Open Text Corporation (OTEX) has reported a 48.66 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $45.02 million, or $0.18 a share in the quarter, compared with $87.69 million, or $0.36 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $133.25 million, or $0.54 a share compared with $122.44 million or $0.50 a share, a year ago. Revenue during the quarter grew 16.62 percent to $542.71 million from $465.35 million in the previous year period. Gross margin for the quarter contracted 93 basis points over the previous year period to 69.04 percent. Total expenses were 80.26 percent of quarterly revenues, up from 76.35 percent for the same period last year. That has resulted in a contraction of 390 basis points in operating margin to 19.74 percent.
Operating income for the quarter was $107.16 million, compared with $110.04 million in the previous year period.
However, the adjusted operating income for the quarter stood at $184.51 million compared to $172.24 million in the prior year period. At the same time, adjusted operating margin contracted 301 basis points in the quarter to 34 percent from 37.01 percent in the last year period.
"OpenText delivered record revenue of $543 million in the second quarter of Fiscal 2017, up 17% year over year, with solid operational performance of 34% adjusted operating margin," said OpenText chief executive officer and CTO, Mark J. Barrenechea. "We made significant progress in advancing our vision, products and market reach over the last 12 months, and it is reflected in our financial results." "Businesses in all industries are transforming into software and analytic companies and Enterprise Information Management ("EIM") is a key platform in enabling that transformation. The very nature of work has changed, and customers are seeking new platforms for content services, customer experience, supply chains, with discovery and analytics," said Barrenechea. "Customers are seeing greater value from Digitalization, and with Release 16 and our recent acquisitions, OpenText is well positioned to enable the next wave of digital transformation."
Operating cash flow declines
Open Text Corporation has generated cash of $180.47 million from operating activities during the first half, down 16.70 percent or $36.19 million, when compared with the last year period. The company has spent $515.88 million cash to meet investing activities during the first six months as against cash outgo of $60.26 million in the last year period.
Cash flow from financing activities was $790.41 million for the first six months as against cash outgo of $119.64 million in the last year period.
Cash and cash equivalents stood at $1,722.49 million as on Dec. 31, 2016, up 137.27 percent or $996.53 million from $725.96 million on Dec. 31, 2015.
Working capital increases sharply
Open Text Corporation has recorded an increase in the working capital over the last year. It stood at $1,475.50 million as at Dec. 31, 2016, up 162.16 percent or $912.68 million from $562.82 million on Dec. 31, 2015. Current ratio was at 3.29 as on Dec. 31, 2016, up from 2.01 on Dec. 31, 2015.
Days sales outstanding went up to 55 days for the quarter compared with 54 days for the same period last year.
Debt increases substantially
Open Text Corporation has witnessed an increase in total debt over the last one year. It stood at $2,397.83 million as on Dec. 31, 2016, up 51.38 percent or $813.83 million from $1,584 million on Dec. 31, 2015. Total debt was 34.84 percent of total assets as on Dec. 31, 2016, compared with 36.66 percent on Dec. 31, 2015. Debt to equity ratio was at 0.69 as on Dec. 31, 2016, down from 0.85 as on Dec. 31, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
