OpenText will continue “making key investments” in its cloud platform, while remaining on the lookout for more acquisition targets to keep growing its business, according to Mark Barrenechea, company CEO and CTO.
The company had a strong third quarter (ended March 31) as cloud services and subscriptions revenue grew 18.1% from a year ago to $209.1 million, while customer support revenue increased 18.5% to $312.3 million and total revenue jumped 15.6% to $685.9 million. Profit grew to $58.8 million (22 cents a share) from $21.7 million (8 cents a share).
“We’re approaching 2,000 customers running their business in the OpenText Cloud,” Barrenechea said on an earnings call May 9, adding the company has “created incredible scale in our cloud business.”
Key achievements in Q3 included the acquisition of cloud service HighTail and the introduction of the OpenText Release 16 Enhancement Pack 4 (EP4) that further extends security, artificial intelligence (AI), the Internet of things (IoT) and cloud support into its OpenText Enterprise Information Management (EIM) platform.
OpenText also had 22 customer transactions over $1 million in Q3 — 10 of them OpenText Cloud and 12 on-premise, it said in an earnings news release. The technology, financial, consumer goods, services and public sectors had the most demand in cloud and license, it said. Key customer wins in the quarter included Progressive Insurance, McGill University and the U.S. Census Bureau, according to OpenText
OpenText will continue “making key investments in our cloud” for the European Union’s General Data Protection Regulation (GDPR) that starts becoming enforceable May 25, as well as “security and more automation,” Barrenechea told analysts on the call.
“We intend to go faster in the cloud” because the company sees that its “largest opportunity,” he said, adding: “We are enthusiastic about the opportunities ahead for OpenText.”
The cloud investments “will drive growth and customer adoption, and these investments will help create even more predictability in our business model,” according to Barrenechea.
At its annual Enfuse conference, May 21-24 in Las Vegas, and Enterprise World, July 10-12 in Toronto, “we will be showcasing our digital platform and new applications, cloud and managed services, information and end-point security, AI” and IoT, he said. Enfuse 2018 will “showcase the future of cybersecurity and digital investigations,” while OpenText Enterprise World 2018 will “showcase the intelligent and connected enterprise,” the company said.
OpenText sees the GDPR being a “longer-term demand driver” for the company, Barrenechea said, noting his company’s customers are “taking a long-term” view of information security and information governance. The company is, especially in the wake of data privacy concerns becoming stepped up after the controversy surrounding Cambridge Analytica and Facebook, starting to see North American customers wondering if they should adopt a strategy similar to what GDPR calls for, even if there is no legislation in the U.S. yet, he also said.
Mergers and acquisitions, meanwhile, remain “the centerpiece to our total growth strategy,” he said, adding: “We are actively in the market” and “we’ll continue to close acquisitions.”