Cover Page
Cover Page - shares | 9 Months Ended | |
Mar. 31, 2020 | Apr. 28, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Entity Registrant Name | OPEN TEXT CORP | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2020 | |
Entity File Number | 0-27544 | |
Entity Central Index Key | 0001002638 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Incorporation, State or Country Code | Z4 | |
Entity Tax Identification Number | 98-0154400 | |
Title of 12(b) Security | Common stock without par value | |
Trading Symbol | OTEX | |
Security Exchange Name | NASDAQ | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 271,642,649 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Address, Address Line One | 275 Frank Tompa Drive, | |
Entity Address, City or Town | Waterloo, | |
Entity Address, State or Province | ON | |
Entity Address, Postal Zip Code | N2L 0A1 | |
Entity Address, Country | CA | |
City Area Code | 519 | |
Local Phone Number | 888-7111 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 1,452,570 | $ 941,009 |
Accounts receivable trade, net of allowance for doubtful accounts of $18,301 as of March 31, 2020 and $17,011 as of June 30, 2019 (note 4) | 459,348 | 463,785 |
Contract assets (note 3) | 27,057 | 20,956 |
Income taxes recoverable (note 15) | 59,930 | 38,340 |
Prepaid expenses and other current assets | 112,073 | 97,238 |
Total current assets | 2,110,978 | 1,561,328 |
Property and equipment (note 5) | 258,892 | 249,453 |
Operating lease right of use assets (note 6) | 243,611 | |
Long-term contract assets (note 3) | 14,225 | 15,386 |
Goodwill (note 7) | 4,678,686 | 3,769,908 |
Acquired intangible assets (note 8) | 1,731,781 | 1,146,504 |
Deferred tax assets (note 15) | 921,643 | 1,004,450 |
Other assets (note 9) | 171,107 | 148,977 |
Long-term income taxes recoverable (note 15) | 31,149 | 37,969 |
Total assets | 10,162,072 | 7,933,975 |
Current liabilities: | ||
Accounts payable and accrued liabilities (note 10) | 324,890 | 329,903 |
Current portion of long-term debt (note 11) | 610,000 | 10,000 |
Operating lease liabilities (note 6) | 68,871 | |
Deferred revenues (note 3) | 819,273 | 641,656 |
Income taxes payable (note 15) | 31,711 | 33,158 |
Total current liabilities | 1,854,745 | 1,014,717 |
Long-term liabilities: | ||
Accrued liabilities (note 10) | 14,634 | 49,441 |
Pension liability (note 12) | 67,438 | 75,239 |
Long-term debt (note 11) | 3,585,684 | 2,604,878 |
Long-term operating lease liabilities (note 6) | 205,789 | |
Deferred revenues (note 3) | 92,341 | 46,974 |
Long-term income taxes payable (note 15) | 184,459 | 202,184 |
Deferred tax liabilities (note 15) | 158,805 | 55,872 |
Total long-term liabilities | 4,309,150 | 3,034,588 |
Shareholders’ equity: | ||
Share capital and additional paid-in capital (note 13): 271,634,149 and 269,834,442 Common Shares issued and outstanding at March 31, 2020 and June 30, 2019, respectively; authorized Common Shares: unlimited | 1,839,150 | 1,774,214 |
Accumulated other comprehensive income | 9,466 | 24,124 |
Retained earnings | 2,180,339 | 2,113,883 |
Treasury stock, at cost (847,369 shares at March 31, 2020 and 802,871 shares at June 30, 2019, respectively) | (32,066) | (28,766) |
Total OpenText shareholders' equity | 3,996,889 | 3,883,455 |
Non-controlling interests | 1,288 | 1,215 |
Total shareholders’ equity | 3,998,177 | 3,884,670 |
Total liabilities and shareholders’ equity | $ 10,162,072 | $ 7,933,975 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable trade, allowance for doubtful accounts | $ 18,301 | $ 17,011 |
Common shares issued | 271,634,149 | 269,834,442 |
Common shares outstanding | 271,634,149 | 269,834,442 |
Treasury stock (in shares) | 847,369 | 802,871 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues (note 3): | ||||
Total revenues | $ 814,679 | $ 719,146 | $ 2,283,124 | $ 2,121,534 |
Cost of revenues: | ||||
Amortization of acquired technology-based intangible assets (note 8) | 63,401 | 44,596 | 145,998 | 140,439 |
Total cost of revenues | 282,187 | 239,631 | 743,080 | 693,966 |
Gross profit | 532,492 | 479,515 | 1,540,044 | 1,427,568 |
Operating expenses: | ||||
Research and development | 108,184 | 84,905 | 269,645 | 238,128 |
Sales and marketing | 166,234 | 132,244 | 432,162 | 378,619 |
General and administrative | 68,828 | 51,833 | 174,958 | 154,955 |
Depreciation | 24,820 | 25,028 | 65,809 | 72,716 |
Amortization of acquired customer-based intangible assets (note 8) | 59,943 | 48,832 | 160,561 | 140,627 |
Special charges (recoveries) (note 18) | 9,406 | 796 | 24,579 | 33,487 |
Total operating expenses | 437,415 | 343,638 | 1,127,714 | 1,018,532 |
Income from operations | 95,077 | 135,877 | 412,330 | 409,036 |
Other income (expense), net (note 21) | (18,923) | 5,065 | (19,736) | 6,965 |
Interest and other related expense, net | (41,263) | (35,607) | (105,849) | (103,751) |
Income before income taxes | 34,891 | 105,335 | 286,745 | 312,250 |
Provision for (recovery of) income taxes (note 15) | 8,891 | 32,542 | 78,800 | 98,628 |
Net income for the period | 26,000 | 72,793 | 207,945 | 213,622 |
Net (income) loss attributable to non-controlling interests | (35) | (31) | (112) | (104) |
Net income attributable to OpenText | $ 25,965 | $ 72,762 | $ 207,833 | $ 213,518 |
Earnings per share—basic attributable to OpenText (note 22) (in dollars per share) | $ 0.10 | $ 0.27 | $ 0.77 | $ 0.80 |
Earnings per share—diluted attributable to OpenText (note 22) (in dollars per share) | $ 0.10 | $ 0.27 | $ 0.77 | $ 0.79 |
Weighted average number of Common Shares outstanding—basic (in '000's) | 271,221 | 268,991 | 270,559 | 268,511 |
Weighted average number of Common Shares outstanding—diluted (in '000's) | 272,202 | 270,030 | 271,643 | 269,606 |
License | ||||
Revenues (note 3): | ||||
Total revenues | $ 81,055 | $ 98,721 | $ 297,048 | $ 308,364 |
Cost of revenues: | ||||
Costs of revenues | 2,544 | 2,692 | 7,917 | 10,219 |
Cloud services and subscriptions | ||||
Revenues (note 3): | ||||
Total revenues | 339,463 | 238,607 | 825,068 | 665,923 |
Cost of revenues: | ||||
Costs of revenues | 127,565 | 103,873 | 333,371 | 280,274 |
Customer support | ||||
Revenues (note 3): | ||||
Total revenues | 322,865 | 310,762 | 950,671 | 932,667 |
Cost of revenues: | ||||
Costs of revenues | 32,151 | 31,844 | 91,326 | 93,582 |
Professional service and other | ||||
Revenues (note 3): | ||||
Total revenues | 71,296 | 71,056 | 210,337 | 214,580 |
Cost of revenues: | ||||
Costs of revenues | $ 56,526 | $ 56,626 | $ 164,468 | $ 169,452 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income for the period | $ 26,000 | $ 72,793 | $ 207,945 | $ 213,622 |
Other comprehensive income (loss)—net of tax: | ||||
Net foreign currency translation adjustments | (15,484) | 3,189 | (16,220) | (3,749) |
Unrealized gain (loss) on cash flow hedges: | ||||
Unrealized gain (loss) - net of tax expense (recovery) effect of ($1,276) and $222 for the three months ended March 31, 2020 and 2019, respectively; ($1,181) and ($274) for the nine months ended March 31, 2020 and 2019, respectively | (3,539) | (3,278) | ||
Unrealized gain (loss) - net of tax expense (recovery) effect of ($1,276) and $222 for the three months ended March 31, 2020 and 2019, respectively; ($1,181) and ($274) for the nine months ended March 31, 2020 and 2019, respectively | 615 | (760) | ||
(Gain) loss reclassified into net income - net of tax (expense) recovery effect of $121 and $124 for the three months ended March 31, 2020 and 2019, respectively; $98 and $425 for the nine months ended March 31, 2020 and 2019, respectively | 337 | 273 | ||
(Gain) loss reclassified into net income - net of tax (expense) recovery effect of $121 and $124 for the three months ended March 31, 2020 and 2019, respectively; $98 and $425 for the nine months ended March 31, 2020 and 2019, respectively | 346 | 1,179 | ||
Actuarial gain (loss) relating to defined benefit pension plans: | ||||
Actuarial gain (loss) - net of tax expense (recovery) effect of $1,495 and ($1,177) for the three months ended March 31, 2020 and 2019, respectively; $1,554 and ($1,390) for the nine months ended March 31, 2020 and 2019, respectively | 3,309 | (4,785) | 3,923 | (5,109) |
Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $203 and $78 for the three months ended March 31, 2020 and 2019, respectively; $446 and $223 for the nine months ended March 31, 2020 and 2019, respectively | 153 | 82 | 644 | 212 |
Total other comprehensive income (loss) net, for the period | (15,224) | (553) | (14,658) | (8,227) |
Total comprehensive income | 10,776 | 72,240 | 193,287 | 205,395 |
Comprehensive (income) loss attributable to non-controlling interests | (35) | (31) | (112) | (104) |
Total comprehensive income attributable to OpenText | $ 10,741 | $ 72,209 | $ 193,175 | $ 205,291 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized gain (loss) on cash flow hedges, tax expense (recovery) | $ (1,276) | $ (1,181) | ||
Unrealized gain (loss) on cash flow hedges, tax expense (recovery) | $ 222 | $ (274) | ||
(Gain) loss reclassified into net income, tax (expense) recovery | 121 | 98 | ||
(Gain) loss reclassified into net income, tax (expense) recovery | 124 | 425 | ||
Actuarial gain (loss), tax (recovery) expense | 1,495 | (1,177) | 1,554 | (1,390) |
Amortization of actuarial (gain) loss into net income, tax recovery (expense) | $ 203 | $ 78 | $ 446 | $ 223 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Shares and Additional Paid in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income | Non-Controlling Interests | Cumulative effect | Cumulative effectRetained Earnings |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of ASU - cumulative effect | $ 3,717,258 | $ 1,707,073 | $ (18,732) | $ 1,994,235 | $ 33,645 | $ 1,037 | ||
Adoption of ASU - cumulative effect | Accounting Standards Update 2016-16 | $ (26,780) | $ (26,780) | ||||||
Adoption of ASU - cumulative effect | Accounting Standards Update 2014-09 | 29,786 | 29,786 | ||||||
Beginning balance (in shares) at Jun. 30, 2018 | 267,651,000 | (691,000) | ||||||
Beginning balance at Jun. 30, 2018 | 3,717,258 | $ 1,707,073 | $ (18,732) | 1,994,235 | 33,645 | 1,037 | ||
Beginning balance (Accounting Standards Update 2016-16) at Jun. 30, 2018 | (26,780) | (26,780) | ||||||
Beginning balance (Accounting Standards Update 2014-09) at Jun. 30, 2018 | 29,786 | 29,786 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of ASU - cumulative effect | 3,717,258 | $ 1,751,811 | $ (28,898) | 2,088,858 | 25,418 | 1,037 | ||
Adoption of ASU - cumulative effect | Accounting Standards Update 2016-16 | (26,780) | (26,780) | ||||||
Adoption of ASU - cumulative effect | Accounting Standards Update 2014-09 | $ 29,786 | $ 29,786 | ||||||
Issuance of Common Shares | ||||||||
Under employee stock option plans (in shares) | 1,100,000 | |||||||
Under employee stock option plans | 25,832 | $ 25,832 | ||||||
Under employee stock purchase plans (in shares) | 523,000 | |||||||
Under employee stock purchase plans | 15,712 | $ 15,712 | ||||||
Share-based compensation | $ 20,152 | 20,152 | ||||||
Purchase of treasury stock (in shares) | (726,059) | (726,000) | ||||||
Purchase of treasury stock | $ (26,499) | $ (26,499) | ||||||
Issuance of treasury stock | $ 0 | (16,333) | $ 16,333 | |||||
Issuance of treasury stock (in shares) | 609,691 | 610,000 | ||||||
Dividends declared | $ (121,901) | (121,901) | ||||||
Other comprehensive income (loss) - net | (8,227) | (8,227) | ||||||
Non-controlling interest | (583) | $ (625) | 42 | |||||
Net income for the period | 213,622 | 213,518 | 104 | |||||
Ending balance (in shares) at Mar. 31, 2019 | 269,274,000 | (807,000) | ||||||
Ending balance at Mar. 31, 2019 | 3,838,372 | $ 1,751,811 | $ (28,898) | 2,088,858 | 25,418 | 1,183 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of ASU - cumulative effect | 3,786,012 | $ 1,731,299 | $ (29,241) | 2,056,831 | 25,971 | 1,152 | ||
Beginning balance (in shares) at Dec. 31, 2018 | 268,569,000 | (817,000) | ||||||
Beginning balance at Dec. 31, 2018 | 3,786,012 | $ 1,731,299 | $ (29,241) | 2,056,831 | 25,971 | 1,152 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of ASU - cumulative effect | 3,838,372 | $ 1,751,811 | $ (28,898) | 2,088,858 | 25,418 | 1,183 | ||
Issuance of Common Shares | ||||||||
Under employee stock option plans (in shares) | 544,000 | |||||||
Under employee stock option plans | 11,661 | $ 11,661 | ||||||
Under employee stock purchase plans (in shares) | 161,000 | |||||||
Under employee stock purchase plans | 4,447 | $ 4,447 | ||||||
Share-based compensation | $ 6,712 | 6,712 | ||||||
Purchase of treasury stock (in shares) | (51,794) | (52,000) | ||||||
Purchase of treasury stock | $ (1,965) | $ (1,965) | ||||||
Issuance of treasury stock | $ 0 | $ (2,308) | $ 2,308 | |||||
Issuance of treasury stock (in shares) | 61,794 | 62,000 | ||||||
Dividends declared | $ (40,735) | (40,735) | ||||||
Other comprehensive income (loss) - net | (553) | (553) | ||||||
Net income for the period | 72,793 | 72,762 | 31 | |||||
Ending balance (in shares) at Mar. 31, 2019 | 269,274,000 | (807,000) | ||||||
Ending balance at Mar. 31, 2019 | 3,838,372 | $ 1,751,811 | $ (28,898) | 2,088,858 | 25,418 | 1,183 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of ASU - cumulative effect | 3,838,372 | 1,751,811 | (28,898) | 2,088,858 | 25,418 | 1,183 | ||
Adoption of ASU - cumulative effect | 3,884,670 | $ 1,774,214 | $ (28,766) | 2,113,883 | 24,124 | 1,215 | ||
Beginning balance (in shares) at Jun. 30, 2019 | 269,834,000 | (803,000) | ||||||
Beginning balance at Jun. 30, 2019 | 3,884,670 | $ 1,774,214 | $ (28,766) | 2,113,883 | 24,124 | 1,215 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of ASU - cumulative effect | $ 3,998,177 | $ 1,839,150 | $ (28,766) | 2,113,883 | 9,466 | 1,215 | ||
Issuance of Common Shares | ||||||||
Under employee stock option plans (in shares) | 1,300,742 | 1,301,000 | ||||||
Under employee stock option plans | $ 34,773 | $ 34,773 | ||||||
Under employee stock purchase plans (in shares) | 499,000 | |||||||
Under employee stock purchase plans | 17,757 | $ 17,757 | ||||||
Share-based compensation | $ 21,530 | 21,530 | ||||||
Purchase of treasury stock (in shares) | (300,000) | (300,000) | ||||||
Purchase of treasury stock | $ (12,424) | $ (12,424) | ||||||
Issuance of treasury stock | $ 0 | $ (9,124) | $ 9,124 | |||||
Issuance of treasury stock (in shares) | 255,502 | 256,000 | ||||||
Dividends declared | $ (141,377) | (141,377) | ||||||
Other comprehensive income (loss) - net | (14,658) | (14,658) | ||||||
Non-controlling interest | (39) | (39) | ||||||
Net income for the period | 207,945 | 207,833 | 112 | |||||
Ending balance (in shares) at Mar. 31, 2020 | 271,634,000 | (847,000) | ||||||
Ending balance at Mar. 31, 2020 | 3,998,177 | $ 1,839,150 | $ (32,066) | 2,180,339 | 9,466 | 1,288 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of ASU - cumulative effect | 3,999,232 | $ 1,803,663 | $ (32,066) | 2,201,653 | 24,690 | 1,292 | ||
Beginning balance (in shares) at Dec. 31, 2019 | 270,609,000 | (847,000) | ||||||
Beginning balance at Dec. 31, 2019 | 3,999,232 | $ 1,803,663 | $ (32,066) | 2,201,653 | 24,690 | 1,292 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of ASU - cumulative effect | 3,998,177 | $ 1,839,150 | $ (32,066) | 2,180,339 | 9,466 | 1,288 | ||
Issuance of Common Shares | ||||||||
Under employee stock option plans (in shares) | 886,000 | |||||||
Under employee stock option plans | 23,414 | $ 23,414 | ||||||
Under employee stock purchase plans (in shares) | 139,000 | |||||||
Under employee stock purchase plans | 5,217 | $ 5,217 | ||||||
Share-based compensation | $ 6,856 | $ 6,856 | ||||||
Purchase of treasury stock (in shares) | 0 | |||||||
Issuance of treasury stock (in shares) | 0 | |||||||
Dividends declared | $ (47,279) | (47,279) | ||||||
Other comprehensive income (loss) - net | (15,224) | (15,224) | ||||||
Non-controlling interest | (39) | (39) | ||||||
Net income for the period | 26,000 | 25,965 | 35 | |||||
Ending balance (in shares) at Mar. 31, 2020 | 271,634,000 | (847,000) | ||||||
Ending balance at Mar. 31, 2020 | 3,998,177 | $ 1,839,150 | $ (32,066) | 2,180,339 | 9,466 | 1,288 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Adoption of ASU - cumulative effect | $ 3,998,177 | $ 1,839,150 | $ (32,066) | $ 2,180,339 | $ 9,466 | $ 1,288 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per common share (in dollars per share) | $ 0.1746 | $ 0.1518 | $ 0.5238 | $ 0.4554 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income for the period | $ 207,945,000 | $ 213,622,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of intangible assets | 372,368,000 | 353,782,000 |
Share-based compensation expense | 21,530,000 | 20,152,000 |
Pension expense | 4,323,000 | 3,412,000 |
Amortization of debt issuance costs | 3,503,000 | 3,234,000 |
Loss on extinguishment of debt | 17,854,000 | 0 |
Loss on sale and write down of property and equipment | 0 | 9,438,000 |
Deferred taxes | 36,711,000 | 11,307,000 |
Share in net (income) loss of equity investees | (6,475,000) | (10,652,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 86,188,000 | 52,777,000 |
Contract assets | (26,665,000) | (28,872,000) |
Prepaid expenses and other current assets | (7,355,000) | (495,000) |
Income taxes | (34,608,000) | 21,006,000 |
Accounts payable and accrued liabilities | (42,263,000) | (30,644,000) |
Deferred revenue | 38,280,000 | 24,134,000 |
Other assets | 7,436,000 | 4,300,000 |
Operating lease assets and liabilities, net | (4,486,000) | |
Net cash provided by operating activities | 674,286,000 | 646,501,000 |
Cash flows from investing activities: | ||
Additions of property and equipment | (55,005,000) | (50,432,000) |
Other investing activities | (11,344,000) | (8,204,000) |
Net cash used in investing activities | (1,448,930,000) | (442,359,000) |
Cash flows from financing activities: | ||
Proceeds from issuance of Common Shares from exercise of stock options and ESPP | 53,107,000 | 42,097,000 |
Proceeds from long-term debt and Revolver | 3,150,000,000 | 0 |
Repayment of long-term debt and Revolver | (1,711,131,000) | (7,500,000) |
Debt extinguishment costs (note 21) | (11,248,000) | 0 |
Debt issuance costs | (18,170,000) | (322,000) |
Purchase of Treasury Stock | (12,424,000) | (26,499,000) |
Purchase of non-controlling interests | 0 | (583,000) |
Payments of dividends to shareholders | (141,377,000) | (121,901,000) |
Net cash provided by (used in) financing activities | 1,308,757,000 | (114,708,000) |
Foreign exchange gain (loss) on cash held in foreign currencies | (20,060,000) | (3,909,000) |
Increase (decrease) in cash, cash equivalents and restricted cash during the period | 514,053,000 | 85,525,000 |
Cash, cash equivalents and restricted cash at beginning of the period | 943,543,000 | 683,991,000 |
Cash, cash equivalents and restricted cash at end of the period | 1,457,596,000 | 769,516,000 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Total cash, cash equivalents and restricted cash | 1,457,596,000 | 769,516,000 |
XMedius | ||
Cash flows from investing activities: | ||
Purchase of business, net of cash acquired | (73,335,000) | 0 |
Carbonite | ||
Cash flows from investing activities: | ||
Purchase of business, net of cash acquired | (1,305,097,000) | 0 |
The Fax Guys | ||
Cash flows from investing activities: | ||
Purchase of business, net of cash acquired | (4,149,000) | 0 |
Catalyst Repository Systems Inc | ||
Cash flows from investing activities: | ||
Purchase of business, net of cash acquired | 0 | (70,800,000) |
Liaison Technologies Inc. | ||
Cash flows from investing activities: | ||
Purchase of business, net of cash acquired | 0 | (310,644,000) |
Guidance Software Inc. | ||
Cash flows from investing activities: | ||
Purchase of business, net of cash acquired | $ 0 | $ (2,279,000) |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying Condensed Consolidated Financial Statements include the accounts of Open Text Corporation and our subsidiaries, collectively referred to as "OpenText" or the "Company". We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd. (OT South Africa) and EC1 Pte. Ltd. (GXS Singapore), which as of March 31, 2020 , were 70% and 81% owned, respectively, by OpenText. All inter-company balances and transactions have been eliminated. Throughout this Quarterly Report on Form 10-Q : (i) the term “Fiscal 2020” means our fiscal year beginning on July 1, 2019 and ending June 30, 2020; (ii) the term “Fiscal 2019” means our fiscal year beginning on July 1, 2018 and ended June 30, 2019; (iii) the term “Fiscal 2018” means our fiscal year beginning on July 1, 2017 and ended June 30, 2018; (iv) the term “Fiscal 2017” means our fiscal year beginning on July 1, 2016 and ended June 30, 2017; and (v) the term “Fiscal 2016” means our fiscal year beginning on July 1, 2015 and ended June 30, 2016. These Condensed Consolidated Financial Statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented and includes certain assets and liabilities of Dynamic Solutions Group Inc. (The Fax Guys), with effect from December 2, 2019 , the financial results of Carbonite, Inc. (Carbonite), with effect from December 24, 2019 and the financial results of XMedius with effect from March 9, 2020 (see note 19 "Acquisitions"). Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements . These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. In particular, key estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) accounting for income taxes, (iii) testing of goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) restructuring accruals, (viii) acquisition accruals and pre-acquisition contingencies, (ix) the realization of investment tax credits, (x) the valuation of stock options granted and obligations related to share-based payments, including the valuation of our long-term incentive plans, and (xi) the valuation of pension obligations. On March 3, 2020, COVID-19 was characterized as a pandemic by the World Health Organization. The spread of COVID-19 has significantly impacted the global economy. We will continue to monitor the potential impact of COVID-19 on our financial statements and related disclosures, including the need for additional estimates going forward, which could include costs related to potential items such as special charges, restructurings, asset impairments and other non-recurring costs. As of March 31, 2020, we have not recorded any estimated amounts with respect to COVID-19 in our Condensed Consolidated Financial Statements . Please also see "Risk Factors" included within Part II, Item 1A of this Quarterly Report on Form 10-Q. Impact of Recently Adopted Accounting Pronouncements Leases Effective July 1, 2019, we adopted Accounting Standards Update (ASU) No. 2016-02 “Leases (Topic 842)” (Topic 842) using the modified retrospective transition approach. In accordance with this adoption method, results for reporting periods as of July 1, 2019 are presented under the new standard, while prior period results continue to be reported under the previous standard. Additionally, we elected the package of practical expedients permitted under the transition guidance within Topic 842, which allowed us to (i) carry forward the historical lease classification for any expired or existing leases, (ii) not reassess whether any expired or existing contracts contain leases and (iii) not reassess any initial direct cost for existing leases. We did not elect the practical expedient of hindsight when determining the lease term of existing contracts at the effective date. As a result of this adoption, we recorded the following adjustments as of July 1, 2019 on the Consolidated Balance Sheets: • An increase in operating lease right of use assets of approximately $217.5 million ; • An increase in total operating lease liabilities of approximately $253.5 million ; • A decrease in prepaid expenses and other current assets of approximately $6.6 million in connection with lease fair value adjustments and prepaid rent; • A decrease in other assets of approximately $0.2 million in connection with lease fair value adjustments; and • A decrease in total accrued liabilities of approximately $42.8 million in connection with tenant allowances, deferred rent, lease fair value adjustments, and amounts payable in respect of restructured facilities. The adoption of Topic 842 had no impact to the Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Statement of Shareholders' Equity or Condensed Consolidated Statements of Cash Flows. Please refer to note 6 “Leases” for additional information. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements Adopted in Fiscal 2020 During Fiscal 2020, we have adopted the following ASUs, in addition to those discussed in note 1 "Basis of Presentation". The ASUs listed below did not have a material impact to our reported financial position, results of operations or cash flows: • ASU No. 2017-12 “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities” (ASU 2017-12) • ASU No. 2018-15 “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract” Accounting Pronouncements Not Yet Adopted Retirement Benefits In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-14 “Compensation-Retirement Benefits-Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans” (ASU 2018-14), which modifies the disclosure requirements for defined benefit pension plans and other post retirement plans. ASU 2018-14 is effective for us in the first quarter of our fiscal year ending June 30, 2021. We are currently evaluating the impact of our pending adoption of ASU 2018-14 on our consolidated financial statements. Financial Instruments In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Losses (Topic 326)” and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, and ASU 2020-02 (collectively Topic 326). Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. Topic 326 is effective for us in our first quarter of our fiscal year ending June 30, 2021. Topic 326 must be adopted by applying a cumulative effect adjustment to retained earnings. We are currently evaluating Topic 326, including its potential impact to our process and controls. We believe the effect on our consolidated financial statements will largely depend on the composition and credit quality of our financial assets and the economic conditions at the time of adoption. |
Revenues
Revenues | 9 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES In accordance with Accounting Standards Codification (ASC) Topic 606 "Revenue from Contracts with Customers" (Topic 606), we account for a customer contract when we obtain written approval, the contract is committed, the rights of the parties, including the payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is recognized when, or as, control of a promised product or service is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for our products and services (at its transaction price). Estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based on readily available information, which may include historical, current and forecasted information, taking into consideration the type of customer, the type of transaction and specific facts and circumstances of each arrangement. We report revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue producing transactions. We have four revenue streams: license, cloud services and subscriptions, customer support, and professional service and other. License revenue Our license revenue can be broadly categorized as perpetual licenses, term licenses and subscription licenses, all of which are deployed on the customer’s premises (on-premise). Perpetual licenses: We sell perpetual licenses which provide customers the right to use software for an indefinite period of time in exchange for a one-time license fee, which is generally paid at contract inception. Our perpetual licenses provide a right to use intellectual property (IP) that is functional in nature and have significant stand-alone functionality. Accordingly, for perpetual licenses of functional IP, revenue is recognized at the point-in-time when control has been transferred to the customer, which normally occurs once software activation keys have been made available for download. Term licenses and Subscription licenses: We sell both term and subscription licenses which provide customers the right to use software for a specified period in exchange for a fee, which may be paid at contract inception or paid in installments over the period of the contract. Like perpetual licenses, both our term licenses and subscription licenses are functional IP that have significant stand-alone functionality. Accordingly, for both term and subscription licenses, revenue is recognized at the point-in-time when the customer is able to use and benefit from the software, which is normally once software activation keys have been made available for download at the commencement of the term. Cloud services and subscriptions revenue Cloud services and subscriptions revenue are from hosting arrangements where in connection with the licensing of software, the end user does not take possession of the software, as well as from end-to-end fully outsourced business-to-business (B2B) integration solutions to our customers (collectively referred to as cloud arrangements). The software application resides on our hardware or that of a third party, and the customer accesses and uses the software on an as-needed basis. Our cloud arrangements can be broadly categorized as "platform as a service" (PaaS), "software as a service" (SaaS), cloud subscriptions and managed services. PaaS/ SaaS/ Cloud Subscriptions (collectively referred to here as cloud-based solutions): We offer cloud-based solutions that provide customers the right to access our software through the internet. Our cloud-based solutions represent a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. These services are made available to the customer continuously throughout the contractual period, however, the extent to which the customer uses the services may vary at the customer’s discretion. The payment for cloud-based solutions may be received either at inception of the arrangement, or over the term of the arrangement. These cloud-based solutions are considered to have a single performance obligation where the customer simultaneously receives and consumes the benefit, and as such we recognize revenue for these cloud-based solutions ratably over the term of the contractual agreement. For example, revenue related to cloud-based solutions that are provided on a usage basis, such as the number of users, is recognized based on a customer’s utilization of the services in a given period. Additionally, a software license is present in a cloud-based solutions arrangement if all of the following criteria are met: (i) The customer has the contractual right to take possession of the software at any time without significant penalty; and (ii) It is feasible for the customer to host the software independent of us. In these cases where a software license is present in a cloud-based solutions arrangement it is assessed to determine if it is distinct from the cloud-based solutions arrangement. The revenue allocated to the distinct software license would be recognized at the point in time the software license is transferred to the customer, whereas the revenue allocated to the hosting performance obligation would be recognized ratably on a monthly basis over the contractual term unless evidence suggests that revenue is earned, or obligations are fulfilled in a different pattern over the contractual term of the arrangement. Managed services: We provide comprehensive B2B process outsourcing services for all day-to-day operations of a customers’ B2B integration program. Customers using these managed services are not permitted to take possession of our software and the contract is for a defined period, where customers pay a monthly or quarterly fee. Our performance obligation is satisfied as we provide services of operating and managing a customer's electronic data interchange (EDI) environment. Revenue relating to these services is recognized using an output method based on the expected level of service we will provide over the term of the contract. In connection with cloud subscription and managed service contracts, we often agree to perform a variety of services before the customer goes live, such as for example, converting and migrating customer data, building interfaces and providing training. These services are considered an outsourced suite of professional services which can involve certain project-based activities. These services can be provided at the initiation of a contract, during the implementation or on an ongoing basis as part of the customer life cycle. These services can be charged separately on a fixed fee or time and materials basis, or the costs associated may be recovered as part of the ongoing cloud subscription or managed services fee. These outsourced professional services are considered to be distinct from the ongoing hosting services and represent a separate performance obligation within our cloud subscription or managed services arrangements. The obligation to provide outsourced professional services is satisfied over time, with the customer simultaneously receiving and consuming the benefits as we satisfy our performance obligations. For outsourced professional services, we recognize revenue by measuring progress toward the satisfaction of our performance obligation. Progress for services that are contracted for a fixed price is generally measured based on hours incurred as a portion of total estimated hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we recognize revenue at that amount. Customer support revenue Customer support revenue is associated with perpetual, term license and on-premise subscription arrangements. As customer support is not critical to the customer's ability to derive benefit from its right to use our software, customer support is considered as a distinct performance obligation when sold together in a bundled arrangement along with the software. Customer support consists primarily of technical support and the provision of unspecified updates and upgrades on a when-and-if-available basis. Customer support for perpetual licenses is renewable, generally on an annual basis, at the option of the customer. Customer support for term and subscription licenses is renewable concurrently with such licenses for the same duration of time. Payments for customer support are generally made at the inception of the contract term or in installments over the term of the maintenance period. Our customer support team is ready to provide these maintenance services, as needed, to the customer during the contract term. As the elements of customer support are delivered concurrently and have the same pattern of transfer, customer support is accounted for as a single performance obligation. The customer benefits evenly throughout the contract period from the guarantee that the customer support resources and personnel will be available to them, and that any unspecified upgrades or unspecified future products developed by us will be made available. Revenue for customer support is recognized ratably over the contract period based on the start and end dates of the maintenance term, in line with how we believe services are provided. Professional service and other revenue Our professional services, when offered along with software licenses, consists primarily of technical services and training services. Technical services may include installation, customization, implementation or consulting services. Training services may include access to online modules or delivering a training package customized to the customer’s needs. At the customer’s discretion, we may offer one, all, or a mix of these services. Payment for professional services is generally a fixed fee or is a fee based on time and materials. Professional services can be arranged in the same contract as the software license or in a separate contract. As our professional services do not significantly change the functionality of the license and our customers can benefit from our professional services on their own or together with other readily available resources, we consider professional services as distinct within the context of the contract. Professional service revenue is recognized over time so long as: (i) the customer simultaneously receives and consumes the benefits as we perform them, (ii) our performance creates or enhances an asset the customer controls as we perform, and (iii) our performance does not create an asset with alternative use and we have enforceable right to payment. If all of the above criteria are met, we use an input-based measure of progress for recognizing professional service revenue. For example we may consider total labor hours incurred compared to total expected labor hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we will recognize revenue at that amount. Material rights To the extent that we grant our customer an option to acquire additional products or services in one of our arrangements, we will account for the option as a distinct performance obligation in the contract only if the option provides a material right to the customer that the customer would not receive without entering into the contract. For example if we give the customer an option to acquire additional goods or services in the future at a price that is significantly lower than the current price, this would be a material right as it allows the customer to, in effect, pay in advance for the option to purchase future products or services. If a material right exists in one of our contracts then revenue allocated to the option is deferred and we would recognize revenue only when those future products or services are transferred or when the option expires. Based on history, our contracts do not typically contain material rights and when they do, the material right is not significant to our consolidated financial statements. Arrangements with multiple performance obligations Our contracts generally contain more than one of the products and services listed above. Determining whether goods and services are considered distinct performance obligations that should be accounted for separately or as a single performance obligation may require judgment, specifically when assessing whether both of the following two criteria are met: • the customer can benefit from the product or service either on its own or together with other resources that are readily available to the customer; and • our promise to transfer the product or service to the customer is separately identifiable from other promises in the contract. If these criteria are not met, we determine an appropriate measure of progress based on the nature of our overall promise for the single performance obligation. If these criteria are met, each product or service is separately accounted for as a distinct performance obligation and the total transaction price is allocated to each performance obligation on a relative standalone selling price (SSP) basis. Standalone selling price The SSP reflects the price we would charge for a specific product or service if it was sold separately in similar circumstances and to similar customers. In most cases we are able to establish the SSP based on observable data. We typically establish a narrow SSP range for our products and services and assess this range on a periodic basis or when material changes in facts and circumstances warrant a review. If the SSP is not directly observable, then we estimate the amount using either the expected cost plus a margin or residual approach. Estimating SSP requires judgment that could impact the amount and timing of revenue recognized. SSP is a formal process whereby management considers multiple factors including, but not limited to, geographic or regional specific factors, competitive positioning, internal costs, profit objectives, and pricing practices. Transaction Price Allocation In bundled arrangements, where we have more than one distinct performance obligation, we must allocate the transaction price to each performance obligation based on its relative SSP. However, in certain bundled arrangements, the SSP may not always be directly observable. For instance, in bundled arrangements with license and customer support, we allocate the transaction price between the license and customer support performance obligations using the residual approach because we have determined that the SSP for licenses in these arrangements are highly variable. We use the residual approach only for our license arrangements. When the SSP is observable but contractual pricing does not fall within our established SSP range, then an adjustment is required and we will allocate the transaction price between license and customer support at a constant ratio reflecting the mid-point of the established SSP range. When two or more contracts are entered into at or near the same time with the same customer, we evaluate the facts and circumstances associated with the negotiation of those contracts. Where the contracts are negotiated as a package, we will account for them as a single arrangement and allocate the consideration for the combined contracts among the performance obligations accordingly. Sales to resellers We execute certain sales contracts through resellers, distributors and channel partners (collectively referred to as resellers). For these type of agreements, we assess whether we are considered the principal or the agent in the arrangement. We consider factors such as, but not limited to, whether or not the reseller has the ability to set the price for which they sell our software products to end users and whether or not resellers distribution rights are limited such that any potential sales are subject to OpenText’s review and approval before delivery of the software product can be made. If we determine that we are the principal in the arrangement, then revenue is recognized based on the transaction price for the sale of the software product to the end user at the gross amount. If that is not known, then the net amount received from the reseller is the transaction price. If we determine that we are the agent in the agreement, then revenue is recognized based on the transaction price for the sale of the software product to the reseller, less any applicable commissions paid or discounts or rebates, if offered. Costs or commissions paid to the reseller would be recognized as a reduction of revenue unless we received a distinct good or service in return. Similarly, any discounts or rebates offered by the reseller would be recognized as a reduction of revenue. Typically, we conclude that we are the principal in our reseller agreements, as we have control over the service and products prior to being transferred to the end customer. We also assess the creditworthiness of each reseller and if they are newly formed, undercapitalized or in financial difficulty, we defer any revenues expected to emanate from such reseller and recognize revenue only when cash is received, and all other revenue recognition criteria under Topic 606 are met. Rights of return and other incentives We do not generally offer rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore, do not provide for or make estimates of rights of return and similar incentives. However, we do offer consumers who purchase certain of our products on-line directly from us an unconditional full 70-days money-back guarantee. Distributors and resellers are also permitted to return the consumer products, subject to certain limitations. Revenue is reduced for such rights based on the estimate of future returns originating from contractual agreements with these customers. Additionally, in some contracts, however, discounts may be offered to the customer for future software purchases and other additional products or services. Such arrangements grant the customer an option to acquire additional goods or services in the future at a discount and therefore are evaluated under guidance related to “material rights” as discussed above. Other policies Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the invoice date. In certain arrangements, we will receive payment from a customer either before or after the performance obligation to which the invoice relates has been satisfied. As a practical expedient, we do not account for significant financing components if the period between when we transfer the promised good or service to the customer and when the customer pays for the product or service will be one year or less. On that basis, our contracts for license and maintenance typically do not contain a significant financing component, however, in determining the transaction price we consider whether we need to adjust the promised consideration for the effects of the time value of money if the timing of payments provides either the customer or OpenText with a significant benefit of financing. Our managed services contracts may not include an upfront charge for outsourced professional services performed as part of an implementation and are recovered through an ongoing fee. Therefore, these contracts may be expected to have a financing component associated with revenue being recognized in advance of billings. We may modify contracts to offer customers additional products or services. The additional products and services will be considered distinct from those products or services transferred to the customer before the modification and will be accounted for as a separate contract. We evaluate whether the price for the additional products and services reflects the SSP adjusted as appropriate for facts and circumstances applicable to that contract. In determining whether an adjustment is appropriate, we evaluate whether the incremental consideration is consistent with the prices previously paid by the customer or similar customers. Certain of our subscription services and product support arrangements generally contain performance response time guarantees. For subscription services arrangements, we estimate variable consideration using a portfolio approach because performance penalties are tied to standard response time requirements. For product support arrangements, we estimate variable consideration on a contract basis because such arrangements are customer-specific. For both subscription services and product support arrangements, we use an expected value approach to estimate variable consideration based on historical business practices and current and future performance expectations to determine the likelihood of incurring penalties. Performance Obligations A summary of our typical performance obligations and when the obligations are satisfied are as follows: Performance Obligation When Performance Obligation is Typically Satisfied License revenue: Software licenses (Perpetual,Term, Subscription) When software activation keys have been made available for download (point in time) Cloud services and subscriptions revenue: Outsourced Professional Services As the services are provided (over time) Managed Services / Ongoing Hosting / SaaS Over the contract term, beginning on the date that service is made available (i.e. "Go live") to the customer (over time) Customer support revenue: When and if available updates and upgrades and technical support Ratable over the course of the service term (over time) Professional service and other revenue: Professional services As the services are provided (over time) Disaggregation of Revenue The following table disaggregates our revenue by significant geographic area, based on the location of our end customer, and by type of performance obligation and timing of revenue recognition for the periods indicated: Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Total Revenues by Geography: Americas (1) $ 509,778 $ 436,873 $ 1,380,179 $ 1,246,909 EMEA (2) 240,529 216,287 702,964 674,699 Asia Pacific (3) 64,372 65,986 199,981 199,926 Total Revenues $ 814,679 $ 719,146 $ 2,283,124 $ 2,121,534 Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Total Revenues by Type of Performance Obligation: Recurring revenue (4) Cloud services and subscriptions revenue $ 339,463 $ 238,607 $ 825,068 $ 665,923 Customer support revenue 322,865 310,762 950,671 932,667 Total recurring revenues $ 662,328 $ 549,369 $ 1,775,739 $ 1,598,590 License revenue (perpetual, term and subscriptions) 81,055 98,721 297,048 308,364 Professional service and other revenue 71,296 71,056 210,337 214,580 Total revenues $ 814,679 $ 719,146 $ 2,283,124 $ 2,121,534 Total Revenues by Timing of Revenue Recognition Point in time $ 81,055 $ 98,721 $ 297,048 $ 308,364 Over time (including professional service and other revenue) 733,624 620,425 1,986,076 1,813,170 Total revenues $ 814,679 $ 719,146 $ 2,283,124 $ 2,121,534 (1) Americas consists of countries in North, Central and South America. (2) EMEA primarily consists of countries in Europe, the Middle East and Africa. (3) Asia Pacific primarily consists of the countries Japan, Australia, China, Korea, Philippines, Singapore and New Zealand. (4) Recurring revenue is defined as the sum of cloud services and subscriptions revenue and customer support revenue. Contract Balances A contract asset will be recorded if we have recognized revenue but do not have an unconditional right to the related consideration from the customer. For example, this will be the case if implementation services offered in a cloud arrangement are identified as a separate performance obligation and are provided to a customer prior to us being able to bill the customer. In addition, a contract asset may arise in relation to subscription licenses if the license revenue that is recognized upfront exceeds the amount that we are able to invoice the customer at that time. Contract assets are reclassified to accounts receivable when the rights become unconditional. The balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows: As of March 31, 2020 As of June 30, 2019 Short-term contract assets $ 27,057 $ 20,956 Long-term contract assets $ 14,225 $ 15,386 Short-term deferred revenue $ 819,273 $ 641,656 Long-term deferred revenue $ 92,341 $ 46,974 The difference in the opening and closing balances of our contract assets and deferred revenues primarily results from the timing difference between our performance and the customer’s payments. We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. During the nine months ended March 31, 2020 , we reclassified $23.5 million of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional. During the three and nine months ended March 31, 2020 , respectively, there was no significant impairment loss recognized related to contract assets. We recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer for future obligations to transfer products or services. Our deferred revenues primarily relate to customer support agreements which have been paid for by customers prior to the performance of those services. The amount of revenue that was recognized during the nine months ended March 31, 2020 that was included in the deferred revenue balances at June 30, 2019 was approximately $591 million . Incremental Costs of Obtaining a Contract with a Customer Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. We have determined that certain of our commission programs meet the requirements to be capitalized. Some commission programs are not subject to capitalization as the commission expense is paid and recognized as the related revenue is recognized. In assessing costs to obtain a contract, we apply a practical expedient that allows us to assess our incremental costs on a portfolio of contracts with similar characteristics instead of assessing the incremental costs on each individual contract. We do not expect the financial statement effects of applying this practical expedient to the portfolio of contracts to be materially different than if we were to apply the new standard to each individual contract. We pay commissions on the sale of new customer contracts as well as for renewals of existing contracts to the extent the renewals generate incremental revenue. Commissions paid on renewal contracts are limited to the incremental new revenue and therefore these payments are not commensurate with the commission paid on the original sale. We allocate commission costs to the performance obligations in an arrangement consistent with the allocation of the transaction price. Commissions allocated to the license performance obligation are expensed at the time the license revenue is recognized. Commissions allocated to professional service performance obligations are expensed as incurred, as these contracts are generally for one year or less and we apply a practical expedient to expense costs as incurred if the amortization period would have been one year or less. Commissions allocated to maintenance, managed services, on-going hosting arrangements or other recurring services, are capitalized and amortized consistent with the pattern of transfer to the customer of the services over the period expected to benefit from the commission payment. As commissions paid on renewals are not commensurate with the original sale, the period of benefit considers anticipated renewals. The benefit period is estimated to be approximately six years which is based on our customer contracts and the estimated life of our technology. Expenses for incremental costs associated with obtaining a contract are recorded within sales and marketing expense in the Condensed Consolidated Statements of Income . Our short term capitalized costs to obtain a contract are included in "Prepaid expenses and other assets", while our long-term capitalized costs to obtain a contract are included in "Other assets" on our Condensed Consolidated Balance Sheets . The following table summarizes the changes in total capitalized costs since June 30, 2019 : Capitalized costs to obtain a contract as of June 30, 2019 $ 48,284 New capitalized costs incurred 19,207 Amortization of capitalized costs (12,106 ) Adjustments on account of foreign exchange (1,357 ) Capitalized costs to obtain a contract as of March 31, 2020 $ 54,028 During the three and nine months ended March 31, 2020 , respectively, there was no significant impairment loss recognized in relation to costs capitalized. Transaction Price Allocated to the Remaining Performance Obligations As of March 31, 2020 , approximately $1.3 billion of revenue is expected to be recognized from remaining performance obligations on existing contracts. We expect to recognize approximately 50% of this amount over the next 12 months and the remaining balance thereafter. We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 9 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ALLOWANCE FOR DOUBTFUL ACCOUNTS Balance as of June 30, 2019 $ 17,011 Bad debt expense 6,444 Write-off /adjustments (5,154 ) Balance as of March 31, 2020 $ 18,301 Included in accounts receivable are unbilled receivables in the amount of $59.4 million as of March 31, 2020 ( June 30, 2019 — $56.1 million ). |
Property and Equipment
Property and Equipment | 9 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT As of March 31, 2020 Cost Accumulated Depreciation Net Furniture and fixtures $ 43,856 $ (30,054 ) $ 13,802 Office equipment 2,231 (1,263 ) 968 Computer hardware 286,077 (189,986 ) 96,091 Computer software 124,804 (98,898 ) 25,906 Capitalized software development costs 106,500 (66,297 ) 40,203 Leasehold improvements 123,314 (75,973 ) 47,341 Land and buildings 49,563 (14,982 ) 34,581 Total $ 736,345 $ (477,453 ) $ 258,892 As of June 30, 2019 Cost Accumulated Depreciation Net Furniture and fixtures $ 40,260 $ (26,492 ) $ 13,768 Office equipment 1,993 (1,576 ) 417 Computer hardware 258,802 (177,402 ) 81,400 Computer software 119,018 (87,240 ) 31,778 Capitalized software development costs 95,729 (56,205 ) 39,524 Leasehold improvements 113,510 (66,520 ) 46,990 Land and buildings 49,557 (13,981 ) 35,576 Total $ 678,869 $ (429,416 ) $ 249,453 |
Leases
Leases | 9 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
LEASES | LEASES We enter into operating leases, both domestically and internationally, for certain facilities, automobiles, data centers and equipment for use in the ordinary course of business. The duration of the majority of these leases generally range from 1 to 10 years , some of which include options to extend for an additional 3 to 5 years after the initial term. Additionally, the land upon which our headquarters in Waterloo, Ontario, Canada is located, is leased from the University of Waterloo for a period of 49 years beginning in December 2005, with an option to renew for an additional term of 49 years . Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets and we do not have any material finance leases. We account for a contract as a lease when we have the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. We determine the initial classification and measurement of our right of use (ROU) assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets represent our right to control the underlying assets under lease, and the lease liability is our obligation to make the lease payments related to the underlying assets under lease, over the contractual term. ROU assets and lease liabilities are recognized on the Condensed Consolidated Balance Sheets based on the present value of future minimum lease payments to be made over the lease term. When available, we will use the rate implicit in the lease to discount lease payments to present value. However, real estate leases generally do not provide a readily determinable implicit rate, therefore, we must estimate our incremental borrowing rate to discount the lease payments. We estimate our incremental borrowing rate based on a collateralized basis with similar terms and payments, in an economic environment where the leased asset is located. The ROU asset equals the lease liability, adjusted for any initial direct costs, prepaid rent and lease incentives. Fixed lease costs are included in the recognition of ROU assets and lease liabilities. Variable lease costs are not included in the measurement of the lease liability. These variable lease payments are recognized in the Condensed Consolidated Statements of Income in the period in which the obligation for those payments is incurred. Consistent with previous lease accounting rules under ASC Topic 840, lease expense for minimum lease payments continue to be recognized in the Condensed Consolidated Statements of Income on a straight-line basis over the lease term. We have not elected the practical expedient to combine lease and non-lease components in the determination of lease costs for our facility leases. For all other asset classes, we have elected the practical expedient to combine the lease and the non-lease components. The lease liability includes lease payments related to options to extend or renew the lease term only if we are reasonably certain we will exercise those options. Our leases typically do not contain any material residual value guarantees or restrictive covenants. In certain circumstances, we sublease all or a portion of a leased facility, to various other companies through a sublease agreement. Lease Costs and Other Information The following illustrates the various components of operating lease costs for the period indicated: Three Months Ended March 31, 2020 Nine Months Ended March 31, 2020 Operating lease cost $ 19,157 $ 51,259 Short-term lease cost 455 743 Variable lease cost 1,140 2,647 Sublease income (1,481 ) (4,618 ) Total lease cost $ 19,271 $ 50,031 The following table summarizes the weighted average remaining lease term and discount rate as of March 31, 2020 : Weighted-average remaining lease term 5.82 years Weighted-average discount rate 3.25 % Supplemental Cash Flow Information The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payment made for variable lease cost and short-term lease are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below: Three Months Ended March 31, 2020 Nine Months Ended March 31, 2020 Cash paid for amounts included in the measurement of operating lease liabilities: $ 17,926 $ 53,996 Right of use assets obtained in exchange for new operating lease liabilities (1) : $ 4,129 $ 15,964 (1) Excludes the impact of $60.1 million of ROU assets acquired as part of the acquisition of Carbonite during the nine months ended March 31, 2020 and $2.9 million of ROU assets acquired as part of the acquisition of XMedius during the three and nine months ended March 31, 2020, respectively. Maturity of Lease Liabilities The following table presents the future minimum lease payments under our operating leases liabilities as of March 31, 2020 : Fiscal years ending June 30, 2020 (three months ended June 30) $ 23,221 2021 68,819 2022 56,128 2023 41,905 2024 30,921 Thereafter 79,646 Total Lease payments $ 300,640 Less: Imputed interest (25,980 ) Total $ 274,660 Reported as Current operating lease liabilities 68,871 Non-current operating lease liabilities 205,789 Total $ 274,660 Operating lease maturity amounts included in the table above do not include sublease income expected to be received under our various sublease agreements with third parties. Under these agreements, we expect to receive sublease income of approximately $1.8 million over the remainder of Fiscal 2020, and approximately $27.1 million thereafter. The following table presents the future minimum lease payments under our operating leases, based on the expected due dates of the various agreements as of June 30, 2019, as previously reported in our Annual Report on Form 10-K for the year ended June 30, 2019, prior to the adoption of Topic 842: Fiscal years ending June 30, 2020 $ 72,853 2021 59,451 2022 46,943 2023 33,871 2024 25,570 Thereafter 80,163 Total minimum lease payments (1) $ 318,851 (1) Net of $30.7 million of sublease income to be received from properties which we have subleased to third parties. |
Goodwill
Goodwill | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets. The following table summarizes the changes in goodwill since June 30, 2019: Balance as of June 30, 2019 $ 3,769,908 Acquisition of XMedius (note 19) 49,899 Acquisition of Carbonite (note 19) 868,365 Acquisition of The Fax Guys (note 19) 1,951 Adjustments relating to acquisitions prior to Fiscal 2020 that had open measurement periods (note 19) 1,476 Adjustments on account of foreign exchange (12,913 ) Balance as of March 31, 2020 $ 4,678,686 |
Acquired Intangible Assets
Acquired Intangible Assets | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS | ACQUIRED INTANGIBLE ASSETS As of March 31, 2020 Cost Accumulated Amortization Net Technology assets $ 1,137,744 $ (495,257 ) $ 642,487 Customer assets 1,560,932 (471,638 ) 1,089,294 Total $ 2,698,676 $ (966,895 ) $ 1,731,781 As of June 30, 2019 Cost Accumulated Amortization Net Technology assets $ 835,498 $ (349,259 ) $ 486,239 Customer assets 1,397,937 (737,672 ) 660,265 Total $ 2,233,435 $ (1,086,931 ) $ 1,146,504 Where applicable, the above balances as of March 31, 2020 have been reduced to reflect the impact of intangible assets where the gross cost has become fully amortized during the nine months ended March 31, 2020. The impact of this resulted in a reduction of $426.6 million to customer assets. The weighted average amortization periods for acquired technology and customer intangible assets are approximately five years and seven years , respectively. The following table shows the estimated future amortization expense for the fiscal years indicated. This calculation assumes no future adjustments to acquired intangible assets: Fiscal years ending June 30, 2020 (three months ended June 30) $ 119,996 2021 435,005 2022 395,617 2023 310,451 2024 231,845 2025 and beyond 238,867 Total $ 1,731,781 |
Other Assets
Other Assets | 9 Months Ended |
Mar. 31, 2020 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
OTHER ASSETS | OTHER ASSETS As of March 31, 2020 As of June 30, 2019 Deposits and restricted cash $ 13,269 $ 13,671 Capitalized costs to obtain a contract 39,702 35,593 Investments 73,061 67,002 Long-term prepaid expenses and other long-term assets 45,075 32,711 Total $ 171,107 $ 148,977 Deposits and restricted cash primarily relate to security deposits provided to landlords in accordance with facility lease agreements and cash restricted per the terms of certain contractual-based agreements. Capitalized costs to obtain a contract relate to incremental costs of obtaining a contract, such as sales commissions, which are eligible for capitalization on contracts to the extent that such costs are expected to be recovered (see note 3 "Revenues"). Investments relate to certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4% to below 20% . These investments are accounted for using the equity method. Our share of net income or losses based on our interest in these investments is recorded as a component of other income (expense), net in our Condensed Consolidated Statements of Income (see note 21 "Other income (expense), net"). During the three and nine months ended March 31, 2020 , our share of income (loss) from these investments was approximately $4.5 million and $6.5 million , respectively, ( three and nine months ended March 31, 2019 — $2.8 million and $10.7 million , respectively). Long-term prepaid expenses and other long-term assets includes advance payments on long-term licenses that are being amortized over the applicable terms of the licenses and other miscellaneous assets. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
Mar. 31, 2020 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Current liabilities Accounts payable and accrued liabilities are comprised of the following: As of March 31, 2020 As of June 30, 2019 Accounts payable—trade $ 50,078 $ 46,323 Accrued salaries and commissions 127,106 131,430 Accrued liabilities (1) 114,275 117,551 Accrued interest on Senior Notes 25,246 24,786 Amounts payable in respect of restructuring and other Special charges (1) 3,884 8,153 Asset retirement obligations 4,301 1,660 Total $ 324,890 $ 329,903 Long-term accrued liabilities As of March 31, 2020 As of June 30, 2019 Amounts payable in respect of restructuring and other Special charges (1) $ — $ 4,804 Other accrued liabilities (1) 2,049 30,338 Asset retirement obligations 12,585 14,299 Total $ 14,634 $ 49,441 (1) Previously, in Fiscal 2019, tenant allowances, deferred rent, lease fair value adjustments and amounts payable relating to restructured facilities were included in total accrued liabilities. Effective July 1, 2019, these balances were reclassified to operating lease right of use assets in accordance with the adoption of Topic 842. See note 1 "Basis of Presentation" and note 6 "Leases" for more information. Asset retirement obligations We are required to return certain of our leased facilities to their original state at the conclusion of our lease. As of March 31, 2020 , the present value of this obligation was $16.9 million ( June 30, 2019 — $16.0 million ), with an undiscounted value of $18.4 million ( June 30, 2019 — $17.6 million ). |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt Long-term debt is comprised of the following: As of March 31, 2020 As of June 30, 2019 Total debt Senior Notes 2030 $ 900,000 $ — Senior Notes 2028 900,000 — Senior Notes 2026 850,000 850,000 Senior Notes 2023 — 800,000 Term Loan B 980,000 987,500 Revolver 600,000 — Total principal payments due 4,230,000 2,637,500 Premium on Senior Notes 2026 4,921 5,405 Debt issuance costs (39,237 ) (28,027 ) Total amount outstanding 4,195,684 2,614,878 Less: Current portion of long-term debt Term Loan B 10,000 10,000 Revolver 600,000 — Total current portion of long-term debt 610,000 10,000 Non-current portion of long-term debt $ 3,585,684 $ 2,604,878 Senior Unsecured Fixed Rate Notes Senior Notes 2030 On February 18, 2020, OpenText Holdings, Inc. a wholly-owned indirect subsidiary of the Company, issued $900 million in aggregate principal amount of 4.125% Senior Notes due 2030 guaranteed by the Company (Senior Notes 2030) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (Securities Act), and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2030 bear interest at a rate of 4.125% per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2030 will mature on February 15, 2030, unless earlier redeemed, in accordance with their terms, or repurchased. For the three and nine months ended March 31, 2020 , we recorded interest expense of $4.4 million , respectively, relating to Senior Notes 2030. Senior Notes 2028 On February 18, 2020, we issued $900 million in aggregate principal amount of 3.875% Senior Notes due 2028 (Senior Notes 2028) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2028 bear interest at a rate of 3.875% per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2028 will mature on February 15, 2028, unless earlier redeemed, in accordance with their terms, or repurchased. For the three and nine months ended March 31, 2020 , we recorded interest expense of $4.2 million , respectively, relating to Senior Notes 2028. Senior Notes 2026 On May 31, 2016, we issued $600 million in aggregate principal amount of 5.875% Senior Notes due 2026 (Senior Notes 2026) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2026 bear interest at a rate of 5.875% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on December 1, 2016. Senior Notes 2026 will mature on June 1, 2026, unless earlier redeemed, in accordance with their terms, or repurchased. On December 20, 2016, we issued an additional $250 million in aggregate principal amount by reopening our Senior Notes 2026 at an issue price of 102.75% . The additional notes have identical terms, are fungible with and are a part of a single series with the previously issued $600 million aggregate principal amount of Senior Notes 2026. The outstanding aggregate principal amount of Senior Notes 2026, after taking into consideration the additional issuance, is $850 million . For the three and nine months ended March 31, 2020 , we recorded interest expense of $12.5 million and $37.5 million , respectively, relating to Senior Notes 2026 ( three and nine months ended March 31, 2019 — $12.5 million and $37.5 million , respectively). Senior Notes 2023 On January 15, 2015, we issued $800 million in aggregate principal amount of 5.625% Senior Notes due 2023 (Senior Notes 2023) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2023 bore interest at a rate of 5.625% per annum, payable semi-annually in arrears on January 15 and July 15, commencing on July 15, 2015. Senior Notes 2023 were to mature on January 15, 2023, unless earlier redeemed, in accordance with their terms, or repurchased. On March 5, 2020 , we redeemed Senior Notes 2023 in full at a price equal to 101.406% of the principal amount plus accrued and unpaid interest up to but excluding the redemption date. A portion of the proceeds from the offerings of Senior Notes 2028 and Senior Notes 2030 was used to redeem Senior Notes 2023. Upon redemption, Senior Notes 2023 were cancelled and any obligation thereunder was extinguished. The resulting loss of $17.9 million has been recorded as a component of other income (expense), net in our Condensed Consolidated Statements of Income. See note 21 "Other income (Expense), net". For the three and nine months ended March 31, 2020 , we recorded interest expense of $8.1 million and $30.6 million , respectively, relating to Senior Notes 2023 ( three and nine months ended March 31, 2019 — $11.2 million and $33.7 million , respectively). Notes due 2022 Following our acquisition of Carbonite (see note 19 "Acquisitions"), our consolidated debt reflected $143.8 million of principal debt convertible notes (Notes due 2022). Notes due 2022 were originally issued by Carbonite, on April 4, 2017, in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Notes due 2022 were issued under an Indenture (the 2022 Notes Indenture) between Carbonite and U.S. Bank National Association, as trustee (the 2022 Notes Trustee). The Notes due 2022 accrued interest at 2.5% per year, which was payable semiannually in arrears on April 1 and October 1 of each year. The Notes due 2022 were to mature on April 1, 2022, unless earlier repurchased, redeemed or converted. Carbonite, now a subsidiary of OpenText, was the sole obligor on the Notes due 2022. In connection with our acquisition of Carbonite, and as required by the 2022 Notes Indenture, Carbonite and the 2022 Notes Trustee entered into a first supplemental indenture, dated as of December 24, 2019 (the 2022 Notes Supplemental Indenture). The 2022 Notes Supplemental Indenture provides that, at and after the effective time of our acquisition of Carbonite, the right to convert each $1,000 principal amount of the Notes due 2022 was changed into the right to convert such principal amount of the Notes due 2022 solely into cash in an amount equal to the Conversion Rate (as defined in the 2022 Notes Indenture) in effect on the Conversion Date (as defined in the 2022 Notes Indenture) multiplied by $23.00 , which was the price per share we paid in connection with our acquisition of Carbonite. As a result of our acquisition of Carbonite, the Conversion Rate for the Notes due 2022 was temporarily increased by 7.7633 per $1,000 principal amount of Notes due 2022 to yield a Conversion Rate of 46.4667 per $1,000 principal amount of Notes due 2022. The increased Conversion Rate was in effect until the close of business (5:00 P.M. New York City time) on February 27, 2020. As of February 27, 2020, all Notes due 2022 had been surrendered and converted at a rate of $1,068.7341 in cash for each $1,000 principal amount. As of March 31, 2020 , all Notes due 2022 have been fully settled in cash and there are no remaining Notes due 2022 outstanding. Term Loan B On May 30, 2018, we refinanced our existing term loan facility, by entering into a new $1 billion term loan facility (Term Loan B), whereby we borrowed $1 billion on that day and repaid in full the loans under our prior $800 million term loan facility originally entered into on January 16, 2014. Borrowings under Term Loan B are secured by a first charge over substantially all of our assets on a pari passu basis with the Revolver (defined below). Term Loan B has a seven year term, maturing in May 2025, and repayments made under Term Loan B are equal to 0.25% of the principal amount in equal quarterly installments for the life of Term Loan B, with the remainder due at maturity. Borrowings under Term Loan B currently bear a floating rate of interest equal to 1.75% plus LIBOR. As of March 31, 2020 , the outstanding balance on the Term Loan B bears an interest rate of approximately 3.35% . Under Term Loan B, we must maintain a “consolidated net leverage” ratio of no more than 4 :1 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of our total debt reduced by unrestricted cash, including guarantees and letters of credit, over our trailing twelve months net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. As of March 31, 2020 , our consolidated net leverage ratio was 2.3 :1. For the three and nine months ended March 31, 2020 , we recorded interest expense of $8.5 million and $27.6 million , respectively, relating to Term Loan B ( three and nine months ended March 31, 2019 — $10.5 million and $30.6 million ). Revolver On October 31, 2019, we amended our committed revolving credit facility (the Revolver) to increase the total commitments under the Revolver from $450 million to $750 million as well as to extend the maturity from May 5, 2022 to October 31, 2024. Borrowings under the Revolver are secured by a first charge over substantially all of our assets, on a pari passu basis with Term Loan B. The Revolver has no fixed repayment date prior to the end of the term. Borrowings under the Revolver bear interest per annum at a floating rate of LIBOR plus a fixed margin dependent on our consolidated net leverage ratio ranging from 1.25% to 1.75% . As of March 31, 2020 , the outstanding balance on the Revolver bears an interest rate of approximately 2.50% . Under the Revolver, we must maintain a “consolidated net leverage” ratio of no more than 4 :1 at the end of each financial quarter. As of March 31, 2020 , our consolidated net leverage ratio was 2.3 :1. During the second quarter of Fiscal 2020, we drew down $750 million from the Revolver to partially fund the acquisition of Carbonite. In February 2020, we repaid $750 million drawn under the Revolver with a portion of the use of proceeds from the Senior Notes 2030 and Senior Notes 2028. In March 2020, we drew down $600 million from the Revolver as a preemptive measure in order to increase our cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 outbreak. The proceeds from the $600 million draw down are presented within cash and cash equivalents and within the current portion of long-term debt in our Condensed Consolidated Balance Sheet as of March 31, 2020 . As of March 31, 2020 , we have outstanding borrowings of $600 million under the Revolver ( June 30, 2019 — nil ) and $150 million remains available to be drawn. During the three and nine months ended March 31, 2020 , we recorded interest expense relating to amounts drawn of approximately $3.7 million and $4.3 million , respectively. As of March 31, 2019 , we had no outstanding balance on the Revolver. There was no activity during the three and nine months ended March 31, 2019 and we recorded no interest expense. Debt Issuance Costs and Premium on Senior Notes Debt issuance costs relate primarily to costs incurred for the purpose of obtaining our credit facilities and issuing our Senior Notes 2026, Senior Notes 2028 and Senior Notes 2030 (collectively referred to as the Senior Notes) and are being amortized over the respective terms of the Senior Notes and Term Loan B and the Revolver using the effective interest method. |
Pension Plans and Other Post Re
Pension Plans and Other Post Retirement Benefits | 9 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
PENSION PLANS AND OTHER POST RETIREMENT BENEFITS | PENSION PLANS AND OTHER POST RETIREMENT BENEFITS The following table provides details of our defined benefit pension plans and long-term employee benefit obligations for Open Text Document Technologies GmbH (CDT), GXS GmbH ( GXS GER ), GXS Philippines, Inc. ( GXS PHP ) and other plans as of March 31, 2020 and June 30, 2019 : As of March 31, 2020 Total benefit obligation Current portion of benefit obligation* Non-current portion of benefit obligation CDT defined benefit plan $ 31,717 $ 700 $ 31,017 GXS GER defined benefit plan 22,144 959 21,185 GXS PHP defined benefit plan 8,155 141 8,014 Other plans 7,930 708 7,222 Total $ 69,946 $ 2,508 $ 67,438 As of June 30, 2019 Total benefit obligation Current portion of benefit obligation* Non-current portion of benefit obligation CDT defined benefit plan $ 35,836 $ 675 $ 35,161 GXS GER defined benefit plan 26,739 1,012 25,727 GXS PHP defined benefit plan 6,904 124 6,780 Other plans 8,052 481 7,571 Total $ 77,531 $ 2,292 $ 75,239 * The current portion of the benefit obligation has been included within "Accrued salaries and commissions", all within "Accounts payable and accrued liabilities" in the Condensed Consolidated Balance Sheets (see note 10 "Accounts Payable and Accrued Liabilities"). Defined Benefit Plans CDT Plan CDT sponsors an unfunded defined benefit pension plan covering substantially all CDT employees (CDT plan) which provides for old age, disability and survivors’ benefits. Benefits under the CDT plan are generally based on age at retirement, years of service and the employee’s annual earnings. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. No contributions have been made since the inception of the plan. Actuarial gains or losses in excess of 10% of the projected benefit obligation are being amortized and recognized as a component of net periodic benefit costs over the average remaining service period of the plan's active employees. As of March 31, 2020 , there is approximately $0.2 million in accumulated other comprehensive income related to the CDT plan that is expected to be recognized as a component of net periodic benefit costs over the remainder of Fiscal 2020. GXS GER Plan As part of our acquisition of GXS Group, Inc. (GXS) in Fiscal 2014, we assumed an unfunded defined benefit pension plan covering certain German employees which provides for old age, disability and survivors' benefits. The GXS GER plan has been closed to new participants since 2006. Benefits under the GXS GER plan are generally based on a participant’s remuneration, date of hire, years of eligible service and age at retirement. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. No contributions have been made since the inception of the plan. Actuarial gains or losses in excess of 10% of the projected benefit obligation are being amortized and recognized as a component of net periodic benefit costs over the average remaining service period of the plan’s active employees. As of March 31, 2020 , there is approximately $0.1 million in accumulated other comprehensive income related to the GXS GER plan that is expected to be recognized as a component of net periodic benefit costs over the remainder of Fiscal 2020. GXS PHP Plan As part of our acquisition of GXS in Fiscal 2014, we assumed a primarily unfunded defined benefit pension plan covering substantially all of the GXS Philippines employees which provides for retirement, disability and survivors' benefits. Benefits under the GXS PHP plan are generally based on a participant’s remuneration, years of eligible service and age at retirement. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. Aside from an initial contribution which has a fair value of approximately $0.03 million as of March 31, 2020 , no additional contributions have been made since the inception of the plan. Actuarial gains or losses in excess of 10% of the projected benefit obligation are being amortized and recognized as a component of net periodic benefit costs over the average remaining service period of the plan’s active employees. As of March 31, 2020 , there is approximately $0.1 million in accumulated other comprehensive income related to the GXS PHP plan that is expected to be recognized as a component of net periodic benefit costs over the remainder of Fiscal 2020. The following are the details of the change in the benefit obligation for each of the above mentioned pension plans for the periods indicated: As of March 31, 2020 As of June 30, 2019 CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Benefit obligation—beginning of fiscal year $ 35,836 $ 26,739 $ 6,904 $ 69,479 $ 32,651 $ 25,382 $ 3,853 $ 61,886 Service cost 426 237 914 1,577 550 566 771 1,887 Interest cost 341 250 265 856 642 489 300 1,431 Benefits paid (469 ) (693 ) (119 ) (1,281 ) (626 ) (996 ) (140 ) (1,762 ) Actuarial (gain) loss (2,575 ) (3,033 ) 125 (5,483 ) 3,365 1,872 1,957 7,194 Foreign exchange (gain) loss (1,842 ) (1,356 ) 66 (3,132 ) (746 ) (574 ) 163 (1,157 ) Benefit obligation—end of period 31,717 22,144 8,155 62,016 35,836 26,739 6,904 69,479 Less: Current portion (700 ) (959 ) (141 ) (1,800 ) (675 ) (1,012 ) (124 ) (1,811 ) Non-current portion of benefit obligation $ 31,017 $ 21,185 $ 8,014 $ 60,216 $ 35,161 $ 25,727 $ 6,780 $ 67,668 The following are details of net pension expense relating to the following pension plans: Three Months Ended March 31, 2020 2019 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 140 $ 78 $ 305 $ 523 $ 136 $ 141 $ 185 $ 462 Interest cost 112 82 92 286 159 121 77 357 Amortization of actuarial (gains) and losses 234 61 (72 ) 223 173 32 (142 ) 63 Net pension expense $ 486 $ 221 $ 325 $ 1,032 $ 468 $ 294 $ 120 $ 882 Nine Months Ended March 31, 2020 2019 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 426 $ 237 $ 914 $ 1,577 $ 413 $ 426 $ 520 $ 1,359 Interest cost 341 250 265 856 483 368 217 1,068 Amortization of actuarial (gains) and losses 703 183 (215 ) 671 524 98 (421 ) 201 Net pension expense $ 1,470 $ 670 $ 964 $ 3,104 $ 1,420 $ 892 $ 316 $ 2,628 Service-related net periodic pension costs are recorded within operating expense and all other non-service related net periodic pension costs are classified under "Other income (expense), net" on our Condensed Consolidated Statements of Income. In determining the fair value of the pension plan benefit obligations as of March 31, 2020 and June 30, 2019 , respectively, we used the following weighted-average key assumptions: As of March 31, 2020 As of June 30, 2019 CDT GXS GER GXS PHP CDT GXS GER GXS PHP Assumptions: Salary increases 2.50% 2.50% 6.50% 2.50% 2.50% 6.50% Pension increases 2.00% 2.00% N/A 2.00% 2.00% N/A Discount rate 1.76% 1.76% 5.00% 1.32% 1.32% 5.00% Normal retirement age 65-67 65-67 60 65-67 65-67 60 Employee fluctuation rate: to age 20 —% —% 12.19% —% —% 12.19% to age 25 —% —% 16.58% —% —% 16.58% to age 30 1.00% —% 13.97% 1.00% —% 13.97% to age 35 0.50% —% 10.77% 0.50% —% 10.77% to age 40 —% —% 7.39% —% —% 7.39% to age 45 0.50% —% 3.28% 0.50% —% 3.28% to age 50 0.50% —% —% 0.50% —% —% from age 51 1.00% —% —% 1.00% —% —% Anticipated pension payments under the pension plans for the fiscal years indicated below are as follows: Fiscal years ending June 30, CDT GXS GER GXS PHP 2020 (three months ended June 30) $ 161 $ 240 $ 10 2021 719 959 264 2022 789 990 341 2023 885 990 244 2024 987 995 304 2025 to 2029 5,695 5,034 3,068 Total $ 9,236 $ 9,208 $ 4,231 Other Plans Other plans include defined benefit pension plans that are offered by certain of our foreign subsidiaries. Many of these plans were assumed through our acquisitions or are required by local regulatory requirements. These other plans are primarily unfunded, with the aggregate projected benefit obligation included in our pension liability. The net periodic costs of these plans are determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. |
Share Capital, Option Plans and
Share Capital, Option Plans and Share-Based Payments | 9 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS | SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS Cash Dividends For the three and nine months ended March 31, 2020 , pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $0.1746 and $0.5238 , respectively, per Common Share in the aggregate amount of $47.3 million and $141.4 million , respectively, which we paid during the same period. For the three and nine months ended March 31, 2019 , pursuant to the Company’s dividend policy, we paid total non-cumulative dividends of $0.1518 and $0.4554 , respectively, per Common Share in the aggregate amount of $40.7 million and $121.9 million , respectively. Share Capital Our authorized share capital includes an unlimited number of Common Shares and an unlimited number of Preference Shares. No Preference Shares have been issued. Treasury Stock Repurchase From time to time we may provide funds to an independent agent to facilitate repurchases of our Common Shares in connection with the settlement of awards under the Long-Term Incentive Plans (LTIP) or other plans. During the three and nine months ended March 31, 2020 , we repurchased nil and 300,000 , respectively, of our Common Shares in the open market, at a cost of approximately nil and $12.4 million , respectively, for potential reissuance under our LTIP or other plans ( three and nine months ended March 31, 2019 — 51,794 and 726,059 , respectively, Common Shares at a cost of $2.0 million and $26.5 million , respectively). See below for more details on our various plans. Reissuance During the three and nine months ended March 31, 2020 , we reissued nil and 255,502 Common Shares, respectively, from treasury stock ( three and nine months ended March 31, 2019 — 61,794 and 609,691 Common Shares, respectively), in connection with the settlement of awards. Share-Based Payments Total share-based compensation expense for the periods indicated below is detailed as follows: Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Stock options $ 2,143 $ 2,616 $ 6,820 $ 7,537 Performance Share Units (issued under LTIP) 1,515 879 4,436 2,573 Restricted Share Units (issued under LTIP) 1,478 1,687 4,447 4,698 Restricted Share Units (other) 64 36 84 169 Deferred Share Units (directors) 735 709 2,610 2,402 Employee Share Purchase Plan 921 785 3,133 2,773 Total share-based compensation expense $ 6,856 $ 6,712 $ 21,530 $ 20,152 Summary of Outstanding Stock Options As of March 31, 2020 , an aggregate of 7,359,490 options to purchase Common Shares were outstanding and an additional 7,840,000 options to purchase Common Shares were available for issuance under our stock option plans. Our stock options generally vest over four years and expire between seven and ten years from the date of the grant. Currently we also have options outstanding that vest over five years , as well as options outstanding that vest based on meeting certain market conditions. The exercise price of all our options is set at an amount that is not less than the closing price of our Common Shares on the NASDAQ on the trading day immediately preceding the applicable grant date. A summary of activity under our stock option plans for the nine months ended March 31, 2020 is as follows: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000s) Outstanding at June 30, 2019 7,102,753 $ 31.82 Granted 2,301,230 42.57 Exercised (1,300,742 ) 26.73 Forfeited or expired (743,751 ) 32.96 Outstanding at March 31, 2020 7,359,490 $ 35.96 4.85 $ 15,496 Exercisable at March 31, 2020 2,137,643 $ 29.72 2.92 $ 11,953 We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo Valuation Method, consistent with the provisions of ASC Topic 718, "Compensation—Stock Compensation" (Topic 718) and SEC Staff Accounting Bulletin No. 107. The option-pricing models require input of subjective assumptions, including the estimated life of the option and the expected volatility of the underlying stock over the estimated life of the option. We use historical volatility as a basis for projecting the expected volatility of the underlying stock and estimate the expected life of our stock options based upon historical data. We believe that the valuation techniques and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair value of our stock option grants. Estimates of fair value are not intended, however, to predict actual future events or the value ultimately realized by employees who receive equity awards. For the periods indicated, the weighted-average fair value of options and weighted-average assumptions were as follows: Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Weighted–average fair value of options granted $ 7.28 $ 7.64 $ 6.95 $ 8.28 Weighted-average assumptions used: Expected volatility 21.80 % 25.60 % 21.92 % 25.92 % Risk–free interest rate 1.38 % 2.51 % 1.49 % 2.73 % Expected dividend yield 1.55 % 1.63 % 1.60 % 1.53 % Expected life (in years) 4.14 4.11 4.13 4.26 Forfeiture rate (based on historical rates) 7 % 6 % 7 % 6 % Average exercise share price $ 44.99 $ 37.24 $ 42.57 $ 38.16 As of March 31, 2020 , the total compensation cost related to the unvested stock option awards not yet recognized was approximately $30.3 million , which will be recognized over a weighted-average period of approximately 3.0 years . No cash was used by us to settle equity instruments granted under share-based compensation arrangements in any of the periods presented. We have no t capitalized any share-based compensation costs as part of the cost of an asset in any of the periods presented. For the three and nine months ended March 31, 2020 , cash in the amount of $23.4 million and $34.8 million , respectively, was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the three and nine months ended March 31, 2020 from the exercise of options eligible for a tax deduction was $0.4 million and $1.3 million , respectively. For the three and nine months ended March 31, 2019 , cash in the amount of $11.6 million and $25.8 million , respectively, was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the three and nine months ended March 31, 2019 from the exercise of options eligible for a tax deduction was $1.1 million and $2.0 million , respectively. Long-Term Incentive Plans We incentivize certain eligible employees, in part, with long-term compensation pursuant to our LTIP. The LTIP is a rolling three year program that grants eligible employees a certain number of target Performance Share Units (PSUs) and/or Restricted Share Units (RSUs). Target PSUs become vested upon the achievement of certain financial and/or operational performance criteria (the Performance Conditions) that are determined at the time of the grant. Target RSUs become vested when an eligible employee remains employed throughout the vesting period. PSUs and RSUs granted under the LTIPs have been measured at fair value as of the effective date, consistent with Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan. Stock options granted under the LTIPs have been measured using the Black-Scholes option-pricing model, consistent with Topic 718. We estimate the fair value of PSUs using the Monte Carlo pricing model and RSUs have been valued based upon their grant date fair value. As of March 31, 2020 , the total expected compensation cost related to the unvested LTIP awards not yet recognized was $21.7 million , which is expected to be recognized over a weighted average period of 1.9 years . LTIP grants that have recently vested, or have yet to vest, are described below. LTIP grants are referred to in this Quarterly Report on Form 10-Q based upon the year in which the grants are expected to vest. Fiscal 2019 LTIP Grants made in Fiscal 2017 under the LTIP (collectively referred to as Fiscal 2019 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2017 starting on August 14, 2016. We settled the Fiscal 2019 LTIP awards by issuing 255,502 Common Shares from treasury stock during the three months ended December 31, 2019, with a cost of $9.1 million . Fiscal 2020 LTIP Grants made in Fiscal 2018 under the LTIP (collectively referred to as Fiscal 2020 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2018 starting on August 7, 2017. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest over the life of the Fiscal 2020 LTIP. We expect to settle the Fiscal 2020 LTIP awards in stock. Fiscal 2021 LTIP Grants made in Fiscal 2019 under the LTIP (collectively referred to as Fiscal 2021 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2019 starting on August 6, 2018. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest over the life of the Fiscal 2021 LTIP. We expect to settle the Fiscal 2021 LTIP awards in stock. Fiscal 2022 LTIP Grants made in Fiscal 2020 under the LTIP (collectively referred to as Fiscal 2022 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2020 starting on August 5, 2019. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest over the life of the Fiscal 2022 LTIP. We expect to settle the Fiscal 2022 LTIP awards in stock. Restricted Share Units (RSUs) During the three and nine months ended March 31, 2020 , we granted 15,000 RSUs to employees in accordance with employment and other non-LTIP related agreements ( three and nine months ended March 31, 2019 — nil , respectively). RSUs vest over a specified contract date, typically three years from the respective date of grants. We expect to settle RSU awards in stock. During the three and nine months ended March 31, 2020 , we did no t issue any Common Shares from treasury stock in connection with the settlement of vested RSUs ( three and nine months ended March 31, 2019 — 10,000 and 18,794 Common Shares, respectively, with a cost of $0.3 million and $0.6 million , respectively). Deferred Share Units (DSUs) During the three and nine months ended March 31, 2020 , we granted 4,479 and 78,887 DSUs, respectively, to certain non-employee directors ( three and nine months ended March 31, 2019 — 3,406 and 96,748 DSUs, respectively). The DSUs were issued under our Deferred Share Unit Plan. DSUs granted as compensation for director fees vest immediately, whereas all other DSUs granted vest at our next annual general meeting following the granting of the DSUs. No DSUs are payable by us until the director ceases to be a member of the Board. Employee Share Purchase Plan (ESPP) Our ESPP offers employees a purchase price discount of 15% . During the three and nine months ended March 31, 2020 , 221,738 and 549,281 Common Shares, respectively, were eligible for issuance to employees enrolled in the ESPP ( three and nine months ended March 31, 2019 — 187,705 and 523,867 Common Shares, respectively). During the three and nine months ended March 31, 2020 , cash in the amount of approximately $6.6 million and $18.3 million , respectively, was received from employees relating to the ESPP ( three and nine months ended March 31, 2019 — $6.1 million and $16.2 million |
Guarantees and Contingencies
Guarantees and Contingencies | 9 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
GUARANTEES AND CONTINGENCIES | GUARANTEES AND CONTINGENCIES We have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows: Payments due between Total April 1, 2020— July 1, 2020— July 1, 2022— July 1, 2024 Long-term debt obligations (1) $ 4,772,778 $ 35,776 $ 329,750 $ 328,478 $ 4,078,774 Purchase obligations for contracts not accounted for as lease obligations (2) 52,938 14,975 32,963 5,000 — $ 4,825,716 $ 50,751 $ 362,713 $ 333,478 $ 4,078,774 (1) Includes interest up to maturity and principal payments. Excludes $600 million currently drawn on the Revolver, which we expect to repay within one year. Please see note 11 "Long-Term Debt" for more details. (2) For contractual obligations relating to leases and purchase obligations accounted for under Topic 842, please see note 6 "Leases". Guarantees and Indemnifications We have entered into customer agreements which may include provisions to indemnify our customers against third party claims that our software products or services infringe certain third party intellectual property rights and for liabilities related to a breach of our confidentiality obligations. We have not made any material payments in relation to such indemnification provisions and have not accrued any liabilities related to these indemnification provisions in our Condensed Consolidated Financial Statements . Occasionally, we enter into financial guarantees with third parties in the ordinary course of our business, including, among others, guarantees relating to taxes and letters of credit on behalf of parties with whom we conduct business. Such agreements have not had a material effect on our results of operations, financial position or cash flows. Litigation We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20 "Loss Contingencies" (Topic 450-20). Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with Topic 450-20. As of the date of this Quarterly Report on Form 10-Q , the aggregate of such accrued liabilities was not material to our consolidated financial position or results of operations and we do not believe as of the date of this filing that it is reasonably possible that a loss exceeding the amounts already recognized will be incurred that would be material to our consolidated financial position or results of operations. As described more fully below, we are unable at this time to estimate a possible loss or range of losses in respect of certain disclosed matters. Contingencies IRS Matter As we have previously disclosed, the United States Internal Revenue Service (IRS) is examining certain of our tax returns for our fiscal year ended June 30, 2010 (Fiscal 2010) through our fiscal year ended June 30, 2012 (Fiscal 2012), and in connection with those examinations is reviewing our internal reorganization in Fiscal 2010 to consolidate certain intellectual property ownership in Luxembourg and Canada and our integration of certain acquisitions into the resulting structure. We also previously disclosed that the examinations may lead to proposed adjustments to our taxes that may be material, individually or in the aggregate, and that we have not recorded any material accruals for any such potential adjustments in our Condensed Consolidated Financial Statements . We previously disclosed that, as part of these examinations, on July 17, 2015 we received from the IRS an initial Notice of Proposed Adjustment (NOPA) in draft form, that, as revised by the IRS on July 11, 2018 proposes a one-time approximately $335 million increase to our U.S. federal taxes arising from the reorganization in Fiscal 2010 (the 2010 NOPA), plus penalties equal to 20% of the additional proposed taxes for Fiscal 2010, and interest at the applicable statutory rate published by the IRS. On July 11, 2018 , we also received, consistent with previously disclosed expectations, a draft NOPA proposing a one time approximately $80 million increase to our U.S. federal taxes for Fiscal 2012 (the 2012 NOPA) arising from the integration of Global 360 Holding Corp. into the structure that resulted from the internal reorganization in Fiscal 2010, plus penalties equal to 40% of the additional proposed taxes for Fiscal 2012, and interest. On January 7, 2019, we received from the IRS official notification of proposed adjustments to our taxable income for Fiscal 2010 and Fiscal 2012, together with the 2010 NOPA and 2012 NOPA in final form. In each case, such documentation was as expected and on substantially the same terms as provided for in the previously disclosed respective draft NOPAs, with the exception of an additional proposed penalty as part of the 2012 NOPA. A NOPA is an IRS position and does not impose an obligation to pay tax. We continue to strongly disagree with the IRS’ positions within the NOPAs and we are vigorously contesting the proposed adjustments to our taxable income, along with any proposed penalties and interest. As of our receipt of the final 2010 NOPA and 2012 NOPA, our estimated potential aggregate liability, as proposed by the IRS, including additional state income taxes plus penalties and interest that may be due, was approximately $770 million , comprised of approximately $455 million in U.S. federal and state taxes, approximately $130 million of penalties, and approximately $185 million of interest. Interest will continue to accrue at the applicable statutory rates until the matter is resolved and may be substantial. As previously disclosed and noted above, we strongly disagree with the IRS’ positions and we are vigorously contesting the proposed adjustments to our taxable income, along with the proposed penalties and interest. We are examining various alternatives available to taxpayers to contest the proposed adjustments, including through IRS Appeals and U.S. Federal court. Any such alternatives could involve a lengthy process and result in the incurrence of significant expenses. As of the date of this Quarterly Report on Form 10-Q , we have not recorded any material accruals in respect of these examinations in our Condensed Consolidated Financial Statements . An adverse outcome of these tax examinations could have a material adverse effect on our financial position and results of operations. For additional information regarding the history of this IRS matter, please see Note 13 "Guarantees and Contingencies" in our Annual Report on Form 10-K for Fiscal 2018. CRA Matter As part of its ongoing audit of our Canadian tax returns, the Canada Revenue Agency (CRA) has disputed our transfer pricing methodology used for certain intercompany transactions with our international subsidiaries and has issued notices of reassessment for Fiscal 2012, Fiscal 2013 and Fiscal 2014. Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of March 31, 2020 , in connection with the CRA's reassessments for Fiscal 2012, Fiscal 2013 and Fiscal 2014 to be limited to penalties and interest that may be due of approximately $25 million . The notices of reassessment for Fiscal 2012, Fiscal 2013 and Fiscal 2014 would, as drafted, increase our taxable income by approximately $90 million to $100 million for each of those years, as well as impose a 10% penalty on the proposed adjustment to income. We strongly disagree with the CRA's positions and believe the reassessments of Fiscal 2012, Fiscal 2013 and Fiscal 2014 (including any penalties) are without merit. We have filed notices of objection for Fiscal 2012, Fiscal 2013 and Fiscal 2014, and we are currently seeking competent authority consideration under applicable international treaties in respect of these reassessments. Even if we are unsuccessful in challenging the CRA's reassessments to increase our taxable income for Fiscal 2012, Fiscal 2013 and Fiscal 2014, or potential reassessments that may be proposed for subsequent years currently under audit, we have elective deductions available for those years (including carry-backs from later years) that would offset such increased amounts so that no additional cash tax would be payable, exclusive of any assessed penalties and interest, as described above. We will continue to vigorously contest the proposed adjustments to our taxable income and any penalty and interest assessments. As of the date of this Quarterly Report on Form 10-Q , we have not recorded any accruals in respect of these reassessments in our Condensed Consolidated Financial Statements . Audits by the CRA of our tax returns for fiscal years prior to Fiscal 2012 have been completed with no reassessment of our income tax liability in respect of our international transactions, including the transfer pricing methodology applied to them. The CRA is currently auditing Fiscal 2015, Fiscal 2016 and Fiscal 2017 and have proposed to reassess Fiscal 2015 in a manner consistent with Fiscal 2012, Fiscal 2013 and Fiscal 2014. We are engaged in ongoing discussions with the CRA and continue to vigorously contest the CRA's audit positions. GXS India Matter Our Indian subsidiary, GXS India Technology Centre Private Limited (GXS India), is subject to potential assessments by Indian tax authorities in the city of Bangalore. GXS India has received assessment orders from the Indian tax authorities alleging that the transfer price applied to intercompany transactions was not appropriate. Based on advice from our tax advisors, we believe that the facts that the Indian tax authorities are using to support their assessment are incorrect. We have filed appeals and anticipate an eventual settlement with the Indian tax authorities. We have accrued $1.2 million to cover our anticipated financial exposure in this matter. Carbonite Class Action Complaint On August 1, 2019, prior to our acquisition of Carbonite, a purported stockholder of Carbonite filed a putative class action complaint against Carbonite, its former Chief Executive Officer, Mohamad S. Ali, and its former Chief Financial Officer, Anthony Folger, in the United States District Court for the District of Massachusetts captioned Ruben A. Luna, Individually and on Behalf of All Others Similarly Situated v. Carbonite, Inc., Mohamad S. Ali, and Anthony Folger (No. 1:19-cv-11662-LTS). The complaint alleges violations of the federal securities laws under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The complaint generally alleges that the defendants made materially false and misleading statements in connection with Carbonite’s Server Backup VM Edition, and seeks, among other things, the designation of the action as a class action, an award of unspecified compensatory damages, costs and expenses, including counsel fees and expert fees, and other relief as the court deems appropriate. On August 23, 2019, a nearly identical complaint was filed in the same court captioned William Feng, Individually and on Behalf of All Others Similarly Situated v. Carbonite, Inc., Mohamad S. Ali, and Anthony Folger (No. 1:19- cv-11808-LTS) (together with the Luna Complaint, the “Securities Actions”). On November 21, 2019, the court consolidated the Securities Actions, appointed a lead plaintiff, and designated a lead counsel. On January 15, 2020, the lead plaintiff filed a consolidated amended complaint generally making the same allegations and seeking the same relief as the complaint filed on August 1, 2019. The defendants moved to dismiss the Securities Actions on March 10, 2020. The lead counsel's opposition is currently due May 4, 2020. In light of, among other things, the early stage of the litigation, we are unable to predict the outcome of this action and are unable to reasonably estimate the amount or range of loss, if any, that could result from this proceeding. Carbonite vs Realtime Data On February 27, 2017, prior to our acquisition of Carbonite, a non-practicing entity named Realtime Data LLC (Realtime Data) filed a lawsuit against Carbonite in the U.S. District Court for the Eastern District of Texas "Realtime Data LLC v. Carbonite, Inc. et al (No 6:17-cv-00121-RWS-JDL)", alleging that certain of Carbonite’s cloud storage services infringe upon certain patents held by Realtime Data. Realtime Data’s complaint against Carbonite sought damages in an unspecified amount and injunctive relief. On December 19, 2017, the U.S. District Court for the Eastern District of Texas transferred the case to the U.S District Court for the District of Massachusetts (No. 1:17-cv-12499). Realtime Data has also filed numerous other patent suits on the asserted patents against other companies around the country. In one of those suits, filed in the U.S. District Court for the District of Delaware, the Delaware Court on July 29, 2019 dismissed the lawsuit after declaring invalid three of the four patents asserted by Realtime Data against Carbonite. By way of Order dated August 19, 2019, the U.S. District Court for the District of Massachusetts stayed the action against Carbonite pending appeal of the dismissal in the Delaware lawsuit. As to the fourth patent, the U.S. Patent & Trademark Office Patent Trial and Appeal Board on September 24, 2019 invalidated certain claims of that patent. No trial date has been set in the action against Carbonite. The Company is defending Carbonite vigorously. We have not accrued a loss contingency related to this matter because litigation related to a non-practicing entity is inherently unpredictable. Although a loss is reasonably possible, an unfavorable outcome is not considered by management to be probable at this time and we remain unable to reasonably estimate a possible loss or range of loss associated with this litigation. Please also see "Risk Factors" included within Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part 1, Item 1A of our Annual Report on Form 10-K for Fiscal 2019. |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective tax rate represents the net effect of the mix of income earned in various tax jurisdictions that are subject to a wide range of income tax rates. The effective tax rate decreased to a provision of 25.5% for the three months ended March 31, 2020 , compared to a provision of 30.9% for the three months ended March 31, 2019 . The decrease in tax expense of $23.7 million was primarily due to (i) a decrease of $20.0 million relating to lower net income including the impact of foreign rates, (ii) a decrease of $9.0 million from tax rate differential in tax years applicable to United States loss carryforwards that became eligible for carryback under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act enacted in the third quarter of Fiscal 2020, and (iii) a decrease of $7.9 million related to tax costs of internal reorganizations that did not recur in Fiscal 2020. These were partially offset by (i) an increase of $4.8 million related to the US Base Erosion Anti-avoidance Tax (US BEAT), (ii) an increase in tax filings in excess of estimates of $3.0 million , (iii) a decrease in tax credits for research and development of $2.9 million resulting from filings in excess of estimates in Fiscal 2019 that did not recur in Fiscal 2020 and (iv) an increase in accruals for repatriations from foreign subsidiaries of $1.7 million . The remainder of the difference was due to normal course movements and non-material items. The effective tax rate decreased to a provision of 27.5% for the nine months ended March 31, 2020 , compared to a provision of 31.6% for the nine months ended March 31, 2019 . Tax expense decreased by $19.8 million primarily due to (i) a decrease of $21.5 million in reserves for unrecognized tax benefits resulting from clarifications provided by tax regulations and taxation years becoming statute barred, (ii) a decrease of $15.8 million relating to the tax impact of internal reorganizations of subsidiaries that did not recur in Fiscal 2020, (iii) a decrease of $9.0 million from tax rate differential in tax years applicable to United States loss carryforwards that became eligible for carryback under the CARES Act enacted in the third quarter of Fiscal 2020, (iv) a decrease in net income taxed at foreign rates of $8.3 million , and (v) an increase in tax credits for research and development of $2.9 million . These were partially offset by (i) an increase of $16.6 million relating to a one-time reversal of accruals for repatriations from subsidiaries in the United States in Fiscal 2019 that did not recur in Fiscal 2020, (ii) an increase in tax filings in excess of estimates of $10.4 million , and (iii) the impact of US BEAT of $9.9 million . The remainder of the difference was due to normal course movements and non-material items. We recognize interest expense and penalties related to income tax matters in income tax expense. For the three and nine months ended March 31, 2020 and 2019 , we recognized the following amounts as income tax-related interest expense and penalties: Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Interest expense (recoveries) $ 2,814 $ 2,823 $ 4,048 $ 7,430 Penalties expense (recoveries) 100 9 175 568 Total $ 2,914 $ 2,832 $ 4,223 $ 7,998 The following amounts have been accrued on account of income tax-related interest expense and penalties: As of March 31, 2020 As of June 30, 2019 Interest expense accrued * $ 68,707 $ 64,530 Penalties accrued * $ 2,580 $ 2,525 * These balances are primarily included within "Long-term income taxes payable" within the Condensed Consolidated Balance Sheets . We believe that it is reasonably possible that the gross unrecognized tax benefits, as of March 31, 2020 , could decrease tax expense in the next 12 months by $9.3 million , relating primarily to the expiration of competent authority relief and tax years becoming statute barred for purposes of future tax examinations by local taxing jurisdictions. Our four most significant tax jurisdictions are Canada, the United States, Luxembourg and Germany. Our tax filings remain subject to audits by applicable tax authorities for a certain length of time following the tax year to which those filings relate. The earliest fiscal years open for examination are 2012 for Germany, 2010 for the United States, 2012 for Luxembourg, and 2012 for Canada. We are subject to tax audits in all major taxing jurisdictions in which we operate and currently have tax audits open in Canada, the United States, Germany, India, the United Kingdom, Italy and Japan. On a quarterly basis we assess the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income and other taxes. Statements regarding the United States and Canada audits are included in note 14 "Guarantees and Contingencies" . The timing of the resolution of income tax audits is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax audits in one or more jurisdictions. These assessments or settlements may or may not result in changes to our contingencies related to positions on tax filings. The actual amount of any change could vary significantly depending on the ultimate timing and nature of any settlements. We cannot currently provide an estimate of the range of possible outcomes. For more information relating to certain tax audits, please refer to note 14 "Guarantees and Contingencies" . As at March 31, 2020 , we have recognized a provision of $21.7 million ( June 30, 2019 — $17.4 million ) in respect of both additional foreign taxes or deferred income tax liabilities for temporary differences related to the undistributed earnings of certain non-United States subsidiaries and planned periodic repatriations from certain German subsidiaries, that will be subject to withholding taxes upon distribution. We have not provided for additional foreign withholding taxes or deferred income tax liabilities related to undistributed earnings of all other non-Canadian subsidiaries, since such earnings are considered permanently invested in those subsidiaries or are not subject to withholding taxes. It is not practicable to reasonably estimate the amount of additional deferred income tax liabilities or foreign withholding taxes that may be payable should these earnings be distributed in the future. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT ASC Topic 820 “Fair Value Measurement” (Topic 820) defines fair value, establishes a framework for measuring fair value, and addresses disclosure requirements for fair value measurements. Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value, in this context, should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including our own credit risk. In addition to defining fair value and addressing disclosure requirements, Topic 820 establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. • Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis: Our financial assets and liabilities measured at fair value on a recurring basis consisted of the following types of instruments as of March 31, 2020 and June 30, 2019 : March 31, 2020 June 30, 2019 Fair Market Measurements using: Fair Market Measurements using: March 31, 2020 Quoted prices in active markets for identical assets/ (liabilities) Significant other observable inputs Significant unobservable inputs June 30, 2019 Quoted prices in active markets for identical assets/ (liabilities) Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3) Financial Assets: Foreign currency forward contracts designated as cash flow hedges (note 17) $ — N/A $ — N/A $ 736 N/A $ 736 N/A Financial Liabilities: Foreign currency forward contracts designated as cash flow hedges (note 17) $ (3,352 ) N/A $ (3,352 ) N/A $ — N/A $ — N/A Our valuation techniques used to measure the fair values of the derivative instruments, the counterparty to which has high credit ratings, were derived from pricing models including discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data, as no quoted market prices exist for these instruments. Our discounted cash flow techniques use observable market inputs, such as, where applicable, foreign currency spot and forward rates. Our cash and cash equivalents, along with our accounts receivable and accounts payable and accrued liabilities balances, are measured and recognized in our Condensed Consolidated Financial Statements at an amount that approximates their fair value (a Level 2 measurement) due to their short maturities. If applicable, we will recognize transfers between levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the three and nine months ended March 31, 2020 and 2019 , we did not have any transfers between Level 1, Level 2 or Level 3. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We measure certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the three and nine months ended March 31, 2020 and 2019 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Foreign Currency Forward Contracts We are engaged in hedging programs with various banks to limit the potential foreign exchange fluctuations incurred on future cash flows relating to a portion of our Canadian dollar payroll expenses. We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of our business, in particular to changes in the Canadian dollar on account of large costs that are incurred from our centralized Canadian operations, which are denominated in Canadian dollars. As part of our risk management strategy, we use foreign currency forward contracts to hedge portions of our payroll exposure with typical maturities of between one and twelve months . We do not use foreign currency forward contracts for speculative purposes. We have designated these transactions as cash flow hedges of forecasted transactions under ASC Topic 815 “Derivatives and Hedging” (Topic 815). As the critical terms of the hedging instrument and of the entire hedged forecasted transaction are the same, in accordance with Topic 815, we have been able to conclude that changes in fair value or cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, quarterly unrealized gains or losses on the effective portion of these forward contracts have been included within other comprehensive income. The fair value of the contracts, as of March 31, 2020 , is recorded within "Accounts payable and accrued liabilities". As of March 31, 2020 , the notional amount of forward contracts we held to sell U.S. dollars in exchange for Canadian dollars was $63.2 million ( June 30, 2019 — $62.0 million ). Fair Value of Derivative Instruments and Effect of Derivative Instruments on Financial Performance The effect of these derivative instruments on our Condensed Consolidated Financial Statements for the periods indicated below were as follows (amounts presented do not include any income tax effects). Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets (see note 16 "Fair Value Measurement") As of March 31, 2020 As of June 30, 2019 Derivatives Balance Sheet Location Fair Value Fair Value Foreign currency forward contracts designated as cash flow hedges Prepaid expenses and other current assets (Accounts payable and accrued liabilities) $ (3,352 ) $ 736 Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) Three and Nine Months Ended March 31, 2020 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Location of Gain or (Loss) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Three Months Ended March 31, 2020 Nine Months Ended March 31, 2020 Three Months Ended March 31, 2020 Nine Months Ended March 31, 2020 Foreign currency forward contracts $ (4,815 ) $ (4,459 ) Operating expenses $ (458 ) $ (371 ) Three and Nine Months Ended March 31, 2019 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Location of Gain or (Loss) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Three Months Ended March 31, 2019 Nine Months Ended March 31, 2019 Three Months Ended March 31, 2019 Nine Months Ended March 31, 2019 Foreign currency forward contracts $ 837 $ (1,034 ) Operating expenses $ (470 ) $ (1,604 ) |
Special Charges (Recoveries)
Special Charges (Recoveries) | 9 Months Ended |
Mar. 31, 2020 | |
Restructuring, Settlement and Impairment Provisions [Abstract] | |
SPECIAL CHARGES (RECOVERIES) | SPECIAL CHARGES (RECOVERIES) Special charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition-related costs and other charges. Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Fiscal 2020 Restructuring Plan $ 5,899 $ — $ 5,899 $ — Fiscal 2019 Restructuring Plan (29 ) 667 1,650 26,906 Fiscal 2018 Restructuring Plan — 7 86 517 Restructuring Plans prior to Fiscal 2018 Restructuring Plan 50 (65 ) (232 ) 410 Acquisition-related costs 2,453 1,430 12,898 5,134 Other charges (recoveries) 1,033 (1,243 ) 4,278 520 Total $ 9,406 $ 796 $ 24,579 $ 33,487 Fiscal 2020 Restructuring Plan During Fiscal 2020, we began to implement restructuring activities to streamline our operations (Fiscal 2020 Restructuring Plan), including in connection with our acquisitions of Carbonite and XMedius, to take further steps to improve our operational efficiency. The Fiscal 2020 Restructuring Plan charges relate to workforce reductions and facility consolidations. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. As of March 31, 2020, we expect total costs to be incurred in connection with the Fiscal 2020 Restructuring Plan to be approximately $26 million to $34 million , of which approximately $5.9 million has been recorded within "Special charges (recoveries)" to date. A reconciliation of the beginning and ending restructuring liability, which is included within "Accounts payable and accrued liabilities" in our Condensed Consolidated Balance Sheets, for the nine months ended March 31, 2020 is shown below. Fiscal 2020 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2019 $ — $ — $ — Accruals and adjustments 5,505 394 5,899 Cash payments (2,295 ) (36 ) (2,331 ) Foreign exchange and other non-cash adjustments (166 ) (94 ) (260 ) Balance payable as at March 31, 2020 $ 3,044 $ 264 $ 3,308 We incurred no charges associated with the re-measurement of facility related ROU assets during the three and nine months ended March 31, 2020 , respectively, as part of the Fiscal 2020 Restructuring Plan. Fiscal 2019 Restructuring Plan During Fiscal 2019, we began to implement restructuring activities to streamline our operations (Fiscal 2019 Restructuring Plan), including in connection with our acquisitions of Catalyst Repository Systems Inc. (Catalyst) and Liaison Technologies, Inc. (Liaison), to take further steps to improve our operational efficiency. The Fiscal 2019 Restructuring Plan charges relate to workforce reductions and facility consolidations. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. Since the inception of the plan, approximately $30.0 million has been recorded within "Special charges (recoveries)" to date. We do not expect to incur any further significant charges relating to this plan. A reconciliation of the beginning and ending liability for the nine months ended March 31, 2020 is shown below. Fiscal 2019 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2019 $ 1,819 $ 5,288 $ 7,107 Adjustment for Topic 842 (note 1 and note 6) — (5,288 ) (5,288 ) Accruals and adjustments 560 1,090 1,650 Cash payments (1,637 ) (1,090 ) (2,727 ) Foreign exchange and other non-cash adjustments (249 ) — (249 ) Balance payable as at March 31, 2020 $ 493 $ — $ 493 Fiscal 2018 Restructuring Plan During Fiscal 2018 and in the context of our acquisitions of Covisint Corporation, Guidance Software Inc. and Hightail, Inc., we implemented restructuring activities to streamline our operations (collectively referred to as the Fiscal 2018 Restructuring Plan). The Fiscal 2018 Restructuring Plan charges relate to workforce reductions and facility consolidations. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. Since the inception of the plan, approximately $10.8 million has been recorded within "Special charges (recoveries)" to date. We do not expect to incur any further significant charges relating to this plan. A reconciliation of the beginning and ending liability for the nine months ended March 31, 2020 is shown below. Fiscal 2018 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2019 $ 150 $ 486 $ 636 Adjustment for Topic 842 (note 1 and note 6) — (486 ) (486 ) Accruals and adjustments (62 ) 148 86 Cash payments (39 ) (148 ) (187 ) Foreign exchange and other non-cash adjustments (10 ) — (10 ) Balance payable as at March 31, 2020 $ 39 $ — $ 39 Other charges (recoveries) For the three months ended March 31, 2020 , "Other charges" includes $1.0 million relating to other miscellaneous charges. For the nine months ended March 31, 2020 , "Other charges" includes $0.7 million relating to the write-off of ROU assets and approximately $3.6 million relating to other miscellaneous charges. For the three months ended March 31, 2019 , "Other recoveries" include $1.5 million relating to certain pre-acquisition sales and use tax liabilities becoming statute barred, partially offset by $0.2 million relating to other miscellaneous charges. For the nine months ended March 31, 2019 , "Other charges" include (i) $1.1 million relating to one-time system implementation costs and (ii) $0.9 million relating to other miscellaneous charges. These charges were partially offset by a recovery of $1.5 million |
Acquisitions
Acquisitions | 9 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Fiscal 2020 Acquisitions Acquisition of XMedius On March 9, 2020 , we acquired all of the equity interest in XMedius for approximately $73.3 million in an all cash transaction. XMedius is a provider of secure information exchange and unified communication solutions. In accordance with ASC Topic 805 "Business Combinations" (Topic 805), this acquisition was accounted for as a business combination. We believe the acquisition will complement our Customer Experience Management (CEM) and Business Network (BN) platforms. The results of operations of this acquisition have been consolidated with those of OpenText beginning March 9, 2020 . Preliminary Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of March 9, 2020 , are set forth below: Current assets $ 8,433 Non-current tangible assets 3,792 Intangible customer assets 35,910 Intangible technology assets 11,143 Liabilities assumed (35,842 ) Total identifiable net assets 23,436 Goodwill 49,899 Net assets acquired $ 73,335 The goodwill of approximately $49.9 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $0.1 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $18.5 million , which represents our estimate of the fair value of the contractual obligations assumed based on a valuation. In arriving at this fair value, we reduced the acquired company’s original carrying value by approximately $2.7 million . The fair value of current assets acquired includes accounts receivable with a fair value of $6.5 million . The gross amount receivable was $6.7 million , of which $0.2 million is expected to be uncollectible. Acquisition-related costs for XMedius included in "Special charges (recoveries)" in the Condensed Consolidated Financial Statements for the three and nine months ended March 31, 2020 were $0.8 million , respectively. The finalization of the above purchase price allocation is pending the finalization of the valuation of fair value for the assets acquired and liabilities assumed, including intangible assets and taxation-related balances as well as for potential unrecorded liabilities. We expect to finalize this determination on or before our quarter ending March 31, 2021 . Since the date of acquisition, the acquisition had no significant impact on revenues and net earnings for the three and nine months ended March 31, 2020 . Pro forma results of operations for this acquisition have not been presented because they are not material to our consolidated results of operations. Acquisition of Carbonite On December 24, 2019 , we acquired all of the equity interest in Carbonite, a leading provider of cloud-based subscription backup, disaster recovery and endpoint security to small and medium-sized businesses (SMB), consumers, and a wide variety of partners. Total consideration for Carbonite was approximately $1.4 billion paid in cash (inclusive of cash acquired) and inclusive of approximately $0.1 billion , relating to the cash settlement of pre-acquisition stock compensation that was previously accrued but since paid as of March 31, 2020 . In accordance with ASC Topic 805, this acquisition was accounted for as a business combination. We believe the acquisition will increase our position in the data protection and endpoint security space, further strengthen our cloud capabilities and open a new route to connect with customers through Carbonite's marquee SMB and consumer channels and products. The results of operations of Carbonite have been consolidated with those of OpenText beginning December 24, 2019 . Preliminary Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of December 24, 2019 , are set forth below: Current assets (inclusive of cash acquired of $62.9 million) $ 129,779 Non-current tangible assets (inclusive of restricted cash acquired of $2.4 million) 102,936 Intangible customer assets 549,000 Intangible technology assets 291,000 Liabilities assumed (570,656 ) Total identifiable net assets 502,059 Goodwill 868,365 Net assets acquired $ 1,370,424 The goodwill of approximately $ 868.4 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $6.9 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of approximately $ 171.0 million , which represents our estimate of the fair value of the contractual obligations assumed. In arriving at this fair value, we reduced the acquired company’s original carrying value by approximately $74.7 million . The fair value of current assets acquired includes accounts receivable with a fair value of $45.7 million . The gross amount receivable was $47.1 million of which $1.4 million of this receivable was expected to be uncollectible. Acquisition-related costs for Carbonite included in "Special charges (recoveries)" in the Condensed Consolidated Financial Statements for the three and nine months ended March 31, 2020 were $1.1 million and $8.5 million , respectively. The finalization of the above purchase price allocation is pending the finalization of the valuation of fair value for the assets acquired and liabilities assumed, including intangible assets and taxation-related balances as well as for potential unrecorded liabilities. We expect to finalize this determination on or before our quarter ending December 31, 2020 . The amount of Carbonite's revenues and net loss included in our Condensed Consolidated Statements of Income for the three and nine months ended March 31, 2020 is set forth below: January 1, 2020 - March 31, 2020 December 24, 2019 - March 31, 2020 Revenues $ 110,351 $ 119,862 Net Loss * (27,877 ) (31,531 ) * Net loss for the three and nine months ended includes one-time fees of approximately $2.8 million and $5.4 million , respectively, on account of special charges and $48.0 million and $52.2 million , respectively, of amortization charges relating to intangible assets, all net of tax. The unaudited pro forma revenues and net income of the combined entity for the three and nine months ended March 31, 2020 and 2019 , respectively, had the acquisition been consummated on July 1, 2018, are set forth below: Three Months Ended March 31, Nine Months Ended March 31, Supplemental Unaudited Pro Forma Information (1) 2019 2020 2019 Total Revenues $ 800,361 $ 2,524,726 $ 2,357,397 Net Income (2) (3) 44,984 134,778 35,236 (1) Carbonite acquired Webroot Inc. in March 2019. The supplemental pro forma revenues and net income shown above do not include the results of operations of Webroot Inc. for periods prior to the Webroot acquisition date. (2) Included in pro forma net income for the nine months ended March 31, 2019 are approximately $127 million of one-time expenses incurred by Carbonite on account of the acquisition and the related tax effect of approximately $33 million . These one-time expenses included i) approximately $74 million related to the accelerated vesting of historical Carbonite equity awards, ii) approximately $29 million of one time fees, primarily related to transaction costs triggered by the closing of the acquisition, iii) $21 million related to the extinguishment of certain of Carbonite's historical debt and interest rate swaps and iv) approximately $3 million in employee severance costs. (3) Included in pro forma net income for the nine months ended March 31, 2020 and three and nine months ended March 31, 2019 are estimated amortization charges relating to the allocated value of intangible assets. There was no pro forma impact during the three months ended March 31, 2020. The unaudited pro forma financial information in the table above is presented for information purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the periods presented or the results that may be realized in the future. Acquisition of Dynamic Solutions Group Inc. (The Fax Guys) On December 2, 2019 , we acquired certain assets and assumed certain liabilities of The Fax Guys, for approximately $5.1 million , of which $1.0 million is currently held back and unpaid in accordance with the terms of the purchase agreement. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements our Enterprise Information Management (EIM) portfolio. The results of operations of The Fax Guys have been consolidated with those of OpenText beginning December 2, 2019 . Since the date of acquisition, the acquisition had no significant impact on revenues and net earnings for the three and nine months ended March 31, 2020 . Pro forma results of operations for this acquisition have not been presented because they are not material to our consolidated results of operations. Fiscal 2019 Acquisitions Acquisition of Catalyst Repository Systems Inc. On January 31, 2019 , we acquired all of the equity interest in Catalyst, a leading provider of eDiscovery that designs, develops and supports market-leading cloud eDiscovery software. Total consideration for Catalyst was approximately $71.4 million , of which $70.8 million was paid in cash and approximately $0.6 million is currently held back and unpaid in accordance with the purchase agreement. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our EIM portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning January 31, 2019 . Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of January 31, 2019 , are set forth below: Current assets $ 9,699 Non-current tangible assets 5,754 Intangible customer assets 30,607 Intangible technology assets 11,658 Liabilities assumed (17,891 ) Total identifiable net assets 39,827 Goodwill 31,607 Net assets acquired $ 71,434 The goodwill of approximately $31.6 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $3.1 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $0.8 million , which represents our estimate of the fair value of the contractual obligations assumed based on a valuation. In arriving at this fair value, we reduced the acquired company’s original carrying value by an insignificant amount. The fair value of current assets acquired includes accounts receivable with a fair value of $10.8 million . The gross amount receivable was $11.8 million , of which $1.0 million is expected to be uncollectible. The finalization of the purchase price allocation during the three months ended March 31, 2020 resulted in an adjustment to amounts previously disclosed of approximately $0.6 million . Acquisition of Liaison Technologies, Inc. On December 17, 2018 , we acquired all of the equity interest in Liaison, a leading provider of cloud-based business to business integration, for approximately $310.6 million in an all cash transaction. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our EIM portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning December 17, 2018 . Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of December 17, 2018 , are set forth below: Current assets $ 23,006 Non-current tangible assets 5,168 Intangible customer assets 68,300 Intangible technology assets 107,000 Liabilities assumed (57,265 ) Total identifiable net assets 146,209 Goodwill 164,434 Net assets acquired $ 310,643 The goodwill of approximately $164.4 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $2.2 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $7.6 million , which represents our estimate of the fair value of the contractual obligations assumed. In arriving at this fair value, we reduced the acquired company’s original carrying value by an insignificant amount. The fair value of current assets acquired includes accounts receivable with a fair value of $20.5 million . The gross amount receivable was $22.2 million , of which $1.7 million is expected to be uncollectible. The finalization of the purchase price allocation during the three months ended December 31, 2019 did not result in any significant changes to the preliminary amounts previously disclosed. |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosures | 9 Months Ended |
Mar. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW DISCLOSURES | SUPPLEMENTAL CASH FLOW DISCLOSURES Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Cash paid during the period for interest $ 43,657 $ 33,585 $ 111,786 $ 102,348 Cash received during the period for interest $ 2,743 $ 987 $ 10,166 $ 4,346 Cash paid during the period for income taxes $ 42,509 $ 26,190 $ 75,881 $ 66,002 |
Other Income (Expense), Net
Other Income (Expense), Net | 9 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | OTHER INCOME (EXPENSE), NET Other income (expense), net relates to certain non-operational charges primarily consisting of debt extinguishment costs, income or losses in our share of investments accounted for under the equity method and of transactional foreign exchange gains (losses). The income (expense) from foreign exchange is dependent upon the change in foreign currency exchange rates vis-à- vis the functional currency of the legal entity. Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Foreign exchange gains (losses) $ (5,766 ) $ 2,033 $ (9,073 ) $ (4,124 ) OpenText share in net income of equity investees (note 9) 4,527 2,789 6,475 10,652 Loss on debt extinguishment (1) (17,854 ) — (17,854 ) — Other miscellaneous income (expense) 170 243 716 437 Total other income (expense), net $ (18,923 ) $ 5,065 $ (19,736 ) $ 6,965 (1) On March 5, 2020 we redeemed Senior Notes 2023 in full, which resulted in a loss on extinguishment of debt of approximately $17.9 million . Of this, approximately $6.7 million relates to unamortized debt issuance costs and the remaining $11.2 million |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share are computed by dividing net income, attributable to OpenText, by the weighted average number of Common Shares outstanding during the period. Diluted earnings per share are computed by dividing net income, attributable to OpenText, by the shares used in the calculation of basic earnings per share plus the dilutive effect of Common Share equivalents, such as stock options, using the treasury stock method. Common Share equivalents are excluded from the computation of diluted earnings per share if their effect is anti-dilutive. Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Basic earnings per share Net income attributable to OpenText $ 25,965 $ 72,762 $ 207,833 $ 213,518 Basic earnings per share attributable to OpenText $ 0.10 $ 0.27 $ 0.77 $ 0.80 Diluted earnings per share Net income attributable to OpenText $ 25,965 $ 72,762 $ 207,833 $ 213,518 Diluted earnings per share attributable to OpenText $ 0.10 $ 0.27 $ 0.77 $ 0.79 Weighted-average number of shares outstanding (in 000's) Basic 271,221 268,991 270,559 268,511 Effect of dilutive securities 981 1,039 1,084 1,095 Diluted 272,202 270,030 271,643 269,606 Excluded as anti-dilutive (1) 3,361 2,928 2,681 2,643 (1) Represents options to purchase Common Shares excluded from the calculation of diluted earnings per share because the exercise price of the stock options was greater than or equal to the average price of the Common Shares during the period. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Mar. 31, 2020 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Our procedure regarding the approval of any related party transaction requires that the material facts of such transaction be reviewed by the independent members of the Audit Committee and the transaction be approved by a majority of the independent members of the Audit Committee. The Audit Committee reviews all transactions in which we are, or will be, a participant and any related party has or will have a direct or indirect interest in the transaction. In determining whether to approve a related party transaction, the Audit Committee generally takes into account, among other facts it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; the extent and nature of the related person’s interest in the transaction; the benefits to the Company of the proposed transaction; if applicable, the effects on a director’s independence; and if applicable, the availability of other sources of comparable services or products. During the nine months ended March 31, 2020 , Mr. Stephen Sadler, a member of the Board of Directors, earned approximately $0.7 million ( nine months ended March 31, 2019 — $0.6 million ) in consulting fees from OpenText for assistance with acquisition-related business activities. Mr. Sadler abstained from voting on all transactions from which he would potentially derive consulting fees. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Cash Dividends As part of our quarterly, non-cumulative cash dividend program, we declared, on April 29, 2020 , a dividend of $0.1746 per Common Share. The record date for this dividend is May 29, 2020 and the payment date is June 19, 2020 . Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board. COVID-19 Restructuring Plan On March 3, 2020, COVID-19 was characterized as a pandemic by the World Health Organization. The spread of COVID-19 has significantly impacted the global economy and is expected to adversely impact our operational and financial performance. The extent of the adverse impact of the pandemic on the global economy and markets will depend, in part, on the length and severity of the measures taken to limit the spread of the virus and, in part, on the size and effectiveness of the compensating measures taken by governments. We are closely monitoring the potential effects and impact on our operations, businesses and financial performance, including liquidity and capital usage, though the extent of the impact is difficult to fully predict at this time due to the rapid evolution of this uncertain situation. On April 29, 2020, our Board approved a restructuring plan that will impact our global workforce and execute a significant reduction in our real estate footprint around the world. The estimated total cost of the plan is expected to be in the range of $80 million to $100 million and the plan is expected to be implemented over the next six to twelve months . The Company has made a strategic decision to move towards a significant work from home (WFH) model. As a result of COVID-19, more than 95% of our employees are currently WFH, and we are now making plans for the future return to office strategy for our nearly 15,000 employees. We currently have approximately 120 offices around the world, and our intent, over time, is to make a significant reduction in the number of offices, anticipated to be over 50% of our global offices impacting approximately 15% of our employees. Based upon our plan, we estimate that this transition can be executed over the next six to twelve months . Management has estimated cost of this restructuring to be in the range of $65 million to $80 million , including the write-off of ROU assets relating to leases, the write-off of leases and fixed assets and other related costs. We have also approved and begun executing an employee rationalization program across various departments in order to further reduce our cost base in light of the anticipated adverse effects and impact of COVID-19. We estimate severance costs to be in the range of $15 million to $20 million . |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of estimates | The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements |
Accounting Pronouncements | Leases Effective July 1, 2019, we adopted Accounting Standards Update (ASU) No. 2016-02 “Leases (Topic 842)” (Topic 842) using the modified retrospective transition approach. In accordance with this adoption method, results for reporting periods as of July 1, 2019 are presented under the new standard, while prior period results continue to be reported under the previous standard. Additionally, we elected the package of practical expedients permitted under the transition guidance within Topic 842, which allowed us to (i) carry forward the historical lease classification for any expired or existing leases, (ii) not reassess whether any expired or existing contracts contain leases and (iii) not reassess any initial direct cost for existing leases. We did not elect the practical expedient of hindsight when determining the lease term of existing contracts at the effective date. As a result of this adoption, we recorded the following adjustments as of July 1, 2019 on the Consolidated Balance Sheets: • An increase in operating lease right of use assets of approximately $217.5 million ; • An increase in total operating lease liabilities of approximately $253.5 million ; • A decrease in prepaid expenses and other current assets of approximately $6.6 million in connection with lease fair value adjustments and prepaid rent; • A decrease in other assets of approximately $0.2 million in connection with lease fair value adjustments; and • A decrease in total accrued liabilities of approximately $42.8 million in connection with tenant allowances, deferred rent, lease fair value adjustments, and amounts payable in respect of restructured facilities. The adoption of Topic 842 had no impact to the Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Statement of Shareholders' Equity or Condensed Consolidated Statements of Cash Flows. Please refer to note 6 “Leases” for additional information. Accounting Pronouncements Adopted in Fiscal 2020 During Fiscal 2020, we have adopted the following ASUs, in addition to those discussed in note 1 "Basis of Presentation". The ASUs listed below did not have a material impact to our reported financial position, results of operations or cash flows: • ASU No. 2017-12 “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities” (ASU 2017-12) • ASU No. 2018-15 “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract” Accounting Pronouncements Not Yet Adopted Retirement Benefits In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-14 “Compensation-Retirement Benefits-Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans” (ASU 2018-14), which modifies the disclosure requirements for defined benefit pension plans and other post retirement plans. ASU 2018-14 is effective for us in the first quarter of our fiscal year ending June 30, 2021. We are currently evaluating the impact of our pending adoption of ASU 2018-14 on our consolidated financial statements. Financial Instruments In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Losses (Topic 326)” and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, and ASU 2020-02 (collectively Topic 326). Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. Topic 326 is effective for us in our first quarter of our fiscal year ending June 30, 2021. Topic 326 must be adopted by applying a cumulative effect adjustment to retained earnings. We are currently evaluating Topic 326, including its potential impact to our process and controls. We believe the effect on our consolidated financial statements will largely depend on the composition and credit quality of our financial assets and the economic conditions at the time of adoption. |
Revenues | We recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer for future obligations to transfer products or services. Our deferred revenues primarily relate to customer support agreements which have been paid for by customers prior to the performance of those services. We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less. Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. We have determined that certain of our commission programs meet the requirements to be capitalized. Some commission programs are not subject to capitalization as the commission expense is paid and recognized as the related revenue is recognized. In assessing costs to obtain a contract, we apply a practical expedient that allows us to assess our incremental costs on a portfolio of contracts with similar characteristics instead of assessing the incremental costs on each individual contract. We do not expect the financial statement effects of applying this practical expedient to the portfolio of contracts to be materially different than if we were to apply the new standard to each individual contract. We pay commissions on the sale of new customer contracts as well as for renewals of existing contracts to the extent the renewals generate incremental revenue. Commissions paid on renewal contracts are limited to the incremental new revenue and therefore these payments are not commensurate with the commission paid on the original sale. We allocate commission costs to the performance obligations in an arrangement consistent with the allocation of the transaction price. Commissions allocated to the license performance obligation are expensed at the time the license revenue is recognized. Commissions allocated to professional service performance obligations are expensed as incurred, as these contracts are generally for one year or less and we apply a practical expedient to expense costs as incurred if the amortization period would have been one year or less. Commissions allocated to maintenance, managed services, on-going hosting arrangements or other recurring services, are capitalized and amortized consistent with the pattern of transfer to the customer of the services over the period expected to benefit from the commission payment. As commissions paid on renewals are not commensurate with the original sale, the period of benefit considers anticipated renewals. The benefit period is estimated to be approximately six years which is based on our customer contracts and the estimated life of our technology. Expenses for incremental costs associated with obtaining a contract are recorded within sales and marketing expense in the Condensed Consolidated Statements of Income . Our short term capitalized costs to obtain a contract are included in "Prepaid expenses and other assets", while our long-term capitalized costs to obtain a contract are included in "Other assets" on our Condensed Consolidated Balance Sheets In accordance with Accounting Standards Codification (ASC) Topic 606 "Revenue from Contracts with Customers" (Topic 606), we account for a customer contract when we obtain written approval, the contract is committed, the rights of the parties, including the payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is recognized when, or as, control of a promised product or service is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for our products and services (at its transaction price). Estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based on readily available information, which may include historical, current and forecasted information, taking into consideration the type of customer, the type of transaction and specific facts and circumstances of each arrangement. We report revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue producing transactions. We have four revenue streams: license, cloud services and subscriptions, customer support, and professional service and other. License revenue Our license revenue can be broadly categorized as perpetual licenses, term licenses and subscription licenses, all of which are deployed on the customer’s premises (on-premise). Perpetual licenses: We sell perpetual licenses which provide customers the right to use software for an indefinite period of time in exchange for a one-time license fee, which is generally paid at contract inception. Our perpetual licenses provide a right to use intellectual property (IP) that is functional in nature and have significant stand-alone functionality. Accordingly, for perpetual licenses of functional IP, revenue is recognized at the point-in-time when control has been transferred to the customer, which normally occurs once software activation keys have been made available for download. Term licenses and Subscription licenses: We sell both term and subscription licenses which provide customers the right to use software for a specified period in exchange for a fee, which may be paid at contract inception or paid in installments over the period of the contract. Like perpetual licenses, both our term licenses and subscription licenses are functional IP that have significant stand-alone functionality. Accordingly, for both term and subscription licenses, revenue is recognized at the point-in-time when the customer is able to use and benefit from the software, which is normally once software activation keys have been made available for download at the commencement of the term. Cloud services and subscriptions revenue Cloud services and subscriptions revenue are from hosting arrangements where in connection with the licensing of software, the end user does not take possession of the software, as well as from end-to-end fully outsourced business-to-business (B2B) integration solutions to our customers (collectively referred to as cloud arrangements). The software application resides on our hardware or that of a third party, and the customer accesses and uses the software on an as-needed basis. Our cloud arrangements can be broadly categorized as "platform as a service" (PaaS), "software as a service" (SaaS), cloud subscriptions and managed services. PaaS/ SaaS/ Cloud Subscriptions (collectively referred to here as cloud-based solutions): We offer cloud-based solutions that provide customers the right to access our software through the internet. Our cloud-based solutions represent a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. These services are made available to the customer continuously throughout the contractual period, however, the extent to which the customer uses the services may vary at the customer’s discretion. The payment for cloud-based solutions may be received either at inception of the arrangement, or over the term of the arrangement. These cloud-based solutions are considered to have a single performance obligation where the customer simultaneously receives and consumes the benefit, and as such we recognize revenue for these cloud-based solutions ratably over the term of the contractual agreement. For example, revenue related to cloud-based solutions that are provided on a usage basis, such as the number of users, is recognized based on a customer’s utilization of the services in a given period. Additionally, a software license is present in a cloud-based solutions arrangement if all of the following criteria are met: (i) The customer has the contractual right to take possession of the software at any time without significant penalty; and (ii) It is feasible for the customer to host the software independent of us. In these cases where a software license is present in a cloud-based solutions arrangement it is assessed to determine if it is distinct from the cloud-based solutions arrangement. The revenue allocated to the distinct software license would be recognized at the point in time the software license is transferred to the customer, whereas the revenue allocated to the hosting performance obligation would be recognized ratably on a monthly basis over the contractual term unless evidence suggests that revenue is earned, or obligations are fulfilled in a different pattern over the contractual term of the arrangement. Managed services: We provide comprehensive B2B process outsourcing services for all day-to-day operations of a customers’ B2B integration program. Customers using these managed services are not permitted to take possession of our software and the contract is for a defined period, where customers pay a monthly or quarterly fee. Our performance obligation is satisfied as we provide services of operating and managing a customer's electronic data interchange (EDI) environment. Revenue relating to these services is recognized using an output method based on the expected level of service we will provide over the term of the contract. In connection with cloud subscription and managed service contracts, we often agree to perform a variety of services before the customer goes live, such as for example, converting and migrating customer data, building interfaces and providing training. These services are considered an outsourced suite of professional services which can involve certain project-based activities. These services can be provided at the initiation of a contract, during the implementation or on an ongoing basis as part of the customer life cycle. These services can be charged separately on a fixed fee or time and materials basis, or the costs associated may be recovered as part of the ongoing cloud subscription or managed services fee. These outsourced professional services are considered to be distinct from the ongoing hosting services and represent a separate performance obligation within our cloud subscription or managed services arrangements. The obligation to provide outsourced professional services is satisfied over time, with the customer simultaneously receiving and consuming the benefits as we satisfy our performance obligations. For outsourced professional services, we recognize revenue by measuring progress toward the satisfaction of our performance obligation. Progress for services that are contracted for a fixed price is generally measured based on hours incurred as a portion of total estimated hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we recognize revenue at that amount. Customer support revenue Customer support revenue is associated with perpetual, term license and on-premise subscription arrangements. As customer support is not critical to the customer's ability to derive benefit from its right to use our software, customer support is considered as a distinct performance obligation when sold together in a bundled arrangement along with the software. Customer support consists primarily of technical support and the provision of unspecified updates and upgrades on a when-and-if-available basis. Customer support for perpetual licenses is renewable, generally on an annual basis, at the option of the customer. Customer support for term and subscription licenses is renewable concurrently with such licenses for the same duration of time. Payments for customer support are generally made at the inception of the contract term or in installments over the term of the maintenance period. Our customer support team is ready to provide these maintenance services, as needed, to the customer during the contract term. As the elements of customer support are delivered concurrently and have the same pattern of transfer, customer support is accounted for as a single performance obligation. The customer benefits evenly throughout the contract period from the guarantee that the customer support resources and personnel will be available to them, and that any unspecified upgrades or unspecified future products developed by us will be made available. Revenue for customer support is recognized ratably over the contract period based on the start and end dates of the maintenance term, in line with how we believe services are provided. Professional service and other revenue Our professional services, when offered along with software licenses, consists primarily of technical services and training services. Technical services may include installation, customization, implementation or consulting services. Training services may include access to online modules or delivering a training package customized to the customer’s needs. At the customer’s discretion, we may offer one, all, or a mix of these services. Payment for professional services is generally a fixed fee or is a fee based on time and materials. Professional services can be arranged in the same contract as the software license or in a separate contract. As our professional services do not significantly change the functionality of the license and our customers can benefit from our professional services on their own or together with other readily available resources, we consider professional services as distinct within the context of the contract. Professional service revenue is recognized over time so long as: (i) the customer simultaneously receives and consumes the benefits as we perform them, (ii) our performance creates or enhances an asset the customer controls as we perform, and (iii) our performance does not create an asset with alternative use and we have enforceable right to payment. If all of the above criteria are met, we use an input-based measure of progress for recognizing professional service revenue. For example we may consider total labor hours incurred compared to total expected labor hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we will recognize revenue at that amount. Material rights To the extent that we grant our customer an option to acquire additional products or services in one of our arrangements, we will account for the option as a distinct performance obligation in the contract only if the option provides a material right to the customer that the customer would not receive without entering into the contract. For example if we give the customer an option to acquire additional goods or services in the future at a price that is significantly lower than the current price, this would be a material right as it allows the customer to, in effect, pay in advance for the option to purchase future products or services. If a material right exists in one of our contracts then revenue allocated to the option is deferred and we would recognize revenue only when those future products or services are transferred or when the option expires. Based on history, our contracts do not typically contain material rights and when they do, the material right is not significant to our consolidated financial statements. Arrangements with multiple performance obligations Our contracts generally contain more than one of the products and services listed above. Determining whether goods and services are considered distinct performance obligations that should be accounted for separately or as a single performance obligation may require judgment, specifically when assessing whether both of the following two criteria are met: • the customer can benefit from the product or service either on its own or together with other resources that are readily available to the customer; and • our promise to transfer the product or service to the customer is separately identifiable from other promises in the contract. If these criteria are not met, we determine an appropriate measure of progress based on the nature of our overall promise for the single performance obligation. If these criteria are met, each product or service is separately accounted for as a distinct performance obligation and the total transaction price is allocated to each performance obligation on a relative standalone selling price (SSP) basis. Standalone selling price The SSP reflects the price we would charge for a specific product or service if it was sold separately in similar circumstances and to similar customers. In most cases we are able to establish the SSP based on observable data. We typically establish a narrow SSP range for our products and services and assess this range on a periodic basis or when material changes in facts and circumstances warrant a review. If the SSP is not directly observable, then we estimate the amount using either the expected cost plus a margin or residual approach. Estimating SSP requires judgment that could impact the amount and timing of revenue recognized. SSP is a formal process whereby management considers multiple factors including, but not limited to, geographic or regional specific factors, competitive positioning, internal costs, profit objectives, and pricing practices. Transaction Price Allocation In bundled arrangements, where we have more than one distinct performance obligation, we must allocate the transaction price to each performance obligation based on its relative SSP. However, in certain bundled arrangements, the SSP may not always be directly observable. For instance, in bundled arrangements with license and customer support, we allocate the transaction price between the license and customer support performance obligations using the residual approach because we have determined that the SSP for licenses in these arrangements are highly variable. We use the residual approach only for our license arrangements. When the SSP is observable but contractual pricing does not fall within our established SSP range, then an adjustment is required and we will allocate the transaction price between license and customer support at a constant ratio reflecting the mid-point of the established SSP range. When two or more contracts are entered into at or near the same time with the same customer, we evaluate the facts and circumstances associated with the negotiation of those contracts. Where the contracts are negotiated as a package, we will account for them as a single arrangement and allocate the consideration for the combined contracts among the performance obligations accordingly. Sales to resellers We execute certain sales contracts through resellers, distributors and channel partners (collectively referred to as resellers). For these type of agreements, we assess whether we are considered the principal or the agent in the arrangement. We consider factors such as, but not limited to, whether or not the reseller has the ability to set the price for which they sell our software products to end users and whether or not resellers distribution rights are limited such that any potential sales are subject to OpenText’s review and approval before delivery of the software product can be made. If we determine that we are the principal in the arrangement, then revenue is recognized based on the transaction price for the sale of the software product to the end user at the gross amount. If that is not known, then the net amount received from the reseller is the transaction price. If we determine that we are the agent in the agreement, then revenue is recognized based on the transaction price for the sale of the software product to the reseller, less any applicable commissions paid or discounts or rebates, if offered. Costs or commissions paid to the reseller would be recognized as a reduction of revenue unless we received a distinct good or service in return. Similarly, any discounts or rebates offered by the reseller would be recognized as a reduction of revenue. Typically, we conclude that we are the principal in our reseller agreements, as we have control over the service and products prior to being transferred to the end customer. We also assess the creditworthiness of each reseller and if they are newly formed, undercapitalized or in financial difficulty, we defer any revenues expected to emanate from such reseller and recognize revenue only when cash is received, and all other revenue recognition criteria under Topic 606 are met. Rights of return and other incentives We do not generally offer rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore, do not provide for or make estimates of rights of return and similar incentives. However, we do offer consumers who purchase certain of our products on-line directly from us an unconditional full 70-days money-back guarantee. Distributors and resellers are also permitted to return the consumer products, subject to certain limitations. Revenue is reduced for such rights based on the estimate of future returns originating from contractual agreements with these customers. Additionally, in some contracts, however, discounts may be offered to the customer for future software purchases and other additional products or services. Such arrangements grant the customer an option to acquire additional goods or services in the future at a discount and therefore are evaluated under guidance related to “material rights” as discussed above. Other policies Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the invoice date. In certain arrangements, we will receive payment from a customer either before or after the performance obligation to which the invoice relates has been satisfied. As a practical expedient, we do not account for significant financing components if the period between when we transfer the promised good or service to the customer and when the customer pays for the product or service will be one year or less. On that basis, our contracts for license and maintenance typically do not contain a significant financing component, however, in determining the transaction price we consider whether we need to adjust the promised consideration for the effects of the time value of money if the timing of payments provides either the customer or OpenText with a significant benefit of financing. Our managed services contracts may not include an upfront charge for outsourced professional services performed as part of an implementation and are recovered through an ongoing fee. Therefore, these contracts may be expected to have a financing component associated with revenue being recognized in advance of billings. We may modify contracts to offer customers additional products or services. The additional products and services will be considered distinct from those products or services transferred to the customer before the modification and will be accounted for as a separate contract. We evaluate whether the price for the additional products and services reflects the SSP adjusted as appropriate for facts and circumstances applicable to that contract. In determining whether an adjustment is appropriate, we evaluate whether the incremental consideration is consistent with the prices previously paid by the customer or similar customers. Certain of our subscription services and product support arrangements generally contain performance response time guarantees. For subscription services arrangements, we estimate variable consideration using a portfolio approach because performance penalties are tied to standard response time requirements. For product support arrangements, we estimate variable consideration on a contract basis because such arrangements are customer-specific. For both subscription services and product support arrangements, we use an expected value approach to estimate variable consideration based on historical business practices and current and future performance expectations to determine the likelihood of incurring penalties. Performance Obligations A summary of our typical performance obligations and when the obligations are satisfied are as follows: Performance Obligation When Performance Obligation is Typically Satisfied License revenue: Software licenses (Perpetual,Term, Subscription) When software activation keys have been made available for download (point in time) Cloud services and subscriptions revenue: Outsourced Professional Services As the services are provided (over time) Managed Services / Ongoing Hosting / SaaS Over the contract term, beginning on the date that service is made available (i.e. "Go live") to the customer (over time) Customer support revenue: When and if available updates and upgrades and technical support Ratable over the course of the service term (over time) Professional service and other revenue: Professional services As the services are provided (over time) Contract Balances A contract asset will be recorded if we have recognized revenue but do not have an unconditional right to the related consideration from the customer. For example, this will be the case if implementation services offered in a cloud arrangement are identified as a separate performance obligation and are provided to a customer prior to us being able to bill the customer. In addition, a contract asset may arise in relation to subscription licenses if the license revenue that is recognized upfront exceeds the amount that we are able to invoice the customer at that time. Contract assets are reclassified to accounts receivable when the rights become unconditional. |
Leases | We account for a contract as a lease when we have the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. We determine the initial classification and measurement of our right of use (ROU) assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets represent our right to control the underlying assets under lease, and the lease liability is our obligation to make the lease payments related to the underlying assets under lease, over the contractual term. ROU assets and lease liabilities are recognized on the Condensed Consolidated Balance Sheets based on the present value of future minimum lease payments to be made over the lease term. When available, we will use the rate implicit in the lease to discount lease payments to present value. However, real estate leases generally do not provide a readily determinable implicit rate, therefore, we must estimate our incremental borrowing rate to discount the lease payments. We estimate our incremental borrowing rate based on a collateralized basis with similar terms and payments, in an economic environment where the leased asset is located. The ROU asset equals the lease liability, adjusted for any initial direct costs, prepaid rent and lease incentives. Fixed lease costs are included in the recognition of ROU assets and lease liabilities. Variable lease costs are not included in the measurement of the lease liability. These variable lease payments are recognized in the Condensed Consolidated Statements of Income in the period in which the obligation for those payments is incurred. Consistent with previous lease accounting rules under ASC Topic 840, lease expense for minimum lease payments continue to be recognized in the Condensed Consolidated Statements of Income on a straight-line basis over the lease term. We have not elected the practical expedient to combine lease and non-lease components in the determination of lease costs for our facility leases. For all other asset classes, we have elected the practical expedient to combine the lease and the non-lease components. The lease liability includes lease payments related to options to extend or renew the lease term only if we are reasonably certain we will exercise those options. Our leases typically do not contain any material residual value guarantees or restrictive covenants. In certain circumstances, we sublease all or a portion of a leased facility, to various other companies through a sublease agreement. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | A summary of our typical performance obligations and when the obligations are satisfied are as follows: Performance Obligation When Performance Obligation is Typically Satisfied License revenue: Software licenses (Perpetual,Term, Subscription) When software activation keys have been made available for download (point in time) Cloud services and subscriptions revenue: Outsourced Professional Services As the services are provided (over time) Managed Services / Ongoing Hosting / SaaS Over the contract term, beginning on the date that service is made available (i.e. "Go live") to the customer (over time) Customer support revenue: When and if available updates and upgrades and technical support Ratable over the course of the service term (over time) Professional service and other revenue: Professional services As the services are provided (over time) |
Disaggregation of Revenue | The following table disaggregates our revenue by significant geographic area, based on the location of our end customer, and by type of performance obligation and timing of revenue recognition for the periods indicated: Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Total Revenues by Geography: Americas (1) $ 509,778 $ 436,873 $ 1,380,179 $ 1,246,909 EMEA (2) 240,529 216,287 702,964 674,699 Asia Pacific (3) 64,372 65,986 199,981 199,926 Total Revenues $ 814,679 $ 719,146 $ 2,283,124 $ 2,121,534 Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Total Revenues by Type of Performance Obligation: Recurring revenue (4) Cloud services and subscriptions revenue $ 339,463 $ 238,607 $ 825,068 $ 665,923 Customer support revenue 322,865 310,762 950,671 932,667 Total recurring revenues $ 662,328 $ 549,369 $ 1,775,739 $ 1,598,590 License revenue (perpetual, term and subscriptions) 81,055 98,721 297,048 308,364 Professional service and other revenue 71,296 71,056 210,337 214,580 Total revenues $ 814,679 $ 719,146 $ 2,283,124 $ 2,121,534 Total Revenues by Timing of Revenue Recognition Point in time $ 81,055 $ 98,721 $ 297,048 $ 308,364 Over time (including professional service and other revenue) 733,624 620,425 1,986,076 1,813,170 Total revenues $ 814,679 $ 719,146 $ 2,283,124 $ 2,121,534 (1) Americas consists of countries in North, Central and South America. (2) EMEA primarily consists of countries in Europe, the Middle East and Africa. (3) Asia Pacific primarily consists of the countries Japan, Australia, China, Korea, Philippines, Singapore and New Zealand. (4) Recurring revenue is defined as the sum of cloud services and subscriptions revenue and customer support revenue. |
Contract Balances | The balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows: As of March 31, 2020 As of June 30, 2019 Short-term contract assets $ 27,057 $ 20,956 Long-term contract assets $ 14,225 $ 15,386 Short-term deferred revenue $ 819,273 $ 641,656 Long-term deferred revenue $ 92,341 $ 46,974 |
Incremental Costs of Obtaining a Contract with a Customer | The following table summarizes the changes in total capitalized costs since June 30, 2019 : Capitalized costs to obtain a contract as of June 30, 2019 $ 48,284 New capitalized costs incurred 19,207 Amortization of capitalized costs (12,106 ) Adjustments on account of foreign exchange (1,357 ) Capitalized costs to obtain a contract as of March 31, 2020 $ 54,028 |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Changes in Carrying Amount of Allowance For Doubtful Accounts | Balance as of June 30, 2019 $ 17,011 Bad debt expense 6,444 Write-off /adjustments (5,154 ) Balance as of March 31, 2020 $ 18,301 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment by Type | As of March 31, 2020 Cost Accumulated Depreciation Net Furniture and fixtures $ 43,856 $ (30,054 ) $ 13,802 Office equipment 2,231 (1,263 ) 968 Computer hardware 286,077 (189,986 ) 96,091 Computer software 124,804 (98,898 ) 25,906 Capitalized software development costs 106,500 (66,297 ) 40,203 Leasehold improvements 123,314 (75,973 ) 47,341 Land and buildings 49,563 (14,982 ) 34,581 Total $ 736,345 $ (477,453 ) $ 258,892 As of June 30, 2019 Cost Accumulated Depreciation Net Furniture and fixtures $ 40,260 $ (26,492 ) $ 13,768 Office equipment 1,993 (1,576 ) 417 Computer hardware 258,802 (177,402 ) 81,400 Computer software 119,018 (87,240 ) 31,778 Capitalized software development costs 95,729 (56,205 ) 39,524 Leasehold improvements 113,510 (66,520 ) 46,990 Land and buildings 49,557 (13,981 ) 35,576 Total $ 678,869 $ (429,416 ) $ 249,453 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lease Costs and Other Information | The following illustrates the various components of operating lease costs for the period indicated: Three Months Ended March 31, 2020 Nine Months Ended March 31, 2020 Operating lease cost $ 19,157 $ 51,259 Short-term lease cost 455 743 Variable lease cost 1,140 2,647 Sublease income (1,481 ) (4,618 ) Total lease cost $ 19,271 $ 50,031 The following table summarizes the weighted average remaining lease term and discount rate as of March 31, 2020 : Weighted-average remaining lease term 5.82 years Weighted-average discount rate 3.25 % Supplemental Cash Flow Information The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payment made for variable lease cost and short-term lease are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below: Three Months Ended March 31, 2020 Nine Months Ended March 31, 2020 Cash paid for amounts included in the measurement of operating lease liabilities: $ 17,926 $ 53,996 Right of use assets obtained in exchange for new operating lease liabilities (1) : $ 4,129 $ 15,964 |
Maturity of Lease Liabilities | The following table presents the future minimum lease payments under our operating leases liabilities as of March 31, 2020 : Fiscal years ending June 30, 2020 (three months ended June 30) $ 23,221 2021 68,819 2022 56,128 2023 41,905 2024 30,921 Thereafter 79,646 Total Lease payments $ 300,640 Less: Imputed interest (25,980 ) Total $ 274,660 Reported as Current operating lease liabilities 68,871 Non-current operating lease liabilities 205,789 Total $ 274,660 |
Maturity of Non-cancellable Operating Leases | The following table presents the future minimum lease payments under our operating leases, based on the expected due dates of the various agreements as of June 30, 2019, as previously reported in our Annual Report on Form 10-K for the year ended June 30, 2019, prior to the adoption of Topic 842: Fiscal years ending June 30, 2020 $ 72,853 2021 59,451 2022 46,943 2023 33,871 2024 25,570 Thereafter 80,163 Total minimum lease payments (1) $ 318,851 (1) Net of $30.7 million of sublease income to be received from properties which we have subleased to third parties. |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes In Carrying Amount of Goodwill | The following table summarizes the changes in goodwill since June 30, 2019: Balance as of June 30, 2019 $ 3,769,908 Acquisition of XMedius (note 19) 49,899 Acquisition of Carbonite (note 19) 868,365 Acquisition of The Fax Guys (note 19) 1,951 Adjustments relating to acquisitions prior to Fiscal 2020 that had open measurement periods (note 19) 1,476 Adjustments on account of foreign exchange (12,913 ) Balance as of March 31, 2020 $ 4,678,686 |
Acquired Intangible Assets (Tab
Acquired Intangible Assets (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Calculation of Acquired Intangibles by Asset Class | As of March 31, 2020 Cost Accumulated Amortization Net Technology assets $ 1,137,744 $ (495,257 ) $ 642,487 Customer assets 1,560,932 (471,638 ) 1,089,294 Total $ 2,698,676 $ (966,895 ) $ 1,731,781 As of June 30, 2019 Cost Accumulated Amortization Net Technology assets $ 835,498 $ (349,259 ) $ 486,239 Customer assets 1,397,937 (737,672 ) 660,265 Total $ 2,233,435 $ (1,086,931 ) $ 1,146,504 |
Calculation of Estimated Future Amortization Expense | The following table shows the estimated future amortization expense for the fiscal years indicated. This calculation assumes no future adjustments to acquired intangible assets: Fiscal years ending June 30, 2020 (three months ended June 30) $ 119,996 2021 435,005 2022 395,617 2023 310,451 2024 231,845 2025 and beyond 238,867 Total $ 1,731,781 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Components of Other Assets | As of March 31, 2020 As of June 30, 2019 Deposits and restricted cash $ 13,269 $ 13,671 Capitalized costs to obtain a contract 39,702 35,593 Investments 73,061 67,002 Long-term prepaid expenses and other long-term assets 45,075 32,711 Total $ 171,107 $ 148,977 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Current Liabilities | Accounts payable and accrued liabilities are comprised of the following: As of March 31, 2020 As of June 30, 2019 Accounts payable—trade $ 50,078 $ 46,323 Accrued salaries and commissions 127,106 131,430 Accrued liabilities (1) 114,275 117,551 Accrued interest on Senior Notes 25,246 24,786 Amounts payable in respect of restructuring and other Special charges (1) 3,884 8,153 Asset retirement obligations 4,301 1,660 Total $ 324,890 $ 329,903 |
Schedule of Long-Term Accrued Liabilities | As of March 31, 2020 As of June 30, 2019 Amounts payable in respect of restructuring and other Special charges (1) $ — $ 4,804 Other accrued liabilities (1) 2,049 30,338 Asset retirement obligations 12,585 14,299 Total $ 14,634 $ 49,441 (1) Previously, in Fiscal 2019, tenant allowances, deferred rent, lease fair value adjustments and amounts payable relating to restructured facilities were included in total accrued liabilities. Effective July 1, 2019, these balances were reclassified to operating lease right of use assets in accordance with the adoption of Topic 842. See note 1 "Basis of Presentation" and note 6 "Leases" for more information. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt is comprised of the following: As of March 31, 2020 As of June 30, 2019 Total debt Senior Notes 2030 $ 900,000 $ — Senior Notes 2028 900,000 — Senior Notes 2026 850,000 850,000 Senior Notes 2023 — 800,000 Term Loan B 980,000 987,500 Revolver 600,000 — Total principal payments due 4,230,000 2,637,500 Premium on Senior Notes 2026 4,921 5,405 Debt issuance costs (39,237 ) (28,027 ) Total amount outstanding 4,195,684 2,614,878 Less: Current portion of long-term debt Term Loan B 10,000 10,000 Revolver 600,000 — Total current portion of long-term debt 610,000 10,000 Non-current portion of long-term debt $ 3,585,684 $ 2,604,878 |
Pension Plans and Other Post _2
Pension Plans and Other Post Retirement Benefits (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Defined Benefit Plan and Long-Term Employee Benefit Obligations | The following table provides details of our defined benefit pension plans and long-term employee benefit obligations for Open Text Document Technologies GmbH (CDT), GXS GmbH ( GXS GER ), GXS Philippines, Inc. ( GXS PHP ) and other plans as of March 31, 2020 and June 30, 2019 : As of March 31, 2020 Total benefit obligation Current portion of benefit obligation* Non-current portion of benefit obligation CDT defined benefit plan $ 31,717 $ 700 $ 31,017 GXS GER defined benefit plan 22,144 959 21,185 GXS PHP defined benefit plan 8,155 141 8,014 Other plans 7,930 708 7,222 Total $ 69,946 $ 2,508 $ 67,438 As of June 30, 2019 Total benefit obligation Current portion of benefit obligation* Non-current portion of benefit obligation CDT defined benefit plan $ 35,836 $ 675 $ 35,161 GXS GER defined benefit plan 26,739 1,012 25,727 GXS PHP defined benefit plan 6,904 124 6,780 Other plans 8,052 481 7,571 Total $ 77,531 $ 2,292 $ 75,239 * The current portion of the benefit obligation has been included within "Accrued salaries and commissions", all within "Accounts payable and accrued liabilities" in the Condensed Consolidated Balance Sheets (see note 10 "Accounts Payable and Accrued Liabilities"). |
Schedule of the Change in the Benefit Obligation of Defined Benefit Plan | The following are the details of the change in the benefit obligation for each of the above mentioned pension plans for the periods indicated: As of March 31, 2020 As of June 30, 2019 CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Benefit obligation—beginning of fiscal year $ 35,836 $ 26,739 $ 6,904 $ 69,479 $ 32,651 $ 25,382 $ 3,853 $ 61,886 Service cost 426 237 914 1,577 550 566 771 1,887 Interest cost 341 250 265 856 642 489 300 1,431 Benefits paid (469 ) (693 ) (119 ) (1,281 ) (626 ) (996 ) (140 ) (1,762 ) Actuarial (gain) loss (2,575 ) (3,033 ) 125 (5,483 ) 3,365 1,872 1,957 7,194 Foreign exchange (gain) loss (1,842 ) (1,356 ) 66 (3,132 ) (746 ) (574 ) 163 (1,157 ) Benefit obligation—end of period 31,717 22,144 8,155 62,016 35,836 26,739 6,904 69,479 Less: Current portion (700 ) (959 ) (141 ) (1,800 ) (675 ) (1,012 ) (124 ) (1,811 ) Non-current portion of benefit obligation $ 31,017 $ 21,185 $ 8,014 $ 60,216 $ 35,161 $ 25,727 $ 6,780 $ 67,668 |
Components of Net Pension Expense for Pension Plan | The following are details of net pension expense relating to the following pension plans: Three Months Ended March 31, 2020 2019 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 140 $ 78 $ 305 $ 523 $ 136 $ 141 $ 185 $ 462 Interest cost 112 82 92 286 159 121 77 357 Amortization of actuarial (gains) and losses 234 61 (72 ) 223 173 32 (142 ) 63 Net pension expense $ 486 $ 221 $ 325 $ 1,032 $ 468 $ 294 $ 120 $ 882 Nine Months Ended March 31, 2020 2019 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 426 $ 237 $ 914 $ 1,577 $ 413 $ 426 $ 520 $ 1,359 Interest cost 341 250 265 856 483 368 217 1,068 Amortization of actuarial (gains) and losses 703 183 (215 ) 671 524 98 (421 ) 201 Net pension expense $ 1,470 $ 670 $ 964 $ 3,104 $ 1,420 $ 892 $ 316 $ 2,628 |
Schedule of Weighted-Average Key Assumptions Used for CDT Pension Plan | In determining the fair value of the pension plan benefit obligations as of March 31, 2020 and June 30, 2019 , respectively, we used the following weighted-average key assumptions: As of March 31, 2020 As of June 30, 2019 CDT GXS GER GXS PHP CDT GXS GER GXS PHP Assumptions: Salary increases 2.50% 2.50% 6.50% 2.50% 2.50% 6.50% Pension increases 2.00% 2.00% N/A 2.00% 2.00% N/A Discount rate 1.76% 1.76% 5.00% 1.32% 1.32% 5.00% Normal retirement age 65-67 65-67 60 65-67 65-67 60 Employee fluctuation rate: to age 20 —% —% 12.19% —% —% 12.19% to age 25 —% —% 16.58% —% —% 16.58% to age 30 1.00% —% 13.97% 1.00% —% 13.97% to age 35 0.50% —% 10.77% 0.50% —% 10.77% to age 40 —% —% 7.39% —% —% 7.39% to age 45 0.50% —% 3.28% 0.50% —% 3.28% to age 50 0.50% —% —% 0.50% —% —% from age 51 1.00% —% —% 1.00% —% —% |
Anticipated Pension Payments Under Pension Plan | Anticipated pension payments under the pension plans for the fiscal years indicated below are as follows: Fiscal years ending June 30, CDT GXS GER GXS PHP 2020 (three months ended June 30) $ 161 $ 240 $ 10 2021 719 959 264 2022 789 990 341 2023 885 990 244 2024 987 995 304 2025 to 2029 5,695 5,034 3,068 Total $ 9,236 $ 9,208 $ 4,231 |
Share Capital, Option Plans a_2
Share Capital, Option Plans and Share-Based Payments (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Share-based Compensation Costs | Total share-based compensation expense for the periods indicated below is detailed as follows: Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Stock options $ 2,143 $ 2,616 $ 6,820 $ 7,537 Performance Share Units (issued under LTIP) 1,515 879 4,436 2,573 Restricted Share Units (issued under LTIP) 1,478 1,687 4,447 4,698 Restricted Share Units (other) 64 36 84 169 Deferred Share Units (directors) 735 709 2,610 2,402 Employee Share Purchase Plan 921 785 3,133 2,773 Total share-based compensation expense $ 6,856 $ 6,712 $ 21,530 $ 20,152 |
Summary of Option Activity | A summary of activity under our stock option plans for the nine months ended March 31, 2020 is as follows: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000s) Outstanding at June 30, 2019 7,102,753 $ 31.82 Granted 2,301,230 42.57 Exercised (1,300,742 ) 26.73 Forfeited or expired (743,751 ) 32.96 Outstanding at March 31, 2020 7,359,490 $ 35.96 4.85 $ 15,496 Exercisable at March 31, 2020 2,137,643 $ 29.72 2.92 $ 11,953 |
Schedule of Weighted-Average Fair Value of Options and Weighted-Average Assumptions Used | For the periods indicated, the weighted-average fair value of options and weighted-average assumptions were as follows: Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Weighted–average fair value of options granted $ 7.28 $ 7.64 $ 6.95 $ 8.28 Weighted-average assumptions used: Expected volatility 21.80 % 25.60 % 21.92 % 25.92 % Risk–free interest rate 1.38 % 2.51 % 1.49 % 2.73 % Expected dividend yield 1.55 % 1.63 % 1.60 % 1.53 % Expected life (in years) 4.14 4.11 4.13 4.26 Forfeiture rate (based on historical rates) 7 % 6 % 7 % 6 % Average exercise share price $ 44.99 $ 37.24 $ 42.57 $ 38.16 |
Guarantees and Contingencies (T
Guarantees and Contingencies (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligations | We have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows: Payments due between Total April 1, 2020— July 1, 2020— July 1, 2022— July 1, 2024 Long-term debt obligations (1) $ 4,772,778 $ 35,776 $ 329,750 $ 328,478 $ 4,078,774 Purchase obligations for contracts not accounted for as lease obligations (2) 52,938 14,975 32,963 5,000 — $ 4,825,716 $ 50,751 $ 362,713 $ 333,478 $ 4,078,774 (1) Includes interest up to maturity and principal payments. Excludes $600 million currently drawn on the Revolver, which we expect to repay within one year. Please see note 11 "Long-Term Debt" for more details. (2) For contractual obligations relating to leases and purchase obligations accounted for under Topic 842, please see note 6 "Leases". |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Interest and Penalties Related to Liabilities for Income Tax Expense | For the three and nine months ended March 31, 2020 and 2019 , we recognized the following amounts as income tax-related interest expense and penalties: Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Interest expense (recoveries) $ 2,814 $ 2,823 $ 4,048 $ 7,430 Penalties expense (recoveries) 100 9 175 568 Total $ 2,914 $ 2,832 $ 4,223 $ 7,998 |
Interest Accrued and Penalties Accrued Related to Income Tax Expense | The following amounts have been accrued on account of income tax-related interest expense and penalties: As of March 31, 2020 As of June 30, 2019 Interest expense accrued * $ 68,707 $ 64,530 Penalties accrued * $ 2,580 $ 2,525 * These balances are primarily included within "Long-term income taxes payable" within the Condensed Consolidated Balance Sheets . |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Our financial assets and liabilities measured at fair value on a recurring basis consisted of the following types of instruments as of March 31, 2020 and June 30, 2019 : March 31, 2020 June 30, 2019 Fair Market Measurements using: Fair Market Measurements using: March 31, 2020 Quoted prices in active markets for identical assets/ (liabilities) Significant other observable inputs Significant unobservable inputs June 30, 2019 Quoted prices in active markets for identical assets/ (liabilities) Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3) Financial Assets: Foreign currency forward contracts designated as cash flow hedges (note 17) $ — N/A $ — N/A $ 736 N/A $ 736 N/A Financial Liabilities: Foreign currency forward contracts designated as cash flow hedges (note 17) $ (3,352 ) N/A $ (3,352 ) N/A $ — N/A $ — N/A |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets | The effect of these derivative instruments on our Condensed Consolidated Financial Statements for the periods indicated below were as follows (amounts presented do not include any income tax effects). Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets (see note 16 "Fair Value Measurement") As of March 31, 2020 As of June 30, 2019 Derivatives Balance Sheet Location Fair Value Fair Value Foreign currency forward contracts designated as cash flow hedges Prepaid expenses and other current assets (Accounts payable and accrued liabilities) $ (3,352 ) $ 736 |
Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) | Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) Three and Nine Months Ended March 31, 2020 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Location of Gain or (Loss) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Three Months Ended March 31, 2020 Nine Months Ended March 31, 2020 Three Months Ended March 31, 2020 Nine Months Ended March 31, 2020 Foreign currency forward contracts $ (4,815 ) $ (4,459 ) Operating expenses $ (458 ) $ (371 ) Three and Nine Months Ended March 31, 2019 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Location of Gain or (Loss) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Three Months Ended March 31, 2019 Nine Months Ended March 31, 2019 Three Months Ended March 31, 2019 Nine Months Ended March 31, 2019 Foreign currency forward contracts $ 837 $ (1,034 ) Operating expenses $ (470 ) $ (1,604 ) |
Special Charges (Recoveries) (T
Special Charges (Recoveries) (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve | Special charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition-related costs and other charges. Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Fiscal 2020 Restructuring Plan $ 5,899 $ — $ 5,899 $ — Fiscal 2019 Restructuring Plan (29 ) 667 1,650 26,906 Fiscal 2018 Restructuring Plan — 7 86 517 Restructuring Plans prior to Fiscal 2018 Restructuring Plan 50 (65 ) (232 ) 410 Acquisition-related costs 2,453 1,430 12,898 5,134 Other charges (recoveries) 1,033 (1,243 ) 4,278 520 Total $ 9,406 $ 796 $ 24,579 $ 33,487 |
Fiscal 2020 Restructuring Plan | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve | A reconciliation of the beginning and ending restructuring liability, which is included within "Accounts payable and accrued liabilities" in our Condensed Consolidated Balance Sheets, for the nine months ended March 31, 2020 is shown below. Fiscal 2020 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2019 $ — $ — $ — Accruals and adjustments 5,505 394 5,899 Cash payments (2,295 ) (36 ) (2,331 ) Foreign exchange and other non-cash adjustments (166 ) (94 ) (260 ) Balance payable as at March 31, 2020 $ 3,044 $ 264 $ 3,308 |
Fiscal 2019 Restructuring Plan | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve | A reconciliation of the beginning and ending liability for the nine months ended March 31, 2020 is shown below. Fiscal 2019 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2019 $ 1,819 $ 5,288 $ 7,107 Adjustment for Topic 842 (note 1 and note 6) — (5,288 ) (5,288 ) Accruals and adjustments 560 1,090 1,650 Cash payments (1,637 ) (1,090 ) (2,727 ) Foreign exchange and other non-cash adjustments (249 ) — (249 ) Balance payable as at March 31, 2020 $ 493 $ — $ 493 |
Fiscal 2018 Restructuring Plan | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve | A reconciliation of the beginning and ending liability for the nine months ended March 31, 2020 is shown below. Fiscal 2018 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2019 $ 150 $ 486 $ 636 Adjustment for Topic 842 (note 1 and note 6) — (486 ) (486 ) Accruals and adjustments (62 ) 148 86 Cash payments (39 ) (148 ) (187 ) Foreign exchange and other non-cash adjustments (10 ) — (10 ) Balance payable as at March 31, 2020 $ 39 $ — $ 39 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
XMedius | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of March 9, 2020 , are set forth below: Current assets $ 8,433 Non-current tangible assets 3,792 Intangible customer assets 35,910 Intangible technology assets 11,143 Liabilities assumed (35,842 ) Total identifiable net assets 23,436 Goodwill 49,899 Net assets acquired $ 73,335 |
Carbonite | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of December 24, 2019 , are set forth below: Current assets (inclusive of cash acquired of $62.9 million) $ 129,779 Non-current tangible assets (inclusive of restricted cash acquired of $2.4 million) 102,936 Intangible customer assets 549,000 Intangible technology assets 291,000 Liabilities assumed (570,656 ) Total identifiable net assets 502,059 Goodwill 868,365 Net assets acquired $ 1,370,424 |
Schedule of Unaudited Pro Forma Information | The amount of Carbonite's revenues and net loss included in our Condensed Consolidated Statements of Income for the three and nine months ended March 31, 2020 is set forth below: January 1, 2020 - March 31, 2020 December 24, 2019 - March 31, 2020 Revenues $ 110,351 $ 119,862 Net Loss * (27,877 ) (31,531 ) * Net loss for the three and nine months ended includes one-time fees of approximately $2.8 million and $5.4 million , respectively, on account of special charges and $48.0 million and $52.2 million , respectively, of amortization charges relating to intangible assets, all net of tax. The unaudited pro forma revenues and net income of the combined entity for the three and nine months ended March 31, 2020 and 2019 , respectively, had the acquisition been consummated on July 1, 2018, are set forth below: Three Months Ended March 31, Nine Months Ended March 31, Supplemental Unaudited Pro Forma Information (1) 2019 2020 2019 Total Revenues $ 800,361 $ 2,524,726 $ 2,357,397 Net Income (2) (3) 44,984 134,778 35,236 (1) Carbonite acquired Webroot Inc. in March 2019. The supplemental pro forma revenues and net income shown above do not include the results of operations of Webroot Inc. for periods prior to the Webroot acquisition date. (2) Included in pro forma net income for the nine months ended March 31, 2019 are approximately $127 million of one-time expenses incurred by Carbonite on account of the acquisition and the related tax effect of approximately $33 million . These one-time expenses included i) approximately $74 million related to the accelerated vesting of historical Carbonite equity awards, ii) approximately $29 million of one time fees, primarily related to transaction costs triggered by the closing of the acquisition, iii) $21 million related to the extinguishment of certain of Carbonite's historical debt and interest rate swaps and iv) approximately $3 million in employee severance costs. (3) Included in pro forma net income for the nine months ended March 31, 2020 and three and nine months ended March 31, 2019 are estimated amortization charges relating to the allocated value of intangible assets. |
Catalyst Repository Systems Inc | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of January 31, 2019 , are set forth below: Current assets $ 9,699 Non-current tangible assets 5,754 Intangible customer assets 30,607 Intangible technology assets 11,658 Liabilities assumed (17,891 ) Total identifiable net assets 39,827 Goodwill 31,607 Net assets acquired $ 71,434 |
Liaison Technologies Inc. | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of December 17, 2018 , are set forth below: Current assets $ 23,006 Non-current tangible assets 5,168 Intangible customer assets 68,300 Intangible technology assets 107,000 Liabilities assumed (57,265 ) Total identifiable net assets 146,209 Goodwill 164,434 Net assets acquired $ 310,643 |
Supplemental Cash Flow Disclo_2
Supplemental Cash Flow Disclosures (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosure of Cash Flow Information | Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Cash paid during the period for interest $ 43,657 $ 33,585 $ 111,786 $ 102,348 Cash received during the period for interest $ 2,743 $ 987 $ 10,166 $ 4,346 Cash paid during the period for income taxes $ 42,509 $ 26,190 $ 75,881 $ 66,002 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Income (Expense), Net | Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Foreign exchange gains (losses) $ (5,766 ) $ 2,033 $ (9,073 ) $ (4,124 ) OpenText share in net income of equity investees (note 9) 4,527 2,789 6,475 10,652 Loss on debt extinguishment (1) (17,854 ) — (17,854 ) — Other miscellaneous income (expense) 170 243 716 437 Total other income (expense), net $ (18,923 ) $ 5,065 $ (19,736 ) $ 6,965 (1) On March 5, 2020 we redeemed Senior Notes 2023 in full, which resulted in a loss on extinguishment of debt of approximately $17.9 million . Of this, approximately $6.7 million relates to unamortized debt issuance costs and the remaining $11.2 million relates to the early termination call premium. See note 11 "Long-Term Debt". |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Basic earnings per share Net income attributable to OpenText $ 25,965 $ 72,762 $ 207,833 $ 213,518 Basic earnings per share attributable to OpenText $ 0.10 $ 0.27 $ 0.77 $ 0.80 Diluted earnings per share Net income attributable to OpenText $ 25,965 $ 72,762 $ 207,833 $ 213,518 Diluted earnings per share attributable to OpenText $ 0.10 $ 0.27 $ 0.77 $ 0.79 Weighted-average number of shares outstanding (in 000's) Basic 271,221 268,991 270,559 268,511 Effect of dilutive securities 981 1,039 1,084 1,095 Diluted 272,202 270,030 271,643 269,606 Excluded as anti-dilutive (1) 3,361 2,928 2,681 2,643 (1) Represents options to purchase Common Shares excluded from the calculation of diluted earnings per share because the exercise price of the stock options was greater than or equal to the average price of the Common Shares during the period. |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) | Mar. 31, 2020 |
OT South Africa | |
Noncontrolling Interest [Line Items] | |
Ownership percentage by Open Text | 70.00% |
GXS Singapore | |
Noncontrolling Interest [Line Items] | |
Ownership percentage by Open Text | 81.00% |
Basis of Presentation - Lease (
Basis of Presentation - Lease (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jul. 01, 2019 | Jun. 30, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase in operating lease right of use assets | $ 243,611 | ||
Increase in operating lease liabilities | 274,660 | ||
Decrease in prepaid expenses and other current assets | (112,073) | $ (97,238) | |
Decrease in other assets | $ (171,107) | $ (148,977) | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase in operating lease right of use assets | $ 217,500 | ||
Increase in operating lease liabilities | 253,500 | ||
Decrease in prepaid expenses and other current assets | 6,600 | ||
Decrease in other assets | 200 | ||
Decrease in total accrued liabilities | $ 42,800 |
Revenues - Additional Informati
Revenues - Additional Information (Details) | 9 Months Ended |
Mar. 31, 2020revenue_stream | |
Revenue from Contract with Customer [Abstract] | |
Number of revenue streams | 4 |
Disaggregation of Revenue [Line Items] | |
Right of return period | 70 days |
Description of timing | As a practical expedient, we do not account for significant financing components if the period between when we transfer the promised good or service to the customer and when the customer pays for the product or service will be one year or less.We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less. |
Minimum | |
Disaggregation of Revenue [Line Items] | |
Payment period | 30 days |
Maximum | |
Disaggregation of Revenue [Line Items] | |
Payment period | 60 days |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 814,679 | $ 719,146 | $ 2,283,124 | $ 2,121,534 |
Point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 81,055 | 98,721 | 297,048 | 308,364 |
Over time (including professional service and other revenue) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 733,624 | 620,425 | 1,986,076 | 1,813,170 |
Recurring revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 662,328 | 549,369 | 1,775,739 | 1,598,590 |
Cloud services and subscriptions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 339,463 | 238,607 | 825,068 | 665,923 |
Customer support revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 322,865 | 310,762 | 950,671 | 932,667 |
License revenue (perpetual, term and subscriptions) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 81,055 | 98,721 | 297,048 | 308,364 |
Professional service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 71,296 | 71,056 | 210,337 | 214,580 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 509,778 | 436,873 | 1,380,179 | 1,246,909 |
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 240,529 | 216,287 | 702,964 | 674,699 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 64,372 | $ 65,986 | $ 199,981 | $ 199,926 |
Revenues - Contract Balances (D
Revenues - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Short-term contract assets | $ 27,057 | $ 27,057 | $ 20,956 |
Long-term contract assets | 14,225 | 14,225 | 15,386 |
Short-term deferred revenue | 819,273 | 819,273 | 641,656 |
Long-term deferred revenue | 92,341 | 92,341 | $ 46,974 |
Contract assets reclassified to receivables | 23,500 | ||
Asset impairment | $ 0 | 0 | |
Revenue recognized | $ 591,000 |
Revenues - Incremental Costs of
Revenues - Incremental Costs of Obtaining a Contract with a Customer (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020USD ($) | Mar. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Capitalized contract cost, amortization period | 6 years | 6 years |
Capitalized Contract Cost [Roll Forward] | ||
Capitalized costs to obtain a contract as of June 30, 2019 | $ 48,284 | |
New capitalized costs incurred | 19,207 | |
Amortization of capitalized costs | (12,106) | |
Adjustments on account of foreign exchange | (1,357) | |
Capitalized costs to obtain a contract as of March 31, 2020 | $ 54,028 | 54,028 |
Impairment loss | $ 0 | $ 0 |
Revenues - Transaction Price Al
Revenues - Transaction Price Allocated to the Remaining Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 $ in Billions | Mar. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 1.3 |
Revenue, remaining performance obligation, percentage | 50.00% |
Expected timing of satisfaction, period | 12 months |
Allowance for Doubtful Accoun_3
Allowance for Doubtful Accounts - Changes In Carrying Amount (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance as of beginning of the period | $ 17,011 | |
Bad debt expense | 6,444 | |
Write-off /adjustments | (5,154) | |
Balance as of end of the period | 18,301 | |
Unbilled receivables | $ 59,400 | $ 56,100 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 736,345 | $ 678,869 |
Accumulated Depreciation | (477,453) | (429,416) |
Net | 258,892 | 249,453 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 43,856 | 40,260 |
Accumulated Depreciation | (30,054) | (26,492) |
Net | 13,802 | 13,768 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 2,231 | 1,993 |
Accumulated Depreciation | (1,263) | (1,576) |
Net | 968 | 417 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 286,077 | 258,802 |
Accumulated Depreciation | (189,986) | (177,402) |
Net | 96,091 | 81,400 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 124,804 | 119,018 |
Accumulated Depreciation | (98,898) | (87,240) |
Net | 25,906 | 31,778 |
Capitalized software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 106,500 | 95,729 |
Accumulated Depreciation | (66,297) | (56,205) |
Net | 40,203 | 39,524 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 123,314 | 113,510 |
Accumulated Depreciation | (75,973) | (66,520) |
Net | 47,341 | 46,990 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 49,563 | 49,557 |
Accumulated Depreciation | (14,982) | (13,981) |
Net | $ 34,581 | $ 35,576 |
Leases - Additional Information
Leases - Additional Information (Details) | Mar. 31, 2020 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating leases, term of contract | 1 year |
Operating leases, term of extension option | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating leases, term of contract | 10 years |
Operating leases, term of extension option | 5 years |
Land | |
Lessee, Lease, Description [Line Items] | |
Operating leases, term of contract | 49 years |
Operating leases, term of extension option | 49 years |
Leases - Lease Costs and Other
Leases - Lease Costs and Other Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020USD ($) | Mar. 31, 2020USD ($) | |
Business Acquisition [Line Items] | ||
Operating lease cost | $ 19,157 | $ 51,259 |
Short-term lease cost | 455 | 743 |
Variable lease cost | 1,140 | 2,647 |
Sublease income | (1,481) | (4,618) |
Total lease cost | $ 19,271 | $ 50,031 |
Weighted-average remaining lease term | 5 years 9 months 25 days | 5 years 9 months 25 days |
Weighted-average discount rate | 3.25% | 3.25% |
Supplemental Cash Flow Information | ||
Cash paid for amounts included in the measurement of operating lease liabilities: | $ 17,926 | $ 53,996 |
Right of use assets obtained in exchange for new operating lease liabilities: | 4,129 | 15,964 |
Carbonite | ||
Supplemental Cash Flow Information | ||
ROU assets acquired | 60,100 | 60,100 |
XMedius | ||
Supplemental Cash Flow Information | ||
ROU assets acquired | $ 2,900 | $ 2,900 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Leases [Abstract] | ||
2020 (three months ended June 30) | $ 23,221 | |
2021 | 68,819 | |
2022 | 56,128 | |
2023 | 41,905 | |
2024 | 30,921 | |
Thereafter | 79,646 | |
Total Lease payments | 300,640 | |
Less: Imputed interest | (25,980) | |
Total | 274,660 | |
Reported as | ||
Current operating lease liabilities | 68,871 | |
Non-current operating lease liabilities | 205,789 | |
Sublease income to be received remainder of fiscal year | 1,800 | |
Sublease income to be received after fiscal year | $ 27,100 | |
Previously reported as | ||
2020 | $ 72,853 | |
2021 | 59,451 | |
2022 | 46,943 | |
2023 | 33,871 | |
2024 | 25,570 | |
Thereafter | 80,163 | |
Total | 318,851 | |
Sublease income to be received from properties | $ 30,700 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 3,769,908 |
Adjustments relating to acquisitions prior to Fiscal 2020 that had open measurement periods (note 19) | 1,476 |
Adjustments on account of foreign exchange | (12,913) |
Ending balance | 4,678,686 |
XMedius | |
Goodwill [Roll Forward] | |
Acquisitions | 49,899 |
Carbonite | |
Goodwill [Roll Forward] | |
Acquisitions | 868,365 |
The Fax Guys | |
Goodwill [Roll Forward] | |
Acquisitions | $ 1,951 |
Acquired Intangible Assets - Ca
Acquired Intangible Assets - Calculation Of Acquired Intangibles By Asset Class (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 2,698,676 | $ 2,233,435 |
Accumulated Amortization | (966,895) | (1,086,931) |
Total | 1,731,781 | 1,146,504 |
Technology assets | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | 1,137,744 | 835,498 |
Accumulated Amortization | (495,257) | (349,259) |
Total | $ 642,487 | 486,239 |
Weighted-average amortization period (in years) for acquired intangible assets | 5 years | |
Customer assets | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 1,560,932 | 1,397,937 |
Accumulated Amortization | (471,638) | (737,672) |
Total | $ 1,089,294 | $ 660,265 |
Weighted-average amortization period (in years) for acquired intangible assets | 7 years | |
Reduction of intangible asset | $ 426,600 |
Acquired Intangible Assets - _2
Acquired Intangible Assets - Calculation Of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 (three months ended June 30) | $ 119,996 | |
2021 | 435,005 | |
2022 | 395,617 | |
2023 | 310,451 | |
2024 | 231,845 | |
2025 and beyond | 238,867 | |
Total | $ 1,731,781 | $ 1,146,504 |
Other Assets - Schedule (Detail
Other Assets - Schedule (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Other Assets, Noncurrent Disclosure [Abstract] | ||
Deposits and restricted cash | $ 13,269 | $ 13,671 |
Capitalized costs to obtain a contract | 39,702 | 35,593 |
Investments | 73,061 | 67,002 |
Long-term prepaid expenses and other long-term assets | 45,075 | 32,711 |
Total other assets | $ 171,107 | $ 148,977 |
Other Assets - Additional Infor
Other Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
OpenText share in net income of equity investees (note 9) | $ 4,527 | $ 2,789 | $ 6,475 | $ 10,652 |
Minimum | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 4.00% | 4.00% | ||
Maximum | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 20.00% | 20.00% |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities - Schedule of Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable—trade | $ 50,078 | $ 46,323 |
Accrued salaries and commissions | 127,106 | 131,430 |
Accrued liabilities | 114,275 | 117,551 |
Accrued interest on Senior Notes | 25,246 | 24,786 |
Amounts payable in respect of restructuring and other Special charges(1) | 3,884 | 8,153 |
Asset retirement obligations | 4,301 | 1,660 |
Total | $ 324,890 | $ 329,903 |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Liabilities - Schedule of Long-Term Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Amounts payable in respect of restructuring and other Special charges | $ 0 | $ 4,804 |
Other accrued liabilities | 2,049 | 30,338 |
Asset retirement obligations | 12,585 | 14,299 |
Total | $ 14,634 | $ 49,441 |
Accounts Payable and Accrued _5
Accounts Payable and Accrued Liabilities - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Jun. 30, 2019 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Present value of asset retirement obligation | $ 16.9 | $ 16 |
Undiscounted value of asset retirement obligation | $ 18.4 | $ 17.6 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 |
Debt Instrument [Line Items] | |||
Total principal payments due | $ 4,230,000,000 | $ 2,637,500,000 | |
Premium on notes | 4,921,000 | 5,405,000 | |
Debt issuance costs | (39,237,000) | (28,027,000) | |
Total amount outstanding | 4,195,684,000 | 2,614,878,000 | |
Less: | |||
Current portion of long-term debt (note 11) | 610,000,000 | 10,000,000 | |
Non-current portion of long-term debt | 3,585,684,000 | 2,604,878,000 | |
Term Loan B | |||
Debt Instrument [Line Items] | |||
Total principal payments due | 980,000,000 | 987,500,000 | |
Less: | |||
Current portion of long-term debt (note 11) | 10,000,000 | 10,000,000 | |
Senior Notes | Senior Notes 2030 | |||
Debt Instrument [Line Items] | |||
Total principal payments due | 900,000,000 | 0 | |
Senior Notes | Senior Notes 2028 | |||
Debt Instrument [Line Items] | |||
Total principal payments due | 900,000,000 | 0 | |
Senior Notes | Senior Notes 2026 | |||
Debt Instrument [Line Items] | |||
Total principal payments due | 850,000,000 | 850,000,000 | |
Senior Notes | Senior Notes 2023 | |||
Debt Instrument [Line Items] | |||
Total principal payments due | 0 | 800,000,000 | |
Revolver | Line of Credit | |||
Debt Instrument [Line Items] | |||
Total principal payments due | 600,000,000 | 0 | $ 0 |
Less: | |||
Current portion of long-term debt (note 11) | $ 600,000,000 | $ 0 |
Long-Term Debt - Senior Unsecur
Long-Term Debt - Senior Unsecured Fixed Rate Notes (Details) - USD ($) | Mar. 05, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Feb. 18, 2020 | Jun. 30, 2019 | Dec. 20, 2016 | May 31, 2016 | Jan. 15, 2015 |
Debt Instrument [Line Items] | ||||||||||
Long-term debt | $ 4,230,000,000 | $ 4,230,000,000 | $ 2,637,500,000 | |||||||
Loss on extinguishment of debt | 17,854,000 | $ 0 | 17,854,000 | $ 0 | ||||||
Senior Notes | Senior Notes 2030 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | $ 900,000,000 | |||||||||
Debt instrument stated interest rate | 4.125% | |||||||||
Long-term debt | 900,000,000 | 900,000,000 | 0 | |||||||
Interest expense | 4,400,000 | |||||||||
Senior Notes | Senior Notes 2028 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | $ 900,000,000 | |||||||||
Debt instrument stated interest rate | 3.875% | |||||||||
Long-term debt | 900,000,000 | 900,000,000 | 0 | |||||||
Interest expense | 4,200,000 | |||||||||
Senior Notes | Senior Notes 2026 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | $ 250,000,000 | $ 600,000,000 | ||||||||
Debt instrument stated interest rate | 5.875% | |||||||||
Debt premium issue price percentage | 102.75% | |||||||||
Long-term debt | 850,000,000 | 850,000,000 | 850,000,000 | |||||||
Interest expense | 12,500,000 | 12,500,000 | 37,500,000 | 37,500,000 | ||||||
Senior Notes | Senior Notes 2023 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | $ 800,000,000 | |||||||||
Debt instrument stated interest rate | 5.625% | |||||||||
Long-term debt | 0 | 0 | $ 800,000,000 | |||||||
Interest expense | $ 8,100,000 | $ 11,200,000 | $ 30,600,000 | $ 33,700,000 | ||||||
Debt redeemed, percentage of principal amount | 101.406% | |||||||||
Loss on extinguishment of debt | $ 17,900,000 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Feb. 27, 2020USD ($) | Dec. 24, 2019USD ($)$ / shares | May 30, 2018USD ($) | Mar. 30, 2020USD ($) | Feb. 29, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Oct. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Apr. 04, 2017USD ($) | Jan. 16, 2014USD ($) |
Debt Instrument [Line Items] | ||||||||||||||
Long-term debt | $ 4,230,000,000 | $ 4,230,000,000 | $ 2,637,500,000 | |||||||||||
Revolver | Line of Credit | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Long-term debt | $ 600,000,000 | $ 0 | $ 600,000,000 | $ 0 | 0 | |||||||||
Effective interest rate percentage | 2.50% | 2.50% | ||||||||||||
Leverage ratio, compliance maximum | 4 | 4 | ||||||||||||
Leverage ratio | 2.3 | 2.3 | ||||||||||||
Interest expense | $ 3,700,000 | 0 | $ 4,300,000 | 0 | ||||||||||
Credit agreement, maximum capacity | 750,000,000 | 750,000,000 | $ 450,000,000 | |||||||||||
Proceeds from lines of credit | $ 600,000,000 | $ 750,000,000 | ||||||||||||
Repayment of line of credit | $ 750,000,000 | 750,000,000 | ||||||||||||
Remaining borrowing capacity | 150,000,000 | $ 150,000,000 | ||||||||||||
Revolver | Line of Credit | LIBOR | Minimum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest addition to floating rate | 1.25% | |||||||||||||
Revolver | Line of Credit | LIBOR | Maximum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest addition to floating rate | 1.75% | |||||||||||||
Notes due 2022 | Convertible Debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument face amount | $ 143,800,000 | |||||||||||||
Debt instrument stated interest rate | 2.50% | |||||||||||||
Incremental principal amount convertible | $ 1,000 | $ 1,000 | ||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 23 | |||||||||||||
Conversion rate increase | 7.7633 | |||||||||||||
Conversion rate | 46.4667 | |||||||||||||
Total converted per $1,000 Principal | $ 1,068.7341 | |||||||||||||
Long-term debt | 0 | $ 0 | ||||||||||||
Term Loan B | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument face amount | $ 1,000,000,000 | $ 800,000,000 | ||||||||||||
Long-term debt | $ 980,000,000 | $ 980,000,000 | $ 987,500,000 | |||||||||||
Proceeds from issuance of debt | $ 1,000,000,000 | |||||||||||||
Term loan period | 7 years | |||||||||||||
Term loan quarterly repayment as percentage of principal | 0.25% | |||||||||||||
Effective interest rate percentage | 3.35% | 3.35% | ||||||||||||
Leverage ratio, compliance maximum | 4 | 4 | ||||||||||||
Leverage ratio | 2.3 | 2.3 | ||||||||||||
Interest expense | $ 8,500,000 | $ 10,500,000 | $ 27,600,000 | $ 30,600,000 | ||||||||||
Term Loan B | LIBOR | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest addition to floating rate | 1.75% |
Pension Plans and Other Post _3
Pension Plans and Other Post Retirement Benefits - Schedule of Defined Benefit Plans and Long-Term Employee Benefit Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Assumptions: | ||
Total benefit obligation | $ 69,946 | $ 77,531 |
Current portion of benefit obligation | 2,508 | 2,292 |
Non-current portion of benefit obligation | 67,438 | 75,239 |
Pension Plan | CDT defined benefit plan | ||
Assumptions: | ||
Total benefit obligation | 31,717 | 35,836 |
Current portion of benefit obligation | 700 | 675 |
Non-current portion of benefit obligation | 31,017 | 35,161 |
Pension Plan | GXS GER defined benefit plan | ||
Assumptions: | ||
Total benefit obligation | 22,144 | 26,739 |
Current portion of benefit obligation | 959 | 1,012 |
Non-current portion of benefit obligation | 21,185 | 25,727 |
Pension Plan | GXS PHP defined benefit plan | ||
Assumptions: | ||
Total benefit obligation | 8,155 | 6,904 |
Current portion of benefit obligation | 141 | 124 |
Non-current portion of benefit obligation | 8,014 | 6,780 |
Other plans | ||
Assumptions: | ||
Total benefit obligation | 7,930 | 8,052 |
Current portion of benefit obligation | 708 | 481 |
Non-current portion of benefit obligation | $ 7,222 | $ 7,571 |
Pension Plans and Other Post _4
Pension Plans and Other Post Retirement Benefits - Additional Information (Details) - Pension Plan | 9 Months Ended |
Mar. 31, 2020USD ($) | |
CDT defined benefit plan | |
Assumptions: | |
Contributions made by employer to plan | $ 0 |
Amount to be amortized from accumulated other comprehensive income (loss) over the next fiscal year | 200,000 |
GXS GER defined benefit plan | |
Assumptions: | |
Contributions made by employer to plan | 0 |
Amount to be amortized from accumulated other comprehensive income (loss) over the next fiscal year | 100,000 |
GXS PHP defined benefit plan | |
Assumptions: | |
Contributions made by employer to plan | 0 |
Amount to be amortized from accumulated other comprehensive income (loss) over the next fiscal year | 100,000 |
Fair value of plan assets | $ 30,000 |
Pension Plans and Other Post _5
Pension Plans and Other Post Retirement Benefits - Schedule of the Change in Benefit Obligation (Details) - Pension Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||||
Benefit obligation—beginning of fiscal year | $ 69,479 | $ 61,886 | $ 61,886 | ||
Service cost | $ 523 | $ 462 | 1,577 | 1,359 | 1,887 |
Interest cost | 286 | 357 | 856 | 1,068 | 1,431 |
Benefits paid | (1,281) | (1,762) | |||
Actuarial (gain) loss | (5,483) | 7,194 | |||
Foreign exchange (gain) loss | (3,132) | (1,157) | |||
Benefit obligation—end of period | 62,016 | 62,016 | 69,479 | ||
Less: Current portion | (1,800) | (1,800) | (1,811) | ||
Non-current portion of benefit obligation | 60,216 | 60,216 | 67,668 | ||
CDT defined benefit plan | |||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||||
Benefit obligation—beginning of fiscal year | 35,836 | 32,651 | 32,651 | ||
Service cost | 140 | 136 | 426 | 413 | 550 |
Interest cost | 112 | 159 | 341 | 483 | 642 |
Benefits paid | (469) | (626) | |||
Actuarial (gain) loss | (2,575) | 3,365 | |||
Foreign exchange (gain) loss | (1,842) | (746) | |||
Benefit obligation—end of period | 31,717 | 31,717 | 35,836 | ||
Less: Current portion | (700) | (700) | (675) | ||
Non-current portion of benefit obligation | 31,017 | 31,017 | 35,161 | ||
GXS GER defined benefit plan | |||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||||
Benefit obligation—beginning of fiscal year | 26,739 | 25,382 | 25,382 | ||
Service cost | 78 | 141 | 237 | 426 | 566 |
Interest cost | 82 | 121 | 250 | 368 | 489 |
Benefits paid | (693) | (996) | |||
Actuarial (gain) loss | (3,033) | 1,872 | |||
Foreign exchange (gain) loss | (1,356) | (574) | |||
Benefit obligation—end of period | 22,144 | 22,144 | 26,739 | ||
Less: Current portion | (959) | (959) | (1,012) | ||
Non-current portion of benefit obligation | 21,185 | 21,185 | 25,727 | ||
GXS PHP defined benefit plan | |||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||||
Benefit obligation—beginning of fiscal year | 6,904 | 3,853 | 3,853 | ||
Service cost | 305 | 185 | 914 | 520 | 771 |
Interest cost | 92 | $ 77 | 265 | $ 217 | 300 |
Benefits paid | (119) | (140) | |||
Actuarial (gain) loss | 125 | 1,957 | |||
Foreign exchange (gain) loss | 66 | 163 | |||
Benefit obligation—end of period | 8,155 | 8,155 | 6,904 | ||
Less: Current portion | (141) | (141) | (124) | ||
Non-current portion of benefit obligation | $ 8,014 | $ 8,014 | $ 6,780 |
Pension Plans and Other Post _6
Pension Plans and Other Post Retirement Benefits - Components of Net Pension Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Assumptions: | |||||
Net pension expense | $ 4,323 | $ 3,412 | |||
Pension Plan | |||||
Assumptions: | |||||
Service cost | $ 523 | $ 462 | 1,577 | 1,359 | $ 1,887 |
Interest cost | 286 | 357 | 856 | 1,068 | 1,431 |
Amortization of actuarial (gains) and losses | 223 | 63 | 671 | 201 | |
Net pension expense | 1,032 | 882 | 3,104 | 2,628 | |
Pension Plan | CDT defined benefit plan | |||||
Assumptions: | |||||
Service cost | 140 | 136 | 426 | 413 | 550 |
Interest cost | 112 | 159 | 341 | 483 | 642 |
Amortization of actuarial (gains) and losses | 234 | 173 | 703 | 524 | |
Net pension expense | 486 | 468 | 1,470 | 1,420 | |
Pension Plan | GXS GER defined benefit plan | |||||
Assumptions: | |||||
Service cost | 78 | 141 | 237 | 426 | 566 |
Interest cost | 82 | 121 | 250 | 368 | 489 |
Amortization of actuarial (gains) and losses | 61 | 32 | 183 | 98 | |
Net pension expense | 221 | 294 | 670 | 892 | |
Pension Plan | GXS PHP defined benefit plan | |||||
Assumptions: | |||||
Service cost | 305 | 185 | 914 | 520 | 771 |
Interest cost | 92 | 77 | 265 | 217 | $ 300 |
Amortization of actuarial (gains) and losses | (72) | (142) | (215) | (421) | |
Net pension expense | $ 325 | $ 120 | $ 964 | $ 316 |
Pension Plans and Other Post _7
Pension Plans and Other Post Retirement Benefits - Schedule of Weighted-Average Key Assumptions Used for Pension Plans (Details) - Pension Plan | 9 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Jun. 30, 2019 | |
CDT | ||
Assumptions: | ||
Salary increases | 2.50% | 2.50% |
Pension increases | 2.00% | 2.00% |
Discount rate | 1.76% | 1.32% |
CDT | to age 20 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
CDT | to age 25 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
CDT | to age 30 | ||
Assumptions: | ||
Employee fluctuation rate | 1.00% | 1.00% |
CDT | to age 35 | ||
Assumptions: | ||
Employee fluctuation rate | 0.50% | 0.50% |
CDT | to age 40 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
CDT | to age 45 | ||
Assumptions: | ||
Employee fluctuation rate | 0.50% | 0.50% |
CDT | to age 50 | ||
Assumptions: | ||
Employee fluctuation rate | 0.50% | 0.50% |
CDT | from age 51 | ||
Assumptions: | ||
Employee fluctuation rate | 1.00% | 1.00% |
CDT | Minimum | ||
Assumptions: | ||
Normal retirement age | 65 years | 65 years |
CDT | Maximum | ||
Assumptions: | ||
Normal retirement age | 67 years | 67 years |
GXS GER | ||
Assumptions: | ||
Salary increases | 2.50% | 2.50% |
Pension increases | 2.00% | 2.00% |
Discount rate | 1.76% | 1.32% |
GXS GER | to age 20 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 25 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 30 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 35 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 40 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 45 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 50 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | from age 51 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | Minimum | ||
Assumptions: | ||
Normal retirement age | 65 years | 65 years |
GXS GER | Maximum | ||
Assumptions: | ||
Normal retirement age | 67 years | 67 years |
GXS PHP | ||
Assumptions: | ||
Salary increases | 6.50% | 6.50% |
Discount rate | 5.00% | 5.00% |
Normal retirement age | 60 years | 60 years |
GXS PHP | to age 20 | ||
Assumptions: | ||
Employee fluctuation rate | 12.19% | 12.19% |
GXS PHP | to age 25 | ||
Assumptions: | ||
Employee fluctuation rate | 16.58% | 16.58% |
GXS PHP | to age 30 | ||
Assumptions: | ||
Employee fluctuation rate | 13.97% | 13.97% |
GXS PHP | to age 35 | ||
Assumptions: | ||
Employee fluctuation rate | 10.77% | 10.77% |
GXS PHP | to age 40 | ||
Assumptions: | ||
Employee fluctuation rate | 7.39% | 7.39% |
GXS PHP | to age 45 | ||
Assumptions: | ||
Employee fluctuation rate | 3.28% | 3.28% |
GXS PHP | to age 50 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS PHP | from age 51 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
Pension Plans and Other Post _8
Pension Plans and Other Post Retirement Benefits - Anticipated Pension Payments Under Pension Plans (Details) - Pension Plan $ in Thousands | Mar. 31, 2020USD ($) |
CDT defined benefit plan | |
Assumptions: | |
2020 (three months ended June 30) | $ 161 |
2021 | 719 |
2022 | 789 |
2023 | 885 |
2024 | 987 |
2025 to 2029 | 5,695 |
Total | 9,236 |
GXS GER defined benefit plan | |
Assumptions: | |
2020 (three months ended June 30) | 240 |
2021 | 959 |
2022 | 990 |
2023 | 990 |
2024 | 995 |
2025 to 2029 | 5,034 |
Total | 9,208 |
GXS PHP defined benefit plan | |
Assumptions: | |
2020 (three months ended June 30) | 10 |
2021 | 264 |
2022 | 341 |
2023 | 244 |
2024 | 304 |
2025 to 2029 | 3,068 |
Total | $ 4,231 |
Share Capital, Option Plans a_3
Share Capital, Option Plans and Share-Based Payments - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Dividends | ||||
Dividends declared per common share (in dollars per share) | $ 0.1746 | $ 0.1518 | $ 0.5238 | $ 0.4554 |
Payments of dividends | $ 47,300,000 | $ 40,700,000 | $ 141,377,000 | $ 121,901,000 |
Share Capital | ||||
Preference shares issued (in shares) | 0 | 0 | ||
Treasury Stock | ||||
Purchase of treasury stock (in shares) | 0 | 51,794 | 300,000 | 726,059 |
Payments for Repurchase of Common Stock | $ 0 | $ 2,000,000 | $ 12,424,000 | $ 26,499,000 |
Issuance of treasury stock (in shares) | 0 | 61,794 | 255,502 | 609,691 |
Share Capital, Option Plans a_4
Share Capital, Option Plans and Share-Based Payments - Schedule of Share-Based Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 6,856 | $ 6,712 | $ 21,530 | $ 20,152 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 2,143 | 2,616 | 6,820 | 7,537 |
Performance Share Units | Long Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 1,515 | 879 | 4,436 | 2,573 |
Restricted Stock Units (RSUs) | Long Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 1,478 | 1,687 | 4,447 | 4,698 |
Restricted Stock Units (RSUs) | Other plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 64 | 36 | 84 | 169 |
Deferred Share Units (directors) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 735 | 709 | 2,610 | 2,402 |
Employee Share Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 921 | $ 785 | $ 3,133 | $ 2,773 |
Share Capital, Option Plans a_5
Share Capital, Option Plans and Share-Based Payments - Summary of Outstanding Stock Options, Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options outstanding (in shares) | 7,359,490 | 7,359,490 | 7,102,753 | ||
Cash used to settle awards | $ 0 | $ 0 | $ 0 | $ 0 | |
Capitalized amount of share-based compensation costs | 0 | 0 | 0 | 0 | |
Cash proceeds from exercise of options granted | 23,400,000 | 11,600,000 | 34,800,000 | 25,800,000 | |
Tax benefit realized from exercise of options | $ 400,000 | $ 1,100,000 | $ 1,300,000 | $ 2,000,000 | |
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options outstanding (in shares) | 7,359,490 | 7,359,490 | |||
Common shares available for issuance (in shares) | 7,840,000 | 7,840,000 | |||
Expiration period of options, minimum term | 7 years | ||||
Expiration period of options, maximum term | 10 years | ||||
Unrecognized compensation cost relating to unvested stock awards | $ 30,300,000 | $ 30,300,000 | |||
Unvested stock awards compensation cost, weighted average recognition period | 3 years | ||||
Stock Options | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 4 years | ||||
Stock Options | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 5 years |
Share Capital, Option Plans a_6
Share Capital, Option Plans and Share-Based Payments - Schedule of Outstanding Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended |
Mar. 31, 2020 | |
Options | |
Outstanding at beginning of period (in shares) | 7,102,753 |
Granted (in shares) | 2,301,230 |
Exercised (in shares) | (1,300,742) |
Forfeited or expired (in shares) | (743,751) |
Outstanding at end of period (in shares) | 7,359,490 |
Exercisable ending balance (in shares) | 2,137,643 |
Weighted- Average Exercise Price | |
Outstanding at beginning of period (in dollars per share) | $ 31.82 |
Granted (in dollars per share) | 42.57 |
Exercised (in dollars per share) | 26.73 |
Forfeited or expired (in dollars per share) | 32.96 |
Outstanding at end of period (in dollars per share) | 35.96 |
Exercisable at end of period (in dollars per share) | $ 29.72 |
Weighted- Average Remaining Contractual Term (years) | |
Outstanding (in years) | 4 years 10 months 6 days |
Exercisable (in years) | 2 years 11 months 1 day |
Aggregate Intrinsic Value ($’000s) | |
Outstanding | $ 15,496 |
Exercisable | $ 11,953 |
Share Capital, Option Plans a_7
Share Capital, Option Plans and Share-Based Payments - Schedule of Weighted-Average Fair Value Of Options And Weighted-Average Assumptions Used (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||||
Weighted-average fair value of options granted (in dollars per share) | $ 7.28 | $ 7.64 | $ 6.95 | $ 8.28 |
Weighted-average assumptions used: | ||||
Expected volatility | 21.80% | 25.60% | 21.92% | 25.92% |
Risk–free interest rate | 1.38% | 2.51% | 1.49% | 2.73% |
Expected dividend yield | 1.55% | 1.63% | 1.60% | 1.53% |
Expected life (in years) | 4 years 1 month 20 days | 4 years 1 month 9 days | 4 years 1 month 17 days | 4 years 3 months 3 days |
Forfeiture rate (based on historical rates) | 7.00% | 6.00% | 7.00% | 6.00% |
Average exercised share price (in dollars per share) | $ 44.99 | $ 37.24 | $ 42.57 | $ 38.16 |
Share Capital, Option Plans a_8
Share Capital, Option Plans and Share-Based Payments - Long-Term Incentive Plans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of treasury stock (in shares) | 0 | 61,794 | 255,502 | 609,691 | |
Payments for Repurchase of Common Stock | $ 0 | $ 2,000,000 | $ 12,424,000 | $ 26,499,000 | |
Long Term Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term of plan | 3 years | ||||
Compensation cost related to unvested awards not yet recognized | $ 21,700,000 | $ 21,700,000 | |||
Unvested stock awards compensation cost, weighted average recognition period | 1 year 10 months 24 days | ||||
Fiscal 2019 LTIP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of treasury stock (in shares) | 255,502 | ||||
Payments for Repurchase of Common Stock | $ 9,100,000 |
Share Capital, Option Plans a_9
Share Capital, Option Plans and Share-Based Payments - RSU's, DSU's and ESPP (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted (in shares) | 15,000 | 0 | 15,000 | 0 |
Award vesting period | 3 years | |||
Stock issued (in shares) | 0 | 10,000 | 0 | 18,794 |
Stock issued | $ 0.3 | $ 0.6 | ||
Deferred Share Units (DSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted (in shares) | 4,479 | 3,406 | 78,887 | 96,748 |
Employee Share Purchase Plan (ESPP) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards purchase price discount | 15.00% | |||
Common shares eligible for issuance (in shares) | 221,738 | 187,705 | 549,281 | 523,867 |
Cash received from employee stock purchase plan | $ 6.6 | $ 6.1 | $ 18.3 | $ 16.2 |
Guarantees and Contingencies -
Guarantees and Contingencies - Schedule of Contractual Obligations with Minimum Payments (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 30, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | |
Long term debt obligations | |||
Total | $ 4,772,778,000 | ||
April 1, 2020— June 30, 2020 | 35,776,000 | ||
July 1, 2020— June 30, 2022 | 329,750,000 | ||
July 1, 2022— June 30, 2024 | 328,478,000 | ||
July 1, 2024 and beyond | 4,078,774,000 | ||
Purchase obligations for contracts not accounted for as lease obligations | |||
Total | 52,938,000 | ||
April 1, 2020— June 30, 2020 | 14,975,000 | ||
July 1, 2020— June 30, 2022 | 32,963,000 | ||
July 1, 2022— June 30, 2024 | 5,000,000 | ||
July 1, 2024 and beyond | 0 | ||
Total payments due between | |||
Total | 4,825,716,000 | ||
April 1, 2020— June 30, 2020 | 50,751,000 | ||
July 1, 2020— June 30, 2022 | 362,713,000 | ||
July 1, 2022— June 30, 2024 | 333,478,000 | ||
July 1, 2024 and beyond | $ 4,078,774,000 | ||
Line of Credit | Revolver | |||
Debt Instrument [Line Items] | |||
Proceeds from lines of credit | $ 600,000,000 | $ 750,000,000 |
Guarantees and Contingencies _2
Guarantees and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Jul. 11, 2018 | Mar. 31, 2020 |
GXS India | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual | $ 1.2 | |
Internal Revenue Service (IRS) | ||
Loss Contingencies [Line Items] | ||
Estimated amount of loss resulting from an adverse tax position | 770 | |
Income tax examination, tax | 455 | |
Income tax examination, penalties | 130 | |
Income tax examination, interest | 185 | |
Internal Revenue Service (IRS) | Tax Year 2010 | ||
Loss Contingencies [Line Items] | ||
Estimated amount of loss resulting from an adverse tax position | $ 335 | |
Additional tax expense, as a percent | 20.00% | |
Internal Revenue Service (IRS) | Tax Year 2012 | ||
Loss Contingencies [Line Items] | ||
Additional tax expense, as a percent | 40.00% | |
Income tax examination, change in liability | $ 80 | |
Canada Revenue Agency (CRA) | ||
Loss Contingencies [Line Items] | ||
Estimated amount of loss resulting from an adverse tax position | $ 25 | |
Canada Revenue Agency (CRA) | Tax Year 2012 | ||
Loss Contingencies [Line Items] | ||
Additional tax expense, as a percent | 10.00% | |
Canada Revenue Agency (CRA) | Tax Year 2013 | ||
Loss Contingencies [Line Items] | ||
Additional tax expense, as a percent | 10.00% | |
Canada Revenue Agency (CRA) | Tax Year 2014 | ||
Loss Contingencies [Line Items] | ||
Additional tax expense, as a percent | 10.00% | |
Minimum | Canada Revenue Agency (CRA) | Tax Year 2012 | ||
Loss Contingencies [Line Items] | ||
Income tax examination, estimate of increase to taxable income | $ 90 | |
Minimum | Canada Revenue Agency (CRA) | Tax Year 2013 | ||
Loss Contingencies [Line Items] | ||
Income tax examination, estimate of increase to taxable income | 90 | |
Minimum | Canada Revenue Agency (CRA) | Tax Year 2014 | ||
Loss Contingencies [Line Items] | ||
Income tax examination, estimate of increase to taxable income | 90 | |
Maximum | Canada Revenue Agency (CRA) | Tax Year 2012 | ||
Loss Contingencies [Line Items] | ||
Income tax examination, estimate of increase to taxable income | 100 | |
Maximum | Canada Revenue Agency (CRA) | Tax Year 2013 | ||
Loss Contingencies [Line Items] | ||
Income tax examination, estimate of increase to taxable income | 100 | |
Maximum | Canada Revenue Agency (CRA) | Tax Year 2014 | ||
Loss Contingencies [Line Items] | ||
Income tax examination, estimate of increase to taxable income | $ 100 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 25.50% | 30.90% | 27.50% | 31.60% | |
Decrease in income tax expense | $ 23.7 | $ 19.8 | |||
Effect of foreign tax rate differences | (20) | (8.3) | |||
Effect of the CARES Act | (9) | (9) | |||
Effect of internal reorganizations of subsidiaries | (7.9) | (15.8) | |||
Effect of Base Erosion and Anti-Abuse Tax (BEAT) | 4.8 | 9.9 | |||
Effect of tax filings in excess of estimates | 3 | 10.4 | |||
Effect of tax credits for research and development | (2.9) | 2.9 | |||
Effect of repatriation from foreign subsidiaries | 1.7 | ||||
Effect of changes in unrecognized tax benefits | (21.5) | ||||
Effect of repatriation from domestic subsidiaries | 16.6 | ||||
Possible decrease in tax expense in next 12 months | 9.3 | 9.3 | |||
Provision for deferred income tax liabilities | $ 21.7 | $ 21.7 | $ 17.4 |
Income Taxes - Interest and Pen
Income Taxes - Interest and Penalties Related to Liabilities for Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Interest expense | $ 2,814 | $ 2,823 | $ 4,048 | $ 7,430 |
Penalties expense (recoveries) | 100 | 9 | 175 | 568 |
Total | $ 2,914 | $ 2,832 | $ 4,223 | $ 7,998 |
Income Taxes - Interest Accrued
Income Taxes - Interest Accrued and Penalties Accrued Related to Income Tax Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Interest expense accrued | $ 68,707 | $ 64,530 |
Penalties accrued | $ 2,580 | $ 2,525 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Financial Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Financial Assets: | ||
Foreign currency forward contracts designated as cash flow hedges (note 17) | $ 0 | $ 736 |
Financial Liabilities: | ||
Foreign currency forward contracts designated as cash flow hedges (note 17) | (3,352) | 0 |
Significant other observable inputs (Level 2) | ||
Financial Assets: | ||
Foreign currency forward contracts designated as cash flow hedges (note 17) | 0 | 736 |
Financial Liabilities: | ||
Foreign currency forward contracts designated as cash flow hedges (note 17) | $ (3,352) | $ 0 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Fair Value in the Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2019 | |
Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount of forward contracts held to sell U.S. dollars in exchange for Canadian dollars | $ 63,200 | $ 62,000 |
Accounts payable and accrued liabilities | Cash Flow Hedging | Designated As Hedging Instrument | Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value Liability | $ (3,352) | |
Prepaid expenses and other current assets | Cash Flow Hedging | Designated As Hedging Instrument | Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value Asset | $ 736 | |
Minimum | ||
Derivatives, Fair Value [Line Items] | ||
Contract maturity | 1 month | |
Maximum | ||
Derivatives, Fair Value [Line Items] | ||
Contract maturity | 12 months |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Effects on Income and Other Comprehensive Income (OCI) (Details) - Cash Flow Hedging - Foreign currency forward contracts - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Derivatives, Fair Value [Line Items] | ||||
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | $ (4,815) | $ (4,459) | ||
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | $ 837 | $ (1,034) | ||
Operating Expenses | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | $ (458) | $ (371) | ||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | $ (470) | $ (1,604) |
Special Charges (Recoveries) -
Special Charges (Recoveries) - Schedule of Special Charges Related to Restructuring Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition-related costs | $ 2,453 | $ 1,430 | $ 12,898 | $ 5,134 |
Other charges (recoveries) | 1,033 | (1,243) | 4,278 | 520 |
Total | 9,406 | 796 | 24,579 | 33,487 |
Fiscal 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges | 5,899 | 0 | 5,899 | 0 |
Fiscal 2019 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges | (29) | 667 | 1,650 | 26,906 |
Fiscal 2018 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges | 0 | 7 | 86 | 517 |
Restructuring Plans prior to Fiscal 2018 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges | $ 50 | $ (65) | $ (232) | $ 410 |
Special Charges (Recoveries) _2
Special Charges (Recoveries) - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Other charges (recoveries) | $ 1,033,000 | $ (1,243,000) | $ 4,278,000 | $ 520,000 |
Miscellaneous other charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other charges (recoveries) | 1,000,000 | 200,000 | 3,600,000 | 900,000 |
ROU asset write-off | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other charges (recoveries) | 700,000 | |||
Pre-acquisition sales and use tax liabilities becoming statute barred | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other charges (recoveries) | $ (1,500,000) | (1,500,000) | ||
System implementation costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other charges (recoveries) | $ 1,100,000 | |||
Fiscal 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges recorded to date | 5,900,000 | 5,900,000 | ||
Fiscal 2020 Restructuring Plan | Facility costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other charges (recoveries) | 0 | 0 | ||
Fiscal 2019 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges recorded to date | 30,000,000 | 30,000,000 | ||
Fiscal 2018 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges recorded to date | 10,800,000 | 10,800,000 | ||
Minimum | Fiscal 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected cost | 26,000,000 | 26,000,000 | ||
Maximum | Fiscal 2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected cost | $ 34,000,000 | $ 34,000,000 |
Special Charges (Recoveries) _3
Special Charges (Recoveries) - Schedule of Restructuring Reserve (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Fiscal 2020 Restructuring Plan | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | $ 0 |
Accruals and adjustments | 5,899 |
Cash payments | (2,331) |
Foreign exchange and other non-cash adjustments | (260) |
Balance, end | 3,308 |
Fiscal 2020 Restructuring Plan | Workforce reduction | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | 0 |
Accruals and adjustments | 5,505 |
Cash payments | (2,295) |
Foreign exchange and other non-cash adjustments | (166) |
Balance, end | 3,044 |
Fiscal 2020 Restructuring Plan | Facility costs | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | 0 |
Accruals and adjustments | 394 |
Cash payments | (36) |
Foreign exchange and other non-cash adjustments | (94) |
Balance, end | 264 |
Fiscal 2019 Restructuring Plan | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | 7,107 |
Adjustment for Topic 842 (note 1 and note 6) | (5,288) |
Accruals and adjustments | 1,650 |
Cash payments | (2,727) |
Foreign exchange and other non-cash adjustments | (249) |
Balance, end | 493 |
Fiscal 2019 Restructuring Plan | Workforce reduction | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | 1,819 |
Adjustment for Topic 842 (note 1 and note 6) | 0 |
Accruals and adjustments | 560 |
Cash payments | (1,637) |
Foreign exchange and other non-cash adjustments | (249) |
Balance, end | 493 |
Fiscal 2019 Restructuring Plan | Facility costs | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | 5,288 |
Adjustment for Topic 842 (note 1 and note 6) | (5,288) |
Accruals and adjustments | 1,090 |
Cash payments | (1,090) |
Foreign exchange and other non-cash adjustments | 0 |
Balance, end | 0 |
Fiscal 2018 Restructuring Plan | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | 636 |
Adjustment for Topic 842 (note 1 and note 6) | (486) |
Accruals and adjustments | 86 |
Cash payments | (187) |
Foreign exchange and other non-cash adjustments | (10) |
Balance, end | 39 |
Fiscal 2018 Restructuring Plan | Workforce reduction | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | 150 |
Adjustment for Topic 842 (note 1 and note 6) | 0 |
Accruals and adjustments | (62) |
Cash payments | (39) |
Foreign exchange and other non-cash adjustments | (10) |
Balance, end | 39 |
Fiscal 2018 Restructuring Plan | Facility costs | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | 486 |
Adjustment for Topic 842 (note 1 and note 6) | (486) |
Accruals and adjustments | 148 |
Cash payments | (148) |
Foreign exchange and other non-cash adjustments | 0 |
Balance, end | $ 0 |
Acquisitions - Acquisition of X
Acquisitions - Acquisition of XMedius (Details) - USD ($) $ in Thousands | Mar. 09, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 4,678,686 | $ 4,678,686 | $ 3,769,908 | |||
Acquisition-related costs | 2,453 | $ 1,430 | 12,898 | $ 5,134 | ||
XMedius | ||||||
Business Acquisition [Line Items] | ||||||
Purchase consideration | $ 73,300 | |||||
Goodwill | 49,899 | |||||
Goodwill expected to be tax deductible | 100 | |||||
Deferred revenue | 18,500 | |||||
Deferred revenue adjustment | 2,700 | |||||
Acquired receivables, fair value | 6,500 | |||||
Acquired receivables, gross contractual amount | 6,700 | |||||
Acquired receivables, estimated uncollectible | $ 200 | |||||
Acquisition-related costs | $ 800 | $ 800 |
Acquisitions - Acquisition of_2
Acquisitions - Acquisition of XMedius, Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 09, 2020 | Jun. 30, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 4,678,686 | $ 3,769,908 | |
XMedius | |||
Business Acquisition [Line Items] | |||
Current assets | $ 8,433 | ||
Non-current tangible assets | 3,792 | ||
Liabilities assumed | (35,842) | ||
Total identifiable net assets | 23,436 | ||
Goodwill | 49,899 | ||
Net assets acquired | 73,335 | ||
XMedius | Customer assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | 35,910 | ||
XMedius | Technology assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 11,143 |
Acquisitions - Acquisition of C
Acquisitions - Acquisition of Carbonite (Details) - USD ($) $ in Thousands | Dec. 24, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 4,678,686 | $ 4,678,686 | $ 3,769,908 | |||
Acquisition-related costs | 2,453 | $ 1,430 | 12,898 | $ 5,134 | ||
Carbonite | ||||||
Business Acquisition [Line Items] | ||||||
Purchase consideration | $ 1,400,000 | |||||
Payment to acquire businesses | 100,000 | |||||
Goodwill | 868,365 | |||||
Goodwill expected to be tax deductible | 6,900 | |||||
Deferred revenue | 171,000 | |||||
Deferred revenue adjustment | 74,700 | |||||
Acquired receivables, fair value | 45,700 | |||||
Acquired receivables, gross contractual amount | 47,100 | |||||
Acquired receivables, estimated uncollectible | $ 1,400 | |||||
Acquisition-related costs | $ 1,100 | $ 8,500 |
Acquisitions - Acquisition of_3
Acquisitions - Acquisition of Carbonite, Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 24, 2019 | Jun. 30, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 4,678,686 | $ 3,769,908 | |
Carbonite | |||
Business Acquisition [Line Items] | |||
Current assets | $ 129,779 | ||
Cash | 62,900 | ||
Restricted cash | 2,400 | ||
Non-current tangible assets | 102,936 | ||
Liabilities assumed | (570,656) | ||
Total identifiable net assets | 502,059 | ||
Goodwill | 868,365 | ||
Net assets acquired | 1,370,424 | ||
Carbonite | Customer assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | 549,000 | ||
Carbonite | Technology assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 291,000 |
Acquisitions - Acquisition of_4
Acquisitions - Acquisition of Carbonite, Unaudited Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Amortization of intangible assets | $ 63,401 | $ 44,596 | $ 145,998 | $ 140,439 |
Carbonite | ||||
Business Acquisition [Line Items] | ||||
Revenues | 110,351 | 119,862 | ||
Net Loss | (27,877) | (31,531) | ||
Total Revenues | 800,361 | 2,524,726 | 2,357,397 | |
Net Income | $ 44,984 | 134,778 | 35,236 | |
Acquisition-related costs | Carbonite | ||||
Business Acquisition [Line Items] | ||||
Special charges | 2,800 | 5,400 | ||
Amortization of intangible assets | $ 48,000 | $ 52,200 | ||
Expenses incurred | 127,000 | |||
Expenses incurred, tax | 33,000 | |||
Expenses incurred, accelerated vesting of equity awards | 74,000 | |||
Expenses incurred, transaction fees | 29,000 | |||
Expenses incurred, extinguishment of debt and interest rate swaps | 21,000 | |||
Expenses incurred, employee severance costs | $ 3,000 |
Acquisitions - Acquisition of D
Acquisitions - Acquisition of Dynamic Solutions Group, Inc (The Fax Guys) (Details) - The Fax Guys $ in Millions | Dec. 02, 2019USD ($) |
Business Acquisition [Line Items] | |
Purchase consideration | $ 5.1 |
Purchase consideration unpaid | $ 1 |
Acquisitions - Acquisition of_5
Acquisitions - Acquisition of Catalyst Repository Systems Inc. (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 4,678,686 | $ 3,769,908 | |
Catalyst Repository Systems Inc | |||
Business Acquisition [Line Items] | |||
Purchase consideration | $ 71,400 | ||
Cash consideration | 70,800 | ||
Purchase consideration unpaid | 600 | ||
Goodwill | 31,607 | ||
Goodwill expected to be tax deductible | 3,100 | ||
Deferred revenue | 800 | ||
Acquired receivables, fair value | 10,800 | ||
Acquired receivables, gross contractual amount | 11,800 | ||
Acquired receivables, estimated uncollectible | $ 1,000 | ||
Purchase price adjustment | $ 600 |
Acquisitions - Acquisition of_6
Acquisitions - Acquisition of Catalyst Repository Systems Inc. Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 | Jan. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 4,678,686 | $ 3,769,908 | |
Catalyst Repository Systems Inc | |||
Business Acquisition [Line Items] | |||
Current assets | $ 9,699 | ||
Non-current tangible assets | 5,754 | ||
Liabilities assumed | (17,891) | ||
Total identifiable net assets | 39,827 | ||
Goodwill | 31,607 | ||
Net assets acquired | 71,434 | ||
Catalyst Repository Systems Inc | Customer assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | 30,607 | ||
Catalyst Repository Systems Inc | Technology assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 11,658 |
Acquisitions - Acquisition of L
Acquisitions - Acquisition of Liaison Technologies, Inc. (Details) - USD ($) $ in Thousands | Dec. 17, 2018 | Mar. 31, 2020 | Jun. 30, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 4,678,686 | $ 3,769,908 | |
Liaison Technologies Inc. | |||
Business Acquisition [Line Items] | |||
Purchase consideration | $ 310,600 | ||
Goodwill | 164,434 | ||
Goodwill expected to be tax deductible | 2,200 | ||
Deferred revenue | 7,600 | ||
Acquired receivables, fair value | 20,500 | ||
Acquired receivables, gross contractual amount | 22,200 | ||
Acquired receivables, estimated uncollectible | $ 1,700 |
Acquisitions - Acquisition of_7
Acquisitions - Acquisition of Liaison Technologies, Inc., Purchase Price Allocation (Details) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 | Dec. 17, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 4,678,686 | $ 3,769,908 | |
Liaison Technologies Inc. | |||
Business Acquisition [Line Items] | |||
Current assets | $ 23,006 | ||
Non-current tangible assets | 5,168 | ||
Liabilities assumed | (57,265) | ||
Total identifiable net assets | 146,209 | ||
Goodwill | 164,434 | ||
Net assets acquired | 310,643 | ||
Liaison Technologies Inc. | Customer assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | 68,300 | ||
Liaison Technologies Inc. | Technology assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 107,000 |
Supplemental Cash Flow Disclo_3
Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | ||||
Cash paid during the period for interest | $ 43,657 | $ 33,585 | $ 111,786 | $ 102,348 |
Cash received during the period for interest | 2,743 | 987 | 10,166 | 4,346 |
Cash paid during the period for income taxes | $ 42,509 | $ 26,190 | $ 75,881 | $ 66,002 |
Other Income (Expense), Net - S
Other Income (Expense), Net - Schedule of Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Other Income and Expenses [Abstract] | ||||
Foreign exchange gains (losses) | $ (5,766) | $ 2,033 | $ (9,073) | $ (4,124) |
OpenText share in net income of equity investees (note 9) | 4,527 | 2,789 | 6,475 | 10,652 |
Loss on debt extinguishment | (17,854) | 0 | (17,854) | 0 |
Other miscellaneous income (expense) | 170 | 243 | 716 | 437 |
Total other income (expense), net | $ (18,923) | $ 5,065 | $ (19,736) | $ 6,965 |
Other Income (Expense), Net - A
Other Income (Expense), Net - Additional information (Details) - USD ($) $ in Thousands | Mar. 05, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Debt Instrument [Line Items] | |||||
Loss on extinguishment of debt | $ 17,854 | $ 0 | $ 17,854 | $ 0 | |
Senior Notes 2023 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Loss on extinguishment of debt | $ 17,900 | ||||
Extinguishment of debt, unamortized debt issuance costs | 6,700 | ||||
Extinguishment of debt, early termination call premium | $ 11,200 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Basic earnings per share | ||||
Net income attributable to OpenText | $ 25,965 | $ 72,762 | $ 207,833 | $ 213,518 |
Basic earnings per share attributable to OpenText (in dollars per share) | $ 0.10 | $ 0.27 | $ 0.77 | $ 0.80 |
Diluted earnings per share | ||||
Net income attributable to OpenText | $ 25,965 | $ 72,762 | $ 207,833 | $ 213,518 |
Diluted earnings per share attributable to OpenText (in dollars per share) | $ 0.10 | $ 0.27 | $ 0.77 | $ 0.79 |
Weighted-average number of shares outstanding | ||||
Basic (in shares) | 271,221 | 268,991 | 270,559 | 268,511 |
Effect of dilutive securities (in shares) | 981 | 1,039 | 1,084 | 1,095 |
Diluted (in shares) | 272,202 | 270,030 | 271,643 | 269,606 |
Excluded as anti-dilutive (in shares) | 3,361 | 2,928 | 2,681 | 2,643 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Director, Stephen Sadler | ||
Related Party Transaction [Line Items] | ||
Consultancy fees for business acquisition-related activities | $ 0.7 | $ 0.6 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Apr. 29, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.1746 | $ 0.1518 | $ 0.5238 | $ 0.4554 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.1746 | ||||
Facility costs | Minimum | COVID-19 Restructuring Plan | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Expected cost | $ 80,000,000 | ||||
Implementation period | 6 months | ||||
Facility costs | Maximum | COVID-19 Restructuring Plan | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Expected cost | $ 100,000,000 | ||||
Implementation period | 12 months | ||||
WFH transition | Minimum | COVID-19 Restructuring Plan | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Expected cost | $ 65,000,000 | ||||
Implementation period | 6 months | ||||
WFH transition | Maximum | COVID-19 Restructuring Plan | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Expected cost | $ 80,000,000 | ||||
Implementation period | 12 months | ||||
Workforce reduction | Minimum | COVID-19 Restructuring Plan | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Expected cost | $ 15,000,000 | ||||
Workforce reduction | Maximum | COVID-19 Restructuring Plan | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Expected cost | $ 20,000,000 |
Uncategorized Items - a10-qq3x2
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 4,292,000 |
Restricted Cash | us-gaap_RestrictedCash | $ 5,026,000 |