COVER PAGE
COVER PAGE - shares | 6 Months Ended | |
Dec. 31, 2022 | Jan. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-27544 | |
Entity Registrant Name | OPEN TEXT CORP | |
Entity Incorporation, State or Country Code | Z4 | |
Entity Tax Identification Number | 98-0154400 | |
Entity Address, Address Line One | 275 Frank Tompa Drive, | |
Entity Address, City or Town | Waterloo, | |
Entity Address, State or Province | ON | |
Entity Address, Country | CA | |
Entity Address, Postal Zip Code | N2L 0A1 | |
City Area Code | 519 | |
Local Phone Number | 888-7111 | |
Title of 12(b) Security | Common stock without par value | |
Trading Symbol | OTEX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 270,463,119 | |
Entity Central Index Key | 0001002638 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 2,820,927 | $ 1,693,741 |
Accounts receivable trade, net of allowance for credit losses of $17,089 as of December 31, 2022 and $16,473 as of June 30, 2022 (Note 4) | 470,794 | 426,652 |
Contract assets (Note 3) | 25,613 | 26,167 |
Income taxes recoverable (Note 15) | 10,300 | 18,255 |
Prepaid expenses and other current assets (Note 9) | 131,172 | 120,552 |
Total current assets | 3,458,806 | 2,285,367 |
Property and equipment (Note 5) | 250,706 | 244,709 |
Operating lease right of use assets (Note 6) | 194,415 | 198,132 |
Long-term contract assets (Note 3) | 18,603 | 19,719 |
Goodwill (Note 7) | 5,250,136 | 5,244,653 |
Acquired intangible assets (Note 8) | 883,748 | 1,075,208 |
Deferred tax assets (Note 15) | 811,142 | 810,154 |
Other assets (Note 9) | 303,559 | 256,987 |
Long-term income taxes recoverable (Note 15) | 47,091 | 44,044 |
Total assets | 11,218,206 | 10,178,973 |
Current liabilities: | ||
Accounts payable and accrued liabilities (Note 10) | 459,360 | 448,607 |
Current portion of long-term debt (Note 11) | 10,000 | 10,000 |
Operating lease liabilities (Note 6) | 58,299 | 56,380 |
Deferred revenues (Note 3) | 879,226 | 902,202 |
Income taxes payable (Note 15) | 87,549 | 51,069 |
Total current liabilities | 1,494,434 | 1,468,258 |
Long-term liabilities: | ||
Accrued liabilities (Note 10) | 18,705 | 18,208 |
Pension liability (Note 12) | 57,349 | 60,951 |
Long-term debt (Note 11) | 5,193,158 | 4,209,567 |
Long-term operating lease liabilities (Note 6) | 188,809 | 198,695 |
Long-term deferred revenues (Note 3) | 84,681 | 91,144 |
Long-term income taxes payable (Note 15) | 40,878 | 34,003 |
Deferred tax liabilities (Note 15) | 18,808 | 65,887 |
Total long-term liabilities | 5,602,388 | 4,678,455 |
Shareholders’ equity: | ||
Common shares | 2,092,079 | 2,038,674 |
Accumulated other comprehensive income (loss) (Note 20) | (1,028) | (7,659) |
Retained earnings | 2,171,236 | 2,160,069 |
Treasury stock, at cost | (142,126) | (159,966) |
Total OpenText shareholders' equity | 4,120,161 | 4,031,118 |
Non-controlling interests | 1,223 | 1,142 |
Total shareholders’ equity | 4,121,384 | 4,032,260 |
Total liabilities and shareholders’ equity | $ 11,218,206 | $ 10,178,973 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable trade, allowance for credit losses | $ 17,089 | $ 16,473 |
Common stock, shares issued (in shares) | 270,235,234 | 269,522,639 |
Common stock, shares outstanding (in shares) | 270,235,234 | 269,522,639 |
Treasury stock (in shares) | 3,295,043 | 3,706,420 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues (Note 3): | ||||
Total revenues | $ 897,440 | $ 876,799 | $ 1,749,476 | $ 1,709,107 |
Cost of revenues: | ||||
Amortization of acquired technology-based intangible assets (Note 8) | 40,863 | 52,602 | 83,500 | 105,769 |
Total cost of revenues | 261,693 | 261,181 | 520,041 | 519,304 |
Gross profit | 635,747 | 615,618 | 1,229,435 | 1,189,803 |
Operating expenses: | ||||
Research and development | 109,700 | 103,622 | 219,898 | 203,787 |
Sales and marketing | 177,171 | 163,938 | 344,341 | 310,178 |
General and administrative | 77,603 | 71,513 | 155,677 | 142,990 |
Depreciation | 22,858 | 21,779 | 46,032 | 43,165 |
Amortization of acquired customer-based intangible assets (Note 8) | 53,446 | 52,665 | 107,884 | 104,549 |
Special charges (recoveries) (Note 18) | 10,306 | 9,217 | 24,587 | 9,561 |
Total operating expenses | 451,084 | 422,734 | 898,419 | 814,230 |
Income from operations | 184,663 | 192,884 | 331,016 | 375,573 |
Other income (expense), net (Note 22) | 163,349 | (25,037) | (25,882) | 4,745 |
Interest and other related expense, net | (38,715) | (40,245) | (79,097) | (77,300) |
Income before income taxes | 309,297 | 127,602 | 226,037 | 303,018 |
Provision for income taxes (Note 15) | 50,774 | 39,266 | 84,399 | 82,716 |
Net income for the period | 258,523 | 88,336 | 141,638 | 220,302 |
Net (income) loss attributable to non-controlling interests | (37) | (38) | (81) | (89) |
Net income (loss) attributable to OpenText | $ 258,486 | $ 88,298 | $ 141,557 | $ 220,213 |
Earnings per share—basic attributable to OpenText (note 23) (in dollars per share) | $ 0.96 | $ 0.32 | $ 0.52 | $ 0.81 |
Earnings per share—diluted attributable to OpenText (note 23) (in dollars per share) | $ 0.96 | $ 0.32 | $ 0.52 | $ 0.81 |
Weighted average number of Common Shares outstanding—basic (in '000's) (in shares) | 270,189 | 272,112 | 269,997 | 272,078 |
Weighted average number of Common Shares outstanding—diluted (in '000's) (in shares) | 270,189 | 272,931 | 270,009 | 273,074 |
Cloud services and subscriptions | ||||
Revenues (Note 3): | ||||
Total revenues | $ 408,674 | $ 364,886 | $ 813,325 | $ 721,475 |
Cost of revenues: | ||||
Costs of revenues | 134,314 | 122,129 | 266,113 | 241,908 |
Customer support | ||||
Revenues (Note 3): | ||||
Total revenues | 316,508 | 334,875 | 633,859 | 670,112 |
Cost of revenues: | ||||
Costs of revenues | 28,589 | 29,668 | 55,943 | 59,151 |
License | ||||
Revenues (Note 3): | ||||
Total revenues | 107,960 | 109,493 | 170,508 | 183,022 |
Cost of revenues: | ||||
Costs of revenues | 3,863 | 3,741 | 6,621 | 7,710 |
Professional service and other | ||||
Revenues (Note 3): | ||||
Total revenues | 64,298 | 67,545 | 131,784 | 134,498 |
Cost of revenues: | ||||
Costs of revenues | $ 54,064 | $ 53,041 | $ 107,864 | $ 104,766 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income for the period | $ 258,523 | $ 88,336 | $ 141,638 | $ 220,302 |
Other comprehensive income (loss)—net of tax: | ||||
Net foreign currency translation adjustments | 39,419 | (21,347) | 3,053 | (31,439) |
Unrealized gain (loss) on cash flow hedges: | ||||
Unrealized gain (loss) - net of tax expense (recovery) effect of $347 and $37 for the three months ended December 31, 2022 and 2021, respectively; ($859) and $(354) for the six months ended December 31, 2022 and 2021, respectively | 959 | 104 | (2,381) | (982) |
(Gain) loss reclassified into net income - net of tax (expense) recovery effect of $397 and $(7) for the three months ended December 31, 2022 and 2021, respectively; $609 and $(110) for the six months ended December 31, 2022 and 2021, respectively | 1,101 | (18) | 1,689 | (305) |
Actuarial gain (loss) relating to defined benefit pension plans: | ||||
Actuarial gain (loss) - net of tax expense (recovery) effect of $106 and $(104) for the three months ended December 31, 2022 and 2021, respectively; $1,210 and $(336) for the six months ended December 31, 2022 and 2021, respectively | 32 | (1,435) | 4,196 | (2,484) |
Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $25 and $67 for the three months ended December 31, 2022 and 2021, respectively; $51 and $135 for the six months ended December 31, 2022 and 2021, respectively | 37 | 159 | 74 | 321 |
Total other comprehensive income (loss) net, for the period | 41,548 | (22,537) | 6,631 | (34,889) |
Total comprehensive income | 300,071 | 65,799 | 148,269 | 185,413 |
Comprehensive (income) loss attributable to non-controlling interests | (37) | (38) | (81) | (89) |
Total comprehensive income attributable to OpenText | $ 300,034 | $ 65,761 | $ 148,188 | $ 185,324 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized gain (loss) on cash flow hedges, tax expense (recovery) | $ 347 | $ 37 | $ (859) | $ (354) |
(Gain) loss reclassified into net income, tax (expense) recovery | 397 | (7) | 609 | (110) |
Actuarial gain (loss), tax expense (recovery) | 106 | (104) | 1,210 | (336) |
Amortization of actuarial (gain) loss into net income, tax (expense) recovery | $ 25 | $ 67 | $ 51 | $ 135 |
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 |
Beginning balance (in shares) at Jun. 30, 2021 | 271,541,000 | |||||
Beginning balance (in shares) at Jun. 30, 2021 | (1,568,000) | |||||
Beginning balance at Jun. 30, 2021 | $ 4,099,453 | $ 1,947,764 | $ (69,386) | $ 2,153,326 | $ 66,238 | $ 1,511 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Under employee stock option plans (in shares) | 852,000 | |||||
Under employee stock option plans | 29,265 | $ 29,265 | ||||
Under employee stock purchase plans (in shares) | 423,000 | |||||
Under employee stock purchase plans | 17,910 | $ 17,910 | ||||
Share-based compensation | 28,343 | 28,343 | ||||
Repurchase of Common Shares | $ (19,593) | $ (19,593) | ||||
Purchase of treasury stock (in shares) | (19,600,000) | (400,000) | ||||
Issuance of treasury stock (in shares) | 491,244 | 492,000 | ||||
Issuance of treasury stock | $ 0 | $ (21,013) | $ 21,013 | |||
Repurchase of Common Shares (in shares) | (1,810,000) | |||||
Repurchase of Common Shares | (91,034) | $ (11,498) | (79,536) | |||
Dividends declared | (119,536) | (119,536) | ||||
Other comprehensive income (loss) - net | (34,889) | (34,889) | ||||
Distribution to non-controlling interest | (396) | $ 142 | (538) | |||
Net income for the period | 220,302 | 220,213 | 89 | |||
Ending balance (in shares) at Dec. 31, 2021 | 271,006,000 | |||||
Ending balance (in shares) at Dec. 31, 2021 | (1,476,000) | |||||
Ending balance at Dec. 31, 2021 | 4,129,825 | $ 1,990,913 | $ (67,966) | 2,174,467 | 31,349 | 1,062 |
Beginning balance (in shares) at Sep. 30, 2021 | 272,534,000 | |||||
Beginning balance (in shares) at Sep. 30, 2021 | (1,426,000) | |||||
Beginning balance at Sep. 30, 2021 | 4,208,515 | $ 1,991,719 | $ (63,477) | 2,225,363 | 53,886 | 1,024 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Under employee stock option plans (in shares) | 56,000 | |||||
Under employee stock option plans | 1,966 | $ 1,966 | ||||
Under employee stock purchase plans (in shares) | 226,000 | |||||
Under employee stock purchase plans | 9,421 | $ 9,421 | ||||
Share-based compensation | 14,409 | 14,409 | ||||
Repurchase of Common Shares | $ (19,593) | $ (19,593) | ||||
Purchase of treasury stock (in shares) | (400,000) | (400,000) | ||||
Issuance of treasury stock (in shares) | 349,792 | 350,000 | ||||
Issuance of treasury stock | $ 0 | $ (15,104) | $ 15,104 | |||
Repurchase of Common Shares (in shares) | (1,810,000) | |||||
Repurchase of Common Shares | (91,034) | $ (11,498) | (79,536) | |||
Dividends declared | (59,658) | (59,658) | ||||
Other comprehensive income (loss) - net | (22,537) | (22,537) | ||||
Net income for the period | 88,336 | 88,298 | 38 | |||
Ending balance (in shares) at Dec. 31, 2021 | 271,006,000 | |||||
Ending balance (in shares) at Dec. 31, 2021 | (1,476,000) | |||||
Ending balance at Dec. 31, 2021 | $ 4,129,825 | $ 1,990,913 | $ (67,966) | 2,174,467 | 31,349 | 1,062 |
Beginning balance (in shares) at Jun. 30, 2022 | 269,522,639 | 269,523,000 | ||||
Beginning balance (in shares) at Jun. 30, 2022 | 3,706,420 | (3,706,000) | ||||
Beginning balance at Jun. 30, 2022 | $ 4,032,260 | $ 2,038,674 | $ (159,966) | 2,160,069 | (7,659) | 1,142 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Under employee stock option plans (in shares) | 72,080 | 72,000 | ||||
Under employee stock option plans | $ 1,994 | $ 1,994 | ||||
Under employee stock purchase plans (in shares) | 640,000 | |||||
Under employee stock purchase plans | 17,221 | $ 17,221 | ||||
Share-based compensation | $ 52,030 | 52,030 | ||||
Purchase of treasury stock (in shares) | 0 | |||||
Issuance of treasury stock (in shares) | 411,376 | 411,000 | ||||
Issuance of treasury stock | $ 0 | $ (17,840) | $ 17,840 | |||
Dividends declared | (130,390) | (130,390) | ||||
Other comprehensive income (loss) - net | 6,631 | 6,631 | ||||
Net income for the period | $ 141,638 | 141,557 | 81 | |||
Ending balance (in shares) at Dec. 31, 2022 | 270,235,234 | 270,235,000 | ||||
Ending balance (in shares) at Dec. 31, 2022 | 3,295,043 | (3,295,000) | ||||
Ending balance at Dec. 31, 2022 | $ 4,121,384 | $ 2,092,079 | $ (142,126) | 2,171,236 | (1,028) | 1,223 |
Beginning balance (in shares) at Sep. 30, 2022 | 269,881,000 | |||||
Beginning balance (in shares) at Sep. 30, 2022 | (3,586,000) | |||||
Beginning balance at Sep. 30, 2022 | 3,850,141 | $ 2,067,881 | $ (154,792) | 1,978,442 | (42,576) | 1,186 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Under employee stock purchase plans (in shares) | 354,000 | |||||
Under employee stock purchase plans | 8,042 | $ 8,042 | ||||
Share-based compensation | $ 28,822 | 28,822 | ||||
Purchase of treasury stock (in shares) | 0 | |||||
Issuance of treasury stock (in shares) | 290,970 | 291,000 | ||||
Issuance of treasury stock | $ 0 | $ (12,666) | $ 12,666 | |||
Dividends declared | (65,692) | (65,692) | ||||
Other comprehensive income (loss) - net | 41,548 | 41,548 | ||||
Net income for the period | $ 258,523 | 258,486 | 37 | |||
Ending balance (in shares) at Dec. 31, 2022 | 270,235,234 | 270,235,000 | ||||
Ending balance (in shares) at Dec. 31, 2022 | 3,295,043 | (3,295,000) | ||||
Ending balance at Dec. 31, 2022 | $ 4,121,384 | $ 2,092,079 | $ (142,126) | $ 2,171,236 | $ (1,028) | $ 1,223 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per common share (in dollars per share) | $ 0.24299 | $ 0.2209 | $ 0.48598 | $ 0.4418 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Cash flows from operating activities: | |||
Net income for the period | $ 141,638 | $ 220,302 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization of intangible assets | 237,416 | 253,483 | |
Share-based compensation expense | 52,030 | 28,343 | |
Pension expense | 3,444 | 3,015 | |
Amortization of debt issuance costs | 3,166 | 2,454 | |
Write-off of right of use assets | 3,775 | 0 | |
Loss on extinguishment of debt | 8,131 | 27,413 | |
Loss on sale and write down of property and equipment | 121 | 38 | |
Deferred taxes | (46,802) | 20,892 | |
Share in net (income) loss of equity investees | 6,823 | (31,357) | |
Unrealized loss on financial instruments | 9,854 | 0 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (26,597) | 51,187 | |
Contract assets | (18,454) | (18,745) | |
Prepaid expenses and other current assets | (3,065) | (11,221) | |
Income taxes | 44,240 | 2,776 | |
Accounts payable and accrued liabilities | 8,964 | (108,629) | |
Deferred revenue | (29,133) | (50,693) | |
Other assets | (60,706) | 16,913 | |
Operating lease assets and liabilities, net | (7,716) | 142 | |
Net cash provided by operating activities | 327,129 | 406,313 | |
Cash flows from investing activities: | |||
Additions of property and equipment | (68,539) | (37,347) | |
Purchase of Zix Corporation, net of cash acquired | 0 | (837,573) | |
Purchase of Bricata Inc. | 0 | (17,927) | |
Other investing activities | (873) | (3,271) | |
Net cash used in investing activities | (69,412) | (896,118) | |
Cash flows from financing activities: | |||
Proceeds from issuance of Common Shares from exercise of stock options and ESPP | 15,773 | 45,688 | |
Proceeds from long-term debt and Revolver | 1,000,000 | 1,500,000 | |
Repayment of long-term debt and Revolver | (5,000) | (855,000) | |
Debt extinguishment costs | 0 | (24,969) | |
Debt issuance costs | (11,650) | (15,347) | |
Repurchase of Common Shares | 0 | (91,034) | |
Purchase of treasury stock | 0 | (19,593) | |
Distribution to non-controlling interest | 0 | (396) | |
Payments of dividends to shareholders | (129,562) | (119,536) | |
Net cash provided by financing activities | 869,561 | 419,813 | |
Foreign exchange gain (loss) on cash held in foreign currencies | (271) | (25,713) | |
Increase (decrease) in cash, cash equivalents and restricted cash during the period | 1,127,007 | (95,705) | |
Cash, cash equivalents and restricted cash at beginning of the period | 1,695,911 | 1,609,800 | |
Cash, cash equivalents and restricted cash at end of the period | 2,822,918 | 1,514,095 | |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Cash and cash equivalents | 2,820,927 | 1,511,792 | |
Restricted cash | [1] | 1,991 | 2,303 |
Total cash, cash equivalents and restricted cash | $ 2,822,918 | $ 1,514,095 | |
[1]Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Condensed Consolidated Balance Sheets (Note 9). |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Dec. 31, 2022 | |
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), which as of December 31, 2022, was 70% owned by OpenText. All intercompany balances and transactions have been eliminated. Previously, our ownership in EC1 Pte. Ltd. (GXS Singapore) was 81%. During the first quarter of Fiscal 2022 (as defined below), we made a final cash distribution of $0.4 million to the non-controlling interest holder in GXS Singapore as part of the process to liquidate the subsidiary. During Fiscal 2022, the liquidation of GXS Singapore was completed. The following Fiscal Year terms are used throughout this Quarterly Report on Form 10-Q: Fiscal Year Beginning Date Ending Date Fiscal 2024 July 1, 2023 June 30, 2024 Fiscal 2023 July 1, 2022 June 30, 2023 Fiscal 2022 July 1, 2021 June 30, 2022 Fiscal 2021 July 1, 2020 June 30, 2021 Fiscal 2020 July 1, 2019 June 30, 2020 Fiscal 2019 July 1, 2018 June 30, 2019 Fiscal 2018 July 1, 2017 June 30, 2018 Fiscal 2017 July 1, 2016 June 30, 2017 Fiscal 2016 July 1, 2015 June 30, 2016 Fiscal 2015 July 1, 2014 June 30, 2015 Fiscal 2014 July 1, 2013 June 30, 2014 Fiscal 2013 July 1, 2012 June 30, 2013 Fiscal 2012 July 1, 2011 June 30, 2012 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. 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 valuation of stock options granted and obligations related to share-based payments, including the valuation of our long-term incentive plans, (x) the valuation of pension obligations, and (xi) the valuation of derivative instruments. Acquisition of Micro Focus On August 25, 2022, we announced an agreement on the terms of an all-cash offer (through our wholly-owned subsidiary), to acquire the entire issued and to be issued share capital of Micro Focus International PLC (Micro Focus), for a total purchase price of approximately $5.8 billion, inclusive of Micro Focus’ cash and debt, subject to final adjustments. Concurrent with the announcement of the acquisition of Micro Focus (Micro Focus Acquisition), the Company entered into the Acquisition Term Loan and Bridge Loan (each as defined below) as well as certain derivative transactions. These derivative transactions were marked-to-market during the three and six months ended December 31, 2022, with the resulting unrealized gains (losses) on these derivatives recognized in Other Income (Expense) within our Condensed Consolidated Statements of Income. On December 1, 2022, the Company issued and sold $1.0 billion in aggregate principal amount of 6.90% Senior Secured Notes due 2027 (Senior Secured Notes 2027) and amended the Acquisition Term Loan to increase commitments to an aggregate principal amount of $3.585 billion. In connection with the issuance of the Senior Secured Notes 2027 and increase in the Acquisition Term Loan, all remaining commitments under the Bridge Loan were reduced to zero and the Bridge Loan was terminated. On January 31, 2023, we completed the Micro Focus Acquisition and repaid Micro Focus’ outstanding indebtedness. In connection with the financing of the Micro Focus Acquisition, we drew down the entire amount of the Acquisition Term Loan, less original issuance discount and other fees, and drew down $450.0 million under the Revolver (as defined below). We used proceeds from the issuance of the Senior Secured Notes 2027 and cash on hand to fund the remaining purchase price consideration. The deal-contingent forward contracts and non-contingent forward contract, as described in Note 17 “Derivative Instruments and Hedging Activities,” entered into to hedge certain foreign currency obligations in relation to the Micro Focus Acquisition, are expected to be settled on February 9, 2023. The following Notes include details related to the Micro Focus Acquisition: Note 9 “Prepaid Expenses and Other Assets,” Note 10 “Accounts Payable and Accrued Liabilities,” Note 11 “Long-Term Debt,” Note 16 “Fair Value Measurement,” Note 17 “Derivative Instruments and Hedging Activities,” Note 19 “Acquisitions”, Note 22 “Other Income (Expense), Net,” and Note 25 “Subsequent Events.” |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTSAccounting Pronouncements Adopted in Fiscal 2023During the three and six months ended December 31, 2022, there have been no new Accounting Standards Updates (ASU) or changes in accounting pronouncements that have had a material impact to our reported financial position, results of operations or cash flows |
REVENUES
REVENUES | 6 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Disaggregation of Revenue We have four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. The following tables disaggregate our revenue by significant geographic area, based on the location of our direct end customer, by type of performance obligation and timing of revenue recognition for the periods indicated: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Total Revenues by Geography: Americas (1) $ 583,602 $ 535,306 $ 1,141,390 $ 1,054,998 EMEA (2) 235,305 267,222 463,658 511,819 Asia Pacific (3) 78,533 74,271 144,428 142,290 Total revenues $ 897,440 $ 876,799 $ 1,749,476 $ 1,709,107 Total Revenues by Type of Performance Obligation: Recurring revenues (4) Cloud services and subscriptions revenue $ 408,674 $ 364,886 $ 813,325 $ 721,475 Customer support revenue 316,508 334,875 633,859 670,112 Total recurring revenues $ 725,182 $ 699,761 $ 1,447,184 $ 1,391,587 License revenue (perpetual, term and subscriptions) 107,960 109,493 170,508 183,022 Professional service and other revenue 64,298 67,545 131,784 134,498 Total revenues $ 897,440 $ 876,799 $ 1,749,476 $ 1,709,107 Total Revenues by Timing of Revenue Recognition: Point in time $ 107,960 $ 109,493 $ 170,508 $ 183,022 Over time (including professional service and other revenue) 789,480 767,306 1,578,968 1,526,085 Total revenues $ 897,440 $ 876,799 $ 1,749,476 $ 1,709,107 ___________________________ (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 Japan, Australia, China, Korea, Philippines, Singapore, India 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, net of allowance for credit losses, 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 December 31, 2022 As of June 30, 2022 Short-term contract assets $ 25,613 $ 26,167 Long-term contract assets $ 18,603 $ 19,719 Short-term deferred revenues $ 879,226 $ 902,202 Long-term deferred revenues $ 84,681 $ 91,144 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 six months ended December 31, 2022, we reclassified $20.2 million (six months ended December 31, 2021 — $18.3 million) of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional. During the three and six months ended December 31, 2022 and 2021, 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 cloud services and 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 six months ended December 31, 2022 that was included in the deferred revenue balances at June 30, 2022 was $658 million (six months ended December 31, 2021—$630 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. The following table summarizes the changes in total capitalized costs to obtain a contract, since June 30, 2022: Capitalized costs to obtain a contract as of June 30, 2022 $ 82,562 New capitalized costs incurred 16,425 Amortization of capitalized costs (15,571) Impact of foreign exchange rate changes 123 Capitalized costs to obtain a contract as of December 31, 2022 $ 83,539 During the three and six months ended December 31, 2022 and 2021, respectively, there was no significant impairment loss recognized related to capitalized costs to obtain a contract. Refer to Note 9 “Prepaid Expenses and Other Assets” for additional information on incremental costs of obtaining a contract. Transaction Price Allocated to the Remaining Performance Obligations |
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
ALLOWANCE FOR CREDIT LOSSES | ALLOWANCE FOR CREDIT LOSSES The following illustrates the activity in our allowance for credit losses on accounts receivable, since June 30, 2022: Balance as of June 30, 2022 $ 16,473 Credit loss expense (recovery) 940 Write-off / adjustments (324) Balance as of December 31, 2022 $ 17,089 Included in accounts receivable are unbilled receivables in the amount of $61.4 million as of December 31, 2022 (June 30, 2022—$47.9 million). As of December 31, 2022, we have an allowance for credit losses of $0.5 million for contract assets (June 30, 2022—$0.7 million). For additional information on contract assets please see Note 3 “Revenues.” |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT As of December 31, 2022 Cost Accumulated Net Computer hardware $ 359,023 $ (245,561) $ 113,462 Computer software 151,632 (124,639) 26,993 Capitalized software development costs 159,449 (109,366) 50,083 Leasehold improvements 104,256 (88,624) 15,632 Land and buildings 48,993 (17,222) 31,771 Furniture, equipment and other 52,482 (39,717) 12,765 Total $ 875,835 $ (625,129) $ 250,706 As of June 30, 2022 Cost Accumulated Net Computer hardware $ 332,462 $ (226,341) $ 106,121 Computer software 142,094 (117,026) 25,068 Capitalized software development costs 149,053 (101,874) 47,179 Leasehold improvements 107,739 (86,514) 21,225 Land and buildings 49,011 (16,633) 32,378 Furniture, equipment and other 52,381 $ (39,643) 12,738 Total $ 832,740 $ (588,031) $ 244,709 |
LEASES
LEASES | 6 Months Ended |
Dec. 31, 2022 | |
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 ranges 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 our Condensed Consolidated Balance Sheets and we do not have any material finance leases. Lease Costs and Other Information The following illustrates the various components of operating lease costs for the period indicated: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Operating lease cost $ 13,991 $ 15,572 $ 28,302 $ 30,963 Short-term lease cost 170 190 557 309 Variable lease cost 621 577 1,200 1,165 Sublease income (2,904) (1,969) (5,816) (3,858) Total lease cost $ 11,878 $ 14,370 $ 24,243 $ 28,579 The weighted average remaining lease term and discount rate for the periods indicated below were as follows: As of December 31, 2022 As of June 30, 2022 Weighted-average remaining lease term 5.73 years 6.13 years Weighted-average discount rate 3.43 % 2.95 % Supplemental Cash Flow Information The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payments made for variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below: Six Months Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of operating lease liabilities $ 35,230 $ 35,046 Right of use assets obtained in exchange for new operating lease liabilities (1) $ 25,061 $ 20,416 ___________________________ (1) The six months ended December 31, 2021 excludes the impact of $9.7 million of right of use assets obtained through the acquisition of Zix Corporation. See Note 19 "Acquisitions" for further details including the finalization of the purchase price allocation for the acquisition of Zix Corporation. Maturity of Lease Liabilities The following table presents the future minimum lease payments under our operating leases liabilities as of December 31, 2022: Fiscal years ending June 30, 2023 (six months ended) $ 33,886 2024 59,744 2025 47,063 2026 33,634 2027 30,697 Thereafter 66,621 Total lease payments $ 271,645 Less: Imputed interest (24,537) Total $ 247,108 Reported as: Current operating lease liabilities $ 58,299 Non-current operating lease liabilities 188,809 Total $ 247,108 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 the agreements initiated with third parties, we expect to receive sublease income of $6.3 million over the remainder of Fiscal 2023 and $43.5 million thereafter. |
GOODWILL
GOODWILL | 6 Months Ended |
Dec. 31, 2022 | |
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, 2022: Balance as of June 30, 2022 $ 5,244,653 Acquisition of Zix Corporation (Note 19) 4,878 Impact of foreign exchange rate changes 605 Balance as of December 31, 2022 $ 5,250,136 |
ACQUIRED INTANGIBLE ASSETS
ACQUIRED INTANGIBLE ASSETS | 6 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS | ACQUIRED INTANGIBLE ASSETS As of December 31, 2022 Cost Accumulated Amortization Net Technology assets $ 880,630 $ (703,937) $ 176,693 Customer assets 1,531,895 (824,840) 707,055 Total $ 2,412,525 $ (1,528,777) $ 883,748 As of June 30, 2022 Cost Accumulated Amortization Net Technology assets $ 999,032 $ (738,710) $ 260,322 Customer assets 1,595,219 (780,333) 814,886 Total $ 2,594,251 $ (1,519,043) $ 1,075,208 Where applicable, the above balances as of December 31, 2022 have been reduced to reflect the impact of intangible assets where the gross cost has become fully amortized during the six months ended December 31, 2022. The impact of this resulted in a reduction of $119 million to technology assets and $64 million to customer assets. The weighted average amortization periods for acquired technology and customer intangible assets are approximately six years and eight 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, 2023 (six months ended) $ 155,670 2024 267,169 2025 154,394 2026 111,004 2027 41,284 2028 and Thereafter 154,227 Total $ 883,748 |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 6 Months Ended |
Dec. 31, 2022 | |
Other Assets [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS | PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other current assets: As of December 31, 2022 As of June 30, 2022 Deposits and restricted cash $ 2,607 $ 6,300 Capitalized costs to obtain a contract 29,421 27,077 Derivative asset 6,848 — Short-term prepaid expenses and other current assets 92,296 87,175 Total $ 131,172 $ 120,552 Other assets: As of December 31, 2022 As of June 30, 2022 Deposits and restricted cash $ 9,894 $ 6,462 Capitalized costs to obtain a contract 54,118 55,484 Deferred debt issuance costs 54,917 — Investments 164,227 173,205 Long-term prepaid expenses and other long-term assets 20,403 21,836 Total $ 303,559 $ 256,987 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”). Derivative asset represents the assets related to the unrealized gains on our derivatives not designated as hedges related to the Micro Focus Acquisition (see Note 17 “Derivative Instruments and Hedging Activities”). Deferred debt issuance costs represents fees incurred related to the Acquisition Term Loan. See Note 11 “Long-Term Debt.” 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, which approximates fair value and is subject to volatility based on market trends and business conditions, is recorded as a component of Other income (expense), net in our Condensed Consolidated Statements of Income (see Note 22 “Other Income (Expense), Net”). During the three and six months ended December 31, 2022, our share of income (loss) from these investments was $(0.3) million and $(6.8) million, respectively (three and six months ended December 31, 2021—$2.0 million and $31.4 million, respectively). Prepaid expenses and other assets, both short-term and long-term, include advance payments on 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 | 6 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities: As of December 31, 2022 As of June 30, 2022 Accounts payable—trade $ 96,007 $ 113,978 Accrued salaries, incentives and commissions 120,533 193,421 Accrued liabilities 103,245 81,564 Accrued sales and other tax liabilities 24,825 20,423 Derivative liability (1) 16,702 — Deferred debt issuance costs (2) 53,497 — Accrued interest on Senior Notes 37,563 31,813 Amounts payable in respect of restructuring and other special charges 3,969 3,589 Asset retirement obligations 3,019 3,819 Total $ 459,360 $ 448,607 ______________________________ (1) Represents the liability related to the unrealized losses on our derivatives not designated as hedges related to the financing of the Micro Focus Acquisition (see Note 17 “Derivative Instruments and Hedging Activities”). (2) Represents deferred debt issuance costs related to the Acquisition Term Loan in connection with the financing of the Micro Focus Acquisition (see Note 11 “Long-Term Debt”). Long-term accrued liabilities: As of December 31, 2022 As of June 30, 2022 Amounts payable in respect of restructuring and other special charges $ 4,454 $ 5,702 Other accrued liabilities 1,216 563 Asset retirement obligations 13,035 11,943 Total $ 18,705 $ 18,208 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 December 31, 2022, the present value of this obligation was $16.1 million (June 30, 2022—$15.8 million), with an undiscounted value of $16.7 million (June 30, 2022—$16.4 million). |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT As of December 31, 2022 As of June 30, 2022 Total debt Senior Notes 2031 $ 650,000 $ 650,000 Senior Notes 2030 900,000 900,000 Senior Notes 2029 850,000 850,000 Senior Notes 2028 900,000 900,000 Senior Secured Notes 2027 1,000,000 — Term Loan B 952,500 957,500 Revolver — — Acquisition Term Loan — — Total principal payments due 5,252,500 4,257,500 Debt issuance costs (1) (49,342) (37,933) Total amount outstanding 5,203,158 4,219,567 Less: Current portion of long-term debt Term Loan B 10,000 10,000 Total current portion of long-term debt 10,000 10,000 Non-current portion of long-term debt $ 5,193,158 $ 4,209,567 ____________________________ (1) As of December 31, 2022, there was an additional $54.9 million of deferred debt issuance costs related to the Acquisition Term Loan included in “Other assets” not included above. Senior Unsecured Fixed Rate Notes Senior Notes 2031 On November 24, 2021, OpenText Holdings, Inc. a wholly-owned indirect subsidiary of the Company, issued $650 million in aggregate principal amount of 4.125% Senior Notes due 2031 guaranteed by the Company (Senior Notes 2031) 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 non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2031 bear interest at a rate of 4.125% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022. Senior Notes 2031 will mature on December 1, 2031, unless earlier redeemed, in accordance with their terms, or repurchased. For the three and six months ended December 31, 2022, we recorded interest expense of $6.7 million and $13.4 million, respectively, relating to Senior Notes 2031 (three and six months ended December 31, 2021 $2.7 million, respectively). 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 and to certain non-U.S. 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 six months ended December 31, 2022, we recorded interest expense of $9.3 million and $18.6 million, respectively, relating to Senior Notes 2030 (three and six months ended December 31, 2021 $9.3 million and $18.6 million, respectively). Senior Notes 2029 On November 24, 2021, we issued $850 million in aggregate principal amount of 3.875% Senior Notes due 2029 (Senior Notes 2029) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2029 bear interest at a rate of 3.875% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022. Senior Notes 2029 will mature on December 1, 2029, unless earlier redeemed, in accordance with their terms, or repurchased. For the three and six months ended December 31, 2022, we recorded interest expense of $8.2 million and $16.4 million, respectively, relating to Senior Notes 2029 (three and six months ended December 31, 2021 $3.3 million, respectively). 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 non-U.S. 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 six months ended December 31, 2022, we recorded interest expense of $8.7 million and $17.4 million, respectively, relating to Senior Notes 2028 (three and six months ended December 31, 2021—$8.7 million and $17.4 million, respectively). 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 had 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 would have matured on June 1, 2026. 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 had identical terms, were fungible with and were 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, was $850 million as of December 9, 2021. On December 9, 2021, we redeemed Senior Notes 2026 in full at a price equal to 102.9375% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date. A portion of the net proceeds from the offerings of Senior Notes 2029 and Senior Notes 2031 was used to redeem Senior Notes 2026. Upon redemption, Senior Notes 2026 were cancelled and any obligation thereunder was extinguished. The resulting loss of $27.4 million, consisting of $25.0 million relating to the early termination call premium, $6.2 million relating to unamortized debt issuance costs and $(3.8) million relating to unamortized premium, has been recorded as a component of Other income (expense), net in our Condensed Consolidated Statements of Income. See Note 22 “Other Income (Expense), Net.” For the three and six months ended December 31, 2022, we did not record any interest expense relating to Senior Notes 2026 (three and six months ended December 31, 2021—$9.4 million and $21.9 million, respectively). Senior Secured Fixed Rate Notes Senior Secured Notes 2027 On December 1, 2022, we issued $1 billion in aggregate principal amount of 6.90% Senior Secured Notes due 2027 (Senior Secured Notes 2027 and, together with the Senior Notes 2031, Senior Notes 2030, Senior Notes 2029 and Senior Notes 2028, the Senior Notes) in connection with the financing of the Micro Focus Acquisition in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Secured Notes 2027 bear interest at a rate of 6.90% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2023. Senior Secured Notes 2027 will mature on December 1, 2027, unless earlier redeemed (which would have occurred in accordance with the terms of the indenture, had we not completed the Micro Focus Acquisition (see Note 25 “Subsequent Events”)), in accordance with their terms, or repurchased. The Senior Secured Notes 2027 are guaranteed on a senior secured basis by certain of the Company’s subsidiaries, and are secured with the same priority as the Company’s senior credit facilities. The Senior Secured Notes 2027 and the related guarantees are effectively senior to all of the Company’s and the guarantors’ senior unsecured debt to the extent of the value of the collateral (as defined in the indenture to the Senior Secured Notes 2027) and are structurally subordinated to all existing and future liabilities of each of the Company’s existing and future subsidiaries that do not guarantee the Senior Secured Notes 2027. For the three and six months ended December 31, 2022, we recorded interest expense of $5.8 million, relating to Senior Secured Notes 2027 (three and six months ended December 31, 2021—nil). 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 (as defined below), Acquisition Term Loan (as defined below) and Senior Secured Notes 2027. 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 December 31, 2022, the outstanding balance on the Term Loan B bears an interest rate of 5.82%. For more information regarding the impact and discontinuance of LIBOR, see “Stress in the global financial system may adversely affect our finances and operations in ways that may be hard to predict or to defend against” included within Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for Fiscal 2022. 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 December 31, 2022, our consolidated net leverage ratio was 2.0:1. For the three and six months ended December 31, 2022, we recorded interest expense of $13.2 million and $22.9 million, respectively, relating to Term Loan B (three and six months ended December 31, 2021—$4.5 million and $9.1 million, respectively). 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 Acquisition Term Loan and Senior Secured Notes 2027. 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%. For more information regarding the impact and discontinuance of LIBOR, see “Stress in the global financial system may adversely affect our finances and operations in ways that may be hard to predict or to defend against” included within Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for Fiscal 2022. As of December 31, 2022, we had no outstanding balance under the Revolver (June 30, 2022—nil). For the three and six months ended December 31, 2022, we did not record any interest expense relating to the Revolver (three and six months ended December 31, 2021—nil). On January 27, 2023, the Company drew down $450.0 million from the Revolver to finance the Micro Focus Acquisition. Acquisition Term Loan On December 1, 2022, we amended our first lien term loan facility (the Acquisition Term Loan), dated as of August 25, 2022, to increase the aggregate commitments under the senior secured delayed-draw term loan facility from an aggregate principal amount of $2.585 billion to an aggregate principal amount of $3.585 billion. On January 31, 2023, the Company drew down the entire amount of the Acquisition Term Loan, less original issuance discount and other fees, of which the net proceeds were used to finance the Micro Focus Acquisition (see Note 19 — “Acquisitions” for more details). The Acquisition Term Loan has a seven-year term from the date of funding, and repayments under the Acquisition Term Loan are equal to 0.25% of the principal amount in equal quarterly installments for the life of the Acquisition Term Loan, with the remainder due at maturity. Borrowings under the Acquisition Term Loan will bear interest at rates as specified in the Acquisition Term Loan. The Acquisition Term Loan has incremental facility capacity of (i) $250 million plus (ii) additional amounts, subject to meeting a “consolidated senior secured net leverage” ratio not exceeding 2.75:1.00, in each case subject to certain conditions. Consolidated senior secured net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, that is secured by the Company’s or any of the Company’s subsidiaries’ assets, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. Under the Acquisition Term Loan, we must maintain a “consolidated net leverage” ratio of no more than 4.5:1.00 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges as defined in the Acquisition Term Loan. As of December 31, 2022, our consolidated net leverage ratio was 2.0:1. The Acquisition Term Loan is unconditionally guaranteed by certain subsidiary guarantors, as defined in the Acquisition Term Loan, and is secured by a first charge on substantially all of the assets of the Company and the subsidiary guarantors on a pari passu basis with the Revolver, Term Loan B and the Senior Secured Notes 2027. As of December 31, 2022, we had no borrowings under the Acquisition Term Loan. For the three and six months ended December 31, 2022, we did not record any interest expense relating to the Acquisition Term Loan (three and six months ended December 31, 2021—nil, respectively). Bridge Loan On August 25, 2022, we entered into a bridge loan agreement (Bridge Loan) which provided for commitments of up to $2.0 billion to finance a portion of the repayment of Micro Focus’ existing debt. On December 1, 2022, we entered into an amendment to the Bridge Loan that reallocated commitments under the Bridge Loan to the Acquisition Term Loan. In connection with the amendment to the Bridge Loan and the receipt of proceeds from the issuance of the Senior Secured Notes 2027, all remaining commitments under the Bridge Loan were reduced to zero and the Bridge Loan was terminated, which resulted in a loss on debt extinguishment of $8.1 million relating to unamortized debt issuance costs (see Note 22 “Other Income (Expense), Net” for more details) . For the three and six months ended December 31, 2022, we did not have any borrowings or record any interest expense relating to the Bridge Loan (three and six months ended December 31, 2021—nil, respectively). Debt Issuance Costs Debt issuance costs relate primarily to costs incurred for the purpose of obtaining our credit facilities and issuing our Senior Notes and are being amortized through interest expense over the respective terms of the Senior Notes, Term Loan B, and Acquisition Term Loan using the effective interest method and straight line method for the Revolver. Additionally, as of December 31, 2022, we had $54.9 million in deferred debt issuance costs included in “Other Assets” (see Note 9 “Prepaid Expenses and Other Assets” for more details). |
PENSION PLANS AND OTHER POST RE
PENSION PLANS AND OTHER POST RETIREMENT BENEFITS | 6 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
PENSION PLANS AND OTHER POST RETIREMENT BENEFITS | PENSION PLANS AND OTHER POST RETIREMENT BENEFITS 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. 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. 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 $(0.03) million as of December 31, 2022, no additional contributions have been made since the inception of the plan. The following are details of net pension expense relating to the following pension plans: Three Months Ended December 31, 2022 2021 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 57 $ 27 $ 315 $ 399 $ 91 $ 42 $ 472 $ 605 Interest cost 210 129 161 500 109 77 160 346 Amortization of actuarial (gains) losses — (17) (140) (157) 121 6 (23) 104 Net pension expense $ 267 $ 139 $ 336 $ 742 $ 321 $ 125 $ 609 $ 1,055 Six Months Ended December 31, 2022 2021 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 109 $ 52 $ 666 $ 827 $ 185 $ 85 $ 900 $ 1,170 Interest cost 405 248 310 963 221 157 293 671 Amortization of actuarial (gains) losses — (32) (94) (126) 246 12 (46) 212 Net pension expense $ 514 $ 268 $ 882 $ 1,664 $ 652 $ 254 $ 1,147 $ 2,053 Service-related net periodic pension costs are recorded within operating expense and all other non-service related net periodic pension costs are classified under “Interest and other related expense, net” on our Condensed Consolidated Statements of Income. Other Plans Other plans include defined benefit pension plans that are offered or statutorily required 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 | 6 Months Ended |
Dec. 31, 2022 | |
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 six months ended December 31, 2022, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $0.24299 and $0.48598 per Common Share, respectively, in the aggregate amount of $64.9 million and $129.6 million, respectively, which we paid during the same period (three and six months ended December 31, 2021—$0.2209 and $0.4418 per Common Share, respectively, in the aggregate amount of $59.7 million and $119.5 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 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 six months ended December 31, 2022, we did not repurchase any Common Shares on the open market for potential settlement of awards under our LTIP or other plans as described below (three and six months ended December 31, 2021—400,000 Common Shares, respectively, at a cost of $19.6 million, respectively). During the three and six months ended December 31, 2022, we delivered to eligible participants 290,970 and 411,376 Common Shares, respectively, that were purchased in the open market in connection with the settlement of awards and other plans (three and six months ended December 31, 2021—349,792 and 491,244 Common Shares, respectively). Share Repurchase Plan On November 4, 2021, the Board authorized a share repurchase plan (Fiscal 2022 Repurchase Plan), pursuant to which we may purchase in open market transactions, from time to time over the 12-month period commencing November 12, 2021, up to an aggregate of $350 million of our Common Shares. During the three and six months ended December 31, 2022, we did not repurchase and cancel any Common Shares (three and six months ended December 31, 2021—1,809,559 Common Shares, respectively, for $91.0 million, respectively). Share-Based Payments Share-based compensation expense for the periods indicated below is detailed as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 Stock Options (issued under Stock Option Plans) $ 5,724 $ 4,748 $ 9,309 $ 9,015 Performance Share Units (issued under LTIP) 5,025 3,726 9,260 7,171 Restricted Share Units (issued under LTIP) 2,644 1,930 4,819 4,096 Restricted Share Units (other) 12,720 1,019 23,357 2,747 Deferred Share Units (directors) 1,288 1,324 2,249 2,154 Employee Stock Purchase Plan 1,421 1,662 3,036 3,160 Total share-based compensation expense $ 28,822 $ 14,409 $ 52,030 $ 28,343 A summary of unrecognized compensation cost for unvested shared-based payment awards is as follows: As of December 31, 2022 Unrecognized Compensation Cost Weighted Average Recognition Period (years) Stock Options (issued under Stock Option Plans) 56,107.3 2.7 Performance Share Units (issued under LTIP) 39,747.4 2.2 Restricted Share Units (issued under LTIP) 20,520.4 2.2 Restricted Share Units (other) 102,643.0 1.9 Total unrecognized share-based compensation cost $ 219,018.1 Stock Option Plans Stock Options A summary of activity under our stock option plans for the six months ended December 31, 2022 is as follows: Options Weighted- Weighted- Aggregate Intrinsic Value Outstanding at June 30, 2022 8,820,662 $ 42.74 4.68 $ 7,111 Granted 4,289,650 30.49 Exercised (72,080) 27.66 Forfeited or expired (734,555) 43.54 Outstanding at December 31, 2022 12,303,677 $ 38.51 5.07 $ 6,857 Exercisable at December 31, 2022 3,645,950 $ 39.19 3.08 $ 16 As of December 31, 2022, 6,039,749 options to purchase Common Shares were available for issuance under our stock option plans. We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo pricing model, 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 estimated under the Black-Scholes option-pricing model were as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 Weighted–average fair value of options granted $ 5.77 $ 9.73 $ 6.40 $ 9.74 Weighted-average assumptions used: Expected volatility 28.87 % 26.66 % 28.50 % 26.63 % Risk–free interest rate 4.46 % 0.90 % 4.03 % 0.64 % Expected dividend yield 3.46 % 1.63 % 3.16 % 1.58 % Expected life (in years) 4.20 4.13 4.19 4.15 Forfeiture rate (based on historical rates) 7 % 7 % 7 % 7 % Average exercise share price $ 26.81 $ 51.61 $ 30.07 $ 52.35 Performance Options During the three and six months ended December 31, 2022, we granted zero and 1,000,000 performance options, respectively (during the three and six months ended December 31, 2021—nil, respectively). For the period in which performance options were granted, the weighted-average fair value of performance options and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows: Six Months Ended December 31, 2022 Weighted–average fair value of options granted $ 8.09 Derived service period (in years) 1.7 Weighted-average assumptions used: Expected volatility 26.00 % Risk–free interest rate 3.21 % Expected dividend yield 2.00 % Average exercise share price $ 31.89 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. RSUs become vested when an eligible employee remains employed throughout the vesting period. PSUs and RSUs granted under the LTIP 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. 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. Stock options granted under the LTIP have been measured using the Black-Scholes option-pricing model, consistent with Topic 718. LTIP 2025 Grants made in Fiscal 2023 under the LTIP (collectively referred to as LTIP 2025), consisting of PSUs and RSUs, took effect in Fiscal 2023 starting on August 8, 2022. 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 LTIP 2025. We expect to settle the LTIP 2025 awards in Common Shares. The LTIP 2025 PSU and RSU awards are eligible to receive dividend equivalent units that vest under the same conditions as the underlying grants. Performance Share Units (Issued Under LTIP) A summary of activity under our performance share units issued under the LTIP for the six months ended December 31, 2022 is as follows: Units Weighted-Average Weighted- Aggregate Intrinsic Value Outstanding at June 30, 2022 812,937 $ 61.29 1.89 $ 30,762 Granted (1) 533,694 54.56 Vested (1) (224,593) 41.75 Forfeited or expired (70,006) 66.30 Outstanding at December 31, 2022 1,052,032 $ 61.64 2.27 $ 31,182 __________________________ (1) PSUs are earned based on market conditions and the actual number of PSUs earned, if any, is dependent upon performance and may range from 0 to 200 percent. For the periods indicated, the weighted-average fair value of PSUs issued under LTIP, and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows: Six Months Ended December 31, 2022 2021 Weighted–average fair value of performance share units granted $43.10 - $55.06 $69.78 - $75.15 Weighted-average assumptions used: Expected volatility 29% - 31% 28.00 % Risk–free interest rate 3.13% - 3.39% 0.45% - 0.71% Expected dividend yield — % 1.70% - 1.80% Expected life (in years) 3.11 3.10 Restricted Share Units (Issued Under LTIP) A summary of activity under our RSUs issued under the LTIP for the six months ended December 31, 2022 is as follows: Units Weighted-Average Weighted- Aggregate Intrinsic Value Outstanding at June 30, 2022 611,743 $ 44.14 1.62 $ 23,148 Granted 400,299 38.82 Vested (147,223) 36.83 Forfeited or expired (56,686) 45.30 Outstanding at December 31, 2022 808,133 $ 42.22 2.20 $ 23,953 Restricted Share Units (Other) In addition to the grants made in connection with the LTIP discussed above, from time to time, we may grant RSUs to certain employees in accordance with employment and other non-LTIP related agreements. RSUs (other) vest over a specified contract date, typically two A summary of activity under our RSUs (other) issued for the six months ended December 31, 2022 is as follows: Units Weighted-Average Weighted- Aggregate Intrinsic Value Outstanding at June 30, 2022 2,593,707 $ 44.90 2.86 $ 98,146 Granted 1,479,192 28.27 Vested (120,406) 45.73 Forfeited or expired (156,133) 43.74 Outstanding at December 31, 2022 3,796,360 $ 38.60 2.65 $ 112,524 Deferred Share Units (DSUs) The DSUs are granted to certain non-employee directors. DSUs are 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. A summary of activity under our deferred share units issued for the six months ended December 31, 2022 is as follows: Units Weighted-Average Weighted- Aggregate Intrinsic Value Outstanding at June 30, 2022 (1) 885,701 $ 31.49 0.36 $ 33,515 Granted 125,918 28.76 Outstanding at December 31, 2022 (2) 1,011,619 $ 29.82 0.85 $ 29,984 ______________________ (1) Includes 55,520 unvested DSUs. (2) Includes 90,906 unvested DSUs. Employee Stock Purchase Plan (ESPP) |
GUARANTEES AND CONTINGENCIES
GUARANTEES AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2022 | |
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 January 1, 2023 - July 1, 2023 - July 1, 2025 - July 1, 2027 Long-term debt obligations (1) $ 6,673,929 $ 133,371 $ 1,455,308 $ 401,500 $ 4,683,750 Purchase obligations for contracts not accounted for as lease obligations (2) 86,305 28,619 45,007 12,679 — $ 6,760,234 $ 161,990 $ 1,500,315 $ 414,179 $ 4,683,750 _________________________ (1) Includes interest up to maturity and principal payments. Please see Note 11 “Long-Term Debt” for more details. The table above does not reflect amounts drawn on the Revolver or the Acquisition Term Loan related to the financing of the Micro Focus Acquisition subsequent to December 31, 2022. (2) For contractual obligations relating to leases and purchase obligations accounted for under ASC 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 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, Fiscal 2014, Fiscal 2015 and Fiscal 2016. Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of December 31, 2022, in connection with the CRA's reassessments for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, to be limited to penalties, interest and provincial taxes that may be due of approximately $72 million. As of December 31, 2022, we have provisionally paid approximately $32 million in order to fully preserve our rights to object to the CRA's audit positions, being the minimum payment required under Canadian legislation while the matter is in dispute. This amount is recorded within “Long-term income taxes recoverable” on the Condensed Consolidated Balance Sheets as of December 31, 2022. The notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 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. 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. We strongly disagree with the CRA's positions and believe the reassessments of Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 (including any penalties) are without merit, and we are continuing to contest these reassessments. On June 30, 2022, we filed a notice of appeal with the Tax Court of Canada seeking to reverse all such reassessments (including penalties) in full and the customary court process is ongoing. Even if we are unsuccessful in challenging the CRA's reassessments to increase our taxable income for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, 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. The CRA has audited Fiscal 2017 on a basis that we strongly disagree with and are contesting. The focus of the CRA audit has been the valuation of certain intellectual property and goodwill when one of our subsidiaries continued into Canada from Luxembourg in July 2016. In accordance with applicable rules, these assets were recognized for tax purposes at fair market value as of that time, which value was supported by an expert valuation prepared by an independent leading accounting and advisory firm. CRA’s position for Fiscal 2017 relies in significant part on the application of its positions regarding our transfer pricing methodology that are the basis for its reassessment of our fiscal years 2012 to 2016 described above, and that we believe are without merit. Other aspects of CRA’s position for Fiscal 2017 conflict with the expert valuation prepared by the independent leading accounting and advisory firm that was used to support our original filing position. On January 27, 2022, the CRA issued a notice of reassessment in respect of Fiscal 2017 on a basis consistent with its proposal to reduce the available depreciable basis of assets in Canada. On April 19, 2022, we filed our notice of objection regarding the reassessment in respect of Fiscal 2017. If we are ultimately unsuccessful in defending our position, the estimated impact of the proposed adjustment could result in us recording an income tax expense, with no immediate cash payment, to reduce the stated value of our deferred tax assets of up to approximately $470 million. Any such income tax expense could also have a corresponding cash tax impact that would primarily occur over a period of several future years based upon annual income realization in Canada. We strongly disagree with the CRA’s position for Fiscal 2017 and intend to vigorously defend our original filing position. We are not required to provisionally pay any cash amounts to the CRA as a result of the reassessment in respect of Fiscal 2017 due to the utilization of available tax attributes; however, to the extent the CRA reassesses subsequent fiscal years on a similar basis, we expect to make certain minimum payments required under Canadian legislation, which may need to be provisionally made starting in Fiscal 2024 while the matter is in dispute. We will continue to vigorously contest the adjustments to our taxable income and any penalty and interest assessments, as well as any reduction to the basis of our depreciable property. We are confident that our original tax filing positions were appropriate. Accordingly, as of the date of this Quarterly Report on Form 10-Q, we have not recorded any accruals in respect of these reassessments or proposed reassessment in our Condensed Consolidated Financial Statements. The CRA is currently in preliminary stages of auditing Fiscal 2018 and Fiscal 2019. 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 district 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 motion was fully briefed in June 2020 and a hearing on the motion to dismiss the Securities Actions was held on October 15, 2020. Following the hearing, on October 22, 2020, the district court granted with prejudice the defendants’ motion to dismiss the Securities Actions. On November 20, 2020, the lead plaintiff filed a notice of appeal to the Court of Appeals for the First Circuit. On December 21, 2021, the First Circuit issued a decision reversing and remanding the Securities Actions to the district court for further proceedings. The defendants remain confident in their position, believe the Securities Actions are without merit, and will continue to vigorously defend the matter. Carbonite vs Realtime Data On February 27, 2017, before 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).” Therein, it alleged 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 same asserted patents against other companies. After a stay pending appeal in one of those suits, on January 21, 2021, the district court held a hearing to construe the claims of the asserted patents. As to the fourth patent asserted against Carbonite, on September 24, 2019, the U.S. Patent & Trademark Office Patent Trial and Appeal Board invalidated certain claims of that patent, including certain claims that had been asserted against Carbonite. The parties then jointly stipulated to dismiss that patent from this action. On August 23, 2021, in one of the suits against other companies, the District of Delaware (No. 1:17-cv-800), held all of the patents asserted against Carbonite to be invalid. Realtime Data has appealed that decision to the U.S. Court of Appeals for the Federal Circuit. We continue to vigorously defend the matter, and the U.S. District Court for the District of Massachusetts has issued a claim construction order. 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 Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for Fiscal 2022. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective tax rate for the three months ended December 31, 2022, was 16.4%, compared to a provision of 30.8% for the three months ended December 31, 2021. The Company’s effective tax rate for the six months ended December 31, 2022, was 37.3%, compared to a provision of 27.3% for the six months ended December 31, 2021. The Company’s effective tax rate for the three months ended December 31, 2022, differs from the Canadian statutory rate of 26.5% primarily due to the pre-tax gain created by the mark-to-market valuation on the derivatives not designated as hedges that the Company entered into in connection with the financing of the Micro Focus Acquisition (see Note 17 “Derivative Instruments and Hedging Activities”). The mark-to-market gains in the quarter are considered capital income for tax purposes and enabled us to recognize the capital losses in the prior quarter that were previously unrecognized. Other items impacting the rate include provision to return adjustments, a net increase in uncertain tax positions, and permanent items such as disallowed stock-based compensation and foreign passive income inclusion, partially offset by research and development credits and amending a prior year return to reduce the prior year US Base Erosion and Anti-Abuse Tax (BEAT). The Company’s effective tax rate for the three months ended December 31, 2021, differs from the Canadian statutory rate primarily due to US BEAT, partially offset by research and development credits. The Company’s effective tax rate for the six months ended December 31, 2022, differs from the Canadian statutory rate of 26.5% primarily due to a net increase in uncertain tax positions and permanent items such as disallowed stock-based compensation and foreign passive income inclusion, partially offset by research and development credits. The Company’s effective tax rate for the six months ended December 31, 2021, differs from the Canadian statutory rate primarily due to US BEAT, partially offset by research and development credits. As of December 31, 2022, the gross amount of unrecognized tax benefits accrued is $66.6 million, which is inclusive of interest and penalties accrued of $9.1 million (June 30, 2022 — $54.1 million and $8.4 million, respectively). We believe that it is reasonably possible that the gross unrecognized tax benefit could decrease by $6.5 million in the next 12 months, 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. We are subject to income tax audits in all major taxing jurisdictions in which we operate, and remain subject to income tax audits by applicable tax authorities for a certain length of time following the tax year to which those tax filings relate. We currently have income tax audits open in Canada, the United States, Germany and other immaterial jurisdictions. The earliest fiscal years open for examination for our major jurisdictions are 2012 for Canada, 2016 for the United States and 2016 for Germany. 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 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 income tax audits, please refer to Note 14 “Guarantees and Contingencies.” As of December 31, 2022, we have recognized a provision of $21.8 million (June 30, 2022—$19.9 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 | 6 Months Ended |
Dec. 31, 2022 | |
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 that are measured at fair value on a recurring basis consisted of the following types of instruments as of December 31, 2022 and June 30, 2022: Fair Value Fair Value Hierarchy December 31, 2022 June 30, 2022 Financial Assets (Liabilities): Designated as Hedging Instruments Cash flow hedge (Note 17) Level 2 $ (1,834) $ (892) Not Designated as Hedging Instruments Deal-contingent forward contracts (Note 17) Level 3 $ 285 $ — Non-contingent forward contract (Note 17) Level 2 $ 6,563 $ — Cross currency swap contract (Note 17) Level 2 $ (16,702) $ — Changes in Level 3 Fair Value Measurements The following tables provides a reconciliation of changes in the fair value of our Level 3 deal-contingent foreign currency forward contract between June 30, 2022 and December 31, 2022. Deal-contingent foreign currency forward contract Balance as of June 30, 2022 $ — Gain (loss) recognized in income 285 Balance as of December 31, 2022 $ 285 Our valuation techniques used to measure the fair value of our Level 2 and Level 3 derivative instruments, the counterparties to which have 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. The valuation technique for our Level 3 derivative instrument utilizes management estimates related to the probability and timing of our Micro Focus Acquisition that are unobservable, and are not deemed to be significant inputs for the overall valuation. 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 the fair value (a Level 2 measurement) due to their short maturities. The fair value of our Senior Notes is determined based on observable market prices and categorized as a Level 2 measurement. As of December 31, 2022, the fair value was $3.7 billion (June 30, 2022—$2.8 billion). The carrying value of our other long-term debt facilities approximates the fair value since the interest rate is at market. Please see Note 11 “Long-Term Debt” for further details. 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 six months ended December 31, 2022 and 2021, respectively, 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 |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Cash Flow Hedge 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 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 (Loss) - net.” As of December 31, 2022, the fair value of the contracts is recorded within “Accounts payable and accrued liabilities” and represents the net loss before tax effect that is expected to be reclassified from accumulated other comprehensive income (loss) into earnings with the next twelve months. As of December 31, 2022, the notional amount of forward contracts we held to sell U.S. dollars in exchange for Canadian dollars was $87.6 million (June 30, 2022—$66.5 million). Non-designated Hedges In connection with the Micro Focus Acquisition, in August 2022, the Company entered into certain derivative transactions to meet certain foreign currency obligations under UK cash confirmation requirements related to the purchase price of the Micro Focus Acquisition, mitigate the risk of foreign currency appreciation in the GBP denominated purchase price and mitigate the risk of foreign currency appreciation in the EUR denominated existing debt held by Micro Focus. The Company entered into the following derivatives: (i) three deal-contingent forward contracts, (ii) a non-contingent forward contract, and (iii) EUR/USD cross currency swaps. The deal-contingent forward contracts have an aggregate notional amount of £1.475 billion. The non-contingent forward contract has a notional amount of £350 million. The cross currency swaps are comprised of a 5 year EUR/USD cross currency swap with a notional amount of €690 million and a 7 year EUR/USD cross currency swap with a notional amount of €690 million. The deal-contingent forward contracts and non-contingent forward contract, as described in Note 17 “Derivative Instruments and Hedging Activities,” entered into to hedge certain foreign currency obligations in relation to the Micro Focus Acquisition, are expected to be settled on February 9, 2023. These instruments were entered into as economic hedges to mitigate foreign currency risks associated with the Micro Focus Acquisition. The instruments do not qualify for hedge accounting at inception. Derivative financial instruments that do not apply hedge accounting are recognized on the Condensed Consolidated Balance Sheets as either assets or liabilities. As of December 31, 2022, the forward contracts are in a net asset position and are classified within “Prepaid expenses and other current assets” and the cross currency swaps are in a net liability position and are classified within “Accounts payable and accrued liabilities.” The forward contracts and cross currency swaps are measured at fair value with changes to fair value being recognized in the Condensed Consolidated Statements of Income within “Other income (expense), net.” Fair Value of Derivative Instruments and Effect of Derivative Instruments on Financial Performance The fair values of outstanding derivative instruments are as follows: As of As of Instrument Balance Sheet Location Asset Liability Asset Liability Derivatives designated as hedges: Cash flow hedge Accounts payable and accrued liabilities $ — $ (1,834) $ — $ (892) Total derivatives designated as hedges: $ — $ (1,834) $ — $ (892) Derivatives not designated as hedges: Deal-contingent forward contracts Prepaid expenses and other current assets 285 — — — Non-contingent forward contract Prepaid expenses and other current assets 6,563 — — — Cross currency swap contracts Accounts payable and accrued liabilities — (16,702) — — Total derivatives not designated as hedges: $ 6,848 $ (16,702) $ — $ — Total derivatives $ 6,848 $ (18,536) $ — $ (892) The effects of gains (losses) from derivative instruments on our Condensed Consolidated Statements of Income is as follows: Three Months Ended December 31, Six Months Ended December 31, Instrument Income Statement Location 2022 2021 2022 2021 Derivatives designated as hedges: Cash flow hedges Operating expenses $ (1,498) $ 25 $ (2,298) $ 415 Derivatives not designated as hedges: Deal-contingent forward contract Other income (expense), net 125,616 — 285 — Non-contingent forward contract Other income (expense), net 32,766 — 6,563 — Cross currency swap contracts Other income (expense), net 13,225 — (16,702) — Total $ 170,109 $ 25 $ (12,152) $ 415 The effects of the cash flow hedges on our Condensed Consolidated Statements of Comprehensive Income: Three Months Ended December 31, Six Months Ended Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income Location 2022 2021 2022 2021 Gain (loss) recognized in OCI (loss) on derivatives (effective portion) Unrealized gain (loss) on cash flow hedges $ 1,306 $ 141 $ (3,240) $ (1,336) Gain (loss) reclassified from AOCI into income (effective portion) Operating expenses $ (1,498) $ 25 $ (2,298) $ 415 |
SPECIAL CHARGES (RECOVERIES)
SPECIAL CHARGES (RECOVERIES) | 6 Months Ended |
Dec. 31, 2022 | |
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 December 31, Six Months Ended December 31, 2022 2021 2022 2021 Fiscal 2022 Restructuring Plan $ 1,991 $ — $ 8,101 $ — Other historical restructuring plans (622) (440) (1,090) (1,042) Acquisition-related costs 6,003 3,937 10,588 4,665 Other charges (recoveries) 2,934 5,720 6,988 5,938 Total $ 10,306 $ 9,217 $ 24,587 $ 9,561 Fiscal 2022 Restructuring Plan During the third quarter of Fiscal 2022, as part of our return to office planning, we made a strategic decision to implement restructuring activities to streamline our operations and further reduce our real estate footprint around the world (Fiscal 2022 Restructuring Plan). The Fiscal 2022 Restructuring Plan charges will relate to facility costs and workforce reductions. Facility costs will include the accelerated amortization associated with the abandonment of ROU assets, the write-off of fixed assets and other related variable lease and exit costs. 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. During the three and six months ended December 31, 2022, we recognized costs of $0.5 million and $4.3 million respectively related to abandoned office space that have been early terminated or assigned to a third party, of which $1 million and $3.9 million were related to the write-off of right of use assets. As of December 31, 2022, we expect total costs to be incurred in connection with the Fiscal 2022 Restructuring Plan to be approximately $35.0 million to $40.0 million, of which $33.9 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 six months ended December 31, 2022 is shown below. Fiscal 2022 Restructuring Plan Workforce reduction Facility charges Total Balance payable as of June 30, 2022 $ 989 $ 5,410 $ 6,399 Accruals and adjustments 3,628 441 4,069 Cash payments (3,158) (987) (4,145) Foreign exchange and other non-cash adjustments (30) (99) (129) Balance payable as of December 31, 2022 $ 1,429 $ 4,765 $ 6,194 Acquisition-related costs Acquisition-related costs, recorded within “Special charges (recoveries)” include direct costs of potential and completed acquisitions. Acquisition-related costs for the three and six months ended December 31, 2022 were $6.0 million and $10.6 million, respectively (three and six months ended December 31, 2021—$3.9 million and $4.7 million, respectively). Other charges (recoveries) For the three and six months ended December 31, 2022, “Other charges (recoveries)” includes $3.6 million and $7.2 million, respectively, related to pre-acquisition equity incentives of Zix Corporation (Zix), which upon acquisition were replaced by equivalent value cash settlements (see Note 19 “Acquisitions”) and $(0.7) million and $(0.2) million, respectively, related to other miscellaneous charges (recoveries). |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS Fiscal 2023 Acquisitions Acquisition of Micro Focus On August 25, 2022, we announced an agreement on the terms of an all-cash offer (through our wholly-owned subsidiary), to acquire the entire issued and to be issued share capital of Micro Focus International PLC (Micro Focus), for a total purchase price of approximately $5.8 billion, inclusive of Micro Focus’ cash and debt, subject to final adjustments. Concurrent with the announcement of the Micro Focus Acquisition, the Company entered into the Acquisition Term Loan and Bridge Loan (see Note 11 “Long-Term Debt”) as well as certain derivative transactions (see Note 17 “Derivative Instruments and Hedging Activities”). These derivative transactions were marked-to-market during the three and six months ended December 31, 2022, with the resulting unrealized gains (losses) on these derivatives recognized in Other Income (Expense) within our Condensed Consolidated Statements of Income (see Note 22 “Other Income (Expense), Net”). On October 18, 2022, the shareholders of Micro Focus approved the all-cash offer. On December 1, 2022, the Company issued and sold $1 billion in aggregate principal amount of 6.90% Senior Secured Notes 2027 and amended the Acquisition Term Loan to increase commitments to an aggregate principal amount of $3.585 billion. In connection with the issuance of the Senior Secured Notes 2027 and increase in the Acquisition Term Loan, all remaining commitments under the Bridge Loan were reduced to zero and the Bridge Loan was terminated. On January 31, 2023, we completed the Micro Focus Acquisition and repaid Micro Focus’ outstanding indebtedness. In connection with the financing of the Micro Focus Acquisition, we drew down the entire amount of the Acquisition Term Loan, less original issuance discount and other fees, and drew down $450.0 million under the Revolver. We used proceeds from the issuance of the Senior Secured Notes 2027 and cash on hand to fund the remaining purchase price consideration. The deal-contingent forward contracts and non-contingent forward contract, as described in Note 17 “Derivative Instruments and Hedging Activities,” entered into to hedge certain foreign currency obligations in relation to the Micro Focus Acquisition, are expected to be settled on February 9, 2023. Acquisition-related costs for Micro Focus included in “Special Charges (Recoveries)” in the Condensed Consolidated Financial Statements for the three and six months ended December 31, 2022 were $5.9 million and $10.3 million. Fiscal 2022 Acquisitions Acquisition of Zix Corporation On December 23, 2021, we acquired all of the equity interest in Zix, a leader in software as a service (SaaS) based email encryption, threat protection and compliance cloud solutions for small and medium-sized businesses (SMB). Total consideration for Zix was $894.5 million paid in cash, inclusive of cash acquired and $18.6 million relating to the cash settlement of pre-acquisition vested share-based compensation that was previously accrued but since paid as of March 31, 2022. In accordance with Accounting Standards Codification (ASC) Topic 805 “Business Combinations” (Topic 805), this acquisition was accounted for as a business combination. We believe the acquisition increases our position in the data protection, threat management, email security and compliance solutions spaces. The results of operations of Zix have been consolidated with those of OpenText beginning December 23, 2021. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based on their fair values as of December 23, 2021, are set forth below: Current assets (inclusive of cash acquired of $38.3 million) $ 71,527 Non-current tangible assets 13,450 Intangible customer assets 212,400 Intangible technology assets 92,650 Liabilities assumed (81,476) Total identifiable net assets 308,551 Goodwill 585,910 Net assets acquired $ 894,461 The goodwill of $585.9 million is primarily attributable to the synergies expected to arise after the acquisition. There is $103.7 million of goodwill that is deductible for tax purposes. The fair value of current assets acquired includes accounts receivable with a fair value of $26.0 million. The gross amount receivable was $32.6 million, of which $6.6 million is expected to be uncollectible. Acquisition-related costs for Zix included in “Special Charges (Recoveries)” in the Condensed Consolidated Financial Statements for the three and six months ended December 31, 2022 were nil and $0.2 million, respectively. Pre-acquisition equity incentives of $26.4 million were replaced upon acquisition by equivalent value cash settlements to be settled in accordance with the original vesting dates, primarily over the two years after the date of the acquisition. Of these equity incentives, $3.6 million and $7.2 million, respectively, for the three and six months ended December 31, 2022 were included in “Special Charges (Recoveries).” The finalization of the purchase price allocation during the three months ended December 31, 2022 did not result in any significant changes to the preliminary amounts previously disclosed. Acquisition of Bricata Inc. On November 24, 2021, we acquired all of the equity interest in Bricata Inc. (Bricata) for $17.8 million. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe the acquisition strengthens our OpenText Security and Protection Cloud with Network Detection and Response technologies. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Three Months Ended December 31, 2022 Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of September 30, 2022 $ (39,682) $ (3,408) $ 514 $ (42,576) Other comprehensive income (loss) before reclassifications, net of tax 39,419 959 32 40,410 Amounts reclassified into net income, net of tax — 1,101 37 1,138 Total other comprehensive income (loss) net, for the period 39,419 2,060 69 41,548 Balance as of December 31, 2022 $ (263) $ (1,348) $ 583 $ (1,028) Six Months Ended December 31, 2022 Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of June 30, 2022 $ (3,316) $ (656) $ (3,687) $ (7,659) Other comprehensive income (loss) before reclassifications, net of tax 3,053 (2,381) 4,196 4,868 Amounts reclassified into net income, net of tax — 1,689 74 1,763 Total other comprehensive income (loss) net, for the period 3,053 (692) 4,270 6,631 Balance as of December 31, 2022 $ (263) $ (1,348) $ 583 $ (1,028) Three Months Ended December 31, 2021 Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of September 30, 2021 $ 65,316 $ (543) $ (10,887) $ 53,886 Other comprehensive income (loss) before reclassifications, net of tax (21,347) 104 (1,435) (22,678) Amounts reclassified into net income, net of tax — (18) 159 141 Total other comprehensive income (loss) net, for the period (21,347) 86 (1,276) (22,537) Balance as of December 31, 2021 $ 43,969 $ (457) $ (12,163) $ 31,349 Six Months Ended December 31, 2021 Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of June 30, 2021 $ 75,408 $ 830 $ (10,000) $ 66,238 Other comprehensive income (loss) before reclassifications, net of tax (31,439) (982) (2,484) (34,905) Amounts reclassified into net income, net of tax — (305) 321 16 Total other comprehensive income (loss) net, for the period (31,439) (1,287) (2,163) (34,889) Balance as of December 31, 2021 $ 43,969 $ (457) $ (12,163) $ 31,349 |
SUPPLEMENTAL CASH FLOW DISCLOSU
SUPPLEMENTAL CASH FLOW DISCLOSURES | 6 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW DISCLOSURES | SUPPLEMENTAL CASH FLOW DISCLOSURES Six Months Ended 2022 2021 Cash paid during the period for interest $ 92,016 $ 73,389 Cash received during the period for interest $ 21,525 $ 1,531 Cash paid during the period for income taxes $ 91,444 $ 60,293 |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 6 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | OTHER INCOME (EXPENSE), NET Three Months Ended Six Months Ended 2022 2021 2022 2021 Foreign exchange gains (losses) $ 60 $ 192 $ (1,301) $ 543 Unrealized gains (losses) on derivatives not designated as hedges (1) 171,607 — (9,854) — OpenText share in net income of equity investees (2) (289) 2,042 (6,823) 31,357 Loss on debt extinguishment (3) (4) (8,131) (27,413) (8,131) (27,413) Other miscellaneous income (expense) 102 142 227 258 Total other income (expense), net $ 163,349 $ (25,037) $ (25,882) $ 4,745 ____________________________________ (1) Represents the unrealized gains (losses) on our derivatives not designated as hedges related to the financing of the Micro Focus Acquisition (see Note 17 “Derivative Instruments and Hedging Activities” for more details). (2) Represents our share in net income (losses) of equity investees, which approximates fair value and subject to volatility based on market trends and business conditions, based on our interest in certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4% to below 20% and these investments are accounted for using the equity method (see Note 9 “Prepaid Expenses and Other Assets” for more details). (3) On December 1, 2022, we amended the Acquisition Term Loan and Bridge Loan to reallocate commitments under the Bridge Loan to the Acquisition Term Loan and terminated all remaining commitments under the Bridge Loan which resulted in a loss on debt extinguishment of $8.1 million related to unamortized debt issuance costs (see Note 11 “Long-Term Debt” for more details). (4) On December 9, 2021, we redeemed Senior Notes 2026 in full, which resulted in a loss on debt extinguishment of $27.4 million. Of this, $25.0 million related to the early termination call premium, $6.2 million related to unamortized debt issuance costs and $(3.8) million related to unamortized premium (see Note 11 “Long-Term Debt” for more details). |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Dec. 31, 2022 | |
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 Six Months Ended 2022 2021 2022 2021 Basic earnings per share Net income attributable to OpenText $ 258,486 $ 88,298 $ 141,557 $ 220,213 Basic earnings per share attributable to OpenText $ 0.96 $ 0.32 $ 0.52 $ 0.81 Diluted earnings per share Net income attributable to OpenText $ 258,486 $ 88,298 $ 141,557 $ 220,213 Diluted earnings per share attributable to OpenText $ 0.96 $ 0.32 $ 0.52 $ 0.81 Weighted-average number of shares outstanding (in '000's) Basic 270,189 272,112 269,997 272,078 Effect of dilutive securities — 819 12 996 Diluted 270,189 272,931 270,009 273,074 Excluded as anti-dilutive (1) 11,462 3,108 10,331 2,845 ____________________________________ |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2022 | |
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 six months ended December 31, 2022, Mr. Stephen Sadler, a member of the Board of Directors, earned $7 thousand (six months ended December 31, 2021 — $0.4 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 | 6 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Cash Dividends As part of our quarterly, non-cumulative cash dividend program, we declared, on February 1, 2023, a dividend of $0.24299 per Common Share. The record date for this dividend is March 3, 2023 and the payment date is March 23, 2023. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board. Acquisition of Micro Focus On August 25, 2022, we announced an agreement on the terms of an all-cash offer (through our wholly-owned subsidiary), to acquire the entire issued and to be issued share capital of Micro Focus International PLC (Micro Focus), for a total purchase price of approximately $5.8 billion, inclusive of Micro Focus’ cash and debt, subject to final adjustments. On January 31, 2023, we completed the Micro Focus Acquisition and repaid Micro Focus’ outstanding indebtedness. In connection with the financing of the Micro Focus Acquisition, we drew down the entire amount of the Acquisition Term Loan, less original issuance discount and other fees, and drew down $450.0 million under the Revolver. We used proceeds from the issuance of the Senior Secured Notes 2027 and cash on hand to fund the remaining purchase price consideration. The deal-contingent forward contracts and non-contingent forward contract, as described in Note 17 “Derivative Instruments and Hedging Activities,” entered into to hedge certain foreign currency obligations in relation to the Micro Focus Acquisition, are expected to be settled on February 9, 2023. In accordance with Topic 805, the Micro Focus Acquisition will be accounted for as a business combination. The major classes of assets acquired through the Micro Focus Acquisition include, current assets, non-current tangible assets, intangible technology assets and intangible customer assets, as well as certain liabilities assumed. Due to the limited time since the acquisition date and the size and complexity of the transaction, the accounting for the business combination is not yet complete. The Company is not able to provide the allocation of consideration paid to the assets acquired or liabilities assumed. As such, it is impractical for the Company to present pro forma and comparative statements as of the date of this filing and such statements will be included in a subsequent Form 8-K. The results of operations of Micro Focus will be consolidated with those of OpenText beginning in the third quarter of Fiscal 2023. Refer to the Notes which include details related to the Micro Focus Acquisition: Note 9 “Prepaid Expenses and Other Assets,” Note 10 “Accounts Payable and Accrued Liabilities,” Note 11 “Long-Term Debt,” Note 16 “Fair Value Measurement,” Note 17 “Derivative Instruments and Hedging Activities,” Note 19 “Acquisitions” and Note 22 “Other Income (Expense), Net” along with Part II, Item 1A, “Risk Factors” included within this Quarterly Report on Form 10-Q. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of estimates | Use of estimates |
Accounting Pronouncements Adopted in Fiscal 2023 | Accounting Pronouncements Adopted in Fiscal 2023During the three and six months ended December 31, 2022, there have been no new Accounting Standards Updates (ASU) or changes in accounting pronouncements that have had a material impact to our reported financial position, results of operations or cash flows |
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 ranges 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 our Condensed Consolidated Balance Sheets and we do not have any material finance leases. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule Of Fiscal Year Terms | The following Fiscal Year terms are used throughout this Quarterly Report on Form 10-Q: Fiscal Year Beginning Date Ending Date Fiscal 2024 July 1, 2023 June 30, 2024 Fiscal 2023 July 1, 2022 June 30, 2023 Fiscal 2022 July 1, 2021 June 30, 2022 Fiscal 2021 July 1, 2020 June 30, 2021 Fiscal 2020 July 1, 2019 June 30, 2020 Fiscal 2019 July 1, 2018 June 30, 2019 Fiscal 2018 July 1, 2017 June 30, 2018 Fiscal 2017 July 1, 2016 June 30, 2017 Fiscal 2016 July 1, 2015 June 30, 2016 Fiscal 2015 July 1, 2014 June 30, 2015 Fiscal 2014 July 1, 2013 June 30, 2014 Fiscal 2013 July 1, 2012 June 30, 2013 Fiscal 2012 July 1, 2011 June 30, 2012 |
REVENUES (Tables)
REVENUES (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following tables disaggregate our revenue by significant geographic area, based on the location of our direct end customer, by type of performance obligation and timing of revenue recognition for the periods indicated: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Total Revenues by Geography: Americas (1) $ 583,602 $ 535,306 $ 1,141,390 $ 1,054,998 EMEA (2) 235,305 267,222 463,658 511,819 Asia Pacific (3) 78,533 74,271 144,428 142,290 Total revenues $ 897,440 $ 876,799 $ 1,749,476 $ 1,709,107 Total Revenues by Type of Performance Obligation: Recurring revenues (4) Cloud services and subscriptions revenue $ 408,674 $ 364,886 $ 813,325 $ 721,475 Customer support revenue 316,508 334,875 633,859 670,112 Total recurring revenues $ 725,182 $ 699,761 $ 1,447,184 $ 1,391,587 License revenue (perpetual, term and subscriptions) 107,960 109,493 170,508 183,022 Professional service and other revenue 64,298 67,545 131,784 134,498 Total revenues $ 897,440 $ 876,799 $ 1,749,476 $ 1,709,107 Total Revenues by Timing of Revenue Recognition: Point in time $ 107,960 $ 109,493 $ 170,508 $ 183,022 Over time (including professional service and other revenue) 789,480 767,306 1,578,968 1,526,085 Total revenues $ 897,440 $ 876,799 $ 1,749,476 $ 1,709,107 ___________________________ (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 Japan, Australia, China, Korea, Philippines, Singapore, India and New Zealand. (4) Recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue. |
Schedule of 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 December 31, 2022 As of June 30, 2022 Short-term contract assets $ 25,613 $ 26,167 Long-term contract assets $ 18,603 $ 19,719 Short-term deferred revenues $ 879,226 $ 902,202 Long-term deferred revenues $ 84,681 $ 91,144 |
Schedule of Incremental Costs of Obtaining a Contract with a Customer | The following table summarizes the changes in total capitalized costs to obtain a contract, since June 30, 2022: Capitalized costs to obtain a contract as of June 30, 2022 $ 82,562 New capitalized costs incurred 16,425 Amortization of capitalized costs (15,571) Impact of foreign exchange rate changes 123 Capitalized costs to obtain a contract as of December 31, 2022 $ 83,539 |
ALLOWANCE FOR CREDIT LOSSES (Ta
ALLOWANCE FOR CREDIT LOSSES (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Activity for Allowance for Credit Losses | The following illustrates the activity in our allowance for credit losses on accounts receivable, since June 30, 2022: Balance as of June 30, 2022 $ 16,473 Credit loss expense (recovery) 940 Write-off / adjustments (324) Balance as of December 31, 2022 $ 17,089 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | As of December 31, 2022 Cost Accumulated Net Computer hardware $ 359,023 $ (245,561) $ 113,462 Computer software 151,632 (124,639) 26,993 Capitalized software development costs 159,449 (109,366) 50,083 Leasehold improvements 104,256 (88,624) 15,632 Land and buildings 48,993 (17,222) 31,771 Furniture, equipment and other 52,482 (39,717) 12,765 Total $ 875,835 $ (625,129) $ 250,706 As of June 30, 2022 Cost Accumulated Net Computer hardware $ 332,462 $ (226,341) $ 106,121 Computer software 142,094 (117,026) 25,068 Capitalized software development costs 149,053 (101,874) 47,179 Leasehold improvements 107,739 (86,514) 21,225 Land and buildings 49,011 (16,633) 32,378 Furniture, equipment and other 52,381 $ (39,643) 12,738 Total $ 832,740 $ (588,031) $ 244,709 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lease Costs and Other Information | The following illustrates the various components of operating lease costs for the period indicated: Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Operating lease cost $ 13,991 $ 15,572 $ 28,302 $ 30,963 Short-term lease cost 170 190 557 309 Variable lease cost 621 577 1,200 1,165 Sublease income (2,904) (1,969) (5,816) (3,858) Total lease cost $ 11,878 $ 14,370 $ 24,243 $ 28,579 The weighted average remaining lease term and discount rate for the periods indicated below were as follows: As of December 31, 2022 As of June 30, 2022 Weighted-average remaining lease term 5.73 years 6.13 years Weighted-average discount rate 3.43 % 2.95 % The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payments made for variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below: Six Months Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of operating lease liabilities $ 35,230 $ 35,046 Right of use assets obtained in exchange for new operating lease liabilities (1) $ 25,061 $ 20,416 ___________________________ (1) The six months ended December 31, 2021 excludes the impact of $9.7 million of right of use assets obtained through the acquisition of Zix Corporation. See Note 19 "Acquisitions" for further details including the finalization of the purchase price allocation for the acquisition of Zix Corporation. |
Schedule of Maturity of Lease Liabilities | The following table presents the future minimum lease payments under our operating leases liabilities as of December 31, 2022: Fiscal years ending June 30, 2023 (six months ended) $ 33,886 2024 59,744 2025 47,063 2026 33,634 2027 30,697 Thereafter 66,621 Total lease payments $ 271,645 Less: Imputed interest (24,537) Total $ 247,108 Reported as: Current operating lease liabilities $ 58,299 Non-current operating lease liabilities 188,809 Total $ 247,108 |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The following table summarizes the changes in goodwill since June 30, 2022: Balance as of June 30, 2022 $ 5,244,653 Acquisition of Zix Corporation (Note 19) 4,878 Impact of foreign exchange rate changes 605 Balance as of December 31, 2022 $ 5,250,136 |
ACQUIRED INTANGIBLE ASSETS (Tab
ACQUIRED INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Calculation of Acquired Intangibles by Asset Class | As of December 31, 2022 Cost Accumulated Amortization Net Technology assets $ 880,630 $ (703,937) $ 176,693 Customer assets 1,531,895 (824,840) 707,055 Total $ 2,412,525 $ (1,528,777) $ 883,748 As of June 30, 2022 Cost Accumulated Amortization Net Technology assets $ 999,032 $ (738,710) $ 260,322 Customer assets 1,595,219 (780,333) 814,886 Total $ 2,594,251 $ (1,519,043) $ 1,075,208 |
Schedule of 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, 2023 (six months ended) $ 155,670 2024 267,169 2025 154,394 2026 111,004 2027 41,284 2028 and Thereafter 154,227 Total $ 883,748 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Other Assets [Abstract] | |
Schedule of Components of Prepaid Expenses and Other Assets | Prepaid expenses and other current assets: As of December 31, 2022 As of June 30, 2022 Deposits and restricted cash $ 2,607 $ 6,300 Capitalized costs to obtain a contract 29,421 27,077 Derivative asset 6,848 — Short-term prepaid expenses and other current assets 92,296 87,175 Total $ 131,172 $ 120,552 Other assets: As of December 31, 2022 As of June 30, 2022 Deposits and restricted cash $ 9,894 $ 6,462 Capitalized costs to obtain a contract 54,118 55,484 Deferred debt issuance costs 54,917 — Investments 164,227 173,205 Long-term prepaid expenses and other long-term assets 20,403 21,836 Total $ 303,559 $ 256,987 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Current Liabilities | Accounts payable and accrued liabilities: As of December 31, 2022 As of June 30, 2022 Accounts payable—trade $ 96,007 $ 113,978 Accrued salaries, incentives and commissions 120,533 193,421 Accrued liabilities 103,245 81,564 Accrued sales and other tax liabilities 24,825 20,423 Derivative liability (1) 16,702 — Deferred debt issuance costs (2) 53,497 — Accrued interest on Senior Notes 37,563 31,813 Amounts payable in respect of restructuring and other special charges 3,969 3,589 Asset retirement obligations 3,019 3,819 Total $ 459,360 $ 448,607 ______________________________ (1) Represents the liability related to the unrealized losses on our derivatives not designated as hedges related to the financing of the Micro Focus Acquisition (see Note 17 “Derivative Instruments and Hedging Activities”). (2) Represents deferred debt issuance costs related to the Acquisition Term Loan in connection with the financing of the Micro Focus Acquisition (see Note 11 “Long-Term Debt”). |
Schedule of Long-Term Accrued Liabilities | Long-term accrued liabilities: As of December 31, 2022 As of June 30, 2022 Amounts payable in respect of restructuring and other special charges $ 4,454 $ 5,702 Other accrued liabilities 1,216 563 Asset retirement obligations 13,035 11,943 Total $ 18,705 $ 18,208 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | As of December 31, 2022 As of June 30, 2022 Total debt Senior Notes 2031 $ 650,000 $ 650,000 Senior Notes 2030 900,000 900,000 Senior Notes 2029 850,000 850,000 Senior Notes 2028 900,000 900,000 Senior Secured Notes 2027 1,000,000 — Term Loan B 952,500 957,500 Revolver — — Acquisition Term Loan — — Total principal payments due 5,252,500 4,257,500 Debt issuance costs (1) (49,342) (37,933) Total amount outstanding 5,203,158 4,219,567 Less: Current portion of long-term debt Term Loan B 10,000 10,000 Total current portion of long-term debt 10,000 10,000 Non-current portion of long-term debt $ 5,193,158 $ 4,209,567 ____________________________ (1) As of December 31, 2022, there was an additional $54.9 million of deferred debt issuance costs related to the Acquisition Term Loan included in “Other assets” not included above. |
PENSION PLANS AND OTHER POST _2
PENSION PLANS AND OTHER POST RETIREMENT BENEFITS (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of 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 December 31, 2022 2021 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 57 $ 27 $ 315 $ 399 $ 91 $ 42 $ 472 $ 605 Interest cost 210 129 161 500 109 77 160 346 Amortization of actuarial (gains) losses — (17) (140) (157) 121 6 (23) 104 Net pension expense $ 267 $ 139 $ 336 $ 742 $ 321 $ 125 $ 609 $ 1,055 Six Months Ended December 31, 2022 2021 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 109 $ 52 $ 666 $ 827 $ 185 $ 85 $ 900 $ 1,170 Interest cost 405 248 310 963 221 157 293 671 Amortization of actuarial (gains) losses — (32) (94) (126) 246 12 (46) 212 Net pension expense $ 514 $ 268 $ 882 $ 1,664 $ 652 $ 254 $ 1,147 $ 2,053 |
SHARE CAPITAL, OPTION PLANS A_2
SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Costs | Share-based compensation expense for the periods indicated below is detailed as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 Stock Options (issued under Stock Option Plans) $ 5,724 $ 4,748 $ 9,309 $ 9,015 Performance Share Units (issued under LTIP) 5,025 3,726 9,260 7,171 Restricted Share Units (issued under LTIP) 2,644 1,930 4,819 4,096 Restricted Share Units (other) 12,720 1,019 23,357 2,747 Deferred Share Units (directors) 1,288 1,324 2,249 2,154 Employee Stock Purchase Plan 1,421 1,662 3,036 3,160 Total share-based compensation expense $ 28,822 $ 14,409 $ 52,030 $ 28,343 |
Schedule of Unrecognized Compensation Cost | A summary of unrecognized compensation cost for unvested shared-based payment awards is as follows: As of December 31, 2022 Unrecognized Compensation Cost Weighted Average Recognition Period (years) Stock Options (issued under Stock Option Plans) 56,107.3 2.7 Performance Share Units (issued under LTIP) 39,747.4 2.2 Restricted Share Units (issued under LTIP) 20,520.4 2.2 Restricted Share Units (other) 102,643.0 1.9 Total unrecognized share-based compensation cost $ 219,018.1 |
Schedule of Option Activity | A summary of activity under our stock option plans for the six months ended December 31, 2022 is as follows: Options Weighted- Weighted- Aggregate Intrinsic Value Outstanding at June 30, 2022 8,820,662 $ 42.74 4.68 $ 7,111 Granted 4,289,650 30.49 Exercised (72,080) 27.66 Forfeited or expired (734,555) 43.54 Outstanding at December 31, 2022 12,303,677 $ 38.51 5.07 $ 6,857 Exercisable at December 31, 2022 3,645,950 $ 39.19 3.08 $ 16 |
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 estimated under the Black-Scholes option-pricing model were as follows: Three Months Ended Six Months Ended 2022 2021 2022 2021 Weighted–average fair value of options granted $ 5.77 $ 9.73 $ 6.40 $ 9.74 Weighted-average assumptions used: Expected volatility 28.87 % 26.66 % 28.50 % 26.63 % Risk–free interest rate 4.46 % 0.90 % 4.03 % 0.64 % Expected dividend yield 3.46 % 1.63 % 3.16 % 1.58 % Expected life (in years) 4.20 4.13 4.19 4.15 Forfeiture rate (based on historical rates) 7 % 7 % 7 % 7 % Average exercise share price $ 26.81 $ 51.61 $ 30.07 $ 52.35 |
Schedule of Weighted Average Assumptions, Fair Value and Intrinsic Value | For the period in which performance options were granted, the weighted-average fair value of performance options and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows: Six Months Ended December 31, 2022 Weighted–average fair value of options granted $ 8.09 Derived service period (in years) 1.7 Weighted-average assumptions used: Expected volatility 26.00 % Risk–free interest rate 3.21 % Expected dividend yield 2.00 % Average exercise share price $ 31.89 For the periods indicated, the weighted-average fair value of PSUs issued under LTIP, and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows: Six Months Ended December 31, 2022 2021 Weighted–average fair value of performance share units granted $43.10 - $55.06 $69.78 - $75.15 Weighted-average assumptions used: Expected volatility 29% - 31% 28.00 % Risk–free interest rate 3.13% - 3.39% 0.45% - 0.71% Expected dividend yield — % 1.70% - 1.80% Expected life (in years) 3.11 3.10 |
Schedule of Non Option Award Activity | A summary of activity under our performance share units issued under the LTIP for the six months ended December 31, 2022 is as follows: Units Weighted-Average Weighted- Aggregate Intrinsic Value Outstanding at June 30, 2022 812,937 $ 61.29 1.89 $ 30,762 Granted (1) 533,694 54.56 Vested (1) (224,593) 41.75 Forfeited or expired (70,006) 66.30 Outstanding at December 31, 2022 1,052,032 $ 61.64 2.27 $ 31,182 __________________________ |
Schedule of Restricted Stock Activity | A summary of activity under our RSUs issued under the LTIP for the six months ended December 31, 2022 is as follows: Units Weighted-Average Weighted- Aggregate Intrinsic Value Outstanding at June 30, 2022 611,743 $ 44.14 1.62 $ 23,148 Granted 400,299 38.82 Vested (147,223) 36.83 Forfeited or expired (56,686) 45.30 Outstanding at December 31, 2022 808,133 $ 42.22 2.20 $ 23,953 A summary of activity under our RSUs (other) issued for the six months ended December 31, 2022 is as follows: Units Weighted-Average Weighted- Aggregate Intrinsic Value Outstanding at June 30, 2022 2,593,707 $ 44.90 2.86 $ 98,146 Granted 1,479,192 28.27 Vested (120,406) 45.73 Forfeited or expired (156,133) 43.74 Outstanding at December 31, 2022 3,796,360 $ 38.60 2.65 $ 112,524 |
Schedule of Nonvested Share Activity | A summary of activity under our deferred share units issued for the six months ended December 31, 2022 is as follows: Units Weighted-Average Weighted- Aggregate Intrinsic Value Outstanding at June 30, 2022 (1) 885,701 $ 31.49 0.36 $ 33,515 Granted 125,918 28.76 Outstanding at December 31, 2022 (2) 1,011,619 $ 29.82 0.85 $ 29,984 ______________________ (1) Includes 55,520 unvested DSUs. (2) Includes 90,906 unvested DSUs. |
GUARANTEES AND CONTINGENCIES (T
GUARANTEES AND CONTINGENCIES (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Obligations | We have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows: Payments due between Total January 1, 2023 - July 1, 2023 - July 1, 2025 - July 1, 2027 Long-term debt obligations (1) $ 6,673,929 $ 133,371 $ 1,455,308 $ 401,500 $ 4,683,750 Purchase obligations for contracts not accounted for as lease obligations (2) 86,305 28,619 45,007 12,679 — $ 6,760,234 $ 161,990 $ 1,500,315 $ 414,179 $ 4,683,750 _________________________ (1) Includes interest up to maturity and principal payments. Please see Note 11 “Long-Term Debt” for more details. The table above does not reflect amounts drawn on the Revolver or the Acquisition Term Loan related to the financing of the Micro Focus Acquisition subsequent to December 31, 2022. (2) For contractual obligations relating to leases and purchase obligations accounted for under ASC Topic 842, please see Note 6 “Leases.” |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Our financial assets and liabilities that are measured at fair value on a recurring basis consisted of the following types of instruments as of December 31, 2022 and June 30, 2022: Fair Value Fair Value Hierarchy December 31, 2022 June 30, 2022 Financial Assets (Liabilities): Designated as Hedging Instruments Cash flow hedge (Note 17) Level 2 $ (1,834) $ (892) Not Designated as Hedging Instruments Deal-contingent forward contracts (Note 17) Level 3 $ 285 $ — Non-contingent forward contract (Note 17) Level 2 $ 6,563 $ — Cross currency swap contract (Note 17) Level 2 $ (16,702) $ — |
Schedule of Reconciliation of Changes in Fair Value of Level 3 Investments | The following tables provides a reconciliation of changes in the fair value of our Level 3 deal-contingent foreign currency forward contract between June 30, 2022 and December 31, 2022. Deal-contingent foreign currency forward contract Balance as of June 30, 2022 $ — Gain (loss) recognized in income 285 Balance as of December 31, 2022 $ 285 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets | The fair values of outstanding derivative instruments are as follows: As of As of Instrument Balance Sheet Location Asset Liability Asset Liability Derivatives designated as hedges: Cash flow hedge Accounts payable and accrued liabilities $ — $ (1,834) $ — $ (892) Total derivatives designated as hedges: $ — $ (1,834) $ — $ (892) Derivatives not designated as hedges: Deal-contingent forward contracts Prepaid expenses and other current assets 285 — — — Non-contingent forward contract Prepaid expenses and other current assets 6,563 — — — Cross currency swap contracts Accounts payable and accrued liabilities — (16,702) — — Total derivatives not designated as hedges: $ 6,848 $ (16,702) $ — $ — Total derivatives $ 6,848 $ (18,536) $ — $ (892) The effects of gains (losses) from derivative instruments on our Condensed Consolidated Statements of Income is as follows: Three Months Ended December 31, Six Months Ended December 31, Instrument Income Statement Location 2022 2021 2022 2021 Derivatives designated as hedges: Cash flow hedges Operating expenses $ (1,498) $ 25 $ (2,298) $ 415 Derivatives not designated as hedges: Deal-contingent forward contract Other income (expense), net 125,616 — 285 — Non-contingent forward contract Other income (expense), net 32,766 — 6,563 — Cross currency swap contracts Other income (expense), net 13,225 — (16,702) — Total $ 170,109 $ 25 $ (12,152) $ 415 |
Schedule of Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) | The effects of the cash flow hedges on our Condensed Consolidated Statements of Comprehensive Income: Three Months Ended December 31, Six Months Ended Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income Location 2022 2021 2022 2021 Gain (loss) recognized in OCI (loss) on derivatives (effective portion) Unrealized gain (loss) on cash flow hedges $ 1,306 $ 141 $ (3,240) $ (1,336) Gain (loss) reclassified from AOCI into income (effective portion) Operating expenses $ (1,498) $ 25 $ (2,298) $ 415 |
SPECIAL CHARGES (RECOVERIES) (T
SPECIAL CHARGES (RECOVERIES) (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Restructuring, Settlement and Impairment Provisions [Abstract] | |
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 December 31, Six Months Ended December 31, 2022 2021 2022 2021 Fiscal 2022 Restructuring Plan $ 1,991 $ — $ 8,101 $ — Other historical restructuring plans (622) (440) (1,090) (1,042) Acquisition-related costs 6,003 3,937 10,588 4,665 Other charges (recoveries) 2,934 5,720 6,988 5,938 Total $ 10,306 $ 9,217 $ 24,587 $ 9,561 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 six months ended December 31, 2022 is shown below. Fiscal 2022 Restructuring Plan Workforce reduction Facility charges Total Balance payable as of June 30, 2022 $ 989 $ 5,410 $ 6,399 Accruals and adjustments 3,628 441 4,069 Cash payments (3,158) (987) (4,145) Foreign exchange and other non-cash adjustments (30) (99) (129) Balance payable as of December 31, 2022 $ 1,429 $ 4,765 $ 6,194 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The recognized amounts of identifiable assets acquired and liabilities assumed, based on their fair values as of December 23, 2021, are set forth below: Current assets (inclusive of cash acquired of $38.3 million) $ 71,527 Non-current tangible assets 13,450 Intangible customer assets 212,400 Intangible technology assets 92,650 Liabilities assumed (81,476) Total identifiable net assets 308,551 Goodwill 585,910 Net assets acquired $ 894,461 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Three Months Ended December 31, 2022 Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of September 30, 2022 $ (39,682) $ (3,408) $ 514 $ (42,576) Other comprehensive income (loss) before reclassifications, net of tax 39,419 959 32 40,410 Amounts reclassified into net income, net of tax — 1,101 37 1,138 Total other comprehensive income (loss) net, for the period 39,419 2,060 69 41,548 Balance as of December 31, 2022 $ (263) $ (1,348) $ 583 $ (1,028) Six Months Ended December 31, 2022 Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of June 30, 2022 $ (3,316) $ (656) $ (3,687) $ (7,659) Other comprehensive income (loss) before reclassifications, net of tax 3,053 (2,381) 4,196 4,868 Amounts reclassified into net income, net of tax — 1,689 74 1,763 Total other comprehensive income (loss) net, for the period 3,053 (692) 4,270 6,631 Balance as of December 31, 2022 $ (263) $ (1,348) $ 583 $ (1,028) Three Months Ended December 31, 2021 Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of September 30, 2021 $ 65,316 $ (543) $ (10,887) $ 53,886 Other comprehensive income (loss) before reclassifications, net of tax (21,347) 104 (1,435) (22,678) Amounts reclassified into net income, net of tax — (18) 159 141 Total other comprehensive income (loss) net, for the period (21,347) 86 (1,276) (22,537) Balance as of December 31, 2021 $ 43,969 $ (457) $ (12,163) $ 31,349 Six Months Ended December 31, 2021 Foreign Currency Translation Adjustments Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of June 30, 2021 $ 75,408 $ 830 $ (10,000) $ 66,238 Other comprehensive income (loss) before reclassifications, net of tax (31,439) (982) (2,484) (34,905) Amounts reclassified into net income, net of tax — (305) 321 16 Total other comprehensive income (loss) net, for the period (31,439) (1,287) (2,163) (34,889) Balance as of December 31, 2021 $ 43,969 $ (457) $ (12,163) $ 31,349 |
SUPPLEMENTAL CASH FLOW DISCLO_2
SUPPLEMENTAL CASH FLOW DISCLOSURES (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Disclosure of Cash Flow Information | Six Months Ended 2022 2021 Cash paid during the period for interest $ 92,016 $ 73,389 Cash received during the period for interest $ 21,525 $ 1,531 Cash paid during the period for income taxes $ 91,444 $ 60,293 |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Income (Expense), Net | Three Months Ended Six Months Ended 2022 2021 2022 2021 Foreign exchange gains (losses) $ 60 $ 192 $ (1,301) $ 543 Unrealized gains (losses) on derivatives not designated as hedges (1) 171,607 — (9,854) — OpenText share in net income of equity investees (2) (289) 2,042 (6,823) 31,357 Loss on debt extinguishment (3) (4) (8,131) (27,413) (8,131) (27,413) Other miscellaneous income (expense) 102 142 227 258 Total other income (expense), net $ 163,349 $ (25,037) $ (25,882) $ 4,745 ____________________________________ (1) Represents the unrealized gains (losses) on our derivatives not designated as hedges related to the financing of the Micro Focus Acquisition (see Note 17 “Derivative Instruments and Hedging Activities” for more details). (2) Represents our share in net income (losses) of equity investees, which approximates fair value and subject to volatility based on market trends and business conditions, based on our interest in certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4% to below 20% and these investments are accounted for using the equity method (see Note 9 “Prepaid Expenses and Other Assets” for more details). (3) On December 1, 2022, we amended the Acquisition Term Loan and Bridge Loan to reallocate commitments under the Bridge Loan to the Acquisition Term Loan and terminated all remaining commitments under the Bridge Loan which resulted in a loss on debt extinguishment of $8.1 million related to unamortized debt issuance costs (see Note 11 “Long-Term Debt” for more details). (4) On December 9, 2021, we redeemed Senior Notes 2026 in full, which resulted in a loss on debt extinguishment of $27.4 million. Of this, $25.0 million related to the early termination call premium, $6.2 million related to unamortized debt issuance costs and $(3.8) million related to unamortized premium (see Note 11 “Long-Term Debt” for more details). |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Three Months Ended Six Months Ended 2022 2021 2022 2021 Basic earnings per share Net income attributable to OpenText $ 258,486 $ 88,298 $ 141,557 $ 220,213 Basic earnings per share attributable to OpenText $ 0.96 $ 0.32 $ 0.52 $ 0.81 Diluted earnings per share Net income attributable to OpenText $ 258,486 $ 88,298 $ 141,557 $ 220,213 Diluted earnings per share attributable to OpenText $ 0.96 $ 0.32 $ 0.52 $ 0.81 Weighted-average number of shares outstanding (in '000's) Basic 270,189 272,112 269,997 272,078 Effect of dilutive securities — 819 12 996 Diluted 270,189 272,931 270,009 273,074 Excluded as anti-dilutive (1) 11,462 3,108 10,331 2,845 ____________________________________ |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jan. 31, 2023 | Aug. 25, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 01, 2022 | |
Noncontrolling Interest [Line Items] | ||||||
Distribution to non-controlling interest | $ 400,000 | $ 0 | $ 396,000 | |||
Senior Secured Notes 2027 | Senior notes | ||||||
Noncontrolling Interest [Line Items] | ||||||
Debt instrument face amount | $ 1,000,000,000 | |||||
Debt instrument stated interest rate | 6.90% | |||||
Acquisition Term Loan | Line of credit | Secured debt | ||||||
Noncontrolling Interest [Line Items] | ||||||
Debt instrument face amount | $ 3,585,000,000 | |||||
Debt instrument stated interest rate | 0.25% | |||||
Acquisition Term Loan | Line of credit | Revolver | Subsequent event | ||||||
Noncontrolling Interest [Line Items] | ||||||
Proceeds from long-term line of credit | $ 450,000,000 | |||||
Bridge Loan | Line of credit | Secured debt | ||||||
Noncontrolling Interest [Line Items] | ||||||
Debt instrument face amount | $ 0 | |||||
Micro Focus | ||||||
Noncontrolling Interest [Line Items] | ||||||
Purchase consideration | $ 5,800,000,000 | |||||
OT South Africa | ||||||
Noncontrolling Interest [Line Items] | ||||||
Ownership percentage by open text | 70% | |||||
GXS Singapore | ||||||
Noncontrolling Interest [Line Items] | ||||||
Ownership percentage by open text | 81% |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) revenueStream | Dec. 31, 2021 USD ($) | |
Revenue from Contract with Customer [Abstract] | ||||
Number of revenue streams (in revenue streams) | revenueStream | 4 | |||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 897,440 | $ 876,799 | $ 1,749,476 | $ 1,709,107 |
Point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 107,960 | 109,493 | 170,508 | 183,022 |
Over time (including professional service and other revenue) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 789,480 | 767,306 | 1,578,968 | 1,526,085 |
Cloud services and subscriptions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 408,674 | 364,886 | 813,325 | 721,475 |
Customer support revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 316,508 | 334,875 | 633,859 | 670,112 |
Total recurring revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 725,182 | 699,761 | 1,447,184 | 1,391,587 |
License revenue (perpetual, term and subscriptions) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 107,960 | 109,493 | 170,508 | 183,022 |
Professional service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 64,298 | 67,545 | 131,784 | 134,498 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 583,602 | 535,306 | 1,141,390 | 1,054,998 |
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 235,305 | 267,222 | 463,658 | 511,819 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 78,533 | $ 74,271 | $ 144,428 | $ 142,290 |
REVENUES - Contract Balances (D
REVENUES - Contract Balances (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |||||
Short-term contract assets | $ 25,613,000 | $ 25,613,000 | $ 26,167,000 | ||
Long-term contract assets | 18,603,000 | 18,603,000 | 19,719,000 | ||
Short-term deferred revenues | 879,226,000 | 879,226,000 | 902,202,000 | ||
Long-term deferred revenues | 84,681,000 | 84,681,000 | $ 91,144,000 | ||
Contract assets reclassified to receivables | 20,200,000 | $ 18,300,000 | |||
Asset impairment | $ 0 | $ 0 | 0 | 0 | |
Revenue recognized | $ 658,000,000 | $ 630,000,000 |
REVENUES - Incremental Costs of
REVENUES - Incremental Costs of Obtaining a Contract with a Customer (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Capitalized Contract Cost [Roll Forward] | ||||
Capitalized costs to obtain a contract, beginning balance | $ 82,562,000 | |||
New capitalized costs incurred | 16,425,000 | |||
Amortization of capitalized costs | (15,571,000) | |||
Impact of foreign exchange rate changes | 123,000 | |||
Capitalized costs to obtain a contract, ending balance | $ 83,539,000 | 83,539,000 | ||
Impairment loss | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUES - Transaction Price Al
REVENUES - Transaction Price Allocated to the Remaining Performance Obligations (Details) $ in Billions | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 1.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 46% |
Expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, period | 3 years |
ALLOWANCE FOR CREDIT LOSSES (De
ALLOWANCE FOR CREDIT LOSSES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2022 | Jun. 30, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ 16,473 | |
Credit loss expense (recovery) | 940 | |
Write-off / adjustments | (324) | |
Balance at end of period | 17,089 | |
Unbilled receivables | 61,400 | $ 47,900 |
Allowance for credit loss, contract assets | $ 500 | $ 700 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 875,835 | $ 832,740 |
Accumulated Depreciation | (625,129) | (588,031) |
Net | 250,706 | 244,709 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 359,023 | 332,462 |
Accumulated Depreciation | (245,561) | (226,341) |
Net | 113,462 | 106,121 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 151,632 | 142,094 |
Accumulated Depreciation | (124,639) | (117,026) |
Net | 26,993 | 25,068 |
Capitalized software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 159,449 | 149,053 |
Accumulated Depreciation | (109,366) | (101,874) |
Net | 50,083 | 47,179 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 104,256 | 107,739 |
Accumulated Depreciation | (88,624) | (86,514) |
Net | 15,632 | 21,225 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 48,993 | 49,011 |
Accumulated Depreciation | (17,222) | (16,633) |
Net | 31,771 | 32,378 |
Furniture, equipment and other | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 52,482 | 52,381 |
Accumulated Depreciation | (39,717) | (39,643) |
Net | $ 12,765 | $ 12,738 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Zix Corporation and Bricata Inc | ||
Lessee, Lease, Description [Line Items] | ||
ROU assets acquired | $ 9.7 | |
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) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | |
Leases [Abstract] | |||||
Operating lease cost | $ 13,991 | $ 15,572 | $ 28,302 | $ 30,963 | |
Short-term lease cost | 170 | 190 | 557 | 309 | |
Variable lease cost | 621 | 577 | 1,200 | 1,165 | |
Sublease income | (2,904) | (1,969) | (5,816) | (3,858) | |
Total lease cost | $ 11,878 | $ 14,370 | $ 24,243 | 28,579 | |
Weighted-average remaining lease term | 5 years 8 months 23 days | 5 years 8 months 23 days | 6 years 1 month 17 days | ||
Weighted-average discount rate | 3.43% | 3.43% | 2.95% | ||
Supplemental Cash Flow Information | |||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 35,230 | 35,046 | |||
Right of use assets obtained in exchange for new operating lease liabilities | $ 25,061 | $ 20,416 |
LEASES - Maturity of Lease Liab
LEASES - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Leases [Abstract] | ||
2023 (six months ended) | $ 33,886 | |
2024 | 59,744 | |
2025 | 47,063 | |
2026 | 33,634 | |
2027 | 30,697 | |
Thereafter | 66,621 | |
Total lease payments | 271,645 | |
Less: Imputed interest | (24,537) | |
Total | 247,108 | |
Reported as: | ||
Current operating lease liabilities | 58,299 | $ 56,380 |
Non-current operating lease liabilities | 188,809 | $ 198,695 |
Total | 247,108 | |
Sublease income to be received remainder of fiscal year | 6,300 | |
Sublease income to be received thereafter | $ 43,500 |
GOODWILL (Details)
GOODWILL (Details) $ in Thousands | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 5,244,653 |
Impact of foreign exchange rate changes | 605 |
Ending balance | 5,250,136 |
Zix Corporation | |
Goodwill [Roll Forward] | |
Acquisition of Zix Corporation (Note 19) | $ 4,878 |
ACQUIRED INTANGIBLE ASSETS - Ca
ACQUIRED INTANGIBLE ASSETS - Calculation of Acquired Intangibles by Asset Class (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2022 | Jun. 30, 2022 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 2,412,525 | $ 2,594,251 |
Accumulated Amortization | (1,528,777) | (1,519,043) |
Total | 883,748 | 1,075,208 |
Technology assets | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | 880,630 | 999,032 |
Accumulated Amortization | (703,937) | (738,710) |
Total | 176,693 | 260,322 |
Reduction to technology assets | $ 119,000 | |
Weighted-average amortization period (in years) for acquired intangible assets | 6 years | |
Customer assets | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 1,531,895 | 1,595,219 |
Accumulated Amortization | (824,840) | (780,333) |
Total | 707,055 | $ 814,886 |
Reduction to technology assets | $ 64,000 | |
Weighted-average amortization period (in years) for acquired intangible assets | 8 years |
ACQUIRED INTANGIBLE ASSETS - _2
ACQUIRED INTANGIBLE ASSETS - Calculation of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (six months ended) | $ 155,670 | |
2024 | 267,169 | |
2025 | 154,394 | |
2026 | 111,004 | |
2027 | 41,284 | |
2028 and Thereafter | 154,227 | |
Total | $ 883,748 | $ 1,075,208 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS - Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Prepaid expenses and other current assets: | ||
Deposits and restricted cash | $ 2,607 | $ 6,300 |
Capitalized costs to obtain a contract | 29,421 | 27,077 |
Derivative asset | 6,848 | 0 |
Short-term prepaid expenses and other current assets | 92,296 | 87,175 |
Total | 131,172 | 120,552 |
Other assets: | ||
Deposits and restricted cash | 9,894 | 6,462 |
Capitalized costs to obtain a contract | 54,118 | 55,484 |
Deferred debt issuance costs | 54,917 | 0 |
Investments | 164,227 | 173,205 |
Long-term prepaid expenses and other long-term assets | 20,403 | 21,836 |
Total | $ 303,559 | $ 256,987 |
PREPAID EXPENSES AND OTHER AS_4
PREPAID EXPENSES AND OTHER ASSETS - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||||
OpenText share in net income of equity investees | $ (289) | $ 2,042 | $ (6,823) | $ 31,357 |
Minimum | Limited Partner Investments | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage by noncontrolling owners | 4% | 4% | ||
Maximum | Limited Partner Investments | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage by noncontrolling owners | 20% | 20% |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES - Schedule of Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable—trade | $ 96,007 | $ 113,978 |
Accrued salaries, incentives and commissions | 120,533 | 193,421 |
Accrued liabilities | 103,245 | 81,564 |
Accrued sales and other tax liabilities | 24,825 | 20,423 |
Derivative liability | 16,702 | 0 |
Deferred debt issuance costs | 53,497 | 0 |
Accrued interest on Senior Notes | 37,563 | 31,813 |
Amounts payable in respect of restructuring and other special charges | 3,969 | 3,589 |
Asset retirement obligations | 3,019 | 3,819 |
Total | $ 459,360 | $ 448,607 |
ACCOUNTS PAYABLE AND ACCRUED _4
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES - Schedule of Long-Term Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Amounts payable in respect of restructuring and other special charges | $ 4,454 | $ 5,702 |
Other accrued liabilities | 1,216 | 563 |
Asset retirement obligations | 13,035 | 11,943 |
Total | $ 18,705 | $ 18,208 |
ACCOUNTS PAYABLE AND ACCRUED _5
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Present value of asset retirement obligation | $ 16.1 | $ 15.8 |
Undiscounted value of asset retirement obligation | $ 16.7 | $ 16.4 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt (Details) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Debt Instrument [Line Items] | ||
Total principal payments due | $ 5,252,500,000 | $ 4,257,500,000 |
Debt issuance costs | (49,342,000) | (37,933,000) |
Total amount outstanding | 5,203,158,000 | 4,219,567,000 |
Less: | ||
Current portion of long-term debt | 10,000,000 | 10,000,000 |
Non-current portion of long-term debt | 5,193,158,000 | 4,209,567,000 |
Unamortized debt issuance costs | 54,917,000 | 0 |
Term Loan B | ||
Less: | ||
Current portion of long-term debt | 10,000,000 | 10,000,000 |
Senior notes | Senior Notes 2031 | ||
Debt Instrument [Line Items] | ||
Total principal payments due | 650,000,000 | 650,000,000 |
Senior notes | Senior Notes 2030 | ||
Debt Instrument [Line Items] | ||
Total principal payments due | 900,000,000 | 900,000,000 |
Senior notes | Senior Notes 2029 | ||
Debt Instrument [Line Items] | ||
Total principal payments due | 850,000,000 | 850,000,000 |
Senior notes | Senior Notes 2028 | ||
Debt Instrument [Line Items] | ||
Total principal payments due | 900,000,000 | 900,000,000 |
Senior notes | Senior Secured Notes 2027 | ||
Debt Instrument [Line Items] | ||
Total principal payments due | 1,000,000,000 | 0 |
Line of credit | Revolver | ||
Debt Instrument [Line Items] | ||
Total principal payments due | 0 | 0 |
Line of credit | Term Loan B | Secured debt | ||
Debt Instrument [Line Items] | ||
Total principal payments due | 952,500,000 | 957,500,000 |
Line of credit | Acquisition Term Loan | Secured debt | ||
Debt Instrument [Line Items] | ||
Total principal payments due | $ 0 | $ 0 |
LONG-TERM DEBT - Senior Unsecur
LONG-TERM DEBT - Senior Unsecured Fixed Rate Notes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||||
Dec. 09, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 01, 2022 | Jun. 30, 2022 | Nov. 24, 2021 | Feb. 18, 2020 | Dec. 20, 2016 | May 31, 2016 | |
Debt Instrument [Line Items] | |||||||||||
Long-term debt | $ 5,252,500,000 | $ 5,252,500,000 | $ 4,257,500,000 | ||||||||
Loss on extinguishment of debt | 8,131,000 | $ 27,413,000 | 8,131,000 | $ 27,413,000 | |||||||
Debt extinguishment costs | 0 | 24,969,000 | |||||||||
Senior notes | Senior Notes 2031 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument face amount | $ 650,000,000 | ||||||||||
Debt instrument stated interest rate | 4.125% | ||||||||||
Interest expense | 6,700,000 | 2,700,000 | 13,400,000 | 2,700,000 | |||||||
Long-term debt | 650,000,000 | 650,000,000 | 650,000,000 | ||||||||
Senior notes | Senior Notes 2030 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument face amount | $ 900,000,000 | ||||||||||
Debt instrument stated interest rate | 4.125% | ||||||||||
Interest expense | 9,300,000 | 9,300,000 | 18,600,000 | 18,600,000 | |||||||
Long-term debt | 900,000,000 | 900,000,000 | 900,000,000 | ||||||||
Senior notes | Senior Notes 2029 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument face amount | $ 850,000,000 | ||||||||||
Debt instrument stated interest rate | 3.875% | ||||||||||
Interest expense | 8,200,000 | 3,300,000 | 16,400,000 | 3,300,000 | |||||||
Long-term debt | 850,000,000 | 850,000,000 | 850,000,000 | ||||||||
Senior notes | Senior Notes 2028 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument face amount | $ 900,000,000 | ||||||||||
Debt instrument stated interest rate | 3.875% | ||||||||||
Interest expense | 8,700,000 | 8,700,000 | 17,400,000 | 17,400,000 | |||||||
Long-term debt | 900,000,000 | 900,000,000 | 900,000,000 | ||||||||
Senior notes | Senior Secured Notes 2027 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument face amount | $ 1,000,000,000 | ||||||||||
Debt instrument stated interest rate | 6.90% | ||||||||||
Interest expense | 5,800,000 | 0 | 5,800,000 | 0 | |||||||
Long-term debt | 1,000,000,000 | 1,000,000,000 | $ 0 | ||||||||
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% | ||||||||||
Interest expense | $ 0 | $ 9,400,000 | $ 0 | $ 21,900,000 | |||||||
Debt premium issue price percentage | 102.75% | ||||||||||
Long-term debt | $ 850,000,000 | ||||||||||
Redemption price | 102.9375% | ||||||||||
Loss on extinguishment of debt | $ 27,400,000 | ||||||||||
Debt extinguishment costs | 25,000,000 | ||||||||||
Unamortized debt issuance costs | 6,200,000 | ||||||||||
Unamortized premium | $ (3,800,000) |
LONG-TERM DEBT - Additional Inf
LONG-TERM DEBT - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||||||||||
Jan. 31, 2023 USD ($) | Aug. 25, 2022 USD ($) | Oct. 31, 2019 USD ($) | May 30, 2018 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 01, 2022 USD ($) | Jun. 30, 2022 USD ($) | Oct. 30, 2019 USD ($) | Jan. 16, 2014 USD ($) | |
Debt Instrument [Line Items] | ||||||||||||
Long-term debt | $ 5,252,500,000 | $ 5,252,500,000 | $ 4,257,500,000 | |||||||||
Revolver | Line of credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest expense | 0 | $ 0 | 0 | $ 0 | ||||||||
Credit agreement, maximum capacity | $ 750,000,000 | $ 450,000,000 | ||||||||||
Long-term debt | 0 | 0 | 0 | |||||||||
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% | |||||||||||
Acquisition Term Loan | Revolver | Line of credit | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from long-term line of credit | $ 450,000,000 | |||||||||||
Acquisition Term Loan | Secured debt | Line of credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument face amount | $ 3,585,000,000 | |||||||||||
Debt term | 7 years | |||||||||||
Leverage ratio, compliance maximum | 2.75 | |||||||||||
Credit agreement, maximum capacity | $ 250,000,000 | |||||||||||
Long-term debt | $ 0 | $ 0 | 0 | |||||||||
Debt instrument stated interest rate | 0.25% | |||||||||||
Acquisition Term Loan | Secured debt | Line of credit | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument face amount | $ 2,585,000,000 | |||||||||||
Acquisition Term Loan | Secured debt | Line of credit | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Leverage ratio | 4.5 | |||||||||||
Term Loan B | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument face amount | $ 1,000,000,000 | $ 800,000,000 | ||||||||||
Proceeds from issuance of debt | $ 1,000,000,000 | |||||||||||
Debt term | 7 years | |||||||||||
Term loan quarterly repayment as percentage of principal | 0.25% | |||||||||||
Effective interest rate percentage | 5.82% | 5.82% | ||||||||||
Leverage ratio, compliance maximum | 4 | |||||||||||
Leverage ratio | 2 | 2 | ||||||||||
Interest expense | $ 13,200,000 | 4,500,000 | $ 22,900,000 | 9,100,000 | ||||||||
Term Loan B | LIBOR | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest addition to floating rate | 1.75% | |||||||||||
Term Loan B | Secured debt | Line of credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term debt | 952,500,000 | 952,500,000 | $ 957,500,000 | |||||||||
Bridge Loan | Secured debt | Line of credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument face amount | $ 0 | |||||||||||
Interest expense | 0 | $ 0 | 0 | $ 0 | ||||||||
Credit agreement, maximum capacity | $ 2,000,000,000 | |||||||||||
Long-term debt | $ 0 | $ 0 |
PENSION PLANS AND OTHER POST _3
PENSION PLANS AND OTHER POST RETIREMENT BENEFITS - Additional Information (Details) - Pension Plan | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
CDT | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions made by employer to plan | $ 0 |
GXS GER | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions made by employer to plan | 0 |
GXS PHP | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions made by employer to plan | 0 |
Fair value of plan assets | $ 30,000 |
PENSION PLANS AND OTHER POST _4
PENSION PLANS AND OTHER POST RETIREMENT BENEFITS - Components of Net Pension Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Net pension expense | $ 3,444 | $ 3,015 | ||
Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 399 | $ 605 | 827 | 1,170 |
Interest cost | 500 | 346 | 963 | 671 |
Amortization of actuarial (gains) losses | (157) | 104 | (126) | 212 |
Net pension expense | 742 | 1,055 | 1,664 | 2,053 |
Pension Plan | CDT | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 57 | 91 | 109 | 185 |
Interest cost | 210 | 109 | 405 | 221 |
Amortization of actuarial (gains) losses | 0 | 121 | 0 | 246 |
Net pension expense | 267 | 321 | 514 | 652 |
Pension Plan | GXS GER | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 27 | 42 | 52 | 85 |
Interest cost | 129 | 77 | 248 | 157 |
Amortization of actuarial (gains) losses | (17) | 6 | (32) | 12 |
Net pension expense | 139 | 125 | 268 | 254 |
Pension Plan | GXS PHP | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 315 | 472 | 666 | 900 |
Interest cost | 161 | 160 | 310 | 293 |
Amortization of actuarial (gains) losses | (140) | (23) | (94) | (46) |
Net pension expense | $ 336 | $ 609 | $ 882 | $ 1,147 |
SHARE CAPITAL, OPTION PLANS A_3
SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Nov. 04, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Dividends | |||||
Dividends declared per common share (in dollars per share) | $ 0.24299 | $ 0.2209 | $ 0.48598 | $ 0.4418 | |
Payments of dividends | $ 64,900 | $ 59,700 | $ 129,562 | $ 119,536 | |
Share Capital | |||||
Preference shares issued (in shares) | 0 | 0 | |||
Treasury Stock | |||||
Purchase of treasury stock (in shares) | 0 | 400,000 | 0 | 19,600,000 | |
Issuance of treasury stock (in shares) | 290,970 | 349,792 | 411,376 | 491,244 | |
Stock Repurchase Plan | |||||
Stock repurchased and retired (in shares) | 0 | 1,809,559 | 0 | 91,000,000 | |
Performance options granted (in shares) | 4,289,650 | ||||
Stock Options (issued under Stock Option Plans) | |||||
Stock Repurchase Plan | |||||
Common shares available for issuance (in shares) | 6,039,749 | 6,039,749 | |||
PSUs | |||||
Stock Repurchase Plan | |||||
Performance options granted (in shares) | 0 | 0 | 1,000,000 | 0 | |
Fiscal 2022 Repurchase Plan | |||||
Stock Repurchase Plan | |||||
Stock repurchase plan, period in force | 12 months | ||||
Stock repurchase plan, authorized amount | $ 350,000 | ||||
Long Term Incentive Plan | |||||
Stock Repurchase Plan | |||||
Award vesting period | 3 years |
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 | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 28,822 | $ 14,409 | $ 52,030 | $ 28,343 |
Stock Options (issued under Stock Option Plans) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 5,724 | 4,748 | 9,309 | 9,015 |
Performance Share Units (issued under LTIP) | Long Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 5,025 | 3,726 | 9,260 | 7,171 |
Restricted Share Units | Long Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 2,644 | 1,930 | 4,819 | 4,096 |
Restricted Share Units | Restricted Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 12,720 | 1,019 | 23,357 | 2,747 |
Deferred Share Units (directors) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 1,288 | 1,324 | 2,249 | 2,154 |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 1,421 | $ 1,662 | $ 3,036 | $ 3,160 |
SHARE CAPITAL, OPTION PLANS A_5
SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS - Unrecognized Compensation Cost (Details) | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 219,018,100 |
Stock Options (issued under Stock Option Plans) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 56,107,300 |
Unvested stock awards compensation cost, weighted average recognition period | 2 years 8 months 12 days |
Performance Share Units (issued under LTIP) | Long Term Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 39,747,400 |
Unvested stock awards compensation cost, weighted average recognition period | 2 years 2 months 12 days |
Restricted Share Units | Long Term Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 20,520,400 |
Unvested stock awards compensation cost, weighted average recognition period | 2 years 2 months 12 days |
Restricted Share Units | Restricted Share Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 102,643,000 |
Unvested stock awards compensation cost, weighted average recognition period | 1 year 10 months 24 days |
SHARE CAPITAL, OPTION PLANS A_6
SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS - Schedule of Outstanding Stock Options Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | |
Options | ||
Outstanding at beginning of period (in shares) | shares | 8,820,662 | |
Granted (in shares) | shares | 4,289,650 | |
Exercised (in shares) | shares | (72,080) | |
Forfeited or expired (in shares) | shares | (734,555) | |
Outstanding at end of period (in shares) | shares | 12,303,677 | 8,820,662 |
Exercisable ending balance (in shares) | shares | 3,645,950 | |
Weighted- Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 42.74 | |
Granted (in dollars per share) | $ / shares | 30.49 | |
Exercised (in dollars per share) | $ / shares | 27.66 | |
Forfeited or expired (in dollars per share) | $ / shares | 43.54 | |
Outstanding at end of period (in dollars per share) | $ / shares | 38.51 | $ 42.74 |
Exercisable at end of period (in dollars per share) | $ / shares | $ 39.19 | |
Weighted- Average Remaining Contractual Term (years) | ||
Outstanding (years) | 5 years 25 days | 4 years 8 months 4 days |
Exercisable (years) | 3 years 29 days | |
Aggregate Intrinsic Value ($’000's) | ||
Outstanding ($’000's) | $ | $ 6,857 | $ 7,111 |
Exercisable ($’000's) | $ | $ 16 |
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 | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Options (issued under Stock Option Plans) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average fair value of options granted (in dollars per share) | $ 5.77 | $ 9.73 | $ 6.40 | $ 9.74 |
Weighted-average assumptions used: | ||||
Expected volatility | 28.87% | 26.66% | 28.50% | 26.63% |
Risk–free interest rate | 4.46% | 0.90% | 4.03% | 0.64% |
Expected dividend yield | 3.46% | 1.63% | 3.16% | 1.58% |
Expected life (in years) | 4 years 2 months 12 days | 4 years 1 month 17 days | 4 years 2 months 8 days | 4 years 1 month 24 days |
Forfeiture rate (based on historical rates) | 7% | 7% | 7% | 7% |
Average exercised share price (in dollars per share) | $ 26.81 | $ 51.61 | $ 30.07 | $ 52.35 |
PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average fair value of options granted (in dollars per share) | $ 8.09 | |||
Derived service period (in years) | 1 year 8 months 12 days | |||
Weighted-average assumptions used: | ||||
Weighted–average fair value of performance share units granted | $ 54.56 | |||
Expected volatility | 26% | |||
Risk–free interest rate | 3.21% | |||
Expected dividend yield | 2% | |||
Average exercised share price (in dollars per share) | $ 31.89 | |||
PSUs | Long Term Incentive Plan | ||||
Weighted-average assumptions used: | ||||
Expected volatility | 28% | |||
Expected dividend yield | 0% | |||
Expected life (in years) | 3 years 1 month 9 days | 3 years 1 month 6 days | ||
PSUs | Long Term Incentive Plan | Minimum | ||||
Weighted-average assumptions used: | ||||
Weighted–average fair value of performance share units granted | $ 43.10 | $ 69.78 | ||
Expected volatility | 29% | |||
Risk–free interest rate | 3.13% | 0.45% | ||
Expected dividend yield | 1.70% | |||
PSUs | Long Term Incentive Plan | Maximum | ||||
Weighted-average assumptions used: | ||||
Weighted–average fair value of performance share units granted | $ 55.06 | $ 75.15 | ||
Expected volatility | 31% | |||
Risk–free interest rate | 3.39% | 0.71% | ||
Expected dividend yield | 1.80% | |||
Restricted Share Units | ||||
Weighted-average assumptions used: | ||||
Weighted–average fair value of performance share units granted | $ 28.27 | |||
Restricted Share Units | Long Term Incentive Plan | ||||
Weighted-average assumptions used: | ||||
Weighted–average fair value of performance share units granted | 38.82 | |||
Deferred Share Units (DSUs) | ||||
Weighted-average assumptions used: | ||||
Weighted–average fair value of performance share units granted | $ 28.76 |
SHARE CAPITAL, OPTION PLANS A_8
SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS - Long-Term Incentive Plans (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issuance of treasury stock (in shares) | 290,970 | 349,792 | 411,376 | 491,244 |
Long Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of plan | 3 years |
SHARE CAPITAL, OPTION PLANS A_9
SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS - Non Option Unit Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | |
Weighted Average | |||||
Issuance of treasury stock (in shares) | 290,970 | 349,792 | 411,376 | 491,244 | |
PSUs | |||||
Units | |||||
Beginning balance (in shares) | 812,937 | ||||
Granted (in shares) | 533,694 | ||||
Vested (in shares) | (224,593) | ||||
Forfeited or expired (in shares) | (70,006) | ||||
Ending balance (in shares) | 1,052,032 | 1,052,032 | 812,937 | ||
Weighted Average | |||||
Beginning balance (in dollars per share) | $ 61.29 | ||||
Weighted–average fair value of performance share units granted | 54.56 | ||||
Vested (in dollars per share) | 41.75 | ||||
Forfeited or expired (in dollars per share) | 66.30 | ||||
Ending balance (in dollars per share) | $ 61.64 | $ 61.64 | $ 61.29 | ||
Weighted- Average Remaining Contractual Term (years) | 2 years 3 months 7 days | 1 year 10 months 20 days | |||
Aggregate Intrinsic Value ($’000's) | $ 31,182 | $ 31,182 | $ 30,762 | ||
PSUs | Minimum | |||||
Weighted Average | |||||
Performance target | 0% | ||||
PSUs | Maximum | |||||
Weighted Average | |||||
Performance target | 200% | ||||
PSUs | Long Term Incentive Plan | Minimum | |||||
Weighted Average | |||||
Weighted–average fair value of performance share units granted | $ 43.10 | $ 69.78 | |||
PSUs | Long Term Incentive Plan | Maximum | |||||
Weighted Average | |||||
Weighted–average fair value of performance share units granted | $ 55.06 | $ 75.15 | |||
Restricted Share Units | |||||
Units | |||||
Beginning balance (in shares) | 2,593,707 | ||||
Granted (in shares) | 1,479,192 | ||||
Vested (in shares) | (120,406) | ||||
Forfeited or expired (in shares) | (156,133) | ||||
Ending balance (in shares) | 3,796,360 | 3,796,360 | 2,593,707 | ||
Weighted Average | |||||
Beginning balance (in dollars per share) | $ 44.90 | ||||
Weighted–average fair value of performance share units granted | 28.27 | ||||
Vested (in dollars per share) | 45.73 | ||||
Forfeited or expired (in dollars per share) | 43.74 | ||||
Ending balance (in dollars per share) | $ 38.60 | $ 38.60 | $ 44.90 | ||
Weighted- Average Remaining Contractual Term (years) | 2 years 7 months 24 days | 2 years 10 months 9 days | |||
Aggregate Intrinsic Value ($’000's) | $ 112,524 | $ 112,524 | $ 98,146 | ||
Restricted Share Units | Long Term Incentive Plan | |||||
Units | |||||
Beginning balance (in shares) | 611,743 | ||||
Granted (in shares) | 400,299 | ||||
Vested (in shares) | (147,223) | ||||
Forfeited or expired (in shares) | (56,686) | ||||
Ending balance (in shares) | 808,133 | 808,133 | 611,743 | ||
Weighted Average | |||||
Beginning balance (in dollars per share) | $ 44.14 | ||||
Weighted–average fair value of performance share units granted | 38.82 | ||||
Vested (in dollars per share) | 36.83 | ||||
Forfeited or expired (in dollars per share) | 45.30 | ||||
Ending balance (in dollars per share) | $ 42.22 | $ 42.22 | $ 44.14 | ||
Weighted- Average Remaining Contractual Term (years) | 2 years 2 months 12 days | 1 year 7 months 13 days | |||
Aggregate Intrinsic Value ($’000's) | $ 23,953 | $ 23,953 | $ 23,148 | ||
Deferred Share Units (DSUs) | |||||
Units | |||||
Beginning balance (in shares) | 885,701 | ||||
Granted (in shares) | 125,918 | ||||
Ending balance (in shares) | 1,011,619 | 1,011,619 | 885,701 | ||
Weighted Average | |||||
Beginning balance (in dollars per share) | $ 31.49 | ||||
Weighted–average fair value of performance share units granted | 28.76 | ||||
Ending balance (in dollars per share) | $ 29.82 | $ 29.82 | $ 31.49 | ||
Weighted- Average Remaining Contractual Term (years) | 10 months 6 days | 4 months 9 days | |||
Aggregate Intrinsic Value ($’000's) | $ 29,984 | $ 29,984 | $ 33,515 | ||
Deferred Share Units (DSUs) | Long Term Incentive Plan | |||||
Units | |||||
Beginning balance (in shares) | 55,520 | ||||
Ending balance (in shares) | 90,906 | 90,906 | 55,520 |
SHARE CAPITAL, OPTION PLANS _10
SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS - RSUs, DSUs and ESPP (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Long Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Restricted Share Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 2 years | |||
Restricted Share Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Employee Share Purchase Plan (ESPP) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards purchase price discount | 15% | |||
Common shares eligible for issuance (in shares) | 227,885 | 172,782 | 582,350 | 398,513 |
Cash received from employee stock purchase plan | $ 5.8 | $ 7 | $ 13.8 | $ 16.4 |
GUARANTEES AND CONTINGENCIES -
GUARANTEES AND CONTINGENCIES - Schedule of Contractual Obligations with Minimum Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Long term debt obligations | |
Total | $ 6,673,929 |
January 1, 2023 - June 30, 2023 | 133,371 |
July 1, 2023 - June 30, 2025 | 1,455,308 |
July 1, 2025 - June 30, 2027 | 401,500 |
July 1, 2027 and beyond | 4,683,750 |
Purchase obligations for contracts not accounted for as lease obligations | |
Total | 86,305 |
January 1, 2023 - June 30, 2023 | 28,619 |
July 1, 2023 - June 30, 2025 | 45,007 |
July 1, 2025 - June 30, 2027 | 12,679 |
July 1, 2027 and beyond | 0 |
Total payments due | |
Total | 6,760,234 |
January 1, 2023 - June 30, 2023 | 161,990 |
July 1, 2023 - June 30, 2025 | 1,500,315 |
July 1, 2025 - June 30, 2027 | 414,179 |
July 1, 2027 and beyond | $ 4,683,750 |
GUARANTEES AND CONTINGENCIES _2
GUARANTEES AND CONTINGENCIES - Additional Information (Details) - Canada Revenue Agency (CRA) $ in Millions | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Loss Contingencies [Line Items] | |
Estimated amount of loss resulting from an adverse tax position | $ 72 |
Income taxes paid | $ 32 |
Tax Year 2012 | |
Loss Contingencies [Line Items] | |
Additional tax expense, as a percent | 10% |
Tax Year 2013 | |
Loss Contingencies [Line Items] | |
Additional tax expense, as a percent | 10% |
Tax Year 2014 | |
Loss Contingencies [Line Items] | |
Additional tax expense, as a percent | 10% |
Tax Year 2015 | |
Loss Contingencies [Line Items] | |
Additional tax expense, as a percent | 10% |
Tax Year 2016 | |
Loss Contingencies [Line Items] | |
Additional tax expense, as a percent | 10% |
Tax Year 2017 | |
Loss Contingencies [Line Items] | |
Estimated amount of loss resulting from an adverse tax position | $ 470 |
Minimum | Tax Year 2012 | |
Loss Contingencies [Line Items] | |
Income tax examination, estimate of increase to taxable income | 90 |
Minimum | Tax Year 2013 | |
Loss Contingencies [Line Items] | |
Income tax examination, estimate of increase to taxable income | 90 |
Minimum | Tax Year 2014 | |
Loss Contingencies [Line Items] | |
Income tax examination, estimate of increase to taxable income | 90 |
Minimum | Tax Year 2015 | |
Loss Contingencies [Line Items] | |
Income tax examination, estimate of increase to taxable income | 90 |
Minimum | Tax Year 2016 | |
Loss Contingencies [Line Items] | |
Income tax examination, estimate of increase to taxable income | 90 |
Maximum | Tax Year 2012 | |
Loss Contingencies [Line Items] | |
Income tax examination, estimate of increase to taxable income | 100 |
Maximum | Tax Year 2013 | |
Loss Contingencies [Line Items] | |
Income tax examination, estimate of increase to taxable income | 100 |
Maximum | Tax Year 2014 | |
Loss Contingencies [Line Items] | |
Income tax examination, estimate of increase to taxable income | 100 |
Maximum | Tax Year 2015 | |
Loss Contingencies [Line Items] | |
Income tax examination, estimate of increase to taxable income | 100 |
Maximum | Tax Year 2016 | |
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 | 6 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 16.40% | 30.80% | 37.30% | 27.30% | |
Effective canadian statutory income tax rate | 26.50% | 26.50% | |||
Unrecognized tax benefits | $ 66.6 | $ 66.6 | $ 54.1 | ||
Interest and penalties accrued | 9.1 | 9.1 | 8.4 | ||
Possible decrease in tax expense in next 12 months | 6.5 | 6.5 | |||
Provision for deferred income tax liabilities | $ 21.8 | $ 21.8 | $ 19.9 |
FAIR VALUE MEASUREMENT - Financ
FAIR VALUE MEASUREMENT - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Fair Value | ||
Liability | $ (18,536) | $ (892) |
Asset | 6,848 | 0 |
Designated as Hedging Instruments | ||
Fair Value | ||
Liability | (1,834) | (892) |
Asset | 0 | 0 |
Designated as Hedging Instruments | Cash Flow Hedge | ||
Fair Value | ||
Liability | (1,834) | (892) |
Asset | 0 | 0 |
Not Designated as Hedging Instruments | ||
Fair Value | ||
Liability | (16,702) | 0 |
Asset | 6,848 | 0 |
Not Designated as Hedging Instruments | Deal Contingent Forward Contract | ||
Fair Value | ||
Liability | 0 | 0 |
Asset | 285 | 0 |
Not Designated as Hedging Instruments | Non-Contingent Forward Contract | ||
Fair Value | ||
Liability | 0 | 0 |
Asset | 6,563 | 0 |
Not Designated as Hedging Instruments | Cross Currency Swap Contracts | ||
Fair Value | ||
Liability | (16,702) | 0 |
Asset | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Designated as Hedging Instruments | Cash Flow Hedge | ||
Fair Value | ||
Liability | (1,834) | (892) |
Fair Value, Measurements, Recurring | Level 2 | Not Designated as Hedging Instruments | Non-Contingent Forward Contract | ||
Fair Value | ||
Asset | 6,563 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Not Designated as Hedging Instruments | Cross Currency Swap Contracts | ||
Fair Value | ||
Liability | (16,702) | 0 |
Fair Value, Measurements, Recurring | Level 3 | Not Designated as Hedging Instruments | Deal Contingent Forward Contract | ||
Fair Value | ||
Asset | $ 285 | $ 0 |
FAIR VALUE MEASUREMENT - Reconc
FAIR VALUE MEASUREMENT - Reconciliation of Changes in Fair Value of Level 3 Investments (Details) - Deal Contingent Forward Contract - Not Designated as Hedging Instruments - Level 3 - Fair Value, Measurements, Recurring $ in Thousands | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 0 |
Gain (loss) recognized in income | 285 |
Ending balance | $ 285 |
FAIR VALUE MEASUREMENT - Narrat
FAIR VALUE MEASUREMENT - Narrative (Details) - USD ($) $ in Billions | Dec. 31, 2022 | Jun. 30, 2022 |
Senior notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of note | $ 3.7 | $ 2.8 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) € in Millions, £ in Millions, $ in Millions | 1 Months Ended | 6 Months Ended | ||
Aug. 31, 2022 GBP (£) derivative | Dec. 31, 2022 USD ($) | Aug. 31, 2022 EUR (€) derivative | Jun. 30, 2022 USD ($) | |
Deal Contingent Forward Contract | Micro Focus | Not Designated as Hedging Instruments | ||||
Derivative [Line Items] | ||||
Notional amount of forward contracts held to sell U.S. dollars in exchange for Canadian dollars | £ | £ 1,475 | |||
Non-Contingent Forward Contract | ||||
Derivative [Line Items] | ||||
Notional amount of forward contracts held to sell U.S. dollars in exchange for Canadian dollars | $ | $ 87.6 | $ 66.5 | ||
Non-Contingent Forward Contract | Micro Focus | Not Designated as Hedging Instruments | ||||
Derivative [Line Items] | ||||
Notional amount of forward contracts held to sell U.S. dollars in exchange for Canadian dollars | £ | £ 350 | |||
Cross Currency Swap Contracts | ||||
Derivative [Line Items] | ||||
Number of foreign currency swaps (in derivatives) | derivative | 3 | 3 | ||
5 Year EUR to USD Market Hedge | Micro Focus | Not Designated as Hedging Instruments | ||||
Derivative [Line Items] | ||||
Contract maturity | 5 years | |||
Notional amount of forward contracts held to sell U.S. dollars in exchange for Canadian dollars | € | € 690 | |||
7 Year EUR to USD Market Hedge | Micro Focus | Not Designated as Hedging Instruments | ||||
Derivative [Line Items] | ||||
Contract maturity | 7 years | |||
Notional amount of forward contracts held to sell U.S. dollars in exchange for Canadian dollars | € | € 690 | |||
Minimum | ||||
Derivative [Line Items] | ||||
Contract maturity | 1 month | |||
Maximum | ||||
Derivative [Line Items] | ||||
Contract maturity | 12 months |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Fair Value in the Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Derivatives, Fair Value [Line Items] | ||
Asset | $ 6,848 | $ 0 |
Liability | $ (18,536) | $ (892) |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Accounts payable and accrued liabilities (Note 10) | Accounts payable and accrued liabilities (Note 10) |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other current assets (Note 9) | Prepaid expenses and other current assets (Note 9) |
Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset | $ 0 | $ 0 |
Liability | (1,834) | (892) |
Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset | 6,848 | 0 |
Liability | (16,702) | 0 |
Cash Flow Hedge | Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset | 0 | 0 |
Liability | (1,834) | (892) |
Deal Contingent Forward Contract | Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset | 285 | 0 |
Liability | 0 | 0 |
Non-Contingent Forward Contract | Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset | 6,563 | 0 |
Liability | 0 | 0 |
Cross Currency Swap Contracts | Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset | 0 | 0 |
Liability | $ (16,702) | $ 0 |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Fair Value in the Condensed Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivatives, Fair Value [Line Items] | ||||
Total | $ 170,109 | $ 25 | $ (12,152) | $ 415 |
Cash Flow Hedge | Designated as Hedging Instruments | Operating expenses | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain (loss) reclassified from AOCI into income (effective portion) | (1,498) | 25 | (2,298) | 415 |
Deal Contingent Forward Contract | Other income (expense), net | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain (loss) or derivatives not designated as hedging instruments, net | 125,616 | 0 | 285 | 0 |
Non-contingent forward contract | Other income (expense), net | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain (loss) or derivatives not designated as hedging instruments, net | 32,766 | 0 | 6,563 | 0 |
Cross Currency Swap Contracts | Other income (expense), net | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain (loss) or derivatives not designated as hedging instruments, net | $ 13,225 | $ 0 | $ (16,702) | $ 0 |
DERIVATIVE INSTRUMENTS AND HE_6
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Effects on Income and Other Comprehensive Income (OCI) (Details) - Cash Flow Hedge - Designated as Hedging Instruments - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Unrealized gain (loss) on cash flow hedges | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain (loss) recognized in OCI (loss) on derivatives (effective portion) | $ 1,306 | $ 141 | $ (3,240) | $ (1,336) |
Operating expenses | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain (loss) reclassified from AOCI into income (effective portion) | $ (1,498) | $ 25 | $ (2,298) | $ 415 |
SPECIAL CHARGES (RECOVERIES) -
SPECIAL CHARGES (RECOVERIES) - Schedule of Special Charges Related to Restructuring Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition-related costs | $ 6,003 | $ 3,937 | $ 10,588 | $ 4,665 |
Other charges (recoveries) | 2,934 | 5,720 | 6,988 | 5,938 |
Total | 10,306 | 9,217 | 24,587 | 9,561 |
Fiscal 2022 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges | 1,991 | 0 | 8,101 | 0 |
Other historical restructuring plans | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges | $ (622) | $ (440) | $ (1,090) | $ (1,042) |
SPECIAL CHARGES (RECOVERIES) _2
SPECIAL CHARGES (RECOVERIES) - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition-related costs | $ 6,003 | $ 3,937 | $ 10,588 | $ 4,665 |
Other charges (recoveries) | 2,934 | 5,720 | 6,988 | 5,938 |
Zix Corporation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition-related costs | 0 | 200 | ||
Pre-Acquisition Equity Incentives | Zix Corporation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other charges (recoveries) | 3,600 | 2,000 | 7,200 | 2,000 |
Miscellaneous Other Charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other charges (recoveries) | (700) | 3,700 | (200) | 3,900 |
Fiscal 2022 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges (recoveries) | 1,991 | $ 0 | 8,101 | $ 0 |
Special charges recorded to date | 33,900 | 33,900 | ||
Fiscal 2022 Restructuring Plan | Minimum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected cost | 35,000 | 35,000 | ||
Fiscal 2022 Restructuring Plan | Maximum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected cost | 40,000 | 40,000 | ||
Fiscal 2022 Restructuring Plan | Abandoned Facilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges (recoveries) | 500 | 4,300 | ||
Fiscal 2022 Restructuring Plan | Reversal of Lease Liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges (recoveries) | $ 1,000 | $ 3,900 |
SPECIAL CHARGES (RECOVERIES) _3
SPECIAL CHARGES (RECOVERIES) - Schedule of Restructuring Reserve (Details) - Fiscal 2022 Restructuring Plan $ in Thousands | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | $ 6,399 |
Accruals and adjustments | 4,069 |
Cash payments | (4,145) |
Foreign exchange and other non-cash adjustments | (129) |
Balance, end | 6,194 |
Workforce reduction | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | 989 |
Accruals and adjustments | 3,628 |
Cash payments | (3,158) |
Foreign exchange and other non-cash adjustments | (30) |
Balance, end | 1,429 |
Facility charges | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning | 5,410 |
Accruals and adjustments | 441 |
Cash payments | (987) |
Foreign exchange and other non-cash adjustments | (99) |
Balance, end | $ 4,765 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||||
Jan. 31, 2023 | Aug. 25, 2022 | Dec. 23, 2021 | Nov. 24, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 01, 2022 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||||||||||
Acquisition-related costs | $ 6,003,000 | $ 3,937,000 | $ 10,588,000 | $ 4,665,000 | ||||||
Goodwill | 5,250,136,000 | 5,250,136,000 | $ 5,244,653,000 | |||||||
Other charges (recoveries) | 2,934,000 | 5,720,000 | 6,988,000 | 5,938,000 | ||||||
Senior Secured Notes 2027 | Senior notes | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Debt instrument face amount | $ 1,000,000,000 | |||||||||
Debt instrument stated interest rate | 6.90% | |||||||||
Acquisition Term Loan | Line of credit | Secured debt | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Debt instrument face amount | $ 3,585,000,000 | |||||||||
Debt instrument stated interest rate | 0.25% | |||||||||
Acquisition Term Loan | Line of credit | Revolver | Subsequent event | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Proceeds from long-term line of credit | $ 450,000,000 | |||||||||
Minimum | Acquisition Term Loan | Line of credit | Secured debt | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Debt instrument face amount | $ 2,585,000,000 | |||||||||
Micro Focus | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase consideration | $ 5,800,000,000 | |||||||||
Acquisition-related costs | 5,900,000 | 10,300,000 | ||||||||
Zix Corporation | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase consideration | $ 894,500,000 | |||||||||
Acquisition-related costs | 0 | 200,000 | ||||||||
Cash consideration | 18,600,000 | |||||||||
Goodwill | 585,910,000 | |||||||||
Goodwill expected to be tax deductible | 103,700,000 | |||||||||
Acquired receivables, fair value | 26,000,000 | |||||||||
Acquired receivables, gross contractual amount | 32,600,000 | |||||||||
Acquired receivables, estimated uncollectible | $ 6,600,000 | |||||||||
Pre-acquisition equity incentives, cost not yet recognized | 26,400,000 | $ 26,400,000 | ||||||||
Period for recognition | 2 years | |||||||||
Zix Corporation | Pre-Acquisition Equity Incentives | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Other charges (recoveries) | $ 3,600,000 | $ 2,000,000 | $ 7,200,000 | $ 2,000,000 | ||||||
Bricata | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase consideration | $ 17,800,000 |
ACQUISITIONS - Acquisition of Z
ACQUISITIONS - Acquisition of Zix, Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 23, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,250,136 | $ 5,244,653 | |
Zix Corporation | |||
Business Acquisition [Line Items] | |||
Current assets (inclusive of cash acquired of $38.3 million) | $ 71,527 | ||
Cash acquired | 38,300 | ||
Non-current tangible assets | 13,450 | ||
Liabilities assumed | (81,476) | ||
Total identifiable net assets | 308,551 | ||
Goodwill | 585,910 | ||
Net assets acquired | 894,461 | ||
Zix Corporation | Customer assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | 212,400 | ||
Zix Corporation | Technology assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 92,650 |
ACQUISITIONS - Acquisition of D
ACQUISITIONS - Acquisition of Dynamic Solutions Group, Inc (The Fax Guys) (Details) - Zix Corporation $ in Millions | Dec. 23, 2021 USD ($) |
Business Acquisition [Line Items] | |
Purchase consideration | $ 894.5 |
Cash consideration | $ 18.6 |
ACQUISITIONS - Acquisition of C
ACQUISITIONS - Acquisition of Catalyst Repository Systems Inc. (Details) - USD ($) $ in Thousands | Dec. 23, 2021 | Dec. 31, 2022 | Jun. 30, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,250,136 | $ 5,244,653 | |
Zix Corporation | |||
Business Acquisition [Line Items] | |||
Purchase consideration | $ 894,500 | ||
Cash consideration | 18,600 | ||
Goodwill | 585,910 | ||
Goodwill expected to be tax deductible | 103,700 | ||
Acquired receivables, fair value | 26,000 | ||
Acquired receivables, gross contractual amount | 32,600 | ||
Acquired receivables, estimated uncollectible | $ 6,600 |
ACQUISITIONS - Acquisition of L
ACQUISITIONS - Acquisition of Liaison Technologies, Inc. (Details) - USD ($) $ in Thousands | Dec. 23, 2021 | Dec. 31, 2022 | Jun. 30, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,250,136 | $ 5,244,653 | |
Zix Corporation | |||
Business Acquisition [Line Items] | |||
Purchase consideration | $ 894,500 | ||
Goodwill | 585,910 | ||
Goodwill expected to be tax deductible | 103,700 | ||
Acquired receivables, fair value | 26,000 | ||
Acquired receivables, gross contractual amount | 32,600 | ||
Acquired receivables, estimated uncollectible | $ 6,600 |
ACQUISITIONS - Acquisition of_2
ACQUISITIONS - Acquisition of Carbonite (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Dec. 23, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 5,250,136 | $ 5,250,136 | $ 5,244,653 | |||
Acquisition-related costs | 6,003 | $ 3,937 | 10,588 | $ 4,665 | ||
Other charges (recoveries) | 2,934 | 5,720 | 6,988 | 5,938 | ||
Zix Corporation | ||||||
Business Acquisition [Line Items] | ||||||
Purchase consideration | $ 894,500 | |||||
Cash consideration | 18,600 | |||||
Goodwill | 585,910 | |||||
Goodwill expected to be tax deductible | 103,700 | |||||
Acquired receivables, fair value | 26,000 | |||||
Acquired receivables, gross contractual amount | 32,600 | |||||
Acquired receivables, estimated uncollectible | $ 6,600 | |||||
Acquisition-related costs | 0 | 200 | ||||
Pre-acquisition equity incentives, cost not yet recognized | 26,400 | $ 26,400 | ||||
Period for recognition | 2 years | |||||
Zix Corporation | Pre-Acquisition Equity Incentives | ||||||
Business Acquisition [Line Items] | ||||||
Other charges (recoveries) | $ 3,600 | $ 2,000 | $ 7,200 | $ 2,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 3,850,141 | $ 4,208,515 | $ 4,032,260 | $ 4,099,453 |
Other comprehensive income (loss) before reclassifications, net of tax | 40,410 | (22,678) | 4,868 | (34,905) |
Amounts reclassified into net income, net of tax | 1,138 | 141 | 1,763 | 16 |
Total other comprehensive income (loss) net, for the period | 41,548 | (22,537) | 6,631 | (34,889) |
Ending balance | 4,121,384 | 4,129,825 | 4,121,384 | 4,129,825 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (42,576) | 53,886 | (7,659) | 66,238 |
Ending balance | (1,028) | 31,349 | (1,028) | 31,349 |
Foreign Currency Translation Adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (39,682) | 65,316 | (3,316) | 75,408 |
Other comprehensive income (loss) before reclassifications, net of tax | 39,419 | (21,347) | 3,053 | (31,439) |
Amounts reclassified into net income, net of tax | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss) net, for the period | 39,419 | (21,347) | 3,053 | (31,439) |
Ending balance | (263) | 43,969 | (263) | 43,969 |
Cash Flow Hedges | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (3,408) | (543) | (656) | 830 |
Other comprehensive income (loss) before reclassifications, net of tax | 959 | 104 | (2,381) | (982) |
Amounts reclassified into net income, net of tax | 1,101 | (18) | 1,689 | (305) |
Total other comprehensive income (loss) net, for the period | 2,060 | 86 | (692) | (1,287) |
Ending balance | (1,348) | (457) | (1,348) | (457) |
Defined Benefit Pension Plans | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 514 | (10,887) | (3,687) | (10,000) |
Other comprehensive income (loss) before reclassifications, net of tax | 32 | (1,435) | 4,196 | (2,484) |
Amounts reclassified into net income, net of tax | 37 | 159 | 74 | 321 |
Total other comprehensive income (loss) net, for the period | 69 | (1,276) | 4,270 | (2,163) |
Ending balance | $ 583 | $ (12,163) | $ 583 | $ (12,163) |
SUPPLEMENTAL CASH FLOW DISCLO_3
SUPPLEMENTAL CASH FLOW DISCLOSURES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid during the period for interest | $ 92,016 | $ 73,389 |
Cash received during the period for interest | 21,525 | 1,531 |
Cash paid during the period for income taxes | $ 91,444 | $ 60,293 |
OTHER INCOME (EXPENSE), NET - S
OTHER INCOME (EXPENSE), NET - Schedule of Other Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | ||||
Foreign exchange gains (losses) | $ 60 | $ 192 | $ (1,301) | $ 543 |
Unrealized gains (losses) on derivatives not designated as hedges | 171,607 | 0 | (9,854) | 0 |
OpenText share in net income of equity investees | (289) | 2,042 | (6,823) | 31,357 |
Loss on extinguishment of debt | (8,131) | (27,413) | (8,131) | (27,413) |
Other miscellaneous income (expense) | 102 | 142 | 227 | 258 |
Total other income (expense), net | $ 163,349 | $ (25,037) | $ (25,882) | $ 4,745 |
OTHER INCOME (EXPENSE), NET - A
OTHER INCOME (EXPENSE), NET - Additional information (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Dec. 09, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Debt extinguishment costs | $ 0 | $ 24,969 | |
Senior Notes 2026 | Senior notes | |||
Debt Instrument [Line Items] | |||
Debt extinguishment costs | $ 25,000 | ||
Unamortized debt issuance costs | 6,200 | ||
Unamortized premium | $ (3,800) | ||
Minimum | Limited Partner Investments | |||
Debt Instrument [Line Items] | |||
Ownership percentage by noncontrolling owners | 4% | ||
Maximum | Limited Partner Investments | |||
Debt Instrument [Line Items] | |||
Ownership percentage by noncontrolling owners | 20% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Basic earnings per share | ||||
Net income attributable to OpenText | $ 258,486 | $ 88,298 | $ 141,557 | $ 220,213 |
Basic earnings per share attributable to OpenText (in dollars per share) | $ 0.96 | $ 0.32 | $ 0.52 | $ 0.81 |
Diluted earnings per share | ||||
Net income attributable to OpenText | $ 258,486 | $ 88,298 | $ 141,557 | $ 220,213 |
Diluted earnings per share attributable to OpenText (in dollars per share) | $ 0.96 | $ 0.32 | $ 0.52 | $ 0.81 |
Weighted-average number of shares outstanding (in '000's) | ||||
Basic (in shares) | 270,189 | 272,112 | 269,997 | 272,078 |
Effect of dilutive securities (in shares) | 0 | 819 | 12 | 996 |
Diluted (in shares) | 270,189 | 272,931 | 270,009 | 273,074 |
Excluded as anti-dilutive (in shares) | 11,462 | 3,108 | 10,331 | 2,845 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Director, Stephen Sadler | ||
Related Party Transaction [Line Items] | ||
Consultancy fees for business acquisition-related activities | $ 7 | $ 400 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Feb. 01, 2023 | Jan. 31, 2023 | Aug. 25, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | |||||||
Dividends declared per common share (in dollars per share) | $ 0.24299 | $ 0.2209 | $ 0.48598 | $ 0.4418 | |||
Micro Focus | |||||||
Subsequent Event [Line Items] | |||||||
Purchase consideration | $ 5,800 | ||||||
Subsequent event | |||||||
Subsequent Event [Line Items] | |||||||
Dividends declared per common share (in dollars per share) | $ 0.24299 | ||||||
Revolver | Acquisition Term Loan | Line of credit | Subsequent event | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds from long-term line of credit | $ 450 |