Open Text Corporation Reports Fourth-Quarter and Fiscal Year End 1998 Results

Tenth Consecutive Quarter of Record Revenue;Record Operating Profits Achieved, Excluding One-Time Acquisition Charges

Waterloo, ON - 1998-08-12 - Open Text Corporation (NASDAQ: OTEX, TSE: OTC), the developer of Livelink, the leading intranet-based collaborative knowledge management application software, today announced its financial results for the fourth quarter and year ended June 30, 1998.*

Net income for the fourth quarter, excluding one-time charges for acquired research and development related mainly to the acquisition of Information Dimensions Inc. was US$2,401,000, which is $0.13 per share (basic and fully diluted) compared to a net loss of $2.3 million, or a loss of $0.14 per share, for the year-earlier quarter. Including one-time charges the net loss for the fourth quarter was $16.0 million or $0.89 per share. The net loss for the year was $23.5 million or $1.33 per share compared to a loss of $13.2 million or $0.78 per share in fiscal 1997.

For the tenth consecutive quarter, Open Text reported the highest quarterly total revenues in the company's history. Total revenues for the quarter were US$16.0 million, up 36 percent from the $11.8 million reported for the third quarter, and up 120 percent from $7.3 million for the year-earlier period. Total revenues for the fiscal year 1998 were $45.3 million up 100% from the $22.6 million reported for fiscal year 1997.

License revenues for the quarter ended June 30, 1998 were $10.8 million, up 127% compared with $4.7 million for the fourth quarter of fiscal 1997.

At June 30, 1998, Open Text's cash and cash equivalents totaled approximately $40.4 million. Accounts receivable was $22.9 million. Total shareholders' equity, or net book value, was $55.9 million.

"Open Text's year end results demonstrate the value of our ongoing strategy to combine strong internal growth with well placed acquisitions," said Tom Jenkins, Chief Executive Officer. "In the past year, we have achieved the market leadership position in installed users and growth in new users**, enabling Open Text to deliver significantly more value to a rapidly growing number of the world's largest corporations."

"Our strong corporate performance again proves that a white-collar or networker productivity application is much more than document management or search alone. Livelink provides an entire work and project environment for managing and collaborating on all your information and tasks," said Brett Newbold, President.

New accounts contributing to Open Text's fourth-quarter revenues included Bell Atlantic, CVS, First USA Bank, F. Hoffman LaRoche, HJ Heinz and Silicon Graphics. Existing accounts contributing to revenues included British Broadcasting Corporation, Hewlett Packard, Lockheed Martin, Northern Telecom, Steelcase and many others.

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

** International Data Corp 1997 Report #14689.

Fiscal Year Retrospective: Progress Against Goals

"One year ago, we articulated a strategy that combined internal growth with acquisitions to achieve our goal of making Open Text the leader in the collaborative knowledge management market. The implementation of this strategy has resulted in continued high growth and profit performance at the same time. During the year we increased our customer base, through our strategy of acquisitions and internal growth, tenfold from 240,000 users in 120 organizations to more than 2.5 million users in 3,500 organizations," said Jenkins. Jenkins went on to cite the following specific achievements during fiscal 1998: Annual revenue growth of 100 percent Annual Gross Profit growth of 138 percent Positive Net Income, excluding one-time charges Derived 50% of revenue from existing customers Increased worldwide install base to 2.5 million users from 240,000 New customers in the fiscal year included John Hancock, ISO, Newbridge Networks, Nissan, Nationsbanc, Steelcase, and many others Existing customers contributing to revenue in the year included Ford Motor Company, United Airlines, Motorola, Swiss Bank, Union Bank of Switzerland, GTE, and many others New strategic partnerships with Adobe, Hewlett Packard and Unisys and continued strategic partnerships with Siemens-Nixdorf, Microsoft, Netscape, and many others International Data Corporation (IDC) report placed Open Text in the market leadership position in worldwide enterprise document management with 42.7% of the installed base of users and 48.5% of the growth in new users Delphi Consulting Group recognized Open Text for the second year in a row as the growth leader in market development for electronic document management Expanded our product offerings with the addition of the OnTime and BASIS product lines to our flagship product Livelink Computer Reseller News awarded Livelink the Editors' Choice Award for document management based on technical merit and a well crafted channel program To review the Statements of Operations and Balance Sheet, please see Financials. To review information about investing in Open Text Corporation, please see our Investor Information.

Release Disclaimer

This news release may contain forward-looking statements relating to the future performance of Open Text Corporation. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are 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 year ended June 30, 1997, and Form 10-Q for the quarters ended September 30, 1997, and December 31, 1997. Note to Editors: Livelink Pinstripe, Livelink 8, Livelink Search, Livelink Library, Livelink Workflow and Livelink Project Collaboration are trademarks of Open Text Corporation. All other trademarks are the property of their respective companies.

For more information, please contact

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