8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 3, 2010

Open Text Corporation

(Exact name of Registrant as specified in its charter)

Canada	0-27544	98-0154400
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

275 Frank Tompa Drive, Waterloo, Ontario, Canada N2L 0A1

(Address of principal executive offices)

(519) 888-7111

Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition.”

On February 3, 2010, Open Text Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended December 31, 2009. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release issued by Open Text Corporation on February 3, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	OPEN TEXT CORPORATION
February 3, 2010	By:	/S/    PAUL MCFEETERS
		Paul McFeeters Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	Press Release issued by Open Text Corporation on February 3, 2010.

EX-99.1

Exhibit 99.1

Open Text Reports Second Quarter Fiscal 2010 Financial Results

Waterloo, ON, February 3, 2010 - Open Text(TM) Corporation (NASDAQ:OTEX) (TSX:OTC), a leading provider of Enterprise Content Management (ECM) software, today announced unaudited financial results for its second quarter ended December 31, 2009. (1)

Total revenue for the second quarter of fiscal 2010 was $247.8 million, up 19% compared to $207.7 million for the same period in the prior fiscal year. License revenue in the second quarter was $72.7 million, up 12% compared to $64.9 million in the second quarter of the prior fiscal year.

Adjusted net income in the quarter was $50.1 million or $0.87 per share on a diluted basis, up 47% compared to $34.0 million or $0.64 per share on a diluted basis for the same period in the prior fiscal year. Net income in accordance with U.S. generally accepted accounting principles (“US GAAP”) was $21.2 million or $0.37 per share on a diluted basis, compared to $0.8 million or $0.01 per share on a diluted basis for the same period in the prior fiscal year. (2)

The cash and cash equivalents balance as of December 31, 2009 was $247.6 million, compared to $275.8 million as of June 30, 2009. During the six months that ended December 31, 2009, the net cash paid for the Vignette acquisition was $90.6 million. Accounts receivable as of December 31, 2009, totaled $143.4 million, compared to $115.8 million as of June 30, 2009, and Days Sales Outstanding (DSO) was 52 days in the second quarter of fiscal 2010, compared to 53 days in the second quarter of fiscal 2009.

“We had a very good quarter across the board — in all geographies and verticals,” said John Shackleton, President and Chief Executive Officer of Open Text. “Our strong license revenue growth has brought us to where we expected to be on a year to date basis.”

“We are also pleased with our profitability this quarter, generating a pre-tax adjusted operating margin of 28.8%,” said Shackleton. “The integration of Vignette is progressing well and we are very encouraged by the synergies we see from the combined businesses.” (4)

Please see note (2) below for a reconciliation of non-US GAAP based financial measures used in this press release, to US GAAP based financial measures.

Teleconference Call

Open Text will host a conference call on February 3, 2010 at 5:00 p.m. ET to discuss the financial results of its second quarter.

Date:	Wednesday, February 3, 2010
Time:	5:00 p.m. ET/2:00 p.m. PT
Length:	60 minutes
Where:	416-644-3414 800-814-4859 (Toll Free)

Please dial-in approximately 10 minutes before the teleconference is scheduled to begin. A replay of the call will be available beginning February 3, 2010 at 7:00 p.m. ET through 11:59 p.m. on February 17, 2010 and can be accessed by dialing 416-640-1917 and using pass code 4198863 followed by the number sign.

For more information or to listen to the call via Web cast, please use the following link:

http://www.opentext.com/events/wa-event.html?id=7736136

About Open Text

Open Text(TM) is the world’s largest independent provider of Enterprise Content Management software. The company’s solutions manage information for all types of business, compliance and industry requirements in large companies, government agencies and professional service firms. Open Text supports approximately 46,000 customers in 114 countries and 12 languages. For more information about Open Text, visit www.opentext.com.

Certain statements in this press release, including statements about the financial conditions, and results of operations and earnings for Open Text Corporation (“Open Text” or “the Company”), may contain words such as “could”, “expects”, “may”, “should”, “will”, “anticipates”, “believes”, “intends”, “estimates”, “targets”, “plans”, “envisions”, “seeks” and other similar language and are considered forward-looking statements or information under applicable securities laws. These statements are based on the Company’s current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which the Company operates. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different. The Company’s assumptions, although considered reasonable by the Company at the date of this press release, may provide to be inaccurate and consequently the Company’s actual results could differ materially from the expectations set out herein.

Actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following: (i) the future performance, financial and otherwise, of Open Text; (ii) the ability of Open Text to bring new products to market and to increase sales; (iii) the strength of the Company’s product development pipeline; (iv) the Company’s growth and profitability prospects; (v) the estimated size and growth prospects of the ECM market; (vi) the Company’s competitive position in the ECM market and its ability to take advantage of future opportunities in this market; (vii) the benefits of the Company’s products to be realized by customers; and (viii) the demand for the Company’s product and the extent of deployment of the company’s products in the ECM marketplace. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. The risks and uncertainties that may affect forward-looking statements include, but are not limited to: (i) integration of acquisitions and related restructuring efforts, including the quantum of restructuring charges and the timing thereof; (ii) the possibility that the Company may be unable to meet its future reporting requirements under the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder; (iii) the risks associated with bringing new products to market; (iv) fluctuations in currency exchange rates; (v) delays in the purchasing decisions of the Company’s customers; (vi) the competition the Company faces in its industry and/or marketplace; (vii) the possibility of technical, logistical or planning issues in connection with the deployment of the Company’s products or services; (viii) the continuous commitment of the Company’s customers; and (ix) demand for the Company’s products.

For additional information with respect to risks and other factors which could occur, see the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the SEC and other securities regulators. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Notes

(1) Based on comparison of historical revenue figures publicly disseminated by companies in the Enterprise Content Management (“ECM”) sector. All dollar amounts in this press release are in US Dollars unless otherwise indicated.

(2) Use of US Non-GAAP financial measures

In addition to reporting financial results in accordance with US GAAP, the Company provides certain non-US GAAP financial measures in this press release that are not in accordance with US GAAP. These non-US GAAP financial measures have certain limitations in that they do not have a standardized meaning and thus the Company’s definition may be different from similar non-US GAAP financial measures used by other companies and/or analysts and may differ from period to period. Thus it may be more difficult to compare the Company’s financial performance to that of other companies. However, the Company’s management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of adjusted net income and adjusted EPS both in its reconciliation to the US GAAP financial measures of net income and EPS and its consolidated financial statements, all of which should be considered when evaluating the Company’s results. The Company uses the financial measures adjusted EPS and adjusted net income to supplement the information provided in its consolidated financial statements, which are presented in accordance with US GAAP. The presentation of adjusted net income and adjusted EPS is not meant to be a substitute for net income or net income per share presented in accordance with US GAAP, but rather should be evaluated in conjunction with and as a supplement to such US GAAP measures. Open Text strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure. The Company therefore believes that despite these limitations, it is appropriate to supplement the disclosure of the US GAAP measures with certain non-US GAAP measures for the reasons set forth below. Adjusted net income and adjusted EPS are calculated as net income or net income per share on a diluted basis, excluding, where applicable, the amortization of acquired intangible assets, other income (expense), share-based compensation, and restructuring, all net of tax. The Company’s management believes that the presentation of adjusted net income and adjusted EPS provides useful information to investors because it excludes non-operational charges. The use of the term “non-operational charge” is defined by the Company as those that do not impact operating decisions taken by the Company’s management and is based upon the way the Company’s management evaluates the performance of the Company’s business for use in the Company’s internal reports. In the course of such evaluation and for the purpose of making operating decisions, the Company’s management excludes certain items from its analysis, such as amortization of acquired intangible assets, restructuring costs, share-based compensation, other income (expense) and the taxation impact of these items. These items are excluded based upon the

manner in which management evaluates the business of the Company and are not excluded in the sense that they may be used under US GAAP. The Company believes the provision of supplemental non-US GAAP measures allows investors to evaluate the operational and financial performance of the Company’s core business using the same evaluation measures that management uses, and is therefore a useful indication of Open Text’s performance or expected performance of recurring operations and facilitates period-to-period comparison of operating performance. As a result, the Company considers it appropriate and reasonable to provide, in addition to US GAAP measures, supplementary non-US GAAP financial measures that exclude certain items from the presentation of its financial results in this press release. The following charts provide a reconciliation of (unaudited) US GAAP based financial measures to non-US GAAP based financial measures referred to in this press release:

Reconciliation of (Unaudited) US GAAP based Net Income to Adjusted Net Income (in millions of US dollars) for the periods indicated:

	Three months ended December 31, 2009			Three months ended December 31, 2008
GAAP based “Net Income”	$	21.2		$	0.8
Special charges		10.4			11.4
Amortization of intangibles		23.9			21.9
Other expense		1.7			12.5
Share-based compensation		1.2			1.1
Tax Impact on above		(8.3	)		(13.7	)
Non-GAAP based “Adjusted Net Income”	$	50.1		$	34.0

Reconciliation of (Unaudited) US GAAP based EPS to non-US GAAP based EPS (calculated on a diluted basis) for the periods indicated:

	Three months ended December 31, 2009			Three months ended December 31, 2008
GAAP based “Net Income”	$	0.37		$	0.01
Special charges		0.18			0.21
Amortization of intangibles		0.41			0.41
Other expense		0.03			0.23
Share-based compensation		0.02			0.02
Tax Impact on Above		(0.14	)		(0.24	)
Non-GAAP based “Adjusted Net Income” per share	$	0.87		$	0.64

(3) The following table provides a composition of our major currencies for revenue and expenses, expressed as a percentage, for the second quarter of fiscal 2010:

Currencies	% of Revenue		% of Expenses*
EURO	27	%	23	%
GBP	9	%	8	%
CHF	6	%	3	%
CAD	7	%	24	%
USD	43	%	34	%
Others	8	%	8	%
Total	100	%	100	%

* Expenses include all cost of revenues and operating expenses included within the Consolidated Statements of Income, except for amortization of intangible assets, depreciation, share-based compensation and special charges.

(4) The following table sets forth our revenue type as a percentage of total revenue, certain operating expenses by function and certain operating expenses as a percentage of total revenue compared to our “forecasted” percentage range within our “operating model”, as communicated in our investor relations presentation, posted on our corporate website at the following web address: http://www.opentext.com/2/global/company/investors.html

(in ‘000s of USD)	Three months ended December 31, 2009					Six months ended December 31, 2009					Open Text “operating model”
				Percentage					Percentage
Revenue:
License	$	72,691		29.3	%	$	120,020		26.1	%	25-30	%
Customer Support		130,283		52.6	%		253,932		55.3	%	50-55	%
Service and Other		44,816		18.1	%		85,260		18.6	%	20-25	%
Total Revenue		247,790					459,212
Gross profit excluding amortization of acquired technology-based intangible assets		185,236		74.8	%		339,280		73.9	%	72-75	%
Operating expenses:
Research and development		34,347		13.9	%		65,889		14.3	%	14-16	%
Sales and marketing		53,891		21.7	%		104,581		22.8	%	24-26	%
General and administrative		22,377	*	9.0	%		43,602	**	9.5	%	9-10	%
Depreciation		4,398		1.8	%		8,545		1.9	%	2	%
Pre-tax adjusted operating margin	$	71,383		28.8	%	$	119,332		26.0	%	22-27	%

* Includes share-based compensation of $1,160.

** Includes share-based compensation of $2,669.

Reconciliation of (unaudited) pre-tax adjusted operating margin to US GAAP-based net income:

(in ‘000s of USD)	Three months ended December 31, 2009		Six months ended December 31, 2009
Pre-tax adjusted operating margin	$	71,383	$	119,332
Less:
Amortization		23,887		46,946
Share-based compensation		1,160		2,669
Special charges		10,423		29,012
Other (income) expense, net		1,671		(1,769	)
Interest expense, net		2,716		5,762
Provision for income taxes		10,325		13,781
US GAAP-based net income for the period	$	21,201	$	22,931

For more information, please contact:

Paul McFeeters

Chief Financial Officer

Open Text Corporation

905-762-6121

pmcfeeters@opentext.com

Greg Secord

Vice President, Investor Relations

Open Text Corporation

519-888-7111 ext.2408

gsecord@opentext.com

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share data)

	December 31, 2009		June 30, 2009
	(unaudited)
ASSETS
Cash and cash equivalents	$	247,630	$	275,819
Short-term investments		8,414		—
Accounts receivable trade, net of allowance for doubtful accounts of $5,063 as of December 31, 2009 and $4,208 as of June 30, 2009		143,446		115,802
Income taxes recoverable		7,555		4,496
Prepaid expenses and other current assets		26,255		18,172
Deferred tax assets		18,940		20,621
Total current assets		452,240		434,910
Investments in marketable securities		—		13,103
Capital assets		55,884		45,165
Goodwill		712,967		576,111
Acquired intangible assets		359,987		315,048
Deferred tax assets		68,748		69,877
Other assets		17,809		13,064
Long-term income taxes recoverable		43,876		39,958
Total assets	$	1,711,511	$	1,507,236
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	122,660	$	116,992
Current portion of long-term debt		3,508		3,449
Deferred revenues		191,736		189,397
Income taxes payable		7,023		10,356
Deferred tax liabilities		2,216		508
Total current liabilities		327,143		320,702
Long-term liabilities:
Accrued liabilities		19,333		21,099
Pension liability		16,188		15,803
Long-term debt		298,601		299,234
Deferred revenues		12,132		7,914
Long-term income taxes payable		53,770		47,131
Deferred tax liabilities		126,626		108,889
Total long-term liabilities		526,650		500,070
Shareholders’ equity:
Share capital
56,444,939 and 52,716,751 Common Shares issued and outstanding at December 31, 2009 and June 30, 2009, respectively; Authorized Common Shares: unlimited		590,328		457,982
Additional paid-in capital		57,233		52,152
Accumulated other comprehensive income		82,747		71,851
Retained earnings		127,410		104,479
Total shareholders’ equity		857,718		686,464
Total liabilities and shareholders’ equity	$	1,711,511	$	1,507,236

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands of U.S. dollars, except share and per share data)

(Unaudited)

	Three months ended December 31,						Six months ended December 31,
	2009			2008			2009			2008
Revenues:
License	$	72,691		$	64,852		$	120,020		$	114,926
Customer support		130,283			100,438			253,932			198,867
Service and other		44,816			42,361			85,260			76,481
Total revenues		247,790			207,651			459,212			390,274
Cost of revenues:
License		4,633			5,281			7,778			8,174
Customer support		21,493			17,356			42,432			32,923
Service and other		36,428			31,881			69,722			59,610
Amortization of acquired technology-based intangible assets		15,152			11,799			29,294			22,546
Total cost of revenues		77,706			66,317			149,226			123,253
Gross profit		170,084			141,334			309,986			267,021
Operating expenses:
Research and development		34,347			29,948			65,889			58,526
Sales and marketing		53,891			49,347			104,581			94,179
General and administrative		22,377			18,280			43,602			36,667
Depreciation		4,398			2,920			8,545			5,618
Amortization of acquired customer-based intangible assets		8,735			10,138			17,652			18,353
Special charges		10,423			11,446			29,012			11,446
Total operating expenses		134,171			122,079			269,281			224,789
Income from operations		35,913			19,255			40,705			42,232
Other income (expense), net		(1,671	)		(12,464	)		1,769			(11,854	)
Interest expense, net		(2,716	)		(5,347	)		(5,762	)		(8,341	)
Income before income taxes		31,526			1,444			36,712			22,037
Provision for income taxes		10,325			683			13,781			6,615
Net income for the period	$	21,201		$	761		$	22,931		$	15,422
Net income per share—basic	$	0.38		$	0.01		$	0.41		$	0.30
Net income per share—diluted	$	0.37		$	0.01		$	0.40		$	0.29
Weighted average number of Common Shares outstanding—basic		56,403			51,873			55,895			51,586
Weighted average number of Common Shares outstanding—diluted		57,448			53,242			56,964			52,955

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)

	Three months ended December 31,						Six months ended December 31,
	2009			2008			2009			2008
Cash flows from operating activities:
Net income for the period	$	21,201		$	761		$	22,931		$	15,422
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		28,285			24,857			55,491			46,517
In-process research and development		—			121			—			121
Share-based compensation expense		1,943			1,110			5,449			2,533
Employee long-term incentive plan		2,971			1,746			5,646			2,805
Excess tax benefits on share-based compensation expense		(6	)		(24	)		(697	)		(6,653	)
Pension expense		218			906			410			906
Amortization of debt issuance costs		468			326			734			550
Unrealized (gain) loss on financial instruments		(1,482	)		1,529			(3,872	)		807
Loss on sale and write down capital assets		453			269			453			269
Unrealized gain on marketable securities		—			—			(4,353	)		—
Deferred taxes		1,657			4,171			(1,300	)		3,915
Changes in operating assets and liabilities:
Accounts receivable		(6,541	)		4,844			1,387			32,790
Prepaid expenses and other current assets		(105	)		456			(3,323	)		(1,470	)
Income taxes		(3,217	)		1,738			(8,004	)		6,469
Accounts payable and accrued liabilities		(2,467	)		2,204			(11,810	)		(16,046	)
Deferred revenue		(11,592	)		(6,183	)		(24,029	)		(25,613	)
Other assets		682			1,012			1,857			1,334
Net cash provided by operating activities		32,468			39,843			36,970			64,656
Cash flows from investing activities:
Additions of capital assets-net		(4,099	)		1,793			(11,764	)		(2,094	)
Purchase of Vignette Corporation, net of cash acquired		—			—			(90,600	)		—
Purchase of Captaris Inc., net of cash acquired		—			(101,033	)		—			(101,033	)
Purchase of eMotion LLC, net of cash acquired		(556	)		—			(556	)		(3,635	)
Purchase of a division of Spicer Corporation		—			—			—			(10,836	)
Purchase consideration for prior period acquisitions		(3,439	)		(9,073	)		(8,240	)		(12,366	)
Investments in marketable securities		—			—			—			(3,608	)
Maturity of short-term investments		11,354			—			38,525			—
Net cash used in investing activities		3,260			(108,313	)		(72,635	)		(133,572	)
Cash flow from financing activities:
Excess tax benefits on share-based compensation expense		6			24			697			6,653
Proceeds from issuance of Common Shares		1,665			497			6,142			6,039
Repayment of long-term debt		(870	)		(854	)		(1,734	)		(1,721	)
Debt issuance costs		—			—			(1,024	)		—
Net cash provided by financing activities		801			(333	)		4,081			10,971
Foreign exchange gain (loss) on cash held in foreign currencies		(1,089	)		(8,460	)		3,395			(24,101	)
Decrease in cash and cash equivalents during the period		35,440			(77,263	)		(28,189	)		(82,046	)
Cash and cash equivalents at beginning of the period		212,190			250,133			275,819			254,916
Cash and cash equivalents at end of the period	$	247,630		$	172,870		$	247,630		$	172,870