The 10-second takeaway
For the quarter ended June 30 (Q4), Open Text missed estimates on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share increased significantly. GAAP earnings per share grew significantly.
Gross margins dropped, operating margins increased, net margins grew.
Open Text notched revenue of $347.3 million. The 14 analysts polled by S&P Capital IQ predicted revenue of $360.2 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $305.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $1.43. The 16 earnings estimates compiled by S&P Capital IQ predicted $1.42 per share. Non-GAAP EPS of $1.43 for Q4 were 22% higher than the prior-year quarter's $1.17 per share. GAAP EPS of $0.71 for Q4 were 407% higher than the prior-year quarter's $0.14 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 71.7%, 110 basis points worse than the prior-year quarter. Operating margin was 16.2%, 130 basis points better than the prior-year quarter. Net margin was 12.1%, 950 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $347.5 million. On the bottom line, the average EPS estimate is $1.33.
Next year's average estimate for revenue is $1.45 billion. The average EPS estimate is $5.81.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 193 members out of 215 rating the stock outperform, and 22 members rating it underperform. Among 73 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 65 give Open Text a green thumbs-up, and eight 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 $71.67.
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