Thank you for standing by. This is the conference operator. Welcome to the OpenText Corporation Q1 fiscal 2022 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. To join the question queue, simply press star and one on your touch tone phone. Should anyone need assistance during the conference call, please signal an operator by pressing star and zero on your telephone. I would like to turn the conference over to Harry Blount, Senior Vice President, Investor Relations. Please go ahead, sir.
Thank you, operator. Good afternoon, everyone, and welcome to OpenText's Q1 2022 earnings call. With me on the call today are 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, investors.opentext.com, where we have posted our 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 on page six, as well as a strategic overview. Before I proceed with the reading of our safe harbor statement, I would like to inform you that we will be participating in several conferences in the coming weeks, including TD's Virtual Technology Conference on November fifteenth, RBC's Global TIMT Virtual Conference on November sixteenth, Needham's Virtual Tech Week on November seventeenth, Nasdaq's Investor Conference on November thirtieth.
Credit Suisse Annual Technology Conference on December first, BofA's Leveraged Finance Conference on December second, Barclays Global TMT Conference on December seventh, and Raymond James Technology Investors Conference on December eighth. Please reach out to any member of our investor relations team if you are interested in joining our schedule. In addition, I'm also pleased to invite investors to OpenText's annual user conference, OpenText World, taking place on November sixteenth to the eighteenth. Investors are invited to explore our latest product innovations and information management during this three-day virtual tech event.
To register for OpenText World, please reach out to the IR team at investors@opentext.com. We look forward to our upcoming engagements with you. Now for 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's recent Forms 10-K and 10-Q, 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 their most directly comparable GAAP measures may be found within our public filings and other materials which are available on our website. With that, I'll hand the call over to Mark.
Thank you, Harry. A good afternoon to everyone, and thank you for joining today's call. Fiscal 2022 is off to a great start as we delivered record Q1 revenues powered by organic growth. We are on track for our Fiscal 2022 annual targets of organic growth and longer term Fiscal 2024 aspirations. The OpenText approach to creating long-term shareholder value is a balance between total growth, profitability, and capital returns. We are executing to our value creation approach. In Q1, we delivered 3.5% organic revenue growth, 38.9% adjusted EBITDA, and we estimate free cash flow as a percent of revenues will be in the high 20s% for Fiscal 2022, and we expect free cash flow dollars to increase significantly Fiscal 2022 over Fiscal 2021. Consistent with what you have.
Consistent with what we have shared before, our bold ambitions remain to be the leader in information management, to double our revenues over the next 5-7 years to $7 billion in annual revenues, to have at least 85% of our revenues recurring, to deliver an organic growth profile between 2%-4% by fiscal 2024, to maintain upper quartile adjusted EBITDA, while investing any adjusted EBITDA above 40% back into growth. To generate $6 billion in cumulative free cash flows over the next 5 years. In return, 33% of our trailing twelve-month free cash flows via dividends and buybacks. As our free cash flow grows, so does our dividend and our buyback. This is a winning formula. Our solid execution reinforces our ambitions. Over the last few quarters, we have returned to organic growth.
We established our fiscal 2024 aspirations that illustrate an acceleration in organic growth. We have increased our R&D investment targets up to 14% of revenues. We are making additional fiscal 2022 investments in people, go-to-market and digital initiatives to drive more future growth. Our trailing 12-month cloud bookings have now grown to double-digit rates. We've accomplished a lot since we spoke to you. Specifically, we continue to successfully execute our cloud-led total growth strategy. We continue to see adoption of cloud editions. Let me note we added 89 new private cloud customers in Q1, such as CNA, Barnardo's in the U.K., and Mitsui. We've expanded our relationship with Google and other hyperscalers. We've renewed our Normal Course Issuer Bid for up to 350 million of common shares.
We are renewing and updating our shelf offering for up to $2 billion of debt and equity securities. I'll discuss in a few minutes, we'll introduce the best and most comprehensive cloud products in the history at OpenText World in a few weeks. Let me transition to our results for the Q1 . Such results were powered, as I said earlier, by organic growth. We delivered record Q1 revenue of $832.3 million, up 3.5% year-over-year or 2% in constant currency. Record Q1 annual recurring revenue, ARR, of $691.8 million, up 3.2% year-over-year or 1.7% in constant currency and 83% of our total revenue.
Record Q1 revenue of $356.6 million, up 4.6% year over year or 3.6% in constant currency. Adjusted EBITDA of $323.4 million at a 38.9% margin. Free cash flow of $163 million or 20% of revenue, reflecting our increased investments in talent, innovation, and sales coverage to fuel future organic growth. Let me speak to some amazing customer wins in the quarter. In the OpenText Content Cloud, notable customer wins included BDO. One of the world's largest global accounting firms selected the OpenText Extended ECM with integration to Microsoft M365 to improve information governance by centralizing all their content management systems into a single platform, the OpenText platform.
Brenntag, an Essen, Germany-based global distributor of chemicals and chemical ingredients, selected OpenText Extended ECM for SAP and M365 to collaborate, approve, and process documents via digital workflows. CNA Financial, I'm very, very pleased with welcoming CNA to OpenText, one of the largest US commercial property and casualty insurance companies, a former FileNet customer, selected OpenText to prove leading edge content service capabilities. In the OpenText Business Network Cloud, notable customer wins included JCB, a Tokyo-based global payment company who selected our business network managed services to streamline processing and payment.
Mastercard, we expanded our relationship. A global technology payments company with operations in more than 210 countries and territories, selected the OpenText Trading Grid managed services to help connect with more partners and more banks.
PepsiCo, the global beverage and snack company, selected OpenText to be their platform for information underneath SAP's SuccessFactors. In the OpenText Experience Cloud, a notable customer win included AIA. The largest independent, publicly listed Pan-Asian life insurance group selected OpenText Core Experience products to orchestrate their customer communication events for marketing campaigns across the entire customer life cycle. In the OpenText Security & Protection Cloud, notable customer wins included the U.S. Army Criminal Investigation Division.
The primary federal law enforcement agency of the U.S. Army is now using OpenText EnCase Forensic to find, decrypt, collect, and preserve forensic data for digital investigation. TD, one of Canada's largest banks, is now utilizing our EVault products to migrate data out of their internal data centers to a secure cloud environment, the OpenText Cloud.
PG&E, California's largest utility, is now using our availability products to enable failover of call centers between data centers in the times of utmost urgencies, such as forest fires in California. Onto OpenText World. You'll hear more from our customers, partners, and industry experts at our annual conference. I'd like to personally invite you to attend the event, the week of November fifteenth. As Harry noted, please contact and reach out to Harry or Greg, and we'll get you registered, to attend the event. We have a great speaker lineup, including keynotes from Dr. Neil deGrasse Tyson. A host of Cosmos and astrophysicist at the Hayden Planetarium. I spent a little time with Neil last week, and, as you know, he's now my personal astrophysicist. He just has an amazing talk for us at OpenText World.
Arianna Huffington is also gonna join us, the founder and CEO of Thrive Global and The Huffington Post. Arianna has a very unique view of what the future of growth and the world looks like post-pandemic. You'll hear from some of our most important customers, including Shell, Dell, L'Oréal, and the Academy of Motion Pictures. In my keynote, I'm gonna describe the five forces affecting every business. First, work is distributed, and traditional models of authority and collaboration are rapidly and permanently changing. Second, every business transaction is going digital. Third, customers and consumers are looking for a tailored seven-star experience. Fourth, for any business to thrive, security and privacy must be job number one.
The fifth force, as we all define what the future of growth will look like, we know it needs to be inclusive and sustainable. More on that in a moment. The response to these forces needs to be simplicity. Which leads me to the theme of OpenText World, Be Digital. Let me touch on a few OpenText Cloud highlights. The OpenText Content Cloud empowers customers to master modern work. We were once again recognized as a leader in the content services by Gartner for the seventeenth consecutive year.
At OpenText World, we'll be introducing the most comprehensive update of the OpenText Content Cloud in our history with Cloud Edition 21.4, designed to empower distributed workforce organizations which need to provide their employees with content in context. The OpenText Content Cloud integrates with leading business applications from Salesforce to SAP to Oracle to dozens more, making it easy to collaborate and access information from anywhere in the organization, including Zoom, Teams, Chime, and Hookup.
Some of the key highlights in this release is gonna include an expansion of core content, expansion with Salesforce, expansion to SAP S/4HANA, expansion with Microsoft 365, all as a SaaS offering, strengthened e-signature archiving and enhanced e-discovery and information extraction capabilities. We'll be providing a return to workplace playbook to manage all operational restart plans and procedures for companies.
We'll be announcing new capabilities to the OpenText Business Network Cloud to help our customers digitize and modernize their supply chains. We were recently named again by IDC as a leader in the multi-enterprise supply chain commerce grid. At OpenText World, we'll be announcing new capabilities to our market-leading Business Cloud, new self-service capabilities that will make many of the enterprise products and features already being used by 24 of the 30 largest supply chains available to a broader class of small and medium-sized customers, and increasing the serviceable components of our overall TAM.
Effectively, we're gonna be taking our enterprise capabilities, making them self-service, thus consumable by smaller-sized businesses. This is right in the SPS Commerce competitive area. We'll also be adding new capabilities to support ethical supply chains and sustainability. The OpenText Experience Cloud helps our customers power modern work experiences for their customers. At Google Cloud Next '21, we announced a new offering that deeply integrates the OpenText Experience Cloud for Google Marketing Platform and data.
We're off to just a great response to what we're offering. This new offering combines our Experience Customer Data Platform and OpenText Exstream and OpenText TeamSite with Google Marketing Platform. We hope to open up the entire clickstream of Google to OpenText Experience Cloud customers. In our June quarter, we'll be announcing this fully integrates as a SaaS offering in 22.2 for deployment in public cloud environments. The OpenText Security & Protection Cloud helps our customers strengthen cyber resilience, and we are significantly enhancing our capabilities and detection response offerings for the SMB market.
Specifically, we have recently introduced an OpenText managed detection and response service, also known as MDR, that pairs our best-in-class security with experienced security personnel. We are now providing MDR as a private cloud service, and we introduced this last quarter and we're off to a great start with new wins at Webcor, SurveyMonkey, and Ginkgo Bioworks. We've also introduced this service that combines the key capabilities of Webroot and we're integrating leading capabilities from security providers such as Blackpoint and N-central.
I'm very excited about our new MDR service in the Security & Protection Cloud. Let me highlight the OpenText Developer Cloud, which is gonna be front and center at OpenText World. It's the first information management as a service offering ready-made for enterprise workloads via APIs. Our Developer Cloud enables developers to build the API economy faster and smarter.
With our recent release, 21.4, we are now offering more services, more consumption-based pricing packages, and more privacy and security features. We have 20 available APIs from content workflow, redaction, archive, content analysis, communications, threat analysis, and more. We'll be unveiling at OpenText World more capabilities in the cloud than off cloud. It's an important milestone for us. More capabilities in the OpenText cloud than off cloud. Given this amazing milestone, I expect even more adoption of the OpenText cloud in the future. Over the next few quarters, we'll be deeply integrating Webroot and BrightCloud security services into our public and private clouds as well. I want to spend a moment on our API cloud, which I'm really excited about because it's starting to gain critical mass.
With our 20 fully featured services available, in October alone, we processed 98 billion requests. We just introduced a new service called Magellan Risk Guard as a new API service. Magellan Risk Guard works just like BrightCloud. Send us a content stream or file, and we'll return a real-time risk score on that content. Does your content contain GDPR data? Does your content contain credit card information? Does your content contain critical and confidential information? Just stream it to our API, and we'll return you back a risk score. You know, 1, low risk, 10, high risk, 5, medium risk. I want to emphasize, in October alone, we processed 98 billion requests to our 20 APIs. We will be an API company in the future.
Customers who run their business in the OpenText API Cloud now include companies such as CVS, GEICO, Trinity Health, Novartis, the government of Ontario, Impossible Burger, F5, and Aruba. As I look at our future roadmap of Cloud Editions 22.1 through 22.4, or basically next calendar year, we'll be doubling down on security, migrations to the OpenText Cloud at low friction, scaling up our new MDR services, scaling up our API Cloud services, more competitive replacements, and continuing to help our customers consume the way they want to, off cloud, private cloud, public cloud, and API Cloud. We also believe with deep purpose, as I mentioned earlier, that the future of growth needs to be both inclusive and sustainable.
I'll be putting forth at OpenText World the OpenText Zero-In Initiative, an initiative focused on zero waste, zero barriers, zero net greenhouse gases, zero friction, and yes, zero IT. Because all companies really need is a router hanging on their wall connected to cloud-based services such as the OpenText Cloud. We'll run our business this way. We expect those who partner with us to do the same, and we'll help others through the OpenText Cloud create and deliver to their bold ESG outcomes. Next, let me speak to outlook and M&A. We're on target to grow organically in fiscal 2022, and Madhu will provide an update on our financial targets and aspirations in her commentary. Let me spend a moment on some macro observations. Customers are managing more complexity today than a year ago.
The continued COVID-19 crisis and the unevenness of it, global supply chain constraints, shipping and transportation costs, sustained chip shortages, labor shortages and costs and inflation. A lot of complexity. The OpenText answer to our customers is be digital. Automate, automate in the OpenText cloud. All challenges are opportunities, right? They must be viewed through the lens of automation. Labor pressures, automate. Supply chain challenges, automate and gain visibility. Inflation costs, remove costs and automate. Manufacturing, transportation tightening, visibility, automate. The OpenText answer to the increasing complexity in the world is be digital, which means automate, automate in the OpenText cloud. Let me spend a moment on M&A. We continue to be very busy, proactive, and ready to act for a target that meets our criteria.
We have the management bandwidth and financial capacity to bring on new deals. We remain focused and disciplined and patient. In parallel, we continue to strengthen our balance sheet and continue to invest in products and systems to drive our organic growth and accelerate the integration and profitability of future acquisitions. Let me conclude my prepared remarks. We are building on the foundation to deliver to our long-term aspirations on doubling the company. It took us 30 years to achieve approximately $3.5 billion in revenues, and we hope to double again over the next 5-7 years. That growth will deliver value, and we remain focused on a value creation approach that is a balance between total growth, profitability, and capital returns.
It is imperative that the future of growth is both inclusive and sustainable, and we intend to lead here with the OpenText Zero-In Initiative. We had our best Q1 revenues in our history, and we expect to deliver a fantastic fiscal 2022 with total growth, organic growth, upper quartile margins, and stated capital return goals. On behalf of OpenText, I'd like to thank our shareholders, loyal customers, partners, employees around the globe for their contribution to this success. I am so proud of our culture and resilience. Please join us at OpenText World the week of November 15. It's my pleasure to turn the call over to Madhu Ranganathan, OpenText Chief Financial Officer. Madhu.
Thank you, Mark, and thank you all for joining us today. We had a strong Q1. We delivered another quarter of organic growth. Kicked off our fiscal 2022 planned and intentional investments of the business, including talent, innovation, sales coverage, and capacity expansion. Also in Q1, we internally mobilized a robust digital roadmap to support with technology many of our organic growth initiatives. Our Q1 results and a strong roadmap, including rapid quarterly releases of innovative cloud edition products to support the momentum in our cloud growth, has given us a strong start to the fiscal year. All consistent with what we shared with you last quarter, we now have a strong Q1 execution behind us to drive our fiscal 2022 targets and fiscal 2024 aspirations.
Starting this quarter, my commentary will focus on selected financial highlights as well as certain operational initiatives underway that will enable us to grow faster and scale our business. Please refer to our press release, our investor presentation in 10-Q, posted on our IR website for more detailed financial data. All references will be in the millions of USD and compared to the same period in the prior fiscal year. Let me start with revenues. As a note, the growth rates I will share here are all organic growth. Total revenues for the quarter were $832.3 million, up 3.5% or up 2% on a constant currency basis. There was a favorable FX impact to revenue of $12.6 million.
Annual recurring revenues for the quarter were $691.8 million, up 3.2% or up 1.7% on a constant currency basis. As a percent of total revenues, ARR was 83% for the quarter, the same as Q1 2021. Cloud revenues were $356.6 million, up 4.6% or up 3.6% on a constant currency basis. Our cloud renewal rate, excluding Carbonite, was approximately 92%. Customer support revenues were $335.2 million, up 1.8% or down 0.3% on a constant currency basis. Our customer support renewal rate was 94%. Our license revenues were $73.5 million, up 7.3% or up 5.8% on a constant currency basis.
The professional services revenues were $67, up 2.8% or up 0.8% on a constant currency basis. As I note here, we achieved positive organic growth in both cloud and ARR during the quarter on a reported and constant currency basis. I would also highlight that we saw double-digit growth in cloud bookings in the quarter on a year-over-year basis, and our expectation is that this momentum continues, supported by our investments in product innovation and go-to-market. We anticipate providing you more detailed cloud metrics beginning in fiscal 2023. Clearly, the investments we have been making during the last several quarters in our organic growth initiatives are bearing fruit. We intend to continue these planned investments as part of our commitment to achieve our fiscal 2024 aspirations.
GAAP net income was $131.9 million, up compared to net income of $103.4 million in the prior year and reflecting lower amortization costs and COVID-related restructuring charges. Non-GAAP net income was $227.8 million, down 5.8% or down 6.6% on a constant currency basis, again reflecting our planned and intentional investments I spoke about earlier to support organic growth. GAAP earnings per share diluted was $0.48, up $0.10 from earnings per share diluted of $0.38. Non-GAAP earnings per share diluted was $0.83, down $0.06 from $0.89 and down $0.06 on a constant currency basis. Let's turn to margins. GAAP gross margin for the quarter was 69% constant.
non-GAAP gross margin for the quarter was 75.7%, down 80 basis points due to specific royalty payments in the quarter, as well as slightly higher investments in our cloud. Adjusted EBITDA was $323.4 this quarter, down 5.5% or down 6.2% on a constant currency basis. This represents 38.9% margin, down from 42.6% in the same quarter last year. You can recall that Q1 fiscal 2021 had COVID-related specific savings, while Q1 fiscal 2022, our current quarter, includes higher investments. Specifically in Q1, on an adjusted basis year-over-year, R&D expenses were higher by 6% and sales and marketing up by 10%. We are investing. Operating and free cash flows. Operating cash flows were $189.7 for the quarter.
Free cash flows were $163 million for the quarter. During the quarter, free cash flows were impacted by four important items. First, cash outlays in Q1 for performance bonuses, commissions, incentives relating to our very successful fiscal 2021. Second, our restoration of prior year's COVID-related compensation. Third, Q1 kicks off our planned and intentional investments for fiscal 2022, as I outlined earlier. Fourth, increased CapEx in investments for stronger operations through digital initiatives, which I will expand upon a bit later. We estimate free cash flow as a percentage of revenue to be in the high 20s% for fiscal 2022 and expect FCF dollars will increase significantly over fiscal 2021. Our working capital is an essential element of our cash flows. Our working capital efficiency remains high with continuous improvement.
DSOs were 40 days for Q1 2022 compared to 44 days in Q1 fiscal 2021, and every other metric, such as customer payment terms, collection efficiency index, and cash conversion cycles, all higher on a year-over-year and sequential basis. Such a strong working capital engine gives us the confidence in our FCF aspirations and the ability to integrate a potential acquisition into our cash flow framework. We're also introducing this quarter, see slide 34 of our investor presentation, specific free cash flow metrics. Including our FCF return on average invested capital, which consistently exceeds the cost of capital, reflecting a consistent track record of strong cash flow returns and value creation. For our fiscal 2021, FCF to revenue was 24%, FCF to average total assets was 8.2%, and FCF to average invested capital was 10.8%.
From a balance sheet perspective, we ended the quarter with approximately $1.7 billion in cash. We have a $750 million revolver undrawn and fully available, bringing our total cash and committed liquidity to approximately $2.5 billion. Our consolidated net leverage ratio is 1.36 times, an improvement from 1.45 times last quarter. Shelf capacity. Today, we're also announcing the renewal of our shelf offering for an aggregate of up to $2 billion in equity and debt securities. We are well-positioned to move should the right M&A opportunity present itself. Now let me turn to our share buyback plans and NCIB renewal. Today, we also announced the renewal of our share repurchase program, and we intend on purchasing from time to time up to $350 million of our stock over the next twelve months.
As mentioned during our last quarter, we intend on purchasing sufficient stock to at least keep our share count flat in fiscal 2022 while we remain flexible on our capital allocation for acquisitions. Turning to quarterly factors. As a reminder, we view our business as annual and quarters will vary. I will add that while inflation is top of mind for all of us, at OpenText, we are watching the trends very closely as well as putting continuous measures in place. We have increased our investments in talent, hiring, and compensation with merit increases and baked into our fiscal 2022 target model. We'll continue to roll out annual pricing adjustments in our customer contracts, and we have a focused operational lens on all our spend, which gives us the financial envelope to invest for organic growth, as I outlined earlier.
Our cash flows, cash position, our leverage ratios, debt rates, and maturities leave a strong balance sheet. For Q2, we expect year-over-year total revenue and ARR, annual recurring revenue, to be slightly up. FX effects to be slightly favorable. On a quarter-over-quarter basis, we expect in Q2 adjusted EBITDA dollars up and margin percentage constant. For fiscal 2022 total growth strategy, target model, and long-term aspirations, we remain confident in our target model and aspirations. Our fiscal 2022 growth strategy, our fiscal 2022 target model, and our aspirations also are as included in our investor deck, they all remain unchanged. Our planned investments during fiscal 2022, they remain critical during this journey to our aspirations. Our approach to profitability remains firm. Any profitability above 40% adjusted EBITDA margin will be invested towards future organic growth.
On the dividend program, as part of our quarterly dividend program, the board declared on November 3, 2021, a cash dividend of $0.2209 per common share. The record date for this dividend is December 3, 2021, and the payment date is December 22, 2021. I'm gonna close my remarks with some comments on operational excellence. At our Investor Day in March, we indicated that we were planning to make significant investments to reduce friction and increase scale and efficiency. These initiatives fall into two broad categories. The OpenText Digital Zone, which drives top-line growth and includes higher self-service, higher online interactive education and support programs.
D&A 2.0, Digital and Automation 2.0, has a set of approximately 20 major projects internally focused on organic growth-related programs, from customer support to renewals, standardization to many levels of our professional service deployments, while strengthening finance and support organizations. In summary, our planned and intentional investments during fiscal 2022 in innovation, sales coverage, digital engagement, and back office systems leave us well-positioned to drive organic growth, support the cloud momentum while our balance sheet and cash flow strengths enable us to execute our dividend, buyback, and M&A strategies. Thank you to the entire OpenText team for another outstanding quarter. I would now like to open the call for your questions. Back to you, operator.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone to join the question queue. You will hear a tone acknowledging your request. If you're using a speakerphone, please ensure you lift the handset before pressing any keys. If you wish to remove yourself from the question queue, you may press star and two. Anyone who has a question may press star and one at this time. The first question comes from Raimo Lenschow from Barclays. Please go ahead.
Hey, this is Jeremy on for Raimo. I was wondering if you could talk a bit about what kind of cross-selling opportunities you're seeing across the five cloud products, and maybe specifically with regard to the Security and Protection Cloud, if you've noticed, like, any sort of expansion with some of the SMB customers who came along as part of the Carbonite acquisition. Thank you.
Yeah. Thank you. You know, thank you for the question. Let me just start a bit structurally on cross-selling. You know, we've essentially recreated the business in our cloud editions: Content Cloud, Security & Protection Cloud, Business Network Cloud, Developer Cloud. Our cloud offerings are inherently integrated, where in the past they were not a bit more. You needed more PS to get the integrated value.
Through engineering and our new destination of Cloud Editions, it's easier to turn on module 2, 3, 4, and 5 than it is in the off-cloud world. I'm very excited about that kind of structural advantage we'll have going forward. We're focused right now in bringing customers up from, you know, a module or 2 to the full suite in their respective cloud. You know, if you're using archive, you know, get to the full Content Cloud. If you're using e-signature, which is a great add-on cross-selling opportunity, we wanna get you to the full Content Cloud. If you're using our trading partners, go to the full Business Network Cloud that also allows you to use Active Community, Active Invoicing, our sustainability module, et cetera.
We're very focused on now that we have this destination of cloud editions, bringing customers from a feature or module or two up to the full respective suite. Look, I think the destination ultimately across the entire portfolio is not any different than ERP. Can we get 10% of our install base using the entire cloud, if you will? We're focused on going from like module one or two into the full cloud suite. In terms of SMB, the team's just made really great progress. We, you know, we majorly have sold through RMMs historically through the Carbonite business, but we've been building up our direct MSP program. You know, roughly, we ended the quarter with about 16,000 active MSPs.
With our new MDR service, we're able to bring those now directly to MSPs and through RMMs, but more so directly to SMBs. The new thing that we're doing is we're focused on MSPs, and we've built up more capacity, and we have a new MDR service that we're bringing to MSPs.
Got it. Thank you.
The next question comes from Stephanie Price of CIBC. Please go ahead.
Hey, good evening.
Hi, Steph.
Just following up on that question around the cloud. I know you mentioned double-digit growth in cloud bookings. Just curious if you could talk a bit about what was driving that growth in bookings, whether it was specific services, and also if there were any major wins that kind of drove that growth too.
Yeah. Thanks, Stephanie. I'd point to a few things here. The first is, you know, our strategy's differentiated. That for us, cloud is both on cloud, but with integrated services back into the cloud. It's private cloud, it's public cloud, and it's our API cloud. As I noted in the script, we had a very strong quarter on our private cloud. About 89 new wins who are moving from on cloud into the private cloud and wanna maintain the uniqueness of their sort of tailored environments and their deep integrations. We're seeing a nice competitive uptake against IBM. You know, with the carve-out of Kyndryl, every FileNet customer and Sterling Commerce customer has to now negotiate a new contract with Kyndryl.
If you were you know having a managed service with IBM for FileNet or Sterling Commerce, you no longer have that with IBM. You now have to do that with Kyndryl. We're seeing this as an opportunity to win business at some accelerated rates against IBM. Stephanie, we're gonna have a lot of activity here. CNA, great example. Big FileNet customer, didn't wanna continue with Kyndryl, has come over to the OpenText cloud. We are in the upper right for Gartner. IBM's in the lower left. We have a public cloud offering. They don't. We provide one SLA. You have to go to two companies now for IBM. Private cloud was a driver of growth.
CNA is a great example of that. Our API cloud is picking up a little faster than I expected. You know, we almost did 100 billion service requests in October alone. We had some nice wins, as I highlighted on the API side. Also some more return to work drove opportunity. Those are some places we saw some outsized growth, Stephanie, and led to those advanced bookings.
That's helpful color. Then I just wanted to switch gears on M&A. The deck talks a bit about focus areas with high adjacencies to information management. Just curious if you could expand on this a bit and how you kind a think about breaking up that market when you look at M&A. Maybe one additional one is just if we should read anything into the increase in the shelf from kind of $1.5 billion previously to $2 billion.
Yeah. Very good. Look, we like the market we're in. Content services, business network, experience, maybe a digital experience platform, security and protection, and SMB. Both in the enterprise and in SMB. I never like to highlight a particular kind of functional area or enterprise versus SMB, just, except to say we like the market we're in, we like those adjacencies. We look for open spaces, we look for ability to expand customers or partners across that landscape. As for the Canadian shelf prospectus, it was expiring, a time to renew and commensurate with our market cap. We felt that upsizing it commensurate with our market cap has just been our practice over time.
You know, with our market cap where it is, it's commensurate to raising the shelf to $2 billion.
Great. Thanks for the color.
The next question comes from Thanos Moschopoulos from BMO Capital Markets. Please go ahead.
Hi, good afternoon. Gross margins for license were a bit lower this quarter. I think I heard Madhu refer to royalty payments. Maybe just if you could expand on that and just confirm if that was a non-recurring item.
Yes, Thanos, it's Madhu here. As I spoke about from a gross margin perspective, we did have slightly higher royalty payments on a couple of the license transactions we did, most specific to product related. As you can see, overall the gross margin was still at 75.7%, but I just want to call that out.
Okay. Just to clarify, when you talk about double-digit cloud bookings, is the metric your TCV? Is that what you're referring to?
Thanos, hi, this is Mark. Yeah, we call it MCV, but it means the new booking value. You know, if we had a customer who's at $1 million and we signed a contract for $1.5 million, it would be $500,000 of new bookings. It is the new booking value, not the total contract value, but the new booking value. That new booking value grew double digits. It was very healthy. First time we've hit double digit and sort of a sustained way. This will turn into future revenues, right? As we get customers live and operational.
Okay, great. Just, if you could speak to the hiring environment. I mean, obviously you're looking to make some more investments this year. You know, any potential constraints as far as being able to, you know, make those investments, ramp up sales accordingly, or, is that not an issue for now?
Thanos, I'm sorry. I had a little difficulty hearing that question. I apologize.
Oh, sorry. Yeah. I was referring to the hiring environment just given the,
Yeah
... constrained labor environments. As you're looking to make more investments this year, whether that could be a potential constraint or whether you're able to bring on the resources needed, relative to the growth you're looking for.
Yeah. Got it. Look, we're doing extremely well in hiring. You know, our recruiting prospects, employees are increasingly so, and I love it, are mission and purpose led. That's why we've gotten a lot of feedback, and I'm very excited to kind of announce our OpenText Zero-In Initiative at OpenText World of zero waste, zero barriers, zero emissions, zero net greenhouse gases. It's both how we're gonna live, run our company, and our products can support all of this. We're beating the market right now on attrition. Our return to workplace strategy is flexible first. Engineering and cloud operations are coming back into the physical workspace.
It's flexible first, 2-3 days in the office, but we believe we're better together, you know, in a flexible way. We're also introducing something called proximity employees, where as long as you're 100-150 clicks from an office, we'll come back together for the moments that matter, for 2-3 days a week. We think you need to be there, be together flexibly, lead with purpose. I'm proud to say we're beating the market right now on hiring, attracting and retaining.
Okay, great. I'll pass the line. Thanks, Mark.
Thank you.
The next question comes from Richard Tse from National Bank Financial. Please go ahead.
Yes. Thank you. You know, congratulations on that organic growth. It's certainly kind of nice to see. Just wondering if you maybe elaborate a little bit in terms of the split of the organic growth. Could you maybe sort of share or give us some context in terms of, you know, the proportion that's coming from upselling into the existing base versus net new customer wins?
Hey, Richard, it's Mark. Thanks for the question and the comments. Really appreciate it. It's a combination. I'll tell you what, you know, is front and center in my mind share is competitive wins against IBM, SPS Commerce, you know, FileNet, Sterling Commerce, SPS Commerce. That's probably driving a bit more of the growth than selling module two or module three. There's certainly some of that. Ontario standardizing in our e-signature. That's an add-on capability to a foundation we have in the province of Ontario. CNA wholesale win. Just a wholesale win. I look at Magellan Risk Guard, it's gonna be a nice add-on feature, module two or three to some customers.
It's a balance, but I'd say it's probably leaning a little more to new wins, but certainly add-on modules for sure.
Okay. Just sort of a question. I think the first gentleman that asked a question was related to Carbonite. If I can sort of ask the question a different way. With respect to the push into the cloud, do you see that sort of creating an incremental opportunity broadly for the entire suite into mid-market enterprise where you traditionally probably haven't been as strong?
Richard, is the question, do we see the mid-market as an opportunity?
Yeah. With you know the cloud and the integrations and probably your selling process.
Absolutely. It's. You know, Oracle purchased NetSuite, we purchased Carbonite. You don't reach your full potential without being able to bring your products and services into a new channel. Let's call it mid-market. The cloud, I think the cloud redefines what mid-market is, 'cause it's easier to connect, it's easier to onboard. So you can take your enterprise capabilities, and you don't need the enterprise big tool, you know, the tool chest, right, to bring a customer on board. So MSP or mid-market for us is a wider definition than others. Let's take some examples. MDR. The MDR service is gonna be both enterprise and mid-market for us.
We'll see more customers come on board with Carbonite in the enterprise 'cause it's all in the cloud. I like very much, we made the right strategic decision to expand into mid-market. We did it with the right company, and it's gonna allow us to bring our enterprise product there and some of their products up into the enterprise.
Okay. That's great. Just one last one. You know, I saw that obviously you increased the shelf. In terms of the leverage ratio, that you're still comfortable with, this is probably a question for Madhu. Is it still kind of in the mid-threes here?
Madhu, you might be on mute.
Yes. No, sorry. I was saying that, yeah, that's right. In terms of available liquidity as of now, we are up to $2.5 billion between cash and the revolver. From a ratio perspective, in and around 3, slightly above 3 is where we're headed, and we obviously have a plan to bring it back to the lower levels as you've seen in the past.
Okay. That's great. Thank you.
Thank you.
Thank you, Richard.
The next question comes from Paul Treiber from RBC Capital Markets. Please go ahead.
Oh, thanks very much, and good afternoon. Mark, you're quite enthusiastic on OpenText's current product portfolio and sort of vision and the roadmap. You know, when you look at your customers from a bottoms-up perspective, you know, what fundamentally do you see as the gating factor in terms of their ability to adopt, you know, all of your products or the suite of products or move to more modules? You, what do you see sort of holding them back at this point?
Yeah. Thank you, Paul. I am enthusiastic, and I'm glad it's actually coming through in my tone. You know, Cloud Editions 21.4, as I said in the past, was gonna be a major release for us. I mean, we're like a week and a half away from OpenText World. This is a different audience than that, but I'm speaking about, you know, unveiling here a little bit of 21.4. It's more capabilities now than our off-cloud offering. That's a major milestone. It's pre-integrated, right? 'Cause it's not like, you know, there's not like seven module cloud. It's one integrated platform. The integration has always been a challenge off cloud. In the cloud, it nearly goes away.
It now turns to configuration, not integration. Paul, we've eliminated that friction. Second is the opportunity remains to migrate thousands of customers to our cloud editions and open up new ways to consume. We always had difficulty in the past attracting developers. We've now provided these incredible features as a service, and we're learning from Stripe, we're learning from Twilio, we're learning from other companies of how to deliver these very rich services via APIs. It's a phenomenal number of almost 100 billion service calls in the month of October just via those APIs.
Integration removes a barrier. The APIs remove a barrier. I believe we have the sales force to make the connections. Christina's new organization of customer success is well set up to enable that migration and success as well.
You know, that's very helpful. I mean, delving into customers further, like the digital transformation initiatives, you know, seem to be going on, you know, everywhere. You know, do you anticipate that you'll be seeing like big migrations of existing workflows to your newer products, or do you think it's new workflows, you know, new deployments that you'll be predominantly seeing?
I think it's both. Now we're gonna continue to support fully kind of our off cloud deployments. You know, release 16 has begun to go end of life, right? I mean, I remember when we built and delivered release 16. It's over 5 years now. It's coming towards end of life, and release 16 EP.1 has now come to end of life. EP.2 will soon be end of life. Those customers need to move forward, and we are very skilled at moving our customers from off cloud to private cloud or off cloud to public cloud. Now that public cloud has greater capabilities. It's not a capability discussion, a product capability discussion to move. I think that's where I wanted to go with that.
Just wanna switch gears to M&A. You know, it's been almost two years since Carbonite. It's been quite a while. How do we think about, you know, the targets in your pipeline or what you're looking at in terms of like the assets versus the valuations of those assets for sale? I mean, how do you think about flexing on one or the other here?
You know, as I said in my prepared remarks that we remain very busy, active, getting to know companies. We're not. You know, if we look in the past, you know, we've stood up to higher valuations at a time like Liaison or slightly higher on Carbonite to meet a growth profile. At other times, we see a value-based asset, more of a value-based asset that creates a stronger return, and would put a certain valuation target on it. We're getting more confidence around our organic growth prospects.
We look at what we've delivered, our confidence in the year and, you know, I think there's an asset class of some higher growth that would, you know, lead to a certain multiple or an asset on certain cash flows that would lead to a certain multiple. I don't see us giving on a metric, but rather having conviction of can we get the cash flow or conviction we can get the growth. You know, valuations remain irrational, then we're just gonna remain patient.
Thank you.
It's gotta fit our profile, right?
Yeah. Thank you.
In our belief.
Thank you. I will now hand the call back over to Mr. Barrenechea for closing remarks.
All right. Well, thank you very much for joining us today, and we hope you'll join us at one of our upcoming conferences. As you heard from Harry, it's a time to be very visible to our employees and have high touch with our employees, customers, and partners, and with our key stakeholders such as you. We hope you'll join us at OpenText World as well. Thanks for joining today's call.
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.