Open Text Corp Q4 2016 Earnings Call Transcript

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

Question: Paul Steep - Scotiabank - Analyst : Great, thanks. Mark, maybe you could talk just a little bit about analytics, and what you have seen over the past year, and where you are at now in terms of the number of deals that have taken analytics into them, and the uptake within the base? And maybe that is a prerequisite to Magellan, or not a prerequisite?

Question: Paul Steep - Scotiabank - Analyst : Great. That helps. One final one, to clarify, is Cloud 16. Can you maybe talk a little bit about what you have seen in terms of the base and migration, and the willingness of clients to shift over there? Thanks.

Question: Paul Steep - Scotiabank - Analyst : Great. Thanks guys.

Question: Steven Li - Raymond James & Associates - Analyst : Thank you. Just a couple of questions for me. John, I thought with the exit from Luxembourg, your adjusted tax rate was going up. How are you bringing it back down, and are there any cash outflow implications as you consolidate your IP into Canada?

Question: Steven Li - Raymond James & Associates - Analyst : Okay. And Mark, maybe a couple of questions for you on the macro. In Europe, was there any impact from Brexit on deal closures at the end of the quarter? And do you expect any impact in Q1?

Question: Steven Li - Raymond James & Associates - Analyst : Great. And last one for me, Mark, the license revenues was quite weak in the Americas for Q4. Was there a specific region, and any changes you've made? Thanks.

Question: Steven Li - Raymond James & Associates - Analyst : Okay, thanks, guys.

Question: Paul Treiber - RBC Capital Markets - Analyst : Thanks very much. I was just hoping, could you comment and perhaps clarify some of the growth, or the growth rates of MCV in 2016? I think you mentioned it was 6%. It does look like it was below the target that you gave out last year. Are those two numbers the right numbers to compare,

Question: Paul Treiber - RBC Capital Markets - Analyst : Thank you for explaining that. How should we think about your bullishness for 2017? What are the signs that you're seeing that lead you to be bullish, and maybe could you just elaborate on the reasons for the shortfall in 2016? Is it product-related timing? Anything would be helpful there.

Question: Paul Treiber - RBC Capital Markets - Analyst : Okay. Just lastly, just looking at the target model for 2017, the margin model, you mentioned acquisitions would take time to ramp up to your margin model. How do we think about organic investments in 2017?

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

Question: Stephanie Price - CIBC World Markets - Analyst : Good evening.

Question: Stephanie Price - CIBC World Markets - Analyst : You touched on the competitive landscape in an earlier question. Could you just walk through what you're seeing there, and where OpenText is gaining traction?

Question: Stephanie Price - CIBC World Markets - Analyst : Okay, thanks. And then on Magellan, can you give us an idea of the scope of the offering, and what features it's going to focus on?

Question: Stephanie Price - CIBC World Markets - Analyst : Great. Thank you very much.

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Thanks for taking my questions. The first one, can you guys provide us with the contribution or the revenue contribution from the acquired assets in the quarter?

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Okay. And in terms of thinking about the integration, Mark, maybe you could just talk a little bit more on the strategic side. Obviously the HP asset is a more of a carve-out. How do you look at integrating those assets? Are they more complicated to integrate? And how has the first traunch gone so far?

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Great. Before I pass the line, just one more question. On Release 16, have you noticed any more difference in the sales cycle? Obviously it is a potentially bigger ticket sale item, and clients could also look at other vertical applications alongside of it?

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Okay. So that could also mean that the sales cycle is a bit longer, then, right, (multiple speakers) no?

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Okay. Okay. That's great. Just finally, on the PS, I think, I don't know if it was John or Mark made the comment. I think the margin profile was a bit lower this quarter. And you said you were already on track for fiscal Q1. I just wanted to confirm that is the case, that PS margins are back up?

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Okay, great. Thank you. I'll pass the line.

Question: Blair Abernethy - Industrial Alliance Securities - Analyst : Thank you. Following on the last question, if we can talk a little bit about the sales and marketing margins. If I look at your fiscal 2016 to 2017 model, you've sort of raised the target model range in 2017 versus what you were going in at in 2016. What's changing there?

Question: Blair Abernethy - Industrial Alliance Securities - Analyst : Yes.

Question: Blair Abernethy - Industrial Alliance Securities - Analyst : Okay. And just on the Recommind acquisition, where will you be allocating revenue? What revenue lines should we expect to be impacted by the Recommind? And if you can do the same, even though the second tranche of the HP assets hasn't closed, I'm just wondering what is going into what I would term as on-premise, versus what's going into cloud? 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. JULY 27, 2016 / 9:00PM, OTEX.TO - Q4 2016 Open Text Corp Earnings Call

Question: Blair Abernethy - Industrial Alliance Securities - Analyst : Okay, great. Thanks, guys.