Open Text Corporation Announces Results For First Quarter Of Fiscal 2000

Revenue Up 47% and Company Plans to Buy Back Up to 2 Million Shares

Waterloo, Ontario, Canada - 1999-10-28 - Open Text Corporation (NASDAQ:OTEX, TSE:OTC), the leading provider of collaborative knowledge management and corporate portal solutions, today announced results for its first quarter ended September 30, 1999. Revenues were $25.4 million representing an increase of 47% from revenue last year of $17.3 million. Net income excluding goodwill rose 32% to $3.4 million or $0.13 per share (diluted) from $2.6 million last year*.

Operating cash flow during the quarter was positive, generating $4 million in cash which contributed to the company's total cash and securities balance of $180 million, or $7.45 per share. During the quarter, the company made two acquisitions for an aggregate sum of $7 million and bought back $7 million in company shares. The company did not sell any of its investments in its Internet companies.

"Although revenue increased substantially over the prior period from last year, we were disappointed in our growth," said Tom Jenkins, Chief Executive Officer, Open Text Corporation. "Specifically, results from the United Kingdom were disappointing. We have taken steps to address this issue."

Market:

"Companies selling to the Global 2000 sector have found the last quarter heavy going," said Jenkins. "Managing the 'lock down' in preparation for Y2K has shifted the emphasis from the initiation of major new projects to the bedding down of existing installations. We consider the slow down to be a temporary phenomenon."

"Our customers are telling us they expect to step up their investment in Web-based e-business deployments once they have passed the Y2K cut-over," added Jenkins. "This was confirmed at our Users' Conference - LivelinkUp 99 - held in Orlando, Florida last week, where we launched and demonstrated our e-business products family built around our myLivelink portal product."

Shareholder Value:

The board of directors of Open Text has approved an increased normal course issuer bid, which, subject to the approval of the Toronto Stock Exchange, will use some of the proceeds of its sale of Internet holdings to purchase up to 2 million Open Text Corporation shares. The issuer bid program will resume on November 1, 1999. The company expects to have more than $100 million in cash and securities remaining on the balance sheet after the issuer bid has been completed.

"We believe Open Text stock is currently undervalued. By using the proceeds of our successful Internet investments to re-purchase our own stock, we maintain our strong balance sheet at the same time as we enhance value for our shareholders," Jenkins said.

Other Highlights of the Quarter:

During this quarter, enterprise-wide customers were announced including Sprint, and Lucent Technologies, as well as notable follow up orders from Siemens and Hewlett-Packard worldwide consulting. There were also three key partnerships:

1. A technology alliance with SAP AG, the world's leading provider of inter-enterprise software solutions, to provide Livelink®'s collaborative services to mySAP.com .

2. J.D. Edwards OneWorld and Livelink allow customers to integrate unstructured and structured information into core business processes.

3. Ardent Software signed a technology agreement to provide greater integration between Open Text's collaborative knowledge management information and data warehousing repositories.

Also during this quarter, Open Text continued to invest in new technology for the future, and announced an investment in Communities.com and made a technology purchase in advanced chat software.

In September, Microsoft awarded Open Text's flagship product Livelink the 1999 Industry Solution Award for best content and document management solution.

Two acquisitions were made during the quarter: Microstar Software Ltd., a provider of XML technology and services for Global 2000 companies, and PSSoftware®, a pioneer in the area of electronic records management.

During the quarter, Open Text Corporation won a legal proceeding, which will send a dispute with NetSys Technology AB of Sweden to arbitration. The arbitration panel will review the dispute beginning in November. Among other claims, Open Text is seeking confirmation of the limited distribution rights for NetSys to the Scandinavia market.

Management:

Thomas Hearne, Chief Financial Officer of Open Text Corporation, will resign his position after completing his duties for the current quarter, including the share repurchase program and participation in the search for his successor. "Thomas is resigning for personal reasons and all of us at Open Text express our thanks for his continued strong contribution," said Jenkins.

* Reported under U.S. Generally Accepted Accounting Principles (GAAP).

For more information, please contact

Margaret E. Dobbin
Director, Industry Analyst Relations
Open Text Corporation
+1-519-888-7111 ext.2410
mdobbin@opentext.com