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Revenues (Tables) | 3 Months Ended
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Sep. 30, 2018
Revenue from Contract with Customer [Abstract] |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | A summary of our typical performance obligations and when the obligations are satisfied are as follows:
Performance Obligation | When Performance Obligation is Typically Satisfied
License revenue: |
Software licenses (Perpetual,Term, Subscription) | When software activation keys have been made available for download (point in time)
Cloud services and subscriptions revenue: |
Outsourced Professional Services | As the services are provided (over time)
Managed Services / Ongoing Hosting | Over the contract term, beginning on the date that service is made available (i.e. "Go live") to the customer (over time)
Customer support revenue: |
When and if available updates and upgrades and technical support | Ratable over the course of the service term (over time)
Professional service and other revenue: |
Professional services | As the services are provided (over time)
Disaggregation of Revenue | The following table disaggregates our revenue by significant geographic area, based on the location of our end customer, and by type of performance obligation and timing of revenue recognition for the periods indicated:
| Three Months Ended September 30, 2018
Total Revenues by Geography: |
Americas (1) | $ | 389,340 |
EMEA (2) | 214,475 |
Asia Pacific (3) | 63,342 |
Total Revenues | $ | 667,157 |
Total Revenues by Type of Performance Obligation: |
Recurring revenue |
Cloud services and subscriptions revenue | $ | 208,083 |
Customer support revenue | 311,551 |
Total recurring revenues | $ | 519,634 |
License revenue (perpetual, term and subscriptions) | 76,887 |
Professional service and other revenue | 70,636 |
Total revenues | $ | 667,157 |
Total Revenues by Timing of Revenue Recognition |
Point in time | 76,887 |
Over time (including professional service and other revenue) | 590,270 |
Total revenues | $ | 667,157 |
(1) Americas consists of countries in North, Central and South America. (2) EMEA primarily consists of countries in Europe, the Middle East and Africa. (3) Asia Pacific primarily consists of the countries Japan, Australia, China, Korea, Philippines, Singapore and New Zealand.
Contract with Customer, Asset and Liability | The balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows:
| As of September 30, 2018 |  | As of July 1, 2018
Short-term contract assets | $ | 8,767 |  |  | $ | 5,474 |
Long-term contract assets | $ | 12,041 |  |  | $ | 12,382 |
Short-term deferred revenue | $ | 582,139 |  |  | $ | 618,197 |
Long-term deferred revenue | $ | 43,585 |  |  | $ | 64,743 |
Capitalized Contract Cost | The following table summarizes the changes since July 1, 2018:
Capitalized costs to obtain a contract as of July 1, 2018 | $ | 35,151 |
New capitalized costs incurred | 3,179 |
Amortization of capitalized costs | (2,271 | )
Capitalized costs to obtain a contract as of September 30, 2018 | $ | 36,059 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | As a result, certain prior period comparative figures in the Condensed Consolidated Statements of Income for the three months ended September 30, 2017 have been adjusted to conform to current period presentation as follows:
| Three Months Ended September 30, 2017
| As Previously Reported |  | Adjustments |  | As Adjusted
Cost of revenues - Cloud services | $ | 84,330 |  |  | $ | (196 | ) |  | $ | 84,134 |
Cost of revenues - Customer Support | 32,791 |  |  | (21 | ) |  | 32,770 |
Cost of revenues - Professional service and other | 59,459 |  |  | (31 | ) |  | 59,428 |
Total cost of revenues | 223,500 |  |  | (248 | ) |  | 223,252 |
Gross profit | 417,187 |  |  | 248 |  |  | 417,435 |
Research and Development | 77,629 |  |  | (55 | ) |  | 77,574 |
Sales and Marketing | 122,822 |  |  | (207 | ) |  | 122,615 |
General and administrative | 48,915 |  |  | (13 | ) |  | 48,902 |
Total operating expense | 330,064 |  |  | (275 | ) |  | 329,789 |
Income from operations | 87,123 |  |  | 523 |  |  | 87,646 |
Interest and other related expense, net | (33,288 | ) |  | (523 | ) |  | (33,811 | )
As a result, certain prior period comparative figures in the Condensed Consolidated Statements of Cash Flows have been adjusted to conform to current period presentation as follows:
| Three Months Ended September 30, 2017
| As Previously Reported |  | Adjustments |  | As Adjusted
Net cash provided by operating activities | $ | 67,102 |  |  | $ | 144 |  |  | $ | 67,246 |
Cash, cash equivalents and restricted cash at beginning of period | 443,357 |  |  | 2,853 |  |  | 446,210 |
Increase (decrease) in cash, cash equivalents and restricted cash during the period | (66,967 | ) |  | 144 |  |  | (66,823 | )
Cash, cash equivalents and restricted cash at end of period | $ | 376,390 |  |  | $ | 2,997 |  |  | $ | 379,387 |
The following tables summarize the impacts of adopting Topic 606 on our condensed consolidated balance sheets, statements of income and cash flows, all as compared to proforma balances illustrating if ASC Topic 605 "Revenue Recognition" (Topic 605) had still been in effect. Financial statement line items that were not impacted by the adoption of Topic 606 have been excluded from the tables below. Condensed Consolidated Balance Sheet
| As of September 30, 2018
| As reported under Topic 606 |  | Adjustments |  | Proforma as if Topic 605 was in effect
ASSETS |  |  |  |  |
Contract assets | $ | 8,767 |  |  | $ | (8,767 | ) |  | $ | — |
Prepaid expenses and other current assets | 80,624 |  |  | 6,481 |  |  | 87,105 |
Total current assets | 1,325,106 |  |  | (2,286 | ) |  | 1,322,820 |
Long-term contract assets | 12,041 |  |  | (12,041 | ) |  | — |
Deferred tax assets | 1,106,377 |  |  | 8,004 |  |  | 1,114,381 |
Other assets | 116,536 |  |  | (179 | ) |  | 116,357 |
Total assets | $ | 7,619,048 |  |  | $ | (6,502 | ) |  | $ | 7,612,546 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |
Accounts payable and accrued liabilities | $ | 252,079 |  |  | $ | (2 | ) |  | $ | 252,077 |
Deferred revenues | 582,139 |  |  | 11,011 |  |  | 593,150 |
Total current liabilities | 875,273 |  |  | 11,009 |  |  | 886,282 |
Long-term liabilities: |  |  |  |  |  |
Deferred revenues | 43,585 |  |  | 20,000 |  |  | 63,585 |
Deferred tax liabilities | 74,328 |  |  | (3,934 | ) |  | 70,394 |
Total long-term liabilities | 3,016,745 |  |  | 16,066 |  |  | 3,032,811 |
Shareholders’ equity: |  |  |  |  |  |
Accumulated other comprehensive income | 32,256 |  |  | 462 |  |  | 32,718 |
Retained earnings | 1,993,099 |  |  | (34,039 | ) |  | 1,959,060 |
Total OpenText shareholders' equity | 3,725,907 |  |  | (33,577 | ) |  | 3,692,330 |
Non-controlling interests | 1,123 |  |  | — |  |  | 1,123 |
Total shareholders’ equity | 3,727,030 |  |  | (33,577 | ) |  | 3,693,453 |
Total liabilities and shareholders’ equity | $ | 7,619,048 |  |  | $ | (6,502 | ) |  | $ | 7,612,546 |
Condensed Consolidated Statements of Income
| Three Months Ended September 30, 2018
| As reported under Topic 606 |  | Adjustments |  | Proforma as if Topic 605 was in effect
Revenues: |  |  |  |  |
License | $ | 76,887 |  |  | $ | (2,601 | ) |  | $ | 74,286 |
Cloud services and subscriptions | 208,083 |  |  | (535 | ) |  | 207,548 |
Customer support | 311,551 |  |  | (583 | ) |  | 310,968 |
Professional service and other | 70,636 |  |  | (54 | ) |  | 70,582 |
Total revenues | 667,157 |  |  | (3,773 | ) |  | 663,384 |
Cost of revenues: |  |  |  |  |
Cloud services and subscriptions | 87,703 |  |  | 467 |  |  | 88,170 |
Total cost of revenues | 226,313 |  |  | 467 |  |  | 226,780 |
Gross profit | 440,844 |  |  | (4,240 | ) |  | 436,604 |
Operating expenses: |  |  |  |  |
Sales and marketing | 120,182 |  |  | 1,107 |  |  | 121,289 |
Total operating expenses | 341,617 |  |  | 1,107 |  |  | 342,724 |
Income from operations | 99,227 |  |  | (5,347 | ) |  | 93,880 |
Interest and other related expense, net | (34,531 | ) |  | (159 | ) |  | (34,690 | )
Income before income taxes | 66,218 |  |  | (5,506 | ) |  | 60,712 |
Provision for (recovery of) income taxes | 29,850 |  |  | (1,253 | ) |  | 28,597 |
Net income for the period | $ | 36,368 |  |  | $ | (4,253 | ) |  | $ | 32,115 |
Condensed Consolidated Statement of Cash Flows
| Three Months Ended September 30, 2018
| As reported under Topic 606 |  | Adjustments |  | Proforma as if Topic 605 was in effect
Cash flows from operating activities: |  |  |  |  |
Net income for the period | $ | 36,368 |  |  | $ | (4,253 | ) |  | $ | 32,115 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |
Deferred taxes | 7,769 |  |  | (1,293 | ) |  | 6,476 |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | 73,875 |  |  | (2,281 | ) |  | 71,594 |
Contract assets | (5,346 | ) |  | 5,346 |  |  | — |
Prepaid expenses and other current assets | 9,732 |  |  | 1,213 |  |  | 10,945 |
Income taxes and deferred charges and credits | 12,561 |  |  | 36 |  |  | 12,597 |
Accounts payable and accrued liabilities | (40,001 | ) |  | 75 |  |  | (39,926 | )
Deferred revenue | (57,403 | ) |  | 703 |  |  | (56,700 | )
Other assets | 2,444 |  |  | 454 |  |  | 2,898 |
Net cash provided by operating activities | $ | 171,401 |  |  | $ | — |  |  | $ | 171,401 |

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