Open Text Corporation Announces Results For Second Quarter Of Fiscal 2000

Revenue Up 28% and Largest Customer Deal in Company History Signed

Waterloo, ON. - 2000-01-31 - Open Text Corporation (NASDAQ:OTEX, TSE:OTC) today announced results for its second quarter ended December 31, 1999.

Revenues for the quarter were $26.7 million, an increase of 28% over the same quarter last year. Second quarter net income was $15.6 million or $0.61 per share (fully diluted) compared to net loss of ($0.02) per share in the second quarter last year. Excluding one time gains, depreciation & amortization and restructuring charges, the Company incurred an operating loss of $4.9 million or $0.19 per share (fully diluted).

As announced earlier in the quarter, the Company realized a gain from its Internet investments and also restructured operations and consolidated redundant offices resulting from prior acquisitions. This restructuring resulted in a one-time charge to reduce ongoing operating expenses.

Cash flow during the quarter generated $37.6 million, contributing to the Company's total cash and securities balance of $183 million, or $7.18 per share as of December 31, 1999. Days Sales Outstanding (DSO) have been significantly reduced by 29 days, from 129 to 100, reflecting success in managing Accounts Receivable down from $35.8 million to $29.6 million.

"Results for the quarter were led by the largest Livelink® order in Open Text history. Saudi Aramco made a strategic commitment to Livelink as an enterprise wide ebusiness application for collaboration throughout its entire operation. Revenue from this order will be recognized in the second quarter and over the next few quarters," said Tom Jenkins, Chief Executive Officer, Open Text Corporation.

Market

"Now that the Global 2000 sector is emerging from the Y2K lockdown period, we look forward to the renewed interest of corporations using Livelink as the mission critical support in developing e-business applications for content, collaboration, communities and commerce for their business to business (b2b)initiatives," said Jenkins. "We plan to profile our e-business strategy over the coming months, showcasing Livelink as a critical e-business application, and demonstrating the expanded role myLivelink will play as the e-community interface for collaboration."

New Mid-East Group: "As part of our overall investment this quarter, we established a mid-east office in Dubai to provide directly accessible, on-site customer service to the area. In addition to our success with Saudi Aramco, we are also pleased to welcome Dubai Petroleum, a joint venture partner of Conoco, as another new customer from this region," said Jenkins.

Other Highlights of the Quarter:

Examples of new Livelink customers during the quarter, in addition to Saudi Aramco are: Chase Manhattan Bank, Dubai Petroleum, and Johnson & Johnson. Global 2000 customers continued to add to their deployments of Livelink as an e-business application. Ford, Hewlett Packard, Lockheed, and Nortel Networks were significant follow on customers.

During the quarter, another ¼ million Livelink users were added to the install base, bringing the total number of e-business users of the Livelink product family to 3.6 million.

Shareholder Value

"We are also pleased that our investment strategy, of both buying advanced Internet technologies and investing in the companies providing those technologies, has resulted in significant increases in shareholder value. Our investment strategy, combined with our revenue growth this quarter and indications of a strong pipeline including follow-on demand for Livelink, we are confident of a good 2000," said Jenkins.

Open Text completed its substantial issuer bid, announcing on January 14, 2000 that it had taken up and arranged payment for 4 million of its common shares at $20 per share, for a total of $80 million. The purchased shares have been cancelled, reducing the number of common shares outstanding to approximately 20 million shares. The company plans to continue its share repurchase program through its normal course issuer bid.

About Open Text

Open Text has pioneered the development of innovative intranet and extranet ebusiness applications. Since creating one of the first search engines to index the World Wide Web, the Company has remained at the forefront of Internet-based technologies. It's product family called Livelink enables individuals, teams, organizations, and global trading communities to collaborate on e-business applications that facilitate e-commerce and other transactions among Global 2000 organizations. Open Text has become one of the largest providers of web based collaboration for e-business applications for e-communities of all types from intranets to extranets and public groups. The Livelink product family has over 3.5 million users in 3,800 installations in 31 countries, speaking 12 languages throughout the world. For more information, visit http://www.opentext.com.

Trademark

Copyright © 2000 by Open Text Corporation. Livelink and Open Text are trademarks or registered trademarks of Open Text Corporation. This list is not exhaustive. Other product and Company names herein may be trademarks of their respective owners.

Release Disclaimer

This news release may contain forward-looking statements relating to the deployment of Livelink by customers, and future performance of Open Text Corporation. Forward-looking statements are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties include, among others, risks involved in the completion and integration of acquisitions, the possibility of technical, logistical or planning issues in connection with deployments, the continuous commitment of the Company's customers and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission (SEC), including the final prospectus for the Company's initial public offering of common stock in January 1996, Form 10-K for the years ended June 30, 1997, June 30, 1998 and June 30, 1999, and Form 10-Q for the quarters ended September 30, 1998, December 31, 1998, March 31, 1999 and September 30, 1999. Forward-looking statements are based on management's beliefs and opinions at the time the statements are made, and the Company does not undertake any obligations to update forward-looking statements should circumstances or management's beliefs or opinions change.

For more information, please contact

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