OpenText, The Information Company™, a market leader in Enterprise Information Management software and solutions, enabling companies to manage, leverage, secure and gain insight into their enterprise information, on premises or in the cloud. For more information about OpenText (NASDAQ/TSX: OTEX) visit www.opentext.com.
The length of our sales cycle can fluctuate significantly which could result in significant fluctuations in revenues being recognized from quarter to quarter
Our success depends on our relationships with strategic partners, distributors and third party service providers and any reduction in the sales efforts by distributors, cooperative efforts from our partners or service from third party providers could materially impact our revenues
If we do not continue to develop technologically advanced products that successfully integrate with the software products and enhancements used by our customers, future revenues and our operating results may be negatively affected
If our software products and services do not gain market acceptance, our operating results may be negatively affected
Our existing customers might cancel contracts with us, fail to renew contracts on their renewal dates, and/or fail to purchase additional services and products, and we may be unable to attract new customers, which could materially adversely affect our operating results
Our investment in our current research and development efforts may not provide a sufficient, timely return
Product development is a long, expensive and uncertain process, and we may terminate one or more of our development programs
Failure to protect our intellectual property could harm our ability to compete effectively
Other companies may claim that we infringe their intellectual property, which could materially increase costs and materially harm our ability to generate future revenues and profits
The loss of licenses to use third-party software or the lack of support or enhancement of such software could adversely affect our business
Current and future competitors could have a significant impact on our ability to generate future revenues and profits
Acquisitions, investments, joint ventures and other business initiatives may negatively affect our operating results
Businesses we acquire may have disclosure controls and procedures and internal controls over financial reporting, cybersecurity and compliance with data privacy laws that are weaker than or otherwise not in conformity with ours
We may not generate sufficient cash flow to satisfy our unfunded pension obligations
Consolidation in the industry, particularly by large, well-capitalized companies, could place pressure on our operating margins which could, in turn, have a material adverse effect on our business
We must continue to manage our internal resources during periods of company growth or our operating results could be adversely affected
If we lose the services of our executive officers or other key employees or if we are not able to attract or retain top employees, our business could be significantly harmed
Loss of key personnel could impair the integration of acquired businesses, lead to loss of customers and a decline in revenues, or otherwise could have an adverse effect on our operations
Our compensation structure may hinder our efforts to attract and retain vital employees
Unexpected events may materially harm our ability to align when we incur expenses with when we recognize revenues
We may fail to achieve our financial forecasts due to inaccurate sales forecasts or other factors
The restructuring of our operations may adversely affect our business or our finances and we may incur restructuring charges in connection with such actions
Fluctuations in foreign currency exchange rates could materially affect our financial results
Our international operations expose us to business, political and economic risks that could cause our operating results to suffer
Our software products and services may contain defects that could harm our reputation, be costly to correct, delay revenues, and expose us to litigation
Our software products rely on the stability of infrastructure software that, if not stable, could negatively impact the effectiveness of our products, resulting in harm to our reputation and business
Risks associated with the evolving use of the Internet, including changing standards, competition, and regulation and associated compliance efforts, may adversely impact our business
Business disruptions, including those related to data security breaches, may adversely affect our operations
Unauthorized disclosures and breaches of data security may adversely affect our operations
Our revenues and operating results are likely to fluctuate, which could materially impact the market price of our Common Shares
Our sales to government clients expose us to business volatility and risks, including government budgeting cycles and appropriations, early termination, audits, investigations, sanctions and penalties
Changes in the market price of our Common Shares and credit ratings of our outstanding debt securities could lead to losses for shareholders and debt holders
Our indebtedness could limit our operations and opportunities.
We may become involved in litigation that may materially adversely affect us
Our provision for income taxes and effective income tax rate may vary significantly and may adversely affect our results of operations and cash resources
As part of a tax examination by the United States Internal Revenue Service (IRS), we have received a Notice of Proposed Adjustment (NOPA) proposing a material increase to our taxes arising from the reorganization in Fiscal 2010 and an additional NOPA proposing a material increase to our taxes arising in connection with our integration of Global 360 in Fiscal 2012 into the structure that resulted from our reorganization. An adverse outcome of these tax examinations could have a material adverse effect on our financial position and results of operations.
The declaration, payment and amount of dividends will be made at the discretion of our Board of Directors and will depend on a number of factors
Our operating results could be adversely affected by any weakening of economic conditions
Risks associated with data privacy issues, including evolving laws and regulations and associated compliance efforts, may adversely impact our business
Certain of our products may be perceived as, or determined by the courts to be, a violation of privacy rights and related laws. Any such perception or determination could adversely affect our revenues and results of operations.
Stress in the global financial system may adversely affect our finances and operations in ways that may be hard to predict or to defend against
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 (on-premise). Our license revenues are impacted by the strength of general economic and industry conditions, the competitive strength of our software products, and our acquisitions. Cost of license revenues consists primarily of royalties payable to third parties.
License revenues decreased by $9.4 million or 2.2% during the year ended June 30, 2019 as compared to the prior fiscal year; up 0.4% after factoring the impact of $11.2 million of foreign exchange rate changes. Geographically, the overall change was attributable to an increase in Americas of $8.2 million, offset by a decrease in Asia Pacific of $10.6 million and a decrease in EMEA of $7.0 million.
During Fiscal 2019, we closed 153 license deals greater than $0.5 million, of which 49 deals were greater than $1.0 million, contributing approximately $144.1 million of license revenues. This was compared to 140 deals greater than $0.5 million during Fiscal 2018, of which 58 deals were greater than $1.0 million, contributing $152.2 million of license revenues.