Thank you for standing by. This is the conference operator. Welcome to the Open Text Corporation Fourth Quarter and Year-End Fiscal 2020 Conference Call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Harry Blount, Senior Vice President, Investor Relations. Please go ahead.

Thank you, operator, and good afternoon everyone. On the call today is Open Text’s Chief Executive Officer and Chief Technology Officer, Mark J. Barrenechea; and our Executive Vice President and Chief Financial Officer, Madhu Ranganathan. We have some prepared remarks, which will be followed by a question-and-answer session. This call will last approximately 60 minutes, with a replay available shortly thereafter. I would like to take a moment and direct investors to the Investor Relations section of our website, investors.opentext.com, where we have posted two presentations that will supplement our prepared remarks today. First, our strategic overview titled Open Text Investor Presentation August 2020. The second titled Q4 FY2020 Financial Results includes information and financials specific to our quarterly results, notably our updated Quarterly Factors on Page 8. During the month of August and September, Open Text management will be pleased to virtually meet with investors at the following conferences. Oppenheimer's Annual Technology Internet and Communications Conference on August 11th, BMO's Virtual Technology Summit on August 26th. Citi's Global Technology Virtual Conference on September 8th, Deutsche Bank Technology Conference on September 14th, and Jeffrey's Virtual Software Conference on September 15th. In addition, I'm pleased to announce that we will be hosting an Investor Day on Thursday, November 12th. This virtual event will consist of our annual investor update, featuring strategic presentations from key members of our executive leadership team. Please save the date in your calendar and contact investors at opentext.com to register for the event. Please feel free to reach out to me or the IR team for additional information. And now, I will proceed with the reading of our Safe Harbor statement. Please note that during the course of this conference call, we may make statements relating to the future performance of OpenText that contain forward-looking information. While these forward-looking statements represent our current judgment, actual results could differ materially from a conclusion, forecast or projection in the forward-looking statements made today. Certain material factors and assumptions were applied in drawing any such statement. Additional information about the material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward-looking information as well as the risk factors including in relation to the current global pandemic that may project future performance results of OpenText are contained in OpenText's recent forms 10-K and 10-Q as well as in our press release that was distributed earlier this afternoon, which may be found on our website. We undertake no obligation to update these forward-looking statements unless required to do so by law. In addition, our conference call may include discussions of certain non-GAAP financial measures. Reconciliations of any non-GAAP financial measures to their most directly comparable GAAP measures may be found within our public filings and other materials, which are available on our website. And with that, I will hand the call over to Mark.

Thank you, Harry. Good afternoon to everyone, and thank you for joining today's call. I wish everyone health, well being, and happiness. The last six months has made it very clear that digital technologies are the key to business resilience and durability. Organizations that own their digital capacity will recover faster and emerge stronger from this ongoing crisis. Resilience is the ability to recover quickly, durability is permanent, the ability to resist stress before. It is also very clear that while the crises persist, there will be economic volatility and uncertainty, and there will be challenges and opportunities alike. Fiscal 2020 was a seminal year for OpenText. We rally around the principles of resilience, durability, change and opportunity to guide us through this difficult time. The pandemic has validated our purpose to help companies digitize and transform. Now more than ever, customers trust and rely on OpenText's products and expertise to help them digitize their business as they navigate through a changing global environment. The world runs on information from the debate on truth, the global pandemic response to the modern civil rights movement. The fact is information is more important than ever. For nearly 30 years, we have helped companies on a global basis across all industries, build cultures of knowing with our information management software and expertise. Our leadership position and information management has never been stronger, and customers of all sizes continue to trust Open Text as they reset to a new equilibrium at work at home and at play. The preemptive actions we took at the beginning of the pandemic are enabling us now to make significant investments in sales products and more automation positioning us to compete better and to gain market share regardless of the economic scenarios ahead. Let me begin by discussing our…

Thank you, Mark. And thank you all for joining us today. Our fiscal 20 was a groundbreaking year in many respects. One with the Open Text operational excellence came through with its results. I'm humbled and proud to share them with you today. I will speak to Q4 to fiscal '20, fiscal 21 target model and our long term activation. Please go to investor presentation that are posted on our IR website will also refer to my comments. All references will be in millions of USD and compared to prior fiscal year. And let me start with revenues and earnings. Total revenue for the quarter was 826.6, up 10.6% or up 12.2% on a constant currency basis. For fiscal '20, our total revenue of 3.1 billion, up 8.4% or up 9.7% on a constant currency basis, there was an unfavorable FX impact to revenue of $12 million in Q4 and $37 million in fiscal '20. The geographical split of total revenues in the year with Americas 61%, EMEA 30% and APJ 89%. Annual recurring revenues for the quarter were 657.5, up 18% or up 19.5% on constant currency basis. For fiscal '20 ARR was 2.4 billion, up 12.9% or up 14.1 on a constant currency basis, as a percent of total revenues ARR was 80% for the quarter and 78% for fiscal 20, up from 75% in fiscal '19. Our cloud revenues are particularly strong at 232.6 to Q4, up 37.5% or up 38.8% on a constant currency basis. For fiscal '20, cloud revenues were 1.2 billion, up 27.5% or up 28.4% on a constant currency basis. The growth was primarily driven by continued successes with in business networks and the integration of Carbonite. Our cloud renewal rate in the quarter remains in the mid-90. Our customer support revenues were…

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Raimo Lenschow of Barclays. Please go ahead.

This is Frank on for Raimo congrats for another really strong quarter. Just one from you in the customer conversations, so last quarter, you've mentioned that the pandemic made things very binary, where if you had a need, you put something on board very quickly. Could you give a little bit more color into how those customer conversations kind of progressed throughout the quarter?

Yes, thanks Mark here. Thanks for the question. Yes, just like I kicked off my introductory remarks on the script. The last six months have just made it very clear that digital technologies are the key to this business resilience and durability. So, we've seen very solid conversations around kind of core digitalization, the ability to support a work from anywhere environment as a data management, collaboration, workflows, electronic signatures. So, that's an area that we think that will continue to accelerate for us. Second is in the world of contactless and direct-to-consumer. We've seen a real strong interest in our digital experience platform, which was another place of strength for us. So, the conversations on digital continue to accelerate. They are right in the core of our wheelhouse of content services, plus our technologies of work from anywhere and customer, customer experiences in our customer experience platform calling direct-to-consumer and in contactless activity.

Our next question comes from Stephanie Price of CIBC World Markets. Please go ahead.

I guess you could dig into the fiscal '21 revenue expectations a little bit more. And I guess I'm talking about the puts and takes, led to an expectation of constant revenue growth, maybe specifically in the off cloud business and the cloud X Carbonite?

As we look into fiscal '21, we expect cloud revenue to grow low double digit, customer support revenue to remain constant in the year, and that sort of models out annual recurring revenue to grow in the mid single digits. And we're communicating today that we expect license to professional services to decline sort of consistent with the broader trends in the software industry impacted by the pandemic and the deferral by some companies of transactions here in the short term, airlines, auto, hospitality, retail, those industries are down for us. But we're also seeing industries off like government, healthcare manufacturing, work-from-home, but the up areas don't offset or the down areas at this point. So, we think it's prudent to kind of look at our licensed and professional services to decline. And that brings us to that brings us to total revenue, which we're expecting to be constant year-over-year, but if we get some help from the economy, we're hoping to get a few points of growth, but that's more dependent on the economy than us. I'll also note, we are not losing to competitors, right. In fact, we see competitive strengths. This is more driven by the demand environment than by a competitive environment. Within cloud, we see Carbonite on plan, our managed services remain strong, but the transactional volumes, as we talked about last call did decline. We're off our lows and we're increasing again, but the new volumes don't completely offset the effective volumes, if you will. We haven't a lot of customers. We're not losing to competitors. But again, we did see -- as we talked about last time, volumes were down we are off those lows now.

Okay, great, thanks. That's good color. And then in terms of Carbonite, sounds like it's still doing well, can you talk a little bit about the demand you're seeing especially in the SMB market there?

Yes. The business has been incredibly resilient in our first six, seven months of owning it, we whining back to December when we closed the transaction our thesis was that it's not just the cloud alone, its Cloud plus the Edge and no edge, no cloud, no edge and here we are, we are all on the edge so to speak, working from everywhere. So, the two go hand-in-hand and we really like the technologies of data protection, threat intelligence, threat protection and having those technologies available from work from anywhere. So we're pleased with our progress. We're on target to complete the integration. Here in fiscal '21. The basis has been on our internal plan. The SMB channels have been very resilient. And we've actually in one of the areas of where demand is up. It's actually our work from home technology, work from anywhere technology. We are very please to our progress.

Our next question comes from Thanos Moschopoulos of BMO Capital Markets. Please go ahead.

Mark just extending on Carbonite, clearly much stronger than you'd expected. So was that more payouts churn holding in better than expected or new customer activities being stronger than expected or a combination of both?

Yes, it's a basket of activities. Overall, the business has been amazingly resilient here during the pandemic. The -- let's take it in its pieces. The OEM part of the business BrightCloud been very resilient that we've added, during the first six months, a few dozen new embedded partners. The SMB channel, our channels probably a little more resistant than others, since we have larger RMMs that helped consolidate SMB for us. Renewal rates for end consumers have been very strong given work, work-from-anywhere, and our new kind of direct marketing activities has shown some early signs of promise. And actually Thanos, we come into fiscal '21 one of our big efforts is cross-selling and having our enterprise teams now bring Carbonite to the enterprise. We are also on plan and all our integrations system, people, et cetera. So it's a combination of renewals, combination of some new demand of work from anywhere, and some early signs of cross selling into the enterprise.

And you mentioned the launching the core and hightail through the channel moving a timing a bit, and how may the pandemic affect the uptake you might see?

Yes, it's, like to start of any new fiscal year gives you an opportunity to do new things and align your organization. So we launched in July just a few weeks ago, having our SMB C teams bring core share core signature and hightail through the SMB channel. So we've only been at it for a few weeks, but it's very relevant and applicable in a very elaborately sales play from how they bring Carbonite and Webroot to market. But we've only been at it for a few weeks, and we'll keep you updated as we go along here in fiscal '21.

Our next question comes from Paul Steep of Scotia Capital. Please go ahead.

Mark, could you talk a little bit about what changes, if any, you've made to sales comp or key metrics that might be looking to drive greater cloud revenues into fiscal 2021 and maybe further deemphasize the license side of the business?

Paul, thanks for the question. We've had great stability in our sales organization, both the leadership or sort of field structure, we call them selling hubs, U.S. West, U.S., East Canada, Southern Europe, we call them, selling hubs, if you will. And we had great stability and kind of our named account model on the specifically in the enterprise. So, as we come into fiscal '21, leadership very stable, structure very stable, we haven't changed our comp plans coming into fiscal '21, an AE is incented to hit an annual number that can be either retired through MCV, guaranteed cloud contract or license. And it's really driven by how the customer wants to consume. And I've never believed that, quote unquote, back at corporate, we can tell an AE in Talos. France and their customers in Talos, right, how they should consume. So we haven't made any changes. We certainly go in and advocate clouds first in what we're doing. We have though made some changes around account prioritization. We're emphasizing a little less the affected industries like airlines and auto, and spending more time on health care of government and manufacturing, but Paul no changes to the comp plan coming into fiscal '21.

One quick follow-up to that clarification, embedded in the numbers next year with the further acceleration of cloud. Is there an implicit assumption that 20.3 or security offering actually force broader migration to the base?

We are a cloud first company. We are -- it's very clear in our history of how we have transitioned to annual recurring revenue, which we expect for fiscal 21 to be between 80% to 82% of our business, we're releasing every 90 days new product releases and we release first into the cloud. So, customer, we're still going to support customer choice of how they consume. We have one cloud line for cloud and off cloud. We released first into the cloud, other great benefit to being the cloud. It's our largest opportunity we will, of course continue to sell licenses and support hybrid but it is a cloud first world and 20.3 certainly supports those principles.

Our next question comes from Richard Tse of National Bank Financial. Please go ahead.

Mark. I think you said you guys are still going to be active on acquisitions here. And my question is. Can you maintain the same level of cadence in terms of the number of deals in terms of the magnitude? Can you also still pursue these larger opportunities assuming this backdrop continues for another more quarters or so?

I believe we can, we have a very experienced team, very experienced both, got a great leader, Doug Parker of the organization. We have our approach and methodology. We also know that markets intimately, and I mean there are ample targets within our core markets of content services, business network, digital experience platform, cyber resilience and advanced technology. I wouldn't want to enter a new market segment at this point in time while lot pandemic present. But Richard, we know our core markets extremely well. We know those competitors, we know their business models and it is ample pipeline and opportunity for us. So it's study as we go on M&A, our balance sheets ready, our team is ready, or the pipeline for data is stronger. And we expected to deploy capital in fiscal 21 that the pandemic isn't going to slow us down a craft. Of course our due diligence is going to include how COVID-19 has affected a potential target and our customers. So that's important built, but it doesn't slow down our passing effect to kind of a target set for us.

Okay. That's fair. Thanks. I don't know if there's a fair question sort of looking at your investor deck that you have when you have the investor day down in your, into to the growth drivers was one expanding into the 10,000 customer base, and then to expanding adoption within the 74,000 customers. I don't want to throw you in the backdrop, but can you give us maybe a sense of whether or push that those objectives out to your next investor day and looking at the 2021, or did you make quite a bit of progress on that in 2020?

Let me just get a little drink of water there. I don't recall the specific metrics maybe you have them that we had in the New York investor deck, but I can say across two of our greatest thought enterprise sales opportunities is expanding the G-10K but we did expand coverage. One of the things we did in fiscal '20 as we put a new global account management team in place. And I'm real pleased and excited about that dedicated team. I'm looking at global accounts, and we expanded the coverage to kind of see if there was a specific number there. And cost volumes in install base, the great opportunity to cloud and continue to drive managed services, which is private clouds, cross selling opportunities, like customer experience management work-from-home technologies, Carbonite and other offerings and upgrading into 20.2 and 20.3. So G-10K installed base remains, front and center for us for growth.

Thank you, Martin. I was just going to add. If you look at our investor deck on Page 25, we continue to do today that as a goal in terms of doubling the coverage of Global 10-K over the next few years, so like Mark said, absolutely font incentive for us.

And Richard, It's also an important point, if I can just add to it. In a time of like this, it's important to leverage existing relationships. And that's why the install base is so important. We're a trusted provider, we have a proven track record, and being able to go into our install base and leverage that history, a track record of delivering benefits and balance sheet strength to sell the next module. The next platform is a long-term strength for us and one that will help us gain share over less stable competitors.

Our next question comes from Paul Treiber of RBC Capital Markets. Please go ahead.

Thanks very much and good afternoon. In regards of the outlook for fiscal '21, in regards to the pandemic, do you see the headwinds or the delays from a pandemic weighing both equally on licensing cloud for new bookings? Are you seeing in cloud demand is more resilient or even increasing whereas majority of the headwinds are on licenses?

Thanks for the question. I say the following: Renewals have been amazingly resilient for us as you can see in the numbers. Renewals are not just support it's the ability to get value from the software, its ability to speak to experts just product updates, its security, patches, and updates services. And as you can see in the numbers, that's been amazingly strong for us, year-over-year growth, great margins, high renewal rates. There is certainly in a time of crisis. It's accelerated customer interest and time to value. So, I would put the emphasis on time to value. So, if we can show time to value in a managed service that could include a license or time to value in our cloud, there's really a premium on time to value. As you know through time, we've been on an ARR and cloud transition where back in fiscal '11 cloud was -- excuse me, license was near 30% of our business and today's 13% of our mix. So, I think the pandemic is revealing the need for time to value. And we still can provide that regardless of the way a customer consumes. But it also does put a bit of an emphasis on cloud, so you typically you can get time to value in our managed service or in one of our SaaS offerings.

And then following up on that cloud additions to launched, now how is the pipeline building versus your expectations. And how -- in terms of bookings or MCV for cloud products this past quarter, maybe without providing a specific number but just how was that the new deal close environment for cloud this past quarter?

As you, -- with 20.2 and now 20.3 almost here, you're the reaction 20.2 has been really very, very favorable. We were on the VP releases and getting features out. And you see in the renewal rates, just how strong they are. You also see it and I think a strong cloud number from fiscal '20. So, customers have really liked our ability to release quickly. So, we're getting better at having customers be able to consume it very quickly and we solved for releasing every 90 days. We've solved for having it run anywhere with two containers. We're now solving for the ease of consumption and the automatic way to turn on, on new modules. So, first take is very, very positive. And as I highlight the script, I think this is a long term differentiator for us. But I think of it as a series of things, getting the time down, getting the features up, it's getting it to run anywhere. It's now turning into the ability to consume it much more quickly, and automatically turn on new capabilities.

This concludes the question-and-answer session. I will hand the call back over to Mr. Barrenechea for closing remarks.

All right, well, I'd like to thank everyone for joining today's call. And again, I wish everyone or health well being and happiness and look forward to continuing to engage in the coming days and reach, and see you digitally in our upcoming conferences. Thank you for joining today's call.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.