OpenText Investor Presentation Deck
Use of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-
GAAP). These Non-GAAP financial measures have certain limitations in that they do not have a standardized meaning and thus the Company's definition may be different from
similar Non-GAAP financial measures used by other companies and/or analysts and may differ from period to period. Thus, it may be more difficult to compare the Company's
financial performance to that of other companies. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items
excluded in the calculation of these Non-GAAP financial measures both in its reconciliation to the U.S. GAAP financial measures and its Consolidated Financial Statements, all
of which should be considered when evaluating the Company's results.
The Company uses these Non-GAAP financial measures to supplement the information provided in its Consolidated Financial Statements, which are presented in accordance
with U.S. GAAP. The presentation of Non-GAAP financial measures is not meant to be a substitute for financial measures presented in accordance with U.S. GAAP, but rather
should be evaluated in conjunction with and as a supplement to such U.S. GAAP measures. Open Text strongly encourages investors to review its financial information in its
entirety and not to rely on a single financial measure. The Company therefore believes that despite these limitations, it is appropriate to supplement the disclosure of the U.S.
GAAP measures with certain Non-GAAP measures defined below.
The Company's management believes that the presentation of Non-GAAP financial measures provides useful information to investors because they portray the financial results
of the Company before the impact of certain nonoperational charges. The use of the term "non-operational charge" is defined for this purpose as an expense that does not
impact the ongoing operating decisions taken by the Company's management. These items are excluded based upon the way the Company's management evaluates the
performance of the Company's business for use in the Company's internal reports and are not excluded in the sense that they may be used under U.S. GAAP.
The Company does not acquire businesses on a predictable cycle, and therefore believes that the presentation of non-GAAP measures, which in certain cases adjust for the
impact of amortization of intangible assets and the related tax effects that are primarily related to acquisitions, will provide readers of financial statements with a more
consistent basis for comparison across accounting periods and be more useful in helping readers understand the Company's operating results and underlying operational
trends. Additionally, the Company has engaged in various restructuring activities over the past several years, primarily due to acquisitions, that have resulted in costs
associated with reductions in headcount, consolidation of leased facilities and related costs, all which are recorded under the Company's "Special Charges (recoveries)"
caption on the Consolidated Statements of Income. Each restructuring activity is a discrete event based on a unique set of business objectives or circumstances, and each
differs in terms of its operational implementation, business impact and scope, and the size of each restructuring plan can vary significantly from period to period. Therefore, the
Company believes that the exclusion of these special charges (recoveries) will also better aid readers of financial statements in the understanding and comparability of the
Company's operating results and underlying operational trends.
In summary, the Company believes the provision of supplemental Non-GAAP measures allow investors to evaluate the operational and financial performance of the Company's
core business using the same evaluation measures that management uses, and is therefore a useful indication of Open Text's performance or expected performance of future
operations and facilitates period-to-period comparison of operating performance (although prior performance is not necessarily indicative of future performance). As a result,
the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary Non-GAAP financial measures that exclude certain items
from the presentation of its financial results.
See historical filings, including the Company's Forms 10-K, 10-Q and 8-K for reconciliations of certain Non-GAAP measures to U.S. GAAP-based financial measures.
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