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

Thank you, operator, and good afternoon everyone. On the call today is OpenText's Chief Executive Officer and Chief Technology Officer, Mark J. Barrenechea; and our Executive Vice President and Chief Financial Officer, Madhu Ranganathan. We have some prepared remarks, which will be followed by a question-and-answer session. This call will last approximately 60 minutes with a replay available shortly thereafter. I would like to take a moment and direct investors to the Investor Relations section of our website where we have posted our consolidated Investor Presentation that will supplement our prepared remarks today. The presentation includes information and financials specific to our quarterly results, notably, our updated quarterly factors as well as the strategic overview. I'm pleased to announce that OpenText management will be participating at the following upcoming conferences: CIBC's Technology and Innovation Conference, Needham Technology and Media Conference, Barclays America Select Franchise Conference, Bernstein's Annual Strategic Decisions Conference, Bank of America Merrill Lynch Global Technology Conference, the Baird Global Consumer Technology and Services Conference and NASDAQ's virtual Investor Conference. We look forward to virtual meetings 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 those stated today. 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 are contained in OpenText's recent filings. We undertake no obligation to update these forward-looking statements unless required to do so by law. Our conference call may also include discussions of certain non-GAAP financial measures, reconciliations of any non-GAAP financial measures to the 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.

Thank you, Harry. Good afternoon to everyone, and thank you for joining today's call. What a difference a year makes. Today, we are announcing the strongest 12-month period in the history of the company. The global economic outlook has significantly improved. US GDP projections are strong and we are in a new product cycle with OpenText Cloud Edition and we just passed $1 billion vaccinations globally. We have endeavored over the last year to help our customers own and deploy digital capabilities, we have intentionally leveraged the last year to accelerate innovation, increase our spending and innovation, transition to modern work, get more efficient and dramatically strengthened our go-to-market. On our last earnings call, we spoke about green shoots and at our Investor Day, we laid out our growth roadmap for fiscal 2021, fiscal 2022 and our fiscal 2024 aspirations. You can see our strong progress from within Q3 with ARR organic growth of 3.6% and Cloud services organic growth of 4.5%. Volatility is still present, of course, but we are on the offense and at the end investing in our growth trajectory. Our business is back to pre-COVID levels, except for some portions of automotive and our confidence is high as we look to complete fiscal 2021 with a return to organic growth, an upward trajectory into fiscal 2022. What a different a year makes! And let me unpack this a little more. I'm deeply optimistic. The number of vaccines is growing daily and vaccine rollout provides reason for optimism in many regions. However, the world does remain in a pandemic and where you're located will impact how you're experiencing it right now. In our major markets, vaccines are generally becoming more available, and improvements and reopenings are accelerating. The International Monetary Fund is calling for 6% growth globally in 2021 and another strong growth year in 2022, and the markets in which OpenText participates could grow even more strongly than this. We are watching the US infrastructure bill proposals with great interest as OpenText should benefit from increased investments in many of these sectors: Transportation, telecom, water utilities, supply chain and hospitals. While the arrows are pointing upward, we recognize that economic recovery may be uneven and will vary by country due to the ongoing pandemic and other events like the global chip shortage. But let me leave you with no doubt that the positive now significantly outweigh the negative. Our amazing foundation in the future is based on a large and growing addressable market within information management where we are the market leader, with 80% plus recurring revenue. We have an enterprise installed base of 75,000 customers and expanding SMB and fee channel through RMMs, MFPs and bars. A comprehensive go-to-market strategy that includes direct partners, channel and digital to service customers of all sizes supported by our new digital zone. We have increased investments in sales. By the end of calendar 2023, we will achieve full coverage of the global 10,000. Increased investment in R&D over the next five years; we will invest $2 billion plus in innovation. We have a 90-day product release cycle that continues to rapidly bring new capabilities to market, and our new Grow with OpenText program defines a clear value path for our customers and a growth path for OpenText, reducing friction in pre-sales, sales, post-sales and back office operations via our digital zone. A disciplined M&A strategy for the foundation of our future is based on approximately $1.5 billion in cash and growing, and an economy that is projected to have strong GDP growth in the markets that matter to OpenText. Let me spend some time on Q3. We had another exceptional quarter, highlighted by revenue growth, margin expansion and a strong renewal rate. Many of our quarterly metrics are at historic highs. Total revenue of $833 million, up 2%, is the highest Q3 in history with ARR organic growth of 3.6% and Cloud services organic growth of 4.5%. Total cloud revenue of $356 million, up 5%, is the highest cloud revenue quarter in our history as cloud remains our largest revenue contributor. The strength in cloud was led by our enterprise content services business and continued increase in business network volumes. Customer support revenues of $336 million, up 4%, the highest customer support revenue of any quarter in our history. ARR of $692 million, up 4%, which represents 83% of total revenue, is the highest quarter in our history on a dollar basis. Adjusted EBITDA of $297 million, up 15% year-over-year and 35.7% on a margin basis. Operating cash flows were $63.6 million and free cash flows were $50.3 million, which includes an IRS payment of $290 million within the quarter. We have over $2.2 billion in cash and committed liquidity at our immediate disposal. I also want to highlight Q3 wins. We have a new battle rhythm created during the pandemic. Our process and speed enabled us to bring new innovations and capabilities to customers every 90 days. This is a clear differentiation from our competitors and is a driver of many of our key customer wins. Let me highlight a few. The Royal Bank of Canada, the second-largest bank in Canada, selected the OpenText business network for commercial lending in a public cloud environment. Maersk, the largest container shipping company in the world, selected OpenText Enterprise Content Management with integration to SAP and Microsoft 360 for better global records and invoice management in a hyperscaler environment. The UN refugee agency, UNHCR, is deploying our Extended ECM product in an OpenText Cloud Managed Services environment enabling connection as well from Microsoft applications. Archer Daniels Midland, one of the world's largest food processing and commodities trading companies, selected our new cloud API services, connecting OpenText content system to salesforce.com deployment. Dell renewed and expanded their commitment to the OpenText Business Network to help manage their growing supply chain. Johnson & Johnson upgraded their Content Suite platform and are migrating into an OpenText Cloud Managed Services environment. Uniper based in Germany, one of Europe's largest power producers, selected our archive cloud API services that connect to their SAP applications. Perrigo, a major Ireland based manufacturer of private label, over-the-counter pharmaceuticals, selected the OpenText Cloud content in a win over Viva and Deutsche Pension selected OpenText Enterprise Cloud for personalized statement and communications to their stakeholders. Our 90-day innovation battle rhythm is clearly helping us win, particularly in key accounts. Let me turn my remarks to our unique retain, grow and acquire total growth strategy. On retain, we delivered another exceptional quarter with customer support renewal rates at 94% and our cloud renewal rate excluding Carbonite at 93%. I want to highlight the important enhancements we have been making to drive growth and increase customer value in this portion of our revenue. It is no longer just a maintenance business; it is turning into a customer value service. Our customers can now receive warranty services, product updates, enhancements, upgrades, new versions, enhanced 24/7 support, full access to our digital knowledge base, security updates, compliance updates, privacy updates and other enhancements. This suite of offerings in the 90-day release cycle increases the overall value of our product and service offerings. We believe this offering will drive higher customer satisfaction and continued growth in our customer support business. Now on GROW; we announced GROW with OpenText at Investor Day. GROW with OpenText is a set of programs that brings together everything our customers need to transform their business, accelerate their growth, engage with their communities and stay ahead of the competition. Our cloud additions are built on a single technology platform that enables customer choice through four different deployment options: off cloud, private cloud, public cloud and our cloud API services. Notable areas of strength in the quarter include core capture for SAP and core archive for Extended ECM. We have added a new go-to-market strategy, Information Management as a Service via archive cloud API services. There are over 25 services available today. This is an important part of our future growth. 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-linearly to expenses. 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 need 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 communicate in. With a majority of business planning 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-signatures. Business Network Cloud; supply chains are constantly changing, based on demand, supply and externalities. The current global chip shortage is hurting auto manufacturing. Supply chains have been under pressure to not just change but to transform, and in many cases regionalize. OpenText is in the early days of helping customers evolve and transform their supply chains to become more real-time, more local, and more sustainable, while remaining compliant with global tax and tariff regulations. Onto our third Cloud, Experience Cloud; as engagement becomes digital, customers demand a more customer-centric, seamless, personalized, and exceptional service and they are less forgiving of sub-par interactions. Digital technologies enable businesses to engage with their customers at every touchpoint. The OpenText Experience Cloud is an exciting part of our future growth and complements our view on information management. Security and Protection Cloud; during the pandemic, the number of off-cloud endpoints and remote workers 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 sizes. 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. Our last cloud, the OpenText Developer Cloud; the modern developer needs to deliver quickly, 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 and extend customized IM applications using a collection of cloud services, APIs and templates. Overall, cloud growth remains our largest opportunity and we are still in the 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 strategy: patient, disciplined, value-based acquisitions with return-based metrics and cash flows as key criteria. We always take the long view and I encourage you to consider our annual rate of revenues onboarded via M&A over the last decade. Our liquidity, cash flow, and balance sheet remain strong. Our M&A pipeline is healthy and we will deploy capital when the right opportunity arises. Our continued cash flow generation 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 fiscal '21, fiscal '22 and our aspirations for fiscal '24, based on our GROW with OpenText program, the strength of our new cloud additions, continuous improvements in our own execution and optimism in the global economy. Today, based on our organic growth in 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 digits. Today, we are increasing our full fiscal '21 cloud revenue growth outlook to a range of 18% to 20% from the previous high teens. We remain confident that we will deliver ARR organic growth in fiscal 2021. For fiscal 2022, total organic revenue growth of 1% to 2%, organic cloud revenue growth of 3% to 4%. We will comment on our fiscal '22 outlook on our next earnings call, but today we see even more green shoots happening in fiscal '22. Our fiscal '24 long-term aspirations include 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. Any new M&A revenue, margin dollars, and cash flows from M&A would be additive to the above outlook. The fiscal '22 outlook and fiscal '24 aspirations are organic and do not include benefits from future M&A at this point in time. Our value creation strategy is predicated on growth, profitability, and capital efficiency. We have built a company that continues to deliver growth, upper quartile profitability and cash flows 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 over $5 billion 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 and corporate citizenship initiatives here at OpenText. The past 12 months have been truly extraordinary. 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 accelerating, and we are growing. We have heard from employees that they 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 approach 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 the workplace, safely, of course, as per governmental rules and guidelines. We are also committed to a new flex work approach, providing our employees the option of weekly flex days in the office. On corporate citizenship, last August we published our foundational report, reflecting our corporate beliefs and culture of doing well by doing good and utilizing technology for the good. We continue to learn and improve, and in the next corporate citizenship report, we expect to publish this August, you will see the OpenText Employee Relief Fund expanded to $3 million to continue supporting our employees in hardship due to the pandemic, the expansion of our equity, diversity, and inclusion programs, and we are adopting the GRI reporting framework to more clearly articulate and measure our investments and progress. 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 on our business, 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 chains. We are a cloud-first company with the best product portfolio in our history. We continue to invest in drivers of future growth and we have a great workforce that is increasing innovation cycles during the pandemic, 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 contributions to our success. I'm so proud of our culture and resilience that we can see demonstrated 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.

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 stated otherwise. 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 was Americas 61%, EMEA 31%, and Asia-Pacific 8%. Year-to-date, total revenues were $2.49 billion, up 9.2% or 7.1% on a constant currency basis. Q3 annual recurring revenues were $691.8 million, up 4.4% or up 1.7% on a constant currency basis. As a percent of total revenues, ARR 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 million, up 4.8% or 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 0.7% on a constant currency basis. Q3 customer support revenues were $345.9 million, up 4% or 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 2.9% on a constant currency basis. Q3 license revenue was $76.2 million, 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 million, down 9% or down 13.2% on a constant currency basis. Year-to-date, professional services revenues were $193.3 million, down 8.1% or down 11.1% on a constant currency basis. Q3 GAAP net income was $91.5 million, compared to net income of $26 million in the prior year, primarily driven by higher revenues, lower operating expenses, as well as debt extinguishment costs incurred in Q3 of fiscal '20. Year-to-date, GAAP net income was $129.4 million compared to net income of $207.8 million in the prior year, primarily driven by the tax expense related to the IRS settlement, partly offset by higher revenue. Q3 non-GAAP net income was $204.5 million, up 22% or 16.9% on a constant currency basis. Year-to-date, non-GAAP net income was $706.9 million, up 24.7% or 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 from 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 $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 were 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 were 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%, reflecting 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 9.9% on a constant currency basis, representing 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 17% on a constant currency basis, representing 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 were at $63.6 million and free cash flows were $50.3 million, which included an IRS settlement payment of $290 million. Operating cash flows are strong. Our days sales outstanding 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 reflects consistent acquisition and collection efficiency and other aspects 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 optimized levels of performance. Free cash flow generation also remains strong in the quarter. Our balance sheet remains strong, ending the quarter with approximately $1.5 billion in cash supported by our solid cash flow performance. We have $750 million of undrawn revolver fully available, bringing our total liquidity to $2.2 billion. Our consolidated net leverage ratio is 1.57 times, an improvement from 1.6 times last quarter. This positions us well to execute on our total growth strategy. Now turning to quality factors, total growth strategy and annual target model, which are all available in the Q3 fiscal '21 Investor Presentation on our website. As a reminder, we view our business annually and quarters will vary. Our long-term value is created from sustained annual performance; 90-day cycles are too short to measure. The quality factors for Q4 fiscal '21 compared to the same period in the prior year: Expect Q4 FX tailwind similar to Q3. Total revenue growth is expected to be up to 2%. Annual recurring revenue is expected to be up low single digits. Adjusted EBITDA margin percentage is expected to decrease by 300 to 400 basis points. Our full-year fiscal 2021 total growth strategy has been strong, and our leading indicators point upwards. We are pleased to increase the cloud revenue outlook for the current fiscal year to growth of 18% to 20% year-over-year versus our previous range of high teens. All other ranges remain unchanged. We're reducing our capital expenditure spend target range to $55 million to $65 million from our prior range of $85 million to $95 million, driven by broader partnerships with hyperscalers as many parts of our business while we continue to invest in our cloud infrastructure. All other aspects of the fiscal '21 target model remain unchanged. We expect to increase our investments in various internal initiatives such as the digital zone, non-linear scaling of our properties, and higher self-service all towards a frictionless environment with tools and automation. Many of these initiatives fall 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 as we continue to execute against the cloud roadmap. Our fiscal '22 outlook provides for 1% to 2% total organic growth and 3% to 4% cloud organic growth. For fiscal '24, we target 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. Regarding tax, we note the recent developments related to the Made in America tax plan proposed by 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. In 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 seeking 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 previously discussed. This CRA proposal has no immediate cash impact but could affect the tax rate in future years. With the support of leading tax advisors, we strongly disagree with the CRA and intend to vigorously defend our position. All details are included in our Form 10-Q filed today. In summary, 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 would now like to open the call for questions. Operator?

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

Hi, good evening. Can you 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 mentioned in the prepared materials, we have about 20% of our installed base now on cloud additions and that's very positive. I believe the ideal landing zone for us is about 50% of the installed base that will migrate to cloud. All new customers are coming on the cloud additions. The current figure of about 20% suggests a significant opportunity in front of us. We have also announced our GROW with OpenText program for those who decided to stay on Release-16, introducing a new extended support program for additional fees and we will be able to provide managed services on-premise for customers wanting to maintain their investment in Release-16 longer, which presents another revenue opportunity. We've made great progress to about 20%. The ultimate goal is to achieve about half the installed base on cloud additions, and new programs are set in place to support those who will take longer to migrate.

That's good color. Thanks. Then on the supply chain transformation, you mentioned that growth driver several times. Can you talk about the demand you're seeing in the business network and maybe some of it is related to your approach and offerings?

Sure thing. I'll start at the headline: all our services are back to pre-COVID levels except some portions of the auto sector which are mainly affected by chip shortages causing temporary production pauses. I'm really excited to see our levels return to pre-COVID conditions. Factors driving demand include the return to GDP growth, increased activity in CPG, retail and healthcare, and higher micro-payments volume across our network. We think one of the strongest growth drivers includes sustainability, with new eco-friendly features enabling supplier evaluations and multi-layer rankings. We're also witnessing regionalization; Canada has moved certain pharmaceutical supply chains back to Canada; similarly, we’re participating in the regionalization of auto supply chains in Germany and certain manufacturing supply chains returning to the US. So, we're seeing recovery back to volumes, especially in sectors expanding their total addressable market alongside efforts for sustainability.

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

Hey, this is Frank for Raimo. I wanted to dig a bit deeper into the rate guidance for cloud. Specifically, where are you seeing the most strength and confidence in the cloud business, both from a product and customer vertical perspective?

Thank you, Frank. We are currently experiencing broad-based confidence. On our private cloud front, we have added approximately 75 new customers from the global 10,000. There is a continuing need to provide specialized private cloud environments that offer unique value propositions, including content services and experience, which are driving demand. Additionally, our new cloud API services have also made significant impacts. The business network volumes have returned to pre-COVID levels within certain industries as I mentioned, including CPG, retail, healthcare, and pharmaceuticals leading our growth. Collectively, all these factors have encouraged our confidence in raising our total growth strategy for fiscal 21, where we expect the cloud at 18% to 20% year-over-year growth.

Great, that's really good color. Then just on the GROW with OpenText program. I was wondering if you could provide more detail into the customer conversations and feedback there so far?

Early engagement has been quite positive. We previewed the initiative at Investor Day and had intended to roll it out during OpenText World Europe, Asia, and at our July sales kickoff for our new fiscal year. However, we decided to accelerate a preview at Investor Day. So, early conversations have been really positive. First, we are focused on engaging off-cloud customers ensuring they derive full value from their investment in Release-16. New services include an extended support program offered at a 20% fee and the introduction of managed services for off-cloud customers. These represent two brand new revenue opportunities. For private cloud customers, our stance has been strong; while some companies have hesitated, we’ve highlighted that private cloud offers unique value in terms of their specific business needs. We’ve already added 75 new private cloud customers and from there, they can choose to integrate into our public cloud offerings. Customer sentiment surrounding our security and business network products is strong, particularly as they have become 100% available on the public cloud.

Thanks very much and good afternoon. Regarding the transition or migration to CE. Could you speak about the unit economics? When customers typically migrate, are you seeing expanded deployments and effectively higher ARR run rate per account as a result?

Paul, good to hear your voice. Thank you for the question. We certainly expect over the long term to see a multiplier effect as you indicated. This is largely because customers will be using more standardized products, have reduced friction, and be able to activate additional services such as Capture, E-Signatures, Project Management, and API connectivity services. We haven't disclosed specific percentages regarding the multiplier effect just yet, but we certainly anticipate a greater share of wallet and higher ARR from each customer that migrates to cloud editions, primarily due to reduced friction and the multiplier effect.

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 HummingBird back in 2006. I imagine you’re keeping an eye on the market and valuations have obviously risen over the last year. How do you think about the environment now in terms of valuations, your pipeline, and the opportunities that you're seeing?

Yes, good question. To clarify, we remain quite excited about our organic growth. Let me emphasize that we will continue to pursue acquisitions. M&A allows us to bring companies into new green spaces that enhance our growth and revenue prospects. We take a long-term view and remain disciplined in our acquisition of value-based targets, keeping in mind that while valuations have risen, we will not participate in inflated valuations without a corresponding return on invested capital or cash flow returns. We plan to continue building our capital position. Over the next five years, I expect our capital build to generate more than $5 million in free cash flows. Based on historical averages, we have onboarded around $200 million of revenue via M&A annually for the last decade. Our pipeline is robust with various levels of diligence ongoing, and I anticipate that we will achieve significant acquired revenues in fiscal 2022 as well.

Hi, good afternoon. Given your share prices and valuation relative to peers, have you considered being more aggressive on share buybacks or pursuing M&A?

As seen in our recent filings, we did not purchase any shares last quarter. Our repurchase program remains available, and Thanos, we are monitoring the situation closely. I appreciate the solid capital build we are generating. Our strong free cash flows, especially given the one-time IRS payment, will provide us with considerable flexibility as we weigh our options for returning value. We will continue observing this space as our cash flow increases.

Thank you, Mark, and thanks, Thanos. As mentioned, regarding the CRA proposal, they do tend to serve their notices over time. I would say while timing isn’t a primary focus, we will take the necessary time to defend ourselves vigorously as we strongly believe in our position.

Thank you for joining us today. We are excited about our GROW with OpenText Program. In that spirit, we've increased our outreach for the quarter here in the short-term and look forward to seeing you at upcoming conferences. Thank you for attending today, and I look forward to our ongoing discussions.

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