Enterprise software provider OpenText reports strong results in latest quarter

Apr 01, 2024

UPDATED 21:57 EDT / AUGUST 03 2023

by Duncan Riley

Enterprise software provider OpenText Corp. today reported adjusted earnings per share of 91 cents in its fiscal fourth quarter on revenue of $1.5 billion, up 65% year-over-year year.

Annual recurring revenue rose 56%, to $1.2 billion, cloud revenue rose almost 10%, to $452 million, and operating cash flow was $115 million in the quarter. The company’s growth was driven by quarterly enterprise cloud bookings, which rose 12% year-over-year, to $164 million. OpenText continued to impress, with its operating margin coming in at 31% on adjusted earnings before interest, taxes, depreciation and amortization of $463 million.

Highlights in the quarter included the launch of a new version of the OpenText Cloud Editions customer experience management platform in April. The release, part of the company’s Project Titanium roadmap, enables customers to drive further productivity and profitability while streamlining experiences and security in a multi-cloud world.

Cloud Editions 23.2 integrates OpenText Extended ECM and OpenText Documentum with Micro Focus IDOL, enabling businesses to explore content connections to make smarter, faster decisions with the help of artificial intelligence-powered insights. The release was also the first time OpenText integrated technology from Micro Focus International plc, which it announced it was acquiring in August before completing the transaction in February.

For its full fiscal year 2023, OpenText reported adjusted earnings per share of $3.29 on revenue of $4.5 billion, the latter up 28% year-over-year or 32% on a constant currency basis. Cloud revenue in the year was up almost 11%, annual recurring revenue was up 26%, to $3.6 billion, and enterprise cloud bookings up 11%, to $528 million.

“Our balance sheet and liquidity position remain strong with approximately $1.2 billion in cash as of June 30, 2023, and a net leverage ratio of 3.5x,” Madhu Ranganathan, executive vice president and chief financial officer of OpenText, said in the company’s earnings release. “We accelerated our initial integration of Micro Focus operations ahead of schedule [and] we remain on track to meet our near-term and long-term operating goals.”

OpenText did not provide an outlook with its earning release. A transcript of OpenText’s investor call, where an outlook may have been given, was unavailable at the time of writing.

Alongside its earnings release, OpenText also announced opentext.ai and OpenText Aviator, both described as the “next generation of information management innovations.”

Opentext.ai is said to be a new strategic approach to advancing how customers can solve complex problems by applying artificial intelligence and large language models with their OpenText Information Management software. OpenText Aviator is a family of “practical and trusted” generative AI capabilities within the company’s Information Management Cloud Editions for content, experience, business network, IT operations, developer operations and cybersecurity.

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