Open Text : Q2 FY2020 Financial & Business Results Presentation

Q2 Fiscal 2020 Financial & Business Results

NASDAQ: OTEX| TSX: OTEX

January 30, 2020

Safe Harbor Statement

Certain statements in this presentation, including statements about the focus of Open Text Corporation ("OpenText" or "the Company") in our fiscal year ending June 30, 2020 (Fiscal 2020) on growth, anticipated benefits of our partnerships and next generation product lines, the strength of our operating framework and balance sheet flexibility, continued investments in product innovation, go-to-market and strategic acquisitions, M&A continuing to be our leading growth contributor, our capital allocation strategy, creating value through investments in broader Information Management (IM) capabilities, the Company's presence in the cloud and in growth markets, expected growth in our revenue lines, total growth from acquisitions, innovation and organic initiatives, the focus on recurring revenues, improving operational efficiency, expanding cash flow and strengthening the business, adjusted operating income and cash flow, its financial condition, the adjusted operating margin target range, impact from currency exchange rates, results of operations and earnings, announced acquisitions, ongoing tax matters, the integration of the acquired businesses, declaration of quarterly dividends, future tax rates, new platform and product offerings, scaling OpenText to new levels in Fiscal 2020 and beyond, and other matters, may contain words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "may", "could", "would", "might", "will" and variations of these words or similar expressions are considered forward-looking statements or information under applicable securities laws. In addition, any information or statements that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking, and based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management's perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances, such as certain assumptions about the economy, as well as market, financial and operational assumptions. Management's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Such forward-looking statements involve known and unknown risks, uncertainties and other factors and assumptions that may cause the actual results, performance or achievements to differ materially. Such factors include, but are not limited to: (i) the future performance, financial and otherwise, of OpenText; (ii) the ability of OpenText to bring new products and services 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 IM market including expected growth in the Artificial Intelligence market; (vi) the Company's competitive position in the IM market and its ability to take advantage of future opportunities in this market; (vii) the benefits of the Company's products and services to be realized by customers; (viii) the demand for the Company's products and services and the extent of deployment of the Company's products and services in the IM marketplace; (ix) downward pressure on our share price and dilutive effect of future sales or issuances of equity securities (including in connection with future acquisitions); (x) the Company's financial condition and capital requirements; and (xi) statements about the impact of product releases. 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 potential for the incurrence of or assumption of debt in connection with acquisitions and the impact on the ratings or outlooks of rating agencies on the Company's outstanding debt securities; (iii) the possibility that the Company may be unable to meet its future reporting requirements under the U.S. Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder, or applicable Canadian securities regulation; (iv) the risks associated with bringing new products and services to market; (v) failure to comply with privacy laws and regulations that are extensive, open to various interpretations and complex to implement including General Data Protection Regulation (GDPR) and Country by Country Reporting (CBCR); (vi) fluctuations in currency exchange rates; (vii) delays in the purchasing decisions of the Company's customers; (viii) the competition the Company faces in its industry and/or marketplace; (ix) the final determination of litigation, tax audits (including tax examinations in the United States and elsewhere) and other legal proceedings; (x) potential exposure to greater than anticipated tax liabilities or expenses, including with respect to changes in Canadian, U.S. or international tax regimes including tax reform legislation enacted through the Tax Cuts and Jobs Act in the United States; (xi) the possibility of technical, logistical or planning issues in connection with the deployment of the Company's products or services; (xii) the continuous commitment of the Company's customers; and (xiii) demand for the Company's products and services. 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 Securities and Exchange Commission (SEC) and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

OpenText Confidential. ©2020 All Rights Reserved.

2

Twenty Consecutive Quarters of Total Growth

Total Revenue Growth in CC(1)(Y/Y)

20	USD)
	(in millions
Consecutive	Revenues
Quarters of	Total
Y/Y Growth(1)

800

700

600

500

400

300

200

100

0

				32.6%	10.0%	1.5% 7.7%	2.0%	6.3%
						5.9%
				10.8%	4.4%
				39.6%29.3%
				36.2%
				17.2%
6.8%	3.2% 6.2%	0.2% 14.3%
8.1%		1.7%

Quarters (Q3 F15 - Q2 F20)

1. Represents Total Revenue growth in constant currency (Y/Y)	OpenText Confidential. ©2020 All Rights Reserved.	3

Q2 FY'20 Financial Highlights

With Y/Y Comparisons

		Q2 FY'20		Trailing Twelve Months (TTM) Ending Q2 FY'20
Total	Revenues	$771.6M		4.9%	Total	Revenues	$2.93B	3.2%
	6.3% in CC	7.0% in CC
		$563.8M,		6.5%			$2.22B,	5.5%
	ARR(1)	73.1%			ARR(1)	75.6%
		7.8% in CC		9.0% in CC
		of Total Revenue				of Total Revenue
Cloud	Revenues	$248.3M		13.3%	Cloud	Revenues	$966.1M	13.1%
	14.1% in CC	15.7% in CC

A-	EBITDA(2)	$317.0M,	2.8%	A-EBITDA(2),(3)	$1.12B,	5.0%
41.1%(margin)	4.9% in CC	38.1%(margin)	9.7% in CC

Non-GAAP Earnings	$0.84	5.0%	Non-GAAP Earnings	$2.84	6.8%
Per Share(2)	7.5% in CC	Per Share(2)	12.8% in CC

Operating Cash	$207.2M	9.6%	Operating Cash	$860.5M	3.0%
Flows	Flows(3)

1.	Annual recurring revenue is defined as the sum of cloud services and subscriptions revenue and customer support revenue.	OpenText Confidential. ©2020 All Rights Reserved.	4
2.	Please see reconciliation of GAAP to Non-GAAP measures at the end of this presentation.
3.	Refer to note 1 of our Fiscal 2019 10-K for details on the impact of recently adopted accounting standards on prior period results.

Q2 FY'20 Revenue Breakdown

Total Revenue Mix

9% 18%

41%

32%

License

Cloud Services & Subscriptions

Customer Support

Professional Service & Other

Total Revenue by

Geography

9%

33%

58%

Americas

EMEA

APJ

ARR by Industry(1)

3%

5%

8%25%

9%

9%

18%

11%

12%

Financial

Services

Consumer goods

Technology

Public Sector

Healthcare

Basic materials and conglomerates

Industrial goods Utilities

1. Does not include revenue contribution from Carbonite.	OpenText Confidential. ©2020 All Rights Reserved.	5

Q2 FY'20 Key Customer Wins

• The Ministry of Justice in Germany, together with three other state judicial administrations, selected OpenText Intelligent Capture
• Enables the digitization of 100 million pages of incoming paper documents in 1,000 workplaces as part of the introduction of electronic court files
• thyssenkrupp AG, a technology group headquartered in Essen, Germany, selected OpenText Core Archive for SAP Solutions
• Streamlines internal processes, leading to collaboration between departments, consolidating different archive solutions
• Kodak Alaris is a privately held global technology company
• Selected OpenText to create drivers for its scanners, software and services in order to capture information that integrates with customer business applications
• Lewis Rice, a leading regional law firm in the US Midwest, chose the OpenText AxcelerateMulti-matter solution
• Enables Lewis Rice to substantially lower their eDiscovery spend with a single vendor ensuring a more consistent work product across all matters in a single platform.
• Morneau Shepell, provider oftechnology-enabled HR services, headquartered in Toronto, Canada, acquired additional licenses of OpenText AppWorks
• Expands use of the application, after completing the acquisition of Mercer in August 2019

OpenText Confidential. ©2020 All Rights Reserved.

6

Carbonite Update and Revenue Impact

• Expect revenue for the 2H of FY'20 to be $195m to $200m, after purchase price accounting (PPA) and disruption of up to 10% for typical integration activities
• OpenText will recognize $171.5M of deferred revenue over the life of the contracts after PPA adjustments totaling $74.9M(1)
• For FY'20, expect Carbonite to be slightly accretive toA-EBITDA dollars and A-EPS

Estimated PPA Amortization (Millions)

		FY'20				FY'21		FY'22+	Total
	Q2	Q3	Q4	Q1	Q2	Q3	Q4
	$3.1	$22.7	$16.7	$11.5	$6.4	$3.5	$2.7	$8.3	$74.9

1. Unaudited and subject to measurement period adjustments.	OpenText Confidential. ©2020 All Rights Reserved.	7

Q3 FY'20 Quarterly Factors:(1)

Externalities

• Economy:
• • Global recession concerns
  • Trade and tariff wars
  • Europe, US, manufacturing slowdown
  • Corona virus
• Geo-political:
• • Gulf Nations
  • Brexit
• Currency:
• • FX headwinds continue

Company Specific

(including Carbonite)

• Our business is annual, and quarters will vary
• FY'20 FX headwind unchanged at ~$35 million
• Expect lowdouble-digit revenue growth in Q3 FY'20 on a y/y basis, including Carbonite and FX
• ExpectNon-GAAP Total Operating Expenses to be ~30% higher in Q3 FY'20 compared to Q2 FY'20 of $286.1M
• • Seasonal increase at OTEX (annual performance cycle)
  • Full quarter of Carbonite operations
• Q3 FY'20A-EBITDA dollars to be flat to slightly up y/y, compared to Q3 FY'19

1. The Q3 Quarterly Factors are anticipated quarterly variances that do not reflect OpenText's annual business.

OpenText Confidential. ©2020 All Rights Reserved.

8

FY'20Target Model

	Fiscal 2019 Results	Previous FY'20 Model		Revised FY'20 Model(3)
Revenue Type:
Annual Recurring Revenue (ARR)	75.1%	74%	- 76%		75%	- 77%
License	14.9%	13%	- 17%		13%	- 17%
Cloud Services and Subscriptions	31.6%	31%	- 35%		34%	- 38%
Customer Support	43.5%	40%	- 44%		38%	- 42%
Professional Services and Other	9.9%	8% - 12%		7% - 11%
Non-GAAP Gross Margin
License	96.6%	96%	- 98%		96%	- 98%
Cloud Services and Subscriptions	57.8%	57%	- 59%		58%	- 60%
Customer Support	90.1%	89%	- 91%		89%	- 91%
Professional Services and Other	21.8%	18%	- 20%		18%	- 20%
Non-GAAP Gross Margin	74.1%	73%	- 75%		73%	- 75%
Non-GAAP Operating Expenses:
Research & Development	11.0%	11% - 13%		11% - 13%
Sales & Marketing	17.8%	17%	- 19%		18%	- 20%
General & Admin	6.9%	6%	- 8%		6%	- 8%
Depreciation	3.4%	2%	- 4%		2%	- 4%
A-EBITDA Margin(1)	38.4%	38% - 39%		36%	- 37%
Interest and Other Related Expense USD million	$136.6	$140	- $145		$147	- $152
Adjusted Tax Rate(2)	14%	14%		14%
Capital Expenditures	$64	$88	- $98		$88	- $98

1.	Please see reconciliation of GAAP to Non-GAAP measures in our historical filings on Form 10K.	OpenText Confidential. ©2020 All Rights Reserved.	9
2.	Please refer to historical filings, including our Forms 10-K and 10-Q, regarding the company's adjusted tax rate.
3.	This model is not guidance. Revised to reflect the acquisition of Carbonite.

FY'22 Long-Term Aspirations

A-EBITDA Margin(1)(2)

38%-40%

38.1%

+500 bps

33.1%

FY'14

Q2 FY'20 TTM

Operating Cash Flows(2)

$1.0B-$1.1B

$860M

106%

$417M

FY'14

Q2 FY'20 TTM

1.	Please see reconciliation of GAAP to Non-GAAP measures in our historical filings.	OpenText Confidential. ©2020 All Rights Reserved.	10
2.	Refer to note 1 of our Fiscal 2019 10-K for details on the impact of recently adopted accounting standards on prior period results.

Strong Liquidity & Balance Sheet

Cash Generated for M&A		Trended Net Leverage

TTM Q2 FY'20 (US$ M)

2.3x leverage post $1.4B acquisition of Carbonite

Consolidated Net Leverage Ratio(1)

OCF$860

Less: Principal

$10

Documentum
Acquisition
Closing		2.6x
2.5x	2.4x
2.3x

Carbonite

Acquisition

Closing

2.3x

Less: CapEx

$69

Less: Dividends

$182

TTM Cash Generated	$599
for M&A

2.0x	1.9x		1.9x
	1.7x
		1.7x	1.5x	1.5x

Q3 FY'17 Q4 FY'17 Q1 FY'18 Q2 FY'18 Q3 FY'18 Q4 FY'18 Q1 FY'19 Q2 FY'19 Q3 FY'19 Q4 FY'19 Q1 FY'20 Q2 FY'20

1. Consolidated Net Leverage Ratio is calculated using bank covenant methodology.	OpenText Confidential. ©2020 All Rights Reserved.	11

Appendix A

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-GAAP).TheseNon-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-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 these Non-GAAP financial measures both in its reconciliation to the U.S. GAAP financial measures and its consolidated financial statements, all of which should be considered when evaluating the Company's results.

The Company uses these Non-GAAP financial measures to supplement the information provided in its consolidated financial statements, which are presented in accordance with U.S. GAAP. The presentation of Non-GAAP financial measures are not meant to be a substitute for financial measures presented in accordance with U.S. GAAP, but rather should be evaluated in conjunction with and as a supplement to such U.S. GAAP measures. OpenText 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 U.S. GAAP measures with certain Non-GAAP measures defined below.

Non-GAAP-based net income and Non-GAAP-based EPS, attributable to OpenText, are consistently calculated as GAAP-based net income or earnings per share, attributable to OpenText, on a diluted basis, excluding the effects of the amortization of acquired intangible assets, other income (expense), share-based compensation, and Special charges (recoveries), all net of tax and any tax benefits/expense items unrelated to current period income, as further described in the tables below. Non-GAAP-based gross profit is the arithmetical sum of GAAP-based gross profit and the amortization of acquired technology-based intangible assets and share-based compensation within cost of sales. Non-GAAP-based gross margin is calculated as Non-GAAP-based gross profit expressed as a percentage of total revenue. Non-GAAP-based income from operations is calculated as GAAP-based income from operations, excluding the amortization of acquired intangible assets, Special charges (recoveries), and share-based compensation expense.

Adjusted earnings (loss) before interest, taxes, depreciation and amortization (Adjusted EBITDA) is consistently calculated as GAAP-based net income, attributable to OpenText, excluding interest income (expense), provision for income taxes, depreciation and amortization of acquired intangible assets, other income (expense), share-based compensation and Special charges (recoveries).

The Company's management believes that the presentation of the above defined Non-GAAP financial measures provides useful information to investors because they portray the financial results of the Company before the impact of certain non- operational charges. The use of the term "non-operational charge" is defined for this purpose as an expense that does not impact the ongoing operating decisions taken by the Company's management. These items are excluded based upon the way the Company's management evaluates the performance of the Company's business for use in the Company's internal reports and are not excluded in the sense that they may be used under U.S. GAAP.

The Company does not acquire businesses on a predictable cycle, and therefore believes that the presentation of non-GAAP measures, which in certain cases adjust for the impact of amortization of intangible assets and the related tax effects that are primarily related to acquisitions, will provide readers of financial statements with a more consistent basis for comparison across accounting periods and be more useful in helping readers understand the Company's operating results and underlying operational trends. Additionally, the Company has engaged in various restructuring activities over the past several years, primarily due to acquisitions, that have resulted in costs associated with reductions in headcount, consolidation of leased facilities and related costs, all which are recorded under the Company's "Special Charges (recoveries)" caption on the Consolidated Statements of Income. Each restructuring activity is a discrete event based on a unique set of business objectives or circumstances, and each differs in terms of its operational implementation, business impact and scope, and the size of each restructuring plan can vary significantly from period to period. Therefore, the Company believes that the exclusion of these special charges (recoveries) will also better aid readers of financial statements in the understanding and comparability of the Company's operating results and underlying operational trends.

In summary, the Company believes the provision of supplemental Non-GAAP measures allow 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 OpenText's performance or expected performance of future operations and facilitates period-to-period comparison of operating performance (although prior performance is not necessarily indicative of future performance). As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary Non-GAAP financial measures that exclude certain items from the presentation of its financial results.

See historical filings, including the Company's Annual Reports on Form 10-K, for reconciliations of certain Non-GAAP measures to GAAP measures. The following charts provide (unaudited) reconciliations of U.S. GAAP-based financial measures to Non-U.S.GAAP-based financial measures for the following periods presented.

OpenText Confidential. ©2020 All Rights Reserved. 12

Summary of Quarterly Results with Constant Currency

							Q2 FY'20 in	% Change
(in millions except per share data)	Q2 FY'20	Q2 FY'19	$ Change	% Change	CC*	in CC*
Revenues:
	Cloud services and subscriptions	$248.3	$219.2	$29.1	13.3	%	$250.2	14.1	%
	Customer support	315.5	310.4	5.2	1.7	%	320.6	3.3	%
	Total annual recurring revenues**	$563.8	$529.6	$34.3	6.5	%	$570.8	7.8	%
	License	138.1	132.8	5.3	4.0	%	140.2	5.6	%
	Professional service and other	69.6	72.9	(3.3)	(4.5)	%	70.8	(2.9)	%
Total revenues	$771.6	$735.2	$36.3	4.9	%	$781.8	6.3	%
GAAP-based operating income	$184.7	$173.9	$10.8	6.2	%	N/A	N/A
Non-GAAP-based operating income (1)	$296.4	$284.5	$11.9	4.2	%	$303.0	6.5	%
GAAP-based EPS, diluted	$0.40	$0.39	$0.01	2.6	%	N/A	N/A
Non-GAAP-based EPS, diluted(1)(2)	$0.84	$0.80	$0.04	5.0	%	$0.86	7.5	%
GAAP-based net income, attributable to OpenText	$107.5	$104.4	$3.0	2.9	%	N/A	N/A
Adjusted EBITDA(1)	$317.0	$308.3	$8.7	2.8	%	$323.4	4.9	%
Operating cash flows	$207.2	$189.1	$18.1	9.6	%	N/A	N/A

1. See reconciliation ofGAAP-based measures to Non-GAAP-based measures at the end of this presentation
2. Please also see note 14 to the Company's Fiscal 2018 Consolidated Financial Statements on Form10-K. Reflective of the amount of net tax benefit arising from the internal reorganization assumed to be allocable to the current period based on the forecasted utilization period.
   Note: Individual line items in table may be adjusted by non-material amounts to enable totals to align to published financial statements.
   *CC: Constant currency for this purpose is defined as the current period reported revenues/expenses/earnings represented at the prior comparative period's foreign exchange rate. ** Annual recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.

OpenText Confidential. ©2020 All Rights Reserved. 13

Summary of Year to Date Results with Constant Currency

(in millions except per share data)	FY'20 YTD	FY'19 YTD	$ Change	% Change
Revenues:
	Cloud services and subscriptions	$485.6	$427.3	$58.3	13.6		%
	Customer support	627.8	621.9	5.9	0.9		%
	Total annual recurring revenues**	$1,113.4	$1,049.2	$64.2	6.1	%
	License	216.0	209.6	6.4	3.0	%
	Professional service and other	139.0	143.5	(4.5)	(3.1)	%
Total revenues	$1,468.4	$1,402.4	$66.1	4.7	%
GAAP-based operating income	$317.3	$273.2	$44.1	16.1		%
Non-GAAP-based operating income (1)	$530.3	$506.9	$23.4	4.6		%
GAAP-based EPS, diluted	$0.67	$0.52	$0.15	28.8		%
Non-GAAP-based EPS, diluted(1)(2)	$1.48	$1.40	$0.08	5.7	%
GAAP-based net income, attributable to OpenText	$181.9	$140.8	$41.1	29.2	%
Adjusted EBITDA(1)	$571.2	$554.5	$16.7	3.0	%
Operating cash flows	$344.7	$360.5	($15.8)	(4.4)	%

FY'20 YTD in CC*

$489.5

637.9

$1,127.4

219.4

141.6

$1,488.3

N/A

$541.4

N/A

$1.51

N/A

$ 582.1

N/A

• Change in CC*

14.5 %

1. 2.6 %

2. %

1. %
   (1.4) %

1. %
   N/A

6.8 %

N/A

7.9 %

N/A

4.9 %

N/A

1. See reconciliation ofGAAP-based measures to Non-GAAP-based measures at the end of this presentation
2. Please also see note 14 to the Company's Fiscal 2018 Consolidated Financial Statements on Form10-K. Reflective of the amount of net tax benefit arising from the internal reorganization assumed to be allocable to the current period based on the forecasted utilization period.
   Note: Individual line items in table may be adjusted by non-material amounts to enable totals to align to published financial statements.
   *CC: Constant currency for this purpose is defined as the current period reported revenues/expenses/earnings represented at the prior comparative period's foreign exchange rate. ** Annual recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.

OpenText Confidential. ©2020 All Rights Reserved. 14

Reconciliation of Selected Non-GAAP Measures | Q2 FY'20

Three Months Ended December 31, 2019

(in '000s USD)

COST OF REVENUES

Cloud services and subscriptions Customer support Professional service and other

Amortization of acquired technology-based intangible assets

GAAP-based gross profit and gross margin (%) /

Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and development

Sales and marketing

General and administrative

Amortization of acquired customer-based intangible assets Special charges (recoveries)

GAAP-based income from operations / Non-GAAP-based income from operations

Other income (expense), net

Provision for (recovery of) income taxes

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

GAAP-based earnings per share / Non GAAP-based earnings per share- diluted, attributable to OpenText

GAAP

$ 103,644 29,788 53,604 42,299

539,172

80,283

137,310

54,595

51,460

10,072

184,740

1,972

46,818

107,467

$0.40

GAAP % of

Total Adjustments FN Non- GAAP

Revenue

$	(371)	(1)	$	103,273
	(297)	(1)		29,491
	(346)	(1)		53,258
	(42,299)	(2)		-
69.9%	43,313	(3)		582,485

	(1,255)	(1)		79,028
	(2,383)	(1)		134,927
	(3,131)	(1)		51,464
	(51,460)	(2)		-
	(10,072)	(4)		-
	111,614	(5)		296,354
	(1,972)	(6)		-
	(9,861)	(7)		36,957
	119,503	(8)		226,970
$	0.44	(8)	$	0.84

Non-GAAP % of

Total Revenue

75.5%

OpenText Confidential. ©2020 All Rights Reserved. 15

Reconciliation of Selected Non-GAAP Measures | Q2 FY'20

FOOTNOTES

1. Adjustment relates to the exclusion of share based compensation expense from ourNon-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.
2. Adjustment relates to the exclusion of amortization expense from ourNon-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3. GAAP-basedand Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.
4. Adjustment relates to the exclusion of Special charges (recoveries) from ourNon-GAAP-based operating expenses as Special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations, and are therefore excluded from our internal analysis of operating results.
5. GAAP-basedand Non-GAAP-based income from operations stated in dollars.
   Adjustment relates to the exclusion of Other income (expense) from our Non-GAAP-based operating expenses as Other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses)
6. from our holdings innon-marketable securities investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.
   Adjustment relates to differences between the GAAP-based tax provision rate of approximately 30% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based adjusted net income. Such excluded items include amortization, share-based compensation, Special charges (recoveries)
7. and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves, and "book to return" adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at ourNon-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.
8. Reconciliation ofGAAP-based net income to Non-GAAP-based net income:

		Three Months Ended December 31, 2019
				Per share diluted
GAAP-based net income, attributable to OpenText
$	107,467	$	0.40
Add:
Amortization		93,759		0.35
Share-based compensation		7,783		0.03
Special charges (recoveries)		10,072		0.04
Other (income) expense, net		(1,972)		(0.01)
GAAP-based provision for (recovery of) income taxes		46,818		0.17
Non-GAAP based provision for income taxes		(36,957)		(0.14)
Non-GAAP-based net income, attributable to OpenText	$	226,970	$	0.84

OpenText Confidential. ©2020 All Rights Reserved. 16

Reconciliation of Selected Non-GAAP Measures | FY'20 YTD

		Six Months Ended December 31, 2019
(in '000s USD)	GAAP	GAAP % of	Adjustments	FN	Non- GAAP	Non-GAAP % of
	Total	Total Revenue
		Revenue

COST OF REVENUES

Cloud services and subscriptions

Customer support

Professional service and other

Amortization of acquired technology-based intangible assets

GAAP-based gross profit and gross margin (%) /

Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and development

Sales and marketing

General and administrative

Amortization of acquired customer-based intangible assets Special charges (recoveries)

GAAP-based income from operations / Non-GAAP-based income from operations

Other income (expense), net

Provision for (recovery of) income taxes

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

GAAP-based earnings per share / Non GAAP-based earnings per share- diluted, attributable to OpenText

$	205,806		$	(754)	(1)	$	205,052
	59,175			(613)	(1)		58,562
	107,942			(589)	(1)		107,353
	82,597			(82,597)	(2)		-
	1,007,552	68.6%		84,553	(3)		1,092,105	74.4%

	161,461		(2,476)	(1)		158,985
	265,928		(4,499)	(1)		261,429
	106,130		(5,743)	(1)		100,387
	100,618		(100,618)	(2)		-
	15,173		(15,173)	(4)		-
	317,253		213,062	(5)		530,315
	(813)		813	(6)		-
	69,909		(4,707)	(7)		65,202
	181,868		218,582	(8)		400,450
$	0.67	$	0.81	(8)	$	1.48

OpenText Confidential. ©2020 All Rights Reserved. 17

Reconciliation of Selected Non-GAAP Measures | FY'20 YTD

FOOTNOTES

1. Adjustment relates to the exclusion of share based compensation expense from ourNon-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.
2. Adjustment relates to the exclusion of amortization expense from ourNon-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3. GAAP-basedand Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.
4. Adjustment relates to the exclusion of Special charges (recoveries) from ourNon-GAAP-based operating expenses as Special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations, and are therefore excluded from our internal analysis of operating results.
5. GAAP-basedand Non-GAAP-based income from operations stated in dollars.
   Adjustment relates to the exclusion of Other income (expense) from our Non-GAAP-based operating expenses as Other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses)
6. from our holdings innon-marketable securities investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.
   Adjustment relates to differences between the GAAP-based tax provision rate of approximately 28% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based adjusted net income. Such excluded items include amortization, share-based compensation, Special charges (recoveries)
7. and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves, and "book to return" adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at ourNon-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.
8. Reconciliation ofGAAP-based net income to Non-GAAP-based net income:

		Six Months Ended December 31, 2019
				Per share diluted
GAAP-based net income, attributable to OpenText
$	181,868	$	0.67
Add:
Amortization		183,215		0.68
Share-based compensation		14,674		0.05
Special charges (recoveries)		15,173		0.06
Other (income) expense, net		813		-
GAAP-based provision for (recovery of) income taxes		69,909		0.26
Non-GAAP based provision for income taxes		(65,202)		(0.24)
Non-GAAP-based net income, attributable to OpenText	$	400,450	$	1.48

OpenText Confidential. ©2020 All Rights Reserved. 18

Reconciliation of Selected Non-GAAP Measures | Q2 FY'19

		Three Months Ended December 31, 2018
(in '000s USD)		GAAP % of				Non-GAAP % of
GAAP	Total	Adjustments	FN	Non- GAAP
	Total Revenue
		Revenue

COST OF REVENUES

Cloud services and subscriptions

Customer support

Professional service and other

Amortization of acquired technology-based intangible assets

GAAP-based gross profit and gross margin (%) /

Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and development

Sales and marketing

General and administrative

Amortization of acquired customer-based intangible assets Special charges (recoveries)

GAAP-based income from operations / Non-GAAP-based income from operations

Other income (expense), net

Provision for (recovery of) income taxes

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

GAAP-based earnings per share / Non GAAP-based earnings per share- diluted, attributable to OpenText

$

$

88,698		$	(265)	(1)	$	88,433
31,273			(271)	(1)		31,002
56,030			(358)	(1)		55,672
48,366			(48,366)	(2)		-
507,209	69.0%		49,260	(3)		556,469	75.7%

75,753		(994)	(1)		74,759
126,193		(1,615)	(1)		124,578
52,198		(3,382)	(1)		48,816
45,919		(45,919)	(2)		-
9,380		(9,380)	(4)		-
173,932		110,550	(5)		284,482
378		(378)	(6)		-
36,236		(1,114)	(7)		35,122
104,432		111,286	(8)		215,718
0.39	$	0.41	(8)	$	0.80

OpenText Confidential. ©2020 All Rights Reserved. 19

Reconciliation of Selected Non-GAAP Measures | Q2 FY'19

FOOTNOTES

1. Adjustment relates to the exclusion of share based compensation expense from ourNon-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.
2. Adjustment relates to the exclusion of amortization expense from ourNon-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3. GAAP-basedand Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.
4. Adjustment relates to the exclusion of Special charges (recoveries) from ourNon-GAAP-based operating expenses as Special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations, and are therefore excluded from our internal analysis of operating results.
5. GAAP-basedand Non-GAAP-based income from operations stated in dollars.
   Adjustment relates to the exclusion of Other income (expense) from our Non-GAAP-based operating expenses as Other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses)
6. from our holdings innon-marketable securities investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.
   Adjustment relates to differences between the GAAP-based tax provision rate of approximately 26% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based adjusted net income. Such excluded items include amortization, share-based compensation, Special charges (recoveries)
7. and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves, and "book to return" adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at ourNon-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.
8. Reconciliation ofGAAP-based net income to Non-GAAP-based net income:

GAAP-based net income, attributable to OpenText Add:

Amortization

Share-based compensation

Special charges (recoveries)

Other (income) expense, net

GAAP-based provision for (recovery of) income taxes Non-GAAP based provision for income taxes Non-GAAP-based net income, attributable to OpenText

Three Months Ended December 31, 2018

			Per share diluted
$	104,432	$	0.39

	94,285		0.35
	6,885		0.03
	9,380		0.03
	(378)		-
	36,236		0.13
	(35,122)		(0.13)
$	215,718	$	0.80

OpenText Confidential. ©2020 All Rights Reserved. 20

Reconciliation of Selected Non-GAAP Measures | FY'19 YTD

		Six Months Ended December 31, 2018
(in '000s USD)		GAAP % of				Non-GAAP % of
GAAP	Total	Adjustments	FN	Non- GAAP
	Total Revenue
		Revenue

COST OF REVENUES

Cloud services and subscriptions

Customer support

Professional service and other

Amortization of acquired technology-based intangible assets

GAAP-based gross profit and gross margin (%) /

Non-GAAP-based gross profit and gross margin (%)

Operating expenses

Research and development

Sales and marketing

General and administrative

Amortization of acquired customer-based intangible assets Special charges (recoveries)

GAAP-based income from operations / Non-GAAP-based income from operations

Other income (expense), net

Provision for (recovery of) income taxes

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

GAAP-based earnings per share / Non GAAP-based earnings per share- diluted, attributable to OpenText

$

$

176,401		$	(582)	(1)	$	175,819
61,738			(571)	(1)		61,167
112,826			(882)	(1)		111,944
95,843			(95,843)	(2)		-
948,053	67.6%		97,878	(3)		1,045,931	74.6%

153,223		(2,353)	(1)		150,870
246,375		(3,416)	(1)		242,959
103,122		(5,636)	(1)		97,486
91,795		(91,795)	(2)		-
32,691		(32,691)	(4)		-
273,159		233,769	(5)		506,928
1,900		(1,900)	(6)		-
66,086		(4,656)	(7)		61,430
140,756		236,525	(8)		377,281
0.52	$	0.88	(8)	$	1.40

OpenText Confidential. ©2020 All Rights Reserved. 21

Reconciliation of Selected Non-GAAP Measures | FY'19 YTD

FOOTNOTES

1. Adjustment relates to the exclusion of share based compensation expense from ourNon-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.
2. Adjustment relates to the exclusion of amortization expense from ourNon-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.
3. GAAP-basedand Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.
4. Adjustment relates to the exclusion of Special charges (recoveries) from ourNon-GAAP-based operating expenses as Special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations, and are therefore excluded from our internal analysis of operating results.
5. GAAP-basedand Non-GAAP-based income from operations stated in dollars.
   Adjustment relates to the exclusion of Other income (expense) from our Non-GAAP-based operating expenses as Other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses)
6. from our holdings innon-marketable securities investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.
   Adjustment relates to differences between the GAAP-based tax provision rate of approximately 32% and a Non-GAAP-based tax rate of approximately 14%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based adjusted net income. Such excluded items include amortization, share-based compensation, Special charges (recoveries)
7. and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves, and "book to return" adjustments for tax return filings and tax assessments. Included is the amount of net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 assumed to be allocable to the current period based on the forecasted utilization period. In arriving at ourNon-GAAP-based tax rate of approximately 14%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.
8. Reconciliation ofGAAP-based net income to Non-GAAP-based net income:

GAAP-based net income, attributable to OpenText Add:

Amortization

Share-based compensation

Special charges (recoveries)

Other (income) expense, net

GAAP-based provision for (recovery of) income taxes Non-GAAP based provision for income taxes Non-GAAP-based net income, attributable to OpenText

Six Months Ended December 31, 2018

			Per share diluted
$	140,756	$	0.52

	187,638		0.70
	13,440		0.05
	32,691		0.12
	(1,900)		(0.01)
	66,086		0.25
	(61,430)		(0.23)
$	377,281	$	1.40

OpenText Confidential. ©2020 All Rights Reserved. 22

Reconciliation of Adjusted EBITDA

(in '000s USD)		FY'20 YTD				Q2 FY'20			FY'19 YTD			Q2 FY'19
GAAP-based Net income attributable to OpenText	$	181,868	$	107,467	$	140,756	$	104,432
Add:
Provision for (recovery of) income taxes		69,909				46,818			66,086			36,236
Interest and other related expense, net		64,586				32,376			68,144			33,613
Amortization of acquired technology-based intangible assets		82,597				42,299			95,843			48,366
Amortization of acquired customer-based intangible assets		100,618				51,460			91,795			45,919
Depreciation		40,989				20,712			47,688			23,834
Share-based compensation		14,674				7,783			13,440			6,885
Special charges (recoveries)		15,173				10,072			32,691			9,380
Other (income) expense, net		813				(1,972)			(1,900)			(378)
Adjusted EBITDA	$	571,227	$	317,015	$	554,543	$	308,287

OpenText Confidential. ©2020 All Rights Reserved. 23