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Copyright © Open Text Corporation. All rights reserved.
May 1, 2012
FY12-Q3
INVESTOR PRESENTATION
DisclaimerCertain statements in this presentation constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Open Text, or developments in Open Text’s business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. The historical increases in the Company's revenues and earnings do not assure the revenues and earnings will not decrease in the future. Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action. Forward-looking statements may also include any statement relating to future events, conditions or circumstances. Open Text cautions you not
Slide 2
any statement relating to future events, conditions or circumstances. Open Text cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements relate to, among other things, changes in the ECM market; the market focus of Open Text, Open Text’s revenue mix and margin targets; Open Text’s operations priorities; and Open Text’s strategy for its products and solutions. The risks and uncertainties that may affect forward-looking statements include, among others, the completion and integration of acquisitions, the possibility of technical, logistical or planning issues in connection with deployments, the continuous commitment of Open Text's customers, demand for Open Text 's products and other risks detailed from time to time in Open Text's filings with the Securities and Exchange Commission and Canadian provincial securities regulators, including Open Text's Annual Report on Form 10-K for the year ended June 30, 2011 and Quarterly Report on Form 10-Q for the quarters ended September 30, 2011, December 31, 2011 and March 31, 2012. Fforward-looking statements are based on management’s current plans, estimates, projections, beliefs and opinions, and the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.
Copyright © 2010 Open Text Corporation. All rights reserved.2Copyright © 2012 Open Text Corporation. All rights reserved.
Reconciliation of Selected Non-GAAP Measures – Q3 FY11Footnotes
1 Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results
2 Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3 Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
4 Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
5 Adjustment relates to differences between the GAAP-based tax recovery of approximately 20% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income. The GAAP-based tax recovery is primarily due to "one-time" tax benefits relating to ongoing internal reorganizations and mergers of international subsidiaries acquired; these reorganizations and mergers cause a change in the tax status of these subsidiaries resulting in a reduction in deferred tax liabilities recorded upon the acquisition of these subsidiaries, and a corresponding reduction in income tax expense.
� (Nasdaq: OTEX, TSX: OTC)
� $1B+ global revenue
� #1 in ECM*
Scale and Momentum
Copyright © 2010 Open Text Corporation. All rights reserved.3Copyright © 2012 Open Text Corporation. All rights reserved.
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Three months ended March 31, 2011
Per share
Non GAAP net income 53,378 0.91
Less:
Amortization 27,779 0.48
Share-based compensation 3,095 0.05
Special charges 4,437 0.08
Other (income) expenses (3,078) (0.05)
GAAP based provision for (recovery of) income taxes
(5,995) (0.10)
Tax on Non-GAAP based provision (8,690) (0.16)
GAAP net income 35,830 0.61
� #1 in ECM*
� 4,600 employees
� 20 years of proven innovation
� 31 country offices
� 141 countries supported
*as per Gartner Group
Why OpenText
� Largest independent provider of Enterprise Content Management (ECM)
� Investing in new markets: Business Process Management (BPM)
� Demonstrated earnings power and operational discipline
� TTM cash flow of $238.6* million and large recurring maintenance revenues
Slide 44
Copyright © 2010 Open Text Corporation. All rights reserved.Copyright © 2012 Open Text Corporation. All rights reserved.
revenues
� $508.9 million in cash*
� Strategic growth opportunities: geographies, verticals and partners
� Market share gains over IBM and EMC
� Global scale: products, people and process
� Proven acquirer
* As of March 31, 2012
Why Customers Buy. Paths to Growth.
Why Customers Buy Paths To Growth
� Compliance and Regulations
� Core ECM Share Gains
� Business Process
5Copyright © 2012 Open Text Corporation. All rights reserved.
� Unstructured Data
� Information Security
� Mobility
� Cloud
� Standardization and Best Practices
� Business Process Management (BPM)
� Customer Experience Management (CEM)
� SAP and Microsoft
� New Verticals
� Public Sector
� Emerging Markets
Diverse Global Customer Base
6Slide 6
Copyright © 2012 Open Text Corporation. All rights reserved.
� Largest newspaper publisher in the UK
� Extended its use of OpenText Semantic solutions, to become a
Customer win: News International
Slide 7
Semantic solutions, to become a key part of their Newsroom 360 transformation project
� Creates and distributes news content across all digital channels
7Copyright © 2010 Open Text Corporation. All rights reserved.
Copyright © 2012 Open Text Corporation. All rights reserved.
Customer Win: The Spanish National Lottery
� Selected OpenText Web Experience Management to create their new website
Copyright © Open Text Corporation. All rights reserved. Slide 8Copyright © Open Text Corporation. All rights reserved. Slide 8
� Will be the main communication channel for their organization in the future
Customer win: Trinity Mirror plc
� Over the next 18 months all Trinity Mirror image desks will be consolidated in to the single database
� All its published digital assets, pages, articles and video
Copyright © Open Text Corporation. All rights reserved. Slide 9
pages, articles and video
� This will form a powerful and agile content hub - allows Trinity Mirror to leverage any digital asset against any of its titles, in print, on-line or tablet.
Customer win: Emergency Medicine Physicians
� Purchased OpenText Tempo™
� Information securely available allowing users to work with it as they need, using desktop, laptops, tablets, and mobile
Copyright © Open Text Corporation. All rights reserved. Slide 10Copyright © Open Text Corporation. All rights reserved. Slide 10
laptops, tablets, and mobile devices.
“Realizing that Dropbox did not meet our security requirements, EMP purchased
OpenText Tempo for secure file sharing from multiple devices. OpenText is a company we
can trust with our secure data needs. We couldn't be happier with the solution.”
-- David Peppard, Chief Information and Technology Officer, Emergency Medicine
Physicians.
OpenText Partner Ecosystem
Applications SI / FSI Transformation
11Copyright © 2012 Open Text Corporation. All rights reserved.
The Value of Enterprise Information Management
Meet growing compliance and
Protect your valuable business
Support productive, secure and
Make optimal use of resources by
Information Governance
InformationSecurity
Information Exchange
InformationProcesses
compliance and regulatory
requirements to reduce exposure
and legal risk in the process of value
creation.
valuable business information from outside intruders and inside leaks.
secure and engaging
collaboration and communication in
the new social world.
of resources by empowering people with the information and processes they
need to be successful.
Slide 12Confidential: Open Text Corporation. All rights reserved.
Enterprise Information Management$13 Billion Opportunity, 10% Growth
2012$4.6B Market7.2% growth
ECM
2012$2.6B Market7.9% Growth
BPM
2012$3.2B Market11.4% Growth
InformationExchange
20121.35B Market14% Growth
CEM
2012$1.4B Market14% Growth
Discovery
7.2% growth
2011 - 20169.9% CAGR
Slide 13Confidential: Open Text Corporation. All rights reserved.
7.9% Growth
2011-20167.2%CAGR
11.4% Growth
2010-201511.4% CAGR
14% Growth
2009 -201414.3% CAGR
14% Growth
2010 – 201515.9% CAGR
Sources: • ECM, BPM: Gartner Forecast Enterprise Software Markets, 2009-2016 1Q12 Update• InfoExchange: Research and Markets, Computer-based Fax Markets, 2010-2015, Gartner Enterprise Software Markets, 2009 – 2016
1Q12 Update, Davidson Consulting, Fax Server Industry Forecast, 2011-2016• CEM: Gartner Magic Quadrant for Web Content Management, 10 Nov. 2011• Discovery: Gartner Market Trends: Expect Disruption and Divergence in the E-Discovery Software Market, 16 Dec 2011
Only 4% of Web content (~8 billion pages)is available via search engines like Google
The Public Web
The Big Picture
7.9
Source: The Deep Web: Semantic Search Takes Innovation to New Depths
The Deep Web
Approximately 96% of the digital universe is on Deep Web sites
protected by passwords
7.9Zettabytes
Why OpenText Will Lead the Market
1. Market evolving from Content Management to Enterprise Information Management
2. OpenText is well positioned to lead this category with broad product offerings and industry expertise
Slide 15Slide 15
Copyright © 2010 Open Text Corporation. All rights reserved.15Copyright © 2012 Open Text Corporation. All rights reserved.
product offerings and industry expertise
3. A trusted vendor - strong partner relationships with SAP and Microsoft/SharePoint
4. Delivering packaged applications that are content-centric not transaction-centric
FY12 – Q3 Business Highlights
� Technology, services, government and financial verticals saw the most demand
� Customer successes in the third quarter include Sumitomo Heavy Industry, NTT Comware, Conoco Phillips, News International, Trinity Mirror and The Spanish Lottery
� Integrated BPM sales force; now selling BPM globally
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� Integrated BPM sales force; now selling BPM globally
� OpenText named one of The Financial Post's 10 Best Companies to
Work For in Canada
� OpenText Extended ECM for SAP® Solutions Version 10 now includes support for the SAP Customer Relationship Management (SAP CRM) and SAP Supplier Relationship Management (SAP SRM) applications
� OpenText Tempo Enterprise and Express Editions now available for easy sharing of content in private clouds
16Copyright © 2010 Open Text Corporation. All rights reserved.
Copyright © 2012 Open Text Corporation. All rights reserved.
FY12 – Q3 Financial Highlights
� Total revenue for the period was $292.3 million, up 11.1% Y/Y
� License revenue was $61.0 million, down 10.1% Y/Y
� GAAP–based EPS was $0.59 compared to $0.61 Y/Y
� Non-GAAP-based EPS was $1.01 compared to $0.91 Y/Y*
� GAAP-based operating margin was 9.3%
� Non-GAAP-based operating margin was 25.2%**
Slide 17
� Non-GAAP-based operating margin was 25.2%**
� Gross Margin 63.6%
� Operating cash flow $96.6 million
� Cash and cash equivalents $508.9 million
17Copyright © 2010 Open Text Corporation. All rights reserved.
Copyright © 2012 Open Text Corporation. All rights reserved.
* See reconciliation of Non-GAAP measures to GAAP measures at the end of this presentation**before taxes and interest expense
FY12 – Q3 Financial Stats
� Americas 53% of total revenue, EMEA 38% and Asia Pacific 9%
� License revenue 21%, customer support 57% and services/other 22%
� Partners contributed 52% of license revenue
� Average deal size: $227K
� Deals over $1 million: 1, compared to 5 Y/Y
� Deals between $500K and $1 million: 11, compared to 4 Y/Y
� License revenue from new accounts: 47%
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� License revenue from new accounts: 47%
� Total employees: approximately 4600
� Quota carrying sales reps: 442 (with overlay)
� Days sales outstanding: 54
� Shares outstanding 58.8 million
� Non-GAAP tax rate: 14%
18Copyright © 2010 Open Text Corporation. All rights reserved.
Copyright © 2012 Open Text Corporation. All rights reserved.
Summary of Quarterly Results
Q3 FY12 Q2 FY12 Q3 FY11% Change
(Q/Q)% Change
(Y/Y)
Revenue (million) $292.3 $321.5 $263.0 (9.1%) 11.1%
GAAP gross margin 63.6% 67.1% 66.5% (350) bps (290) bps
GAAP operating income margin
9.3% 17.2% 10.9% (790) bps (160) bps
Slide 1919
Copyright © 2010 Open Text Corporation. All rights reserved.Copyright © 2012 Open Text Corporation. All rights reserved.
* See reconciliation of Non-GAAP measures to GAAP measures at the end of this presentation**before taxes and interest expense
GAAP EPS $0.59 $0.81 $0.61 (27.2%) (3.3%)
Non-GAAP gross margin *
71.0% 73.8% 73.3% (280) bps (230) bps
Non-GAAP operating margin**
25.2% 30.7% 24.4% (550) bps 80 bps
Non-GAAP EPS* $1.01 $1.39 $0.91 (27.3%) 11.0%
Summary of Year To Date Results
Q3 FY12 Q2 FY12 Q3 FY11% Change
(Y/Y)
Revenue (million) $901.8 $609.5 $747.9 20.6%
GAAP gross margin 65.2% 66.0% 67.1% (190) bps
GAAP operating income margin
12.2% 13.5% 15.2% (300) bps
Slide 2020
Copyright © 2010 Open Text Corporation. All rights reserved.Copyright © 2012 Open Text Corporation. All rights reserved.
* See reconciliation of Non-GAAP measures to GAAP measures at the end of this presentation**before taxes and interest expense
GAAP EPS $2.00 $1.41 $1.63 22.7%
Non-GAAP gross margin *
72.3% 72.9% 73.8% (150) bps
Non-GAAP operating margin**
27.2% 28.1% 28.2% (100) bps
Non-GAAP EPS* $3.43 $2.42 $3.02 13.6%
Summary of Quarterly Revenue Results
In millions Q3 FY12 Q2 FY12 Q3 FY11% Change
(Q/Q)% Change
(Y/Y)
License $61.0 $89.7 $67.8 (32.0%) (10.0%)
Customer support
166.0 165.4 143.1 0.4% 16.0%
Slide 2121
Copyright © 2010 Open Text Corporation. All rights reserved.Copyright © 2012 Open Text Corporation. All rights reserved.
support
Service and other
65.3 66.4 52.1 (1.7%) 25.3%
Total $292.3 $321.5 $263.0 (9.1%) 11.1%
Summary of YTD Revenue Results
In millions Q3 FY12 Q2 FY12 Q3 FY11% Change
(Q/Q)% Change
(Y/Y)
License $215.7 $154.7 $189.6 39.4% 13.8%
Customer support
493.4 327.4 409.6 50.7% 20.5%
Slide 2222
Copyright © 2010 Open Text Corporation. All rights reserved.Copyright © 2012 Open Text Corporation. All rights reserved.
support
Service and other
192.7 127.4 148.6 51.3% 29.7%
Total $901.8 $609.5 $747.8 48.0% 20.6%
21%
57%
22%
53%38%
9%
FY12 – Q3 Revenue BreakdownGlobal Revenue by Geography Global Revenue Mix
19%
15%
15%14%
14%
7%
5%
5%4%
2% Technology
Services
Public Sector
Financial
Basic Materials
Healthcare
Consumer Goods
Industrial Goods
Utilities
Conglomerates
Customer SupportService* LicenseEMEA Asia Pac Americas
Slide 23Slide 23
Copyright © 2010 Open Text Corporation. All rights reserved.23Copyright © 2012 Open Text Corporation. All rights reserved. *Includes under 1% of hardware revenue
License Revenue by industry
Revenue Type Fiscal 2012 Target
Model
Three months
ended Mar 31, 2012
(Actual)
Nine months ended
Mar 31, 2012
(Actual)
Product License 25-30% 20.9% 23.9%
Product Maintenance 52-57% 56.8% 54.7%
Professional Services 18-23% 22.3% 21.4%
Non-GAAP Gross
Margin
73-75% 71.0% 72.3%
Previously Announced Revenue Mix & Margin Internal Target Model*
Margin
Non-GAAP
Operating Expenses
Development 14-16% 13.9% 13.9%
Sales & Marketing 21-23% 22.9% 21.8%
General & Admin 8-10% 7.1% 7.6%
Depreciation 2% 1.9% 1.8%
Non-GAAP Ops
Margin
25-30% 25.2% 27.2%
24*This target model is not guidance.Copyright © 2012 Open Text Corporation. All rights reserved.
About EasyLink
� Public Company (Nasdaq ESIC)
� Cloud-based offerings
� Fax (production, desktop, broadcast) and Messaging (email, telex, notifications, EDI)
� TTM revenue of $186 million
Slide 2525
Copyright © 2010 Open Text Corporation. All rights reserved.Copyright © 2012 Open Text Corporation. All rights reserved.
� TTM revenue of $186 million
� Operate profitably
� Revenue splits: 60% Americas, 23% APAC, 17% EMEA.
� Approximately 550 Employees
� Headquarters in Atlanta, GA
* As of March 31, 2012
Business Rationale
� Secure Information Exchange: $3.2B market, 11.4% CAGR*
� Upon close, transaction will be immediately accretive
� Cloud platform for Fax and Messaging
� Scalable architecture � Scalable architecture
� Leverage platform for other OpenText software
Copyright © 2011 Open Text Corporation. All rights reserved. 26
*InfoExchange: Research and Markets, Computer-based Fax Markets, 2010-2015, Gartner Enterprise Software Markets, 2009 – 2016 1Q12 Update, Davidson Consulting, Fax Server Industry Forecast, 2011-2016
Transaction Details
� All cash bid
� $7.25 per share in cash, purchase price of approximately $310 million, inclusive of debt
� Subject to customary closing conditions and approvalsapprovals
� Expected to close in mid-to-late summer 2012
Copyright © 2011 Open Text Corporation. All rights reserved. 27
Thank YouThank You
28Copyright © 2012 Open Text Corporation. All rights reserved.
Reconciliation of Selected Non-GAAP Measures – Q3 FY12
(in ‘000s USD) Three months ended March 31, 2012
GAAP Adjustments
FN Non- GAAP
Cost of Revenues:
Customer support $ 27,987 $ (53) 1 $ 27,934
Service and other 52,596 (203) 1 52,393
Amortization of acquired technology-based intangibles 21,264 (21,264) 2
Gross profit 185,951 21,520 207,471
Operating expenses:
Research and development 41,738 (1,028) 1 40,710Research and development 41,738 (1,028) 1 40,710
Sales and marketing 69,572 (2,594) 1 66,978
General and administrative 21,999 (1,287) 1 20,712
Amortization – customer based intangibles 13,462 (13,462) 2
Special charges 6,450 (6,450) 3
GAAP income from operations/ Non-GAAP operating income 27,303 46,341 73,644
Other income, net (1,804) 1,804 4
Provision for (recovery of) income taxes (14,036) 23,680 5 9,644
GAAP net income/ Non GAAP net income $ 34,774 $ 24,465 6 $ 59,239
GAAP EPS/ Non GAAP EPS - diluted $ 0.59 $ 0.42 6 $ 1.01
Copyright © 2010 Open Text Corporation. All rights reserved.29Copyright © 2012 Open Text Corporation. All rights reserved.
Reconciliation of Selected Non-GAAP Measures – Q3 FY12
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Footnotes
1 Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results
2 Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3 Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
4 Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
5 Adjustment relates to differences between the GAAP-based tax recovery of approximately 68% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income. The GAAP-based tax recovery is primarily due to "one-time" tax benefits relating to ongoing internal reorganizations and mergers of international subsidiaries acquired; these reorganizations and mergers cause a change in the tax status of these subsidiaries resulting in a reduction in deferred tax liabilities recorded upon the acquisition of these subsidiaries, and a corresponding reduction in income tax expense.
Copyright © 2010 Open Text Corporation. All rights reserved.30Copyright © 2012 Open Text Corporation. All rights reserved.
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Three months ended March 31, 2012
Per share
Non GAAP net income 59,239 1.01
Less:
Amortization 34,726 0.59
Share-based compensation 5,165 0.09
Special charges 6,450 0.11
Other (income) expenses 1,804 0.03
GAAP based provision for (recovery of )income taxes
(14,036) (0.24)
Tax on Non-GAAP based provision (9,644) (0.16)
GAAP net income 34,774 0.59
Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY12
(in ‘000s USD) Nine months ended March 31, 2012
GAAP Adjustments FN Non- GAAP
Cost of Revenues:
Customer support $ 82,724 $ (112) 1 $ 82,612
Service and other 153,551 (408) 1 153,143
Amortization of acquired technology-based intangibles 63,307 (63,307) 2
Gross profit 588,350 63,827 652,177
Operating expenses:
Research and development 127,848 (2,872) 1 124,976Research and development 127,848 (2,872) 1 124,976
Sales and marketing 202,903 (6,040) 1 196,863
General and administrative 72,886 (3,974) 1 68,912
Amortization – customer based intangibles 39,948 (39,948) 2
Special charges 18,776 (18,776) 3
GAAP income from operations/ Non-GAAP operating income
109,670 135,437 245,107
Other income, net 10,145 (10,145) 4
Provision for (recovery of) income taxes (8,542) 41,295 5 32,753
GAAP net income/ Non GAAP net income $ 117,203 $ 83,997 6 $ 201,200
GAAP EPS/ Non GAAP EPS - diluted $ 2.00 $ 1.43 6 $ 3.43
Copyright © 2010 Open Text Corporation. All rights reserved.31Copyright © 2012 Open Text Corporation. All rights reserved.
Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY12
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Footnotes
1 Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results
2 Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3 Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
4 Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
5 Adjustment relates to differences between the GAAP-based tax recovery of approximately 8% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income. The GAAP-based tax recovery is primarily due to "one-time" tax benefits relating to ongoing internal reorganizations and mergers of international subsidiaries acquired; these reorganizations and mergers cause a change in the tax status of these subsidiaries resulting in a reduction in deferred tax liabilities recorded upon the acquisition of these subsidiaries, and a corresponding reduction in income tax expense.
Copyright © 2010 Open Text Corporation. All rights reserved.32Copyright © 2012 Open Text Corporation. All rights reserved.
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Nine months ended March 31, 2012
Per share
Non GAAP net income 201,200 3.43
Less:
Amortization 103,255 1.76
Share-based compensation 13,406 0.23
Special charges 18,776 0.32
Other (income) expenses (10,145) (0.17)
GAAP based provision for (recovery of )income taxes
(8,542) (0.15)
Tax on Non-GAAP based provision (32,753) (0.56)
GAAP net income 117,203 2.00
Reconciliation of Selected Non-GAAP Measures – Q2 FY12
(in ‘000s USD) Three months ended December 31, 2011
GAAP Adjustments
FN Non- GAAP
Cost of Revenues:
Customer support $ 28,468 $ (34) 1 $ 28,434
Service and other 50,604 (106) 1 50,498
Amortization of acquired technology-based intangibles 21,253 (21,253) 2
Gross profit 215,761 21,393 237,154
Operating expenses:
Research and development 42,652 (768) 1 41,884Research and development 42,652 (768) 1 41,884
Sales and marketing 68,451 (1,676) 1 66,775
General and administrative 25,126 (813) 1 24,313
Amortization – customer based intangibles 13,445 (13,445) 2
Special charges 5,221 (5,221) 3
GAAP income from operations/ Non-GAAP operating income 55,232 43,316 98,548
Other expenses, net 2,637 (2,637) 4
Provision for income taxes 6,819 6,472 5 13,291
GAAP net income/ Non GAAP net income $ 47,443 $ 34,207 6 $ 81,650
GAAP EPS/ Non GAAP EPS - diluted $ 0.81 $ 0.58 6 $ 1.39
Copyright © 2010 Open Text Corporation. All rights reserved.33Copyright © 2012 Open Text Corporation. All rights reserved.
Reconciliation of Selected Non-GAAP Measures – Q2 FY12
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Footnotes
1 Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results
2 Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3 Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
4 Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
5 Adjustment relates to differences between the GAAP-based tax rate of approximately 13% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income.
Copyright © 2010 Open Text Corporation. All rights reserved.34Copyright © 2012 Open Text Corporation. All rights reserved.
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Three months ended December 31, 2011
Per share
Non GAAP net income 81,650 1.39
Less:
Amortization 34,698 0.59
Share-based compensation 3,397 0.06
Special charges 5,221 0.09
Other (income) expenses (2,637) (0.04)
GAAP based provision for income taxes 6,819 0.12
Tax on Non-GAAP based provision (13,291) (0.24)
GAAP net income 47,443 0.81
Reconciliation of Selected Non-GAAP Measures – Q2 YTD FY12
(in ‘000s USD) Six months ended December 31, 2011
GAAP Adjustments
FN Non- GAAP
Cost of Revenues:
Customer support $ 54,737 $ (58) 1 $ 54,679
Service and other 100,955 (205) 1 100,750
Amortization of acquired technology-based intangibles 42,043 (42,043) 2
Gross profit 402,399 42,306 444,705
Operating expenses:
Research and development 86,110 (1,845) 1 84,265Research and development 86,110 (1,845) 1 84,265
Sales and marketing 133,331 (3,446) 1 129,885
General and administrative 50,887 (2,687) 1 48,200
Amortization – customer based intangibles 26,486 (26,486) 2
Special charges 12,326 (12,326) 3
GAAP income from operations/ Non-GAAP operating income 320,032 (46,790) 273,242
Other expenses, net 11,949 (11,949) 4
Provision for income taxes 5,494 17,616 5 23,110
GAAP net income/ Non GAAP net income $ 82,429 $ 59,531 6 $ 141,960
GAAP EPS/ Non GAAP EPS - diluted $ 1.41 $ 1.01 6 $ 2.42
Copyright © 2010 Open Text Corporation. All rights reserved.35Copyright © 2012 Open Text Corporation. All rights reserved.
Reconciliation of Selected Non-GAAP Measures – Q2 YTD FY12
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Footnotes
1 Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results
2 Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3 Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
4 Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
5 Adjustment relates to differences between the GAAP-based tax rate of approximately 6% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income.
Copyright © 2010 Open Text Corporation. All rights reserved.36Copyright © 2012 Open Text Corporation. All rights reserved.
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Six months ended December 31, 2011
Per share
Non GAAP net income 141,960 2.42
Less:
Amortization 68,529 1.17
Share-based compensation 8,241 0.14
Special charges 12,326 0.21
Other (income) expenses (11,949) (0.20)
GAAP based provision for income taxes 5,494 0.09
Tax on Non-GAAP based provision (23,110) (0.40)
GAAP net income 82,429 1.41
Reconciliation of Selected Non-GAAP Measures – Q3 FY11
(in ‘000s USD) Three months ended March 31, 2011
GAAP Adjustments
FN Non- GAAP
Cost of Revenues:
Customer support $ 22,699 $ (16) 1 $ 22,683
Service and other 43,830 (116) 1 43,714
Amortization of acquired technology-based intangibles 17,677 (17,677) 2
Gross profit 174,979 17,809 192,788
Operating expenses:
Research and development 41,324 (653) 1 40,671Research and development 41,324 (653) 1 40,671
Sales and marketing 61,132 (1,437) 1 59,695
General and administrative 23,323 (873) 1 22,450
Amortization – customer based intangibles 10,102 (10,102) 2
Special charges 4,437 (4,437) 3
GAAP income from operations/ Non-GAAP operating income 28,744 35,311 64,055
Other expenses, net 3,078 (3,078) 4
Provision for (recovery of) income taxes (5,995) 14,685 5 8,690
GAAP net income/ Non GAAP net income $ 35,830 $ 17,548 6 $ 53,378
GAAP EPS/ Non GAAP EPS - diluted $ 0.61 $ 0.30 6 $ 0.91
Copyright © 2010 Open Text Corporation. All rights reserved.37Copyright © 2012 Open Text Corporation. All rights reserved.
Reconciliation of Selected Non-GAAP Measures – Q3 FY11Footnotes
1 Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results
2 Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3 Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
4 Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
5 Adjustment relates to differences between the GAAP-based tax recovery of approximately 20% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income. The GAAP-based tax recovery is primarily due to "one-time" tax benefits relating to ongoing internal reorganizations and mergers of international subsidiaries acquired; these reorganizations and mergers cause a change in the tax status of these subsidiaries resulting in a reduction in deferred tax liabilities recorded upon the acquisition of these subsidiaries, and a corresponding reduction in income tax expense.
Copyright © 2010 Open Text Corporation. All rights reserved.38Copyright © 2012 Open Text Corporation. All rights reserved.
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Three months ended March 31, 2011
Per share
Non GAAP net income 53,378 0.91
Less:
Amortization 27,779 0.48
Share-based compensation 3,095 0.05
Special charges 4,437 0.08
Other (income) expenses (3,078) (0.05)
GAAP based provision for (recovery of) income taxes
(5,995) (0.10)
Tax on Non-GAAP based provision (8,690) (0.16)
GAAP net income 35,830 0.61
Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY11
(in ‘000s USD) Nine months ended March 31, 2011
GAAP Adjustments
FN Non- GAAP
Cost of Revenues:
Customer support $ 63,597 $ (34) 1 $ 63,563
Service and other 120,101 (323) 1 119,778
Amortization of acquired technology-based intangibles 49,524 (49,524) 2
Gross profit 501,891 49,881 551,772
Operating expenses:
Research and development 106,555 (1,918) 1 104,637Research and development 106,555 (1,918) 1 104,637
Sales and marketing 163,915 (4,228) 1 159,687
General and administrative 62,611 (1,928) 1 60,683
Amortization – customer based intangibles 28,159 (28,159) 2
Special charges 11,093 (11,093) 3
GAAP income from operations/ Non-GAAP operating income 113,508 97,207 210,715
Other expenses, net (660) 660 4
Provision for income taxes 11,875 16,734 5 28,609
GAAP net income/ Non GAAP net income $ 94,611 $ 81,133 6 $ 175,744
GAAP EPS/ Non GAAP EPS - diluted $ 1.63 $ 1.39 6 $ 3.02
Copyright © 2010 Open Text Corporation. All rights reserved.39Copyright © 2012 Open Text Corporation. All rights reserved.
Reconciliation of Selected Non-GAAP Measures – Q3 YTD FY11
Footnotes
1 Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results
2 Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3 Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the aftermath of acquisitions and are not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
4 Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and are generally not indicative or related to continuing operations and are hence excluded from our internal analysis of operating results.
5 Adjustment relates to differences between the GAAP-based tax rate of approximately 11% and a non-GAAP-based tax rate of 14%; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income. The GAAP-based tax recovery is primarily due to "one-time" tax benefits relating to ongoing internal reorganizations and mergers of international subsidiaries acquired; these reorganizations and mergers cause a change in the tax status of these subsidiaries resulting in a reduction in deferred tax liabilities recorded upon the acquisition of these subsidiaries, and a corresponding reduction in income tax expense.
Copyright © 2010 Open Text Corporation. All rights reserved.40Copyright © 2012 Open Text Corporation. All rights reserved.
6 Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income:
Nine months ended March 31, 2011
Per share
Non GAAP net income 175,744 3.02
Less:
Amortization 77,683 1.34
Share-based compensation 8,431 0.15
Special charges 11,093 0.19
Other (income) expenses 660 0.01
GAAP based provision for income taxes 11,875 0.20
Tax on Non-GAAP based provision (28,609) (0.50)
GAAP net income 94,611 1.63