OpenText Corp.’s top executive says the company is prioritizing organic growth going forward, after it reported its latest set of earnings last week.
Shares of the Waterloo-based software company were trading nearly 3.5 per cent higher late Monday morning. OpenText reported earnings of US$230 million during the second quarter, up from US$38 million during the same period a year earlier. Revenue for the quarter came in at US$1.34 billion, falling from US1.54 billion a year earlier. Could revenue, rose around three per cent during the quarter reaching US$462 million.
“We’ve now declared a new number one priority for the company, which is growth. And I outlined our growth plans and the market is starting to understand that we’re tapping the growth pedal here at OpenText now that we have the operations on a solid foundation, post the acquisition, post the divestiture,” Mark Barrenechea, the Open Text CEO, said in an interview with BNN Bloomberg on Monday.
In May of last year, the company announced in a press release that it completed a divestiture of its AMC/Mainframe business to Rocket Software Inc. for $2.275 billion in cash.
Barrenechea said that since the divestiture, he’s been focused on “getting our business model right and building a solid operating foundation.”
“Now, we announced our divestiture about eight months ago, and our number one priority was margin. Our second quarter results show that we have delivered,” he said.
“We delivered, an amazing 38 per cent adjusted EBITDA, half a billion of adjusted EBITDA dollars. Our free cash flow was up strong, to $300 million. Cloud bookings up six per cent, a record cloud bookings quarter, $250 million and our cloud revenue, grew three per cent.”
Barrenechea said that following the divestiture, the company is “reviving up” its growth engine. He noted OpenText is releasing a new platform called Titanum X, which he says is about 60 days from launch.
With files from The Canadian Press
