Thursday, August 18, 2022

OpenText reports revenue flat in Q1

The country’s biggest software company had virtually no growth in its most recent quarter.

OpenText Corp. said Wednesday that it had net income of $30 million on revenue of $324.5 million during the three month period that ended Sept. 30, essentially flat compared to the same period a year ago. Licence revenue of $55 million was also flat.

“We could not overcome the macro challenges towards the end of the quarter, predominantly driven by the U.S. government shut down and its widespread effects on pausing customer spending decisions,” CEO Mark Barrenechea said in a statement accompanying the numbers.

Still, he said the results “demonstrated our intelligent growth strategy, with operating cash flow growth of 29.4 per cent, adjusted operating margins of 30.6 per cent and non-GAAP EPS (earnings per share) growth of 4.6 per cent  – on essentially flat year over year revenues.”

In a report to investors this morning, National Bank Financial analyst Kris Thompson said the licence growth was much weaker than expected. Two years ago, he noted, OpenText pulled in $65 million during the same period.

On the other hand, he acknowledged that customer support revenue of $168 million was strong.

In a report issued just before the financials, Thompson predicted that the last eight years of double-digit growth wouldn’t be sustained. In fact he predicted it would be in the single-digits for the next two years.

Based in Waterloo, Ont., OpenText [TSX: OTC] makes what it calls enterprise information management solutions including content management, (OpenText ECM), Business Process Management, and Customer Experience Management.

Next month it will release details of an upcoming new integrated suite of products it has code-named Red Oxygen. It will also lift the curtain on a unified collaboration platform called Tempo

Meanwhile, looking at the latest quarterly results the company touted that it had five licence transactions over $1 million, and won new business from the Bank of Hawaii, National Security Technologies LLC, Volkswagen India, NRI in Japan, and the Dangote Group.

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Jim Love, Chief Content Officer, IT World Canada

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

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