OTEX - Earnings call transcript Q2 2022

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Operator

Welcome to the OpenText Corporation Second Quarter Fiscal 2022 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Harry Blount, Senior Vice President, Investor Relations. Please go ahead.

Harry Blount

Thank you, Operator. Good afternoon everyone, and welcome to OpenText’s second quarter fiscal 2022 earnings call. Madhu call Officer, OpenText’s Executive Mark and Financial the and Executive Vice on Chief Technology Chief Barrenechea; Officer, me today Chief are Officer President With Ranganathan. and our shortened Please note allow time the for prepared this session. quarter more our question-and-answer that to remarks have we available website. Today’s being replay and the on recorded live is thereafter OpenText’s call with webcast shortly Investor Relations release inaugural we shareholder letter press posted our our quarterly and today, presentation. Earlier with investor along on accessed OpenText’s prepared remarks and website materials Investor These supplement investors.opentext.com. be Relations will our can the

I with on statement, event the Day March inform investor our OpenText Before proceed our on the Safe days for Investor I investors will relations reading website. Harbor be XXXX will of virtually Registration to take available place would in like X. coming that the

management our at on OpenText Please TMT Harbor Stanley relating TMT addition, the that the X make performance may for information. will conference note contain to March conference during In course participating the statements now of Scotiabank Safe and future And be of on conference this the call, Morgan we that forward-looking statement. March X. OpenText

While or made forward-looking drawing in conclusion, differ a materially forward-looking statements forecast statement. were such results any current factors represent from actual these judgment, statements and material today. could in Certain the assumptions projection our applied

law. earlier on website. statements obligation factors, of update well press risk a future in performance. materially information XX-Q and may We undertake by project as or about to as be release forward-looking Additional found global OpenText’s the in projection forms as information, material pandemic cause the our actual contained are conclusion current forecast recent which in from as these may required the that so factors to distributed was differ relation afternoon, could OpenText do Results our results no that that unless to in to forward-looking this including XX-K well

of our filings reconciliations on to And discussions measures pleasure over their of the any which measures within available may materials most with to measures, other certain GAAP In directly non-GAAP it’s public Mark. financial conference include and call call hand website. that, to found comparable great a non-GAAP addition, our our are financial be may

Mark Barrenechea

good and Today our growth strategy, provide investor Well, in joining to our letter in presentation are investors.opentext.com. new thank available three into call introducing results Harry. more and shareholder Earlier you release to all programs on published quarterly you, for to today’s afternoon our everyone we aspirations, The documents are Thank format. today, long-term we call. inaugural addition insight horizons. short, medium and press over our intended

of M&A. investing feedback buybacks free our our in our continued next investors to Going recall, amazing to over years. a dividends corporate how generate billion spend This cash strategically. ‘XX X% expect myself reinforces five remarks ‘XX total in flow the growth the cash in prepared we organic ensure fiscal our shareholder forward, can bit for adjusted and doing leaving aspirations shorter on from term time towards QX progress longer new to transition margin, format. X% form improve purposes, We XX%. and an had cash We aspiration cumulative to targets of return over while of Please plan XX% smooth up to a letter fiscal our in we of billion Q&A. up quarter growth the organic you to [indiscernible] of welcome your our of more communication. to majority more free Today provided remarks of and Today flows up plus. time XX% accomplishments, quarterly XX% a flow our EBITDA $X growth growth, to Onto to and cloud increased financially and $X.X the in to cash include our revenue primarily to and we’ll

we flow for our make view employers. based To free and XX We up quartile our quarter zero of on core, very program. just XX.X%, net strategy bold the strategy delivered proud zero the future basis. trailing barriers, We XXXX, named flows. expecting let annual and has business our revenue cash pandemic with history and while inclusive at a are With via cash pillars in annual culture me Forbes fundamental talent But employer our including of generation best XX% admired prospects to young growth on to growth. believe OpenText are capital initiative. upper $XXX.X value. decisions call cash recognitions cloud out our adjusted returning many of we decisions, the Canada’s OpenText and X.X% waste results. the two sustained share our with strengthened quarter year-over-year us growth, zero lead the both We setting three buyback return line at people, accomplishments Canada’s achieve our and the organic The to are cash letter. OpenText ESG capital we being objectives, plan and one, year-over-year cultures, stellar announced up to our double-digit pillars year-over-year teammates here. quarterly of two a we adjusted Our EBITDA dividends, in our growth annual, in puts as strongest out in flow allocation By constant of strong EBITDA our an emissions. recent long-term free we These zero shareholder our driving top with cloud a received to and sustainable. I count listed few. initiative create -month million, via keeping best position zero QX is bookings bettered believe I’m X.X% the free year-over-year, that, company bright We most very the one strong and

our a XX% leadership total defined as become striving majority and are manager comment in Zix significantly to It increased as actively mid-market ahead. exceptional We growth and both on longer moment, improves the and horizon diverse are and across said OpenText programs visibility with an partners up. over enterprise board. mix. leadership a a QX our days best near-term on the expand zero company female entered and in Specifically Zix of I’ll and was to simply barriers, to we quarter

they But supply chains. employees way digital Let work, It or includes to through Businesses they led you I digitizing by processes. call transforming of work. and importantly, why. as transforming and way are information and sizes me tell supply all mastering we’re and information are change and like way in we resilience. their all includes the strengthen the digitizing and transforming they how their power modern cloud way and the it and into cyber we more we the This go-to-market transformations. our infrastructures This experiences sell secure the modern includes manage are how

market management and they information journey. edition offerings the of are our are size help their We or leader are cloud transformation where optimized to regardless in our their customers

amazing are the to seven path to share had organic growth acquisitions to in market the We We years. company take through doubling over and going five the wins next quarter. on our

our can the You investor in presentation. detail read

Army Corps and new those of the Amazon’s of more. Engineers, PillPack & many Kimberly-Clark, Intelligence Volkswagen, Some and wins U.S. Raytheon Space include

Carbonite, Zix industry’s XX,XXX together protection the and Cloud within our us is to the amazing complete our and force high the leadership and the you We our remarks enterprise of being opportunity just solutions. see of secure Let in in market. and compliance businesses to year Microsoft, [Indiscernible] need we’re data profitable lead, my Webroot, by plus small to platforms management And started relationship and most with for bringing management and And platform on Microsoft SMB prepared digital in medium e-mail win Onto Solution high able enterprise, direct third scalable company me MSPs in and information for the an larger cyber needs partners to offer We have with sales resilience management security We to and U.S. most Zix, growth each for scale businesses. as small information expect a we a OpenText. and market. to our endpoint Cloud to expand medium the programs businesses, presence. the RMMs continue top and and Nearly impact SMB turn most enterprise strategic grow and the GDP market Zix. enterprise provider emphasis XX% acquire of protection, information acquisition and drive direct data addressing planet the strategic the to sized a can points well to from Zix, on important as fantastic provider total of by intend we strategies in for a mid-market have SMB. security, leading as By generated growth.

in cover customers First, account this one is direct with recent of is important XXX investments our to now top place. global most managers, our program

is via of chain I clear our are global, model partners, we companies, XX market. opportunity important the just GAM are grow here direct enterprise and a as that On business XX And supply chain have as top one get more this a is to top we the And in now Second, large, place. program the investments of recent the larger with program. do program, investing top to our our want partners. we speak third, supply to top building and partners about XXX remarkable customer covered

SAP, now calendar and partner data we to partners the are are for to extended already today expanded and a this million a new to multiplier and to customers. greatly product near relationships, us announced for and to expanding users the large the year. our our we SMB enhanced platform new cloud. SAP momentum committed security a fully cloud into three Google, bring a enterprise ECM bring heading Amazon selling opportunity and protection have cloud base. are core joint their and force installed We with we our Service strong is and leading partnership long-term. with Microsoft model is solution experience content massively AWS over

time and and and our to the Here’s QX vendors with point. services, more to next API partners. and our metadata, the We needs programs supply offensive into and as the cloud, results developer growth chain believe just Zix it intend through smartly intelligence And Underlie via threat of calendar chain digitalization ‘XX answer content set and progress to There is OpenText is enterprise more our best relates developer information the previous heading greater the where to app labor our friction our is inflation. our two you positive reduce to is offensive and even have this transformation, global led additions, outlook to than we your customers to Cloud the SMB as cloud. relates strategic cloud our information on capture, new remove opportunity win beyond do supply we their create through to management it processes. costs generation the vastly to years. inflation macro API workflow our cloud, for in the of via can, help inflation.

the growth And company success conclude up Day. share, Investor XX%. with annual by two and nature are to today to is target colleagues pandemic. at me aspirations. next courage customer through The X saying, our excited revenue. I’m team a years humbled leadership market to cloud journey to into of increased and to our detail cloud to by resilience, they cloud present business of raising capabilities plan We transform and generation my Let used financial our last And our we achieve the March this XX% recurring unstoppable

cloud two with you XX% mix. and leave Zix me improves targeting things, up to our Let growth

financial quarter let outlook. on Zix’s to Madhu? call and Now turn the to commentary Madhu our provide me the the

Madhu Ranganathan

for a you, financial call Thank Mark. highlights new selected a And is all thank than today. line-by-line us joining format. And we’ll review. you focus rather on This

QX at On find results. of our on the quarterly relations investor section the the latest website opentext.com, please

well revenues double-digit positive record revenue, we the on in four bookings, low growth in And see the all at period investor references enterprise cloud the the of of single-digit of quarter cloud saw revenues fiscal PDF year annual half ARR rates organic grew its growth QX XX% with our organically. single-digit quarterly and XXXX QX in quarters recurring and our are same are as our year recurring recurring of annual revenues pleased safety cloud we millions will with Strong total of of low We revenue, of shareholder USD on cloud PDF and renewal our domains. presentation. a prior results, organic You consecutive bookings, All XX% cloud posted total in earnings, and total first revenue. of revenues. the ARR fiscal was letter market revenue off-cloud. to record our cloud a basis, another revenue our compared Growth, as are the annual very database. record QX reported basis and on

the tax strong GAAP-based many primarily large and million quarter, $XX.X fiscal products during $XX.X loss XX.X% ‘XX, front, down due deal was to across for talent income settlement EBITDA year. primarily than was growth $XXX.X of On geographies of the enterprise cloud slightly and fiscal restoration XXXX the from of bookings investments million QX was compensation, QX of including board QX and prior were Adjusted up. in a the initiatives. net recorded bookings and or trend to higher $XXX.X sales due million million coverage the across

in million quarter, operating $XXX the $XXX.X XX%. in We operating generated $XXX.X the generated down XX.X% million the flows. in trailing XX% flows quarter, down cash down XX-months, We flows to and free XX-months, and trailing free and in Turning down XX.X%. cash $XXX in cash million in million the

and want to items are with with to and During to the year, prior I you OCF quarter three the share respect compared there FCS.

relating costs current the big in acquisitions integration quarter. to the First

prior of And restore let the quarter, competitive timing increases months in year, salary me and including CARES two in well. the an working forbearance our now of in Second framework. minutes occurring with benefits spend augmented capital are refunds few not as this prior salary on tax that ACT

Our from improved a times year-over-year X.X while by increased XX conversion strong, metrics X.X three cash cycle to working capital sales our improved are times Day on from basis. to ratio days days. XX days, capital working

flow terms to CARES reasons basis, forbearance in trailing settlement ACT plus last the flows and of XX-month the in benefits Our operating the similar salary cash are one-time IRS year, current cash free year. the

will comparisons on QX COVID easier. a to quarter. to the strongest quarter next basis comparisons become cash anniversary continue expected settlement and Also year-over-year year related IRS is free Our last remain a payment cash flow as improve the also free flow

revenue times. and with speak sheet liquidity, I outlook of of we our Zix’s shared and leverage regarding billion our to we balance acquisition, available and $X.X And quarter net liquidity ratio the a to two strong Turning and ended cash very XXX% that aspiration before details Zix’s relative note a acquisition, to the with our acquisition Zix’s record of margins the following. on in the closed cloud OpenText net we basis, revenues low XX, on And gross reporting please it will be XXXX. part to prior XXs. December will

overall modules. year customer factoring partner During integration we disruption one are that

the targets fiscal We end commentary. our at that with for you as powerhouse combined June growth expect his year let aspirations. a to quarter, turn the offering SMB our prospects share Mark the of in updated me we and complete referenced And now to

quarter For million look and to mid-to-high to mid-single-digits to FX year-over-year the ‘XX ARR, fiscal single-digit, of million. and on recurring $XX third a grow year-over-year of grow revenue total for revenue basis, annual $XX we headwind

be talent our ambitions, XXX benefits down due and points reset higher adjusted to expect of to investments typical We expense. growth margin EBITDA Zix’s to calendar in XXX year higher percentage continued basis support acquisitions basis of points and

bookings, XXXX, to fiscal and from to X% a growth of to our A increasing X% predicated to X% Zix’s a growth X% to me cloud X% X% to QX And half range confidence from year expand higher outlook we’re from revenue revenue is of XX%. full For first cloud on our on range X% our cloud line. contributions from the outlook revenue revenue strong results. and and cloud let

booking both XX% as headwinds to fiscal FX growth includes expect reported Setting QX with Cloud we bookings we and expanding organic our our said well. currency half Cloud cloud to expect acquisition, constant the XXXX cloud expect enterprise at relationships, earlier, ‘XX X% aspirations. today, hyper to fiscal we in of during Zix’s saw where FX and acquisition, to Carbonite in grow the sit future along growth despite first Our I in aside, and QX in we organically FX headwind scale the growth Zix’s the continue drive strongest we as our and

to ‘XX investments to of EBITDA of Zix’s be and reflecting to to initiatives. adjusted integration Moving our fiscal expect margin, the adjusted we margin the range growth support in now XX.X% EBITDA internal XX.X%

momentum We ‘XX. finish towards fiscal solid have progress a continued made and ‘XX into fiscal demonstrable

aspirations growth. and into XX% $X.X revenue, back invest at to margin initiatives Our ‘XX annual adjusted EBITDA billion anything growth, of unchanged free fiscal higher plan to We than organic and X% product XX% recurring to cash driving to sales, continue XX% organic remain plus up XX% growth. marketing

We’re right seeing growth in the all places.

Our investment innovation are in growth. talent, sales, and in covers paying-off organic

long-term high. remains strong Our bookings also us while business of predictability our the give visibility,

would and turn thank the OpenText loyal All customers, would like contributions of to by this team are On over possible questions. the across and you, invaluable. amazing over to your to call shareholders, I to has globe. behalf made OpenText, employees now our partners of Operator. And your the I like

Operator

Thank you.

answer begin from of Instructions] go Barclays. now will and comes ahead. Please question first question session. Lenschow We the Raimo [Operator Our

RaimoLenschow

one the here. please. at lot kind and back customers. the last solid mind more to kind then for of the the Mark, the discussed we And transformation picture terms one you up seeing What years, kind I numbers. we’re sharpened big for are in was notion people’s bigger spending terms kind Congrats Madhu you? with in bit And playing out a so demand over a overspent of year on it’s investors the little thing this Digital is had coming levels. last of of normal situation the The of moment question. in more a how really follow of now of pandemic with gets software here couple theme that there, is

Mark Barrenechea

for machine a billion us. learning Novartis said hear at good new vastly math, electric Cloud year assembly, cars wins. Corps and the from customer calendar is across And Volkswagen on Like capture, our I and a new to building X,XXX rough Engineer in levies for XX documents look ‘XX and you. edition. big I my going more XX mean, year I service XXX remarks, Yes, into more. U.S. mean, coming dams prepared and cars, thanks projects new Raimo and a on U.S. positive to Army in million purchasing warranty, and delivery, of all they’re platform

we we we’re installed and into And cloud upgrading not migrating our edition. our very So, demand come focused into calendar as also see increased on shortening base demand ‘XX.

positivity the at least more had into is position OpenText we over ‘XX years. than So last two coming

RaimoLenschow

look EBITDA the bit Madhu, little the a That’s do guidance, good your in I little it to terms hear. about about you think bit. a came I if talk Can of, if for And look I I drivers down at terms if math, etcetera, level, kind break of drivers investment in just could employee down higher the if between Thank you absolute at you of a little bit? the costs, congrats. here and to FX business,

Madhu Ranganathan

the Raimo comments. thank Yes, you for

I’ll and top certainly play a So pick role. FX does on the line revenue FX on big first

is We’re quarterly we calling well FX and growing that line factors. it but cloud out in the that I where I in lines said, And impact as the similar today, And sit from absolutely FX where Again, services support. impacts most And a today, we’re definitely organic QX. growing two would QX. is the underlying as as customer business the basis. expect seeing we our sit say an in

and uncommon us. put the EBITDA the acquisition, As for far not Zix’s growth, as adjusted one I which is number

then downward go you how we we following. and the EBITDA tick quarter adjusted did back back Carbonite Yes, up. take you saw did a we If came the to acquisition, on immediately

we’re two, increases investing we we Zix’s did to accomplish model usual through some pass talent going outlined, number overall. timeframe be So forbearance plus. one in a in importantly, our of more targeting duration, And savvy to did reason to you Zix’s the we’re to have number yes, better but and as get and year is our operating

coverage, R&D addition, as expansion sales products In talent marketing, in an from we perspective, and innovation. investing shared

terms of a well. and the two as in you’re the you acquisition, So number anytime and investment products more and go of one, people live Zix order reasons that do go-to-market in number

Operator

Paul Our Please Steep Capital. comes of Scotia next from go question ahead.

Paul Steep

the you radar us quick be that Mark, third other then we Can doesn’t you look just XXs Zix’s? in on like maybe the on customer because when comment And it? broke Madhu on maybe then one screen. side And transcript terms net your can of just Thanks. caught our and the just one for Two gross we get on after as margins, well. back key update roadmap my go could ones, at up should gross it that to last on impact XX.X you releases maybe versus low

Mark Barrenechea

from Yes, a you. update Paul, question to you the thank large product for at and going we’re to Investor hear good And Day. important and have

all X. the is XX-day going in our to XX.X content remain I advance Microsoft, that for over of extended and days And gunpowder force, enabling our cadence the the side, is save of this ECM really which SAP, So to content And our we for the forward so some first, ECM. can our cry. next But that, cloud we XX March battle which embedding for sales Google, is am ServiceNow, on XX.X on support extended look partners. of notion reason

actually have network up coming a in summit the we couple and On cloud a supply weeks. business chain

a supporting we’re are case. a freeway. capability offering not just our commerce case at have invoicing with what that new time, to We targeted countries in to mid-market enable just SPS call product new going bringing chains, in called in but line XX market And mid-market we directly just the supply about in global

cloud, have On and we in a XX next the over enhanced new the marketplace SeaPass the experienced platform days.

real within security and win very Paladin a for learning and it customers cloud of SIM and We’re number We a API for email going risk more rapidly just have over score. API’s, number? send nice that be back social content, encryption it dozen for SAP Does a advanced send threat the you violation a and cyber to capture. go have it we’ll and Zix’s does guard, a content security GDPR? Is Magellan in and protection us machine protection want integrating

capabilities. more it’d machine So learning be

product important in please roadmap Investor expect Day a of our clouds and flavor very bit a significant update XX.X. March. that’s a But across So at five

Madhu Ranganathan

Zix’s address and to a Paul piece and opportunity certainly as out in information well. this we’re approaching was want We That’s the we before Zix’s acquired me mind Mark keeping data Zix. company about you, take to Again, how them. public clarify Zix. let Thank there

I as XX. closed December mentioned, acquisition on So we the

record this sort in cloud And net the the to of appropriate that’s revenue done efforts in part the that’s that of that we’ve revenues view. reporting, do, and keep right? a way partner thorough into mind XXs. So growth the doesn’t and on discount the what We financial on in is our Zix a the that basis, totality from gross our channel, our goes will what channel, by business complete will in supposed And revenues low it’s way, all margin of revenue and recording basis, did we in emphasize get be goes bringing a net as perspective the diligence. sales in business all

certainly year, commentary. During prudent And run that number of combined that talked my meet integration, strive at is in do models, disruptions. disruption partner rate, of we with customer third discount to partner the we generally share in end it point And the to powerhouse end normal SMB do this point higher prospects you this it. given overall for factor every view his we’ll our the to just was some in the acquisition, two. year-one growth we at year-one revenue was, our But the about Mark fiscal factor customer a

Paul Steep

missed. we’ve what was line last Your

the to of what think XX% integration, that sort were at to thought I XX% the traditional, Is step-down. be believe process the on sort should of we point? this we to embedded So used into

Madhu Ranganathan

agree. would thank I Yes, Yes, you.

Paul Steep

promise. their last of from I’ll going certain trying at are gross to looking And leave a I that the standard? numbers stated Can give read that Zix’s and is you folks you translation, to to revenues, were obviously to deal you understandable it recast and the going IFRS sort in net already, be sense, clarification, your it on across us what since

Madhu Ranganathan

types businesses, getting we of Right, they system, to totality based two look net have is of here. business math. would in a of, to of right. go the I the And position to totality different into taking that components the think without revenue where Again, range somewhere a we’re growth the the will resale hairy

translates it into $X of XX% side, really revenue. resell in resale the of somewhere On XX% the to

Paul Steep

very Thank much, folks. Perfect. you

Operator

Please Our Moschopoulos Capital next of from Thanos question go Markets. BMO ahead. comes

Thanos Moschopoulos

good Hi, afternoon, all anyway? on some needs to the accounting. that and deferred in balance, a net When or deferred there just stuff that they company as we revenue your down been to up have in you’re Zix’s a be that maybe recognizing resale revenue pertain that to would at with to stuff marked follow basis look had that the public

Madhu Ranganathan

Zix’s Again, gross for that well. it’s Yes. revenue applies deferred to question. adopted a as great had accounting entire revenue their business the so

Thanos Moschopoulos

balance? So elements even the would revenue resale deferred revenue it has that different some in be

Madhu Ranganathan

different Actually yes. Yes, elements.

Thanos Moschopoulos

model? it be above your Also, given operating might profile. it’s a that integrated once be going to higher margin target gross Does that that mean actually

Madhu Ranganathan

to target convergence of too, business gross we from want that And Carbonite. model it to that’s make point the a come a very is that the why the mentioned we to up expect absolutely we margin akin with goal a because XXs. fact, low SAP would based important operating sort in integration Yes, the as in Cloud is

Thanos Moschopoulos

just Mark, on finally, M&A. touching Then

And but obviously Thanks. exploring, terms public of seeing might You you head corporate down we’re announced color of be you’re this assets if a that markets. point, at any on new that front? update valuations come yet the seeing I’m on sure developments. not in

Mark Barrenechea

very you. to hear and Yes, and to happy from you good Thanos thank

to promotion dev of reporting me the leading to of live pleased first So and first, corp Doug voice team. my to and I’m expansion give somewhat the

also and his retirement. my best fantastic in to He’s him partner journey use been his just opportunity delighted and a a the reporting have over the in-house fantastic Gordon’s last We to we and me, corporate retirement. decade all have this development voice a organization him in is Doug just to let me wish to and add great leader continued

Doug promoted we expanded than for So in a today are is team corp were ago. assets we me year more working dev. And seeing

a well. as better seeing We’re valuation

that more optionality there’s see. So we

acquired that note be flows growth strong here, flows. flows, And to deals our if fund flows calendar we straight double-digit strength us our expect more double-digit to the growth flow. we cash but are look cash use can other our should may from instruments, You ‘XX. enough can straight you our here of our acquired but we at cash in also we bold I’d from and cash can cash choose now fund complete And that

things our calendar more straight get team, or I improvement So flows in to flows. seeing for those from growth cash deals of ‘XX. in expanded the are note more M&A. reporting implies And done strong directly valuation acquired to Doug would cash assets, strength me, the expecting

Operator

Our Tse Bank Please next question of from National comes Financial. ahead. go Richard

Richard Tse

you. Kind got gains lot website like way share against material of terms your them, Yes, sort And that had that quarters? over here of pretty there in seems any are of making guys in gains IBM. you changed some has on a still following you’ve of past the few and it thank big you’ve those

Mark Barrenechea

for and right Gartner. and chains platform. out Net different they Net roadmaps, you that Blue” time the which question and the in you. beginning call rich, at SLAs Bye two Sterling very and provide to We are a an is Commerce companies, different good and investing campaign, thanks they’re the when of challenge Sterling called it’s contracts, information a two upper the great from Richard, have, customers, rich, File communicating for the two alternative complexity They’re of supply to January, your the Commercecustomer think Kyndryl of to management hear IBM, because got program and two have not. carved asset now campaign every different increased is not different We running launched or very “Bye File

don’t. they have cloud, a private We

alternative, don’t. they We have SaaS a

this to the So wins, wins, to one next going going it’s yield three probably is to yield years. over

love we automation one so the campaign, the have we’re tools more just building And even to we rapid. platform the customer, make IBM of

Microsoft product we’re of me lot competitor bringing an customers the freeway. front mid-market, Let also that transition, into network now which helping on call business we alternative on a focused focused winning And the SPS we’re just spent time marketplace. it’s note the that our very support in Commerce mid-market the a in And to transition. line, on the on Microsoft very

to their we also establish be So want there help us for because program, is here be important And in competitor their MCE to any as to we’re Microsoft Microsoft. Microsoft watchdog way right to our program. an help going to moves MCE

on competitors. would be my that comments So

Richard Tse

then they And they’re of guess, investing. information through think looking at? asset they related to spending is, as about business sort question of kind consider a And not would non-core, acquisitions on I on that were you an that that view management

Mark Barrenechea

And for said It’s it. like really we campaign too. going we been competing the long. And but our yes, established look I the been too that, Having way has how Well, market competing, and we’re at in answer, it. of I’m derive be at competitive to we’d it look of a look And great way of a it. of position. short happy very the value, course course, is we’d course, at it’s them. at we’re with look But market. it course got But we to against in keep

Operator

of next Capital Our Paul comes go Markets. Treiber Please Instructions] ahead. [Operator question from RBC

Paul Treiber

very Thanks cloud speaking, And that this generally afternoon. of flows and prepared and ebbs cloud that then, cycles factoring? wondering you I do bookings double-digit release do the XX.X good In growth that product product expect future, content the bookings? was quarter around significant told and was growth, the more less more remarks how you cloud is think in much important about releases of or how we in a and the the bookings

Mark Barrenechea

in There’s from earlier to customer information and to the firms regulated services, Cloud proud win dams, of everything locks, editions. one processes hear our out over at year from warranty. bringing Novartis, you XXX XXXK to Army I’d documents that wins, of Volkswagen, of some thank proud engineering of this information Corps in and prestigious clinical our is machine one And million very good XX from equals And we a cities everywhere most content the look many civilian world, to doubt their of if water U.S. Paul, construction. of all levees now. a a military supply mentioned a from times everything of learning, learning call great rich on content of into customer with trials. question cloud capabilities Yes, machine hydroelectric platform for no the right from I’m cloud very little XX documents content the from That’s to documents purchasing million content. capturing cars partner single Engineers, U.S. from facilities, the platform you.

So announcements March yes, XX.X, add to the Investor to X important. some real I’m ahead. get XX-day earlier, cycles, really and to our I Day, as for XX.X significant roadmap up really brought eager capabilities. big highlighted

big very of to edition our if hold Day contributed matters. these So to on Paul, innovation allow I’m of for gunpowder of XX.X, wins, yes, But significant. XX.X ahead. cloud impressive Investor the in to me, roadmap pieces But the you going they’re really some some

Paul Treiber

it enterprise is, SMB more My your acquired, generally but build-out software try sort down question just SMB more or grade SMB relates and to distinct there, to to or would to, about you products? it of build-out it maybe think have the portfolio, speak and that further you should products require we on market is that been be do repositioned roadmap, I’ll mentioned, opportunity traditional the the second has into expect, distinct a that OpenText that is

Mark Barrenechea

EDR, to cloud, edge, kind And it’s are lives our cloud-based spend forensics. they’re edge. edge security, But we right? and solutions. of important, It’s no And both it’s the edge. going protection, the it and for information so into MDR, of product. strategy think and And on both edge, And bit constantly we off and both edge cloud really it’s it’s no a both, move security, helping our more cloud, is no at at innovate our in management, the the it’s distinct the vision No at data information a email customers the information edge important. really back we

So integrates security healthcare. our information edge. is think and for take We security experience guidance [Indiscernible] technologies enforcement. very up SMB It didn’t have email And really technology, they the there bring. into its the well in do both network we software some in law a didn’t goes business SMB our think big those are for be unique enterprise. edge Zix’s force really for technologies our cloud encryption is into we going channel But sales platform email to all the to the a for secure well think but scale helpful have We that. to the and edge

unique So There its both, multi SMB layered, right? ways. circle intersecting It’s are It’s both enterprise. edging can technologies large bring that enough but technologies for that we is cloud. and

Paul Treiber

API’s it available, I went I all me. different sales. and are is, thinking and today, And from enterprise channel your then there’s the a was strategy a developer number through, the through website one quite what’s seems What quite run marketing developer that them. Last than cloud? of I of for though

to API’s So raise for how do you, what’s plan developers? OpenText awareness the for

Mark Barrenechea

it’s on developer at great, opentext.com. a I’m delighted you’re Well,

for So thanks being there.

So the today the of inside have $XXX haven’t roughly OpenText. gems look, company. yet. Twilio million business the our I one we inside And think company, inside and it’s a cracked scale of code we It’s it’s locked

platform think Chief a So attach internal we to up to Officer, set is new a being an go-to-market. to good group sale Marketing strategy. it able sale in bringing was new API the our onboard strategy part and a unlock of Sandy Ono come to We

our and a over there’s who learning But to won bought Christina customer new we’ve into things. a Magellan is Harrison, we set group example, market, driver have the the of We’ve we’re attach learning guard have code. Chief applications We’ve top in to going combination new of set a us. For we are the network. But platform be new introduced going success risk technology, PS in to sale on sales. build to on to this now reporting for a and dozen that Twilio enhanced capture. comprehensive a customers machine future API’s Ted up going our scale crack understands selling Dickinson, We some it and intelligence. the making back API’s for to we to we a some and up team, business from our that be it’s organization to got Marketing know-how it, going growth Officer, SAP going threat of

Paul Treiber

Thanks.

Mark Barrenechea

on the have. because we can You it’s passion unique very hear this voice in my one, something

Operator

CIBC. of from comes Price Stephanie question next Please go ahead. Our

Stephanie Price

this bit a about that talk about afternoon? How from you you potential the vehicle Can are thinking that the evolving? you partnerships partnership announced

Mark Barrenechea

strategy our long Yes, partners. And technology yes, very hear with Stephanie from come I out us, prepared a my in And our developing on joining for enterprise remarks you. thanks way focused to and good partners. Oh, purposely just good. our we’ve and

is we MoU jointly to new we greatly today, Google, also relation place in in we’re put the enhanced One together. going in So to and enterprise. partnership innovate announced a announced which we

to to we’ve content to consume their going experience and and build-out use. And our their selling going engage OpenText with platforms bring their SAP team like places of platform other at for a joint we we’re customers. our are via We will more what workspace enterprise platform. our at and done customers And to customers

experience selling cloud then of to and innovation next joint cloud to happy. level mutual and around create content deals very organization our more to and engagement bringing demand layering So of and strategy and and it’s Google customers close that complete around the move very the workspace a via evolved make consumption joint kind their a enterprise successful

bit So announcement on a Google that’s today. more the

Stephanie Price

cross-sell SMB to switching market, the timeline ability that? I’m Then channel you. the the like solutions about through to SMB and Zix for partner what thank looks curious Great, other starting

Mark Barrenechea

I couple thing, today. of things highlight a would Sure

opportunity opportunities opportunity Two first day, is bring a one. and products to XXX service a relation, big is if like traffic, scale there. auto our there’s Zix strengthen into emails to you and and Proofpoint immediate cloud security, experience bring service. The EDI is of healthcare, good and They’re Webroot customers’ platform which that and Zix email some million to opportunity to Carbonite processing We good other number will. bring a our SeaPass think

doesn’t X,XXX relationship we’ve platform going doing -- we’re that Microsoft also to time Microsoft the a we’re close that’s new reseller reaching immediate, cloud actively Webroot X,XXX that. we’re Microsoft And MSPs. out Carbonite world MSPs that the We is them to to side, have to to those service and the on bring from identified real CEE think active with in and

going it. we’re to programs definitely that of some immediate are are those and the cross-sell cross those -- So bond

Stephanie Price

finally, That’s model. from the in customer as revenue percentage a support target came total helpful. due of And overall the down

about takes Just the curious here? puts and

Madhu Ranganathan

see say slightly. very Stephanie, and more as you driver, customer and have would is as continues comment impacts, going do adjustment and up so the cloud share commentary and well. I the the of customer about strong renewal the model main see headwinds the in revenue to One, support That’s things. I target rates, cloud two support FX an Yes, FX you it’s the lines last as maybe impact the our spoke a

Operator

Howard Our Research. ahead. of Please Leung Investment from go next question Veritas comes

Howard Leung

business. larger Even part margins little look Zix doesn’t for the renegotiate bit to OpenText the It there. with sense. the I guess of of side the Thanks. The call. the like combined marks my a about a it the try on which it of questions. like, sound cross-sell, doesn’t And for a those resale list sounds guess to that are their get And you’ll focus I or lot acquisition, and Zix’s are trying for thanks taking makes like

Mark Barrenechea

us plus our products. are kind welcome. the it strategy there with integrated data and and That’s integration of EDR you. I thanks is strategy our And data of integrated to your to good note the first, Zix’s eventually Howard, of and and vectors secure security MDR. have platform. There’s multiple email strong for for component an security, this And email opportunity that information security. information And forensic our protection, offerings, endpoint an ultimately, edge better across here And then another arc obviously, question. protection, cloud do to the is hear And from platform. to

is across companies. Second cross-sell to our ability those

ultimately relation, power bring Zix’s opportunity. enormous bringing resale relationship customers. customers us. Carbonite resell the the Zix’s force then And and the for equals just into the and is opportunity, multiplier Carbonite noted, There’s and into Webroot Webroot As

the is and then then important other very Microsoft bring top no won’t that the Webroot. can’t others. and as even So and ability platform I go there’s we go larger resellers MSPs into than with relationship And reason our singular Carbonite, into on MSPs that, expanding bringing well. to into further great the that of third-party relationship, XX,XXX

of complementary top Microsoft on We’re working little to even resell. a with more for Microsoft, bring there in

the platform for So powerhouse an Howard, of it’s approach and Microsoft very through at SMB create the call relationship from integrated a to assuming edge complementary with Microsoft the the vendors. power we comprehensive do

Madhu Ranganathan

question to Madhu say going you thank was well. Yes, just the it’s I for as Howard here.

Howard Leung

products? Oh, follow actually, or up new And process how No, problem. about no, the guess, yes. -- no problem. just I maybe of, onboard you the MSPs on your MSPs. bit? Can a the to to to then And introduced talk talk your No you how through guys, that

Mark Barrenechea

Absolutely. platform effectively, driven And they question, to to our but after And support single that this digital a as tries running after buys, application we’re But and Day. can very going can is cloud the goal our can a all renew. provision and software. pane it’s MSPs about And transact, cloud and and a because of selling our they where by platform. single and can the that a have a speak one their software is Investor and zone important come a is they or The bit they glass in engagement self-service. to

to writing friction platform friction of the by trying that And is and call zone. approach from that invest software buying, digital the we from part our remove today so remove in strategic to selling, renewing, our monitoring,

Howard Leung

growth rates. renewal there? mid-XXs bit Is the call we explaining or want for it me it’s directory I deals Thanks helpful. guess one side, it’s a And -- about from the for the think there out anything new on and less more is expect XX, then about the really process. XX. Should the That’s go I retention? just final maybe back one slipped to maybe cloud to on I up know you

Mark Barrenechea

may Madhu mute. you be on

Madhu Ranganathan

Oh, apologies. my

in running I oral an coming argument a Howard lot heading world Paul he annual So saying believe, new the up are was been of and along. a is we business. a He’s Duggan, ideas interpretation ago, in in quarter announced, billion convection $X our

that our also stay to products world improvement There the right? tuned. piece say in in expect as the questions value I the and and rates, the say would that would we ahead. customers. this second lead churn, but is going There be to churn introducing the So than continuous I to value to cloud is about would innovations And keep were organization look earlier and is higher

Mark Barrenechea

a into mid-to-high definitely quarter will given renewal the cloud vary nine? But trajectory on is rate. Any

Operator

concludes session. remarks. This over hand to question any the back answer the call I will and for now Barrenechea closing Mr.

Mark Barrenechea

our be format together going All on letter. this in we most your on join on you’re today. hope team for remarks our good. call. the joining to out executive here and narrowing feedback keep more important majors quarterly our person The very, And Thank X prepared I virtually and Investor live. to in of shareholder Silicon the you Day you our welcome Madhu you’ll disciplined March most we for in or will Q&A, provide where join which majoring and are And right. And March marks time welcome all Very, us to very our very Valley then. think us X to you. point Investor in be I is new seeing for Day. our forward look thank

Operator

This concludes today’s call. conference

And pleasant may lines. have your You participating. day. you for a Thank disconnect

Open Text (OTEX) 4 Feb 222022 Q2 Earnings call transcript