Open Text Corp (OTEX) has reported a 2,111.12 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $912.88 million, or $7.46 a share in the quarter, compared with $41.29 million, or $0.34 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $105.50 million, or $0.86 a share compared with $103.19 million or $0.84 a share, a year ago.
Revenue during the quarter grew 13.15 percent to $491.66 million from $434.54 million in the previous year period. Gross margin for the quarter contracted 120 basis points over the previous year period to 66.57 percent. Total expenses were 84.94 percent of quarterly revenues, up from 82.40 percent for the same period last year. That has resulted in a contraction of 254 basis points in operating margin to 15.06 percent.
Operating income for the quarter was $74.06 million, compared with $76.47 million in the previous year period.
However, the adjusted operating income for the quarter stood at $151.40 million compared to $148.03 million in the prior year period. At the same time, adjusted operating margin contracted 327 basis points in the quarter to 30.79 percent from 34.07 percent in the last year period.
"OpenText delivered nearly half a billion dollars in quarterly revenues, double digit cloud and license performance, our fastest start to a fiscal year in the company's history. We expect Fiscal 2017 to be a transformative year for OpenText as we strengthen our product offerings with innovation and acquisitions," said OpenText chief executive officer and CTO, Mark J. Barrenechea. "Our customers are responding well to our digital transformation products and we expect this to translate into double digit revenue growth for the entire year. Within the quarter, we achieved significant milestones with the closing of multiple acquisitions and expect to complete their integrations and improve operations by the end of the fiscal year."
Operating cash flow declines
Open Text Corporation has generated cash of $73.45 million from operating activities during the quarter, down 20.78 percent or $ 19.27 million, when compared with the last year period.
The company has spent $501.17 million cash to meet investing activities during the quarter as against cash outgo of $25.68 million in the last year period.
The company has spent $25.81 million cash to carry out financing activities during the quarter as against cash outgo of $70.30 million in the last year period.
Cash and cash equivalents stood at $834.94 million as on Sep. 30, 2016, up 20.87 percent or $144.16 million from $690.78 million on Sep. 30, 2015.
Working capital increases
Open Text Corporation has recorded an increase in the working capital over the last year. It stood at $555.18 million as at Sep. 30, 2016, up 10.10 percent or $50.94 million from $504.24 million on Sep. 30, 2015. Current ratio was at 1.83 as on Sep. 30, 2016, down from 1.94 on Sep. 30, 2015.
Days sales outstanding were almost stable at 58 days for the quarter, when compared with the last year period.
Debt increases substantially
Open Text Corporation has witnessed an increase in total debt over the last one year. It stood at $2,145.28 million as on Sep. 30, 2016, up 35.26 percent or $559.28 million from $1,586 million on Sep. 30, 2015. Total debt was 35.33 percent of total assets as on Sep. 30, 2016, compared with 37.19 percent on Sep. 30, 2015. Debt to equity ratio was at 0.75 as on Sep. 30, 2016, down from 0.88 as on Sep. 30, 2015.
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