Preemptive approach to cybersecurity showcased at RSAC USA North Hall 4235 WATERLOO, ON, May 6, 2024 /PRNewswire/ -- OpenText™ (NASDAQ: OTEX), (TSX: OTEX), today announced new advancements to protect organizations against the ever-growing complexity of cyber threats. As the threat landscape continues to evolve, security teams face the challenge of securing every element of their IT environment. OpenText remains committed to preemptive cybersecurity measures, introducing innovations that prioritize customer ...

Financial Data and Key Metrics - Total revenues for Q3 were $1.4 billion, up 16% year-over-year [18] - Cloud bookings in Q3 were $165 million, up 53% year-over-year [18] - Free cash flow in Q3 was $348 million, up 14% year-over-year [18] - GAAP net income was $98.3 million, with GAAP EPS of $0.36 [26] - Adjusted EBITDA was $463.7 million, up 27% year-over-year [26] - Adjusted EBITDA margin was 32% [26] - Annual recurring revenue (ARR) was $1.146 billion, up 13.3% year-over-year [25] - Cash on hand at the end of Q3 was $1.125 billion [27] Business Line Data and Key Metrics - Cloud revenue in Q3 was $455 million, up 4.4% year-over-year [25] - Enterprise cloud bookings grew 53% year-over-year in Q3 [25] - The company more than doubled its $1 million+ cloud deals year-over-year, from 13 to 28 [18] - Average cloud deal size increased by 30% [18] - The company is targeting 20%+ enterprise cloud bookings growth in fiscal 2025 and beyond [11] Market Data and Key Metrics - The company is focused on winning workloads in knowledge workers, business networks, customer experience, and digital operations [12] - OpenText is aligned with Gartner and customer spending priorities in cybersecurity, information security, data, cloud platforms, and AI [12] - The company is seeing longer-term customer commitments, with contracts now including ramps to full value over four-plus years [20] Company Strategy and Industry Competition - The company’s strategy focuses on four key areas: leading the OpenText business system, accelerating cloud growth, generating powerful free cash flow, and disciplined capital allocation [11][14][16] - OpenText is investing $900 million annually in R&D, representing 16% of fiscal 2024 revenue [11] - The company is targeting 20%+ free cash flow as a percentage of revenue by fiscal 2027 [14] - OpenText is re-entering the M&A market, focusing on small to medium-sized cloud companies that can leverage its operational scale [16][17] - The company is leveraging partnerships with SAP, Google, and Microsoft to accelerate customer value in AI and cloud [13] Management Commentary on Operating Environment and Future Outlook - Management is confident in the company’s ability to grow in the cloud and produce higher profits from higher revenues [21] - The company expects mid-single-digit total revenue growth long-term, driven by cloud-led organic growth and M&A [10] - OpenText is targeting $1.2 billion to $1.3 billion in free cash flow by fiscal 2027 [20] - The company is seeing strong demand for AI and cloud solutions, with customers consolidating systems and preparing for AI adoption [51] Other Important Information - The company completed the divestiture of its AMC business on May 1st, 2024, which will reduce fiscal 2024 revenue by approximately $100 million [30] - OpenText plans to repay $2 billion in debt on May 6th, reducing its net leverage ratio to below 3x [27] - The company announced a $250 million share buyback program and plans to return $450 million to $500 million to shareholders in fiscal 2025 [10][16] Q&A Session Summary Question: Why are the mid-term aspirations pushed out to fiscal 2027 instead of fiscal 2026? - The pushout is due to the divestiture of $528 million in revenue from the AMC business and the trend of customers signing larger, longer-term cloud contracts with ramps to full value [40] Question: What is driving the flattish EBITDA margin trajectory for fiscal 2025? - The flattish margin is due to increased investments in AI and cloud growth programs, as well as trailing expenses from the Micro Focus acquisition [45] Question: What is the outlook for SMB market strength in fiscal 2025? - The company expects an uptick in SMB market strength in fiscal 2025, driven by Microsoft’s push in the market and upgrades to OpenText’s partner platform [65] Question: How is AI adoption progressing among customers? - AI is a key focus in customer discussions, with some customers piloting AI solutions and others consolidating systems in preparation for AI adoption [51] Question: What is the M&A strategy for cloud-focused acquisitions? - The company is targeting small to medium-sized cloud businesses that can leverage OpenText’s operational scale and distribution network [55] Question: What are the key drivers for improving free cash flow conversion? - Key drivers include cloud revenue growth at scale, adjusted EBITDA margin expansion, interest savings from deleveraging, and efficiencies through automation and AI [58] Question: How is the Micro Focus integration progressing? - Micro Focus is on track to return to organic growth by the end of fiscal 2024, with strong renewal rates and focus on ITOM, developer, and security businesses [86]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ______________________ Commission file number: 0-27544 ______________________________________ OPEN TEXT CORPORATION (Exact name of Registrant as specified in its charter) ______________________ Canada 98-0154400 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 275 Frank Tompa Drive, Wa ...

Our Software is at the Center of Global Information Flow OpenText is at the center of connected ecosystems, the internet of clouds, and plays a critical role in customer adoption of cloud, security and AI opentext | --- | --- | |-------|-------------------------------------------------------| | | | | 1 | We Lead The Information Management Software Industry | | 2 | We Are Transforming For Cloud, Security and AI Growth | | 3 | We Are Essential to AI | | 4 | Building Shareholder Value | | 5 | Introducing Retur ...

Exhibit 99.1 OpenText Reports Q3 F'24 Financial Results Record Q3 Total Revenues and Enterprise Cloud Bookings Announces $250 Million Share Repurchase Program Fiscal 2024 Third Quarter Highlights | Total Revenues | | | Annual Recurring Revenues | | Cloud Revenues | | --- | --- | --- | --- | --- | --- | | (in millions) | | | (in millions) | | (in millions) | | Reported | Constant | Reported | Constant | Reported | Constant | | Currency | | | Currency | | Currency | | $1,447 | $1,444 | $1,146 | $1,143 | $455 ...

OpenText to Reduce Debt by $2 Billion WATERLOO, ON, May 1, 2024 /PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced that it has successfully completed the divestiture of its AMC/Mainframe business to Rocket Software, Inc., a Bain Capital portfolio company ("Rocket Software"), for $2.275 billion in cash before taxes, fees and other adjustments. "We are pleased to complete the divestiture of our AMC/Mainframe business to Rocket Software," said Mark J. Barrenechea, OpenText CEO & ...

Solves open source intake challenges WATERLOO, ON, April 29, 2024 /PRNewswire/ -- OpenText™ (NASDAQ: OTEX), (TSX: OTEX), today announced an innovative solution to long-standing open source intake challenges. Developers spend a significant amount of time searching for open source libraries that comply with their company intake policies. OpenText Debricked Open Source Select is a unique start left solution to this age-old problem. It guides developers in selecting the right open source components—those that m ...

Financial Data and Key Metrics Changes - The company reported record adjusted EBITDA of $566 million, representing a 37% margin and 66% year-over-year growth [96] - Strong free cash flows of $305 million, reflecting an 87% year-over-year increase [96] - Q2 cloud revenue reached $450 million, up 10.1% year-over-year, with annual recurring revenue (ARR) of $1.15 billion, up 58% [115] Business Line Data and Key Metrics Changes - Enterprise cloud bookings grew by 63% year-over-year, reaching $236 million [99] - License revenue increased by 168% year-over-year, driven by contributions from Micro Focus and an increase in large deals [115] - The company closed 48 cloud deals greater than $1 million in Q2, compared to 23 in the previous year [116] Market Data and Key Metrics Changes - The SMB market is significant, with a $370 billion spend for companies with 1,000 employees or less, and the company aims to benefit from this market [3] - 60% of the company's business is in North America, with strong demand in public sector, energy, financial services, and manufacturing [4] Company Strategy and Development Direction - The company is focused on transforming into a cloud growth company and expanding its mission in information management [95] - Investments are being made in AI, cloud infrastructure, and private cloud offerings to drive future growth [18][64] - The company plans to return to strategic M&A focused on ARR and cloud assets post AMC divestiture [64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for cloud services and AI, noting a reasonable economy to execute their strategy [4] - The outlook for cloud bookings growth has been raised to 25% to 30% for the year, up from a previous target of 15% [102] - Management highlighted the importance of AI integration in all products and the positive customer feedback received [105] Other Important Information - The company is on track to complete the AMC divestiture by the end of the fiscal year, which will allow for faster investments in AI and cloud [97] - The company has established a new platform called Platform Athena to enhance software development and productivity [107] Q&A Session All Questions and Answers Question: Can you expand on the SMB market and the enterprise spending environment? - Management noted that the SMB market is a massive part of the U.S. economy and expressed confidence in benefiting from this market in the medium and long term [3] Question: What drove the strong cash conversion performance? - Management indicated that cash conversion has remained steady and strong, particularly following the integration with Micro Focus [13][14] Question: What is driving the EBITDA margin guidance for the full year? - Management explained that Q3 is typically a seasonally lower EBITDA quarter, with higher expenses expected, but Q4 is anticipated to be stronger [15][16] Question: What areas are the investments in cloud AI focused on? - Management highlighted investments in private cloud infrastructure, compliance, data security, and AI capabilities [18] Question: What contributed to the strong cloud bookings growth? - Management attributed the growth to customers consolidating away from competitors and the strength of their private cloud offerings [22]

Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Open Text Corporation's unaudited condensed consolidated financial statements, including balance sheets, income statements, and cash flows, with accompanying notes for detailed explanations [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a slight decrease in total assets to **$16.44 billion** and total liabilities to **$12.41 billion** as of December 31, 2023, primarily due to asset reclassification and debt reduction Condensed Consolidated Balance Sheet Highlights (in thousands of U.S. dollars) | Account | December 31, 2023 (unaudited) | June 30, 2023 | | :--- | :--- | :--- | | **Total current assets** | $4,083,990 | $2,275,231 | | *Assets held for sale* | $2,051,116 | $— | | **Goodwill** | $7,604,409 | $8,662,603 | | **Acquired intangible assets** | $2,773,220 | $4,080,879 | | **Total assets** | **$16,443,264** | **$17,089,200** | | **Total current liabilities** | $2,959,175 | $3,219,614 | | **Long-term debt** | $8,474,599 | $8,562,096 | | **Total liabilities** | **$12,412,917** | **$13,067,096** | | **Total shareholders' equity** | $4,030,347 | $4,022,104 | - As of December 31, 2023, the company has classified **$2.05 billion** in assets and **$222.8 million** in liabilities as held for sale, related to the proposed divestiture of its Application Modernization and Connectivity (AMC) business[11](index=11&type=chunk)[32](index=32&type=chunk) [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Total revenues surged **71.0%** to **$1.53 billion** for the three months ended December 31, 2023, primarily due to the Micro Focus acquisition, though net income significantly decreased to **$37.7 million** Income Statement Summary (in thousands of U.S. dollars, except per share data) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Total revenues | $1,534,868 | $897,440 | +71.0% | | Gross profit | $1,129,120 | $635,747 | +77.6% | | Income from operations | $253,867 | $184,663 | +37.5% | | Net income attributable to OpenText | $37,675 | $258,486 | -85.4% | | Diluted EPS attributable to OpenText | $0.14 | $0.96 | -85.4% | - For the six months ended December 31, 2023, total revenues were **$2.96 billion**, a **69.2%** increase from **$1.75 billion** in the prior year period. Net income was **$118.6 million**, down from **$141.6 million**[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to **$397.8 million** for the six months ended December 31, 2023, while financing activities used **$532.9 million**, resulting in a net cash decrease of **$228.5 million** Cash Flow Summary for Six Months Ended Dec 31 (in thousands of U.S. dollars) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $397,774 | $327,129 | | Net cash used in investing activities | ($96,868) | ($69,412) | | Net cash provided by (used in) financing activities | ($532,925) | $869,561 | | **Increase (decrease) in cash** | **($228,480)** | **$1,127,007** | - The significant swing in financing cash flow from a large inflow in 2022 to an outflow in 2023 is due to the **$1.0 billion** in proceeds from long-term debt in the prior year period for the Micro Focus acquisition, which did not recur, combined with debt repayments in the current period[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures supporting the financial statements, covering accounting policies, revenue recognition, acquisitions, divestitures, long-term debt, and significant contingencies like the CRA tax dispute - **Revenue Disaggregation**: For the six months ended Dec 31, 2023, the Americas represented **58.4%** of total revenue, EMEA **32.1%**, and Asia Pacific **9.5%**. Recurring revenues (Cloud services and Customer support) constituted **77.5%** of total revenues[38](index=38&type=chunk)[39](index=39&type=chunk) - **Micro Focus Acquisition**: On January 31, 2023, the company acquired Micro Focus for a total purchase price of **$6.2 billion**. The preliminary purchase price allocation includes **$3.4 billion** in goodwill[30](index=30&type=chunk)[187](index=187&type=chunk)[190](index=190&type=chunk) - **Proposed AMC Divestiture**: On November 28, 2023, the company agreed to sell its Application Modernization and Connectivity (AMC) business for **$2.275 billion** in cash. The transaction is expected to close in Q4 Fiscal 2024. Assets and liabilities of the AMC business have been classified as held for sale[31](index=31&type=chunk)[195](index=195&type=chunk) - **Long-Term Debt**: As of December 31, 2023, total principal debt outstanding was **$8.72 billion**, including various Senior Notes, a Term Loan B, and an Acquisition Term Loan[70](index=70&type=chunk) - **CRA Tax Contingency**: The company is in a dispute with the Canada Revenue Agency (CRA) over transfer pricing for fiscal years 2012-2016, with a potential liability of approximately **$79 million** in penalties and interest. A separate dispute for fiscal years 2017-2019 could result in a non-cash income tax expense of up to **$470 million**[132](index=132&type=chunk)[136](index=136&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q2 Fiscal 2024 financial performance, highlighting the Micro Focus acquisition's impact on revenue and expenses, alongside liquidity, capital resources, and the AMC business divestiture [Executive Overview](index=46&type=section&id=Executive%20Overview) This overview summarizes OpenText's strong Q2 Fiscal 2024 performance, with total revenue growing **71.0%** to **$1.53 billion** due to the Micro Focus acquisition, alongside debt repayments and the AMC business divestiture agreement Q2 FY2024 Financial Highlights (YoY) | Metric | Q2 FY2024 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $1,534.9M | +71.0% | | Annual Recurring Revenue | $1,145.9M | +58.0% | | GAAP Net Income | $37.7M | -85.4% | | Non-GAAP Net Income | $338.5M | +40.9% | | GAAP Diluted EPS | $0.14 | -85.4% | | Non-GAAP Diluted EPS | $1.24 | +39.3% | | Adjusted EBITDA | $566.3M | +66.1% | - The company entered into a definitive agreement to sell its Application Modernization and Connectivity (AMC) business to Rocket Software for **$2.275 billion** in cash, with the transaction expected to close in Q4 Fiscal 2024[232](index=232&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) This section details financial performance, attributing substantial year-over-year increases in revenue and operating expenses to the Micro Focus acquisition, which significantly impacted Q2 FY2024 results - The Micro Focus acquisition was the primary driver of financial changes. For the three months ended Dec 31, 2023, it contributed **$601.4 million** to revenue and **$513.0 million** to costs and operating expenses[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) Revenue by Product Type - Q2 FY2024 vs Q2 FY2023 (in thousands) | Revenue Stream | Q2 FY2024 | Q2 FY2023 | YoY Change | | :--- | :--- | :--- | :--- | | Cloud services and subscriptions | $450,091 | $408,674 | +10.1% | | Customer support | $695,762 | $316,508 | +119.8% | | License | $289,238 | $107,960 | +167.9% | | Professional service and other | $99,777 | $64,298 | +55.2% | Operating Expenses - Q2 FY2024 vs Q2 FY2023 (in thousands) | Expense Category | Q2 FY2024 | Q2 FY2023 | YoY Change | | :--- | :--- | :--- | :--- | | Research and development | $220,220 | $109,700 | +100.7% | | Sales and marketing | $280,263 | $177,171 | +58.2% | | General and administrative | $173,264 | $77,603 | +123.3% | [Use of Non-GAAP Financial Measures](index=61&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company reconciles GAAP to Non-GAAP financial measures, including Non-GAAP net income of **$338.5 million** for Q2 FY2024, to provide a clearer view of core operational performance by excluding specific items Reconciliation of GAAP to Non-GAAP Net Income - Q2 FY2024 (in thousands) | Description | Amount | | :--- | :--- | | **GAAP-based net income, attributable to OpenText** | **$37,675** | | Amortization | $184,709 | | Share-based compensation | $40,175 | | Special charges (recoveries) | $54,166 | | Other (income) expense, net | $68,784 | | Tax adjustments | ($47,054) | | **Non-GAAP-based net income, attributable to OpenText** | **$338,455** | Reconciliation to Adjusted EBITDA - Q2 FY2024 (in thousands) | Description | Amount | | :--- | :--- | | **GAAP-based net income, attributable to OpenText** | **$37,675** | | Add back: Taxes, Interest, D&A, etc. | $528,595 | | **Adjusted EBITDA** | **$566,270** | [Liquidity and Capital Resources](index=70&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of December 31, 2023, the company held **$1.0 billion** in cash and **$8.5 billion** in long-term debt, with operating cash flow of **$397.8 million** for the first six months of Fiscal 2024, indicating sufficient liquidity for the next twelve months - Cash and cash equivalents stood at **$1.003 billion** as of December 31, 2023, a decrease of **$228.5 million** from June 30, 2023[364](index=364&type=chunk) - For the six months ended Dec 31, 2023, the company generated **$397.8 million** in cash from operations, used **$96.9 million** in investing, and used **$532.9 million** in financing activities, primarily for debt repayment and dividends[365](index=365&type=chunk) Contractual Obligations Summary (as of Dec 31, 2023, in thousands) | Obligation | Total | Next 6 Months | 2024-2026 | 2026-2028 | Beyond 2028 | | :--- | :--- | :--- | :--- | :--- | :--- | | Long-term debt | $11,584,399 | $303,321 | $2,042,458 | $2,896,912 | $6,341,708 | | Operating leases | $364,641 | $52,754 | $151,528 | $94,124 | $66,235 | | Purchase obligations | $427,043 | $106,237 | $301,550 | $19,256 | $— | [Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate fluctuations, with a 100 basis point increase potentially raising annual interest payments by **$9.4 million** and **$34.7 million** on specific term loans, and foreign currency exposure on **$390.1 million** in cash - **Interest Rate Risk**: A 100 basis point adverse change in interest rates would increase annual interest payments by approximately **$9.4 million** on the Term Loan B and **$34.7 million** on the Acquisition Term Loan[458](index=458&type=chunk)[459](index=459&type=chunk) - **Foreign Currency Risk**: As of December 31, 2023, the company held **$390.1 million** in cash and cash equivalents denominated in foreign currencies. A uniform **10%** weakening of these currencies against the U.S. dollar would result in a reported decrease of **$39.0 million** in cash[467](index=467&type=chunk) [Controls and Procedures](index=84&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of December 31, 2023, the company's disclosure controls and procedures were effective[468](index=468&type=chunk) - No material changes to the internal control over financial reporting were identified during the fiscal quarter ended December 31, 2023[469](index=469&type=chunk) Part II [Risk Factors](index=85&type=section&id=Item%201A.%20Risk%20Factors) This section introduces new risk factors related to the proposed AMC business divestiture, including transaction completion uncertainty, potential business disruptions, and the risk of not achieving anticipated strategic and financial benefits - The proposed divestiture of the AMC business is subject to closing conditions and regulatory approvals, and there is a risk it may not be consummated on the current timeline or at all[474](index=474&type=chunk) - The divestiture process could disrupt the company's remaining business, divert management attention, and negatively impact relationships with customers and employees[477](index=477&type=chunk) - The company may not realize the anticipated benefits of the divestiture, such as enhanced focus on Cloud and AI or the full value from repaying debt with the proceeds[478](index=478&type=chunk) [Other Information](index=86&type=section&id=Item%205.%20Other%20Information) This section confirms that no officers or directors adopted or terminated any Rule 10b5-1 trading plans or non-10b5-1 trading arrangements during the three months ended December 31, 2023 - During the quarter, no officers or directors adopted or terminated any Rule 10b5-1 trading plans[480](index=480&type=chunk) [Exhibits](index=87&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q report, including the AMC business divestiture purchase agreement, a credit agreement amendment, and CEO/CFO certifications - Exhibits filed with the report include the Purchase Agreement for the AMC business divestiture and certifications from the CEO and CFO[482](index=482&type=chunk)

Key Points Company and Industry * **Company**: Open Text Corporation (NASDAQ:OTEX) * **Industry**: Information Management, Content Management, Cybersecurity, IT Operations, Application Development Core Views and Arguments * **Mission**: To power and protect information, ensuring data accessibility, security, and compliance across various systems and regulatory requirements. * **Market Leadership**: OpenText is the market leader in enterprise content management, with IBM's FileNet as the primary competitor. Box is considered a smaller competitor in the content management space. * **Business Segments**: The company operates across six distinct businesses, including content management, business network, cybersecurity, IT operations, and application development. * **Digital Transformation**: OpenText's solutions support digital transformation initiatives, ensuring data accessibility throughout the transformation process. Acquisition of Micro Focus * **Acquisition**: OpenText acquired Micro Focus in January 2023, a move aimed at expanding its market reach and addressing various buying groups within enterprises. * **Benefits**: The acquisition filled gaps in OpenText's offerings, providing solutions for CTOs, application developers, and cybersecurity officers. It also enabled the company to cloudify its products and address faster-growing deployment options. * **Integration**: OpenText expects Micro Focus to achieve organic growth in fiscal 2024, returning to organic growth in fiscal 2025. The company aims to reduce net leverage to less than 3 times by the end of fiscal 2025 or sooner. * **Renewal Rates**: OpenText has improved Micro Focus' renewal rates from the low 80s to the upper 80s, with a target of reaching the mid-90s by fiscal 2025. This improvement is expected to add over $200 million in incremental revenue to the top line. Financial Outlook * **Fiscal 2024**: OpenText expects to achieve a stronger second half of fiscal 2024 compared to the first half, driven by the integration of Micro Focus and the growth of cloud-based products. * **Free Cash Flow**: The company expects free cash flow to ramp up to over $1.5 billion by fiscal 2026, with an uplift of over $5 per share at that point in time. * **Macroeconomic Factors**: OpenText has historically been resilient to macroeconomic factors, with long sales cycles and cloudification benefits. The only notable headwind mentioned is the small and medium business component, which is less than 10% of revenue. AI and Product Roadmap * **AI Integration**: OpenText has integrated AI and machine learning into its product offerings, leveraging its existing content management solutions. * **Generative AI**: The company has introduced new products, including Vertica and IDOL, to support generative AI initiatives. * **Product Roadmap**: OpenText plans to continue expanding its AI product suite, with a focus on content management, vectorization, and large language models. Capital Allocation * **Debt Reduction**: OpenText aims to reduce leverage to less than 3 times by the end of fiscal 2025 or sooner, with a minimum quarterly principal payment of $175 million. * **Capital Allocation**: The company's capital allocation priorities include paying down leverage, maintaining a 20% free cash flow dividend, and potentially reinstating share buybacks as leverage approaches the target level. * **Organic Growth**: OpenText has shifted its focus from M&A to organic growth, targeting a 2% to 4% increase in total organic growth and a 7% to 9% increase in cloud organic growth by fiscal 2026.