Enterprise software provider OpenText Corp. has reported mixed quarterly results following the finalization of its purchase of Micro Focus International plc.
For its fiscal 2023 second quarter, OpenText reported non-generally accepted accounting principles earnings per share of 89 cents, the same figure as in the same quarter of last year. Revenue came in at $897.4 million, up 2.4% year-over-year. Analysts had expected earnings per share of $1.05.
OpenText’s cloud services and subscriptions were up 12% year-over-year in the quarter to $408.7 million, while customer support revenue was down 18.4% to $316.5 million. Total annual recurring revenue was up 3.6% to $725.2 million.
Adjusted earnings before interest, taxes, depreciation and amortization were down 3.3% year-over-year to $645 million. Free cash flow dropped 29.9% to $258.6 million.
Highlights in the quarter included OpenText partnering with Allstate Identity Protection to offer identity protection services to Webroot customers. OpenText also achieved a FedRAMP “In Process” designation for its OpenText Cloud for Government offering.
“OpenText delivered a superb second quarter with strong cloud bookings and revenues, establishing our eighth consecutive quarter of cloud organic and ARR organic growth in constant currency,” Mark J. Barrenechea, chief executive officer and chief technology officer of OpenText, said in a statement.
The company did not provide an outlook with its release. A transcript of OpenText’s investor call, where an outlook may have been given, was unavailable at the time of writing.
The biggest story over the period was OpenText’s acquisition of Micro Focus for $6 billion. The detail was announced in August and was said to enable OpenText to gain a presence in parts of the enterprise technology market where it isn’t an established player. The deal also expands OpenText’s core portfolio of products for managing business records.
The deal closed on Jan. 31, with Barrenechea saying in a blog post that with the acquisition, “OpenText’s corporate mission expands to help enterprise professionals secure their operations, gain more insight into their information and better manage an increasingly hybrid and complex digital fabric with a new generation of tools.”
Expanded offerings coming to OpenText through the acquisition include tools covering cybersecurity, digital operations management, application automation, advanced analytics and artificial intelligence.
