Group 1: Financial Performance - Open Text Corporation reported quarterly revenue of $1.33 billion for the December-ending quarter, representing a 0.6% year-over-year decline but exceeding analyst expectations of $1.29 billion [1] - Cloud revenue grew 3.4% year-over-year to $478 million, marking the twentieth consecutive quarter of organic cloud growth [2] - Management reiterated its FY2026 guidance for total revenue growth of 1% to 2% and cloud revenue growth of 3% to 4% [3] Group 2: Strategic Initiatives - The company is strategically pivoting away from non-core assets, which contributed to the modest top-line contraction [1] - OpenText divested the Vertica analytics business for $150 million in cash and completed the divestiture of its eDOCS on-premise solution for $163 million in cash [4] - The faster-growing core business, particularly in content management, is expanding at roughly twice the pace of total revenues [1][2] Group 3: Business Segments - The Content Cloud business generated 43% of total revenue and grew 4.5% overall [2] - Enterprise cloud bookings increased by 18% year-over-year to $295 million, surpassing the company's full-year guidance range of 12-16% growth [2] Group 4: Company Overview - Open Text Corporation develops and sells enterprise information management software, including solutions for content services, business networks, cybersecurity, and digital experience [5] - The company's products assist organizations in managing, securing, and analyzing large volumes of data across cloud and on-premises environments [5]

Group 1 - OpenText (OTEX) has increased its FY26 share repurchase program by $200 million, intending to purchase up to a maximum aggregate value of $500 million of its common shares under a normal course issuer bid (NCIB) [1] - The maximum number of common shares that may be acquired under the NCIB remains unchanged at 24,906,456 common shares, previously approved by the TSX [1] - The NCIB is effective for a 12-month period from August 12, 2025, to August 11, 2026 [1] Group 2 - As of January 31, 2026, the company has purchased approximately $190 million of common shares for cancellation during FY26 [1] - Approximately 5 million common shares have been purchased and cancelled for an aggregate value of approximately $165 million since the beginning of the NCIB [1]

Core Viewpoint - OpenText has increased its share repurchase program to a total of US$500 million, reflecting confidence in its cash flow and capital allocation strategy [1]. Share Repurchase Program - The company raised the authorized limits of its Fiscal 2026 share repurchase program by US$200 million, from US$300 million to US$500 million [1]. - The maximum number of common shares that can be acquired remains at 24,906,456, as previously approved by the Toronto Stock Exchange [1]. - As of January 31, 2026, OpenText has repurchased approximately US$190 million worth of common shares, including about 5 million shares for an aggregate value of approximately US$165 million since the start of the program [1]. Duration and Mechanism - The normal course issuer bid (NCIB) is effective for a 12-month period from August 12, 2025, to August 11, 2026, with the possibility of earlier termination if maximum purchase limits are reached [1]. - Common shares can be repurchased through open market transactions on the TSX, NASDAQ Global Select Market, and alternative trading systems in Canada and the U.S. [1]. - An automatic share purchase plan (ASPP) is in place to facilitate these repurchases, and purchases under the ASPP will count towards the total under the NCIB [1].

Core Insights - Carahsoft Technology Corp. has been named U.S. Public Sector Partner of the Year for 2025 by OpenText, recognizing its commitment to partner success and collaboration [1][2] Group 1: Partnership and Recognition - The award was announced at the OpenText World 2025 Partner Summit, highlighting Carahsoft's significant contributions to OpenText's U.S. Public Sector business [1][2] - OpenText's Senior Vice President, Stephanie Waltrip, acknowledged Carahsoft's efforts in accelerating the scale and impact of OpenText's solutions in the Public Sector [2] Group 2: Strategic Initiatives - Over the past year, Carahsoft's sales and marketing teams executed several strategic initiatives to enhance OpenText's impact in the Public Sector [2][3] - Carahsoft has been OpenText's Public Sector distributor since 2018, significantly expanding the reach of OpenText's information management solutions [2] Group 3: Cybersecurity Solutions - Carahsoft's Cybersecurity solutions portfolio includes various technology vendors that help organizations defend against cyber threats and achieve compliance [4] - The portfolio covers areas such as Supply Chain Risk Management, Cloud Security, Network & Infrastructure, and Identity & Access Management, ensuring comprehensive protection for organizations [4] Group 4: Company Overview - Carahsoft is recognized as The Trusted Government IT Solutions Provider, supporting various Public Sector organizations including Federal, State, and Local Government agencies [5] - The company acts as the Master Government Aggregator for vendor partners, delivering solutions across multiple domains including Cybersecurity, AI, and MultiCloud [5]

Financial Data and Key Metrics Changes - The company reported total revenues of approximately $1,330,000,000 for Q2, with cloud revenue growing by 3.4% year-over-year [9][16] - Adjusted EBITDA was $491,000,000, representing a margin of 37.0%, down 2.1% year-over-year [17] - GAAP net income was $168,000,000, down 26.9% year-over-year, largely due to foreign exchange impacts [17] - Non-GAAP diluted EPS was $1.13, up 1.8%, while GAAP diluted EPS was $0.66, down 24.1% [18] Business Line Data and Key Metrics Changes - The content business, which constitutes 43% of total revenues, grew by 4.5% year-over-year, with cloud revenue for content increasing by 18% year-over-year [9][10] - Enterprise cloud bookings reached $295,000,000, reflecting an 18% year-over-year growth [9] - Customer support revenue was $582,000,000, down 1.5%, while annual recurring revenue (ARR) was $1,060,000,000, up 0.7% year-over-year [16] Market Data and Key Metrics Changes - The company closed 53 cloud deals larger than $1,000,000 during the quarter [9] - The cloud net renewal rate remained consistent at 95%, while the customer support net renewal rate was 92% [16] Company Strategy and Development Direction - The company is focused on reshaping its business to concentrate on faster-growing core businesses, particularly in cloud and AI [8][10] - A divestiture agreement for Vertica was reached for $150,000,000, with plans to use proceeds to reduce outstanding debt [18][19] - The company aims to execute one divestiture per quarter to streamline its portfolio [24][28] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed a total revenue growth target of 1%-2% year-over-year for FY26, with expectations for Q3 total revenues between $1,260,000,000 and $1,280,000,000 [12][20] - The company anticipates continued growth in its core products as clients make decisions regarding cloud and AI needs [13][29] - Management expressed optimism about the strategic initiatives in place to pivot towards higher growth while maintaining solid margins [14][23] Other Important Information - The company is executing a $300,000,000 share buyback program, having repurchased half of this amount year-to-date [21] - The new CEO, Ayman Antoun, is expected to join the company in a couple of months, with a strong alignment on the company's strategy [25][26] Q&A Session Summary Question: Concerns about AI disrupting OpenText and content management - Management clarified that OpenText does not create applications but provides content for training AI, ensuring the need for content remains [32][33] Question: Confidence in ongoing divestitures and valuations - Management expressed confidence in maintaining a divestiture pace of one per quarter, with strong interest from buyers [34][35] Question: Ayman Antoun's mandate regarding divestments - Management indicated that Ayman's strategy aligns with the company's focus on core business and divestments [38][39] Question: Dynamics of cloud bookings and revenue guidance - Management acknowledged strong bookings but noted that revenue guidance reflects seasonal trends and deal timing [40][41] Question: Customer adoption of AI and Aviator - Management stated that customers are in early stages of preparing content for AI training, with significant long-term potential [44][45] Question: Impact of software budgets on AI deployment - Management noted that deploying AI involves careful consideration of data curation and regulatory compliance, affecting software budgets [66][67] Question: Tuck-in M&A strategy and AI risk - Management confirmed that tuck-in acquisitions will focus on acquiring subject matter experts to enhance AI training capabilities [71][72]

Financial Data and Key Metrics Changes - Total revenues for Q2 fiscal 2026 were approximately $1.33 billion, with cloud revenue at $478 million, reflecting a year-over-year growth of 3.4% [9][16] - Adjusted EBITDA was $491 million, representing a margin of 37.0%, down 2.1% year-over-year [17] - GAAP net income was $168 million, down 26.9% year-over-year, primarily due to foreign exchange impacts [18] - Non-GAAP diluted EPS was $1.13, up 1.8% year-over-year, while GAAP diluted EPS was $0.66, down 24.1% [18] Business Line Data and Key Metrics Changes - The content business, which constitutes 43% of total revenues, grew 4.5% year-over-year, with cloud revenue for content increasing by 18% year-over-year [9][10] - Enterprise cloud bookings reached $295 million, marking an 18% year-over-year growth [9] - Customer support revenue was $582 million, down 1.5%, with a net renewal rate of 92% [16] Market Data and Key Metrics Changes - Total cloud RPO (Remaining Performance Obligations) increased by 13.7% year-over-year [9] - The company expects Q3 total revenues to be between $1.26 billion and $1.28 billion, reflecting a slight reduction due to the divestiture of eDOCS [20] Company Strategy and Development Direction - The company is focused on reshaping its business to concentrate on faster-growing core businesses, particularly in cloud and AI [8][12] - OpenText plans to divest non-core assets at a rate of one per quarter to streamline its portfolio [24][28] - The introduction of the OpenText AI Data Platform is aimed at enhancing capabilities in AI and cloud services [12] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the company's financial position and the execution of its strategic initiatives [14] - The company reaffirms its total revenue growth target of 1%-2% year-over-year for fiscal 2026 [19] - Management highlighted the importance of preparing content for AI training, indicating a long-term growth trajectory in this area [45][70] Other Important Information - The divestiture of Vertica for $150 million is expected to close during fiscal 2026, with proceeds aimed at reducing outstanding debt [19][26] - The company is executing a $300 million share buyback program, having repurchased half of this amount year-to-date [21] Q&A Session Summary Question: How does AI impact OpenText and content management? - Management clarified that OpenText provides content for training AI, which remains essential regardless of application changes [33] Question: Can you discuss the divestiture strategy and valuations? - Management expressed confidence in maintaining a divestiture pace of one per quarter, with strong interest in high-quality assets [34][35] Question: What is Ayman Antoun's mandate regarding divestments? - Management indicated that Ayman's strategy aligns with the company's focus on core business and divestments [39] Question: How are cloud migrations trending? - Management noted that most migrations are towards hyperscalers, with ongoing development of a sovereign cloud strategy [61] Question: What is the outlook for software budgets in relation to AI? - Management suggested that as companies deploy AI, there will be an evolutionary path in software budgets, particularly for managing proprietary data [67][70] Question: What is the expected contribution of other core products to growth? - Management expects other product groupings to contribute positively to growth throughout the year [81]

Financial Data and Key Metrics Changes - Total revenues for Q2 fiscal 2026 were approximately $1.33 billion, with a year-over-year growth of 0.4% [7][13] - Adjusted EBITDA was $491 million, representing a margin of 37.0%, down 2.1% year-over-year [14] - GAAP net income was $168 million, down 26.9% year-over-year, largely due to foreign exchange impacts [14] - Non-GAAP diluted EPS was $1.13, up 1.8% year-over-year, while GAAP diluted EPS was $0.66, down 24.1% [15] Business Line Data and Key Metrics Changes - Cloud revenue was $478 million, up 3.4% year-over-year, driven mainly by content cloud [13] - Total content business, which constitutes 43% of total revenues, grew 4.5% year-over-year, with cloud revenue for content growing 18% year-over-year [7][8] - Customer support revenue was $582 million, down 1.5%, while annual recurring revenue (ARR) was $1.06 billion, up 0.7% year-over-year [13] Market Data and Key Metrics Changes - Enterprise cloud bookings reached $295 million, reflecting an 18% year-over-year growth [7] - Total cloud remaining performance obligations (RPO) increased by 13.7% year-over-year [7] - The cloud net renewal rate remained consistent at 95% [13] Company Strategy and Development Direction - The company is focused on reshaping its business to concentrate on faster-growing core businesses, particularly in cloud and AI [6][10] - A divestiture agreement for Vertica was made for $150 million, with plans to use proceeds to reduce debt [5][16] - The company aims to divest one business unit or product category per quarter to streamline its portfolio [20][24] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed a total revenue growth target of 1%-2% year-over-year for fiscal 2026 [10][16] - The company expects Q3 total revenues to be between $1.26 billion and $1.28 billion, reflecting a slight reduction due to the eDOCS divestiture [17] - Management expressed optimism about the growth trajectory of core products, particularly in cloud and AI [11][28] Other Important Information - The company appointed Ayman Antoun as the new CEO, expected to join in a couple of months [5][21] - The company is executing a $300 million share buyback program, with half of this amount already repurchased [18] Q&A Session Summary Question: Concerns about AI disrupting OpenText and content management - Management clarified that OpenText does not create applications but provides content for training AI, ensuring the need for content remains [30] Question: Confidence in ongoing divestitures and valuations - Management expressed confidence in maintaining a divestiture cadence of one per quarter, with strong interest from buyers [31] Question: Ayman Antoun's mandate regarding divestments - Management confirmed alignment on strategy with Ayman, indicating no significant changes expected [36] Question: Dynamics of cloud bookings and revenue guidance - Management noted strong bookings but acknowledged that deals can shift between quarters, maintaining a positive outlook for future growth [38] Question: Customer adoption of Aviator and AI training - Management indicated that customers are in early stages of preparing content for AI training, with significant work ahead [42] Question: Impact of cloud migrations on software budgets - Management suggested that as companies deploy AI, they will need to curate data, which may drive software budget increases [65] Question: Tuck-in M&A strategy and AI risk - Management stated that tuck-in acquisitions will focus on acquiring subject matter experts to enhance AI training capabilities [70]

Investor Presentation February 5, 2026 NASDAQ/TSX: OTEX Safe Harbor and IP Statement This presentation contains forward-looking statements or information (forward-looking statements) within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act), Section 27A of the U.S. Securities Act of 1933, as amended, and other applicable securities laws of the United States and Canada, and is subject to the safe harbors ...

Financial Performance - Total revenue for Q2 Fiscal 2026 was $1,326.7 million, a decrease of 0.6% year-over-year, and down 2.6% after adjusting for foreign exchange impacts[218]. - Total annual recurring revenue reached $1,060.0 million, an increase of 0.7% year-over-year, but down 1.2% after adjusting for foreign exchange impacts[218]. - Cloud services and subscriptions revenue was $478.1 million, up 3.4% year-over-year, and up 1.9% after adjusting for foreign exchange impacts[218]. - GAAP-based net income attributable to OpenText was $168.1 million, down from $229.9 million in the same period last year, while Non-GAAP-based net income was $286.3 million compared to $293.3 million[225]. - GAAP-based diluted earnings per share (EPS) decreased to $0.66 from $0.87 year-over-year, while Non-GAAP diluted EPS increased slightly to $1.13 from $1.11[225]. - The company reported total revenues of $1,327,000 for the three months ended December 31, 2025[317]. - For the six months ended December 31, 2025, GAAP-based net income attributable to OpenText was $314,707, with a diluted earnings per share of $1.24[340]. - Non-GAAP-based net income for the same period was $552,553, resulting in a diluted earnings per share of $2.18[340]. Operational Efficiency - GAAP-based gross margin improved to 74.0%, compared to 73.3% in the same period last year[218]. - Non-GAAP-based gross margin increased to 77.6%, compared to 77.2% in the same period last year[218]. - Operating cash flow for the six months ended December 31, 2025, was $466.4 million, a significant increase of 72.6% compared to $270.2 million in the same period last year[225]. - The Business Optimization Plan is expected to generate annualized savings of approximately $490.0 million to $550.0 million, with 35% of these savings realized in Fiscal 2025 and an additional 35% expected in Fiscal 2026[233][234]. - Total operating expenses for the three months ended December 31, 2025, were $690.4 million, an increase of $8.3 million compared to the same period in 2024[278]. Workforce and Employment - The company employed approximately 21,300 individuals as of December 31, 2025, with 34% in the Americas, 23% in EMEA, and 43% in Asia Pacific[217]. - The company reduced its research and development labor resources by 341 employees, from 7,401 at December 31, 2024, to 7,060 at December 31, 2025[281]. - The company experienced a decrease in general and administrative labour resources by 299 employees, from 3,083 employees at December 31, 2024, to 2,784 employees at December 31, 2025[288]. Strategic Focus - The company focuses on growth in earnings and cash flows for Fiscal 2026 and 2027, with a strategic emphasis on Information Management capabilities[207]. - The company plans to redeploy capital from non-core assets to enhance focus on core Information Management for AI business[207]. - The company is committed to integrating AI and machine learning into its products and services to enhance customer value[216]. - The company is focused on expanding its AI-first Information Management offerings and pursuing tuck-in acquisitions to align capital with high-return opportunities[230]. Cash and Liquidity - Cash and cash equivalents increased to $1,271.4 million as of December 31, 2025, compared to $1,156.5 million as of June 30, 2025[225]. - Free cash flows for the three months ended December 31, 2025, amounted to $279,444, calculated as GAAP-based cash flows from operating activities of $318,659 less capital expenditures of $39,215[324]. - Cash flows used in investing activities increased by $0.4 million during the six months ended December 31, 2025, primarily due to property and equipment additions[359]. - Cash flows used in financing activities decreased by $64.3 million during the six months ended December 31, 2025, mainly due to reduced cash used for share repurchases[361]. Market and Revenue Trends - Enterprise cloud bookings reached $294.9 million, up from $249.9 million in the same period last year, indicating strong demand for cloud services[225]. - The company expects total revenues for Fiscal 2026 to grow by 1% to 2%, with cloud services and subscriptions revenues projected to increase by 3% to 4%[227]. - The Americas region accounted for 53.4% of total revenues, down from 57.4% in the previous year[243]. - There were 53 cloud services contracts greater than $1.0 million closed during the second quarter of Fiscal 2026, compared to 51 contracts in the same quarter of Fiscal 2025[249]. Foreign Currency Risks - The company is exposed to foreign currency transaction risks from intercompany transactions, which may result in realized gains or losses depending on currency exchange rates[397]. - As of December 31, 2025, a one cent change in the Canadian dollar to U.S. dollar exchange rate would have resulted in a change of $0.7 million in the mark-to-market valuation of existing foreign exchange forward contracts[398]. - A one cent change in the Euro to U.S. dollar forward exchange rate for the 5-year EUR/USD cross currency swaps would have caused a change of $5.8 million in the mark-to-market valuation[400]. - Total cash and cash equivalents denominated in foreign currencies as of December 31, 2025, amounted to $557.9 million, compared to $720.5 million as of June 30, 2025[403].

Financial Performance - Total revenues for Q2 FY'26 were $1.327 billion, a decrease of 0.6% year-over-year[7] - GAAP net income was $168 million, down 26.9% year-over-year, while Non-GAAP net income was $286 million, a decrease of 2.4% year-over-year[7] - Annual recurring revenues (ARR) totaled $1.060 billion, an increase of 0.7% year-over-year[7] - Net income for the three months ended December 31, 2025, was $168,126, a decrease of 26.8% compared to $229,906 for the same period in 2024[25] - Total comprehensive income for the six months ended December 31, 2025, was $343,421, an increase of 11.4% from $308,168 in 2024[25] - GAAP-based net income attributable to OpenText for the three months ended December 31, 2025, was $168,091, with a diluted earnings per share of $0.66[50] - Non-GAAP-based net income attributable to OpenText for the same period was $286,278, resulting in a diluted earnings per share of $1.13[50] - For the six months ended December 31, 2025, GAAP-based net income attributable to OpenText was $314,707, with a diluted earnings per share of $1.24[54] - Non-GAAP-based net income for the six months was $552,553, leading to a diluted earnings per share of $2.18[54] Revenue Breakdown - Cloud revenues reached $478 million, reflecting a growth of 3.4% year-over-year, marking 20 consecutive quarters of organic growth[7] - Quarterly enterprise cloud bookings amounted to $295 million, representing an 18.0% increase year-over-year[7] - Cloud services and subscriptions revenue increased to $478,084 for the three months ended December 31, 2025, compared to $462,306 in the prior year, reflecting a growth of approximately 3%[23] Cash Flow and Liquidity - Operating cash flows were $319 million, down 8.4% year-over-year, and free cash flows were $279 million, down 8.9% year-over-year[7] - Net cash provided by operating activities for the six months ended December 31, 2025, was $466,422 thousand, compared to $270,186 thousand for the same period in 2024, indicating an increase of approximately 72.5%[33] - Cash and cash equivalents at the end of the period on December 31, 2025, totaled $1,272,997 thousand, up from $1,124,208 thousand on December 31, 2024, reflecting an increase of about 13.2%[35] - The company reported a net cash used in financing activities of $270,787 thousand for the six months ended December 31, 2025, compared to $335,117 thousand for the same period in 2024, indicating a decrease of approximately 19.2%[33] Asset Management - Total assets decreased to $13,570,162 as of December 31, 2025, from $13,774,064 as of June 30, 2025[20] - Total current liabilities decreased to $2,504,664 as of December 31, 2025, from $2,747,054 as of June 30, 2025, showing improved liquidity[20] - The total amount of retained earnings as of December 31, 2025, was $1,971,950, an increase from $2,174,514 in 2024[31] Operational Efficiency - Adjusted EBITDA was $491 million, with a margin of 37.0%[7] - Research and development expenses for the three months ended December 31, 2025, were $158,309, down from $180,727 in the prior year, indicating a focus on cost management[23] - The company reported a GAAP-based income from operations of $291,755 for the three months, which adjusted to $455,954 on a Non-GAAP basis[51] Strategic Initiatives - OpenText announced the divestiture of Vertica for $150 million and eDOCS for $163 million, focusing on non-core asset divestiture[17] - Ayman Antoun has been appointed as the new CEO, effective April 20, 2026, to lead the company in its growth strategy[17] - OpenText unveiled a next-generation AI Data Platform for secure information management at the OpenText World user conference[17] - The company aims to leverage AI and automation in its strategy to drive future growth and innovation in its product offerings[18] - The company has proposed a divestiture of non-core assets, including Vertica, to optimize its portfolio and enhance shareholder value[18] Shareholder Returns - The company declared dividends of $0.275 per common share for the three months ended December 31, 2025, totaling $69,402[29] - The company repurchased 1,390 common shares for $9,717 during the three months ended December 31, 2025[29]