Open Text Q2 2013 Earnings Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Richard Tse - Cormark Securities - Analyst : Thanks. Paul, last quarter you talked about sales and marketing bouncing back this quarter, but now it seems that you're pushing that out here a little bit. Is it just timing of when you are hiring these guys? Or what happened there? Maybe you can just elaborate a little bit.

Question: Richard Tse - Cormark Securities - Analyst : Okay. And, Mark -- so you guys obviously have a lot of [prodent] issues in your way. Can you maybe frame for us of your using the licensees that are in the market? How many [progs] they have or some kind of metric, and what you plan or hope to take that to over the course of the next 12 to 18 months?

Question: Richard Tse - Cormark Securities - Analyst : Okay. And just one last question here and I will pass the line. If you listened to the SAP call earlier this week, they certainly indicated that their businesses are really growing on cloud side. But I guess the offset to that is it certainly takes away from some of their traditional professional licenses there. Do you see that kind of impact on your business model here as well? Or do you think you have the [urduris] side enough that it shouldn't have a meaningful impact going forward? Thank you.

Question: Thanos Moschopoulos - BMO Capital Markets - Analyst : I realize you don't provide guidance, although in the past you have talked about what typical license seasonality looks like for your business. And so as we look towards Q3, is there anything that would suggest that seasonality might be any different this time around than what you've seen historically?

Question: Thanos Moschopoulos - BMO Capital Markets - Analyst : Okay. And then one for Mark. Have you started to see any early data points as far as your EIM vision and the traction there with your OpenText Unlimited model? Are clients increasingly buying multiple modules? Or is it still early days with respect to that trend?

Question: Tom Liston - Cantor Fitzgerald - Analyst : Mark, some further commentary you made on the large deals, over 1 million out of the 5 deals was obviously pretty close year-over-year. But the mid-point deals were down 50% year-over-year. What are you seeing there? Is it more sales force changes, or it just hesitation around fiscal cliff as per your commentary?

Question: Kris Thompson - National Bank Financial - Analyst : Mark, I heard what you said about the revenue growth. But on a year-over-year basis the license revenue growth is still negative. When do you expect you are going start to achieve organic revenue growth in the license bucket? Because I know that's one of your key pillars of growth.

Question: Scott Penner - TD Securities - Analyst : Paul, just to be clear on the past comments on seasonality, to make sure we are all on the same page -- what you said most recently was that Q3 is normally, on the license side, down 5% to 10%, and Q4 would be up sequentially 20% to 30%. Is that still the plan for the back half?

Question: Paul Steep - Scotia Capital - Analyst : Mark, I guess this one is for you. Knowing that you have high expectations for the business, what would be, in your mind, success for the new products if we come back a year from now? Which -- EasyLink, cloud, and InfoFusion -- where would you've won or OpenText has won? Thanks. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

Question: Stephanie Price - CIBC World Markets - Analyst : In terms of the sales force expansion, can you talk a bit more about where you are? And the expense of the distribution networks as well. Are we in the last inning here? Or is there still -- how much more work is there to be done?

Question: Paul Treiber - RBC Capital Markets - Analyst : Thanks. There are a number of [subfields] last quarter. Have they all closed this quarter? And then you mentioned that license would have been better if not for the fiscal cliff. Is that more of a general comment? Or is there any way that you can quantify the potential impact from that?

Question: Mike Anderson - Credit Suisse - Analyst : This is Mike Anderson on behalf of Michael. Just a quick one, Paul. Can you just comment on the renewal rates, with respect to the customer support line? How they trended, as around 92% as before? A little bit higher, a little bit lower?

Question: Mike Anderson - Credit Suisse - Analyst : Okay. And then for -- because we are just trying to make sure that we get the deferred revenue right, going into the next quarter, since it is your seasonally strongest for your bookings. So I appreciate that, thank you.

Question: Scott Penner - TD Securities - Analyst : Mark, Richard led off the Q&A by asking about the -- and you answered about the number of modules. Of the 25, how many does your average customer have right now? And is that a good way to think about penetration?

Question: Richard Tse - Cormark Securities - Analyst : Just, I wanted to clarify a little bit on the sales side. So I think you made a commentary saying that you are pretty much up and running on the sales count. But Paul had mentioned that the sales spending is going to increase. So I'm just trying to reconcile where that's spending and what's it for? And when that's going to come? I'm a bit confused on that right now.

Question: Blair Abernethy - Stifel Nicolaus & Company - Analyst : Just two quick things. First off -- Paul, do you have the average selling price of the [DS] quarter?

Question: Blair Abernethy - Stifel Nicolaus & Company - Analyst : $250,000, Okay, great. And Mark, just one for you. I'm just wondering if you can expand a little bit more on InfoFusion in terms of some of the betas customers that you had it into. How big is that test bed been? And what's some of the key feedback you've been getting there? And then finally, on the InfoFusion, what is this going to cost customers who are looking to implement this?

Question: Tom Liston - Cantor Fitzgerald - Analyst : Thank you, and Mark or Paul, just a follow-up on R&D. It's at a multi-year low, certainly as a percentage of sales. Where were most of the cuts? Was it more the Legacy maintenance-type base for the cuts? And then, more importantly, or as importantly -- are you going to get to the model this next quarter? And where is most of that growth area is going to be, in terms of product focus?

Question: Kris Thompson - National Bank Financial - Analyst : Great, thanks. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. Mark, over the last couple of quarters, the license revenue from your install base has been higher than normal. And I hear you are focusing on your current Companies. But can you just give us an update on the success of the autonomy trade-in program? Are you getting any traction there? And that sounds like a different strategy outside of your go to your current install base strategy.