Open Text Corporation【OTEX】株式ニュース

OpenText Reports Second Quarter Fiscal Year 2026 Financial ResultsFebruary 5, 2026 4:01 PM
PR Newswire (US)

Total Revenues of $1.33B, 20 Consecutive Quarters of Cloud Organic Growth
Delivers Net Income Margin of 13%, Robust Adjusted EBITDA Margin of 37.0% Fiscal 2026 Second Quarter Highlights (in millions)(1)Total
RevenuesCloud
Revenues
Profitability
Diluted EPS
Cash Flows
Net Income
A-EBITDA
GAAP
Non-GAAP
Operating
Free Cash
Flows$1,327$478
$168
$491
$0.66
$1.13
$319
$279-0.6% Y/Y+3.4% Y/Y
12.7% margin
37.0% margin
-24.1% Y/Y
+1.8% Y/Y
-8.4% Y/Y
-8.9% Y/YWATERLOO, ON, Feb. 5, 2026 /PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced its financial results for the second quarter ended December 31, 2025.

"We had an excellent quarter, led by 18% revenue growth in our Content Management cloud business," said James McGourlay, Interim Chief Executive Officer. "OpenText is at the forefront of Enterprise Information Management for AI, and at our recent OpenText World conference, our customers and partners demonstrated on the main stage how they leverage our Aviator AI solutions to solve complex problems, bringing insights, security and compliance to their information and most sensitive data. I would also like to welcome Ayman Antoun to the CEO role at OpenText, and I look forward to working with him on a smooth and steady transition."

James McGourlay, OpenText Interim Chief Executive Officer

"With strong adjusted EBITDA margin and free cash flow performance in the quarter, the strength of the OpenText operating model continues to drive our business to meet the Company's margin targets for Fiscal 2026," said Steve Rai, Executive Vice President, Chief Financial Officer. "Our robust cash flow engine provides the scale and capital flexibility to continue investing for growth within our core Enterprise Information Management for AI market."

Steve Rai, OpenText Executive Vice President, Chief Financial Officer

"Welcoming Ayman Antoun as our CEO marks a pivotal milestone in OpenText's journey. He brings deep enterprise technology and software expertise with decades of experience leading large scale global transformations. Ayman's leadership will help OpenText expand our market share as the world's leader in secure, trusted data amid accelerating demand for cloud modernization and enterprise AI," said P. Thomas Jenkins, Executive Chair of the Board and Chief Strategy Officer. "The closing of eDOCS and announced divestiture of Vertica demonstrates our continued progress in divesting non-core assets. We remain committed to building a leaner OpenText, focused on growth and helping clients leverage enterprise content to train agentic AI."

P. Thomas Jenkins, OpenText Executive Chair & Chief Strategy Officer

Second Quarter Financial Highlights Y/YTotal revenues: $1.327 billion, -0.6% Y/YAnnual recurring revenues (ARR): $1.060 billion, +0.7% Y/YCloud revenues: $478 million, +3.4% Y/Y, 20 consecutive quarters of cloud organic growthQuarterly enterprise cloud bookings(2): $295 million, +18.0% Y/YCash flows: Operating $319 million and free cash flows(3) $279 millionNet income: GAAP $168 million, -26.9% Y/Y, Non-GAAP(3) $286 million, -2.4% Y/YAdjusted EBITDA(3) of $491 million, margin of 37.0%Diluted earnings per share (EPS): GAAP $0.66, Non-GAAP(3) $1.13Capital returns of $119 million including $69 million via dividends and $50 million of share repurchases(1) Numbers presented are in millions of US dollars, except for per share or percentage metrics.(2) Enterprise cloud bookings is defined as the total value from cloud services and subscription contracts, entered into in the period that are new, committed and incremental to our existing contracts, entered into with our enterprise based customers.(3) Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed consolidated financial statements below.Financial Highlights for Q2 Fiscal 2026 with Year Over Year ComparisonsSummary of Quarterly Results

(In millions, except per share data)Q2 FY'26Q2 FY'25$ Change % Change
Q2 FY'26
in CC*% Change
in CC*Revenues:

Cloud services and subscriptions$478$462$163.4 %
$4711.9 %Customer support$582$591($9)(1.5) %
$569(3.7) %Total annual recurring revenues**$1,060$1,053$70.7 %
$1,040(1.2) %License$184$189($5)(2.5) %
$179(5.3) %Professional service and other$83$93($10)(11.0) %
$81(13.1) %Total revenues$1,327$1,335($8)(0.6) %
$1,299(2.6) %GAAP-based operating income$292$296($4)(1.4) %
N/AN/ANon-GAAP-based operating income (1)$456$470($14)(2.9) %
$436(7.2) %GAAP-based net income attributable to OpenText$168$230($62)(26.9) %
N/AN/ANon-GAAP-based net income attributable to OpenText (1)$286$293($7)(2.4) %
$272(7.4) %GAAP-based EPS, diluted$0.66$0.87($0.21)(24.1) %
N/AN/ANon-GAAP-based EPS, diluted (1)$1.13$1.11$0.021.8 %
$1.07(3.6) %Adjusted EBITDA (1)$491$501($10)(2.1) %
$471(6.1) %Operating cash flows$319$348($29)(8.4) %
N/AN/AFree cash flows (1)$279$307($27)(8.9) %
N/AN/A Summary of YTD Results

(In millions, except per share data)FY'26 YTDFY'25 YTD$ Change % Change
FY'26 YTD
in CC*% Change
in CC*Revenues:

Cloud services and subscriptions$963$919$434.7 %
$9473.0 %Customer support$1,169$1,186($17)(1.5) %
$1,141(3.8) %Total annual recurring revenues**$2,131$2,105$261.2 %
$2,089(0.8) %License$319$315$41.3 %
$311(1.1) %Professional service and other$165$183($19)(10.2) %
$160(12.7) %Total revenues$2,615$2,604$110.4 %
$2,560(1.7) %GAAP-based operating income$562$502$6011.9 %
N/AN/ANon-GAAP-based operating income (1)$887$881$60.7 %
$850(3.5) %GAAP-based net income attributable to OpenText$315$314$—0.2 %
N/AN/ANon-GAAP-based net income attributable to OpenText (1)$553$542$101.9 %
$526(3.0) %GAAP-based EPS, diluted$1.24$1.18$0.065.1 %
N/AN/ANon-GAAP-based EPS, diluted (1)$2.18$2.03$0.157.4 %
$2.082.5 %Adjusted EBITDA (1)$959$945$131.4 %
$921(2.5) %Operating cash flows$466$270$19672.6 %
N/AN/AFree cash flows (1)$381$190$191100.8 %
N/AN/A
(1) Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed consolidated financial statements below.Note: Items in tables may not add due to rounding. Percentages presented are calculated based on the underlying amounts.*CC: Constant currency for this purpose is defined as the current period reported revenues/expenses/earnings represented at the prior comparative period's foreign exchange rate.**Annual recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.DividendAs part of the quarterly, non-cumulative cash dividend program, the Board declared on February 4, 2026, a cash dividend of $0.275 per common share. The record date for this dividend is March 6, 2026 and the payment date is March 20, 2026. OpenText believes strongly in returning value to its shareholders. Any future declarations of dividends and the establishment of future record and payment dates are all subject to the final determination and discretion of the Board of Directors.Quarterly Business HighlightsOpenText appoints Ayman Antoun as Chief Executive Officer, effective April 20, 2026OpenText announces divestiture of Vertica, a part of its non-core Analytics portfolio, for US$150 millionOpenText completes divestiture of eDOCS, a non-core product, for US$163 millionJohn Hastings and Margaret Stuart appointed to the Board of Directors in December 2025, totaling four new board members appointed in 2025OpenText unveiled next-generation AI Data Platform for secure information management at our OpenText World user conferenceOpenText expands collaboration with SAP to deliver AI-ready cloud content management at scaleKey customer wins in the quarter include: Anritsu Service Assurance, Atos Group, BNP Paribas, Central Clinical Labs, Dairy Farmers of America, Desjardins, Finova, Raiffeisen Informatik Consulting, Ricoh Corporation, Sklavenitis, Solenis, Turkcell, US Bank National AssociationSummary of Quarterly Results

Q2 FY'26Q1 FY'26Q2 FY'25% Change (Q2 FY'26 vs
Q1 FY'26)
% Change(Q2 FY'26 vs
Q2 FY'25)
Revenue (millions)$        1,327$        1,288$        1,3353.0 %
(0.6) %
GAAP-based gross margin74.0 %72.8 %73.3 %130bps70bpsNon-GAAP-based gross margin (1)77.6 %76.5 %77.2 %120bps40bpsGAAP-based EPS, diluted$          0.66$          0.58$          0.8713.8 %
(24.1) %
Non-GAAP-based EPS, diluted (1)$          1.13$          1.05$          1.117.6 %
1.8 %

(1) Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed consolidated financial statements below.Conference Call InformationOpenText posted an investor presentation on its Investor Relations website and invites the public to listen to the earnings conference call webcast on Thursday, February 5, 2026 at 5:00 p.m. ET (2:00 p.m. PT) from the Investor Relations section of the Company's website at https://investors.opentext.com. To join the webcast instantly, use this webcast link. A webcast replay will be available shortly following completion of the live call.Please see below note (2) for a reconciliation of U.S. GAAP-based financial measures used in this press release to Non-GAAP-based financial measures.OTEX-FCopyright © 2026 OpenText. All Rights Reserved. Trademarks owned by OpenText. One or more patents may cover this product(s). For more information, please visit https://www.opentext.com/patents.About OpenTextOpenText™ is a global leader in secure information management for AI, helping organizations protect, govern, and activate their data with confidence. Our technologies turn data into information with context to form the knowledge base for AI. Learn more at www.opentext.com.Cautionary Statement Regarding Forward-Looking StatementsCertain statements in this press release, including statements about Open Text Corporation ("OpenText" or "the Company") on growth, profitability and future of Information Management, including returning to growth, strategic capital allocation, delivering sustained margin and free cash flow growth, reinvestment in core business, and generating returns for investors; expected future performance, including competitive position of and innovation to certain products and ability to build long-term shareholder value; customer benefits from products; A-EBITDA expansion; executing the Company's capital allocation strategy, including expected return to shareholders; execution of Business Optimization Plan and other savings initiatives, including timing, costs, savings, associated benefits thereof and potential adjustments of amounts thereto; projected outlook, estimates and business model; portfolio shaping opportunities and divestiture of non-core assets, including the proposed divestiture of Vertica, associated strategy, benefits from and timing of such transactions and use of proceeds therefrom; future total and cloud revenues, operating expenses, margins, RPO, cRPO, free cash flows, earnings, interest expense and capital expenditures; net leverage and savings estimates and timing thereof; market share of our products; innovation road map; estimated annualized dividend; expected size and timing of the Repurchase Plan, including execution thereof; future tax rates; renewal rates; new platform and product offerings, including reinvestment therein and associated benefits to customers; internal automation and AI leverage, including our AI strategy, vision and growth; and other matters, which may contain words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "may", "could", "would", "might", "will" and variations of these words or similar expressions are intended to identify forward-looking statements or information under applicable securities laws (forward-looking statements). In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements, and are based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management's perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances, such as certain assumptions about the economy, as well as market, financial and operational assumptions. Management's estimates, beliefs and assumptions, including statements regarding future outlook, estimates and business models, are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change and are not considered guidance. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Future declarations of dividends are also subject to the final determination and discretion of the Board of Directors, and an annualized dividend has not been approved or declared by the Board. Forward-looking statements involve known and unknown risks and uncertainties such as those relating to: all statements regarding the expected future financial position, results of operations, revenues, expenses, margins, cash flows, dividends, share buybacks, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management, including any anticipated synergy benefits; incurring unanticipated costs, delays or difficulties; and our ability to develop, protect and maintain our intellectual property and proprietary technology and to operate without infringing on the proprietary rights of others. We rely on a combination of copyright, patent, trademark and trade secret laws, non-disclosure agreements and other contractual provisions to establish and maintain our proprietary rights, which are important to our success. From time to time, we may also enforce our intellectual property rights through litigation in line with our strategic and business objectives. The actual results that OpenText achieves may differ materially from any forward-looking statements. For additional information with respect to risks and other factors which could occur, see the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the Securities and Exchange Commission (SEC) and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Further, readers should note that we may announce information using our website, press releases, securities law filings, public conference calls, webcasts and the social media channels identified on the Investors section of our website (https://investors.opentext.com). Such social media channels may include the Company's or our executive's blog, X, formerly known as Twitter, account or LinkedIn account. The information posted through such channels may be material. Accordingly, readers should monitor such channels in addition to our other forms of communication.OPEN TEXT CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share data)

December 31, 2025
June 30, 2025ASSETS(unaudited)

Cash and cash equivalents$             1,271,374
$             1,156,496Accounts receivable trade, net of allowance for credit losses of $15,116 as of December 31, 2025 and $14,258 as of June 30, 2025665,617
659,675Contract assets73,965
77,920Income taxes recoverable38,583
108,792Prepaid expenses and other current assets186,383
198,575Assets held for sale116,105
—Total current assets2,352,027
2,201,458Property and equipment, net of accumulated depreciation of $727,520 as of December 31, 2025 and $835,324 as of June 30, 2025389,366
375,252Operating lease right of use assets156,402
197,977Long-term contract assets55,133
49,293Goodwill7,433,913
7,517,463Acquired intangible assets1,729,983
1,976,591Deferred tax assets1,071,236
1,080,575Other assets308,115
307,693Long-term income taxes recoverable73,987
67,762Total assets$          13,570,162
$          13,774,064LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities$                929,508
$             1,026,583Current portion of long-term debt35,850
35,850Operating lease liabilities66,600
75,914Deferred revenues1,456,883
1,515,382Income taxes payable2,804
93,325Liabilities held for sale13,019
—Total current liabilities2,504,664
2,747,054Long-term liabilities:

Accrued liabilities41,214
42,312Pension liability, net132,511
132,215Long-term debt6,335,758
6,342,071Long-term operating lease liabilities155,217
189,949Long-term deferred revenues165,191
168,757Long-term income taxes payable68,654
79,604Deferred tax liabilities121,559
141,514Total long-term liabilities7,020,104
7,096,422Shareholders' equity:

Share capital and additional paid-in capital

251,676,295 and 254,784,391 Common Shares issued and outstanding at December 31, 2025 and June 30, 2025, respectively; authorized Common Shares: unlimited2,183,939
2,193,985Accumulated other comprehensive income (loss)(38,432)
(67,067)Retained earnings1,971,950
1,940,113Treasury stock, at cost (2,584,014 and 4,648,036 shares at December 31, 2025 and June 30, 2025, respectively)(73,863)
(138,164)Total OpenText shareholders' equity4,043,594
3,928,867Non-controlling interests1,800
1,721Total shareholders' equity4,045,394
3,930,588Total liabilities and shareholders' equity$          13,570,162
$          13,774,064 OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In thousands of U.S. dollars, except share and per share data)(unaudited)

Three Months EndedDecember 31,
Six Months EndedDecember 31,
2025
2024
2025
2024Revenues:

Cloud services and subscriptions$       478,084
$       462,306
$       962,593
$       919,330Customer support581,921
590,595
1,168,766
1,186,085License184,227
188,923
318,775
314,736Professional service and other82,504
92,676
164,737
183,354Total revenues1,326,736
1,334,500
2,614,871
2,603,505Cost of revenues:

Cloud services and subscriptions170,252
172,288
342,469
347,545Customer support58,497
62,656
122,561
125,230License9,046
6,336
16,142
12,993Professional service and other62,537
68,041
125,575
134,956Amortization of acquired technology-based intangible assets44,204
47,203
88,408
94,447Total cost of revenues344,536
356,524
695,155
715,171Gross profit982,200
977,976
1,919,716
1,888,334Operating expenses:

Research and development158,309
180,727
327,437
371,420Sales and marketing287,995
273,929
545,050
519,811General and administrative110,111
99,356
215,874
206,086Depreciation35,267
31,879
71,188
64,050Amortization of acquired customer-based intangible assets78,645
81,048
158,206
162,552Special charges (recoveries)20,118
15,238
40,257
62,374Total operating expenses690,445
682,177
1,358,012
1,386,293Income from operations291,755
295,799
561,704
502,041Other income (expense), net2,932
68,615
(44)
32,960Interest and other related expense, net(79,227)
(83,615)
(160,341)
(167,897)Income before income taxes215,460
280,799
401,319
367,104Provision for income taxes47,334
50,893
86,533
52,776Net income for the period$       168,126
$       229,906
$       314,786
$       314,328Net (income) attributable to non-controlling interests(35)
(44)
(79)
(98)Net income attributable to OpenText$       168,091
$       229,862
$       314,707
$       314,230Earnings per share—basic attributable to OpenText$              0.67
$              0.87
$              1.24
$              1.18Earnings per share—diluted attributable to OpenText$              0.66
$              0.87
$              1.24
$              1.18Weighted average number of Common Shares outstanding—basic (in '000's)251,983
265,099
252,814
266,252Weighted average number of Common Shares outstanding—diluted (in '000's)253,733
265,193
253,406
266,505 OPEN TEXT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands of U.S. dollars)(unaudited)

Three Months EndedDecember 31,
Six Months Ended
December 31,
2025
2024
2025
2024Net income for the period$       168,126
$       229,906
$       314,786
$       314,328Other comprehensive income (loss)—net of tax:

Net foreign currency translation adjustments6,843
1,167
29,020
(4,023)Unrealized gain (loss) on cash flow hedges:

Unrealized gain (loss)—net of tax (1)668
(4,188)
(1,007)
(3,534)(Gain) loss reclassified into net income—net of tax (2)45
1,010
(67)
1,272Unrealized gain (loss) on available-for-sale financial assets:

Unrealized gain (loss)—net of tax (3)510
436
671
684Actuarial gain (loss) relating to defined benefit pension plans:

Actuarial gain (loss)—net of tax (4)—
—
—
(1,045)Amortization of actuarial (gain) loss into net income—net of tax (5)13
252
18
486Total other comprehensive income (loss), net for the period8,079
(1,323)
28,635
(6,160)Total comprehensive income 176,205
228,583
343,421
308,168Comprehensive income attributable to non-controlling interests(35)
(44)
(79)
(98)Total comprehensive income attributable to OpenText$       176,170
$       228,539
$       343,342
$       308,070______________________________(1)Net of tax expense (recovery) of $241 and $(1,510) for the three months ended December 31, 2025 and 2024, respectively; $(363) and $(1,274) for the six months ended December 31, 2025 and 2024, respectively.(2)Net of tax expense (recovery) of $16 and $364 for the three months ended December 31, 2025 and 2024, respectively; $(25) and $458 for the six months ended December 31, 2025 and 2024, respectively.(3)Net of tax expense (recovery) of $243 and $18 for the three months ended December 31, 2025 and 2024, respectively; $309 and $225 for the six months ended December 31, 2025 and 2024, respectively.(4)Net of tax expense (recovery) of $— and $— for the three months ended December 31, 2025 and 2024, respectively; $— and $(43) for the six months ended December 31, 2025 and 2024, respectively.(5)Net of tax expense (recovery) of $(21) and $92 for the three months ended December 31, 2025 and 2024, respectively; $(17) and $184 for the six months ended December 31, 2025 and 2024, respectively. OPEN TEXT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY(In thousands of U.S. dollars and shares)(unaudited)

Three Months Ended December 31, 2025
Common Shares and
Additional Paid in Capital
Treasury Stock
RetainedEarnings
Accumulated OtherComprehensiveIncome
Non-
Controlling
Interests
Total
Shares
Amount
Shares
Amount
Balance as of September 30, 2025251,964
$ 2,189,340
(4,452)
$ (130,561)
$ 1,938,716
$        (46,511)
$      1,765
$ 3,952,749Issuance of Common Shares

Under employee stock option plans857
26,746
—
—
—
—
—
26,746Under employee stock purchase plans245
7,826
—
—
—
—
—
7,826Share-based compensation—
21,119
—
—
—
—
—
21,119Issuance of treasury stock—
(51,375)
1,868
56,698
—
—
—
5,323Repurchase of Common Shares(1,390)
(9,717)
—
—
(65,455)
—
—
(75,172)Dividends declared ($0.275 per Common Share)—
—
—
—
(69,402)
—
—
(69,402)Other comprehensive income (loss) - net—
—
—
—
—
8,079
—
8,079Net income for the period—
—
—
—
168,091
—
35
168,126Balance as of December 31, 2025251,676
$ 2,183,939
(2,584)
$ (73,863)
$ 1,971,950
$        (38,432)
$      1,800
$ 4,045,394

Three Months Ended December 31, 2024
Common Shares and
Additional Paid in Capital
Treasury Stock
RetainedEarnings
Accumulated OtherComprehensiveIncome
Non-
Controlling
Interests
Total
Shares
Amount
Shares
Amount
Balance as of September 30, 2024265,546
$ 2,290,191
(3,900)
$ (145,646)
$ 2,065,221
$        (74,456)
$      1,577
$ 4,136,887Issuance of Common Shares

Under employee stock option plans65
1,739
—
—
—
—
—
1,739Under employee stock purchase plans330
9,308
—
—
—
—
—
9,308Share-based compensation—
30,355
—
—
—
—
—
30,355Purchase of treasury stock—
—
(1,363)
(40,013)
—
—
—
(40,013)Issuance of treasury stock—
(39,906)
1,037
41,227
—
—
—
1,321Repurchase of Common Shares(2,213)
(16,104)
—
—
(50,990)
—
—
(67,094)Dividends declared ($0.2625 per Common Share)—
—
—
—
(69,579)
—
—
(69,579)Other comprehensive income (loss) - net—
—
—
—
—
(1,323)
—
(1,323)Net income for the period—
—
—
—
229,862
—
44
229,906Balance as of December 31, 2024263,728
$ 2,275,583
(4,226)
$ (144,432)
$ 2,174,514
$        (75,779)
$      1,621
$ 4,231,507 OPEN TEXT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY(In thousands of U.S. dollars and shares)(unaudited)

Six Months Ended December 31, 2025
Common Shares and
Additional Paid in Capital
Treasury Stock
RetainedEarnings
Accumulated OtherComprehensiveIncome
Non-Controlling
Interests
Total
Shares
Amount
Shares
Amount
Balance as of June 30, 2025254,784
$ 2,193,985
(4,648)
$ (138,164)
$ 1,940,113
$        (67,067)
$      1,721
$ 3,930,588Issuance of Common Shares

Under employee stock option plans882
27,301
—
—
—
—
—
27,301Under employee stock purchase plans556
15,422
—
—
—
—
—
15,422Share-based compensation—
38,800
—
—
—
—
—
38,800Issuance of treasury stock—
(58,777)
2,064
64,301
—
—
—
5,524Repurchase of Common Shares(4,546)
(32,792)
—
—
(144,103)
—
—
(176,895)Dividends declared ($0.55 per Common Share)—
—
—
—
(138,767)
—
—
(138,767)Other comprehensive income (loss) - net—
—
—
—
—
28,635
—
28,635Net income for the period—
—
—
—
314,707
—
79
314,786Balance as of December 31, 2025251,676
$ 2,183,939
(2,584)
$ (73,863)
$ 1,971,950
$        (38,432)
$      1,800
$ 4,045,394

Six Months Ended December 31, 2024
Common Shares and
Additional Paid in Capital
Treasury Stock
RetainedEarnings
Accumulated OtherComprehensiveIncome
Non-
Controlling
Interests
Total
Shares
Amount
Shares
Amount
Balance as of June 30, 2024267,801
$ 2,271,886
(3,136)
$ (123,268)
$ 2,119,159
$        (69,619)
$      1,523
$ 4,199,681Issuance of Common Shares

Under employee stock option plans70
1,880
—
—
—
—
—
1,880Under employee stock purchase plans719
19,171
—
—
—
—
—
19,171Share-based compensation—
59,801
—
—
—
—
—
59,801Purchase of treasury stock—
—
(2,187)
(65,023)
—
—
—
(65,023)Issuance of treasury stock—
(41,836)
1,097
43,859
(702)
—
—
1,321Repurchase of Common Shares(4,862)
(35,319)
—
—
(118,256)
—
—
(153,575)Dividends declared ($0.525 per Common Share)—
—
—
—
(139,917)
—
—
(139,917)Other comprehensive income (loss) - net—
—
—
—
—
(6,160)
—
(6,160)Net income for the period—
—
—
—
314,230
—
98
314,328Balance as of December 31, 2024263,728
$ 2,275,583
(4,226)
$ (144,432)
$ 2,174,514
$        (75,779)
$      1,621
$ 4,231,507 OPEN TEXT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars)(unaudited)

Three Months EndedDecember 31,
Six Months EndedDecember 31,
2025
2024
2025
2024Cash flows from operating activities:

Net income for the period$         168,126
$         229,906
$         314,786
$         314,328Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of intangible assets158,116
160,130
317,802
321,049Share-based compensation expense21,232
30,361
38,913
59,919Pension expense3,087
3,350
6,228
6,813Amortization of debt discount and issuance costs5,852
5,499
11,612
10,795Write-off of right of use assets3,422
1,385
7,844
1,385Adjustment to gain on AMC Divestiture—
4,175
—
4,175Loss on sale and write down of property and equipment, net509
437
2,823
439Deferred taxes(17,667)
(10,827)
(32,799)
(52,977)Share in net (income) of equity investees(5,216)
(1,538)
(7,633)
(1,993)Changes in derivative instruments(2,906)
(45,549)
(10,749)
(20,614)Changes in operating assets and liabilities:

Accounts receivable(33,508)
(15,728)
60,490
41,879Contract assets(38,708)
(26,097)
(69,678)
(59,946)Prepaid expenses and other current assets12,264
32,427
10,168
54,578Income taxes448
(3,218)
(32,664)
(196,727)Accounts payable and accrued liabilities(8,699)
(20,590)
(98,492)
(128,110)Deferred revenue59,383
5,124
(49,415)
(71,407)Other assets(432)
3,306
7,377
(1,436)Operating lease assets and liabilities, net(6,644)
(4,561)
(10,191)
(11,964)Net cash provided by operating activities318,659
347,992
466,422
270,186Cash flows from investing activities:

Additions of property and equipment(39,215)
(41,269)
(85,749)
(80,585)Adjustment to proceeds from AMC Divestiture—
(11,686)
—
(11,686)Proceeds from interest on derivative instruments—
—
870
2,519Other investing activities—
5,535
632
5,892Net cash used in investing activities(39,215)
(47,420)
(84,247)
(83,860)Cash flows from financing activities:

Proceeds from issuance of Common Shares from exercise of stock options and ESPP33,119
8,291
41,499
17,740Repayment of long-term debt and Revolver(8,963)
(8,963)
(17,926)
(17,926)Net change in transition services agreement obligation—
26,233
—
21,938Debt issuance costs—
(1,066)
—
(1,066)Repurchase of Common Shares(49,996)
(66,003)
(157,625)
(153,406)Purchase of treasury stock—
(40,023)
—
(65,023)Payments of dividends to shareholders(68,515)
(68,313)
(136,735)
(137,374)Net cash used in financing activities(94,355)
(149,844)
(270,787)
(335,117)Foreign exchange gain (loss) on cash held in foreign currencies(803)
(28,930)
3,503
(9,794)Increase (decrease) in cash, cash equivalents and restricted cash during the period184,286
121,798
114,891
(158,585)Cash, cash equivalents and restricted cash at beginning of the period1,088,711
1,002,410
1,158,106
1,282,793Cash, cash equivalents and restricted cash at end of the period$      1,272,997
$      1,124,208
$      1,272,997
$      1,124,208 OPEN TEXT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars)(unaudited)
Reconciliation of cash, cash equivalents and restricted cash:December 31, 2025
December 31, 2024Cash and cash equivalents$               1,271,374
$               1,122,192Restricted cash (1)1,623
2,016Total cash, cash equivalents and restricted cash$               1,272,997
$               1,124,208

(1) Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Condensed Consolidated Balance Sheets.Notes(1)      All dollar amounts in this press release are in U.S. Dollars unless otherwise indicated.(2)      Use of Non-GAAP Financial Measures: In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-GAAP). These Non-GAAP financial measures have certain limitations in that they do not have a standardized meaning and thus the Company's definition may be different from similar Non-GAAP financial measures used by other companies and/or analysts and may differ from period to period. Thus it may be more difficult to compare the Company's financial performance to that of other companies. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of these Non-GAAP financial measures both in its reconciliation to the U.S. GAAP financial measures and its condensed consolidated financial statements, all of which should be considered when evaluating the Company's results.The Company uses these Non-GAAP financial measures to supplement the information provided in its condensed consolidated financial statements, which are presented in accordance with U.S. GAAP. The presentation of Non-GAAP financial measures is not meant to be a substitute for financial measures presented in accordance with U.S. GAAP, but rather should be evaluated in conjunction with and as a supplement to such U.S. GAAP measures. OpenText strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure. The Company therefore believes that despite these limitations, it is appropriate to supplement the disclosure of the U.S. GAAP measures with certain Non-GAAP measures defined below.Non-GAAP-based net income and Non-GAAP-based EPS, attributable to OpenText, are consistently calculated as GAAP-based net income (loss) or earnings (loss) per share, attributable to OpenText, on a diluted basis, excluding the effects of the amortization of acquired intangible assets, other income (expense), share-based compensation, and special charges (recoveries), all net of tax and any tax benefits/expense items unrelated to current period income, as further described in the tables below. Non-GAAP-based gross profit is the arithmetical sum of GAAP-based gross profit and the amortization of acquired technology-based intangible assets and share-based compensation within cost of sales. Non-GAAP-based gross margin is calculated as Non-GAAP-based gross profit expressed as a percentage of total revenue. Non-GAAP-based income from operations is calculated as GAAP-based income from operations, excluding the amortization of acquired intangible assets, special charges (recoveries), and share-based compensation expense.Adjusted EBITDA is defined and calculated as GAAP-based net income (loss), attributable to OpenText, excluding interest income (expense), provision for (recovery of) income taxes, depreciation and amortization of acquired intangible assets, other income (expense), share-based compensation and special charges (recoveries). Adjusted EBITDA margin is calculated as adjusted EBITDA expressed as a percentage of total revenue.Free cash flows is defined and calculated as GAAP-based cash flows provided by operating activities less capital expenditures.The Company's management believes that the presentation of the above defined Non-GAAP financial measures provides useful information to investors because they portray the financial results of the Company before the impact of certain non-operational charges. The use of the term "non-operational charge" is defined for this purpose as an expense that does not impact the ongoing operating decisions taken by the Company's management. These items are excluded based upon the way the Company's management evaluates the performance of the Company's business for use in the Company's internal reports and are not excluded in the sense that they may be used under U.S. GAAP.The Company does not acquire businesses on a predictable cycle, and therefore believes that the presentation of Non-GAAP measures, which in certain cases adjust for the impact of amortization of intangible assets and the related tax effects that are primarily related to acquisitions, will provide readers of financial statements with a more consistent basis for comparison across accounting periods and be more useful in helping readers understand the Company's operating results and underlying operational trends. Additionally, the Company has engaged in various restructuring activities over the past several years, primarily due to acquisitions and most recently in response to our return to office planning, that have resulted in costs associated with reductions in headcount, consolidation of leased facilities and related costs, all which are recorded under the Company's "Special charges (recoveries)" caption on the Condensed Consolidated Statements of Income. Each restructuring activity is a discrete event based on a unique set of business objectives or circumstances, and each differs in terms of its operational implementation, business impact and scope, and the size of each restructuring plan can vary significantly from period to period. Therefore, the Company believes that the exclusion of these special charges (recoveries) will also better aid readers of financial statements in the understanding and comparability of the Company's operating results and underlying operational trends.In summary, the Company believes the provision of supplemental Non-GAAP measures allow investors to evaluate the operational and financial performance of the Company's core business using the same evaluation measures that management uses, and is therefore a useful indication of OpenText's performance or expected performance of future operations and facilitates period-to-period comparison of operating performance (although prior performance is not necessarily indicative of future performance). As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary Non-GAAP financial measures that exclude certain items from the presentation of its financial results. Information reconciling certain forward-looking GAAP measures to non-GAAP measures related to outlook, estimates or business models, including A-EBITDA is not available without unreasonable effort due to high variability, complexity and uncertainty with respect to forecasting and quantifying certain amounts that are necessary for such reconciliations.The following charts provide unaudited reconciliations of U.S. GAAP-based financial measures to Non-GAAP-based financial measures for the following periods presented.Reconciliation of selected GAAP-based measures to Non-GAAP-based measuresfor the three months ended December 31, 2025(In thousands, except for per share data)
Three Months Ended December 31, 2025
GAAP-based
Measures GAAP-based
Measures % of Total
RevenueAdjustments NoteNon-GAAP-
based
Measures Non-GAAP-
based
Measures% of Total
RevenueCost of revenues

Cloud services and subscriptions$ 170,252
$     (1,597)(1)$   168,655
Customer support58,497
(1,087)(1)57,410
Professional service and other62,537
(822)(1)61,715
Amortization of acquired technology-based intangible assets44,204
(44,204)(2)—
GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%)982,20074.0 %47,710(3)1,029,91077.6 %Operating expenses

Research and development158,309
(4,839)(1)153,470
Sales and marketing287,995
(7,837)(1)280,158
General and administrative110,111
(5,050)(1)105,061
Amortization of acquired customer-based intangible assets78,645
(78,645)(2)—
Special charges (recoveries)20,118
(20,118)(4)—
GAAP-based income from operations / Non-GAAP-based income from operations291,755
164,199(5)455,954
Other income (expense), net2,932
(2,932)(6)—
Provision for income taxes47,334
43,080(7)90,414
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText168,091
118,187(8)286,278
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText$         0.66
$         0.47(8)$         1.13

(1)Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.(2)Adjustment relates to the exclusion of amortization expense from our Non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.(3)GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.(4)Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.(5)GAAP-based and Non-GAAP-based income from operations stated in dollars.(6)Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results.(7)Adjustment relates to differences between the GAAP-based tax provision rate of approximately 22% and a Non-GAAP-based tax rate of approximately 24%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and "book to return" adjustments for tax return filings and tax assessments. Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included. In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.(8)Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Three Months Ended December 31, 2025

Per share dilutedGAAP-based net income, attributable to OpenText$                   168,091$                          0.66Add:

Amortization122,8490.49Share-based compensation21,2320.08Special charges (recoveries)20,1180.08Other (income) expense, net(2,932)(0.01)GAAP-based provision for income taxes47,3340.19Non-GAAP-based provision for income taxes(90,414)(0.36)Non-GAAP-based net income, attributable to OpenText$                   286,278$                          1.13 Reconciliation of Adjusted EBITDA
Three Months Ended December 31, 2025GAAP-based net income, attributable to OpenText$                                                       168,091Add:
Provision for income taxes47,334Interest and other related expense, net79,227Amortization of acquired technology-based intangible assets44,204Amortization of acquired customer-based intangible assets78,645Depreciation35,267Share-based compensation21,232Special charges (recoveries)20,118Other (income) expense, net(2,932)Adjusted EBITDA$                                                       491,186

GAAP-based net income margin12.7 %Adjusted EBITDA margin37.0 % Reconciliation of Free Cash Flows

Three Months Ended December 31, 2025GAAP-based cash flows provided by operating activities$                                                         318,659Add:
Capital expenditures (1)(39,215)Free cash flows$                                                         279,444

(1) Defined as "Additions of property and equipment" in the Condensed Consolidated Statements of Cash Flows. Reconciliation of selected GAAP-based measures to Non-GAAP-based measuresfor the six months ended December 31, 2025(In thousands, except for per share data)
Six Months Ended December 31, 2025
GAAP-basedMeasures GAAP-based
Measures % of Total
RevenueAdjustments NoteNon-GAAP-
basedMeasures Non-GAAP-
based
Measures% of Total
RevenueCost of revenues

Cloud services and subscriptions$   342,469
$     (3,346)(1)$   339,123
Customer support122,561
(2,140)(1)120,421
Professional service and other125,575
(1,321)(1)124,254
Amortization of acquired technology-based intangible assets88,408
(88,408)(2)—
GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%)1,919,71673.4 %95,215(3)2,014,93177.1 %Operating expenses

Research and development327,437
(8,448)(1)318,989
Sales and marketing545,050
(14,733)(1)530,317
General and administrative215,874
(8,925)(1)206,949
Amortization of acquired customer-based intangible assets158,206
(158,206)(2)—
Special charges (recoveries)40,257
(40,257)(4)—
GAAP-based income from operations / Non-GAAP-based income from operations561,704
325,784(5)887,488
Other income (expense), net(44)
44(6)—
Provision for income taxes86,533
87,982(7)174,515
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText314,707
237,846(8)552,553
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText$         1.24
$         0.94(8)$         2.18

(1)Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.(2)Adjustment relates to the exclusion of amortization expense from our Non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.(3)GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.(4)Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.(5)GAAP-based and Non-GAAP-based income from operations stated in dollars.(6)Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results. (7)Adjustment relates to differences between the GAAP-based tax provision rate of approximately 22% and a Non-GAAP-based tax rate of approximately 24%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and "book to return" adjustments for tax return filings and tax assessments. Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included. In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.(8)Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Six Months Ended December 31, 2025

Per share dilutedGAAP-based net income, attributable to OpenText$                   314,707$                          1.24Add (deduct):

Amortization246,6140.98Share-based compensation38,9130.15Special charges (recoveries)40,2570.16Other (income) expense, net44—GAAP-based provision for income taxes86,5330.34Non-GAAP-based provision for income taxes(174,515)(0.69)Non-GAAP-based net income, attributable to OpenText$                   552,553$                          2.18 Reconciliation of Adjusted EBITDA

Six Months Ended December 31, 2025GAAP-based net income, attributable to OpenText$                                                       314,707Add:
Provision for income taxes86,533Interest and other related expense, net160,341Amortization of acquired technology-based intangible assets88,408Amortization of acquired customer-based intangible assets158,206Depreciation71,188Share-based compensation38,913Special charges (recoveries)40,257Other (income) expense, net44Adjusted EBITDA$                                                       958,597

GAAP-based net income margin12.0 %Adjusted EBITDA margin36.7 % Reconciliation of Free cash flows

Six Months Ended December 31, 2025GAAP-based cash flows provided by operating activities$                                                         466,422Add:
Capital expenditures (1)(85,749)Free cash flows$                                                         380,673

(1) Defined as "Additions of property and equipment" in the Condensed Consolidated Statements of Cash Flows. Reconciliation of selected GAAP-based measures to Non-GAAP-based measuresfor the three months ended September 30, 2025(In thousands, except for per share data)
Three Months Ended September 30, 2025
GAAP-basedMeasures GAAP-based
Measures % of Total
RevenueAdjustments NoteNon-GAAP-
basedMeasures Non-GAAP-
based
Measures % of Total
RevenueCost of revenues

Cloud services and subscriptions$   172,217
$     (1,749)(1)$   170,468
Customer support64,064
(1,053)(1)63,011
Professional service and other63,038
(499)(1)62,539
Amortization of acquired technology-based intangible assets44,204
(44,204)(2)—
GAAP-based gross profit and gross margin (%) /Non-GAAP-based gross profit and gross margin (%)937,51672.8 %47,505(3)985,02176.5 %Operating expenses

Research and development169,128
(3,609)(1)165,519
Sales and marketing257,055
(6,896)(1)250,159
General and administrative105,763
(3,875)(1)101,888
Amortization of acquired customer-based intangible assets79,561
(79,561)(2)—
Special charges (recoveries)20,139
(20,139)(4)—
GAAP-based income from operations / Non-GAAP-based income from operations269,949
161,585(5)431,534
Other income (expense), net(2,976)
2,976(6)—
Provision for income taxes39,199
44,902(7)84,101
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText146,616
119,659(8)266,275
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText$         0.58
$         0.47(8)$         1.05

(1)Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.(2)Adjustment relates to the exclusion of amortization expense from our Non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.(3)GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.(4)Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.(5)GAAP-based and Non-GAAP-based income from operations stated in dollars.(6)Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results.(7)Adjustment relates to differences between the GAAP-based tax provision rate of approximately 21% and a Non-GAAP-based tax rate of approximately 24%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and "book to return" adjustments for tax return filings and tax assessments. Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included. In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.(8)Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Three Months Ended September 30, 2025

Per share dilutedGAAP-based net income, attributable to OpenText$                   146,616$                          0.58Add:

Amortization123,7650.49Share-based compensation17,6810.07Special charges (recoveries)20,1390.08Other (income) expense, net2,9760.01GAAP-based provision for income taxes39,1990.15Non-GAAP-based provision for income taxes(84,101)(0.33)Non-GAAP-based net income, attributable to OpenText$                   266,275$                          1.05 Reconciliation of Adjusted EBITDA

Three Months Ended September 30, 2025GAAP-based net income, attributable to OpenText$                                                     146,616Add:
Provision for income taxes39,199Interest and other related expense, net81,114Amortization of acquired technology-based intangible assets44,204Amortization of acquired customer-based intangible assets79,561Depreciation35,921Share-based compensation17,681Special charges (recoveries)20,139Other (income) expense, net2,976Adjusted EBITDA$                                                     467,411

GAAP-based net income margin11.4 %Adjusted EBITDA margin36.3 % Reconciliation of Free Cash Flows

Three Months Ended September 30, 2025
GAAP-based cash flows provided by operating activities$                                                         147,763
Add:

Capital expenditures (1)(46,534)
Free cash flows$                                                         101,229

(1) Defined as "Additions of property and equipment" in the Condensed Consolidated Statements of Cash Flows.
Reconciliation of selected GAAP-based measures to Non-GAAP-based measuresfor the three months ended December 31, 2024(In thousands, except for per share data)
Three Months Ended December 31, 2024
GAAP-basedMeasures GAAP-based
Measures % of Total
RevenueAdjustments NoteNon-GAAP-
basedMeasures Non-GAAP-
based
Measures % of Total
RevenueCost of revenues

Cloud services and subscriptions$   172,288
$     (2,796)(1)$   169,492
Customer support62,656
(1,139)(1)61,517
Professional service and other68,041
(1,273)(1)66,768
Amortization of acquired technology-based intangible assets47,203
(47,203)(2)—
GAAP-based gross profit and gross margin (%) /Non-GAAP-based gross profit and gross margin (%)977,97673.3 %52,411(3)1,030,38777.2 %Operating expenses

Research and development180,727
(7,656)(1)173,071
Sales and marketing273,929
(11,223)(1)262,706
General and administrative99,356
(6,274)(1)93,082
Amortization of acquired customer-based intangible assets81,048
(81,048)(2)—
Special charges (recoveries)15,238
(15,238)(4)—
GAAP-based income from operations / Non-GAAP-based income from operations295,799
173,850(5)469,649
Other income (expense), net68,615
(68,615)(6)—
Provision for income taxes50,893
41,755(7)92,648
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText229,862
63,480(8)293,342
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText$         0.87
$         0.24(8)$         1.11

(1)Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.(2)Adjustment relates to the exclusion of amortization expense from our Non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.(3)GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.(4)Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.(5)GAAP-based and Non-GAAP-based income from operations stated in dollars.(6)Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results.(7)Adjustment relates to differences between the GAAP-based tax provision rate of approximately 18% and a Non-GAAP-based tax rate of approximately 24%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and "book to return" adjustments for tax return filings and tax assessments. Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included. In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.(8)Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Three Months Ended December 31, 2024

Per share dilutedGAAP-based net income, attributable to OpenText$                   229,862$                          0.87Add:

Amortization128,2510.49Share-based compensation30,3610.11Special charges (recoveries)15,2380.06Other (income) expense, net(68,615)(0.26)GAAP-based provision for income taxes50,8930.19Non-GAAP-based provision for income taxes(92,648)(0.35)Non-GAAP-based net income, attributable to OpenText$                   293,342$                          1.11
Reconciliation of Adjusted EBITDA

Three Months Ended December 31, 2024GAAP-based net income, attributable to OpenText$                                                     229,862Add:
Provision for income taxes50,893Interest and other related expense, net83,615Amortization of acquired technology-based intangible assets47,203Amortization of acquired customer-based intangible assets81,048Depreciation31,879Share-based compensation30,361Special charges (recoveries)15,238Other (income) expense, net(68,615)Adjusted EBITDA$                                                     501,484

GAAP-based net income margin17.2 %Adjusted EBITDA margin37.6 % Reconciliation of Free Cash Flows

Three Months Ended December 31, 2024GAAP-based cash flows provided by operating activities$                                                         347,992Add:
Capital expenditures (1)(41,269)Free cash flows$                                                         306,723

(1) Defined as "Additions of property and equipment" in the Condensed Consolidated Statements of Cash Flows. Reconciliation of selected GAAP-based measures to Non-GAAP-based measuresfor the six months ended December 31, 2024(In thousands, except for per share data)
Six Months Ended December 31, 2024
GAAP-basedMeasures GAAP-based
Measures % of Total
RevenueAdjustments NoteNon-GAAP-
basedMeasures Non-GAAP-
based
Measures % of Total
RevenueCost of revenues

Cloud services and subscriptions$   347,545
$     (4,982)(1)$   342,563
Customer support125,230
(2,481)(1)122,749
Professional service and other134,956
(2,587)(1)132,369
Amortization of acquired technology-based intangible assets94,447
(94,447)(2)—
GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%)1,888,33472.5 %104,497(3)1,992,83176.5 %Operating expenses

Research and development371,420
(15,823)(1)355,597
Sales and marketing519,811
(20,538)(1)499,273
General and administrative206,086
(13,508)(1)192,578
Amortization of acquired customer-based intangible assets162,552
(162,552)(2)—
Special charges (recoveries)62,374
(62,374)(4)—
GAAP-based income from operations / Non-GAAP-based income from operations502,041
379,292(5)881,333
Other income (expense), net32,960
(32,960)(6)—
Provision for income taxes52,776
118,448(7)171,224
GAAP-based net income / Non-GAAP-based net income, attributable to OpenText314,230
227,884(8)542,114
GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText$         1.18
$         0.85(8)$         2.03

(1)Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.(2)Adjustment relates to the exclusion of amortization expense from our Non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.(3)GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.(4)Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.(5)GAAP-based and Non-GAAP-based income from operations stated in dollars.(6)Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner. We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments. We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results. Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges. We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results.(7)Adjustment relates to differences between the GAAP-based tax provision rate of approximately 14% and a Non-GAAP-based tax rate of approximately 24%; these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income. Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net. Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and "book to return" adjustments for tax return filings and tax assessments. Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included. In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.(8)Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Six Months Ended December 31, 2024

Per share dilutedGAAP-based net income, attributable to OpenText$                   314,230$                          1.18Add (deduct):

Amortization256,9990.96Share-based compensation59,9190.22Special charges (recoveries)62,3740.23Other (income) expense, net(32,960)(0.12)GAAP-based provision for income taxes52,7760.20Non-GAAP-based provision for income taxes(171,224)(0.64)Non-GAAP-based net income, attributable to OpenText$                   542,114$                          2.03 Reconciliation of Adjusted EBITDA

Six Months Ended December 31, 2024
GAAP-based net income, attributable to OpenText$                                                     314,230
Add:

Provision for income taxes52,776
Interest and other related expense, net167,897
Amortization of acquired technology-based intangible assets94,447
Amortization of acquired customer-based intangible assets162,552
Depreciation64,050
Share-based compensation59,919
Special charges (recoveries)62,374
Other (income) expense, net(32,960)
Adjusted EBITDA$                                                     945,285

GAAP-based net income margin12.1 %
Adjusted EBITDA margin36.3 %
Reconciliation of Free cash flows

Six Months Ended December 31, 2024GAAP-based cash flows provided by operating activities$                                                         270,186Add:
Capital expenditures (1)(80,585)Free cash flows$                                                         189,601

(1) Defined as "Additions of property and equipment" in the Condensed Consolidated Statements of Cash Flows. (3) The following tables provide a composition of our major currencies for revenue and expenses, expressed as a percentage, for the three and six months ended December 31, 2025 and 2024:
Three Months Ended December 31, 2025
Three Months Ended December 31, 2024Currencies% of Revenue% of Expenses(1)
% of Revenue% of Expenses(1)EURO26 %14 %
23 %13 %GBP5 %6 %
5 %7 %CAD3 %13 %
3 %10 %USD55 %43 %
58 %46 %Other11 %24 %
11 %24 %Total100 %100 %
100 %100 %

Six Months Ended December 31, 2025
Six Months Ended December 31, 2024Currencies% of Revenue% of Expenses(1)
% of Revenue% of Expenses(1)EURO25 %13 %
23 %12 %GBP5 %6 %
5 %7 %CAD3 %13 %
3 %10 %USD56 %45 %
59 %48 %Other11 %23 %
10 %23 %Total100 %100 %
100 %100 %
(1) Expenses include all cost of revenues and operating expenses included within the Condensed Consolidated Statements of Income, except for amortization of intangible assets, share-based compensation and special charges (recoveries).

View original content to download multimedia:https://www.prnewswire.com/news-releases/opentext-reports-second-quarter-fiscal-year-2026-financial-results-302680692.htmlSOURCE Open Text Corporation

Original: OpenText Reports Second Quarter Fiscal Year 2026 Financial Results

Open Text CEO Discusses Q2 2011 Earnings Call Transcript
February 02, 2011

Good evening, ladies and gentlemen, and thank you for standing by. Welcome to the Open Text Corp. Second Quarter Fiscal Year 2011 Financial Results Conference Call. [Operator Instructions] I will now turn the conference over to your host, Mr. Greg Secord, Vice President, Investor Relations. Please go ahead.

Greg Secord

Thank you, and thank you, everyone, for joining us. Please note that during the course of this conference call, we may make projections or other forward-looking statements relating to the future performance of Open Text or its subsidiaries. These oral statements that may contain forward-looking information, and actual results could differ materially from a conclusion, forecast or projection in the forward-looking information. Certain material factors or assumptions were applied in drawing a conclusion or while making a forecast or projection as reflected in the forward-looking information.

Additional information about the material factors or assumptions that could cause actual results to differ materially from a conclusion, forecast or projection in the forward-looking information, and the material factors or assumptions that were applied in drawing a conclusion while making a forecast or projection as reflected in the forward-looking information are contained in the Form 10-K and Form 10-Qs of Open Text, as well as in our press release that was issued earlier today.

And with that, I'll turn the call over to Paul.

Paul McFeeters

Thank you, Greg. I will highlight the results for the second quarter. Total revenue for the quarter was $267.5 million, up 8% compared to $247.8 million for the same period last year. License revenue for the quarter was $79.2 million, up 9% compared to $72.7 million reported for the same period last year. Maintenance revenue for the quarter was $136.7 million, up 5% compared to $130.3 million for the same period last year. Services and other revenue in the quarter was $51.6 million, up 15% compared to $44.8 million in the same period last year.

Gross margin for the second quarter before amortization of acquired technology was 75%, which remained consistent compared with the same period last year. Adjusted operating income increased 18% to $84.5 million or 32% adjusted operating margin from $71.4 million or 29% adjusted operating margin in Q2 last year.

Adjusted net income increased 41% to $70.5 million this quarter from $50.1 million in the second quarter last year. Second quarter adjusted earnings per share was $1.21 on a diluted basis, up from $0.87 per share for the same period a year ago. The adjusted tax rate for the quarter was 14%. We expect the FY '11 adjusted tax rate to be between 12% and 14% and cash taxes to be in the 5% to 10% range.

Net income for the second quarter, in accordance with GAAP, was $37.1 million or $0.64 per share on a diluted basis compared to $21.2 million or $0.37 per share on a diluted basis for the same period a year ago or approximately 51.8 million shares outstanding on a fully diluted basis for the quarter.

Operating cash flow in the quarter was $40 million compared to $32.5 million in the same period last year, an increase of $7.5 million. After the impact of special charges incurred in the quarter, operating cash flow would've been $45 million for the quarter versus $40 million in the same period last year.

On a year-to-date basis, operating cash flow was $89 million compared to $37 million in the same period last year, an increase of $52 million. Absent the impact of cash paid related to special charges, we did operating cash flow of $101 million compared to $54 million for the first six months last year.

On the balance sheet, at December 31, 2010, deferred revenue was $214 million compared to $230 million as of June 30, 2010, and accounts receivable was $135 million compared to $132 million at the end of last year. Days sales outstanding were 44 days as of December 31, 2010 compared to 50 days at the end of last year and 52 days at the end of Q2 last year.

The sequential effect of foreign currency movement on adjusted earnings per share was a positive $0.02. In comparison to the second quarter of last year, the foreign currency impact on adjusted earnings per share was a negative $0.06.

We closed the StreamServe acquisition on October 27, 2010. Total consideration for this acquisition was $57.2 million net of cash acquired. StreamServe was accretive to our operational results and contributed $0.03 to our adjusted earnings per share for the quarter. There's no changes to our pretax adjusted operating model for this quarter, and we expect our annual operating net margin model to continue to be in the range of 25% to 30%. The full details of our operating model are available on our website.

Today, we announced that we entered into a definitive merger agreement with Metastorm, a leading provider of Business Process Management, Business Process Analysis and Enterprise Architecture software. Total consideration for this acquisition is expected to be approximately $172 million net of cash acquired. The purchase consideration is subject to customary repurchase price and holdback adjustments.

Metastorm's revenue run rate is approximate the $70 million to $75 million on an annual basis and is breakeven on profits and slightly positive on an EBITDA basis. Transaction is expected to close in our third quarter and is subject to customary approvals and Metastorm stockholder consent. At that time, we will issue more information with regard to our integration plan.

Now I'll turn the call over to John.

John Shackleton

Thank you, Paul. Hello, everyone, and thank you for joining us today. I'm very pleased with our second quarter results. We are on track for our year, and all geographies had excellent results throughout the quarter.

As Paul mentioned, we generated $79.2 million of license revenue in the quarter. Geographically, the Americas were responsible for 53% of revenue, Europe, 41% with the remaining 6% coming from Asia Pac. Of the license revenue, approximately 37% came from new customers and 63% from our install base.

We had 13 transactions over $500,000, an additional 6 transactions over $1 million. This compared to nine transactions over $500,000 and six transactions over $1 million a year ago. Average transaction size was approximately $290,000, which is relatively unchanged from last quarter. The larger transactions in the quarter came from the public sector, financial services, high-tech manufacturing and the petrochemical industry.

Examples of customers that board in the quarter include SABIC, one of the world's top petrochemical companies in Saudi Arabia. They purchased Open Text ECM Suite to provide their 37,000 users around the world with a single integrated ECM solution but included integration with SAP, with Microsoft SharePoint. An Open Text strategic alliance with SAP and Microsoft were key factors in the SABIC's selection of us.

Another customer was Scottish and Southern Energy, one of the largest energy companies in the U.K. They purchased several components of the Open Text ECM Suite, including Content Lifecycle Management and e-mail archiving for both Microsoft Exchange and IBM Lotus Notes.

Trinity Mirror, one of the U.K.'s largest newspaper publishers, purchased Open Text Content Management, the complete suite of Open Text Content Analytics and Open Text Semantic Navigation. Trinity Mirror will implement the suite to manage high volumes of incoming content feeds and rich media, which are expected to dramatically increase during the 2012 Olympic Games in London.

Fonterra, a leading multinational dairy company, extended its investment in Open Text technology with the purchase of Content Server, Extended ECM for SAP, Contract Management and CLM Services for SharePoint. The Open Text ECM Suite will facilitate the sharing of information and knowledge to ensure compliance and address risk management across the organization.

In Q2, we saw license revenue broken down by vertical as 20% from technology, 16% from services, 15% from financial services, 15% from natural resources and base materials, 11% from public sector, 6% from healthcare, 6% from consumer goods, 6% for industrial goods and 5% from utilities. Once again, compliance-based solutions were responsible for approximately 60% to 70% of license sales. And despite government spending CapEx, we continued to see pipeline gains in the government vertical over the long term.

From a sales operation standpoint, we closed the quarter with a combined sales force of over 364 quota-carrying sales execs, up from 323 last quarter. With the addition of StreamServe sales reps plus some recent hires, we now have more than sufficient capacity to meet our annual plan.

Maintenance retention rates in the quarter remained the same, roughly in the low 90s. License revenue from partners and resellers was approximately 38% in the quarter. SAP continues to track well at approximately 10% of annual license sales.

With Microsoft, we announced that we recertified our records management and Microsoft solutions against the DoD standards. We're the only leading ECM vendor to have certified solutions with SharePoint 2010.

The Oracle relationship is progressing well, with Oracle influencing one of the larger transactions in the quarter. With SAP, we announced a series of enhancements to our extended ECM for the use with SAP solutions. These enhancements will allow users to access shared workspace and collaborate on content relating to SAP business transactions.

At Content World in November, we profiled Open Text ECM Suite 2010. This is the largest product release in our company's history. All the major components of this suite are now shipping and actually drove several key transactions this quarter.

Also at Content World, we showcased the new release of Open Text Everywhere, our mobile ECM offering, enabling businesses, users to gain access to critical content and processes from their iPads and iPhones.

Open Text Social Media was once again used as the social forum for the G-20, this time in Seoul, South Korea, and we're encouraged by the demand we're seeing for our Social Workplace solution. Currently, we have close to 40 customers and process installations using these new products.

This week, we announced the availability of Open Text portal solutions. It brings together content from Open Text ECM Suite and many other sources into a single, highly flexible and personalized interface for Internet, extranet and customer-facing websites.

As you may recall, last quarter, we announced the agreement to acquire StreamServe, adding document output and customer communication management software to the Open Text ECM Suite. This quarter, we introduced Open Text StreamServe Persuasion version 5, which helps increase the efficiency of document-based communications and improves customer engagement with easy integration with ERP systems.

As Paul mentioned, today, we announced that we have reached an agreement to acquire Metastorm, a provider of software for Business Process Management, Business Process Analysis, as well as enterprise and business architecture. We look forward to welcoming their employees and customers after the transaction closes, which should be by the end of the current quarter. Once it's closed, we'll be happy to share our integration and go-to-market plans with you.

Turning to our outlook for the remainder of FY 2011. The industry analysts are telling us they expect the ECM license revenue to grow at an average of 7% to just over 10%, slightly up from last quarter. This will be through 2013. And while we're not providing guidance, we feel confident with our business model. From a seasonality perspective, we're working hard to smooth out our pipeline, and we'll be focusing on reviewing our sales forecast in detail and our pipeline visibility and predictability is improving.

So in summary, we had an excellent quarter across the board. We exceeded our margin targets, delivering record profits for our shareholders and are tracking to our model for the rest of the year. We remain positive on the outlook for fiscal 2011.

With that, I'd like to open the line for questions.

http://seekingalpha.com/article/250439-open-text-ceo-discusses-q2-2011-earnings-call-transcript