
|
1,096
|
|
|
1,120
|
|
||||
Diluted
|
271,590
|
|
|
269,400
|
|
|
271,328
|
|
|
269,396
|
|
||||
Excluded as anti-dilutive(1)
|
2,541
|
|
|
3,171
|
|
|
2,360
|
|
|
2,597
|
|
•
|
Workforce restructurings of approximately $13 million to $17 million; and
|
•
|
Facility consolidations of approximately $13 million to $17 million.
|
•
|
Total revenue was $771.6 million, up 4.9% compared to the same period in the prior fiscal year; up 6.3% after factoring the impact of $10.2 million of foreign exchange rate changes.
|
•
|
Total annual recurring revenue, which we define as the sum of cloud services and subscriptions revenue and customer support revenue, was $563.8 million, up 6.5% compared to the same period in the prior fiscal year; up 7.8% after factoring the impact of $6.9 million of foreign exchange rate changes.
|
•
|
Cloud services and subscriptions revenue was $248.3 million, up 13.3% compared to the same period in the prior fiscal year; up 14.1% after factoring the impact of $1.8 million of foreign exchange rate changes.
|
•
|
License revenue was $138.1 million, up 4.0% compared to the same period in the prior fiscal year; up 5.6% after factoring the impact of $2.1 million of foreign exchange rate changes.
|
•
|
GAAP-based EPS, diluted, was $0.40 compared to $0.39 in the same period in the prior fiscal year.
|
•
|
Non-GAAP-based EPS, diluted, was $0.84 compared to $0.80 in the same period in the prior fiscal year.
|
•
|
GAAP-based gross margin was 69.9% compared to 69.0% in the same period in the prior fiscal year.
|
•
|
Non-GAAP-based gross margin was 75.5% compared to 75.7% in the same period in the prior fiscal year.
|
•
|
GAAP-based net income attributable to OpenText was $107.5 million compared to $104.4 million in the same period in the prior fiscal year.
|
•
|
Non-GAAP-based net income attributable to OpenText was $227.0 million compared to $215.7 million in the same period in the prior fiscal year.
|
•
|
Adjusted EBITDA was $317.0 million compared to $308.3 million in the same period in the prior fiscal year.
|
•
|
Operating cash flow was $344.7 million for the six months ended December 31, 2019, down 4.4% from the same period in the prior fiscal year.
|
•
|
Cash and cash equivalents was $675.4 million as of December 31, 2019, compared to $941.0 million as of June 30, 2019.
|
(i)
|
Revenue recognition,
|
(ii)
|
Goodwill,
|
(iii)
|
Acquired intangibles, and
|
(iv)
|
Income taxes.
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change
increase (decrease) |
|
2018
|
|
2019
|
|
Change
increase (decrease) |
|
2018
|
||||||||||||
Total Revenues by Product Type:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
License
|
$
|
138,095
|
|
|
$
|
5,339
|
|
|
$
|
132,756
|
|
|
$
|
215,993
|
|
|
$
|
6,350
|
|
|
$
|
209,643
|
|
Cloud services and subscriptions
|
248,340
|
|
|
29,107
|
|
|
219,233
|
|
|
485,605
|
|
|
58,289
|
|
|
427,316
|
|
||||||
Customer support
|
315,508
|
|
|
5,154
|
|
|
310,354
|
|
|
627,806
|
|
|
5,901
|
|
|
621,905
|
|
||||||
Professional service and other
|
69,614
|
|
|
(3,274
|
)
|
|
72,888
|
|
|
139,041
|
|
|
(4,483
|
)
|
|
143,524
|
|
||||||
Total revenues
|
771,557
|
|
|
36,326
|
|
|
735,231
|
|
|
1,468,445
|
|
|
66,057
|
|
|
1,402,388
|
|
||||||
Total Cost of Revenues
|
232,385
|
|
|
4,363
|
|
|
228,022
|
|
|
460,893
|
|
|
6,558
|
|
|
454,335
|
|
||||||
Total GAAP-based Gross Profit
|
539,172
|
|
|
31,963
|
|
|
507,209
|
|
|
1,007,552
|
|
|
59,499
|
|
|
948,053
|
|
||||||
Total GAAP-based Gross Margin %
|
69.9
|
%
|
|
|
|
69.0
|
%
|
|
68.6
|
%
|
|
|
|
67.6
|
%
|
||||||||
Total GAAP-based Operating Expenses
|
354,432
|
|
|
21,155
|
|
|
333,277
|
|
|
690,299
|
|
|
15,405
|
|
|
674,894
|
|
||||||
Total GAAP-based Income from Operations
|
$
|
184,740
|
|
|
$
|
10,808
|
|
|
$
|
173,932
|
|
|
$
|
317,253
|
|
|
$
|
44,094
|
|
|
$
|
273,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
% Revenues by Product Type:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
License
|
17.9
|
%
|
|
|
|
18.1
|
%
|
|
14.7
|
%
|
|
|
|
15.0
|
%
|
||||||||
Cloud services and subscriptions
|
32.2
|
%
|
|
|
|
29.8
|
%
|
|
33.1
|
%
|
|
|
|
30.5
|
%
|
||||||||
Customer support
|
40.9
|
%
|
|
|
|
42.2
|
%
|
|
42.8
|
%
|
|
|
|
44.3
|
%
|
||||||||
Professional service and other
|
9.0
|
%
|
|
|
|
9.9
|
%
|
|
9.4
|
%
|
|
|
|
10.2
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Cost of Revenues by Product Type:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
License
|
$
|
3,050
|
|
|
$
|
(605
|
)
|
|
$
|
3,655
|
|
|
$
|
5,373
|
|
|
$
|
(2,154
|
)
|
|
$
|
7,527
|
|
Cloud services and subscriptions
|
103,644
|
|
|
14,946
|
|
|
88,698
|
|
|
205,806
|
|
|
29,405
|
|
|
176,401
|
|
||||||
Customer support
|
29,788
|
|
|
(1,485
|
)
|
|
31,273
|
|
|
59,175
|
|
|
(2,563
|
)
|
|
61,738
|
|
||||||
Professional service and other
|
53,604
|
|
|
(2,426
|
)
|
|
56,030
|
|
|
107,942
|
|
|
(4,884
|
)
|
|
112,826
|
|
||||||
Amortization of acquired technology-based intangible assets
|
42,299
|
|
|
(6,067
|
)
|
|
48,366
|
|
|
82,597
|
|
|
(13,246
|
)
|
|
95,843
|
|
||||||
Total cost of revenues
|
$
|
232,385
|
|
|
$
|
4,363
|
|
|
$
|
228,022
|
|
|
$
|
460,893
|
|
|
$
|
6,558
|
|
|
$
|
454,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
% GAAP-based Gross Margin by Product Type:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
License
|
97.8
|
%
|
|
|
|
97.2
|
%
|
|
97.5
|
%
|
|
|
|
96.4
|
%
|
||||||||
Cloud services and subscriptions
|
58.3
|
%
|
|
|
|
59.5
|
%
|
|
57.6
|
%
|
|
|
|
58.7
|
%
|
||||||||
Customer support
|
90.6
|
%
|
|
|
|
89.9
|
%
|
|
90.6
|
%
|
|
|
|
90.1
|
%
|
||||||||
Professional service and other
|
23.0
|
%
|
|
|
|
23.1
|
%
|
|
22.4
|
%
|
|
|
|
21.4
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Revenues by Geography:(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas (2)
|
$
|
450,691
|
|
|
$
|
29,995
|
|
|
$
|
420,696
|
|
|
$
|
870,401
|
|
|
$
|
60,365
|
|
|
$
|
810,036
|
|
EMEA (3)
|
252,268
|
|
|
8,331
|
|
|
243,937
|
|
|
462,435
|
|
|
4,023
|
|
|
458,412
|
|
||||||
Asia Pacific (4)
|
68,598
|
|
|
(2,000
|
)
|
|
70,598
|
|
|
135,609
|
|
|
1,669
|
|
|
133,940
|
|
||||||
Total revenues
|
$
|
771,557
|
|
|
$
|
36,326
|
|
|
$
|
735,231
|
|
|
$
|
1,468,445
|
|
|
$
|
66,057
|
|
|
$
|
1,402,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
% Revenues by Geography:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas (2)
|
58.4
|
%
|
|
|
|
57.2
|
%
|
|
59.3
|
%
|
|
|
|
57.8
|
%
|
||||||||
EMEA (3)
|
32.7
|
%
|
|
|
|
33.2
|
%
|
|
31.5
|
%
|
|
|
|
32.7
|
%
|
||||||||
Asia Pacific (4)
|
8.9
|
%
|
|
|
|
9.6
|
%
|
|
9.2
|
%
|
|
|
|
9.5
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change
increase (decrease) |
|
2018
|
|
2019
|
|
Change
increase (decrease) |
|
2018
|
||||||||||||
Other Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
GAAP-based gross margin
|
69.9
|
%
|
|
|
|
69.0
|
%
|
|
68.6
|
%
|
|
|
|
67.6
|
%
|
||||||||
GAAP-based EPS, diluted
|
$
|
0.40
|
|
|
|
|
$
|
0.39
|
|
|
$
|
0.67
|
|
|
|
|
$
|
0.52
|
|
||||
Net income, attributable to OpenText
|
$
|
107,467
|
|
|
|
|
$
|
104,432
|
|
|
$
|
181,868
|
|
|
|
|
$
|
140,756
|
|
||||
Non-GAAP-based gross margin (5)
|
75.5
|
%
|
|
|
|
75.7
|
%
|
|
74.4
|
%
|
|
|
|
74.6
|
%
|
||||||||
Non-GAAP-based EPS, diluted (5)
|
$
|
0.84
|
|
|
|
|
$
|
0.80
|
|
|
$
|
1.48
|
|
|
|
|
$
|
1.40
|
|
||||
Adjusted EBITDA (5)
|
$
|
317,015
|
|
|
|
|
$
|
308,287
|
|
|
$
|
571,227
|
|
|
|
|
$
|
554,543
|
|
(1)
|
Total revenues by geography are determined based on the location of our end customer.
|
(2)
|
Americas consists of countries in North, Central and South America.
|
(3)
|
EMEA primarily consists of countries in Europe, the Middle East and Africa.
|
(4)
|
Asia Pacific primarily consists of the countries Japan, Australia, China, Korea, Philippines, Singapore and New Zealand.
|
(5)
|
See "Use of Non-GAAP Financial Measures" (discussed later in this MD&A) for definitions and reconciliations of GAAP-based measures to Non-GAAP-based measures.
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change
increase (decrease) |
|
2018
|
|
2019
|
|
Change
increase (decrease) |
|
2018
|
||||||||||||
License Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
66,261
|
|
|
$
|
137
|
|
|
$
|
66,124
|
|
|
$
|
105,497
|
|
|
$
|
100
|
|
|
$
|
105,397
|
|
EMEA
|
58,101
|
|
|
9,236
|
|
|
48,865
|
|
|
84,793
|
|
|
7,584
|
|
|
77,209
|
|
||||||
Asia Pacific
|
13,733
|
|
|
(4,034
|
)
|
|
17,767
|
|
|
25,703
|
|
|
(1,334
|
)
|
|
27,037
|
|
||||||
Total License Revenues
|
138,095
|
|
|
5,339
|
|
|
132,756
|
|
|
215,993
|
|
|
6,350
|
|
|
209,643
|
|
||||||
Cost of License Revenues
|
3,050
|
|
|
(605
|
)
|
|
3,655
|
|
|
5,373
|
|
|
(2,154
|
)
|
|
7,527
|
|
||||||
GAAP-based License Gross Profit
|
$
|
135,045
|
|
|
$
|
5,944
|
|
|
$
|
129,101
|
|
|
$
|
210,620
|
|
|
$
|
8,504
|
|
|
$
|
202,116
|
|
GAAP-based License Gross Margin %
|
97.8
|
%
|
|
|
|
97.2
|
%
|
|
97.5
|
%
|
|
|
|
96.4
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
% License Revenues by Geography:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
48.0
|
%
|
|
|
|
49.8
|
%
|
|
48.8
|
%
|
|
|
|
50.3
|
%
|
||||||||
EMEA
|
42.1
|
%
|
|
|
|
36.8
|
%
|
|
39.3
|
%
|
|
|
|
36.8
|
%
|
||||||||
Asia Pacific
|
9.9
|
%
|
|
|
|
13.4
|
%
|
|
11.9
|
%
|
|
|
|
12.9
|
%
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change
increase (decrease) |
|
2018
|
|
2019
|
|
Change
increase (decrease) |
|
2018
|
||||||||||||
Cloud Services and Subscriptions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
170,519
|
|
|
$
|
25,302
|
|
|
$
|
145,217
|
|
|
$
|
337,075
|
|
|
$
|
53,242
|
|
|
$
|
283,833
|
|
EMEA
|
56,054
|
|
|
2,092
|
|
|
53,962
|
|
|
104,497
|
|
|
1,816
|
|
|
102,681
|
|
||||||
Asia Pacific
|
21,767
|
|
|
1,713
|
|
|
20,054
|
|
|
44,033
|
|
|
3,231
|
|
|
40,802
|
|
||||||
Total Cloud Services and Subscriptions Revenues
|
248,340
|
|
|
29,107
|
|
|
219,233
|
|
|
485,605
|
|
|
58,289
|
|
|
427,316
|
|
||||||
Cost of Cloud Services and Subscriptions Revenues
|
103,644
|
|
|
14,946
|
|
|
88,698
|
|
|
205,806
|
|
|
29,405
|
|
|
176,401
|
|
||||||
GAAP-based Cloud Services and Subscriptions Gross Profit
|
$
|
144,696
|
|
|
$
|
14,161
|
|
|
$
|
130,535
|
|
|
$
|
279,799
|
|
|
$
|
28,884
|
|
|
$
|
250,915
|
|
GAAP-based Cloud Services and Subscriptions Gross Margin %
|
58.3
|
%
|
|
|
|
59.5
|
%
|
|
57.6
|
%
|
|
|
|
58.7
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
% Cloud Services and Subscriptions Revenues by Geography:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
68.7
|
%
|
|
|
|
66.2
|
%
|
|
69.4
|
%
|
|
|
|
66.4
|
%
|
||||||||
EMEA
|
22.5
|
%
|
|
|
|
24.6
|
%
|
|
21.5
|
%
|
|
|
|
24.0
|
%
|
||||||||
Asia Pacific
|
8.8
|
%
|
|
|
|
9.2
|
%
|
|
9.1
|
%
|
|
|
|
9.6
|
%
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change
increase (decrease) |
|
2018
|
|
2019
|
|
Change
increase (decrease) |
|
2018
|
||||||||||||
Customer Support Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
181,563
|
|
|
$
|
3,559
|
|
|
$
|
178,004
|
|
|
$
|
361,006
|
|
|
$
|
4,615
|
|
|
$
|
356,391
|
|
EMEA
|
108,128
|
|
|
1,075
|
|
|
107,053
|
|
|
215,075
|
|
|
214
|
|
|
214,861
|
|
||||||
Asia Pacific
|
25,817
|
|
|
520
|
|
|
25,297
|
|
|
51,725
|
|
|
1,072
|
|
|
50,653
|
|
||||||
Total Customer Support Revenues
|
315,508
|
|
|
5,154
|
|
|
310,354
|
|
|
627,806
|
|
|
5,901
|
|
|
621,905
|
|
||||||
Cost of Customer Support Revenues
|
29,788
|
|
|
(1,485
|
)
|
|
31,273
|
|
|
59,175
|
|
|
(2,563
|
)
|
|
61,738
|
|
||||||
GAAP-based Customer Support Gross Profit
|
$
|
285,720
|
|
|
$
|
6,639
|
|
|
$
|
279,081
|
|
|
$
|
568,631
|
|
|
$
|
8,464
|
|
|
$
|
560,167
|
|
GAAP-based Customer Support Gross Margin %
|
90.6
|
%
|
|
|
|
89.9
|
%
|
|
90.6
|
%
|
|
|
|
90.1
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
% Customer Support Revenues by Geography:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
57.5
|
%
|
|
|
|
57.4
|
%
|
|
57.5
|
%
|
|
|
|
57.3
|
%
|
||||||||
EMEA
|
34.3
|
%
|
|
|
|
34.5
|
%
|
|
34.3
|
%
|
|
|
|
34.5
|
%
|
||||||||
Asia Pacific
|
8.2
|
%
|
|
|
|
8.1
|
%
|
|
8.2
|
%
|
|
|
|
8.2
|
%
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change
increase (decrease) |
|
2018
|
|
2019
|
|
Change
increase (decrease) |
|
2018
|
||||||||||||
Professional Service and Other Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
32,348
|
|
|
$
|
997
|
|
|
$
|
31,351
|
|
|
$
|
66,823
|
|
|
$
|
2,408
|
|
|
$
|
64,415
|
|
EMEA
|
29,985
|
|
|
(4,072
|
)
|
|
34,057
|
|
|
58,070
|
|
|
(5,591
|
)
|
|
63,661
|
|
||||||
Asia Pacific
|
7,281
|
|
|
(199
|
)
|
|
7,480
|
|
|
14,148
|
|
|
(1,300
|
)
|
|
15,448
|
|
||||||
Total Professional Service and Other Revenues
|
69,614
|
|
|
(3,274
|
)
|
|
72,888
|
|
|
139,041
|
|
|
(4,483
|
)
|
|
143,524
|
|
||||||
Cost of Professional Service and Other Revenues
|
53,604
|
|
|
(2,426
|
)
|
|
56,030
|
|
|
107,942
|
|
|
(4,884
|
)
|
|
112,826
|
|
||||||
GAAP-based Professional Service and Other Gross Profit
|
$
|
16,010
|
|
|
$
|
(848
|
)
|
|
$
|
16,858
|
|
|
$
|
31,099
|
|
|
$
|
401
|
|
|
$
|
30,698
|
|
GAAP-based Professional Service and Other Gross Margin %
|
23.0
|
%
|
|
|
|
23.1
|
%
|
|
22.4
|
%
|
|
|
|
21.4
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
% Professional Service and Other Revenues by Geography:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
46.5
|
%
|
|
|
|
43.0
|
%
|
|
48.1
|
%
|
|
|
|
44.9
|
%
|
||||||||
EMEA
|
43.1
|
%
|
|
|
|
46.7
|
%
|
|
41.8
|
%
|
|
|
|
44.4
|
%
|
||||||||
Asia Pacific
|
10.4
|
%
|
|
|
|
10.3
|
%
|
|
10.1
|
%
|
|
|
|
10.7
|
%
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change
increase (decrease) |
|
2018
|
|
2019
|
|
Change
increase (decrease) |
|
2018
|
||||||||||||
Amortization of acquired technology-based intangible assets
|
$
|
42,299
|
|
|
$
|
(6,067
|
)
|
|
$
|
48,366
|
|
|
$
|
82,597
|
|
|
$
|
(13,246
|
)
|
|
$
|
95,843
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change
increase (decrease) |
|
2018
|
|
2019
|
|
Change
increase (decrease) |
|
2018
|
||||||||||||
Research and development
|
$
|
80,283
|
|
|
$
|
4,530
|
|
|
$
|
75,753
|
|
|
$
|
161,461
|
|
|
$
|
8,238
|
|
|
$
|
153,223
|
|
Sales and marketing
|
137,310
|
|
|
11,117
|
|
|
126,193
|
|
|
265,928
|
|
|
19,553
|
|
|
246,375
|
|
||||||
General and administrative
|
54,595
|
|
|
2,397
|
|
|
52,198
|
|
|
106,130
|
|
|
3,008
|
|
|
103,122
|
|
||||||
Depreciation
|
20,712
|
|
|
(3,122
|
)
|
|
23,834
|
|
|
40,989
|
|
|
(6,699
|
)
|
|
47,688
|
|
||||||
Amortization of acquired customer-based intangible assets
|
51,460
|
|
|
5,541
|
|
|
45,919
|
|
|
100,618
|
|
|
8,823
|
|
|
91,795
|
|
||||||
Special charges (recoveries)
|
10,072
|
|
|
692
|
|
|
9,380
|
|
|
15,173
|
|
|
(17,518
|
)
|
|
32,691
|
|
||||||
Total operating expenses
|
$
|
354,432
|
|
|
$
|
21,155
|
|
|
$
|
333,277
|
|
|
$
|
690,299
|
|
|
$
|
15,405
|
|
|
$
|
674,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
% of Total Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research and development
|
10.4
|
%
|
|
|
|
10.3
|
%
|
|
11.0
|
%
|
|
|
|
10.9
|
%
|
||||||||
Sales and marketing
|
17.8
|
%
|
|
|
|
17.2
|
%
|
|
18.1
|
%
|
|
|
|
17.6
|
%
|
||||||||
General and administrative
|
7.1
|
%
|
|
|
|
7.1
|
%
|
|
7.2
|
%
|
|
|
|
7.4
|
%
|
||||||||
Depreciation
|
2.7
|
%
|
|
|
|
3.2
|
%
|
|
2.8
|
%
|
|
|
|
3.4
|
%
|
||||||||
Amortization of acquired customer-based intangible assets
|
6.7
|
%
|
|
|
|
6.2
|
%
|
|
6.9
|
%
|
|
|
|
6.5
|
%
|
||||||||
Special charges (recoveries)
|
1.3
|
%
|
|
|
|
1.3
|
%
|
|
1.0
|
%
|
|
|
|
2.3
|
%
|
|
Change between Three Months Ended December 31, 2019 and 2018
|
|
Change between Six
Months Ended December 31, 2019 and 2018 |
||||
(In thousands)
|
increase (decrease)
|
|
increase (decrease)
|
||||
Payroll and payroll-related benefits
|
$
|
3,319
|
|
|
$
|
8,122
|
|
Contract labour and consulting
|
82
|
|
|
540
|
|
||
Share-based compensation
|
(21
|
)
|
|
(159
|
)
|
||
Travel and communication
|
29
|
|
|
(35
|
)
|
||
Facilities
|
798
|
|
|
(555
|
)
|
||
Other miscellaneous
|
323
|
|
|
325
|
|
||
Total change in research and development expenses
|
$
|
4,530
|
|
|
$
|
8,238
|
|
|
Change between Three Months Ended December 31, 2019 and 2018
|
|
Change between Six
Months Ended December 31, 2019 and 2018 |
||||
(In thousands)
|
increase (decrease)
|
|
increase (decrease)
|
||||
Payroll and payroll-related benefits
|
$
|
7,210
|
|
|
$
|
12,065
|
|
Commissions
|
4,297
|
|
|
7,300
|
|
||
Contract labour and consulting
|
(871
|
)
|
|
(799
|
)
|
||
Share-based compensation
|
169
|
|
|
484
|
|
||
Travel and communication
|
106
|
|
|
1,487
|
|
||
Marketing expenses
|
1,719
|
|
|
2,622
|
|
||
Facilities
|
912
|
|
|
1,548
|
|
||
Bad debt expense
|
(2,865
|
)
|
|
(4,586
|
)
|
||
Other miscellaneous
|
440
|
|
|
(568
|
)
|
||
Total change in sales and marketing expenses
|
$
|
11,117
|
|
|
$
|
19,553
|
|
|
Change between Three Months Ended December 31, 2019 and 2018
|
|
Change between Six
Months Ended December 31, 2019 and 2018 |
||||
(In thousands)
|
increase (decrease)
|
|
increase (decrease)
|
||||
Payroll and payroll-related benefits
|
$
|
3,912
|
|
|
$
|
6,762
|
|
Contract labour and consulting
|
(531
|
)
|
|
(1,149
|
)
|
||
Share-based compensation
|
715
|
|
|
1,073
|
|
||
Travel and communication
|
391
|
|
|
20
|
|
||
Facilities
|
(704
|
)
|
|
(380
|
)
|
||
Other miscellaneous
|
(1,386
|
)
|
|
(3,318
|
)
|
||
Total change in general and administrative expenses
|
$
|
2,397
|
|
|
$
|
3,008
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change
increase (decrease) |
|
2018
|
|
2019
|
|
Change
increase (decrease) |
|
2018
|
||||||||||||
Depreciation
|
$
|
20,712
|
|
|
$
|
(3,122
|
)
|
|
$
|
23,834
|
|
|
$
|
40,989
|
|
|
$
|
(6,699
|
)
|
|
$
|
47,688
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change
increase (decrease) |
|
2018
|
|
2019
|
|
Change
increase (decrease) |
|
2018
|
||||||||||||
Amortization of acquired customer-based intangible assets
|
$
|
51,460
|
|
|
$
|
5,541
|
|
|
$
|
45,919
|
|
|
$
|
100,618
|
|
|
$
|
8,823
|
|
|
$
|
91,795
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change increase (decrease)
|
|
2018
|
|
2019
|
|
Change increase (decrease)
|
|
2018
|
||||||||||||
Special charges (recoveries)
|
$
|
10,072
|
|
|
$
|
692
|
|
|
$
|
9,380
|
|
|
$
|
15,173
|
|
|
$
|
(17,518
|
)
|
|
$
|
32,691
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change increase (decrease)
|
|
2018
|
|
2019
|
|
Change increase (decrease)
|
|
2018
|
||||||||||||
Foreign exchange gains (losses)
|
$
|
352
|
|
|
$
|
5,568
|
|
|
$
|
(5,216
|
)
|
|
$
|
(3,307
|
)
|
|
$
|
2,850
|
|
|
$
|
(6,157
|
)
|
OpenText share in net income (loss) of equity investees (note 9)
|
1,266
|
|
|
(4,225
|
)
|
|
5,491
|
|
|
1,948
|
|
|
(5,915
|
)
|
|
7,863
|
|
||||||
Other miscellaneous income (expense)
|
354
|
|
|
251
|
|
|
103
|
|
|
546
|
|
|
352
|
|
|
194
|
|
||||||
Total other income (expense), net
|
$
|
1,972
|
|
|
$
|
1,594
|
|
|
$
|
378
|
|
|
$
|
(813
|
)
|
|
$
|
(2,713
|
)
|
|
$
|
1,900
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change increase (decrease)
|
|
2018
|
|
2019
|
|
Change increase (decrease)
|
|
2018
|
||||||||||||
Interest expense related to total outstanding debt (1)
|
$
|
33,778
|
|
|
$
|
(601
|
)
|
|
$
|
34,379
|
|
|
$
|
67,944
|
|
|
$
|
(278
|
)
|
|
$
|
68,222
|
|
Interest income
|
(3,474
|
)
|
|
(850
|
)
|
|
(2,624
|
)
|
|
(7,423
|
)
|
|
(4,064
|
)
|
|
(3,359
|
)
|
||||||
Other miscellaneous expense
|
2,072
|
|
|
214
|
|
|
1,858
|
|
|
4,065
|
|
|
784
|
|
|
3,281
|
|
||||||
Total interest and other related expense, net
|
$
|
32,376
|
|
|
$
|
(1,237
|
)
|
|
$
|
33,613
|
|
|
$
|
64,586
|
|
|
$
|
(3,558
|
)
|
|
$
|
68,144
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||||||||||||||
(In thousands)
|
2019
|
|
Change increase (decrease)
|
|
2018
|
|
2019
|
|
Change increase (decrease)
|
|
2018
|
||||||||||||
Provision for (recovery of) income taxes
|
$
|
46,818
|
|
|
$
|
10,582
|
|
|
$
|
36,236
|
|
|
$
|
69,909
|
|
|
$
|
3,823
|
|
|
$
|
66,086
|
|
|
Three Months Ended December 31, 2019
|
|||||||||||
|
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
|
$
|
103,644
|
|
|
$
|
(371
|
)
|
(1)
|
$
|
103,273
|
|
|
Customer support
|
29,788
|
|
|
(297
|
)
|
(1)
|
29,491
|
|
|
|||
Professional service and other
|
53,604
|
|
|
(346
|
)
|
(1)
|
53,258
|
|
|
|||
Amortization of acquired technology-based intangible assets
|
42,299
|
|
|
(42,299
|
)
|
(2)
|
—
|
|
|
|||
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross margin (%) |
539,172
|
|
69.9%
|
43,313
|
|
(3)
|
582,485
|
|
75.5%
|
|||
Operating expenses
|
|
|
|
|
|
|
||||||
Research and development
|
80,283
|
|
|
(1,255
|
)
|
(1)
|
79,028
|
|
|
|||
Sales and marketing
|
137,310
|
|
|
(2,383
|
)
|
(1)
|
134,927
|
|
|
|||
General and administrative
|
54,595
|
|
|
(3,131
|
)
|
(1)
|
51,464
|
|
|
|||
Amortization of acquired customer-based intangible assets
|
51,460
|
|
|
(51,460
|
)
|
(2)
|
—
|
|
|
|||
Special charges (recoveries)
|
10,072
|
|
|
(10,072
|
)
|
(4)
|
—
|
|
|
|||
GAAP-based income from operations / Non-GAAP-based income from operations
|
184,740
|
|
|
111,614
|
|
(5)
|
296,354
|
|
|
|||
Other income (expense), net
|
1,972
|
|
|
(1,972
|
)
|
(6)
|
—
|
|
|
|||
Provision for (recovery of) income taxes
|
46,818
|
|
|
(9,861
|
)
|
(7)
|
36,957
|
|
|
|||
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText
|
107,467
|
|
|
119,503
|
|
(8)
|
226,970
|
|
|
|||
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText
|
$
|
0.40
|
|
|
$
|
0.44
|
|
(8)
|
$
|
0.84
|
|
|
(1)
|
Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.
|
(2)
|
Adjustment relates to the exclusion of amortization expense from our Non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
|
(3)
|
GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.
|
(4)
|
Adjustment relates to the exclusion of Special charges (recoveries) from our Non-GAAP-based operating expenses as Special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations, and are therefore excluded from our internal analysis of operating results. 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 non-marketable securities 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:
|
|
Three Months Ended December 31, 2019
|
|
||||
|
|
Per share diluted
|
|
|||
GAAP-based net income, attributable to OpenText
|
$
|
107,467
|
|
$
|
0.40
|
|
Add:
|
|
|
||||
Amortization
|
93,759
|
|
0.35
|
|
||
Share-based compensation
|
7,783
|
|
0.03
|
|
||
Special charges (recoveries)
|
10,072
|
|
0.04
|
|
||
Other (income) expense, net
|
(1,972
|
)
|
(0.01
|
)
|
||
GAAP-based provision for (recovery of) income taxes
|
46,818
|
|
0.17
|
|
||
Non-GAAP-based provision for income taxes
|
(36,957
|
)
|
(0.14
|
)
|
||
Non-GAAP-based net income, attributable to OpenText
|
$
|
226,970
|
|
$
|
0.84
|
|
|
Three Months Ended December 31, 2019
|
||
GAAP-based net income, attributable to OpenText
|
$
|
107,467
|
|
Add:
|
|
||
Provision for (recovery of) income taxes
|
46,818
|
|
|
Interest and other related expense, net
|
32,376
|
|
|
Amortization of acquired technology-based intangible assets
|
42,299
|
|
|
Amortization of acquired customer-based intangible assets
|
51,460
|
|
|
Depreciation
|
20,712
|
|
|
Share-based compensation
|
7,783
|
|
|
Special charges (recoveries)
|
10,072
|
|
|
Other (income) expense, net
|
(1,972
|
)
|
|
Adjusted EBITDA
|
$
|
317,015
|
|
|
Three Months Ended December 31, 2018
|
|||||||||||
|
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
|
$
|
88,698
|
|
|
$
|
(265
|
)
|
(1)
|
$
|
88,433
|
|
|
Customer support
|
31,273
|
|
|
(271
|
)
|
(1)
|
31,002
|
|
|
|||
Professional service and other
|
56,030
|
|
|
(358
|
)
|
(1)
|
55,672
|
|
|
|||
Amortization of acquired technology-based intangible assets
|
48,366
|
|
|
(48,366
|
)
|
(2)
|
—
|
|
|
|||
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross margin (%) |
507,209
|
|
69.0%
|
49,260
|
|
(3)
|
556,469
|
|
75.7%
|
|||
Operating expenses
|
|
|
|
|
|
|
||||||
Research and development
|
75,753
|
|
|
(994
|
)
|
(1)
|
74,759
|
|
|
|||
Sales and marketing
|
126,193
|
|
|
(1,615
|
)
|
(1)
|
124,578
|
|
|
|||
General and administrative
|
52,198
|
|
|
(3,382
|
)
|
(1)
|
48,816
|
|
|
|||
Amortization of acquired customer-based intangible assets
|
45,919
|
|
|
(45,919
|
)
|
(2)
|
—
|
|
|
|||
Special charges (recoveries)
|
9,380
|
|
|
(9,380
|
)
|
(4)
|
—
|
|
|
|||
GAAP-based income from operations / Non-GAAP-based income from operations
|
173,932
|
|
|
110,550
|
|
(5)
|
284,482
|
|
|
|||
Other income (expense), net
|
378
|
|
|
(378
|
)
|
(6)
|
—
|
|
|
|||
Provision for (recovery of) income taxes
|
36,236
|
|
|
(1,114
|
)
|
(7)
|
35,122
|
|
|
|||
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText
|
104,432
|
|
|
111,286
|
|
(8)
|
215,718
|
|
|
|||
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText
|
$
|
0.39
|
|
|
$
|
0.41
|
|
(8)
|
$
|
0.80
|
|
|
(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 non-marketable securities 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 December 31, 2018
|
|||||
|
|
Per share diluted
|
||||
GAAP-based net income, attributable to OpenText
|
$
|
104,432
|
|
$
|
0.39
|
|
Add:
|
|
|
||||
Amortization
|
94,285
|
|
0.35
|
|
||
Share-based compensation
|
6,885
|
|
0.03
|
|
||
Special charges (recoveries)
|
9,380
|
|
0.03
|
|
||
Other (income) expense, net
|
(378
|
)
|
—
|
|
||
GAAP-based provision for (recovery of) income taxes
|
36,236
|
|
0.13
|
|
||
Non-GAAP-based provision for income taxes
|
(35,122
|
)
|
(0.13
|
)
|
||
Non-GAAP-based net income, attributable to OpenText
|
$
|
215,718
|
|
$
|
0.80
|
|
|
Three Months Ended December 31, 2018
|
||
GAAP-based net income, attributable to OpenText
|
$
|
104,432
|
|
Add:
|
|
||
Provision for (recovery of) income taxes
|
36,236
|
|
|
Interest and other related expense, net
|
33,613
|
|
|
Amortization of acquired technology-based intangible assets
|
48,366
|
|
|
Amortization of acquired customer-based intangible assets
|
45,919
|
|
|
Depreciation
|
23,834
|
|
|
Share-based compensation
|
6,885
|
|
|
Special charges (recoveries)
|
9,380
|
|
|
Other (income) expense, net
|
(378
|
)
|
|
Adjusted EBITDA
|
$
|
308,287
|
|
|
Six Months Ended December 31, 2019
|
|||||||||||
|
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
|
$
|
205,806
|
|
|
$
|
(754
|
)
|
(1)
|
$
|
205,052
|
|
|
Customer support
|
59,175
|
|
|
(613
|
)
|
(1)
|
58,562
|
|
|
|||
Professional service and other
|
107,942
|
|
|
(589
|
)
|
(1)
|
107,353
|
|
|
|||
Amortization of acquired technology-based intangible assets
|
82,597
|
|
|
(82,597
|
)
|
(2)
|
—
|
|
|
|||
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross margin (%) |
1,007,552
|
|
68.6%
|
84,553
|
|
(3)
|
1,092,105
|
|
74.4%
|
|||
Operating expenses
|
|
|
|
|
|
|
||||||
Research and development
|
161,461
|
|
|
(2,476
|
)
|
(1)
|
158,985
|
|
|
|||
Sales and marketing
|
265,928
|
|
|
(4,499
|
)
|
(1)
|
261,429
|
|
|
|||
General and administrative
|
106,130
|
|
|
(5,743
|
)
|
(1)
|
100,387
|
|
|
|||
Amortization of acquired customer-based intangible assets
|
100,618
|
|
|
(100,618
|
)
|
(2)
|
—
|
|
|
|||
Special charges (recoveries)
|
15,173
|
|
|
(15,173
|
)
|
(4)
|
—
|
|
|
|||
GAAP-based income from operations / Non-GAAP-based income from operations
|
317,253
|
|
|
213,062
|
|
(5)
|
530,315
|
|
|
|||
Other income (expense), net
|
(813
|
)
|
|
813
|
|
(6)
|
—
|
|
|
|||
Provision for (recovery of) income taxes
|
69,909
|
|
|
(4,707
|
)
|
(7)
|
65,202
|
|
|
|||
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText
|
181,868
|
|
|
218,582
|
|
(8)
|
400,450
|
|
|
|||
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText
|
$
|
0.67
|
|
|
$
|
0.81
|
|
(8)
|
$
|
1.48
|
|
|
(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 non-marketable securities 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 28% 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:
|
|
Six Months Ended December 31, 2019
|
|||||
|
|
Per share diluted
|
|
|||
GAAP-based net income, attributable to OpenText
|
$
|
181,868
|
|
$
|
0.67
|
|
Add:
|
|
|
||||
Amortization
|
183,215
|
|
0.68
|
|
||
Share-based compensation
|
14,674
|
|
0.05
|
|
||
Special charges (recoveries)
|
15,173
|
|
0.06
|
|
||
Other (income) expense, net
|
813
|
|
—
|
|
||
GAAP-based provision for (recovery of) income taxes
|
69,909
|
|
0.26
|
|
||
Non-GAAP-based provision for income taxes
|
(65,202
|
)
|
(0.24
|
)
|
||
Non-GAAP-based net income, attributable to OpenText
|
$
|
400,450
|
|
$
|
1.48
|
|
|
Six Months Ended December 31, 2019
|
||
GAAP-based net income, attributable to OpenText
|
$
|
181,868
|
|
Add:
|
|
||
Provision for (recovery of) income taxes
|
69,909
|
|
|
Interest and other related expense, net
|
64,586
|
|
|
Amortization of acquired technology-based intangible assets
|
82,597
|
|
|
Amortization of acquired customer-based intangible assets
|
100,618
|
|
|
Depreciation
|
40,989
|
|
|
Share-based compensation
|
14,674
|
|
|
Special charges (recoveries)
|
15,173
|
|
|
Other (income) expense, net
|
813
|
|
|
Adjusted EBITDA
|
$
|
571,227
|
|
|
Six Months Ended December 31, 2018
|
|||||||||||
|
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
|
$
|
176,401
|
|
|
$
|
(582
|
)
|
(1)
|
$
|
175,819
|
|
|
Customer support
|
61,738
|
|
|
(571
|
)
|
(1)
|
61,167
|
|
|
|||
Professional service and other
|
112,826
|
|
|
(882
|
)
|
(1)
|
111,944
|
|
|
|||
Amortization of acquired technology-based intangible assets
|
95,843
|
|
|
(95,843
|
)
|
(2)
|
—
|
|
|
|||
GAAP-based gross profit and gross margin (%) /
Non-GAAP-based gross profit and gross margin (%) |
948,053
|
|
67.6%
|
97,878
|
|
(3)
|
1,045,931
|
|
74.6%
|
|||
Operating expenses
|
|
|
|
|
|
|
||||||
Research and development
|
153,223
|
|
|
(2,353
|
)
|
(1)
|
150,870
|
|
|
|||
Sales and marketing
|
246,375
|
|
|
(3,416
|
)
|
(1)
|
242,959
|
|
|
|||
General and administrative
|
103,122
|
|
|
(5,636
|
)
|
(1)
|
97,486
|
|
|
|||
Amortization of acquired customer-based intangible assets
|
91,795
|
|
|
(91,795
|
)
|
(2)
|
—
|
|
|
|||
Special charges (recoveries)
|
32,691
|
|
|
(32,691
|
)
|
(4)
|
—
|
|
|
|||
GAAP-based income from operations / Non-GAAP-based income from operations
|
273,159
|
|
|
233,769
|
|
(5)
|
506,928
|
|
|
|||
Other income (expense), net
|
1,900
|
|
|
(1,900
|
)
|
(6)
|
—
|
|
|
|||
Provision for (recovery of) income taxes
|
66,086
|
|
|
(4,656
|
)
|
(7)
|
61,430
|
|
|
|||
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText
|
140,756
|
|
|
236,525
|
|
(8)
|
377,281
|
|
|
|||
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText
|
$
|
0.52
|
|
|
$
|
0.88
|
|
(8)
|
$
|
1.40
|
|
|
(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 non-marketable securities 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 32% 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:
|
|
Six Months Ended December 31, 2018
|
|||||
|
|
Per share diluted
|
||||
GAAP-based net income, attributable to OpenText
|
$
|
140,756
|
|
$
|
0.52
|
|
Add:
|
|
|
||||
Amortization
|
187,638
|
|
0.70
|
|
||
Share-based compensation
|
13,440
|
|
0.05
|
|
||
Special charges (recoveries)
|
32,691
|
|
0.12
|
|
||
Other (income) expense, net
|
(1,900
|
)
|
(0.01
|
)
|
||
GAAP-based provision for (recovery of) income taxes
|
66,086
|
|
0.25
|
|
||
Non-GAAP-based provision for income taxes
|
(61,430
|
)
|
(0.23
|
)
|
||
Non-GAAP-based net income, attributable to OpenText
|
$
|
377,281
|
|
$
|
1.40
|
|
|
Six Months Ended December 31, 2018
|
||
GAAP-based net income, attributable to OpenText
|
$
|
140,756
|
|
Add:
|
|
||
Provision for (recovery of) income taxes
|
66,086
|
|
|
Interest and other related expense, net
|
68,144
|
|
|
Amortization of acquired technology-based intangible assets
|
95,843
|
|
|
Amortization of acquired customer-based intangible assets
|
91,795
|
|
|
Depreciation
|
47,688
|
|
|
Share-based compensation
|
13,440
|
|
|
Special charges (recoveries)
|
32,691
|
|
|
Other (income) expense, net
|
(1,900
|
)
|
|
Adjusted EBITDA
|
$
|
554,543
|
|
(In thousands)
|
As of December 31, 2019
|
|
Change
increase (decrease)
|
|
As of June 30, 2019
|
||||||
Cash and cash equivalents
|
$
|
675,403
|
|
|
$
|
(265,606
|
)
|
|
$
|
941,009
|
|
Restricted cash included in other assets
|
4,829
|
|
|
2,295
|
|
|
2,534
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
680,232
|
|
|
$
|
(263,311
|
)
|
|
$
|
943,543
|
|
|
Six Months Ended December 31,
|
||||||||||
(In thousands)
|
2019
|
|
Change
|
|
2018
|
||||||
Cash provided by operating activities
|
$
|
344,685
|
|
|
$
|
(15,819
|
)
|
|
$
|
360,504
|
|
Cash used in investing activities
|
$
|
(1,264,541
|
)
|
|
$
|
(911,140
|
)
|
|
$
|
(353,401
|
)
|
Cash used in financing activities
|
$
|
660,616
|
|
|
$
|
747,935
|
|
|
$
|
(87,319
|
)
|
|
Fiscal years ending June 30,
|
||||||||||
|
CDT
|
|
GXS GER
|
|
GXS PHP
|
||||||
2020 (six months ended June 30)
|
$
|
331
|
|
|
$
|
493
|
|
|
$
|
31
|
|
2021
|
739
|
|
|
985
|
|
|
268
|
|
|||
2022
|
810
|
|
|
1,017
|
|
|
266
|
|
|||
2023
|
909
|
|
|
1,017
|
|
|
222
|
|
|||
2024
|
1,014
|
|
|
1,023
|
|
|
278
|
|
|||
2025 to 2029
|
5,851
|
|
|
5,171
|
|
|
2,890
|
|
|||
Total
|
$
|
9,654
|
|
|
$
|
9,706
|
|
|
$
|
3,955
|
|
|
Payments due between
|
||||||||||||||||||
|
Total
|
|
January 1, 2020—
June 30, 2020 |
|
July 1, 2020—
June 30, 2022 |
|
July 1, 2022—
June 30, 2024 |
|
July 1, 2024
and beyond |
||||||||||
Long-term debt obligations (1)
|
$
|
3,449,651
|
|
|
$
|
223,222
|
|
|
$
|
277,680
|
|
|
$
|
1,031,371
|
|
|
$
|
1,917,378
|
|
Purchase obligations for contracts not accounted for as lease obligations (2)
|
60,978
|
|
|
23,135
|
|
|
32,843
|
|
|
5,000
|
|
|
—
|
|
|||||
|
$
|
3,510,629
|
|
|
$
|
246,357
|
|
|
$
|
310,523
|
|
|
$
|
1,036,371
|
|
|
$
|
1,917,378
|
|
(In thousands)
|
|
U.S. Dollar
Equivalent at December 31, 2019 |
|
U.S. Dollar
Equivalent at June 30, 2019 |
||||
Euro
|
|
$
|
58,020
|
|
|
$
|
120,417
|
|
British Pound
|
|
30,603
|
|
|
33,703
|
|
||
Canadian Dollar
|
|
15,678
|
|
|
12,635
|
|
||
Swiss Franc
|
|
34,163
|
|
|
56,776
|
|
||
Other foreign currencies
|
|
97,856
|
|
|
105,273
|
|
||
Total cash and cash equivalents denominated in foreign currencies
|
|
236,320
|
|
|
328,804
|
|
||
U.S. dollar
|
|
439,083
|
|
|
612,205
|
|
||
Total cash and cash equivalents
|
|
$
|
675,403
|
|
|
$
|
941,009
|
|
•
|
Difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the acquisition;
|
•
|
Difficulties in the integration of operations and systems, including pricing and marketing strategies, which may hurt the sale of hybrid backup solutions which are sensitive to price; and
|
•
|
Difficulties in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures.
|
Exhibit
Number
|
|
Description of Exhibit
|
2.1
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
10.1
|
|
|
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)
|
|
(Acting Principal Accounting Officer)
|
|
|
|
|
|
|
|
PAGE
|
ARTICLE 1
|
|||
DEFINITIONS
|
|||
|
|
|
|
Section 1.01.
|
|
Definitions
|
1
|
Section 1.02.
|
|
References to Interest
|
13
|
|
|||
ARTICLE 2
|
|||
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
|
|||
|
|
|
|
Section 2.01.
|
|
Designation and Amount
|
13
|
Section 2.02.
|
|
Form of Notes
|
13
|
Section 2.03.
|
|
Date and Denomination of Notes; Payments of Interest and Defaulted Amounts
|
14
|
Section 2.04.
|
|
Execution, Authentication and Delivery of Notes
|
15
|
Section 2.05.
|
|
Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary
|
16
|
Section 2.06.
|
|
Mutilated, Destroyed, Lost or Stolen Notes
|
22
|
Section 2.07.
|
|
Temporary Notes
|
23
|
Section 2.08.
|
|
Cancellation of Notes Paid, Converted, Etc.
|
24
|
Section 2.09.
|
|
CUSIP Numbers
|
24
|
Section 2.10.
|
|
Additional Notes; Purchases
|
24
|
Section 2.11.
|
|
Ranking
|
25
|
|
|||
ARTICLE 3
|
|||
SATISFACTION AND DISCHARGE
|
|||
|
|
|
|
Section 3.01.
|
|
Satisfaction and Discharge
|
25
|
|
|||
ARTICLE 4
|
|||
PARTICULAR COVENANTS OF THE COMPANY
|
|||
|
|
|
|
Section 4.01.
|
|
Payment of Principal and Interest
|
26
|
Section 4.02.
|
|
Maintenance of Office or Agency
|
26
|
Section 4.03.
|
|
Appointments to Fill Vacancies in Trustee’s Office
|
27
|
Section 4.04.
|
|
Provisions as to Paying Agent
|
27
|
Section 4.05.
|
|
[Reserved]
|
28
|
Section 4.06.
|
|
Rule 144A Information Requirement; Reporting; and Additional Interest
|
28
|
Section 4.07.
|
|
Stay, Extension and Usury Laws
|
30
|
Section 4.08.
|
|
Compliance Certificate; Statements as to Defaults
|
30
|
|
|
|
|
|
ARTICLE 5.
|
||||
[RESERVED]
|
||||
|
||||
ARTICLE 6
|
||||
DEFAULTS AND REMEDIES
|
||||
|
|
|
||
Section 6.01.
|
|
Events of Default
|
30
|
|
Section 6.02.
|
|
Acceleration
|
32
|
|
Section 6.03.
|
|
Additional Interest
|
32
|
|
Section 6.04.
|
|
Payments of Notes on Default; Suit Therefor
|
34
|
|
Section 6.05.
|
|
Application of Monies Collected by Trustee
|
35
|
|
Section 6.06.
|
|
Proceedings by Holders
|
36
|
|
Section 6.07.
|
|
Proceedings by Trustee
|
36
|
|
Section 6.08.
|
|
Remedies Cumulative and Continuing
|
37
|
|
Section 6.09.
|
|
Direction of Proceedings and Waiver of Defaults by Majority of Holders
|
37
|
|
Section 6.10.
|
|
Notice of Defaults
|
38
|
|
Section 6.11.
|
|
Undertaking to Pay Costs
|
38
|
|
|
||||
ARTICLE 7
|
||||
CONCERNING THE TRUSTEE
|
||||
|
|
|
||
Section 7.01.
|
|
Duties and Responsibilities of Trustee
|
38
|
|
Section 7.02.
|
|
Certain Rights of the Trustee
|
40
|
|
Section 7.03.
|
|
No Responsibility for Recitals, Etc.
|
41
|
|
Section 7.04.
|
|
Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note Registrar May Own Notes
|
42
|
|
Section 7.05.
|
|
Monies and Shares of Common Stock to Be Held in Trust
|
42
|
|
Section 7.06.
|
|
Compensation and Expenses of Trustee
|
42
|
|
Section 7.07.
|
|
Officer’s Certificate as Evidence
|
43
|
|
Section 7.08.
|
|
Eligibility of Trustee
|
43
|
|
Section 7.09.
|
|
Resignation or Removal of Trustee
|
43
|
|
Section 7.10.
|
|
Acceptance by Successor Trustee
|
44
|
|
Section 7.11.
|
|
Succession by Merger, Etc.
|
45
|
|
Section 7.12.
|
|
Trustee’s Application for Instructions from the Company
|
46
|
|
Section 7.13.
|
|
Conflicting Interests of Trustee
|
46
|
|
Section 7.14
|
|
Limitation on Trustee’s Liability
|
46
|
|
|
||||
ARTICLE 8
|
||||
CONCERNING THE HOLDERS
|
||||
|
|
|
||
Section 8.01.
|
|
Action by Holders
|
46
|
|
Section 8.02.
|
|
Proof of Execution by Holders
|
46
|
|
Section 8.03.
|
|
Who Are Deemed Absolute Owners
|
47
|
|
Section 8.04.
|
|
Company-Owned Notes Disregarded
|
47
|
|
Section 8.05.
|
|
Revocation of Consents; Future Holders Bound
|
47
|
|
|
|
|
|
ARTICLE 9
|
|||
[RESERVED]
|
|||
|
|||
ARTICLE 10
|
|||
SUPPLEMENTAL INDENTURES
|
|||
|
|
|
|
Section 10.01.
|
|
Supplemental Indentures Without Consent of Holders
|
48
|
Section 10.02.
|
|
Supplemental Indentures with Consent of Holders
|
49
|
Section 10.03.
|
|
Effect of Amendment, Supplement and Waiver
|
50
|
Section 10.04.
|
|
Notation on Notes
|
50
|
Section 10.05.
|
|
Evidence of Compliance of Amendment, Supplement or Waiver to Be Furnished to Trustee
|
51
|
|
|||
ARTICLE 11
|
|||
CONSOLIDATION, MERGER AND SALE
|
|||
|
|
|
|
Section 11.01.
|
|
Company May Consolidate, Etc. on Certain Terms
|
51
|
Section 11.02.
|
|
Opinion of Counsel to Be Given to Trustee
|
52
|
|
|||
ARTICLE 12
|
|||
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
|
|||
|
|
|
|
Section 12.01.
|
|
Indenture and Notes Solely Corporate Obligations
|
52
|
|
|||
ARTICLE 13
|
|||
[RESERVED]
|
|||
|
|||
ARTICLE 14
|
|||
CONVERSION OF NOTES
|
|||
|
|
|
|
Section 14.01.
|
|
Conversion Privilege
|
53
|
Section 14.02.
|
|
Conversion Procedure; Settlement Upon Conversion
|
56
|
Section 14.03.
|
|
Increase in Conversion Rate Upon Conversion in Connection with a Make-Whole Fundamental Change or Redemption Notice
|
61
|
Section 14.04.
|
|
Adjustment of Conversion Rate
|
63
|
Section 14.05.
|
|
Adjustments of Prices
|
72
|
Section 14.06.
|
|
Shares to Be Fully Reserved
|
73
|
Section 14.07.
|
|
Effect of Recapitalizations, Reclassifications and Changes of the Common Stock
|
73
|
Section 14.08.
|
|
Certain Covenants
|
75
|
Section 14.09.
|
|
Responsibility of Trustee
|
75
|
Section 14.10.
|
|
Notice to Holders Prior to Certain Actions
|
76
|
Section 14.11.
|
|
Stockholder Rights Plans
|
77
|
|
|
|
|
ARTICLE 15
|
|||
PURCHASE OF NOTES AT OPTION OF HOLDERS
|
|||
|
|
|
|
Section 15.01.
|
|
Intentionally Omitted
|
77
|
Section 15.02.
|
|
Repurchase at Option of Holders Upon a Fundamental Change
|
77
|
Section 15.03.
|
|
Withdrawal of Fundamental Change Repurchase Notice
|
80
|
Section 15.04.
|
|
Deposit of Fundamental Change Repurchase Price
|
81
|
Section 15.05.
|
|
Covenant to Comply with Applicable Laws Upon Repurchase of Notes
|
82
|
|
|||
ARTICLE 16
|
|||
OPTIONAL REDEMPTION
|
|||
|
|
|
|
Section 16.01.
|
|
Optional Redemption
|
82
|
Section 16.02.
|
|
Notice of Optional Redemption; Selection of Notes
|
82
|
Section 16.03.
|
|
Payment of Notes Called for Redemption
|
84
|
Section 16.04.
|
|
Restrictions on Redemption
|
84
|
|
|||
ARTICLE 17
|
|||
MISCELLANEOUS PROVISIONS
|
|||
|
|
|
|
Section 17.01.
|
|
Provisions Binding on Company’s Successors
|
85
|
Section 17.02.
|
|
Official Acts by Successor Entity
|
85
|
Section 17.03.
|
|
Addresses for Notices, Etc.
|
85
|
Section 17.04.
|
|
Governing Law
|
86
|
Section 17.05.
|
|
Intentionally Omitted
|
86
|
Section 17.06.
|
|
Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee
|
86
|
Section 17.07.
|
|
Legal Holidays
|
86
|
Section 17.08.
|
|
No Security Interest Created
|
87
|
Section 17.09.
|
|
Benefits of Indenture
|
87
|
Section 17.10.
|
|
Table of Contents, Headings, Etc.
|
87
|
Section 17.11.
|
|
Authenticating Agent
|
87
|
Section 17.12.
|
|
Execution in Counterparts
|
88
|
Section 17.13.
|
|
Severability
|
88
|
Section 17.14.
|
|
Waiver of Jury Trial; Submission of Jurisdiction
|
88
|
Section 17.15.
|
|
Force Majeure
|
89
|
Section 17.16.
|
|
Calculations
|
89
|
Section 17.17.
|
|
U.S.A. Patriot Act
|
89
|
Section 17.18.
|
|
Tax Withholding
|
89
|
|
|
|
|
Exhibit A
|
|
Form of Note
|
A-1
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Date
|
$
|
19.50
|
|
|
$
|
22.50
|
|
|
$
|
25.84
|
|
|
$
|
30.00
|
|
|
$
|
35.00
|
|
|
$
|
40.00
|
|
|
$
|
50.00
|
|
|
$
|
60.00
|
|
|
$
|
70.00
|
|
|
$
|
80.00
|
|
|
$
|
90.00
|
|
|
$
|
100.00
|
|
|
$
|
120.00
|
|
April 4, 2017
|
12.5786
|
|
|
9.3480
|
|
|
6.9146
|
|
|
4.9196
|
|
|
3.4035
|
|
|
2.4353
|
|
|
1.3356
|
|
|
0.7722
|
|
|
0.4542
|
|
|
0.2631
|
|
|
0.1444
|
|
|
0.0697
|
|
|
0.0000
|
|
|||||||||||||
April 1, 2018
|
12.5786
|
|
|
8.9937
|
|
|
6.4879
|
|
|
4.4800
|
|
|
2.9996
|
|
|
2.0851
|
|
|
1.0905
|
|
|
0.6067
|
|
|
0.3437
|
|
|
0.1902
|
|
|
0.0972
|
|
|
0.0400
|
|
|
0.0000
|
|
|||||||||||||
April 1, 2019
|
12.5786
|
|
|
8.5839
|
|
|
5.9636
|
|
|
3.9314
|
|
|
2.4994
|
|
|
1.6602
|
|
|
0.8088
|
|
|
0.4271
|
|
|
0.2307
|
|
|
0.1200
|
|
|
0.0543
|
|
|
0.0153
|
|
|
0.0000
|
|
|||||||||||||
April 1, 2020
|
12.5786
|
|
|
8.0247
|
|
|
5.2280
|
|
|
3.1692
|
|
|
1.8285
|
|
|
1.1159
|
|
|
0.4829
|
|
|
0.2393
|
|
|
0.1233
|
|
|
0.0590
|
|
|
0.0205
|
|
|
0.0000
|
|
|
0.0000
|
|
|||||||||||||
April 1, 2021
|
12.5786
|
|
|
7.1138
|
|
|
4.0072
|
|
|
1.9555
|
|
|
0.8526
|
|
|
0.4048
|
|
|
0.1362
|
|
|
0.0683
|
|
|
0.0361
|
|
|
0.0143
|
|
|
0.0000
|
|
|
0.0000
|
|
|
0.0000
|
|
|||||||||||||
April 1, 2022
|
12.5786
|
|
|
5.7410
|
|
|
0.0000
|
|
|
0.0000
|
|
|
0.0000
|
|
|
0.0000
|
|
|
0.0000
|
|
|
0.0000
|
|
|
0.0000
|
|
|
0.0000
|
|
|
0.0000
|
|
|
0.0000
|
|
|
0.0000
|
|
CR1
|
=
|
CR0
|
x
|
OS1
|
|
|
|
|
OS0
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date of such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as applicable;
|
|
|
|
||
CR1
|
|
=
|
|
the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or effective date, as applicable;
|
|
|
|
|
|
OS0
|
|
=
|
|
the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or effective date, as applicable, before giving effect to such dividend, distribution, share split or share combination; and
|
|
|
|
||
OS1
|
|
=
|
|
the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination.
|
CR1
|
=
|
CR0
|
x
|
OS0 + X
|
|
|
|
|
OS0 + Y
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance;
|
|
|
|
||
CR1
|
|
=
|
|
the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;
|
|
|
|
||
OS0
|
|
=
|
|
the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date;
|
|
|
|
||
X
|
|
=
|
|
the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and
|
|
|
|
||
Y
|
|
=
|
|
the number of shares of Common Stock equal to (i) the aggregate price payable to exercise such rights, options or warrants, divided by (ii) the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants.
|
CR1
|
=
|
CR0
|
x
|
SP0
|
|
|
|
|
(SP0 - FMV)
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;
|
|
|
|
||
CR1
|
|
=
|
|
the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;
|
|
|
|
||
SP0
|
|
=
|
|
the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and
|
|
|
|
||
FMV
|
|
=
|
|
the fair market value (as determined by the Company in good faith) of the Distributed Property so distributed with respect to each outstanding share of the Common Stock on the Ex-Dividend Date for such distribution.
|
CR1
|
=
|
CR0
|
x
|
(FMV0 + MP0)
|
|
|
|
|
MP0
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately prior to the end of the Valuation Period;
|
|
|
|
||
CR1
|
|
=
|
|
the Conversion Rate in effect immediately after the end of the Valuation Period;
|
|
|
|
|
|
FMV0
|
|
=
|
|
the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in Section 1.01 as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the “Valuation Period”); and
|
|
|
|
||
MP0
|
|
=
|
|
the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period.
|
CR1
|
=
|
CR0
|
x
|
SP0
|
|
|
|
|
(SP0 - C)
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution;
|
|
|
|
||
CR1
|
|
=
|
|
the Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution;
|
|
|
|
||
SP0
|
|
=
|
|
the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and
|
|
|
|
||
C
|
|
=
|
|
the amount in cash per share the Company distributes to all or substantially all holders of the Common Stock.
|
CR1
|
=
|
CR0
|
x
|
(AC + (SP1 x OS1))
|
|
|
|
|
(OS0 - SP1)
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the Expiration Date;
|
|
|
|
||
CR1
|
|
=
|
|
the Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the Expiration Date;
|
|
|
|
||
AC
|
|
=
|
|
the aggregate value of all cash and any other consideration (as determined by the Company in good faith) paid or payable for shares of Common Stock purchased in such tender or exchange offer;
|
|
|
|
||
OS0
|
|
=
|
|
the number of shares of Common Stock outstanding immediately prior to the Expiration Date (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);
|
|
|
|
||
OS1
|
|
=
|
|
the number of shares of Common Stock outstanding immediately after the Expiration Date (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and
|
|
|
|
||
SP1
|
|
=
|
|
the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Expiration Date.
|
|
|
|
|
||||
,
|
|
||||||
as Authenticating Agent, certifies that this is one of the Notes described in the within-named Indenture.
|
|
||||||
|
|
|
|||||
|
|
||||||
By:
|
|
|
|||||
|
|
|
|
||||
Authorized Officer.
|
|
|
|
|
|
|
ISSUER:
|
||||
|
||||
CARBONITE, INC.
|
||||
|
|
|||
By:
|
|
|
||
|
|
Name:
|
|
Anthony Folger
|
|
|
Title:
|
|
Chief Financial Officer and Treasurer
|
|
|
|
|
|
U.S. BANK NATIONAL ASSOCIATION, as Trustee
|
||||
|
|
|||
By:
|
|
|
||
|
|
Name:
|
|
Karen R. Beard
|
|
|
Title:
|
|
Vice President
|
1
|
The legend set forth on this page [Insert if a Global Note: (other than the first paragraph hereof)] shall be deemed removed from the face of this Security, without further action of the Company, the Trustee or the Holder(s) of this Security, at such time when the Company delivers written notice to the Trustee of such deemed removal pursuant to Section 2.05(c) of the within-mentioned Indenture
|
|
.
|
|
|
|
|
No. R-[ ]
|
|
[Initially]2 $[ ]
|
2
|
Include if a global note.
|
|
3
|
At such time as the Company notifies the Trustee of the deemed removal of the legend set forth on the immediately preceding page [Insert if a Global Note: (other than the first paragraph thereof)] pursuant to Section 2.05(c) of the within-mentioned Indenture, the CUSIP number for this Note shall be deemed to be CUSIP No. [141337 AB1] and the ISIN No. for this Note shall be deemed to be [US141337AB11].
|
|
4
|
Include if a global note.
|
|
5
|
Include if a certificated note.
|
|
6
|
Include if a global note.
|
|
7
|
Include if a certificated note.
|
|
|
|
CARBONITE, INC.
|
||
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
Dated:
|
||
|
||
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
|
||
This is one of the Notes described
in the within-named Indenture.
|
||
|
||
U.S. BANK NATIONAL ASSOCIATION, as Trustee.
|
||
|
|
|
By:
|
|
|
|
|
Authorized Signatory
|
Date
|
|
Amount of
decrease in
principal amount
of this Global
Note
|
|
|
Amount of
increase in
principal amount
of this Global
Note
|
|
|
Principal amount
of this Global
Note
following such
decrease or
increase
|
|
|
Signature of
authorized
signatory of
Trustee or
Custodian
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
8
|
To be inserted for Global Notes.
|
|
To:
|
Carbonite, Inc.
|
|
|
|
|
|
|
|
|
Dated:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Signature(s)
|
|
|
|
|
|
|
|
||||
|
|
|
|
||||
Signature Guarantee
|
|
|
|
||||
|
|
|
|
||||
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be issued, or
|
|
|
|
|
Notes are to be delivered, other than to and in the name of the registered holder.
|
|
Fill in for registration of shares if to be issued, and Notes if to be delivered, other than to and in the name of the registered holder:
|
|
|
(Name)
|
|
|
(Street Address)
|
|
|
(City, State and Zip Code)
|
Please print name and address
|
|
Principal amount to be converted (if less than all): $ ,000
|
|
NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.
|
|
|
Social Security or Other Taxpayer
|
Identification Number
|
To:
|
Carbonite, Inc.
|
|
Dated:
|
|
|
Signature(s)
|
|
|
Social Security or Other Taxpayer
|
Identification Number
|
|
Principal amount to be repaid (if less than all): $ ,000
|
|
NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.
|
|
Dated:
|
|
|
|
|
Signature(s)
|
|
|
Signature Guarantee
|
|
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if Notes are to be delivered, other than to and in the name of the registered holder.
|
|
|
|
CARBONITE, INC.
|
||
|
|
|
By:
|
|
|
Name:
|
|
Stephen Munford
|
Title:
|
|
Interim Chief Executive Officer
|
|
|
|
||
U.S. BANK NATIONAL ASSOCIATION, as Trustee
|
||||
|
|
|
||
|
|
|||
By:
|
|
|
||
Name:
|
|
Karen R. Beard
|
||
Title:
|
|
Vice President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Open Text Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Securities Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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By:
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/s/ MARK J. BARRENECHEA
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Mark J. Barrenechea
Vice Chair, Chief Executive Officer and Chief Technology Officer |
1.
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I have reviewed this Quarterly Report on Form 10-Q of Open Text Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Securities Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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By:
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/s/ MADHU RANGANATHAN
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|
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Madhu Ranganathan
Executive Vice President and Chief Financial Officer |
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|
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(Acting Principal Accounting Officer)
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By:
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/s/ MARK J. BARRENECHEA
|
|
|
Mark J. Barrenechea
Vice Chair, Chief Executive Officer and Chief Technology Officer |
By:
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/s/ MADHU RANGANATHAN
|
|
|
Madhu Ranganathan
Executive Vice President and Chief Financial Officer |
|
|
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(Acting Principal Accounting Officer)
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