PR Newswire | May 6, 2021 04:02PM EDT

05/06 15:01 CDT

OpenText Reports Third Quarter Fiscal Year 2021 Financial Results WATERLOO, ON, May 6, 2021

Record Annual Recurring Revenues (ARR), Record Cloud Revenues

WATERLOO, ON, May 6, 2021 /PRNewswire/ --

Third Quarter Highlights

Total Revenues Annual Recurring Cloud Revenues Revenues (in millions) (in millions) (in millions)

ReportedConstant ReportedConstant ReportedConstant Currency Currency Currency

$832.9 $807.9 $691.8 $673.8 $355.8 $350.0

+2.2% (0.8)% +4.4% +1.7% +4.8% +3.1%

Annual Recurring Revenues represent 83% of Total Revenues

* Operating cash flows were $63.6 million and free cash flows were $50.3 million, which include an IRS settlement payment of $290.0 million * GAAP-based net income of $91.5 million, up 252.4% Y/Y, margin of 11.0%, up 780 basis points Y/Y * Adjusted EBITDA of $297.1 million, up 14.5%, margin of 35.7%, up 390 basis points Y/Y * GAAP-based diluted EPS of $0.33, up 230.0% Y/Y * Non-GAAP diluted EPS of $0.75, up 23.0%, and $0.71 in constant currency, up 16.4% Y/Y

Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), "The Information Company," today announced its financial results for the third quarter ended March 31, 2021.

"The shift to modern work, digital customer experiences, supply chain retooling and continued economic stimulus are creating positive demand for OpenText Cloud Editions (tm) and other services," said Mark J. Barrenechea, OpenText CEO & CTO. "OpenText delivered a robust quarter with organic revenue growth in Annual Recurring Revenues (ARR) and Cloud services and subscriptions, driving Total Growth and profitability across the organization. Total revenues in the quarter grew 2.2% year-over-year to $832.9 million, Cloud services and subscriptions revenues grew 4.8% year-over-year to a record $355.8 million. Annual Recurring Revenues grew to a record $691.8 million, up 4.4% year-over-year, representing 83% of total revenues. We are well positioned to grow and extend our leadership in Information Management as we focus on expanding our global sales initiatives and capturing market share."

"OpenText Cloud Editions - The Ultimate Cloud(tm) brings together everything a company needs to accelerate their digital transformation, grow, engage with their customers, and stay ahead of the competition," said Mr. Barrenechea. "With flexible deployment options and secure, purpose-built solutions to support modern work, OpenText's complete Information Management suite continues to be vital for companies of all sizes. Through our GROW with OpenText program, we will continue to successfully deliver compelling innovations that provide our customers with a competitive digital advantage."

"In Q3 we continued on our proven path, achieving excellence in operational performance while investing in initiatives to drive organic growth," said OpenText EVP, CFO, Madhu Ranganathan. "We delivered $297.1 million of Adjusted EBITDA and $63.6 million of free cash flows, which include the IRS settlement payment of $290.0 million, and we continue to focus on generating consistent free cash flows. Our balance sheet and liquidity position remain strong with approximately $1.5 billion of cash after the IRS settlement payment and a 1.6x net leverage ratio, giving us the financial strength and flexibility to invest in future growth and deploy capital for the right acquisitions."

Financial Highlights for Q3 Fiscal 2021 with Year Over Year Comparisons



Summary of Quarterly Results

(In millions, except Q3 Q3 % Change Q3 % Changeper share data) FY'21 FY'20 $ Change FY'21 in CC* (Y/Y) in CC*

Revenues:

Cloud services and $355.8$339.5$16.4 4.8 % $350.03.1 %subscriptions

Customer support 335.9 322.9 13.1 4.0 % 323.8 0.3 %

Total annual recurring $691.8$662.3$29.4 4.4 % $673.81.7 %revenues**

License 76.3 81.1 (4.8) (5.9) % 72.2 (10.9)%

Professional service 64.9 71.3 (6.4) (9.0) % 61.8 (13.3)%and other

Total revenues $832.9$814.7$18.3 2.2 % $807.9(0.8) %

GAAP-based operating $152.4$95.1 $57.3 60.3 % N/A N/A income

Non-GAAP-based $275.2$234.7$40.5 17.3 % $263.412.2 %operating income ^(1)

GAAP-based net income attributable to $91.5 $26.0 $65.5 252.4 % N/A N/A OpenText

GAAP-based EPS, diluted$0.33 $0.10 $0.23 230.0 % N/A N/A

Non-GAAP-based EPS, $0.75 $0.61 $0.14 23.0 % $0.71 16.4 %diluted ^(1)(2)

Adjusted EBITDA ^(1) $297.1$259.5$37.7 14.5 % $285.29.9 %

Operating cash flows $63.6 $329.6($266.0)(80.7)% N/A N/A

Free cash flows ^(1) $50.3 $312.8($262.5)(83.9)% N/A N/A

Summary of YTD Results

(In millions, $ % Change FY'21 YTD% Changeexcept per share FY'21 YTDFY'20 YTDChange in CC* in CC* data) (Y/Y)

Revenues:

Cloud services $1,047.3$825.1 $222.2 26.9 % $1,036.925.7 %and subscriptions

Customer support 999.8 950.7 49.1 5.2 % 977.9 2.9 %

Total annual recurring $2,047.1$1,775.7$271.4 15.3 % $2,014.813.5 %revenues**

License 252.2 297.0 (44.9) (15.1)% 243.5 (18.0)%

Professional 193.3 210.3 (17.0) (8.1) % 187.0 (11.1)%service and other

Total revenues $2,492.6$2,283.1$209.5 9.2 % $2,445.47.1 %

GAAP-based $569.2 $412.3 $156.9 38.1 % N/A N/A operating income

Non-GAAP-based operating income $936.1 $765.0 $171.1 22.4 % $908.2 18.7 %^(1)

GAAP-based net income $129.4 $207.8 ($78.4)(37.7)% N/A N/A attributable to OpenText

GAAP-based EPS, $0.47 $0.77 ($0.30)(39.0)% N/A N/A diluted

Non-GAAP-based EPS, diluted ^(1)$2.59 $2.09 $0.50 23.9 % $2.50 19.6 %(2)

Adjusted EBITDA ^$1,000.2$830.7 $169.5 20.4 % $971.9 17.0 %(1)

Operating cash $579.9 $674.3 ($94.4)(14.0)% N/A N/A flows

Free cash flows ^$543.7 $619.3 ($75.6)(12.2)% N/A N/A (1)

^(1) Please see note 2 "Use of Non-GAAP Financial Measures" below.

Please also see note 14 to the Company's Fiscal 2018 Consolidated^(2) Financial Statements on Form 10-K. Reflective of the amount of net tax benefit arising from the internal reorganization assumed to be allocable to the current period based on the forecasted utilization period.

Note: Individual line items in tables may be adjusted by non-material amounts to enable totals to align to published financial statements.

Constant currency for this purpose is defined as the current period*CC: reported revenues/expenses/earnings represented at the prior comparative period's foreign exchange rate.

** Annual recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.

Dividend Program

As part of our quarterly, non-cumulative cash dividend program, the Board declared on May 5, 2021 a cash dividend of $0.2008 per common share. The record date for this dividend is June 4, 2021 and the payment date is June 25, 2021. OpenText believes strongly in returning value to its shareholders and intends to maintain its dividend program. Any future declarations of dividends and the establishment of future record and payment dates are all subject to the final determination and discretion of the Board of Directors.

Quarterly Business Highlights

* Key customer wins in the quarter included AccessDx, Achievers, AIA Philam Life, Central 1, Impulse Dynamics, Johnson & Johnson, Maersk, New Balance Athletic Shoe, Inc., Royal Bank of Canada, State of Qatar Ministry of Interior, Uniper and Vitesco Technologies * Launched OpenText World Europe and Asia Pacific * Announced the release of Cloud Editions 21.2, enabling organizations to GROW with OpenText * Announced new Content Services platform to power modern work in the Cloud * OpenText Migrate achieved AWS Outposts Ready designation * Announced OpenText(tm) EnCase Endpoint Security is now certified on Microsoft Azure * Launched Webroot Business Management Console 6.0 * Appointed Kristina Lengyel as Executive Vice President, Customer Solutions * Appointed Renee McKenzie as Senior Vice President, Chief Information Officer

Summary of Quarterly Results

% Change % Change Q3 FY'21Q2 FY'21 Q3 FY'20(Q3 FY'21 (Q3 FY'21 vs Q2 vs Q3 FY'21) FY'20)

Revenue $832.9 $855.6 $814.7 (2.7) % 2.2 % (millions)

GAAP-based gross 68.6 %70.5 %65.4 %(190) bps320 bpsmargin

GAAP-based earnings (loss) $0.33 ($0.24) $0.10 (237.5) % 230.0 % per share, diluted

Non-GAAP-based 75.2 %77.1 %73.3 %(190) bps190 bpsgross margin ^(1)

Non-GAAP-based EPS, diluted ^(1)$0.75 $0.95 $0.61 (21.1) % 23.0 % (2)

^ Please see note 2 "Use of Non-GAAP Financial Measures" below.(1)

Please also see note 14 to the Company's Fiscal 2018 Consolidated Financial^ Statements on Form 10-K. Reflective of the amount of net tax benefit(2) arising from the internal reorganization assumed to be allocable to the current period based on the forecasted utilization period.

Conference Call Information

The public is invited to listen to the earnings conference call today at 5:00 p.m. ET (2:00 p.m. PT) by dialing 1-800-319-4610 (toll-free) or +1-604-638-5340 (international). Please dial-in 10 minutes ahead of time to ensure proper connection. Alternatively, a live webcast of the earnings conference call will be available on the Investor Relations section of the Company's website at http://investors.opentext.com/investor-events-and-presentations.

A replay of the call will be available beginning May 6, 2021 at 7:00 p.m. ET through 11:59 p.m. on May 20, 2021 and can be accessed by dialing 1-855-669-9658 (toll-free) or +1-604-674-8052 (international) and using passcode 6557 followed by the number sign.

Please see below note (2) for a reconciliation of U.S. GAAP-based financial measures used in this press release, to Non-GAAP-based financial measures. Additionally, "off-cloud" is a term we use to describe license transactions.

About OpenText

OpenText, The Information Company(tm), enables organizations to gain insight through market leading information management solutions, powered by OpenText Cloud Editions. For more information about OpenText (NASDAQ: OTEX, TSX: OTEX) visit opentext.com.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release, including statements about the focus of Open Text Corporation ("OpenText" or "the Company") in our fiscal year ending June 30, 2021 (Fiscal 2021) on growth, future cloud growth and market share gains, generating substantial long-term value for shareholders, the financial and operational impact of the COVID-19 pandemic, anticipated benefits of our partnerships and next generation product lines, the strength of our operating framework and balance sheet flexibility, continued investments in product innovation, go-to-market and strategic acquisitions, M&A continuing to be our leading growth contributor, our capital allocation strategy, creating value through investments in broader Information Management capabilities, the Company's presence in the cloud and in growth markets, expected growth in our revenue lines, total growth from acquisitions, innovation and organic initiatives, the focus on recurring revenues, improving operational efficiency, expanding cash flow and strengthening the business, adjusted operating income and cash flow, its financial condition, the adjusted operating margin target range, results of operations and earnings, announced acquisitions, ongoing tax matters, the integration of the acquired businesses, declaration of quarterly dividends, potential share repurchases pursuant to its Repurchase Plan, future tax rates, new platform and product offerings, scaling OpenText to new levels in Fiscal 2021 and beyond, and other matters, may contain words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "may", "could", "would", "might", "will" and variations of these words or similar expressions are considered forward-looking statements or information under applicable securities laws. In addition, any information or statements that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking, and based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management's perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances, such as certain assumptions about the economy, as well as market, financial and operational assumptions. Management's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Such forward-looking statements involve known and unknown risks, uncertainties and other factors and assumptions that may cause the actual results, performance or achievements to differ materially which include, but are not limited to, actual and potential risks and uncertainties relating to the ultimate spread of COVID-19, the severity of the disease and the duration of the COVID-19 pandemic. For additional information with respect to risks and other factors which could occur, see the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the Securities and Exchange Commission (SEC) and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

OTEX-F

For more information, please contact:Harry E. BlountSenior Vice President, Global Head of Investor RelationsOpen Text Corporation415-963-0825investors@opentext.com

Copyright (c)2021 Open Text. OpenText is a trademark or registered trademark of Open Text. The list of trademarks is not exhaustive of other trademarks. Registered trademarks, product names, company names, brands and service names mentioned herein are property of Open Text. All rights reserved. For more information, visit: http://www.opentext.com/who-we-are/copyright-information.

OPEN TEXT CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share data)



March 31, June 30, 2020 2021

ASSETS (unaudited)

Cash and cash equivalents $1,475,626$1,692,850

Accounts receivable trade, net of allowance for credit losses of $22,931 as of March 31, 2021 and402,672 466,357 $20,906 as of June 30, 2020

Contract assets 26,276 29,570

Income taxes recoverable 17,026 61,186

Prepaid expenses and other current assets 140,576 136,436

Total current assets 2,062,176 2,386,399

Property and equipment 230,517 244,555

Operating lease right of use assets 226,021 207,869

Long-term contract assets 18,594 15,427

Goodwill 4,688,449 4,672,356

Acquired intangible assets 1,291,796 1,612,564

Deferred tax assets 833,369 911,565

Other assets 174,965 154,467

Long-term income taxes recoverable 30,734 29,620

Total assets $9,556,621$10,234,822

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities $372,819 $373,314

Current portion of long-term debt 10,000 610,000

Operating lease liabilities 56,143 64,071

Deferred revenues 873,581 812,218

Income taxes payable 26,481 44,630

Total current liabilities 1,339,024 1,904,233

Long-term liabilities:

Accrued liabilities 27,849 34,955

Pension liability 80,649 73,129

Long-term debt 3,580,206 3,584,311

Long-term operating lease liabilities 217,584 217,165

Long-term deferred revenues 99,679 94,382

Long-term income taxes payable 31,974 171,200

Deferred tax liabilities 147,731 148,738

Total long-term liabilities 4,185,672 4,323,880

Shareholders' equity:

Share capital and additional paid-in capital

272,973,445 and 271,863,354 Common Shares issued and outstanding at March 31, 2021 and June 30, 1,915,759 1,851,777 2020, respectively; authorized Common Shares: unlimited

Accumulated other comprehensive income 54,074 17,825

Retained earnings 2,130,047 2,159,396

Treasury stock, at cost (1,567,664 and 622,297 shares at March 31, 2021 and June 30, 2020, (69,386) (23,608) respectively)

Total OpenText shareholders' equity 4,030,494 4,005,390

Non-controlling interests 1,431 1,319

Total shareholders' equity 4,031,925 4,006,709

Total liabilities and shareholders' equity $9,556,621$10,234,822

OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands of U.S. dollars, except share and per share data) (unaudited)



Three Months Ended Nine Months Ended March March 31, 31,

2021 2020 2021 2020

Revenues:

Cloud services and $355,845$339,463$1,047,285$825,068subscriptions

Customer support 335,915 322,865 999,806 950,671

License 76,299 81,055 252,170 297,048

Professional service and 64,872 71,296 193,327 210,337 other

Total revenues 832,931 814,679 2,492,588 2,283,124

Cost of revenues:

Cloud services and 123,729 127,565 354,235 333,371 subscriptions

Customer support 30,953 32,151 89,815 91,326

License 2,810 2,544 9,601 7,917

Professional service and 50,321 56,526 143,521 164,468 other

Amortization of acquired technology-based intangible 53,453 63,401 165,581 145,998 assets

Total cost of revenues 261,266 282,187 762,753 743,080

Gross profit 571,665 532,492 1,729,835 1,540,044

Operating expenses:

Research and development 110,071 108,184 304,212 269,645

Sales and marketing 158,687 166,234 438,984 432,162

General and administrative 71,548 68,828 190,502 174,958

Depreciation 21,961 24,820 64,244 65,809

Amortization of acquired customer-based intangible 54,156 59,943 164,075 160,561 assets

Special charges (recoveries)2,846 9,406 (1,404) 24,579

Total operating expenses 419,269 437,415 1,160,613 1,127,714

Income from operations 152,396 95,077 569,222 412,330

Other income (expense), net 8,283 (18,923) 16,417 (19,736)

Interest and other related (37,333) (41,263) (114,017) (105,849)expense, net

Income before income taxes 123,346 34,891 471,622 286,745

Provision for (recovery of) 31,818 8,891 342,121 78,800 income taxes

Net income for the period $91,528 $26,000 $129,501 $207,945

Net (income) loss attributable to (38) (35) (112) (112) non-controlling interests

Net income attributable to $91,490 $25,965 $129,389 $207,833OpenText

Earnings per share-basic $0.34 $0.10 $0.47 $0.77 attributable to OpenText

Earnings per share-diluted $0.33 $0.10 $0.47 $0.77 attributable to OpenText

Weighted average number of Common Shares 272,832 271,221 272,414 270,559 outstanding-basic (in '000's)

Weighted average number of Common Shares 273,924 272,202 273,312 271,643 outstanding-diluted (in '000's)

OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands of U.S. dollars) (unaudited)



Three Months Ended Nine Months Ended March 31, March 31,

2021 2020 2021 2020

Net income for the period $91,528$26,000$129,501$207,945

Other comprehensive income (loss)-net of tax:

Net foreign currency translation(12,568)(15,484)36,142 (16,220) adjustments

Unrealized gain (loss) on cash flow hedges:

Unrealized gain (loss) - net of tax expense (recovery) effect of $246 and ($1,276) for the three months ended March 31, 2021 and 681 (3,539) 3,608 (3,278) 2020, respectively; $1,302 and ($1,181) for the nine months ended March 31, 2021 and 2020, respectively

(Gain) loss reclassified into net income - net of tax (expense) recovery effect of ($399) and $121 for the three months ended March 31, 2021 and (1,108) 337 (1,892) 273 2020, respectively; ($682) and $98 for the nine months ended March 31, 2021 and 2020, respectively

Actuarial gain (loss) relating to defined benefit pension plans:

Actuarial gain (loss) - net of tax expense (recovery) effect of $944 and $1,495 for the three months ended March 31, 2021 and 344 3,309 (2,342) 3,923 2020, respectively; ($413) and $1,554 for the nine months ended March 31, 2021 and 2020, respectively

Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $95 and $203 for the three months ended March 31, 2021 and 249 153 733 644 2020, respectively; $275 and $446 for the nine months ended March 31, 2021 and 2020, respectively

Total other comprehensive income(12,402)(15,224)36,249 (14,658) (loss) net, for the period

Total comprehensive income 79,126 10,776 165,750 193,287

Comprehensive (income) loss attributable to non-controlling (38) (35) (112) (112) interests

Total comprehensive income $79,088$10,741$165,638$193,175attributable to OpenText

OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands of U.S. dollars and shares) |(unaudited)



Three Months Ended March 31, 2021

Common Shares and Accumulated Additional Paid in Treasury Stock Other Capital Retained Non-Controlling ComprehensiveInterests Total Earnings Shares Amount Shares Amount Income

Balance as of December 31, 272,589$1,889,857(1,101)$(47,555)$2,093,076$66,476 $ 1,393 $4,003,2472020

Issuance of Common Shares

Under employee 219 8,270 - - - - - 8,270 stock option plans

Under employee stock 165 6,421 - - - - - 6,421 purchase plans

Share-based - 12,357 - - - - - 12,357 compensation

Purchase of treasury - - (490) (22,977) - - - (22,977) stock

Issuance of treasury - (1,146) 23 1,146 - - - - stock

Dividends declared - - - - (54,519) - - (54,519) ($0.2008 per Common Share)

Other comprehensive- - - - - (12,402) - (12,402) income (loss) - net

Net income for the - - - - 91,490 - 38 91,528 quarter

Balance as of March 31, 272,973$1,915,759(1,568)$(69,386)$2,130,047$54,074 $ 1,431 $4,031,9252021

Three Months Ended March 31, 2020

Common Shares and Accumulated Additional Paid in Treasury Stock Other Capital Retained Non-Controlling ComprehensiveInterests Total Earnings Shares Amount SharesAmount Income

Balance as of December 31, 270,609$1,803,663(847)$(32,066)$2,201,653$24,690 $ 1,292 $3,999,2322019

Issuance of Common Shares

Under employee stock option 886 23,414 - - - - - 23,414 plans

Under employee stock purchase 139 5,217 - - - - - 5,217 plans

Share-based - 6,856 - - - - - 6,856 compensation

Dividends declared - - - - (47,279) - - (47,279) ($0.1746 per Common Share)

Other comprehensive - - - - - (15,224) - (15,224) income (loss) - net

Non-controlling- - - - - - (39) (39) interest

Net income for - - - - 25,965 - 35 26,000 the quarter

Balance as of 271,634$1,839,150(847)$(32,066)$2,180,339$9,466 $ 1,288 $3,998,177March 31, 2020

Nine Months Ended March 31, 2021

Common Shares and Accumulated Additional Paid in Treasury Stock Other Capital Retained Non-Controlling ComprehensiveInterests Total Earnings Shares Amount Shares Amount Income

Balance as of June271,863$1,851,777(622) $(23,608)$2,159,396$17,825 $ 1,319 $4,006,70930, 2020

Adoption of ASU 2016-13 - - - - - (2,450) - - (2,450) cumulative effect, net

Issuance of Common Shares

Under employee 743 23,768 - - - - - 23,768 stock option plans

Under employee stock purchase 367 13,974 193 6,690 - - - 20,664 plans

Share-based - 38,619 - - - - - 38,619 compensation

Purchase of - - (1,455)(64,847) - - - (64,847) treasury stock

Issuance of - (12,379) 316 12,379 - - - - treasury stock

Dividends declared - - - - (156,288) - - (156,288) ($0.5762 per Common Share)

Other comprehensive - - - - - 36,249 - 36,249 income (loss) - net

Net income for the- - - - 129,389 - 112 129,501 period

Balance as of 272,973$1,915,759(1,568)$(69,386)$2,130,047$54,074 $ 1,431 $4,031,925March 31, 2021

Nine Months Ended March 31, 2020

Common Shares and Accumulated Additional Paid in Treasury Stock Other Capital Retained Non-Controlling ComprehensiveInterests Total Earnings Shares Amount SharesAmount Income

Balance as of 269,834$1,774,214(803)$(28,766)$2,113,883$24,124 $ 1,215 $3,884,670June 30, 2019

Issuance of Common Shares

Under employee stock option 1,301 34,773 - - - - - 34,773 plans

Under employee stock purchase 499 17,757 - - - - - 17,757 plans

Share-based - 21,530 - - - - - 21,530 compensation

Purchase of - - (300)(12,424) - - - (12,424) treasury stock

Issuance of - (9,124) 256 9,124 - - - - treasury stock

Dividends declared - - - - (141,377) - - (141,377) ($0.5238 per Common Share)

Other comprehensive - - - - - (14,658) - (14,658) income (loss) - net

Non-controlling- - - - - - (39) (39) interest

Net income for - - - - 207,833 - 112 207,945 the period

Balance as of 271,634$1,839,150(847)$(32,066)$2,180,339$9,466 $ 1,288 $3,998,177March 31, 2020

OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars) (unaudited)



Three Months Ended March Nine Months Ended March 31, 31,

2021 2020 2021 2020

Cash flows from operating activities:

Net income for the $91,528 $26,000 $129,501 $207,945 period

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of 129,570 148,164 393,900 372,368 intangible assets

Share-based 12,357 6,856 38,619 21,530 compensation expense

Pension expense 1,550 1,428 4,670 4,323

Amortization of debt 1,141 1,227 3,395 3,503 issuance costs

Loss on extinguishment of - 17,854 - 17,854 debt

Loss on sale and write down of 1,026 - 1,979 - property and equipment

Deferred taxes 447 2,543 80,844 36,711

Share in net (income) loss of equity (11,765) (4,527) (20,020) (6,475) investees

Changes in operating assets and liabilities:

Accounts receivable 54,345 83,590 87,072 86,188

Contract assets (8,842) (9,006) (29,035) (26,665)

Prepaid expenses and (10,494) (6,854) (2,528) (7,355) other current assets

Income taxes (286,435) (33,717) (117,594) (34,608)

Accounts payable and 9,211 (9,028) (27,327) (42,263) accrued liabilities

Deferred revenue 81,247 102,373 62,600 38,280

Other assets 2,232 5,079 765 7,436

Operating lease assets and (3,546) (2,381) (26,910) (4,486) liabilities, net

Net cash provided by 63,572 329,601 579,931 674,286 operating activities

Cash flows from investing activities:

Additions of property(13,311) (16,793) (36,267) (55,005) and equipment

Purchase of XMedius - (73,335) 444 (73,335)

Purchase of Carbonite, Inc., net of cash and - (88,458) - (1,305,097) restricted cash acquired

Purchase of Dynamic - - (371) (4,149) Solutions Group Inc.

Other investing (648) (5,803) (2,018) (11,344) activities

Net cash used in (13,959) (184,389) (38,212) (1,448,930) investing activities

Cash flows from financing activities:

Proceeds from issuance of Common Shares from exercise 16,603 29,990 45,780 53,107 of stock options and ESPP

Proceeds from long-term debt and - 2,400,000 - 3,150,000 Revolver

Repayment of long-term debt and (2,500) (1,706,131)(607,500) (1,711,131) Revolver

Debt extinguishment - (11,248) - (11,248) costs

Debt issuance costs - (17,191) - (18,170)

Purchase of treasury (22,977) - (64,847) (12,424) stock

Payments of dividends(54,519) (47,279) (156,288) (141,377) to shareholders

Net cash provided by (used in) financing (63,393) 648,141 (782,855) 1,308,757 activities

Foreign exchange gain (loss) on cash held (11,218) (15,989) 22,553 (20,060) in foreign currencies

Increase (decrease) in cash, cash equivalents and (24,998) 777,364 (218,583) 514,053 restricted cash during the period

Cash, cash equivalents and restricted cash at 1,503,678 680,232 1,697,263 943,543 beginning of the period

Cash, cash equivalents and $1,478,680$1,457,596$1,478,680$1,457,596 restricted cash at end of the period

Reconciliation of cash, cash equivalents and March 31, March 31, restricted cash: 2021 2020

Cash and cash equivalents $1,475,626$1,452,570

Restricted cash ^(1) 3,054 5,026

Total cash, cash equivalents and restricted cash $1,478,680$1,457,596



^(1) Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Condensed Consolidated Balance Sheets.

Notes

(1) All dollar amounts in this press release are in U.S. Dollars unlessotherwise indicated.

(2) Use of Non-GAAP Financial Measures: In addition to reporting financialresults in accordance with U.S. GAAP, the Company provides certain financialmeasures that are not in accordance with U.S. GAAP (Non-GAAP). These Non-GAAPfinancial measures have certain limitations in that they do not have astandardized meaning and thus the Company's definition may be different fromsimilar Non-GAAP financial measures used by other companies and/or analysts andmay differ from period to period. Thus it may be more difficult to compare theCompany's financial performance to that of other companies. However, theCompany's management compensates for these limitations by providing therelevant disclosure of the items excluded in the calculation of these Non-GAAPfinancial measures both in its reconciliation to the U.S. GAAP financialmeasures and its consolidated financial statements, all of which should beconsidered when evaluating the Company's results.

The Company uses these Non-GAAP financial measures to supplement theinformation provided in its consolidated financial statements, which arepresented in accordance with U.S. GAAP. The presentation of Non-GAAP financialmeasures is not meant to be a substitute for financial measures presented inaccordance with U.S. GAAP, but rather should be evaluated in conjunction withand as a supplement to such U.S. GAAP measures. OpenText strongly encouragesinvestors to review its financial information in its entirety and not to relyon a single financial measure. The Company therefore believes that despitethese limitations, it is appropriate to supplement the disclosure of theU.S. GAAP measures with certain Non-GAAP measures defined below.

Non-GAAP-based net income and Non-GAAP-based EPS, attributable to OpenText, areconsistently calculated as GAAP-based net income (loss) or earnings (loss) pershare, attributable to OpenText, on a diluted basis, excluding the effects ofthe amortization of acquired intangible assets, other income (expense),share-based compensation, and special charges (recoveries), all net of tax andany tax benefits/expense items unrelated to current period income, as furtherdescribed in the tables below. Non-GAAP-based gross profit is the arithmeticalsum of GAAP-based gross profit and the amortization of acquiredtechnology-based intangible assets and share-based compensation within cost ofsales. Non-GAAP-based gross margin is calculated as Non-GAAP-based gross profitexpressed as a percentage of total revenue. Non-GAAP-based income fromoperations is calculated as GAAP-based income from operations, excluding theamortization of acquired intangible assets, special charges (recoveries), andshare-based compensation expense.

Adjusted earnings before interest, taxes, depreciation and amortization(Adjusted EBITDA) is consistently calculated as GAAP-based net income (loss),attributable to OpenText, excluding interest income (expense), provision forincome taxes, depreciation and amortization of acquired intangible assets,other income (expense), share-based compensation and special charges(recoveries). Adjusted EBITDA margin is calculated as adjusted EBITDA expressedas a percentage of total revenue.

The Company's management believes that the presentation of the above definedNon-GAAP financial measures provides useful information to investors becausethey portray the financial results of the Company before the impact of certainnon-operational charges. The use of the term "non-operational charge" isdefined for this purpose as an expense that does not impact the ongoingoperating decisions taken by the Company's management. These items are excludedbased upon the way the Company's management evaluates the performance of theCompany's business for use in the Company's internal reports and are notexcluded in the sense that they may be used under U.S. GAAP.

The Company does not acquire businesses on a predictable cycle, and thereforebelieves that the presentation of Non-GAAP measures, which in certain casesadjust for the impact of amortization of intangible assets and the related taxeffects that are primarily related to acquisitions, will provide readers offinancial statements with a more consistent basis for comparison acrossaccounting periods and be more useful in helping readers understand theCompany's operating results and underlying operational trends. Additionally,the Company has engaged in various restructuring activities over the pastseveral years, primarily due to acquisitions, that have resulted in costsassociated with reductions in headcount, consolidation of leased facilities andrelated costs, all which are recorded under the Company's "Special charges(recoveries)" caption on the Consolidated Statements of Income. Eachrestructuring activity is a discrete event based on a unique set of businessobjectives or circumstances, and each differs in terms of its operationalimplementation, business impact and scope, and the size of each restructuringplan can vary significantly from period to period. Therefore, the Companybelieves that the exclusion of these special charges (recoveries) will alsobetter aid readers of financial statements in the understanding andcomparability of the Company's operating results and underlying operationaltrends.

In summary, the Company believes the provision of supplemental Non-GAAPmeasures allow investors to evaluate the operational and financial performanceof the Company's core business using the same evaluation measures thatmanagement uses, and is therefore a useful indication of OpenText's performanceor expected performance of future operations and facilitates period-to-periodcomparison of operating performance (although prior performance is notnecessarily indicative of future performance). As a result, the Companyconsiders it appropriate and reasonable to provide, in addition to U.S. GAAPmeasures, supplementary Non-GAAP financial measures that exclude certain itemsfrom the presentation of its financial results.

The following charts provide unaudited reconciliations of U.S. GAAP-basedfinancial measures to Non-GAAP-based financial measures for the followingperiods presented.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the three months ended March 31, 2021 (In thousands, except for per share data)

Three Months Ended March 31, 2021

GAAP-based Non-GAAP-based GAAP-basedMeasures Non-GAAP-basedMeasures Measures Adjustments NoteMeasures % of Total % of Total Revenue Revenue

Cost of revenues

Cloud services and $123,729 $(505) (1) $ 123,224 subscriptions

Customer support30,953 (464) (1) 30,489

Professional service and 50,321 (684) (1) 49,637 other

Amortization of acquired technology-based53,453 (53,453) (2) - intangible assets

GAAP-based gross profit and gross margin (%) / 571,665 68.6% 55,106 (3) 626,771 75.2% Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and 110,071 (2,146) (1) 107,925 development

Sales and 158,687 (4,580) (1) 154,107 marketing

General and 71,548 (3,978) (1) 67,570 administrative

Amortization of acquired customer-based 54,156 (54,156) (2) - intangible assets

Special charges 2,846 (2,846) (4) - (recoveries)

GAAP-based income from operations / 152,396 122,812 (5) 275,208 Non-GAAP-based income from operations

Other income 8,283 (8,283) (6) - (expense), net

Provision for (recovery of) 31,818 1,485 (7) 33,303 income taxes

GAAP-based net income / Non-GAAP-based 91,490 113,044 (8) 204,534 net income, attributable to OpenText

GAAP-based earnings per share / Non-GAAP-based $0.33 $0.42 (8) $ 0.75 earnings per share-diluted, attributable to OpenText

Adjustment relates to the exclusion of share-based compensation expense(1) from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

Adjustment relates to the exclusion of amortization expense from our(2) 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.

Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are(4) generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations, and are therefore excluded from our internal analysis of operating results.

(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.

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(6) (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.

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(7) in reserves for tax uncertainties and valuation allowance reserves, and "book to return" adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at our Non-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8) Reconciliation of GAAP-based net income to Non-GAAP-based net income:

Three Months Ended March 31, 2021

Per share diluted

GAAP-based net income, attributable to $91,490 $ 0.33 OpenText

Add:

Amortization 107,609 0.39

Share-based compensation 12,357 0.05

Special charges (recoveries) 2,846 0.01

Other (income) expense, net (8,283) (0.03)

GAAP-based provision for (recovery of) income 31,818 0.12 taxes

Non-GAAP-based provision for income taxes (33,303) (0.12)

Non-GAAP-based net income, attributable to $204,534 $ 0.75 OpenText



Reconciliation of Adjusted EBITDA



Three Months Ended March 31, 2021

GAAP-based net income, attributable to OpenText $91,490

Add:

Provision for (recovery of) income taxes 31,818

Interest and other related expense, net 37,333

Amortization of acquired technology-based 53,453 intangible assets

Amortization of acquired customer-based 54,156 intangible assets

Depreciation 21,961

Share-based compensation 12,357

Special charges (recoveries) 2,846

Other (income) expense, net (8,283)

Adjusted EBITDA $297,131



GAAP-based net income margin 11.0 %

Adjusted EBITDA margin 35.7 %

Reconciliation of Free cash flows



Three Months Ended March 31, 2021

GAAP-based cash flows provided by operating activities$ 63,572

Add:

Capital expenditures ^(1) (13,311)

Free cash flows $ 50,261



^(1) Defined as "Additions of property and equipment" in the Condensed Consolidated Statements of Cash Flows.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the nine months ended March 31, 2021 (In thousands, except for per share data)

Nine Months Ended March 31, 2021

GAAP-based Non-GAAP- Non-GAAP-based GAAP-basedMeasures based Measures Adjustments Note Measures % of Total Measures % of Total Revenue Revenue

Cost of revenues

Cloud services and $354,235 $(2,484) (1) $351,751 subscriptions

Customer support89,815 (1,405) (1) 88,410

Professional service and 143,521 (1,867) (1) 141,654 other

Amortization of acquired technology-based165,581 (165,581) (2) - intangible assets

GAAP-based gross profit and gross margin (%) / 1,729,83569.4% 171,337 (3) 1,901,17276.3% Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and 304,212 (7,195) (1) 297,017 development

Sales and 438,984 (13,594) (1) 425,390 marketing

General and 190,502 (12,074) (1) 178,428 administrative

Amortization of acquired customer-based 164,075 (164,075) (2) - intangible assets

Special charges (1,404) 1,404 (4) - (recoveries)

GAAP-based income from operations / 569,222 366,871 (5) 936,093 Non-GAAP-based income from operations

Other income 16,417 (16,417) (6) - (expense), net

Provision for (recovery of) 342,121 (227,030) (7) 115,091 income taxes

GAAP-based net income / Non-GAAP-based 129,389 577,484 (8) 706,873 net income, attributable to OpenText

GAAP-based earnings per share / Non-GAAP-based $0.47 $2.12 (8) $2.59 earnings per share-diluted, attributable to OpenText

Adjustment relates to the exclusion of share-based compensation expense(1) from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

Adjustment relates to the exclusion of amortization expense from our(2) 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.

Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are(4) generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations, and are therefore excluded from our internal analysis of operating results.

(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.

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(6) (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 73% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based adjusted net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves, and "book to return" adjustments for tax return filings and tax assessments.(7) Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at our Non-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense. The GAAP-based tax provision rate for the nine months ended March 31, 2021 includes the income tax provision charge from the IRS settlement partially offset by a tax benefit from the release of unrecognized tax benefits due to the conclusion of relevant tax audits that was recognized during the three months ended December 31, 2020.

(8) Reconciliation of GAAP-based net income to Non-GAAP-based net income:



Nine Months Ended March 31, 2021

Per share diluted

GAAP-based net income, attributable to $129,389 $ 0.47 OpenText

Add:

Amortization 329,656 1.21

Share-based compensation 38,619 0.14

Special charges (recoveries) (1,404) (0.01)

Other (income) expense, net (16,417) (0.06)

GAAP-based provision for (recovery of) income 342,121 1.26 taxes

Non-GAAP-based provision for income taxes (115,091) (0.42)

Non-GAAP-based net income, attributable to $706,873 $ 2.59 OpenText

Reconciliation of Adjusted EBITDA



Nine Months Ended March 31, 2021

GAAP-based net income, attributable to OpenText $129,389

Add:

Provision for (recovery of) income taxes 342,121

Interest and other related expense, net 114,017

Amortization of acquired technology-based 165,581 intangible assets

Amortization of acquired customer-based 164,075 intangible assets

Depreciation 64,244

Share-based compensation 38,619

Special charges (recoveries) (1,404)

Other (income) expense, net (16,417)

Adjusted EBITDA $1,000,225



GAAP-based net income margin 5.2 %

Adjusted EBITDA margin 40.1 %

Reconciliation of Free cash flows



Nine Months Ended March 31, 2021

GAAP-based cash flows provided by operating activities$ 579,931

Add:

Capital expenditures ^(1) (36,267)

Free cash flows $ 543,664



^(1) Defined as "Additions of property and equipment" in the Condensed Consolidated Statements of Cash Flows.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the three months ended December 31, 2020 (In thousands, except for per share data)

Three Months Ended December 31, 2020

GAAP-based Non-GAAP-based GAAP-basedMeasures Non-GAAP- Measures Measures Adjustments Notebased % of Total Measures % of Total Revenue Revenue

Cost of revenues

Cloud services and $117,882 $(1,143) (1) $116,739 subscriptions

Customer support29,668 (499) (1) 29,169

Professional service and 46,619 (666) (1) 45,953 other

Amortization of acquired technology-based54,091 (54,091) (2) - intangible assets

GAAP-based gross profit and gross margin (%) / 603,082 70.5% 56,399 (3) 659,481 77.1% Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and 100,238 (2,707) (1) 97,531 development

Sales and 147,897 (4,957) (1) 142,940 marketing

General and 62,765 (4,554) (1) 58,211 administrative

Amortization of acquired customer-based 54,926 (54,926) (2) - intangible assets

Special charges (17,494) 17,494 (4) - (recoveries)

GAAP-based income from operations / 234,470 106,049 (5) 340,519 Non-GAAP-based income from operations

Other income 5,251 (5,251) (6) - (expense), net

Provision for (recovery of) 267,559 (225,150) (7) 42,409 income taxes

GAAP-based net income (loss) / Non-GAAP-based (65,477) 325,948 (8) 260,471 net income, attributable to OpenText

GAAP-based earnings (loss) per share / Non-GAAP-based $(0.24) $1.19 (8) $0.95 earnings per share-diluted, attributable to OpenText

Adjustment relates to the exclusion of share-based compensation expense(1) from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

Adjustment relates to the exclusion of amortization expense from our(2) 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.

Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are(4) generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations, and are therefore excluded from our internal analysis of operating results.

(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.

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(6) (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 132% 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.(7) Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at our Non-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense. The GAAP-based tax provision rate for the three months ended December 31, 2020 includes an income tax provision charge from the IRS Settlement partially offset by a tax benefit from the release of unrecognized tax benefits due to the conclusion of relevant tax audits.

(8) Reconciliation of GAAP-based net loss to Non-GAAP-based net income:



Three Months Ended December 31, 2020

Per share diluted*

GAAP-based net loss, attributable to OpenText $(65,477) $(0.24)

Add:

Amortization 109,017 0.40

Share-based compensation 14,526 0.05

Special charges (recoveries) (17,494) (0.06)

Other (income) expense, net (5,251) (0.02)

GAAP-based provision for (recovery of) income taxes267,559 0.98

Non-GAAP-based provision for income taxes (42,409) (0.16)

Non-GAAP-based net income, attributable to OpenText$260,471 $0.95



*Weighted average number of Common Shares - diluted (in thousands) used in the calculation of Non-GAAP-based earnings per share for the three months ended December 31, 2020 were 273,183.

Reconciliation of Adjusted EBITDA



Three Months Ended December 31, 2020

GAAP-based net loss, attributable to OpenText $(65,477)

Add:

Provision for (recovery of) income taxes 267,559

Interest and other related expense, net 37,595

Amortization of acquired technology-based 54,091 intangible assets

Amortization of acquired customer-based 54,926 intangible assets

Depreciation 20,280

Share-based compensation 14,526

Special charges (recoveries) (17,494)

Other (income) expense, net (5,251)

Adjusted EBITDA $360,755



GAAP-based net loss margin (7.7) %

Adjusted EBITDA margin 42.2 %

Reconciliation of Free cash flows



Three Months Ended December 31, 2020

GAAP-based cash flows provided by operating activities$ 282,455

Add:

Capital expenditures ^(1) (7,651)

Free cash flows $ 274,804



^(1) Defined as "Additions of property and equipment" in the Condensed Consolidated Statements of Cash Flows.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the three months ended March 31, 2020 (In thousands, except for per share data)

Three Months Ended March 31, 2020

GAAP-based Non-GAAP-based GAAP-basedMeasures Non-GAAP- Measures Measures Adjustments Notebased % of Total Measures % of Total Revenue Revenue

Cost of revenues

Cloud services and $127,565 $(398) (1) $127,167 subscriptions

Customer support32,151 (284) (1) 31,867

Professional service and 56,526 (328) (1) 56,198 other

Amortization of acquired technology-based63,401 (63,401) (2) - intangible assets

GAAP-based gross profit and gross margin (%) / 532,492 65.4 %64,411 (3) 596,903 73.3 %Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and 108,184 (1,243) (1) 106,941 development

Sales and 166,234 (2,261) (1) 163,973 marketing

General and 68,828 (2,342) (1) 66,486 administrative

Amortization of acquired customer-based 59,943 (59,943) (2) - intangible assets

Special charges 9,406 (9,406) (4) - (recoveries)

GAAP-based income from operations / 95,077 139,606 (5) 234,683 Non-GAAP-based income from operations

Other income (18,923) 18,923 (6) - (expense), net

Provision for (recovery of) 8,891 18,188 (7) 27,079 income taxes

GAAP-based net income / Non-GAAP-based 25,965 140,341 (8) 166,306 net income, attributable to OpenText

GAAP-based earnings per share / Non-GAAP-based $0.10 $0.51 (8) $0.61 earnings per share-diluted, attributable to OpenText





Adjustment relates to the exclusion of share-based compensation expense(1) from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

Adjustment relates to the exclusion of amortization expense from our(2) 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.

Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are(4) generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations, and are therefore excluded from our internal analysis of operating results.

(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.

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(6) (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 25% 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(7) in reserves for tax uncertainties and valuation allowance reserves, and "book to return" adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at our Non-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8) Reconciliation of GAAP-based net income to Non-GAAP-based net income:



Three Months Ended March 31, 2020

Per share diluted

GAAP-based net income, attributable to $25,965 $ 0.10 OpenText

Add:

Amortization 123,344 0.45

Share-based compensation 6,856 0.03

Special charges (recoveries) 9,406 0.03

Other (income) expense, net 18,923 0.07

GAAP-based provision for (recovery of) income 8,891 0.03 taxes

Non-GAAP-based provision for income taxes (27,079) (0.10)

Non-GAAP-based net income, attributable to $166,306 $ 0.61 OpenText

Reconciliation of Adjusted EBITDA



Three Months Ended March 31, 2020

GAAP-based net income, attributable to OpenText $25,965

Add:

Provision for (recovery of) income taxes 8,891

Interest and other related expense, net 41,263

Amortization of acquired technology-based 63,401 intangible assets

Amortization of acquired customer-based 59,943 intangible assets

Depreciation 24,820

Share-based compensation 6,856

Special charges (recoveries) 9,406

Other (income) expense, net 18,923

Adjusted EBITDA $259,468



GAAP-based net income margin 3.2 %

Adjusted EBITDA margin 31.8 %

Reconciliation of Free cash flows



Three Months Ended March 31, 2020

GAAP-based cash flows provided by operating activities$ 329,601

Add:

Capital expenditures ^(1) (16,793)

Free cash flows $ 312,808



^(1) Defined as "Additions of property and equipment" in the Condensed Consolidated Statements of Cash Flows.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the nine months ended March 31, 2020 (In thousands, except for per share data)

Nine Months Ended March 31, 2020

GAAP-based Non-GAAP- Non-GAAP-based GAAP-basedMeasures based Measures Adjustments Note Measures % of Total Measures % of Total Revenue Revenue

Cost of revenues

Cloud services and $333,371 $(1,152) (1) $332,219 subscriptions

Customer support91,326 (897) (1) 90,429

Professional service and 164,468 (917) (1) 163,551 other

Amortization of acquired technology-based145,998 (145,998) (2) - intangible assets

GAAP-based gross profit and gross margin (%) / 1,540,04467.5 %148,964 (3) 1,689,00874.0 %Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and 269,645 (3,719) (1) 265,926 development

Sales and 432,162 (6,760) (1) 425,402 marketing

General and 174,958 (8,085) (1) 166,873 administrative

Amortization of acquired customer-based 160,561 (160,561) (2) - intangible assets

Special charges 24,579 (24,579) (4) - (recoveries)

GAAP-based income from operations / 412,330 352,668 (5) 764,998 Non-GAAP-based income from operations

Other income (19,736) 19,736 (6) - (expense), net

Provision for (recovery of) 78,800 13,481 (7) 92,281 income taxes

GAAP-based net income / Non-GAAP-based 207,833 358,923 (8) 566,756 net income, attributable to OpenText

GAAP-based earnings per share / Non-GAAP-based $0.77 $1.32 (8) $2.09 earnings per share-diluted, attributable to OpenText



Adjustment relates to the exclusion of share-based compensation expense(1) from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

Adjustment relates to the exclusion of amortization expense from our(2) 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.

Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are(4) generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations, and are therefore excluded from our internal analysis of operating results.

(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.

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(6) (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 27% 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(7) in reserves for tax uncertainties and valuation allowance reserves, and "book to return" adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at our Non-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8) Reconciliation of GAAP-based net income to Non-GAAP-based net income:



Nine Months Ended March 31, 2020

Per share diluted

GAAP-based net income, attributable to $207,833 $ 0.77 OpenText

Add:

Amortization 306,559 1.13

Share-based compensation 21,530 0.08

Special charges (recoveries) 24,579 0.09

Other (income) expense, net 19,736 0.07

GAAP-based provision for (recovery of) income 78,800 0.29 taxes

Non-GAAP-based provision for income taxes (92,281) (0.34)

Non-GAAP-based net income, attributable to $566,756 $ 2.09 OpenText

Reconciliation of Adjusted EBITDA



Nine Months Ended March 31, 2020

GAAP-based net income, attributable to OpenText $207,833

Add:

Provision for (recovery of) income taxes 78,800

Interest and other related expense, net 105,849

Amortization of acquired technology-based 145,998 intangible assets

Amortization of acquired customer-based 160,561 intangible assets

Depreciation 65,809

Share-based compensation 21,530

Special charges (recoveries) 24,579

Other (income) expense, net 19,736

Adjusted EBITDA $830,695



GAAP-based net income margin 9.1 %

Adjusted EBITDA margin 36.4 %

Reconciliation of Free cash flows



Nine Months Ended March 31, 2020

GAAP-based cash flows provided by operating activities$ 674,286

Add:

Capital expenditures ^(1) (55,005)

Free cash flows $ 619,281



^(1) Defined as "Additions of property and equipment" in the Condensed Consolidated Statements of Cash Flows.

(3) The following tables provide a composition of our major currencies for revenue and expenses, expressed as a percentage, for the three and nine months ended March 31, 2021 and 2020:



Three Months Ended March 31, Three Months Ended March 31, 2021 2020

Currencies% of Revenue % of Expenses* % of Revenue % of Expenses*

EURO 24 % 14 % 22 % 13 %

GBP 5 % 6 % 5 % 6 %

CAD 3 % 11 % 3 % 10 %

USD 60 % 53 % 63 % 56 %

Other 8 % 16 % 7 % 15 %

Total 100 % 100 % 100 % 100 %



Nine Months Ended March 31, Nine Months Ended March 31, 2021 2020

Currencies% of Revenue % of Expenses* % of Revenue % of Expenses*

EURO 23 % 14 % 23 % 14 %

GBP 5 % 5 % 5 % 6 %

CAD 3 % 10 % 3 % 10 %

USD 61 % 55 % 60 % 54 %

Other 8 % 16 % 9 % 16 %

Total 100 % 100 % 100 % 100 %

Expenses include all cost of revenues and operating expenses included within* the Condensed Consolidated Statements of Income, except for amortization of intangible assets, share-based compensation and special charges (recoveries).

View original content: http://www.prnewswire.com/news-releases/opentext-reports-third-quarter-fiscal-year-2021-financial-results-301286076.html

SOURCE Open Text Corporation