Earnings call transcript Q4 2023

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Operator

Thank you for standing by. This is the conference operator. Welcome to the OpenText Corporation Fourth Quarter Fiscal 2023 Financial Results Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Instructions] [Operator

to Investor over Relations. like Senior Harry the President, Vice Please, turn would to conference Blount, I go ahead.

Harry Blount

available and with With Officer, Today’s webcast call our Executive everyone, OpenText XXXX Madhu Technology Officer, Executive Ranganathan. afternoon, welcome President a the Barrenechea; fourth Chief and shortly OpenText’s Investor live Good and J. quarter Officer earnings thereafter and call. being are and me call website. today the Vice replay is Mark on on recorded OpenText’s Chief to fiscal Relations Chief Financial

and following Citi's we conferences: presentation our today, and posted OpenText New be X Investor Earlier Conference our and Technology pleased Conference in earnings Oppenheimer investors.opentext.com. Technology the remarks These on X, Dana supplement at in accessed Global that York. press management and release to XX, Virtual will upcoming Point, will Deutsche website, Internet the August you the California OpenText Relations Technology on investor Bank's be Conference Communications September materials participating on August on can online. prepared I’m inform

now this And may call, Safe to that OpenText statements note statement. information. performance contain make future to of conference relating the we course the forward-looking on that during Please our of Harbor

today. While made a represent could conclusion, these results the our from statements forward-looking statements differ forecast in materially current actual judgment, forward-looking or projection

were and factors assumptions in applied drawing statement. material Certain such any

in earlier found our afternoon, and to that cause Forms that projection distributed which results factors well may could Additional XX-Q, contained future the in as that information, differ are from project OpenText information our forward-looking performance as this results a may of recent about OpenText’s material website. the was forecast XX-K the as release as actual press be materially on conclusion, or factors risk well in

by do We required undertake law. forward-looking to so update statements obligation to no these unless

other their measures any Reconciliations our In certain of available most our measures may non-GAAP addition, materials, measures. and financial may call conference GAAP non-GAAP financial directly be on within to which our of comparable filings are found include discussions website. public

I over pleased that, with am hand And Mark. to the to call

Mark J. Barrenechea

and afternoon, Hill. Thank everyone, from good you, Harry, Richmond

see, can of was announcement of Project record Cloud acquisition, titanium, quarter the Titanium delivery by XX, year, results, financial the end and the Editions integration highlighted XX.X great successful Micro you Editions As fantastic just of QX changed Focus another X. of Cloud of the AI for And we essential of change. are in everything global management. gen of the today's opentext.ai, a next AI, leader and information Information everything with Internet management as next the transformation. And must gen announcement business project is

become XX cash years that double a would over XX% to $X around flow I approximately us a said company, at the would trailing we of grow via like the Before cloud-centric the a and return organically, billion ago, year. business got here. over that years expanding by management our mission, information transform to significantly and we get Three we in the journey go were value rate dividends months revenues, I'd next numbers, in I delivering manner accretive per free five capital

of led this revenues currency, constant and organic X.X%, X.X% as so QX billion, team of or growth I'm growth revenues revenues and our $X.X has Well, organic cloud can see, on by aspirations. $X.X organic delivering you total ARR of played FXXXX X.X%. to In proud total XX% billion of were the out. were growth

$X.XX XX% growth. between and in target billion, Looking billion ranges revenue revenue to total XXXX $X.X ahead plus fiscal or currency, constant are

dividend year annualized per For we than subject up program. approvals, $X.XX earlier are $X.XX program started a announced FXXXX, growth, Micro dividend organic from Focus, $X annualized Today, quarter, targeting our a contribution from including we positive or organic to positive share a expected. when a we

to our We of growth EBITDA the total flows X% expansion, aspirations, remain X%; free to include up of cash committed growth targets, in adjusted months and five FXXXX X% margin X%, of to organic of of cloud customer, the XX% organic which system. doubling the and to and rigor the billion agility reflect Focus, business, $X.X OpenText have business our The operational to organization product, integration. closing our plus. we the confidence Within Micro completed

on are off one we fiscal growth. creates As success and kick XXXX, customer intelligent we company that innovation focused

driven fundamental by advantages three momentum our is over competitors. Our

management our complete and information unique they software; customers choice Our how customer deliver technology; experience delivering model. second, in through large consume our comprehensive ability to and deploy differentiated and third, giving best-in-class

our our also businesses. our are been integrating business and Oracle, SAP, the business them. Epic, more we among journey. as network the information the business customers and and between to hundreds relative This to standard me And popular competitive from On systems Salesforce, while content of advantages integrate management speak Microsoft ServiceNow, NetSuite, let has sizes transactions are

BN our business. in approximately of Content represents XX%

-- protecting is XX% from organizations defense and soft sizes, and has actively enterprises through approximately and protecting all of Our fantastic physical It's assets. our business. a opportunity identity cybersecurity attractively growth for governments, solutions of platform, are significant

the Our customer-critical business. assets across of are service hybrid of about ITOM all and solutions experience, is X% our architecting flow and changing approximately information

experience use their them developer and Our by workloads enhancing more time seamlessly by highly This automation centered XX% operating our is off-cloud professionals is cloud. on precious application trained the helping and business today. modernizing approximately running of efficiently in moving, the to

from combining from our information new technologies consolidate now IT cloud in our further moment differentiation This customers transform position platform, into AI to platforms service and from leveraging again placed very applications, competitive help as business with from fantastic and by key and our content us important customers helping yet data scripts from others and factors and AI business such models. automation set has and of innovate network, transactions a a in sets ITOM, OpenText our large rumor, test implementing

data, the better automation, better data; To the data, be successful large models, AI, no data no the automation, AI. the in the you the new the AI; the need and better sets better

and Magellan, and learning machine AI many acquisition, for IDOL. the new learning technology, Vertica added our capabilities prior implemented vector we AI machine Focus databases current And to breakthroughs. capture including years such with and have Micro AI platform We as

We OpenText.ai, running we and have these our of platform proven with Aviator, of private Today, AI X% technologies. OpenText announced customers technologies. our an Presently, business. are analytics and elevation an deep many experience and approximately OpenText cloud Aviator AI

train customers. allow to more expanded use AI to management are we to our Please of is information as capabilities security. Aviators large with OpenText.ai OpenText will clouds Gen to private trust built language from data models OpenText OpenText.ai our and with map. into AI customers and this visit strategy road so continue our that journey each learn their do and business and

models We the OpenText Aviator open source language for support models in specialized job. Assist. models offers with private Open customers right OpenText support a cloud many right to secure environment. will highly cloud private as Google's Vertex X initially specialized the such leverage learning intend Aviator learning model Aviator and and ability the PaLM to applying

OpenText the platforms integrations. analysis, threat redefining OpenText and level Experience OpenText's Aviator Aviator, Content six conversational DevOps generating experiences. large-scale business-to-business search test Business and Aviator, aviators, management communications. Aviator Cybersecurity initial Here Aviator, transforming generating and through enhancing ITOM document Network X OpenText OpenText behavioral supporting trusted are software customer Aviator, support generating analysis. OpenText

be today. and cycles. available be Our be will of and capabilities Aviator, Aviator begin with will progress private AI to Editions cloud each platform and our OpenText, with built AI technologies, are earlier, XX.X XX-day which Cloud will in At available part I mentioned release. release we

Aviator investment into range revenues XXXX F R&D AI signals, update investments XXXX factored we'll into are we R&D of clear have and capital XX%. F to our initial plan. Our factored you. we once At see any And present, not XX% revenue our

large to intend opportunity OpenText to play in has over is it. a the believe play role we AI, long-term We AI significant. the and

Now I'll will QX to provide insights. deeper results. XXXX and Madhu turn fiscal

currency. highlights a on touch key me few Let constant in

$XXX cloud improvements $X.X strong mid-XXs billion XX% renewal and revenues, QX, in XX.X%, rates million XX.X%, total in clear margins micro-focused mid-XXs. in renewal rates enterprise showing up the and with the of cloud up revenues, our into EBITDA adjusted For

Renesas, and WalkTop, [ph] Vertex DHL, I want the for Daykin thank selecting Paribas, quarter. to technology OpenText FEMA, BNP during CNA,

For FEMA and providing we're DHL, cybersecurity.

For micro-focused Value new platform to platform CNA Warta information AI platform our DevSecOps their business. and a tailoring. and with essential win content is content Renesas, Edge, cloud for BNP, a

billion $X.X billion results developers, cloud XX.X%; million. of content, year specific operations strength the constant revenues, total These and IT XX.X% XXXX reflect dollars flows needs. in in and addressing up growing fiscal in migrations, $X.X $XXX up and sustainability currency, needs in chains, in climate adjusted or cash our XX.X%, customers solutions of the supply For the revenues, EBIT $X.X cloud billion free across of

delivered have XX cloud constant page thoughts before three fiscal investor accelerating finish, presentation, of you'll me some years On I that Now growth initial see we for let of our consecutive in currency. organic provide XXXX.

from continue this note XXXX F to our XXXX aspirations, trend. targets F expect we You -- and we will continue

enterprise We in cloud in of XXXX. we plus delivered are targeting up XXXX from XX% bookings X.X%

XX% note million. me growth $XXX by QX million strong enterprise bookings or QX bookings that grew Let million sequentially $XXX to $XX cloud year-over-year. we to QX was from at

plus. acceleration previous micro the and pipeline, momentum cloudification for growing focused We solid have of demand products based The to investments the titanium. our expected in XX% is our on

security, unprecedented -- move as F from begin consume capabilities, digital into automation Gen next the AI going more management as look platforms, customers an to application XXXX and year workloads to information customers adopt competitive Cloud, away consolidate is to be more operations capabilities. OpenText

expanded is Focus is our Further, to tools. in growth you the this provide return have exceed rates fiscal confidence products That quarter Focus to expect our show to Micro year. and foundational the information every to Focus back, Micro vision fiscal I $X.X year. organic renewal billion Customer AI Micro progress this revenues. we and plan management expanding

highlights or plus year, added revenues outlook revenues. of $XX $X.XX To organic of to to in new million fiscal Now new we X% on $XX to organic million XXXX, Total in F million we revenues. up or $X.XX growth. Total note, our X% currency. the this of to between new billion billion XX% to $XX of organic up And is constant organic XXXX revenue add in expect growth year.

Enterprise X% X%, gen of $XXX season XX% new to and EBITDA million to of additions help remains opentext.ai. free bookings our growth and macro capture environment. to transformation Cloud the information clouds, XX% with the range management a $XXX adjusted customers It earnings on of of next issues well-positioned to cloud OpenText of million. our is and growth cash our margin to demand cloud business our this much of XX% plus; Total flow

opportunity. internal in. quarters. Our revenues our remain have yet unique dashboards now right aviator we built F any not And with advance again, our do Once XXXX offense targets to consistent previous are playing

thank experience. in to thank see for for trust advancing been Micro ahead enormous want an and Focus you and to amazing such mission providing partners, an employees customers new many our their much of think our our the fiscal and customer XXXX innovation in can acquisition who our best to and for for and transformational us for want making to fiscal employees We AI. and the success all XXXX through OpenText on fiscal -- customers' partnership customers, employees our us. I so incredible days placed exemplary for remain you making I your have I to the years, to accomplished our an place OpenText with work

our You are source inspiration. of the

commitments as I'd today, we for strive better core tremendous for brings company. corporate reflects the an well read annual values an inclusive to culture to one encourage to I'd our We as that that fourth sustainable and and our -- as create we report. citizenship like again, report our world both to And I'd corporate as our strive thank The all. even imperative a highlight citizenship you it. you as see opportunity. may like peace more we a brings and and published

And over the to to I'd with like turn that, Madhu. call

Madhu Ranganathan

all Mark. today. for Thank you Okay. you, thank And us joining

a saw team. driven solid outstanding strong from results the QX XXXX with execution year OpenText entire finish fiscal Our by

of For acquisition XX. as ahead we results Micro in on January see plan, are since you the Focus, close of the our financial

disclosures. additional It are fiscal year-end and is we company. with one communication, providing are you We consistent with our earlier

And materials about. addition the in in lease our the outline complete list of today what are the conjunction let me materials Mark with AI-related to talked

a Form few earnings to our attention investor items. presentation, Our release, and me XX-K, let key draw your

annual XX, is page consecutive page of of the years a organic On highlighted growth our accelerating providing X disclosure cloud are constant view currency. growth our in businesses. On into we XX by high-value organic size

path our to deeper On to XXXX. highlights growth provide integration page to clear On Micro a XX, XXXX, returning in target by It our model. Focus fiscal our doubling flow one and insight expectation page we ahead year framework fiscal have of of free XX, updated organic financial plan. cash

USD All reported are in year results, of the to on references in presentation. otherwise. unless and So are moving here the basis to our compared XX are millions page the fiscal same of investor making period to QX refer prior please stated and a

and we bookings up year-over-year a total consecutive This X.X% up quarter of constant represents record We revenue. enterprise and XX.X% growth revenue currency. for million, in had revenue constant $XXX ARR currency record cloud our currency On XX% up of cloud had year-over-year. $X.X $XXX basis, it We in record million, had XXth of and XX.X% of billion, ARR. cloud was organic in both XX.X% XX% constant of

and income million income of in the and net of with XX.X% $X.X quarter, with amortization operating up Our special active to in related million XX% Focus XX% expenses interest Enterprise was loss at Cloud constant $XXX Micro of higher GAAP and total Focus. XX.X% renewals And revenue cloud. contributing of metrics. billion, strong moving down currency $XXX financial other Micro of million, a the acquisition charges from $XX expenses, to in

GAAP increased and led XX.X% of continued revenue for by from strong margin higher gross of gross the and reflecting Focus XX.X%, customer support Non-GAAP margin OpenText Micro support. license customer margin business contribution performance. versus gross XX.X%

XX.X% OpenText's million $XXX breaking versus Adjusted revenue adjusted an year-over-year increase EBITDA XX.X%. was XX.X% $XXX of or in EBITDA million of this of and or XX% further, of down and currency margin constant revenue XX.X%

from a EBITDA Micro XX.X% XX.X% adjusted Focus significant of an And in had QX. in margin improvement QX,

our excellent Micro progress adjusted Focus to model. EBITDA into bringing make continue We

We $XXX Working operating free cash quarter. in in flows $XX and the capital performance cash million remained million generated strong. flow

XX to in were DSOs prior compared days, the Our XX days year.

fiscal $X.X and of and revenue XX.X% on revenue X.X% currency year-over-year year representing constant up cloud total $X.X XX.X% revenue. full up up of billion, basis, XX.X% ARR million, currency of $XXX and cloud bookings constant XXXX, in For a year-over-year XX.X% XX% billion enterprise in of

XX.X% a contributing revenue Total support customer with of the cloud. currency, XXth. constant revenue was in of five and in exchange of million, Focus this fiscal $X.X billion, June ended up approximately in XX% months for XX.X% million Micro Foreign and We XXXX headwind half in $XXX $XXX

net of And full GAAP $XXX higher income for other with Micro metrics Focus. special moving from the $XXX interest amortization, the financial million year, to operating charges and expenses of down expenses, acquisition million, to related

margin XX.X% OpenText versus support. higher customer GAAP support from by increasing was margin gross the margin for XX.X%, reflecting well and year business the revenue Micro of for customer gross supported contribution XX.X% again, license as Non-GAAP gross Focus continued as performance.

XX.X% or of down of XX.X%. currency, making constant had XX.X%, XX.X% EBITDA or EBITDA revenue, further, million OpenText XX.X% in margin adjusted up of Focus Adjusted adjusted and Micro of billion EBITDA and revenue versus XX.X% was $X.X and margin up $X.X an this year-over-year

XXXX in year. cash $XXX to of the cash flows We acquisition. compared in in related operating generated prior million $XXX in in primarily million $XXX to $XXX fiscal Free the the decline flows million XXXX, Focus compared Micro year. integration fiscal to The of prior million

our was capital of well collections $XXX performance operational target to Focus. reflects strong better integration as and range of $XXX than working This million Micro million a as performance and rapid

$XXX fiscal million Micro flow $X.X billion of provides strong aspiration And our and in cash contributed platform XXXX positive the by Focus to target a for driven for capital performance. range working million flow free XXXX fiscal for year, their $XXX performance XXXX of fiscal cash solid our plus. Free

long-term the page of $X.X Turning debt. QX We billion of see investor in sheet, with balance finished $X.X cash billion to XX presentation. the please and total

slightly and mentioned impact X.X the would net timing leverage we times and net of expenses fluctuate quarters, QX. our next EBITDA. adjusted investments reflecting Last the over was of few integration ratio leverage for Our ratio quarter,

as reduced we quarter, program. After our further debt our by $XXX the closed we million of part deleveraging

times to net leverage fiscal committed three of delivering XXXX are a the of or ratio We than less sooner. end by

common subject per date XXXX. our to payment share. dividend The and approvals. XXnd, a September to our of XXXX, $X.XX per a increases Today, The board September record share next to annualized dividend of Xst, program. date $X Board quarterly Turning quarterly dividend dividend approved the quarterly of Directors for in cash

Turning aspirations. targets business We a quarterly currency factors, aspirations. to for constant basis our present and our on our and targets,

on fiscal year-over-year ARR reflecting seasonality. we expect of revenue XX to basis, XXXX EBITDA QX percentage page on again the reflecting $X.XX margin micro-focused year-over-year billion costs. $X.XX factors investor a QX points, integration quarterly of billion, XXX Our to to presentation, basis $X.XX XXX billion of Adjusted billion. $X.XX down

plan and earlier, on business annual will an we basis mentioned view As and our quarters vary.

Specifically as flows, neutral capital interest, working in $XXX seasonally $XXX are lower be negative charges of as million expected costs the cash confident is QX result of special target year. free to fiscal to million on well start our of integration annual and to we at a the as slightly

QX, basis expect quarter. growth subsequent on year-over-year from Starting flow free we cash a in each

Our fiscal XXXX presentation. XX page in of targets and constant our currency are investor provided

enterprise We XX%. to to revenues cloud to to to bookings up revenues XX% XX%. range, year-over-year. XX%, representing customer Cloud XX% to plus plus. Total gross X%, grow look billion, XX% adjusted margin to XX% growth XX%. billion $X.XX range, of $X.XX X% ARR, EBITDA for up up support of XX% growth revenues Non-GAAP XX%

FX would million. At $XX to current be exchange approximately million revenue and $XX of a tailwind rates,

aspirations XX unchanged, included these XXX of our and are in remain fiscal investor Our page presentation.

integration financial on investor the framework XX of the to turn me let And update page presentation.

savings of million $XXX $XXX to with million balance actioned the XXXX. completed fiscal be have cost expected our We in

with the the completed $X incurred to integration have balance be expense million $XX XXXX. expected We of million fiscal in

the million incurred charges. special have of we Finally, $XXX

million $XXX $XXX $XXX micro-focus expect to and in million incurred expenses of the charges be million XXXX in to fiscal and $XXX remaining the We XXXX. remaining fiscal

driving are structures optimization. presentation, technology entity include outlined of of footprint These XX on targets simplification, aspirations. reflected in fully global the and these these the spend are initiatives our investor page and related All tax

to Turning cash flow. free our

million of We fiscal billion our are aspirations of plus. $XXX fiscal and cash reaffirming free $X.X XXXX range target flow our to $XXX XXXX million

FCS cash XXXX are aspirations flow more fiscal Our XXXX our free than for the fiscal double year.

pleased and we performance. summary, outstanding QX full our are year In very with

XXXX. and size global to have outstanding and for behalf to stellar customers and OpenText XXXX members, in would growth. ahead. enhanced for and To and looking delivered I'm for gross the Our shareholders, forward like by driven loyal innovation fiscal metrics OpenText, deliver milestones position our I of fiscal you adjusted flows enables great journey to team On us scale margin, put us partners. thank a proudly cash EBITDA that free exciting an

request call to the will now I open the operator questions. for

Operator

Thank you.

We session. will question-and-answer now begin the

The comes from from Bank question ahead. first National Please Tse Richard Financial. go

Richard Tse

Yes. Matthew, it on why prior of sort question. just the about the talk bit Thanks deck wondering you looks here I the here? it's that for taking up maybe little quarter, if if of sort of XX, special explain charges, little from kind that you Slide at my when look a like us a and just unpack to increased bit, for gone prior

Madhu Ranganathan

Yeah, yeah, absolutely.

look you range million, integration expanded structures, estimates about the et actually these if a down of on entity we've have and $XX the $XX couple we to million global fact, expense for at And current are again, about tax simplification, gone the of items, In special cetera. line the by charges. the

of a through fiscal yes, $XX So increase million. XXXX, net it's about

Richard Tse

It's in Focus. center bit terms doing job too Okay. with good a quite seems probably a ratio little of you're this, the early for but obviously, Micro Thank it like you.

fiscal I'm look it not here XXXX, aspirational include forward I acquisitions. let's to, assuming guidance as does any at So say, your going

could at comes us of So deployment help targets that? should kind wondering when just process we about that capital to annual way, Do your around thoughts how look acquisitions. you it and it think maybe if or understand you

Mark J. Barrenechea

and growth is. ahead that's here, on for thank very you present, Focus we're organic certainly year returning a focused Yeah. energy At Richard, where And of schedule. this to year, the question. Micro Mark our

we as we have role it. large in a Second, I noted, play AI, and to to play intend

sale our announcements new product in today So and we a aviators parallel investments and set XX% about initial of our or discussion quarter. are of we And road between within available framework, to large announced next OpenText. strategy line our AI, to year. that focus for our XX% revenues of map and expect R&D that be AI for called six had aviators this

$X our we if very as And the all we do acquisitions. we're capturing XXXX certainly to annualized Xx focused F as capital focused organic. right under opportunity brought share. I'd XXXX. us. dividend certainly, F know, note But bring for approach aspirations, we're also on on return, to our as So up want on are those are And And now, leverage, consider delivering to we per organic you we'll well

Richard Tse

Do use Aviator great. an that I'm related that's maybe within if guess, Aviator my kind just model, impact company? the OpenText's see you're to question. using just the operating I there terms And understand current of Okay, operations? you and cases really you last the in case, use within trying of having

Mark J. Barrenechea

much we do How time Richard. have,

and way and today we're There's the direction. people's other metadata. jobs. We're technologies highly AI announcement Vertica a there. highly highly to talking How And going database, use specialized consumer strategy our we're initial and bring not into our from to specialized our are in How So be Idle not going offering use as will technology, models useful enterprise support be as going AI. around We're product lot about going going for to we're translate vectors to in vector technology. information specialized. And language language source. our to How open here, poly-model. we're to models a embedding

in integrated, got that as expense if we product P&L. our automation a XX% the that think our a of and to played up So role private over G&A the trusted and private you in is for has the getting to before in ERP And of XX me if just focus enterprise last years, was moment, suites Idle Magellan. in market, elevating allow doing cloud well Vertica initial way

into AI for the Automation but aspects different AI next than mid-single the transformative is automation, knocked G&A digits. enterprises. is

ability Aviator, areas initial about We just over X to transform will Support. use Aviator consider business ITOM to talked our that support, own time, our as Level well I transform our

professional we will have of code. in opportunities generate how our We services

they have test. can how our transform engineers opportunities We how

a So cost we'll our Aviators have -- to about we'll side, sales. our business and the transform apply we'll how how we'll how revenue and Richard, RFPs speak whole in structure, transform more more we'll and

vector generate out have the years RFPs. information in XXX,XXX it. We We'll our language database, them apply history, of best we'll XX put a and of model our

So in our will that we're right as our come initial and we time. But time. ourselves investment, will our through direction, now, announcing strategy, our it products, initial apply to well R&D our vision, then

Richard Tse

my Okay. Thanks for taking question.

Mark J. Barrenechea

you Thank

Operator

next question The comes from Steve go Enders ahead. of Please Citi.

George Kurosawa

Hi, taking want on this just George question, bookings. click for enterprise on the on is getting I Kurosawa the on double next to some confident into year. quarter. guess, you help congrats are Thanks into in close, and more color expect any Steve. for push-outs great next guys to that? deal that And acceleration there give or any element on, this from year how just the of you the year I about Was just cloud thinking

Mark J. Barrenechea

the and happy today. on for thanks being to, George, call

were So F recap In were our and bookings just already QX. QX, which at $XXX million, QX, to had in X.X%, about $XXX bookings up XX% bookings quarter, the a our QX, XXXX talked we million. In QX, numbers, year-over-year. constant strong cloud we've

bookings to $XXX plus. solid to QX we've got get million. was the And so And XX% momentum

based And on so that's based pipeline, deals. on

I XX%, between at all. different the wouldn't deals push to and mean, point XX% I So

momentum Our up. is

to XX% the $XXX delivered to we plus. in QX, momentum we million got up So get and XX%, solid

George Kurosawa

on on here? what kind of of color helpful. monetization you set just just of the exciting Super unique kind anything any then a products. it. Maybe really the I kind strategy of announcement, And there go-to-market Aviator there? would highlight Is guess or Got and

Mark J. Barrenechea

would market. two pricing I things. two in of the emerging There's sort say models Yes.

ChatGPT, You to of that $XX Microsoft, Copilot, $XX to GitHub, And have think ranging certainly per I sense user month. they're sort from per GitLab OXXX, makes me.

in other where of pricing kind you based You tokens. process and sort of others have see on the enterprise Google the spectrum

in sort So next right per more pricing setting $XX between introduce of in right, user quarter, we'll Aviators the market -- will the to some But month when the oriented the we turn then. rate $XX. pricing GA now, towards be

more what kilo And business we on call there is other way, of our thing we on characters, be is priced network, consumption. will which of And based the parts as by tokens. do what the same sort

have -- have models in $XX is some between announce we on So the Aviators the for we'll either Aviator. we'll thought And user built and Aviator again, the we'll and it, we two user the more based. But for $XX towards to we'll XX.X, pricing one kilo when oriented of deliver per right character. probably consumption each based kind right or tokens month pricing through and per get market

George Kurosawa

Great. taking questions. Thanks the for

Operator

ahead. comes Please Kevin question Krishnaratne next Scotiabank. from The of go

Kevin Krishnaratne

Hi, there. Good evening for Just maybe one me.

correct Just on in what recurring about just you're think -- gave if came the guidance, that maybe quarter. the guide I'm you you talk the bit perhaps the XXXX we faster. but me How result Thanks. with last in Core OpenText preliminary to down think from little F do Micro seeing Focus that on which organic a conjunction Can wrong, that a growth in to the I it it -- bit top end, little lead about

Mark J. Barrenechea

call the today. Yes. the on for Thanks Thanks, for thanks and being Kevin. question,

the revenues organic X.X%. recap our we XXXX, in to in total company added of new organic or And Just million fiscal growth was the right, year. numbers, $XX

on percent of of new or top -- to So we can said -- $XX million revenues. annually. percent We're right? tricky, And you that committed But X.X%. we real differently, showing simple grew added be organically, just

Our a larger X% but target X%, for on much is to base. XXXX

XXXX in million because $XX not million you it's because organic on fiscal it's higher base, revenues of to new So $XX if will. a much that's

So that's up to 'XX. $XX million, almost $XXX fiscal million here of new in revenues

new expecting not Micro new it the fiscal have revenues clearly to grow, expect We're X% and revenues we my we growth have organic to organic both like growth. aviator to this and yet. of the it. Look, no of but and way, year. last 'XX for all in in And revenue don't speaking $XX to And well, Focus until we is way. we say our have base as X% again, up built product lines revenues to to script, to I I our going this million return said million added add $XX I'll And signals, OpenText growth expect model having we as organic we're

Madhu Ranganathan

if your the share printer there just last #XX. this Slide I one could print on in midpoint what And about And Kevin, the Yeah. said, note Mark FX tailwind we point, $XX make have just of the million. addition last to point is versus please to

Kevin Krishnaratne

Got it.

line. Okay. the Thank I'll pass you.

Madhu Ranganathan

Yeah. you. Thank

Operator

The RBC ahead. Paul from go of Treiber Please next Markets. question comes Capital

Paul Treiber

Thanks for questions. taking the

than Fundamentally, has in expected. much been the the comments on Micro changed then missed Focus and renewal the prepared you for might Micro but this did Just business? trending? why given remarks, with that's your is better quarter And you comment remarks, have rates in how is that? Focus prepared doing I What

Mark J. Barrenechea

happily, thanks being for today. with and Paul, us

things. see and two to fiscal also sell company renewals return customers’ map Focus And the take sells we're done all announced renew. back. and XXs to We've year. renewals 'XX get Text the and our practices, We've renewals the the around XXs Focus. right? And experienced it for wind the on And a a first transform back the that's right? for integrators. a We trajectory cloud. to road released experienced We the it. our in acquirers, of XX.X, announced products. We linear, to had Focus cloudification, executing. delivered We're executing organic vision with high and renewal fundamentals, work We Documentum of product a growth pace how cloud. Micro XX.X, integrate cloudification Micro our we're in the more the So from They the -- Micro to in cloud. new. the We've where We've transform low the integrated deck into ended don't with right, of we We've teams confidence giving the And we've you will Open our first is confidence road systems investor just Edge. aligned the Value mid-XXs, field so to the map we this and gotten into practices. it's right? can field XX.X, continued BNP actually, we're up the

Focus execution organic along showing to plus pipeline year. going the giving every will growth So it's the you you way numbers. that those And show Micro this and that the fundamentals I'm to are plus quarter confidence, us return the our

Paul Treiber

And in do of How some past, do giving an opportunity the -- Magellan I the that about past, products terms you're but I the the Aviator? excited had very opportunity it about about for of we had in think regards we sizing in you've mean compare to we you've past. had outlook, it. know do you've to sound other you product large how Aviator, in magnitude launches in product the the the think how not the And

Mark J. Barrenechea

we're not to Yes. right? believe TAM I'm a it's on going long-term And I after I deliver, to significant innovation, put my in a fundamental for going it. a put show TAM to the you when OpenText fair we're it, opportunity. way, the predicting be question. those. ready as to all it said along not to way remarks, go We're on the sort signals But So ready a of

our into built -- our into built revenues revenue Aviator any have any model. F XXXX don't We

for to relevant clear an do be did So I'm can it's going enterprise. set that automation make AI the enterprise, going going be Its to products. the for customer. It's to I independent the every what distinction of think for

you in of data the automation. the customers the better better we've We're content. the for And the well-positioned data; automation, AI. Better extremely been where managing data, the sets better the need large thousands

ADM. where business IT with well-positioned transactions. of billions we been managing well-positioned are ITOM and we've We're well-positioned network We software We're the testing scripts have in where assets. in

value can enterprise. where the places you in the So we're in create

And because of have be nice impacted. the think, report, grid going are kind report there's it AI I great they places a enterprise real of to the -- a I of the McKinsey mean -- their is

its mentioned. the into developer, It's the it's content, it's right, contracting. up just I've things the look You

So I'm it. ready not on to put TAM a

about Our Vegas. products to And more we'll are Initial next time when Aviators obviously, showcase, comes be the quarter, and available in market spend our TAM quarter. announce be the pricing will a talking product next

Paul Treiber

last Just me. question for one

And in to speak the – rate obviously, regards that global what's minimum from that a tax Can slope tax? And the Madhu, reflect big the driving reflect increase? -- the Just, tax. then jump does to you mid-XX% to in it to And does XX%. it's XX.

Madhu Ranganathan

Yes.

So a few things.

the we in the about this as attributes, end the of and plays creep up talked before, we've using the end Canadian up a XXXX, all, role of towards that fiscal of First up rates.

about initiatives. here. Now attributes the statutory no using tax Again, tax is not on U.K. but the is front, We're in we're relief the sort you strategic absolutely Micro There so and Micro Focus OpenText. taxpayer talking from immediate, slap of, Focus, U.S. in Micro rate. of is Focus a

factored attributes wave you're the slope of next XX sort Micro the I to. tax will Focus. attributes expiry of referring not tax we the the months at and Again, you're seeing So XX months spend next the Canadian is for as but the really, is that on optimization, adding in OpenText slope strategizing to US said, utilization of the

Paul Treiber

Okay. you. Thank

Madhu Ranganathan

you. Thank Okay.

Operator

from comes Stephanie Please ahead. Price question of CIBC. go Next

Stephanie Price

Hi. afternoon. Good

Mark J. Barrenechea

Hi, the Stephanie. Welcome call. to

Stephanie Price

Thanks et the different the each cetera. breakout additional management for the the from revenue and you. on Thank the details divisions content security, of between

speak Just little that. into a wanted deeper bit to

different the you you If XXXX which the you've businesses businesses and opportunity company's the And you think the see rate? see high-value fiscal most growth growing you if pointed where really look capable above about out do beyond, of high-value mix businesses, of out? the of do the is at into

Mark J. Barrenechea

for Thanks, dynamics. question. their Thanks each the They have Stephanie.

promised we Slide more just me presentation. high-value Let of of the each to with provide investor into on XX visibility businesses the start

growth down IT You and can into at And XX%, XX%, of get them. for I'm one each automation AI application see X%. content business not at X%; ops network cybersecurity XX%, analytics, XX%; rates

opportunity. opportunity to in clear going do But a So about and just not today. AI analytics, that as I'm we've have clear we today, talked

bringing with market. the SaaS private management, that very cloud products we're IT pleased to operations and I'm

I and needs have think significant we there a everyone cybersecurity. opportunity

kind talking right? of is having these our cybersecurity across value So we've the programs winning value value businesses. about the each businesses. underway select of all stack, all been And -- an across effort

I enriched IT need therefore, consolidation a And content because more then has Again, to AI. And that my an private obviously, each all take they have on of opportunity But advantage opportunity. that They're about cloud data continue platform, you through unique. optimistic need I some advantage AI And there's interesting AI, very children. and thing for to significant love ops, customers AI. cybersecurity, So deep analytics, on said, opportunity, as automation different than take public. automation AI. management their consolidate believe I to that. more of They to into automation or to grow and be and

Stephanie Price

you much. very Thank

Mark J. Barrenechea

Yes, thank you.

Operator

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

Thanos Moschopoulos

early that sales Hi, Mark, early on see to where cross-selling as And front? good us far days update started any have can afternoon. as you on stand you integration? or you

Mark J. Barrenechea

accounts complete, go like Thanos, for you singular We're joining I’d assignments, completed have we're all global that by July And integrated. market kicked buyer. We've off completed thank account to Yes. We're Thanos. X. you integrated, X. account all on implemented today. our and single us to We July team. fully work call. the our Salesforce plan, was

as have We single a force as sales system example. compensation well an

The we're areas, complete. so

The second piece the list as again, select of security is top top idle list, cross-selling. on the the And of well.

training part as everybody. which for just of of so ago, And weeks a out couple was kick-off, laid we our

we're tools. and days really on it's focused is metadata AI but and the cross-selling, two early areas, security, it So on a

Thanos Moschopoulos

progressing? to And leveraging, products. is the respect micro that as far your Great. with How as partnerships OpenText then channel

Mark J. Barrenechea

XX, this OpenText top that few program. Salesforce, Well, we're our pyramid of TCS SAP, call the a DXC, on Network, earlier sort we Partner We top year, and very which of the Accenture, now of OPM. are Microsoft, partner others. pyramid, next it announced on or the of focused our Amazon, the top Google, generation And

is work to kind holistically to to to that Google, just of holistically DXC, So Accenture. speak holistically beginning

So still and to these early of them. pick say, in days. the to each kind XX, the key done work opportunities going top we're But of we've are

We're together modernization hosting to the had Google AWS OpenText. bringing had application into workloads more great into partnership with the Cloud. of mainframe work right? We an Let a me a on again, moving great lot SaaS take We and example, our relationship with going relationship. a AWS Google automation products, at

So and focused has the there's begun. on the this high work top XX We're synergies.

Thanos Moschopoulos

Mark. Thanks Great.

Operator

Kadve question next The Capital. Please of Eight go comes Adhir from ahead.

Adhir Kadve

excited taking you course, customers But just initial the well. Mark? of deploy we -- you products guys. how those Are customers these to based for they evening going hear to as this I Good a in see products. sense ask give product just these question. conversations, are we we for move past are do ready wanted increase adoption that going Thanks I on productivity. deployment the And the October? just mean for Can customers, Hey. your could on my product business? as to Aviator their of do what with for conversations us

Mark J. Barrenechea

Yes.

talking So we'll days about Aviator, us look, Aviators few informed just customers days deployments XX XX as we've right? ago, announced and will have We're conversations. we've a to Aviator now, first our XX our early announced days deeply and with early later, conversations in production, from well. you and good cloud. if private

initial So it's strategies, you -- our these will. if are

area. build We're a practice also going to

don't them. So I obviously cloud, bring tools, here. own Magellan, done that Unique. for rent have things very unique We of can tools kind have to and those when a speak others. we market Vertica, we've of we about couple private We IDOL, Aviator have We to -- our out go

want data able securely. is Customers thing services, to managed right? second unique cloud, privately The our private be their to our use

cloud a bring and our to already want for private So customers avenue to in domain. their it and to cloud data or Aviator our not public into private train strong private use privately cloud privately our is their some move data

So around we're a going to area practice build this.

like network, practice have business just and areas we and So areas content. practice

in We have models. and areas practice language AI

days. So and updated along coming the way. and it's early products of announced next you the vision direction, We've keep quarter, set initial next we'll

Adhir Kadve

Excellent.

you acquisition. early Thanos' Just to of the on that the post second for Focus some piggyback early Micro question, onboarded question my customers

do really envisioned Now had had kind over that the we've chance those playing the past experience you And synergies are spoken out. the find that combined that offerings about What's to feedback? they've of combined you initial few that a company, your quarters. initial

Of initial that, some be but would just that you. great. course, I it's Thank days for thoughts early on understand

Mark J. Barrenechea

year. Returning them this growth to organic

and mid-XXs, the to reiterate, cloud initial XXs, So back. innovation. has up high wins key -- of confidence pace -- the to just is the renewal published. of in cloudification we complete integration maybe rates to aspects Roadmap the the pathway All begun

the to being middle lines the in Focus a year. see Focus Micro growth some organic square this aviators accelerating You and can of of product Micro

the indicators, are indicators. much the to add don't that, are more those those And but right? to So know

Adhir Kadve

it pass on. I'll Excellent.

Mark J. Barrenechea

Thank you.

Madhu Ranganathan

you. Thank

Operator

of comes Please question from next Raimo Barclays. The Lenschow ahead. go

Unidentified Analyst

acquisition about share you Great. wondering, just talk free the flow conversion if if closed. for cash I a This that Focus is Thank you. just could maybe Raimo. on point curious any And I I was can you know Micro when was was of how anything trending there. the Jeremy opportunity on is improvement

Madhu Ranganathan

Mather. absolutely, Thanks Yes, for question. the

like in fundamentally, every our of we've with percentage And X customers adjusted take up One, the was reasons like EBITDA things. terms And customer operational the what the even Adjusted side, as of start markets XX%. and market asked and shared, base own from will although only capital that. the in applied months. product rigor, have points you also, question and I therefore, strong QX the operational all are as So two on right? was team I'll we to couple of QX EBITDA. a was terms the working a saw in that They integration receptor,

that we the see capital they've and really EBITDA, free flow a improved where you perspective, working adjusted positively from cash is with starting say, contributed. would I So

answer again, the So question the second well. on part I'll as

And and all $XXX continue. million As our adds in will QX I capital we you saw to performance to look in into confidence in -- for $XXX fiscal XXXX, million the the of working continued what improvement adjusted that see EBITDA XXXX.

Unidentified Analyst

Thank Perfect. you.

Operator

question go from comes James. next of Raymond The Steven ahead. Please Li

Steven Li

Thank Mark in a QX. got I've you, growth Hey, on Madhu. one organic and quick

QX, I So slight if of QX a Micro constant the out for OpenText organic Focus I for currency. growth from negative take XXX get at

a areas for stronger out, is soft have quarter a any Mark? should maybe call not want to organic performance? guys, stronger seasonally this we you QX, And Given seen you probably which

Madhu Ranganathan

Yes.

Steven, I take So mean, I'll that.

negative we growth. not you and take are the look when QX organic seeing So at micro focus, out you

and if organic positive through seeing will are We there. the but I as numbers, numbers the all to growth helpful, shared it walk are happy be

want you are say, Organic positively to in we as Again, I just when as in emphasize constant I'll Focus, factor for well cloud Micro ARR currency. that. growth growing. QX, So

Steven Li

Okay. and minus and Yes. X%, last I lower or it's mean, X% I'm just year. taking numbers reported the than

Madhu Ranganathan

Yes.

license out growth. the ARR X%, constant is as from year-over-year support from well. take positive is the organic cloud Customer as in So or you X% growth currency when organic positive quarter. organic And again, perspective, positive see is down a a is you growth

Steven Li

Okay.

Okay. Micro housekeeping, that a actually revenue did quarter. couldn't you last And lines like just maybe Focus Madhu. PS, license, did try then but needing I disclose you the think different and M&DA, I maintenance

Madhu Ranganathan

with share we I out call I Yes, we you mean, can I'm -- sorry, services offline called out did. And Page cloud the XX-K. did the number the We license.

as We in also well. Focus Micro number support customer called a of out the

Steven Li

Okay. I'll for get it offline Thanks. you.

Madhu Ranganathan

Absolutely. Thank you.

Operator

Please your The Daniel line comes Chan go ahead. is open. from go ahead. Daniel next from Cowen. question line Please ahead. open. go Chan, TD Danil, your is Please

Mark J. Barrenechea

there must not operator, working there. be Okay, something

we think -- me go I go wrap up. to to So let can

the October. for out Internet on everyone we'll thank Citibank us Vegas on look reaching join for August joining Technology to today's XX; Deutsche call. in X; Thanks like you And World August to joining I'd Technology, Conference & be OpenText September Communications Virtual X, and Bank, So call. today's at you seeing and at can Oppenheimer Global forward hope we

Operator

conference concludes This call. today's

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

Open Text (OTEX) 3 Aug 232023 Q4 Earnings call transcript