Technology

OpenText Reports Second Quarter Fiscal Year 2025 Financial Results

Published

2 years ago

February 6, 2025

Total Revenues of $1.335B, 16 Consecutive Quarters of Cloud Organic Growth

Delivers Net Income Margin of 17%, Robust Adjusted EBITDA Margin of 37.6%

GAAP EPS of $0.87, Non-GAAP EPS of $1.11

Operating Cash Flows of $348M and Free Cash Flows of $307M

Fiscal 2025 Second Quarter Highlights

Total Revenues

(in millions)

Annual Recurring Revenues

(in millions)

Cloud Revenues

(in millions)

$1,335

$1,053

$462

(13.1) %

(8.1) %

+2.7 %

Annual Recurring Revenues represent 79% of Total Revenues

“OpenText’s Q2 results demonstrate the strength of our operating model, delivering $501 million of adjusted EBITDA, and 37.6% adjusted EBITDA margin, and generating $307 million of Free Cash Flows (FCF). The Company’s top priorities remain total growth, competitive advantage, margin expansion and FCF, while producing upper quartile capital returns,” said Mark J. Barrenechea, OpenText CEO & CTO.

Mr. Barrenechea added: “By helping customers adapt to the new world of multi-cloud, we are making their businesses more resilient and future-ready. Our next generation platform Titanium X (Cloud Editions 25.2) is on target for Q4 delivery. With Titanium X as our foundation, we are empowering organizations to seamlessly integrate cloud, security, and AI, helping them adapt and thrive in this dynamic ecosystem.”

Mark J. Barrenechea, OpenText CEO & CTO

“OpenText generated solid adjusted EBITDA margin this quarter, reflecting our continued focus on operational discipline, efficiency and margin expansion,” said Madhu Ranganathan, OpenText President, CFO & Corporate Development. “Our initiatives to drive efficiencies across the business and our execution in the second half of fiscal 2025 will put us in a position to deliver a strong fiscal 2026.”

Madhu Ranganathan, OpenText President & CFO

WATERLOO, ON, Feb. 6, 2025 /PRNewswire/ — Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced its financial results for the second quarter ended December 31, 2024.

Second Quarter Financial Highlights Y/Y

Total revenues of $1.335 billion, down 13.1% Y/Y or down 4.9% when adjusted for the AMC divestitureAnnual recurring revenues (ARR) of $1.053 billion, down 8.1% Y/Y or down 0.8% when adjusted for the AMC divestitureCloud revenues of $462 million, up 2.7% Y/YQuarterly enterprise cloud bookings(1) of $250 million, up 6.1% Y/YOperating cash flows of $348 million and free cash flows(2) of $307 millionGAAP-based net income of $230 million, up 510.1% Y/YAdjusted EBITDA(2) of $501 million, margin of 37.6%GAAP-based diluted earnings per share (EPS) of $0.87, Non-GAAP-based diluted EPS(2) of $1.11Returned $134 million of capital to shareholders consisting of $68 million of dividends and $66 million of share repurchases

(1)

Enterprise cloud bookings is defined as the total value from cloud services and subscription contracts, entered into in the period that are new, committed and incremental to our existing contracts, entered into with our enterprise based customers.

(2)

Please see Note 2 “Use of Non-GAAP Financial Measures” to the condensed consolidated financial statements below.

Financial Highlights for Q2 Fiscal 2025 with Year Over Year Comparisons

Summary of Quarterly Results

(In millions, except per share data)

Q2 FY’25

Q2 FY’24

$ Change

% Change

Q2 FY’25
in CC*

% Change
in CC*

Revenues:

Cloud services and subscriptions

$462

$450

$12

2.7 %

$460

2.2 %

Customer support

$591

$696

($105)

(15.1) %

$585

(15.9) %

Total annual recurring revenues**

$1,053

$1,146

($93)

(8.1) %

$1,045

(8.8) %

License

$189

$289

($100)

(34.7) %

$188

(34.9) %

Professional service and other

$93

$100

($7)

(7.1) %

$91

(8.6) %

Total revenues

$1,335

$1,535

($200)

(13.1) %

$1,325

(13.7) %

GAAP-based operating income

$296

$254

$42

16.5 %

N/A

Non-GAAP-based operating income (1)

$470

$533

($63)

(11.9) %

$465

(12.8) %

GAAP-based net income attributable to OpenText

$230

$38

$192

510.1 %

N/A

GAAP-based EPS, diluted

$0.87

$0.14

$0.73

521.4 %

N/A

Non-GAAP-based EPS, diluted (1)(2)

$1.11

$1.24

($0.13)

(10.5) %

$1.09

(12.1) %

Adjusted EBITDA (1)

$501

$566

($65)

(11.4) %

$497

(12.3) %

Operating cash flows

$348

$351

($3)

(0.8) %

N/A

Free cash flows (1)

$307

$305

0.4 %

N/A

Summary of YTD Results

(In millions, except per share data)

FY’25 YTD

FY’24 YTD

$ Change

% Change

FY’25 YTD
in CC*

% Change
in CC*

Revenues:

Cloud services and subscriptions

$919

$901

$18

2.0 %

$919

1.9 %

Customer support

$1,186

$1,393

($207)

(14.9) %

$1,183

(15.1) %

Total annual recurring revenues**

$2,105

$2,295

($189)

(8.2) %

$2,102

(8.4) %

License

$315

$462

($148)

(31.9) %

$314

(32.0) %

Professional service and other

$183

$203

($20)

(9.9) %

$182

(10.6) %

Total revenues

$2,604

$2,960

($357)

(12.1) %

$2,598

(12.2) %

GAAP-based operating income

$502

$467

$35

7.6 %

N/A

Non-GAAP-based operating income (1)

$881

$994

($112)

(11.3) %

$875

(11.9) %

GAAP-based net income attributable to OpenText

$314

$119

$196

165.0 %

N/A

GAAP-based EPS, diluted

$1.18

$0.44

$0.74

168.2 %

N/A

Non-GAAP-based EPS, diluted (1)(2)

$2.03

$2.25

($0.22)

(9.8) %

$2.02

(10.4) %

Adjusted EBITDA (1)

$945

$1,061

($116)

(10.9) %

$939

(11.5) %

Operating cash flows

$270

$398

($128)

(32.1) %

N/A

Free cash flows (1)

$190

$315

($125)

(39.8) %

N/A

(1)

Please see Note 2 “Use of Non-GAAP Financial Measures” to the condensed consolidated financial statements below.

(2)

For periods prior to Fiscal 2025, this is reflective of the amount of net tax benefit arising from the internal reorganization assumed to be allocable to the period based on the forecasted utilization period. Please also see Note 14 to the Company’s Fiscal 2018 Consolidated Financial Statements on Form 10-K.

Note: Items in tables may not add due to rounding. Percentages presented are calculated based on the underlying amounts.

*CC: Constant currency for this purpose is defined as the current period reported revenues/expenses/earnings represented at the prior comparative period’s foreign exchange rate.

**Annual recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.

Dividend

As part of our quarterly, non-cumulative cash dividend program, the Board declared on February 5, 2025, a cash dividend of $0.2625 per common share. The record date for this dividend is March 7, 2025 and the payment date is March 21, 2025. OpenText believes strongly in returning value to its shareholders and intends to maintain its dividend program. Any future declarations of dividends and the establishment of future record and payment dates are all subject to the final determination and discretion of the Board of Directors.

Share Repurchase

OpenText also announced that in the second quarter of Fiscal 2025, it repurchased $66 million of common shares for cancellation under its share repurchase plan (the Fiscal 2025 Repurchase Plan). In Fiscal 2025, $151 million of common shares have been repurchased for cancellation. Under the Fiscal 2025 Repurchase Plan, for the period commencing August 7, 2024 until August 6, 2025, OpenText intends to purchase for cancellation in open market transactions, from time to time, up to $300 million of its issued and outstanding common shares, subject to a maximum of 21,179,064 common shares.

Quarterly Business Highlights

Key customer wins in the quarter include: Aeven, Anglian Water Services, BASF Catalysts, Bosch, Cencor, Domcura MLP, Ergon, Frost Bank, GWC Qatar, H3C, Linde, MAN Energy Solutions, Mott MacDonald, Sky Italia, ST Microelectronics, Tucson Medical Center, University Health System, WanderaOpenText World 2024 unites industry leaders to tackle AI and information management, elevate human potential with robust AI masterclassesOpenText launches new Partner Enterprise Learning SubscriptionOpenText expands partner ecosystem access across full OpenText product suiteOpenText makes multi-cloud work with Cloud Editions 24.4OpenText partners with Secure Code Warrior to deliver comprehensive application security and customized developer risk management

Summary of Quarterly Results

Q2 FY’25

Q1 FY’25

Q2 FY’24

% Change

(Q2 FY’25 vs
Q1 FY’25)

% Change

(Q2 FY’25 vs
Q2 FY’24)

Revenue (millions)

$1,335

$1,269

$1,535

5.2 %

(13.1) %

GAAP-based gross margin

73.3 %

71.7 %

73.6 %

160

bps

(30)

bps

Non-GAAP-based gross margin (1)

77.2 %

75.8 %

78.6 %

140

bps

(140)

bps

GAAP-based EPS, diluted

$0.87

$0.32

$0.14

171.9 %

521.4 %

Non-GAAP-based EPS, diluted (1)(2)

$1.11

$0.93

$1.24

19.4 %

(10.5) %

(1)

Please see Note 2 “Use of Non-GAAP Financial Measures” to the condensed consolidated financial statements below.

(2)

Please also see Note 14 to the Company’s Fiscal 2018 Consolidated Financial Statements on Form 10-K. Reflective of the amount of net tax benefit arising from the internal reorganization assumed to be allocable to the current period based on the forecasted utilization period.

Conference Call Information

OpenText posted an investor presentation on its Investor Relations website and invites the public to listen to the earnings conference call webcast today at 5:00 p.m. ET (2:00 p.m. PT) from the Investor Relations section of the Company’s website at https://investors.opentext.com. To join the webcast instantly, use this webcast link. A webcast replay will be available shortly following completion of the live call.

Please see below note (2) for a reconciliation of U.S. GAAP-based financial measures used in this press release to Non-GAAP-based financial measures.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release, including statements about Open Text Corporation (“OpenText” or “the Company”) on growth, profitability and future of Information Management, including achieving total growth, competitive advantage, margin expansion and free cash flow, and delivering upper quartile capital returns; customer benefits from products; timing of next generation platform; focus on operational discipline, efficiency and margin expansion; executing the Company’s capital allocation strategy, including expected return to shareholders; achieving Fiscal 2025 financial targets; level of performance through the fiscal year; cloud bookings, demand, scale and revenue growth; future organic growth initiatives and deployment of capital; innovation fueled by cloud, AI and security technologies; future revenues, operating expenses, margins, free cash flows, interest expense and capital expenditures; market share of our products; innovation road map; intention to maintain a dividend program, including any targeted annualized dividend; expected size and timing of the Fiscal 2025 Repurchase Plan, including execution thereof; future tax rates; renewal rates; new platform and product offerings, including OpenText AI products, and associated benefits to customers; internal automation and AI leverage, including our AI strategy, vision and growth; strategy to build shareholder value; and other matters, which may contain words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “may”, “could”, “would”, “might”, “will” and variations of these words or similar expressions are intended to identify forward-looking statements or information under applicable securities laws (forward-looking statements). In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements, and are based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management’s perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances, such as certain assumptions about the economy, as well as market, financial and operational assumptions. Management’s estimates, beliefs and assumptions, including statements regarding future targets and aspirations, are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change and are not considered guidance. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Future declarations of dividends are also subject to the final determination and discretion of the Board of Directors, and an annualized dividend has not been approved or declared by the Board. Forward-looking statements involve known and unknown risks and uncertainties such as those relating to: all statements regarding the expected future financial position, results of operations, revenues, expenses, margins, cash flows, dividends, share buybacks, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management, including any anticipated synergy benefits; incurring unanticipated costs, delays or difficulties; and our ability to develop, protect and maintain our intellectual property and proprietary technology and to operate without infringing on the proprietary rights of others. We rely on a combination of copyright, patent, trademark and trade secret laws, non-disclosure agreements and other contractual provisions to establish and maintain our proprietary rights, which are important to our success. From time to time, we may also enforce our intellectual property rights through litigation in line with our strategic and business objectives. The actual results that OpenText achieves may differ materially from any forward-looking statements. For additional information with respect to risks and other factors which could occur, see the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the Securities and Exchange Commission (SEC) and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Further, readers should note that we may announce information using our website, press releases, securities law filings, public conference calls, webcasts and the social media channels identified on the Investors section of our website (https://investors.opentext.com). Such social media channels may include the Company’s or our CEO’s blog, X, formerly known as Twitter, account or LinkedIn account. The information posted through such channels may be material. Accordingly, readers should monitor such channels in addition to our other forms of communication.

OTEX-F

Copyright ©2025 Open Text. OpenText is a trademark or registered trademark of Open Text. The list of trademarks is not exhaustive of other trademarks. Registered trademarks, product names, company names, brands and service names mentioned herein are property of Open Text. All rights reserved. For more information, visit: https://www.opentext.com/about/copyright-information.

About OpenText

OpenText is the leading Information Management software and services company in the world. We help organizations solve complex global problems with a comprehensive suite of Business Clouds, Business AI, and Business Technology. For more information about OpenText (NASDAQ/TSX: OTEX), please visit us at www.opentext.com.

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share data)

December 31, 2024

June 30, 2024

ASSETS

(unaudited)

Cash and cash equivalents

$ 1,122,192

$ 1,280,662

Accounts receivable trade, net of allowance for credit losses of $14,641 as of December 31, 2024 and $12,108 as of June 30, 2024

639,611

626,189

Contract assets

68,487

66,450

Income taxes recoverable

68,004

61,113

Prepaid expenses and other current assets

186,763

242,911

Total current assets

2,085,057

2,277,325

Property and equipment, net of accumulated depreciation of $779,868 as of December 31, 2024 and $751,174 as of June 30, 2024

355,877

367,740

Operating lease right of use assets

211,079

219,774

Long-term contract assets

39,208

38,684

Goodwill

7,483,404

7,488,367

Acquired intangible assets

2,229,087

2,486,264

Deferred tax assets

982,567

932,657

Other assets

296,382

298,281

Long-term income taxes recoverable

49,052

96,615

Total assets

$ 13,731,713

$ 14,205,707

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$ 772,641

$ 931,116

Current portion of long-term debt

35,850

Operating lease liabilities

74,699

76,446

Deferred revenues

1,452,734

1,521,416

Income taxes payable

65,145

235,666

Total current liabilities

2,401,069

2,800,494

Long-term liabilities:

Accrued liabilities

38,974

46,483

Pension liability, net

126,909

127,255

Long-term debt

6,348,814

6,356,943

Long-term operating lease liabilities

200,815

218,174

Long-term deferred revenues

159,987

162,401

Long-term income taxes payable

82,310

145,644

Deferred tax liabilities

141,328

148,632

Total long-term liabilities

7,099,137

7,205,532

Shareholders’ equity:

Share capital and additional paid-in capital

263,727,502 and 267,800,517 Common Shares issued and outstanding at December 31, 2024 and June 30, 2024, respectively; authorized Common Shares: unlimited

2,275,583

2,271,886

Accumulated other comprehensive income (loss)

(75,779)

(69,619)

Retained earnings

2,174,514

2,119,159

Treasury stock, at cost (4,225,850 and 3,135,980 shares at December 31, 2024 and June 30, 2024, respectively)

(144,432)

(123,268)

Total OpenText shareholders’ equity

4,229,886

4,198,158

Non-controlling interests

1,621

1,523

Total shareholders’ equity

4,231,507

4,199,681

Total liabilities and shareholders’ equity

$ 13,731,713

$ 14,205,707

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands of U.S. dollars, except share and per share data)

(unaudited)

Three Months Ended

December 31,

Six Months Ended

December 31,

2024

2023

2024

2023

Revenues:

Cloud services and subscriptions

$ 462,306

$ 450,091

$ 919,330

$ 901,105

Customer support

590,595

695,762

1,186,085

1,393,475

License

188,923

289,238

314,736

462,264

Professional service and other

92,676

99,777

183,354

203,453

Total revenues

1,334,500

1,534,868

2,603,505

2,960,297

Cost of revenues:

Cloud services and subscriptions

172,288

180,148

347,545

351,560

Customer support

62,656

73,374

125,230

148,388

License

6,336

5,983

12,993

9,822

Professional service and other

68,041

75,459

134,956

155,381

Amortization of acquired technology-based intangible assets

47,203

70,784

94,447

147,608

Total cost of revenues

356,524

405,748

715,171

812,759

Gross profit

977,976

1,129,120

1,888,334

2,147,538

Operating expenses:

Research and development

180,727

212,855

371,420

439,086

Sales and marketing

273,929

287,628

519,811

567,635

General and administrative

99,356

173,264

206,086

304,475

Depreciation

31,879

33,415

64,050

67,506

Amortization of acquired customer-based intangible assets

81,048

113,925

162,552

234,117

Special charges (recoveries)

15,238

54,166

62,374

67,960

Total operating expenses

682,177

875,253

1,386,293

1,680,779

Income from operations

295,799

253,867

502,041

466,759

Other income (expense), net

68,615

(68,784)

32,960

(48,614)

Interest and other related expense, net

(83,615)

(139,292)

(167,897)

(281,056)

Income before income taxes

280,799

45,791

367,104

137,089

Provision for income taxes

50,893

8,054

52,776

18,406

Net income for the period

$ 229,906

$ 37,737

$ 314,328

$ 118,683

Net (income) attributable to non-controlling interests

(44)

(62)

(98)

(107)

Net income attributable to OpenText

$ 229,862

$ 37,675

$ 314,230

$ 118,576

Earnings per share—basic attributable to OpenText

$ 0.87

$ 0.14

$ 1.18

$ 0.44

Earnings per share—diluted attributable to OpenText

$ 0.87

$ 0.14

$ 1.18

$ 0.44

Weighted average number of Common Shares outstanding—basic (in ‘000’s)

265,099

271,568

266,252

271,373

Weighted average number of Common Shares outstanding—diluted (in ‘000’s)

265,193

272,141

266,505

272,019

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands of U.S. dollars)

(unaudited)

Three Months Ended

December 31,

Six Months Ended
December 31,

2024

2023

2024

2023

Net income for the period

$ 229,906

$ 37,737

$ 314,328

$ 118,683

Other comprehensive income (loss)—net of tax:

Net foreign currency translation adjustments

1,167

(15,796)

(4,023)

(30,379)

Unrealized gain (loss) on cash flow hedges:

Unrealized gain (loss) – net of tax (1)

(4,188)

1,522

(3,534)

(319)

(Gain) loss reclassified into net income – net of tax (2)

1,010

328

1,272

337

Unrealized gain (loss) on available-for-sale financial assets:

Unrealized gain (loss) – net of tax (3)

436

450

684

229

Actuarial gain (loss) relating to defined benefit pension plans:

Actuarial gain (loss) – net of tax (4)

—

(91)

(1,045)

(110)

Amortization of actuarial (gain) loss into net income – net of tax (5)

252

113

486

302

Total other comprehensive loss net, for the period

(1,323)

(13,474)

(6,160)

(29,940)

Total comprehensive income

228,583

24,263

308,168

88,743

Comprehensive income attributable to non-controlling interests

(44)

(62)

(98)

(107)

Total comprehensive income attributable to OpenText

$ 228,539

$ 24,201

$ 308,070

$ 88,636

______________________________

(1)

Net of tax expense (recovery) of $(1,510) and $549 for the three months ended December 31, 2024 and 2023, respectively; $(1,274) and $(115) for the six months ended December 31, 2024 and 2023, respectively.

(2)

Net of tax expense (recovery) of $364 and $118 for the three months ended December 31, 2024 and 2023, respectively; $458 and $121 for the six months ended December 31, 2024 and 2023, respectively.

(3)

Net of tax expense (recovery) of $18 and $119 for the three months ended December 31, 2024 and 2023, respectively; $225 and $60 for the six months ended December 31, 2024 and 2023, respectively.

(4)

Net of tax expense (recovery) of $— and $91 for the three months ended December 31, 2024 and 2023, respectively; $(43) and $110 for the six months ended December 31, 2024 and 2023, respectively.

(5)

Net of tax expense (recovery) of $92 and $50 for the three months ended December 31, 2024 and 2023, respectively; $184 and $125 for the six months ended December 31, 2024 and 2023, respectively.

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands of U.S. dollars and shares)

(unaudited)

Three Months Ended December 31, 2024

Common Shares and
Additional Paid in Capital

Treasury Stock

Retained

Earnings

Accumulated
Other

Comprehensive

Income

Non-
Controlling
Interests

Total

Amount

Balance as of September 30, 2024

265,546

$ 2,290,191

(3,900)

$ (145,646)

$ 2,065,221

$ (74,456)

$ 1,577

$ 4,136,887

Issuance of Common Shares

Under employee stock option plans

1,739

—

1,739

Under employee stock purchase plans

330

9,308

—

9,308

Share-based compensation

—

30,355

—

30,355

Purchase of treasury stock

—

(1,363)

(40,013)

—

(40,013)

Issuance of treasury stock

—

(39,906)

1,037

41,227

—

1,321

Repurchase of Common Shares

(2,213)

(16,104)

—

(50,990)

—

(67,094)

Dividends declared

($0.2625 per Common Share)

—

(69,579)

—

(69,579)

Other comprehensive income (loss) – net

—

(1,323)

—

(1,323)

Net income for the period

—

229,862

—

229,906

Balance as of December 31, 2024

263,728

$ 2,275,583

(4,226)

$ (144,432)

$ 2,174,514

$ (75,779)

$ 1,621

$ 4,231,507

Three Months Ended December 31, 2023

Common Shares and
Additional Paid in Capital

Treasury Stock

Retained

Earnings

Accumulated
Other

Comprehensive

Income

Non-
Controlling
Interests

Total

Amount

Balance as of September 30, 2023

271,228

$ 2,216,921

(4,753)

$ (196,119)

$ 2,062,107

$ (70,025)

$ 1,374

$ 4,014,258

Issuance of Common Shares

Under employee stock option plans

340

11,111

—

11,111

Under employee stock purchase plans

287

8,370

—

8,370

Share-based compensation

—

39,993

—

39,993

Issuance of treasury stock

—

(14,539)

353

17,030

(2,491)

—

Dividends declared

($0.25 per Common Share)

—

(67,648)

—

(67,648)

Other comprehensive income (loss) – net

—

(13,474)

—

(13,474)

Net income for the period

—

37,675

—

37,737

Balance as of December 31, 2023

271,855

$ 2,261,856

(4,400)

$ (179,089)

$ 2,029,643

$ (83,499)

$ 1,436

$ 4,030,347

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands of U.S. dollars and shares)

(unaudited)

Six Months Ended December 31, 2024

Common Shares and
Additional Paid in Capital

Treasury Stock

Retained

Earnings

Accumulated
Other

Comprehensive

Income

Non-
Controlling
Interests

Total

Amount

Balance as of June 30, 2024

267,801

$ 2,271,886

(3,136)

$ (123,268)

$ 2,119,159

$ (69,619)

$ 1,523

$ 4,199,681

Issuance of Common Shares

Under employee stock option plans

1,880

—

1,880

Under employee stock purchase plans

719

19,171

—

19,171

Share-based compensation

—

59,801

—

59,801

Purchase of treasury stock

—

(2,187)

(65,023)

—

(65,023)

Issuance of treasury stock

—

(41,836)

1,097

43,859

(702)

—

1,321

Repurchase of Common Shares

(4,862)

(35,319)

—

(118,256)

—

(153,575)

Dividends declared

($0.525 per Common Share)

—

(139,917)

—

(139,917)

Other comprehensive income (loss) – net

—

(6,160)

—

(6,160)

Net income for the period

—

314,230

—

314,328

Balance as of December 31, 2024

263,728

$ 2,275,583

(4,226)

$ (144,432)

$ 2,174,514

$ (75,779)

$ 1,621

$ 4,231,507

Six Months Ended December 31, 2023

Common Shares and
Additional Paid in Capital

Treasury Stock

Retained

Earnings

Accumulated
Other

Comprehensive

Income

Non-
Controlling
Interests

Total

Amount

Balance as of June 30, 2023

270,903

$ 2,176,947

(3,536)

$ (151,597)

$ 2,048,984

$ (53,559)

$ 1,329

$ 4,022,104

Issuance of Common Shares

Under employee stock option plans

425

14,003

—

14,003

Under employee stock purchase plans

527

17,011

—

17,011

Share-based compensation

—

76,997

—

76,997

Purchase of treasury stock

—

(1,400)

(53,085)

—

(53,085)

Issuance of treasury stock

—

(23,102)

536

25,593

(2,491)

—

Dividends declared

($0.50 per Common Share)

—

(135,426)

—

(135,426)

Other comprehensive income (loss) – net

—

(29,940)

—

(29,940)

Net income for the period

—

118,576

—

107

118,683

Balance as of December 31, 2023

271,855

$ 2,261,856

(4,400)

$ (179,089)

$ 2,029,643

$ (83,499)

$ 1,436

$ 4,030,347

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(unaudited)

Three Months Ended

December 31,

Six Months Ended

December 31,

2024

2023

2024

2023

Cash flows from operating activities:

Net income for the period

$ 229,906

$ 37,737

$ 314,328

$ 118,683

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of intangible assets

160,130

218,124

321,049

449,231

Share-based compensation expense

30,361

40,175

59,919

77,270

Pension expense

3,350

3,212

6,813

6,383

Amortization of debt discount and issuance costs

5,499

7,325

10,795

12,821

Write-off of right of use assets

1,385

6,248

1,385

10,963

Adjustment to gain on AMC Divestiture

4,175

—

4,175

—

Loss on sale and write down of property and equipment, net

437

1,419

439

1,877

Deferred taxes

(10,827)

(88,400)

(52,977)

(177,030)

Share in net (income) loss of equity investees

(1,538)

8,482

(1,993)

18,178

Changes in financial instruments

(45,549)

38,117

(20,614)

20,222

Changes in operating assets and liabilities:

Accounts receivable

(15,728)

(91,589)

41,879

(60,285)

Contract assets

(26,097)

(24,061)

(59,946)

(46,627)

Prepaid expenses and other current assets

32,427

(15,337)

54,578

3,989

Income taxes

(3,218)

29,136

(196,727)

58,733

Accounts payable and accrued liabilities

(20,590)

76,058

(128,110)

(48,156)

Deferred revenue

5,124

107,974

(71,407)

(42,502)

Other assets

3,306

1,114

(1,436)

5,218

Operating lease assets and liabilities, net

(4,561)

(5,081)

(11,964)

(11,194)

Net cash provided by operating activities

347,992

350,653

270,186

397,774

Cash flows from investing activities:

Additions of property and equipment

(41,269)

(45,240)

(80,585)

(82,779)

Purchase of Micro Focus, net of cash acquired

—

(9,272)

Adjustment to proceeds from AMC Divestiture

(11,686)

—

(11,686)

—

Proceeds from net investment hedge derivative contracts

—

2,519

1,966

Other investing activities

5,535

(1,229)

5,892

(6,783)

Net cash used in investing activities

(47,420)

(46,469)

(83,860)

(96,868)

Cash flows from financing activities:

Proceeds from issuance of Common Shares from exercise of stock options and ESPP

8,291

17,804

17,740

29,257

Repayment of long-term debt and Revolver

(8,963)

(186,463)

(17,926)

(372,926)

Net change in transition services agreement obligation

26,233

—

21,938

—

Debt issuance costs

(1,066)

(831)

(1,066)

(2,792)

Repurchase of Common Shares

(66,003)

—

(153,406)

—

Purchase of treasury stock

(40,023)

—

(65,023)

(53,085)

Payments of dividends to shareholders

(68,313)

(66,414)

(137,374)

(133,379)

Net cash used in financing activities

(149,844)

(235,904)

(335,117)

(532,925)

Foreign exchange gain (loss) on cash held in foreign currencies

(28,930)

15,042

(9,794)

3,539

Increase (decrease) in cash, cash equivalents and restricted cash during the period

121,798

83,322

(158,585)

(228,480)

Cash, cash equivalents and restricted cash at beginning of the period

1,002,410

922,150

1,282,793

1,233,952

Cash, cash equivalents and restricted cash at end of the period

$ 1,124,208

$ 1,005,472

$ 1,124,208

$ 1,005,472

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(unaudited)

Reconciliation of cash, cash equivalents and restricted cash:

December 31, 2024

December 31, 2023

Cash and cash equivalents

$ 1,122,192

$ 1,003,134

Restricted cash (1)

2,016

2,338

Total cash, cash equivalents and restricted cash

$ 1,124,208

$ 1,005,472

(1) Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Consolidated Balance Sheets.

Notes

(1) All dollar amounts in this press release are in U.S. Dollars unless otherwise indicated.

(2) Use of Non-GAAP Financial Measures: In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-GAAP). These Non-GAAP financial measures have certain limitations in that they do not have a standardized meaning and thus the Company’s definition may be different from similar Non-GAAP financial measures used by other companies and/or analysts and may differ from period to period. Thus it may be more difficult to compare the Company’s financial performance to that of other companies. However, the Company’s management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of these Non-GAAP financial measures both in its reconciliation to the U.S. GAAP financial measures and its condensed consolidated financial statements, all of which should be considered when evaluating the Company’s results.

The Company uses these Non-GAAP financial measures to supplement the information provided in its condensed consolidated financial statements, which are presented in accordance with U.S. GAAP. The presentation of Non-GAAP financial measures is not meant to be a substitute for financial measures presented in accordance with U.S. GAAP, but rather should be evaluated in conjunction with and as a supplement to such U.S. GAAP measures. OpenText strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure. The Company therefore believes that despite these limitations, it is appropriate to supplement the disclosure of the U.S. GAAP measures with certain Non-GAAP measures defined below.

Non-GAAP-based net income and Non-GAAP-based EPS, attributable to OpenText, are consistently calculated as GAAP-based net income (loss) or earnings (loss) per share, attributable to OpenText, on a diluted basis, excluding the effects of the amortization of acquired intangible assets, other income (expense), share-based compensation, and special charges (recoveries), all net of tax and any tax benefits/expense items unrelated to current period income, as further described in the tables below. Non-GAAP-based gross profit is the arithmetical sum of GAAP-based gross profit and the amortization of acquired technology-based intangible assets and share-based compensation within cost of sales. Non-GAAP-based gross margin is calculated as Non-GAAP-based gross profit expressed as a percentage of total revenue. Non-GAAP-based income from operations is calculated as GAAP-based income from operations, excluding the amortization of acquired intangible assets, special charges (recoveries), and share-based compensation expense.

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) is consistently calculated as GAAP-based net income (loss), attributable to OpenText, excluding interest income (expense), provision for (recovery of) income taxes, depreciation and amortization of acquired intangible assets, other income (expense), share-based compensation and special charges (recoveries). Adjusted EBITDA margin is calculated as adjusted EBITDA expressed as a percentage of total revenue.

The Company’s management believes that the presentation of the above defined Non-GAAP financial measures provides useful information to investors because they portray the financial results of the Company before the impact of certain non-operational charges. The use of the term “non-operational charge” is defined for this purpose as an expense that does not impact the ongoing operating decisions taken by the Company’s management. These items are excluded based upon the way the Company’s management evaluates the performance of the Company’s business for use in the Company’s internal reports and are not excluded in the sense that they may be used under U.S. GAAP.

The Company does not acquire businesses on a predictable cycle, and therefore believes that the presentation of Non-GAAP measures, which in certain cases adjust for the impact of amortization of intangible assets and the related tax effects that are primarily related to acquisitions, will provide readers of financial statements with a more consistent basis for comparison across accounting periods and be more useful in helping readers understand the Company’s operating results and underlying operational trends. Additionally, the Company has engaged in various restructuring activities over the past several years, primarily due to acquisitions and in response to our return to office planning, that have resulted in costs associated with reductions in headcount, consolidation of leased facilities and related costs, all which are recorded under the Company’s “Special charges (recoveries)” caption on the Consolidated Statements of Income. Each restructuring activity is a discrete event based on a unique set of business objectives or circumstances, and each differs in terms of its operational implementation, business impact and scope, and the size of each restructuring plan can vary significantly from period to period. Therefore, the Company believes that the exclusion of these special charges (recoveries) will also better aid readers of financial statements in the understanding and comparability of the Company’s operating results and underlying operational trends.

In summary, the Company believes the provision of supplemental Non-GAAP measures allow investors to evaluate the operational and financial performance of the Company’s core business using the same evaluation measures that management uses, and is therefore a useful indication of OpenText’s performance or expected performance of future operations and facilitates period-to-period comparison of operating performance (although prior performance is not necessarily indicative of future performance). As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary Non-GAAP financial measures that exclude certain items from the presentation of its financial results. Information reconciling certain forward-looking GAAP measures to non-GAAP measures related to F’25 targets and F’27 aspirations, including A-EBITDA is not available without unreasonable effort due to high variability, complexity and uncertainty with respect to forecasting and quantifying certain amounts that are necessary for such reconciliations.

The following charts provide unaudited reconciliations of U.S. GAAP-based financial measures to Non-GAAP-based financial measures for the following periods presented. The Micro Focus Acquisition significantly impacts period-over-period comparability.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures

for the three months ended December 31, 2024

(In thousands, except for per share data)

Three Months Ended December 31, 2024

GAAP-based
Measures

% of Total
Revenue

Adjustments

Note

Non-GAAP-
based
Measures

% of Total
Revenue

Cost of revenues

Cloud services and subscriptions

$ 172,288

$ (2,796)

(1)

$ 169,492

Customer support

62,656

(1,139)

(1)

61,517

Professional service and other

68,041

(1,273)

(1)

66,768

Amortization of acquired technology-based intangible assets

47,203

(47,203)

(2)

—

GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%)

977,976

73.3 %

52,411

(3)

1,030,387

77.2 %

Operating expenses

Research and development

180,727

(7,656)

(1)

173,071

Sales and marketing

273,929

(11,223)

(1)

262,706

General and administrative

99,356

(6,274)

(1)

93,082

Amortization of acquired customer-based intangible assets

81,048

(81,048)

(2)

—

Special charges (recoveries)

15,238

(15,238)

(4)

—

GAAP-based income from operations / Non-GAAP-based income from operations

295,799

173,850

(5)

469,649

Other income (expense), net

68,615

(68,615)

(6)

—

Provision for income taxes

50,893

41,755

(7)

92,648

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

229,862

63,480

(8)

293,342

GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText

$ 0.87

$ 0.24

(8)

$ 1.11

(1)

Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

Adjustment relates to the exclusion of amortization expense from our Non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results.

(7)

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 18% and a Non-GAAP-based tax rate of approximately 24% ; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and “book to return” adjustments for tax return filings and tax assessments. Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included. In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8)

Reconciliation of GAAP-based income to Non-GAAP-based net income:

Three Months Ended December 31, 2024

Per share diluted

GAAP-based net income, attributable to OpenText

$ 229,862

$ 0.87

Add (deduct):

Amortization

128,251

0.49

Share-based compensation

30,361

0.11

Special charges (recoveries)

15,238

0.06

Other (income) expense, net

(68,615)

(0.26)

GAAP-based provision for income taxes

50,893

0.19

Non-GAAP-based provision for income taxes

(92,648)

(0.35)

Non-GAAP-based net income, attributable to OpenText

$ 293,342

$ 1.11

Reconciliation of Adjusted EBITDA

Three Months Ended December 31, 2024

GAAP-based net income, attributable to OpenText

$ 229,862

Add:

Provision for income taxes

50,893

Interest and other related expense, net

83,615

Amortization of acquired technology-based intangible assets

47,203

Amortization of acquired customer-based intangible assets

81,048

Depreciation

31,879

Share-based compensation

30,361

Special charges (recoveries)

15,238

Other (income) expense, net

(68,615)

Adjusted EBITDA

$ 501,484

GAAP-based net income margin

17.2 %

Adjusted EBITDA margin

37.6 %

Reconciliation of Free cash flows

Three Months Ended December 31, 2024

GAAP-based cash flows provided by operating activities

$ 347,992

Add:

Capital expenditures (1)

$ (41,269)

Free cash flows

$ 306,723

(1) Defined as “Additions of property and equipment” in the Consolidated Statements of Cash Flows.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures

for the six months ended December 31, 2024

(In thousands, except for per share data)

Six Months Ended December 31, 2024

GAAP-based

Measures

GAAP-based
Measures

% of Total
Revenue

Adjustments

Note

Non-GAAP-
based

Measures

Non-GAAP-
based
Measures

% of Total
Revenue

Cost of revenues

Cloud services and subscriptions

$ 347,545

$ (4,982)

(1)

$ 342,563

Customer support

125,230

(2,481)

(1)

122,749

Professional service and other

134,956

(2,587)

(1)

132,369

Amortization of acquired technology-based intangible assets

94,447

(94,447)

(2)

—

GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%)

1,888,334

72.5 %

104,497

(3)

1,992,831

76.5 %

Operating expenses

Research and development

371,420

(15,823)

(1)

355,597

Sales and marketing

519,811

(20,538)

(1)

499,273

General and administrative

206,086

(13,508)

(1)

192,578

Amortization of acquired customer-based intangible assets

162,552

(162,552)

(2)

—

Special charges (recoveries)

62,374

(62,374)

(4)

—

GAAP-based income from operations / Non-GAAP-based income from operations

502,041

379,292

(5)

881,333

Other income (expense), net

32,960

(32,960)

(6)

—

Provision for income taxes

52,776

118,448

(7)

171,224

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

314,230

227,884

(8)

542,114

GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText

$ 1.18

$ 0.85

(8)

$ 2.03

(1)

Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

(7)

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 14% and a Non-GAAP-based tax rate of approximately 24%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and “book to return” adjustments for tax return filings and tax assessments. Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included. In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8)

Reconciliation of GAAP-based net income to Non-GAAP-based net income:

Six Months Ended December 31, 2024

Per share diluted

GAAP-based net income, attributable to OpenText

$ 314,230

$ 1.18

Add (deduct):

Amortization

256,999

0.96

Share-based compensation

59,919

0.22

Special charges (recoveries)

62,374

0.23

Other (income) expense, net

(32,960)

(0.12)

GAAP-based provision for income taxes

52,776

0.20

Non-GAAP-based provision for income taxes

(171,224)

(0.64)

Non-GAAP-based net income, attributable to OpenText

$ 542,114

$ 2.03

Reconciliation of Adjusted EBITDA

Six Months Ended December 31, 2024

GAAP-based net income, attributable to OpenText

$ 314,230

Add:

Provision for income taxes

52,776

Interest and other related expense, net

167,897

Amortization of acquired technology-based intangible assets

94,447

Amortization of acquired customer-based intangible assets

162,552

Depreciation

64,050

Share-based compensation

59,919

Special charges (recoveries)

62,374

Other (income) expense, net

(32,960)

Adjusted EBITDA

$ 945,285

GAAP-based net income margin

12.1 %

Adjusted EBITDA margin

36.3 %

Reconciliation of Free cash flows

Six Months Ended December 31, 2024

GAAP-based cash flows provided by operating activities

$ 270,186

Add:

Capital expenditures (1)

(80,585)

Free cash flows

$ 189,601

(1) Defined as “Additions of property and equipment” in the Consolidated Statements of Cash Flows.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures

for the three months ended September 30, 2024

(In thousands, except for per share data)

Three Months Ended September 30, 2024

GAAP-based

Measures

GAAP-based
Measures

% of Total
Revenue

Adjustments

Note

Non-GAAP-
based

Measures

Non-GAAP-
based
Measures

% of Total
Revenue

Cost of revenues

Cloud services and subscriptions

$ 175,257

$ (2,186)

(1)

$ 173,071

Customer support

62,574

(1,342)

(1)

61,232

Professional service and other

66,915

(1,314)

(1)

65,601

Amortization of acquired technology-based intangible assets

47,244

(47,244)

(2)

—

GAAP-based gross profit and gross margin (%) /Non-GAAP-based gross profit and gross margin (%)

910,358

71.7 %

52,086

(3)

962,444

75.8 %

Operating expenses

Research and development

190,693

(8,167)

(1)

182,526

Sales and marketing

245,882

(9,315)

(1)

236,567

General and administrative

106,730

(7,234)

(1)

99,496

Amortization of acquired customer-based intangible assets

81,504

(81,504)

(2)

—

Special charges (recoveries)

47,136

(47,136)

(4)

—

GAAP-based income from operations / Non-GAAP-based income from operations

206,242

205,442

(5)

411,684

Other income (expense), net

(35,655)

35,655

(6)

—

Provision for income taxes

1,883

76,693

(7)

78,576

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

84,368

164,404

(8)

248,772

GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText

$ 0.32

$ 0.61

(8)

$ 0.93

(1)

Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

(7)

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 2% and a Non-GAAP-based tax rate of approximately 24%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and “book to return” adjustments for tax return filings and tax assessments. Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included. In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8)

Reconciliation of GAAP-based net income to Non-GAAP-based net income:

Three Months Ended September 30, 2024

Per share diluted

GAAP-based net income, attributable to OpenText

$ 84,368

$ 0.32

Add (deduct):

Amortization

128,748

0.47

Share-based compensation

29,558

0.11

Special charges (recoveries)

47,136

0.18

Other (income) expense, net

35,655

0.13

GAAP-based provision for income taxes

1,883

0.01

Non-GAAP-based provision for income taxes

(78,576)

(0.29)

Non-GAAP-based net income, attributable to OpenText

$ 248,772

$ 0.93

Reconciliation of Adjusted EBITDA

Three Months Ended September 30, 2024

GAAP-based net income, attributable to OpenText

$ 84,368

Add (deduct):

Provision for income taxes

1,883

Interest and other related expense, net

84,282

Amortization of acquired technology-based intangible assets

47,244

Amortization of acquired customer-based intangible assets

81,504

Depreciation

32,171

Share-based compensation

29,558

Special charges (recoveries)

47,136

Other (income) expense, net

35,655

Adjusted EBITDA

$ 443,801

GAAP-based net income margin

6.6 %

Adjusted EBITDA margin

35.0 %

Reconciliation of Free cash flows

Three Months Ended September 30, 2024

GAAP-based cash flows provided by operating activities

$ (77,806)

Add:

Capital expenditures (1)

(39,316)

Free cash flows

$ (117,122)

(1) Defined as “Additions of property and equipment” in the Consolidated Statements of Cash Flows.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures

for the three months ended December 31, 2023

(In thousands, except for per share data)

Three Months Ended December 31, 2023

GAAP-based

Measures

GAAP-based
Measures

% of Total
Revenue

Adjustments

Note

Non-GAAP-
based

Measures

Non-GAAP-
based
Measures

% of Total
Revenue

Cost of revenues

Cloud services and subscriptions

$ 180,148

$ (3,609)

(1)

$ 176,539

Customer support

73,374

(1,128)

(1)

72,246

Professional service and other

75,459

(1,756)

(1)

73,703

Amortization of acquired technology-based intangible assets

70,784

(70,784)

(2)

—

GAAP-based gross profit and gross margin (%) /Non-GAAP-based gross profit and gross margin (%)

1,129,120

73.6 %

77,277

(3)

1,206,397

78.6 %

Operating expenses

Research and development

212,855

(12,767)

(1)

200,088

Sales and marketing

287,628

(13,227)

(1)

274,401

General and administrative

173,264

(7,688)

(1)

165,576

Amortization of acquired customer-based intangible assets

113,925

(113,925)

(2)

—

Special charges (recoveries)

54,166

(54,166)

(4)

—

GAAP-based income from operations / Non-GAAP-based income from operations

253,867

279,050

(5)

532,917

Other income (expense), net

(68,784)

68,784

(6)

—

Provision for income taxes

8,054

47,054

(7)

55,108

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

37,675

300,780

(8)

338,455

GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText

$ 0.14

$ 1.10

(8)

$ 1.24

(1)

Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

(7)

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 18% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and “book to return” adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at our Non-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8)

Reconciliation of GAAP-based net income to Non-GAAP-based net income:

Three Months Ended December 31, 2023

Per share diluted

GAAP-based net income, attributable to OpenText

$ 37,675

$ 0.14

Add (deduct):

Amortization

184,709

0.68

Share-based compensation

40,175

0.15

Special charges (recoveries)

54,166

0.20

Other (income) expense, net

68,784

0.24

GAAP-based provision for income taxes

8,054

0.03

Non-GAAP-based provision for income taxes

(55,108)

(0.20)

Non-GAAP-based net income, attributable to OpenText

$ 338,455

$ 1.24

Reconciliation of Adjusted EBITDA

Three Months Ended December 31, 2023

GAAP-based net income, attributable to OpenText

$ 37,675

Add (deduct):

Provision for income taxes

8,054

Interest and other related expense, net

139,292

Amortization of acquired technology-based intangible assets

70,784

Amortization of acquired customer-based intangible assets

113,925

Depreciation

33,415

Share-based compensation

40,175

Special charges (recoveries)

54,166

Other (income) expense, net

68,784

Adjusted EBITDA

$ 566,270

GAAP-based net income margin

2.5 %

Adjusted EBITDA margin

36.9 %

Reconciliation of Free cash flows

Three Months Ended December 31, 2023

GAAP-based cash flows provided by operating activities

$ 350,653

Add:

Capital expenditures (1)

(45,240)

Free cash flows

$ 305,413

(1) Defined as “Additions of property and equipment” in the Consolidated Statements of Cash Flows.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures

for the six months ended December 31, 2023

(In thousands, except for per share data)

Six Months Ended December 31, 2023

GAAP-based

Measures

GAAP-based
Measures

% of Total
Revenue

Adjustments

Note

Non-GAAP-
based

Measures

Non-GAAP-
based
Measures

% of Total
Revenue

Cost of revenues

Cloud services and subscriptions

$ 351,560

$ (6,600)

(1)

$ 344,960

Customer support

148,388

(2,186)

(1)

146,202

Professional service and other

155,381

(3,638)

(1)

151,743

Amortization of acquired technology-based intangible assets

147,608

(147,608)

(2)

—

GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%)

2,147,538

72.5 %

160,032

(3)

2,307,570

78.0 %

Operating expenses

Research and development

439,086

(24,501)

(1)

414,585

Sales and marketing

567,635

(25,034)

(1)

542,601

General and administrative

304,475

(15,311)

(1)

289,164

Amortization of acquired customer-based intangible assets

234,117

(234,117)

(2)

—

Special charges (recoveries)

67,960

(67,960)

(4)

—

GAAP-based income from operations / Non-GAAP-based income from operations

466,759

526,955

(5)

993,714

Other income (expense), net

(48,614)

48,614

(6)

—

Provision for income taxes

18,406

81,367

(7)

99,773

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

118,576

494,202

(8)

612,778

GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText

$ 0.44

$ 1.81

(8)

$ 2.25

(1)

Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2)

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

(7)

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 13% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and “book to return” adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at our Non-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8)

Reconciliation of GAAP-based net income to Non-GAAP-based net income:

Six Months Ended December 31, 2023

Per share diluted

GAAP-based net income, attributable to OpenText

$ 118,576

$ 0.44

Add (deduct):

Amortization

381,725

1.40

Share-based compensation

77,270

0.29

Special charges (recoveries)

67,960

0.25

Other (income) expense, net

48,614

0.16

GAAP-based provision for income taxes

18,406

0.07

Non-GAAP-based provision for income taxes

(99,773)

(0.36)

Non-GAAP-based net income, attributable to OpenText

$ 612,778

$ 2.25

Reconciliation of Adjusted EBITDA

Six Months Ended December 31, 2023

GAAP-based net income, attributable to OpenText

$ 118,576

Add:

Provision for income taxes

18,406

Interest and other related expense, net

281,056

Amortization of acquired technology-based intangible assets

147,608

Amortization of acquired customer-based intangible assets

234,117

Depreciation

67,506

Share-based compensation

77,270

Special charges (recoveries)

67,960

Other (income) expense, net

48,614

Adjusted EBITDA

$ 1,061,113

GAAP-based net income margin

4.0 %

Adjusted EBITDA margin

35.8 %

Reconciliation of Free cash flows

Six Months Ended December 31, 2023

GAAP-based cash flows provided by operating activities

$ 397,774

Add:

Capital expenditures (1)

(82,779)

Free cash flows

$ 314,995

(1) Defined as “Additions of property and equipment” in the Consolidated Statements of Cash Flows.

(3) The following tables provide a composition of our major currencies for revenue and expenses, expressed as a percentage, for the three and six months ended December 31, 2024 and 2023:

Three Months Ended December 31, 2024

Three Months Ended December 31, 2023

Currencies

% of Revenue

% of Expenses(1)

% of Revenue

% of Expenses(1)

EURO

23 %

13 %

23 %

12 %

GBP

5 %

7 %

4 %

7 %

CAD

3 %

10 %

3 %

9 %

USD

58 %

46 %

59 %

51 %

Other

11 %

24 %

11 %

21 %

Total

100 %

Six Months Ended December 31, 2024

Six Months Ended December 31, 2023

Currencies

% of Revenue

% of Expenses(1)

% of Revenue

% of Expenses(1)

EURO

23 %

12 %

22 %

11 %

GBP

5 %

7 %

5 %

8 %

CAD

3 %

10 %

3 %

10 %

USD

59 %

48 %

59 %

51 %

Other

10 %

23 %

11 %

20 %

Total

100 %

(1) Expenses include all cost of revenues and operating expenses included within the Consolidated Statements of Income, except for amortization of intangible assets, share-based compensation and special charges (recoveries).

View original content to download multimedia:https://www.prnewswire.com/news-releases/opentext-reports-second-quarter-fiscal-year-2025-financial-results-302370659.html

SOURCE Open Text Corporation

Technology

Tech Beats Tariffs: Global Trade Growth Accelerates and Globalization Sets New Record

Published

46 minutes ago

October 20, 2026

The AI boom has become a powerful driver of global trade – outweighing tariffs and geopolitical shocks, according to the latest DHL Globalization TrackerThe trade outlook has improved, with growth through 2029 now forecast to outpace the previous decadeSouth and Central Asia to have the second-fastest goods-trade growth over 2026–29, behind only the Middle East & North AfricaIndia continues to strengthen its trade resiliency by developing new trade agreementsGlobalization has reached a record level of 25.8%

NEW DELHI, Oct. 20, 2026 /PRNewswire/ — The global race to build infrastructure for artificial intelligence is giving world trade strong momentum at a time of higher tariffs and geopolitical conflicts.

This is one of the key findings of the latest edition of the DHL Globalization Tracker, released by DHL and New York University’s Stern School of Business. Based on more than 30 million data points, the report analyzes international flows of trade, capital, information, and people. It offers the most comprehensive view of globalization available. This edition marks the report’s first publication under its new name. It was previously known as the “DHL Global Connectedness Tracker”.

AI buildout boosts global trade

The report shows that global goods trade grew faster in the first half of 2026 than in any half-year in the past 15 years, apart from the exceptional Covid rebound. A major driver was strong demand for goods used to build AI infrastructure, such as semiconductors and data-transmission equipment. Trade in AI-enabling goods drove 42% of goods trade growth in 2025, and this share rose to 76% during the first quarter of 2026, according to WTO and OECD analysis.

“The biggest story in global trade right now is AI – not tariffs,” said John Pearson, CEO of DHL Express. “Every AI query ultimately depends on logistics. Chips, networking equipment and the many other goods behind this technology must be in the right place at the right time. DHL connects the businesses and markets behind these complex supply chains. Whenever innovation creates new trade flows, our global network helps keep them moving.”

Global effects of Iran war and tariffs remain limited

At the same time, the Iran war and the closure of the Strait of Hormuz disrupted important trade routes. But the effects remained concentrated. Economies dependent on the Strait were hit particularly hard. For example, the value of trade fell 37% in Saudi Arabia and 7% in the United Arab Emirates in the first five months of 2026 compared with the same period in 2025.

Trade policy created a separate headwind. U.S. tariffs reached their highest levels in decades, but their global impact was limited. One reason is that the U.S. accounted for only 13% of world imports in recent years, with roughly half of those imports exempt from the tariff increases as of August 2026. Another is that most countries refrained from broad retaliation. Many instead increased efforts to secure access to alternative markets through new trade agreements.

Trade outlook upgraded despite recent shocks

Looking ahead, global goods trade is projected to expand by an average of 3.4% per year through 2029. That would be substantially faster than the 2.7% rate recorded over the previous decade.

“The surprise is not only that global trade kept growing through new tariffs and the Iran war,” said Prof. Steven A. Altman, Director of the DHL Initiative on Globalization at NYU Stern’s Center for the Future of Management. “The outlook is now stronger than it was before either shock. This reminds us to look beyond the most visible disruptions and recognize the deeper reasons why trade remains so resilient. The AI trade boom highlights the demand for goods and services that can only be provided efficiently when specialized producers work together across countries. It also shows how companies continually adapt to keep trade moving through disruptions and policy shifts.”

India sits within one of the world’s strongest trade-growth regions, East Asia and the Pacific leads the way in 2026

Among all regions, East Asia and the Pacific recorded the strongest trade growth. The value of its trade rose 24% in the first five months of 2026 compared with the same period in 2025. Europe followed with 12% and Sub-Saharan Africa with 11%. South and Central Asia recorded a trade value growth of 9.6%. Looking forward, the region’s forecast remain the second-fastest for goods-trade growth over 2026–29, behind only the Middle East and North Africa.

East Asia and the Pacific not only recorded the strongest growth, but also saw a larger share of its trade stay within the region. This share increased from 57% in 2025 to 60% in the first five months of 2026. Strong Asian supply chains serving the AI boom contributed to this increase.

India focuses on market diversification

One of the major changes in international flows is the weakening of U.S.–China ties. Yet the global impact remains surprisingly small. For example, trade between the U.S. and China accounted for 3.5% of world trade at its peak in 2015, before falling to only 1.6% during the first five months of 2026. The U.S.–China share of international business investment is even smaller – less than 1%. Meanwhile, close U.S. allies have largely maintained their relationships with China. These findings challenge the idea that U.S.–China decoupling is dividing the world economy into rival blocs.

A closer look also shows that direct trade figures understate U.S. reliance on China. Goods imported into the U.S. from other countries contain growing amounts of Chinese materials and components. When these indirect imports are also taken into account, U.S. reliance on China has declined only slightly through 2024, the latest year for which data are available.

While U.S.-China ties are weakening, India’s trade relationship with the U.S. remains strong. At the same time, trade resilience remains a focus as India continues to expand its trade relationships, developing trade agreements with the European Union, the United Kingdom, the European Free Trade Association, New Zealand, and Oman.

Globalization reaches a new record

Beyond trade and investment patterns, the report tracks the broader development of globalization based on international flows of trade, capital, information and people. It uses a scale from 0% (no cross-border flows) to 100% (borders and distance have no impact). In 2025, globalization reached a record level of 25.8%, supported in part by AI-related trade and investment.

All four flow categories contributed to the new record, reaching higher levels of internationalization. Information flows remain the most globalized, followed by capital and trade flows. People flows remain the least globalized.

The DHL Globalization Tracker

The DHL Globalization Tracker is a concise report and interactive website that provides regular updates on globalization and global trade. It complements the renowned DHL Globalization Report, published regularly since 2011. Drawn from over 25 public, private, and academic sources, the Tracker analyzes more than 30 million data points on international flows of trade, capital, information, and people.
It includes interactive online charts that make it easy for users to explore trends by region, geopolitical alignment, and for individual countries. It also supports easy data and chart downloads for offline use.

The DHL Globalization Tracker is commissioned by DHL and authored by Prof. Steven A. Altman and Caroline R. Bastian of New York University Stern School of Business. It is available, together with further resources, at dhl.com/globalization.

Note: The DHL Globalization Tracker and DHL Globalization Report were formerly known as the “DHL Global Connectedness Tracker” and “DHL Global Connectedness Report”. Their new names more directly reflect the focus of the research. The scope and underlying approach remain unchanged, ensuring continuity with previous editions.

At a glance: The October 2026 edition of the DHL Globalization Tracker

What is the main finding of the report?

The global boom in artificial intelligence is giving world trade strong momentum despite higher tariffs and geopolitical conflicts. Global goods trade grew faster in the first half of 2026 than in any half-year in the past 15 years, apart from the exceptional Covid rebound.

Beyond trade, the report tracks the broader development of globalization based on international flows of trade, capital, information and people. In 2025, globalization reached a record level of 25.8%. The report measures this using a scale from 0% (no cross-border flows) to 100% (borders and distance have no impact). All four types of flows contributed to the record, becoming more international.

What is the outlook for global trade?

The outlook has improved. Global goods trade is projected to grow by an average of 3.4% per year through 2029. That would be significantly faster than the 2.7% annual growth rate recorded over the previous decade. Notably, current forecasts are more optimistic than those made before both the 2025-26 U.S. tariff increases and the Iran war, suggesting that recent shocks have had a smaller impact on the global economy than many expected.

How have tariffs and geopolitical conflicts affected global trade?

Tariffs and geopolitical conflicts continue to create risks and disruptions. But their overall impact on global trade has been limited. While the Iran war affected important shipping routes and hit economies dependent on the Strait of Hormuz particularly hard, the effects remained largely concentrated. U.S. tariffs rose to their highest levels in decades, but the United States accounted for only 13% of world imports in recent years, and roughly half of U.S. imports were exempt from tariff increases as of August 2026. Many countries also avoided broad retaliation and instead expanded trade links with alternative markets. As a result, global trade continued to grow.

Where is trade growing fastest?

East Asia and the Pacific saw the strongest trade growth among all regions. The value of its trade rose 24% in the first five months of 2026 compared with the same period in 2025. Europe followed with 12% and Sub-Saharan Africa with 11%.

Is U.S.–China decoupling splitting the world into rival blocs?

No, not so far. The United States and China have significantly reduced their ties with each other over the past decade. But this has not led to a broader split in the global economy. Close U.S. allies have largely maintained their economic relationships with China. Another reason is that direct U.S.–China ties account for a surprisingly small share of the global economy. For example, trade between the two countries represented 3.5% of world goods trade at its peak in 2015, before falling to 1.6% in the first five months of 2026. The U.S.–China share of international business investment is even smaller – less than 1%.

Has the United States become less dependent on China?

Direct trade between the two countries has declined sharply, but the picture is more complex when supply chains are taken into account. Goods imported into the United States from third countries increasingly contain Chinese materials and components. When these indirect imports are considered, U.S. reliance on China declined only slightly through 2024.

Should companies redesign their supply chains to improve resilience?

For business leaders, the report recommends preparing for disruptions without giving up the advantages of international engagement. While specific economies, industries or trade routes can still face significant risks, overall global flows remain strong. Decisions such as relocating production should therefore balance supply-chain resilience with the benefits of global reach and market access. Companies that pull back from international markets while competitors remain globally active may risk weakening their competitive position.

– End –

The report and further resources are available at dhl.com/globalization.

DHL Group is the world’s leading logistics company. The Group connects people and markets and is an enabler of global trade. It aspires to be the first choice for customers, employees, investors and green logistics worldwide. To this end, DHL Group is focusing on accelerating sustainable growth in its profitable core logistics businesses and Group growth initiatives. The Group contributes to the world through sustainable business practices, corporate citizenship, and environmental activities. By the year 2050, DHL Group aims to achieve net-zero emissions logistics.

DHL Group is home to two strong brands: DHL offers a comprehensive range of parcel, express, freight transport, and supply chain management services as well as e-commerce logistics solutions. Deutsche Post is the largest postal service provider in Europe and the market leader in the German mail market. DHL Group employs approximately 584,000 people in over 220 countries and territories worldwide. The Group generated revenues of approximately 82.9 billion Euros in 2025.

The logistics company for the world.

New York University Stern School of Business, located in the heart of Greenwich Village and deeply connected to the city after which it is named, is one of the United States’ premier management education schools and research centers. NYU Stern offers a broad portfolio of transformational programs at graduate, undergraduate, and executive levels, all of them enriched by the dynamism and deep resources of one of the world’s business capitals. NYU Stern is a welcoming community that inspires its members to embrace and lead change in a rapidly transforming world. Visit www.stern.nyu.edu.

View original content to download multimedia:https://www.prnewswire.com/in/news-releases/tech-beats-tariffs-global-trade-growth-accelerates-and-globalization-sets-new-record-302912407.html

Technology

ASTRI Welcomes Government Appointments of New Board Chairman and Board Members

Published

46 minutes ago

October 20, 2026

HONG KONG, Oct. 20, 2026 /PRNewswire/ — The Hong Kong Applied Science and Technology Research Institute (ASTRI) welcomes the Hong Kong SAR Government’s appointment of Prof Chan Chi-hou as the new Board Chairman, effective 21 October 2026, for a two-year term. He succeeds Ir Prof Sunny Lee, who concludes a seven-year tenure as ASTRI’s Board Chairman on 20 October 2026.

Prof Chan Chi-hou said: “I am deeply honoured that the Hong Kong SAR Government has entrusted me to serve ASTRI and contribute to our country and Hong Kong’s technological innovation and development goals outlined in the Nation’s 15th Five-Year Plan and Hong Kong’s first five-year plan. I would also like to thank Ir Prof Sunny Lee for his visionary leadership, particularly in steering the successful merger with the Nano and Advanced Materials Institute (NAMI), which has strengthened ASTRI’s interdisciplinary research and development (R&D) capabilities and heightened its profile at home and abroad.”

“As Hong Kong accelerates investment in technology infrastructure and talent development, I look forward to working closely with fellow Board members and Ir Dr Ted Suen, CEO of ASTRI, to advance innovation, foster collaboration across government, industry, academia, research, and investment communities, and expedite the commercialisation and adoption of research outcomes. Together, we will help enhance Hong Kong’s competitiveness, create greater value for society and reinforce the city’s position as an international innovation and technology (I&T) hub,” he added.

Prof Chan is an internationally-recognised expert in applied electromagnetics, terahertz science and wireless communications. He currently serves as Vice-President (Community Engagement), Director of the State Key Laboratory of Terahertz and Millimetre Waves, and Chair Professor of Electronic Engineering at City University of Hong Kong (CityU). Before joining CityU in 1996, he was a tenured Associate Professor in the Electrical Engineering Department at the University of Washington, and a Visiting Assistant Professor in the Electrical and Computer Engineering Department at the University of Illinois. He obtained his bachelor’s and master’s degrees from The Ohio State University and his doctoral degree from the University of Illinois at Urbana-Champaign. An IEEE Fellow, Prof Chan has received numerous international honours in recognition of his pioneering research and contributions to the field.

Outgoing Chairman Ir Prof Sunny Lee congratulated Prof Chan on the appointment and said: “It has been my great privilege to serve on ASTRI’s Board as a member and Chairman for nearly 14 years to witness its remarkable growth into a leading R&D centre that delivers tangible impact for industry, the economy and society. I am confident that, with Prof Chan’s distinguished expertise, strategic vision and extensive leadership experience, ASTRI will continue to scale new heights, drive impactful innovations and accelerate the translation of research excellence into real-world applications, creating lasting value for Hong Kong and beyond.”

Under Ir Prof Lee’s stewardship, ASTRI has actively supported national development priorities and the Hong Kong SAR Government’s policy agenda. Leveraging Hong Kong’s unique role as a super-connector between Chinese Mainland and the world, ASTRI has reinforced its position bridging stakeholders in the global I&T ecosystem.

Six New Board Members Appointed

In addition, the Hong Kong SAR Government has appointed six new members to the ASTRI Board: Prof Chan Shing-chow, Professor & Associate Dean (Masters), Faculty of Engineering, University of Hong Kong; Mr Ricky Chan Wai-chung, Chief Executive Officer, Jing Mei Automotive Limited; Mr Alan Chiu Chi-wai, Managing Partner, ELLALAN; Ms Irene Chow Man-ling, Director, DSL Investments Limited; Mr Hui Chi-wai, Chief Executive Officer (AXM), ASMPT SEMI China (AXM); and Prof Gary Wong Ka-leung, Associate Provost (Quality Assurance and Accountability) and Chair Professor, Department of Chemistry, City University of Hong Kong. Their two-year terms will run from 21 October 2026 to 20 October 2028.

ASTRI expresses its heartfelt gratitude to outgoing Board Chairman Ir Prof Sunny Lee and members Dr Felix Chow Bok-hin, Mr Theodore Ma Heng, Dr Alfred Ng Man-cheuk, Ir Dr Samson Tai Kin-hon and Mr Anthony Tong Tat-hay for their dedicated service and invaluable guidance.

Effective from 21 October 2026, the members of ASTRI’s Board of Directors are as follows:

Chairman

Prof Chan Chi-hou

Members (listed in alphabetical order of surname)

Prof Chan Shing-chowMr Ricky Chan Wai-chungProf Christopher Chao Yu-hangProf Cheng Shuk-han, MHMr Alan Chiu Chi-waiMr Jason Chiu Tsz-kiu, JPMs Irene Chow Man-ling, JPMr Dennis Ho Chiu-pingMr William Ho TatMr Hui Chi-waiIr Arthur Lee Kam-hungHon Jack Ng Wun-kit, JPArchitect So Ching, JPProf Michael Tse Chi-kongProf Martin Wong Ding-fatProf Gary Wong Ka-leungMr Wilfred Wong Kam-pui, BBS, JP

Official Members

Mr Kevin Choi, JP, Permanent Secretary for Innovation, Technology and IndustryMr Ivan KB Lee, JP, Commissioner for Innovation and Technology

Photos Download: https://bit.ly/4B1pToO

About ASTRI

Founded in 2000 by the HKSAR Government, Hong Kong Applied Science and Technology Research Institute (ASTRI) is the city’s largest government-funded R&D centre. Committed to transforming high-impact research into practical innovations, ASTRI drives market-driven, interdisciplinary advancements across sectors, including Smart City, FinTech, Digital Health and Life Sciences, New Industrialisation and Intelligent Manufacturing, Application-Specific Integrated Circuits (ASIC) and Advanced Electronics, New Energy and Energy Storage, and Green and ESG Technologies. Following its merger with the Nano and Advanced Materials Institute, ASTRI has further strengthened its capabilities, with over 1,500 patents and 2,200 successful cases of technology transfer. Recognised with numerous international awards, ASTRI continues to nurture top I&T talent and foster collaborations among the I&T ecosystem, contributing to Hong Kong’s high-value economic development. For more information, please visit: https://www.astri.org

View original content to download multimedia:https://www.prnewswire.com/apac/news-releases/astri-welcomes-government-appointments-of-new-board-chairman-and-board-members-302913400.html

SOURCE Hong Kong Applied Science and Technology Research Institute (ASTRI)

Technology

Neo’s European Integrated Magnet Project Selected for €126 Million Grant Under EU Innovation Fund

Published

46 minutes ago

October 20, 2026

Grant would help fund an expanded integrated rare earth separation, metallization and magnet manufacturing platform in Estonia

TORONTO, Oct. 19, 2026 /CNW/ — Neo Performance Materials Inc. (“Neo” or the “Company”) (TSX: NEO) (OTCQX: NOPMF) today announced that the European Climate, Infrastructure and Environment Executive Agency (“CINEA”) has invited Neo to prepare a grant agreement for its Green Assets from European Union Strategic Supply (“Project GAUSS”) under the European Union’s Innovation Fund. Neo’s Project was selected with a grant of up to €126 million (approximately US$141 million).

Neo’s project, co-funded by the Innovation Fund, would support an expanded rare earth magnet value chain in Estonia, spanning separation, metallization and magnet manufacturing, including adding up to 3,000 metric tonnes of permanent magnets per year. One third of that capacity would be allocated to offshore wind farms in the EU.

The project includes the following scope:

Separation (Silmet 2.0): light and heavy rare earth separation tripling its total separation capacity. Earlier this month, the European Commission designated Silmet 2.0 a Strategic Project under the EU Critical Raw Materials Act.Metallization: conversion of separated light and heavy rare earth oxides into metals.Magnet Manufacturing (Phase 1B): the Phase 1B expansion of the European permanent magnet facility, which is expected to increase its nameplate capacity from its current 2,000 metric tonnes to approximately 5,000 metric tonnes per year, with the addition of capabilities to support offshore wind farms.Digital Infrastructure for Competitiveness: digital twins and artificial intelligence across rare earth separation, metallization and magnet manufacturing, learning from plant data and operator expertise to predict quality, optimize resource use and progressively translate validated insights into physical process control.

“Neo’s strategy includes building the most vertically integrated rare earth magnetics value chain in Europe, and this project brings that strategy together, from separation to metallization and finished magnets,” said Rahim Suleman, President and Chief Executive Officer of Neo. “The EU’s selection of Neo’s project, following the Strategic Project designation of Silmet 2.0 earlier this month, is strong recognition of that plan. This funding would help us further scale magnet production for European customers in wind energy, electromobility and industrial automation. I want to thank the European Commission, CINEA and the Government of Estonia for their continued support.”

Neo expects the value of the project to be approximately €400 million. Neo intends to update the capital cost estimate as project planning and engineering activities progress. The timetable set by CINEA provides for signature of the grant agreement by March 23, 2027 and the project is expected to take between two to three years to complete.

The project remains subject to final investment decisions and a final grant agreement, which include legal entity validation, a financial capacity assessment, a non-exclusion check and ethics and security reviews.

About Neo Performance Materials

Neo manufactures the building blocks of many modern technologies that enhance efficiency and sustainability. Neo’s advanced industrial materials – magnetic powders, rare earth magnets, magnetic assemblies, specialty chemicals, metals, and alloys – are critical to the performance of many everyday products and emerging technologies. Neo’s products fast-forward technologies for the net-zero transition. The business of Neo is organized along three segments: Magnequench, Chemicals & Oxides and Rare Metals. Neo is headquartered in Toronto, Ontario, Canada; with corporate offices in Greenwood Village, Colorado, United States; Singapore; and Beijing, China. Neo has a global platform that includes manufacturing facilities located in Canada, Estonia, China, Germany, Thailand and the United Kingdom, as well as a dedicated research and development center in Singapore.

For more information, please visit www.neomaterials.com.

Cautionary Statements Regarding Forward-Looking Statements

This news release may contain “forward-looking information” within the meaning of applicable Canadian securities legislation. Generally, but not always, forward-looking information and statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation thereof. Specific forward-looking statements in this news release include, but are not limited to, the signing and timing of the grant agreement with CINEA, the amount of the grant, final investment decisions, the scope, capacity, development, financing and timing of Project GAUSS, including Silmet 2.0 and Phase 1B, expected emissions avoidance and job creation, and other matters relating thereto. In making the forward-looking information in this news release, the Company has applied certain factors and assumptions that are based on its current beliefs as well as assumptions made by and information currently available to the Company. Although the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking information in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking information. There are many risk factors associated with the development of a new Project. A number of factors could cause actual results to differ materially from those anticipated by the Company, including but not limited to the risks and uncertainties inherent in the nature of operations including the risks of a material adverse change in the Company’s assets or revenues, or risks of unknown liabilities that may arise.

Readers are cautioned not to place undue reliance on forward-looking information. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by law.

Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Climate, Infrastructure and Environment Executive Agency (CINEA). Neither the European Union nor the granting authority can be held responsible for them.

For more information on Neo, investors should review Neo’s continuous disclosure filings that are available under Neo’s profile at www.sedarplus.ca.

SOURCE Neo Performance Materials, Inc.

Coin Market4 days ago

OpenAI model helped itself to testnet crypto, then kept quiet about it

Technology4 days ago

Born to Be Open: RoboParty Launches RP1, a Full-Stack Open-Source Humanoid

Coin Market4 days ago

MSCI adopts index exclusion rules that could oust Strategy

Coin Market5 days ago

Bitcoin dips to $80.1K as KOSPI closes at its lowest since April

Technology4 days ago

Tucuvi joins the Microsoft Pegasus Program to scale clinically governed AI Care Management across health systems

Technology4 days ago

FF EAI Robotics (FFR) and FF Jointly Launch FF Nova, First Embodied AI Humanoid Robot Priced Below $2,500 in U.S., FF Nova Mini, Physical AI Spark Program Curriculum, Nova Reinforcement Learning Developer Program and Developer Community Recruitment

Technology4 days ago

Bloomberg Law Brings Dockets and Litigation Intelligence to Microsoft Copilot

Technology5 days ago

LRQA and K-Frontiers strengthen local inspection capabilities in Malaysia through strategic partnership

Nativo Ventures

OpenText Reports Second Quarter Fiscal Year 2025 Financial Results

Technology

OpenText Reports Second Quarter Fiscal Year 2025 Financial Results

Technology

Tech Beats Tariffs: Global Trade Growth Accelerates and Globalization Sets New Record

Technology

ASTRI Welcomes Government Appointments of New Board Chairman and Board Members

Technology

Neo’s European Integrated Magnet Project Selected for €126 Million Grant Under EU Innovation Fund

Tech Beats Tariffs: Global Trade Growth Accelerates and Globalization Sets New Record

ASTRI Welcomes Government Appointments of New Board Chairman and Board Members

Neo’s European Integrated Magnet Project Selected for €126 Million Grant Under EU Innovation Fund

Send Rakhi to UK swiftly with UK Gifts Portal

Whiteboard Series with NEAR | Ep: 45 Joel Thorstensson from ceramic.network

Nullmax and Renesas Forge Strategic Partnership to Deliver Competitive ADAS Solutions for the Global Market

Why You Should Build on #NEAR – Co-founder Illia Polosukhin at CV Labs

Whiteboard Series with NEAR | Ep: 45 Joel Thorstensson from ceramic.network

NEAR End of Year Town Hall 2021: The Open Web World, MetaBUILD 2 Hackathon and 2021 recap

Trending

Nativo Ventures

OpenText Reports Second Quarter Fiscal Year 2025 Financial Results

You may like

Technology

Tech Beats Tariffs: Global Trade Growth Accelerates and Globalization Sets New Record

Technology

ASTRI Welcomes Government Appointments of New Board Chairman and Board Members

Technology

Neo’s European Integrated Magnet Project Selected for €126 Million Grant Under EU Innovation Fund

Tech Beats Tariffs: Global Trade Growth Accelerates and Globalization Sets New Record

ASTRI Welcomes Government Appointments of New Board Chairman and Board Members

Neo’s European Integrated Magnet Project Selected for €126 Million Grant Under EU Innovation Fund

Send Rakhi to UK swiftly with UK Gifts Portal

Whiteboard Series with NEAR | Ep: 45 Joel Thorstensson from ceramic.network

Nullmax and Renesas Forge Strategic Partnership to Deliver Competitive ADAS Solutions for the Global Market

Why You Should Build on #NEAR – Co-founder Illia Polosukhin at CV Labs

Whiteboard Series with NEAR | Ep: 45 Joel Thorstensson from ceramic.network

NEAR End of Year Town Hall 2021: The Open Web World, MetaBUILD 2 Hackathon and 2021 recap

Trending