On Wednesday, Waterloo’s Open Text (TSX:OTC) surprised the street with a particularly strong Q2. The company’s results, which covered the quarter ended December 31st, 2011 saw revenue climb to $321.5-million, up 20.2% year over year.
Versant Partners analyst Tom Liston was among those who were pleasantly surprised by the numbers. Liston, who has maintained a buy target on the stock, thought revenue would be about $309 million. Liston felt Open Text’s results were particularly encouraging given the slowing software spending environment. In a note to clients, the Versant analyst raised his twelve month target price on the stock to $70 from $64.
Open Text’s Q2 signals the end of the John Shackleton era and the beginning of the Mark Barrenechea era. On January 2nd, the former President and CEO of Rackable took the helm at Waterloo’s second most well known company. Barrenechea says he is “….delighted to join Open Text and to be based out of Waterloo” adding “With proven success as a market leader in [enterprise content management], Open Text has unparalleled talent, innovative products, and an impressive group of world-class customers and partners. I see tremendous market opportunity and an exciting future for the company. I look forward to working with the company’s employees, customers and investors to lead Open Text to the next level of success.”
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This past August, Open Text which has become a leader in the Enterprise Content Management space, going head to head with the likes of Oracle and Microsoft, joined Research in Motion in the Waterloo billion dollar club, reporting fiscal 2011 revenues of $1.03 billion.
Liston says he is particularly encouraged by Open Text’s strong performance with regard to license revenue growth. He notes that Open Text’s year over year license revenue growth of 13% was “significantly” higher than its peer average of 6% for the December quarter. Microsoft and Oracle, by comparison, each managed just 3% license revenue growth.
Shares of Open Text closed Friday on the TSX up three cents to $60.37.