Enterprise content management software provider Open Text Corp. (OTEX, OTC.TO), on Wednesday reported a profit for the second quarter that soared from last year, aided by a 12% growth in license revenues and synergies from the acquisition of Vignette. Adjusted earnings per share for the quarter topped analysts' consensus estimate.
The Waterloo, Canada-based company's net income for the second quarter rose to US$21.2 million or US$0.37 per share from US$0.8 million or US$0.01 per share, in the prior-year quarter.
The results for the latest quarter include special charges of US$10.4 million and amortization of intangibles of $23.9 million. The year-ago quarter's results include special charges of $11.4 million and amortization of intangibles of $21.9 million.
Excluding items, adjusted net income for the quarter surged to US$50.1 million or US$0.87 per share from US$34.0 million or US$0.64 per share in the same period last year. On average, fourteen analysts polled by Thomson Reuters expected the company to earn US$0.70 per share for the quarter. Analysts' estimates typically exclude one-time charges and gains.
Quarterly revenue climbed 19% to US$247.8 million from US$207.7 million in the same period last year, and beat analysts' consensus estimate of US$228.85 million for the quarter.
John Shackleton, President and Chief Executive Officer of Open Text, said, "We had a very good quarter across the board - in all geographies and verticals. Our strong license revenue growth has brought us to where we expected to be on a year to date basis. We are also pleased with our profitability this quarter, generating a pre-tax adjusted operating margin of 28.8%. The integration of Vignette is progressing well and we are very encouraged by the synergies we see from the combined businesses."
License revenues for the quarter increased 12% to US$72.69 million from US$64.85 million in the year-ago quarter. Meanwhile, customer support revenues for the quarter rose 29.7% to US$130.28 million from US$100.44 million last year. Service and other revenues increased 5.8% to US$44.82 million from US$42.36 million in the same quarter last year.
The company's gross profit for the quarter was US$170.08 million, up from US$141.33 million in the year-ago quarter.
Total operating expenses for the quarter rose to US$134.17 million from US$122.08 million in the prior-year quarter.
Income from operations rose to US$35.91 million from US$19.26 million a year ago.
For the six months, the company's net income increased to US$22.93 million or US$0.40 per share from US$15.42 million or US$0.29 per share in the same period last year.
Total revenues for the half year rose to US$459.21 million from US$390.27 million in the year-ago period.
During the six months that ended December 31, 2009, the net cash paid for the Vignette acquisition was $90.6 million. In July 2009, Open Text had announced that it had completed the acquisition of all of the issued and outstanding shares of Vignette Corp. for a purchase price of about US$317 million in a mix of cash and Open Text common stock.
OTEX closed Wednesday's regular trading on the Nasdaq at US$40.55, down US$0.04 or 0.10% on a volume of 0.15 million shares.
On the Toronto stock exchange, OTC.TO closed Wednesday's regular trading at C$43.03, down C$0.28 or 0.65% on a volume of 59 thousand shares.
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