The 10-second takeaway
For the quarter ended Sep. 30 (Q1), Open Text missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share dropped significantly.
Gross margins dropped, operating margins increased, net margins shrank.
Open Text booked revenue of $326.2 million. The 16 analysts polled by S&P Capital IQ hoped for revenue of $334.8 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $288.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.31. The 18 earnings estimates compiled by S&P Capital IQ anticipated $1.17 per share. GAAP EPS of $0.33 for Q1 were 45% lower than the prior-year quarter's $0.60 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 70.3%, 170 basis points worse than the prior-year quarter. Operating margin was 15.2%, 330 basis points better than the prior-year quarter. Net margin was 6.0%, 610 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $359.1 million. On the bottom line, the average EPS estimate is $1.39.
Next year's average estimate for revenue is $1.42 billion. The average EPS estimate is $5.28.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 189 members out of 211 rating the stock outperform, and 22 members rating it underperform. Among 68 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 59 give Open Text a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Open Text is outperform, with an average price target of $66.00.
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