OpenText Intelligent Growth Strategy Drives Record Fourth Quarter and Fiscal Year 2014 Financial Results
2014 Revenue up 19%, EPS rises 21%; Cloud Revenue up 108%
Open Text Corporation (NASDAQ: OTEX) (TSX: OTC) announced today its financial results for the fourth quarter and fiscal year ended June 30, 2014, and the appointment of John Doolittle as Chief Financial Officer.
Financial Highlights for Q4 FY14 (1)
- Total revenue was $494.0 million, up 42% Y/Y
- License revenue was $99.7 million, up 27% Y/Y
- Cloud services revenue was $148.9 million, up 255% Y/Y
- Customer support revenue was $183.9 million, up 12% Y/Y
- Non-GAAP-based EPS, diluted was $1.05 compared to $0.72 Y/Y, up 48%; GAAP-based EPS, diluted was $0.72 compared to $0.36 Y/Y up 100%, on a post stock-split basis.(2)
- Non-GAAP-based income from operations was $162.2 million and 33% of revenues up 58% Y/Y; GAAP-based income from operations was $107.7 million and 22% of revenues, up 118% Y/Y.(2)
- Operating cash flow was $134.9 million, up 107%Y/Y, with an ending cash balance of $427.9 million.
Financial Highlights for FY14 (1)
- Total revenue for the period was $1,624.7 million, up 19% Y/Y
- License revenue was $309.2 million, up 11% Y/Y
- Cloud services revenue was $361.1 million, up 108% Y/Y
- Customer support revenue was $707.0 million, up 7% Y/Y
- Non-GAAP-based EPS, diluted was $3.37 compared to $2.79 Y/Y, up 21%; GAAP-based EPS, diluted was $1.81 compared to $1.26 Y/Y up 44%, on a post stock-split basis.(2)
- Non-GAAP-based income from operations was $502.7 million and 31% of revenues, up 26% Y/Y; GAAP-based income from operations was $300.5 million and 18% of revenues, up 52% Y/Y.(2)
- Operating cash flow was $417.1 million, up 31%Y/Y, with an ending cash balance of $427.9 million.
“Our focus on Enterprise Information Management is well aligned to the strategic priorities of our customers. We delivered record quarterly and full fiscal year results, including full fiscal year total revenues of $1.625 billion, up 19%, license of $309 million, up 11%, and operating cash flows of $417 million, up 31% year over year,” said Mark J. Barrenechea OpenText CEO. “For Fiscal 2015, we are committed to unlocking further value, growth and leadership for our customers, partners and shareholders through focused execution utilizing our Intelligent Growth Business System (OTIGS).”
Appoints John Doolittle as Chief Financial Officer
Mr. Doolittle is a senior executive with more than 20 years of financial experience, including most recently as Chief Financial Officer (CFO) of Mattamy Homes Limited, Canada’s largest new home builder, and with Nortel Networks Corporation, where he held senior global finance roles.
“John brings tremendous experience as a seasoned global executive,” said Mark J. Barrenechea OpenText CEO. “He has the breadth of financial skills, experience and leadership to take our finance organization and our company to the next level of scale, efficiency and growth.”
Commenting on his appointment, Mr. Doolittle said, “OpenText’s strategy of Enterprise Information Management is placing OpenText in a winning market position. I look forward to joining Mark’s world-class executive team and contributing to the company’s exciting next phase of growth and execution.”
Effective September 8, 2014, Mr. Doolittle will replace Paul McFeeters who previously announced his intention to retire from his position as CFO by no later than September 30, 2014. Mr. Doolittle will work with Mr. McFeeters to ensure a seamless transition of financial leadership responsibilities.
Barrenechea further added, “I would like to take this opportunity again to thank Paul McFeeters. Paul has served as our CFO for 8 years, his career spans nearly 40 years and I thank him for his extraordinary service to the company. John and Paul will work together to ensure a textbook transition.”
Business Highlights
- Basic materials, technology, services and financial industries saw the most demand
- 16 license transactions over $1 million and 11 license transactions between $500K and $1 million
- Customer successes in the quarter include Banco Original, The City of Calgary, FMC Technologies, Joy Global, Del Monte Foods Inc, Tata Motors Limited, Superior Tribunal de Justica, AbbVie and Eisenmann AG
- OpenText launches Discovery Suite to capture and create value in big content
- SAP and OpenText to accelerate global adoption of enterprise content management
- OpenText receives SAP® Pinnacle Award for the seventh consecutive year
- OpenText announces free enterprise file synchronization and sharing for content management customers
Dividend Program Highlights
Cash Dividend
As part of our quarterly, non cumulative cash dividend program the Board declared a quarterly cash dividend to holders of the Company’s Common Shares of $0.1725. The record date for this dividend is August 29, 2014 and the payment date is September 19, 2014. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board of Directors.
| Summary of Quarterly Results | ||||||||||||
|
Q4 FY14 |
Q3 FY14 |
Q4 FY13 |
% Change (Q/Q) |
% Change (Y/Y) |
||||||||
| Revenue (million) |
$494.0 |
$442.8 |
$347.3 |
11.6 |
% |
42.2 |
% | |||||
| GAAP-based gross margin |
69.1 |
% |
67.3 |
% |
66.0 |
% |
180 |
bps |
310 |
bps | ||
| GAAP-based operating margin |
21.8 |
% |
15.1 |
% |
14.2 |
% |
670 |
bps |
760 |
bps | ||
| GAAP-based EPS, diluted |
$0.72 |
$0.38 |
$0.36 |
89.5 |
% |
100.0 |
% | |||||
| Non-GAAP-based gross margin (2) |
72.9 |
% |
71.3 |
% |
72.9 |
% |
160 |
bps |
— |
bps | ||
| Non-GAAP-based operating margin (2) |
32.8 |
% |
29.1 |
% |
29.5 |
% |
370 |
bps |
330 |
bps | ||
| Non-GAAP-based EPS, diluted (2) |
$1.05 |
$0.84 |
$0.72 |
25.0 |
% |
45.8 |
% | |||||
| Summary of Year to Date Results | |||||||||
|
FY14 |
Q3 FY14 YTD |
FY13 |
% Change (Y/Y) |
||||||
| Revenue (million) |
$1,624.7 |
$1,130.7 |
$1,363.3 |
19.2 |
% | ||||
| GAAP-based gross margin |
68.5 |
% |
68.3 |
% |
64.4 |
% |
410 |
bps | |
| GAAP-based operating margin |
18.5 |
% |
17.1 |
% |
14.5 |
% |
400 |
bps | |
| GAAP-based EPS, diluted |
$1.81 |
$1.08 |
$1.26 |
43.7 |
% | ||||
| Non-GAAP-based gross margin (2) |
72.9 |
% |
73.0 |
% |
71.3 |
% |
160 |
bps | |
| Non-GAAP-based operating margin (2) |
30.9 |
% |
30.1 |
% |
29.3 |
% |
160 |
bps | |
| Non-GAAP-based EPS, diluted (2) |
$3.37 |
$2.32 |
$2.79 |
20.8 |
% | ||||