Open Text Corporation (OTEX) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of Open Text Corporation. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer and use of same. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the corporation, that you first obtained all required consents for their disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure. [Operator Instructions] It is now my pleasure to turn today's meeting over to Mr. Tom Jenkins, Executive Chair of Open Text. Mr. Jenkins, the meeting is yours.

Thank you. Hello, everyone, and welcome to the Annual Meeting of Open Text shareholders. I'm Tom Jenkins, Executive Chair of Open Text. We have members of our Board of Directors, our management and our external auditors in attendance today, and we look forward to meeting with you and answering questions about your company. The meeting is being conducted virtually, enabling greater participation by our shareholders by allowing shareholders that might not otherwise be able to travel to a physical meeting to attend online. Holding our meetings virtually means that I may pause from time to time to allow coordination from the speakers who are in different locations. I'll also pause at certain points during the meeting to provide an opportunity for you to vote or ask questions online. As in past years, we expect that the vast majority of all the votes will have been cast in advance of the meeting by proxy. That said, registered shareholders and duly appointed proxy holders will be allowed to vote online at the meeting in accordance with the instructions to be provided. Given the virtual format of the meeting in order for us to expediently undertake discussion on any matter proposed for a vote, we would encourage shareholders who have specific questions on a formal item of business to submit such questions now, clearly identifying the applicable item of formal business as well as your name and contact information. Shareholders can submit these questions by clicking on the Q&A tab, typing in and submitting your question. During the course of this meeting, at the appropriate time, such questions will be addressed prior to voting on the applicable motion. We will be following the agenda for the meeting displayed on your screens. First, we'll call the meeting to order, and go through the procedural matters. Then we have five matters of business to conduct today: the first, the presentation of financial statements, then the election of directors, then the reappointment of the company's independent auditors, then the approval of the continuance, amendment and restatement of the shareholder rights plan and finally, the nonbinding say-on-pay advisory resolution on the company's approach to executive comp. Following the formal meeting, we'll have a question-and-answer session. If you have any questions on the business of the company not specifically related to any of these item of business to be discussed at today's meeting, please feel free to submit those questions at any time, and they'll be considered at the conclusion of the meeting. Questions that are similar in nature or repetitive will be grouped together and addressed in a single response. When asking a question, please indicate your name and contact information. If we are unable to answer your question during this meeting, a member of our team will follow up with you after the meeting. I'll now call the meeting to order. The meeting has been convened pursuant to resolutions of the Board of Directors in accordance with the company's bylaws. I'll act as Chair of the meeting, Michael Acedo, our EVP, President and Chief Legal Officer and our Corporate Secretary, will act as Secretary of the meeting, and I appoint Computershare Investor Services, through its representatives, as scrutineer to compute the votes of the ballots taken at this meeting and report the results to me, which I will disclose after the close of the polls. Now before commencing with the procedural matters, I would like to call upon the secretary to make a statement concerning today's remarks.

Thank you, Mr. Chairman. Please note that in the course of today's meeting, officers or directors of Open Text may, in their remarks or in response to questions during the question period, make statements which are forward-looking under the United States Private Securities Litigation Reform Act of 1995 and under Canadian Securities legislation. Certain material factors and assumptions are applied in making these statements, and there are a number of other factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of Open Text. Additional information concerning these factors and assumptions is contained in Open Text's filings with the United States Securities and Exchange Commission and the Canadian securities regulators, including Open Text's annual report on Form 10-K.

The secretary has confirmed that notice of this meeting was duly given in compliance with the applicable requirements. A copy of the notice of the meeting is available on our website and under our profile on SEDAR. . I'll dispense with the reading of the notice of the meeting. There has been filed with me proof of service of such mailing provided by the company's transfer agent, and I direct that a copy of such proof of service be annexed to the minutes of this meeting as a schedule. I've been advised that there are at least 2 persons present each being a shareholder entitled to vote at the meeting or a duly appointed shareholder or representative of a shareholder so entitled, together holding or representing shares having not less than 33 1/3% of the outstanding votes entitled to be cast at this meeting. Therefore, a quorum of shareholders of the company is present, and the meeting is properly called and duly constituted for the transaction of business. I've received the preliminary scrutineers' report, and I direct that their formal report following today's voting be annexed to the minutes of this meeting as a schedule. To facilitate the meeting, I've requested that certain persons make and second formal motions, and I will call on these persons at the appropriate time. The voting at today's meeting will be conducted by online ballot. If you're a registered shareholder or a duly appointed proxy holder, that has already been voted by proxy, there will be no need for you to vote online since your vote will be recorded in accordance with your proxy instructions. However, if you wish to change your previously submitted vote, you can simply vote when prompted. The polls will be open for all items of business to be voted on at the same time. This will allow you to vote on each item immediately or if you prefer, you can wait until the conclusion of the discussion on each item prior to casting your vote. Once the polls have been opened, the items of business to be voted on and your available voting options will be visible on the voting panel accessible at the top of your screen. To submit a vote, please click on the voting choice displayed on your screen. You will see a vote received message confirming your vote has been taken. Once discussion is concluded on all items, you'll have a moment to enter your votes. I'll then declare voting closed on all matters of business. The summary results of the voting will be announced prior to the close of the meeting. I now declare the polls open on all items of business. The first item of business is the presentation of the company's audited consolidated financial statements and the auditor's report thereon. The 2025 annual report to shareholders, including the company's 2025 audited consolidated financial statements and the auditor's report were delivered to shareholders in advance of the meeting. Additional copies are available on our website and under our profile on SEDAR. If any shareholder or proxy holder has questions relating to the 2025 audited consolidated financial statements, these questions can be submitted at any time and will be addressed after the formal business of the meeting concludes. The next item of business is the election of directors. The number of directors to be elected at the meeting is 12. The proxy circular for the meeting contains the names and the backgrounds of the individuals who will be nominated by the company for election as directors. I'll ask Julie Millard to read the names of the nominees.

My name is Julie Millard, and I nominate the following individuals for election as directors of the company: Thomas Jenkins, Randy Fowlie, David Fraser, John Hastings, Robert Hau, Goldy Hyder, Kristen Ludgate, Fletcher Previn, Annette Rippert, George Schindler, Margaret Stewart and Deborah Weinstein.

Thank you. 12 directors are duly nominated. In accordance with the company's bylaws, I declare the nominations closed. May I have a motion to elect the nominees as directors of the company?

My name is Greg Secord, and I move that each of the individuals nominated for election at this meeting be elected as a director to hold office until the close of the next Annual Meeting of Shareholders or until their successors are duly elected or appointed in accordance with the articles and bylaws of the company.

May I have this motion seconded?

My name is Jennifer Kerr, and I second the motion.

At this time, I would ask the secretary to please advise if there are any questions received on this item of business.

Thank you, Mr. Chairman. I will pause for a moment to allow for questions to be submitted. Mr. Chairman, I confirm that we have not received any further questions specifically on this item of business that we have not already addressed.

Thank you. As previously noted, we will conduct a vote on this motion by way of online ballot. Registered shareholders or their duly appointed proxy holders can vote throughout the meeting by online ballot by selecting the applicable voting options on the voting panel displayed on their screens. If you have previously submitted a completed proxy, you will have already voted in respect of the 12 nominated candidates and it is not necessary to do so again. You may vote up to 12 nominees. Only those individuals that have been nominated are eligible for election. At least 25% of the directors elected must be resident Canadians according with the Canadian Business Corporations Act and the company's majority voting policy for director elections. Each nominee must be elected by receiving a greater number of votes for their election than the votes against their election at this meeting. We'll now move on to the next item of business, and that's the appointment of the independent auditors of the company. May I have a motion that KPMG LLP, Chartered Accountants, be reappointed as independent auditors.

My name is Julie Millard, and I move that KPMG LLP Chartered Accountants be appointed the independent auditors of the company to hold office until the close of business at the next Annual Meeting of Shareholders.

Thank you. May I have this motion seconded?

My name is Greg Secord, and I second the motion.

Thank you. In order to be carried, this motion must be passed by a majority of the votes cast at this meeting. At this time, I would ask secretary to please advise of any questions received on this item of business.

Thank you, Mr. Chairman. I will again pause for a moment to allow for questions to be submitted. Mr. Chairman, I confirm that we have not received any further questions specifically on this item of business that we have not already addressed.

Thank you. As previously noted, we'll conduct a vote on this motion by way of online ballot. Registered shareholders or their duly appointed proxy holders can now vote throughout this meeting by online ballot by selecting the applicable voting option on the voting panel displayed on their screens. If you have previously submitted a completed proxy, you will have voted in respect of the appointment of the auditor, and it's not necessary to vote again on this ballot. The next item of business is the approval of the continuance, amendment and restatement of the company's shareholder rights plan. The terms and conditions of the shareholder rights plan, including the proposed amendments are described in the proxy circular. The shareholder right plan requires reapproval every 3 years and was previously approved by the shareholders of the company's Annual Meeting of Shareholders on September 15, 2022. The Board of Directors believes that the continuation, amendment and restatement of the company's shareholder rights plan is in the best interest of the company. In order for the continuation, amendment and restatement of the company's shareholder rights plan to be approved, a resolution must be passed by, one, a simple majority of votes cast by all shareholders in the meeting or two, a simple majority of votes cast by the independent shareholders at the meeting as defined in the current shareholder rights plan. An independent shareholders generally any shareholder other than an acquiring person as defined in the shareholder rights plan and its associates and affiliates. The company is not aware of any shareholder that would not be considered as an independent shareholder and therefore, all shareholders are eligible to vote their common shares on this resolution. May I have a motion for the resolution approving the continuance, amendment and restatement of the Shareholder Rights Plan in the form attached as Schedule D in the proxy circular to be passed as a resolution of the company?

My name is Greg Secord, and I move that the resolution approving the continuation, amendment and restatement of the shareholder rights plan be approved.

May I have this motion seconded?

My name is Jennifer Kerr, and I second the motion.

At this time, I would ask the secretary to please advise of any questions received on this item of business.

Thank you, Mr. Chairman. I will again pause for a moment to allow for questions to be submitted. Mr. Chairman, I confirm that we have not received any questions specifically on this item of business.

As previously noted, we will conduct a vote on this motion by way of online ballot. Registered shareholders or their duly appointed proxy holders can vote throughout this meeting by online ballot by selecting the applicable voting option on the voting panel displayed on their screens. If you have previously submitted a completed proxy, you will have voted in respect of the continuation amendment and restatement of the shareholders' rights plan, and it is not necessary to vote again on this ballot. We'll now move on to the next item of business, and that's the nonbinding say-on-pay advisory resolution on the company's approach to executive compensation. The proxy circular for the meeting contains the description of the say-on-pay advisory vote, along with the full text of the say-on-pay advisory resolution. This vote is advisory only and nonbinding on the company and the Board of Directors. In order to be approved, the say-on-pay advisory resolution must be passed by a majority of the votes cast at this meeting. May I have a motion that the say-on-pay advisory resolution in the form set out on Page 31 to the proxy circular be passed as a resolution of the company?

My name is Greg Secord, and I move that say-on-pay advisory resolution on the company's approach to executive compensation be approved.

May I have the motion seconded?

My name is Julie Millard, and I second the motion.

At this time, I would ask the secretary to please advise of any questions received on this item of business.

Thank you, Mr. Chairman. I will once again pause for a moment to allow for questions to be submitted. Mr. Chairman, I confirm that we have not received any further questions specifically on this item of business that have not already been addressed.

Thank you. As previously noted, we'll conduct a vote on this motion by way of online ballot. Registered shareholders or their duly appointed proxy holders can vote throughout this meeting by online ballot by selecting the applicable voting options on the voting panel displayed on their screens. If you've previously submitted a completed proxy, you will have voted in respect of this motion, and it is not necessary to vote again on this ballot. We'll now proceed with the process for completing the voting on the items of business of the meeting. For those of you who have not voted on all the items of business, please do so now. If you previously submitted a completed proxy, you will have already voted in respect of the formal business of the meeting, and it's not necessary to vote again via online ballot. We'll now take a short break to allow shareholders to complete the voting on all items of the business of the meeting and to allow the results to be tabulated by the scrutineer. [Voting]

Mr. Chairman, the voting is now complete, and the polls are closed.

Thank you. That concludes voting at today's meeting. The scrutineer has now reported on all matters put to a ballot at this meeting. I declare that each of the 12 directors nominated is hereby elected to serve as Director of the company to hold office until the next Annual Meeting of Shareholders of the company or until his or her successor is duly elected or appointed in accordance with the articles and bylaws of the company. I declare the motion on the reappointment of the company's auditors to a pass. I declare the motion on the continuance, amendment and restatement of the company's shareholder rights plan to have passed. I declare the motion on the say-on-pay advisory resolution on the company's approach to executive compensation to have passed. A report disclosing the voting results in respect of each applicable item of business will be filed on SEDAR promptly following the meeting and a report of the voting results for the election of each director will be disclosed in a press release to be issued following the meeting. That concludes the formal business brought before the meeting, and I therefore declare the meeting to be terminated. Now that the formal part of the meeting has been concluded, we would be pleased to answer any questions that you may have. I ask all attendees who would like to ask a question to use the Q&A feature of the virtual interface to do so. We will answer as many questions as time permits. [Operator Instructions] Please limit your questions to the topics related to today's subject matters and please keep your questions short and to the point. We'll now give attendees a moment to type in their questions. For each question we answer, we'll summarize the question, read it out loud name of the person who asked such question and if applicable, the company they represent. We would like to remind you that questions which we already have answered or that are redundant or repetitive will not be answered. And now I'll ask the secretary to please advise if there are any questions.

Thank you, Mr. Chairman. I confirm that we have not received any further questions that have not already been addressed.

Thank you. That's all for today. I'd like to thank you very much for participating in the business of the meeting and for your interest in the company. Operator, back over to you to conclude the call. Thank you.

Thank you. Ladies and gentlemen, this does conclude the meeting. Thank you for your participation, and you may now disconnect.