Revenue Performance - Total revenue for Q1 Fiscal 2026 was $1,288.1 million, an increase of 1.5% compared to Q1 Fiscal 2025, but down 0.6% after adjusting for foreign exchange impacts[210]. - Total annual recurring revenue reached $1,071.4 million, up 1.8% year-over-year, and down 0.3% after considering foreign exchange effects[210]. - Cloud services and subscriptions revenue was $484.5 million, reflecting a 6.0% increase compared to the same period last year, and a 4.2% increase after adjusting for foreign exchange[210]. - The company reported increases in revenue from Content, Business Network, Cybersecurity (Enterprise), and ADM product categories, while ITOM, Cybersecurity (SMB & Consumer), and Analytics categories saw declines[210]. - Total revenues for the three months ended September 30, 2025, were $1,288,135, an increase of $19,130 or 1.5% compared to $1,269,005 in 2024[233]. - Cloud services and subscriptions revenues increased by $27.5 million or 6.0% to $484,509, driven by growth in Content, Business Network, ADM, and ITOM product categories[238]. Financial Metrics - GAAP-based gross margin increased to 72.8% from 71.7% year-over-year, while non-GAAP-based gross margin rose to 76.5% from 75.8%[216]. - GAAP-based net income attributable to the Company was $146.6 million, up from $84.4 million in the same period last year, representing a 73.5% increase[216]. - Operating cash flow for the three months ended September 30, 2025, was $147.8 million, a significant increase of 289.9% compared to $(77.8) million in the prior year[216]. - The GAAP-based EPS, diluted, increased to $0.58 from $0.32 year-over-year[233]. - Non-GAAP-based net income attributable to OpenText for the three months ended September 30, 2025, was $266,275, representing an increase from GAAP-based net income of $146,616[297]. - Non-GAAP-based earnings per share for the three months ended September 30, 2025, was $1.05, compared to GAAP-based earnings per share of $0.58[297]. - Adjusted EBITDA for the quarter was $467,411, compared to $443,801 in the prior year[233]. - Adjusted EBITDA margin for the three months ended September 30, 2025, is calculated as a percentage of total revenue, reflecting operational performance[286]. - GAAP-based net income attributable to OpenText for the three months ended September 30, 2025, was $146,616, with a net income margin of 11.4%[298]. - Free cash flows for the three months ended September 30, 2025, were $101,229, compared to cash flows used in operating activities of $147,763[299]. Cost Management - Research and development expenses decreased by $21.6 million to $169.1 million, representing 13.1% of total revenues, down from 15%[258]. - Sales and marketing expenses increased by $11.2 million to $257.1 million, accounting for 20% of total revenues, up from 19%[262]. - General and administrative expenses decreased by $1.0 million to $105.8 million, remaining stable at 8% of total revenues[264]. - Special charges decreased by $27.0 million to $20.1 million, primarily due to a reduction in restructuring costs[269]. - Cost of professional service and other revenues decreased by $3.9 million, primarily due to a reduction in labor-related costs of $4.3 million[255]. Strategic Initiatives - The company is focusing on growth in earnings and cash flows for Fiscal 2026 and Fiscal 2027, with a strategic emphasis on Information Management capabilities[199]. - The Business Optimization Plan announced in July 2024 aims to redeploy capital from non-core assets to enhance focus on core Information Management for AI business[199]. - The company anticipates future growth through both organic and inorganic means, including potential acquisitions[199]. - 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[223]. Workforce and Management - The company employed approximately 21,200 individuals as of September 30, 2025, with 34% in the Americas, 23% in EMEA, and 43% in Asia Pacific[209]. - The newly appointed Chief Financial Officer, Steve Rai, brings over 30 years of global finance experience, including prior leadership at BlackBerry Limited[213]. - The company reduced its workforce in research and development by 397 employees, from 7,426 to 7,029[259]. Cash Flow and Debt Management - Cash and cash equivalents as of September 30, 2025, totaled $1,087,083, a decrease of $69,413 from the previous quarter[309]. - Cash flows from operating activities increased by $225.6 million compared to the same period in the prior fiscal year, driven by a net change from working capital of $177.3 million[313]. - Cash used in investing activities increased by $36,440 during the three months ended September 30, 2025, primarily due to higher property and equipment additions[315]. - Cash flows used in financing activities decreased by $8.8 million, attributed to a reduction in cash used for repurchases of Common Shares[317]. - As of September 30, 2025, the company had senior debt outstanding with a total carrying value of $4.3 billion, maturing between 2027 and 2031[323]. - The company entered into a $3.585 billion Acquisition Term Loan with a floating interest rate of Term SOFR plus 1.75%, with an outstanding balance of $2.176 billion as of September 30, 2025[324]. - The company amended its $750 million Revolver to extend the maturity date to December 19, 2028, with no outstanding borrowings as of September 30, 2025[325]. - The company has long-term debt obligations totaling $7.787 billion, with minimum payments due across various fiscal periods[336]. Foreign Currency and Hedging - The company hedged certain Canadian dollar foreign currency exposures, with a one cent change in the exchange rate affecting the mark-to-market valuation by $0.7 million[354]. - A one cent change in the Euro to U.S. dollar forward exchange rate would impact the mark-to-market valuation of the 7-year EUR/USD cross currency swaps by $7.6 million as of September 30, 2025[357]. - The mark-to-market valuation change for the 5-year EUR/USD cross currency swaps would be $5.8 million for a one cent change in the Euro to U.S. dollar forward exchange rate[356]. - Fluctuations in foreign currencies significantly impact the reported total assets and liabilities for foreign subsidiaries, affecting cash and cash equivalents reported in U.S. dollars[358].

Financial Performance - Total revenues for Q1 FY2026 reached $1.288 billion, reflecting a year-over-year increase of 1.5%[7] - Net income for the quarter was $147 million, representing a significant increase of 73.8% year-over-year, with a GAAP EPS of $0.58[7] - Adjusted EBITDA was reported at $467 million, yielding a robust margin of 36.3%[7] - Annual recurring revenues (ARR) totaled $1.071 billion, an increase of 1.8% year-over-year[8] - Gross profit for the quarter was $937,516, an increase from $910,358 in the same quarter of 2024[22] - Non-GAAP-based net income attributable to OpenText was $266,275, translating to a Non-GAAP-based earnings per share of $1.05, compared to $0.58 GAAP-based earnings per share[46] - GAAP-based net income attributable to OpenText for the three months ended September 30, 2025, was $146,616, with a net income margin of 11.4%[47] - Adjusted EBITDA for the same period was $467,411, representing an adjusted EBITDA margin of 36.3%[47] Cash Flow and Liquidity - Operating cash flows were $148 million, a remarkable increase of 289.9% year-over-year, while free cash flows reached $101 million, up 186.4%[7] - Cash flows from operating activities provided $147,763, a significant recovery from a cash outflow of $(77,806) in the prior year[29] - Total cash, cash equivalents, and restricted cash at the end of the period was $1,088,711, up from $1,002,410 a year earlier, indicating a 8.6% increase[31] - Cash used in investing activities was $(45,032), up from $(36,440) in the previous year, reflecting increased capital expenditures[29] - The company experienced a decrease in cash, cash equivalents, and restricted cash of $(69,395) during the period, a significant improvement from a decrease of $(280,383) in the same quarter last year[29] Shareholder Returns - The Board declared a cash dividend of $0.275 per common share, with a record date of December 5, 2025[10] - The company declared dividends of $0.275 per common share during the quarter, totaling $69,365[26] - The company repurchased $107,629 worth of common shares during the quarter, compared to $87,403 in the same period last year, indicating a 23.2% increase in share repurchases[29] Strategic Initiatives - The company announced a strategic divestiture of its on-premise solution (eDOCS) for $163 million as part of its portfolio-shaping strategy[11] - OpenText plans to showcase its innovation roadmap at the upcoming OpenText World User Conference, emphasizing its focus on Information Management for AI[2] Expense Management - Research and development expenses were $169,128, down from $190,693 in the prior year, indicating a focus on cost management[22] - Operating expenses for research and development totaled $169,128, while sales and marketing expenses were $257,055, reflecting ongoing investment in growth[42] Revenue Composition - Quarterly enterprise cloud bookings were $160 million, reflecting a growth of 20.2% year-over-year[7] - Revenue composition for the three months ended September 30, 2024, included 58% from USD, 24% from EURO, and 10% from other currencies[65]

Core Insights - OpenText Corporation reported total revenues of $1.29 billion for the first quarter of Fiscal 2026, reflecting a year-over-year increase of 1.5% [6][5] - The company achieved a GAAP net income of $147 million, which is a significant increase of 73.8% year-over-year, and a non-GAAP net income of $266 million, up 7.0% year-over-year [6][5] - Cloud revenues reached $485 million, marking a 6.0% increase year-over-year, and the company has experienced 19 consecutive quarters of organic growth in its cloud business [6][5] Financial Performance - Total revenues for Q1 FY'26 were $1,288 million, compared to $1,269 million in Q1 FY'25, resulting in a 1.5% increase [5][6] - Cloud services and subscriptions revenue was $485 million, up 6.0% year-over-year, while customer support revenue decreased by 1.5% to $587 million [5][6] - Annual recurring revenues (ARR) stood at $1.071 billion, reflecting a 1.8% increase year-over-year [5][6] Profitability Metrics - The company reported a GAAP EPS of $0.58, which is an increase of 81.3% compared to $0.32 in the previous year [7][6] - Non-GAAP EPS was $1.05, up 12.9% from $0.93 year-over-year [7][6] - Adjusted EBITDA was $467 million, with a margin of 36.3% [6][5] Cash Flow and Shareholder Returns - Operating cash flows were $148 million, while free cash flows reached $101 million, representing increases of 289.9% and 186.4% year-over-year, respectively [6][7] - The company repurchased $100 million of common shares during the quarter [6][5] - A cash dividend of $0.275 per common share was declared, with a record date of December 5, 2025 [9] Strategic Developments - OpenText is focusing on enhancing shareholder value through growth in its core Information Management for AI business and divesting non-core assets, including the on-premise solution eDOCS [2][15] - The company is committed to operational efficiencies through its Business Optimization Plan, which is currently underway [2][15] - OpenText aims to strengthen its position in the AI market and plans to showcase its innovation roadmap at the upcoming OpenText World User Conference [2][15]

Core Insights - OpenText has introduced new cybersecurity capabilities aimed at integrating AI into enterprise security operations, enhancing governance and compliance across various domains [2][3]. Cybersecurity Innovations - The new features include OpenText Core Threat Detection and Response for behavioral analytics, OpenText Core Identity Foundation for advanced permission settings, and OpenText Application Security Aviator for auto-remediation during application testing [2][3]. - These innovations are part of OpenText Cloud Editions 25.4 and are designed to help organizations manage security more effectively while ensuring compliance with regulations such as GDPR, HIPAA, and PCI DSS [2][4]. AI Integration - The company emphasizes the need for enterprises to leverage AI's speed without compromising security, providing tools for security and IT teams to operate more efficiently [3]. - OpenText's solutions aim to unify identity management across complex environments and enhance managed detection and response capabilities [3][7]. Data Privacy and Protection - OpenText Data Privacy and Protection offers advanced encryption services to safeguard sensitive data throughout its lifecycle, ensuring that AI applications operate within a secure framework [7][8]. - The company also provides Managed Security Services to assist organizations in threat detection and compliance with regulatory requirements [7][8]. Market Position - OpenText positions itself as a leader in secure information management for AI, catering to organizations of all sizes with a comprehensive suite of cybersecurity solutions [9][8].

Core Insights - OpenText has launched new Content Cloud solutions for Guidewire, aimed at helping insurers transition to the cloud more efficiently and improve access to critical policy and claims content [1][2][3] - The solutions integrate AI-powered assistance into insurance workflows, allowing teams to focus on delivering outcomes rather than searching for information [2][3] Industry Trends - Insurers are facing increasing pressure to modernize their operations in the cloud and scale AI capabilities, with content management being a significant challenge [3] - The demand for seamless service and faster claims decisions is rising among policyholders, necessitating improvements in content management and operational efficiency [1][3] Company Developments - OpenText's solutions for Guidewire include enhancements for PolicyCenter, ClaimCenter, and BillingCenter, which are designed to streamline operations and improve compliance [4] - A multinational insurance firm has successfully utilized OpenText's Content Management to centralize content and align operations with Guidewire systems, addressing fragmentation and compliance issues [3][4]

Core Insights - OpenText Corporation will release its financial results for the first quarter of fiscal year 2026 on November 5, 2025, after market close [1] - The earnings call will be hosted by key executives including Executive Chair Tom Jenkins and Interim CEO James McGourlay [2] Earnings Call and Investor Engagement - The earnings call will take place the morning after the financial results release, providing insights into the company's performance [2] - OpenText World 2025 will be held from November 17-20 in Nashville, Tennessee, featuring an Investor Track on November 18 for institutional investors and financial analysts [3] - The Investor Track will offer opportunities for engagement with OpenText leadership and insights into the company's strategy and innovation [3] Company Overview - OpenText is recognized as a leading Cloud and AI company, offering a comprehensive suite of Business AI, Business Clouds, and Business Technology [4] - The company aims to help organizations grow, innovate, and improve efficiency through effective Information Management [4]

Core Insights - The article emphasizes the effectiveness of value investing as a strategy that consistently performs well across various market conditions [2] - Open Text (OTEX) is highlighted as a strong candidate for value investors, currently holding a Zacks Rank of 2 (Buy) and a Value grade of A [3][6] Valuation Metrics - OTEX has a Price-to-Sales (P/S) ratio of 1.86, significantly lower than the industry average of 4.38, indicating potential undervaluation [4] - The Price-to-Cash Flow (P/CF) ratio for OTEX stands at 8.67, compared to the industry's average of 24.08, further suggesting that OTEX may be undervalued based on its cash flow outlook [5] - Over the past 52 weeks, OTEX's P/CF has fluctuated between 4.55 and 8.83, with a median of 6.00, showcasing its relative stability [5] Investment Outlook - The combination of favorable valuation metrics and a strong earnings outlook positions OTEX as one of the market's most attractive value stocks [6]

Core Insights - OpenText Corporation has appointed George Schindler to its board of directors, bringing extensive experience from his previous role as President and CEO of CGI Inc. [1][2] - Schindler's leadership at CGI from 2016 to 2024 focused on developing a profitable growth strategy, enhancing CGI's position in the global IT consulting market [1][2] - The appointment is expected to provide valuable insights as OpenText enhances its focus on Information Management for AI [2] Company Background - OpenText is recognized as a leading Cloud and AI company, offering a comprehensive suite of Business AI, Business Clouds, and Business Technology to organizations globally [3] - The company aims to help organizations grow, innovate, and operate efficiently and securely through effective Information Management [3]

Company Updates - Actelis Networks Inc. announced a new contract valued at approximately 5.45% of the company's current market capitalization, resulting in a 43.2% increase in share price to $0.53 in after-hours trading [2] - XCel Brands Inc. reached a settlement agreement and equity transfer deal with the Securities and Exchange Commission, leading to a 66.5% surge in share price to $2.88 in after-hours trading [2] - Rumble Inc. formed a partnership with Perplexity to integrate AI-powered tools, causing shares to rise by 11.4% to $8.23 in after-hours trading [2] - Theriva Biologics Inc. announced plans to reduce its workforce by 32%, which resulted in a 2.1% decline in share price to $0.40 in after-hours trading [2] - Open Text Corp agreed to divest its on-premise solution (eDOCS) from its Analytics portfolio to NetDocuments for $163 million, leading to a 0.8% decrease in share price to $37.36 in after-hours trading [2]

Core Viewpoint - OpenText Corporation has reached a definitive agreement to divest its on-premise solution eDOCS, part of its Analytics portfolio, to NetDocuments for US$163 million in cash, aligning with its strategy to focus on core business areas and reduce debt [1][2][3]. Summary by Sections Transaction Details - The divested business, eDOCS, is part of OpenText's Analytics product group, primarily serving legal professionals, and generated approximately US$30 million in annual revenue for the fiscal year ending June 30, 2025 [2]. - The transaction is expected to close by early 2026, pending customary approvals and closing conditions [4]. Strategic Implications - The divestiture supports OpenText's strategy to enhance shareholder value by rationalizing non-core assets and focusing on secure information management for AI, which is seen as a driver for future revenue growth [3]. - The proceeds from the sale will be utilized to reduce the company's outstanding debt, reinforcing its capital allocation framework [2][3]. Transition and Integration - Under the agreement, all software, customer contracts, associated services, and employees related to eDOCS will be integrated into NetDocuments, ensuring a seamless transition for users [4].