OpenText revenue up; Microsoft flat

Canada’s biggest software company pulled in $45 million in income on sales of $442 million in its latest quarter, according to results released Thursday.

Also on Thursday Microsoft said its profit dropped to US$5.7 billion from $6.1 billion and revenue was almost flat compared to the same period a year ago.

At OpenText, the Q3 revenue of $442 million compared to $363 million for the second quarter and $337 million for the same period a year ago.

“In the third quarter we delivered strong year-over-year results with revenue growth of 31 per cent, adjusted operating income growth of 43 per cent and operating cash flow growth of 21 per cent” CEO Mark Barrenechea said in a release.

“With our intelligent growth strategy, we are focused on delivering value through acquisitions, innovation and now an increased dividend program. The GXS integration is off to a fast start and has established OpenText (TSX:OTC)  as a key cloud services provider. Our newly upgraded EIM (enterprise information management)  product suite is driving customer demand, and reinforces our market position as a leader in EIM.”

Kris Thompson, a financial analyst with National Bank Financial, said in a note to investors that “the metrics look good for the future:” Deal sizes are moving higher, the install base of customers drove 75 per cent of licence revenue and 300 customers are evaluating moving to Content Suite 10.5.

The licence revenue growth rate “is not fantastic” but should be considered in light of ongoing economic weak sales in Canada and the U.S.

At Microsoft (Nasdaq: MSFT), Computerworld U.S. quoted new CEO Satya Nadella telling financial analysts that “We delivered solid financial results and we took several steps to reorient Microsoft.”

The devices and consumer division’s revenue grew by 12 per cent to $8.30 billion, while gross margin fell 1 percent to $4.71 billion. Some highlights were a 4 percent revenue increase in Windows OS sales to hardware vendors, and a 50 percent increase in Surface tablet revenue, to $500 million.

At Information Week, Michael Endler noted that revenue for the consumer version of Windows 8 dropped 15 per cent in the quarter; he wonders if that means buyers are putting their money into Android and iPad tablets and smart phones. And while sales of Windows to enterprises was up, he wonders if that’s a late surge of WinXP replacements that won’t be sustained.

On the other hand, he added sales of enterprise software like SQL Server, System Center, Windows Server Premium, Lync businesses and Office 365, are booming.



Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including 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 [@]

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