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Revenues (Tables) | 12 Months Ended
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Jun. 30, 2019
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:
| Year Ended June 30, 2019
Total Revenues by Geography: |
Americas (1) | $ | 1,683,282 |
EMEA (2) | 920,422 |
Asia Pacific (3) | 265,051 |
Total Revenues | $ | 2,868,755 |
Total Revenues by Type of Performance Obligation: |
Recurring revenue (4) |
Cloud services and subscriptions revenue | $ | 907,812 |
Customer support revenue | 1,247,915 |
Total recurring revenues | $ | 2,155,727 |
License revenue (perpetual, term and subscriptions) | 428,092 |
Professional service and other revenue | 284,936 |
Total revenues | $ | 2,868,755 |
Total Revenues by Timing of Revenue Recognition |
Point in time | 428,092 |
Over time (including professional service and other revenue) | 2,440,663 |
Total revenues | $ | 2,868,755 |
(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. (4) Recurring revenue is defined as the sum of cloud services and subscriptions revenue and customer support revenue.
Contract Balances | The balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows:
| As of June 30, 2019 |  | As of July 1, 2018
Short-term contract assets | $ | 20,956 |  |  | $ | 5,474 |
Long-term contract assets | $ | 15,386 |  |  | $ | 12,382 |
Short-term deferred revenue | $ | 641,656 |  |  | $ | 618,197 |
Long-term deferred revenue | $ | 46,974 |  |  | $ | 64,743 |
Incremental Costs of Obtaining a Contract with a Customer | 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 | 24,347 |
Amortization of capitalized costs | (11,003 | )
Adjustments on account of foreign exchange | (211 | )
Capitalized costs to obtain a contract as of June 30, 2019 | $ | 48,284 |
Schedule of New Accounting Pronouncements, Impact on Financial Statements | As a result, certain prior period comparative figures in the Consolidated Statements of Income have been adjusted to conform to current period presentation as follows:
| Year Ended June 30, 2018 |  | Year Ended June 30, 2017
| As Previously Reported |  | Adjustments |  | As Adjusted |  | As Previously Reported |  | Adjustments |  | As Adjusted
Cost of revenues - Cloud services | $ | 364,091 |  |  | $ | 69 |  |  | $ | 364,160 |  |  | $ | 300,255 |  |  | $ | (405 | ) |  | $ | 299,850 |
Cost of revenues - Customer Support | $ | 134,089 |  |  | $ | (200 | ) |  | $ | 133,889 |  |  | $ | 122,753 |  |  | $ | (188 | ) |  | $ | 122,565 |
Cost of revenues - Professional service and other | $ | 253,670 |  |  | $ | (281 | ) |  | $ | 253,389 |  |  | $ | 195,195 |  |  | $ | (241 | ) |  | $ | 194,954 |
Total cost of revenues | $ | 951,411 |  |  | $ | (412 | ) |  | $ | 950,999 |  |  | $ | 762,391 |  |  | $ | (834 | ) |  | $ | 761,557 |
Gross profit | $ | 1,863,830 |  |  | $ | 412 |  |  | $ | 1,864,242 |  |  | $ | 1,528,666 |  |  | $ | 834 |  |  | $ | 1,529,500 |
Research and Development | $ | 323,461 |  |  | $ | (552 | ) |  | $ | 322,909 |  |  | $ | 281,680 |  |  | $ | (465 | ) |  | $ | 281,215 |
Sales and Marketing | $ | 529,381 |  |  | $ | (240 | ) |  | $ | 529,141 |  |  | $ | 444,838 |  |  | $ | (384 | ) |  | $ | 444,454 |
General and administrative | $ | 205,313 |  |  | $ | (86 | ) |  | $ | 205,227 |  |  | $ | 170,438 |  |  | $ | (85 | ) |  | $ | 170,353 |
Total operating expense | $ | 1,358,427 |  |  | $ | (878 | ) |  | $ | 1,357,549 |  |  | $ | 1,175,734 |  |  | $ | (934 | ) |  | $ | 1,174,800 |
Income from operations | $ | 505,403 |  |  | $ | 1,290 |  |  | $ | 506,693 |  |  | $ | 352,932 |  |  | $ | 1,768 |  |  | $ | 354,700 |
Interest and other related expense, net | $ | (137,250 | ) |  | $ | (1,290 | ) |  | $ | (138,540 | ) |  | $ | (119,124 | ) |  | $ | (1,768 | ) |  | $ | (120,892 | )
As a result, certain prior period comparative figures in the Consolidated Statements of Cash Flows have been adjusted to conform to current period presentation as follows:
| Year Ended June 30, 2018 |  | Year Ended June 30, 2017
| As Previously Reported |  | Adjustments |  | As Adjusted |  | As Previously Reported |  | Adjustments |  | As Adjusted
Net cash provided by operating activities | $ | 709,885 |  |  | $ | (1,804 | ) |  | $ | 708,081 |  |  | $ | 439,253 |  |  | $ | 1,100 |  |  | $ | 440,353 |
Cash, cash equivalents and restricted cash at beginning of period | 443,357 |  |  | 2,853 |  |  | 446,210 |  |  | 1,283,757 |  |  | 1,753 |  |  | 1,285,510 |
Increase (decrease) in cash, cash equivalents and restricted cash during the period | 239,585 |  |  | (1,804 | ) |  | 237,781 |  |  | (840,400 | ) |  | 1,100 |  |  | (839,300 | )
Cash, cash equivalents and restricted cash at end of period | $ | 682,942 |  |  | $ | 1,049 |  |  | $ | 683,991 |  |  | $ | 443,357 |  |  | $ | 2,853 |  |  | $ | 446,210 |
The following tables summarize the impacts of adopting Topic 606 on our 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. Consolidated Balance Sheet
| As of June 30, 2019
| As reported under Topic 606 |  | Adjustments |  | Proforma as if Topic 605 was in effect
ASSETS |  |  |  |  |
Contract assets | $ | 20,956 |  |  | $ | (20,956 | ) |  | $ | — |
Prepaid expenses and other current assets | 97,238 |  |  | 4,428 |  |  | 101,666 |
Total current assets | 1,561,328 |  |  | (16,528 | ) |  | 1,544,800 |
Long-term contract assets | 15,386 |  |  | (15,386 | ) |  | — |
Deferred tax assets | 1,004,450 |  |  | 16,631 |  |  | 1,021,081 |
Other assets | 148,977 |  |  | (5,614 | ) |  | 143,363 |
Total assets | $ | 7,933,975 |  |  | $ | (20,897 | ) |  | $ | 7,913,078 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |
Accounts payable and accrued liabilities | $ | 329,903 |  |  | $ | (55 | ) |  | $ | 329,848 |
Deferred revenues | 641,656 |  |  | 24,635 |  |  | 666,291 |
Total current liabilities | 1,014,717 |  |  | 24,580 |  |  | 1,039,297 |
Long-term liabilities: |  |  |  |  |  |
Deferred revenues | 46,974 |  |  | 32,170 |  |  | 79,144 |
Deferred tax liabilities | 55,872 |  |  | (8,178 | ) |  | 47,694 |
Total long-term liabilities | 3,034,588 |  |  | 23,992 |  |  | 3,058,580 |
Shareholders’ equity: |  |  |  |  |  |
Accumulated other comprehensive income | 24,124 |  |  | 1,260 |  |  | 25,384 |
Retained earnings | 2,113,883 |  |  | (70,729 | ) |  | 2,043,154 |
Total OpenText shareholders' equity | 3,883,455 |  |  | (69,469 | ) |  | 3,813,986 |
Non-controlling interests | 1,215 |  |  | — |  |  | 1,215 |
Total shareholders’ equity | 3,884,670 |  |  | (69,469 | ) |  | 3,815,201 |
Total liabilities and shareholders’ equity | $ | 7,933,975 |  |  | $ | (20,897 | ) |  | $ | 7,913,078 |
Consolidated Statements of Income
| Year Ended June 30, 2019
| As reported under Topic 606 |  | Adjustments |  | Proforma as if Topic 605 was in effect
Revenues: |  |  |  |  |
License | $ | 428,092 |  |  | $ | (37,709 | ) |  | $ | 390,383 |
Cloud services and subscriptions | 907,812 |  |  | (6,361 | ) |  | 901,451 |
Customer support | 1,247,915 |  |  | (1,605 | ) |  | 1,246,310 |
Professional service and other | 284,936 |  |  | 24 |  |  | 284,960 |
Total revenues | 2,868,755 |  |  | (45,651 | ) |  | 2,823,104 |
Cost of revenues: |  |  |  |  |
Cloud services and subscriptions | 383,993 |  |  | (338 | ) |  | 383,655 |
Professional service and other | 224,635 |  |  | 5 |  |  | 224,640 |
Total cost of revenues | 930,703 |  |  | (333 | ) |  | 930,370 |
Gross profit | 1,938,052 |  |  | (45,318 | ) |  | 1,892,734 |
Operating expenses: |  |  |  |  |
Sales and marketing | 518,035 |  |  | 8,945 |  |  | 526,980 |
Total operating expenses | 1,371,042 |  |  | 8,945 |  |  | 1,379,987 |
Income from operations | 567,010 |  |  | (54,263 | ) |  | 512,747 |
Interest and other related expense, net | (136,592 | ) |  | (801 | ) |  | (137,393 | )
Income before income taxes | 440,574 |  |  | (55,064 | ) |  | 385,510 |
Provision for (recovery of) income taxes | 154,937 |  |  | (14,121 | ) |  | 140,816 |
Net income for the period | $ | 285,637 |  |  | $ | (40,943 | ) |  | $ | 244,694 |
The adjustment on license revenue for the year ended June 30, 2019 of $37.7 million is primarily due to new contracts entered into during Fiscal 2019 for which a timing difference of revenue recognition exists between Topic 606 and Topic 605. See above for an explanation of how license revenues are recognized under Topic 606. The Fiscal 2019 contracts pertaining to the respective adjustments are recognized up front under Topic 606, whereas such revenues would have been recognized over time under Topic 605. Consolidated Statement of Cash Flows
| Year Ended June 30, 2019
| As reported under Topic 606 |  | Adjustments |  | Proforma as if Topic 605 was in effect
Cash flows from operating activities: |  |  |  |  |
Net income for the period | $ | 285,637 |  |  | $ | (40,943 | ) |  | $ | 244,694 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |
Deferred taxes | 47,425 |  |  | (14,165 | ) |  | 33,260 |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | 75,508 |  |  | (18,883 | ) |  | 56,625 |
Contract assets | (37,623 | ) |  | 37,623 |  |  | — |
Prepaid expenses and other current assets | (819 | ) |  | 3,319 |  |  | 2,500 |
Income taxes and deferred charges and credits | 27,291 |  |  | 101 |  |  | 27,392 |
Accounts payable and accrued liabilities | (21,732 | ) |  | 173 |  |  | (21,559 | )
Deferred revenue | (1,827 | ) |  | 26,841 |  |  | 25,014 |
Other assets | (4 | ) |  | 5,934 |  |  | 5,930 |
Net cash provided by operating activities | $ | 876,278 |  |  | $ | — |  |  | $ | 876,278 |

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