Core Revenues growth of 2% Y/Y, and Core Cloud Revenues growth of 11% Y/Y
Delivers Net Income Margin of 13%, Robust Adjusted EBITDA Margin of 35.8%
Fiscal 2027 First Quarter Highlights (in millions)(1)
Profitability EPS Cash Flows
--------- --------- ---------------------------- ---------------------- ------------------------
Total Cloud Free Cash
Revenues Revenues Net Income A-EBITDA GAAP Non-GAAP Operating Flow
--------- --------- ------------ ------------ ---------- -------- ---------- ----------
$1,237 $505 $155 $442 $0.64 $1.05 $172 $139
-4.0% Y/Y +4.3% Y/Y 12.6% margin 35.8% margin +10.3% Y/Y --% Y/Y +16.6% Y/Y +36.8% Y/Y
WATERLOO, ON, Nov. 5, 2026 /PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced its financial results for the first quarter ended September 30, 2026.
"Our first quarter reflects the strength of our core portfolio and the
value we deliver for clients," said Ayman Antoun, OpenText CEO. "As
clients move to AI, they need trusted context and connected data for
outcomes they can rely on. With Aviator AI agents infused across our core
portfolio and a go-to-market model built around our clients' success, we
are supporting them at every step of their AI journey."
Ayman Antoun, OpenText Chief Executive Officer
"OpenText delivered strong performance in the first quarter of Fiscal
2027, supported by continued financial and operational discipline," said
Steve Rai, OpenText EVP, CFO. "Following the quarter, we completed a $1.0
billion debt refinancing and paid down $300 million in debt through a
successfully completed tender offer, providing the Company with greater
financial flexibility. The durability of our operating model enables us to
execute our capital allocation priorities through the remainder of Fiscal
2027."
Steve Rai, OpenText Executive Vice President, Chief Financial Officer
First Quarter Financial Highlights Y/Y
-- Total revenues: $1.237 billion, -4.0% Y/Y, -1.7% Y/Y in constant currency
excluding divestitures
-- Core Revenues(2): $864 million, +2.4% Y/Y, +2.7% Y/Y in constant currency
-- Core Cloud Revenues(2): $339 million, +11.2% Y/Y, +11.7% Y/Y in constant
currency
-- Annual recurring revenues (ARR): $1.040 billion
-- Cloud revenues: $505 million, +4.3% Y/Y, 23 consecutive quarters of cloud
organic growth
-- Cash flows: Operating $172 million and free cash flow(3) $139 million
-- Net income: GAAP $155 million, +5.9% Y/Y, Non-GAAP(3) $254 million, -4.5%
Y/Y
-- Adjusted EBITDA(3) of $442 million, margin of 35.8%
-- Diluted earnings per share (EPS): GAAP $0.64, Non-GAAP(3) $1.05
-- Repurchased $23 million of common shares for cancellation
(1) Numbers presented are in millions of US dollars, except for per share or
percentage metrics.
(2) Core revenues product categories include Content, Business Network, IT
Operations Management (ITOM) and Cybersecurity (Enterprise).
(3) Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed
consolidated financial statements below.
Financial Highlights for Q1 Fiscal 2027 with Year Over Year Comparisons
Summary of
Quarterly
Results
-----------------
(In millions,
except per share $ Q1 FY'27 % Change
data) Q1 FY'27 Q1 FY'26 Change % Change in CC* in CC*
Revenues:
Cloud services
and
subscriptions $ 505 $ 485 $ 21 4.3 % $ 506 4.3 %
Client support 534 587 (53) (9.0) % 535 (8.8) %
Total annual
recurring
revenues** $ 1,040 $ 1,071 $ (32) (3.0) % $ 1,041 (2.9) %
License 124 135 (11) (8.0) % 124 (7.7) %
Professional
service and
other 73 82 (9) (11.0) % 73 (10.8) %
Total revenues $ 1,237 $ 1,288 $ (52) (4.0) % $ 1,238 (3.9) %
GAAP-based
operating
income $ 251 $ 270 $ (19) (7.1) % N/A N/A
Non-GAAP-based
operating income
(1) $ 403 $ 432 $ (29) (6.7) % $ 395 (8.4) %
GAAP-based net
income
attributable to
OpenText $ 155 $ 147 $ 9 5.9 % N/A N/A
GAAP-based EPS,
diluted $ 0.64 $ 0.58 $ 0.06 10.3 % N/A N/A
Non-GAAP-based
EPS,
diluted (1) $ 1.05 $ 1.05 $ -- -- % $ 1.03 (1.9) %
Adjusted
EBITDA (1) $ 442 $ 467 $ (25) (5.3) % $ 435 (6.9) %
Operating cash
flows $ 172 $ 148 $ 25 16.6 % N/A N/A
Free cash flow
(1) $ 139 $ 101 $ 37 36.8 % N/A N/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 revenues is defined as the sum of Cloud services and
subscriptions revenues and Client support revenues.
Dividend
As part of the quarterly, non-cumulative cash dividend program, the Board declared on November 3, 2026, a cash dividend of $0.280 per common share. The record date for this dividend is December 4, 2026 and the payment date is December 18, 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 Highlights
-- In October, OpenText completed a $1.0 billion senior secured notes
offering, with proceeds used to retire its outstanding 2027 notes.
OpenText further reduced its debt by $300 million as part of a
successfully completed tender offer of a portion of its outstanding 2028
notes. Including debt repaid in October 2026, the Company has reduced
debt by approximately $949 million over the past twelve months. Our net
leverage ratio is 2.55x as of September 30, 2026.
-- OpenText, Cohere partnered to combine trusted data with agentic AI
-- OpenText had a number of key client wins in the quarter representing a
diverse set of industries across the globe.
-- Key wins in the Americas included: Workplace Safety & Insurance
Board (WSIB)
-- Key wins in EMEA and the rest of the world included: Commerz Real
AG, Gruppo CAP, Insurance Australia Group (IAG), and Sumitomo
Electric Wiring Systems Inc.
Summary of
Quarterly
Results
---------------
% Change % Change (Q1
(Q1 FY'27 vs FY'27 vs Q1
Q1 FY'27 Q4 FY'26 Q1 FY'26 Q4 FY'26) FY'26)
Revenues
(millions) $ 1,236.6 $ 1,349.0 $ 1,288.1 (8.3) % (4.0) %
GAAP-based
gross margin 73.2 % 75.0 % 72.8 % (180) bps 40 bps
Non-GAAP-based
gross margin
(1) 76.9 % 78.3 % 76.5 % (140) bps 40 bps
GAAP-based EPS,
diluted $ 0.64 $ 0.64 $ 0.58 -- % 10.3 %
Non-GAAP-based
EPS, diluted
(1) $ 1.05 $ 1.23 $ 1.05 (14.6) % -- %
--------------- ----------- ----------- ----------- ------------ --- ------------ ---
(1) Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed
consolidated financial statements below.
Conference Call Information
OpenText posted an investor presentation on its Investor Relations website and invites the public to listen to the earnings conference call webcast on Thursday, November 5, 2026 at 8:00 a.m. ET (5:00 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.
Save the Date for OpenText Investor Day: February 10, 2027
OpenText intends to host an Investor Day on Wednesday February 10, 2027 in Toronto, Canada. The event will also be available by audio webcast for investors who wish to attend virtually. At the Investor Day, OpenText CEO Ayman Antoun and members of the Executive Leadership Team will discuss the outcome of the previously announced Enterprise Assessment. This includes a discussion of the Company's strategic priorities, growth initiatives, and financial framework.
OTEX-F
Copyright (c) 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 OpenText
OpenText(TM) is a global leader in data management for enterprise 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 enterprise AI. Learn more at www.opentext.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release, including statements about Open Text Corporation ("OpenText" or "the Company") on: focus of Fiscal 2027, including expanding sales capacity, deepening reach through ecosystem partners, and increasing organic investment in our core portfolio; growth in our core business; timing for enterprise assessment and results therefrom; expected future performance, including competitive position of and innovation to certain products, cash generation therefrom and ability to build long-term shareholder value; client benefits from products; executing the Company's capital allocation strategy, including debt reduction, dividends, share repurchases and targeted organic investment ; execution of Business Optimization Plan and other savings initiatives, including timing, costs, savings, associated benefits thereof and potential adjustments of amounts thereto; projected quarterly and annual outlook and estimates; portfolio shaping opportunities and divestiture of non-core assets, including 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; innovation road map; estimated annualized dividend; expected size and timing of the share repurchase program, including execution thereof; future tax rates; renewal rates; potential investments and associated job creation; internal automation and AI leverage, including our AI strategy, vision and growth; Aviator's impact on deal volume and sizes; 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 . 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 CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
September 30, 2026 June 30, 2026
------------------ ------------------
ASSETS (unaudited)
Cash and cash equivalents $ 983,292 $ 956,024
Accounts receivable trade, net of
allowance for credit losses of
$13,920 as of September 30, 2026
and $13,136 as of June 30, 2026 663,434 751,046
Contract assets 72,647 77,447
Income taxes recoverable 86,965 97,715
Prepaid expenses and other current
assets 208,931 235,641
------------------ ------------------
Total current assets 2,015,269 2,117,873
Property and equipment, net of
accumulated depreciation of
$750,779 as of September 30, 2026
and $747,892 as of June 30, 2026 524,125 522,197
Operating lease right of use assets 137,690 134,377
Long-term contract assets 62,679 59,872
Goodwill 7,326,605 7,327,376
Acquired intangible assets 1,376,131 1,475,018
Deferred tax assets 1,054,861 1,077,003
Other assets 317,230 301,328
Long-term income taxes recoverable 109,174 91,460
------------------ ------------------
Total assets $ 12,923,764 $ 13,106,504
================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 863,107 $ 969,079
Current portion of long-term debt 35,850 35,850
Operating lease liabilities 64,822 63,612
Deferred revenues 1,378,557 1,483,234
Income taxes payable 32,515 71,550
------------------ ------------------
Total current liabilities 2,374,851 2,623,325
Long-term liabilities:
Accrued liabilities 127,239 128,915
Pension liability, net 98,914 100,473
Long-term debt 5,730,527 5,734,519
Long-term operating lease
liabilities 137,939 138,425
Long-term deferred revenues 151,137 159,912
Long-term income taxes payable 59,905 65,255
Deferred tax liabilities 132,312 139,614
------------------ ------------------
Total long-term liabilities 6,437,973 6,467,113
Shareholders' equity:
Share capital and additional
paid-in capital
241,515,939 and 242,126,460
Common Shares issued and
outstanding at September 30,
2026 and June 30, 2026,
respectively; authorized Common
Shares: unlimited 2,170,790 2,160,481
Accumulated other comprehensive
income (loss) (37,503) (38,567)
Retained earnings 2,089,829 2,016,086
Treasury stock, at cost
(4,424,724 and 4,751,257 shares
at September 30, 2026 and
June 30, 2026, respectively) (114,191) (123,896)
------------------ ------------------
Total OpenText shareholders'
equity 4,108,925 4,014,104
Non-controlling interests 2,015 1,962
------------------ ------------------
Total shareholders' equity 4,110,940 4,016,066
------------------ ------------------
Total liabilities and
shareholders' equity $ 12,923,764 $ 13,106,504
================== ==================
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share and per share data)
(unaudited)
Three Months Ended September 30,
--------------------------------------
2026 2025
------------------ ------------------
Revenues:
Cloud services and subscriptions $ 505,469 $ 484,509
Client support 534,111 586,845
License 123,847 134,548
Professional service and other 73,207 82,233
------------------ ------------------
Total revenues 1,236,634 1,288,135
------------------ ------------------
Cost of revenues:
Cloud services and subscriptions 178,453 172,217
Client support 47,836 64,064
License 4,275 7,096
Professional service and other 57,732 63,038
Amortization of acquired
technology-based intangible
assets 42,810 44,204
------------------ ------------------
Total cost of revenues 331,106 350,619
------------------ ------------------
Gross profit 905,528 937,516
------------------ ------------------
Operating expenses:
Research and development 142,147 169,128
Sales and marketing 277,587 257,055
General and administrative 105,813 105,763
Depreciation 39,802 35,921
Amortization of acquired
client-based intangible assets 56,078 79,561
Special charges (recoveries) 33,290 20,139
------------------ ------------------
Total operating expenses 654,717 667,567
------------------ ------------------
Income from operations 250,811 269,949
------------------ ------------------
Other income (expense), net 16,110 (2,976)
Interest and other related expense,
net (67,938) (81,114)
------------------ ------------------
Income before income taxes 198,983 185,859
Provision for income taxes 43,683 39,199
------------------ ------------------
Net income for the period $ 155,300 $ 146,660
------------------ ------------------
Net (income) attributable to
non-controlling interests (53) (44)
------------------ ------------------
Net income attributable to OpenText $ 155,247 $ 146,616
================== ==================
Earnings per share--basic
attributable to OpenText $ 0.64 $ 0.58
================== ==================
Earnings per share--diluted
attributable to OpenText $ 0.64 $ 0.58
================== ==================
Weighted average number of Common
Shares outstanding--basic (in
'000's) 242,012 253,645
================== ==================
Weighted average number of Common
Shares outstanding--diluted (in
'000's) 242,087 253,772
================== ==================
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)
(unaudited)
Three Months Ended September 30,
2026 2025
------------------ ------------------
Net income for the period $ 155,300 $ 146,660
Other comprehensive income
(loss)--net of tax:
Net foreign currency translation
adjustments 1,615 22,177
Unrealized gain (loss) on cash
flow hedges:
Unrealized gain (loss) - net
of tax (1) (330) (1,675)
(Gain) loss reclassified into
net income - net of tax (2) 590 (112)
Unrealized gain (loss) on
available-for-sale financial
assets:
Unrealized gain (loss) - net
of tax (3) (277) 161
Actuarial gain (loss) relating to
defined benefit pension plans:
Amortization of actuarial
(gain) loss into net income -
net of tax (4) (534) 5
------------------ ------------------
Total other comprehensive income net 1,064 20,556
------------------ ------------------
Total comprehensive income 156,364 167,216
Comprehensive income attributable to
non-controlling interests (53) (44)
------------------ ------------------
Total comprehensive income
attributable to OpenText $ 156,311 $ 167,172
================== ==================
(______________________________)
(1) Net of tax expense (recovery) of $(119) and $(604) for the three months
ended September 30, 2026 and 2025, respectively.
(2) Net of tax expense (recovery) of $213 and $(41) for the three months
ended September 30, 2026 and 2025, respectively.
(3) Net of tax expense (recovery) of $(132) and $66 for the three months
ended September 30, 2026 and 2025, respectively.
(4) Net of tax expense (recovery) of $(223) and $4 for the three months ended
September 30, 2026 and 2025, respectively.
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands of U.S. dollars and shares)
(unaudited)
Three Months Ended September 30, 2026
----------------------------------------------------------------------------------------------------
Common Shares and
Additional Paid in
Capital Treasury Stock
-------------------- ------------------- ----------- ------------------ ----------- -----------
Accumulated Other Non-
Retained Comprehensive Controlling
Shares Amount Shares Amount Earnings Income Interests Total
------- ----------- ------- ---------- ----------- ------------------ ----------- -----------
Balance as of June
30, 2026 242,126 $ 2,160,481 (4,751) $(123,896) $ 2,016,086 $ (38,567) $ 1,962 $ 4,016,066
Issuance of Common
Shares
Under employee
stock purchase
plans 371 6,956 -- -- -- -- -- 6,956
Share-based
compensation -- 19,694 -- -- -- -- -- 19,694
Issuance of
treasury stock -- (9,218) 326 9,705 -- -- -- 487
Repurchase of
Common Shares (981) (7,123) -- -- (13,588) -- -- (20,711)
Dividends declared
($0.28 per Common
Share) -- -- -- -- (67,916) -- -- (67,916)
Other comprehensive
income (loss) -
net -- -- -- -- -- 1,064 -- 1,064
Net income for the
period -- -- -- -- 155,247 -- 53 155,300
------- ----------- ------- ---------- ----------- ------------------ ----------- -----------
Balance as of
September 30,
2026 241,516 $ 2,170,790 (4,425) $(114,191) $ 2,089,829 $ (37,503) $ 2,015 $ 4,110,940
======= =========== ======= ========== =========== ================== =========== ===========
Three Months Ended September 30, 2025
----------------------------------------------------------------------------------------------------
Common Shares and
Additional Paid in
Capital Treasury Stock
-------------------- ------------------- ----------- ------------------ ----------- -----------
Accumulated Other Non-
Retained Comprehensive Controlling
Shares Amount Shares Amount Earnings Income Interests Total
------- ----------- ------- ---------- ----------- ------------------ ----------- -----------
Balance as of June
30, 2025 254,784 $ 2,193,985 (4,648) $(138,164) $ 1,940,113 $ (67,067) $ 1,721 $ 3,930,588
Issuance of Common
Shares
Under employee
stock option
plans 25 555 -- -- -- -- -- 555
Under employee
stock purchase
plans 311 7,596 -- -- -- -- -- 7,596
Share-based
compensation -- 17,681 -- -- -- -- -- 17,681
Issuance of
treasury stock -- (7,402) 196 7,603 -- -- -- 201
Repurchase of
Common Shares (3,156) (23,075) -- -- (78,648) -- -- (101,723)
Dividends declared
($0.275 per Common
Share) -- -- -- -- (69,365) -- -- (69,365)
Other comprehensive
income (loss) -
net -- -- -- -- -- 20,556 -- 20,556
Net income for the
period -- -- -- -- 146,616 -- 44 146,660
------- ----------- ------- ---------- ----------- ------------------ ----------- -----------
Balance as of
September 30,
2025 251,964 $ 2,189,340 (4,452) $(130,561) $ 1,938,716 $ (46,511) $ 1,765 $ 3,952,749
======= =========== ======= ========== =========== ================== =========== ===========
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
Three Months Ended September 30,
------------------------------------------------
2026 2025
----------------------- -----------------------
Cash flows from operating
activities:
Net income $ 155,300 $ 146,660
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization of
intangible assets 138,690 159,686
Share-based compensation
expense 19,694 17,681
Pension expense 1,968 3,141
Amortization of debt
discount and issuance
costs 4,970 5,760
Write-off of right of use
assets -- 4,422
Loss on sale and write
down of property and
equipment, net 217 2,314
Deferred taxes 12,262 (15,132)
Share in net (income) of
equity investees (5,729) (2,417)
Changes in derivative
instruments (7,558) (7,843)
Changes in operating
assets and liabilities:
Accounts receivable 115,800 93,998
Contract assets (27,819) (30,970)
Prepaid expenses and
other current assets 26,893 (2,096)
Income taxes (48,435) (33,112)
Accounts payable and
accrued liabilities (81,848) (89,793)
Deferred revenues (116,563) (108,798)
Other assets (12,288) 7,809
Operating lease assets
and liabilities, net (3,281) (3,547)
----------------------- -----------------------
Net cash provided by
operating activities 172,273 147,763
----------------------- -----------------------
Cash flows from investing
activities:
Additions of property and
equipment (33,756) (46,534)
Proceeds from interest on
derivative instruments (607) 870
Other investing
activities 1,248 632
----------------------- -----------------------
Net cash used in investing
activities (33,115) (45,032)
----------------------- -----------------------
Cash flows from financing
activities:
Proceeds from issuance of
Common Shares from
exercise of stock
options and ESPP 6,742 8,380
Repayment of long-term
debt and Revolver (8,963) (8,963)
Net change in transition
services agreement
obligation (12,840) --
Repurchase of Common
Shares (30,010) (107,629)
Payments of dividends to
shareholders (66,465) (68,220)
----------------------- -----------------------
Net cash used in financing
activities (111,536) (176,432)
----------------------- -----------------------
Foreign exchange gain
(loss) on cash held in
foreign currencies (301) 4,306
----------------------- -----------------------
Increase (decrease) in
cash, cash equivalents
and restricted cash
during the period 27,321 (69,395)
Cash, cash equivalents and
restricted cash at
beginning of the period 957,254 1,158,106
----------------------- -----------------------
Cash, cash equivalents and
restricted cash at end of
the period $ 984,575 $ 1,088,711
======================= =======================
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
Reconciliation of cash,
cash equivalents and
restricted cash: September 30, 2026 September 30, 2025
----------------------- ----------------------
Cash and cash equivalents $ 983,292 $ 1,087,083
Restricted cash (1) 1,283 1,628
----------------------- ----------------------
Total cash, cash
equivalents and restricted
cash $ 984,575 $ 1,088,711
======================= ======================
(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 revenues. 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 revenues.
Free cash flow 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 measures
for the three months ended September 30, 2026
(In thousands, except for per share data)
-----------------------------------------------------------------------------------
Three Months Ended September 30, 2026
----------------------------------------------------------------
GAAP-
based Non-GAAP-
Measures based
% of Non-GAAP- Measures
GAAP-based Total based % of Total
Measures Revenues Adjustments Note Measures Revenues
---------- -------- ----------- ---- ---------- -----------
Cost of revenues
Cloud services
and
subscriptions $ 178,453 $ (1,691) (1) $ 176,762
Client support 47,836 (789) (1) 47,047
Professional
service and
other 57,732 (714) (1) 57,018
Amortization of
acquired
technology-based
intangible
assets 42,810 (42,810) (2) --
GAAP-based gross
profit and gross
margin (%) /
Non-GAAP-based
gross profit and
gross margin
(%) 905,528 73.2 % 46,004 (3) 951,532 76.9 %
Operating
expenses
Research and
development 142,147 (3,654) (1) 138,493
Sales and
marketing 277,587 (6,871) (1) 270,716
General and
administrative 105,813 (5,975) (1) 99,838
Amortization of
acquired
client-based
intangible
assets 56,078 (56,078) (2) --
Special charges
(recoveries) 33,290 (33,290) (4) --
GAAP-based income
from operations
/ Non-
GAAP-based
income from
operations 250,811 151,872 (5) 402,683
Other income
(expense), net 16,110 (16,110) (6) --
Provision for
income taxes 43,683 36,656 (7) 80,339
GAAP-based net
income /
Non-GAAP-based
net income,
attributable to
OpenText 155,247 99,106 (8) 254,353
GAAP-based
earnings per
share /
Non-GAAP- based
earnings per
share-diluted,
attributable to
OpenText $ 0.64 $ 0.41 (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 revenues.
(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. 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, 2026
-------------------------------------------
Per share diluted
------------------- ----------------------
GAAP-based net income,
attributable to OpenText $ 155,247 $ 0.64
Add:
Amortization 98,888 0.41
Share-based compensation 19,694 0.08
Special charges (recoveries) 33,290 0.14
Other (income) expense, net (16,110) (0.07)
GAAP-based provision for income
taxes 43,683 0.18
Non-GAAP-based provision for
income taxes (80,339) (0.33)
------------------- ----------------------
Non-GAAP-based net income,
attributable to OpenText $ 254,353 $ 1.05
=================== ======================
Reconciliation of Adjusted EBITDA
Three Months Ended September 30, 2026
-----------------------------------------------
GAAP-based net income,
attributable to OpenText $ 155,247
Add:
Provision for income taxes 43,683
Interest and other related
expense, net 67,938
Amortization of acquired
technology-based intangible
assets 42,810
Amortization of acquired
client-based intangible
assets 56,078
Depreciation 39,802
Share-based compensation 19,694
Special charges (recoveries) 33,290
Other (income) expense, net (16,110)
-----------------------------------------------
Adjusted EBITDA $ 442,432
===============================================
GAAP-based net income margin 12.6 %
Adjusted EBITDA margin 35.8 %
Reconciliation of Free Cash Flow
Three Months Ended September 30, 2026
------------------------------------------------
GAAP-based cash flows
provided by operating
activities $ 172,273
Add:
Capital expenditures (1) (33,756)
------------------------------------------------
Free cash flow $ 138,517
================================================
(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 measures
for the three months ended June 30, 2026
(In thousands, except for per share data)
--------------------------------------------------------------------------------------
Three Months Ended June 30, 2026
------------------------------------------------------------------
GAAP-
based Non-GAAP-
Measures based
% of Non-GAAP- Measures
GAAP-based Total based % of Total
Measures Revenues Adjustments Note Measures Revenues
----------- -------- ----------- ---- ----------- -----------
Cost of revenues
Cloud services and
subscriptions $ 180,788 $ (1,555) (1) $ 179,233
Client support 53,045 (632) (1) 52,413
Professional
service and
other 56,828 (328) (1) 56,500
Amortization of
acquired
technology-based
intangible
assets 42,879 (42,879) (2) --
GAAP-based gross
profit and gross
margin (%)
/Non-GAAP-based
gross profit and
gross margin
(%) 1,011,472 75.0 % 45,394 (3) 1,056,866 78.3 %
Operating expenses
Research and
development 149,104 (3,884) (1) 145,220
Sales and
marketing 308,356 (8,898) (1) 299,458
General and
administrative 112,025 (6,549) (1) 105,476
Amortization of
acquired
client-based
intangible
assets 64,989 (64,989) (2) --
Special charges
(recoveries) 18,879 (18,879) (4) --
GAAP-based income
from operations /
Non- GAAP-based
income from
operations 319,680 148,593 (5) 468,273
Other income
(expense), net 5,688 (5,688) (6) --
Provision for
income taxes 94,799 (376) (7) 94,423
GAAP-based net
income /
Non-GAAP-based
net income,
attributable to
OpenText 155,663 143,281 (8) 298,944
GAAP-based
earnings per
share / Non-GAAP-
based earnings
per
share-diluted,
attributable to
OpenText $ 0.64 $ 0.59 (8) $ 1.23
(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 revenues.
(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 38% 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. 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 June 30, 2026
-------------------------------------------
Per share diluted
------------------- ----------------------
GAAP-based net income,
attributable to OpenText $ 155,663 $ 0.64
Add:
Amortization 107,868 0.44
Share-based compensation 21,846 0.09
Special charges (recoveries) 18,879 0.08
Other (income) expense, net (5,688) (0.02)
GAAP-based provision for income
taxes 94,799 0.39
Non-GAAP-based provision for
income taxes (94,423) (0.39)
------------------- ----------------------
Non-GAAP-based net income,
attributable to OpenText $ 298,944 $ 1.23
=================== ======================
Reconciliation of Adjusted EBITDA
Three Months Ended June 30, 2026
---------------------------------------------
GAAP-based net income,
attributable to OpenText $ 155,663
Add:
Provision for income taxes 94,799
Interest and other related
expense, net 74,845
Amortization of acquired
technology-based intangible
assets 42,879
Amortization of acquired
client-based intangible
assets 64,989
Depreciation 38,439
Share-based compensation 21,846
Special charges (recoveries) 18,879
Other (income) expense, net (5,688)
---------------------------------------------
Adjusted EBITDA $ 506,651
=============================================
GAAP-based net income margin 11.5 %
Adjusted EBITDA margin 37.6 %
Reconciliation of Free Cash Flow
Three Months Ended June 30, 2026
------------------------------------------------
GAAP-based cash flows
provided by operating
activities $ 185,802
Add:
Capital expenditures (1) (63,831)
------------------------------------------------
Free cash flow $ 121,971
================================================
(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 measures
for the three months ended September 30, 2025
(In thousands, except for per share data)
------------------------------------------------------------------------------------
Three Months Ended September 30, 2025
----------------------------------------------------------------
GAAP-
based Non-GAAP-
Measures based
% of Non-GAAP- Measures
GAAP-based Total based % of Total
Measures Revenues Adjustments Note Measures Revenues
---------- -------- ----------- ---- ---------- -----------
Cost of revenues
Cloud services and
subscriptions $ 172,217 $ (1,749) (1) $ 170,468
Client support 64,064 (1,053) (1) 63,011
Professional
service and
other 63,038 (499) (1) 62,539
Amortization of
acquired
technology-based
intangible
assets 44,204 (44,204) (2) --
GAAP-based gross
profit and gross
margin (%)
/Non-GAAP-based
gross profit and
gross margin
(%) 937,516 72.8 % 47,505 (3) 985,021 76.5 %
Operating expenses
Research and
development 169,128 (3,609) (1) 165,519
Sales and
marketing 257,055 (6,896) (1) 250,159
General and
administrative 105,763 (3,875) (1) 101,888
Amortization of
acquired
client-based
intangible
assets 79,561 (79,561) (2) --
Special charges
(recoveries) 20,139 (20,139) (4) --
GAAP-based income
from operations /
Non- GAAP-based
income from
operations 269,949 161,585 (5) 431,534
Other income
(expense), net (2,976) 2,976 (6) --
Provision for
income taxes 39,199 44,902 (7) 84,101
GAAP-based net
income /
Non-GAAP-based
net income,
attributable to
OpenText 146,616 119,659 (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 revenues.
(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. 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 diluted
------------------- ----------------------
GAAP-based net income,
attributable to OpenText $ 146,616 $ 0.58
Add:
Amortization 123,765 0.49
Share-based compensation 17,681 0.07
Special charges (recoveries) 20,139 0.08
Other (income) expense, net 2,976 0.01
GAAP-based provision for income
taxes 39,199 0.15
Non-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, 2025
---------------------------------------------
GAAP-based net income,
attributable to OpenText $ 146,616
Add:
Provision for income taxes 39,199
Interest and other related
expense, net 81,114
Amortization of acquired
technology-based intangible
assets 44,204
Amortization of acquired
client-based intangible
assets 79,561
Depreciation 35,921
Share-based compensation 17,681
Special charges (recoveries) 20,139
Other (income) expense, net 2,976
---------------------------------------------
Adjusted EBITDA $ 467,411
=============================================
GAAP-based net income margin 11.4 %
Adjusted EBITDA margin 36.3 %
Reconciliation of Free Cash Flow
Three Months Ended September 30, 2025
------------------------------------------------
GAAP-based cash flows
provided by operating
activities $ 147,763
Add:
Capital expenditures (1) (46,534)
------------------------------------------------
Free cash flow $ 101,229
================================================
(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
revenues and expenses, expressed as a percentage, for the three months
ended September 30, 2026 and 2025:
Three Months Ended September Three Months Ended September
30, 2026 30, 2025
------------------------------- -------------------------------
Currencies % of Revenues % of Expenses(1) % of Revenues % of Expenses(1)
------------- ---------------- ------------- ----------------
EURO 25 % 13 % 24 % 12 %
GBP 5 % 6 % 5 % 6 %
CAD 3 % 14 % 3 % 12 %
USD 57 % 44 % 58 % 46 %
Other 10 % 23 % 10 % 24 %
------------- ---------------- ------------- ----------------
Total 100 % 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-first-quarter-fiscal-year-2027-financial-results-302929877.html
SOURCE Open Text Corporation
Comments