OpenText(US:OTEX)2022-02-08 16:33Financial Data and Key Metrics Changes - The company reported revenues of $2.9 billion for FY '21, reflecting a halving in the rate of overall decline from 10% in FY '20 to approximately 5% in FY '21 [11][14] - Adjusted EBITDA was $1 billion, with an adjusted EBITDA margin of 36% [11][15] - Adjusted free cash flow was $300 million, with expectations for improvement in future periods [12][29] Business Line Data and Key Metrics Changes - License revenue grew by approximately 5%, marking a return to growth [18] - Maintenance revenue declined by 9%, which was below expectations [18] - SaaS revenue declined by 4%, but excluding Digital Safe, it grew by 0.2% year-on-year [19] Market Data and Key Metrics Changes - The company noted significant market opportunities in Big Data, expecting growth to accelerate [22] - The strategic partnership with AWS is expected to generate consulting revenues and subscription revenues in the future [9] Company Strategy and Development Direction - The company is transitioning to a product group operating model to enhance specialization and agility [45] - Focus on improving maintenance renewal rates and increasing recurring revenue through subscription and SaaS offerings [48] - Plans to achieve a gross cost reduction of $400 million to $500 million by the end of FY '23 [54] Management's Comments on Operating Environment and Future Outlook - Management expressed increasing confidence in achieving objectives for FY '23, citing positive indicators in customer discussions and product reception [61][63] - The company is addressing labor market challenges and attrition through enhanced employee propositions and career development opportunities [58][60] Other Important Information - The company completed the sale of Digital Safe for $375 million, which is being used to pay down debt [13][40] - Exceptional spend in FY '21 totaled $247 million, significantly lower than the previous year's $3 billion [24] Q&A Session Summary Question: Outlook for FY '23 and confidence factors - Management highlighted several indicators beyond AWS that contribute to confidence in FY '23, including growth in core portfolios and improvements in maintenance performance [61][63] Question: Staff retention and attrition levels - Management acknowledged elevated attrition levels but emphasized robust plans for retention and recruitment [58][60] Question: Cost savings visibility in P&L - Management indicated that cost savings will be gradual, with impacts becoming more evident over time [77] Question: Gross margin expectations - Management expects a slight reduction in gross margin initially, followed by improvements as cost programs take effect [72] Question: M&A opportunities - Management confirmed ongoing interest in small technology-oriented acquisitions to enhance the portfolio [73] Question: Timing for maintenance renewal improvements - Management anticipates material improvements in maintenance renewal rates to be evident in FY '23 [79]