UPDATE 2-Cloud computing services help boost Open Text profit

Wed Oct 22, 2014 7:48pm EDT
 
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(Adds CEO comments, analyst comments)

By Tanvi Mehta

Oct 22 (Reuters) - Soaring demand for cloud services helped Canadian business software maker Open Text Corp's more than double its first-quarter profit.

Net income rose to $64.6 million, or 53 cents per share, from $30.6 million, or 26 cents per share, a year earlier.

The cloud services business, which helps customers make use of software, services and content over the Internet, accounted for $150 million in revenue in the first quarter ended Sept. 30, its best ever growth rate of 260 percent.

Open Text, whose customers include Oracle Corp and Microsoft, has focused on cloud as businesses increasingly turn to cheaper services hosted online over proprietary software.

The company earned $58.6 million from license services in the first quarter, short of analysts expectations.

Quarterly revenue from customers paying license fees rose 6 percent, the company, which makes software to help companies manage documents and workflows, said.

"The company spoke about a soft economic backdrop which is causing the shortfall in license services," Cormark Securities analyst Richard Tse told Reuters.   Continued...