Open Text Corp (NASDAQ: OTEX) stock rose over 4.9% on 1st February, 2019 (As of 11:47 am GMT-5; Source: Google finance) after the company posted better than expected results for the second quarter of FY 19. The company has delivered record annual recurring revenue, ARR, of $530 million, which is up 2.6% year-over-year and 72% of total revenue, adjusted EBITDA of $308 million, or 42%, PS margin at 24%, CS margin at 90%. and cloud margin at 60%. The key win in the second quarter includes the Philips Radiation and Oncology Group that selected the EIM platform to connect their oncology systems real-time to accelerate cancer treatment plans. On a business network, that company has welcomed Coca-Cola and FedEx, enabling global digital supply chains. And within OT2, we had nice wins at both in the UK and HS, both for external review and collaboration. Further, during the quarter, OTEX has completed the acquisition of Catalyst Systems.
OCF during the quarter was of $189 million, which is up 14% year-over-year, ending cash of $595 million, net debt to adjusted EBITDA of 1.9 times, well under two, 35 deals over $1 million, 16 in the cloud, 19 off-cloud, 15 private, 15 new private cloud customers. OTEX has completed the acquisition of Liaison, customer support renewal rate in the low-90s, cloud renewal rates in the mid-90s and positive organic growth.
Moreover, during the second quarter, OTEX had purchased Liaison for approximately $311 million. In the first year of operations, the company expect revenue down 15% to 20%, or $15 million to $20 million due to PPA and normal integration disruption. Liaison will negatively impact adjusted EBITDA margin by approximately 100 bps in Q3 and Q4.
OTEX in the second quarter of FY 19 has reported the adjusted earnings per share of 80 cents, beating the analysts’ estimates for the adjusted earnings per share of 70 cents. The company had reported the adjusted revenue growth of 10 percent to $735.23 million in the second quarter of FY 19, beating the analysts’ estimates for revenue of $728.5 million.
OTEX has declared on January 30, 2019 a cash dividend of $0.1518 per common share. The record date for this dividend is March 1, 2019 and the payment date is March 22, 2019.
For the second-half of fiscal 2019, OTEX expect approximately $41 million in revenue contribution and expect a negative 100 bps, a negative 100 bps of adjusted EBITDA impact in Q3 and Q4.