Will OpenText Launch An App Marketplace?

According to a Persistence market research report, the global enterprise information management solutions market is estimated to grow to $70 billion by 2025. Waterloo, Canada-based OpenText (Nasdaq: OTEX) is a leader in the market that has grown through acquisitions and a well-defined platform strategy.

OpenText’s Offerings

OpenText was founded in 1991 at the University of Waterloo as a project to create a full-text indexing and string-search technology for the Oxford English Dictionary. The project resulted in a search engine that supported searches within user-defined document structures. Its new search engine technology was soon adopted by several key players including the Oxford University Press, the Canadian Pharmaceutical Association, and Yahoo!

Since being founded, nearly three decades ago, the OpenText project has come a long way. Today, it is a publicly-traded Canadian software company with more than 8,200 employees spread across more than 140 offices worldwide. Its products help organizations with management and security of unstructured digital data, content management and discovery, customer experience management, digital process automation, BI and analytics delivery, and access to forensic capabilities across all endpoints. Its solution suites can be deployed both on premises and in the cloud.

OpenText’s Financials

OpenText primarily earns revenues through subscriptions for its cloud-based services and its customer support services. For the recently reported third quarter, OpenText saw revenues grow 5% to $719.1 million, compared with $714.8 million forecast by the market. It ended the quarter with a net income of $72.8 million, or $0.27 per share. On an adjusted basis, it reported an EPS of $0.64, which was ahead of the market’s forecast of $0.59 for the quarter.

By segment, OpenText saw cloud services and subscription revenues grow 14% over the year to $238.6 million. Revenues from customer support services declined 0.5% to $310 million. License revenues grew 17% to $98.7 million and professional services and other revenues segment registered a decline of 12% to $71.1 million.

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