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Open Text's CEO Discusses Q3 2012 Results - Earnings Call Transcript

Stocks in this article: OTEX

Service and Other revenue in the quarter was $65 million, up 25% compared to $52 million in the same period last year. Gross margin for the quarter before amortization of acquired technology was slightly lower this quarter at 71% compared to 73.3% in the same period last year. The lower margin was primarily due to a lower proportion of license revenues and the impact of Global 360 and Metastorm.

The pretax adjusted operating margin was $73.6 million this quarter compared to $64.1 million in Q3 last year, an increase of 15%. Adjusted net income increased 11% to $59.2 million this quarter from $53.4 million in the same quarter last year. Adjusted earnings per share was $1.01 on a diluted basis, up 11% from $0.91 per share for the same period a year ago.

GAAP net income for the third quarter was $35 million or $0.59 per share on a diluted basis compared to $36 million or $0.61 per share on a diluted basis for the same period a year ago. There are approximately 59 million shares outstanding on a fully diluted basis for the third quarter. Sequential effect of foreign currency movement on adjusted earnings per share for Q3 was a negative $0.01.

Total revenue on a year-to-date basis was $902 million, up 21% compared to $748 million for the same period last year. Regionally, the Americas contributed 53%, EMEA 38% and Asia-Pacific, 9%. License revenue on a year-to-date basis was $215 million, up 14% compared to $190 million reported for the same period last year.

On a year-to-date basis, Customer Support revenue was up 20%, and Service and Other revenue was up 30% over the previous year-to-date results. Pretax adjusted operating income on a year-to-date basis was $245 million compared to $211 million for the same period last year, an increase of 16%. Adjusted net income on a year-to-date basis increased 15% to $201 million from $176 million for the same period last year.

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