PR Newswire | Aug 5, 2021 04:02PM EDT

08/05 15:01 CDT

OpenText Reports Fourth Quarter and Fiscal Year 2021 Financial Results WATERLOO, ON, Aug. 5, 2021

Record Annual Total Revenues with Cloud Revenue Growth of 21.6%

Repurchases 2.5 Million Common Shares and Increases Dividend by 10%

WATERLOO, ON, Aug. 5, 2021 /PRNewswire/ --

Fiscal 2021 Fourth Quarter Highlights Y/Y

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

ReportedConstant ReportedConstant ReportedConstant Currency Currency Currency

$893.5 $859.4 $694.4 $671.8 $360.2 $352.7

+8.1% +4.0% +5.6% +2.2% +8.3% +6.0%

Annual Recurring Revenues represent 78% of Total Revenues

* Operating cash flows were $296.2 million and free cash flows were $268.8 million * GAAP-based net income of $181.3 million, up 586.9% Y/Y, margin of 20.3%, up 1,710 basis points Y/Y * Adjusted EBITDA of $314.8 million, down 0.8%, margin of 35.2%, down 320 basis points Y/Y * GAAP-based diluted EPS of $0.66, up 560.0% Y/Y * Non-GAAP diluted EPS of $0.80, constant Y/Y * During the quarter, the company repurchased and cancelled 2.5 million common shares for $119.1 million under our Share Repurchase Plan * Quarterly cash dividend increased by 10%

Fiscal 2021 Annual Highlights Y/Y

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

ReportedConstant ReportedConstant ReportedConstant Currency Currency Currency

$3,386.1$3,304.8 $2,741.5$2,686.6 $1,407.4$1,389.7

+8.9% +6.3% +12.7% +10.4% +21.6% +20.0%

Annual Recurring Revenues represent 81% of Total Revenues

* Operating cash flows were $876.1 million and free cash flows were $812.4 million, which include the IRS settlement payment of $299.6 million * GAAP-based net income of $310.7 million, up 32.6% Y/Y, margin of 9.2%, up 170 basis points Y/Y * Adjusted EBITDA of $1,315.0 million, up 14.5%, margin of 38.8%, up 190 basis points Y/Y * GAAP-based diluted EPS of $1.14, up 32.6% Y/Y * Non-GAAP diluted EPS of $3.39, up 17.3% Y/Y

Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced its financial results for the fourth quarter and year ended June 30, 2021.

"Our robust fourth quarter results contributed to a record fiscal year, as we successfully helped our customers navigate the challenges of an evolving market and workforce," said Mark J. Barrenechea, OpenText CEO & CTO. "In Fiscal 2021, OpenText delivered a record $3.39 billion in total revenues, up 8.9% year-over-year, supported by record Cloud revenues of $1.4 billion, up 21.6% from a year ago. Annual Recurring Revenues (ARR) reached a record $2.7 billion, up 12.7% year-over-year, representing 81% of total revenues."

"Information Management's time has come, and OpenText is perfectly positioned to lead the market as we digitally empower many of the most innovative global organizations, in nearly every vertical and line of business. OpenText Cloud Editions enables customers to accelerate growth and stay ahead of the competition by maximizing the value of their information through our cloud-based Information Management platform."

"I am very pleased with our fourth quarter and Fiscal 2021 results," said Madhu Ranganathan, OpenText EVP, CFO. "In Fiscal 2021, we excelled in our operational performance, generating a record $1.3 billion of adjusted EBITDA, up 14.5% year-over-year, and free cash flows of $812.4 million which includes the IRS settlement payment of $299.6 million. With approximately $1.6 billion of cash as of June 30, 2021, and a net leverage ratio of 1.5x, our balance sheet and liquidity position remain strong. We are well positioned to drive our organic growth initiatives and to deploy capital that meet OpenText's growth and returns based metrics."

Financial Highlights for Q4 and Fiscal 2021 with Year Over Year Comparisons

Summary of Quarterly Results

(In millions, except per Q4 Q4 $ Q4 % share data) FY'21 FY'20 Change % Change FY'21 Change in CC* in CC*

Revenues:

Cloud services and $360.2$332.6$27.5 8.3 % $352.76.0 %subscriptions

Customer support 334.3 324.9 9.3 2.9 % 319.1 (1.8)%

Total annual recurring $694.4$657.5$36.9 5.6 % $671.82.2 %revenues**

License 132.5 105.8 26.7 25.3 % 124.6 17.8 %

Professional service and 66.6 63.3 3.3 5.2 % 63.0 (0.4)%other

Total revenues $893.5$826.6$66.9 8.1 % $859.44.0 %

GAAP-based operating $171.7$91.2 $80.5 88.2 % N/A N/A income

Non-GAAP-based operating $293.9$293.8$0.1 - % $285.7(2.7)%income ^(1)

GAAP-based net income $181.3$26.4 $154.9586.9% N/A N/A attributable to OpenText

GAAP-based EPS, diluted $0.66 $0.10 $0.56 560.0% N/A N/A

Non-GAAP-based EPS, $0.80 $0.80 $- - % $0.78 (2.5)%diluted ^(1)(2)

Adjusted EBITDA ^(1) $314.8$317.4($2.6)(0.8)% $306.3(3.5)%

Operating cash flows $296.2$280.3$15.9 5.7 % N/A N/A

Free cash flows ^(1) $268.8$262.5$6.2 2.4 % N/A N/A

Summary of Annual Results

(In millions, $ FY'21 in % except per share FY'21 FY'20 Change % Change CC* Change data) in CC*

Revenues:

Cloud services and $1,407.4$1,157.7$249.8 21.6 % $1,389.720.0 %subscriptions

Customer support 1,334.1 1,275.6 58.5 4.6 % 1,297.0 1.7 %

Total annual recurring $2,741.5$2,433.3$308.2 12.7 % $2,686.610.4 %revenues**

License 384.7 402.9 (18.1) (4.5)% 368.1 (8.6)%

Professional 259.9 273.6 (13.7) (5.0)% 250.0 (8.6)%service and other

Total revenues $3,386.1$3,109.7$276.4 8.9 % $3,304.86.3 %

GAAP-based $740.9 $503.5 $237.4 47.1 % N/A N/A operating income

Non-GAAP-based operating income ^ $1,230.0$1,058.8$171.2 16.2 % $1,193.912.8 %(1)

GAAP-based net income attributable$310.7 $234.2 $76.4 32.6 % N/A N/A to OpenText

GAAP-based EPS, $1.14 $0.86 $0.28 32.6 % N/A N/A diluted

Non-GAAP-based EPS,$3.39 $2.89 $0.50 17.3 % $3.28 13.5 %diluted^ (1)(2)

Adjusted EBITDA ^ $1,315.0$1,148.1$167.0 14.5 % $1,278.211.3 %(1)

Operating cash $876.1 $954.5 ($78.4)(8.2)% N/A N/A flows

Free cash flows ^ $812.4 $881.8 ($69.4)(7.9)% 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 and Share Repurchases

As part of our quarterly, non-cumulative cash dividend program, the Board declared on August 4, 2021, a cash dividend increase of 10% to $0.2209 per common share. The record date for this dividend is September 3, 2021 and the payment date is September 24, 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.

"Since Fiscal 2013, OpenText has delivered approximately $1.3 billion to shareholders through our dividend and share repurchase programs. In Fiscal 2021 we repurchased and cancelled 2.5 million common shares through our share repurchase plan, and in the next fiscal year, we expect to increase shareholder returns by allocating approximately 33% of free cash flows towards both our dividend and share repurchase programs," said Mark J. Barrenechea.

Quarterly Business Highlights

* Key customer wins in the quarter included VMware, Wells Fargo, EDF, Cerner, Raytheon, Revlon, Froneri, DHL, Transport for London, Big Cart Holdings, California Department of State Hospitals, Enercon, Multibank Panama, Netherlands Police, Rapid Radiology and Services Australia * Cloud Editions 21.3 strengthens Information Management in the cloud at scale * OpenText partners with Google Cloud to extend availability of solution extensions for SAP(r) applications to the Asia Pacific Japan region * Industry-leading solutions from OpenText Complement RISE with SAP * OpenText launches Managed Detection and Response (MDR) Service * OpenText named a leader in Content Platforms by Forrester * OpenText recognized as an overall leader for fourth consecutive year in the 2021 Customer Communications Management Aspire Leaderboard * OpenText World Asia Pacific showcases OpenText Cloud Editions * Published our second Corporate Citizenship Report confirming our commitment to ESG

Summary of Quarterly Results

% Change % Change Q4 FY'21Q3 FY'21Q4 FY'20 (Q4 FY'21 vs (Q4 FY'21 vs Q3 FY'21) Q4 FY'20)

Revenue $893.5 $832.9 $826.6 7.3 % 8.1 % (millions)

GAAP-based 69.6 %68.6 %68.5 %100 bps110 bpsgross margin

Non-GAAP-based gross margin ^ 75.8 %75.2 %75.8 %60 bps- bps(1)

GAAP-based EPS,$0.66 $0.33 $0.10 100.0 % 560.0 % diluted

Non-GAAP-based EPS, diluted ^ $0.80 $0.75 $0.80 6.7 % - % (1)(2)

Summary of Annual Results

FY'21 FY'20 % Change

Revenue (millions) $3,386.1 $3,109.7 8.9 %

GAAP-based gross margin 69.4 %67.7 %170 bps

Non-GAAP-based gross margin ^(1) 76.1 %74.5 %160 bps

GAAP-based EPS, diluted $1.14 $0.86 32.6 %

Non-GAAP-based EPS, diluted ^(1)(2)$3.39 $2.89 17.3 %

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

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 August 5, 2021 at 7:00 p.m. ET through 11:59 p.m. on August 19, 2021 and can be accessed by dialing 1-855-669-9658 (toll-free) or +1-604-674-8052 (international) and using passcode 7298 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, 2022 (Fiscal 2022) on growth, future cloud growth and market share gains, future organic growth initiatives and deployment of capital, 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 2022 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 CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share data)



June 30, June 30, 2020 2021

ASSETS

Cash and cash equivalents $1,607,306$1,692,850

Accounts receivable trade, net of allowance for credit losses of $22,151 as of June 30, 2021 and 438,547 466,357 $20,906 as of June 30, 2020

Contract assets 25,344 29,570

Income taxes recoverable 32,312 61,186

Prepaid expenses and other current assets 98,551 136,436

Total current assets 2,202,060 2,386,399

Property and equipment 233,595 244,555

Operating lease right of use assets 234,532 207,869

Long-term contract assets 19,222 15,427

Goodwill 4,691,673 4,672,356

Acquired intangible assets 1,187,260 1,612,564

Deferred tax assets 796,738 911,565

Other assets 208,894 154,467

Long-term income taxes recoverable 35,362 29,620

Total assets $9,609,336$10,234,822

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities $423,592 $373,314

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

Operating lease liabilities 58,315 64,071

Deferred revenues 852,629 812,218

Income taxes payable 17,368 44,630

Total current liabilities 1,361,904 1,904,233

Long-term liabilities:

Accrued liabilities 28,830 34,955

Pension liability 74,511 73,129

Long-term debt 3,578,859 3,584,311

Long-term operating lease liabilities 224,453 217,165

Long-term deferred revenues 98,989 94,382

Long-term income taxes payable 34,113 171,200

Deferred tax liabilities 108,224 148,738

Total long-term liabilities 4,147,979 4,323,880

Shareholders' equity:

Share capital and additional paid-in capital

271,540,755 and 271,863,354 Common Shares issued and outstanding at June 30, 2021 and June 30, 1,947,764 1,851,777 2020, respectively; authorized Common Shares: unlimited

Accumulated other comprehensive income 66,238 17,825

Retained earnings 2,153,326 2,159,396

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

Total OpenText shareholders' equity 4,097,942 4,005,390

Non-controlling interests 1,511 1,319

Total shareholders' equity 4,099,453 4,006,709

Total liabilities and shareholders' equity $9,609,336$10,234,822

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



Three Months Ended June 30,

2021 2020

Revenues:

Cloud services and subscriptions $360,160$332,618

Customer support 334,256 324,915

License 132,541 105,803

Professional service and other 66,570 63,276

Total revenues 893,527 826,612

Cost of revenues:

Cloud services and subscriptions 127,583 116,569

Customer support 32,938 32,568

License 4,315 3,404

Professional service and other 53,662 48,435

Amortization of acquired technology-based intangible 53,215 59,719 assets

Total cost of revenues 271,713 260,695

Gross profit 621,814 565,917

Operating expenses:

Research and development 117,235 100,766

Sales and marketing 183,237 152,882

General and administrative 73,019 62,574

Depreciation 21,021 23,649

Amortization of acquired customer-based intangible 52,469 58,998 assets

Special charges (recoveries) 3,152 75,849

Total operating expenses 450,133 474,718

Income from operations 171,681 91,199

Other income (expense), net 45,017 7,790

Interest and other related expense, net (37,550) (40,529)

Income before income taxes 179,148 58,460

Provision for (recovery of) income taxes (2,215) 32,037

Net income for the period $181,363$26,423

Net (income) loss attributable to non-controlling (80) (31) interests

Net income attributable to OpenText $181,283$26,392

Earnings per share-basic attributable to OpenText $0.66 $0.10

Earnings per share-diluted attributable to OpenText $0.66 $0.10

Weighted average number of Common Shares 272,892 271,717 outstanding-basic (in '000's)

Weighted average number of Common Shares 273,981 272,367 outstanding-diluted (in '000's)

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



Year Ended June 30,

2021 2020 2019

Revenues:

Cloud services and subscriptions $1,407,445$1,157,686$907,812

Customer support 1,334,062 1,275,586 1,247,915

License 384,711 402,851 428,092

Professional service and other 259,897 273,613 284,936

Total revenues 3,386,115 3,109,736 2,868,755

Cost of revenues:

Cloud services and subscriptions 481,818 449,940 383,993

Customer support 122,753 123,894 124,343

License 13,916 11,321 14,347

Professional service and other 197,183 212,903 224,635

Amortization of acquired 218,796 205,717 183,385 technology-based intangible assets

Total cost of revenues 1,034,466 1,003,775 930,703

Gross profit 2,351,649 2,105,961 1,938,052

Operating expenses:

Research and development 421,447 370,411 321,836

Sales and marketing 622,221 585,044 518,035

General and administrative 263,521 237,532 207,909

Depreciation 85,265 89,458 97,716

Amortization of acquired customer-based 216,544 219,559 189,827 intangible assets

Special charges (recoveries) 1,748 100,428 35,719

Total operating expenses 1,610,746 1,602,432 1,371,042

Income from operations 740,903 503,529 567,010

Other income (expense), net 61,434 (11,946) 10,156

Interest and other related expense, net (151,567) (146,378) (136,592)

Income before income taxes 650,770 345,205 440,574

Provision for (recovery of) income taxes339,906 110,837 154,937

Net income $310,864 $234,368 $285,637

Net (income) loss attributable to (192) (143) (136) non-controlling interests

Net income attributable to OpenText $310,672 $234,225 $285,501

Earnings per share-basic attributable to$1.14 $0.86 $1.06 OpenText

Earnings per share-diluted attributable $1.14 $0.86 $1.06 to OpenText

Weighted average number of Common Shares outstanding-basic 272,533 270,847 268,784 (in '000's)

Weighted average number of Common Shares outstanding-diluted 273,479 271,817 269,908 (in '000's)

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



Year Ended June 30,

2021 2020 2019

Net income $310,864$234,368$285,637

Other comprehensive income (loss)-net of tax:

Net foreign currency translation 42,440 (7,784) (3,882) adjustments

Unrealized gain (loss) on cash flow hedges:

Unrealized gain (loss) - net of tax expense (recovery) effect of $1,532, 4,246 (1,662) 16 ($599) and $6 for the year ended June 30, 2021, 2020 and 2019, respectively

(Gain) loss reclassified into net income - net of tax (expense) recovery effect of (3,280) 985 1,494 ($1,182), $355 and $539 for the year ended June 30, 2021, 2020 and 2019, respectively

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

Actuarial gain (loss) - net of tax expense (recovery) effect of $990, $1,219 and 3,987 1,245 (7,421) ($2,004) for the year ended June 30, 2021, 2020 and 2019, respectively

Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $379, $520 and $292 for the year1,020 917 272 ended June 30, 2021, 2020 and 2019, respectively

Total other comprehensive income (loss) 48,413 (6,299) (9,521) net

Total comprehensive income 359,277 228,069 276,116

Comprehensive (income) loss attributable (192) (143) (136) to non-controlling interests

Total comprehensive income attributable to$359,085$227,926$275,980OpenText

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



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 267,651$1,707,073(691) $(18,732)$1,994,235$33,645 $ 1,037 $3,717,258June 30, 2018

Issuance of Common Shares

Under employee stock option 1,472 35,626 - - - - - 35,626 plans

Under employee stock purchase 711 21,835 - - - - - 21,835 plans

Share-based - 26,770 - - - - - 26,770 compensation

Purchase of - - (726) (26,499) - - - (26,499) treasury stock

Issuance of - (16,465) 614 16,465 - - - - treasury stock

Dividends declared - - - - (168,859) - - (168,859) ($0.6300 per Common Share)

Cumulative effect of ASU - - - - (26,780) - - (26,780) 2016-16

Cumulative effect of Topic- - - - 29,786 - - 29,786 606

Other comprehensive - - - - - (9,521) - (9,521) income (loss) - net

Non-controlling- (625) - - - - 42 (583) interest

Net income - - - - 285,501 - 136 285,637

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 1,530 41,282 - - - - - 41,282 plans

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

Share-based - 29,532 - - - - - 29,532 compensation

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

Issuance of - (11,008) 481 17,582 - - - 6,574 treasury stock

Dividends declared - - - - (188,712) - - (188,712) ($0.6984 per Common Share)

Other comprehensive - - - - - (6,299) - (6,299) income (loss) - net

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

Net income - - - - 234,225 - 143 234,368

Balance as of 271,863$1,851,777(622) $(23,608)$2,159,396$17,825 $ 1,319 $4,006,709June 30, 2020

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

Issuance of Common Shares

Under employee stock option 1,605 49,565 - - - - - 49,565 plans

Under employee stock purchase 573 22,307 193 6,690 - - - 28,997 plans

Share-based - 51,969 - - - - - 51,969 compensation

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

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

Repurchase of (2,500)(15,475) - - (103,630) - - (119,105) Common Shares

Dividends declared - - - - (210,662) - - (210,662) ($0.7770 per Common Share)

Other comprehensive - - - - - 48,413 - 48,413 income (loss) - net

Net income - - - - 310,672 - 192 310,864

Balance as of 271,541$1,947,764(1,568)$(69,386)$2,153,326$66,238 $ 1,511 $4,099,453June 30, 2021

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



Three Months Ended June 30,

2021 2020

Cash flows from operating activities:

Net income for the period $181,363 $26,423

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

Depreciation and amortization of intangible assets126,705 142,366

Share-based compensation expense 13,350 8,002

Pension expense 1,946 1,479

Amortization of debt issuance costs 1,153 1,130

Accelerated amortization of right of use assets - 36,864

Loss on sale and write down of property and 792 9,714 equipment

Deferred taxes (7,805) 14,677

Share in net (income) loss of equity investees (42,877) (2,225)

Changes in operating assets and liabilities:

Accounts receivable (26,118) (1,689)

Contract assets (10,298) (13,636)

Prepaid expenses and other current assets 40,261 458

Income taxes (23,169) (478)

Accounts payable and accrued liabilities 53,415 72,876

Deferred revenue (23,305) (12,974)

Other assets 11,149 (6,309)

Operating lease assets and liabilities, net (373) 3,572

Net cash provided by operating activities 296,189 280,250

Cash flows from investing activities:

Additions of property and equipment (27,408) (17,704)

Purchase of Dynamic Solutions Group Inc. (600) -

Other investing activities (2,550) (2,783)

Net cash used in investing activities (30,558) (20,487)

Cash flows from financing activities:

Proceeds from issuance of Common Shares from 34,287 13,493 exercise of stock options and ESPP

Repayment of long-term debt and Revolver (2,500) (2,500)

Debt issuance costs - (3,636)

Repurchase of Common Shares (119,105) -

Payments of dividends to shareholders (54,374) (47,335)

Net cash provided by (used in) financing (141,692) (39,978) activities

Foreign exchange gain (loss) on cash held in 7,181 19,882 foreign currencies

Increase (decrease) in cash, cash equivalents and 131,120 239,667 restricted cash during the period

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

Cash, cash equivalents and restricted cash at end $1,609,800$1,697,263of the period



Reconciliation of cash, cash equivalents and June 30, June 30, restricted cash: 2021 2020

Cash and cash equivalents $1,607,306$1,692,850

Restricted cash ^(1) 2,494 4,413

Total cash, cash equivalents and restricted cash $1,609,800$1,697,263



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

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



Year Ended June 30,

2021 2020 2019

Cash flows from operating activities:

Net income $310,864 $234,368 $285,637

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

Depreciation and amortization of 520,605 514,734 470,928 intangible assets

Share-based compensation expense 51,969 29,532 26,770

Pension expense 6,616 5,802 4,624

Amortization of debt issuance costs 4,548 4,633 4,330

Accelerated amortization of right of - 36,864 - use assets

Loss on extinguishment of debt - 17,854 -

Loss on sale and write down of 2,771 9,714 9,438 property and equipment

Deferred taxes 73,039 51,388 47,425

Share in net (income) loss of equity (62,897) (8,700) (13,668) investees

Changes in operating assets and liabilities:

Accounts receivable 60,954 84,499 75,508

Contract assets (39,333) (40,301) (37,623)

Prepaid expenses and other current 37,733 (6,897) (819) assets

Income taxes (140,763) (35,086) 27,291

Accounts payable and accrued 26,088 30,613 (21,732) liabilities

Deferred revenue 39,295 25,306 (1,827)

Other assets 11,914 1,127 (4)

Operating lease assets and (27,283) (914) - liabilities, net

Net cash provided by operating 876,120 954,536 876,278 activities

Cash flows from investing activities:

Additions of property and equipment (63,675) (72,709) (63,837)

Purchase of XMedius 444 (73,335) -

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

Purchase of Dynamic Solutions Group (971) (4,149) - Inc.

Purchase of Catalyst Repository - - (70,800) Systems Inc.

Purchase of Liaison Technologies, Inc.- - (310,644)

Purchase of Guidance Software, Inc., - - (2,279) net of cash acquired

Other investing activities (4,568) (14,127) (16,966)

Net cash used in investing activities (68,770) (1,469,417)(464,526)

Cash flows from financing activities:

Proceeds from issuance of Common Shares from exercise of stock options 80,067 66,600 57,889 and ESPP

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

Repayment of long-term debt and (610,000) (1,713,631)(10,000) Revolver

Debt extinguishment costs - (11,248) -

Debt issuance costs - (21,806) (322)

Repurchase of Common Shares (119,105) - -

Purchase of treasury stock (64,847) (12,424) (26,499)

Purchase of non-controlling interest - - (583)

Payments of dividends to shareholders (210,662) (188,712) (168,859)

Net cash provided by (used in) (924,547) 1,268,779 (148,374)financing activities

Foreign exchange gain (loss) on cash 29,734 (178) (3,826) held in foreign currencies

Increase (decrease) in cash, cash equivalents and restricted cash during(87,463) 753,720 259,552 the period

Cash, cash equivalents and restricted 1,697,263 943,543 683,991 cash at beginning of the period

Cash, cash equivalents and restricted $1,609,800$1,697,263$943,543cash at end of the period

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



Reconciliation of cash, cash June 30, June 30, June 30, equivalents and restricted cash: 2021 2020 2019

Cash and cash equivalents $1,607,306$1,692,850$941,009

Restricted cash ^(1) 2,494 4,413 2,534

Total cash, cash equivalents and $1,609,800$1,697,263$943,543restricted cash



^(1) Restricted cash is classified under the Prepaid expenses and othercurrent assets and Other assets line items on the 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 or earnings per share,attributable to OpenText, on a diluted basis, excluding the effects of theamortization of acquired intangible assets, other income (expense), share-basedcompensation, and special charges (recoveries), all net of tax and any taxbenefits/expense items unrelated to current period income, as further describedin the tables below. Non-GAAP-based gross profit is the arithmetical sum ofGAAP-based gross profit and the amortization of acquired technology-basedintangible assets and share-based compensation within cost of sales.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,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 and most recently in response tothe COVID-19 pandemic, that have resulted in costs associated with reductionsin headcount, consolidation of leased facilities and related costs, all whichare recorded under the Company's "Special charges (recoveries)" caption on theConsolidated Statements of Income. Each restructuring activity is a discreteevent based on a unique set of business objectives or circumstances, and eachdiffers in terms of its operational implementation, business impact and scope,and the size of each restructuring plan can vary significantly from period toperiod. Therefore, the Company believes that the exclusion of these specialcharges (recoveries) will also better aid readers of financial statements inthe understanding and comparability of the Company's operating results andunderlying operational trends.

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 June 30, 2021 (In thousands, except for per share data)

Three Months Ended June 30, 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 $127,583 $(935) (1) $ 126,648 subscriptions

Customer support32,938 (505) (1) 32,433

Professional service and 53,662 (698) (1) 52,964 other

Amortization of acquired technology-based53,215 (53,215) (2) - intangible assets

GAAP-based gross profit and gross margin (%) / 621,814 69.6% 55,353 (3) 677,167 75.8% Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and 117,235 (2,664) (1) 114,571 development

Sales and 183,237 (4,718) (1) 178,519 marketing

General and 73,019 (3,830) (1) 69,189 administrative

Amortization of acquired customer-based 52,469 (52,469) (2) - intangible assets

Special charges 3,152 (3,152) (4) - (recoveries)

GAAP-based income from operations / 171,681 122,186 (5) 293,867 Non-GAAP-based income from operations

Other income 45,017 (45,017) (6) - (expense), net

Provision for (recovery of) (2,215) 38,099 (7) 35,884 income taxes

GAAP-based net income / Non-GAAP-based 181,283 39,070 (8) 220,353 net income, attributable to OpenText

GAAP-based earnings per share / Non-GAAP-based $0.66 $0.14 (8) $ 0.80 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 recovery rate of approximately 1% 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 June 30, 2021

Per share diluted

GAAP-based net income, attributable to $181,283 $ 0.66 OpenText

Add:

Amortization 105,684 0.39

Share-based compensation 13,350 0.05

Special charges (recoveries) 3,152 0.01

Other (income) expense, net (45,017) (0.16)

GAAP-based provision for (recovery of) income (2,215) (0.02) taxes

Non-GAAP-based provision for income taxes (35,884) (0.13)

Non-GAAP-based net income, attributable to $220,353 $ 0.80 OpenText



Reconciliation of Adjusted EBITDA



Three Months Ended June 30, 2021

GAAP-based net income, attributable to OpenText $181,283

Add:

Provision for (recovery of) income taxes (2,215)

Interest and other related expense, net 37,550

Amortization of acquired technology-based 53,215 intangible assets

Amortization of acquired customer-based 52,469 intangible assets

Depreciation 21,021

Share-based compensation 13,350

Special charges (recoveries) 3,152

Other (income) expense, net (45,017)

Adjusted EBITDA $314,808



GAAP-based net income margin 20.3 %

Adjusted EBITDA margin 35.2 %

Reconciliation of Free cash flows



Three Months Ended June 30, 2021

GAAP-based cash flows provided by operating activities$ 296,189

Add:

Capital expenditures ^(1) (27,408)

Free cash flows $ 268,781



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

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the year ended June 30, 2021 (In thousands, except for per share data)

Year Ended June 30, 2021

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

Cost of revenues

Cloud services and $481,818 $(3,419) (1) $478,399 subscriptions

Customer support122,753 (1,910) (1) 120,843

Professional service and 197,183 (2,565) (1) 194,618 other

Amortization of acquired technology-based218,796 (218,796) (2) - intangible assets

GAAP-based gross profit and gross margin (%) / 2,351,64969.4% 226,690 (3) 2,578,339 76.1% Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and 421,447 (9,859) (1) 411,588 development

Sales and 622,221 (18,312) (1) 603,909 marketing

General and 263,521 (15,904) (1) 247,617 administrative

Amortization of acquired customer-based 216,544 (216,544) (2) - intangible assets

Special charges 1,748 (1,748) (4) - (recoveries)

GAAP-based income from operations / 740,903 489,057 (5) 1,229,960 Non-GAAP-based income from operations

Other income 61,434 (61,434) (6) - (expense), net

Provision for (recovery of) 339,906 (188,931) (7) 150,975 income taxes

GAAP-based net income / Non-GAAP-based 310,672 616,554 (8) 927,226 net income, attributable to OpenText

GAAP-based earnings per share / Non-GAAP-based $1.14 $2.25 (8) $3.39 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 52% 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 year ended June 30, 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 second quarter of Fiscal 2021.

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

Year Ended June 30, 2021

Per share diluted

GAAP-based net income, attributable to OpenText $310,672$ 1.14

Add:

Amortization 435,340 1.59

Share-based compensation 51,969 0.19

Special charges (recoveries) 1,748 0.01

Other (income) expense, net (61,434) (0.22)

GAAP-based provision for (recovery of) income 339,906 1.23 taxes

Non-GAAP-based provision for income taxes (150,975)(0.55)

Non-GAAP-based net income, attributable to $927,226$ 3.39 OpenText

Reconciliation of Adjusted EBITDA



Year Ended June 30, 2021

GAAP-based net income, attributable to OpenText $310,672

Add:

Provision for (recovery of) income taxes 339,906

Interest and other related expense, net 151,567

Amortization of acquired technology-based intangible 218,796 assets

Amortization of acquired customer-based intangible 216,544 assets

Depreciation 85,265

Share-based compensation 51,969

Special charges (recoveries) 1,748

Other (income) expense, net (61,434)

Adjusted EBITDA $1,315,033



GAAP-based net income margin 9.2 %

Adjusted EBITDA margin 38.8 %

Reconciliation of Free cash flows



Year Ended June 30, 2021

GAAP-based cash flows provided by operating $876,120 activities

Add:

Capital expenditures ^(1) (63,675)

Free cash flows $812,445



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

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 Adjustments Note Measures % of Total Measures % 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 $ 63,572 activities

Add:

Capital expenditures ^(1) (13,311)

Free cash flows $ 50,261



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

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the three months ended June 30, 2020 (In thousands, except for per share data)

Three Months Ended June 30, 2020

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

Cost of revenues

Cloud services and $116,569 $(490) (1) $ 116,079 subscriptions

Customer support32,568 (310) (1) 32,258

Professional service and 48,435 (377) (1) 48,058 other

Amortization of acquired technology-based59,719 (59,719) (2) - intangible assets

GAAP-based gross profit and gross margin (%) / 565,917 68.5 %60,896 (3) 626,813 75.8 % Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and 100,766 (1,590) (1) 99,176 development

Sales and 152,882 (2,575) (1) 150,307 marketing

General and 62,574 (2,660) (1) 59,914 administrative

Amortization of acquired customer-based 58,998 (58,998) (2) - intangible assets

Special charges 75,849 (75,849) (4) - (recoveries)

GAAP-based income from operations / 91,199 202,568 (5) 293,767 Non-GAAP-based income from operations

Other income 7,790 (7,790) (6) - (expense), net

Provision for (recovery of) 32,037 3,416 (7) 35,453 income taxes

GAAP-based net income / Non-GAAP-based 26,392 191,362 (8) 217,754 net income, attributable to OpenText

GAAP-based earnings per share / Non-GAAP-based $0.10 $0.70 (8) $ 0.80 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 55% 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 June 30, 2020

Per share diluted

GAAP-based net income, attributable to $26,392 $ 0.10 OpenText

Add:

Amortization 118,717 0.44

Share-based compensation 8,002 0.03

Special charges (recoveries) 75,849 0.28

Other (income) expense, net (7,790) (0.03)

GAAP-based provision for (recovery of) income 32,037 0.12 taxes

Non-GAAP-based provision for income taxes (35,453) (0.14)

Non-GAAP-based net income, attributable to $217,754 $ 0.80 OpenText

Reconciliation of Adjusted EBITDA



Three Months Ended June 30, 2020

GAAP-based net income, attributable to OpenText $26,392

Add:

Provision for (recovery of) income taxes 32,037

Interest and other related expense, net 40,529

Amortization of acquired technology-based 59,719 intangible assets

Amortization of acquired customer-based 58,998 intangible assets

Depreciation 23,649

Share-based compensation 8,002

Special charges (recoveries) 75,849

Other (income) expense, net (7,790)

Adjusted EBITDA $317,385



GAAP-based net income margin 3.2 %

Adjusted EBITDA margin 38.4 %

Reconciliation of Free cash flows



Three Months Ended June 30, 2020

GAAP-based cash flows provided by operating $ 280,250 activities

Add:

Capital expenditures ^(1) (17,704)

Free cash flows $ 262,546



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

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures for the year ended June 30, 2020 (In thousands, except for per share data)

Year Ended June 30, 2020

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

Cost of revenues

Cloud services and $449,940 $ (1,642) (1) $ 448,298 subscriptions

Customer support123,894 (1,207) (1) 122,687

Professional service and 212,903 (1,294) (1) 211,609 other

Amortization of acquired technology-based205,717 (205,717) (2) - intangible assets

GAAP-based gross profit and gross margin (%) / 2,105,96167.7 %209,860 (3) 2,315,821 74.5 % Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and 370,411 (5,309) (1) 365,102 development

Sales and 585,044 (9,335) (1) 575,709 marketing

General and 237,532 (10,745) (1) 226,787 administrative

Amortization of acquired customer-based 219,559 (219,559) (2) - intangible assets

Special charges 100,428 (100,428) (4) - (recoveries)

GAAP-based income from operations / 503,529 555,236 (5) 1,058,765 Non-GAAP-based income from operations

Other income (11,946) 11,946 (6) - (expense), net

Provision for (recovery of) 110,837 16,897 (7) 127,734 income taxes

GAAP-based net income / Non-GAAP-based 234,225 550,285 (8) 784,510 net income, attributable to OpenText

GAAP-based earnings per share / Non-GAAP-based $0.86 $ 2.03 (8) $ 2.89 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 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(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:

Year Ended June 30, 2020

Per share diluted

GAAP-based net income, attributable to OpenText $234,225$ 0.86

Add:

Amortization 425,276 1.56

Share-based compensation 29,532 0.11

Special charges (recoveries) 100,428 0.37

Other (income) expense, net 11,946 0.04

GAAP-based provision for (recovery of) income 110,837 0.41 taxes

Non-GAAP-based provision for income taxes (127,734)(0.46)

Non-GAAP-based net income, attributable to $784,510$ 2.89 OpenText

Reconciliation of Adjusted EBITDA



Year Ended June 30, 2020

GAAP-based net income, attributable to OpenText $234,225

Add:

Provision for (recovery of) income taxes 110,837

Interest and other related expense, net 146,378

Amortization of acquired technology-based intangible 205,717 assets

Amortization of acquired customer-based intangible 219,559 assets

Depreciation 89,458

Share-based compensation 29,532

Special charges (recoveries) 100,428

Other (income) expense, net 11,946

Adjusted EBITDA $1,148,080



GAAP-based net income margin 7.5 %

Adjusted EBITDA margin 36.9 %

Reconciliation of Free cash flows



Year Ended June 30, 2020

GAAP-based cash flows provided by operating $954,536 activities

Add:

Capital expenditures ^(1) (72,709)

Free cash flows $881,827



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

The following tables provide a composition of our major currencies for(3) revenue and expenses, expressed as a percentage, for the three months and year ended June 30, 2021 and 2020:

Three Months Ended June 30, 2021Three Months Ended June 30, 2020

Currencies% of Revenue % of Expenses^(1)% of Revenue % of Expenses^(1)

EURO 24 % 14 % 22 % 13 %

GBP 5 % 5 % 4 % 5 %

CAD 3 % 13 % 3 % 8 %

USD 60 % 53 % 63 % 57 %

Other 8 % 15 % 8 % 17 %

Total 100 % 100 % 100 % 100 %



Year Ended June 30, 2021 Year Ended June 30, 2020

Currencies% of Revenue % of Expenses^(1)% of Revenue % of Expenses^(1)

EURO 23 % 14 % 22 % 14 %

GBP 5 % 5 % 5 % 6 %

CAD 3 % 11 % 3 % 9 %

USD 61 % 54 % 61 % 55 %

Other 8 % 16 % 9 % 16 %

Total 100 % 100 % 100 % 100 %

Expenses include all cost of revenues and operating expenses included^ within the Consolidated Statements of Income, except for amortization of(1) intangible assets, share-based compensation and special charges (recoveries).

View original content: https://www.prnewswire.com/news-releases/opentext-reports-fourth-quarter-and-fiscal-year-2021-financial-results-301349782.html

SOURCE Open Text Corporation