Open Text Corp Q2 2016 Earnings Call Transcript

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

Question: Phillip Huang - Barclays Capital - Analyst : Thanks, good afternoon. Congrats on the solid set of results. It should certainly help to address any lingering concerns on a cloud transition strategy. But I was wondering if you could give us some additional color or perhaps an update on how much of the revenue growth on the cloud side is now coming from what you would consider as new revenue sources rather than existing customers switching from older platforms? 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. FEBRUARY 09, 2016 / 10:00PM, OTEX.TO - Q2 2016 Open Text Corp Earnings Call

Question: Phillip Huang - Barclays Capital - Analyst : Right. That's very helpful. Along the same line, given what is happening at some of your competitors -- Dell, HP -- can you give us an update on any changes observed perhaps by your sales team? Have you done any analysis perhaps on potential benefits as a result of disruptions at some of your competitors? Thanks.

Question: Phillip Huang - Barclays Capital - Analyst : Thanks very much.

Question: Richard Tse - Cormark Securities - Analyst : Mark, could you talk about the go-to-market strategy for Release 16 when it comes to existing and new customers, or any major programs that you are planning here, and maybe give us a bit of color on that?

Question: Richard Tse - Cormark Securities - Analyst : Okay. As far as the M&A environment goes, I was wondering if you could maybe talk to the opportunities today, the pipeline, how robust it would be, and perhaps a little bit of color on valuations in the market?

Question: Richard Tse - Cormark Securities - Analyst : Okay. Last one for me, just wondering if you could maybe comment on your progress in regards to cross-selling products among your base? You've obviously expanded through acquisitions at both your product and your customer list. Is that something that you're focused on now, and perhaps give us a bit of color on that progress, or are you really waiting for Release 16 to do that? That's it, thanks.

Question: Richard Tse - Cormark Securities - Analyst : Great. Thanks, guys.

Question: Kris Thompson - National Bank - Analyst : Great, thanks. This question is for Steve. Welcome, first of all. I think it's probably fair to say that OpenText has had fits and starts with the formal Oracle partnership over a number of years. Is there now renewed hope for a formal agreement similar to the one with SAP, now that you're now on board at OpenText?

Question: Kris Thompson - National Bank - Analyst : Okay. So, it's fair to say it's not a priority for you then, in the near term?

Question: Kris Thompson - National Bank - Analyst : Mark, one for you then. In your opening commentary, you talked about customers setting their budgets in this March quarter. Are you seeing any spending caution so far, when you're talking to your customers looking into this quarter?

Question: Kris Thompson - National Bank - Analyst : Okay, good stuff. I'll hop back in the queue. Thanks a lot, guys.

Question: Paul Treiber - RBC Capital Markets - Analyst : Thanks very much. I wanted to touch on cloud revenue. It has been flattish for the last number of quarters, despite the strong cloud MCV or bookings. Could you speak to some of the moving parts in cloud revenue? And then, when should we think about cloud bookings translating into stronger headline cloud revenue on a constant-currency basis?

Question: Paul Treiber - RBC Capital Markets - Analyst : Thanks. Just wanted to ask one more question of Steve. Could you elaborate on what you feel personally is the opportunity that you see for OpenText in EIM over the next several years? And in regards to your own goals and priorities at OpenText, in what ways do you feel that you can improve OpenText's performance going forward?

Question: Paul Treiber - RBC Capital Markets - Analyst : Thank you; I'll pass the line.

Question: Paul Steep - Scotia Capital - Analyst : Great, thanks. The first one's a clarification. Mark, you've talked a bunch of times on the call, as has John, about strategic investments for the back half of the year. Maybe you could talk about the significance or the size of these investments. You've highlighted customers. Is this a ramp in additional headcount, or is this more related to R&D and marketing spend -- marketing spend around the tour? And then, I have a quick follow-up.

Question: Paul Steep - Scotia Capital - Analyst : Okay. That's clear. Mark, we're just slightly over a one-year anniversary on Actuate; so, happy anniversary. Can you reflect a little bit on the performance to date? It was a company with great assets, and maybe some executional challenges on a prior strategy. What's your take a year in? And we've talked about some of the opportunity, but maybe where are we standing here today on February 9?

Question: Paul Steep - Scotia Capital - Analyst : You made me think of one last one that I will slide in. You've talked a bunch on this call, more than any time in the past I can recall, about M2M and IOT as an opportunity area. What have customers been bringing that up to you, or is that a vector that you're identifying as an area of growth? Thanks very much.

Question: Paul Steep - Scotia Capital - Analyst : Thank you.

Question: Steven Li - Raymond James & Associates, Inc. - Analyst : A quick one from me: Your DSO's very strong in Q1, but in Q2 you had 54 days, probably the worst it has been in a couple years. Anything going on there, John, and would you expect that to revert as soon as Q3? Thank you.