Open Text Corporation Posts Strong Financial Results for First-Quarter Fiscal 2001

Q1: $0.14 ADJUSTED EPS, STRONG GROWTH IN ASP BUSINESS

WATERLOO, Ontario, Canada - 2000-10-26 - Open Text Corporation (Nasdaq: OTEX; TSE: OTC), a worldwide leader of collaborative commerce solutions for e-business, today announced strong results for its first quarter of fiscal 2001 ending September 30, 2000(see note 1 below). Open Text reported adjusted net income(see note 2 below) for the first quarter of $3.1 million, or $0.14 per diluted share, up 75% from $0.08 in the previous year. Cash flow from operations for the quarter was $4.7 million (see note 3 below). During the quarter, the Company continued to grow its Application Service Provider (ASP) program and b2bScene Division businesses with net costs (after revenue generated) of approximately $0.9 million, equivalent to $0.04 per share. Prior to this investment, adjusted net income 2 was $4.0 million or $0.18 per share (diluted) for the quarter.

Total revenues for the quarter increased to $30.1 million, up 18% from the prior year. These results were achieved despite the 17% decline in the euro that affected European revenue which totaled 36% of total revenues. During the quarter, ASP revenues accounted for $0.6 million and the Company booked $5.0 million in orders from its ASP business. The KPNQwest partnership signed 40 new corporate customers and is now up and running. And, in addition, Open Text today announced that British Telecommunications selected Livelink ASP Solution to power its collaborative e-business managed service.

"This outstanding performance in our first quarter is a great way to start our new fiscal year," said Tom Jenkins, CEO of Open Text. "We achieved significant profits and cash flow, and enjoyed strong growth in all aspects of our business. During the quarter we won more than 100 new corporate accounts which is the most we have ever signed in a quarter. This growth indicates the momentum we see in our business and the results are starting to pay off from our investments in the ASP and b2bScene businesses."

Accounts Receivable as of September 30, 2000 was $23.4 million, resulting in a DSO (days sales outstanding) of 70 days, an improvement of 5 days from last quarter. As of September 30, 2000, cash was $109 million or $5.37 per share.

In accordance with US generally accepted accounting principles, the Company reported net income of $2.1 million and earnings per diluted share of $0.10 for the quarter ended September 30, 2000.

Global Growth Drives Revenues

Livelink continues to enjoy strong momentum as companies implement collaborative commerce solutions to enhance their CRM, SCM and ERP applications. During the first quarter, Open Text s largest customers drove the results by continued enterprise-wide adoptions. Customers contributing to revenues included British Telecom, Clearnet, IBM, Merrill Lynch, Nissho Iwai, , Sun Microsystems, Shell Corporation, and Texaco. Revenue results were broadly based across North America, Europe and Asia. For the quarter, 59% of revenue was from North America, 36% from Europe and the remaining 5% from Asia. New customers contribued to 49% of license revenue and strong repeat orders from existing customers accounted for 51% of license revenue.

Strategy for Growth Bluebird Acquired

After the quarter, Open Text purchased the shares of Bluebird Systems. With the acquisition, Open Text has extended its collaborative commerce solutions to SCM, CRM and ERP applications from vendors such as PeopleSoft. Bluebird has 68 employees and annual revenues of $6.5 million. Senior management of Bluebird will remain with Open Text. The acquisition will be accounted for during the second quarter and will be accretive to profits immediately. Open Text paid $6.5 million cash and has provided for additional cash payments depending on future performance.

Major Product Initiatives

During this quarter, the Company will be delivering its next major release, Livelink 9.0, which will have increased functionality and expanded enterprise integration capabilities. This product will be launched at open Text s annual Users Conference in San Antonio on October, 30, 2000. During the first quarter, the Company entered into a major agreement with Oracle, making Livelink the only collaborative commerce solution to be integrated with Oracle s full offering of e-commerce solutions for CRM, SCM, and ERP applications.

Major Market Activities

The Company will be holding its annual Users Conference in San Antonio, Texas next week on October 28, and a major European user symposium next month in Paris on November 23. More than 2,000 attendees are expected at these events and represent a major expansion of user activity for the Company.

Other Activities in the Quarter

During the quarter, the Company repurchased 105,200 shares and will continue to repurchase shares which it views are under valued.

Reported under U.S. Generally Accepted Accounting Principles (GAAP). All amounts are in US Dollars.
Adjusted net income: net income excluding amortization of acquired intangible assets and other income (expense).
Exclusive of a one time income tax payment with respect to a prior year investment gain.

About Open Text

Open Text provides collaborative commerce solutions for e-business that enable users to extend and build CRM, SCM and ERP applications and allow uses to work together within and across organizations. 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. Its 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. For more information, visit www.opentext.com.

Trademark

Copyright © 2000 by Open Text Corporation. Livelink, myLivelink, b2bScene 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 and myLivelink by customers, and future performance of Open Text Corporation and b2bScene. 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, June 30, 1999 and June 30, 2000. 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

Alan Hoverd
Chief Financial Officer
Open Text Corporation
(519) 888-7111 ext. 2480
ahoverd@opentext.com

Greg Secord
Open Text Corporation
+1-519-888-7111 ext.2408
gsecord@opentext.com