Thank you for standing by. This is the conference operator. Welcome to the OpenText Corporation Third Quarter Fiscal 2021 Earnings Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.

[Operator Instructions] I would like to turn the conference over to Harry Blount, Senior Vice President of Investor Relations. Please go ahead, sir..

CIBC's Technology and Innovation Conference on May 12, Needham Technology and Media Conference on May 18, Barclays America Select Franchise Conference on May 19, Bernstein's Annual Strategic Decisions Conference on June 4, Bank of America Merrill Lynch Global Technology Conference on June 8, the Baird Global Consumer Technology and Services Conference on June 9 and NASDAQ's virtual Investor Conference on June 15.

We look forward to virtual meeting with investors in the coming days and weeks. I will now proceed with the reading of our Safe Harbor statement. Please note that during the course of this conference call we may make statements relating to the future performance of OpenText that contain forward-looking information.

While these forward-looking statements represent our current judgment, actual results could differ materially from a conclusion, forecast or projection in the forward-looking statements made today.

Certain material factors and assumptions were applied in drawing any such statement, additional information about the material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward-looking information as well as risk factors, including in relation to the current global pandemic that may project future performance results of OpenText are contained in OpenText recent 10-Q and 10-K as well as in our press release that was distributed earlier this afternoon, which may be found on our website.

We undertake no obligation to update these forward-looking statements unless required to do so by law.

In addition, our conference call may include discussions of certain non-GAAP financial measures, reconciliations of any non-GAAP financial measures to this most directly comparable GAAP measures may be found within our public filings and other materials which are available on our website.

And with that, it's my pleasure to hand the call over to Mark..

off cloud, private cloud, public cloud and our cloud API services. Here are the strategic programs for GROW with OpenText. For off cloud customers we are offering enhanced long term extended support programs and now on-premise managed services. Two brand new revenue opportunities for OpenText.

For customers that want to deploy cloud addition in OpenText private secure cloud, our managed service offering is ideal. We added 75 new private cloud customers in the quarter. We are already 100% available on the public cloud with a security and Business Network Cloud.

Content Cloud will be available in Cloud Editions 21.4 and our experience cloud in Cloud Edition 22.2 some notable areas of strength in the quarter include core capture core capture for SAP and core archive for Extended ECM. We have added a new go-to-market Information Management as a service via archive cloud API services.

There are over 25 services available today at developer.opentext.com. This is an important part of our future growth. At the forefront of our GROW with OpenText program is our cloud-based engagement platform, the OpenText digital zone.

Available today, the digital zone allows us to connect with customers and prospects for events, seminars, presales, design, proof of concept support and renewals. We do this digitally today. The OpenText digital zone will ultimately automate the vast majority of our customer engagement and allow us to help scale revenues non-linear to expense.

And lastly, in our GROW with OpenText set of programs is our Voucher Learning services program that brings more professionals into the OpenText ecosystem with scale, training and certification. With the release of OpenText Cloud Editions 21.2, we've never been better positioned to capitalize on some of the most powerful post-pandemic trends.

I'm going to spend a moment and just highlight our five clouds. Content Cloud; the modern workforce wants control of their time and space. The workforce is forever changed.

Employees to have simple access to accurate and timely information to do their jobs, wherever they are, whenever they want it, whatever device they are using and whatever language they communicated.

With a majority of business planning as a permanent shift to remote or hybrid work, organizations must support the modern worker, while simultaneously organizing their data to extract business insights and comply with record retention and customer privacy regulations, while enabling product management, collaboration, sharing capture, and e-signature.

Business Network Cloud, supply chains are constantly changing, based on demand and supply and externalities. From the current global chip shortage which is hurting auto manufacturing, the U.S. China trade tensions, the recent blockage of the Suez Canal former supply shortages and logistics today.

Supply chains have been under pressure to not just change but to transform and in many cases regionalize. With 21 of the 25 largest global supply chains as customers, OpenText is the clear market leader.

OpenText is in the early days of helping customers evolve and transform the supply chains, become more real-time, more local and more sustainable, while simultaneously remaining compliant with global tax and tariff regulations. Onto our third Cloud, Experience Cloud.

As engagement becomes digital, customers are demanding a more customer-centric seamless, personalized, and exceptional service and they are less forgiving of sub-par interaction, I have always call this the internet of me. Digital technologies enable businesses to engage with their customers every touch point to allow their customers.

The OpenText Experience Cloud is an exciting part of our future growth and fully complements our thinking on information management. Security and Protection Cloud; during the pandemic, the number of off cloud endpoints and remote worker skyrocketed and cyber-attacks increased by five times.

The OpenText Security and Protection Cloud provides the foundation for best-in-class cybersecurity, data protection, digital forensics, and endpoint security solutions for businesses of all size.

We're committed to expanding our Security business over the long-term and providing the necessary protection - for the edge, for the core and for the cloud, for information management. And our last cloud, the OpenText Developer Cloud.

The modern developer needs to deliver fast, reliably and at scale making it critical to select the right partners, early in their innovation cycle. OpenText Developer Cloud provides Information Management as a service, making it faster and easier to build, extending customized IM applications using a collection of cloud services, APIs and FTKs.

The OpenText Cloud API services or IMF is already showing big wins and it is opening a new route to market for OpenText. Overall, cloud growth remains our largest opportunity and we are still on these early days of cloud addition adoption, with approximately 20% of our customer base on the new platform.

Cloud Editions accelerates our ability to cross sell, up-sell and enables self-service access to more of our portfolio. On acquire, we are committed to our M&A playbook, patient, disciplined, value-based buyers, with return-based metrics and cash flows as key criteria.

We always take the long view and I encourage you to look at our annual rate of revenues we have onboarded via M&A over the last decade. Our liquidity, cash flow and balance sheet remains strong. Our M&A pipeline is healthy and we will deploy capital when the right opportunity arises.

Our continued cash flow and cash flow generation only enhances our financial position. We are very confident in our unique total growth strategy of retain, grow and acquire. Let me turn to our financial outlook.

At Investor Day, we laid out our growth strategy for this fiscal '21, fiscal '22 and our aspirations for fiscal '24 based on, as I said above our GROW with OpenText program, the strength of our new cloud additions, continuous improvements in our own execution and optimism and the global economy.

Today based on our organic growth within Q3 and other factors, we are updating our financial outlook with an increase to our cloud revenue outlook. Let me summarize. For fiscal '21, total revenue growth of mid-single-digit. Today, we are increasing our full fiscal '21 cloud revenue growth outlook to a range of 18% to 20% from the previous high teens.

And we remain confident that we will deliver ARR organic growth here in fiscal 2021. For fiscal 2022, total organic revenue growth of 1% to 2%, organic cloud revenue growth of 3% to 4% and we will comment on our fiscal '22 outlook on our next earnings call but today we can see even more green shoots happening in fiscal '22.

Our fiscal '24 long-term aspirations sustained total organic revenue growth of 2% to 4%, ARR of 85%, adjusted EBITDA between 38% to 40% and free cash flow of $1.1 billion to $1.2 billion. And of course, any new M&A revenue or new margin dollars and new cash flows from M&A would be additive to the above outlook.

The above F'22 outlook and F'24 aspirations are organic and they do not include any benefits from future M&A at this point in time. Madhu will comment as well here in a few moments. On our value creation strategy, it is predicated on growth, profitability and capital efficiency.

We have built a company that continues to deliver growth, upper quartile profitability and cash flow regardless of the economic environment. This strategy enables us to drive shareholder returns through stock price appreciation, dividends and periodic share buybacks.

With this financial outlook, we could generate $5 billion plus in free cash flows over the next five years. That capital will enable great flexibility within our total growth and value creation strategies.

Today, I'm pleased to announce that the Board of Directors has approved our quarterly dividend of $20.08 per share for holders of record on June 4, 2021 with a payment date of June 25, 2021. Before I turn my summary comments, let me touch on the back-to-workplace in corporate citizen initiatives here at OpenText.

The past 12 months have been truly extraordinary, a shared journey. When our employees began to work from home last March, we didn't know how long it would last or exactly how we would adapt? We have shown that our productivity is up, our innovation is accelerated and we are growing.

We have heard from employees that their value and appreciate the flexibility that working from home is providing. The pandemic has forever changed the nature of work, employees want more control of their time, more control of their space and more personal advancement.

OpenText remains in a voluntary work from anywhere through the end of this calendar year and this approach is clearly working for our customers and for employees. We have also begun a phased return to their workplace, safely, of course, as per governmental rules and guidelines.

We have also dedicated and decided that our return to the workplace will include a new flex work approach. That means providing our employees, the option of weekly flex days in the office.

On corporate citizenship last August, we published our foundational report, which reflects our corporate beliefs and culture of doing well by doing good and utilizing technology for the good. We continue to learn and improve.

And the next corporate citizenship report, which we expect to publish this August, you will see OpenText Employee Relief Fund expanded to $3 million USD to continue to support our employees in the event of hardship incurred because of the pandemic, the expansion of our equity, diversity, and inclusion programs and we are adopting the GRI reporting framework.

So, can more clearly articulate and measure our amazing investments and progress. In the past 12 months, we have experienced great disparities in Fishers, not just at home, but also around the world.

This is deeply impacted me and the OpenText leadership team and we are redoubling our efforts to do good to create sustained positive change while doing well as an organization, the corporate citizenship report and our initiatives are so important to us.

The last 12 months have been the best financial performance in the history of OpenText and our forward momentum is even stronger. In closing, let me summarize, we delivered another exceptional quarter led by organic growth in cloud and ARR. Our cash, cash flow and liquidity keep getting stronger.

We have increased visibility into the impact of the global economic recovery of our business and this is creating upward momentum in our future outlook. We will benefit from any secular trends including modern work, modern experiences and a transformation of global supply chain.

We are a cloud-first company with the best product portfolio in our history. We continue to invest in the drivers of future growth and we have a great workforce that is increasing innovation cycles during the pandemic, and leading the way to modern work.

On behalf of OpenText, I'd like to thank our shareholders, loyal customers, partners, and 14,000 plus dedicated employees across the globe for their contribution to the success. I'm so proud of our culture and resilience in our employees that we can see them demonstrating every single day.

What a difference a year makes? It's my pleasure to turn the call over to Madhu Ranganathan, OpenText's Chief Financial Officer.

Madhu?.

Thank you, Mark, and thank you all for joining us today. OpenText delivered another strong quarter of results-driven by our investments in organic growth on a strengthening base of operational excellence. We expect this momentum to continue in fiscal '22.

I will speak to Q3, Q4, our quarterly factors, our fiscal '21 total growth strategy, our fiscal '21 annual target model ranges, our '22 outlook, and our long-term aspirations all as outlined in our Q3 investor presentation that is posted on our IR website today.

All references will be in millions of USD and compared to the same period in the prior fiscal year unless otherwise stated. And let me start with revenues. Total revenues for the quarter were $832.9 million, up 2.2%, down 0.8% on a constant currency basis, there was a favorable FX impact revenue of $25 million.

The geographical split of revenues in the quarter was Americas 61%, EMEA 31% and Asia-Pacific 8%. Year-to-date, total revenues were $2.49 billion [ph], up 9.2% or 7.1% on a constant currency basis. Q3 annual recurring revenues at $691.8 million, up 4.4% or up 1.7% on a constant currency basis.

As a percent of total revenues, ARR, annual recurring revenue, was 83% for the quarter, up from 81% in the third quarter of fiscal '20. Year-to-date annual recurring revenues were $2.047 billion up 15.3%, or up 13.5% on a constant currency basis.

As a percent of total revenues year-to-date ARR was 82% up from 78% in the first nine months of fiscal '20. Q3 cloud revenues were 355.8 up 4.8% or up 3.1% on a constant currency basis. Our cloud renewal rate excluding Carbonite was approximately 92%.

Year-to-date cloud revenue was $1.047 billion up, 26.9% or up $25.5 million or 0.7% on a constant currency basis. Q3 customer support revenues of $345.9 million, up 4% or up 0.3% on a constant currency basis. Our customer support renewal rate for Q3 was 94%. Across the business, our renewals performance remained strong.

Year-to-date, customer support revenues were $999.8 million up 5.2% or up 2.9% on a constant currency basis. Q3 license revenue was 76.2, down 5.9% or down 10.9% on a constant currency basis. Year to date, license revenues were $252.2 million down 15.1% or down 18% on a constant currency basis.

Q3 professional services revenues were 64.9, down 9% or down 13.2% in a constant currency basis. Year-to-date, professional services revenues were 193.3, down 8.1% or down 11.1% on a constant currency basis.

Q3 GAAP net income was 91.5%, up compared to net income of $26 million in the prior year and primarily driven by higher revenues, lower operating expenses, as well as debt extinguishment cost incurred in Q3 of fiscal '20.

Year to date, GAAP net income of $129.4 million compared to net income of $207.8 million in the prior year, primarily driven by the tax expense relating to the IRS settlement, partly offset by higher revenue. Q3 non-GAAP net income was $204.5 million, up 22% or up 16.9% on a constant currency basis.

Year-to-date, non-GAAP net income was $706.9 million, up 24.7% or up 20.5% on a constant currency basis. Q3 GAAP earnings per share diluted was $0.33, up from earnings per share diluted of $0.10. Year-to-date GAAP earnings per share diluted was $0.47, down from $0.77, also driven by the tax expense relating to the IRS Settlement.

Q3 non-GAAP earnings per share diluted was $0.75, up $0.14 from $0.51 and up $0.10 on a constant currency basis. Year-to-date, non-GAAP earnings per share diluted was $2.59, up $0.50 from $2.09, and up to $0.41 on a constant currency basis. Turning to margins; GAAP gross margin for the quarter was 68.6%, up 320 basis points.

Year-to-date GAAP gross margins of 69.4%, up 190 basis points. Non-GAAP gross margin for the quarter was 75.2%, up 190 basis points. Year-to-date non-GAAP gross margin was 76.3%, up 230 basis points. For GAAP gross margins by revenue stream please refer to our Q2 fiscal 21 10-Q report.

Also on an adjusted basis for the quarter, cloud margin was 65.4% up from 62.5% driven by continued improvement with our cloud service delivery and strong contribution from Carbonite. Year-to-date cloud margin was 66.4% up from 59.7%.

For the quarter, customer support margins was 90.9%, up from 90.1% and reflecting continued strong renewal performance. Year-to-date customer support margin was 91.2% up from 90.5%. For the quarter, license margin was 96.3% down from 96.9% primarily due to higher third-party technology costs, similar trends on a year-to-date basis as well.

For the quarter, professional services margin was 23.5% up from 21.2% and reflecting the ongoing benefits from remote and cloud-based deployment. Year-to-date professional services margin was 26.7%, up from 22.2%. Adjusted EBITDA was $297.1 million this quarter, up 14.5% or up 9.9% on a constant currency basis.

This represents 35.7% margin, up from 31.8% in the same quarter last year. Year-to-date adjusted EBITDA was $1.0 billion, up 20.4% or up 17% on a constant currency basis. This represents 40.1% margin, up from 36.4% during the first nine months of fiscal '20. Turning to operating and free cash flow.

Operating cash flows was at $63.6 million and free cash flows were $50.3 million, which include an IRS settlement payment of $290 million. Operating cash flows are very strong in Q3. Our DSO was 44 days for Q3 fiscal '21, compared to 51 days in Q3 fiscal '20.

The year-over-year reduction of 7 days is significant and it reflects a consistent acquisition through collection efficiency and other aspect of our working capital via the cash conversion cycle. Our next milestone in fiscal '22 will be automation, within the working capital framework to maintain these well optimized levels of performance.

The higher efficiencies of capital spend free cash flow generation also remain strong in the quarter. From a balance sheet perspective, we ended the quarter with approximately $1.5 billion in cash and supported by our strong cash flow performance.

We have a $750 million of Revolver undrawn and fully available gaining our total liquidity to $2.2 billion. Our consolidated net leverage ratio is 1.57 times of slight improvement from 1.6 times last quarter. This is a strong place to be. A balance sheet that positions us well to execute on our total growth strategy.

Now turning to quality factors, total growth strategy and annual target model all available in the Q3 fiscal '21 Investor Presentation on our website. As a reminder, we view our business as annual and quarters will vary. Our long-term value created from sustained annual performance and 90-day cycles are too short to measure.

The quality factors for the fourth quarter fiscal '21 when compared to the same period in the prior year, we expect the following. Expect Q4 FX tailwind similar to Q3. Total revenue growth up to 2%. Annual recurring revenue, ARR, up low single digits. Adjusted EBITDA margin percentage down 300 basis points to 400 basis points.

For our full year fiscal 2021 total growth strategy, our fiscal year-to-date performance has been strong and our leading indicators appointing upwards. We are pleased to increase the clouds revenue outlook for the current fiscal year to grow 18% to 20% year-over-year versus our previous range of high teens. All other ranges remain unchanged.

For our full year fiscal '21 target model were reducing our capital expenditure spend target range to $55 million to $65 million from our prior range of $85 million to $95 million, a lower CapEx range is driven by broader partnership to the hyperscale as the many parts of our business while we continue to invest in our cloud infrastructure.

All other aspects of fiscal '21 target models remain unchanged. We do expect to increase our investments in a variety of internal initiatives such as the digital down, non-linear scaling of our properties and higher self-service all towards the frictionless environment with tools and automation.

I am truly excited that many of these initiatives are under my direct responsibility including our CIO organization. Our fiscal '22 outlook and fiscal '24 aspirations remain unchanged from our Investor Day presentation in March of this year as we continue to strongly execute against the cloud roadmap.

Our fiscal '22 outlook provides for 1% to 2% total organic growth and 3% to 4% cloud organic growth.

So fiscal '24, we are targeting 2% to 4% total organic revenue growth, 85% ARR, adjusted EBITDA margin of 38% to 40% with a plan to reinvest any margin gains above 40% into additional growth initiatives and free cash flow of $1.1 billion to $1.2 billion. All M&A remains additive to our outlook and aspirations.

Tax update; we note the recent developments related to the Made in America tax plan proposed the President, Biden, and the ongoing considerations by the OECD. We do not anticipate any changes to our fiscal '21 tax rate nor any significant changes to our fiscal '22 tax rates and we will continue to monitor these developments.

During April, the Canada Revenue Agency or CRA issued a proposal letter to OpenText in connection with its audit of our 2017 tax year. The CRA is asserting aggressive technical valuation arguments with seek to reduce the fair market value of certain tax assets.

I want to be clear that this is not, similar to the prior IRS matter we have previously discussed. This CRA proposal has no industrial cash impact but rather could affect the tax rate in future years. That said, with the support of leading tax advisors, we strongly disagree with the CRA and we intend to vigorously defend our position.

All details are included in our Form 10-Q filed today. So in summary, very well done to the OpenText team for delivering a solid Q3 and leading the way. We are excited about our future and the momentum that continues to build into fiscal '22. I wish you all continued safety environments. I would now like to open the call for questions.

Operator?.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Stephanie Price from CIBC. Please go ahead..

Hi, good evening.

Just want you to give us more color on the uptake of CE? Where you're seeing the most demand and how is the pipeline building there?.

Stephanie, thank you for the question. As I said in the prepared materials, we have about 20% of our installed base now on cloud additions and that's very positive. I think ultimately the ideal landing zone for us is about 50% of the installed base that will migrate to cloud. We have all new customers come on the cloud additions.

I think the ultimate landing zone is about half of our installed base by 20% today. So still significant opportunity in front of us.

We are also announcing our GROW with OpenText program that for those who decided to stay on Release-16 that we introduced a new extended support program at additional fees and we're going to take our private cloud to on-premise.

So, we'll be able to do managed services on-premise for customers who want to maintain themselves on Release-16 longer, which is another revenue opportunity. So, we progressed to about 20%.

I think the ultimate landing zone is about half the installed base and we introduced new programs to the support those who are either going to take a little longer to get there or we'll just run the life of their investment on Release-16..

That's good color. Thanks. Then on the supply chain transformation, you mentioned that of the growth driver several times.

Just wondering if you could talk a bit about the demand, you're seeing in the business network and maybe some of it is [ph] approach in offerings?.

Sure thing. I'll start at the headline, which is all our services are back to pre-COVID levels except some portions of auto and that's driven mainly by chip shortages and wherever there is a temporary pause of some production. But I'm really excited to see our levels back to pre-COVID levels.

Things driving demand, the return to GDP growth, new activity for us in CPG retail, healthcare, more micro payments volume over our network. As we stated, we think the one of the strongest drivers include sustainability and we have new eco-friendly sustainability features of being able to look up suppliers and get scores and look at many layers.

We're also seeing regionalization. Canada has moved certain pharmaceutical supply chains back to Canada. We're participating in the regionalization of auto supply chains in Germany. We're seeing certain manufacturing supply chains come back to the US, which we're going to put be participating in some of those as well.

So, I think it's a return to volume. Certain industries that have just gained more TAM, it is regionalization and our long-term sustainability features that is driving the growth..

Great, thanks so much..

The next question comes from Raimo Lenschow from Barclays. Please go ahead..

Hey, this is Frank [ph] for Raimo. I wanted to dig a bit deeper into rate guidance for cloud.

So, specifically, where you seeing the most strength and confidence in the cloud business, both from a product and customer vertical perspective?.

Yes. Thank you, Frank. So, it's sort of broad-based confidence right now. On our private cloud, as I said, we added approximately 75 new customers into our private cloud and these are global 10,000 customers.

So, there is a continue need to provide these specialized environments, these private clouds that have very unique value proposition for them and that includes content services, experience, and some other things. Second, our new cloud API services. I highlight some of the wins previously. Then, both network volumes coming back.

We're back to pre-COVID levels in certain industries as I noted, CPG, retail, healthcare, pharmaceutical leading the way for us. Putting that all together has led us to our confidence in raising our total growth strategy for fiscal 21, where we now expect to see the cloud at 18% to 20% year-over-year percent growth..

Great, that's really good color. Then just on the GROW with OpenText program.

I was wondering if you provide some more detail into the customer conversations and feedback there so far?.

Early engagement is quite positive. We announced it. We kind of gave in early preview in March at Investor Day.

We had intended to launch it with OpenText World Europe and then OpenText World Asia and then continue that sort of rolling thunder approach into July with our sales kickoff and started a new fiscal year, but we kind of accelerated it and a preview did at Investor Day. So, early conversations are really positive.

The first is that engagement with off-cloud customers and ensuring that they can get the full value for their investment in Released-16. So the two new services, extended support program, which is a 20% fee that we're going to charge. Then we have bringing on-prem managed services to off-cloud customers.

So, those are the two brand new revenue opportunities for off-cloud. For private cloud, we believed in private cloud. Some companies were in and out and back and again. This is just a great opportunity. The customers gain unique value in their unique processes and don't want to move to kind of a more generic public cloud.

We have 75 new private cloud customers and from that point, you can integrate into our public cloud or go to the public cloud directly. Our security and business network products are 100% public cloud today. Cloud Editions 21.4 or content cloud will be a 100% public cloud.

You'll never have to upgrade again and that 21.4, which will be available by the end of this year. Then Experience Cloud will be 100% public cloud and Cloud Editions 22.2. So, we got great momentum there.

Then, we got this brand new market which is we've turned our Information Management into APIs and whether it'd be Twilio or other companies, Stripe, and alike, who are just pure API companies, now will be our product and platform company plus an API service company as well.

This is our Developer Cloud, but that's part of the GROW with OpenText Program. So, Frank, you probably hear in my voice the excitement around these strategic programs, but the initial take from April and May were just two months in have been pretty positive..

Great to hear. Thank you..

The next question comes from Paul Treiber from RBC Capital Markets. Please go ahead..

Thanks very much and good afternoon. Only the transition or migration to CE.

Could you speak about the unit economics? Typically when you see a customer migrate, are you seeing expanded deployments and effectively higher AR run rate per account as a result?.

Paul, good to hear your voice. Thanks for the question. We certainly expect over the long term a multiplier effect as you just noted.

The reason for that is you will be on more standard product, you'll have less friction, and you'll be able to turn on more services, whether it'd be Capture, E-Signature, Project Management, the Supply Chain, or maybe you go to some API connectivity services as well.

We haven't talked about certain percentages of what that multiplier effect is, but we certainly expect a greater share of wallet and higher ARR from each customer that come on cloud editions. Because of that less friction and multiplier effect as you noted..

Thanks. That's helpful. Shifting to M&A, we haven't made an acquisition in over a year or so. Looking back, that's probably the biggest gap since probably [ph] HummingBird back in 2006. I imagine you're at the market and valuations of obviously run up over the last year. You mentioned, you're still looking to do acquisitions.

How you think about the environment right now in terms of valuations, in terms of your pipeline, what are the opportunities that you're seeing out there?.

Yes, fair enough. It's a good question. Obviously, we're quite excited about organic growth. Let me just state at a high level we're going to continue to acquire. So, nothing has changed in that. M&A allows us to bring companies into green spaces for us. That also adds to future growth and revenue growth and future cash flows. We take a long-term view.

Nothing has changed in our philosophy of disciplined and value based. Valuations are clearly higher today and we're not going to participate in valuations where we can get the return on invested capital or cash flow returns. So, we'll continue to build our capital position or cash position.

As I said in the script, over the next five years, I'd expect to have a pretty good capital build of $5 million in free cash flows on our current run rate. I also noted that when you look at us historically per fiscal year, we tend to on-board on average $200 million plus of revenues per fiscal year.

That will happen this fiscal year, in fiscal 21, and that's happened on average for the last 10 years.

Our pipeline is healthy or varying degrees of the diligence and again, we're going to have to go over $200 million of M&A revenues in fiscal 2021 and I would expect to have meaningful acquired revenues in fiscal 2022 as well, which are not part of any of our projections right now in our F22 targets..

Great, thank you..

[Operator Instructions] The next question comes from Thanos Moschopoulos from BMO Capital Markets. Please go ahead..

Hi, good afternoon. [Indiscernible] your share prices and your valuation relative to peers.

Have you thought about being more aggressive on the share buyback or for M&A?.

As you can see in our queue from today, we did not purchase any shares last quarter. We have our repurchase program available to us and Thanos, we'll keep monitoring it. We'll see how the share prices are tomorrow [ph]. But I like the capital build that we're all going under right now.

It's probably my third time I'm going to say it, but you look at our free cash flows and of course, within the quarter, we had a one-time IRS payment.

We're going to have a period of very strong cash flows based on all the efficiencies we gained over the last year as well as our incredible improvements in cloud margin and overall margin improvement for the company. I like the cash, the capital build. It is going to provide us a lot of flexibility in our thinking around how we return value.

So, we'll keep watching this space especially as we increase our cash flow..

Right.

And then, in terms of the CRA tax dispute, just any color in terms of the timing? Would it be similar to the IRS in terms of [indiscernible] probably a year or two or more before it gets resolved, how should we think about that?.

Madhu will take the CRA question..

Thank you, Mark and thanks, Thanos. As mentioned, we just see the proposal. CRA does of tend to talk within timing. I would say, to us, time is less of the factor. We will take the required time to defend ourselves because we strongly believe in our position and we do plan to defend ourselves vigorously for a successful outcome to OpenText..

All right. Thanks..

Thank you. I will now hand the call back over to Mr. Barrenechea for closing remarks..

Very good. Thank you for joining us today. We're excited about our GROW with OpenText Program. In that spirit, we've increased our outreach for the quarter and here in the short-term and we look forward to seeing you at CIBC, Barclays, Bernstein, BofA, and NASDAQ Virtual. Thanks for attending today and look forward to our ongoing discussion.

Have a nice day..

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant evening..