OPEN TEXT CORP
For the period ended Dec 31, 2024. Filed Feb 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 6, 2025
OTEX$24.85-4.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0001002638-24-000075
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-06.
0001002638-25-000021
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 216 previous paragraphs and 233 current paragraphs.
127 unchanged; 64 reworded; 25 added; 24 removed; 1 previous and 17 current paragraphs rearranged.
Tables are not compared: 26 previous and 32 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
•Total revenue was $1,334.5 million, down 13.1% compared to the same period in the prior fiscal year; down 13.7% after factoring in the favorable impact of $9.8 million of foreign exchange rate changes.
Current report
•GAAP-based gross margin was 73.3% compared to 73.6% in the same period in the prior fiscal year.
Current report
•Non-GAAP-based gross margin was 77.2% compared to 78.6% in the same period in the prior fiscal year.
Current report
•GAAP-based net income attributable to OpenText was $229.9 million compared to $37.7 million in the same period in the prior fiscal year.
Current report
•Non-GAAP-based net income attributable to OpenText was $293.3 million compared to $338.5 million in the same period in the prior fiscal year.
Current report
Cloud services and subscriptions revenues increased by $12.2 million or 2.7% during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year; up 2.2% after factoring in the favorable impact of $2.4 million of foreign exchange rate changes. Geographically, the overall change was attributable to an increase in Americas of $7.2 million, an increase in EMEA of $4.8 million and an increase in Asia Pacific of $0.2 million.
Current report
Cost of Cloud services and subscriptions revenues decreased by $7.9 million during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in third-party network usage fees of $6.9 million and a decrease in labour-related costs of $1.2 million. Overall, the gross margin percentage on Cloud services and subscriptions revenues increased to 63% from 60%.
Current report
There were 74 cloud services contracts greater than $1.0 million that closed during the first six months of Fiscal 2025, compared to 69 contracts during the first six months of Fiscal 2024.
Current report
Customer support revenues decreased by $105.2 million or 15.1% during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year; down 15.9% after factoring in the favorable impact of $5.4 million of foreign exchange rate changes. The decrease was primarily due to the exclusion of customer support revenue contributions as a result of the AMC Divestiture. Geographically, the overall change was attributable to a decrease in Americas of $73.4 million, a decrease in EMEA of $21.6 million and a decrease in Asia Pacific of $10.1 million.
Current report
Customer support revenues decreased by $207.4 million or 14.9% during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year; down 15.1% after factoring in the favorable impact of $2.9 million of foreign exchange rate changes. The decrease was primarily due to the exclusion of customer support revenue contributions as a result of the AMC Divestiture. Geographically, the overall change was attributable to a decrease in Americas of $149.8 million, a decrease in EMEA of $41.8 million and a decrease in Asia Pacific of $15.7 million.
Current report
License revenues decreased by $100.3 million or 34.7% during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year; down 34.9% after factoring in the favorable impact of $0.6 million of foreign exchange rate changes. The decrease was primarily driven by license revenues in the prior fiscal year relating to the grant of certain IP rights and the exclusion of license revenue contributions as a result of the AMC Divestiture. Geographically, the overall change was attributable to a decrease in Americas of $45.3 million, a decrease in EMEA of $37.9 million and a decrease in Asia Pacific of $17.1 million.
Current report
License revenues decreased by $147.5 million or 31.9% during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year; down 32.0% after factoring in the favorable impact of $0.5 million of foreign exchange rate changes. The decrease was primarily driven by the exclusion of license revenue contributions as a result of the AMC Divestiture and license revenues in the prior fiscal year, relating to the grant of certain IP rights. Geographically, the overall change was attributable to a decrease in Americas of $76.3 million, a decrease in EMEA of $48.1 million and a decrease in Asia Pacific of $23.2 million.
Current report
Professional service and other revenues decreased by $20.1 million or 9.9% during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year; down 10.6% after factoring in the impact of foreign exchange rate changes. The decrease was partially due to the exclusion of professional services revenue contributions as a result of the AMC Divestiture over the comparative period. Geographically, the overall change was attributable to a decrease in Americas of $14.1 million and a decrease in EMEA of $5.9 million.
Current report
Cost of Professional service and other revenues decreased by $20.4 million during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $20.7 million. Overall, the gross margin percentage on Professional service and other revenues increased to 26% from 24%.
Current report
Amortization of acquired technology-based intangible assets decreased during the six months ended December 31, 2024 by $53.2 million as compared to the same period in the prior fiscal year. This was primarily due to a reduction in amortization related to technology-based intangible assets from previous acquisitions becoming fully amortized and reduced amortization related to the AMC Divestiture.
Current report
Research and development expenses decreased by $32.1 million during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year. Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $16.8 million, contract labour and consulting expense decreased by $5.7 million, and share-based compensation expense decreased by $4.8 million. Overall, our research and development expenses, as a percentage of total revenues, remained stable at 14% as compared to the same period in the prior fiscal year.
Current report
Sales and marketing expenses decreased by $13.7 million during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year. Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $19.1 million, share-based compensation expense decreased by $2.3 million, and contract labour and consulting expense decreased by $1.2 million. These decreases were partially offset by increases in marketing expenses of $3.7 million, increases in commissions of $2.4 million and increases in credit loss expense of $2.0 million. Overall, our sales and marketing expenses, as a percentage of total revenues, increased to 21% compared to 19% for the same period in the prior fiscal year.
Current report
Sales and marketing expenses decreased by $47.8 million during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year. Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $41.8 million, share-based compensation expense decreased by $5.1 million, facility-related expenses decreased by $3.3 million, and contract labour and consulting expenses decreased by $2.9 million. These decreases were partially offset by increases in credit loss expense of $5.6 million and increases in commissions of $2.5 million. Overall, our sales and marketing expenses, as a percentage of total revenues, increased to 20% compared to 19% for the same period in the prior fiscal year.
Current report
General and administrative expenses decreased by $73.9 million during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year. Other miscellaneous costs, which include professional fees such as legal, audit and tax related expenses, decreased by $45.7 million primarily driven by a reduction in costs related to IP, including the grant of certain IP rights and the resolution of certain historical IP related matters in the prior fiscal year, and reductions in other professional fees. Additionally, payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $13.6 million and contract labour and consulting expenses decreased by $10.3 million. Overall, general and administrative expenses, as a percentage of total revenues, decreased to 7% compared to 11% for the same period in the prior fiscal year.
Current report
Depreciation expenses decreased during the three and six months ended December 31, 2024 by $1.5 million and $3.5 million, respectively, compared to the same periods in the prior fiscal year.
Current report
Depreciation expenses, as a percentage of total revenue, remained stable for the three and six months ended December 31, 2024 at 2% as compared to the same periods in the prior fiscal year.
Current report
Special charges (recoveries) decreased by $5.6 million during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year. Restructuring costs related to the Micro Focus Acquisition decreased by $52.6 million, other miscellaneous charges decreased by $4.1 million and divestiture costs decreased by $2.8 million, partially offset by an increase in restructuring costs of $54.9 million related to the Business Optimization Plan, as compared to the same period in the prior fiscal year.
Current report
(3)Represents final settlement of working capital and other adjustments (see Note 17 “Acquisitions and Divestitures” to our Condensed Consolidated Financial Statements for more details).
Current report
(6)Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective on our ongoing business and operating results.
Current report
(iii)$1.7 million reduction in debt issuance costs.
Removed paragraphs (24)
Previous report
•Total revenue was $1,269.0 million, down 11.0% compared to the same period in the prior fiscal year; down 10.7% after factoring in the unfavorable impact of $4.2 million of foreign exchange rate changes.
Previous report
•GAAP-based gross margin was 71.7% compared to 71.4% in the same period in the prior fiscal year.
Previous report
•Non-GAAP-based gross margin was 75.8% compared to 77.3% in the same period in the prior fiscal year.
Previous report
•GAAP-based net income attributable to OpenText was $84.4 million compared to $80.9 million in the same period in the prior fiscal year.
Previous report
•Non-GAAP-based net income attributable to OpenText was $248.8 million compared to $274.3 million in the same period in the prior fiscal year.
Previous report
Customer support revenues decreased by $102.2 million or 14.7% during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year; down 14.3% after factoring in the unfavorable impact of $2.5 million of foreign exchange rate changes. The decrease was primarily due to the exclusion of customer support revenue contributions as a result of the AMC Divestiture. Geographically, the overall change was attributable to a decrease in Americas of $76.4 million, a decrease in EMEA of $20.2 million, and a decrease in Asia Pacific of $5.6 million.
Previous report
License revenues decreased by $47.2 million or 27.3% during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year; down 27.2% after factoring in the unfavorable impact of $0.1 million of foreign exchange rate changes. The decrease was primarily due to the exclusion of license revenue contributions as a result of the AMC Divestiture. Geographically, the overall change was attributable to a decrease in Americas of $31.0 million, a decrease in EMEA of $10.1 million, and a decrease in Asia Pacific of $6.1 million.
Previous report
Sales and marketing expenses decreased by $34.1 million during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year. Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $22.7 million, facility-related expenses decreased by $3.8 million, marketing expenses decreased by $3.0 million, share-based compensation expense decreased by $2.8 million, and travel and communication expenses decreased by $1.4 million. Overall, our sales and marketing expenses, as a percentage of total revenues, decreased to 19% compared to the same period in the prior fiscal year at 20%.
Previous report
Depreciation expenses decreased during the three months ended September 30, 2024 by $1.9 million compared to the same periods in the prior fiscal year. Depreciation expenses, as a percentage of total revenues, increased for the three months ended September 30, 2024 to 3% compared to 2% for the same period in the prior fiscal year.
Previous report
Reconciliation of selected GAAP-based measures to Non-GAAP-based measures
Previous report
(In thousands, except for per share data)
Previous report
(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.
Previous report
(3)GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.
Previous report
(5)GAAP-based and Non-GAAP-based income from operations stated in dollars.
Previous report
(8)Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Previous report
Reconciliation of Adjusted EBITDA
Previous report
Reconciliation of selected GAAP-based measures to Non-GAAP-based measures
Previous report
(In thousands, except for per share data)
Previous report
(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.
Previous report
(3)GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.
Previous report
(5)GAAP-based and Non-GAAP-based income from operations stated in dollars.
Previous report
(8)Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Previous report
Reconciliation of Adjusted EBITDA
Previous report
(iv)$2.0 million increase due to reduced debt issuance costs payments.
Reworded paragraphs (64)
Previous wording
When used in this report, the words “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “may”, “could”, “would”, “might”, “will” and other similar language, as they relate to Open Text Corporation (OpenText or the Company), are intended to identify forward-looking statements under applicable securities laws. Specific forward-looking statements in this report include, but are not limited to, statements regarding: (i) our focus in the fiscal years beginning July 1, 2024 and ending June 30, 2025 (Fiscal 2025) and July 1, 2025 and ending June 30, 2026 (Fiscal 2026) on growth in earnings and cash flows; (ii) creating value through investments in broader Information Management capabilities; (iii) our future business plans and operations, strategic goals and business planning process, including the Company’s business optimization plan announced in July 2024 (the Business Optimization Plan); (iv) business trends; (v) distribution; (vi) the Company’s presence in the cloud and in growth markets; (vii) product and solution developments, enhancements and releases, the timing thereof and the customers targeted; (viii) the Company’s financial condition, results of operations and earnings; (ix) the basis for any future growth and for our financial performance; (x) declaration of quarterly dividends; (xi) future tax rates, including Canada's newly enacted global minimum tax act; (xii) the changing regulatory environment; (xiii) annual recurring revenues; (xiv) research and development and related expenditures; (xv) our building, development and consolidation of our network infrastructure; (xvi) competition and changes in the competitive landscape; (xvii) our management and protection of intellectual property and other proprietary rights; (xviii) existing and foreign sales and exchange rate fluctuations; (xix) cyclical or seasonal aspects of our business; (xx) capital expenditures; (xxi) potential legal and/or regulatory proceedings, including the Company's expected refund of the State Aid charging notice relating to the CJEU's judgment on the ruling of the European Commission; (xxii) acquisitions and their expected impact, including our ability to realize the benefits expected from the acquisitions and to successfully integrate the assets we acquire or utilize such assets to their full capacity, including in connection with the acquisition of Micro Focus International Limited, formerly Micro Focus International plc, and its subsidiaries (Micro Focus) (see Note 17 “Acquisitions and Divestitures” to our Condensed Consolidated Financial Statements for more details); (xxiii) tax audits; (xxiv) the expected impact of the Russia-Ukraine and Middle East conflicts on our business;(xxv) expected costs of the restructuring and business optimization plans; (xxvi) targets regarding greenhouse gas emissions, waste diversion, energy consumption and Equity, Diversity and Inclusion (ED&I) initiatives; (xvii) integration of Micro Focus, resulting syne…
Excerpt shortened here; the source contains the full paragraph.
Current wording
When used in this report, the words “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “may”, “could”, “would”, “might”, “will” and other similar language, as they relate to Open Text Corporation (OpenText or the Company), are intended to identify forward-looking statements under applicable securities laws. Specific forward-looking statements in this report include, but are not limited to, statements regarding: (i) our focus in the fiscal years beginning July 1, 2024 and ending June 30, 2025 (Fiscal 2025) and July 1, 2025 and ending June 30, 2026 (Fiscal 2026) on growth in earnings and cash flows; (ii) creating value through investments in broader Information Management capabilities; (iii) our future business plans and operations, strategic goals and business planning process, including the Company’s business optimization plan announced in July 2024 (the Business Optimization Plan); (iv) business trends; (v) distribution; (vi) the Company’s presence in the cloud and in growth markets; (vii) product and solution developments, enhancements and releases, the timing thereof and the customers targeted; (viii) the Company’s financial condition, results of operations and earnings; (ix) the basis for any future growth and for our financial performance; (x) declaration of quarterly dividends; (xi) future tax rates, including Canada's newly enacted global minimum tax act; (xii) the changing regulatory environment; (xiii) annual recurring revenues; (xiv) research and development and related expenditures; (xv) our building, development and consolidation of our network infrastructure; (xvi) competition and changes in the competitive landscape; (xvii) our management and protection of intellectual property and other proprietary rights; (xviii) existing and foreign sales and exchange rate fluctuations; (xix) cyclical or seasonal aspects of our business; (xx) capital expenditures; (xxi) potential legal and/or regulatory proceedings, including the Company's expected refund of the State Aid charging notice relating to the CJEU's judgment on the ruling of the European Commission; (xxii) acquisitions and their expected impact, including our ability to realize the benefits expected from the acquisitions and to successfully integrate the assets we acquire or utilize such assets to their full capacity, including in connection with the acquisition of Micro Focus International Limited, formerly Micro Focus International plc, and its subsidiaries (Micro Focus) (see Note 17 “Acquisitions and Divestitures” to our Condensed Consolidated Financial Statements for more details); (xxiii) tax audits; (xxiv) the expected impact of the Russia-Ukraine and Middle East conflicts on our business;(xxv) expected costs of the restructuring and business optimization plans; (xxvi) targets regarding greenhouse gas emissions, waste diversion, energy consumption and Equity, Diversity and Inclusion (ED&I) initiatives; (xvii) integration of Micro Focus, resulting syne…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. The risks and uncertainties that may affect forward-looking statements include, but are not limited to: (i) our inability to realize successfully any anticipated synergy benefits from the acquisition of Micro Focus (Micro Focus Acquisition); (ii) the actual and potential impacts of the use of cash and incurrence of indebtedness, including the granting of security interests related to such debt; (iii) the change in scope and size of our operations as a result of the Micro Focus Acquisition and the AMC Divestiture; (iv) the uncertainty around expectations related to Micro Focus’ business prospects; (v) integration of acquisitions and related restructuring efforts, including the quantum of restructuring charges and the timing thereof; (vi) the possibility that we may be unable to successfully integrate the assets we acquire or fail to utilize such assets to their full capacity and not realize the benefits we expect from our acquired portfolios and businesses, including the acquisition of Micro Focus; (vii) the potential for the incurrence of or assumption of debt in connection with acquisitions, its impact on future operations and on the ratings or outlooks of rating agencies on our outstanding debt securities, and the possibility of not being able to generate sufficient cash to service all indebtedness; (viii) the possibility that the Company may be unable to meet its future reporting requirements under the Exchange Act, and the rules promulgated thereunder, or applicable Canadian securities regulation; (ix) the risks associated with bringing new products and services to market; (x) fluctuations in currency exchange rates (including as a result of the impact of any policy changes resulting from trade and tariff disputes) and the impact of mark-to-market valuation relating to associated derivatives; (xi) delays in the purchasing decisions of the Company’s customers; (xii) competition the Company faces in its industry and/or marketplace; (xiii) the final determination of litigation, tax audits (including tax examinations in Canada, the United States or elsewhere) and other legal proceedings; (xiv) potential exposure to greater than anticipated tax liabilities or expenses, including with respect to changes in Canadian, United States or international tax regimes; (xv) the possibility of technical, logistical or planning issues in connection with the deployment of the Company’s products or services; (xvi) the continuous commitment of the Company’s customers; (xvii) demand for the Company’s products and services; (xviii) increase in exposure to international business risks including the impact of geopolitical instability, political unrest, war and other global conflict…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. The risks and uncertainties that may affect forward-looking statements include, but are not limited to: (i) our inability to realize successfully any anticipated synergy benefits from the acquisition of Micro Focus (Micro Focus Acquisition); (ii) the actual and potential impacts of the use of cash and incurrence of indebtedness, including the granting of security interests related to such debt; (iii) the change in scope and size of our operations as a result of the Micro Focus Acquisition and the AMC Divestiture; (iv) the uncertainty around expectations related to Micro Focus’ business prospects; (v) integration of acquisitions and related restructuring efforts, including the quantum of restructuring charges and the timing thereof; (vi) the possibility that we may be unable to successfully integrate the assets we acquire or fail to utilize such assets to their full capacity and not realize the benefits we expect from our acquired portfolios and businesses, including the acquisition of Micro Focus; (vii) the potential for the incurrence of or assumption of debt in connection with acquisitions, its impact on future operations and on the ratings or outlooks of rating agencies on our outstanding debt securities, and the possibility of not being able to generate sufficient cash to service all indebtedness; (viii) the possibility that the Company may be unable to meet its future reporting requirements under the Exchange Act, and the rules promulgated thereunder, or applicable Canadian securities regulation; (ix) the risks associated with bringing new products and services to market; (x) fluctuations in currency exchange rates (including as a result of the impact of any policy changes resulting from trade and tariff disputes) and the impact of mark-to-market valuation relating to associated derivatives; (xi) delays in the purchasing decisions of the Company’s customers; (xii) competition the Company faces in its industry and/or marketplace; (xiii) the final determination of litigation, tax audits (including tax examinations in Canada, the United States or elsewhere) and other legal proceedings; (xiv) potential exposure to greater than anticipated tax liabilities or expenses, including with respect to changes in Canadian, United States or international tax regimes; (xv) the possibility of technical, logistical or planning issues in connection with the deployment of the Company’s products or services; (xvi) the continuous commitment of the Company’s customers; (xvii) demand for the Company’s products and services; (xviii) increase in exposure to international business risks including the impact of geopolitical instability, political unrest, war and other global conflict…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
All dollar and percentage comparisons made herein refer to the three months ended September 30, 2024 compared with the three months ended September 30, 2023, unless otherwise noted.
Current wording
All dollar and percentage comparisons made herein refer to the three and six months ended December 31, 2024 compared with the three and six months ended December 31, 2023, unless otherwise noted.
Previous wording
As of September 30, 2024, we employed a total of approximately 21,800 individuals. Of the total 21,800 individuals we employed as of September 30, 2024, 7,700 or 35% are in the Americas, 4,800 or 22% are in EMEA and 9,300 or 43% are in Asia Pacific. Currently, we have employees in 42 countries enabling strong access to multiple talent pools while ensuring reach and proximity to our customers. See “Results of Operations” below for our definitions of geographic regions.
Current wording
As of December 31, 2024, we employed a total of approximately 21,800 individuals. Of the total 21,800 individuals we employed as of December 31, 2024, 7,600 or 35% are in the Americas, 4,800 or 22% are in EMEA and 9,400 or 43% are in Asia Pacific. Currently, we have employees in 42 countries enabling strong access to multiple talent pools while ensuring reach and proximity to our customers. See “Results of Operations” below for our definitions of geographic regions.
Previous wording
During the first quarter of Fiscal 2025 we saw the following activity, as compared to the first quarter of Fiscal 2024, which includes the results of the AMC Business prior to the AMC Divestiture, which has an impact on period-over-period comparisons. See “Divestiture of AMC Business” under “Results of Operations”, below for more details:
Current wording
During the second quarter of Fiscal 2025 we saw the following activity, as compared to the second quarter of Fiscal 2024, which includes the results of the AMC Business prior to the AMC Divestiture, which has an impact on period-over-period comparisons. See “Divestiture of AMC Business” under “Results of Operations”, below for more details:
Previous wording
•Total annual recurring revenue, which we define as the sum of cloud services and subscriptions revenue and customer support revenue, was $1,052.5 million, down 8.4% compared to the same period in the prior fiscal year; down 8.0% after factoring in the unfavorable impact of $4.1 million of foreign exchange rate changes.
Current wording
•Total annual recurring revenue, which we define as the sum of cloud services and subscriptions revenue and customer support revenue, was $1,052.9 million, down 8.1% compared to the same period in the prior fiscal year; down 8.8% after factoring in the favorable impact of $7.7 million of foreign exchange rate changes.
Previous wording
•Cloud services and subscriptions revenue was $457.0 million, up 1.3% compared to the same period in the prior fiscal year; up 1.7% after factoring in the unfavorable impact of $1.6 million of foreign exchange rate changes.
Current wording
•Cloud services and subscriptions revenue was $462.3 million, up 2.7% compared to the same period in the prior fiscal year; up 2.2% after factoring in the favorable impact of $2.4 million of foreign exchange rate changes.
Previous wording
•GAAP-based earnings per share (EPS), diluted, was $0.32 compared to $0.30 in the same period in the prior fiscal year.
Current wording
•GAAP-based earnings per share (EPS), diluted, was $0.87 compared to $0.14 in the same period in the prior fiscal year.
Previous wording
•Non-GAAP-based EPS, diluted, was $0.93 compared to $1.01 the same period in the prior fiscal year.
Current wording
•Non-GAAP-based EPS, diluted, was $1.11 compared to $1.24 the same period in the prior fiscal year.
Previous wording
•Adjusted EBITDA, a non-GAAP measure, was $443.8 million compared to $494.8 million in the same period in the prior fiscal year.
Current wording
•Adjusted EBITDA, a non-GAAP measure, was $501.5 million compared to $566.3 million in the same period in the prior fiscal year.
Previous wording
•Operating cash flow was $(77.8) million for the three months ended September 30, 2024 compared to $47.1 million in the same period in the prior fiscal year, down 265.1%.
Current wording
•Operating cash flow was $270.2 million for the six months ended December 31, 2024 compared to $397.8 million in the same period in the prior fiscal year, down 32.1%.
Previous wording
•Cash and cash equivalents were $1,000.2 million as of September 30, 2024, compared to $1,280.7 million as of June 30, 2024.
Current wording
•Cash and cash equivalents were $1,122.2 million as of December 31, 2024, compared to $1,280.7 million as of June 30, 2024.
Previous wording
•Enterprise cloud bookings were $133.5 million, compared to $121.0 million in the same period in the prior fiscal year. We define Enterprise cloud bookings as the total value from cloud services and subscription contracts entered into in the period that is new, committed and incremental to our existing contracts, entered into with our enterprise-based customers.
Current wording
•Enterprise cloud bookings were $249.9 million, compared to $235.5 million in the same period in the prior fiscal year. We define Enterprise cloud bookings as the total value from cloud services and subscription contracts entered into in the period that is new, committed and incremental to our existing contracts, entered into with our enterprise-based customers.
Previous wording
•During the three months ended September 30, 2024, we repurchased and cancelled 2,649,131 Common Shares for $86.5 million, inclusive of 2% Canadian excise taxes recorded (nil in the three months ended September 30, 2023).
Current wording
•During the three months ended December 31, 2024, we repurchased and cancelled 2,212,971 Common Shares for $67.1 million, inclusive of 2% Canadian excise taxes recorded (nil in the three months ended December 31, 2023).
Previous wording
On May 1, 2024, the Company completed the AMC Divestiture for $2.275 billion in cash before taxes, fees and other adjustments. For the three months ended September 30, 2023, the results of the AMC business were recorded and presented within our Condensed Consolidated Financial Statements. See Note 17 “Acquisitions and Divestitures” to our Condensed Consolidated Financial Statements for more details.
Current wording
On May 1, 2024, the Company completed the AMC Divestiture for $2.275 billion in cash before taxes, fees and other adjustments. Working capital adjustments were finalized during the quarter ended December 31, 2024. For the three and six months ended December 31, 2023, the results of the AMC business were recorded and presented within our Condensed Consolidated Financial Statements. See Note 17 “Acquisitions and Divestitures” to our Condensed Consolidated Financial Statements for more details.
Previous wording
As an organization, we are committed to “Total Growth,” meaning we strive towards delivering value through organic initiatives and innovations and acquisitions. With an emphasis on increasing recurring revenues and expanding profitability, we believe our Total Growth strategy will ultimately drive cash flow growth, thus helping to fuel our innovation, broaden our go-to-market distribution and identify and execute strategic acquisitions. We are well positioned to expand our product portfolio and improve our ability to innovate and grow organically, which helps us to meet our long-term growth targets. Our Total Growth strategy is a durable model that we believe will create both near and long-term shareholder value through organic and acquired growth, capital efficiency and profitability.
Current wording
As an organization, we are committed to “Total Growth,” meaning we strive towards delivering value through organic initiatives and innovations and acquisitions. With an emphasis on increasing recurring revenues and expanding profitability, we believe our Total Growth strategy will ultimately drive cash flow growth, thus helping to fuel our innovation, broaden our go-to-market distribution and identify and execute strategic acquisitions. We are well positioned to optimize our product portfolio and improve our ability to innovate and grow organically, which helps us to meet our long-term growth targets. Our Total Growth strategy is a durable model that we believe will create both near and long-term shareholder value through organic and acquired growth, capital efficiency and profitability.
Previous wording
We are committed to continuous innovation. Our investments in research and development (R&D) push product innovation, increasing the value of our offerings to our existing customer base and new customers, which includes Global 10,000 companies (G10K), SMBs and consumers. The G10K are the world’s largest companies, ranked by estimated total revenues, as well as the world’s largest governments and global organizations. More valuable products, coupled with our established global partner program, lead to greater distribution and cross-selling opportunities which further help us to achieve organic growth. On a fiscal year-to-date basis, we have invested $190.7 million or 15.0% of revenue in R&D expense, which is in line with our target spend for R&D expense this fiscal year.
Current wording
We are committed to continuous innovation. Our investments in research and development (R&D) push product innovation, increasing the value of our offerings to our existing customer base and new customers, which includes Global 10,000 companies (G10K), SMBs and consumers. The G10K are the world’s largest companies, ranked by estimated total revenues, as well as the world’s largest governments and global organizations. More valuable products, coupled with our established global partner program, lead to greater distribution and cross-selling opportunities which further help us to achieve organic growth. On a fiscal year-to-date basis, we have invested $371.4 million or 14.3% of revenue in R&D expense, which is in line with our target spend for R&D expense this fiscal year.
Previous wording
Looking ahead, the destination for innovation is cloud. Businesses of all sizes rely on a combination of public and private clouds, managed services and off-cloud solutions. As a result, we are committed to continue to modernize our technology infrastructure and leverage our existing investments in the OpenText Cloud and programs to help customers off-cloud. The combination of OpenText cloud-native applications and managed services, together with the scalability and performance of our partner public cloud providers, offer more secure, reliable and compliant solutions to customers wanting to deploy cloud-based Information Management applications. The OpenText Cloud is designed to build additional flexibility and scalability for our customers: becoming cloud-native, connecting anything, and extending capabilities quickly with multi-tenant SaaS applications and services.
Current wording
Looking ahead, the destination for innovation is cloud. Businesses of all sizes rely on a combination of public and private clouds, managed services and off-cloud solutions. As a result, we are committed to continue to modernize our technology infrastructure and leverage our existing investments in the OpenText Cloud and programs to help customers off-cloud. The combination of OpenText cloud-native applications and managed services, together with the scalability and performance of our partner public cloud providers, offer more secure, reliable and compliant solutions to customers wanting to deploy cloud-based Information Management applications. The OpenText Cloud is designed to build additional flexibility and scalability for our customers: becoming cloud-native, connecting anything, and extending capabilities quickly with multi-tenant SaaS applications and services. Our growth strategy includes embedding AI in our products to empower knowledge workers to significantly raise their productivity through our offerings such as Titanium X.
Previous wording
We will continue to closely monitor the potential impacts of inflation with respect to wages, services and goods, concerns regarding any potential recession, higher interest rates, financial market volatility, the Russia-Ukraine and Middle East conflicts and other geopolitical disputes on our business. See Part II, Item 1A “Risk Factors” herein and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for Fiscal 2024.
Current wording
We will continue to closely monitor the potential impacts of inflation with respect to wages, services and goods, concerns regarding any potential recession, higher interest rates, potential increases or changes in U.S., Canadian or global tariff policies and structures and other trade policies, financial market volatility, the Russia-Ukraine and Middle East conflicts and other geopolitical disputes on our business. See Part II, Item 1A “Risk Factors” herein and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for Fiscal 2024.
Previous wording
On May 1, 2024, the Company completed the sale of its AMC business to Rocket Software. The AMC business was comprised of the legacy OpenText connectivity business and the legacy Micro Focus AMC business. The comparability of our operating results for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 was impacted by the recent divestiture of our AMC business, the results of which were excluded from those of OpenText beginning May 1, 2024. As such, consolidated operating results for the three months ended September 30, 2023 and 2024 included three and nil months, respectively, of AMC business operating results.
Current wording
On May 1, 2024, the Company completed the sale of its AMC business to Rocket Software. The AMC business was comprised of the legacy OpenText connectivity business and the legacy Micro Focus AMC business. The comparability of our operating results for the three and six months ended December 31, 2024 as compared to the three and six months ended
Previous wording
Our total revenues decreased by $156.4 million primarily across license and customer support product types in the three months ended September 30, 2024, relative to the three months ended September 30, 2023, primarily due to the exclusion of revenue contributions from the AMC business, in addition to a unfavorable impact of $4.2 million of foreign exchange rate changes. The AMC business contributed $132.8 million to our total revenues during the three months ended September 30, 2023, of which $84.1 million related to customer support revenues, $44.2 million related to license revenues, and $4.5 million related to professional services and other revenue.
Current wording
Our total revenues decreased by $200.4 million and $356.8 million, primarily across license and customer support product types in the three and six months ended December 31, 2024, respectively, relative to the three and six months ended December 31, 2023, primarily due to the exclusion of revenue contributions from the AMC business, partially offset by a favorable impact of $5.6 million and $9.8 million, respectively, of foreign exchange rate changes. The AMC business contributed $131.2 million and $264.0 million, respectively, to our total revenues during the three and six months ended December 31, 2023, of which $84.1 million and $168.2 million, respectively, related to customer support revenues, $41.6 million and $85.8 million, respectively, related to license revenues, and $5.5 million and $10.0 million, respectively, related to professional services and other revenue.
Previous wording
In connection with the AMC Divestiture, we entered into a Transition Service Agreement (TSA) with Rocket Software, whereby we will provide certain transition services to Rocket Software for up to 24 months from May 1, 2024. These transition service costs are reimbursable by Rocket Software. During the three months ended September 30, 2024, we billed Rocket Software $14.5 million under the TSA. The following table illustrates the financial statement impact of these TSA reimbursements, which have been recorded as an offset to the respective costs incurred, within our Condensed Consolidated Statements of Income.
Current wording
In connection with the AMC Divestiture, we entered into a TSA with Rocket Software, whereby we will provide certain transition services to Rocket Software for up to 24 months from May 1, 2024. These transition service costs are reimbursable by Rocket Software. During the three and six months ended December 31, 2024, we billed Rocket Software $12.7 million and $27.2 million, respectively, under the TSA. The following table illustrates the financial statement impact of these TSA reimbursements, which have been recorded as an offset to the respective costs incurred, within our Condensed Consolidated Statements of Income.
Previous wording
Beginning with the quarter ended September 30, 2024, we are disclosing the cloud renewal rate on a net basis (cloud net renewal rate). The cloud net renewal rate, excluding the impact of Carbonite Inc. and Zix, was 94% for the quarter ended September 30, 2024. This rate includes increases and decreases in renewed contract values driven by product mix, volume and consumption, and changes for price adjustments relating to renewed contract values, which were not part of the historical calculation of the cloud renewal rate.
Current wording
Beginning with the quarter ended September 30, 2024, we have disclosed the cloud renewal rate on a net basis (cloud net renewal rate). For the quarter ended December 31, 2024, our cloud net renewal rate, excluding the impact of Carbonite Inc. and Zix Corporation, was 95%. This rate includes increases and decreases in renewed contract values driven by product mix, volume and consumption, and changes for price adjustments relating to renewed contract values, which were not part of the historical calculation of the cloud renewal rate.
Previous wording
There were 23 cloud services contracts greater than $1.0 million that closed during the first quarter of Fiscal 2025, compared to 21 contracts during the first quarter of Fiscal 2024.
Current wording
There were 51 cloud services contracts greater than $1.0 million that closed during the second quarter of Fiscal 2025, compared to 48 contracts during the second quarter of Fiscal 2024.
Previous wording
Cloud services and subscriptions revenues increased by $6.0 million or 1.3% during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year; up 1.7% after factoring in the unfavorable impact of $1.6 million of foreign exchange rate changes. Geographically, the overall change was attributable to a decrease in Americas of $2.4 million, an increase in EMEA of $9.0 million, and a decrease in Asia Pacific of $0.7 million.
Current wording
Cloud services and subscriptions revenues increased by $18.2 million or 2.0% during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year; up 1.9% after factoring in the favorable impact of $0.7 million of foreign exchange rate changes. Geographically, the overall change was attributable to an increase in EMEA of $13.8 million, an increase in Americas of $4.8 million and a decrease in Asia Pacific of $0.4 million.
Previous wording
Cost of Cloud services and subscriptions revenues increased by $3.8 million during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year. This was primarily due to an increase in third-party network usage fees of $12.3 million, partially offset by a decrease in labour-related costs of $8.7 million. Overall, the gross margin percentage on Cloud services and subscriptions revenues remained stable at 62%.
Current wording
Cost of Cloud services and subscriptions revenues decreased by $4.0 million during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year. This was due to a decrease in labour-related costs of $9.9 million, partially offset by an increase in third-party network usage fees of $5.4 million. Overall, the gross margin percentage on Cloud services and subscriptions revenues increased to 62% from 61%.
Previous wording
Beginning with the quarter ended September 30, 2024, we are disclosing the customer support renewal rate on a net basis (customer support net renewal rate). The customer support net renewal rate was 91% for the quarter ended September 30, 2024. This rate includes increases in renewed contract values driven by volume and consumption, and excludes reductions driven by shifts from customer support renewals where customers migrate to other product types, which were not part of the historical calculation of the customer support renewal rate.
Current wording
Beginning with the quarter ended September 30, 2024, we have disclosed the customer support renewal rate on a net basis (customer support net renewal rate). For the quarter ended December 31, 2024, our customer support net renewal rate was 92%. This rate includes increases in renewed contract values driven by volume and consumption, and excludes reductions driven by shifts from customer support renewals where customers migrate to other product types, which were not part of the historical calculation of the customer support renewal rate.
Previous wording
Cost of Customer support revenues decreased by $12.4 million during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $11.9 million over the comparative period. Overall, the gross margin percentage on Customer support revenues remained stable at 89%.
Current wording
Cost of Customer support revenues decreased by $10.7 million during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $10.4 million over the comparative period. Overall, the gross margin percentage on Customer support revenues remained stable at 89%.
Previous wording
Cost of License revenues increased by $2.8 million during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year. Overall, the gross margin percentage on License revenues decreased to 95% from 98%.
Current wording
Cost of License revenues increased by $0.4 million during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year. Overall, the gross margin percentage on License revenues decreased to 97% from 98%.
Previous wording
During the first quarter of Fiscal 2025, we closed 39 license contracts greater than $0.5 million, of which 15 contracts were greater than $1.0 million, contributing $39.6 million of License revenues. This was compared to 51 license contracts greater than $0.5 million during the first quarter of Fiscal 2024, of which 21 contracts were greater than $1.0 million, contributing $63.9 million of License revenues.
Current wording
During the first six months of Fiscal 2025, we closed 99 license contracts greater than $0.5 million, of which 39 contracts were greater than $1.0 million, contributing $111.0 million of License revenues. This was compared to 134 license contracts greater than $0.5 million during the first six months of Fiscal 2024, of which 56 contracts were greater than $1.0 million, contributing $211.6 million of License revenues.
Previous wording
Professional service and other revenues decreased by $13.0 million or 12.5% during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year; down 12.5% after factoring in the impact of foreign exchange rate changes. The decrease was partially due to the exclusion of professional services revenue contributions as a result of the AMC Divestiture. Geographically, the overall change was attributable to a decrease in Americas of $7.2 million, a decrease in EMEA of $4.9 million and a decrease in Asia Pacific of $0.9 million.
Current wording
Professional service and other revenues decreased by $7.1 million or 7.1% during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year; down 8.6% after factoring in the impact of foreign exchange rate changes. The decrease was primarily due to the exclusion of professional services revenue contributions as a result of the AMC Divestiture. Geographically, the overall change was attributable to a decrease in Americas of $6.9 million, a decrease in EMEA of $1.0 million and an increase in Asia Pacific of $0.9 million.
Previous wording
Cost of Professional service and other revenues decreased by $13.0 million during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $12.9 million. Overall, the gross margin percentage on Professional service and other revenues increased to 26% from 23%.
Current wording
Cost of Professional service and other revenues decreased by $7.4 million during the three months ended December 31, 2024 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $7.8 million. Overall, the gross margin percentage on Professional service and other revenues increased to 27% from 24%.
Previous wording
Amortization of acquired technology-based intangible assets decreased during the three months ended September 30, 2024 by $29.6 million as compared to the same period in the prior fiscal year. This was primarily due to a reduction in amortization related to technology-based intangible assets from previous acquisitions becoming fully amortized and reduced amortization related to the AMC Divestiture.
Current wording
Amortization of acquired technology-based intangible assets decreased during the three months ended December 31, 2024 by $23.6 million as compared to the same period in the prior fiscal year. This was primarily due to a reduction in amortization related to technology-based intangible assets from previous acquisitions becoming fully amortized and reduced amortization related to the AMC Divestiture.
Previous wording
Research and development expenses decreased by $35.5 million during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year. Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $21.8 million, facility-related expenses decreased by $7.2 million, share-based compensation expense decreased by $3.3 million, and contract labour and consulting expense decreased by $2.3 million. Overall, our research and development expenses, as a percentage of total revenues, decreased to 15% compared to the same period in the prior fiscal year at 16%.
Current wording
Research and development expenses decreased by $67.7 million during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year. Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $38.7 million, facility-related expenses decreased by $8.9 million, contract labour and consulting decreased by $8.1 million, and share-based compensation expense decreased by $8.1 million. Overall, our research and development expenses, as a percentage of total revenues, decreased to 14% compared to 15% for the same period in the prior fiscal year.
Previous wording
Our research and development labour resources decreased by 809 employees, from 8,235 employees at September 30, 2023 to 7,426 employees at September 30, 2024.
Current wording
Our research and development labour resources decreased by 661 employees, from 8,062 employees at December 31, 2023 to 7,401 employees at December 31, 2024.
Previous wording
Our sales and marketing labour resources decreased by 732 employees, from 4,654 employees at September 30, 2023 to 3,922 employees at September 30, 2024.
Current wording
Our sales and marketing labour resources decreased by 473 employees, from 4,511 employees at December 31, 2023 to 4,038 employees at December 31, 2024.
Previous wording
General and administrative expenses decreased by $24.5 million during the three months ended September 30, 2024 as compared to the same period in the prior fiscal year. Contract labour and consulting expenses decreased by $10.3 million, payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $7.9 million, travel and communication expenses decreased by $3.7 million, and other miscellaneous costs, which include professional fees such as legal, audit and tax related expenses decreased by $2.5 million. Overall, general and administrative expenses, as a percentage of total revenues, decreased to 8% compared to 9% for the same period in the prior fiscal year.
Current wording
General and administrative expenses decreased by $98.4 million during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year. Other miscellaneous costs, which include professional fees such as legal, audit and tax related expenses, decreased by $48.2 million primarily driven by a reduction in costs related to IP, including the grant of certain IP rights and the resolution of certain historical IP related matters in the prior fiscal year, and reductions in other professional fees. Additionally, payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $21.4 million, contract labour and consulting expenses decreased by $20.6 million and travel and communication expenses decreased by $5.3 million. Overall, general and administrative expenses, as a percentage of total revenues, decreased to 8% compared to 10% for the same period in the prior fiscal year.
Previous wording
Our general and administrative labour resources decreased by 221 employees, from 3,463 employees at September 30, 2023 to 3,242 employees at September 30, 2024.
Current wording
Our general and administrative labour resources decreased by 345 employees, from 3,428 employees at December 31, 2023 to 3,083 employees at December 31, 2024.
Previous wording
Amortization of acquired customer-based intangible assets decreased during the three months ended September 30, 2024 by $38.7 million as compared to the same period in the prior fiscal year. This was primarily due to a reduction in amortization related to customer-based intangible assets from previous acquisitions becoming fully amortized and reduced amortization related to the AMC Divestiture.
Current wording
Amortization of acquired customer-based intangible assets decreased during the three and six months ended December 31, 2024 by $32.9 million and $71.6 million, respectively, as compared to the same period in the prior fiscal year. This was primarily due to a reduction in amortization related to customer-based intangible assets from previous acquisitions becoming fully amortized and reduced amortization related to the AMC Divestiture.
Previous wording
Special charges (recoveries) increased by $33.3 million during the three months ended September 30, 2024 over the comparative period. This was primarily due to an increase in restructuring costs of $42.5 million related to the Business Optimization Plan and an increase in divestiture costs of $2.6 million, partially offset by a decrease of $8.7 million related to Micro Focus Restructuring Plan, as compared to the same period in the prior fiscal year.
Current wording
Special charges (recoveries) decreased by $38.9 million during the three months ended December 31, 2024 over the comparative period. This was primarily due to a decrease in restructuring costs related to the Micro Focus Acquisition of $44.1 million and a decrease in divestiture costs of $5.3 million, partially offset by an increase related to the Business Optimization Plan of $12.3 million, as compared to the same period in the prior fiscal year.
Showing the first 40 of 64 pairs. Open the source sections for the rest.
Rearranged current paragraphs (17)
Current report — wording carried from elsewhere
December 31, 2023 was impacted by the recent divestiture of our AMC business, the results of which were excluded from those of OpenText beginning May 1, 2024. As such, AMC business operating results were included in the consolidated operating results for the three and six months ended December 31, 2023, but were not included in the consolidated operating results for the three and six months ended December 31, 2024.
Current report — wording carried from elsewhere
Cost of Customer support revenues decreased by $23.2 million during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $22.3 million over the comparative period. Overall, the gross margin percentage on Customer support revenues remained stable at 89%.
Current report — wording carried from elsewhere
During the second quarter of Fiscal 2025, we closed 60 license contracts greater than $0.5 million, of which 24 contracts were greater than $1.0 million, contributing $71.4 million of License revenues. This was compared to 83 license contracts greater than $0.5 million during the second quarter of Fiscal 2024, of which 35 contracts were greater than $1.0 million, contributing $147.7 million of License revenues.
Current report — wording carried from elsewhere
Cost of License revenues increased by $3.2 million during the six months ended December 31, 2024 as compared to the same period in the prior fiscal year. Overall, the gross margin percentage on License revenues decreased to 96% from 98%.
Current report — wording carried from elsewhere
The Company’s effective tax rate for the three months ended December 31, 2023 differs from the Canadian statutory rate primarily due to tax benefits related to foreign tax credits, research and development credits, partially offset by U.S. Base Erosion and Anti-Abuse Tax (BEAT).
Current report — wording carried from elsewhere
The Company’s effective tax rate for the six months ended December 31, 2024 increased to a provision of 14.4% compared to a provision of 13.4% for the six months ended December 31, 2023. The Company’s effective tax rate for the six months ended December 31, 2024 differs from the Canadian statutory rate of 26.5% primarily due to tax benefits related to a net decrease in unrecognized tax benefits, foreign tax credits, research and development credits, and a change in valuation allowance, partially offset by disallowed share-based compensation deductions and foreign source income inclusion in the U.S. and Canada.
Current report — wording carried from elsewhere
The Company’s effective tax rate for the six months ended December 31, 2023 differs from the Canadian statutory rate primarily due to tax benefits related to foreign tax credits, research and development credits, partially offset by U.S. BEAT.
Current report — wording carried from elsewhere
(6)Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results.
Current report — wording carried from elsewhere
for the six months ended December 31, 2024
Current report — wording carried from elsewhere
(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.
Current report — wording carried from elsewhere
(4)Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results. See Note 16 “Special Charges (Recoveries)” to our Condensed Consolidated Financial Statements for more details.
Current report — wording carried from elsewhere
(7)Adjustment relates to differences between the GAAP-based tax provision rate of approximately 14% and a Non-GAAP-based tax rate of approximately 24%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and “book to return” adjustments for tax return filings and tax assessments. Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included. In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.
Current report — wording carried from elsewhere
for the six months ended December 31, 2023
Current report — wording carried from elsewhere
(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.
Current report — wording carried from elsewhere
(4)Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results. See Note 16 “Special Charges (Recoveries)” to our Condensed Consolidated Financial Statements for more details.
Current report — wording carried from elsewhere
(6)Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results.
Current report — wording carried from elsewhere
(7)Adjustment relates to differences between the GAAP-based tax provision rate of approximately 13% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves, and “book to return” adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at our Non-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
(6)Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.