Total Revenues of $1.29B, 19 Consecutive Quarters of Cloud Organic Growth
Delivers Net Income Margin of 11%, Robust Adjusted EBITDA Margin of 36.3%
GAAP EPS of $0.58, Non-GAAP EPS of $1.05
Fiscal 2026 First Quarter Highlights (in millions)(1)
--------------------------------------------------------------------------------------------------------------
Total Cloud Profitability EPS Cash Flows
Revenues Revenues
Net Income A-EBITDA GAAP Non-GAAP Operating Free Cash
Flows
$1,288 $485 $147 $467 $0.58 $1.05 $148 $101
+1.5% Y/Y +6.0% Y/Y 11.4% margin 36.3% margin +81.3% Y/Y +12.9% Y/Y +289.9% Y/Y +186.4% Y/Y
WATERLOO, ON, Nov. 5, 2025 /CNW/ -- Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced its financial results for the first quarter ended September 30, 2025.
"OpenText performed well in the quarter, driven by growth in our Content Management cloud business. The strength of the OpenText operating model continues to drive the business towards meeting our margin targets for Fiscal 2026," said James McGourlay, Interim CEO. "We are strengthening our position at the forefront of Information Management for AI, and we look forward to showcasing our exciting innovation roadmap at our upcoming OpenText World User Conference in Nashville." James McGourlay, OpenText Interim Chief Executive Officer "OpenText delivered strong margin and free cash flow performance in the quarter. The Company's Business Optimization Plan is well underway, and will drive operational efficiencies across the organization," said Steve Rai, Executive Vice President, Chief Financial Officer. "We have tremendous scale and the capital flexibility to continue investing for growth to ensure OpenText is well positioned to lead the Information Management for AI market." Steve Rai, OpenText Executive Vice President, Chief Financial Officer "OpenText continues to advance its strategy to enhance shareholder value by growing revenue in its core Information Management for AI business, and with the announcement of our definitive agreement to divest an on-premise solution (eDOCS), a part of its Analytics portfolio, we have started the process of portfolio-shaping and divesting non-core assets," said P. Thomas Jenkins, Executive Chair of the Board and Chief Strategy Officer. "As you can see from our results, the company remains in good operational hands as we continue to make excellent progress in our search of a permanent CEO." P. Thomas Jenkins, OpenText Executive Chair & Chief Strategy Officer
First Quarter Financial Highlights Y/Y
-- Total revenues: $1.288 billion, +1.5% Y/Y -- Annual recurring revenues $(ARR)$: $1.071 billion -- Cloud revenues: $485 million, +6.0% Y/Y, 19 consecutive quarters of cloud organic growth -- Quarterly enterprise cloud bookings(2): $160 million, +20.2% Y/Y -- Cash flows: Operating $148 million and free cash flows(3) $101 million -- Net income: GAAP $147 million, +73.8% Y/Y, Non-GAAP(3) $266 million, +7.0% Y/Y -- Adjusted EBITDA(3) of $467 million, margin of 36.3% -- Diluted earnings per share (EPS): GAAP $0.58, Non-GAAP(3) $1.05 -- Repurchased $100 million of common shares for cancellation (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 Q1 Fiscal 2026 with Year Over Year Comparisons
Summary of Quarterly Results --------------- (In millions, Q1 Q1 FY'25 $ Change % Change Q1 FY'26 % Change except per FY'26 in CC* in CC* share data) Revenues: Cloud services and subscriptions $ 485 $ 457 $ 27 6.0 % $ 476 4.2 % Customer support 587 595 (9) (1.5) % 573 (3.8) % Total annual recurring revenues** $ 1,071 $ 1,053 $ 19 1.8 % $ 1,049 (0.3) % License 135 126 9 6.9 % 132 5.2 % Professional service and other 82 91 (8) (9.3) % 80 (12.2) % Total revenues $ 1,288 $ 1,269 $ 19 1.5 % $ 1,261 (0.6) % GAAP-based operating income $ 270 $ 206 $ 64 30.9 % N/A N/A Non-GAAP-based operating income (1) $ 432 $ 412 $ 20 4.8 % $ 415 0.8 % GAAP-based net income attributable to OpenText $ 147 $ 84 $ 62 73.8 % N/A N/A GAAP-based EPS, diluted $ 0.58 $ 0.32 $ 0.26 81.3 % N/A N/A Non-GAAP-based EPS, diluted (1) $ 1.05 $ 0.93 $ 0.12 12.9 % $ 1.00 7.5 % Adjusted EBITDA (1) $ 467 $ 444 $ 24 5.3 % $ 451 1.5 % Operating cash flows $ 148 $ (78) $ 226 289.9 % N/A N/A Free cash flows (1) $ 101 $ (117) $ 218 186.4 % 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 revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.
Dividend
As part of the quarterly, non-cumulative cash dividend program, the Board declared on November 4, 2025, a cash dividend of $0.275 per common share. The record date for this dividend is December 5, 2025 and the payment date is December 19, 2025. 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
-- OpenText appoints Steve Rai as EVP, Chief Financial Officer
-- OpenText to strategically divest on-premise solution (eDOCS), a part of
its analytics portfolio, for US$163 million
-- OpenText appoints George Schindler to the Board of Directors
-- Key customer wins in the quarter include: Alten, Australia Department of
Health (Health Support Services), Core42, Eisenbahn-Bundesamt, GSTN,
Optiv Security, MH Service, National Grid USA Service Company, Wegmans
Food Markets
-- OpenText named a leader in 2025 Gartner$(R)$ Magic Quadrant$(TM)$ for
Application Security Testing for the 11th successive year
-- OpenText recognized as a leader in the 2025 Gartner(R) Magic Quadrant(TM)
for AI-Augmented Software Testing Tools
-- OpenText expands availability of core threat detection and response with
deep Microsoft integrations
-- OpenText and Fiserv drive resilient information management in financial
services
-- OpenText delivers enterprise-ready AI solutions through HPE Unleash AI
program
-- OpenText unveils new solutions for Guidewire to power AI and cloud-ready
insurance workflows
Summary of
Quarterly
Results
---------------
Q1 Q4 Q1 % Change (Q1 % Change (Q1
FY'26 FY'25 FY'25 FY'26 vs FY'26 vs
Q4 FY'25) Q1 FY'25)
Revenue
(millions) $ 1,288 $ 1,311 $ 1,269 (1.7) % 1.5 %
GAAP-based
gross margin 72.8 % 72.3 % 71.7 % 50 bps 100 bps
Non-GAAP-based
gross margin
(1) 76.5 % 76.2 % 75.8 % 30 bps 60 bps
GAAP-based EPS,
diluted $ 0.58 $ 0.11 $ 0.32 427.3 % 81.3 %
Non-GAAP-based
EPS, diluted
(1) $ 1.05 $ 0.97 $ 0.93 8.2 % 12.9 %
(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 tomorrow on Thursday, November 6, 2025 at 8:30 a.m. ET (5:30 a.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-F
Copyright (c) 2025 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 leading Cloud and AI company that provides organizations around the world with a comprehensive suite of Business AI, Business Clouds, and Business Technology. We help organizations grow, innovate, become more efficient and effective, and do so in a trusted and secure way -- through Information Management. For more information about OpenText (NASDAQ/TSX: OTEX), please visit us at http://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 growth, profitability and future of Information Management, including returning to growth, strategic capital allocation, delivering sustained margin and free cash flow growth, reinvestment in out-performing products, 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, associated strategy, benefits from and timing of such transactions and use of proceeds therefrom; appointment of permanent CEO and timing thereof; 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 . 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, 2025 June 30, 2025
ASSETS (unaudited)
Cash and cash equivalents $ 1,087,083 $ 1,156,496
Accounts receivable trade, net of
allowance for credit
losses of $14,670 as of September 30,
2025 and $14,258
as of June 30, 2025 590,974 659,675
Contract assets 80,956 77,920
Income taxes recoverable 75,706 108,792
Prepaid expenses and other current assets 198,191 198,575
Assets held for sale 104,023 --
Total current assets 2,136,933 2,201,458
Property and equipment, net of
accumulated depreciation
of $710,851 as of September 30, 2025 and
$835,324
as of June 30, 2025 370,552 375,252
Operating lease right of use assets 186,920 197,977
Long-term contract assets 50,902 49,293
Goodwill 7,441,579 7,517,463
Acquired intangible assets 1,852,906 1,976,591
Deferred tax assets 1,062,736 1,080,575
Other assets 301,792 307,693
Long-term income taxes recoverable 70,966 67,762
Total assets $ 13,475,286 $ 13,774,064
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 889,195 $ 1,026,583
Current portion of long-term debt 35,850 35,850
Operating lease liabilities 73,770 75,914
Deferred revenues 1,403,126 1,515,382
Income taxes payable 46,612 93,325
Liabilities held for sale 14,111 --
Total current liabilities 2,462,664 2,747,054
Long-term liabilities:
Accrued liabilities 41,635 42,312
Pension liability, net 133,522 132,215
Long-term debt 6,338,869 6,342,071
Long-term operating lease liabilities 181,973 189,949
Long-term deferred revenues 158,883 168,757
Long-term income taxes payable 74,337 79,604
Deferred tax liabilities 130,654 141,514
Total long-term liabilities 7,059,873 7,096,422
Shareholders' equity:
Share capital and additional paid-in
capital
251,964,241 and 254,784,391 Common Shares
issued
and outstanding at September 30, 2025
and June 30,
2025, respectively; authorized Common
Shares: unlimited 2,189,340 2,193,985
Accumulated other comprehensive income
(loss) (46,511) (67,067)
Retained earnings 1,938,716 1,940,113
Treasury stock, at cost (4,452,019 and
4,648,036
shares at September 30, 2025 and June
30, 2025, respectively) (130,561) (138,164)
Total OpenText shareholders' equity 3,950,984 3,928,867
Non-controlling interests 1,765 1,721
Total shareholders' equity 3,952,749 3,930,588
Total liabilities and shareholders'
equity $ 13,475,286 $ 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 Ended September 30,
2025 2024
Revenues:
Cloud services and subscriptions $ 484,509 $ 457,024
Customer support 586,845 595,490
License 134,548 125,813
Professional service and other 82,233 90,678
Total revenues 1,288,135 1,269,005
Cost of revenues:
Cloud services and subscriptions 172,217 175,257
Customer support 64,064 62,574
License 7,096 6,657
Professional service and other 63,038 66,915
Amortization of acquired
technology-based intangible
assets 44,204 47,244
Total cost of revenues 350,619 358,647
Gross profit 937,516 910,358
Operating expenses:
Research and development 169,128 190,693
Sales and marketing 257,055 245,882
General and administrative 105,763 106,730
Depreciation 35,921 32,171
Amortization of acquired customer-based
intangible
assets 79,561 81,504
Special charges (recoveries) 20,139 47,136
Total operating expenses 667,567 704,116
Income from operations 269,949 206,242
Other income (expense), net (2,976) (35,655)
Interest and other related expense, net (81,114) (84,282)
Income before income taxes 185,859 86,305
Provision for income taxes 39,199 1,883
Net income for the period $ 146,660 $ 84,422
Net (income) attributable to
non-controlling interests (44) (54)
Net income attributable to OpenText $ 146,616 $ 84,368
Earnings per share--basic attributable
to OpenText $ 0.58 $ 0.32
Earnings per share--diluted attributable
to OpenText $ 0.58 $ 0.32
Weighted average number of Common Shares
outstanding--basic
(in '000's) 253,645 267,400
Weighted average number of Common Shares
outstanding--diluted
(in '000's) 253,772 267,821
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
(In thousands of U.S. dollars)
(unaudited)
Three Months Ended September 30,
2025 2024
Net income for the period $ 146,660 $ 84,422
Other comprehensive income (loss)--net
of tax:
Net foreign currency translation
adjustments 22,177 (5,190)
Unrealized gain (loss) on cash flow
hedges:
Unrealized gain (loss) - net of tax (1) (1,675) 654
(Gain) loss reclassified into net income
- net of
tax (2) (112) 262
Unrealized gain (loss) on
available-for-sale financial
assets:
Unrealized gain (loss) - net of tax (3) 161 248
Actuarial 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) 5 234
Total other comprehensive income (loss)
net 20,556 (4,837)
Total comprehensive income 167,216 79,585
Comprehensive income attributable to
non-controlling
interests (44) (54)
Total comprehensive income attributable
to OpenText $ 167,172 $ 79,531
(______________________________)
(1) Net of tax expense (recovery) of $(604) and $236
for the three months ended September 30, 2025 and
2024, respectively.
(2) Net of tax expense (recovery) of $(41) and $94 for
the three months ended September 30, 2025 and 2024,
respectively.
(3) Net of tax expense (recovery) of $66 and $207 for
the three months ended September 30, 2025 and 2024,
respectively.
(4) Net of tax expense (recovery) of $0 and $(43) for
the three months ended September 30, 2025 and 2024,
respectively.
(5) Net of tax expense (recovery) of $4 and $92 for the
three months ended September 30, 2025 and 2024, respectively.
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY
(In thousands of U.S. dollars and shares)
(unaudited)
Three Months Ended September 30, 2025
Common Shares and Treasury Stock Retained Accumulated Non- Total
Additional Paid in Earnings Other Controlling
Capital Comprehensive
Income Interests
Shares Amount Shares Amount
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
Three Months Ended September 30, 2024
Common Shares and Treasury Stock Retained Accumulated Non- Total
Additional Paid in Earnings Other Controlling
Capital Comprehensive
Income Interests
Shares Amount Shares Amount
Balance as of June
30, 2024 267,801 $ 2,271,886 (3,136) $ (123,268) $ 2,119,159 $ (69,619) $ 1,523 $ 4,199,681
Issuance of Common
Shares
Under employee stock
option plans 5 141 -- -- -- -- -- 141
Under employee stock
purchase plans 389 9,863 -- -- -- -- -- 9,863
Share-based
compensation -- 29,446 -- -- -- -- -- 29,446
Purchase of treasury
stock -- -- (824) (25,010) -- -- -- (25,010)
Issuance of treasury
stock -- (1,930) 60 2,632 (702) -- -- --
Repurchase of Common
Shares (2,649) (19,215) -- -- (67,266) -- -- (86,481)
Dividends declared
($0.2625 per Common
Share) -- -- -- -- (70,338) -- -- (70,338)
Other comprehensive
income (loss) - net -- -- -- -- -- (4,837) -- (4,837)
Net income for the
period -- -- -- -- 84,368 -- 54 84,422
Balance as of
September 30, 2024 265,546 $ 2,290,191 (3,900) $ (145,646) $ 2,065,221 $ (74,456) $ 1,577 $ 4,136,887
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
Three Months Ended September 30,
2025 2024
Cash flows from operating activities:
Net income $ 146,660 $ 84,422
Adjustments to reconcile net income to
net cash provided
by operating activities:
Depreciation and amortization of
intangible assets 159,686 160,919
Share-based compensation expense 17,681 29,558
Pension expense 3,141 3,463
Amortization of debt discount and
issuance costs 5,760 5,296
Write-off of right of use assets 4,422 --
Loss on sale and write down of property 2,314 2
and equipment,
net
Deferred taxes (15,132) (42,150)
Share in net (income) of equity
investees (2,417) (455)
Changes in derivative instruments (7,843) 24,935
Changes in operating assets and
liabilities:
Accounts receivable 93,998 57,607
Contract assets (30,970) (33,849)
Prepaid expenses and other current
assets (2,096) 22,151
Income taxes (33,112) (193,509)
Accounts payable and accrued liabilities (89,793) (107,520)
Deferred revenue (108,798) (76,531)
Other assets 7,809 (4,742)
Operating lease assets and liabilities,
net (3,547) (7,403)
Net cash provided by (used in) operating
activities 147,763 (77,806)
Cash flows from investing activities:
Additions of property and equipment (46,534) (39,316)
Proceeds from interest on derivative
instruments 870 2,519
Other investing activities 632 357
Net cash used in investing activities (45,032) (36,440)
Cash flows from financing activities:
Proceeds from issuance of Common Shares
from exercise
of stock options and ESPP 8,380 9,449
Repayment of long-term debt and Revolver (8,963) (8,963)
Net change in transition services
agreement obligation -- (4,295)
Repurchase of Common Shares (107,629) (87,403)
Purchase of treasury stock -- (25,000)
Payments of dividends to shareholders (68,220) (69,061)
Net cash used in financing activities (176,432) (185,273)
Foreign exchange gain on cash held in
foreign currencies 4,306 19,136
Decrease in cash, cash equivalents and
restricted
cash during the period (69,395) (280,383)
Cash, cash equivalents and restricted
cash at beginning
of the period 1,158,106 1,282,793
Cash, cash equivalents and restricted
cash at end
of the period $ 1,088,711 $ 1,002,410
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
Reconciliation of cash, cash September 30, 2025 September 30, 2024
equivalents and restricted
cash:
Cash and cash equivalents $ 1,087,083 $ 1,000,219
Restricted cash (1) 1,628 2,191
Total cash, cash equivalents and
restricted cash $ 1,088,711 $ 1,002,410
(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 measures for the three months ended September 30, 2025 (In thousands,
except for per share data)
------------------------------------------------------------------------------------------
Three Months Ended September 30, 2025
GAAP-based GAAP-based Adjustments Note Non-GAAP- Non-GAAP-
Measures Measures % of based based
Total Measures Measures % of
Revenue Total
Revenue
Cost of revenues
Cloud services
and
subscriptions $ 172,217 $ (1,749) (1) $ 170,468
Customer 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
customer-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 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 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 customer-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 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 measures for the three months ended June 30, 2025 (In thousands, except for
per share data)
------------------------------------------------------------------------------------------
Three Months Ended June 30, 2025
GAAP-based GAAP-based Adjustments Note Non-GAAP- Non-GAAP-
Measures Measures % of based based
Total Measures Measures % of
Revenue Total
Revenue
Cost of revenues
Cloud services
and
subscriptions $ 176,198 $ (1,489) (1) $ 174,709
Customer support 63,347 (774) (1) 62,573
Professional
service and
other 64,717 (1,369) (1) 63,348
Amortization of
acquired
technology-based
intangible
assets 47,134 (47,134) (2) --
GAAP-based gross
profit and gross
margin (%)
/Non-GAAP-based
gross profit and
gross margin (%) 947,699 72.3 % 50,766 (3) 998,465 76.2 %
Operating
expenses
Research and
development 187,183 (5,439) (1) 181,744
Sales and
marketing 279,584 (11,446) (1) 268,138
General and
administrative 106,007 (1,404) (1) 104,603
Amortization of
acquired
customer-based
intangible
assets 79,656 (79,656) (2) --
Special charges
(recoveries) 79,662 (79,662) (4) --
GAAP-based income
from operations
/ Non-GAAP-based
income from
operations 181,558 228,373 (5) 409,931
Other income
(expense), net (89,169) 89,169 (6) --
Provision for
(recovery of)
income taxes (17,613) 96,528 (7) 78,915
GAAP-based net
income /
Non-GAAP-based
net income,
attributable to
OpenText 28,833 221,014 (8) 249,847
GAAP-based
earnings per
share /
Non-GAAP-based
earnings
per
share-diluted,
attributable to
OpenText $ 0.11 $ 0.86 (8) $ 0.97
(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 (156)% 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 June 30, 2025
Per share diluted
GAAP-based net income, attributable to
OpenText $ 28,833 $ 0.11
Add:
Amortization 126,790 0.49
Share-based compensation 21,921 0.09
Special charges (recoveries) 79,662 0.31
Other (income) expense, net 89,169 0.35
GAAP-based recovery of income taxes (17,613) (0.07)
Non-GAAP-based provision for income taxes (78,915) (0.31)
Non-GAAP-based net income, attributable to
OpenText $ 249,847 $ 0.97
Reconciliation of Adjusted EBITDA
Three Months Ended June 30, 2025
GAAP-based net income, attributable to
OpenText $ 28,833
Add:
Recovery of income taxes (17,613)
Interest and other related expense, net 81,118
Amortization of acquired technology-based
intangible
assets 47,134
Amortization of acquired customer-based
intangible
assets 79,656
Depreciation 34,049
Share-based compensation 21,921
Special charges (recoveries) 79,662
Other (income) expense, net 89,169
Adjusted EBITDA $ 443,929
GAAP-based net income margin 2.2 %
Adjusted EBITDA margin 33.9 %
Reconciliation of Free Cash Flows
Three Months Ended June 30, 2025
GAAP-based cash flows provided by operating
activities $ 158,191
Add:
Capital expenditures (1) (34,225)
Free cash flows $ 123,966
(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, 2024 (In thousands,
except for per share data)
------------------------------------------------------------------------------------------
Three Months Ended September 30, 2024
GAAP-based GAAP-based Adjustments Note Non-GAAP- Non-GAAP-
Measures Measures % of based based
Total Measures Measures % of
Revenue Total
Revenue
Cost of revenues
Cloud services
and
subscriptions $ 175,257 $ (2,186) (1) $ 173,071
Customer support 62,574 (1,342) (1) 61,232
Professional
service and
other 66,915 (1,314) (1) 65,601
Amortization of
acquired
technology-based
intangible
assets 47,244 (47,244) (2) --
GAAP-based gross
profit and gross
margin (%)
/Non-GAAP-based
gross profit and
gross margin (%) 910,358 71.7 % 52,086 (3) 962,444 75.8 %
Operating
expenses
Research and
development 190,693 (8,167) (1) 182,526
Sales and
marketing 245,882 (9,315) (1) 236,567
General and
administrative 106,730 (7,234) (1) 99,496
Amortization of
acquired
customer-based
intangible
assets 81,504 (81,504) (2) --
Special charges
(recoveries) 47,136 (47,136) (4) --
GAAP-based income
from operations
/ Non-GAAP-based
income from
operations 206,242 205,442 (5) 411,684
Other income
(expense), net (35,655) 35,655 (6) --
Provision for
income taxes 1,883 76,693 (7) 78,576
GAAP-based net
income /
Non-GAAP-based
net income,
attributable to
OpenText 84,368 164,404 (8) 248,772
GAAP-based
earnings per
share /
Non-GAAP-based
earnings
per
share-diluted,
attributable to
OpenText $ 0.32 $ 0.61 (8) $ 0.93
(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 2% 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, 2024
Per share diluted
GAAP-based net income, attributable
to OpenText $ 84,368 $ 0.32
Add:
Amortization 128,748 0.47
Share-based compensation 29,558 0.11
Special charges (recoveries) 47,136 0.18
Other (income) expense, net 35,655 0.13
GAAP-based provision for income taxes 1,883 0.01
Non-GAAP-based provision for income
taxes (78,576) (0.29)
Non-GAAP-based net income,
attributable to OpenText $ 248,772 $ 0.93
Reconciliation of Adjusted EBITDA
Three Months Ended September 30, 2024
GAAP-based net income, attributable to
OpenText $ 84,368
Add:
Provision for income taxes 1,883
Interest and other related expense, net 84,282
Amortization of acquired
technology-based intangible
assets 47,244
Amortization of acquired customer-based
intangible
assets 81,504
Depreciation 32,171
Share-based compensation 29,558
Special charges (recoveries) 47,136
Other (income) expense, net 35,655
Adjusted EBITDA $ 443,801
GAAP-based net income margin 6.6 %
Adjusted EBITDA margin 35.0 %
Reconciliation of Free Cash Flows
Three Months Ended September 30, 2024
GAAP-based cash flows used in operating
activities $ (77,806)
Add:
Capital expenditures (1) (39,316)
Free cash flows $ (117,122)
(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 months ended September
30, 2025 and 2024:
Three Months Ended September Three Months Ended September
30, 2025 30, 2024
Currencies % of Revenue % of % of Revenue % of
Expenses(1) Expenses(1)
EURO 24 % 12 % 22 % 12 %
GBP 5 % 6 % 5 % 6 %
CAD 3 % 12 % 3 % 10 %
USD 58 % 46 % 59 % 49 %
Other 10 % 24 % 11 % 23 %
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).
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SOURCE Open Text Corporation
/CONTACT:
Copyright CNW Group 2025
(END) Dow Jones Newswires
November 05, 2025 16:01 ET (21:01 GMT)