Open Text Corp (NASDAQ: OTEX) stock rose 0.2% on 1st November 2018 (as of 12:20 PM GMT-4; Source: Google finance) despite mixed results for the first quarter of 2019. Open Text also announced it was acquiring cloud company Liaison Technologies for about $310 million in cash. Liaison is a leading provider of cloud-based enterprise application integration and data management solutions. They are based in Alpharetta, Georgia and have approximately 475 employees and 4,000 global enterprise customers. The acquisition is subject to customary closing conditions and the company expect to close over the next 90 days.
Fiscal 2019 objectives included low-single-digit organic growth and fiscal 2021 objectives included adjusted EBITDA of 38% to 40% and operating cash flow of $1 billion. Adjusted EBITDA was solid at $246 million, or 37% of revenues, up 250 basis points year-over-year. Operating cash flow was solid at $171 million, up 155% year-over-year. Ending cash was $788 million, up $105 million quarter-over-quarter. And adjusted EPS was $0.60, up $0.06, or 11% year-over-year.
OTEX in the first quarter of FY 19 has reported the adjusted earnings per share of 60 cents, beating the analysts’ estimates for the adjusted earnings per share of 59 cents. The company had reported the adjusted revenue growth of 4 percent to $667.2 million in the first quarter of FY 19, missing the analysts’ estimates for revenue of $689.9 million. The geographical split of revenues in Americas, EMEA and APJ was 58%, 32% and 10%, respectively, and that was consistent with the prior year. During the first quarter, the company had 14 deals over $1 million in value same as last year, nine in the OpenText Cloud versus seven in the prior year and five on on-premise versus seven in the prior year. The company has delivered $77 million in license revenues, down 2% compared to the prior year and $56 million in new MCV, down 16% compared to the prior year.
Annual recurring revenues was $520 million and 78% of total revenues, up 6% year-over-year. The company’s ARR this quarter of $52 million is larger than total revenues of two years ago, demonstrating the significance of the focus on ARR and the transition to a recurring revenue business. Within ARR, cloud was $208 million, up 7%. Customer support was $312 million, up 6% year-over-year, with 90% margin. Cloud was 58% margin. On an absolute dollar basis, ARR was up $30 million year-over-year, non-recurring revenues were down slightly by $4 million. The increases in recurring revenues far outweigh any slight quarterly decline in non-recurring.