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OpenText Reports First Quarter Fiscal Year 2027 Financial Results
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)
Total | Cloud | Profitability | EPS | Cash Flows | |||||||||
Net Income | A-EBITDA | GAAP | Non-GAAP | Operating | Free Cash | ||||||||
$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 /CNW/ -- 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 data) | Q1 FY'27 | Q1 FY'26 | $ | % Change | Q1 FY'27 | % Change | ||
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 | |||||||
Q1 FY'27 | Q4 FY'26 | Q1 FY'26 | % Change (Q1 FY'27 vs | % Change (Q1 FY'27 vs | |||
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 © 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™ 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 (https://investors.opentext.com). Such social media channels may include the Company's or our executive's blog, X, formerly known as Twitter, account or LinkedIn account. The information posted through such channels may be material. Accordingly, readers should monitor such channels in addition to our other forms of communication.
OPEN TEXT 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 | 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 | 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: | |||
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