Summary of OpenText Conference Call Company Overview - **Company**: OpenText - **Key Personnel**: Tom Jenkins, Chief Strategy Officer and Executive Chair of the Board Core Industry Insights - **Industry**: Software and Cloud Solutions - **Focus Areas**: Content management, IT Operations Management (ITOM), business networks, and cybersecurity Key Points and Arguments 1. **CEO Search**: The search for a new CEO is being conducted by a newly formed board committee, focusing on candidates with a solutions background to enhance customer engagement [2][3] 2. **Divestitures**: OpenText plans to divest up to $1 billion in revenue, focusing on streamlining operations by selling off non-core business units. The goal is to reduce the company size by 15%-20%, moving from over $6 billion to approximately $4 billion in revenue [3][6][7] 3. **Core Business Units**: The core businesses identified include content, ITOM, business networks, and cybersecurity, with a particular emphasis on the content division, which is experiencing over 20% growth [6][7][15] 4. **ITOM's Role**: ITOM is considered essential for training AI due to its integration of human, transactional, and machine-generated content, which is critical for enterprise AI applications [14][15][16] 5. **Cloud Transition**: Cloud revenue growth has accelerated from 2% to 6%, driven by customer demand for cloud solutions rather than OpenText pushing for it. The transition is expected to lead to a majority of revenues coming from cloud services [19][22][26] 6. **Revenue Mix Changes**: The shift from license to cloud revenue will initially show a decrease in immediate revenue but is expected to yield higher long-term profits due to the J-Curve effect [24][25] 7. **Security as a Core Element**: Cybersecurity is emphasized as a critical layer for all products, with a focus on providing multiple layers of security to meet enterprise needs [36][37] 8. **Open Data Platform**: OpenText positions itself as an open data platform, allowing integration with various data formats and systems, which is seen as a competitive advantage [39][41][43] 9. **Aviator Data Platform**: The Aviator platform is designed to support multiple large language models and applications, enhancing the company's ability to serve diverse customer needs [43][44][46] Additional Important Insights - **Operational Caution in Divestitures**: The company is cautious about the pace of divestitures to avoid operational disruptions, emphasizing the need for careful management during the transition [10][11] - **Customer Engagement**: OpenText is learning from peers like SAP and Oracle to enhance customer engagement and increase deal sizes as customers transition to cloud solutions [28][29] - **Future Developments**: Upcoming initiatives include a focus on training AI bots tailored to specific industry needs, with plans for further publications to guide customers in this area [46][48]

Financial Data and Key Metrics Changes - Total revenues for Q1 Fiscal 2026 were $1.3 billion, an increase of 1.5% year over year, exceeding expectations, primarily driven by cloud and license revenues [17][19] - Cloud revenues reached $485 million, up 6% year over year, attributed to strong demand in the content product category [7][17] - Annual recurring revenue (ARR) was $1.1 billion, an increase of 1.8% year over year, representing 83.2% of total revenues [18] - Adjusted EBITDA for the quarter was $467 million, with a margin of 36.3%, up 130 basis points year over year [19] - Free cash flow was $101 million, a significant increase of $218 million year over year [19] Business Line Data and Key Metrics Changes - Content Cloud, the largest business unit, grew 21% year over year, driven by bookings in financial services, energy, utilities, and telecom verticals [8][9] - Customer support revenues were down 1.5% year over year, indicating challenges in that segment [18] - Enterprise cloud bookings increased by 20% year over year, with 33 deals greater than $1 million closed in Q1, up 43% year over year [8] Market Data and Key Metrics Changes - The company is experiencing a shift towards cloud solutions, with customers increasingly making faster decisions to transition workloads from on-premise to cloud [11][12] - The content management business is expected to dominate revenue sources as non-core units are divested [25][26] Company Strategy and Development Direction - The company is focusing on its core business units in enterprise information management and plans to leverage its extensive data connectors for training agentic AI [24][25] - A strategy to divest non-core business units is underway, with a goal to enhance shareholder value [25][28] - The company aims to maintain a hybrid model offering both on-premise and cloud solutions, catering to customer preferences [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial and operational position, expecting continued strength in the content business [10][12] - The outlook for Q2 total revenue is projected to be between $1.275 billion and $1.295 billion, with an adjusted EBITDA margin between 35.5% and 36% [10] - The company anticipates ARR to return to growth in fiscal 2026, with cloud growth outpacing maintenance declines [11] Other Important Information - The company is actively seeking a permanent CEO, with a search ongoing for both internal and external candidates [29] - The upcoming OpenText World event is expected to showcase new product offerings and innovations, particularly in agentic AI solutions [9][10] Q&A Session Summary Question: What is OpenText's competitive edge in content as it pivots to leveraging data for AI? - The competitive edge has been built over 35 years, with extensive data connectors critical for training agentic AI [36][38] Question: Can you provide insight into the growth of the content business? - Growth is driven by customer readiness for AI and the need for content curation [39][40] Question: What are the expectations for Q2 revenue guidance? - The guidance implies potential variability due to customer transitions to cloud solutions, affecting license revenue [44][62] Question: What is the strategy for divestitures moving forward? - The company plans to divest non-core units methodically, aiming for one divestiture per quarter [47][48] Question: How is the ITOM business expected to stabilize? - Stabilization is still to be determined, but there is positive demand and growth in cloud offerings [58]

Financial Data and Key Metrics Changes - Total revenue grew 16% year-over-year to $90.4 million, with core revenue increasing 14% to $83.9 million [27] - Adjusted EBITDA rose 14% to $29.7 million, with an adjusted EBITDA margin of 33% compared to 34% a year ago [29] - Client retention improved to 85%, up from 84% for four consecutive quarters [27][28] Business Line Data and Key Metrics Changes - Franchise premiums totaled $976 million, up 18%, while corporate premiums were $206 million, a 1% increase [28] - Franchise producers at quarter end were 2,124, up 1% year-over-year, with producers per franchise growing 6% [22] - The corporate team achieved new business commissions growth of 20% year-over-year, accelerating from 13% in the previous quarter [24] Market Data and Key Metrics Changes - Total written premium for the quarter was $1.2 billion, a 15% increase from the previous year [28] - Policies in force grew 13% year-over-year to 1.9 million [28] - Contingent commissions for the quarter were $4.5 million, an increase of 82% compared to $2.5 million in the previous year [29] Company Strategy and Development Direction - The company aims to become the largest distributor of personal lines insurance in the U.S. and has identified significant growth opportunities in a fragmented market [6][8] - Key strategic initiatives include expanding existing agencies, launching new franchises, and enhancing technology to improve client experience [9][10] - The digital agent technology is expected to revolutionize personal lines insurance distribution and drive significant growth [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a stable pricing cycle, which is expected to enhance operational efficiency and client satisfaction [16][27] - The company anticipates continued improvement in client retention and premium growth, with expectations for revenue contributions from new partnerships starting in 2026 [20][28] - The management highlighted the importance of technology investments and partnerships in driving future growth [19][22] Other Important Information - The company repurchased and retired 685,000 Class A shares, utilizing $58.7 million of its share repurchase authorization [30] - Total debt outstanding was $299 million, with cash and cash equivalents at $51.6 million [30] - The company reiterated its full-year 2025 revenue guidance, expecting total revenues between $350 million and $385 million [30][31] Q&A Session Summary Question: Can you break out the margin profile of franchise versus corporate versus enterprise? - Management indicated that the enterprise sales business will have a more impactful margin profile over the long term compared to corporate and franchise businesses [34] Question: How many carriers are currently on the digital agent? - There are about 12 carriers integrated with the digital agent, and management is in discussions with major carriers for further integration [37][38] Question: What is the outlook for home sales and how does it affect written premium? - Management noted that housing activity remains depressed, but the company is well-positioned to capture leads as the market improves [41] Question: What is the expected growth in producer count? - Management expects consistent growth in producer count, emphasizing the importance of quality over quantity in franchise performance [46] Question: Why is the revenue trajectory not more upbeat? - Management expressed optimism about the business direction but acknowledged ongoing challenges in the product market, which is gradually improving [51][55] Question: What needs to happen to reach the high end of the revenue outlook? - Management highlighted the variability of contingent commissions and the need for a stable product market to achieve higher revenue [66]

Financial Data and Key Metrics Changes - Total revenue grew 16% year-over-year to $90.4 million, with core revenue increasing 14% to $83.9 million [27] - Adjusted EBITDA rose 14% to $29.7 million, with an adjusted EBITDA margin of 33% compared to 34% a year ago [29] - Client retention improved to 85%, up from 84% for four consecutive quarters [28] Business Line Data and Key Metrics Changes - Franchise premiums reached $976 million, up 18%, while corporate premiums were $206 million, a 1% increase [28] - Franchise producers at quarter end were 2,124, up 1% year-over-year, with producers per franchise growing 6% [22] - The corporate team achieved new business commissions growth of 20% year-over-year, accelerating from 13% in the previous quarter [24] Market Data and Key Metrics Changes - Total written premium for the quarter was $1.2 billion, a 15% increase from the previous year [28] - Policies in force grew 13% year-over-year to 1.9 million [28] - Contingent commissions for the quarter were $4.5 million, an increase of 82% compared to $2.5 million in the previous year [29] Company Strategy and Development Direction - The company aims to become the largest distributor of personal lines insurance in the U.S. and has identified significant growth opportunities in a fragmented market [6][8] - Key strategic initiatives include expanding existing agencies, launching new franchises, and enhancing technology to improve client experience [9][10] - The digital agent technology is expected to revolutionize personal lines insurance distribution and drive significant growth [14][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a stable pricing cycle, which is expected to enhance client retention and overall business efficiency [16][26] - The company anticipates continued acceleration in revenue growth and improvements in client retention as market conditions stabilize [27][30] - Management highlighted the importance of technology investments and partnerships in driving future growth [19][22] Other Important Information - The company has invested $10.9 million into the digital agent platform in 2025, with plans to invest between $25 million and $35 million in 2026 and 2027 [19] - The company repurchased and retired 685,000 Class A shares, utilizing $58.7 million of its share repurchase authorization [30] Q&A Session Summary Question: Can you break out the margin profile of franchise versus corporate versus enterprise? - Management indicated that the enterprise sales business will have a more impactful margin profile over the long term compared to corporate and franchise businesses [34] Question: How many carriers are on the digital agent right now? - Currently, there are about 12 carriers integrated with the digital agent, and major carriers are supportive of the initiative [37][38] Question: What are you seeing in home sales and how is that affecting written premium? - Management noted that housing activity remains depressed, but the company is well-positioned to capture leads as the market improves [41] Question: What is the expectation for producer count growth? - Management expects consistent producer count growth, focusing on quality and strategic geographic expansion [46] Question: Why is there a wide range in the full-year outlook? - The wide range is due to the variability of contingent commissions and the unpredictable nature of the market [66] Question: How will the digital agent impact future growth? - The digital agent is expected to allow the company to penetrate additional markets and significantly increase total written premium growth [68]

Financial Data and Key Metrics Changes - Total revenue grew 16% year-over-year to $90.4 million, with core revenue increasing 14% to $83.9 million [26] - Adjusted EBITDA rose 14% to $29.7 million, with an adjusted EBITDA margin of 33% compared to 34% a year ago [29] - Client retention improved to 85%, up from 84% for four consecutive quarters [26][27] Business Line Data and Key Metrics Changes - Franchise premiums totaled $976 million, up 18%, while corporate premiums were $206 million, a 1% increase [27] - Franchise producers at quarter end were 2,124, up 1% year-over-year, with producers per franchise growing 6% [20] - The corporate team achieved new business commissions growth of 20% year-over-year, accelerating from 13% in the second quarter [23] Market Data and Key Metrics Changes - Total written premium for the quarter was $1.2 billion, a 15% increase from the previous year [27] - Policies in force grew 13% year-over-year to 1.9 million, with the growth rate accelerating during the quarter [27] - Contingent commissions for the quarter were $4.5 million, an increase of 82% compared to $2.5 million in the previous year [28] Company Strategy and Development Direction - The company aims to become the largest distributor of personal lines insurance in the U.S. and has identified significant growth opportunities in a fragmented market [5][6] - Key strategic initiatives include expanding existing agencies, launching new franchises, and enhancing technology to improve client experience [8][10] - The company is investing heavily in its digital agent platform, expecting it to drive substantial growth in total written premiums over the next five years [19][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a stable pricing cycle, which is expected to enhance client retention and overall business efficiency [14][25] - The company anticipates continued improvement in client retention and premium growth, with expectations for acceleration in 2026 [26][49] - Management highlighted the importance of technology investments and partnerships in driving future growth and improving service delivery [18][20] Other Important Information - The company repurchased and retired 685,000 Class A shares, utilizing $58.7 million of its share repurchase authorization [30] - The company expects to invest between $25 million and $35 million annually in the digital agent platform for 2026 and 2027 [18] Q&A Session Summary Question: Can you break out the margin profile of franchise versus corporate versus enterprise? - Management indicated that the enterprise sales business will have a more impactful margin profile in the long term compared to corporate or franchise business, with franchise business still being the primary driver of total written premium [33][34] Question: How many carriers are currently on the digital agent? - Currently, there are about 12 carriers integrated with the digital agent, and management is in discussions with major carriers for further integration [36][37] Question: What is the outlook for home sales and how does it affect written premium? - Management noted that while housing activity remains depressed, the company is well-positioned to capture market share as housing activity improves [39][40] Question: What is the expected trajectory for client retention next year? - Management is optimistic about continued improvement in client retention, driven by investments in service delivery tools and a stable pricing environment [73] Question: Were there any one-time revenue adjustments this quarter? - Management confirmed there were no one-time revenue adjustments in the third quarter, and improvements in commission rates are ongoing [75]

Financial Data and Key Metrics Changes - Total revenue grew 16% year over year to $90.4 million, with core revenue increasing 14% to $83.9 million [29] - Adjusted EBITDA for the quarter grew 14% to $29.7 million, with an adjusted EBITDA margin of 33% compared to 34% a year ago [33] - Client retention improved to 85%, up from 84% for four consecutive quarters [30] - Total written premiums for the quarter were $1.2 billion, up 15% from a year ago [31] Business Line Data and Key Metrics Changes - Franchise premiums were $976 million, an increase of 18%, while corporate premiums were $206 million, a 1% increase from a year ago [31] - Franchise producers at quarter end were 2,124, up 1% from a year ago, with producers per franchise growing 6% [23] - The corporate team generated new business commissions growth of 20% year over year, accelerating from 13% in the second quarter [26] Market Data and Key Metrics Changes - The industry has over $530 billion in total written premium annually, with the company growing from over $2 billion in premiums in 2022 to over $4 billion in 2025 [7] - The company still represents less than 1% of total market share, indicating significant growth potential [7] Company Strategy and Development Direction - The company aims to become the largest distributor of personal lines insurance in the U.S. and has identified five key strategic initiatives to support this goal [10] - The digital agent technology is expected to revolutionize personal lines insurance distribution, allowing for a more seamless client experience [15] - The company plans to invest between $25 million and $35 million annually in the digital agent platform for 2026 and 2027 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a stable pricing cycle, which is expected to improve client retention and overall business efficiency [17] - The company anticipates continued acceleration in revenue growth and premium growth in 2026 [65] - Management highlighted the importance of technology investments and partnerships in driving future growth [20] Other Important Information - The company repurchased and retired 685,000 Class A shares, utilizing $58.7 million of its share repurchase authorization [34] - The company expects total revenues for 2025 to be between $350 million and $385 million, representing organic growth of 11% to 22% [34] Q&A Session Summary Question: Can you break out the margin profile of franchise versus corporate versus enterprise? - The enterprise sales business is expected to have a more impactful margin profile over the long term compared to corporate or franchise business [37] Question: How many carriers are involved in the digital agent? - Currently, there are about 12 carriers integrated with the digital agent, and major carriers are supportive of the integration [42][44] Question: What is the outlook for home sales and how does it affect written premium? - The housing market remains depressed, but the company is building a referral partner network to capture lead flow [47] Question: What is the expected growth in producer count? - Producer count is expected to grow consistently, with a focus on quality over quantity [54] Question: Why is the revenue trajectory not more upbeat? - The company is optimistic about the direction of the business, but is cautious due to the variability in contingent commissions [58] Question: What needs to happen to reach the high end of revenue guidance? - The contingent commissions are variable, and the company is optimistic about potential upside based on current market conditions [70] Question: How will the digital agent impact growth? - The digital agent is expected to allow for significant market penetration and could drive total written premium growth of over 40% in the next five years [76]

Core Point - Ford Motor Company is recalling over 200,000 vehicles due to a software malfunction affecting rearview cameras, which increases the risk of crashes and potential injuries [1][6]. Group 1: Recall Details - The recall involves 200,061 vehicles, including models from 2018 to 2024 such as Transit Connect, MKZ, Edge, Continental, F-150, Nautilus, Fusion, Ranger, Mustang, EcoSport, Expedition, Navigator, Escape, F-250 SD, Corsair, Aviator, Transit, Explorer, Bronco Sport, and Maverick [2]. - A software error may cause rearview cameras to display a blank or frozen image when the vehicle is in reverse, which can distract drivers and reduce visibility [3][6]. Group 2: Customer Support and Actions - Affected vehicle owners can visit dealerships for free software updates to resolve the issue [9]. - Notification letters to owners are expected to be sent out by July 28, and customers can contact Ford customer service for inquiries [12].