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]