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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________________
FORM 10-Q
______________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 0-27544
______________________________________
OPEN TEXT CORPORATION
(Exact name of Registrant as specified in its charter)
______________________
Canada98-0154400
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
275 Frank Tompa Drive,N2L 0A1
Waterloo, OntarioCanada
(Address of principal executive offices)(Zip code)
Registrant's telephone number, including area code: (519888-7111

Securities registered pursuant to Section 12(b) of the Act:
Title of each class 
Trading Symbol(s)Name of each exchange on which registered
Common stock without par valueOTEXNASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ☒  Accelerated filer  ☐ Non-accelerated filer  ☐ Smaller reporting company  Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ☐   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐   No  
At April 26, 2024, there were 272,869,443 outstanding Common Shares of the registrant.
1

OPEN TEXT CORPORATION
TABLE OF CONTENTS

2

Part I - Financial Information
Item 1. Financial Statements
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
March 31, 2024June 30, 2023
ASSETS(unaudited)
Cash and cash equivalents$1,125,323 $1,231,625 
Accounts receivable trade, net of allowance for credit losses of $11,390 as of March 31, 2024 and $13,828 as of June 30, 2023 (Note 4)
654,190 682,517 
Contract assets (Note 3)
66,124 71,196 
Income taxes recoverable (Note 15)
14,119 68,161 
Prepaid expenses and other current assets (Note 9)
212,261 221,732 
Assets held for sale (Note 19)
2,120,311  
Total current assets4,192,328 2,275,231 
Property and equipment (Note 5)
346,073 356,904 
Operating lease right of use assets (Note 6)
229,327 285,723 
Long-term contract assets (Note 3)
42,659 64,553 
Goodwill (Note 7)
7,528,147 8,662,603 
Acquired intangible assets (Note 8)
2,624,117 4,080,879 
Deferred tax assets (Note 15)
1,019,878 926,719 
Other assets (Note 9)
314,580 342,318 
Long-term income taxes recoverable (Note 15)
95,567 94,270 
Total assets$16,392,676 $17,089,200 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities (Note 10)
$898,611 $996,261 
Current portion of long-term debt (Note 11)
45,850 320,850 
Operating lease liabilities (Note 6)
80,960 91,425 
Deferred revenues (Note 3)
1,583,638 1,721,781 
Income taxes payable (Note 15)
150,990 89,297 
Liabilities held for sale (Note 19)
228,106  
Total current liabilities2,988,155 3,219,614 
Long-term liabilities:
Accrued liabilities (Note 10)
48,031 51,961 
Pension liability, net (Note 12)
128,955 126,312 
Long-term debt (Note 11)
8,305,670 8,562,096 
Long-term operating lease liabilities (Note 6)
224,984 271,579 
Long-term deferred revenues (Note 3)
170,544 217,771 
Long-term income taxes payable (Note 15)
154,679 193,808 
Deferred tax liabilities (Note 15)
241,013 423,955 
Total long-term liabilities9,273,876 9,847,482 
Shareholders’ equity:
Share capital and additional paid-in capital (Note 13)
272,561,685 and 270,902,571 Common Shares issued and outstanding at March 31, 2024 and June 30, 2023, respectively; authorized Common Shares: unlimited
2,276,758 2,176,947 
Accumulated other comprehensive income (loss) (Note 20)
(73,045)(53,559)
Retained earnings2,059,060 2,048,984 
Treasury stock, at cost (3,376,994 and 3,536,375 shares at March 31, 2024 and June 30, 2023, respectively)
(133,606)(151,597)
Total OpenText shareholders' equity4,129,167 4,020,775 
Non-controlling interests1,478 1,329 
Total shareholders’ equity4,130,645 4,022,104 
Total liabilities and shareholders’ equity$16,392,676 $17,089,200 
Guarantees and contingencies (Note 14)
Related party transactions (Note 24)
Subsequent events (Note 25)
See accompanying Notes to Condensed Consolidated Financial Statements
3

OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share and per share data)
(unaudited)

Three Months Ended
March 31,
Nine Months Ended
March 31,
2024202320242023
Revenues (Note 3):
Cloud services and subscriptions$454,528 $435,449 $1,355,633 $1,248,774 
Customer support691,441 575,884 2,084,916 1,209,743 
License200,363 139,722 662,627 310,230 
Professional service and other100,799 93,619 304,252 225,403 
Total revenues1,447,131 1,244,674 4,407,428 2,994,150 
Cost of revenues:
Cloud services and subscriptions186,400 157,658 537,960 423,771 
Customer support74,639 67,067 223,027 123,010 
License6,769 3,840 16,591 10,461 
Professional service and other75,455 78,526 230,836 186,390 
Amortization of acquired technology-based intangible assets (Note 8)
48,094 62,639 195,702 146,139 
Total cost of revenues391,357 369,730 1,204,116 889,771 
Gross profit1,055,774 874,944 3,203,312 2,104,379 
Operating expenses:
Research and development234,022 210,731 688,679 430,629 
Sales and marketing296,249 271,013 848,313 615,354 
General and administrative145,924 127,047 450,399 282,724 
Depreciation32,109 30,577 99,615 76,609 
Amortization of acquired customer-based intangible assets (Note 8)
100,841 97,237 334,958 205,121 
Special charges (recoveries) (Note 18)
19,561 74,350 87,521 98,937 
Total operating expenses828,706 810,955 2,509,485 1,709,374 
Income from operations
227,068 63,989 693,827 395,005 
Other income (expense), net (Note 22)
9,950 85,706 (38,664)59,824 
Interest and other related expense, net(132,663)(104,502)(413,719)(183,599)
Income before income taxes
104,355 45,193 241,444 271,230 
Provision for (recovery of) income taxes (Note 15)
6,028 (12,420)24,434 71,979 
Net income for the period
$98,327 $57,613 $217,010 $199,251 
Net (income) attributable to non-controlling interests
(42)(57)(149)(138)
Net income attributable to OpenText
$98,285 $57,556 $216,861 $199,113 
Earnings per share—basic attributable to OpenText (Note 23)
$0.36 $0.21 $0.80 $0.74 
Earnings per share—diluted attributable to OpenText (Note 23)
$0.36 $0.21 $0.80 $0.74 
Weighted average number of Common Shares outstanding—basic (in '000's)272,272 270,441 271,671 270,143 
Weighted average number of Common Shares outstanding—diluted (in '000's)273,033 270,650 272,349 270,173 

See accompanying Notes to Condensed Consolidated Financial Statements
4

OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)
(unaudited)

 Three Months Ended
March 31,
Nine Months Ended
March 31,
 2024202320242023
Net income for the period
$98,327 $57,613 $217,010 $199,251 
Other comprehensive income (loss)—net of tax:
Net foreign currency translation adjustments11,765 (28,640)(18,614)(25,587)
Unrealized gain (loss) on cash flow hedges:
Unrealized gain (loss) - net of tax (1)
(1,634)38 (1,953)(2,343)
(Gain) loss reclassified into net income - net of tax (2)
118 699 455 2,388 
Unrealized gain (loss) on available-for-sale financial assets:
Unrealized gain (loss) - net of tax (3)
90 (900)319 (900)
Actuarial gain (loss) relating to defined benefit pension plans:
Actuarial gain (loss) - net of tax (4)
 (3,318)(110)878 
Amortization of actuarial (gain) loss into net income - net of tax (5)
115 35 417 109 
Total other comprehensive income (loss), net for the period
10,454 (32,086)(19,486)(25,455)
Total comprehensive income
108,781 25,527 197,524 173,796 
Comprehensive income attributable to non-controlling interests
(42)(57)(149)(138)
Total comprehensive income attributable to OpenText
$108,739 $25,470 $197,375 $173,658 
______________________
(1)Net of tax expense (recovery) of ($589) and $15 for the three months ended March 31, 2024 and 2023, respectively; $(704) and $(844) for the nine months ended March 31, 2024 and 2023, respectively.
(2)Net of tax expense (recovery) of $42 and $252 for the three months ended March 31, 2024 and 2023, respectively; $163 and $861 for the nine months ended March 31, 2024 and 2023, respectively.
(3)Net of tax expense (recovery) of $24 and ($238) for the three months ended March 31, 2024 and 2023, respectively; $84 and ($238) for the nine months ended March 31, 2024 and 2023, respectively.
(4)Net of tax expense (recovery) of $ and $(892) for the three months ended March 31, 2024 and 2023, respectively; $110 and $318 for the nine months ended March 31, 2024 and 2023, respectively.
(5)Net of tax expense (recovery) of $50 and $25 for the three months ended March 31, 2024 and 2023, respectively; $175 and $76 for the nine months ended March 31, 2024 and 2023, respectively.
See accompanying Notes to Condensed Consolidated Financial Statements

5

OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands of U.S. dollars and shares)
(unaudited)

Three Months Ended March 31, 2024
Common Shares and Additional Paid in CapitalTreasury StockRetained
Earnings
Accumulated  Other
Comprehensive
Income
Non-Controlling InterestsTotal
SharesAmountSharesAmount
Balance as of December 31, 2023
271,855 $2,261,856 (4,400)$(179,089)$2,029,643 $(83,499)$1,436 $4,030,347 
Issuance of Common Shares
Under employee stock option plans517 17,315 — — — — — 17,315 
Under employee stock purchase plans190 6,698 — — — — — 6,698 
Share-based compensation— 35,947 — — — — — 35,947 
Issuance of treasury stock— (45,058)1,023 45,483 (425)— —  
Dividends declared
($0.25 per Common Share)
— — — — (68,443)— — (68,443)
Other comprehensive income (loss) - net— — — — — 10,454 — 10,454 
Net income for the period— — — — 98,285 — 42 98,327 
Balance as of March 31, 2024
272,562 $2,276,758 (3,377)$(133,606)$2,059,060 $(73,045)$1,478 $4,130,645 



Three Months Ended March 31, 2023
Common Shares and Additional Paid in CapitalTreasury StockRetained
Earnings
Accumulated  Other
Comprehensive
Income
Non-Controlling InterestsTotal
SharesAmountSharesAmount
Balance as of December 31, 2022
270,235 $2,092,079 (3,295)$(142,126)$2,171,236 $(1,028)$1,223 $4,121,384 
Issuance of Common Shares
Under employee stock option plans16 479 — — — — — 479 
Under employee stock purchase plans228 5,776 — — — — — 5,776 
Share-based compensation— 36,505 — — — — — 36,505 
Issuance of treasury stock— (4,496)79 3,426 — — — (1,070)
Dividends declared
($0.24299 per Common Share)
— — — — (65,454)— — (65,454)
Other comprehensive income (loss) - net— — — — — (32,086)— (32,086)
Net income for the period— — — — 57,556 — 57 57,613 
Balance as of March 31, 2023
270,479 $2,130,343 (3,216)$(138,700)$2,163,338 $(33,114)$1,280 $4,123,147 
6

OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands of U.S. dollars and shares)
(unaudited)

Nine Months Ended March 31, 2024
Common Shares and Additional Paid in CapitalTreasury StockRetained
Earnings
Accumulated  Other
Comprehensive
Income
Non-Controlling InterestsTotal
SharesAmountSharesAmount
Balance as of June 30, 2023
270,903 $2,176,947 (3,536)$(151,597)$2,048,984 $(53,559)$1,329 $4,022,104 
Issuance of Common Shares
Under employee stock option plans942 31,318 — — — — — 31,318 
Under employee stock purchase plans717 23,709 — — — — — 23,709 
Share-based compensation— 112,944 — — — — — 112,944 
Purchase of treasury stock— — (1,400)(53,085)— — — (53,085)
Issuance of treasury stock— (68,160)1,559 71,076 (2,916)— —  
Dividends declared
($0.75 per Common Share)
— — — — (203,869)— — (203,869)
Other comprehensive income (loss) - net— — — — — (19,486)— (19,486)
Net income for the period— — — — 216,861 — 149 217,010 
Balance as of March 31, 2024
272,562 $2,276,758 (3,377)$(133,606)$2,059,060 $(73,045)$1,478 $4,130,645 



Nine Months Ended March 31, 2023
Common Shares and Additional Paid in CapitalTreasury StockRetained
Earnings
Accumulated  Other
Comprehensive
Income
Non-Controlling InterestsTotal
SharesAmountSharesAmount
Balance as of June 30, 2022
269,523 $2,038,674 (3,706)$(159,966)$2,160,069 $(7,659)$1,142 $4,032,260 
Issuance of Common Shares
Under employee stock option plans88 2,473 — — — — — 2,473 
Under employee stock purchase plans868 22,997 — — — — — 22,997 
Share-based compensation— 88,535 — — — — — 88,535 
Issuance of treasury stock— (22,336)490 21,266 — — — (1,070)
Dividends declared
($0.72897 per Common Share)
— — — — (195,844)— — (195,844)
Other comprehensive income (loss) - net— — — — — (25,455)— (25,455)
Net income for the period— — — — 199,113 — 138 199,251 
Balance as of March 31, 2023
270,479 $2,130,343 (3,216)$(138,700)$2,163,338 $(33,114)$1,280 $4,123,147 

See accompanying Notes to Condensed Consolidated Financial Statements
7

OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
Nine Months Ended March 31,
 20242023
Cash flows from operating activities:
Net income for the period
$217,010 $199,251 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangible assets630,275 427,869 
Share-based compensation expense113,312 88,398 
Pension expense9,579 5,806 
Amortization of debt discount and issuance costs
19,587 8,496 
Write-off of right of use assets15,241 7,119 
Loss on extinguishment of debt10,803 8,152 
Loss on sale and write down of property and equipment, net
1,715 1,428 
Deferred taxes(249,174)(178,700)
Share in net loss of equity investees
19,013 11,547 
Changes in financial instruments3,551 112,567 
Changes in operating assets and liabilities:
Accounts receivable51,487 141,269 
Contract assets(71,486)(29,896)
Prepaid expenses and other current assets4,717 (65,186)
Income taxes75,676 131,517 
Accounts payable and accrued liabilities(72,887)(137,674)
Deferred revenue14,338 (42,631)
Other assets5,868 (5,998)
Operating lease assets and liabilities, net(16,154)(19,430)
Net cash provided by operating activities
782,471 663,904 
Cash flows from investing activities:
Additions of property and equipment(119,316)(99,772)
Micro Focus acquisition
(9,272)(5,655,606)
Realized gain on financial instruments
 131,248 
Proceeds from net investment hedge derivative contracts
4,456  
Other investing activities(468)(873)
Net cash used in investing activities
(124,600)(5,625,003)
Cash flows from financing activities:
Proceeds from issuance of Common Shares from exercise of
stock options and ESPP
57,027 25,172 
Proceeds from long-term debt and Revolver 4,927,450 
Repayment of long-term debt and Revolver(559,389)(16,463)
Debt issuance costs(2,792)(77,209)
Purchase of treasury stock(53,085) 
Payments of dividends to shareholders(200,672)(194,481)
Other financing activities(1,447)(2,193)
Net cash provided by (used in) financing activities
(760,358)4,662,276 
Foreign exchange gain (loss) on cash held in foreign currencies
(3,982)2,632 
Decrease in cash, cash equivalents and restricted cash during the period
(106,469)(296,191)
Cash, cash equivalents and restricted cash at beginning of the period1,233,952 1,695,911 
Cash, cash equivalents and restricted cash at end of the period$1,127,483 $1,399,720 
8

OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)

Reconciliation of cash, cash equivalents and restricted cash:March 31, 2024March 31, 2023
Cash and cash equivalents$1,125,323 $1,396,817 
Restricted cash (1)
2,160 2,903 
Total cash, cash equivalents and restricted cash$1,127,483 $1,399,720 
______________________
(1)Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Condensed Consolidated Balance Sheets (Note 9).

Supplemental cash flow disclosures (Note 6 and Note 21)

See accompanying Notes to Condensed Consolidated Financial Statements
9

OPEN TEXT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Nine Months Ended March 31, 2024
(Tabular amounts in thousands of U.S. dollars, except share and per share data)
(unaudited)
NOTE 1—BASIS OF PRESENTATION
The accompanying Condensed Consolidated Financial Statements include the accounts of Open Text Corporation and our subsidiaries, collectively referred to as “OpenText” or the “Company.” We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd. (OT South Africa), which as of March 31, 2024, was 70% owned by OpenText. All intercompany balances and transactions have been eliminated.
The following Fiscal Year terms are used throughout this Quarterly Report on Form 10-Q:
Fiscal YearBeginning DateEnding Date
Fiscal 2025
July 1, 2024June 30, 2025
Fiscal 2024
July 1, 2023June 30, 2024
Fiscal 2023
July 1, 2022June 30, 2023
Fiscal 2022
July 1, 2021June 30, 2022
Fiscal 2021
July 1, 2020June 30, 2021
Fiscal 2020
July 1, 2019June 30, 2020
Fiscal 2019
July 1, 2018June 30, 2019
Fiscal 2018
July 1, 2017June 30, 2018
Fiscal 2017
July 1, 2016June 30, 2017
Fiscal 2016
July 1, 2015June 30, 2016
Fiscal 2015
July 1, 2014June 30, 2015
Fiscal 2014
July 1, 2013June 30, 2014
Fiscal 2013
July 1, 2012June 30, 2013
Fiscal 2012
July 1, 2011June 30, 2012

These Condensed Consolidated Financial Statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented and includes the consolidated financial results of Micro Focus International Limited, formerly Micro Focus International plc, and its subsidiaries (Micro Focus), with effect from February 1, 2023 (see below and Note 19 “Acquisitions and Divestitures” for more details).
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements. These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. In particular, key estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) accounting for income taxes, (iii) testing of goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) restructuring accruals, (viii) acquisition accruals and pre-acquisition contingencies, (ix) the valuation of stock options granted and obligations related to share-based payments, including the valuation of our long-term incentive plans, (x) the valuation of pension obligations and pension assets, (xi) the valuation of available-for-sale investments, (xii) the valuation of derivative instruments and (xiii) the accounting for assets and liabilities held for sale and divestitures.
10

Acquisition of Micro Focus
On January 31, 2023, we acquired all of the issued and to be issued share capital of Micro Focus (the Micro Focus Acquisition) for a total purchase price of $6.2 billion, inclusive of Micro Focus’ cash and repayment of Micro Focus’ outstanding indebtedness. The results of operations of Micro Focus have been consolidated with those of OpenText with effect from February 1, 2023. See Note 19 “Acquisitions and Divestitures” for more details.
Divestiture of AMC Business
On May 1, 2024, the Company completed the previously announced sale of its Application Modernization and Connectivity (AMC) business to Rocket Software, Inc. (Rocket Software), for $2.275 billion in cash before taxes, fees and other adjustments (the AMC Divestiture). For the three and nine months ended March 31, 2024, the results of the AMC business were recorded and presented within our Condensed Consolidated Financial Statements. See Note 25 “Subsequent Events” for more details.
As of March 31, 2024, the Company determined that the assets and liabilities of the AMC business met the criteria for held for sale classification and the respective assets and liabilities have been reclassified to Assets held for sale and Liabilities held for sale reported in our Condensed Consolidated Balance Sheets. The Company has determined that the AMC business does not constitute a component, as its operations and cash flows cannot be clearly distinguished from the rest of the Company’s operations and cash flows due to significant shared costs, therefore, the transaction does not meet the discontinued operations criteria, and the results of operations from the AMC business are presented within Income from operations in our Condensed Consolidated Statements of Income. The Company expects that the sale proceeds less costs to sell will exceed the carrying value of the net assets for the AMC business. The carrying value is subject to change based on developments leading up to the closing date. See Note 19 “Acquisitions and Divestitures” for more details.
NOTE 2—ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS
Accounting Policies
Held for Sale Classification
Assessments for held for sale accounting classification are performed by the Company when events or changes in business circumstances indicate that a change in classification may be necessary. The Company classifies assets and liabilities to be disposed of as held for sale in the period in which they are available for immediate sale in their present condition and when the sale is probable and expected to be completed within one year. Assets and liabilities classified as held for sale are presented separately within current assets and liabilities in our Condensed Consolidated Balance Sheets and are measured at the lower of their carrying amount or fair value less costs to sell. Further, the Company ceases to record depreciation and amortization expense on assets that are classified as held for sale. The Company has classified Assets held for sale and Liabilities held for sale as of March 31, 2024 related to the AMC Divestiture.
Accounting Pronouncements Adopted in Fiscal 2024
During Fiscal 2024, we have adopted the following Accounting Standards Updates (ASU):
Supplier Financing Program Obligations
In September 2022, the Financial Accounting Standards Board (FASB) issued ASU 2022-04 “Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” This standard requires companies that participate in supplier finance programs in connection with the procurement of goods or services to disclose quantitative and qualitative information about the programs. We adopted this ASU as of July 1, 2023, which did not have a material impact on our Condensed Consolidated Financial Statements and related disclosures, as we had no material supplier finance program obligations as of March 31, 2024.
Accounting Pronouncements Not Yet Adopted in Fiscal 2024
Segment Reporting
In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which provides guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. Public entities must adopt the new guidance for fiscal years beginning after December 15, 2023, and interim periods within fiscal years
11

beginning after December 15, 2024. The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. We are currently evaluating the potential impact of the adoption of ASU 2023-07 on the Company’s financial disclosures.
Income Taxes
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” that addresses requests for improved income tax disclosures from investors that use the financial statements to make capital allocation decisions. Public entities must adopt the new guidance for fiscal years beginning after December 15, 2024. The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. We are currently evaluating the potential impact of the adoption of ASU 2023-09 on the Company’s financial disclosures.
NOTE 3—REVENUES
Disaggregation of Revenue
We have four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. The following tables disaggregate our revenue by significant geographic area, based on the location of our direct end customer, by type of performance obligation and timing of revenue recognition for the periods indicated:
Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
Total Revenues by Geography:
Americas (1)
$828,830 $750,999 $2,558,344 $1,892,389 
EMEA (2)
481,175 379,430 1,431,500 843,088 
Asia Pacific (3)
137,126 114,245 417,584 258,673 
Total revenues$1,447,131 $1,244,674 $4,407,428 $2,994,150 
Total Revenues by Type of Performance Obligation:
Recurring revenues (4)
Cloud services and subscriptions revenue
$454,528 $435,449 $1,355,633 $1,248,774 
Customer support revenue
691,441 575,884 2,084,916 1,209,743 
Total recurring revenues
$1,145,969 $1,011,333 $3,440,549 $2,458,517 
License revenue (perpetual, term and subscriptions) 200,363 139,722 662,627 310,230 
Professional service and other revenue100,799 93,619 304,252 225,403 
Total revenues$1,447,131 $1,244,674 $4,407,428 $2,994,150 
Total Revenues by Timing of Revenue Recognition:
Point in time $200,363 $139,722 $662,627 $310,230 
Over time (including professional service and other revenue)1,246,768 1,104,952 3,744,801 2,683,920 
Total revenues$1,447,131 $1,244,674 $4,407,428 $2,994,150 
______________________
(1)Americas consists of countries in North, Central and South America.
(2)EMEA consists of countries in Europe, the Middle East and Africa.
(3)Asia Pacific primarily consists of Japan, Australia, China, Korea, Philippines, Singapore, India and New Zealand.
(4)Recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.

12

Contract Balances
A contract asset, net of allowance for credit losses, will be recorded if we have recognized revenue but do not have an unconditional right to the related consideration from the customer. For example, this will be the case if implementation services offered in a cloud arrangement are identified as a separate performance obligation and are provided to a customer prior to us being able to bill the customer. In addition, a contract asset may arise in relation to subscription licenses if the license revenue that is recognized upfront exceeds the amount that we are able to invoice the customer at that time. Contract assets are reclassified to accounts receivable when the rights become unconditional.
The balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows:
As of March 31, 2024
As of June 30, 2023
Short-term contract assets (1)
$66,124 $71,196 
Long-term contract assets (1)
$42,659 $64,553 
Short-term deferred revenues (1)
$1,583,638 $1,721,781 
Long-term deferred revenues (1)
$170,544 $217,771 
______________________
(1)Excludes $5.5 million of short-term contract assets and $2.9 million of long-term contract assets that have been reclassified to Assets held for sale, as well as $176.9 million of short-term deferred revenues and $24.5 million of long-term deferred revenues that have been reclassified to Liabilities held for sale as of March 31, 2024, related to the AMC Divestiture. See Note 19 “Acquisitions and Divestitures” for more details.
The difference in the opening and closing balances of our contract assets and deferred revenues, excluding the impact of assets held for sale, primarily results from the timing difference between our performance and the customer’s payments. We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. During the nine months ended March 31, 2024, we reclassified $90.6 million (nine months ended March 31, 2023 — $37.7 million) of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional. During the three and nine months ended March 31, 2024 and 2023, respectively, there was no significant impairment loss recognized related to contract assets.
We recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer for future obligations to transfer products or services. Our deferred revenues, excluding the impact of Liabilities held for sale, primarily relate to cloud services and customer support agreements which have been paid for by customers prior to the performance of those services. The amount of revenue that was recognized during the nine months ended March 31, 2024 that was included in the deferred revenue balances at June 30, 2023 was $1,566 million (nine months ended March 31, 2023—$813 million).
Incremental Costs of Obtaining a Contract with a Customer
Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. The following table summarizes the changes in total capitalized costs to obtain a contract, since June 30, 2023:
Capitalized costs to obtain a contract as of June 30, 2023
$97,207 
New capitalized costs incurred47,961 
Amortization of capitalized costs(30,493)
Impact of foreign exchange rate changes(233)
Reclassification to Assets held for sale (1)
(4,143)
Capitalized costs to obtain a contract as of March 31, 2024
$110,299 
______________________
(1)Adjustment to reclassify capitalized costs to obtain a contract to Assets held for sale related to the AMC Divestiture. See Note 19 “Acquisitions and Divestitures” for more details.
During the three and nine months ended March 31, 2024 and 2023, respectively, there was no significant impairment loss recognized related to capitalized costs to obtain a contract. Refer to Note 9 “Prepaid Expenses and Other Assets” for additional information on incremental costs of obtaining a contract.
13

Transaction Price Allocated to the Remaining Performance Obligations
As of March 31, 2024, approximately $2.6 billion of revenue is expected to be recognized from remaining performance obligations on existing contracts, excluding performance obligations related to the AMC Divestiture which are reported within Liabilities held for sale. We expect to recognize approximately 45% of this amount over the next 12 months and the remaining balance substantially over the next three years thereafter. As of March 31, 2024, approximately $130.0 million of revenue is expected to be recognized from remaining performance obligations on existing contracts related to the AMC Divestiture and the AMC business expects to recognize approximately 50% of this amount over the next 12 months. We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less. See Note 25 “Subsequent Events” for more details.
NOTE 4—ALLOWANCE FOR CREDIT LOSSES
The following illustrates the activity in our allowance for credit losses on accounts receivable, since June 30, 2023:
Balance as of June 30, 2023
$13,828 
Credit loss expense (recovery)7,149 
Write-off / adjustments(8,527)
Reclassification to Assets held for sale (1)
(1,060)
Balance as of March 31, 2024
$11,390 
______________________
(1)Allowance for credit losses of $1.1 million have been reclassified to Assets held for sale related to the AMC Divestiture. See Note 19 “Acquisitions and Divestitures” for more details.
Included in accounts receivable are unbilled receivables in the amount of $68.5 million as of March 31, 2024 (June 30, 2023—$66.5 million).
As of March 31, 2024, we have an allowance for credit losses of $1.3 million for contract assets (June 30, 2023—$0.3 million). For additional information on contract assets, see Note 3 “Revenues.”
NOTE 5—PROPERTY AND EQUIPMENT
 As of March 31, 2024
 
Cost (1)
Accumulated
Depreciation (1)
Net (1)
Computer hardware$404,580 $(273,179)$131,401 
Computer software191,740 (156,045)35,695 
Capitalized software development costs241,286 (145,121)96,165 
Leasehold improvements125,229 (94,800)30,429 
Land and buildings58,481 (18,974)39,507 
Furniture, equipment and other53,924 (41,048)12,876 
Total$1,075,240 $(729,167)$346,073 
______________________
(1)Excludes Property and equipment with cost of $1.7 million, accumulated depreciation of $0.7 million and a net book value of $1.0 million that have been reclassified to Assets held for sale related to the AMC Divestiture. See Note 19 “Acquisitions and Divestitures” for more details.
 As of June 30, 2023
 CostAccumulated
Depreciation
Net
Computer hardware$386,400 $(254,131)$132,269 
Computer software178,899 (135,123)43,776 
Capitalized software development costs216,762 (122,730)94,032 
Leasehold improvements123,607 (94,721)28,886 
Land and buildings62,041 (18,020)44,021 
Furniture, equipment and other55,741 $(41,821)13,920 
Total$1,023,450 $(666,546)$356,904 
14

Sale of Company Owned Facility
During the three months ended March 31, 2024, we completed the sale of a Company owned facility with a carrying value of $4.5 million that was previously classified within Assets held for sale. The Company recognized a gain of $1.0 million on this sale.
NOTE 6—LEASES
We enter into operating leases, both domestically and internationally, for certain facilities, automobiles, data centers and equipment for use in the ordinary course of business. The duration of the majority of these leases generally ranges from 1 to 10 years, some of which include options to extend for an additional 3 to 5 years after the initial term. Additionally, the land upon which our headquarters in Waterloo, Ontario, Canada is located is leased from the University of Waterloo for a period of 49 years beginning in December 2005, with an option to renew for an additional term of 49 years. We also have finance lease liabilities comprised of equipment lease arrangements with an average duration of 4 to 5 years, all of which are currently being sublet. Leases with an initial term of 12 months or less are not recorded on our Condensed Consolidated Balance Sheets.
The following illustrates the Condensed Consolidated Balance Sheets information related to leases:
Operating LeasesBalance Sheet LocationAs of March 31, 2024As of June 30, 2023
Operating lease right of use assets (1)
Operating lease right of use assets$229,327 $285,723 
Operating lease liabilities (current) (1)
Operating lease liabilities$80,960 $91,425 
Operating lease liabilities (non-current) (1)
Long-term operating lease liabilities224,984 271,579 
Total operating lease liabilities$305,944 $363,004 
Finance Leases
Finance lease receivables (current)Prepaid expenses and other current assets$4,255 $6,362 
Finance lease receivables (non-current)
Other assets2,934 5,515 
Total finance lease receivables$7,189 $11,877 
Finance lease liabilities (current)Accounts payable and accrued liabilities$3,785 $5,281 
Finance lease liabilities (non-current)
Accrued liabilities2,932 5,500 
Total finance lease liabilities$6,717 $10,781 
______________________
(1)Excludes Operating lease right of use assets of $3.4 million that have been reclassified to Assets held for sale, as well as $2.1 million of Operating lease liabilities and $1.4 million of Long-term operating lease liabilities that have been reclassified to Liabilities held for sale related to the AMC Divestiture. See Note 19 “Acquisitions and Divestitures” for more details.
The weighted average remaining lease term and discount rate, inclusive of Assets held for sale for the periods indicated below were as follows:
As of March 31, 2024As of June 30, 2023
Weighted-average remaining lease term
Operating leases5.23 years5.62 years
Finance leases1.96 years2.40 years
Weighted-average discount rate
Operating leases4.86 %4.66 %
Finance leases5.51 %5.60 %
15

Lease Costs and Other Information
The following illustrates the various components of lease costs for the period indicated:
Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
Operating lease cost$22,068 $20,923 $68,402 $49,225 
Short-term lease cost675 1,696 2,567 2,253 
Variable lease cost1,342 1,204 3,798 2,404 
Sublease income(2,955)(3,018)(9,668)(8,834)
Total lease cost$21,130 $20,805 $65,099 $45,048 
Supplemental Cash Flow Information
The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payments made for variable lease costs and short-term leases are not included in the measurement of lease liabilities, and, as such, are excluded from the amounts below:
Nine Months Ended March 31,
20242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating leases$82,449 $62,282 
Finance leases$4,427 $989 
Right of use assets obtained in exchange for new lease liabilities:
Operating leases (1)
$19,360 $28,579 
______________________
(1)The nine months ended March 31, 2023 excludes the impact of $129.3 million of right of use assets obtained through the Micro Focus Acquisition. See Note 19 “Acquisitions and Divestitures” for further details including the finalization of the purchase price allocation for the Micro Focus Acquisition.

Maturity of Lease Liabilities
The following table presents the future minimum lease payments under our lease liabilities as of March 31, 2024:
Fiscal years ending June 30,Operating LeasesFinance Leases
2024 (three months ended)
$26,578 $1,295 
2025
88,505 3,369 
2026
67,585 1,940 
2027
55,966 459 
2028
42,277  
Thereafter66,900  
Total lease payments$347,811 $7,063