January 24, 2013 / 9:13 PM / 5 years ago

Open Text profit jumps on cloud-based services

(Reuters) - Canadian business software maker Open Text Corp reported a 29 percent growth in quarterly profit on revenue from cloud-based services.

The relatively new business brought in 13 percent of Open Text’s second-quarter revenue, helping the company post a 10 percent growth in total revenue. All other businesses recorded declines in revenue.

Open Text, whose software helps manage compliance and other information for large companies, government agencies and professional service firms, bought EasyLink Services in May to tap the growing cloud and mobile environments.

Revenue from the high-margin license business, which is also a measure of future demand, fell to $76.1 million from $89.7 million a year earlier.

The company, however, expects license revenue to grow in the next six months, Chief Executive Mark Barrenechea told Reuters.

Worldwide IT spending is expected to rise 4.2 percent in 2013 to $3.7 trillion as business sentiments improve, industry research firm Gartner said earlier this month.

Profit rose to $61.1 million, or $1.04 per share, from $47.4 million, or 81 cents per share, a year earlier.

The company — whose partners include technology infrastructure vendors SAP AG, Microsoft Corp and Oracle Corp — got about 36 percent of its revenue from Europe, Middle East and Africa (EMEA), down from about 40 percent a year earlier.

“I would expect EMEA to continue to perform in the mid-30s,” said Barrenechea, who completed a year as the CEO this month.

Additional reporting by Krithika Krishnamurthy in Bangalore; Editing by Joyjeet Das

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