OPEN TEXT CORP 10-K

Item 9A. Controls and Procedures (A) Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this Annual Report on Form 10-K, our management, with the participation of the Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) promulgated under the Exchange Act. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2024, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act were recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that information required to be disclosed by us in the reports we file under the Exchange Act (according to Rule 13(a)-15(e)) is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. 88 Table of Contents (B) Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (ICFR), as such term is defined in Exchange Act Rule 13a-15(f). ICFR is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. ICFR includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorizations of our management and our directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. Our management assessed our ICFR as of June 30, 2024, the end of our most recent fiscal year. In making our assessment, our management used the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of our evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our ICFR was effective as of June 30, 2024. The results of our management’s assessment were reviewed with our Audit Committee and the conclusion that our ICFR was effective as of June 30, 2024 has been audited by KPMG LLP, our independent registered public accounting firm, as stated in their report which is included in Part IV, Item 15 of this Annual Report. Our management, including the Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls or our ICFR will prevent or detect all error or all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any evaluation of prospective control effectiveness, with respect to future periods, is subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. (C) Attestation Report of the Independent Registered Public Accounting Firm KPMG LLP, our independent registered public accounting firm, has issued a report under Public Company Accounting Oversight Board Auditing Standards AS 2201 on the effectiveness of our ICFR. See Part IV, Item 15 of this Annual Report on Form 10-K. (D) Changes in Internal Control over Financial Reporting (ICFR) Based on the evaluation completed by our management, in which our Chief Executive Officer and Chief Financial Officer participated, our management has concluded that there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Rule 10b5-1 Trading Plans During the three months ended June 30, 2024, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K. 89 Table of Contents Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not Applicable. 90 Table of Contents Part III Item 10. Directors, Executive Officers and Corporate Governance The following table sets forth certain information as to our directors and executive officers as of August 1, 2024. Name Age Office and Position Currently Held With Company Mark J. Barrenechea 59 Vice Chair, Chief Executive Officer and Chief Technology Officer, Director Paul Duggan 49 President, Chief Customer Officer Todd Cione 54 President, OpenText Worldwide Sales Madhu Ranganathan 60 President, Chief Financial Officer & Corporate Development Michael Acedo 43 Executive Vice President, Chief Legal Officer & Corporate Secretary Cosmin Balota 50 Senior Vice President, Chief Accounting Officer Shannon Bell 49 Executive Vice President, Chief Digital Officer Muhi Majzoub 64 Executive Vice President, Chief Product Officer James McGourlay 55 Executive Vice President, International Sales Sandy Ono 42 Executive Vice President, Chief Marketing Officer Paul Rodgers 61 Executive Vice President, Sales Operations Brian Sweeney 60 Executive Vice President, Chief Human Resources Officer P. Thomas Jenkins 64 Chair of the Board Randy Fowlie (2)(3) 64 Director Major General David Fraser (1)(3) 67 Director Gail E. Hamilton (1) 74 Director Robert Hau (2) 58 Director Goldy Hyder 57 Director Ann M. Powell (1)(3) 58 Director Annette Rippert 59 Director Stephen J. Sadler 73 Director Michael Slaunwhite (1) 63 Director Katharine B. Stevenson (2) 62 Director Deborah Weinstein (2)(3) 64 Director ______________________ (1) Member of the Talent and Compensation Committee. (2) Member of the Audit Committee. (3) Member of the Corporate Governance and Nominating Committee. Mark J. Barrenechea Mr. Barrenechea joined OpenText in January 2012 as the President and Chief Executive Officer. In January 2016, Mr. Barrenechea took on the role of Chief Technology Officer, while remaining the Company’s Chief Executive Officer. In September 2017, Mr. Barrenechea was appointed Vice Chair, in addition to remaining the Chief Executive Officer and Chief Technology Officer. Before joining OpenText, Mr. Barrenechea was President and Chief Executive Officer of Silicon Graphics International Corporation (SGI), where he also served as a member of the Board. During Mr. Barrenechea’s tenure at SGI, he led strategy and execution, which included transformative acquisition of assets, as well as penetrating diverse new markets and geographic regions. Mr. Barrenechea also served as a director of SGI from 2006 to 2012. Prior to SGI, Mr. Barrenechea served as Executive Vice President and CTO for CA, Inc. (CA), (formerly Computer Associates International, Inc.) from 2003 to 2006 and was a member of the executive management team. Before going to CA, Mr. Barrenechea was the Senior Vice President of Applications Development at Oracle Corporation from 1997 to 2003, managing a multi-thousand person global team while serving as a member of the executive management team. From 1994 to 1997, Mr. Barrenechea served as Vice President of Development at Scopus, a software applications company. Prior to Scopus, Mr. Barrenechea was the Vice President of Development at Tesseract, where he was responsible for reshaping the company’s line of CRM and human capital management software. Mr. Barrenechea serves as a member of the Board and Audit Committee Chair of Dick’s Sporting Goods and is also on the Board of Directors of the Leukemia & Lymphoma Society. In the past five years, Mr. Barrenechea also served as a director of Hamilton Insurance Group and as a board member of Avery Dennison Corporation. Mr. Barrenechea holds a 91 Table of Contents Bachelor of Science degree in computer science from Saint Michael’s College. He has been the recipient of many awards, including the 2011 Best Large Company CEO from the San Francisco Business Times and 2015 Results-Oriented CEO of the year by CEO World Awards. Mr. Barrenechea has authored several books including The Intelligent and Connected Enterprise, The Golden Age of Innovation, Digital Manufacturing, Digital Financial Services, On Digital, Digital: Disrupt or Die, eGovernment or Out of Government, Enterprise Information Management: The Next Generation of Enterprise Software, Versant . He has also written a number of whitepapers, such as The Resilient Organization: COVID-19 and New Ways to Work, The Cloud: Destination for Innovation, Security: Creating Trust in a Zero Trust World and The Information Advantage . Paul Duggan Mr. Duggan has served as Executive Vice President, Chief Customer Officer since January 2023. Prior to this role, Mr. Duggan served as Executive Vice President, Worldwide Renewals from July 2021 to January 2023 and as Senior Vice President, Revenue Operations from January 2017 to July 2021. He is responsible for operations across sales, professional services, business networks and customer support. Prior to joining OpenText, Mr. Duggan held various roles at Oracle Corporation, including Group Vice President of Support Renewal Sales, North America from December 1999 to January 2017. Previously, Mr. Duggan served on the advisory board for the Technology Services Industry Association from 2016 to 2017. He has completed executive leadership programs at the University of Michigan Ross School of Business and IESE Business School in Barcelona, Spain. Todd Cione Mr. Cione joined OpenText as the President of OpenText Worldwide Sales in April 2024. Mr. Cione is responsible for global go-to-market strategy, sales, and revenue growth. This includes Enterprise Sales, International Sales, Cybersecurity Sales, and Sales Operations. Mr. Cione is a veteran business executive with more than 30 years of global experience in sales, alliance partnerships, marketing, customer success, and operations at large multi-national technology organizations. Prior to joining OpenText, Mr. Cione was Chief Revenue Officer (CRO) for Teradata Corporation. At Teradata, Mr. Cione was responsible for the company’s global go-to-market strategy and commercial execution, including worldwide sales, partner alliances, technical architecture, and revenue operations functions. Prior to Teradata, Mr. Cione served as Head of U.S. Enterprise Accounts at Apple Inc., as SVP of Oracle Digital North America Applications, and as Chief Revenue Officer of Rackspace Technology, Inc. Additionally, he spent 15 years at Microsoft Corporation, where he held roles of increasing responsibility in the U.S. and Asia, including General Manager, Asia Pacific Region Marketing & Operations and Managing Director, Asia Pacific Region Enterprise, Partner, & Services Sales. Mr. Cione holds a degree from Baylor University with continuing executive education at INSEAD, Harvard, and PIVOT Leadership Group. He serves on several boards, including Canonical Ltd. as a non-executive director, Technology & Services Industry Association’s CRO Advisory Board, and Baylor University Advisory Boards with Hankamer School of Business and ProSales. Madhu Ranganathan Ms. Ranganathan joined OpenText as Executive Vice President, Chief Financial Officer in April 2018 and became President, CFO and Corporate Development in April 2024. With more than 25 years of financial leadership experience, Ms. Ranganathan served as the Chief Financial Officer for [24]7.ai from June 2008 to March 2018. Ms. Ranganathan also held senior financial roles at Rackable Systems from December 2005 to May 2008, Redback Networks from August 2002 to November 2005, and Backweb Technologies from December 1996 to January 2000. She also has public accounting experience with PricewaterhouseCoopers LLC. Ms. Ranganathan currently serves as a Board Member for the Bank of Montreal and Akamai Technologies. In past years she served as a Board Member of ServiceSource and Watermark, a Bay Area organization focused on professional development for women. Ms. Ranganathan holds an MBA in Finance from the University of Massachusetts, is a member of the AICPA and a Chartered Accountant (India). 92 Table of Contents Michael Acedo Mr. Acedo was appointed Chief Legal Officer and Corporate Secretary in January 2022, and became Executive Vice President, Chief Legal Officer and Corporate Secretary in August 2022. Since joining OpenText in 2014, Mr. Acedo has held various increasingly senior legal roles, primarily supporting corporate governance, external reporting, investor relations, Corporate Citizenship, capital markets, corporate communications, government relations, and merger and acquisitions matters and, most recently, as the Vice President, General Counsel–Corporate & Corporate Secretary. Mr. Acedo is responsible for leading the global legal organization, including the Office of the Chief Compliance Officer and the Corporate Secretarial department. Prior to joining OpenText, Mr. Acedo practiced corporate and securities law, with a concentration on international capital markets and merger and acquisitions transactions, at the global law firm, Skadden, Arps, Slate, Meagher & Flom LLP. Mr. Acedo holds a Law Degree from The University of Western Ontario, Canada (including Law exchange at Hong Kong University) and a B.A. (Honours) from The University of Toronto, and is a member of the New York State Bar Association and a Foreign Legal Consultant with the Law Society of Ontario. Cosmin Balota Mr. Balota has served as the Company’s Senior Vice President and Chief Accounting Officer since December 2022. Prior to this, Mr. Balota served as Vice President, Accounting and Reporting from August 2020 to December 2022 and Vice President, Corporate Accounting from January 2019 to August 2020. Mr. Balota has over 25 years of experience in various U.S., Canadian and international finance and accounting roles where he has been responsible for external reporting, corporate accounting, controllership, mergers & acquisitions, and financial planning & analysis. Prior to joining OpenText, Mr. Balota served as Vice President, Corporate Finance at Enercare Inc. from January 2017 to December 2018, along with other finance leadership positions from April 2012 to January 2017. He also held various increasingly senior finance, accounting, and audit positions from October 1998 to April 2012 at Expedia Group, The Globe and Mail, and Deloitte. Mr. Balota is a Chartered Professional Accountant (CPA, CA) in Canada and holds a Bachelor of Arts (Honours) degree in Chartered Accountancy Studies and a Master of Accounting degree from The University of Waterloo. Shannon Bell Ms. Bell joined OpenText as the Executive Vice President and Chief Digital Officer in September 2023. Ms. Bell is responsible for all our IT and digital systems, data platforms, networks and communications, commercial and corporate cloud operations, as well as our security and compliance. Ms. Bell has over 25 years of experience driving technology transformations and delivering innovative solutions to the market. Prior to joining OpenText, Ms. Bell spent four years at Rogers Communications Inc. where she led all aspects of IT, digital, cloud and data. Prior to Rogers, Ms. Bell spent eight years at Amdocs Limited where she led product and strategy for Digital, Intelligence and BSS. Ms. Bell has also encompassed roles in Canada, the U.S., and Europe with companies including NewStep Networks, MetaSolv Software, Axiom Systems, and Newbridge Networks. Ms. Bell graduated with an MBA from University of Surrey in England. Muhi Majzoub Mr. Majzoub has served as Executive Vice President, Chief Product Officer since September 2019. Prior to this role, Mr. Majzoub served as Executive Vice President, Engineering from January 2016 to September 2019 and as Senior Vice President, Engineering from June 2012 to January 2016. Mr. Majzoub is responsible for managing product development cycles, global development organization and driving internal operations and development processes. Mr. Majzoub is a seasoned enterprise software technology executive having recently served as Head of Products for NorthgateArinso, Inc., a private company that provides global Human Resources software and services. Prior to this, Mr. Majzoub was Senior Vice President of Product Development for CA, Technologies Inc. from June 2004 to July 2010. Mr. Majzoub also worked for several years as Vice President for Product Development at Oracle Corporation from January 1989 to June 2004. Mr. Majzoub attended San Francisco State University. James McGourlay Mr. McGourlay has served as Executive Vice President, International Sales since July 2021. Prior to this, Mr. McGourlay was the Company’s Executive Vice President, Customer Operations from October 2017 to July 2021, Senior Vice President of Global Technical Services from May 2015 to October 2017 and Senior Vice President of Worldwide Customer Service from February 2012 to May 2015. Mr. McGourlay joined OpenText in 1997 and held progressive positions in information technology, technical support, product support and special projects, including, Director, Customer Service and Vice President, Customer Service. 93 Table of Contents Sandy Ono Ms. Ono joined OpenText as Executive Vice President and Chief Marketing Officer in January 2022. Ms. Ono is responsible for driving marketing and communications worldwide, from brand to demand, to deliver growth for the Company. Prior to joining OpenText, Ms. Ono was Vice President, Growth Marketing at the Hewlett Packard Enterprise Company from 2015 to 2022 and in the Strategy & Operations practice at Deloitte Consulting LLP from 2003 to 2015. Ms. Ono has a Bachelor’s degree in business administration and rhetoric from UC Berkeley, and her MBA from the Wharton School of Business. Paul Rodgers Mr. Rodgers joined OpenText as Executive Vice President, Sales Operations in January 2023. Prior to joining the Company, Mr. Rodgers served as the Business Operations and Integration lead for Micro Focus from April 2018 to January 2023, where he was responsible for overseeing the successful integrations resulting from Micro Focus’ merger and acquisition activity. Mr. Rodgers joined Micro Focus in April 2008 as the Group Human Resources Director, and prior to joining Micro Focus, Mr. Rodgers spent 17 years with International Business Machines Corporation and four years as Managing Director of a successful Executive Human Resources consultancy business. Brian Sweeney Mr. Sweeney joined OpenText as Chief Human Resources Officer in October 2018. He has over 25 years of experience as a Human Resource (HR) leader in high growth, global technology businesses, and professional services consulting. He has led organizational growth and transformation initiatives, including international expansion, M&A, global talent management, compensation and benefits, employee engagement, communication and cultural transformation. Prior to joining OpenText, Mr. Sweeney worked at Amgen Inc. from 2003 to 2018, where he served in various HR leadership roles, including Global VP of HR, Head of HR for Global R&D and VP of International Human Resources. Prior to this, Mr. Sweeney worked at Dell Technologies Inc., where he served as Director of Worldwide Compensation and Benefits from 1993 to 1997 and HR Director from 1997 to 2001. From 1989 to 1992, Mr. Sweeney was a Human Resource consultant at AON Hewitt Associates, working across multiple client industry sectors in the practice areas of employee benefits and executive compensation. Earlier in his professional career, Mr. Sweeney worked in corporate sales and sales management for Steelcase, Inc. Mr. Sweeney holds an MBA from the University of Michigan and a Bachelor’s degree in Sociology from Vanderbilt University. P. Thomas Jenkins Mr. Jenkins is Chair of the Board of OpenText. From 1994 to 2005, Mr. Jenkins was President, then Chief Executive Officer and then from 2005 to 2013, Chief Strategy Officer of OpenText. Mr. Jenkins has served as a Director of OpenText since 1994 and as its Chairman since 1998. Mr. Jenkins has also served as a board member of Manulife Financial Corporation, Thomson Reuters Inc. and TransAlta Corporation. He was also past Chair of the Ontario Global 100 (OG100), past Canadian Co-Chair of the Atlantik Bruecke and past Chair of the World Wide Web Foundation, a Commissioner of the Tri-Lateral Commission. He was the tenth Chancellor of the University of Waterloo and was the Chair of the National Research Council of Canada (NRC). Mr. Jenkins received an M.B.A. from Schulich School of Business at York University, an M.A.Sc. from the University of Toronto and a B.Eng. & Mgt. from McMaster University. Mr. Jenkins has received honorary doctorates from six universities. He is a member of the Waterloo Region Entrepreneur Hall of Fame, a Companion of the Canadian Business Hall of Fame and recipient of the Ontario Entrepreneur of the Year award, the McMaster Engineering L.W. Shemilt Distinguished Alumni Award and the Schulich School of Business Outstanding Executive Leadership award. He is a Fellow of the Canadian Academy of Engineering (FCAE). Mr. Jenkins was awarded the Canadian Forces Decoration (CD), the Queen’s Diamond Jubilee Medal (QJDM) and the Cross of the Order of Merit of the Federal Republic of Germany. Mr. Jenkins is an Officer of the Order of Canada (OC). Randy Fowlie Mr. Fowlie has served as a director of OpenText since March 1998. From December 2010 to April 2017, Mr. Fowlie was the President and CEO of RDM Corporation, a leading provider of specialized hardware and software solutions in the electronic payment industry. Mr. Fowlie operated a consulting practice from July 2006 to December 2010. From January 2005 until July 2006, Mr. Fowlie held the position of Vice President and General Manager, Digital Media, of Harris Corporation, formerly Leitch Technology Corporation (Leitch), a company that was engaged in the manufacturing of audio and video infrastructure products for the professional broadcast and video industry. From June 1999 to January 2005, Mr. Fowlie held the position of Chief Operating Officer and Chief Financial Officer of Inscriber Technology Corporation (Inscriber), a software company providing products to the broadcast and video industry. From February 1998 to June 1999, Mr. Fowlie was the Chief Financial Officer of Inscriber. Inscriber was acquired by Leitch in January 2005. Prior to working at Inscriber Mr. Fowlie was a partner with KPMG LLP, Chartered Accountants, where he worked from 1984 to February 1998. Mr. Fowlie received a B.B.A. 94 Table of Contents (Honours) from Wilfrid Laurier University and is a Chartered Professional Accountant. Mr. Fowlie is also a director of InvestorCom Inc. and Sapphire Digital Health Solutions Inc., both privately held companies. In the last five years, Mr. Fowlie also served as a director of Dye & Durham Limited (TSX: DND) a leading provider of cloud-based software and technology solutions for legal and business professionals. Major General David Fraser Major-General (Ret.) David Fraser has served as a director of OpenText since September 2018. Mr. Fraser is the President of Aegis Six Corporation of Toronto. Mr. Fraser was commissioned as an Infantry Officer following graduation from Carleton University with a Bachelor of Arts in 1980. He served in various command and staff positions in the Princess Patricia’s Canadian Light Infantry from platoon to Division throughout his 30 year career. Most notable, he commanded the NATO coalition in southern Afghanistan in 2006. He is a graduate of the Canadian Forces Command and Staff College in Toronto, holds a Master’s of Management and Policy and is a graduate of the United States Capstone Program (Executive School for generals). His honors and awards including the Commander of Military Merit, the Canadian Meritorious Service Cross, the Meritorious Service Medal, the United States Legion of Honor and Bronze Star (for service in Afghanistan), and leadership recognition awards from the Netherlands, Poland, and NATO. He is the recipient of the Vimy award for contributions to leadership and international affairs and the Atlantic Council Award for international leadership. Upon his departure from the military, Mr. Fraser joined the private sector and, along with his partners, created Blue Goose Pure Foods Ltd. Mr. Fraser joined INKAS® Armored Vehicle Manufacturing as their Chief Operating Officer in 2015 until 2017. In 2016, he founded Aegis Six Corporation, which aims at addressing the needs of capacity building abroad and for the private sector within Canada. Mr. Fraser currently works with the Bank of Montreal on their Canadian Defence Community Banking Program and serves as a director of Antoxa Corp. and the Canadian Forces College Foundation. In the last five years, Mr. Fraser was also a member of the Conference of Defence Association board and was a director of Route1 Inc.. Mr. Fraser is also a mentor at the Ivey Business School and is the co-author of Operation Medusa, The Furious Battle that Saved Afghanistan from the Taliban . Gail E. Hamilton Ms. Hamilton has served as a director of OpenText since December 2006. Ms. Hamilton previously led a team of over 2,000 employees worldwide as Executive Vice President at Symantec Corp (Symantec), an infrastructure software company, and had “P&L” responsibility for their global services and support business. While leading Symantec’s $2 billion enterprise and consumer business, Ms. Hamilton helped steer the company through an aggressive acquisition strategy. In 2003, Information Security magazine recognized Ms. Hamilton as one of the “20 Women Luminaries” shaping the security industry. Ms. Hamilton has over 20 years of experience growing leading technology and services businesses in the enterprise market. She has extensive management experience at Compaq Computer Corporation and Hewlett-Packard Company, as well as Microtec Research, Inc. Ms. Hamilton received both a BSEE from the University of Colorado and an MSEE from Stanford University. Currently, Ms. Hamilton is also a director of Arrow Electronics, Inc. Ms. Hamilton also served as a director of Ixia and Westmoreland Coal Company. She was named as one of WomenInc.’s 2018 Most Influential Corporate Board Directors. 95 Table of Contents Robert Hau Mr. Hau has served as a director of OpenText since September 2020. He is the Chief Financial Officer and Treasurer at Fiserv, Inc., and provides oversight for all financial functions of the company. Mr. Hau has nearly 30 years of experience in business and financial leadership roles. Prior to joining Fiserv, he was Executive Vice President and Chief Financial Officer of TE Connectivity Ltd. from 2012 to 2016, where he was responsible for developing and implementing financial strategy, as well as creating the financial infrastructure necessary to drive the company’s financial direction, vision and compliance initiatives. Previously, Mr. Hau served as Chief Financial Officer for Lennox International Inc. Mr. Hau also spent 22 years at Honeywell International Inc. in a variety of progressive financial and operations leadership roles, including serving as Chief Financial Officer of its Aerospace Business Group, Specialty Materials Business Group and Aerospace Electronic Systems Unit. Mr. Hau holds a Master’s degree in business administration from the USC Marshall School of Business and a Bachelor’s degree in business administration from Marquette University. Goldy Hyder Mr. Hyder has served as a director of OpenText since December 2023. From October 2018 to present, Mr. Hyder has served as President and Chief Executive Officer of the Business Council of Canada, a non-profit, non-partisan organization composed of the chief executives and entrepreneurs of Canada’s leading companies, whose members collectively employ approximately two million Canadians in every major industry. Mr. Hyder was previously President and Chief Executive Officer of Hill+Knowlton Strategies (Canada), providing strategic communications counsel to the firm’s extensive and diverse client base. Prior to joining Hill+Knowlton, he served as Director of Policy and Chief of Staff to The Right Honourable Joe Clark, former Prime Minister of Canada. Mr. Hyder holds a B.A. and Master’s degree in Public Policy from the University of Calgary. Ann M. Powell Ms. Powell has served as a director of OpenText since June 2021. She is currently a Corporate Director. Ms. Powell is the former EVP, Global Chief Human Resource Officer for Bristol Myers Squibb (BMS) whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. With a focus on business performance, Ms. Powell led efforts to drive the corporation’s global people strategy, empowering the company’s current and future workforce and building a healthy culture focused on serving patients and communities. Ms. Powell worked across the enterprise to support BMS’s commitment to creating an energizing work experience and a diverse and globally inclusive culture. Ms. Powell’s industry experience and expertise lie in executive compensation, global leadership development, change management, global diversity and inclusion, training design and delivery, recruitment and placement, labour relations, mergers and acquisitions, divestitures and green field start-ups. With a career spanning both international and domestic assignments, Ms. Powell has held leadership roles of increasing responsibility within the gas, chemical and pharmaceutical industries, including Dow Chemical and Wyeth Pharmaceuticals. Prior to joining BMS in 2013, Ms. Powell was the Chief Human Resources Officer for Shire Pharmaceuticals. Ms. Powell holds a B.S. degree from Iowa State University, a Master’s degree in Industrial Relations, University of Minnesota, and is certified as a Senior Professional in Human Resources (SPHR®). Annette Rippert Ms. Rippert was appointed as a director of OpenText in July 2024. She is the former Group Chief Executive – Strategy & Consulting at Accenture, having retired after 28 years of service in 2022. In that role, Ms. Rippert led Accenture's global Strategy & Consulting business, transforming the advisory services portfolio by accelerating the use of technology, data, and AI to drive new, differentiated growth. She spearheaded the acquisition of more than 20 companies and introduced Accenture's “Business Futures” thought leadership, creating a strong foundation for the future. Ms. Rippert also led Accenture's Technology business in North America, pivoting the business to new areas including data, cloud, platform services, and software engineering. Throughout her distinguished career, she has helped clients digitally transform in key industries such as communications, media, technology, health, and public service. Ms. Rippert serves as a member of the Board of Trustees for Northwestern University. Ms. Rippert holds a Bachelor of Science degree in Computer Science and a Master of Management degree, both from Northwestern University. 96 Table of Contents Stephen J. Sadler Mr. Sadler has served as a director of OpenText since September 1997. From April 2000 to present, Mr. Sadler has served as the Chairman and CEO of Enghouse Systems Limited, a publicly traded software company that provides enterprise software solutions focusing on remote work, contact centers, visual computing and communications for next generation software defined networks. Mr. Sadler was previously Chief Financial Officer, President and Chief Executive Officer of GEAC Computer Corporation Ltd. (GEAC). Prior to Mr. Sadler’s involvement with GEAC, he held executive positions with Phillips Electronics Limited and Loblaws Companies Limited, and was Chairman of Helix Investments (Canada) Inc. Currently, Mr. Sadler is a director of Enghouse Systems Limited. Mr. Sadler has a Business and Security Valuation certificate from Canadian Association of Business Valuators, holds a B.A. Sc. (Honours) in Industrial Engineering and an M.B.A. (Dean’s List) from York University. He is also a Chartered Professional Accountant. Michael Slaunwhite Mr. Slaunwhite has served as a director of OpenText since March 1998. Mr. Slaunwhite also previously served on the board of Vector Talent Holdings, L.P., the parent holding company of Saba Software from 2017 to December 2020. Previously, Mr. Slaunwhite also served as Chairman of the Board of Saba Software. Prior to his appointment at Vector Talent Holdings, Mr. Slaunwhite served as CEO and Chairman of Halogen Software Inc. from 2000 to August 2006, as President and Chairman from 1995 to 2000, and as a Director and Chairman from 1995 up to its acquisition by Vector Talent Holdings in 2017. From 1994 to 1995, Mr. Slaunwhite was an independent consultant to a number of companies, assisting them with strategic and financing plans. Mr. Slaunwhite was the Chief Financial Officer of Corel Corporation from 1988 to 1993. Mr. Slaunwhite holds a B.A. Commerce (Honours) from Carleton University . Katharine B. Stevenson Ms. Stevenson has served as a director of OpenText since December 2008. She has extensive corporate governance experience, having served on numerous public company and not-for-profit boards in Canada and the U.S. over the past two decades, where she has consistently assumed leadership roles. Ms. Stevenson is the Chair of the Board of the Canadian Imperial Bank of Commerce (CIBC). Ms. Stevenson also serves on the board of Unity Health Toronto. Ms. Stevenson has previously served as a director of Capital Power Corporation and CAE Inc. She was previously a financial executive in the telecommunications and banking sectors. Ms. Stevenson holds a B.A. ( Magna Cum Laude ) from Harvard University. She is certified with the professional designation ICD.D. granted by the Institute of Corporate Directors (ICD). Ms. Stevenson received an honorary doctorate from Carleton University and has been named one of the Top 100 Most Powerful Women in Canada. Deborah Weinstein Ms. Weinstein has served as a director of OpenText since December 2009. Ms. Weinstein is a co-founder and partner of LaBarge Weinstein LLP, a business law firm based in Ottawa, Ontario, since 1997. Ms. Weinstein’s legal practice specializes in corporate finance, securities law, mergers and acquisitions and business law representation of public and private companies, primarily in knowledge-based growth industries. Prior to founding LaBarge Weinstein LLP, Ms. Weinstein was a partner of the law firm Blake, Cassels & Graydon LLP, where she practiced from 1990 to 1997 in Ottawa, and in Toronto from 1985 to 1987. Ms. Weinstein also serves on a number of not-for-profit boards. Ms. Weinstein has been recognized by Martindale-Hubbell (U.S.) with the highest possible rating in both Legal Ability and Ethical Standards. As well LaBarge Weinstein has been recognized by Canadian Lawyer as one of the Top 10 Corporate Boutiques. Ms. Weinstein holds an LL.B. from Osgoode Hall Law School of York University. Involvement in Certain Legal Proceedings None of our directors or executive officers have been involved in any events during the past ten years that would require disclosure under Item 401(f) of Regulation S-K. 97 Table of Contents Audit Committee The Audit Committee currently consists of four directors, Mr. Fowlie (Chair), Mr. Hau, Ms. Stevenson and Ms. Weinstein, all of whom have been determined by the Board of Directors to be independent as that term is defined in NASDAQ Rule 5605(a)(2) and in Rule 10A-3 promulgated by the SEC under the Exchange Act, and within the meaning of our director independence standards and those of any exchange, quotation system or market upon which our securities are traded. The responsibilities, mandate and operation of the Audit Committee are set out in the Audit Committee Charter, a copy of which is available on the Company’s website, investors.opentext.com under the Corporate Governance section. The Board of Directors has determined that Mr. Fowlie qualifies as an “audit committee financial expert” as such term is defined in SEC Regulation S-K, Item 407(d)(5)(ii). Code of Business Conduct and Ethics We have a Code of Business Conduct and Ethics (the Ethics Code) that applies to all of our directors, officers and employees. The Ethics Code incorporates our guidelines designed to deter wrongdoing and to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and compliance with all applicable laws and regulations. The Ethics Code also incorporates our expectations of our employees that enable us to provide full, fair, accurate, timely and understandable disclosure in our filings with the SEC and other public communications. The full text of the Ethics Code is published on our web site at investors.opentext.com under the Corporate Governance section. If we make any substantive amendments to the Ethics Code or grant any waiver, including any implicit waiver, from a provision of the Ethics Code to our Chief Executive Officer, Chief Financial Officer or Chief Accounting Officer, we will disclose the nature of the amendment or waiver on our website at investors.opentext.com or on a Current Report on Form 8-K. Board Diversity and Term Limits The Company, including the Corporate Governance and Nominating Committee, views diversity in a broad context and considers a variety of factors when assessing nominees for the Board. The Company has established a Board Diversity Policy recognizing that a Board made up of highly qualified directors from diverse backgrounds, including diversity of gender, age, race, sexual orientation, religion, ethnicity and geographic representation, is important. In reference to the disclosure requirements under the CBCA, the Company has not adopted a written policy that specifically relates to the identification and nomination of women, aboriginal peoples in Canada, persons with disabilities and members of visible minorities (collectively, the Designated Groups) for election as directors. As discussed above, the Board Diversity Policy of the Company includes consideration of broader categories of diversity beyond those of the Designated Groups but which encompass the Designated Groups and which the Board of Directors considers to be better aligned to achieve the range of perspectives, experience and expertise required by the Company. For each of the four Designated Groups, the Company has not established a specific target number or percentage, nor a specific target date by which to achieve a specific target number or percentage of members of each Designated Groups on the Board, as we consider a multitude of factors, including skills, experience, expertise, character and the Company’s objective and challenges at the time in determining the best nominee at such time. As of the date of filing of this Annual Report on Form 10-K, there are five women on the Board which represents approximately 38% of the Board, and 45% of the independent Board members. One director self-identified to the Company as a person with disabilities. One director has self-identified as a visible minority. No director has identified as a member of aboriginal peoples in Canada. The Company has not set term limits for independent directors because it values the cumulative experience and comprehensive knowledge of the Company that long serving directors possess. The Company does not have a director retirement policy, however, the Corporate Governance and Nominating Committee considers the results of its director assessment process in determining the nominees to be put forward. In conducting director evaluations and nominations, the Corporate Governance and Nominating Committee considers the composition of the Board and whether there is a need to include nominees with different skills, experiences and perspectives on the Board. This flexible approach allows the Company to consider each director individually as well as the Board composition generally to determine if the appropriate balance is being achieved. The onboarding of five new directors over the past six years demonstrates the Company’s focus on this approach. 98 Table of Contents The table below reports self-identified diversity statistics for the Board as required by NASDAQ Rule 5606. Board Diversity Matrix Country of Principal Executive Offices Canada Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No As of June 30, 2024 As of June 30, 2023 Total Number of Directors 12 (1) 11 Gender Identity Female Male Non-Binary Did Not Disclose Gender Female Male Non-Binary Did Not Disclose Gender Directors 4 6 0 2 4 5 0 2 Demographic Background Underrepresented Individual in Home Country Jurisdiction 1 0 LGBTQ+ 0 0 Did Not Disclose Demographic Background 2 2 ______________________ (1) Does not include Annette Rippert, who joined the Board in July 2024. Diversity in Executive Officer Positions The Company is committed to a diverse and inclusive workplace, including advancing women to executive officer positions. The Company has adopted a formal written Global Employment Equity and Diversity Policy which expresses its commitment to fostering a diverse and inclusive workplace for all employees, regardless of culture, national origin, race, color, gender, gender identification, sexual orientation, family status, age, veteran status, disability, or religion, or other basis. A principal objective of our Global Employment Equity and Diversity Policy is to support and monitor the identification, development and retention of diverse employees, including gender diversity at executive and leadership positions. We will continue to develop a sustainable culture of equity, diversity and inclusion that provides all employees an opportunity to excel, and strive to present diverse slates of candidates for all our roles and mandate it for our senior leader positions. At the executive officer level, we consider a multitude of factors, including skills, experience, expertise, character and the Company’s objectives and challenges at the time in determining the best appointment at such time. To advance equity, diversity and inclusion, we have committed to have, by 2030, a majority of ethnically diverse staff, with a 50/50 gender representation in key roles and 40% women in leadership positions at all management levels. The Company currently has one woman as a Named Executive Officer (17%) and three women as executive officers part of the executive leadership team (ELT) (27%), while approximately 21% of existing positions on the senior leadership team (SLT), exclusive of our ELT, are held by women. 16% of ELT and SLT members are based outside of North America. Within North America, 28% of the ELT and SLT members are visible minorities. Insider Trading Policies and Procedures We have adopted an Insider Trading Policy governing the purchase, sale, and/or other dispositions of the Company's securities by directors, officers and employees that are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to the Company. A copy of our policies and procedures is filed as Exhibit 19.1 to this report. 99 Table of Contents Item 11. Executive Compensation TALENT AND COMPENSATION COMMITTEE REPORT Our Talent and Compensation Committee of Open Text’s board of directors (the Talent and Compensation Committee, the Compensation Committee or the Committee) has reviewed and discussed with our management the following Compensation Discussion and Analysis (CD&A). Based on this review and discussion, our Talent and Compensation Committee has recommended to the Board that the following CD&A be included in our Annual Report on Form 10-K for Fiscal 2024. This report is provided by the following independent directors, who comprise our Compensation Committee: Ann Powell (Chair), David Fraser, Gail Hamilton and Michael Slaunwhite. To the extent that this Annual Report on Form 10-K has been or will be specifically incorporated by reference into any filing by us under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (Exchange Act), this “Compensation Committee Report” shall not be deemed “soliciting materials”, unless specifically otherwise provided in any such filing. LETTER FROM OUR TALENT AND COMPENSATION COMMITTEE Dear Fellow Shareholders, We are Engaged, Listening, and Responding to Shareholder Feedback The Talent and Compensation Committee seeks to ensure that our executive compensation and talent programs closely align the interests of our executives with those of our shareholders. We conduct extensive engagement with our shareholders to obtain feedback on topics including our executive compensation program. During the past fiscal year, we have reached out to shareholders representing approximately 56% of our outstanding shares, and held meetings with 9 of our 15 largest shareholders, with our Board Chair and the Chair of our Talent and Compensation Committee leading all of these meetings. We listened to the feedback, discussed and analyzed it, and then evaluated every aspect of the design of our executive compensation program with shareholder feedback in mind. The design changes that we have made to our executive compensation program further our objectives to attract and retain critical leaders, incentivize leaders to deliver on our strategy, and create long-term value for shareholders. We believe these changes are welcomed by our shareholders based on our engagement meetings. In Fiscal 2024, we also refreshed our Board committees to benefit from new perspectives and enhance its effectiveness through, among other things, the appointment of a new Talent and Compensation Committee Chair. Annual Shareholder Meeting Feedback Following our Fiscal 2023 annual meeting of shareholders, we immediately re-engaged with our shareholders to obtain feedback and understand their concerns regarding our executive compensation program. Shareholders expressed appreciation for the continued engagement on our executive compensation program, our continued desire to evaluate and evolve our compensation practices, and our commitment to be responsive to their concerns, but were critical of certain of our prior compensation practices. We learned that many investors did not support our Fiscal 2023 say-on-pay vote primarily because of the quantum and timing of the one-time performance-based stock options grant to our CEO in Fiscal 2022 following the announcement of the Micro Focus acquisition. How we are Responding to Shareholder Feedback We responded to those concerns by upholding our commitment to only deliver Fiscal 2024 long-term incentive awards through our annual long-term incentive plans (LTIP) without any special one-time awards. Further, for Fiscal 2024, we made no adjustments to our CEO’s base salary, ensured stretch goals in our approach to setting targets for our annual short-term incentive (STI) plan, and made sure that our Named Executive Officers’ compensation remains competitive to attract and retain talent while ensuring our LTIP parameters remain highly correlated to shareholder returns. The CEO’s Fiscal 2024 total direct compensation, which is the sum of his salary, target STI opportunity and the fair value of his LTIP award, was 15% below the median compensation of our benchmarked peer group. We have also committed that we will only deliver Fiscal 2025 long-term incentive awards through the annual LTIP without any special one-time awards. It is our intention to ensure that the competitive pay levels needed to attract and retain both our CEO and our Named Executive Officers are delivered through annual programs aligned with shareholder interests. In 100 Table of Contents direct response to shareholder feedback and in consideration of the lack of majority support for our advisory say-on-pay proposal last year, we have made substantial changes to our executive compensation program for the current Fiscal 2025: • We adjusted our long-term incentive Performance Share Unit (PSU) plan such that target awards will only be earned for achieving relative Total Shareholder Return (rTSR) that is above the median, with target earned if performance is at the 55th percentile against the rTSR of the constituents of the NASDAQ Composite Index. • We modified the payout curve of our annual STI plan for Named Executive Officers to deleverage it such that higher above target Revenue and above target Adjusted Operating Income (AOI) results must be achieved to be eligible for a maximum payout under the plan. • We evaluated and confirmed the measures of Revenue and AOI, each weighted 50%, reflect our overarching strategy focused on profitable growth as we continue to gain efficiencies through management of the acquired Micro Focus business while taking a relentless focus on organic growth, leveraging AI and accelerating to the Cloud. • We modified our change in control provisions such that in the event of a change in control event, payments for PSUs granted beginning Fiscal 2025 will be paid based on actual rTSR results rather than at-target, on a pro-rata basis. We had extensive discussions with our shareholders regarding the criteria and the composition of our compensation peer group. Consistent with overwhelming shareholder feedback, we decided to leave our peer group unchanged for Fiscal 2025, as we deemed that a primarily U.S. peer group remains relevant considering factors such as the highly competitive executive talent market, the U.S.-based location of most of our executive team (including the CEO), our industry’s complexity, our global reach as well as the choices that investors make in allocating their capital. We believe these changes enhance our pay-for-performance philosophy, further align the interests of our executives with shareholders and advance our objectives to attract, develop and retain critical leaders given the exceptionally competitive landscape for executive talent. In addition, we are committed to providing clearer, more transparent disclosure regarding our redesigned program so that our shareholders can better understand our decision-making on executive compensation topics. We continuously review ways to evolve our executive compensation program to attract, motivate and retain our executives because they are critical to our ongoing success and long-term shareholder value creation. We greatly benefit from and appreciate dialogue with our shareholders and look forward to continuing discussions. Thank you for your support and investment in OpenText. Sincerely, The Talent and Compensation Committee Ann Powell (Chair), David Fraser, Gail Hamilton and Michael Slaunwhite 101 Table of Contents COMPENSATION DISCUSSION AND ANALYSIS The following discussion and analysis of compensation arrangements for the fiscal year ended June 30, 2024 (Fiscal 2024) should be read together with the compensation tables and related disclosures set forth below. This discussion and analysis is focused on the persons who served as our named executive officers for Fiscal 2024 (collectively, the Named Executive Officers or NEOs). The NEOs who are the subject of this compensation discussion and analysis are: • Mark J. Barrenechea — Vice Chair, Chief Executive Officer (CEO) and Chief Technology Officer (CTO) • Madhu Ranganathan — President, Chief Financial Officer (CFO) and Corporate Development • Todd Cione — President, Worldwide Sales • Paul Duggan — President, Chief Customer Officer • Muhi Majzoub — Executive Vice President, Chief Product Officer • Simon Harrison — Strategic Advisor to the President, Worldwide Sales On April 8, 2024, the Company announced that Mr. Harrison had decided to retire from the Company effective September 15, 2024 and, until such time, will be acting as a Strategic Advisor to our recently hired President, Worldwide Sales. In accordance with Item 402(a)(3)(iv) of Regulation S-K, Mr. Harrison has been included as an NEO for Fiscal 2024 as he would have been included pursuant to Item 402(a)(3)(iii) of Regulation S-K but for the fact that he was not serving as an executive officer as of June 30, 2024. Quick Compensation Discussion and Analysis Reference Guide Page Number Section I - Business and Compensation Highlights 103 Section II - Our Shareholder Engagement Process and Response to Say-on-Pay Vote 105 Section III - Compensation Philosophy and Objectives 107 Section IV - Talent and Compensation Governance 108 Section V - Aligning Pay with Performance 111 Section VI - Elements of our Compensation Program 113 Section VII - Other Elements of our Compensation Program 120 102 Table of Contents Section I - Business and Compensation Highlights Key Business Highlights for Fiscal 2024 Fiscal 2024 was a successful year for our business. In Fiscal 2024, we successfully integrated Micro Focus’ acquired technology with our enterprise software, providing expanded offerings to support our customers’ growing needs to digitize. We also completed the divestiture of our AMC business for $2.275 billion in cash before taxes, fees and other adjustments, whereby we used the net proceeds to complete a $2 billion debt reduction. The divestiture of our AMC business reinforces our focus on Cloud and AI and accelerated our deleveraging plans. Compensation Highlights for Fiscal 2024 Highlights and outcomes related to specific components of CEO and NEO pay are as follows: • The target value of our CEO’s annual compensation package, comprised of base salary, STI plan and long-term equity awards, decreased relative to the Fiscal 2023 package by 38%. ◦ In Fiscal 2024, for the sixth consecutive year, our CEO was provided no increase to his base salary. ◦ In Fiscal 2024, there was no increase to the STI targets for our CEO. ◦ In Fiscal 2024, our CEO’s annual LTIP target grant value remained flat year-over-year and the mix of LTIP grants remained the same. There was a decrease of 45% in the target amount of equity granted to the CEO in Fiscal 2024 compared to Fiscal 2023 given the absence of one-time awards. There will be no increase in Fiscal 2025 in the target amount of equity granted to our CEO. ◦ We increased the overall target grant value of annual NEO LTIP awards (excluding the CEO) so that the overall LTIP value was at least at or above the 25th percentile of our peers. In so doing, we added a long-term PSU component tied to a two-year organic growth metric to link our stock-based compensation to strategic growth. The mix of stock options, PSUs and RSUs, tied to one-, two-, three- and four-year vesting time horizons, has been used to solidify our retention objectives for an executive team that is critical to our business growth, scale and transformation. ◦ We chose not to modify our CEO’s pay for performance measures. We also recognize that our CEO has other outstanding performance-based equity awards from previous years. We acknowledge the importance of both internal equity and alignment of performance measures between the CEO and the other NEOs, which is reflected in our CEO to NEO target ratio having decreased by 39% from Fiscal 2023 to Fiscal 2024 from 4.4x to 2.7x, respectively. • We maintained our rTSR PSUs to reward performance compared to other similar investments. ◦ The performance period for the PSUs granted in Fiscal 2021 concluded in Fiscal 2024. Absolute TSR for such measurement period was (2)%, which was the 17th percentile relative to the S&P Midcap 400 Software & Services Peer Group used for the Fiscal 2021 PSU award. This was below the earnout threshold and the Talent and Compensation Committee did not approve any payout under the plan. As a result, no PSUs vested from the Fiscal 2021 grant. ◦ As previously disclosed, starting with the Fiscal 2024 grant, rTSR PSUs will be measured against the three-year TSR of the constituents of the NASDAQ Composite Index, with target awards earned for performance at the 55th percentile to recognize that the goal is to provide enhanced value for shareholders. We chose to start measuring against NASDAQ Composite Index constituents in order to reflect our new size and scope of 103 Table of Contents operations as a result of the Micro Focus acquisition and to provide for a larger peer group reflecting a wide range of shareholder alternatives for investment choices. • We reviewed the peer group established in Fiscal 2023 following the Micro Focus acquisition and determined that no changes were necessary in Fiscal 2024 because the peer group reflected the market for executive talent and outside shareholder investment while also maintaining a relevant revenue and market cap size. • Fiscal 2024 STI plan measures focused on profitable growth including our objective to increase revenues across our portfolio by, among other things, reversing the historical decline of Micro Focus revenues that was occurring prior to our acquisition of the Micro Focus business. For most executives, including the CEO, STI plan measures were Worldwide Revenue, Adjusted Operating Income (AOI), and Micro Focus Revenues. • The table below outlines Fiscal 2024 performance and the impact of assuming the budgeted performance of the AMC business for the fourth quarter of the fiscal year. AMC business performance for the fourth quarter was assumed at the level budgeted at the start of the year because the AMC business was divested in May 2024. This divestiture was not expected at the start of the year when Fiscal 2024 short-term incentive plan goals were being set. The use of budgeted performance as a placeholder for the final quarter of the year to replace the divested unit’s performance was viewed as fair and neutral for the overall STI plan funding outcome. The AMC business’s Revenue performance through the first three quarters of the fiscal year was exceeding the Company’s plan at 109% achievement through March 2024, while the AMC business’s AOI performance through three fiscal quarters was 96% achievement through March 2024. • Based on the achievement of key results, STI plan results are shown in the following table: STI Plan Metric Fiscal 2023 Actual Results Fiscal 2024 Target before AMC Divestiture Fiscal 2024 Actual Results Q1- Q3 Fiscal 2024 Q4 Results (assumes AMC at target for fourth quarter) Fiscal 2024 Total (1) Fiscal 2024 Metrics Achievement % Metric Payout % Worldwide Revenue $ 3,532 $ 5,978 $ 4,416 $ 1,460 $ 5,876 98 % 85 % Adjusted Operating Income (AOI) $ 1,128 $ 1,971 $ 1,426 $ 488 $ 1,914 97 % 70 % Micro Focus Revenue $ 978 $ 2,300 $ 1,732 $ 565 $ 2,297 100 % 100 % ______________________ (1) Reflects the total of columns “Fiscal 2024 Actual Results Q1 - Q3” and Fiscal 2024 Q4 Results (assumes AMC at target for fourth quarter). See “Short-Term Incentives” below for additional details. ◦ Worldwide revenues are derived from the “Total Revenues” line of our audited income statement with certain adjustments relating to the aging of accounts receivable. Worldwide revenues are an important metric for measuring our growth and the scope of the business enterprise. ◦ AOI is a non-GAAP measure intended to reflect the operational effectiveness of our leadership by showing our ability to generate profits from our operational activities, and to manage the costs associated with our worldwide revenues. AOI is calculated as total revenues less the total cost of revenues and operating expenses excluding amortization of intangible assets, special charges and stock-based compensation expense. AOI is also adjusted to remove the impact of foreign exchange. ◦ Micro Focus revenues are included within the “Total Revenues” line of our audited income statement with certain adjustments relating to the aging of accounts receivable. This is an important metric for measuring the stabilization of the Micro Focus business. 104 Table of Contents Section II - Our Shareholder Engagement Process and Response to Say-on-Pay Vote The Board, as well as management, are involved in shareholder engagement activities throughout the fiscal year. As a lead-up to our 2024 annual meeting of shareholders, we specifically requested feedback from shareholders on our executive compensation program to consider ways to further evolve the design of our program. We held meetings with 9 of our 15 largest shareholders relating to executive compensation, which were led by our Chair of the Board and Chair of the Talent and Compensation Committee. No NEOs were present at these meetings. Offered Meetings Engaged in Discussions Relating to Executive Compensation 56% of our outstanding shares reached throughout the year as part of our Investor Relations team’s numerous touchpoints. 31% of our outstanding shares, including director-led discussions with 9 of our 15 largest shareholders. Shareholders expressed appreciation for the continued engagement on our executive compensation program, our continued desire to evaluate and evolve our compensation practices, and our commitment to be responsive to their concerns. While the shareholder feedback is generally supportive, the table below outlines the areas of specific feedback and topics discussed during our shareholder engagement efforts and how we responded, informed by such feedback. What We Heard From Shareholders How We Responded Concerns with one-time CEO stock options granted in August 2022 following the announcement of the Micro Focus acquisition. We adhered to our commitment in Fiscal 2024, and re-committed for Fiscal 2025, that there would not be any one-time long-term incentive awards. Consider the composition of our peer group to ensure that it is appropriate and scaled for our size. We reviewed our compensation peer group and deemed it to be a good fit based on the quantitative and qualitative factors we consider when selecting our peer group. Our peer group is aligned with U.S. software and technology companies with a global presence and is not aspirational. It reflects our market for executive talent, which is in the U.S. where 100% of the NEOs reside. OpenText revenues are above the median of our Fiscal 2024 peer group. 105 Table of Contents What We Heard From Shareholders How We Responded Concerns about CEO to NEO pay ratio. We reviewed and made adjustments to non-CEO pay that resulted in a reduction in our CEO to average NEO ratio. The Fiscal 2024 ratio at target was 3.1x, compared to 5.3x in Fiscal 2023, representing a 41% decrease. Short-term incentive performance goals should be set higher than the previous year’s performance (notwithstanding amounts reinvested into the business) and maximum payouts under the STI plan should reflect significant performance over-achievement. For Fiscal 2025, we revised our STI plan design after considering shareholder feedback and the practices of our peer group. Revisions include the adjustment of the payout curves under the STI plan to increase the performance required to earn the maximum 200% payout under the plan: • Maximum revenue performance required for maximum payout has increased from 102% to 103% of target. • Maximum AOI performance required for maximum payout has increased from 102% to 104%. We recognize the importance of and engage in rigorous performance goal-setting to ensure that growth and profitability are aligned with our business objectives and shareholder expectations. After factoring in the complexities of our business, on a like-for-like basis, Fiscal 2025 variable compensation performance targets will be set higher than Fiscal 2024 actual outcomes. Consider reviewing and adjusting the relationship between LTIP performance metrics and shareholder return. For Fiscal 2025, we will adjust the rTSR measure within the PSU plan so that earning a target award requires exceeding the median and achieving at least 55th percentile rTSR performance compared to the NASDAQ Composite Index. Change of control provisions for PSUs should be based on actual rTSR performance rather than target. For Fiscal 2025, PSU vesting acceleration provisions within 12 months of a change in control will be aligned with peer group practices to provide for that the number of PSUs earned is based on actual rTSR performance through the change in control date on a pro-rata basis, as opposed to a pay out at target. Request for more disclosure about succession planning. Each year, the Talent and Compensation Committee reviews the detailed succession plans for our CEO, NEOs and the Top 50 management positions across our organization, determining for each role whether there are individuals that are “ready now” or “ready in 1 – 3 years.” This allows for development and hiring opportunities and aligns with our desire to have a strong leadership bench. The Talent and Compensation Committee also reviews the evolution of the leadership structure to ensure it is scaled to OpenText’s strategy, growth and complexity. See “Statement of Corporate Governance Practices – Succession Planning” in Schedule “A” for more information. We reviewed with shareholders their perspectives on feedback from proxy advisors, including the use of a Canadian-only peer group. Reinforced by their feedback, we continue to believe that certain proxy advisors’ peer group methodology, based on Canadian companies in the telecommunications and other unrelated industries, results in a skewed analysis of our executive compensation program, does not reflect the fact that 100% of our NEOs are located in the highly competitive U.S. technology industry, and thus using Canadian-only peers is not a relevant comparison methodology for measuring compensation at companies with which we compete for talent. 106 Table of Contents Section III - Compensation Philosophy and Objectives We believe that compensation plays an important role in achieving short and long-term business objectives that ultimately drive business success in alignment with long-term shareholder value creation. The Talent and Compensation Committee ensures compensation decisions are in line with our compensation philosophy to be talent competitive. Our compensation program objectives include: • Attracting, motivating and retaining highly qualified executive officers who have a history of proven success through compensation programs that reflect the market. Our compensation program reflects the market in terms of compensation value and structural design. We use market data from similarly sized U.S. software and technology companies with a global presence for a variety of reasons including that greater than 95% of our revenues are outside of Canada, 100% of our NEOs and 67% of the executive leadership team are based in the U.S., and we generally recruit from U.S.-based competitors for executive leadership talent. • Aligning the interests of executive officers with our shareholders' interests and with the execution of our business strategy, with the majority of the total compensation package tied to performance-based variable rewards. Evaluation of executive performance is based on achievement of key financial metrics that we believe closely correlate to long-term shareholder value. Our short and long-term goals are reflected in our overall compensation program with evaluations based on achieving and overachieving predetermined objectives. Our CEO has only 7% of his total compensation provided in the form of base salary and has 93% tied to performance-based variable rewards, including 77% in the form of annual equity grants. Other NEOs average only 17% of their total compensation in the form of base salary with 83% tied to performance-based variable rewards. Our reward package is based primarily on results achieved by the Company as a whole. Our approach to executive pay is guided by the following best practices: What We Do What We Don’t Do P Balance short- and long-term incentives, cash and equity, and fixed and variable pay. O Overemphasize any single performance metric. P Link a significant amount of target NEO pay to company performance (at least 80%). O Use an aspirational peer group of significantly larger companies. P Cap short-term incentive plans at 200% of target. O Replace underwater options. P Use multiple types of equity awards to balance risk and reward. O Grant in-the-money stock options with an exercise price below the fair market value on the grant date. P Use distinct performance metrics in our short-term and long-term incentives. O Guarantee a minimum level of vesting for long-term incentives. P Compare executive compensation and company performance to relevant peer group companies considering our industry scope, market for executive talent and geographic footprint. O Guarantee annual base salary increases. O Provide discretionary bonuses. P Maintain executive stock ownership guidelines. O Provide supplemental executive retirement plans. P Allow unearned incentive pay to be recaptured under compensation clawback policy. O Provide single-trigger change in control benefits to our NEOs. P Provide only limited perquisites. O Apply pay policies or practices that pose a material adverse risk to the Company. P Retain an independent compensation consultant. P Conduct an annual shareholder say-on-pay advisory vote. P Conduct regular engagement with our shareholders. 107 Table of Contents Section IV - Talent and Compensation Governance Role of the Talent and Compensation Committee The Talent and Compensation Committee has responsibility for the oversight of executive compensation within the terms and conditions of our various compensation plans. The Talent and Compensation Committee approves the compensation of our executive officers, except for our CEO, where decisions are approved by the Board without the CEO present. Compensation decisions for our executive officers consider, among other things, performance goals, base salary, bonuses, executive benefits, short-term incentives, and long-term incentives. The Talent and Compensation Committee also reviews and recommends for approval all equity awards related to executive compensation prior to final approval by the Board and supports the Board with respect to talent and culture matters, including: succession and development of our executive officers; reviewing and discussing the progress of our equity, diversity and inclusion efforts across our global talent; providing input on human capital disclosures; and reviewing our approach to retirement programs. The Talent and Compensation Committee coordinates with the CEO and the Chief Human Resources Officer (CHRO), in collaboration with management and the finance and legal groups, as appropriate, to design and develop the compensation program. This group supports the preparation and analysis of financial data, peer group comparisons, and other materials to assist the Talent and Compensation Committee in making and implementing its decisions. The Board, the Talent and Compensation Committee, and our management employ a set of policies and processes to evaluate the performance of each of our NEOs, which help determine the amount of long-term incentives to award to each NEO. The performance of each of our NEOs, other than our CEO, is assessed by our CEO in his capacity as the direct supervisor of the other NEOs. The performance of our CEO is assessed by the Board (excluding the CEO). The Board conducts discussions and makes decisions with respect to the performance of our CEO in special sessions from which management and the CEO is absent. The CEO, with the assistance of the CHRO, also conducts an annual review of the total compensation of each executive officer, including the NEOs. The review includes an assessment of each executive officer’s experience, performance, the performance of the executive officer’s respective business or function, and market pay levels within our peer group. After this review, the CEO recommends base salaries, target annual cash and long-term incentive opportunities, any payouts related to the annual cash incentive plan, and annual equity grants for the executive officers to the Talent and Compensation Committee for approval. The Talent and Compensation Committee considers previous compensation awards, competitive market practice, the impact of tax and accounting treatments, applicable regulatory requirements, any material acquisitions or divestitures closed during the year and the results of the most recent shareholder advisory vote on executive compensation when approving compensation programs. The Talent and Compensation Committee met five times during Fiscal 2024. Management assisted in the coordination and preparation of the meeting agenda and materials for each meeting. The agenda is reviewed and approved by the Chair of the Talent and Compensation Committee. The meeting materials are generally posted and made available to the other Talent and Compensation Committee members and invitees, if any, for review approximately one week in advance of each meeting. Following each meeting, the Talent and Compensation Committee reported items that it, in its determination, considered noteworthy to the Board. Further, prior to setting executive compensation, the Talent and Compensation Committee considered internal pay equity to ensure that the pay of our executives (including the CEO’s pay relative to that of our other NEOs) is appropriate. Compensation Consultant NASDAQ standards require compensation committees to have certain responsibilities and authority regarding the retention, oversight and funding of committees’ advisors and perform an evaluation of each advisor’s independence, taking into consideration all factors relevant to that person’s independence from management. Such standards also require that such rights and responsibilities be enumerated in the compensation committee’s charter. While, as a foreign private issuer under the U.S. federal securities laws, we are exempt from these rules, nonetheless, our Talent and Compensation Committee has the sole authority to retain and terminate outside consultants. From time to time, the Talent and Compensation Committee seeks the advice of an outside compensation consultant to provide assistance and guidance on compensation issues. The compensation consultant may provide the Talent and Compensation Committee with relevant information pertaining to market compensation levels, alternative compensation plan designs, market trends and best practices and may assist the Talent and Compensation Committee with respect to determining the appropriate benchmarks for each NEO’s compensation. In Fiscal 2024, the Talent and Compensation Committee retained Frederic W. Cook & Co., Inc. (FW Cook), an independent consulting firm specializing in executive compensation consulting. During Fiscal 2024, the Chair and members of the Talent and Compensation Committee held discussions from time to time with representatives of FW Cook in connection 108 Table of Contents with compensation market practices, and potential impacts on Company’s financial performance. FW Cook reviewed relevant information and industry benchmarks on matters relating to CEO and executive officer compensation. In Fiscal 2024, FW Cook received $61,500 in respect of such consulting services. In addition, in Fiscal 2024, management engaged Aon's Human Capital Solutions’ practice, a division of Aon plc, a third-party consulting firm, to review our peer group and supply market data to assist in the evaluation of our approach to executive and director compensation. Management also engaged Mercer Canada Limited, a management advising firm, to provide certain analysis related to TSR and performance under our PSU programs. Peer Group Benchmarking Aggregate compensation for each NEO is designed to be market competitive. The Talent and Compensation Committee refers to the compensation practices of similarly situated companies in determining our compensation policy. Although the Talent and Compensation Committee reviews each element of compensation for market competitiveness and may weigh a particular element more heavily than another based on an NEO’s role within the Company, the focus remains on being competitive in the market with respect to total compensation. We use the framework below to identify companies that are comparable in size, have similar business strategies and financial models, recognizing that there are very few, if any direct peers that are based in Canada with named executive officers residing in the U.S. The following attributes were reviewed and considered, in order of importance: Screening Process Quantitative Screen • Revenues (generally between 0.3x and 3x our revenue) • Market capitalization (generally between 0.3x and 3x our market cap); • Number of Employees; and • Net income. Qualitative Screen • Focus on global companies operating in the technology industry; • Disclosed as a peer of one of our previous year’s peers; • Companies that use OpenText as a peer; and • Peer groups disclosed by proxy advisors. The Talent and Compensation Committee generally benchmarks against U.S. software and technology companies with a global presence, rather than Canadian companies because: • We are a global software company with greater than 95% of our revenues outside of Canada, including 53% of our revenues in the U.S.; • 100% of our NEOs, including our CEO, are located in the highly competitive U.S. technology industry, which is a key market for multi-national executive talent in the software and technology industry; and • We generally recruit from U.S. based software companies for executive leadership talent. For the full range of Executive Leadership roles at the Company, it is not feasible to solely source talent from Canada and from adjacent sectors, when new or replacement officers are needed. The Talent and Compensation Committee recognizes that recruiting talent from the U.S. is critical for our success, even though executive compensation levels in the U.S. are higher than in Canada. Attracting and retaining talent with the highest level of industry expertise is a key part of the Company’s business and strategy, and our compensation practices must align with market expectations where the industry skills reside. Further, the Talent and Compensation Committee also acknowledges that paying U.S. market compensation to U.S. executives in U.S. dollars may result in higher relative compensation compared to other Canadian companies that provide Canadian residents with Canadian dollars. Converting amounts paid to U.S.-based executives into U.S. dollars to Canadian currency inflates the appearance of the compensation if compared to Canadian companies that pay Canadian residents in local currency. 2024 Peer Group For Fiscal 2024, we reviewed our compensation peer group and determined that no peer group changes were necessary. In April 2023, we had updated our peer group to reflect our new size and scope of our operations following the acquisition of Micro Focus. Our peer group is shown in the table below. The Talent and Compensation Committee determined that revenue is a relevant metric for the scope of the enterprise. All our peers are within the targeted 0.3x to 3x OpenText revenue range, and our 109 Table of Contents trailing 12-month revenue is positioned at the 55 th percentile compared to our peer group’s. Additionally, OpenText is at the 81 st percentile in headcount relative to our peer group. Akamai Technologies Euronet Worldwide Palo Alto Networks Amdocs Fortinet Paychex Autodesk Gartner Roper Technologies Broadridge Financial Solutions GoDaddy Splunk (1) Cadence Design Systems NCR Voyix SS&C Technologies CGI NetApp Synopsys DXC Technology Company Gen Digital Workday _______________ (1) Splunk has been excluded from the table below as the company was acquired during the fiscal year. As part of our peer group benchmarking, we note that our CEO’s target pay is near the median for target total cash compensation and was slightly below the median on a total target direct compensation basis. 110 Table of Contents Section V - Aligning Pay with Performance Our CEO’s realizable pay aligns with the experience of shareholders of the Company and is directly correlated to TSR performance. The grant date value in the Summary Compensation Table significantly overstates the CEO’s actual realized and realizable compensation after our actual performance is measured because the program aligns the final reward with actual performance. The table below also shows that the actual value (realizable) is considerably lower than the grant date fair value of stock and option awards as reported in the Summary Compensation Table. The actual value realizable by our CEO was 72% lower than the grant date fair value of stock and option awards reported in the Summary Compensation Table over the last three fiscal years. Fiscal Year PSUs and RSUs (#) (1) Stock Options (#) (1) Performance Stock Options (#) (1)(4) Grant Date Fair Value (Reported $) (2) Actual Value Realizable as of June 30, 2024 ($) (3) 2022 144,160 256,410 — $ 12,120,496 $ 1,443,422 2023 184,770 306,370 1,000,000 $ 19,779,107 $ 5,550,491 2024 184,260 272,930 — $ 12,066,580 $ 5,535,170 Total (Reported vs. Realizable Value) $ 43,966,183 $ 12,529,083 ______________________ (1) Number of stock and option awards reported in the Grants of Plan-Based Awards table relating to Fiscal 2022 to Fiscal 2024. PSUs awards are reported at target. All option awards granted remain outstanding and have not been exercised for value. (2) The amount recognized as the aggregate grant date fair value of equity-based compensation awards, as calculated in accordance with ASC Topic 718 for the fiscal year in which the awards were granted, as reported in the summary compensation table for the applicable year. (3) Based upon the closing price for the Company’s Common Shares as traded on the NASDAQ on June 30, 2024 of $30.04. (4) In Fiscal 2023, Mr. Barrenechea was granted performance stock options with vesting subject to certain performance conditions. The amount in the table represents the grant date fair value as calculated in accordance with ASC Topic 718 for the fiscal year in which the awards were granted, as reported in the summary compensation table for the applicable year. The actual value realizable of the performance stock options represents the number of performance stock options that have vested as of June 30, 2024, and that have achieved certain performance criteria as discussed in “Long-Term Equity Grants to CEO” in Item 11 of our Annual Report on Form 10-K for Fiscal 2023. 111 Table of Contents Alignment of Realizable Pay and TSR Performance The following graph demonstrates the degree of alignment between our CEO’s realizable pay and our TSR over the last three years relative to our Fiscal 2024 peer group. The higher each company is shown on the chart below demonstrates the higher degree of alignment between 3-year TSR and Realizable Pay versus our peers. Alignment was calculated based on the variance between the percentile ranking of 3-year TSR and Realizable Pay as compared to our peers, with the smallest variance being positioned highest on the graph. As shown below, OpenText’s alignment is positioned in the top quartile, which demonstrates the effectiveness of the pay for performance design of our executive compensation program, as the pay our CEO may realize is strongly aligned to our TSR performance. 112 Table of Contents Section VI - Elements of Our Compensation Program We use a combination of fixed and variable compensation to motivate our executive officers to achieve our corporate goals. The basic components of our executive officer compensation program are: • Base salary (fixed); • Short-term incentives (variable); and • Long-term incentives (variable). To ensure alignment of the interests of our executive officers with the interests of our shareholders, our executive officers have a significant proportion of compensation that is variable or “at risk.” Compensation that is “at risk” means compensation that may or may not be paid to an executive officer depending on whether the Company and such executive officer is able to meet or exceed applicable performance targets. The Talent and Compensation Committee annually considers the percentage of each NEO’s total compensation that is “at risk” depending on the NEO’s responsibilities and objectives. Named Executive Officer Fixed Pay Percentage (“Not At Risk”) Short-Term Incentive Percentage (at 100% target) (“At Risk”) Long-Term Incentive Percentage (at 100% target) (“At Risk”) Mark J. Barrenechea 7% 16% 77% Madhu Ranganathan 16% 21% 63% Todd Cione (1) 14% 14% 72% Paul Duggan 17% 24% 59% Muhi Majzoub 17% 23% 60% Simon Harrison 17% 24% 59% ______________________ (1) Mr. Cione’s values are based on annual target compensation as Mr. Cione joined the Company in April 2024. Mr. Cione’s targets are excluded from the graph above 113 Table of Contents Base Salary The base salary review for each NEO considers factors such as current competitive market conditions and the individual’s particular skills (such as leadership ability and management effectiveness, experience, responsibility and proven or expected performance). Named Executive Officer Fiscal 2023 Base Salary Fiscal 2024 Base Salary Base Salary Change from Fiscal 2023 to Fiscal 2024 (in %) Mark J. Barrenechea $950,000 $950,000 —% Madhu Ranganathan $688,750 $775,000 13% Todd Cione N/A $155,966 N/A Paul Duggan $575,000 $650,000 13% Muhi Majzoub $562,500 $600,000 7% Simon Harrison $575,000 $650,000 13% Short-Term Incentives In Fiscal 2024, all of our NEOs, with the exception of Mr. Cione, participated in our STI plan, which is designed to motivate achievement of our short-term corporate goals. Mr. Cione joined the Company in April 2024. See below for the treatment of Mr. Cione’s STI award for Fiscal 2024. These short-term corporate goals are typically derived from our annual business plan which is prepared by management and approved by the Board at the start of the fiscal year. Awards made under the STI plan are made using cash only. The executive STI plan for Fiscal 2024 was based on the following metrics: Worldwide Revenues, Annual Operating Income (AOI) as well as Micro Focus Revenues. Micro Focus Revenue was an additional metric introduced in Fiscal 2023 and continues into Fiscal 2024. The strong revenue orientation of the metrics was directly aligned to our business strategy reflecting our focus, following the Micro Focus acquisition, on organic growth, in addition to the key objective of quickly changing the trajectory of revenues from Micro Focus products. The budget and STI goals for Fiscal 2024 included the assumption that the AMC business would be contributing to performance for the entire year because there was no prior expectation that the business would be divested during Fiscal 2024. The divestiture of the AMC business occurred in the fourth quarter of the fiscal year, after it had contributed to the STI performance for three quarters. The Talent and Compensation Committee decided to assume that the AMC business’s revenue and AOI contributed to the fourth quarter STI performance “at budget” rather than reset the goals to account for the divestiture of the AMC business. The assumption that the AMC business performed at the original budgeted level during the April, May and June STI period was generally consistent with its results during the first three fiscal quarters, and the AMC business’s revenue performance was tracking above target in advance of the divestiture. For Fiscal 2024, the following table shows the target short-term award for each NEO, along with the associated weighting of the related performance measures for each (weightings are slightly different to reflect individual differences in accountability). Named Executive Officer (1) Total Target Award Worldwide Revenues (2) Worldwide Adjusted Operating Income (3) Enterprise License Revenue, FYM, Cloud Bookings and PS Bookings (4) Team Cloud, Customer Support Revenue and Enterprise PS Bookings (5) Micro Focus Revenue (6) Mark J. Barrenechea $ 2,015,000 35% 35% N/A N/A 30 % Madhu Ranganathan $ 1,025,000 38% 38% N/A N/A 24 % Paul Duggan $ 900,000 N/A 22% N/A 50% 28 % Muhi Majzoub $ 850,000 35% 35% N/A N/A 30 % Simon Harrison $ 900,000 N/A 22% 50% N/A 28 % ______________________ (1) This table includes all NEOs other than Mr. Cione, as Mr. Cione joined the Company in April 2024. See below for treatment of Mr. Cione’s STI award for Fiscal 2024. (2) Worldwide revenues are derived from the “Total Revenues” line of our audited income statement with certain adjustments relating to the aging of accounts receivable. Worldwide revenues are an important metric for measuring our growth and the scope of the business enterprise. 114 Table of Contents (3) AOI is a non-GAAP measure intended to reflect the operational effectiveness of our leadership by showing our ability to generate profits from our operational activities, and to manage the costs associated with our worldwide revenues. AOI is calculated as total revenues less the total cost of revenues and operating expenses excluding amortization of intangible assets, special charges and stock-based compensation expense. AOI is also adjusted to remove the impact of foreign exchange. (4) Enterprise license revenues are a component of “License” revenue line of our audited income statement. First year maintenance (FYM) is allocated for the first annual term of maintenance as invoiced for new license deals, which is a component of our “Customer support” revenue line of our audited income statement. Enterprise cloud bookings is the total value from cloud services and subscription contracts entered into in the period that is new, committed and incremental to our existing contracts, entered into with our enterprise-based customers. Enterprise professional services (PS) bookings are the total value from Enterprise PS contracts entered into the period that is new, committed and incremental to our existing contracts. (5) Team cloud revenues are a component of “Cloud services and subscriptions” revenue line of our audited income statement and customer support revenues are a component of our “Customer support” revenue line of our audited income statement, and Enterprise PS Bookings are the total value from Enterprise PS contracts entered into the period that is new, committed and incremental to our existing contracts. (6) Micro Focus revenues are included within the “Total Revenues” line of our audited income statement with certain adjustments relating to the aging of accounts receivable. This is an important metric for measuring the stabilization of the Micro Focus business. For the STI award amounts that would be earned at each of threshold, target and maximum levels of performance, see “Grants of Plan-Based Awards for Fiscal 2024” below. For each performance measure noted above, the Talent and Compensation Committee approves the target award eligible to be earned by an NEO. The Board also sets a minimum performance threshold (most worldwide performance measures require attainment of at least 90% of the goal), a target performance level and a maximum performance level. Where applicable, the Board also creates an objective formula for determining the percentage STI payout for performance above and below the performance target (with performance below threshold funding no STI award). To the extent the performance goal is exceeded, the award will be proportionately greater, up to the maximum performance level. The threshold, target and maximum levels and payout formula are set forth below, as well as actual performance and payouts as a percentage of targets achieved in Fiscal 2024. The Fiscal 2024 performance goals for all measures were set above Fiscal 2023 performance goals because our strategic mandate is to grow the business. The STI performance goals and measurement of the final levels include pre-established plan adjustments that remove the impact of foreign exchange as compared to the original budget because performance due to rising or falling foreign currency exchange rates is viewed as outside of the control of the executives. Objectives (in millions) Fiscal 2023 Target Fiscal 2024 Threshold Fiscal 2024 Target Fiscal 2024 Maximum Fiscal 2024 Actual Fiscal 2024 % Target Actually Achieved % of Payment per Fiscal 2024 Payout Table Worldwide Revenues $ 3,558 $ 5,380 $ 5,978 $ 6,098 $ 5,876 98 % 85 % Worldwide Adjusted Operating Income $ 1,076 $ 1,774 $ 1,971 $ 2,010 $ 1,914 97 % 70 % Enterprise License Revenue, FYM, Cloud Bookings and PS Bookings $ 2,772 $ 1,368 $ 1,520 $ 1,550 $ 1,434 94 % 55 % Team Cloud, Customer Support Revenue and Enterprise PS Bookings $ 1,130 $ 4,000 $ 4,444 $ 4,533 $ 4,511 102 % 176 % Micro Focus Revenues $ 900 $ 2,162 $ 2,300 $ 2,346 $ 2,297 100 % 100 % Payment Scale for 2024 Worldwide Revenues, Enterprise License Revenue, FYM, Cloud Bookings and PS Bookings, Team Cloud and Customer Support Revenue, and PS Enterprise Bookings, and Worldwide Adjusted Operating Income % Attainment % Payment % Attainment % Payment 0 - 89% —% 100.0% 100% 90 - 91% 15% 100.5% 125% 92 - 93% 40% 101.0% 150% 94 - 95% 55% 101.5% 175% 96 - 97% 70% 102% and above 200% cap 98 - 99% 85% Formula when performance is above-target: Actual / Target = % of Attainment (Linear x25% earnout for every 0.5% by which performance attainment is over 100% of goal) 115 Table of Contents Micro Focus Revenue % Attainment % Payment 0 - 93.9% —% 94.0 - 95.9% 50% 96.0 - 104.9% 100% 105.0 - 106.9% 150% 107% and above 200% cap Formula: Actual / Target = % of Attainment The actual STI award earned by each NEO for Fiscal 2024 was determined in accordance with the formulas described above, without any discretionary adjustment. We have set forth below for each NEO the award amount actually paid for Fiscal 2024, and the percentage of target award amount reflected by the actual award paid, broken out by performance measure as follows: Mark J. Barrenechea Performance Measure: Payable at Target Payable at Threshold Actual Payable ($) Actual Payable (% of Target) Worldwide Revenues $ 712,500 $ 106,875 $ 605,625 85 % Worldwide Adjusted Operating Income $ 712,500 $ 106,875 $ 498,750 70 % Micro Focus Revenues $ 590,000 $ 295,000 $ 590,000 100 % Total $ 2,015,000 $ 508,750 $ 1,694,375 84 % Madhu Ranganathan Performance Measure: Payable at Target Payable at Threshold Actual Payable ($) Actual Payable (% of Target) Worldwide Revenues $ 387,500 $ 58,125 $ 329,375 85 % Worldwide Adjusted Operating Income $ 387,500 $ 58,125 $ 271,250 70 % Micro Focus Revenues $ 250,000 $ 125,000 $ 250,000 100 % Total $ 1,025,000 $ 241,250 $ 850,625 83 % Paul Duggan Performance Measure: Payable at Target Payable at Threshold Actual Payable ($) Actual Payable (% of Target) Team Cloud, Customer Support Revenue and Enterprise PS Bookings $ 455,000 $ 68,250 $ 846,300 186 % Worldwide Adjusted Operating Income $ 195,000 $ 29,250 $ 136,500 70 % Micro Focus Revenues $ 250,000 $ 125,000 $ 250,000 100 % Total $ 900,000 $ 222,500 $ 1,232,800 137 % Muhi Majzoub Performance Measure: Payable at Target Payable at Threshold Actual Payable ($) Actual Payable (% of Target) Worldwide Revenues $ 300,000 $ 45,000 $ 255,000 85 % Worldwide Adjusted Operating Income $ 300,000 $ 45,000 $ 210,000 70 % Micro Focus Revenues $ 250,000 $ 125,000 $ 250,000 100 % Total $ 850,000 $ 215,000 $ 715,000 84 % 116 Table of Contents Simon Harrison Performance Measure: Payable at Target Payable at Threshold Actual Payable ($) Actual Payable (% of Target) Enterprise License Revenue, FYM, Cloud Bookings and PS Bookings $ 455,000 $ 68,250 $ 250,250 55 % Worldwide Adjusted Operating Income $ 195,000 $ 29,250 $ 136,500 70 % Micro Focus Revenues $ 250,000 $ 125,000 $ 250,000 100 % Total $ 900,000 $ 222,500 $ 636,750 71 % Todd Cione Mr. Cione joined the Company at the start of the fourth quarter of the fiscal year. As part of Mr. Cione’s sign-on compensation arrangement, he was provided with an “at target” STI payment prorated for the last quarter of 2024 to ensure Mr. Cione does not benefit from or is penalized for performance metrics that would not have reflected Mr. Cione’s contribution to the Company during the remainder of the fiscal year. As a result, Mr. Cione’s at target payout in Fiscal 2024 was $167,828, based on his annual STI target of $675,000. Any STI payouts in future years would be based on performance measures derived from our annual business plan. New for Fiscal 2025 We recognize the importance of and engage in rigorous performance goal setting to ensure growth and profitability are aligned with our business objectives and shareholder expectations. Factoring in the complexities of our business, on a like-for-like basis, Fiscal 2025 variable compensation performance targets will be set higher than Fiscal 2024 actual outcomes. For Fiscal 2025, our short-term incentive payout structure was deleveraged in response to shareholder feedback. The Fiscal 2025 STI program requires attainment of 103% and 104% for Worldwide Revenue and AOI goals, respectively, before the maximum 200% payout is earned. The higher level of required performance is to increase the incentive to achieve significant revenue and AOI growth for the Company. We will no longer have a separate Micro Focus Revenue measure as part of the plan now that the business is integrated. Ambitious performance targets, combined with the deleveraged payout curve for exceeding performance targets, work together to provide significant financial results to our shareholders in return for earning the maximum 200% payout under the STI plan. Long-Term Incentives We incentivize our executive officers, including our NEOs, in part, with long-term compensation pursuant to our LTIP. Our LTIP grants represent a significant proportion of our NEOs’ total compensation, and their purpose is two-fold: (i) as a component of a competitive compensation package; and (ii) to align the interests of our NEOs with the interests of our shareholders. For each LTIP grant, a target value is established by the Talent and Compensation Committee for each NEO, except for the CEO, whose target value is established by the Board, based on competitive market practice and by the respective NEO’s ability to influence financial or operational performance. The target values of the annual grants are consistent with competitive market practice, set to ensure that the annual total direct target compensation packages are appropriately positioned relative to our industry peer group for each of our NEOs. Grant amounts consider the desired pay mix, competitive position and internal equity across our NEOs. The program is designed to ensure alignment with our performance over the longer term, with a very high percentage of the long-term incentive being “at risk”. The performance goals and the weightings of performance goals under the LTIP are first recommended by the Talent and Compensation Committee and then approved by the Board. Grants are generally made annually and are comprised of the components outlined in the table below. 117 Table of Contents Vehicle Vesting Performance Share Units (PSUs) All NEOs: Cliff vesting in the third year following the determination by the Board that the performance criteria have been met for the rTSR metric. (1) NEOs excluding CEO Organic Growth Metric: Cliff vesting in the second year following the determination by the Board that the performance criteria have been met for the organic growth operating financial performance metric. Restricted Share Units (RSUs) Vesting is annually in equal amounts on each of the first three anniversaries of grant date. Stock Options Vesting is 25% on each of the first four anniversaries of grant date. Options expire seven years after the grant date. ______________________ (1) The number of PSUs to vest will be based on the Company’s rTSR at the end of a three-year period as compared to the TSR of the constituents of the NASDAQ Composite Index. Once vested, PSUs and RSUs will be settled in either Common Shares or cash, at the discretion of the Board. Once vested, stock options may be exercised for Common Shares. Payouts under LTIP grants: • May be subject to certain limitations in the event of early termination of employment or change in control of the Company; • Are subject to the clawback policy (the “Clawback Policy”) we adopted in 2023 in accordance with SEC rules and NASDAQ listing standards and in line with market practice. The Clawback Policy mandates the recovery of certain erroneously paid incentive-based compensation that may be received by our executive officers on or after October 2, 2023, if we have a qualifying financial restatement during the three completed fiscal years immediately preceding the fiscal year in which a financial restatement determination is made, subject to limited exceptions. Recovery is required regardless of whether the executive officer was involved in the preparation of the relevant financial statements; and • For grants made on or after Fiscal 2023, when cash dividends are paid by the Company on outstanding Common Shares, the Company will credit additional dividend equivalent PSUs and RSUs to the participant’s account. Dividend equivalent PSUs and RSUs will be subject to the same terms and conditions as the granted PSUs or RSUs, as applicable, and vest and are settled at the same time and in the same form as the PSUs or RSUs to which such dividend equivalent PSUs or RSUs relate. The dividend equivalents for PSUs are only credited for shares earned under the PSU program. LTIP - PSU Grants in 2024 In Fiscal 2024, we maintained our practice of providing PSUs aligned with a rTSR metric for all NEOs. Starting with the Fiscal 2024 grants, we will use rTSR to benchmark our performance against the three-year TSR of the constituents of the NASDAQ Composite Index. The composition of the NASDAQ Composite Index is heavily weighted towards companies in the information technology sector, which reflects similar alternate investments for our shareholders. Relative TSR Compared to NASDAQ Composite Index Constituents: PSUs Earned: Below 25 th percentile 0% 25 th percentile 50% 50 th percentile 100% 80 th percentile 200% We closely reviewed the LTIP award levels of our NEOs. Recognizing that the LTIP grant values for NEOs other than our CEO were below market peer companies, we increased their LTIP grant values to raise their target compensation to a level closer to the median. This increase in grant value was achieved by adding a PSU component tied to an organic growth two-year operating metric, strengthening the link between compensation and our multi-year internal financial goals. This addition balanced clear line of sight to performance results with our objective to retain key executives through a competitive pay package. The mix of stock options, PSUs and RSUs tied to one-, two-, three- and four-year vesting time horizons, has been used to solidify our retention objectives for an executive team that is critical to our business growth, scale and transformation. Our CEO’s annual LTIP grant is positioned 15% below the median of our selected peer group and deemed an appropriate level. As such, we did not modify our CEO’s pay for performance or grant levels. We also recognize that our CEO has other 118 Table of Contents outstanding performance-based equity from previous years. As such, our CEO’s awards are appropriately aligned with the rest of our NEOs, resulting in greater internal compensation equity. Our CEO’s target long-term incentive compensation decreased by 45%, due to the fact that he was not provided with a one-time LTIP grant and his regular annual Fiscal 2024 LTIP award value was kept flat to Fiscal 2023. As noted above, Todd Cione joined the Company at the start of the fourth quarter of Fiscal 2024. Mr. Cione was provided with grants for two of the in-progress LTIPs on a pro-rata basis. These grants were provided to incent Mr. Cione to join the organization and are a component of his compensation package that will immediately align his interests with the interests of our shareholders. The LTIP grant that vests in Fiscal 2025 was prorated 47% of target ($1.6 million) and the LTIP grant that vests in Fiscal 2026 at 79% of target ($2.8 million). The fair value of PSUs was at least 50% of the equity value for NEOs. Named Executive Officer Performance Share Units Value Restricted Share Units Value Stock Options Value Total rTSR PSU Organic Growth Acceleration Program PSU Mark J. Barrenechea $ 5,000,000 $ — $ 2,500,000 $ 2,500,000 $ 10,000,000 Madhu Ranganathan $ 1,235,000 $ 600,000 $ 617,500 $ 617,500 $ 3,070,000 Todd Cione $ 1,382,500 $ — $ 691,250 $ 691,250 $ 2,765,000 Paul Duggan $ 792,500 $ 600,000 $ 396,250 $ 396,250 $ 2,185,000 Muhi Majzoub $ 792,500 $ 600,000 $ 396,250 $ 396,250 $ 2,185,000 Simon Harrison $ 792,500 $ 600,000 $ 396,250 $ 396,250 $ 2,185,000 For details of our previous LTIPs, see Item 11 of our Annual Report on Form 10-K for the relevant year. LTIP - PSU Vesting in 2024 Relative TSR PSUs granted in Fiscal 2022 were eligible to vest during Fiscal 2024 based on rTSR versus the relevant index over their three-year performance period. The threshold rTSR of 25th percentile was not achieved and no PSUs were earned under this grant. LTIP - RSUs The RSUs do not have any specific performance-based vesting criteria and are to reward employment retention during the three-year vesting period and value through share price appreciations over time. LTIP - Stock Options The stock options granted in connection with the annual LTIP vest over four years and are only valuable if the stock price increases during their seven-year life. For a discussion of the assumptions used in the valuation of stock options, see Note 13 “Share Capital, Option Plans and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of the Annual Report on Form 10-K. With respect to stock option grants, the Board will determine the following, based upon the recommendation of the Talent and Compensation Committee: the executive officers entitled to participate in our stock option plan; the number of options to be granted; and any other material terms and conditions of the stock option grant. All stock option grants, whether part of the LTIP or granted separately for new hires, promotions, retention or other reasons, are governed by our stock option plans. In addition, grants and exercises of stock options are subject to our Insider Trading Policy. For details of our Insider Trading Policy, see “Other Information with Respect to Our Compensation Program - Insider Trading Policy” below. New for Fiscal 2025 For Fiscal 2025, we have adjusted the rTSR measure within the PSU plan to require higher performance in order to earn a target payout. New rTSR PSUs in Fiscal 2025 are earned at target only for above-median rTSR performance. The target is earned for 55 th percentile rTSR performance to ensure we hold ourselves to a high standard of over-achievement. 119 Table of Contents rTSR vs Index Constituents: PSUs Earned as % Target: Below 20th percentile 0% 20th percentile 50% 50th percentile 97.5% 55th percentile 100% 75th percentile 200% Further, the vesting for the rTSR PSUs granted in Fiscal 2025 will only accelerate in the event of a change of control for the number of shares earned based on actual (rTSR) performance compared to the NASDAQ Composite Index. Section VII - Other Elements of Our Compensation Program Executive Change in Control and Severance Benefits Our severance benefit agreements are designed to provide reasonable compensation to departing senior executive officers under certain circumstances. While we do not believe that the severance benefits would be a determinative factor in a senior executive’s decision to join or remain with the Company, the absence of such benefits, we believe, would present a distinct competitive disadvantage in the market for talented executive officers. Furthermore, we believe that it is important to set forth the benefits payable in triggering circumstances in advance to avoid future disputes or litigation. The severance benefits we offer to our senior executive officers are competitive with similarly situated individuals and companies. We have structured our senior executive officers’ change in control benefits as “double trigger” benefits, meaning that the benefits are paid only in the event of, first, a change in control transaction, and second, a change in relationship between the Company and the senior executive officer within one year after the transaction. These benefits are intended to incentivize our senior executive officers to remain employed with the Company in such a transaction. Perquisites Our NEOs receive a minimal amount of non-cash compensation in the form of executive perquisites. To remain competitive in the marketplace, our NEOs are entitled to some limited benefits that are not otherwise available to all our employees, including: • An annual executive medical physical examination; and • An annual allowance to reimburse expenses to a pre-defined maximum related to financial planning, tax preparation or club memberships. Other Benefits We provide various employee benefit programs on the same terms to all employees, including our NEOs, such as, but not limited to: • Medical health insurance; • Dental insurance; • Life insurance; and • Tax-based retirement savings plans matching contributions. Pension Plans We do not provide pension benefits or any non-qualified deferred compensation to any of our NEOs. Share Ownership Guidelines We currently have equity ownership guidelines (Share Ownership Guidelines), the objective of which is to encourage our senior management, including our NEOs, and our directors to buy and hold Common Shares in the Company based upon an investment target. We believe that the Share Ownership Guidelines help align the financial interests of our senior management team and directors with the financial interests of our shareholders. In Fiscal 2024, we updated our CEO’s equity ownership guidelines to further strengthen the alignment between our key executive and the long-term performance of the Company. The equity ownership levels are as follows: CEO 6x base salary Other senior management 1x base salary Non-management director 5x annual retainer 120 Table of Contents For purposes of the Share Ownership Guidelines, individuals are deemed to hold all securities over which they are the registered or beneficial owner thereof under the rules of Section 13(d) of the Exchange Act through any contract, arrangement, understanding, relationship or otherwise in which such person has or shares: • voting power which includes the power to vote, or to direct the voting of, such security; and/or • investment power which includes the power to dispose, or to direct the disposition of, such security. Also, Common Shares will be valued at the greater of their book value (i.e., purchase price) or the current market value. On an annual basis, the Talent and Compensation Committee reviews the recommended ownership levels under the Share Ownership Guidelines and the compliance by our executive officers and directors with the Share Ownership Guidelines. The Board originally implemented the Share Ownership Guidelines in October 2009 and recommends that equity ownership levels be achieved within five years of becoming a member of the executive leadership team, including NEOs. The Board also recommends that the executive leadership team retain their ownership levels for as long as they remain members of the executive leadership team. Named Executive Officers NEOs may achieve the Share Ownership Guidelines through the exercise of stock option awards for Common Shares, Common Shares received as a result of vested RSUs or PSUs, purchases under the OpenText Employee Stock Purchase Plan (ESPP), through open market purchases made in compliance with applicable securities laws or through any equity plan(s) we may adopt from time to time providing for the acquisition of Common Shares. Until the Share Ownership Guidelines are met, it is recommended that an NEO retain a portion of any stock option exercise or LTIP award in Common Shares to contribute to the achievement of the Share Ownership Guidelines. Common Shares issuable pursuant to the unexercised options are not counted towards meeting the equity ownership target. All NEOs are in compliance with the Share Ownership Guidelines applicable to them for Fiscal 2024, with Mr. Duggan and Mr. Cione having until 2026 and 2029, respectively, to reach their applicable equity ownership guidelines. Directors Regarding non-management directors, both Common Shares and deferred stock units (DSUs) are counted towards the achievement of the Share Ownership Guidelines. The Company currently has a Directors’ Deferred Share Unit Plan (DSU Plan), whereby any non-management director of the Company may elect to defer all or part of their retainer and/or fees in the form of common stock equivalents. As of the date of the Circular, all non-management directors, as applicable to them, are in compliance with the Share Ownership Guidelines. For further details, see the table below titled “Director Compensation for Fiscal 2024.” Insider Trading Policy All our employees, officers and directors, including our NEOs, are required to comply with our Insider Trading Policy. Our Insider Trading Policy prohibits the purchase, sale or trade of our securities with the knowledge of material inside information. In addition, our Insider Trading Policy prohibits our employees, officers and directors, including our NEOs, from, directly or indirectly, short selling any security of the Company or entering into any other arrangement that results in a gain only if the value of the Company’s securities decline in the future, selling a “call option” giving the holder an option to purchase securities of the Company, or buying a “put option” giving the holder an option to sell securities of the Company. The definition of “trading in securities” includes any derivatives-based, monetization, non-recourse loan or similar arrangement that changes the insider’s economic exposure to or interest in securities of the Company and which may not necessarily involve a sale. All grants of stock options are subject to our Insider Trading Policy and as a result, stock options may not be granted during the “blackout” period beginning on the fifteenth day of the last month of each quarter and ending at the beginning of the second trading day following the date on which the Company’s quarterly or annual financial results, as applicable, have been publicly released. If the Board approves the issuance of stock options during the blackout period, these stock options are not granted until the blackout period is over. The price at which stock options are granted is not less than the closing price of the Company’s Common Shares on the trading day for NASDAQ immediately preceding the applicable grant date. 121 Table of Contents Summary Compensation Table The following table sets forth summary information concerning the annual compensation of our NEOs. All numbers are rounded to the nearest dollar or whole share. Fiscal Year Salary ($) Bonus ($) Stock Awards ($) (1) Option Awards ($) (2) Non-Equity Incentive Plan Compensation ($) (3) All Other Compensation ($) (4) Total ($) Mark J. Barrenechea 2024 $ 950,000 — $ 9,566,165 $ 2,500,415 $ 1,694,375 $ 31,781 (5) $ 14,742,736 Vice Chair, CEO and CTO 2023 $ 950,000 — $ 9,189,844 $ 10,589,263 $ 2,498,125 $ 21,050 (6) $ 23,248,282 2022 $ 950,000 — $ 9,621,323 $ 2,499,173 $ 2,850,000 $ 16,947 (6) $ 15,937,443 Madhu Ranganathan 2024 $ 775,000 — $ 3,050,728 $ 617,568 $ 850,625 $ 10,000 (7) $ 5,303,921 President, CFO and Corporate Development 2023 $ 688,750 — $ 2,021,796 $ 1,588,832 $ 1,110,500 $ — (6) $ 5,409,878 2022 $ 600,000 — $ 1,924,114 $ 499,815 $ 1,200,000 $ — (6) $ 4,223,929 Todd Cione 2024 $ 155,966 — $ 3,240,363 $ 2,780,139 $ 167,828 $ — (8) $ 6,344,296 President, Worldwide Sales 2023 N/A N/A N/A N/A N/A N/A (8) N/A 2022 N/A N/A N/A N/A N/A N/A (8) N/A Paul Duggan 2024 $ 650,000 — $ 2,204,410 $ 396,321 $ 1,232,800 $ — (9) $ 4,483,531 President, Chief Customer Officer 2023 $ 575,000 — $ 919,134 $ 1,288,957 $ 1,273,300 $ 10,110 (10) $ 4,066,501 2022 N/A N/A N/A N/A N/A N/A (11) N/A Muhi Majzoub 2024 $ 600,000 — $ 2,204,410 $ 396,321 $ 715,000 $ 16,307 (9) $ 3,932,038 Executive Vice President, Chief Product Officer 2023 $ 562,500 — $ 1,364,721 $ 1,410,180 $ 1,008,750 $ 4,329 (6) $ 4,350,480 2022 $ 500,000 — $ 1,298,676 $ 337,434 $ 1,000,000 $ 4,995 (6) $ 3,141,105 Simon Harrison 2024 $ 650,000 — $ 2,204,410 $ 396,321 $ 636,750 $ 189,501 (12) $ 4,076,982 Strategic Advisor to the President, Worldwide Sales 2023 $ 575,000 — $ 1,364,721 $ 1,410,180 $ 722,750 $ 304,118 (12) $ 4,376,769 2022 $ 500,000 — $ 1,298,676 $ 337,434 $ 1,000,000 $ 304,118 (12) $ 3,440,228 ______________________ (1) The amounts set forth in this column represent the aggregate grant date fair value, as computed in accordance with ASC Topic 718 “Compensation-Stock Compensation” (Topic 718). Grant date fair value may vary from the target value indicated in the table set forth above in the section “LTIP .” For a discussion of the assumptions used in these valuations, see Note 13 “Share Capital, Option Plans and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. For the maximum value that may be received under the PSU awards granted in Fiscal 2024 by each NEO, see the “Maximum” column under “Estimated Future Payouts under Equity Incentive Plan Awards” under the “Grants of Plan-Based Awards in Fiscal 2024” table below. (2) Amounts set forth in this column represent the amount recognized as the aggregate grant date fair value of stock option awards, as calculated in accordance with Topic 718 for the fiscal year in which the awards were granted. In all cases, these amounts do not reflect whether the recipient has actually realized a financial benefit from the exercise of the awards. The performance options granted to Mr. Barrenechea in Fiscal 2021 and Fiscal 2023 have been reflected and valued here, assuming all performance conditions are satisfied. Also see “Long-Term Equity Grants to CEO” and “Grants of Plan-Based Awards in Fiscal 2023” in Item 11 of our Annual Report on Form 10-K for Fiscal 2023 for details of target performance value and vesting. For a discussion of the assumptions used in this valuation, see Note 13 “Share Capital, Option Plans and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. (3) The amounts set forth in this column for Fiscal 2024 represent payments under the short-term incentive plan based on actual performance achieved. (4) Except as otherwise indicated the amounts in “All Other Compensation” primarily include (i) medical examinations and (ii) tax preparation and financial advisory fees paid. “All Other Compensation” does not include benefits received by the NEOs which are generally available to all our salaried employees. (5) Represents amounts we paid, reimbursed or attributed for international tax and financial planning and travel related items. (6) For details of the amounts of fees or expenses we paid or reimbursed please refer to Summary Compensation Table in Item 11 of our Annual Report on Form 10-K for the corresponding fiscal years ended June 30, 2023 and 2022. (7) Represents amounts we paid or reimbursed for tax, financial, and estate planning. (8) Mr. Cione joined the Company in April 2024. (9) The total value of all perquisites and personal benefits for this NEO was less than $10,000, and, therefore, excluded. (10) Represents amounts we paid or reimbursed for medical examinations and life insurance. (11) The executive officer was not an NEO during the fiscal year, and therefore compensation details have been excluded. 122 Table of Contents (12) Represents amounts we paid or reimbursed for housing allowance inclusive of a related tax gross-up amount of $80,059, $160,118 and $160,118 for the fiscal years ended June 30, 2024, 2023 and 2022, respectively. Grants of Plan-Based Awards in Fiscal 2024 The following table sets forth certain information concerning grants of awards made to each NEO during Fiscal 2024. Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) All Other Option Awards: Number of Securities Underlying (2) Exercise or Base Price of Option Awards Grant Date Fair Value of Options (3) Name Grant Date Threshold ($) Target ($) Maximum ($) Options (#) ($/share) Awards ($) Mark J. Barrenechea August 7, 2023 $ 508,750 $ 2,015,000 $ 4,030,000 272,930 $ 36.79 $ 2,500,415 Madhu Ranganathan August 7, 2023 $ 241,250 $ 1,025,000 $ 2,050,000 67,410 $ 36.79 $ 617,568 Todd Cione May 6, 2024 $ — $ — $ — 414,550 $ 30.25 $ 2,780,139 Paul Duggan August 7, 2023 $ 222,500 $ 900,000 $ 1,800,000 43,260 $ 36.79 $ 396,321 Muhi Majzoub August 7, 2023 $ 215,000 $ 850,000 $ 1,700,000 43,260 $ 36.79 $ 396,321 Simon Harrison August 7, 2023 $ 222,500 $ 900,000 $ 1,800,000 43,260 $ 36.79 $ 396,321 Estimated Future Payouts Under Equity Incentive Plan Awards (4) All Other Stock Awards: Number of Securities Underlying (5) Grant Date Fair Value of Stock (3) Name Grant Date Threshold (#) Target (#) Maximum (#) Stock (#) Awards ($) Mark J. Barrenechea August 7, 2023 61,420 122,840 245,680 61,420 $ 9,566,165 Madhu Ranganathan August 7, 2023 15,170 30,340 60,680 15,170 $ 2,362,728 November 30, 2023 8,570 17,140 34,280 — $ 688,000 Todd Cione May 6, 2024 32,075 64,150 128,300 32,070 $ 3,240,363 Paul Duggan August 7, 2023 9,735 19,470 38,940 9,740 $ 1,516,410 November 30, 2023 8,570 17,140 34,280 — $ 688,000 Muhi Majzoub August 7, 2023 9,735 19,470 38,940 9,740 $ 1,516,410 November 30, 2023 8,570 17,140 34,280 — $ 688,000 Simon Harrison August 7, 2023 9,735 19,470 38,940 9,740 $ 1,516,410 November 30, 2023 8,570 17,140 34,280 — $ 688,000 ______________________ (1) Represents the threshold, target and maximum estimated payouts under our short-term incentive plan for Fiscal 2024. For further information, see “Compensation Discussion and Analysis - Elements of Our Compensation Program - Short-Term Incentives” above. (2) For further information regarding our options granting procedures, see “Compensation Discussion and Analysis - Elements of Our Compensation Program - Long-Term Incentives” above. (3) Amounts set forth in this column represent the amount recognized as the aggregate grant date fair value of equity-based compensation awards, as calculated in accordance with ASC Topic 718 for the fiscal year in which the awards were granted. In all cases, these amounts do not reflect whether the recipient has actually realized a financial benefit from the exercise of the awards. For a discussion of the assumptions used in this valuation, see Note 13 “Share Capital, Option Plans and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. (4) Represents the threshold, target and maximum estimated payouts under our LTIP PSUs for all NEOs. For further information, see “Compensation Discussion and Analysis - Elements of Our Compensation Program - Long-Term Incentives - LTIP - PSU Grants in 2024” above. (5) Represents the estimated payouts under our LTIP RSUs. For further information, see “Compensation Discussion and Analysis - Elements of Our Compensation Program - Long-Term Incentives - LTIP - RSUs” above. 123 Table of Contents Outstanding Equity Awards at End of Fiscal 2024 The following table sets forth certain information regarding outstanding equity awards held by each NEO as of June 30, 2024. Option Awards (1) Stock Awards Name Grant Date Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Non- exercisable Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) (2) Market Value of Shares or Units of Stock That Have Not Vested ($) (2) Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not vested (#) (3) Equity Incentive Plan Awards: Market or payout value of unearned shares, units or other rights that have not vested ($) (3) Mark J. Barrenechea August 7, 2017 59,180 — $ 34.49 August 7, 2024 August 6, 2018 161,040 — $ 39.27 August 6, 2025 August 5, 2019 273,010 — $ 38.76 August 5, 2026 August 10, 2020 160,260 53,420 $ 45.81 August 10, 2027 August 10, 2020 — 750,000 $ 45.81 August 10, 2027 August 9, 2021 128,206 128,204 $ 52.62 August 9, 2028 August 8, 2022 76,593 229,777 $ 39.09 August 8, 2029 August 29, 2022 292,521 707,479 $ 31.89 August 29, 2029 August 7, 2023 — 272,930 $ 36.79 August 7, 2030 August 9, 2021 48,050 $ 1,443,422 August 9, 2021 96,110 $ 2,887,144 August 8, 2022 65,218 $ 1,959,170 August 8, 2022 130,437 $ 3,918,340 August 7, 2023 63,151 $ 1,897,047 August 7, 2023 126,301 $ 3,794,093 Madhu Ranganathan May 11, 2018 220,132 — $ 34.71 May 11, 2025 August 6, 2018 28,600 — $ 39.27 August 6, 2025 August 5, 2019 42,900 — $ 38.76 August 5, 2026 August 10, 2020 89,738 65,316 $ 45.81 August 10, 2027 August 9, 2021 25,640 25,640 $ 52.62 August 9, 2028 August 8, 2022 16,850 50,550 $ 39.09 August 8, 2029 November 7, 2022 — 180,000 $ 26.81 November 7, 2029 August 7, 2023 — 67,410 $ 36.79 August 7, 2030 August 9, 2021 9,610 $ 288,684 August 9, 2021 19,220 $ 577,369 August 8, 2022 14,348 $ 431,024 August 8, 2022 28,697 $ 862,047 August 7, 2023 15,597 $ 468,548 August 7, 2023 31,195 $ 937,095 November 30, 2023 17,506 $ 525,889 Todd Cione May 6, 2024 — 414,550 $ 30.25 May 6, 2031 May 6, 2024 32,349 $ 971,754 May 6, 2024 64,707 $ 1,943,811 Paul Duggan August 6, 2018 2,502 — $ 39.27 August 6, 2025 May 7, 2019 45,000 — $ 40.20 May 7, 2026 August 5, 2019 9,750 — $ 38.76 August 5, 2026 August 10, 2020 24,473 20,657 $ 45.81 August 10, 2027 August 9, 2021 9,616 9,614 $ 52.62 August 9, 2028 August 8, 2022 7,660 22,980 $ 39.09 August 8, 2029 124 Table of Contents November 7, 2022 — 180,000 $ 26.81 November 7, 2029 August 7, 2023 — 43,260 $ 36.79 August 7, 2030 August 9, 2021 3,600 $ 108,144 August 9, 2021 7,210 $ 216,588 August 8, 2022 6,523 $ 195,949 August 8, 2022 13,046 $ 391,898 August 7, 2023 10,014 $ 300,834 August 7, 2023 20,019 $ 601,359 November 30, 2023 17,506 $ 525,889 Muhi Majzoub August 7, 2017 36,960 — $ 34.49 August 7, 2024 August 6, 2018 31,460 — $ 39.27 August 6, 2025 May 7, 2019 75,000 — $ 40.20 May 7, 2026 August 5, 2019 42,900 — $ 38.76 August 5, 2026 August 10, 2020 73,185 54,487 $ 45.81 August 10, 2027 August 9, 2021 17,310 17,310 $ 52.62 August 9, 2028 August 8, 2022 11,375 34,125 $ 39.09 August 8, 2029 November 7, 2022 — 180,000 $ 26.81 November 7, 2029 August 7, 2023 — 43,260 $ 36.79 August 7, 2030 August 9, 2021 6,490 $ 194,960 August 9, 2021 12,970 $ 389,619 August 8, 2022 9,689 $ 291,060 August 8, 2022 19,367 $ 581,803 August 7, 2023 10,014 $ 300,834 August 7, 2023 20,019 $ 601,359 November 30, 2023 17,506 $ 525,889 Simon Harrison November 6, 2017 40,000 — $ 34.48 November 6, 2024 August 6, 2018 12,510 — $ 39.27 August 6, 2025 August 5, 2019 19,500 — $ 38.76 August 5, 2026 August 10, 2020 76,416 57,336 $ 45.81 August 10, 2027 August 9, 2021 17,310 17,310 $ 52.62 August 9, 2028 August 8, 2022 11,375 34,125 $ 39.09 August 8, 2029 November 7, 2022 — 180,000 $ 26.81 November 7, 2029 August 7, 2023 — 43,260 $ 36.79 August 7, 2030 August 9, 2021 6,490 $ 194,960 August 9, 2021 12,970 $ 389,619 August 8, 2022 9,689 $ 291,060 August 8, 2022 19,367 $ 581,803 August 7, 2023 10,014 $ 300,834 August 7, 2023 20,019 $ 601,359 November 30, 2023 17,506 $ 525,889 ______________________ (1) Options in the table above vest annually over a period of 4 years starting from the date of grant, with the exception of (i) options granted to certain of our executive officers on August 10, 2020 in recognition of their service which vest annually over a 5 year period, with the first vesting date being two years from the date of grant, (ii) options granted to certain of our executive officers on November 7, 2022 in recognition of their services which vest annually over a 4 year period, with the first vesting date being two years from the date of grant, and (iii) 750,000 performance options granted to the CEO in Fiscal 2021 and 1,000,000 performance options granted to the CEO in Fiscal 2023 both of which vest subject to the satisfaction of certain performance criteria. For additional detail, see “Compensation Discussion and Analysis - Our Compensation Program - Long-Term Incentives - Long-Term Grants to CEO”, Item 11 of our Annual Report on Form 10-K for Fiscal 2021 and “Compensation Discussion and Analysis - Our Compensation Program - Long-Term Incentives - Long-Term Grants to CEO” Item 11 of our Annual Report on Form 10-K for Fiscal 2023. (2) Represents each NEO’s target number of RSUs granted pursuant to our LTIP program, and other non-LTIP related RSUs, which vest upon the schedules described above in “Compensation Discussion and Analysis - Elements of Our Compensation Program - Long Term Incentives.” These amounts illustrate the market value as of June 30, 2024, based upon the closing price for the Company’s Common Shares as traded on the NASDAQ on such date of $30.04. (3) Represents each NEO’s target number of PSUs granted pursuant to our LTIP program, which vest upon the schedules described above in “Compensation Discussion and Analysis - Elements of Our Compensation Program - Long Term Incentives.” These 125 Table of Contents amounts illustrate the market value as of June 30, 2024, based upon the closing price for the Company’s Common Shares as traded on the NASDAQ on such date of $30.04. As of June 30, 2024, options to purchase an aggregate of 12,207,412 Common Shares had been previously granted and are outstanding under our stock option plans, of which 4,616,707 Common Shares were vested. Options to purchase an additional 5,018,767 Common Shares remain available for issuance pursuant to our stock option plans. Our outstanding options pool represents 4.6% of the Common Shares issued and outstanding as of June 30, 2024. During Fiscal 2024, the Company granted options to purchase 2,148,780 Common Shares or 0.8% of the Common Shares issued and outstanding as of June 30, 2024. Option Exercises and Stock Vested in Fiscal 2024 The following table sets forth certain details with respect to each of the NEOs concerning the exercise of stock options and vesting of stock in Fiscal 2024: Option Awards Stock Awards (1) Name Number of Shares Acquired on Exercise (2) (#) Value Realized on Exercise (3) ($) Number of Shares Acquired on Vesting (#) Value Realized on Vesting (4) ($) Mark J. Barrenechea 654,255 $ 5,142,683 98,270 $ 3,996,641 Madhu Ranganathan — $ — 10,983 $ 439,287 Todd Cione — $ — — $ — Paul Duggan — $ — 3,438 $ 137,480 Muhi Majzoub 32,560 $ 249,981 8,598 $ 343,398 Simon Harrison — $ — 8,839 $ 352,832 ______________________ (1) Relates to the vesting of PSUs and RSUs under our LTIP program. (2) The stock options exercised by Mr. Barrenechea were set to expire in Fiscal 2024 and Fiscal 2025. (3) Value realized on exercise” is the excess of the market price, at date of exercise, of the shares underlying the options over the exercise price of the options. (4) Value realized on vesting” is the market price of the underlying Common Shares on the vesting date. Potential Payments Upon Termination or Change in Control We have entered into employment contracts with each of our NEOs. These contracts may require us to make certain types of payments and provide certain types of benefits to the NEOs upon the occurrence of any of these events: • If the NEO is terminated without cause; and • If there is a change in control in the ownership of the Company and subsequent to the change in control, there is a change in the relationship between the Company and the NEO. When determining the amounts and the type of compensation and benefits to provide in the event of a termination or change in control described above, we considered available information with respect to amounts payable to similarly situated officers of our peer groups and the position held by the NEO within the Company. The amounts payable upon termination or change in control represent the amounts determined by the Company and are not the result of any individual negotiations between us and any of our NEOs. Our employment agreements with our NEOs are similar in structure, terms and conditions, with the key exception of the amount of severance payments, which is determined by the position held by the NEO. Details are set out below of each of their potential payments upon a termination by the Company without cause and upon a change in control event where there is a subsequent change in the relationship between the Company and the NEO. Termination Without Cause If the NEO is terminated without cause, we may be obligated to make payments or provide benefits to the NEO. A termination without cause means a termination of an NEO for any reason other than the following, each of which provides “cause” for termination: • The failure by the NEO to attempt in good faith to perform their duties, other than as a result of a physical or mental illness or injury; 126 Table of Contents • The NEO’s willful misconduct or gross negligence of a material nature in connection with the performance of their duties which is or could reasonably be expected to be injurious to the Company; • The breach by the NEO of their fiduciary duty or duty of loyalty to the Company; • The NEO’s intentional and unauthorized removal, use or disclosure of information relating to the Company, including customer information, which is injurious to the Company or its customers; • The willful performance by the NEO of any act of dishonesty or willful misappropriation of funds or property of the Company or its affiliates; • The indictment of the NEO or a plea of guilty or nolo contendere to a felony or other serious crime involving moral turpitude; • The material breach by the NEO of any obligation material to their employment relationship with the Company; or • The material breach by the NEO of the Company’s policies and procedures which breach causes or could reasonably be expected to cause harm to the Company; provided that in certain of the circumstances listed above, the Company has given the NEO reasonable notice of the reason for termination as well as a reasonable opportunity to correct the circumstances giving rise to the termination. Change in Control If there is a change in control of the Company and within one year of such change in control event, there is a change in the relationship between the Company and the NEO without the NEO’s written consent, we may be obligated to provide payments or benefits to the NEO, unless such a change is in connection with the termination of the NEO either for cause or due to the death or disability of the NEO. A change in control includes the following events: • The sale, lease, exchange or other transfer, in one transaction or a series of related transactions, of all or substantially all of the Company’s assets; • The approval by the holders of Common Shares of any plan or proposal for the liquidation or dissolution of the Company; • Any transaction in which any person or group acquires ownership of more than 50% of outstanding Common Shares; or • Any transaction in which a majority of the Board is replaced over a twelve-month period and such replacement of the Board was not approved by a majority of the Board still in office at the beginning of such period. Examples of a change in the relationship between the NEO and the Company where payments or benefits may be triggered following a change in control event include: • A material diminution in the duties and responsibilities of the NEO, other than (a) a change arising solely out of the Company becoming part of a larger organization following the change in control event or any related change in the reporting hierarchy or (b) a reorganization of the Company resulting in similar changes to the duties and responsibilities of similarly situated executive officers; • A material reduction to the NEO’s compensation, other than a similar reduction to the compensation of similarly situated executive officers; • A relocation of the NEO’s primary work location by more than fifty miles; or • A reduction in the title or position of the NEO, other than (a) a change arising solely out of the Company becoming part of a larger organization following the change in control event or any related change in the reporting hierarchy or (b) a reorganization of the Company resulting in similar changes to the titles or positions of similarly situated executive officers. None of our NEOs are entitled to the payments or benefits described below, or any other payments or benefits, solely upon a change in control where there is no change to the NEO’s relationship with the Company. Amounts Payable Upon Termination or Change in Control Pursuant to our employment agreements with our NEOs and the terms of our LTIP, each NEO’s entitlement upon termination of employment without cause or following a change in the NEO’s relationship with the Company, both absent a change in control event and within twelve months of a change in control event, are set forth below. 127 Table of Contents For Fiscal 2025, PSU vesting acceleration provisions within 12 months of a change in control will be aligned with peer group practices to provide for that the number of PSUs earned is based on actual rTSR performance through the change in control date, as opposed to a pay out at target as was the case for Fiscal 2024. No Change in Control No change in control Base Short term incentives (1) LTIP (2) Options (3) Employee and Medical Benefits (4) Mark J. Barrenechea Termination without cause or Change in relationship 24 months 24 months Prorated Vested 24 months (5) Madhu Ranganathan Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months Todd Cione Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months Paul Duggan Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months Muhi Majzoub Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months Simon Harrison Termination without cause or Change in relationship 12 months 12 months Prorated Vested 12 months ______________________ (1) Assuming 100% achievement of the expected targets for the fiscal year in which the triggering event occurred. (2) LTIP amounts are prorated for the number of months of participation at termination date in the applicable 38-month performance period. If the termination date is before the commencement of the 19th month of the performance period, a prorated LTIP will not be paid. (3) Already vested as of termination date with no acceleration of unvested options. For a period of 90 days following the termination date, the NEO has the right to exercise all options which have vested as of the date of termination. (4) Employee and medical benefits provided to each NEO immediately prior to the occurrence of the trigger event. (5) In accordance with the terms of his employment agreement, as amended, Mr. Barrenechea is entitled to participate until the age of 65 in healthcare benefits substantially similar to what he currently receives as Vice Chair, CEO and CTO of the Company. These benefits will be provided at the cost of the Company, provided that Mr. Barrenechea continues to be responsible for funding an amount that is equal to his employee contribution as Vice Chair, CEO and CTO, unless he becomes employed elsewhere, at which point this benefit will terminate. In the event that the employee or company contribution funding increases, Mr. Barrenechea would be responsible for that increase. Within 12 Months of a Change in Control Within 12 Months of a Change in Control Base Short term incentives (1) LTIP Options (2) Employee and Medical Benefits (3) Mark J. Barrenechea Termination without cause or Change in relationship 24 months 24 months 100% Vested 100% Vested 24 months (4) Madhu Ranganathan Termination without cause or Change in relationship 24 months 24 months 100% Vested 100% Vested 24 months Todd Cione Termination without cause or Change in relationship 12 months 12 months 100% Vested 100% Vested 12 months Paul Duggan Termination without cause or Change in relationship 12 months 12 months 100% Vested 100% Vested 12 months Muhi Majzoub Termination without cause or Change in relationship 24 months 24 months 100% Vested 100% Vested 24 months Simon Harrison Termination without cause or Change in relationship 12 months 12 months 100% Vested 100% Vested 12 months ______________________ (1) Assuming 100% achievement of the expected targets for the fiscal year in which the triggering event occurred. (2) For a period of 90 days following the termination date, the NEO has the right to exercise all options which are deemed to have vested as of the date of termination. (3) Employee and medical benefits provided to each NEO immediately prior to the occurrence of the trigger event. (4) In accordance with the terms of his employment agreement, as amended, Mr. Barrenechea is entitled to participate until the age of 65 in healthcare benefits substantially similar to what he currently receives as Vice Chair, CEO and CTO of the Company. These 128 Table of Contents benefits will be provided at the cost of the Company, provided that Mr. Barrenechea continues to be responsible for funding an amount that is equal to his employee contribution as Vice Chair, CEO and CTO, unless he becomes employed elsewhere, at which point this benefit will terminate. In the event that the employee or company contribution funding increases, Mr. Barrenechea would be responsible for that increase. In addition to the information identified above, each NEO is entitled to all accrued payments up to the date of termination, including all earned but unpaid short-term incentive amounts and earned but unsettled LTIP. Except as otherwise required by law, we are required to make all these payments and provide these benefits over a period of 12 months or 24 months, depending on the NEO’s entitlement and the circumstances which triggered our obligation to make such payments and provide such benefits, from the date of the event which triggered our obligation. With respect to payments to Mr. Barrenechea, the Company intends to make all required payments to Mr. Barrenechea no later than two and a half months after the end of the later of the fiscal year or calendar year in which the payments are no longer subject to a substantial risk of forfeiture . In return for receiving the payments and the benefits described above, each NEO must comply with certain obligations in favor of the Company, including a non-disparagement obligation. Also, each NEO is bound by a confidentiality and non-solicitation agreement where the non-solicitation obligation lasts six months from the date of termination of their employment. Any breach by an NEO of any provision of his/her contractual agreements may only be waived upon the review and approval of the Board. Quantitative Estimates of Payments upon Termination or Change in Control Further information regarding payments to our NEOs in the event of a termination or a change in control may be found in the table below. This table sets forth the estimated amount of payments and other benefits each NEO would be entitled to receive upon the occurrence of the indicated event, assuming that the event occurred on June 30, 2024. Amounts (i) potentially payable under plans which are generally available to all salaried employees, such as life and disability insurance, and (ii) earned but unpaid, in both cases, are excluded from the table. The values related to vesting of stock options and awards are based upon the fair market value of our Common Shares of $30.04 per share as reported on the NASDAQ on June 30, 2024, the last trading day of our fiscal year. The other material assumptions made with respect to the numbers reported in the table below are: • The salary and incentive payments are calculated based on the amounts of salary, incentive and benefit payments which were payable to each NEO as of June 30, 2024; and • Payments under the LTIPs are calculated as though 100% of outstanding LTIP awards have vested with respect to a termination without cause or change in relationship following a change in control event, and as though a pro-rated amount have vested with respect to no change in control event. Actual payments made at any future date may vary, including the amount the NEO would have accrued under the applicable benefit or compensation plan as well as the price of our Common Shares. Named Executive Officer Salary ($) Short-term Incentive Payment ($) Gain on Vesting of LTIP and Non-LTIP RSUs ($) Gain on Vesting of Stock Options ($) Employee Benefits ($) Total ($) Mark J. Barrenechea Termination Without Cause / Change in Relationship with no Change in Control $ 1,900,000 $ 2,850,000 $ 7,816,867 $ — $ 69,391 (1) $ 12,636,258 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 1,900,000 $ 2,850,000 $ 15,899,211 $ — $ 69,391 $ 20,718,602 Madhu Ranganathan Termination Without Cause / Change in Relationship with no Change in Control $ 775,000 $ 775,000 $ 2,163,266 $ — $ 10,000 $ 3,723,266 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 1,550,000 $ 1,550,000 $ 4,090,637 $ 581,400 $ 20,000 $ 7,792,037 Todd Cione Termination Without Cause / Change in Relationship with no Change in Control $ 675,000 $ 675,000 $ 685,130 $ — $ — $ 2,035,130 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 675,000 $ 675,000 $ 2,915,562 $ 581,400 $ — $ 4,846,962 129 Table of Contents Paul Duggan Termination Without Cause / Change in Relationship with no Change in Control $ 650,000 $ 650,000 $ 1,204,723 $ — $ — $ 2,504,723 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 650,000 $ 650,000 $ 2,340,657 $ 581,400 $ — $ 4,222,057 Muhi Majzoub Termination Without Cause / Change in Relationship with no Change in Control $ 600,000 $ 600,000 $ 1,631,139 $ — $ 16,439 $ 2,847,578 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 1,200,000 $ 1,200,000 $ 2,885,522 $ 581,400 $ 32,877 $ 5,899,799 Simon Harrison Termination Without Cause / Change in Relationship with no Change in Control $ 650,000 $ 650,000 $ 1,631,139 $ — $ 94,751 $ 3,025,890 Termination Without Cause / Change in Relationship, within 12 months following a Change in Control $ 650,000 $ 650,000 $ 2,885,522 $ 581,400 $ 94,751 $ 4,861,673 ______________________ (1) In accordance with the terms of his employment agreement, as amended, Mr. Barrenechea is entitled to participate until the age of 65 in healthcare benefits substantially similar to what he currently receives as Vice Chair, CEO and CTO of the Company. These benefits will be provided at the cost of the Company, provided that Mr. Barrenechea continues to be responsible for funding an amount that is equal to his employee contribution as Vice Chair, CEO and CTO, unless he becomes employed elsewhere, at which point this benefit will terminate. In the event that the employee or company contribution funding increases, Mr. Barrenechea would be responsible for that increase. 130 Table of Contents Director Compensation for Fiscal 2024 The following table sets forth summary information concerning the annual compensation received by each of the non-management directors of the Company for the fiscal year ended June 30, 2024. Fees Earned or Paid in Cash (1) ($) Stock Awards (2)(3) ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) All Other Compensation ($) Total ($) P. Thomas Jenkins (4) $ 520,000 $ 152,610 $ — $ — $ — $ 672,610 Randy Fowlie (5) $ 170,000 $ 333,028 $ — $ — $ — $ 503,028 David Fraser (6) $ 75,000 $ 318,394 $ — $ — $ — $ 393,394 Gail E. Hamilton (7) $ 340,000 $ 103,269 $ — $ — $ — $ 443,269 Robert Hau (8) $ 100,000 $ 275,356 $ — $ — $ — $ 375,356 Goldy Hyder (9) $ 61,233 $ 206,668 $ — $ — $ — $ 267,901 Ann M. Powell (10) $ 105,000 $ 270,408 $ — $ — $ — $ 375,408 Stephen J. Sadler (11) $ — $ 463,690 $ — $ — $ 21,721 (15) $ 485,411 Michael Slaunwhite (12) $ 1,000 $ 505,742 $ — $ — $ — $ 506,742 Katharine B. Stevenson (13) $ — $ 490,377 $ — $ — $ — $ 490,377 Deborah Weinstein (14) $ 258,250 $ 258,511 $ — $ — $ — $ 516,761 ______________________ (1) Non-management directors may elect to receive DSUs or cash for their directors’ fees and/or annual equity grant. Cash paid for directors’ fees are paid in accordance with the scheduled fee arrangements set forth in the table below. If cash is elected for the annual equity grant, such cash is payable at the Company’s next annual general meeting. In Fiscal 2024, Messrs. Jenkins and Fowlie, and Mses. Hamilton and Weinstein elected to receive cash for all or a portion of their annual equity grant. (2) Non-management directors may elect to defer all or a portion of their retainer and/or fees in the form of DSUs under our DSU Plan based on the value of the Company’s shares as of the date fees would otherwise be paid. The DSU Plan, originally effective February 2, 2010, and amended and restated in October 2018, is available to any non-management director of the Company and is designed to promote greater alignment of long-term interests between directors of the Company and its shareholders. DSUs granted as compensation for directors’ fees vest immediately whereas the DSUs granted for the annual equity grant vest at the Company’s next annual general meeting. No DSUs are payable by the Company until the director ceases to be a member of the Board. (3) The amounts set forth in this column represents the amount recognized as the aggregate grant date fair value of equity-based compensation awards, inclusive of DSU dividend equivalents, as calculated in accordance with ASC Topic 718. These amounts do not reflect whether the recipient has actually realized a financial benefit from the awards. For a discussion of the assumptions used in this valuation, see Note 13 “Share Capital, Option Plans and Share-based Payments” to our Consolidated Financial Statements in this Annual Report on Form 10-K. In Fiscal 2024, Messrs. Jenkins, Fowlie, Fraser, Hau, Hyder, Sadler and Slaunwhite and Mses. Hamilton, Powell, Stevenson and Weinstein received 4,259, 8,748, 8,141, 7,002, 5,156 , 12,040, 13,163, 2,882, 6,864, 12,723, and 6,926 DSUs, respectively. (4) As of June 30, 2024, Mr. Jenkins holds 155,421 DSUs. Mr. Jenkins serves as Chair of the Board. (5) As of June 30, 2024, Mr. Fowlie holds 136,701 DSUs. (6) As of June 30, 2024, Mr. Fraser holds 43,844 DSUs. (7) As of June 30, 2024, Ms. Hamilton holds 105,155 DSUs. (8) As of June 30, 2024, Mr. Hau holds 27,373 DSUs. (9) As of June 30, 2024, Mr. Hyder holds 5,156 DSUs. (10) As of June 30, 2024, Ms. Powell holds 22,366 DSUs. (11) As of June 30, 2024, Mr. Sadler holds 137,249 DSUs. (12) As of June 30, 2024, Mr. Slaunwhite holds 161,124 DSUs. (13) As of June 30, 2024, Ms. Stevenson holds 139,217 DSUs. (14) As of June 30, 2024, Ms. Weinstein holds 148,866 DSUs. (15) During Fiscal 2024, Mr. Sadler received $21,721 in consulting fees, paid or payable in cash, for assistance with acquisition-related business activities. Mr. Sadler abstained from voting on all transactions from which he would potentially derive consulting fees. The Board sets the level of compensation for directors, based on the recommendations of the Corporate Governance and Nominating Committee. From time to time, the Corporate Governance and Nominating Committee reviews the amount and form of compensation paid to directors, having regard to the workload and responsibilities involved in being an effective director, and benchmarked against director compensation for comparable companies. The committee’s review may be conducted with the assistance of outside consultants. Directors who are salaried officers or employees receive no compensation 131 Table of Contents for serving as directors. Mr. Barrenechea was the only employee director in Fiscal 2024. The material terms of our director compensation arrangements are as follows : Description Amount and Frequency of Payment Annual Chair retainer fee payable to the Chair of the Board $200,000 per year payable following our annual general meeting Annual retainer fee payable to each non-management director $75,000 per director payable following our annual general meeting Annual Audit Committee retainer fee payable to each member of the Audit Committee $25,000 per year payable at $6,250 at the beginning of each quarterly period. Annual Audit Committee Chair retainer fee payable to the Chair of the Audit Committee $10,000 per year payable at $2,500 at the beginning of each quarterly period. Annual Compensation Committee retainer fee payable to each member of the Compensation Committee $15,000 per year payable at $3,750 at the beginning of each quarterly period. Annual Compensation Committee Chair retainer fee payable to the Chair of the Compensation Committee $10,000 per year payable at $2,500 at the beginning of each quarterly period. Annual Corporate Governance & Nominating Committee retainer fee payable to each member of the Corporate Governance & Nominating Committee $10,000 per year payable at $2,500 at the beginning of each quarterly period. Annual Corporate Governance & Nominating Committee Chair retainer fee payable to the Chair of the Corporate Governance & Nominating Committee $8,000 per year payable at $2,000 at the beginning of each quarterly period. Excess travel fee payable to each non-management director attending a meeting who travels more than six hours $2,000 per meeting when applicable In addition to the scheduled fee arrangements set forth in the table above, non-management directors also receive an annual equity grant representing the long-term component of their compensation. The amount of the annual equity grant is discretionary; however, historically, the amount of this grant has been determined and updated on a periodic basis with the assistance of the Talent and Compensation Committee and the compensation consultant and benchmarked against director compensation for comparable companies. For Fiscal 2024, the annual equity grant was approximately $250,000 for each non-management director and approximately $320,000 for the Chair of the Board. Non-management directors may elect to receive DSUs or cash for their directors’ fees and/or annual equity grant. DSUs are granted under a DSU Plan, which is available to any non-management director of the Company. DSUs granted as compensation for directors’ fees vest immediately whereas DSUs granted for the annual equity grant vest at the Company’s next annual general meeting. If cash is elected for the annual equity grant, such cash is also payable at the Company’s next annual general meeting. No DSUs are payable by the Company until the director ceases to be a member of the Board. As with its employees, the Company believes that granting compensation to directors in the form of equity, such as DSUs, promotes a greater alignment of long-term interests between directors of the Company and the shareholders of the Company and since Fiscal 2013 the Company has taken the position that non-management directors will receive DSUs instead of stock options where granting of equity awards is appropriate. For further details of our Share Ownership Guidelines as they relate to directors, see “Share Ownership Guidelines” above. Compensation Committee Interlocks and Insider Participation The members of our Compensation Committee consist of Mses. Powell (Chair) and Hamilton and Messrs. Fraser and Slaunwhite. None of the members of the Compensation Committee have been or are an officer or employee of the Company, or any of our subsidiaries, or had any relationship requiring disclosure herein. None of our executive officers served as a member of the compensation committee of another entity (or other committee of the board of directors performing equivalent functions, 132 Table of Contents or in the absence of any such committee, the entire board of directors) one of whose executive officers served as a director of ours. Board’s Role in Risk Oversight The Board has overall responsibility for risk oversight. The Board is responsible for overseeing management’s implementation and operation of enterprise risk management, either directly or through its committees, which shall report to the Board with respect to risk oversight undertaken in accordance with their respective charters. At least annually, the Board shall review reports provided by management on the risks inherent in the business of the Company (including appropriate crisis preparedness, business continuity, information system controls, cybersecurity programs and risks, and disaster recovery plans, as well as environmental, social and governance matters, including climate-related matters), the appropriate degree of risk mitigation and risk control, overall compliance with and the effectiveness of the Company’s risk management policies, and residual risks remaining after implementation of risk controls. In addition, each committee reviews and reports to the Board on risk oversight matters, as described below. The Audit Committee oversees risks related to our accounting, financial statements and financial reporting process. On a quarterly basis, the Audit Committee also reviews reports provided by management on the risks inherent in the business of the Company, including those related to cybersecurity programs and risks, and disaster recovery plans, and reports to the Board with respect to risk oversight undertaken. The Compensation Committee oversees risks which may be associated with our compensation policies, practices and programs, in particular with respect to our executive officers. The Compensation Committee assesses such risks with the review and assistance of the Company’s management and the Compensation Committee’s external compensation consultants. The Corporate Governance and Nominating Committee monitors risk and potential risks with respect to the effectiveness of the Board, and considers aspects such as director succession, Board composition and the principal policies that guide the Company’s overall corporate governance. The members of each of the Audit Committee, Compensation Committee, and the Corporate Governance and Nominating Committee are all “independent” directors within the meaning ascribed to it in Multilateral Instrument 52-110- Audit Committees as well as the listing standards of NASDAQ, and, in the case of the Audit Committee, the additional independence requirements set out by the SEC. All of our directors are kept informed of our business through open discussions with our management team, including our CEO, who serves on our Board. The Board also receives documents, such as quarterly and periodic management reports and financial statements, as well our directors have access to all books, records and reports upon request, and members of management are available at all times to answer any questions which Board members may have. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth certain information as of June 30, 2024 regarding Common Shares beneficially owned by the following persons or companies: (i) each person or company known by us to be the beneficial owner of approximately 5% or more of our outstanding Common Shares, (ii) each director of our Company, (iii) each Named Executive Officer, and (iv) all directors and executive officers as a group. Except as otherwise indicated, we believe that the beneficial owners of the Common Shares listed below have sole investment and voting power with respect to such Common Shares, subject to community property laws where applicable. The number and percentage of shares beneficially owned as exhibited in Item 12 is based on filings made in accordance with the rules of the SEC and is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting or investment power and also any shares of Common Shares underlying options or warrants that are exercisable by that person within 60 days of June 30, 2024. Unless otherwise indicated, the address of each person or entity named in the table is “care of” Open Text Corporation, 275 Frank Tompa Drive, Waterloo, Ontario, Canada N2L 0A1. 133 Table of Contents Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent of Common Shares Outstanding (1) BlackRock, Inc. (2) 50 Hudson Yards, New York NY 10001 16,705,085 6.24% Jarislowsky, Fraser Ltd. (3) 1010 Sherbrooke St. West, Montreal QC H3A 2R7 15,391,557 5.75% P. Thomas Jenkins (4) 3,444,225 * Mark J. Barrenechea (5) 2,576,574 * Michael Slaunwhite (6) 563,216 * Madhu Ranganathan (7) 535,731 * Stephen J. Sadler (8) 478,456 * Muhi Majzoub (9) 456,370 * Randy Fowlie (10) 326,167 * Simon Harrison (11) 272,232 * Deborah Weinstein (12) 168,866 * Katharine B. Stevenson (13) 158,554 * Paul Duggan (14) 145,022 * Gail E. Hamilton (15) 105,165 * David Fraser (16) 37,804 * Robert Hau (17) 21,080 * Ann M. Powell (18) 16,073 * Goldy Hyder (19) 77 * Todd Cione (20) — * All executive officers and directors as a group (21)(22) 9,556,492 3.51% ______________________ * Less than 2% (1) The percentage of Common Shares outstanding is calculated using the total shares outstanding as of June 30, 2024. (2) Information based on Schedule 13G/A filed on February 12, 2024 filed by BlackRock, Inc. with the SEC. (3) Information based on Schedule 13G filed on February 12, 2024 filed by Jarislowsky, Fraser Limited with the SEC. (4) Includes 3,288,804 Common Shares owned and 155,421 deferred share units (DSUs) which are exercisable. (5) Includes 1,163,417 Common Shares owned, 1,150,810 options which are exercisable and 262,347 options which will become exercisable within 60 days of June 30, 2024. (6) Includes 408,385 Common Shares owned and 154,831 DSUs which are exercisable. (7) Includes 26,585 Common Shares owned, 423,860 options which are exercisable and 85,286 options which will become exercisable within 60 days of June 30, 2024. (8) Includes 347,500 Common Shares owned and 130,956 DSUs which are exercisable. (9) Includes 105,418 Common Shares owned, 288,190 options which are exercisable and 62,762 options which will become exercisable within 60 days of June 30, 2024. (10) Includes 194,500 Common Shares owned and 131,667 DSUs which are exercisable. (11) Includes 30,838 Common Shares owned, 177,111 options which are exercisable and 64,283 options which will become exercisable within 60 days of June 30, 2024. (12) Includes 20,000 Common Shares owned and 148,866 DSUs which are exercisable. (13) Includes 25,630 Common Shares owned and 132,924 DSUs which are exercisable. (14) Includes 10,503 Common Shares owned, 99,001 options which are exercisable and 35,518 options which will become exercisable within 60 days of June 30, 2024. (15) Includes 10 Common Shares owned and 105,155 DSUs which are exercisable. (16) Includes 253 Common Shares owned and 37,551 DSUs which are exercisable. (17) Includes 21,080 DSUs which are exercisable. (18) Includes 16,073 DSUs which are exercisable. (19) Includes 77 DSUs which are exercisable. (20) Mr. Cione joined the Company in April 2024, and therefore has no vested shares as of June 30, 2024. (21) Ms. Rippert was appointed to the Board in July 2024. (22) Includes 5,660,170 Common Shares owned, 2,288,166 options which are exercisable, 573,555 options which will become exercisable within 60 days of June 30, 2024, and 1,034,601 DSUs which are exercisable. 134 Table of Contents Securities Authorized for Issuance under Equity Compensation Plans The following table sets forth summary information relating to our various stock compensation plans as of June 30, 2024: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants, and rights Weighted average exercise price of outstanding options, warrants, and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a) (a) (b) (c) Equity compensation plans approved by security holders: 12,207,412 $38.51 5,018,767 Equity compensation plans not approved by security holders: Under deferred share unit awards 1,082,471 Under performance share unit awards 1,605,116 Under restricted share unit awards 5,512,280 Total 20,407,279 5,018,767 For more information regarding stock compensation plans, refer to Note 13 “Share Capital, Option Plans and Share-based Payments” to our Consolidated Financial Statements within this Annual Report on Form 10-K. Item 13. Certain Relationships and Related Transactions, and Director Independence Related Transactions Policy and Director Independence We have adopted a written policy that all transactional agreements between us and our officers, directors and affiliates will be first approved by a majority of the independent directors. Once these agreements are approved, payments made pursuant to the agreements are approved by the members of our Audit Committee. Our procedure regarding the approval of any related party transaction is that the material facts of such transaction shall be reviewed by the independent members of our Audit Committee and the transaction approved by a majority of the independent members of our Audit Committee. The Audit Committee reviews all transactions wherein we are, or will be a participant and any related party has or will have a direct or indirect interest. In determining whether to approve a related party transaction, the Audit Committee generally takes into account, among other facts it deems appropriate: whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; the extent and nature of the related person’s interest in the transaction; the benefits to the company of the proposed transaction; if applicable, the effects on a director’s independence; and if applicable, the availability of other sources of comparable services or products. The Board has determined that all directors, except Messrs. Barrenechea and Sadler, meet the independence requirements under the NASDAQ Listing Rules and qualify as “independent directors” under those Listing Rules. Mr. Barrenechea is not considered independent by virtue of being our Vice Chair, Chief Executive Officer and Chief Technology Officer. See “Transactions with Related Persons” below with respect to payments made to Mr. Sadler. Each of the members of our Compensation Committee, Audit Committee and Corporate Governance and Nominating Committee is an independent director. Transactions With Related Persons One of our directors, Mr. Sadler, received consulting fees for assistance with acquisition-related business activities pursuant to a consulting agreement with the Company. Mr. Sadler’s consulting agreement, which was adopted by way of Board resolution effective July 1, 2011, is for an indefinite period. The material terms of the agreement are as follows: Mr. Sadler is paid at the rate of Canadian dollars (CAD) $450 per hour for services relating to his consulting agreement. In addition, he is eligible to receive a bonus fee equivalent to 1.0% of the acquired company’s revenues, up to CAD $10.0 million in revenue, plus an additional amount of 0.5% of the acquired company’s revenues above CAD $10.0 million. The total bonus fee payable, for any given fiscal year, is subject to an annual limit of CAD $450,000 per single acquisition and an aggregate annual limit of CAD $980,000. The acquired company’s revenues, for this purpose, is equal to the acquired company’s revenues for the 12 months prior to the date of acquisition. During Fiscal 2024, Mr. Sadler received CAD $44 thousand in consulting fees from OpenText (equivalent to $32 thousand USD), for assistance with acquisition-related business activities. Mr. Sadler abstained from voting on all transactions from which he would potentially derive consulting fees. Additionally, Mr. Sadler has direct or indirect control over a material interest in Enghouse Systems Limited, a publicly traded software company, and its subsidiaries. 135 Table of Contents OpenText entered into product supply and license agreements to purchase certain software licenses from Enghouse Systems Limited and its subsidiaries, under which the company makes payments in the normal course of business. During Fiscal 2024, OpenText paid $1.7 million under such agreements. Item 14. Principal Accountant Fees and Services Pre-approval Policies and Procedures The Audit Committee has established an Audit and Non-Audit Services Pre-Approval Policy to pre-approve all permissible audit and non-audit services provided by our independent registered public accounting firm. The policy provides that the Audit Committee shall pre-approve all audit and non-audit services to be provided to the Company and its subsidiaries by its independent registered public accounting firm. On an annual basis, the Audit Committee reviews and provides pre-approval for certain types of services that may be rendered by the independent registered accounting firm and a budget for audit and non-audit services for the applicable fiscal year. Upon pre-approval of the services on the initial list, management may engage the auditor for specific engagements that are within the definition of the pre-approved services. Any significant service engagements above a certain threshold will require separate pre-approval. The policy contains a provision delegating pre-approval authority to the Chair of the Audit Committee in instances when pre-approval is needed prior to a scheduled Audit Committee meeting. The Chair of the Audit Committee is required to report on such pre-approvals at the next scheduled Audit Committee meeting. A final detailed review of all audit and non-audit services and fees is performed by the Audit Committee prior to the issuance of the audit opinion at year-end. The Audit Committee has determined that the provision of the services set out below is compatible with the maintaining of KPMG LLP’s independence in the conduct of its auditing functions. No services in 2024 were provided by KPMG for which the foregoing pre-approval procedures were waived pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X. Audit services representing approximately $0.1 million in 2023 were provided by KPMG for which the foregoing pre-approval procedures were waived pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X. Principal Accountant Services and Fees The aggregate fees for professional services rendered by our independent registered public accounting firm, KPMG LLP, for Fiscal 2024 and Fiscal 2023 were: Year ended June 30, (In thousands) 2024 2023 Audit fees (1) $ 14,874 $ 14,546 Audit-related fees (2)(3) 2,362 113 Tax fees (4) — — All other fees (5) — — Total $ 17,236 $ 14,659 ______________________ (1) Audit fees were primarily for professional services rendered for (a) the annual audits of our consolidated financial statements and the accompanying attestation report regarding our ICFR contained in our Annual Report on Form 10-K, (b) the review of quarterly financial information included in our Quarterly Reports on Form 10-Q, (c) audit services related to mergers and acquisitions, (d) fees associated with non-periodic securities filings, and (e) annual statutory audits where applicable. (2) Includes $2.2 million for audit-related services performed in Fiscal 2024 related to the divestiture of the AMC business, which were reimbursed by Rocket Software, Inc. (3) Audit-related fees (excluding the services performed in Fiscal 2024 related to the divestiture of the AMC business) were primarily for assurance and related services, such as IT assurance engagements and accounting research services. (4) Tax fees were for services related to tax compliance, including the preparation of tax returns, tax planning and tax advice. (5) All other fees consist of fees for services other than the services reported in audit fees, audit-related fees, and tax fees. 136 Table of Contents Part IV Item 15. Exhibits and Financial Statement Schedules (a) Financial Statements and Schedules Index to Consolidated Financial Statements and Supplementary Data (Item 8) Page Number Report of Independent Registered Public Accounting Firm (KPMG LLP, Toronto, Canada, Auditor Firm ID: 85 ) 141 Report of Independent Registered Public Accounting Firm 143 Consolidated Balance Sheets 144 Consolidated Statements of Income 145 Consolidated Statements of Comprehensive Income 146 Consolidated Statements of Shareholders’ Equity 147 Consolidated Statements of Cash Flows 148 Notes to Consolidated Financial Statements 150 (b) The following documents are filed as a part of this report: 1) Consolidated financial statements and Reports of Independent Registered Public Accounting Firm and the related notes thereto are included in Part II, Item 8. 2) Valuation and Qualifying Accounts; see Note 4 “Allowance for Credit Losses” and Note 15 “Income Taxes” in the Notes to Consolidated Financial Statements included in Part II, Item 8. 3) Exhibits: The following exhibits are filed as part of this Annual Report on Form 10-K or are incorporated by reference to exhibits previously filed with the SEC. Exhibits not incorporated by reference to a prior filing are designated by a cross (+); all exhibits not so designated are incorporated by reference to a prior filing as indicated. Management contracts relating to compensatory plans or arrangements are designated by a star (*). Exhibit Number Description Report or Registration Statement Exhibit Reference 2.1 Agreement and Plan of Merger, dated November 10, 2019, by and among Open Text Corporation, Coral Merger Sub Inc. and Carbonite, Inc . Company’s Form 8-K, filed November 12, 2019 Exhibit 2.1 2.2 Rule 2.7 Announcement, dated August 25, 2022. Company’s Form 8-K/A, filed August 29, 2022 Exhibit 2.1 3.1 Articles of Amalgamation of the Company. Company’s registration statement on Form F-1, filed November 1, 1995, or Amendments 1, 2 or 3 thereto (filed December 28, 1995, January 22, 1996 and January 23, 1996, respectively) 3.2 Articles of Amendment of the Company. Company’s registration statement on Form F-1, filed November 1, 1995, or Amendments 1, 2 or 3 thereto (filed December 28, 1995, January 22, 1996 and January 23, 1996, respectively) 3.3 Articles of Amendment of the Company. Company’s registration statement on Form F-1, filed November 1, 1995, or Amendments 1, 2 or 3 thereto (filed December 28, 1995, January 22, 1996 and January 23, 1996, respectively) 3.4 Articles of Amalgamation of the Company. Company’s registration statement on Form F-1, filed November 1, 1995, or Amendments 1, 2 or 3 thereto (filed December 28, 1995, January 22, 1996 and January 23, 1996, respectively) 3.5 Articles of Amalgamation of the Company, dated July 1, 2001. Company’s Form 10-K, filed September 28, 2001 3.6 Articles of Amalgamation of the Company, dated July 1, 2002. Company’s Form 10-K, filed September 28, 2002 Exhibit 3.10 3.7 Articles of Amalgamation of the Company, dated July 1, 2003. Company’s Form 10-K, filed September 29, 2003 Exhibit 3.11 137 Table of Contents 3.8 Articles of Amalgamation of the Company, dated July 1, 2004. Company’s Form 10-K, filed September 13, 2004 Exhibit 3.12 3.9 Articles of Amalgamation of the Company, dated July 1, 2005. Company’s Form 10-K, filed September 27, 2005 Exhibit 3.13 3.10 Articles of Continuance of the Company, dated December 29, 2005. Company’s Form 10-Q, filed February 3, 2006 Exhibit 3.1 3.11 By-Law 1 of Open Text Corporation. Company’s Form 8-K, filed September 26, 2013 Exhibit 3.1 4.1 Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. Company’s Form 10-K, filed August 1, 2019 Exhibit 4.1 4.2 Form of Common Share Certificate. Company’s registration statement on Form F-1 (Registration Number 33-98858), filed November 1, 1995, or Amendments 1, 2 or 3 thereto (filed December 28, 1995, January 22, 1996 and January 23, 1996, respectively) 4.3 Indenture, dated as of February 18, 2020, between Open Text Corporation and the Bank of NY Mellon, as U.S. Trustee, and BNY Trust Company of Canada, as Canadian trustee. Company’s Form 8-K filed February 18, 2020 Exhibit 4.1 4.4+ Supplemental Indenture to Indenture governing the Company’s 3.875% Senior Notes due 2028, dated as of July 1, 2024, among Open Text Inc., Open Text Corporation and the Bank of NY Mellon, as U.S. Trustee, and BNY Trust Company of Canada, as Canadian trustee. 4.5 Indenture, dated as of February 18, 2020, between Open Text Holdings, Inc. and the Bank of NY Mellon, as U.S. Trustee, and BNY Trust Company of Canada, as Canadian trustee. Company’s Form 8-K filed February 18, 2020 Exhibit 4.3 4.6+ Supplemental Indenture to Indenture governing OTHI’s 4.125% Senior Notes due 2030, dated as of July 1, 2024, among Open Text Inc., Open Text Corporation and the Bank of NY Mellon, as U.S. Trustee, and BNY Trust Company of Canada, as Canadian trustee. 4.7 Indenture governing the Company’s 3.875% Senior Notes due 2029, dated as of November 24, 2021, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S. trustee, and BNY Trust Company of Canada, as Canadian trustee . Company’s Form 8-K filed November 24, 2021 Exhibit 4.1 4.8+ Supplemental Indenture to Indenture governing the Company’s 3.875% Senior Notes due 2029, dated as of July 1, 2024, among Open Text Inc., Open Text Corporation and the Bank of NY Mellon, as U.S. Trustee, and BNY Trust Company of Canada, as Canadian trustee. 4.9 Indenture governing OTHI’s 4.125% Senior Notes due 2031, dated as of November 24, 2021, among OTHI, the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S. trustee, and BNY Trust Company of Canada, as Canadian trustee. Company’s Form 8-K filed November 24, 2021 Exhibit 4.3 4.10+ Supplemental Indenture to Indenture governing OTHI’s 4.125% Senior Notes due 2031, dated as of July 1, 2024, among Open Text Inc., Open Text Corporation and the Bank of NY Mellon, as U.S. Trustee, and BNY Trust Company of Canada, as Canadian trustee. 4.11 Amended and Restated Shareholder Rights Plan Agreement between Open Text Corporation and Computershare Investor Services, Inc. dated September 15, 2022. Company’s Form 8-K, filed September 15, 2022 Exhibit 4.1 4.12 Form of Common Share Certificate. Company’s Form 10-Q, filed November 3, 2022 4.13 Indenture governing the Company’s 6.90% senior secured notes due 2027, dated as of December 1, 2022, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S. trustee and Notes collateral agent, and BNY Trust Company of Canada, as Canadian trustee. Company’s Form 8-K, filed December 1, 2022 Exhibit 4.1 4.14+ Supplemental Indenture to Indenture governing the Company’s 6.90% senior secured notes due 2027, dated as of July 1, 2024, among Open Text Inc., Open Text Corporation and the Bank of NY Mellon, as U.S. Trustee, and BNY Trust Company of Canada, as Canadian trustee. 10.1* 1998 Stock Option Plan. Company’s Form 10-K filed August 20, 1999 10.2* Form of Indemnity Agreement between the Company and certain of its officers dated September 7, 2006. Company’s Form 10-K filed September 12, 2006 Exhibit 10.26 10.3* Consulting Agreement between Steven Sadler and SJS Advisors Inc. and the Company, dated May 3, 2005. Company’s Form 10-K filed August 26, 2008 Exhibit 10.28 10.4* OpenText Corporation Directors’ Deferred Share Unit Plan, as amended and restated October 30, 2018. Company’s Form 10-Q filed January 31, 2019 Exhibit 10.1 10.5 Amended and Restated Credit Agreement among Open Text Corporation and certain of its subsidiaries, the Lenders, Barclays Bank PLC, Royal Bank of Canada, Barclays Capital and RBC Capital Markets, dated as of November 9, 2011. Company’s Form 8-K filed November 9, 2011 Exhibit 99.1 10.6* OpenText Corporation Long-Term Incentive Plan 2015 for eligible employees, effective October 3, 2012. Company’s Form 10-Q filed November 1, 2012 Exhibit 10.2 10.7* Employment Agreement, dated October 30, 2012 between Mark Barrenechea and the Company. Company’s Form 10-Q filed November 1, 2012 Exhibit 10.3 138 Table of Contents 10.8* Amendment No. 1 to the Employment Agreement between Mark J. Barrenechea and the Company dated January 24, 2013 (amending the Employment Agreement between Mark J. Barrenechea and the Company dated October 30, 2012). Company’s Form 10-Q filed January 25, 2013 Exhibit 10.3 10. 9 First Amendment to Amended and Restated Credit Agreement and Amended and Restated Security and Pledge Agreement, dated as of December 16, 2013, between Open Text ULC, as term borrower, Open Text ULC, Open Text Inc. and Open Text Corporation, as revolving credit borrowers, the domestic guarantors party thereto, each of the lenders party thereto, Barclays Bank PLC, as sole administrative agent and collateral agent, and Royal Bank of Canada, as documentary credit lender. Company’s Form 8-K filed December 20, 2013 Exhibit 10.1 10.1 0 Credit Agreement, dated as of January 16, 2014, among Open Text Corporation, as guarantor, Ocelot Merger Sub, Inc., which on January 16, 2014 merged with and into GXS Group, Inc. which survived such merger, as borrower, the other domestic guarantors party thereto, the lenders named therein, as lenders, Barclays Bank PLC, as sole administrative agent and collateral agent, and with Barclays and RBC Capital Markets, as lead arrangers and joint bookrunners. Company’s Form 8-K filed January 16, 2014 Exhibit 10.1 10.1 1 Second Amendment to Amended and Restated Credit Agreement, dated as of December 22, 2014, between Open Text ULC, as term borrower, Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as revolving credit borrowers, the domestic guarantors party thereto, each of the lenders party thereto, Barclays Bank PLC, as sole administrative agent and collateral agent, and Royal Bank of Canada, as documentary credit lender. Company’s Form 8-K filed December 23, 2014 Exhibit 10.1 10.1 2 * Employment Agreement, dated November 30, 2012, between Muhi Majzoub and the Company. Company’s Form 10-K filed July 31, 2014 Exhibit 10.20 10.1 3 * Amendment No. 2 to the Employment Agreement between Mark J. Barrenechea and the Company dated July 30, 2014 (amending the Employment Agreement between Mark J. Barrenechea and the Company dated October 30, 2012). Company’s Form 10-K filed July 31, 2014 Exhibit 10.23 10.1 4 Repricing Amendment and Amendment No. 2 dated as of February 22, 2017 to Credit Agreement, by and among Open Text Corporation, as guarantor, Open Text GXS ULC, as borrower, the other guarantors party thereto, each of the lenders party thereto and Barclays Bank PLC, as administrative agent. Company’s Form 8-K filed February 22, 2017 Exhibit 10.1 10.1 5 Amendment No. 3 to Second Amended and Restated Credit Agreement, dated as of May 5, 2017, among Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as borrowers, the guarantors party thereto, each of the lenders party thereto, and Barclays Bank PLC, as sole administrative agent and collateral agent. Company’s Form 10-Q filed May 8, 2017 Exhibit 10.2 10.1 6 * Amendment No. 3 to the Employment Agreement between Mark J. Barrenechea and the Company dated June 1, 2017 (amending the Employment Agreement between Mark J. Barrenechea and the Company dated October 30, 2012). Company’s Form 8-K filed June 6, 2017 Exhibit 10.1 10.1 7 Amendment No. 4 to Second Amended and Restated Credit Agreement, dated as of September 6, 2017, among Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as borrowers, the guarantors party thereto, each of the lenders party thereto, and Barclays Bank PLC, as sole administrative agent and collateral agent. Company’s Form 10-Q filed November 2, 2017 Exhibit 10.1 10.1 8 * Employment Agreement, dated January 30, 2018, among the Company, Open Text Inc. and Madhu Ranganathan. Company’s Form 8-K filed February 1, 2018 Exhibit 10.1 10. 19 Amended and Restated Credit Agreement dated as of May 30, 2018, by and among Open Text Corporation, as borrower, the guarantors party thereto, each of the lenders party thereto and Barclays Bank PLC, as administrative agent and collateral agent. Company’s Form 8-K filed May 30, 2018 Exhibit 10.1 10.2 0 Third Amended and Restated Credit Agreement dated as of May 30, 2018, by and among Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as borrowers, the guarantors party thereto, each of the lenders party thereto, Barclays Bank PLC, as administrative agent, collateral agent and swing line lender and Royal Bank of Canada as documentary credit lender. Company’s Form 8-K filed May 30, 2018 Exhibit 10.2 10.2 1 * Employment Agreement, dated October 1, 2017, between Simon (Ted) Harrison and the Company. Company’s Form 10-K filed August 2, 2018 Exhibit 10.31 10.2 2 Fourth Amended and Restated Credit Agreement dated as of October 31, 2019, by and among Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as borrowers, the guarantors party thereto, each of the lenders party thereto, Barclays Bank PLC, as administrative agent, collateral agent and swing line lender and Royal Bank of Canada as documentary credit lender. Company’s Form 8-K filed November 5, 2019 Exhibit 10.1 10.2 3 * Amendment No. 4 to the Employment Agreement between Mark J. Barrenechea and the Company dated August 14, 2020 (amending the Employment Agreement between Mark J. Barrenechea and the Company dated October 30, 2012, as amended). Company’s Form 8-K filed August 14, 2020 Exhibit 10.1 10.2 4 Open Text Corporation 2004 Stock Option Plan, as amended and restated on September 14, 2020. Company’s Registration Statement on Form S-8 filed September 30, 2020 Exhibit 4.1 10.2 5 Open Text Corporation 2004 Employee Stock Purchase Plan, as amended and restated on September 14, 2020. Company’s Registration Statement on Form S-8 filed September 30, 2020 Exhibit 4.2 10.2 6 Bridge Loan Agreement, dated August 25, 2022, by and between the Company, the guarantors party thereto, Barclays Bank PLC, as administrative agent, and certain financial institution parties thereto. Company’s Form 8-K, filed August 25, 2022 Exhibit 10.3 10.2 7 Co-operation Agreement, dated August 25, 2022, by and between the Company, Bidco and Micro Focus International plc. Company’s Form 8-K/A, filed August 29, 2022 Exhibit 10.1 10.2 8 Term Loan Credit Agreement, dated August 25, 2022, by and between the Company, the guarantors party thereto, Barclays Bank PLC, as administrative agent, and certain financial institution parties thereto. Company’s Form 8-K/A, filed August 29, 2022 Exhibit 10.2 139 Table of Contents 10. 29 First Amendment to Credit Agreement, dated December 1, 2022, by and among the Company, the guarantors party thereto, Barclays Bank PLC, as administrative agent and collateral agent, and certain financial institution parties thereto. Company’s Form 8-K, filed December 1, 2022 Exhibit 10.1 10. 30 Amendment No. 1 to Amended and Restated Credit Agreement dated June 6, 2023, by and among Open Text Corporation, as borrower, the guarantors party thereto, each of the lenders party thereto and Barclays Bank PLC, as administrative agent and collateral agent. Company’s Form 10-K, filed August 3, 2023 Exhibit 10.31 10.3 1 Amendment No. 1 to Fourth Amended and Restated Credit Agreement dated as of June 6, 2023, by and among Open Text ULC, Open Text Holdings, Inc. and Open Text Corporation, as borrowers, the guarantors party thereto, each of the lenders party thereto, Barclays Bank PLC, as administrative agent, collateral agent and swing line lender and Royal Bank of Canada as documentary credit lender. Company’s Form 10-K, filed August 3, 2023 Exhibit 10.32 10.32 S econd Amendment to Credit Agreement, date d August 14, 2023, by and among the Compan y, the guarantors party thereto, Barclays Bank PLC, as administrative age nt and collateral agent, and certain financial institution parties thereto. Company’s Form 8-K, filed August 14, 2023 Exhibit 10.1 10.33 P urchase Agreement, dated November 28, 2023, by and among the Company as sell er, Rocket Software, Inc., as buyer, and Rocke t So ftware UK Limited. Company’s Form 8-K/A, filed December 1, 2023 Exhibit 10.1 10.34 Second Amendment to Fourth Amended and Restated Credit Agreement, dated December 19, 2023, by and among Open Text ULC, Open Text Inc. and the Company, as borrowers, the guarantors party thereto, each of the lenders party thereto, Barclays Bank PLC, as administrative agent, collateral agent and swing line lender and Royal Bank of Canada as documentary credit lender. Company’s Form 8-K, filed December 21, 2023 Exhibit 10.1 10.35 Third Amendment to Credit Agreement, dated May 15, 2024, by and among the Company, the guarantors party thereto, Barclays Bank PLC, as administrative agent and collateral agent, and certain financial institution parties thereto. Company’s Form 8-K, filed May 15, 2024 Exhibit 10.1 1 0.36+ E mployment Agreement, dated January 12, 2024 between Todd Cione and the Compa ny. 19. 1+ O pen Text Corporation Insider Trading Policy . 21.1+ List of the Company’s Subsidiaries. 23.1+ Consent of Independent Registered Public Accounting Firm. 31.1+ Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2+ Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1+ Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2+ Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 9 7 + Open Text Corporation Clawback Policy . 101.INS+ XBRL instance document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH+ Inline XBRL taxonomy extension schema. 101.CAL+ Inline XBRL taxonomy extension calculation linkbase. 101.DEF+ Inline XBRL taxonomy extension definition linkbase. 101.LAB+ Inline XBRL taxonomy extension label linkbase. 101.PRE+ Inline XBRL taxonomy extension presentation. 104+ Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). 140 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Open Text Corporation Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Open Text Corporation (the Company) as of June 30, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three‑year period ended June 30, 2024, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three‑year period ended June 30, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated July 31, 2024 , expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Evaluation of the determination of standalone selling prices of revenue performance obligations for customer contracts with a software license As discussed in Note 2 and Note 3 to the consolidated financial statements, the Company generally sells or licenses its software in combination with other products and services such as customer support and professional services. The accounting for customer contracts with a software license requires an allocation of the transaction price to each distinct performance obligation based on the determination of the standalone selling price (SSP). SSP for a performance obligation in a customer contract is an estimate of the price that would be charged for the specific product or service if it was sold separately in similar circumstances and to similar customers. This estimate determines the allocation of the transaction price and affects the amount and timing of revenue recognized for each performance obligation in a customer contract. SSP is estimated based on the impact of geographic or regional specific factors, profit objectives and pricing practices for different performance obligations. We identified the evaluation of the determination of the SSP of revenue performance obligations for customer contracts with a software license as a critical audit matter. A higher degree of auditor judgment was required to evaluate the approach and the significant assumptions, including the basis for stratification, used to establish SSP for each performance obligation which could be offered in a customer contract. The primary procedures we performed to address this critical audit matter included the following. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s revenue process, including controls over the approach and the significant assumptions used to determine SSP for identified performance obligations in customer contracts which include a software license. We evaluated the approach used to determine SSP based on current pricing patterns in 141 Table of Contents relevant customer contracts, historical analysis of renewal contract pricing completed by the Company and pricing practices observed in the industry. We inspected a selection of contracts from the SSP population and compared attributes such as price and employee consultant level to historical information. Assessment of uncertain tax positions As discussed in Note 2, Note 14 and Note 15 to the consolidated financial statements, the Company has recognized uncertain tax positions including associated interest and penalties. The Company’s tax positions are subject to audit by local taxing authorities across multiple global subsidiaries and the resolution of such audits may span multiple years. Tax law is complex and often subject to varied interpretations. Accordingly, the ultimate outcome with respect to taxes the Company may owe may differ from the amounts recognized. We identified the assessment of uncertain tax positions as a critical audit matter. The assessment of tax exposures and the ultimate resolution of uncertain tax positions requires a higher degree of auditor judgment in evaluating the Company’s interpretation of, and compliance with, tax law globally across multiple jurisdictions. The primary procedures we performed to address this critical audit matter included the following. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to assess uncertain tax positions, including controls related to the interpretation of tax law and identification of uncertain tax positions, the evaluation of which of the Company’s tax positions may not be sustained upon audit and the estimation of exposures associated with uncertain tax positions. We involved domestic and international tax professionals with specialized skills and knowledge who assisted in assessing filed tax positions and transfer pricing studies, and evaluating the Company’s interpretation of tax law and its assessment of certain tax uncertainties and expected outcomes, including, if applicable, the measurement thereof, by reading advice obtained from the Company’s external specialists and correspondence with taxation authorities. /s/ KPMG LLP Chartered Professional Accountants, Licensed Public Accountants We have served as the Company’s auditor since 2001. Toronto, Canada July 31, 2024 142 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Open Text Corporation: Opinion on Internal Control Over Financial Reporting We have audited Open Text Corporation’s internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, Open Text Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of June 30, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2024, and the related notes, and our report dated July 31, 2024 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in this Annual Report on Form 10-K. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Chartered Professional Accountants, Licensed Public Accountants Toronto, Canada July 31, 2024 143 Table of Contents OPEN TEXT CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share data) June 30, 2024 June 30, 2023 ASSETS Cash and cash equivalents $ 1,280,662 $ 1,231,625 Accounts receivable trade, net of allowance for credit losses of $ 12,108 as of June 30, 2024 and $ 13,828 as of June 30, 2023 (Note 4) 626,189 682,517 Contract assets (Note 3) 66,450 71,196 Income taxes recoverable (Note 15) 61,113 68,161 Prepaid expenses and other current assets (Note 9) 242,911 221,732 Total current assets 2,277,325 2,275,231 Property and equipment (Note 5) 367,740 356,904 Operating lease right of use assets (Note 6) 219,774 285,723 Long-term contract assets (Note 3) 38,684 64,553 Goodwill (Note 7) 7,488,367 8,662,603 Acquired intangible assets (Note 8) 2,486,264 4,080,879 Deferred tax assets (Note 15) 932,657 926,719 Other assets (Note 9) 298,281 342,318 Long-term income taxes recoverable (Note 15) 96,615 94,270 Total assets $ 14,205,707 $ 17,089,200 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities (Note 10) $ 931,116 $ 996,261 Current portion of long-term debt (Note 11) 35,850 320,850 Operating lease liabilities (Note 6) 76,446 91,425 Deferred revenues (Note 3) 1,521,416 1,721,781 Income taxes payable (Note 15) 235,666 89,297 Total current liabilities 2,800,494 3,219,614 Long-term liabilities: Accrued liabilities (Note 10) 46,483 51,961 Pension liability, net (Note 12) 127,255 126,312 Long-term debt (Note 11) 6,356,943 8,562,096 Long-term operating lease liabilities (Note 6) 218,174 271,579 Long-term deferred revenues (Note 3) 162,401 217,771 Long-term income taxes payable (Note 15) 145,644 193,808 Deferred tax liabilities (Note 15) 148,632 423,955 Total long-term liabilities 7,205,532 9,847,482 Shareholders’ equity: Share capital and additional paid-in capital (Note 13) 267,800,517 and 270,902,571 Common Shares issued and outstanding at June 30, 2024 and June 30, 2023, respectively; authorized Common Shares: unlimited 2,271,886 2,176,947 Accumulated other comprehensive income (loss) (Note 21) ( 69,619 ) ( 53,559 ) Retained earnings 2,119,159 2,048,984 Treasury stock, at cost ( 3,135,980 and 3,536,375 shares at June 30, 2024 and June 30, 2023, respectively) ( 123,268 ) ( 151,597 ) Total OpenText shareholders’ equity 4,198,158 4,020,775 Non-controlling interests 1,523 1,329 Total shareholders’ equity 4,199,681 4,022,104 Total liabilities and shareholders’ equity $ 14,205,707 $ 17,089,200 Guarantees and contingencies (Note 14) Related party transactions (Note 25) Subsequent events (Note 26) See accompanying Notes to Consolidated Financial Statements 144 Table of Contents OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands of U.S. dollars, except share and per share data) Year Ended June 30, 2024 2023 2022 Revenues (Note 3): Cloud services and subscriptions $ 1,820,524 $ 1,700,433 $ 1,535,017 Customer support 2,713,297 1,915,020 1,330,965 License 834,162 539,026 358,351 Professional service and other 401,594 330,501 269,511 Total revenues 5,769,577 4,484,980 3,493,844 Cost of revenues: Cloud services and subscriptions 713,759 590,165 511,713 Customer support 292,733 209,705 121,485 License 25,608 16,645 13,501 Professional service and other 302,527 276,888 216,895 Amortization of acquired technology-based intangible assets (Note 8) 243,922 223,184 198,607 Total cost of revenues 1,578,549 1,316,587 1,062,201 Gross profit 4,191,028 3,168,393 2,431,643 Operating expenses: Research and development 893,932 680,587 440,448 Sales and marketing 1,133,665 948,598 677,118 General and administrative 577,038 419,590 317,085 Depreciation 131,599 107,761 88,241 Amortization of acquired customer-based intangible assets (Note 8) 432,404 326,406 217,105 Special charges (recoveries) (Note 18) 135,305 169,159 46,873 Total operating expenses 3,303,943 2,652,101 1,786,870 Income from operations 887,085 516,292 644,773 Other income, net (Note 23) 358,391 34,469 29,118 Interest and other related expense, net ( 516,180 ) ( 329,428 ) ( 157,880 ) Income before income taxes 729,296 221,333 516,011 Provision for income taxes (Note 15) 264,012 70,767 118,752 Net income $ 465,284 $ 150,566 $ 397,259 Net (income) attributable to non-controlling interests ( 194 ) ( 187 ) ( 169 ) Net income attributable to OpenText $ 465,090 $ 150,379 $ 397,090 Earnings per share—basic attributable to OpenText (Note 24) $ 1.71 $ 0.56 $ 1.46 Earnings per share—diluted attributable to OpenText (Note 24) $ 1.71 $ 0.56 $ 1.46 Weighted average number of Common Shares outstanding—basic (in ‘000’s) 271,548 270,299 271,271 Weighted average number of Common Shares outstanding—diluted (in ‘000’s) 272,588 270,451 271,909 See accompanying Notes to Consolidated Financial Statements 145 Table of Contents OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands of U.S. dollars) Year Ended June 30, 2024 2023 2022 Net income $ 465,284 $ 150,566 $ 397,259 Other comprehensive income (loss)—net of tax: Net foreign currency translation adjustments ( 15,646 ) ( 40,798 ) ( 78,724 ) Unrealized gain (loss) on cash flow hedges: Unrealized gain (loss)—net of tax (1) ( 2,697 ) ( 941 ) ( 1,859 ) (Gain) loss reclassified into net income—net of tax (2) 965 2,721 373 Unrealized gain (loss) on available-for-sale financial assets: Unrealized gain (loss)—net of tax (3) 228 ( 602 ) — Actuarial gain (loss) relating to defined benefit pension plans: Actuarial gain (loss)—net of tax (4) 640 ( 6,605 ) 5,595 Amortization of actuarial (gain) loss into net income—net of tax (5) 450 325 718 Total other comprehensive loss, net ( 16,060 ) ( 45,900 ) ( 73,897 ) Total comprehensive income 449,224 104,666 323,362 Comprehensive income attributable to non - controlling interests ( 194 ) ( 187 ) ( 169 ) Total comprehensive income attributable to OpenText $ 449,030 $ 104,479 $ 323,193 ______________________ (1) Net of tax expense (recovery) of $( 972 ), $( 339 ), and $( 671 ) for the year ended June 30, 2024, 2023 and 2022, respectively. (2) Net of tax expense (recovery) of $ 347 , $ 981 , and $ 134 for the year ended June 30, 2024, 2023 and 2022, respectively. (3) Net of tax expense (recovery) of $ 112 , $( 159 ), and $ — for the year ended June 30, 2024, 2023, and 2022, respectively. (4) Net of tax expense (recovery) of $ 765 , $( 1,961 ) and $ 1,866 for the year ended June 30, 2024, 2023 and 2022, respectively. (5) Net of tax expense (recovery) of $ 193 , $ 143 and $ 290 for the year ended June 30, 2024, 2023 and 2022, respectively. See accompanying Notes to Consolidated Financial Statements 146 Table of Contents OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands of U.S. dollars and shares) Common Shares and Additional Paid in Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income Non-Controlling Interests Total Shares Amount Shares Amount Balance as of June 30, 2021 271,541 $ 1,947,764 ( 1,568 ) $ ( 69,386 ) $ 2,153,326 $ 66,238 $ 1,511 $ 4,099,453 Issuance of Common Shares Under employee stock option plans 950 32,714 — — — — — 32,714 Under employee stock purchase plans 842 33,806 — — — — — 33,806 Share-based compensation — 69,556 — — — — — 69,556 Purchase of treasury stock — — ( 2,630 ) ( 111,593 ) — — — ( 111,593 ) Issuance of treasury stock — ( 21,013 ) 492 21,013 — — — — Repurchase of Common Shares ( 3,810 ) ( 24,295 ) — — ( 152,692 ) — — ( 176,987 ) Dividends declared ($ 0.8836 per Common Share) — — — — ( 237,655 ) — — ( 237,655 ) Other comprehensive income (loss) - net — — — — — ( 73,897 ) — ( 73,897 ) Distribution to non-controlling interest — 142 — — — — ( 538 ) ( 396 ) Net income — — — — 397,090 — 169 397,259 Balance as of June 30, 2022 269,523 $ 2,038,674 ( 3,706 ) $ ( 159,966 ) $ 2,160,069 $ ( 7,659 ) $ 1,142 $ 4,032,260 Issuance of Common Shares Under employee stock option plans 245 7,830 — — — — — 7,830 Under employee stock purchase plans 1,135 31,679 — — — — — 31,679 Share-based compensation — 130,119 — — — — — 130,119 Purchase of treasury stock — — ( 521 ) ( 21,919 ) — — — ( 21,919 ) Issuance of treasury stock — ( 31,355 ) 691 30,288 — — — ( 1,067 ) Dividends declared ($ 0.9720 per Common Share) — — — — ( 261,464 ) — — ( 261,464 ) Other comprehensive income (loss) - net — — — — — ( 45,900 ) — ( 45,900 ) Net income — — — — 150,379 — 187 150,566 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 945 31,358 — — — — — 31,358 Under employee stock purchase plans 1,027 34,120 — — — — — 34,120 Share-based compensation — 139,779 — — — — — 139,779 Purchase of treasury stock — — ( 1,400 ) ( 53,085 ) — — — ( 53,085 ) Issuance of treasury stock — ( 76,178 ) 1,800 81,414 ( 5,236 ) — — — Repurchase of Common Shares ( 5,074 ) ( 34,140 ) — — ( 118,193 ) — — ( 152,333 ) Dividends declared ($ 1.00 per Common Share) — — — — ( 271,486 ) — — ( 271,486 ) Other comprehensive income (loss) - net — — — — — ( 16,060 ) — ( 16,060 ) Net income — — — — 465,090 — 194 465,284 Balance as of June 30, 2024 267,801 $ 2,271,886 ( 3,136 ) $ ( 123,268 ) $ 2,119,159 $ ( 69,619 ) $ 1,523 $ 4,199,681 147 Table of Contents OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars) Year Ended June 30, 2024 2023 2022 Cash flows from operating activities: Net income $ 465,284 $ 150,566 $ 397,259 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of intangible assets 807,925 657,351 503,953 Share-based compensation expense 140,079 130,302 69,556 Pension expense 13,881 9,207 6,606 Amortization of debt discount and issuance costs 25,257 16,753 5,422 Write-off of right of use assets 20,056 9,626 17,707 Loss on extinguishment of debt 56,393 8,152 27,413 Gain on AMC Divestiture ( 429,102 ) — — Loss on sale and write down of property and equipment, net 3,710 2,331 294 Deferred taxes ( 142,271 ) ( 149,560 ) ( 36,088 ) Share in net (income) loss of equity investees 18,194 23,077 ( 58,702 ) Changes in financial instruments ( 3,116 ) 128,841 — Changes in operating assets and liabilities: Accounts receivable 108,562 168,604 81,841 Contract assets ( 95,403 ) ( 73,539 ) ( 37,966 ) Prepaid expenses and other current assets ( 28,395 ) ( 23,035 ) ( 13,954 ) Income taxes 112,097 14,948 34,589 Accounts payable and accrued liabilities ( 65,887 ) ( 127,092 ) ( 24,177 ) Deferred revenue ( 42,974 ) ( 128,395 ) ( 5,236 ) Other assets 24,849 ( 11,297 ) 17,297 Operating lease assets and liabilities, net ( 21,448 ) ( 27,635 ) ( 4,004 ) Net cash provided by operating activities 967,691 779,205 981,810 Cash flows from investing activities: Additions of property and equipment ( 159,295 ) ( 123,832 ) ( 93,109 ) Purchase of Micro Focus, net of cash acquired ( 9,272 ) ( 5,657,963 ) — Purchase of Zix Corporation, net of cash acquired — — ( 856,175 ) Purchase of Bricata Inc. — — ( 17,753 ) Proceeds from AMC Divestiture 2,229,187 — — Realized gain on financial instruments — 131,248 — Proceeds from net investment hedge derivative contracts 4,456 — — Other investing activities ( 9,759 ) ( 873 ) ( 3,922 ) Net cash provided by (used in) investing activities 2,055,317 ( 5,651,420 ) ( 970,959 ) Cash flows from financing activities: Proceeds from issuance of Common Shares from exercise of stock options and ESPP 66,914 39,331 67,215 Proceeds from long-term debt and Revolver — 4,927,450 1,500,000 Repayment of long-term debt and Revolver ( 2,568,352 ) ( 202,926 ) ( 860,000 ) Debt extinguishment costs — — ( 24,969 ) Debt issuance costs ( 3,833 ) ( 77,899 ) ( 17,159 ) Net change in transition services agreement obligation 15,278 — — Repurchase of Common Shares ( 150,017 ) — ( 176,987 ) Purchase of treasury stock ( 53,085 ) ( 21,919 ) ( 111,593 ) Distribution to non-controlling interest — — ( 396 ) Payments of dividends to shareholders ( 267,362 ) ( 259,549 ) ( 237,655 ) Other financing activities ( 1,447 ) ( 1,435 ) — Net cash provided by (used in) financing activities ( 2,961,904 ) 4,403,053 138,456 Foreign exchange gain (loss) on cash held in foreign currencies ( 12,263 ) 7,203 ( 63,196 ) Increase (decrease) in cash, cash equivalents and restricted cash during the year 48,841 ( 461,959 ) 86,111 Cash, cash equivalents and restricted cash at beginning of the year 1,233,952 1,695,911 1,609,800 Cash, cash equivalents and restricted cash at end of the year $ 1,282,793 $ 1,233,952 $ 1,695,911 148 Table of Contents OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars) Reconciliation of cash, cash equivalents and restricted cash: June 30, 2024 June 30, 2023 June 30, 2022 Cash and cash equivalents $ 1,280,662 $ 1,231,625 $ 1,693,741 Restricted cash (1) 2,131 2,327 2,170 Total cash, cash equivalents and restricted cash $ 1,282,793 $ 1,233,952 $ 1,695,911 ______________________ (1) Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Consolidated Balance Sheets (Note 9). Supplemental cash flow disclosures (Note 6 and Note 22) See accompanying Notes to Consolidated Financial Statements 149 Table of Contents OPEN TEXT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended June 30, 2024 (Tabular amounts in thousands of U.S. dollars, except share and per share data) NOTE 1— BASIS OF PRESENTATION The accompanying Consolidated Financial Statements include the accounts of Open Text Corporation and our subsidiaries, collectively referred to as “OpenText” or the “Company.” We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd. (OT South Africa), which as of June 30, 2024, was 70 % owned by OpenText. All intercompany balances and transactions have been eliminated. Previously, our ownership in EC1 Pte. Ltd. (GXS Singapore) was 81 %. During the first quarter of Fiscal 2022 (as defined below), we made a final cash distribution of $ 0.4 million to the non-controlling interest holder in GXS Singapore as part of the process to liquidate the subsidiary. During Fiscal 2022, the liquidation of GXS Singapore was completed. The following Fiscal Year terms are used throughout this Annual Report on Form 10-K: Fiscal Year Beginning Date Ending Date Fiscal 2026 July 1, 2025 June 30, 2026 Fiscal 2025 July 1, 2024 June 30, 2025 Fiscal 2024 July 1, 2023 June 30, 2024 Fiscal 2023 July 1, 2022 June 30, 2023 Fiscal 2022 July 1, 2021 June 30, 2022 Fiscal 2021 July 1, 2020 June 30, 2021 Fiscal 2020 July 1, 2019 June 30, 2020 Fiscal 2019 July 1, 2018 June 30, 2019 Fiscal 2018 July 1, 2017 June 30, 2018 Fiscal 2017 July 1, 2016 June 30, 2017 Fiscal 2016 July 1, 2015 June 30, 2016 Fiscal 2015 July 1, 2014 June 30, 2015 Fiscal 2014 July 1, 2013 June 30, 2014 Fiscal 2013 July 1, 2012 June 30, 2013 Fiscal 2012 July 1, 2011 June 30, 2012 These Consolidated Financial Statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented and includes the consolidated financial results of Micro Focus International Limited, formerly Micro Focus International plc, and its subsidiaries (Micro Focus), with effect from February 1, 2023 (see below and Note 19 “Acquisitions and Divestitures” for more details). Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the amounts reported in the Consolidated Financial Statements. These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. In particular, key estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) accounting for income taxes, (iii) testing of goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) restructuring accruals, (viii) acquisition accruals and pre-acquisition contingencies, (ix) the valuation of stock options granted and obligations related to share-based payments, including the valuation of our long-term incentive plans, (x) the valuation of pension obligations and pension assets, (xi) the 150 Table of Contents valuation of available-for-sale investments, (xii) the valuation of derivative instruments and (xiii) the accounting for disposals of assets and liabilities. Acquisition of Micro Focus On January 31, 2023, we acquired all of the issued and to be issued share capital of Micro Focus (the Micro Focus Acquisition) for a total purchase price of $ 6.2 billion, inclusive of Micro Focus’ cash and repayment of Micro Focus’ outstanding indebtedness. The results of operations of Micro Focus have been consolidated with those of OpenText with effect from February 1, 2023. See Note 19 “Acquisitions and Divestitures” for more details. Divestiture of AMC Business On May 1, 2024, the Company completed the sale of its 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). See Note 19 “Acquisitions and Divestitures” for more details. The Company has determined that the AMC business does not constitute a component, as its operations and cash flows cannot be clearly distinguished from the rest of the Company’s operations and cash flows due to significant shared costs. Therefore, the transaction does not meet the discontinued operations criteria, and the results of operations from the AMC business are presented within Income from operations in our Consolidated Statements of Income. NOTE 2— ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS Accounting Policies Cash and cash equivalents Cash and cash equivalents include balances with banks as well as deposits that have original terms to maturity of three months or less. Cash equivalents are recorded at cost and typically consist of term deposits, commercial paper, certificates of deposit and short-term interest-bearing investment-grade securities of major banks in the countries in which we operate. Accounts Receivable and Allowance for Credit Losses In accordance with ASC Topic 326, “Financial Instruments - Credit Losses” (Topic 326), we recognize expected credit losses for accounts receivable and contract assets based on lifetime expected losses. We recognize a loss allowance using a collective assessment for accounts receivable, including contract assets, with similar risk characteristics based on historical credit loss experience, adjusted for forward-looking factors specific to the debtors and economic environment. We continue to maintain an allowance for 100% of all accounts deemed to be uncollectible. Customer creditworthiness is evaluated prior to order fulfillment and based on evaluations, we adjust our credit limit to the respective customer. In addition to these evaluations, we conduct on-going credit evaluations of our customers’ payment history and current creditworthiness. To date, the actual losses have been within our expectations. No single customer accounted for more than 10% of the accounts receivable balance as of June 30, 2024 and 2023, respectively. From time to time, we may sell certain accounts receivable to a financial institution on a non-recourse basis for cash, less a discount. Proceeds from the sale of receivables approximate their discounted book value and are included in operating cash flows on the Consolidated Statements of Cash Flows. Property and equipment Property and equipment are stated at the lower of cost or net realizable value and shown net of depreciation which is computed on a straight-line basis over the estimated useful lives of the related assets. Gains and losses on asset disposals are taken into income in the year of disposition. Fully depreciated property and equipment are retired from the Consolidated Balance Sheets when they are no longer in use. See the “Impairment of long-lived assets” section below for policy on property and equipment impairments. The following represents the estimated useful lives of property and equipment as of June 30, 2024: Furniture, equipment and other 5 to 15 years Computer hardware 3 to 5 years Computer software 3 to 7 years Capitalized software development costs 3 to 5 years Leasehold improvements Lesser of the lease term or 5 years Building 40 years 151 Table of Contents Capitalized Software We capitalize software development costs in accordance with ASC Topic 350-40, “Internal-Use Software.” We capitalize costs for software to be used internally when we enter the application development stage. This occurs when we complete the preliminary project stage, management authorizes and commits to funding the project, and it is feasible that the project will be completed, and the software will perform the intended function. We cease to capitalize costs related to a software project when it enters the post-implementation and operation stage. If different determinations are made with respect to the state of development of a software project, then the amount capitalized and the amount charged to expense for that project could differ materially. Costs capitalized during the application development stage consist of payroll and related costs for employees who are directly associated with, and who devote time directly to, a project to develop software for internal use. We also capitalize the direct costs of materials and services, which generally includes outside contractors, and interest. We do not capitalize any general and administrative or overhead costs or costs incurred during the application development stage related to training or data conversion costs. Costs related to upgrades and enhancements to internal-use software, if those upgrades and enhancements result in additional functionality, are capitalized. If upgrades and enhancements do not result in additional functionality, those costs are expensed as incurred. If different determinations are made with respect to whether upgrades or enhancements to software projects would result in additional functionality, then the amount capitalized and the amount charged to expense for that project could differ materially. We amortize capitalized costs with respect to development projects for internal-use software when the software is ready for use. The capitalized software development costs are generally amortized using the straight-line method over a 3 to 5 year period. In determining and reassessing the estimated useful life over which the cost incurred for the software should be amortized, we consider the effects of obsolescence, technology, competition and other economic factors. If different determinations are made with respect to the estimated useful life of the software, the amount of amortization charged in a particular period could differ materially. As of June 30, 2024 and 2023, our capitalized software development costs were $ 250.9 million and $ 216.8 million, respectively. Our additions relating to capitalized software development costs incurred during Fiscal 2024 and Fiscal 2023 were $ 26.1 million and $ 18.3 million, respectively. Leases We enter into operating leases, both domestically and internationally, for certain facilities, automobiles, data centers and equipment for use in the ordinary course of business. During Fiscal 2023, as part of the Micro Focus Acquisition, we acquired certain finance leases primarily comprised of equipment leases, all of which are sublet. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. In accordance with ASC Topic 842, “Leases” (Topic 842), we account for a contract as a lease when we have the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. We determine the initial classification and measurement of our right of use (ROU) assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets represent our right to control the underlying assets under lease, and the lease liability is our obligation to make the lease payments related to the underlying assets under lease, over the contractual term. ROU assets and lease liabilities are recognized on the Consolidated Balance Sheets based on the present value of future minimum lease payments to be made over the lease term. When available, we will use the rate implicit in the lease to discount lease payments to present value. However, real estate leases generally do not provide a readily determinable implicit rate, therefore, we must estimate our incremental borrowing rate to discount the lease payments. We estimate our incremental borrowing rate based on a collateralized basis with similar terms and payments, in an economic environment where the leased asset is located. The ROU asset equals the lease liability, adjusted for any initial direct costs, prepaid rent and lease incentives on initial recognition. Fixed lease costs are included in the recognition of ROU assets and lease liabilities. Variable lease costs are not included in the measurement of the lease liability. These variable lease payments are recognized in the Consolidated Statements of Income in the period in which the obligation for those payments is incurred. Lease expense for minimum lease payments continues to be recognized in the Consolidated Statements of Income on a straight-line basis over the lease term. We have not elected the practical expedient to combine lease and non-lease components in the determination of lease costs for our facility leases. For all other asset classes, we have elected the practical expedient to combine the lease and the non-lease components. The lease liability includes lease payments related to options to extend or renew the lease term only if we are reasonably certain we will exercise those options. Our leases typically do not contain any material residual value guarantees or restrictive covenants. In certain circumstances, we sublease all or a portion of a leased facility to various other companies through a sublease agreement. 152 Table of Contents Business combinations We apply the provisions of ASC Topic 805, “Business Combinations” (Topic 805), in the accounting for our acquisitions. It requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities, including contingent consideration where applicable, assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement, particularly since these assumptions and estimates are based in part on historical experience and information obtained from the management of the acquired companies. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill in the period identified. Furthermore, when valuing certain intangible assets that we have acquired, critical estimates may be made relating to, but not limited to: (i) future expected cash flows from software license sales, cloud SaaS, “desktop as a service” (DaaS) and PaaS contracts, support agreements, consulting agreements and other customer contracts (ii) the acquired company’s technology and competitive position, as well as assumptions about the period of time that the acquired technology will continue to be used in the combined company’s product portfolio, and (iii) discount rates. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments would be recorded to our Consolidated Statements of Income. For a given acquisition, we may identify certain pre-acquisition contingencies as of the acquisition date and may extend our review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether we include these contingencies as a part of the purchase price allocation and, if so, to determine the estimated amounts. If we determine that a pre-acquisition contingency (non-income tax related) is probable in nature and estimable as of the acquisition date, we record our best estimate for such a contingency as a part of the preliminary purchase price allocation. We often continue to gather information and evaluate our pre-acquisition contingencies throughout the measurement period and if we make changes to the amounts recorded or if we identify additional pre-acquisition contingencies during the measurement period, such amounts will be included in the purchase price allocation during the measurement period and, subsequently, in our results of operations. Uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We review these items during the measurement period as we continue to actively seek and collect information relating to facts and circumstances that existed at the acquisition date. Changes to these uncertain tax positions and tax related valuation allowances made subsequent to the measurement period, or if they relate to facts and circumstances that did not exist at the acquisition date, are recorded in the Provision for income taxes line of our Consolidated Statements of Income. Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. The carrying amount of goodwill is periodically reviewed for impairment (at a minimum annually) and whenever events or changes in circumstances indicate that the carrying value of this asset may not be recoverable. Our operations are analyzed by management and our chief operating decision maker (CODM) as being part of a single industry segment: the design, development, marketing and sales of Information Management software and solutions. Therefore, our goodwill impairment assessment is based on the allocation of goodwill to a single reporting unit. We perform a qualitative assessment to test our reporting unit’s goodwill for impairment. Based on our qualitative assessment, if we determine that the fair value of our reporting unit is more likely than not (i.e., a likelihood of more than 50 percent) to be less than its carrying amount, the quantitative assessment of the impairment test is performed. In the quantitative assessment, we compare the fair value of our reporting unit to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired and we are not required to perform further testing. If the carrying value of the net assets of our reporting unit exceeds its fair value, then an impairment loss equal to the difference, but not exceeding the total carrying value of goodwill allocated to the reporting unit, would be recorded. Our annual impairment analysis of goodwill was performed as of April 1, 2024. Our qualitative assessment indicated that there were no indications of impairment and therefore there was no impairment of goodwill required to be recorded for Fiscal 2024 ( no impairments were recorded for Fiscal 2023 and Fiscal 2022, respectively). 153 Table of Contents Acquired intangibles Acquired intangibles consist of acquired technology and customer relationships associated with various acquisitions. Acquired technology is initially recorded at fair value based on the present value of the estimated net future income-producing capabilities of software products acquired in acquisitions. We amortize acquired technology over its estimated useful life on a straight-line basis. Customer relationships represent relationships that we have with customers of the acquired companies and are either based upon contractual or legal rights or are considered separable; that is, capable of being separated from the acquired entity and being sold, transferred, licensed, rented or exchanged. These customer relationships are initially recorded at their fair value based on the present value of expected future cash flows. We amortize customer relationships on a straight-line basis over their estimated useful lives. We continually evaluate the remaining estimated useful life of our intangible assets being amortized to determine whether events and circumstances warrant a revision to the remaining period of amortization. Impairment of long-lived assets We account for the impairment and disposition of long-lived assets in accordance with ASC Topic 360, “Property, Plant, and Equipment” (Topic 360). We test long-lived assets or asset groups, such as property and equipment, ROU assets and definite lived intangible assets, for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed of before the end of its estimated useful life. Recoverability is assessed based on comparing the carrying amount of the asset to the aggregate pre-tax undiscounted cash flows expected to result from the use and eventual disposal of the asset or asset group. Impairment is recognized when the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. The impairment loss, if any, is measured as the amount by which the carrying amount exceeds fair value, which for this purpose is based upon the discounted projected future cash flows of the asset or asset group. We have no t recorded any significant impairment charges for long-lived assets during Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively. Derivative financial instruments We use derivative financial instruments to manage foreign currency rate risk. We account for these instruments in accordance with ASC Topic 815, “Derivatives and Hedging” (Topic 815), which requires that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of the reporting date. Topic 815 also requires that changes in our derivative financial instruments’ fair values be recognized in earnings; unless specific hedge accounting and documentation criteria are met (i.e., the instruments are accounted for as hedges). We recorded the effective portions of the gain or loss on derivative financial instruments that were designated as cash flow hedges in Accumulated other comprehensive income (loss), net of tax, in our accompanying Consolidated Balance Sheets. Any ineffective or excluded portion of a designated cash flow hedge, if applicable, was recognized in our Consolidated Statements of Income. In Fiscal 2023, we entered into certain derivative financial instruments, a portion of which were designated as a net investment hedge. In accordance with Topic 815, we recorded the effective portion of the gain or loss on derivative financial instruments that were designated as a net investment hedge within our currency translation adjustment component of Accumulated other comprehensive income (loss), in our accompanying Consolidated Balance Sheets. Any ineffective or excluded portion of our net investment hedge, if applicable, is recognized in Interest and other related expense, net of our Consolidated Statements of Income. See Note 17 “Derivative Instruments and Hedging Activities” for more details. Asset retirement obligations We account for asset retirement obligations in accordance with ASC Topic 410, “Asset Retirement and Environmental Obligations” (Topic 410), which applies to certain obligations associated with “leasehold improvements” within our leased office facilities. Topic 410 requires that a liability be initially recognized for the estimated fair value of the obligation when it is incurred. The associated asset retirement cost is capitalized as part of the carrying amount of the long-lived asset and depreciated over the remaining life of the underlying asset and the associated liability is accreted to the estimated fair value of the obligation at the settlement date through periodic accretion charges which are generally recorded within General and administrative expense in our Consolidated Statements of Income. When the obligation is settled, any difference between the final cost and the recorded amount is recognized as income or loss on settlement in our Consolidated Statements of Income. 154 Table of Contents Revenue recognition In accordance with ASC Topic 606, we account for a customer contract when we obtain written approval, the contract is committed, the rights of the parties, including the payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is recognized when, or as, control of a promised product or service is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for our products and services (at its transaction price). Estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based on readily available information, which may include historical, current and forecasted information, taking into consideration the type of customer, the type of transaction and specific facts and circumstances of each arrangement. We report revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue producing transactions. We have four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. Cloud services and subscriptions revenue Cloud services and subscriptions revenue are from hosting arrangements where in connection with the licensing of software, the end user does not take possession of the software, as well as from end-to-end fully outsourced B2B integration solutions to our customers (collectively referred to as cloud arrangements). The software application resides on our hardware or that of a third party, and the customer accesses and uses the software on an as-needed basis. Our cloud arrangements can be broadly categorized as PaaS, SaaS, cloud subscriptions and managed services. PaaS/ SaaS/ Cloud Subscriptions (collectively referred to here as cloud-based solutions): We offer cloud-based solutions that provide customers the right to access our software through the internet. Our cloud-based solutions represent a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. These services are made available to the customer continuously throughout the contractual period. However, the extent to which the customer uses the services may vary at the customer’s discretion. The payment for cloud-based solutions may be received either at inception of the arrangement, or over the term of the arrangement. These cloud-based solutions are considered to have a single performance obligation where the customer simultaneously receives and consumes the benefit, and as such we recognize revenue for these cloud-based solutions ratably over the term of the contractual agreement. For example, revenue related to cloud-based solutions that are provided on a usage basis, such as the number of users, is recognized based on a customer’s utilization of the services in a given period. Additionally, a software license is present in a cloud-based solutions arrangement if all of the following criteria are met: (i) The customer has the contractual right to take possession of the software at any time without significant penalty; and (ii) It is feasible for the customer to host the software independent of us. In these cases where a software license is present in a cloud-based solutions arrangement it is assessed to determine if it is distinct from the cloud-based solutions arrangement. The revenue allocated to the distinct software license would be recognized at the point in time the software license is transferred to the customer, whereas the revenue allocated to the hosting performance obligation would be recognized ratably on a monthly basis over the contractual term unless evidence suggests that revenue is earned, or obligations are fulfilled in a different pattern over the contractual term of the arrangement. Managed services: We provide comprehensive B2B process outsourcing services for all day-to-day operations of a customers’ B2B integration program. Customers using these managed services are not permitted to take possession of our software and the contract is for a defined period, where customers pay a monthly or quarterly fee. Our performance obligation is satisfied as we provide services of operating and managing a customer’s EDI environment. Revenue relating to these services is recognized using an output method based on the expected level of service we will provide over the term of the contract. As part of cloud services and subscription revenues, in connection with cloud subscription and managed service contracts, we often agree to perform a variety of services before the customer goes live, such as, converting and migrating customer data, building interfaces and providing training. These services are considered an outsourced suite of professional services which can involve certain project-based activities. These services can be provided at the initiation of a contract, during the implementation or on an ongoing basis as part of the customer life cycle. These services can be charged separately on a fixed fee or time and materials basis, or the costs associated may be recovered as part of the ongoing cloud subscription or managed services fee. These outsourced professional services are considered to be distinct from the ongoing hosting services and represent a separate performance obligation within our cloud subscription or managed services arrangements. The obligation to provide outsourced professional services is satisfied over time, with the customer simultaneously receiving and consuming the benefits as we 155 Table of Contents satisfy our performance obligations. For outsourced professional services, we recognize revenue by measuring progress toward the satisfaction of our performance obligation. Progress for services that are contracted for a fixed price is generally measured based on hours incurred as a portion of total estimated hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we recognize revenue at that amount. Customer support revenue Customer support revenue is associated with perpetual, term license and off-cloud subscription arrangements. As customer support is not critical to the customer’s ability to derive benefit from its right to use our software, customer support is considered as a distinct performance obligation when sold together in a bundled arrangement along with the software. Customer support consists primarily of technical support and the provision of unspecified updates and upgrades on a when-and-if-available basis. Customer support for perpetual licenses is renewable, generally on an annual basis, at the option of the customer. Customer support for term and subscription licenses is renewable concurrently with such licenses for the same duration of time. Payments for customer support are generally made at the inception of the contract term or in installments over the term of the maintenance period. Our customer support team is ready to provide these maintenance services, as needed, to the customer during the contract term. As the elements of customer support are delivered concurrently and have the same pattern of transfer, customer support is accounted for as a single performance obligation. The customer benefits evenly throughout the contract period from the guarantee that the customer support resources and personnel will be available to them, and that any unspecified upgrades or unspecified future products developed by us will be made available. Revenue for customer support is recognized ratably over the contract period based on the start and end dates of the maintenance term, in line with how we believe services are provided. License revenue Our license revenue can be broadly categorized as perpetual licenses, term licenses and subscription licenses, all of which are deployed on the customer’s premises (off-cloud). Perpetual licenses: We sell perpetual licenses which provide customers the right to use software for an indefinite period of time in exchange for a one-time license fee, which is generally paid at contract inception. Our perpetual licenses provide a right to use IP that is functional in nature and have significant stand-alone functionality. Accordingly, for perpetual licenses of functional IP, revenue is recognized at the point-in-time when control has been transferred to the customer, which normally occurs once software activation keys have been made available for download. Term licenses and Subscription licenses: We sell both term and subscription licenses which provide customers the right to use software for a specified period in exchange for a fee, which may be paid at contract inception or paid in installments over the period of the contract. Like perpetual licenses, both our term licenses and subscription licenses are functional IP that have significant stand-alone functionality. Accordingly, for both term and subscription licenses, revenue is recognized at the point-in-time when the customer is able to use and benefit from the software, which is normally once software activation keys have been made available for download at the commencement of the term. Professional service and other revenue Our professional services, when offered along with software licenses, consist primarily of technical services and training services. Technical services may include installation, customization, implementation or consulting services. Training services may include access to online modules or delivering a training package customized to the customer’s needs. At the customer’s discretion, we may offer one, all, or a mix of these services. Payment for professional services is generally a fixed fee or is a fee based on time and materials. Professional services can be arranged in the same contract as the software license or in a separate contract. As our professional services do not significantly change the functionality of the license and our customers can benefit from our professional services on their own or together with other readily available resources, we consider professional services as distinct within the context of the contract. Professional service revenue is recognized over time so long as: (i) the customer simultaneously receives and consumes the benefits as we perform them, (ii) our performance creates or enhances an asset the customer controls as we perform, and (iii) our performance does not create an asset with alternative use and we have enforceable right to payment. If all the above criteria are met, we use an input-based measure of progress for recognizing professional service revenue. For example, we may consider total labour hours incurred compared to total expected labour hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we will recognize revenue at that amount. 156 Table of Contents Material rights To the extent that we grant our customer an option to acquire additional products or services in one of our arrangements, we will account for the option as a distinct performance obligation in the contract only if the option provides a material right to the customer that the customer would not receive without entering into the contract. For example, if we give the customer an option to acquire additional goods or services in the future at a price that is significantly lower than the current price, this would be a material right as it allows the customer to, in effect, pay in advance for the option to purchase future products or services. If a material right exists in one of our contracts, then revenue allocated to the option is deferred and we would recognize revenue only when those future products or services are transferred or when the option expires. Based on history, our contracts do not typically contain material rights and when they do, the material right is not significant to our Consolidated Financial Statements. Arrangements with multiple performance obligations Our contracts generally contain more than one of the products and services listed above. Determining whether goods and services are considered distinct performance obligations that should be accounted for separately or as a single performance obligation may require judgment, specifically when assessing whether both of the following two criteria are met: • the customer can benefit from the product or service either on its own or together with other resources that are readily available to the customer; and • our promise to transfer the product or service to the customer is separately identifiable from other promises in the contract. If these criteria are not met, we determine an appropriate measure of progress based on the nature of our overall promise for the single performance obligation. If these criteria are met, each product or service is separately accounted for as a distinct performance obligation and the total transaction price is allocated to each performance obligation on a relative SSP basis. Standalone selling price The SSP reflects the price we would charge for a specific product or service if it were sold separately in similar circumstances and to similar customers. In most cases we can establish the SSP based on observable data. We typically establish a narrow SSP range for our products and services and assess this range on a periodic basis or when material changes in facts and circumstances warrant a review. If the SSP is not directly observable, then we estimate the amount using either the expected cost plus a margin or residual approach. Estimating SSP requires judgment that could impact the amount and timing of revenue recognized. SSP is a formal process whereby management considers multiple factors including, but not limited to, geographic or regional specific factors, competitive positioning, internal costs, profit objectives, and pricing practices. Transaction Price Allocation In bundled arrangements, where we have more than one distinct performance obligation, we must allocate the transaction price to each performance obligation based on its relative SSP. However, in certain bundled arrangements, the SSP may not always be directly observable. For instance, in bundled arrangements with license and customer support, we allocate the transaction price between the license and customer support performance obligations using the residual approach because we have determined that the SSP for licenses in these arrangements are highly variable. We use the residual approach only for our license arrangements. When the SSP is observable but contractual pricing does not fall within our established SSP range, then an adjustment is required, and we will allocate the transaction price between license and customer support based on the relative SSP established for the respective performance obligations. When two or more contracts are entered into at or near the same time with the same customer, we evaluate the facts and circumstances associated with the negotiation of those contracts. Where the contracts are negotiated as a package, we will account for them as a single arrangement and allocate the consideration for the combined contracts among the performance obligations accordingly. Sales to resellers We execute certain sales contracts through resellers, distributors and channel partners (collectively referred to as resellers). Typically, we conclude that the resellers are OpenText customers in our reseller agreements. The resellers have control over the pricing, service and products prior to being transferred to the end customer. We also assess the creditworthiness of each reseller and if they are newly formed, undercapitalized or in financial difficulty, we defer any revenues expected to 157 Table of Contents emanate from such reseller and recognize revenue only when cash is received, and all other revenue recognition criteria under ASC Topic 606 are met. Rights of return and other incentives We do not generally offer rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore, do not provide for or make estimates of rights of return and similar incentives. However, we do offer consumers who purchase certain of our products online directly from us an unconditional full 70-day money-back guarantee. Distributors and resellers are also permitted to return the consumer products, subject to certain limitations. Revenue is reduced for such rights based on the estimate of future returns originating from contractual agreements with these customers. Additionally, in some contracts, however, discounts may be offered to the customer for future software purchases and other additional products or services. Such arrangements grant the customer an option to acquire additional goods or services in the future at a discount and therefore are evaluated under guidance related to “material rights” as discussed above. Other policies Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the invoice date. In certain arrangements, we will receive payment from a customer either before or after the performance obligation to which the invoice relates has been satisfied. As a practical expedient, we do not account for significant financing components if the period between when we transfer the promised good or service to the customer and when the customer pays for the product or service will be one year or less. On that basis, our contracts for license and maintenance typically do not contain a significant financing component, however, in determining the transaction price we consider whether we need to adjust the promised consideration for the effects of the time value of money if the timing of payments provides either the customer or OpenText with a significant benefit of financing. Our managed services contracts may not include an upfront charge for outsourced professional services performed as part of an implementation and are recovered through an ongoing fee. Therefore, these contracts may be expected to have a financing component associated with revenue being recognized in advance of billings. We may modify contracts to offer customers additional products or services. The additional products and services will be considered distinct from those products or services transferred to the customer before the modification and will be accounted for as a separate contract. We evaluate whether the price for the additional products and services reflects the SSP adjusted as appropriate for facts and circumstances applicable to that contract. In determining whether an adjustment is appropriate, we evaluate whether the incremental consideration is consistent with the prices previously paid by the customer or similar customers. Certain of our subscription services and product support arrangements generally contain performance response time guarantees. For subscription services arrangements, we estimate variable consideration using a portfolio approach because performance penalties are tied to standard response time requirements. For product support arrangements, we estimate variable consideration on a contract basis because such arrangements are customer-specific. For both subscription services and product support arrangements, we use an expected value approach to estimate variable consideration based on historical business practices and current and future performance expectations to determine the likelihood of incurring penalties. Performance Obligations A summary of our typical performance obligations and when the obligations are satisfied are as follows: Performance Obligation When Performance Obligation is Typically Satisfied Cloud services and subscriptions revenue: Outsourced Professional Services Managed Services / Ongoing Hosting / SaaS As the services are provided (over time) Over the contract term, beginning on the date that service is made available (i.e., “Go live”) to the customer (over time) Customer support revenue: When and if available updates and upgrades and technical support Ratable over the course of the service term (over time) License revenue: Software licenses (Perpetual, Term, Subscription) When software activation keys have been made available for download (point in time) Professional service and other revenue: Professional services As the services are provided (over time) 158 Table of Contents Incremental Costs of Obtaining a Contract with a Customer Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. We have determined that certain of our commission programs meet the requirements to be capitalized. Some commission programs are not subject to capitalization as the commission expense is paid and recognized as the related revenue is recognized. In assessing costs to obtain a contract, we apply a practical expedient that allows us to assess our incremental costs on a portfolio of contracts with similar characteristics instead of assessing the incremental costs on each individual contract. We do not expect the financial statement effects of applying this practical expedient to the portfolio of contracts to be materially different than if we were to apply the standard to each individual contract. We pay commissions on the sale of new customer contracts as well as for renewals of existing contracts to the extent the renewals generate incremental revenue. Commissions paid on renewal contracts are limited to the incremental new revenue and therefore these payments are not commensurate with the commission paid on the original sale. We allocate commission costs to the performance obligations in an arrangement consistent with the allocation of the transaction price. Commissions allocated to the license performance obligation are expensed at the time the license revenue is recognized. Commissions allocated to professional service performance obligations are expensed as incurred, as these contracts are generally for one year or less and we apply a practical expedient to expense costs as incurred if the amortization period would have been one year or less. Commissions allocated to maintenance, managed services, on-going hosting arrangements or other recurring services, are capitalized and amortized consistent with the pattern of transfer to the customer of the services over the period expected to benefit from the commission payment. As commissions paid on renewals are not commensurate with the original sale, the period of benefit considers anticipated renewals. The benefit period is estimated to be approximately six years which is based on our customer contracts and the estimated life of our technology. Expenses for incremental costs associated with obtaining a contract are recorded within Sales and marketing expense in the Consolidated Statements of Income. Our short-term capitalized costs to obtain a contract are included in Prepaid expenses and other current assets, while our long-term capitalized costs to obtain a contract are included in Other assets on our Consolidated Balance Sheets. Research and development costs Research and development costs internally incurred in creating computer software to be sold, licensed or otherwise marketed are expensed as incurred unless they meet the criteria for deferral and amortization, as described in ASC Topic 985-20, “Costs of Software to be Sold, Leased, or Marketed” (Topic 985-20). In accordance with Topic 985-20, costs related to research, design and development of products are charged to expense as incurred and capitalized between the dates that the product is considered to be technologically feasible and is considered to be ready for general release to customers. In our historical experience, the dates relating to the achievement of technological feasibility and general release of the product have substantially coincided. In addition, no significant costs are incurred subsequent to the establishment of technological feasibility. As a result, we do not capitalize any research and development costs relating to internally developed software to be sold, licensed or otherwise marketed. Advertising Expenses Advertising costs, which include digital advertising, marketing programs and other promotional costs, are expensed as incurred. Advertising expenses incurred in Fiscal 2024, Fiscal 2023 and Fiscal 2022 were $ 66.9 million, $ 73.8 million and $ 59.6 million, respectively. Income taxes We account for income taxes in accordance with ASC Topic 740, “Income Taxes” (Topic 740). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the Consolidated Financial Statements that will result in taxable or deductible amounts in future years. These temporary differences are measured using enacted tax rates. A valuation allowance is recorded to reduce deferred tax assets to the extent that we consider it is more likely than not that a deferred tax asset will not be realized. In determining the valuation allowance, we consider factors such as the reversal of deferred income tax liabilities, projected taxable income, and the character of income tax assets and tax planning strategies. A change to these factors could impact the estimated valuation allowance and income tax expense. We account for our uncertain tax provisions by using a two-step approach. The first step is to evaluate the tax position for recognition by determining if the weight of the available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained on audit, including the resolution of related appeals or litigation processes, if any. The second step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize is 159 Table of Contents measured as the maximum amount which is more likely than not to be realized. The tax position is derecognized when it is no longer more likely than not that the position will be sustained on audit. On subsequent recognition and measurement, the maximum amount which is more likely than not to be recognized at each reporting date will represent the Company’s best estimate, given the information available at the reporting date, although the outcome of the tax position is not absolute or final. We recognize both accrued interest and penalties related to liabilities for income taxes within the Provision for income taxes line of our Consolidated Statements of Income (see Note 15 “Income Taxes” for more details). Equity investments We invest in investment funds in which we are a limited partner. Our interests in each of these investees range from 4 % to below 20 %. These investments are accounted for using the equity method. Our share of net income or losses based on our interest in these investments, which approximates fair value, is recorded as a component of Other income, net in our Consolidated Statements of Income (see Note 23 “Other Income (Expense), Net” for more details). Fair value of financial instruments Carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable and accounts payable (trade and accrued liabilities) approximate the fair value due to the relatively short period of time between origination of the instruments and their expected realization. The fair value of our Senior Notes is determined based on observable market prices and categorized as a Level 2 measurement. The carrying value of our other long-term debt facilities approximates the fair value since the interest rate is at market. We apply the provisions of ASC Topic 820, “Fair Value Measurement” (Topic 820), to our available-for-sale financial assets and derivative financial instruments that we are required to carry at fair value pursuant to other accounting standards (see Note 16 “Fair Value Measurement” for more details). Foreign currency Our Consolidated Financial Statements are presented in U.S. dollars. In general, the functional currency of our subsidiaries is the local currency. For each subsidiary, assets and liabilities denominated in foreign currencies are translated into U.S dollars at the exchange rates in effect at the balance sheet dates and revenues and expenses are translated at the average exchange rates prevailing during the previous month of the transaction. The effect of foreign currency translation adjustments are recorded as a component of Accumulated other comprehensive income (loss). Transactional foreign currency gains (losses) included in the Consolidated Statements of Income under the line item Other income, net for Fiscal 2024, Fiscal 2023 and Fiscal 2022 were $ 1.2 million, $ 56.6 million, and $( 2.7 ) million, respectively. Restructuring charges We record restructuring charges relating to contractual lease obligations, not accounted for under Topic 842, and other exit costs in accordance with ASC Topic 420, “Exit or Disposal Cost Obligations” (Topic 420). Topic 420 requires that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at its fair value in the period in which the liability is incurred. In order to incur a liability pursuant to Topic 420, our management must have established and approved a plan of restructuring in sufficient detail. A liability for a cost associated with involuntary termination benefits is recorded when benefits have been communicated and a liability for a cost to terminate an operating lease or other contract is incurred, when the contract has been terminated in accordance with the contract terms or we have ceased using the right conveyed by the contract, such as vacating a leased facility not accounted for under Topic 842. The recognition of restructuring charges requires us to make certain judgments regarding the nature, timing and amount associated with the planned restructuring activities, including estimating sub-lease income and the net recoverable amount of equipment to be disposed of. At the end of each reporting period, we evaluate the appropriateness of the remaining accrued balances (see Note 18 “Special Charges (Recoveries)” for more details). Loss Contingencies We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20, “Loss Contingencies” (Topic 450-20). Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant 160 Table of Contents internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with Topic 450-20. As of the date of this Annual Report on Form 10-K, the aggregate of such accrued liabilities was not material to our consolidated financial position or results of operations and we do not believe as of the date of this filing that it is reasonably possible that a loss exceeding the amounts already recognized will be incurred that would be material to our consolidated financial position or results of operations. As described more fully below, we are unable at this time to estimate a possible loss or range of losses in respect of certain disclosed matters (see Note 14 “Guarantees and Contingencies” for more details). Net income per share Basic net income per share is computed using the weighted average number of Common Shares outstanding including contingently issuable shares where the contingency has been resolved. Diluted net income per share is computed using the weighted average number of Common Shares and stock equivalents outstanding using the treasury stock method during the year. For periods in which we incur a net loss, our outstanding Common Share equivalents are not included in the calculation of diluted earnings (loss) per share as their effect is antidilutive. Accordingly, basic and diluted net loss per share for those periods are identical. See Note 24 “Earnings Per Share” for more details. Share-based payment We measure share-based compensation costs, in accordance with ASC Topic 718, “Compensation - Stock Compensation” (Topic 718) on the grant date, based on the calculated fair value of the award. We have elected to treat awards with graded vesting as a single award when estimating fair value. Compensation cost is recognized on a straight-line basis over the employee requisite service period, which in our circumstances is the stated vesting period of the award, provided that total compensation cost recognized at least equals the pro-rata value of the award that has vested. Compensation cost is initially based on the estimated number of options for which the requisite service is expected to be rendered. This estimate is adjusted in the period once actual forfeitures are known (see Note 13 “Share Capital, Option Plans and Share-based Payments” for more details). Accounting for Pensions, post-retirement and post-employment benefits Pension expense is accounted for in accordance with ASC Topic 715, “Compensation-Retirement Benefits” (Topic 715). Pension expense consists of actuarially computed costs of pension benefits in respect of the current year of service, imputed returns on plan assets (for funded plans), imputed interest on pension obligations and amortization of actuarial gain/loss. The expected costs of post-retirement benefits, other than pensions, are accrued in the Consolidated Financial Statements based upon actuarial methods and assumptions. The over-funded or under-funded status of defined benefit pension and other post-retirement plans are recognized as an asset or a liability (with the offset to Accumulated other comprehensive income (loss), net of tax, within Shareholders’ equity), respectively, on the Consolidated Balance Sheets. Actuarial gains or losses in excess of the greater of (i) 10% of the projected benefit obligation, or (ii) 10% of the plan assets, are recognized as a component of Other Comprehensive Income (Loss), net and subsequently amortized as a component of net periodic benefit costs over the weighted average of future working life of the plan’s active employees. See Note 12 “Pension Plans and Other Post Retirement Benefits” for more details. Held for Sale Classification Assessments for held for sale accounting classification are performed by the Company when events or changes in business circumstances indicate that a change in classification may be necessary. The Company classifies assets and liabilities to be disposed of as held for sale in the period in which they are available for immediate sale in their present condition and when the sale is probable and expected to be completed within one year. Assets and liabilities classified as held for sale are presented separately within current assets and liabilities in our Consolidated Balance Sheets and are measured at the lower of their carrying amount or fair value less costs to sell. Further, the Company ceases to record depreciation and amortization expense on assets that are classified as held for sale. Accounting Pronouncements Adopted in Fiscal 2024 During Fiscal 2024, we adopted the following Accounting Standards Updates (ASU): 161 Table of Contents Supplier Financing Program Obligations In September 2022, the Financial Accounting Standards Board (FASB) issued ASU 2022-04 “Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” This standard requires companies that participate in supplier finance programs in connection with the procurement of goods or services to disclose quantitative and qualitative information about the programs. We adopted this ASU as of July 1, 2023, which did not have a material impact on our Consolidated Financial Statements and related disclosures, as we had no material supplier finance program obligations as of June 30, 2024. NOTE 3— REVENUES Disaggregation of Revenue We have four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. The following tables disaggregate our revenue by significant geographic area, based on the location of our direct end customer, by type of performance obligation and timing of revenue recognition for the periods indicated: Year Ended June 30, 2024 2023 2022 Total Revenues by Geography: Americas (1) $ 3,341,881 $ 2,785,003 $ 2,187,629 EMEA (2) 1,878,470 1,310,016 1,026,201 Asia Pacific (3) 549,226 389,961 280,014 Total revenues $ 5,769,577 $ 4,484,980 $ 3,493,844 Total Revenues by Type of Performance Obligation: Recurring revenues (4) Cloud services and subscriptions revenue $ 1,820,524 $ 1,700,433 $ 1,535,017 Customer support revenue 2,713,297 1,915,020 1,330,965 Total recurring revenues $ 4,533,821 $ 3,615,453 $ 2,865,982 License revenue (perpetual, term and subscriptions) 834,162 539,026 358,351 Professional service and other revenue 401,594 330,501 269,511 Total revenues $ 5,769,577 $ 4,484,980 $ 3,493,844 Total Revenues by Timing of Revenue Recognition: Point in time $ 834,162 $ 539,026 $ 358,351 Over time (including professional service and other revenue) $ 4,935,415 $ 3,945,954 $ 3,135,493 Total revenues $ 5,769,577 $ 4,484,980 $ 3,493,844 ______________________ (1) Americas consists of countries in North, Central and South America. (2) EMEA consists of countries in Europe, the Middle East and Africa. (3) Asia Pacific primarily consists of Japan, Australia, China, Korea, Philippines, Singapore, India and New Zealand. (4) Recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue. Contract Balances A contract asset, net of allowance for credit losses, will be recorded if we have recognized revenue but do not have an unconditional right to the related consideration from the customer. For example, this will be the case if implementation services offered in a cloud arrangement are identified as a separate performance obligation and are provided to a customer prior to us being able to bill the customer. In addition, a contract asset may arise in relation to subscription licenses if the license revenue that is recognized upfront exceeds the amount that we are able to invoice the customer at that time. Contract assets are reclassified to accounts receivable when the rights become unconditional. 162 Table of Contents The balance for our contract assets and contract liabilities (i.e., deferred revenues) for the periods indicated below were as follows: As of June 30, 2024 As of June 30, 2023 Short-term contract assets $ 66,450 $ 71,196 Long-term contract assets $ 38,684 $ 64,553 Short-term deferred revenues $ 1,521,416 $ 1,721,781 Long-term deferred revenues $ 162,401 $ 217,771 The difference in the opening and closing balances of our contract assets and deferred revenues primarily results from the timing difference between our performance and customer payments. We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. During the year ended June 30, 2024, we reclassified $ 116.3 million (year ended June 30, 2023—$ 61.9 million) of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional. During the year ended June 30, 2024, 2023 and 2022 respectively, there was no significant impairment loss recognized related to contract assets. We recognize deferred revenue when we have received consideration, or an amount of consideration is due from the customer for future obligations to transfer products or services. Our deferred revenues primarily relate to cloud services and customer support agreements which have been paid for by customers prior to the performance of those services. The amount of revenue that was recognized during the year ended June 30, 2024 that was included in the deferred revenue balances at June 30, 2023 was $ 1.7 billion (year ended June 30, 2023 and 2022 —$ 887 million and $ 843 million, respectively). Incremental Costs of Obtaining a Contract with a Customer Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. The following table summarizes the changes in total capitalized costs to obtain a contract, since June 30, 2021: Capitalized costs to obtain a contract as of June 30, 2021 $ 72,900 New capitalized costs incurred 39,852 Amortization of capitalized costs ( 26,255 ) Impact of foreign exchange rate changes ( 3,935 ) Capitalized costs to obtain a contract as of June 30, 2022 82,562 New capitalized costs incurred 47,305 Amortization of capitalized costs ( 33,269 ) Impact of foreign exchange rate changes 609 Capitalized costs to obtain a contract as of June 30, 2023 97,207 New capitalized costs incurred 60,507 Amortization of capitalized costs ( 44,016 ) Impact of foreign exchange rate changes ( 246 ) Divestiture of AMC business (Note 19) ( 3,964 ) Capitalized costs to obtain a contract as of June 30, 2024 $ 109,488 During the year ended June 30, 2024, 2023 and 2022 respectively, there was no significant impairment loss recognized related to capitalized costs to obtain a contract. Refer to Note 9 “Prepaid Expenses and Other Assets” for additional information on incremental costs of obtaining a contract. Transaction Price Allocated to the Remaining Performance Obligations As of June 30, 2024, approximately $ 2.7 billion of revenue is expected to be recognized from remaining performance obligations on existing contracts. We expect to recognize approximately 44 % of this amount over the next 12 months and the remaining balance substantially over the next three years thereafter. We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less. Refer to Note 2 “Accounting Policies and Recent Accounting Pronouncements” for additional information on our revenue policy. 163 Table of Contents NOTE 4— ALLOWANCE FOR CREDIT LOSSES The following illustrates the activity in our allowance for credit losses on accounts receivable: Balance as of June 30, 2021 $ 22,151 Credit loss expense (recovery) ( 1,913 ) Write-off/adjustments ( 3,765 ) Balance as of June 30, 2022 $ 16,473 Credit loss expense (recovery) ( 2,007 ) Write-off/adjustments ( 638 ) Balance as of June 30, 2023 $ 13,828 Credit loss expense (recovery) 8,622 Write-off/adjustments ( 9,196 ) Divestiture of AMC business (Note 19) ( 1,146 ) Balance as of June 30, 2024 $ 12,108 Included in accounts receivable are unbilled receivables in the amount of $ 62.1 million as of June 30, 2024 (June 30, 2023—$ 66.5 million). As of June 30, 2024, we have an allowance for credit losses of $ 0.5 million for contract assets (June 30, 2023—$ 0.3 million). For additional information on contract assets see Note 3 “Revenues” for more details. NOTE 5— PROPERTY AND EQUIPMENT As of June 30, 2024 Cost Accumulated Depreciation Net Computer hardware $ 423,689 $ ( 281,331 ) $ 142,358 Computer software 201,942 ( 161,726 ) 40,216 Capitalized software development costs 250,941 ( 153,285 ) 97,656 Leasehold improvements 128,787 ( 94,605 ) 34,182 Land and buildings 59,472 ( 19,333 ) 40,139 Furniture, equipment and other 54,083 ( 40,894 ) 13,189 Total $ 1,118,914 $ ( 751,174 ) $ 367,740 As of June 30, 2023 Cost Accumulated Depreciation Net Computer hardware $ 386,400 $ ( 254,131 ) $ 132,269 Computer software 178,899 ( 135,123 ) 43,776 Capitalized software development costs 216,762 ( 122,730 ) 94,032 Leasehold improvements 123,607 ( 94,721 ) 28,886 Land and buildings 62,041 ( 18,020 ) 44,021 Furniture, equipment and other 55,741 ( 41,821 ) 13,920 Total $ 1,023,450 $ ( 666,546 ) $ 356,904 Sale of Company Owned Facility During the year ended June 30, 2024, we completed the sale of a Company owned facility with a carrying value of $ 4.5 million. The Company recognized a gain of $ 1.0 million on this sale in the Consolidated Statements of Income within Other income (expense), net. 164 Table of Contents NOTE 6— LEASES We enter into operating leases, both domestically and internationally, for certain facilities, automobiles, data centers and equipment for use in the ordinary course of business. The duration of the majority of these leases generally ranges from 1 to 10 years, some of which include options to extend for an additional 3 to 5 years after the initial term. Additionally, the land upon which our headquarters in Waterloo, Ontario, Canada is located is leased from the University of Waterloo for a period of 49 years beginning in December 2005, with an option to renew for an additional term of 49 years. We also have finance lease liabilities comprised of equipment lease arrangements with an average duration of 4 to 5 years of which all are currently being sublet. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets. The following illustrates the Consolidated Balance Sheets information related to leases: As of June 30, 2024 As of June 30, 2023 Operating Leases Balance Sheet Location Operating lease right of use assets Operating lease right of use assets $ 219,774 $ 285,723 Operating lease liabilities (current) Operating lease liabilities $ 76,446 $ 91,425 Operating lease liabilities (noncurrent) Long-term operating lease liabilities 218,174 271,579 Total operating lease liabilities $ 294,620 $ 363,004 Finance Leases Finance lease receivables (current) Prepaid expenses and other current assets $ 4,031 $ 6,362 Finance lease receivables (noncurrent) Other assets 2,329 5,515 Total finance lease receivables $ 6,360 $ 11,877 Finance lease liabilities (current) Accounts payable and accrued liabilities $ 3,173 $ 5,281 Finance lease liabilities (noncurrent) Accrued liabilities 2,327 5,500 Total finance lease liabilities $ 5,500 $ 10,781 The weighted average remaining lease term and discount rate for the periods indicated below were as follows: As of June 30, 2024 As of June 30, 2023 Weighted-average remaining lease term Operating leases 5.13 years 5.62 years Finance leases 1.85 years 2.40 years Weighted-average discount rate Operating leases 5.00 % 4.66 % Finance leases 5.47 % 5.60 % Lease Costs and Other Information The following illustrates the various components of lease costs for the period indicated: Year Ended June 30, 2024 2023 2022 Operating lease cost $ 90,383 $ 72,977 $ 62,401 Short-term lease cost 2,920 4,195 687 Variable lease cost 5,084 3,488 2,694 Sublease income ( 12,941 ) ( 12,518 ) ( 10,008 ) Total lease cost $ 85,446 $ 68,142 $ 55,774 165 Table of Contents Supplemental Cash Flow Information The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payments made for variable lease costs and short-term leases are not included in the measurement of lease liabilities, and, as such, are excluded from the amounts below: Year Ended June 30, 2024 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating leases $ 109,708 $ 93,556 $ 70,611 Finance leases $ 5,722 $ 2,473 $ — Right of use assets obtained in exchange for new lease liabilities: Operating leases (1) (2) $ 30,869 $ 29,551 $ 39,155 ___________________________ (1) The year ended June 30, 2023 excludes the impact of $ 129.7 million of right of use assets obtained through the Micro Focus Acquisition. See Note 19 “Acquisitions and Divestitures” for further details including the finalization of the purchase price allocation for the Micro Focus Acquisition. (2) The year ended June 30, 2022 excludes the impact of $ 8.1 million of right of use assets obtained through the acquisition of Zix Corporation. See Note 19 “Acquisitions and Divestitures” for further details including the finalization of the purchase price allocation. Maturity of Lease Liabilities The following table presents the future minimum lease payments under our lease liabilities as of June 30, 2024: Fiscal years ending June 30, Operating Leases Finance Leases 2025 $ 88,768 $ 3,367 2026 71,209 1,939 2027 58,163 459 2028 44,680 — 2029 25,025 — Thereafter 43,439 — Total lease payments $ 331,284 $ 5,765 Less: Imputed interest ( 36,664 ) ( 265 ) Total $ 294,620 $ 5,500 Operating lease maturity amounts included in the table above do not include sublease income expected to be received under our various sublease agreements with third parties. Under the agreements initiated with third parties, we expect to receive sublease income of $ 10.7 million in Fiscal 2025 and $ 24.0 million thereafter. 166 Table of Contents NOTE 7— GOODWILL Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets. The following table summarizes the changes in goodwill: Balance as of June 30, 2022 $ 5,244,653 Acquisition of Micro Focus (Note 19) 3,417,635 Acquisition of Zix Corporation (Note 19) (1) 4,878 Impact of foreign exchange rate changes ( 4,563 ) Balance as of June 30, 2023 8,662,603 Acquisition of Micro Focus (Note 19) (2) ( 32,063 ) Divestiture of AMC business (Note 19) ( 1,139,403 ) Other acquisitions (Note 19) 4,649 Impact of foreign exchange rate changes ( 7,419 ) Balance as of June 30, 2024 $ 7,488,367 ______________________ (1) Adjustments relate to the measurement period, which closed on December 23, 2022. (2) Adjustments relate to the measurement period, which closed on February 1, 2024. NOTE 8— ACQUIRED INTANGIBLE ASSETS As of June 30, 2024 Cost (1) Accumulated Amortization (1) Net (1) Technology assets $ 1,153,457 $ ( 342,528 ) $ 810,929 Customer assets 2,762,371 ( 1,087,036 ) 1,675,335 Total $ 3,915,828 $ ( 1,429,564 ) $ 2,486,264 As of June 30, 2023 Cost Accumulated Amortization Net Technology assets $ 1,815,260 $ ( 385,868 ) $ 1,429,392 Customer assets 3,691,252 ( 1,039,765 ) 2,651,487 Total $ 5,506,512 $ ( 1,425,633 ) $ 4,080,879 ______________________ (1) Excludes technology and customer intangible net assets with cost of $ 432.1 million and $ 610.2 million respectively, accumulated amortization of $ 48.6 million and $ 62.9 million respectively, and net book value of $ 383.5 million and $ 547.3 million, respectively, disposed of as part of the AMC Divestiture. See Note 19 “Acquisitions and Divestitures” for more details. Where applicable, the above balances as of June 30, 2024 have been reduced to reflect the impact of intangible assets where the gross cost has become fully amortized during the year ended June 30, 2024. The impact of this resulted in reductions to the cost and accumulated amortization of technology assets and customer assets of $ 240 million and $ 322 million, respectively. The weighted average amortization periods for acquired technology and customer intangible assets are approximately six years and nine years , respectively. 167 Table of Contents The following table shows the estimated future amortization expense for the fiscal years indicated. This calculation assumes no future adjustments to acquired intangible assets: Fiscal years ending June 30, 2025 $ 510,452 2026 467,124 2027 396,817 2028 379,177 2029 283,144 2030 and Thereafter 449,550 Total $ 2,486,264 NOTE 9— PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other current assets: As of June 30, 2024 As of June 30, 2023 Deposits and restricted cash $ 4,142 $ 2,621 Capitalized costs to obtain a contract 44,577 39,685 Short-term prepaid expenses and other current assets 192,065 175,879 Derivative asset (1) 2,127 3,547 Total $ 242,911 $ 221,732 ______________________ (1) Represents the asset related to our derivative instrument activity. See Note 17 “Derivative Instruments and Hedging Activities” for more details. Other assets: As of June 30, 2024 As of June 30, 2023 Deposits and restricted cash $ 20,063 $ 20,418 Capitalized costs to obtain a contract 64,911 57,522 Investments 124,168 147,974 Available-for-sale financial assets 40,541 39,858 Long-term prepaid expenses and other long-term assets 48,598 76,546 Total $ 298,281 $ 342,318 Deposits and restricted cash primarily relate to security deposits provided to landlords in accordance with facility lease agreements and cash restricted per the terms of certain contractual-based agreements. Capitalized costs to obtain a contract relate to incremental costs of obtaining a contract, such as sales commissions, which are eligible for capitalization on contracts to the extent that such costs are expected to be recovered (see Note 3 “Revenues”). Investments relate to certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4 % to below 20 %. These investments are accounted for using the equity method. Our share of net income or losses based on our interest in these investments, which approximates fair value and is subject to volatility based on market trends and business conditions, is recorded as a component of Other income (expense), net in our Consolidated Statements of Income (see Note 23 “Other Income (Expense), Net”). During the year ended June 30, 2024, our share of income (loss) from these investments was $( 18.2 ) million (year ended June 30, 2023 and 2022 — $( 23.1 ) million and $ 58.7 million, respectively). A portion of the available-for-sale financial assets relate to contractual arrangements under insurance policies held by the Company with guaranteed interest rates that are utilized to meet certain pension and post retirement obligations but do not meet the definition of a plan asset. The remaining portion of available-for-sale financial assets are primarily comprised of various debt and equity funds, which are valued utilizing market quotes provided by our third-party custodian. These arrangements are treated as available-for-sale financial assets measured at fair value quarterly (see Note 16 “Fair Value Measurement”) with unrealized gains and losses recorded within Other comprehensive income (loss), net (see Note 21 “Accumulated Other Comprehensive Income (Loss)”). 168 Table of Contents Prepaid expenses and other assets, both short-term and long-term, include advance payments on licenses that are being amortized over the applicable terms of the licenses and other miscellaneous assets. NOTE 10— ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities: As of June 30, 2024 As of June 30, 2023 Accounts payable—trade $ 151,202 $ 162,720 Accrued salaries, incentives and commissions 267,991 333,543 Accrued liabilities 262,190 239,817 Accrued sales and other tax liabilities 21,167 25,439 Derivative liability (1) 159,234 161,191 Accrued interest on long-term debt 38,670 37,563 Amounts payable in respect of restructuring and other special charges 22,489 30,073 Asset retirement obligations 8,173 5,915 Total $ 931,116 $ 996,261 ______________________ (1) Represents the liability related to our derivative instrument activity (see Note 17 “Derivative Instruments and Hedging Activities” for more details) . Long-term accrued liabilities: As of June 30, 2024 As of June 30, 2023 Amounts payable in respect of restructuring and other special charges $ 9,682 $ 8,875 Other accrued liabilities 15,390 17,749 Asset retirement obligations 21,411 25,337 Total $ 46,483 $ 51,961 Asset retirement obligations We are required to return certain of our leased facilities to their original state at the conclusion of our lease. As of June 30, 2024, the present value of this obligation was $ 29.6 million (June 30, 2023—$ 31.3 million), with an undiscounted value of $ 32.8 million (June 30, 2023—$ 35.0 million). 169 Table of Contents NOTE 11— LONG-TERM DEBT As of June 30, 2024 As of June 30, 2023 Total debt Senior Notes 2031 $ 650,000 $ 650,000 Senior Notes 2030 900,000 900,000 Senior Notes 2029 850,000 850,000 Senior Notes 2028 900,000 900,000 Senior Secured Notes 2027 1,000,000 1,000,000 Term Loan B — 947,500 Acquisition Term Loan 2,221,225 3,567,075 Revolver — 275,000 Total principal payments due 6,521,225 9,089,575 Unamortized debt discount and issuance costs (1) (2) ( 128,432 ) ( 206,629 ) Total amount outstanding 6,392,793 8,882,946 Less: Current portion of long-term debt Term Loan B — 10,000 Acquisition Term Loan 35,850 35,850 Revolver — 275,000 Total current portion of long-term debt 35,850 320,850 Non-current portion of long-term debt $ 6,356,943 $ 8,562,096 ______________________ (1) During the year ended June 30, 2024, we recorded $ 3.5 million of debt issuance costs, related to the amendment of the Revolver (as defined below) and the modification of the Acquisition Term Loan (as defined below) (year ended June 30, 2023—$ 185.6 million of debt discount and issuance costs related to the issuance of Senior Secured Notes 2027 and Acquisition Term Loan, each as defined below). (2) During the year ended June 30, 2024, we recognized a loss on debt extinguishment of $ 56.4 million related to the acceleration and recognition of unamortized debt discount and issuance costs related to the optional repayments of the Acquisition Term Loan and Term Loan B (as defined below) in Fiscal 2024 . Senior Unsecured Fixed Rate Notes Senior Notes 2031 On November 24, 2021, Open Text Holdings, Inc. (OTHI) a wholly-owned indirect subsidiary of the Company, issued $ 650 million in aggregate principal amount of 4.125 % senior notes due 2031 guaranteed by the Company (Senior Notes 2031) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (Securities Act), and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2031 bear interest at a rate of 4.125 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022. Senior Notes 2031 will mature on December 1, 2031, unless earlier redeemed, in accordance with their terms, or repurchased. On July 1, 2024, OTHI merged with and into Open Text Inc. (OTI), a wholly-owned indirect subsidiary of the Company. As a result of the merger, OTI assumed all rights and obligations of OTHI concerning the Senior Notes 2031, effective July 1, 2024. For the year ended June 30, 2024, we recorded interest expense of $ 26.8 million relating to Senior Notes 2031 (year ended June 30, 2023 and 2022—$ 26.8 million and $ 16.1 million, respectively) Senior Notes 2030 On February 18, 2020, OTHI issued $ 900 million in aggregate principal amount of 4.125 % senior notes due 2030 guaranteed by the Company (Senior Notes 2030) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2030 bear interest at a rate of 4.125 % per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2030 will mature on February 15, 2030, unless earlier 170 Table of Contents redeemed, in accordance with their terms, or repurchased. On July 1, 2024, as a result of the merger of OTHI with and into OTI, OTI assumed all rights and obligations of OTHI concerning the Senior Notes 2030, effective July 1, 2024. For the year ended June 30, 2024, we recorded interest expense of $ 37.1 million relating to Senior Notes 2030 (year ended June 30, 2023 and 2022—$ 37.1 million and $ 37.1 million, respectively). Senior Notes 2029 On November 24, 2021, we issued $ 850 million in aggregate principal amount of 3.875 % senior notes due 2029 (Senior Notes 2029) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2029 bear interest at a rate of 3.875 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022. Senior Notes 2029 will mature on December 1, 2029, unless earlier redeemed, in accordance with their terms, or repurchased. For the year ended June 30, 2024, we recorded interest expense of $ 32.9 million relating to Senior Notes 2029 (year ended June 30, 2023 and 2022—$ 32.9 million and $ 19.8 million, respectively). Senior Notes 2028 On February 18, 2020, we issued $ 900 million in aggregate principal amount of 3.875 % senior notes due 2028 (Senior Notes 2028) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2028 bear interest at a rate of 3.875 % per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2028 will mature on February 15, 2028, unless earlier redeemed, in accordance with their terms, or repurchased. For the year ended June 30, 2024, we recorded interest expense of $ 34.9 million relating to Senior Notes 2028 (year ended June 30, 2023 and 2022—$ 34.9 million and $ 34.9 million, respectively). Senior Notes 2026 On May 31, 2016, we issued $ 600 million in aggregate principal amount of 5.875 % senior notes due 2026 (Senior Notes 2026) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2026 had interest at a rate of 5.875 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on December 1, 2016. Senior Notes 2026 would have matured on June 1, 2026. On December 20, 2016, we issued an additional $ 250 million in aggregate principal amount by reopening our Senior Notes 2026 at an issue price of 102.75 %. The additional notes had identical terms, were fungible with and were a part of a single series with the previously issued $ 600 million aggregate principal amount of Senior Notes 2026. The outstanding aggregate principal amount of Senior Notes 2026, after taking into consideration the additional issuance, was $ 850 million as of December 9, 2021. On December 9, 2021, we redeemed Senior Notes 2026 in full at a price equal to 102.9375 % of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date. A portion of the net proceeds from the offerings of Senior Notes 2029 and Senior Notes 2031 was used to redeem Senior Notes 2026. Upon redemption, Senior Notes 2026 were cancelled and any obligation thereunder was extinguished. The resulting loss of $ 27.4 million, consisting of $ 25.0 million relating to the early termination call premium, $ 6.2 million relating to unamortized debt issuance costs and $( 3.8 ) million relating to unamortized premium, has been recorded as a component of Other income (expense), net in our Consolidated Statements of Income. See Note 23 “Other Income (Expense), Net.” For the year ended June 30, 2024, we did not record any interest expense relating to Senior Notes 2026 (year ended June 30, 2023 and 2022— nil and $ 21.9 million, respectively). Senior Secured Fixed Rate Notes Senior Secured Notes 2027 On December 1, 2022, we issued $ 1 billion in aggregate principal amount of senior secured notes due 2027 (Senior Secured Notes 2027, and together with the Senior Notes 2031, Senior Notes 2030, Senior Notes 2029, and Senior Notes 2028, the Senior Notes) in connection with the financing of the Micro Focus Acquisition in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Secured Notes 2027 bear interest at a rate of 6.90 % per annum, 171 Table of Contents payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2023. Senior Secured Notes 2027 will mature on December 1, 2027, unless earlier redeemed, in accordance with their terms, or repurchased. The Senior Secured Notes 2027 are guaranteed on a senior secured basis by certain of the Company’s subsidiaries, and are secured with the same priority as the Company’s senior credit facilities. The Senior Secured Notes 2027 and the related guarantees are effectively senior to all of the Company’s and the guarantors’ senior unsecured debt to the extent of the value of the Collateral (as defined in the indenture to the Senior Secured Notes 2027) and are structurally subordinated to all existing and future liabilities of each of the Company’s existing and future subsidiaries that do not guarantee the Senior Secured Notes 2027. As of June 30, 2024, the Senior Secured Notes 2027 bear an effective interest rate of 7.39 %. The effective interest rate includes interest expense of $ 69.0 million and amortization of debt discount and issuance costs of $ 2.7 million. For the year ended June 30, 2024, we recorded interest expense of $ 69.0 million, relating to Senior Secured Notes 2027 (year ended June 30, 2023 and 2022—$ 40.3 million and nil , respectively). Term Loan B On May 30, 2018, we entered into a credit facility which provides for a $ 1 billion term loan facility (Term Loan B), and borrowed under the facility to, among other things, repay in full the loans under our prior $ 800 million term loan facility originally entered into on January 16, 2014. On June 6, 2023, we amended the Term Loan B to replace the LIBOR benchmark rate applicable to borrowings under Term Loan B with a SOFR benchmark rate. On May 6, 2024, we used a portion of the net proceeds from the AMC Divestiture to prepay in full the outstanding principal balance of $ 940 million under Term Loan B, at which point all remaining commitments under Term Loan B were reduced to zero and Term Loan B was terminated, which resulted in a loss on debt extinguishment of $ 1.8 million relating to unamortized debt issuance costs (see Note 23 “Other Income (Expense), Net” for more details) . As of June 30, 2024, we had no outstanding aggregate principal balance under Term Loan B (June 30, 2023—$ 947.5 million). For the year ended June 30, 2024, we recorded interest expense of $ 58.4 million relating to Term Loan B (year ended June 30, 2023 and 2022—$ 54.0 million and $ 19.7 million, respectively). Revolver On December 19, 2023, we amended our committed revolving credit facility (the Revolver) to, among other things, extend the maturity from October 31, 2024 to December 19, 2028, and to remove the 10 -basis point credit spread adjustment for loans bearing interest based on the SOFR rate. Borrowings under the Revolver are secured by a first charge over substantially all of our assets, on a pari passu basis with the Acquisition Term Loan (as defined below) and Senior Secured Notes 2027. The Revolver has no fixed repayment date prior to the end of the term. On June 6, 2023, we entered into an amendment to replace the LIBOR benchmark rate applicable to borrowings under the Revolver with SOFR benchmark rate. Borrowings under the Revolver currently bear interest per annum at a floating rate of interest equal to Term SOFR (as defined in the Revolver) and a fixed margin dependent on our consolidated net leverage ratio ranging from 1.25 % to 1.75 %. Under the Revolver, we must maintain a “consolidated net leverage” ratio of no more than 4.50 :1.00 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of our total debt reduced by unrestricted cash, including guarantees and letters of credit, over our trailing twelve months net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. As of June 30, 2024, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 2.32 :1.00. As of June 30, 2024, we had no outstanding balance under the Revolver (June 30, 2023—$ 275.0 million). For the year ended June 30, 2024, we recorded interest expense of $ 2.2 million relating to the Revolver (year ended June 30, 2023 and 2022—$ 10.1 million and nil , respectively, relating to amounts previously drawn). Acquisition Term Loan On December 1, 2022, we amended our first lien term loan facility (the Acquisition Term Loan), dated as of August 25, 2022, to increase the aggregate commitments under the senior secured delayed-draw term loan facility from an aggregate principal amount of $ 2.585 billion to an aggregate principal amount of $ 3.585 billion. During the third quarter of Fiscal 2023, the Company drew down $ 3.585 billion from the Acquisition Term Loan, net of original issuance discount of 3 % and other fees (see Note 19 “Acquisitions and Divestitures” for more details). On August 14, 2023, we amended the Acquisition Term Loan, to reduce the applicable interest rate margin by 0.75 % over the remaining term of the Acquisition Term Loan. On May 15, 2024, we further amended the Acquisition Term Loan, to reduce the applicable interest rate margin by 0.5 % and remove the 10 -basis point credit spread adjustment for loans bearing interest based on the SOFR rate. Both of the above reductions in interest rate margin on the Acquisition Term Loan resulting from the amendments were accounted for by the Company as debt modifications. 172 Table of Contents The Acquisition Term Loan has a seven-year term from the date of funding, and repayments under the Acquisition Term Loan are equal to 0.25 % of the principal amount in equal quarterly installments for the life of the Acquisition Term Loan, with the remainder due at maturity. Borrowings under the Acquisition Term Loan currently bear a floating rate of interest equal to Term SOFR plus an applicable margin of 2.25 %. As of June 30, 2024, the outstanding balance on the Acquisition Term Loan bears an interest rate of 7.58 %. As of June 30, 2024, the Acquisition Term Loan bears an effective interest rate of 8.67 %. The effective interest rate includes interest expense of $ 272.5 million and amortization of debt discount and issuance costs of $ 18.3 million. The Acquisition Term Loan has incremental facility capacity of (i) $ 250 million plus (ii) additional amounts, subject to meeting a “consolidated senior secured net leverage” ratio not exceeding 2.75 :1.00, in each case subject to certain conditions. Consolidated senior secured net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, that is secured by the Company’s or any of the Company’s subsidiaries’ assets, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. Under the Acquisition Term Loan, we must maintain a “consolidated net leverage” ratio of no more than 4.50 :1.00 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges as defined in the Acquisition Term Loan. As of June 30, 2024, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 2.32 :1.00. The Acquisition Term Loan is unconditionally guaranteed by certain subsidiary guarantors, as defined in the Acquisition Term Loan, and is secured by a first charge on substantially all of the assets of the Company and the subsidiary guarantors on a pari passu basis with the Revolver and the Senior Secured Notes 2027. On October 20, 2023 and January 22, 2024, the Company made prepayments of $ 75 million and $ 175 million, respectively, on the Acquisition Term Loan using cash on hand. On May 6, 2024, the Company used a portion of the net proceeds from the AMC Divestiture to prepay $ 1.06 billion of the outstanding principal balance of the Acquisition Term Loan. As a result of these prepayments in Fiscal 2024, the Company recognized a loss on debt extinguishment of $ 54.6 million relating to unamortized debt issuance costs (see Note 23 “Other Income (Expense), Net” for more details) . For the year ended June 30, 2024, we recorded interest expense of $ 272.5 million relating to the Acquisition Term Loan (year ended June 30, 2023 and 2022—$ 125.7 million and nil , respectively). Bridge Loan On August 25, 2022, we entered into a bridge loan agreement (Bridge Loan) which provided for commitments of up to $ 2.0 billion to finance a portion of the repayment of Micro Focus’ existing debt. On December 1, 2022, we entered into an amendment to the Bridge Loan that reallocated commitments under the Bridge Loan to the Acquisition Term Loan. In connection with the amendment to the Bridge Loan and the receipt of proceeds from the issuance of the Senior Secured Notes 2027, all remaining commitments under the Bridge Loan were reduced to zero and the Bridge Loan was terminated, which resulted in a loss on debt extinguishment of $ 8.2 million relating to unamortized debt issuance costs (see Note 23 “Other Income (Expense), Net” for more details) . For the year ended June 30, 2024, we did not have any borrowings or record any interest expense relating to the Bridge Loan (year ended June 30, 2023— nil ). Debt Discount and Issuance Costs Debt discount and issuance costs relate primarily to costs incurred for the purpose of obtaining or amending our credit facilities and issuing our Senior Notes, and are being amortized through interest expense over the respective terms of the Senior Notes and Acquisition Term Loan using the effective interest method and straight-line method for the Revolver. 173 Table of Contents NOTE 12— PENSION PLANS AND OTHER POST RETIREMENT BENEFITS Defined Benefit Plans The Company has 51 pension and other post retirement plans in multiple countries, including 37 defined benefit and other post retirement benefit plans which were assumed as part of the Micro Focus Acquisition (see Note 19 “Acquisitions and Divestitures” for more details). All of our pension and other post retirement plans are located outside of Canada and the United States. The plans are primarily located in Germany, which, as of June 30, 2024, make up approximately 58 % of the total net benefit pension obligations. Our defined benefit pension plans include a mix of final salary type plans which provide for retirement, old age, disability and survivor’s benefits. Final salary type pension plans provide benefits to members either in the form of a lump sum payment or a guaranteed level of pension payable for life in the case of retirement, disability and death. Benefits under our final salary type plans are generally based on the participant’s age, compensation and years of service as well as the social security ceiling and other factors. Many of these plans are closed to new members. The net periodic costs of these plans are determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. Other post-retirement plans include statutory plans that offer termination, indemnity or other end of service benefits. Many of these plans were assumed through our acquisitions or are required by local regulatory and statutory requirements. All of our defined benefit and other post retirement plans are included in the aggregate projected benefit obligation within Pension liability, net on our Consolidated Balance Sheets. The Company does not intend to make any cash contributions to any defined benefit pension or post-retirement plans unless required by the local regulatory or statutory requirements. For the year ended June 30, 2024, we made cash contributions of $ 4.2 million (year ended June 30, 2023 and 2022—$ 6.5 million and $ 3.7 million, respectively). For Fiscal 2025, we expect to make cash contributions of $ 7.6 million to our defined benefit plans. As part of the Micro Focus Acquisition (see Note 19 “Acquisitions and Divestitures” for more details), we assumed a total of 37 defined benefit plans, all located outside of Canada and the United States. As of June 30, 2024, these assumed plans carried a net liability of $ 48.9 million and are funded at 77 % of the defined benefit obligations. Plan assets that partially fund these assumed defined benefit obligations are primarily classified within Level 1 and Level 2 of the fair value hierarchy and consist primarily of investments in equity and debt funds. Plan assets exclude insurance contracts with guaranteed interest rates classified as Level 3 available-for-sale financial assets of $ 24.9 million that do not meet the definition of a qualifying insurance policy, as they have not been pledged to the defined benefit and other post retirement plans (see Note 16 “Fair Value Measurement” for more details). As of June 30, 2024, the fair value of these acquired plan assets was $ 167.0 million. The following tables provides the details of the funded status of our defined benefit pension and other post-retirement plans: As of June 30, 2024 As of June 30, 2023 Plan assets $ 217,324 $ 208,363 Projected benefit obligations ( 349,427 ) ( 339,179 ) Funded status $ ( 132,103 ) $ ( 130,816 ) The following tables provides details of the net benefit obligations of our defined benefit pension and other post-retirement plans: As of June 30, 2024 As of June 30, 2023 Current portion of benefit obligation (1) $ 4,848 $ 4,504 Non-current portion of benefit obligation 127,255 126,312 Total $ 132,103 $ 130,816 ______________________ (1) The current portion of the benefit obligation has been included within “Accrued salaries, incentives and commissions,” all within Accounts payable and accrued liabilities in the Consolidated Balance Sheets (see Note 10 “Accounts Payable and Accrued Liabilities” for more details). 174 Table of Contents The following tables provides the details of the change in the benefit obligation and plan assets for the periods indicated: As of June 30, 2024 As of June 30, 2023 Benefit obligation—beginning of fiscal year $ 339,179 $ 115,591 Service cost 11,073 6,921 Interest cost 12,345 7,091 Benefits paid ( 3,204 ) ( 3,293 ) Company contributions ( 3,849 ) 20 Employee contributions 2,007 1,393 Plan settlement ( 7,089 ) ( 2,789 ) Plan amendment 1,501 ( 221 ) Net transfers ( 228 ) 205,556 Actuarial (gain) loss 3,412 6,199 Foreign exchange (gain) loss ( 5,720 ) 2,711 Benefit obligation—end of period 349,427 339,179 Less: Current portion 4,848 4,504 Non-current portion of benefit obligation $ 344,579 $ 334,675 As of June 30, 2024 As of June 30, 2023 Plan assets—beginning of fiscal year $ 208,363 $ 52,111 Benefit payments from plan assets ( 2,520 ) ( 325 ) Expected return on plan assets 11,400 5,502 Return on plan assets 3,973 ( 3,174 ) Company contributions 3,454 3,522 Employee contributions 2,007 1,515 Net transfers — 150,058 Plan settlement ( 7,089 ) ( 2,789 ) Foreign exchange (gain) loss ( 2,264 ) 1,943 Plan assets—end of period $ 217,324 $ 208,363 The following table provides details of net pension expense for the periods indicated: Year Ended June 30, Pension expense: 2024 2023 2022 Service cost $ 11,073 $ 6,921 $ 4,404 Interest cost 12,345 7,091 2,271 Expected return of plan assets ( 11,400 ) ( 5,502 ) ( 1,299 ) Amortization of actuarial (gains) losses 643 246 1,008 Settlement cost 1,220 451 — Net pension expense $ 13,881 $ 9,207 $ 6,384 Service-related net periodic pension costs are recorded within operating expense and all other non-service related net periodic pension costs are classified under Interest and other related expense, net on our Consolidated Statements of Income. The following table provides details of amounts recognized in Other Comprehensive Income: Year Ended June 30, 2024 2023 2022 Net actuarial gain (loss) $ 1,598 $ ( 9,017 ) $ 7,461 Amortization of actuarial loss (gain) 643 246 1,008 Settlement cost and plan amendments ( 193 ) 673 — Total recognized in other comprehensive income $ 2,048 $ ( 8,098 ) $ 8,469 175 Table of Contents The following table provides details of the plan assets measured at fair value presented by asset category and fair value hierarchy for the periods indicated: As of June 30, 2024 As of June 30, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash $ 2,444 $ — $ — $ 2,444 $ 2,924 $ — $ — $ 2,924 Debt funds 82,264 9,301 — 91,565 73,053 14,765 — 87,818 Equity funds 79,538 6,122 — 85,660 66,975 5,745 — 72,720 Real estate funds 4,438 70 4,771 9,279 235 72 6,420 6,727 Other 22,002 4,487 1,887 28,376 9,497 26,625 2,052 38,174 Total $ 190,686 $ 19,980 $ 6,658 $ 217,324 $ 152,684 $ 47,207 $ 8,472 $ 208,363 The Company’s investment objective with respect to its defined benefit plan assets is to achieve an optimal rate of return over the long term while managing an appropriate level of risk to meet adequate future benefit obligations. Plan assets are managed by investment fiduciaries that determine the appropriate asset allocation, risk tolerance, fund diversification and investment strategies to achieve the long term investment objectives of the plan assets. In determining the fair value of the defined benefit obligations as of June 30, 2024 and 2023, we used the following weighted-average key assumptions: Year Ended June 30, 2024 2023 Assumptions: Salary increases 3.0 % 2.9 % Pension increases 2.1 % 2.1 % Discount rate 3.8 % 3.9 % Expected return on plan assets 5.5 % 5.8 % Normal retirement age 64 64 Anticipated pension payments under the defined benefit plans for the fiscal years indicated below are as follows: Fiscal years ending June 30, 2025 $ 18,425 2026 14,087 2027 16,443 2028 18,112 2029 19,805 2030 to 2034 115,117 Total $ 201,989 Defined Contribution Plans The Company has various defined contribution retirement plans around the world covering many of its employees. Under these plans, employees can contribute a portion of their salary to the plan and the Company makes minimum non-elective contributions, discretionary contributions, and matching contributions, depending on the terms of the specific plan. The majority of the plans are primarily located in Canada, the United States, the United Kingdom and Germany. For the year ended June 30, 2024, we made contributions of $ 54.7 million relating to the defined contribution retirement plans (year ended June 30, 2023 and 2022—$ 40.0 million and $ 24.0 million, respectively). NOTE 13— SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS Cash Dividends For the year ended June 30, 2024, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $ 1.00 per Common Share in the aggregate amount of $ 267.4 million, which we paid during the same period (year ended June 30, 2023 and 2022—$ 0.9720 and $ 0.8836 per Common Share, respectively, in the aggregate amount of $ 259.5 million and $ 237.7 million, respectively). 176 Table of Contents Share Capital Our authorized share capital includes an unlimited number of Common Shares and an unlimited number of Preference Shares. No Preference Shares have been issued. Treasury Stock From time to time we may provide funds to an independent agent to facilitate repurchases of our Common Shares in connection with the settlement of awards under the Long-Term Incentive Plans (LTIP) or other plans. During the year ended June 30, 2024, we repurchased 1,400,000 Common Shares on the open market at a cost of $ 53.1 million for potential settlement of awards under “Long-Term Incentive Plans” and “Restricted Share Units” or other plans as described below (year ended June 30, 2023 and 2022— 521,136 and 2,630,000 Common Shares, respectively, at a cost of $ 21.9 million and $ 111.6 million, respectively). During the year ended June 30, 2024, we delivered to eligible participants 1,800,395 Common Shares that were purchased in the open market in connection with the settlement of awards and other plans (year ended June 30, 2023 and 2022— 691,181 and 491,244 Common Shares, respectively). Share Repurchase Plan On November 4, 2021, the Board authorized a share repurchase plan (Fiscal 2022 Repurchase Plan), pursuant to which we were authorized to purchase in open market transactions, from time to time over the 12-month period commencing November 12, 2021, up to an aggregate of $ 350 million of our Common Shares. . On April 30, 2024, the Board authorized a share repurchase plan (Fiscal 2024 Repurchase Plan) pursuant to which we were authorized to purchase for cancellation, in open market transactions from time to time over the 12-month period commencing on May 7, 2024 until May 6, 2025, up to $ 250 million of our Common Shares. The Fiscal 2024 Repurchase Plan includes a normal course issuer bid to provide means to execute purchases over the Toronto Stock Exchange (TSX). During the year ended June 30, 2024, we repurchased and cancelled 5,073,913 Common Shares for $ 152.3 million, inclusive of 2% Canadian excise taxes recorded (year ended June 30, 2023 and 2022— nil and 3,809,559 Common Shares for nil and $ 177.0 million, respectively). Share-Based Payments Share-based compensation expense for the periods indicated below is detailed as follows: Year Ended June 30, 2024 2023 2022 Stock options $ 18,167 $ 20,144 $ 17,091 Performance Share Units (issued under LTIP) 26,415 18,631 13,844 Restricted Share Units (issued under LTIP) 10,677 9,762 7,799 Restricted Share Units (other) 75,642 72,149 20,859 Deferred Share Units (directors) 3,162 4,036 3,993 Employee Stock Purchase Plan 6,016 5,580 5,970 Total share-based compensation expense $ 140,079 $ 130,302 $ 69,556 No cash was used by us to settle equity instruments granted under share-based compensation arrangements in any of the periods presented. We have not capitalized any share-based compensation costs as part of the cost of an asset in any of the periods presented. 177 Table of Contents A summary of unrecognized compensation cost for unvested shared-based payment awards is as follows: As of June 30, 2024 Unrecognized Compensation Cost Weighted Average Recognition Period (years) Stock Options (issued under Stock Option Plans) $ 41,261 2.5 Performance Share Units (issued under LTIP) 42,486 1.7 Restricted Share Units (issued under LTIP) 17,058 1.9 Restricted Share Units (other) 66,999 1.6 Total unrecognized share-based compensation cost $ 167,804 Stock Option Plans A summary of stock options outstanding under our 2004 Stock Option Plan is set forth below. 2004 Stock Option Plan Date of inception Oct-04 Eligibility Eligible employees, as determined by the Board of Directors Options granted to date 48,015,347 Options exercised to date ( 22,937,101 ) Options cancelled to date ( 12,870,834 ) Options outstanding 12,207,412 Options available for issuance 5,018,767 Termination grace periods Immediately “for cause”; 90 days for any other reason; 180 days due to death Vesting schedule 25 % per year, unless otherwise specified Exercise price range $ 26.81 - $ 52.62 Expiration dates 7/5/2024 - 5/06/2031 Our stock options generally vest over four years and expire between seven and ten years from the date of the grant. Currently we also have options outstanding that vest over five years , as well as options outstanding that vest based on meeting certain market conditions. The exercise price of all our options is set at an amount that is not less than the closing price of our Common Shares on the NASDAQ on the trading day immediately preceding the applicable grant date. We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo pricing model, consistent with the provisions of ASC Topic 718, “Compensation—Stock Compensation” (Topic 718) and SEC Staff Accounting Bulletin No. 107. The option-pricing models require input of subjective assumptions, including the estimated life of the option and the expected volatility of the underlying stock over the estimated life of the option. We use historical volatility as a basis for projecting the expected volatility of the underlying stock and estimate the expected life of our stock options based upon historical data. We believe that the valuation techniques and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair value of our stock option grants. Estimates of fair value are not intended, however, to predict actual future events or the value ultimately realized by employees who receive equity awards. A summary of activity under our stock option plans for the year ended June 30, 2024 is as follows: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000’s) Outstanding at June 30, 2023 12,219,439 $ 38.44 4.68 $ 62,473 Granted 2,148,780 36.55 Exercised ( 944,092 ) 33.21 Forfeited or expired ( 1,216,715 ) 38.46 Outstanding at June 30, 2024 12,207,412 $ 38.51 4.31 $ 6,142 Exercisable at June 30, 2024 4,616,707 $ 41.22 2.93 $ 280 178 Table of Contents For the periods indicated, the weighted-average fair value of options and weighted-average assumptions estimated under the Black-Scholes option-pricing model were as follows: Year Ended June 30, 2024 2023 2022 Weighted–average fair value of options granted $ 9.00 $ 6.75 $ 9.02 Weighted-average assumptions used: Expected volatility 30.46 % 28.73 % 26.39 % Risk–free interest rate 4.44 % 3.98 % 1.15 % Expected dividend yield 2.73 % 3.07 % 1.78 % Expected life (in years) 4.26 4.20 4.15 Forfeiture rate (based on historical rates) 7 % 7 % 7 % Average exercise share price $ 36.55 $ 31.13 $ 48.20 Performance Options During the year ended June 30, 2024, we did not grant performance options (year ended June 30, 2023 and 2022— 1,000,000 and nil performance options, respectively). For the periods in which performance options were granted, as indicated, the weighted-average fair value of performance options and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows: Year Ended June 30, 2024 2023 2022 Weighted–average fair value of options granted $ — $ 8.09 $ — Derived service period (in years) — 1.70 — Weighted-average assumptions used: Expected volatility — % 26.00 % — % Risk–free interest rate — % 3.21 % — % Expected dividend yield — % 2.00 % — % Average exercise share price $ — $ 31.89 $ — Summary of Stock Options and Performance Options The aggregate intrinsic value of options exercised during the year ended June 30, 2024 was $ 7.0 million (year ended June 30, 2023 and 2022—$ 1.8 million and $ 17.0 million, respectively). For the year ended June 30, 2024, cash in the amount of $ 31.4 million was received as the result of the exercise of options granted under share-based payment arrangements (year ended June 30, 2023 and 2022—$ 7.8 million and $ 32.7 million, respectively). The tax benefit realized by us during the year ended June 30, 2024 from the exercise of options eligible for a tax deduction was $ 1.5 million (year ended June 30, 2023 and 2022—$ 0.3 million and $ 2.8 million, respectively). Long-Term Incentive Plans We incentivize certain eligible employees, in part, with long-term compensation pursuant to our LTIP. The LTIP is a rolling three-year program that grants eligible employees a certain number of target Performance Share Units (PSUs) and/or Restricted Share Units (RSUs). Target PSUs become vested upon the achievement of certain financial and/or operational performance criteria (the Performance Conditions) that are determined at the time of the grant. The Performance Conditions for vesting of the outstanding PSUs are based on market conditions or performance based revenue conditions. RSUs become vested when an eligible employee remains employed throughout the vesting period. For the year ended June 30, 2024, we settled LTIP awards that vested by delivering to eligible participants 223,577 Common Shares that were purchased in the open market at a cost of $ 10.7 million. PSUs and RSUs granted under the LTIP have been measured at fair value as of the effective date, consistent with ASC Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan. We estimate the fair value of PSUs with market based conditions using the Monte Carlo pricing model and RSUs have been valued based upon their grant date fair value. The fair value of PSUs with performance based conditions have been valued based upon their grant date fair value. Beginning in Fiscal 2024 certain PSU and RSU grants were eligible to receive dividend equivalent units that vest under the same conditions as the underlying grants. 179 Table of Contents Performance Share Units (Issued Under LTIP) A summary of activity under our performance share units issued under the LTIP for the year ended June 30, 2024 is as follows: Units Weighted-Average Grant Date Fair Value Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000’s) Outstanding at June 30, 2023 1,013,385 $ 61.64 1.75 $ 42,106 Granted (1) 1,006,609 51.13 Vested (1) ( 240,741 ) 61.23 Forfeited or expired ( 174,137 ) 55.64 Outstanding at June 30, 2024 1,605,116 $ 56.09 1.70 $ 48,218 ______________________ (1) PSUs are earned based on market or performance conditions and the actual number of PSUs earned, if any, is dependent upon performance and may range from 0 to 200 percent. For the periods indicated, the weighted-average fair value of market based PSUs issued under LTIP, and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows: Year Ended June 30, 2024 2023 2022 Weighted–average fair value of performance share units granted $ 21.17 - $ 59.48 $ 43.10 - $ 55.06 $ 69.78 - $ 75.15 Weighted-average assumptions used: Expected volatility 28.05 % 29.00 % 28.00 % Risk–free interest rate 4.38 % - 4.95 % 3.13 % - 3.39 % 0.45 % - 0.71 % Expected dividend yield — % — % 1.7 % - 1.8 % Expected life (in years) 3.00 3.11 3.10 Forfeiture rate (based on historical rates) 7 % 7 % 7 % Weighted–average fair value of performance share units vested $ — $ 41.75 $ 30.39 Aggregate intrinsic value of performance share units vested ($ in ‘000’s) $ — $ 6,216 $ 10,370 The weighted average fair value of the performance based PSUs granted was $ 40.14 for the year ended June 30, 2024. Restricted Share Units (Issued Under LTIP) A summary of activity under our RSUs issued under the LTIP for the year ended June 30, 2024 is as follows: Units Weighted-Average Grant Date Fair Value Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000’s) Outstanding at June 30, 2023 774,360 $ 42.83 1.68 $ 32,175 Granted 535,801 35.07 Vested ( 223,577 ) 43.40 Forfeited or expired ( 130,259 ) 39.23 Outstanding at June 30, 2024 956,325 $ 39.61 1.77 $ 28,728 For the periods indicated, the weighted-average fair value and aggregate intrinsic value of RSUs (issued under LTIP) were as follows: Year Ended June 30, 2024 2023 2022 Weighted–average fair value of restricted share units granted $ 35.07 $ 38.82 $ 49.91 Weighted–average fair value of restricted share units vested $ 43.40 $ 36.83 $ 37.36 Aggregate intrinsic value of restricted share units vested ($ in ‘000’s) $ 9,093 $ 3,947 $ 9,139 180 Table of Contents Restricted Share Units (Other) In addition to the grants made in connection with the LTIP plans discussed above, from time to time, we may grant RSUs to certain employees in accordance with employment and other non-LTIP related agreements. RSUs (other) vest over a specified contract date, typically two or three years from the respective date of grants. A summary of activity under our RSUs (other) issued for the year ended June 30, 2024 is as follows: Units Weighted-Average Grant Date Fair Value Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000’s) Outstanding at June 30, 2023 5,310,595 $ 36.43 1.97 $ 220,655 Granted 1,419,810 38.04 Vested ( 1,576,565 ) 40.94 Forfeited or expired ( 597,885 ) 35.76 Outstanding at June 30, 2024 4,555,955 $ 35.87 1.79 $ 136,861 For the periods indicated, the weighted-average fair value and intrinsic value of RSUs (other) were as follows: Year Ended June 30, 2024 2023 2022 Weighted–average fair value of restricted share units granted $ 38.04 $ 30.46 $ 44.81 Weighted–average fair value of restricted share units vested $ 40.94 $ 36.33 $ 45.73 Aggregate intrinsic value of restricted share units vested ($ in ‘000’s) $ 62,821 $ 15,755 $ 7,406 During the year ended June 30, 2024, we delivered to eligible participants 1,576,565 Common Shares that were purchased in the open market in connection with the settlement of vested RSUs, at a cost of $ 70.7 million (year ended June 30, 2023 and 2022— 400,210 and 141,452 Common Shares, respectively, with a cost of $ 17.6 million and $ 5.9 million). Deferred Share Units (DSUs) The DSUs are granted to certain non-employee directors. DSUs are issued under our Deferred Share Unit Plan. DSUs granted as compensation for director fees vest immediately, whereas all other DSUs granted vest at our next annual general meeting following the granting of the DSUs. No DSUs are payable by us until the director ceases to be a member of the Board. A summary of activity under our deferred share units issued for the year ended June 30, 2024 is as follows: Units Weighted-Average Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000’s) Outstanding at June 30, 2023 (1) 994,568 $ 29.98 0.36 $ 41,324 Granted (2) 87,903 38.43 Outstanding at June 30, 2024 (2) 1,082,471 $ 30.67 0.42 $ 32,517 ______________________ (1) Includes 90,906 unvested DSUs. (2) Includes 47,871 unvested DSUs. For the periods indicated, the weighted-average fair value and intrinsic value of DSUs were as follows: Year Ended June 30, 2024 2023 2022 Weighted–average fair value of deferred share units granted $ 38.43 $ 29.72 $ 50.04 Weighted–average fair value of deferred share units vested $ 36.81 $ 32.44 $ 41.24 Aggregate intrinsic value of deferred share units vested ($ in ‘000’s) $ 1,461 $ 1,565 $ 4,133 181 Table of Contents During the year ended June 30, 2024, we settled no DSUs at a cost of nil (year ended June 30, 2023 and 2022— 30,273 and nil Common Shares, respectively, with a cost of $ 1.1 million and nil , respectively). Employee Stock Purchase Plan (ESPP) Our ESPP offers employees the opportunity to purchase our Common Shares at a purchase price discount of 15 %. During the year ended June 30, 2024, 1,176,466 Common Shares were eligible for issuance to employees enrolled in the ESPP (year ended June 30, 2023 and 2022— 1,089,120 and 931,036 Common Shares, respectively). During the year ended June 30, 2024, cash in the amount of $ 33.9 million was received from employees relating to the ESPP (year ended June 30, 2023 and 2022—$ 31.0 million and $ 34.5 million, respectively). NOTE 14— GUARANTEES AND CONTINGENCIES We have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows: Payments due between Total July 1, 2024 - June 30, 2025 July 1, 2025 - June 30, 2027 July 1, 2027 - June 30, 2029 July 1, 2029 and beyond Long-term debt obligations (1) $ 8,420,561 $ 406,261 $ 804,257 $ 2,555,304 $ 4,654,739 Purchase obligations for contracts not accounted for as lease obligations (2) 340,765 181,003 159,762 — — $ 8,761,326 $ 587,264 $ 964,019 $ 2,555,304 $ 4,654,739 ______________________ (1) Includes interest up to maturity and principal payments. See Note 11 “Long-Term Debt” for more details. (2) For contractual obligations relating to leases and purchase obligations accounted for under ASC Topic 842, see Note 6 “Leases” for more details. Guarantees and Indemnifications We have entered into customer agreements which may include provisions to indemnify our customers against third party claims that our software products or services infringe certain third-party intellectual property rights and for liabilities related to a breach of our confidentiality obligations. We have not made any material payments in relation to such indemnification provisions and have not accrued any liabilities related to these indemnification provisions in our Consolidated Financial Statements. Occasionally, we enter into financial guarantees with third parties in the ordinary course of our business, including, among others, guarantees relating to taxes and letters of credit on behalf of parties with whom we conduct business. Such agreements have not had a material effect on our results of operations, financial position or cash flows. Litigation We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20 “Loss Contingencies” (Topic 450-20). Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with Topic 450-20. As of the date of this Annual Report on Form 10-K, the aggregate of such accrued liabilities was not material to our consolidated financial position or results of operations and we do not believe as of the date of this filing that it is reasonably possible that a loss exceeding the amounts already recognized will be incurred that would be material to our consolidated financial position or results of operations. As described more fully below, we are unable at this time to estimate a possible loss or range of losses in respect of certain disclosed matters. 182 Table of Contents Contingencies CRA Matter As part of its ongoing audit of our Canadian tax returns, the Canada Revenue Agency (CRA) has disputed our transfer pricing methodology used for certain intercompany transactions with our international subsidiaries and has issued notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016. Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of June 30, 2024, in connection with the CRA’s reassessments for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, to be limited to penalties, interest and provincial taxes that may be due of approximately $ 80 million. As of June 30, 2024, we have provisionally paid approximately $ 33 million in order to fully preserve our rights to object to the CRA’s audit positions, being the minimum payment required under Canadian legislation while the matter is in dispute. This amount is recorded within Long-term income taxes recoverable on the Consolidated Balance Sheets as of June 30, 2024. The notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 would, as drafted, increase our taxable income by approximately $ 90 million to $ 100 million for each of those years, as well as impose a 10 % penalty on the proposed adjustment to income. Audits by the CRA of our tax returns for fiscal years prior to Fiscal 2012 have been completed with no reassessment of our income tax liability. We strongly disagree with the CRA's positions and believe the reassessments of Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 (including any penalties) are without merit, and we are continuing to contest these reassessments. On June 30, 2022, we filed a notice of appeal with the Tax Court of Canada seeking to reverse all such reassessments (including penalties) in full and the customary court process is ongoing. Even if we are unsuccessful in challenging the CRA's reassessments to increase our taxable income for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, we have elective deductions available for those years (including carry-backs from later years) that would offset such increased amounts so that no additional cash tax would be payable, exclusive of any assessed penalties and interest, as described above. The CRA has audited Fiscal 2017, Fiscal 2018 and Fiscal 2019 on a basis that we strongly disagree with and are contesting. The focus of the CRA audit has been the valuation of certain intellectual property and goodwill when one of our subsidiaries continued into Canada from Luxembourg in July 2016. In accordance with applicable rules, these assets were recognized for tax purposes at fair market value as of that time, which value was supported by an expert valuation prepared by an independent leading accounting and advisory firm. CRA’s position for Fiscal 2017 through Fiscal 2019 relies in significant part on the application of its positions regarding our transfer pricing methodology that are the basis for its reassessment of our fiscal years 2012 to 2016 described above, and that we believe are without merit. Other aspects of CRA’s position for Fiscal 2017 through Fiscal 2019 conflict with the expert valuation prepared by the independent leading accounting and advisory firm that was used to support our original filing position. The CRA issued notices of reassessment in respect of Fiscal 2017, Fiscal 2018 and Fiscal 2019 on a basis consistent with its proposal to reduce the available depreciable basis of assets in Canada. On April 19, 2022, we filed our notice of objection regarding the reassessment in respect of Fiscal 2017 and on March 15, 2023, we filed our notice of objection regarding the reassessment in respect of Fiscal 2018. On December 11, 2023, we filed a notice of objection regarding Fiscal 2019. If we are ultimately unsuccessful in defending our position, the estimated impact of the proposed adjustment could result in us recording an income tax expense, with no immediate cash payment, to reduce the stated value of our deferred tax assets of up to approximately $ 470 million. Any such income tax expense could also have a corresponding cash tax impact that would primarily occur over a period of several future years based upon annual income realization in Canada. We strongly disagree with the CRA’s position for Fiscal 2017 through Fiscal 2019 and intend to vigorously defend our original filing position. We are not required to provisionally pay any cash amounts to the CRA as a result of the reassessment in respect of Fiscal 2017 through Fiscal 2019 due to the utilization of available tax attributes; however, to the extent the CRA reassesses subsequent fiscal years on a similar basis, we expect to make certain minimum payments required under Canadian legislation, which may need to be provisionally made starting in Fiscal 2025 while the matter is in dispute. We will continue to vigorously contest the adjustments to our taxable income and any penalty and interest assessments, as well as any reduction to the basis of our depreciable property. We are confident that our original tax filing positions were appropriate. Accordingly, as of the date of this Annual Report on Form 10-K, we have not recorded any accruals in respect of these reassessments or proposed reassessment in our Consolidated Financial Statements. The CRA is also in preliminary stages of auditing Fiscal 2020. Carbonite Class Action Complaint On August 1, 2019, prior to our acquisition of Carbonite Inc. (Carbonite), a purported stockholder of Carbonite filed a putative class action complaint against Carbonite, its former Chief Executive Officer, Mohamad S. Ali, and its former Chief 183 Table of Contents Financial Officer, Anthony Folger, in the United States District Court for the District of Massachusetts captioned Ruben A. Luna, Individually and on Behalf of All Others Similarly Situated v. Carbonite, Inc., Mohamad S. Ali, and Anthony Folger (No. 1:19-cv-11662-LTS) (the Luna Complaint). The complaint alleges violations of the federal securities laws under Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder. The complaint generally alleges that the defendants made materially false and misleading statements in connection with Carbonite’s Server Backup VM Edition, and seeks, among other things, the designation of the action as a class action, an award of unspecified compensatory damages, costs and expenses, including counsel fees and expert fees, and other relief as the court deems appropriate. On August 23, 2019, a nearly identical complaint was filed in the same court captioned William Feng, Individually and on Behalf of All Others Similarly Situated v. Carbonite, Inc., Mohamad S. Ali, and Anthony Folger (No. 1:19- cv-11808-LTS) (together with the Luna Complaint, the Securities Actions). On November 21, 2019, the district court consolidated the Securities Actions, appointed a lead plaintiff, and designated a lead counsel. On January 15, 2020, the lead plaintiff filed a consolidated amended complaint generally making the same allegations and seeking the same relief as the complaint filed on August 1, 2019. The defendants moved to dismiss the Securities Actions on March 10, 2020. On October 22, 2020, the district court granted with prejudice the defendants’ motion to dismiss the Securities Actions. On November 20, 2020, the lead plaintiff filed a notice of appeal to the United States Court of Appeals for the First Circuit. On December 21, 2021, the United States Court of Appeals for the First Circuit issued a decision reversing and remanding the Securities Actions to the district court for further proceedings. On July 14, 2023, the district court certified the lead plaintiff’s proposed class, following which the defendants filed a motion for class decertification. On January 31, 2024 the parties filed a motion for preliminary approval of a settlement to fully resolve the litigation. On February 1, 2024, the court issued a preliminary approval order and on May 15, 2024, the court issued a final approval order for the settlement and dismissal of the case with prejudice. The settlement was substantially paid from insurance coverage, with any remaining amount not covered by insurance being immaterial to the Company. All defendants denied the merit of the claims alleged in the case and the final settlement does not reflect any admission of fault, wrongdoing, or liability as to any defendant. Other Matters Also see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K for Fiscal 2024, as well as Note 15 “Income Taxes” related to certain historical matters arising prior to the Micro Focus Acquisition. NOTE 15— INCOME TAXES Our effective tax rate represents the net effect of the mix of income earned in various tax jurisdictions that are subject to a wide range of income tax rates. The effective tax rate increased to a provision of 36.2 % for the year ended June 30, 2024, compared to a provision of 32.0 % for the year ended June 30, 2023. Tax expense increased from $ 70.8 million during the year ended June 30, 2023 to $ 264.0 million during the year ended June 30, 2024. The increase in the effective tax rate was driven by an increase in valuation allowance, the impact of internal reorganizations and the AMC Divestiture, and U.S. Base Erosion and Anti-Abuse Tax (BEAT), partially offset by tax credits and change in undistributed earnings. The tax rate for the year ended June 30, 2023 varied from the statutory rate due to withholding taxes, changes in valuation allowance, permanent differences related to foreign source income inclusions, and the impact of internal reorganizations, partially offset by tax credits and permanent differences related to preferential tax treatment of the mark-to-market gains on derivatives. 184 Table of Contents A reconciliation of the combined Canadian federal and provincial income tax rate with our effective income tax rate is as follows: Year Ended June 30, 2024 2023 2022 Expected statutory rate 26.50 % 26.50 % 26.50 % Expected provision for income taxes $ 193,263 $ 58,653 $ 136,743 Effect of foreign tax rate differences ( 18,338 ) ( 17,502 ) ( 4,578 ) Change in valuation allowance 71,328 16,218 ( 2,444 ) Effect of permanent differences 11,864 17,281 ( 12,710 ) Effect of changes in unrecognized tax benefits ( 4,570 ) 857 8,130 Effect of withholding taxes 18,680 12,464 6,617 Effect of tax credits ( 84,244 ) ( 45,596 ) ( 12,330 ) Effect of accrual for undistributed earnings ( 12,421 ) 5,804 ( 6,343 ) Effect of U.S. BEAT 17,927 6,854 — Impact of internal reorganizations 59,761 8,822 13,077 Other items 10,762 6,912 ( 7,410 ) Provision for income taxes $ 264,012 $ 70,767 $ 118,752 The following is a geographical breakdown of income before the provision for income taxes: Year Ended June 30, 2024 2023 2022 Domestic income (loss) 359,865 300,437 435,355 Foreign income (loss) 369,431 ( 79,104 ) 80,656 Income before income taxes $ 729,296 $ 221,333 $ 516,011 185 Table of Contents The provision for (recovery of) income taxes consisted of the following: Year Ended June 30, 2024 2023 2022 Current income taxes (recoveries): Domestic 76,571 15,619 17,428 Foreign 329,712 204,708 137,412 Total current income taxes (recoveries) 406,283 220,327 154,840 Deferred income taxes (recoveries): Domestic 17,205 17,461 54,867 Foreign ( 159,476 ) ( 167,021 ) ( 90,955 ) Total deferred income taxes (recoveries) ( 142,271 ) ( 149,560 ) ( 36,088 ) Provision for income taxes $ 264,012 $ 70,767 $ 118,752 The primary components of the deferred tax assets and liabilities are as follows, for the periods indicated below: As of June 30, 2024 2023 Deferred tax assets Non-capital loss carryforwards $ 750,895 $ 754,852 Capital loss carryforwards 13,221 13,512 Interest expense carryforwards 217,071 156,832 Capitalized scientific research and development expenses 416,126 343,308 Restructuring costs and other reserves 21,347 34,357 Capitalized inventory and intangible expenses — 52,345 Tax credits 172,409 171,536 Lease liabilities 36,343 48,378 Deferred revenue 23,362 90,312 Share-based compensation 40,188 37,692 Derivatives 41,978 42,716 Other 88,901 50,272 Total deferred tax asset $ 1,821,841 $ 1,796,112 Valuation allowance ( 662,694 ) ( 605,926 ) Deferred tax liabilities Depreciation and amortization ( 233,219 ) ( 546,024 ) Right of use assets ( 21,173 ) ( 31,933 ) Other ( 120,730 ) ( 109,465 ) Deferred tax liabilities $ ( 375,122 ) $ ( 687,422 ) Net deferred tax asset $ 784,025 $ 502,764 Comprised of: Long-term assets 932,657 926,719 Long-term liabilities ( 148,632 ) ( 423,955 ) Net deferred tax asset $ 784,025 $ 502,764 As of June 30, 2024, we have $ 414.2 million of domestic non-capital loss carryforwards. In addition, we have $ 3.1 billion of foreign non-capital loss carryforwards, which includes $ 490.6 million of U.S. state loss carryforwards. $ 565.1 million of the foreign non-capital loss carryforwards have no expiry date, which includes $ 61.2 million of U.S. state loss carryforwards. The remainder of the domestic and foreign losses expire between 2025 and 2044. In addition, investment tax credits of $ 81.5 million will expire between 2028 and 2044. 186 Table of Contents We believe that sufficient uncertainty exists regarding the realization of certain deferred tax assets that a valuation allowance is required. We continue to evaluate our taxable position quarterly and consider factors by taxing jurisdiction, including but not limited to factors such as estimated taxable income, any historical experience of losses for tax purposes and the future growth of OpenText. As of June 30, 2024 and 2023, the Company had a valuation allowance on its domestic and foreign deferred tax assets of $ 662.7 million and $ 605.9 million, respectively. The balance at June 30, 2024 consisted of $ 8.8 million and $ 653.9 million against the Company’s domestic and foreign deferred tax assets, respectively, which, the Company believes, are more likely than not to be utilized in future years. The valuation allowance increased in Fiscal 2024 by $ 56.8 million primarily related to interest carryovers and losses that cannot be benefited. The aggregate changes in the balance of our gross unrecognized tax benefits (including interest and penalties) were as follows: Unrecognized tax benefits as of June 30, 2022 $ 54,126 Increases on account of current year positions 8,118 Increases on account of prior year positions (1) 138,062 Decreases on account of prior year positions ( 2,086 ) Decreases due to settlements with tax authorities ( 4,485 ) Decreases due to lapses of statutes of limitations ( 15,007 ) Unrecognized tax benefits as of June 30, 2023 $ 178,728 Increases on account of current year positions 4,074 Increases on account of prior year positions 16,558 Decreases on account of prior year positions ( 3,338 ) Decreases due to settlements with tax authorities ( 11,497 ) Decreases due to lapses of statutes of limitations ( 4,160 ) Unrecognized tax benefits as of June 30, 2024 $ 180,365 ______________________ (1) The increase in unrecognized tax benefits is primarily driven by the assumption of unrecognized tax benefits related to the Micro Focus Acquisition. Included in the above tabular reconciliation are unrecognized tax benefits of $ 63.0 million as of June 30, 2024 (June 30, 2023—$ 66.1 million) relating to tax attributes in which the unrecognized tax benefit has been recorded as a reduction to the deferred tax asset. The net unrecognized tax benefit excluding these deferred tax assets is $ 117.4 million as of June 30, 2024 (June 30, 2023—$ 112.6 million). We recognize interest expense and penalties related to income tax matters in income tax expense. For the year ended June 30, 2024, 2023 and 2022, respectively, we recognized the following amounts as income tax-related interest expense and penalties: Year Ended June 30, 2024 2023 2022 Interest expense (income) $ 7,778 $ ( 1,922 ) $ 419 Penalties expense 964 ( 21 ) 1,739 Total $ 8,742 $ ( 1,943 ) $ 2,158 The following amounts have been accrued on account of income tax-related interest expense and penalties: As of June 30, 2024 As of June 30, 2023 Interest expense accrued (1) $ 19,976 $ 10,187 Penalties accrued (1) $ 4,295 $ 3,332 ______________________ (1) These balances are primarily included within Long-term income taxes payable within the Consolidated Balance Sheets. We believe that it is reasonably possible that the gross unrecognized tax benefits, as of June 30, 2024, could decrease tax expense in the next 12 months by $ 44.0 million, relating primarily to the expiration of competent authority relief and tax years becoming statute barred for purposes of future tax examinations by local taxing jurisdictions. 187 Table of Contents We are subject to income tax audits in all major taxing jurisdictions in which we operate. Our four most significant tax jurisdictions are Canada, the United States, the United Kingdom and Germany. Our tax filings remain subject to audits by applicable tax authorities for a certain length of time following the tax year to which those filings relate. We currently have income tax audits open in Canada, the United States, the United Kingdom, Germany and other immaterial jurisdictions. The earliest fiscal years open for examination for our major jurisdictions are 2012 for Canada, 2020 for the United States, 2015 for the United Kingdom and 2016 for Germany. On a quarterly basis we assess the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income and other taxes. Statements regarding the Canada audits are included in Note 14 “Guarantees and Contingencies.” The timing of the resolution of income tax audits is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax audits in one or more jurisdictions. These assessments or settlements may or may not result in changes to our contingencies related to positions on tax filings. The actual amount of any change could vary significantly depending on the ultimate timing and nature of any settlements. We cannot currently provide an estimate of the range of possible outcomes. For more information relating to certain income tax audits, refer to Note 14 “Guarantees and Contingencies.” As of June 30, 2024, we have recognized a provision of $ 15.9 million (June 30, 2023—$ 28.3 million) in respect of deferred income tax liabilities for temporary differences related to the undistributed earnings of certain non-United States subsidiaries and planned periodic repatriations from certain German subsidiaries, that will be subject to withholding taxes upon distribution. We have not provided for additional foreign withholding taxes or deferred income tax liabilities related to undistributed earnings of all other non-Canadian subsidiaries, since such earnings are considered permanently invested in those subsidiaries or are not subject to withholding taxes. It is not practicable to reasonably estimate the amount of additional deferred income tax liabilities or foreign withholding taxes that may be payable should these earnings be distributed in the future. State Aid Matter In April 2019, the European Commission published its final decision on its State Aid investigation into the UK’s “Financing Company Partial Exemption” legislation and concluded that part of the legislation was in breach of EU State Aid rules. The UK government and certain UK-based international companies, supported by Micro Focus, appealed to the General Court of the Court of Justice of the European Union (General Court of the CJEU) against the decision. In February 2021, Micro Focus received and settled GBP denominated State Aid charging notices issued by HM Revenue and Customs, following the requirement for the UK government to start collection proceedings. As a result, Micro Focus recorded a long-term income tax receivable of $ 44.1 million. This reflects the payment that was made following the final decision published by the European Commission on its State Aid investigation into the UK’s ‘Financing Company Partial Exemption’ legislation. Based on management’s assessment of the value of the underlying tax benefit under dispute, and as supported by external professional advice, Micro Focus believed they had no liability in respect of these matters and therefore no tax charge was recorded. On June 8, 2022, the General Court of the CJEU found in favor of the European Commission’s decision that the UK’s ‘Financing Company Partial Exemption’ legislation is in breach of EU State Aid rules. The UK Government and UK-based international companies, supported by Micro Focus, lodged an appeal against the judgement with the CJEU. On April 11, 2024, the CJEU Advocate General (AG) issued an Opinion proposing that the CJEU should (i) set aside the General Court decision of June 8, 2022, (ii) annul the Commission Decision of April 2, 2019, and (iii) order the European Commission to pay the costs of the appeals. While this decision is not binding on the Court, and it is possible that the Court forms a different view to the AG, Court decisions do in most cases follow AG opinions. The AG decision is therefore considered as positively impacting the collectability of this income tax recoverable. Furthermore, the Court has now confirmed that its decision will be handed down on September 19, 2024. Micro Focus previously received and settled State Aid charging notices from HM Revenue and Customs (including historic interest). Although the Court decision is due within the period ending June 30, 2025, the timing of the refund is uncertain and therefore the income tax recoverable has continued to be treated as long term and recognized as part of non-current tangible assets as of June 30, 2024. 188 Table of Contents NOTE 16— FAIR VALUE MEASUREMENT ASC Topic 820 “Fair Value Measurement” (Topic 820) defines fair value, establishes a framework for measuring fair value, and addresses disclosure requirements for fair value measurements. Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value, in this context, should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including our own credit risk. In addition to defining fair value and addressing disclosure requirements, Topic 820 establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. • Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques. Financial Assets and Liabilities Measured at Fair Value: Our cash and cash equivalents, along with our accounts receivable and accounts payable and accrued liabilities balances, are measured and recognized in our Consolidated Financial Statements at an amount that approximates the fair value (a Level 2 measurement) due to their short maturities. The carrying value of our other long-term debt facilities approximates the fair value since the interest rate is at market. See Note 11 “Long-Term Debt” for further details. The following table summarizes the fair value of the Company’s financial instruments as of June 30, 2024 and 2023: Fair Value Fair Value Hierarchy June 30, 2024 June 30, 2023 Assets: Available-for-sale financial assets (Note 9) Level 2 $ 15,603 $ 15,231 Available-for-sale financial assets (Note 9) Level 3 $ 24,938 $ 24,627 Derivative asset (Note 17) Level 2 $ 2,127 $ 3,547 Liabilities: Derivative liability (Note 17) Level 2 $ ( 159,234 ) $ ( 161,191 ) Senior Notes (Note 11) (1) Level 2 $ ( 4,006,771 ) $ ( 3,827,888 ) ______________________ (1) Senior Notes are presented within the Consolidated Balance Sheets at amortized cost. See Note 11 “Long-Term Debt” for further details. Changes in Level 3 Fair Value Measurements The following table provides a reconciliation of changes in the fair value of our Level 3 available-for-sale financial assets between June 30, 2023 and June 30, 2024. Available-for-sale financial assets Balance as of June 30, 2023 $ 24,627 Gain (loss) recognized in income 311 Balance as of June 30, 2024 $ 24,938 189 Table of Contents Our derivative liabilities and our derivative assets are classified as Level 2 and are comprised of foreign currency forward and swap contracts. Our valuation techniques used to measure the fair values of the derivative instruments, the counterparties to which have high credit ratings, were derived from pricing models including discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data, as no quoted market prices exist for these instruments. Our discounted cash flow techniques use observable market inputs, such as, where applicable, foreign currency spot and forward rates. Our available-for-sale financial assets are classified as either Level 2 or Level 3. Our Level 2 available-for-sale financial assets are comprised primarily of various debt and equity funds, which are valued utilizing market quotes provided by our third-party custodian. Our Level 3 available-for-sale financial assets are comprised of insurance contracts which are valued by an external insurance expert by applying a discount rate to the future cash flows and taking into account the fixed interest rate, mortality rates and term of the insurance contracts. See Note 9 “Prepaid Expenses and Other Assets” for further details. If applicable, we will recognize transfers between levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the year ended June 30, 2024 and 2023, respectively, we did not have any transfers between Level 1, Level 2 or Level 3. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We measure certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the year ended June 30, 2024 and 2023, respectively, no indications of impairments were identified and therefore no fair value measurements were required. NOTE 17— DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Non-designated Hedges In connection with the Micro Focus Acquisition, in August 2022, we entered into certain derivative transactions to meet certain foreign currency obligations under UK cash confirmation requirements related to the purchase price of the Micro Focus Acquisition, mitigate the risk of foreign currency appreciation in the GBP denominated purchase price and mitigate the risk of foreign currency appreciation in the EUR denominated existing debt held by Micro Focus. We entered into the following derivatives: (i) three deal-contingent forward contracts, (ii) a non-contingent forward contract, and (iii) EUR/USD cross currency swaps. The deal-contingent forward contracts had an aggregate notional amount of £ 1.475 billion. The non-contingent forward contract had a notional amount of £ 350 million. The cross currency swaps are comprised of 5-year EUR/USD cross currency swaps with a notional amount of € 690 million and 7-year EUR/USD cross currency swaps with a notional amount of € 690 million. These instruments were entered into as economic hedges to mitigate foreign currency risks associated with the Micro Focus Acquisition. The instruments did not initially qualify for hedge accounting at the time they were entered into. In connection with the closing of the Micro Focus Acquisition, the deal-contingent forward and non-contingent forward contracts were settled and we designated the 7-year EUR/USD cross currency swaps as net investment hedges (see further details below). The 5-year EUR/USD cross currency swaps are non-designated and are measured at fair value with changes to fair value being recognized in the Consolidated Statements of Income within Other income (expense), net. Net Investment Hedge During the third quarter of Fiscal 2023, the Company designated the € 690 million of 7-year EUR/USD cross currency swaps as net investment hedges in accordance with “Derivatives and Hedging” (Topic 815). The Company utilizes the designated cross currency swaps to protect our EUR-denominated operations against exchange rate fluctuations. The Company assesses the hedge effectiveness of its net investment hedges on a quarterly basis utilizing a method based on the changes in spot price. As such, for derivative instruments designated as net investment hedges, changes in fair value of the designated hedging instruments attributable to fluctuations in the foreign currency spot exchange rates are initially recorded as a component of currency translation adjustments included within Consolidated Statements of Comprehensive Income until the hedged foreign operations are either sold or substantially liquidated. In accordance with Topic 815 certain components of the designated cross currency swaps relating to counterparty credit risk and forward exchange rates were excluded from the above effectiveness assessment. The fair value of these excluded components will be amortized over the life of the hedging instruments within Interest and other related expense, net within the Consolidated Statements of Income. Additionally, we will record the cash flows related to the periodic interest settlements on the 7-year EUR/USD cross currency swaps within the investing activities section of the Consolidated Statements of Cash 190 Table of Contents Flows. Any gains or losses recognized upon settlement of the cross currency swaps will be recorded within the investing activities section of the Consolidated Statements of Cash Flows. Cash Flow Hedge We are engaged in hedging programs with various banks to limit the potential foreign exchange fluctuations incurred on future cash flows relating to a portion of our Canadian dollar payroll expenses. We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of our business, in particular to changes in the Canadian dollar on account of large costs that are incurred from our centralized Canadian operations, which are denominated in Canadian dollars. As part of our risk management strategy, we use foreign currency forward contracts to hedge portions of our payroll exposure with typical maturities of between one and twelve months . We do not use foreign currency forward contracts for speculative purposes. We have designated these transactions as cash flow hedges of forecasted transactions under Topic 815. As the critical terms of the hedging instrument and of the entire hedged forecasted transaction are the same, in accordance with Topic 815, we have been able to conclude that changes in fair value or cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, quarterly unrealized gains or losses on the effective portion of these forward contracts have been included within Other comprehensive loss, net within the Consolidated Statements of Comprehensive Income. As of June 30, 2024, the fair value of the contracts is recorded within Accounts payable and accrued liabilities within the Consolidated Balance Sheets and represents the net loss before tax effect that is expected to be reclassified from accumulated other comprehensive income (loss) into earnings with the next twelve months. As of June 30, 2024, the notional amount of forward contracts we held to sell U.S. dollars in exchange for Canadian dollars was $ 95.7 million (June 30, 2023—$ 96.3 million). Fair Value of Derivative Instruments and Effect of Derivative Instruments on Financial Performance The fair values of outstanding derivative instruments are as follows: As of June 30, 2024 As of June 30, 2023 Instrument Balance Sheet Location Asset Liability Asset Liability Derivatives designated as hedges: Cash flow hedge Prepaid expenses and other current assets (Accounts payable and accrued liabilities) $ — $ ( 828 ) $ 1,530 $ — Net investment hedge Prepaid expenses and other current assets (Accounts payable and accrued liabilities) 654 ( 88,186 ) 596 ( 87,855 ) Total derivatives designated as hedges: $ 654 $ ( 89,014 ) $ 2,126 $ ( 87,855 ) Derivatives not designated as hedges: Cross currency swap contracts Prepaid expenses and other current assets (Accounts payable and accrued liabilities) 1,473 ( 70,220 ) 1,421 ( 73,336 ) Total derivatives not designated as hedges: $ 1,473 $ ( 70,220 ) $ 1,421 $ ( 73,336 ) Total derivatives $ 2,127 $ ( 159,234 ) $ 3,547 $ ( 161,191 ) 191 Table of Contents The effects of gains (losses) from derivative instruments on our Consolidated Statements of Comprehensive Income is as follows: Year Ended June 30, Instrument Income Statement Location 2024 2023 2022 Derivatives designated as hedges: Cash flow hedge Operating expenses $ ( 1,312 ) $ ( 3,702 ) $ ( 507 ) Net investment hedge Interest and other related expense, net 3,707 1,344 — Derivatives not designated as hedges: Deal-contingent forward contract Other income (expense), net — 9,354 — Non-contingent forward contract Other income (expense), net — 9,052 — Cross currency swap contracts Other income (expense), net 3,116 ( 9,779 ) — Cross currency swap contracts Interest and other related expense, net 3,441 1,421 — Total $ 8,952 $ 7,690 $ ( 507 ) The effects of the cash flow and net investment hedges on our Consolidated Statements of Comprehensive Income: Year Ended June 30, Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Location 2024 2023 2022 Gain (loss) recognized in OCI (loss) on cash flow hedge (effective portion) Unrealized gain (loss) on cash flow hedge $ ( 3,670 ) $ ( 1,280 ) $ ( 2,530 ) Gain (loss) recognized in OCI (loss) on net investment hedge (effective portion) Net foreign currency translation adjustment $ ( 331 ) $ ( 32,347 ) $ — Gain (loss) reclassified from AOCI into income (effective portion) - cash flow hedge Operating expenses $ ( 1,312 ) $ ( 3,702 ) $ ( 507 ) Gain (loss) reclassified from AOCI into income (excluded from effectiveness testing) - net investment hedge Interest and other related expense, net $ 2,244 $ 748 $ — NOTE 18— SPECIAL CHARGES (RECOVERIES) Special charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition-related costs and other charges. Year Ended June 30, 2024 2023 2022 Micro Focus Acquisition Restructuring Plan $ 74,267 $ 72,284 $ — Fiscal 2022 Restructuring Plan 340 6,744 25,778 Other historical restructuring plans ( 593 ) ( 1,628 ) ( 3,892 ) Divestiture-related costs 46,640 — — Acquisition-related costs 2,036 48,941 6,872 Other charges (recoveries) 12,615 42,818 18,115 Total $ 135,305 $ 169,159 $ 46,873 192 Table of Contents Micro Focus Acquisition Restructuring Plan During the third quarter of Fiscal 2023, as part of the Micro Focus Acquisition, we made a strategic decision to implement restructuring activities to reduce our overall workforce and further reduce our real estate footprint around the world (Micro Focus Acquisition Restructuring Plan). The Micro Focus Acquisition Restructuring Plan charges relate to facility costs and workforce reductions. Facility costs include the accelerated amortization associated with the abandonment of right of use assets, the write-off of property and equipment and other related variable lease and exit costs. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. During the year ended June 30, 2024, we recognized costs of $ 36.4 million related to abandoned office spaces that have been early terminated or assigned to a third party, of which $ 19.2 million was related to the write-off of right of use assets, and $ 3.5 million in charges associated with the write-off of property and equipment as part of the Micro Focus Acquisition Restructuring Plan. Since the inception of the Micro Focus Acquisition Restructuring Plan, $ 146.6 million has been recorded within Special charges (recoveries) within the Consolidated Statements of Income to date. We do not expect to incur any further significant charges relating to the Micro Focus Acquisition Restructuring Plan. A reconciliation of the beginning and ending restructuring liability, which is included within Accounts payable and accrued liabilities in our Consolidated Balance Sheets, for the year ended June 30, 2024 is shown below. Micro Focus Acquisition Restructuring Plan Workforce reduction Facility charges Total Balance payable as of June 30, 2023 $ 25,816 $ 7,276 $ 33,092 Accruals and adjustments 37,889 17,209 55,098 Cash payments ( 51,899 ) ( 4,417 ) ( 56,316 ) Foreign exchange and other non-cash adjustments ( 41 ) ( 3,742 ) ( 3,783 ) Balance payable as of June 30, 2024 $ 11,765 $ 16,326 $ 28,091 Fiscal 2022 Restructuring Plan During the third quarter of Fiscal 2022, as part of our return to office planning, we made a strategic decision to implement restructuring activities to streamline our operations and further reduce our real estate footprint around the world (Fiscal 2022 Restructuring Plan). The Fiscal 2022 Restructuring Plan charges relate to facility costs and workforce reductions. Facility costs include the accelerated amortization associated with the abandonment of right of use assets, the write-off of property and equipment and other related variable lease and exit costs. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. During the year ended June 30, 2024, we recognized costs of $ 0.5 million related to abandoned office spaces that have been early terminated or assigned to a third party, of which $ 0.1 million was related to the write-off of right of use assets. Since the inception of the Fiscal 2022 Restructuring Plan, $ 32.9 million has been recorded within Special charges (recoveries) in our Consolidated Financial Statements to date. We do not expect to incur any further significant charges relating to the Fiscal 2022 Restructuring Plan. 193 Table of Contents A reconciliation of the beginning and ending restructuring liability, which is included within Accounts payable and accrued liabilities in our Consolidated Balance Sheets, for the year ended June 30, 2024 is shown below. Fiscal 2022 Restructuring Plan Workforce reduction Facility charges Total Balance payable as of June 30, 2022 $ 989 $ 5,410 $ 6,399 Accruals and adjustments 3,729 1,387 5,116 Cash payments ( 4,212 ) ( 3,199 ) ( 7,411 ) Foreign exchange and other non-cash adjustments ( 9 ) ( 290 ) ( 299 ) Balance payable as of June 30, 2023 $ 497 $ 3,308 $ 3,805 Accruals and adjustments ( 159 ) 411 252 Cash payments ( 156 ) ( 1,431 ) ( 1,587 ) Foreign exchange and other non-cash adjustments ( 7 ) 307 300 Balance payable as of June 30, 2024 $ 175 $ 2,595 $ 2,770 Divestiture-related costs Divestiture-related costs, recorded within Special charges (recoveries), include the direct costs related to the AMC Divestiture. For the year ended June 30, 2024, divestiture-related costs were $ 46.6 million (year ended June 30, 2023 and 2022— nil ) . Acquisition-related costs Acquisition-related costs, recorded within Special charges (recoveries) include direct costs of potential and completed acquisitions. Acquisition-related costs for the year ended June 30, 2024 were $ 2.0 million (year ended June 30, 2023 and 2022—$ 48.9 million and $ 6.9 million, respectively). Other charges (recoveries) For the year ended June 30, 2024, Other charges (recoveries) includes $ 5.5 million of compensation related charges and $ 5.8 million of other miscellaneous charges, both associated with the Micro Focus Acquisition, along with $ 1.3 million related to pre-acquisition equity incentives of Zix, which upon acquisition were replaced by equivalent value cash settlements (see Note 19 “Acquisitions and Divestitures” for more details). For the year ended June 30, 2023, Other charges (recoveries) includes $ 23.0 million of severance charges, $ 11.8 million of other miscellaneous charges, both associated with the Micro Focus Acquisition and $ 8.3 million related to pre-acquisition equity incentives of Zix, which upon acquisition were replaced by equivalent value cash settlements (see Note 19 “Acquisitions and Divestitures” for more details). For the year ended June 30, 2022, Other charges (recoveries) includes $ 15.4 million related to pre-acquisition equity incentives of Zix, which upon acquisition were replaced by equivalent value cash settlements (see Note 19 “Acquisitions and Divestitures”) and $ 2.7 million relating to other miscellaneous charges. NOTE 19— ACQUISITIONS AND DIVESTITURES Fiscal 2024 Divestitures Divestiture of AMC Business On May 1, 2024, the Company completed the sale of its AMC business to Rocket Software for $ 2.275 billion in cash before taxes, fees and other adjustments. The results of the AMC business were recorded and presented within our Consolidated Financial Statements during Fiscal 2024 for the period of July 1, 2023 through April 30, 2024. In connection with the sale, a gain of $ 429.1 million was recorded in Other income (expense), net within the Company’s Consolidated Statements of Comprehensive Income for the year ended June 30, 2024. The Company determined that the AMC business did not constitute a component, as its operations and cash flows cannot be clearly distinguished from the rest of the Company’s operations and cash flows due to significant shared costs, therefore, the transaction did not meet the discontinued operations criteria, and the results of operations from the AMC business are presented within Income from operations in our Consolidated Statements of Income. 194 Table of Contents The Company used the net proceeds from the transaction to prepay in full the outstanding principal balances of the Term Loan B and prepay a portion of the outstanding principal balance of the Acquisition Term Loan, as further described in Note 11 “Long-Term Debt.” The Company has also agreed to provide certain transition services to Rocket Software following completion of the divestiture for up to 24 months, which are included in financing activities on the Consolidated Statements of Cash Flows. These tra