What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-08-01 compared with 2023-08-03 · 62 added, 73 removed, 349 unchanged (28% of the section changed)

15 unchanged sentences

We make information more valuable by connecting it to digital business processes, enriching it with insights, protecting and securing it throughout its entire lifecycle and leveraging it to create engaging digital experiences.

Our solutions connect large digital supply chains, IT service management ecosystems, application development and delivery workflows, and processes in many industries including manufacturing, retail and financial services.

Our solutions also enable organizations and consumers to secure their information so that they can collaborate with confidence, stay ahead of the regulatory technology curve and identify threats across their endpoints and networks.

3 unchanged sentences

Businesses of all sizes rely on a combination of public and private clouds, managed cloud services and off-cloud solutions.

Looking ahead, the destination for our customers is hybrid and multi-cloud and our innovation roadmap is designed to provide flexibility in all environments.

Looking ahead, the destination for our customers is hybrid (on cloud and off-cloud) and multi-cloud and our innovation roadmap is designed to provide flexibility in all environments.

On January 31, 2023, we completed the acquisition of all of the outstanding ordinary shares of Micro Focus International Limited, formerly Micro Focus International plc (Micro Focus), a leading provider of mission-critical software technology and services that help customers accelerate digital transformation, for a total purchase price of $6.2 billion (the Micro Focus Acquisition), inclusive of Micro Focus’ cash and repayment of Micro Focus’ outstanding indebtedness.

On May 1, 2024, we completed the divestiture of our Application Modernization and Connectivity (AMC) business to Rocket Software, Inc.

(Rocket Software) for $2.275 billion in cash before taxes, fees and other adjustments (the AMC Divestiture).

We used the net proceeds from the AMC Divestiture to complete a $2.0 billion debt reduction, which resulted in the termination of the Term Loan B (as defined below) and the reduction of amounts outstanding under the Acquisition Term Loan (as defined below).

Our Products and Services

3 unchanged sentences

The OpenText Cloud is a comprehensive Information Management platform consisting of six business clouds:

our Content Cloud, Cybersecurity Cloud,

Application Automation Cloud, Business Network Cloud, IT Operations Management Cloud and Analytics & AI Cloud.

In addition to our six business clouds, we have the Developers Cloud to help unleash developer creativity.

our Content Cloud, Cybersecurity Cloud, Application Automation Cloud, Business Network Cloud, IT Operations Management Cloud and Analytics Cloud.

In addition to our six business clouds, we have the Developer Cloud to help unleash developer creativity.

With embedded AI and analytics, our solutions improve business insight, employee productivity, customer experiences, asset utilization, collaboration, supply chain efficiency and risk management.

Our innovation roadmap is focused on investing a significant amount of our R&D in cloud and AI capabilities.

This includes enhancing the capabilities and deployment options of the acquired Micro Focus products, growing our public cloud and API offerings, driving deep integrations through co-innovations with partners, integrating security, analytics and AI solutions throughout our offerings and investing to meet new compliance standards.

This includes continuing to enhance the capabilities and deployment options of the acquired Micro Focus products, growing our public cloud and API offerings, driving deep integrations through co-innovations with partners, integrating security, analytics and AI solutions throughout our offerings and investing to meet new compliance standards.

Our platform offers multi-level, multi-role and multi-context security.

2 unchanged sentences

Below is a listing of our Information Management solutions.

For the year ended June 30, 2023, total revenues is comprised of 45% from Content Cloud, 20% from Cybersecurity Cloud, 15% from Business Network Cloud, 10% from Application Automation Cloud, 5% from IT Operations Management Cloud and 5% from Analytics & AI Cloud, with revenues from Business Network Cloud and Cybersecurity Cloud primarily derived from Cloud revenues, and the remaining primarily derived from Customer support revenues.

For the year ended June 30, 2024, total revenues is comprised of 40% from Content Cloud, 20% from Cybersecurity Cloud, 15% from Application Automation Cloud, 10% from Business Network Cloud, 10% from IT Operations Management Cloud and 5% from Analytics Cloud, with revenues from Business Network Cloud and Cybersecurity Cloud primarily derived from Cloud revenues, and the remaining primarily derived from Customer support revenues.

Content Cloud

6 unchanged sentences

OpenText Content Services adhere to the Content Management Interoperability Services (CMIS) standard and support a broad range of operating systems, databases, application servers and applications.

Our Content Services integrate with the applications that manage critical business processes, such as SAP® S/4HANA, SAP® SuccessFactors®, Salesforce®, Microsoft® Office 365® and other software systems and applications, establishing the foundation for intelligent business process and content workflow automation.

foundation for intelligent business process and content workflow automation.

By connecting unstructured content with structured data workflows, our Content Services allow users to have the content they need, when they need it, reducing errors, driving greater business insight and increasing efficiency.

1 unchanged sentence

Our Digital Experience solutions create, manage, track and optimize omnichannel interactions throughout the customer journey, from acquisition to retention, and integrate with systems of record including Salesforce® and SAP®.

The OpenText Digital Experience platform enables businesses to gain insights into their

customer interactions and optimize them to improve customer lifetime value.

The OpenText Digital Experience platform enables businesses to gain insights into their customer interactions and optimize them to improve customer lifetime value.

The platform includes solutions and extensions that deliver highly personalized content and engagements along a continuous customer journey.

25 unchanged sentences

OpenText offers a range of application-to-application, IoT, identity and access management, active applications and industry specific applications.

We enable supply chain optimization, digital business integration, data management, messaging, security, communications and secure data exchange across an increasingly complex network of off-cloud and cloud applications,

connected devices, systems and people.

The Business Network Cloud can be accessed through our new multi-tenant, self-service Foundation offering or as a managed service to simplify the inherent complexities of business-to-business (B2B) data exchange.

6 unchanged sentences

Lastly, with the power of our universal discovery and automation tools that can manage distributed landscapes, we help customers better manage cloud costs and carbon footprints.

As OpenText integrates the Micro Focus portfolio, we expect that new innovations will drive the combination of IT service management and enterprise content management to enable IT service agents with the right content and insights.

Bringing the AI operations portfolio onto the OpenText private cloud is anticipated to allow customers to take advantage of the discovery capabilities on top of a private network and within private data.

As OpenText continues to integrate the Micro Focus portfolio, we expect that new innovations will drive the combination of IT service management and enterprise content management to enable IT service agents with the right content and insights.

Bringing the AI operations portfolio onto the OpenText private cloud is expected to allow customers to take advantage of the discovery capabilities on top of a private network and within private data.

AI enabled tools are expected to accelerate how customers can manage and control cloud costs and carbon footprints across multiple environments.

OpenText solutions are built on the integrated, AI-based OPTIC Platform to ensure IT efficiency and performance.

Analytics & AI Cloud

OpenText Analytics & AI Cloud solutions bring artificial intelligence with practical usage to provide organizations with actionable insights and better automation.

Analytics Cloud

OpenText Analytics Cloud solutions bring artificial intelligence with practical usage to provide organizations with actionable insights and better automation.

We help organizations overcome enterprise data challenges through visualizations, advanced natural language processing and natural language understanding and integrated computer vision capabilities.

With an open architecture, Analytics & AI can integrate with external AI services, such as Google Cloud or Azure.

Our Analytics & AI solutions feature capabilities from data analytics (Vertica) to insights from new unstructured data types (IDOL) to visualization that can be applied to key processes (Magellan, LegalTech).

Our solutions help organizations process data of all types from anywhere, at any speed, and transforms data into insights that can be used in workflows through applications.

With an open architecture, Analytics Cloud can integrate with external AI services, such as Google Cloud or Azure.

Our Analytics Cloud solutions feature capabilities from data analytics to insights from new unstructured data types to visualization that can be applied to key processes.

These solutions help organizations process data of all types from anywhere, at any speed, and transform data into insights that can be used in workflows through applications.

These capabilities can be consumed as a full stack analytics engine or as API components embedded in other custom OEM solutions.

In addition, we have embedded AI data analytics in all our major offerings.

Information management in the cloud, secure and intelligent and at scale;

customers will benefit from our enhanced offerings.

Our AI and analytics capabilities within Content Cloud leverage structured or unstructured data to help organizations improve decision-making, gain operational efficiencies and increase visibility through interactive dashboards, reports and data visualizations.

It leverages a comprehensive set of data analytics software, such as text mining, natural language processing, interactive visualizations and machine learning, to identify patterns, relationships, risks and trends that are used for predictive process automation and accelerated decision making.

Our Magellan, Vertica, and IDOL solutions support composite AI for improved accuracy, and we help customers turn repositories of operational and experience information into clean and integrated “data lakes” that can be mined by AI to extract useful knowledge and insight for our customers.

Our Analytics Cloud solutions support composite AI for improved accuracy, and we help customers turn repositories of operational and experience information into clean and integrated “data lakes” that can be mined by AI to extract useful knowledge and insight for our customers.

Application Automation Cloud

4 unchanged sentences

Within our applications automation space, we help customers move workloads into the cloud by integrating customer applications they have on mainframes and older infrastructures.

From mainframe development tools to host connectivity, our products deliver value managing a fast-paced and ever-changing IT landscape.

Customers can innovate

faster, with lower risk, by transforming their core business applications, processes, and infrastructure—from mainframe to cloud.

Developers Cloud

From mainframe development tools to host connectivity, our

products deliver value managing a fast-paced and ever-changing IT landscape.

Customers can innovate faster, with lower risk, by transforming their core business applications, processes, and infrastructure—from mainframe to cloud.

The Application Automation Cloud included our AMC business prior to the AMC Divestiture on May 1, 2024.

During Fiscal 2024, the AMC business comprised approximately 45% of the Application Automation Cloud.

See Note 19 “Acquisitions and Divestitures” to our Consolidated Financial Statements for more details.

Developer Cloud

Developers can access API, cloud services and software development kits (SDK) from our six business cloud offerings, through the OpenText Developer Cloud, making it faster and easier to build, extend and customize Information Management applications.

23 unchanged sentences

Over the last three fiscal years, we have invested a cumulative total of $2.0 billion in R&D or 14.7% of cumulative revenue for that three-year period.

On an annual basis, we continue to target to spend 14% to 16% of revenues on R&D expense.

On an annual basis, we continue to target to spend

14% to 16% of revenues on R&D expense.

With our innovation roadmap delivered, we believe we have fortified our support for customer choice:

4 unchanged sentences

We remain a value-oriented and disciplined acquirer, having efficiently deployed $12.1 billion on acquisitions over the last 10 fiscal years.

Mergers and acquisitions are one of our leading growth drivers.

We look for companies that are situated within our total addressable markets.

3 unchanged sentences

We regularly evaluate acquisition and divestiture opportunities and at any time may be at various stages of discussion with respect to such opportunities.

For additional details on our acquisitions, please see “Acquisitions During the Last Five Fiscal Years”, elsewhere in Item 1 of this Annual Report on Form 10-K.

For additional details on our acquisitions, see “Acquisitions and Divestitures During the Last Five Fiscal Years,” elsewhere in Item 1 of this Annual Report on Form 10-K.

OpenText Revenues

1 unchanged sentence

cloud services and subscriptions, customer support, license and professional service and other.

For information regarding our revenues by significant geographic area for Fiscal 2023, Fiscal 2022 and Fiscal 2021, please see Note 20 “Segment Information” to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

For information regarding our revenues by significant geographic area for Fiscal 2024, Fiscal 2023 and Fiscal 2022, see Note 20 “Segment Information” to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

Cloud Services and Subscriptions

66 unchanged sentences

We compete with multiple companies, some that have single or narrow solutions and some that have a range of information management solutions, like us.

Our primary competitor is International Business Machines Corporation (IBM), with numerous other software vendors competing with us in the Information Management sector, such as Box Inc., Hyland Software Inc., Alfresco Software Inc., ServiceNow Inc., Atlassian Corp., Splunk Inc., Gen Digital Inc.

and Adobe Inc.

17 unchanged sentences

As a result, our success, in part, depends on our ability to continually enhance our existing products in a timely and efficient manner and to develop and introduce new products that meet customer needs while reducing total cost of ownership.

To achieve these objectives, we have made and expect to continue to make investments in research and development, through internal and third-party development activities, third-party licensing agreements and potentially through technology acquisitions.

To achieve these objectives, we have made and expect to continue to make investments in R&D, through internal and third-party development activities, third-party licensing agreements and potentially through technology acquisitions.

We expect a significant amount of our future R&D investment will be in cloud-based technologies.

Our R&D expenses were $893.9 million for Fiscal 2024, $680.6 million for Fiscal 2023 and $440.4 million for Fiscal 2022.

We believe our spending on research and development is an appropriate balance between managing our organic growth and results of operations.

We believe our spending on R&D is an appropriate balance between managing our organic growth and results of operations.

We expect to continue to invest in R&D to maintain and improve our products and services offerings.

Acquisitions During the Last Five Fiscal Years

We regularly evaluate acquisition opportunities within the Information Management market and at any time may be in various stages of discussions with respect to such opportunities.

Below is a summary of certain significant acquisitions we have made over the last five fiscal years.

• On January 31, 2023, we acquired Micro Focus, a leading provider of mission-critical software technology and services that help customers accelerate digital transformations, for $6.2 billion (the Micro Focus Acquisition).

Acquisitions and Divestitures During the Last Five Fiscal Years

We regularly evaluate acquisition and divestiture opportunities within the Information Management market and at any time may be in various stages of discussions with respect to such opportunities.

Below is a summary of certain significant acquisitions and divestitures we have made over the last five fiscal years.

• On May 1, 2024, we completed the sale of our AMC business to Rocket Software, Inc.

for $2.275 billion in cash before taxes, fees and other adjustments.

• On January 31, 2023, we acquired Micro Focus, a leading provider of mission-critical software technology and services that help customers accelerate digital transformations, for $6.2 billion.

• On December 23, 2021, we acquired Zix, a leader in SaaS based email encryption, threat protection and compliance cloud solutions for SMBs, for $894.5 million.

4 unchanged sentences

(Carbonite), a leading provider of cloud-based subscription backup, disaster recovery and endpoint security to SMB, consumers and a wide variety of partners, for $1.4 billion.

• O n December 2, 2019, we acquired certain assets and certain liabilities of Dynamic Solutions Group (The Fax Guys) for $5.1 million.

• O n January 31, 2019, we acquired Catalyst, a leading provider of eDiscovery that designs, develops and supports market-leading cloud eDiscovery software, for $71.4 million.

• On December 17, 2018, we acquired Liaison, a leading provider of cloud-based business to business integration, for $310.6 million.

We believe our acquisitions support our long-term strategy for growth, strengthen our competitive position, expand our customer base and provide greater scale to accelerate innovation, grow our earnings and provide superior shareholder value.

We expect to continue to strategically acquire companies, products, services and technologies to augment our existing business.

We believe opportunistic acquisitions or divestitures can strengthen our product offerings in the Information Management market.

Considering the continually evolving marketplace in which we operate, we regularly evaluate such opportunities within the Information Management market and at any time may be in various stages of discussions with respect to such opportunities.

Intellectual Property Rights

19 unchanged sentences

As a result, we are committed to continue to modernize our technology infrastructure and leverage existing investments in the OpenText Cloud.

The combination of

OpenText cloud-native applications and managed services, together with the scalability and performance of our partner public cloud providers, offer more secure, reliable and compliant solutions to customers wanting to deploy cloud-based Information Management applications.

The combination of OpenText cloud-native applications and managed services, together with the scalability and performance of our partner public cloud providers, offer more secure, reliable and compliant solutions to customers wanting to deploy cloud-based Information Management applications.

OpenText Cloud Editions is designed to build additional flexibility and scalability for our customers:

27 unchanged sentences

As customers move into the cloud, it will facilitate cross-sell and upsell opportunities across the product portfolio and geographies.

Execute on Deleveraging Goals.

As part of the Micro Focus Acquisition, the Company announced an initiative to deleverage our balance sheet through the repayment of outstanding debt instruments utilizing the free cash flows generated from our combined operations.

We intend to maintain our dividend during our deleveraging initiatives which is aimed at enhancing our continued commitment to returning value to our shareholders.

Selectively Pursue Acquisitions.

We expect to continue to pursue strategic acquisitions to strengthen our service offerings in the Information Management market.

Strategically Pursue Acquisitions.

We expect to continue to pursue strategic acquisitions to strengthen our product offerings in the Information Management market.

Considering the continually evolving marketplace in which we operate, we regularly evaluate acquisition opportunities within the Information Management market and at any time may be in various stages of discussions with respect to such opportunities.

1 unchanged sentence

We may also target future acquisitions to expand or add functionality and capabilities to our existing portfolio of solutions, as well as add new solutions to our portfolio.

Return of Capital.

Following the AMC Divestiture, we announced our share repurchase plan pursuant to which we intend to repurchase our common shares for cancellation, reflecting our confidence in our operational execution, expanding cash flows and our continued commitment to returning capital to our shareholders via dividends and repurchase of common shares.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Share Repurchase Plan / Normal Course Issuer Bid.

Human Capital

1 unchanged sentence

Our ability to attract, retain and engage a diverse workforce committed to innovation, operational excellence and the OpenText mission and values across our global footprint is a cornerstone to our success.

As of June 30, 2023, we employed a total of approximately 24,100 individuals, of which approximately 9,700 joined our workforce as part of the Micro Focus Acquisition.

Of the total 24,100 individuals we employed as of June 30, 2023, 9,050 or 38% are in the Americas, 5,750 or 24% are in EMEA and 9,300 or 38% are in Asia Pacific.

As of June 30, 2024, we employed a total of approximately 22,900 individuals, of which 8,300 or 36% are in the Americas, 5,000 or 22% are in EMEA and 9,600 or 42% are in Asia Pacific.

Currently, we have employees in 44 countries enabling strong access to multiple talent pools while ensuring reach and proximity to our customers.

Please see “Results of Operations” included in Item 7 of this Annual Report on Form 10-K for our definitions of geographic regions.

See “Results of Operations” included in Item 7 of this Annual Report on Form 10-K for our definitions of geographic regions.

The approximate composition of our employee base is as follows:

2 unchanged sentences

In certain jurisdictions, where it is customary to do so, a “Workers’ Council” or professional union represents our employees.

Employee Safety and Remote Work

The OpenText COVID-19 pandemic response program, Project Shield, evolved in Fiscal 2023 with the global lifting of COVID-19 safety restrictions.

While active, Project Shield kept teams informed with comprehensive resources and current COVID-19 information, including a dedicated platform with helpful health and safety protocols for our employees returning to the office.

As of January 2023, all office-based employees were granted the flexibility to work from home up to 40% of their time.

Project Shield worked alongside our internal teams to launch our flexible approach to return to the office.

We continue to invest in software and hardware along with office redesign to support a flexible workforce where teams can collaborate and be productive.

Using our offices in a purposeful way drives innovation, creativity and teamwork.

Our past experiences continue to inform our future workplace standards and practices.

See “We have a Flex-Office program, which subjects us to certain operational challenges and risks” in Part I, Item 1A “Risk Factors” included elsewhere within this Annual Report on Form 10-K.

Employee Engagement

We regularly conduct employee research to understand perceptions in the areas of engagement, company strategy, personal impact, manager effectiveness, recognition, career development and equity, diversity and inclusion.

We regularly conduct employee research to understand perceptions in the areas of engagement, company strategy, company mission and values, personal impact, manager effectiveness, recognition, career development and equity, diversity and inclusion.

Participation level and engagement have remained high.

Throughout the phases of the global health pandemic, employee communication and listening strategies increased, including supplemental surveys ranging from topics of well-being, feedback from new hires on the quality of their onboarding and office re-opening plans.

This has enabled us to listen to employees through the phases of the global health pandemic, our return to office, as well as the post-integration perspective of employees following major acquisitions, including the acquisition of Micro Focus.

Additional surveys and listening, including feedback from new hires through onboarding surveys, inform our communication and engagement plan to ensure we create meaningful experiences and support higher productivity and engagement.

Environmental, Social and Corporate Governance

8 unchanged sentences

We integrate the consideration of environmental concerns and impacts into our everyday decision making and business activities.

Externally, we promote sustainable

consumption by developing and promoting environmentally sound technologies to support our customers’ digital transformations, including transitioning to the cloud environment.

Externally, we promote sustainable consumption by developing and promoting environmentally sound technologies to support our customers’ digital transformations, including transitioning to the cloud environment.

Internally, we continue to develop, implement and manage company-wide environmental initiatives.

See “Increased attention from shareholders, customers and other key relationships regarding our CSR and ESG practices could impact our business activities, financial performance and reputation” in Part I, Item 1A “Risk Factors” included elsewhere within this Annual Report on Form 10-K.

See “Increased attention from shareholders, customers and other key relationships regarding our CSR and ESG practices and increased regulatory scrutiny of CSR and ESG practices and related disclosures could impact our business activities, financial performance and reputation” in Part I, Item 1A “Risk Factors” included elsewhere within this Annual Report on Form 10-K.

Equity, Diversity and Inclusion (ED&I)

1 unchanged sentence

We are committed to increasing equity in opportunity for all employees regardless of race, gender, sexual orientation, religion or other differences.

At OpenText, we have established a global Equity, Diversity and Inclusion steering committee to guide ED&I programs.

We bring our ambition to life through impact teams made of employees who come together to recommend policies, programs and initiatives across a range of topics.

Our impact teams are leading global initiatives with local impact which include:

• Awareness and Training:

At OpenText, we have established a global Equity, Diversity and Inclusion steering committee to guide ED&I strategy and initiatives.

We bring our ambition to life through project teams made of employees who come together to recommend policies, programs and initiatives across a range of topics.

These teams are leading global initiatives with local impact, which include:

For employees and managers on matters such as inclusive leadership practices and diversity awareness;

3 unchanged sentences

Internal career building opportunities, mentoring and networks;

Employee affinity groups, including “Black Employee Empowerment” and “Women in Technology,” fostering sponsorship, community and career conversations;

Employee networks, including “Black Empowerment & Excellence” and “Worldwide OpenText Women,” fostering sponsorship, community and career conversations;

• Civic Action:

31 unchanged sentences

Access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports filed with or furnished to the SEC may be obtained free of charge through the Investors section of our website at investors.opentext.com as soon as is reasonably practical after we electronically file or furnish these reports.

In addition, our filings with the SEC may be accessed through the SEC’s website at www.sec.gov and our filings with the Canadian Securities Administrators (CSA) may be accessed through the CSA’s System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com .

The SEC and SEDAR+ websites are included in this Annual Report on Form 10-K as inactive textual references only.

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business