Total Revenues of $1.33B, 20 Consecutive Quarters of Cloud Organic Growth
Delivers Net Income Margin of 13%, Robust Adjusted EBITDA Margin of 37.0%
Fiscal 2026 Second Quarter Highlights (in millions)(1)
Total Cloud
Revenues Revenues Profitability Diluted EPS Cash Flows
--------- --------- ---------------------------- ----------------------- ----------------------
Free Cash
Net Income A-EBITDA GAAP Non-GAAP Operating Flows
--------- --------- ------------ ------------ ---------- --------- --------- ---------
$1,327 $478 $168 $491 $0.66 $1.13 $319 $279
-0.6% Y/Y +3.4% Y/Y 12.7% margin 37.0% margin -24.1% Y/Y +1.8% Y/Y -8.4% Y/Y -8.9% Y/Y
WATERLOO, ON, Feb. 5, 2026 /PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced its financial results for the second quarter ended December 31, 2025.
"We had an excellent quarter, led by 18% revenue growth in our Content
Management cloud business," said James McGourlay, Interim Chief Executive
Officer. "OpenText is at the forefront of Enterprise Information
Management for AI, and at our recent OpenText World conference, our
customers and partners demonstrated on the main stage how they leverage
our Aviator AI solutions to solve complex problems, bringing insights,
security and compliance to their information and most sensitive data. I
would also like to welcome Ayman Antoun to the CEO role at OpenText, and I
look forward to working with him on a smooth and steady transition."
James McGourlay, OpenText Interim Chief Executive Officer
"With strong adjusted EBITDA margin and free cash flow performance in the
quarter, the strength of the OpenText operating model continues to drive
our business to meet the Company's margin targets for Fiscal 2026," said
Steve Rai, Executive Vice President, Chief Financial Officer. "Our robust
cash flow engine provides the scale and capital flexibility to continue
investing for growth within our core Enterprise Information Management for
AI market."
Steve Rai, OpenText Executive Vice President, Chief Financial Officer
"Welcoming Ayman Antoun as our CEO marks a pivotal milestone in OpenText's
journey. He brings deep enterprise technology and software expertise with
decades of experience leading large scale global transformations. Ayman's
leadership will help OpenText expand our market share as the world's
leader in secure, trusted data amid accelerating demand for cloud
modernization and enterprise AI," said P. Thomas Jenkins, Executive Chair
of the Board and Chief Strategy Officer. "The closing of eDOCS and
announced divestiture of Vertica demonstrates our continued progress in
divesting non-core assets. We remain committed to building a leaner
OpenText, focused on growth and helping clients leverage enterprise
content to train agentic AI."
P. Thomas Jenkins, OpenText Executive Chair & Chief Strategy Officer
Second Quarter Financial Highlights Y/Y
-- Total revenues: $1.327 billion, -0.6% Y/Y -- Annual recurring revenues $(ARR)$: $1.060 billion, +0.7% Y/Y -- Cloud revenues: $478 million, +3.4% Y/Y, 20 consecutive quarters of cloud organic growth -- Quarterly enterprise cloud bookings(2): $295 million, +18.0% Y/Y -- Cash flows: Operating $319 million and free cash flows(3) $279 million -- Net income: GAAP $168 million, -26.9% Y/Y, Non-GAAP(3) $286 million, -2.4% Y/Y -- Adjusted EBITDA(3) of $491 million, margin of 37.0% -- Diluted earnings per share (EPS): GAAP $0.66, Non-GAAP(3) $1.13 -- Capital returns of $119 million including $69 million via dividends and $50 million of share repurchases (1) Numbers presented are in millions of US dollars, except for per share or percentage metrics. (2) Enterprise cloud bookings is defined as the total value from cloud services and subscription contracts, entered into in the period that are new, committed and incremental to our existing contracts, entered into with our enterprise based customers. (3) Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed consolidated financial statements below.
Financial Highlights for Q2 Fiscal 2026 with Year Over Year Comparisons
Summary of
Quarterly
Results
-----------------
(In millions, Q2
except per share FY'26 % Change
data) Q2 FY'26 Q2 FY'25 $ Change % Change in CC* in CC*
Revenues:
Cloud services
and
subscriptions $478 $462 $16 3.4 % $471 1.9 %
Customer
support $582 $591 ($9) (1.5) % $569 (3.7) %
Total annual
recurring
revenues** $1,060 $1,053 $7 0.7 % $1,040 (1.2) %
License $184 $189 ($5) (2.5) % $179 (5.3) %
Professional
service and
other $83 $93 ($10) (11.0) % $81 (13.1) %
Total revenues $1,327 $1,335 ($8) (0.6) % $1,299 (2.6) %
GAAP-based
operating
income $292 $296 ($4) (1.4) % N/A N/A
Non-GAAP-based
operating income
(1) $456 $470 ($14) (2.9) % $436 (7.2) %
GAAP-based net
income
attributable to
OpenText $168 $230 ($62) (26.9) % N/A N/A
Non-GAAP-based
net income
attributable to
OpenText (1) $286 $293 ($7) (2.4) % $272 (7.4) %
GAAP-based EPS,
diluted $0.66 $0.87 ($0.21) (24.1) % N/A N/A
Non-GAAP-based
EPS, diluted
(1) $1.13 $1.11 $0.02 1.8 % $1.07 (3.6) %
Adjusted
EBITDA (1) $491 $501 ($10) (2.1) % $471 (6.1) %
Operating cash
flows $319 $348 ($29) (8.4) % N/A N/A
Free cash flows
(1) $279 $307 ($27) (8.9) % N/A N/A
----------------- -------- -------- -------- -------- ------- --------
Summary of YTD
Results
-----------------
(In millions,
except per share FY'26 YTD % Change
data) FY'26 YTD FY'25 YTD $ Change % Change in CC* in CC*
Revenues:
Cloud services
and
subscriptions $963 $919 $43 4.7 % $947 3.0 %
Customer
support $1,169 $1,186 ($17) (1.5) % $1,141 (3.8) %
Total annual
recurring
revenues** $2,131 $2,105 $26 1.2 % $2,089 (0.8) %
License $319 $315 $4 1.3 % $311 (1.1) %
Professional
service and
other $165 $183 ($19) (10.2) % $160 (12.7) %
Total revenues $2,615 $2,604 $11 0.4 % $2,560 (1.7) %
GAAP-based
operating
income $562 $502 $60 11.9 % N/A N/A
Non-GAAP-based
operating income
(1) $887 $881 $6 0.7 % $850 (3.5) %
GAAP-based net
income
attributable to
OpenText $315 $314 $-- 0.2 % N/A N/A
Non-GAAP-based
net income
attributable to
OpenText (1) $553 $542 $10 1.9 % $526 (3.0) %
GAAP-based EPS,
diluted $1.24 $1.18 $0.06 5.1 % N/A N/A
Non-GAAP-based
EPS, diluted
(1) $2.18 $2.03 $0.15 7.4 % $2.08 2.5 %
Adjusted
EBITDA (1) $959 $945 $13 1.4 % $921 (2.5) %
Operating cash
flows $466 $270 $196 72.6 % N/A N/A
Free cash flows
(1) $381 $190 $191 100.8 % N/A N/A
----------------- --------- --------- -------- -------- --------- --------
(1) Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed
consolidated financial statements below.
Note: Items in tables may not add due to rounding. Percentages presented are
calculated based on the underlying amounts.
*CC: Constant currency for this purpose is defined as the current period
reported revenues/expenses/earnings represented at the prior comparative
period's foreign exchange rate.
**Annual recurring revenue is defined as the sum of Cloud services and
subscriptions revenue and Customer support revenue.
Dividend
As part of the quarterly, non-cumulative cash dividend program, the Board declared on February 4, 2026, a cash dividend of $0.275 per common share. The record date for this dividend is March 6, 2026 and the payment date is March 20, 2026. OpenText believes strongly in returning value to its shareholders. Any future declarations of dividends and the establishment of future record and payment dates are all subject to the final determination and discretion of the Board of Directors.
Quarterly Business Highlights
-- OpenText appoints Ayman Antoun as Chief Executive Officer, effective
April 20, 2026
-- OpenText announces divestiture of Vertica, a part of its non-core
Analytics portfolio, for US$150 million
-- OpenText completes divestiture of eDOCS, a non-core product, for US$163
million
-- John Hastings and Margaret Stuart appointed to the Board of Directors in
December 2025, totaling four new board members appointed in 2025
-- OpenText unveiled next-generation AI Data Platform for secure information
management at our OpenText World user conference
-- OpenText expands collaboration with SAP to deliver AI-ready cloud content
management at scale
-- Key customer wins in the quarter include: Anritsu Service Assurance, Atos
Group, BNP Paribas, Central Clinical Labs, Dairy Farmers of America,
Desjardins, Finova, Raiffeisen Informatik Consulting, Ricoh Corporation,
Sklavenitis, Solenis, Turkcell, US Bank National Association
Summary of
Quarterly
Results
---------------
% Change % Change (Q2
(Q2 FY'26 vs FY'26 vs Q2
Q2 FY'26 Q1 FY'26 Q2 FY'25 Q1 FY'26) FY'25)
Revenue
(millions) $ 1,327 $ 1,288 $ 1,335 3.0 % (0.6) %
GAAP-based
gross margin 74.0 % 72.8 % 73.3 % 130 bps 70 bps
Non-GAAP-based
gross margin
(1) 77.6 % 76.5 % 77.2 % 120 bps 40 bps
GAAP-based EPS,
diluted $ 0.66 $ 0.58 $ 0.87 13.8 % (24.1) %
Non-GAAP-based
EPS, diluted
(1) $ 1.13 $ 1.05 $ 1.11 7.6 % 1.8 %
--------------- -------------- -------------- -------------- ------------ --- ------------ ---
(1) Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed
consolidated financial statements below.
Conference Call Information
OpenText posted an investor presentation on its Investor Relations website and invites the public to listen to the earnings conference call webcast on Thursday, February 5, 2026 at 5:00 p.m. ET (2:00 p.m. PT) from the Investor Relations section of the Company's website at https://investors.opentext.com. To join the webcast instantly, use this webcast link. A webcast replay will be available shortly following completion of the live call.
Please see below note (2) for a reconciliation of U.S. GAAP-based financial measures used in this press release to Non-GAAP-based financial measures.
OTEX-F
Copyright (c) 2026 OpenText. All Rights Reserved. Trademarks owned by OpenText. One or more patents may cover this product(s). For more information, please visit https://www.opentext.com/patents.
About OpenText
OpenText$(TM)$ is a global leader in secure information management for AI, helping organizations protect, govern, and activate their data with confidence. Our technologies turn data into information with context to form the knowledge base for AI. Learn more at www.opentext.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release, including statements about Open Text Corporation ("OpenText" or "the Company") on growth, profitability and future of Information Management, including returning to growth, strategic capital allocation, delivering sustained margin and free cash flow growth, reinvestment in core business, and generating returns for investors; expected future performance, including competitive position of and innovation to certain products and ability to build long-term shareholder value; customer benefits from products; A-EBITDA expansion; executing the Company's capital allocation strategy, including expected return to shareholders; execution of Business Optimization Plan and other savings initiatives, including timing, costs, savings, associated benefits thereof and potential adjustments of amounts thereto; projected outlook, estimates and business model; portfolio shaping opportunities and divestiture of non-core assets, including the proposed divestiture of Vertica, associated strategy, benefits from and timing of such transactions and use of proceeds therefrom; future total and cloud revenues, operating expenses, margins, RPO, cRPO, free cash flows, earnings, interest expense and capital expenditures; net leverage and savings estimates and timing thereof; market share of our products; innovation road map; estimated annualized dividend; expected size and timing of the Repurchase Plan, including execution thereof; future tax rates; renewal rates; new platform and product offerings, including reinvestment therein and associated benefits to customers; internal automation and AI leverage, including our AI strategy, vision and growth; and other matters, which may contain words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "may", "could", "would", "might", "will" and variations of these words or similar expressions are intended to identify forward-looking statements or information under applicable securities laws (forward-looking statements). In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements, and are based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management's perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances, such as certain assumptions about the economy, as well as market, financial and operational assumptions. Management's estimates, beliefs and assumptions, including statements regarding future outlook, estimates and business models, are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change and are not considered guidance. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Future declarations of dividends are also subject to the final determination and discretion of the Board of Directors, and an annualized dividend has not been approved or declared by the Board. Forward-looking statements involve known and unknown risks and uncertainties such as those relating to: all statements regarding the expected future financial position, results of operations, revenues, expenses, margins, cash flows, dividends, share buybacks, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management, including any anticipated synergy benefits; incurring unanticipated costs, delays or difficulties; and our ability to develop, protect and maintain our intellectual property and proprietary technology and to operate without infringing on the proprietary rights of others. We rely on a combination of copyright, patent, trademark and trade secret laws, non-disclosure agreements and other contractual provisions to establish and maintain our proprietary rights, which are important to our success. From time to time, we may also enforce our intellectual property rights through litigation in line with our strategic and business objectives. The actual results that OpenText achieves may differ materially from any forward-looking statements. For additional information with respect to risks and other factors which could occur, see the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the Securities and Exchange Commission (SEC) and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Further, readers should note that we may announce information using our website, press releases, securities law filings, public conference calls, webcasts and the social media channels identified on the Investors section of our website . Such social media channels may include the Company's or our executive's blog, X, formerly known as Twitter, account or LinkedIn account. The information posted through such channels may be material. Accordingly, readers should monitor such channels in addition to our other forms of communication.
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
December 31, 2025 June 30, 2025
----------------------- ------------------------
ASSETS (unaudited)
Cash and cash
equivalents $ 1,271,374 $ 1,156,496
Accounts receivable
trade, net of
allowance for credit
losses of $15,116 as
of December 31, 2025
and $14,258 as of
June 30, 2025 665,617 659,675
Contract assets 73,965 77,920
Income taxes
recoverable 38,583 108,792
Prepaid expenses and
other current
assets 186,383 198,575
Assets held for sale 116,105 --
----------------------- ------------------------
Total current
assets 2,352,027 2,201,458
Property and
equipment, net of
accumulated
depreciation of
$727,520 as of
December 31, 2025
and $835,324 as of
June 30, 2025 389,366 375,252
Operating lease right
of use assets 156,402 197,977
Long-term contract
assets 55,133 49,293
Goodwill 7,433,913 7,517,463
Acquired intangible
assets 1,729,983 1,976,591
Deferred tax assets 1,071,236 1,080,575
Other assets 308,115 307,693
Long-term income
taxes recoverable 73,987 67,762
Total assets $ 13,570,162 $ 13,774,064
======================= ========================
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
and accrued
liabilities $ 929,508 $ 1,026,583
Current portion of
long-term debt 35,850 35,850
Operating lease
liabilities 66,600 75,914
Deferred revenues 1,456,883 1,515,382
Income taxes
payable 2,804 93,325
Liabilities held
for sale 13,019 --
----------------------- ------------------------
Total current
liabilities 2,504,664 2,747,054
Long-term
liabilities:
Accrued
liabilities 41,214 42,312
Pension liability,
net 132,511 132,215
Long-term debt 6,335,758 6,342,071
Long-term
operating lease
liabilities 155,217 189,949
Long-term deferred
revenues 165,191 168,757
Long-term income
taxes payable 68,654 79,604
Deferred tax
liabilities 121,559 141,514
Total long-term
liabilities 7,020,104 7,096,422
Shareholders' equity:
Share capital and
additional paid-in
capital
251,676,295 and
254,784,391
Common Shares
issued and
outstanding at
December 31, 2025
and June 30,
2025,
respectively;
authorized Common
Shares:
unlimited 2,183,939 2,193,985
Accumulated other
comprehensive
income (loss) (38,432) (67,067)
Retained earnings 1,971,950 1,940,113
Treasury stock, at
cost (2,584,014
and 4,648,036
shares at
December 31, 2025
and June 30,
2025,
respectively) (73,863) (138,164)
----------------------- ------------------------
Total OpenText
shareholders'
equity 4,043,594 3,928,867
Non-controlling
interests 1,800 1,721
----------------------- ------------------------
Total
shareholders'
equity 4,045,394 3,930,588
----------------------- ------------------------
Total
liabilities
and
shareholders'
equity $ 13,570,162 $ 13,774,064
======================= ========================
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. dollars, except share and per share data)
(unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
-------------------------------------- ----------------------------------------
2025 2024 2025 2024
------------------ ------------------ ------------------ --------------------
Revenues:
Cloud services and
subscriptions $ 478,084 $ 462,306 $ 962,593 $ 919,330
Customer support 581,921 590,595 1,168,766 1,186,085
License 184,227 188,923 318,775 314,736
Professional
service and
other 82,504 92,676 164,737 183,354
------------------ ------------------ ------------------ --------------------
Total revenues 1,326,736 1,334,500 2,614,871 2,603,505
------------------ ------------------ ------------------ --------------------
Cost of revenues:
Cloud services and
subscriptions 170,252 172,288 342,469 347,545
Customer support 58,497 62,656 122,561 125,230
License 9,046 6,336 16,142 12,993
Professional
service and
other 62,537 68,041 125,575 134,956
Amortization of
acquired
technology-based
intangible
assets 44,204 47,203 88,408 94,447
------------------ ------------------ ------------------ --------------------
Total cost of
revenues 344,536 356,524 695,155 715,171
------------------ ------------------ ------------------ --------------------
Gross profit 982,200 977,976 1,919,716 1,888,334
------------------ ------------------ ------------------ --------------------
Operating expenses:
Research and
development 158,309 180,727 327,437 371,420
Sales and
marketing 287,995 273,929 545,050 519,811
General and
administrative 110,111 99,356 215,874 206,086
Depreciation 35,267 31,879 71,188 64,050
Amortization of
acquired
customer-based
intangible
assets 78,645 81,048 158,206 162,552
Special charges
(recoveries) 20,118 15,238 40,257 62,374
------------------ ------------------ ------------------ --------------------
Total operating
expenses 690,445 682,177 1,358,012 1,386,293
------------------ ------------------ ------------------ --------------------
Income from
operations 291,755 295,799 561,704 502,041
------------------ ------------------ ------------------ --------------------
Other income
(expense), net 2,932 68,615 (44) 32,960
Interest and other
related expense,
net (79,227) (83,615) (160,341) (167,897)
------------------ ------------------ ------------------ --------------------
Income before income
taxes 215,460 280,799 401,319 367,104
Provision for income
taxes 47,334 50,893 86,533 52,776
------------------ ------------------ ------------------ --------------------
Net income for the
period $ 168,126 $ 229,906 $ 314,786 $ 314,328
------------------ ------------------ ------------------ --------------------
Net (income)
attributable to
non-controlling
interests (35) (44) (79) (98)
------------------ ------------------ ------------------ --------------------
Net income
attributable to
OpenText $ 168,091 $ 229,862 $ 314,707 $ 314,230
================== ================== ================== ====================
Earnings per
share--basic
attributable to
OpenText $ 0.67 $ 0.87 $ 1.24 $ 1.18
================== ================== ================== ====================
Earnings per
share--diluted
attributable to
OpenText $ 0.66 $ 0.87 $ 1.24 $ 1.18
================== ================== ================== ====================
Weighted average
number of Common
Shares
outstanding--basic
(in '000's) 251,983 265,099 252,814 266,252
================== ================== ================== ====================
Weighted average
number of Common
Shares
outstanding--diluted
(in '000's) 253,733 265,193 253,406 266,505
================== ================== ================== ====================
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)
(unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2025 2024 2025 2024
-------------- -------------- -------------- ----------------
Net income for the
period $ 168,126 $ 229,906 $ 314,786 $ 314,328
Other comprehensive
income (loss)--net of
tax:
Net foreign
currency
translation
adjustments 6,843 1,167 29,020 (4,023)
Unrealized gain
(loss) on cash flow
hedges:
Unrealized gain
(loss)--net of
tax (1) 668 (4,188) (1,007) (3,534)
(Gain) loss
reclassified
into net
income--net of
tax (2) 45 1,010 (67) 1,272
Unrealized gain
(loss) on
available-for-sale
financial assets:
Unrealized gain
(loss)--net of
tax (3) 510 436 671 684
Actuarial gain
(loss) relating to
defined benefit
pension plans:
Actuarial gain
(loss)--net of
tax (4) -- -- -- (1,045)
Amortization of
actuarial
(gain) loss
into net
income--net of
tax (5) 13 252 18 486
-------------- -------------- -------------- ----------------
Total other
comprehensive income
(loss), net for the
period 8,079 (1,323) 28,635 (6,160)
-------------- -------------- -------------- ----------------
Total comprehensive
income 176,205 228,583 343,421 308,168
Comprehensive income
attributable to
non-controlling
interests (35) (44) (79) (98)
-------------- -------------- -------------- ----------------
Total comprehensive
income attributable
to OpenText $ 176,170 $ 228,539 $ 343,342 $ 308,070
============== ============== ============== ================
(______________________________)
(1) Net of tax expense (recovery) of $241 and $(1,510) for the three months
ended December 31, 2025 and 2024, respectively; $(363) and $(1,274) for
the six months ended December 31, 2025 and 2024, respectively.
(2) Net of tax expense (recovery) of $16 and $364 for the three months ended
December 31, 2025 and 2024, respectively; $(25) and $458 for the six
months ended December 31, 2025 and 2024, respectively.
(3) Net of tax expense (recovery) of $243 and $18 for the three months ended
December 31, 2025 and 2024, respectively; $309 and $225 for the six
months ended December 31, 2025 and 2024, respectively.
(4) Net of tax expense (recovery) of $-- and $-- for the three months ended
December 31, 2025 and 2024, respectively; $-- and $(43) for the six
months ended December 31, 2025 and 2024, respectively.
(5) Net of tax expense (recovery) of $(21) and $92 for the three months ended
December 31, 2025 and 2024, respectively; $(17) and $184 for the six
months ended December 31, 2025 and 2024, respectively.
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands of U.S. dollars and shares)
(unaudited)
Three Months Ended December 31, 2025
-------------------------------------------------------------------------------------------------------
Common Shares and
Additional Paid in
Capital Treasury Stock
---------------------- -------------------- ----------- ---------------- ----------- -------------
Accumulated
Other Non-
Retained Comprehensive Controlling
Shares Amount Shares Amount Earnings Income Interests Total
------- ------------- ------- ----------- ----------- ---------------- ----------- -------------
Balance as of
September 30, 2025 251,964 $ 2,189,340 (4,452) $ (130,561) $ 1,938,716 $ (46,511) $ 1,765 $ 3,952,749
Issuance of Common
Shares
Under employee
stock option
plans 857 26,746 -- -- -- -- -- 26,746
Under employee
stock purchase
plans 245 7,826 -- -- -- -- -- 7,826
Share-based
compensation -- 21,119 -- -- -- -- -- 21,119
Issuance of treasury
stock -- (51,375) 1,868 56,698 -- -- -- 5,323
Repurchase of Common
Shares (1,390) (9,717) -- -- (65,455) -- -- (75,172)
Dividends declared
($0.275 per Common
Share) -- -- -- -- (69,402) -- -- (69,402)
Other comprehensive
income (loss) -
net -- -- -- -- -- 8,079 -- 8,079
Net income for the
period -- -- -- -- 168,091 -- 35 168,126
------- ------------- ------- ----------- ----------- ---------------- ----------- -------------
Balance as of
December 31, 2025 251,676 $ 2,183,939 (2,584) $ (73,863) $ 1,971,950 $ (38,432) $ 1,800 $ 4,045,394
======= ============= ======= =========== =========== ================ =========== =============
Three Months Ended December 31, 2024
-------------------------------------------------------------------------------------------------------
Common Shares and
Additional Paid in
Capital Treasury Stock
---------------------- -------------------- ----------- ---------------- ----------- -------------
Accumulated
Other Non-
Retained Comprehensive Controlling
Shares Amount Shares Amount Earnings Income Interests Total
------- ------------- ------- ----------- ----------- ---------------- ----------- -------------
Balance as of
September 30, 2024 265,546 $ 2,290,191 (3,900) $ (145,646) $ 2,065,221 $ (74,456) $ 1,577 $ 4,136,887
Issuance of Common
Shares
Under employee
stock option
plans 65 1,739 -- -- -- -- -- 1,739
Under employee
stock purchase
plans 330 9,308 -- -- -- -- -- 9,308
Share-based
compensation -- 30,355 -- -- -- -- -- 30,355
Purchase of treasury
stock -- -- (1,363) (40,013) -- -- -- (40,013)
Issuance of treasury
stock -- (39,906) 1,037 41,227 -- -- -- 1,321
Repurchase of Common
Shares (2,213) (16,104) -- -- (50,990) -- -- (67,094)
Dividends declared
($0.2625 per Common
Share) -- -- -- -- (69,579) -- -- (69,579)
Other comprehensive
income (loss) -
net -- -- -- -- -- (1,323) -- (1,323)
Net income for the
period -- -- -- -- 229,862 -- 44 229,906
------- ------------- ------- ----------- ----------- ---------------- ----------- -------------
Balance as of
December 31, 2024 263,728 $ 2,275,583 (4,226) $ (144,432) $ 2,174,514 $ (75,779) $ 1,621 $ 4,231,507
======= ============= ======= =========== =========== ================ =========== =============
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands of U.S. dollars and shares)
(unaudited)
Six Months Ended December 31, 2025
-------------------------------------------------------------------------------------------------------
Common Shares and
Additional Paid in
Capital Treasury Stock
---------------------- -------------------- ----------- ---------------- ----------- -------------
Accumulated
Other Non-
Retained Comprehensive Controlling
Shares Amount Shares Amount Earnings Income Interests Total
------- ------------- ------- ----------- ----------- ---------------- ----------- -------------
Balance as of June
30, 2025 254,784 $ 2,193,985 (4,648) $ (138,164) $ 1,940,113 $ (67,067) $ 1,721 $ 3,930,588
Issuance of Common
Shares
Under employee
stock option
plans 882 27,301 -- -- -- -- -- 27,301
Under employee
stock purchase
plans 556 15,422 -- -- -- -- -- 15,422
Share-based
compensation -- 38,800 -- -- -- -- -- 38,800
Issuance of
treasury stock -- (58,777) 2,064 64,301 -- -- -- 5,524
Repurchase of
Common Shares (4,546) (32,792) -- -- (144,103) -- -- (176,895)
Dividends declared
($0.55 per Common
Share) -- -- -- -- (138,767) -- -- (138,767)
Other comprehensive
income (loss) -
net -- -- -- -- -- 28,635 -- 28,635
Net income for the
period -- -- -- -- 314,707 -- 79 314,786
------- ------------- ------- ----------- ----------- ---------------- ----------- -------------
Balance as of
December 31, 2025 251,676 $ 2,183,939 (2,584) $ (73,863) $ 1,971,950 $ (38,432) $ 1,800 $ 4,045,394
======= ============= ======= =========== =========== ================ =========== =============
Six Months Ended December 31, 2024
-------------------------------------------------------------------------------------------------------
Common Shares and
Additional Paid in
Capital Treasury Stock
---------------------- -------------------- ----------- ---------------- ----------- -------------
Accumulated
Other Non-
Retained Comprehensive Controlling
Shares Amount Shares Amount Earnings Income Interests Total
------- ------------- ------- ----------- ----------- ---------------- ----------- -------------
Balance as of
June 30, 2024 267,801 $ 2,271,886 (3,136) $ (123,268) $ 2,119,159 $ (69,619) $ 1,523 $ 4,199,681
Issuance of Common
Shares
Under employee
stock option
plans 70 1,880 -- -- -- -- -- 1,880
Under employee
stock purchase
plans 719 19,171 -- -- -- -- -- 19,171
Share-based
compensation -- 59,801 -- -- -- -- -- 59,801
Purchase of
treasury stock -- -- (2,187) (65,023) -- -- -- (65,023)
Issuance of
treasury stock -- (41,836) 1,097 43,859 (702) -- -- 1,321
Repurchase of
Common Shares (4,862) (35,319) -- -- (118,256) -- -- (153,575)
Dividends declared
($0.525 per Common
Share) -- -- -- -- (139,917) -- -- (139,917)
Other comprehensive
income (loss) -
net -- -- -- -- -- (6,160) -- (6,160)
Net income for the
period -- -- -- -- 314,230 -- 98 314,328
------- ------------- ------- ----------- ----------- ---------------- ----------- -------------
Balance as of
December 31, 2024 263,728 $ 2,275,583 (4,226) $ (144,432) $ 2,174,514 $ (75,779) $ 1,621 $ 4,231,507
======= ============= ======= =========== =========== ================ =========== =============
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
---------------------------------- ------------------------------------
2025 2024 2025 2024
---------------- ---------------- ---------------- ------------------
Cash flows
from operating
activities:
Net income for
the period $ 168,126 $ 229,906 $ 314,786 $ 314,328
Adjustments to
reconcile net
income to net
cash provided
by operating
activities:
Depreciation
and
amortization
of
intangible
assets 158,116 160,130 317,802 321,049
Share-based
compensation
expense 21,232 30,361 38,913 59,919
Pension
expense 3,087 3,350 6,228 6,813
Amortization
of debt
discount and
issuance
costs 5,852 5,499 11,612 10,795
Write-off of
right of use
assets 3,422 1,385 7,844 1,385
Adjustment to
gain on AMC
Divestiture -- 4,175 -- 4,175
Loss on sale
and write
down of
property and
equipment,
net 509 437 2,823 439
Deferred
taxes (17,667) (10,827) (32,799) (52,977)
Share in net
(income) of
equity
investees (5,216) (1,538) (7,633) (1,993)
Changes in
derivative
instruments (2,906) (45,549) (10,749) (20,614)
Changes in
operating
assets and
liabilities:
Accounts
receivable (33,508) (15,728) 60,490 41,879
Contract
assets (38,708) (26,097) (69,678) (59,946)
Prepaid
expenses and
other
current
assets 12,264 32,427 10,168 54,578
Income taxes 448 (3,218) (32,664) (196,727)
Accounts
payable and
accrued
liabilities (8,699) (20,590) (98,492) (128,110)
Deferred
revenue 59,383 5,124 (49,415) (71,407)
Other assets (432) 3,306 7,377 (1,436)
Operating
lease assets
and
liabilities,
net (6,644) (4,561) (10,191) (11,964)
---------------- ---------------- ---------------- ------------------
Net cash
provided by
operating
activities 318,659 347,992 466,422 270,186
---------------- ---------------- ---------------- ------------------
Cash flows
from investing
activities:
Additions of
property and
equipment (39,215) (41,269) (85,749) (80,585)
Adjustment to
proceeds
from AMC
Divestiture -- (11,686) -- (11,686)
Proceeds from
interest on
derivative
instruments -- -- 870 2,519
Other
investing
activities -- 5,535 632 5,892
---------------- ---------------- ---------------- ------------------
Net cash used
in investing
activities (39,215) (47,420) (84,247) (83,860)
---------------- ---------------- ---------------- ------------------
Cash flows
from financing
activities:
Proceeds from
issuance of
Common
Shares from
exercise of
stock
options and
ESPP 33,119 8,291 41,499 17,740
Repayment of
long-term
debt and
Revolver (8,963) (8,963) (17,926) (17,926)
Net change in
transition
services
agreement
obligation -- 26,233 -- 21,938
Debt issuance
costs -- (1,066) -- (1,066)
Repurchase of
Common
Shares (49,996) (66,003) (157,625) (153,406)
Purchase of
treasury
stock -- (40,023) -- (65,023)
Payments of
dividends to
shareholders (68,515) (68,313) (136,735) (137,374)
Net cash used
in financing
activities (94,355) (149,844) (270,787) (335,117)
---------------- ---------------- ---------------- ------------------
Foreign
exchange gain
(loss) on
cash held in
foreign
currencies (803) (28,930) 3,503 (9,794)
---------------- ---------------- ---------------- ------------------
Increase
(decrease) in
cash, cash
equivalents
and
restricted
cash during
the period 184,286 121,798 114,891 (158,585)
Cash, cash
equivalents
and
restricted
cash at
beginning of
the period 1,088,711 1,002,410 1,158,106 1,282,793
---------------- ---------------- ---------------- ------------------
Cash, cash
equivalents
and
restricted
cash at end
of the
period $ 1,272,997 $ 1,124,208 $ 1,272,997 $ 1,124,208
================ ================ ================ ==================
OPEN TEXT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)
Reconciliation of
cash, cash
equivalents and
restricted cash: December 31, 2025 December 31, 2024
------------------------ --------------------------
Cash and cash
equivalents $ 1,271,374 $ 1,122,192
Restricted cash
(1) 1,623 2,016
------------------------ --------------------------
Total cash, cash
equivalents and
restricted cash $ 1,272,997 $ 1,124,208
======================== ==========================
(1) Restricted cash is classified under the Prepaid expenses and other current
assets and Other assets line items on the Condensed Consolidated Balance
Sheets.
Notes
(1) All dollar amounts in this press release are in U.S. Dollars unless otherwise indicated.
(2) Use of Non-GAAP Financial Measures: In addition to reporting financial results in accordance with U.S. GAAP, the Company provides certain financial measures that are not in accordance with U.S. GAAP (Non-GAAP). These Non-GAAP financial measures have certain limitations in that they do not have a standardized meaning and thus the Company's definition may be different from similar Non-GAAP financial measures used by other companies and/or analysts and may differ from period to period. Thus it may be more difficult to compare the Company's financial performance to that of other companies. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of these Non-GAAP financial measures both in its reconciliation to the U.S. GAAP financial measures and its condensed consolidated financial statements, all of which should be considered when evaluating the Company's results.
The Company uses these Non-GAAP financial measures to supplement the information provided in its condensed consolidated financial statements, which are presented in accordance with U.S. GAAP. The presentation of Non-GAAP financial measures is not meant to be a substitute for financial measures presented in accordance with U.S. GAAP, but rather should be evaluated in conjunction with and as a supplement to such U.S. GAAP measures. OpenText strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure. The Company therefore believes that despite these limitations, it is appropriate to supplement the disclosure of the U.S. GAAP measures with certain Non-GAAP measures defined below.
Non-GAAP-based net income and Non-GAAP-based EPS, attributable to OpenText, are consistently calculated as GAAP-based net income (loss) or earnings (loss) per share, attributable to OpenText, on a diluted basis, excluding the effects of the amortization of acquired intangible assets, other income (expense), share-based compensation, and special charges (recoveries), all net of tax and any tax benefits/expense items unrelated to current period income, as further described in the tables below. Non-GAAP-based gross profit is the arithmetical sum of GAAP-based gross profit and the amortization of acquired technology-based intangible assets and share-based compensation within cost of sales. Non-GAAP-based gross margin is calculated as Non-GAAP-based gross profit expressed as a percentage of total revenue. Non-GAAP-based income from operations is calculated as GAAP-based income from operations, excluding the amortization of acquired intangible assets, special charges (recoveries), and share-based compensation expense.
Adjusted EBITDA is defined and calculated as GAAP-based net income (loss), attributable to OpenText, excluding interest income (expense), provision for (recovery of) income taxes, depreciation and amortization of acquired intangible assets, other income (expense), share-based compensation and special charges (recoveries). Adjusted EBITDA margin is calculated as adjusted EBITDA expressed as a percentage of total revenue.
Free cash flows is defined and calculated as GAAP-based cash flows provided by operating activities less capital expenditures.
The Company's management believes that the presentation of the above defined Non-GAAP financial measures provides useful information to investors because they portray the financial results of the Company before the impact of certain non-operational charges. The use of the term "non-operational charge" is defined for this purpose as an expense that does not impact the ongoing operating decisions taken by the Company's management. These items are excluded based upon the way the Company's management evaluates the performance of the Company's business for use in the Company's internal reports and are not excluded in the sense that they may be used under U.S. GAAP.
The Company does not acquire businesses on a predictable cycle, and therefore believes that the presentation of Non-GAAP measures, which in certain cases adjust for the impact of amortization of intangible assets and the related tax effects that are primarily related to acquisitions, will provide readers of financial statements with a more consistent basis for comparison across accounting periods and be more useful in helping readers understand the Company's operating results and underlying operational trends. Additionally, the Company has engaged in various restructuring activities over the past several years, primarily due to acquisitions and most recently in response to our return to office planning, that have resulted in costs associated with reductions in headcount, consolidation of leased facilities and related costs, all which are recorded under the Company's "Special charges (recoveries)" caption on the Condensed Consolidated Statements of Income. Each restructuring activity is a discrete event based on a unique set of business objectives or circumstances, and each differs in terms of its operational implementation, business impact and scope, and the size of each restructuring plan can vary significantly from period to period. Therefore, the Company believes that the exclusion of these special charges (recoveries) will also better aid readers of financial statements in the understanding and comparability of the Company's operating results and underlying operational trends.
In summary, the Company believes the provision of supplemental Non-GAAP measures allow investors to evaluate the operational and financial performance of the Company's core business using the same evaluation measures that management uses, and is therefore a useful indication of OpenText's performance or expected performance of future operations and facilitates period-to-period comparison of operating performance (although prior performance is not necessarily indicative of future performance). As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary Non-GAAP financial measures that exclude certain items from the presentation of its financial results. Information reconciling certain forward-looking GAAP measures to non-GAAP measures related to outlook, estimates or business models, including A-EBITDA is not available without unreasonable effort due to high variability, complexity and uncertainty with respect to forecasting and quantifying certain amounts that are necessary for such reconciliations.
The following charts provide unaudited reconciliations of U.S. GAAP-based financial measures to Non-GAAP-based financial measures for the following periods presented.
Reconciliation of selected GAAP-based measures to Non-GAAP-based measures
for the three months ended December 31, 2025
(In thousands, except for per share data)
---------------------------------------------------------------------------------------------
Three Months Ended December 31, 2025
--------------------------------------------------------------------------
Non-GAAP-
GAAP-based based
Measures % Non-GAAP- Measures
GAAP-based of Total based % of Total
Measures Revenue Adjustments Note Measures Revenue
------------- ---------- ------------- ---- ------------- -----------
Cost of revenues
Cloud services
and
subscriptions $ 170,252 $ (1,597) (1) $ 168,655
Customer support 58,497 (1,087) (1) 57,410
Professional
service and
other 62,537 (822) (1) 61,715
Amortization of
acquired
technology-based
intangible
assets 44,204 (44,204) (2) --
GAAP-based gross
profit and gross
margin (%) /
Non-GAAP-based
gross profit and
gross margin
(%) 982,200 74.0 % 47,710 (3) 1,029,910 77.6 %
Operating
expenses
Research and
development 158,309 (4,839) (1) 153,470
Sales and
marketing 287,995 (7,837) (1) 280,158
General and
administrative 110,111 (5,050) (1) 105,061
Amortization of
acquired
customer-based
intangible
assets 78,645 (78,645) (2) --
Special charges
(recoveries) 20,118 (20,118) (4) --
GAAP-based income
from operations
/ Non-GAAP-based
income from
operations 291,755 164,199 (5) 455,954
Other income
(expense), net 2,932 (2,932) (6) --
Provision for
income taxes 47,334 43,080 (7) 90,414
GAAP-based net
income /
Non-GAAP-based
net income,
attributable to
OpenText 168,091 118,187 (8) 286,278
GAAP-based
earnings per
share /
Non-GAAP-based
earnings per
share-diluted,
attributable to
OpenText $ 0.66 $ 0.47 (8) $ 1.13
(1) Adjustment relates to the exclusion of share-based compensation expense
from our Non-GAAP-based operating expenses as this expense is excluded
from our internal analysis of operating results.
(2) Adjustment relates to the exclusion of amortization expense from our
Non-GAAP-based operating expenses as the timing and frequency of
amortization expense is dependent on our acquisitions and is hence
excluded from our internal analysis of operating results.
(3) GAAP-based and Non-GAAP-based gross profit stated in dollars and gross
margin stated as a percentage of total revenue.
(4) Adjustment relates to the exclusion of special charges (recoveries) from
our Non-GAAP-based operating expenses as special charges (recoveries) are
generally incurred in the periods relevant to an acquisition and include
certain charges or recoveries that are not indicative or related to
continuing operations and are therefore excluded from our internal
analysis of operating results.
(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.
(6) Adjustment relates to the exclusion of other income (expense) from our
Non-GAAP-based operating expenses as other income (expense) generally
relates to the transactional impact of foreign exchange and is generally
not indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other income
(expense) also includes our share of income (losses) from our holdings in
investments as a limited partner. We do not actively trade equity
securities in these privately held companies nor do we plan our ongoing
operations based around any anticipated fundings or distributions from
these investments. We exclude gains and losses on these investments as we
do not believe they are reflective of our ongoing business and operating
results. Other income (expense) also includes unrealized and realized
gains (losses) on our derivatives which are not designated as hedges. We
exclude gains and losses on these derivatives as we do not believe they
are reflective of our ongoing business and operating results.
(7) Adjustment relates to differences between the GAAP-based tax provision
rate of approximately 22% and a Non-GAAP-based tax rate of approximately
24%; these rate differences are due to the income tax effects of items
that are excluded for the purpose of calculating Non-GAAP-based net
income. Such excluded items include amortization, share-based
compensation, special charges (recoveries) and other income (expense),
net. Also excluded are tax benefits/expense items unrelated to current
period income such as changes in reserves for tax uncertainties and
valuation allowance reserves and "book to return" adjustments for tax
return filings and tax assessments. Beginning in Fiscal 2025, net tax
benefits arising from the internal reorganization that occurred in Fiscal
2017 have been fully utilized and are no longer included. In arriving at
our Non-GAAP-based tax rate of approximately 24%, we analyzed the
individual adjusted expenses and took into consideration the impact of
statutory tax rates from local jurisdictions incurring the expense.
(8) Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Three Months Ended December 31, 2025
----------------------------------------------------------
Per share diluted
-------------------------- ------------------------------
GAAP-based net
income,
attributable to
OpenText $ 168,091 $ 0.66
Add:
Amortization 122,849 0.49
Share-based
compensation 21,232 0.08
Special charges
(recoveries) 20,118 0.08
Other (income)
expense, net (2,932) (0.01)
GAAP-based
provision for
income taxes 47,334 0.19
Non-GAAP-based
provision for
income taxes (90,414) (0.36)
-------------------------- ------------------------------
Non-GAAP-based net
income,
attributable to
OpenText $ 286,278 $ 1.13
========================== ==============================
Reconciliation of Adjusted EBITDA
Three Months Ended December 31, 2025
----------------------------------------------------------------
GAAP-based net
income,
attributable to
OpenText $ 168,091
Add:
Provision for
income taxes 47,334
Interest and
other related
expense, net 79,227
Amortization of
acquired
technology-based
intangible
assets 44,204
Amortization of
acquired
customer-based
intangible
assets 78,645
Depreciation 35,267
Share-based
compensation 21,232
Special charges
(recoveries) 20,118
Other (income)
expense, net (2,932)
----------------------------------------------------------------
Adjusted EBITDA $ 491,186
================================================================
GAAP-based net
income margin 12.7 %
Adjusted EBITDA
margin 37.0 %
Reconciliation of Free Cash Flows
Three Months Ended December 31, 2025
------------------------------------------------------------------
GAAP-based
cash flows
provided by
operating
activities $ 318,659
Add:
Capital
expenditures
(1) (39,215)
------------------------------------------------------------------
Free cash $ 279,444
flows
==================================================================
(1) Defined as "Additions of property and equipment" in the Condensed
Consolidated Statements of Cash Flows.
Reconciliation of selected GAAP-based measures to Non-GAAP-based measures
for the six months ended December 31, 2025
(In thousands, except for per share data)
---------------------------------------------------------------------------------------------
Six Months Ended December 31, 2025
--------------------------------------------------------------------------
Non-GAAP-
GAAP-based based
Measures % Non-GAAP- Measures
GAAP-based of Total based % of Total
Measures Revenue Adjustments Note Measures Revenue
------------- ---------- ------------- ---- ------------- -----------
Cost of revenues
Cloud services
and
subscriptions $ 342,469 $ (3,346) (1) $ 339,123
Customer support 122,561 (2,140) (1) 120,421
Professional
service and
other 125,575 (1,321) (1) 124,254
Amortization of
acquired
technology-based
intangible
assets 88,408 (88,408) (2) --
GAAP-based gross
profit and gross
margin (%) /
Non-GAAP-based
gross profit and
gross margin
(%) 1,919,716 73.4 % 95,215 (3) 2,014,931 77.1 %
Operating
expenses
Research and
development 327,437 (8,448) (1) 318,989
Sales and
marketing 545,050 (14,733) (1) 530,317
General and
administrative 215,874 (8,925) (1) 206,949
Amortization of
acquired
customer-based
intangible
assets 158,206 (158,206) (2) --
Special charges
(recoveries) 40,257 (40,257) (4) --
GAAP-based income
from operations
/ Non-GAAP-based
income from
operations 561,704 325,784 (5) 887,488
Other income
(expense), net (44) 44 (6) --
Provision for
income taxes 86,533 87,982 (7) 174,515
GAAP-based net
income /
Non-GAAP-based
net income,
attributable to
OpenText 314,707 237,846 (8) 552,553
GAAP-based
earnings per
share /
Non-GAAP-based
earnings per
share-diluted,
attributable to
OpenText $ 1.24 $ 0.94 (8) $ 2.18
(1) Adjustment relates to the exclusion of share-based compensation expense
from our Non-GAAP-based operating expenses as this expense is excluded
from our internal analysis of operating results.
(2) Adjustment relates to the exclusion of amortization expense from our
Non-GAAP-based operating expenses as the timing and frequency of
amortization expense is dependent on our acquisitions and is hence
excluded from our internal analysis of operating results.
(3) GAAP-based and Non-GAAP-based gross profit stated in dollars and gross
margin stated as a percentage of total revenue.
(4) Adjustment relates to the exclusion of special charges (recoveries) from
our Non-GAAP-based operating expenses as special charges (recoveries) are
generally incurred in the periods relevant to an acquisition and include
certain charges or recoveries that are not indicative or related to
continuing operations and are therefore excluded from our internal
analysis of operating results.
(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.
(6) Adjustment relates to the exclusion of other income (expense) from our
Non-GAAP-based operating expenses as other income (expense) generally
relates to the transactional impact of foreign exchange and is generally
not indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other income
(expense) also includes our share of income (losses) from our holdings in
investments as a limited partner. We do not actively trade equity
securities in these privately held companies nor do we plan our ongoing
operations based around any anticipated fundings or distributions from
these investments. We exclude gains and losses on these investments as we
do not believe they are reflective of our ongoing business and operating
results. Other income (expense) also includes unrealized and realized
gains (losses) on our derivatives which are not designated as hedges. We
exclude gains and losses on these derivatives as we do not believe they
are reflective of our ongoing business and operating results.
(7) Adjustment relates to differences between the GAAP-based tax provision
rate of approximately 22% and a Non-GAAP-based tax rate of approximately
24%; these rate differences are due to the income tax effects of items
that are excluded for the purpose of calculating Non-GAAP-based net
income. Such excluded items include amortization, share-based
compensation, special charges (recoveries) and other income (expense),
net. Also excluded are tax benefits/expense items unrelated to current
period income such as changes in reserves for tax uncertainties and
valuation allowance reserves and "book to return" adjustments for tax
return filings and tax assessments. Beginning in Fiscal 2025, net tax
benefits arising from the internal reorganization that occurred in Fiscal
2017 have been fully utilized and are no longer included. In arriving at
our Non-GAAP-based tax rate of approximately 24%, we analyzed the
individual adjusted expenses and took into consideration the impact of
statutory tax rates from local jurisdictions incurring the expense.
(8) Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Six Months Ended December 31, 2025
----------------------------------------------------------
Per share diluted
-------------------------- ------------------------------
GAAP-based net
income,
attributable to
OpenText $ 314,707 $ 1.24
Add (deduct):
Amortization 246,614 0.98
Share-based
compensation 38,913 0.15
Special charges
(recoveries) 40,257 0.16
Other (income)
expense, net 44 --
GAAP-based
provision for
income taxes 86,533 0.34
Non-GAAP-based
provision for
income taxes (174,515) (0.69)
-------------------------- ------------------------------
Non-GAAP-based net
income,
attributable to
OpenText $ 552,553 $ 2.18
========================== ==============================
Reconciliation of Adjusted EBITDA
Six Months Ended December 31, 2025
----------------------------------------------------------------
GAAP-based net
income,
attributable to
OpenText $ 314,707
Add:
Provision for
income taxes 86,533
Interest and
other related
expense, net 160,341
Amortization of
acquired
technology-based
intangible
assets 88,408
Amortization of
acquired
customer-based
intangible
assets 158,206
Depreciation 71,188
Share-based
compensation 38,913
Special charges
(recoveries) 40,257
Other (income)
expense, net 44
----------------------------------------------------------------
Adjusted EBITDA $ 958,597
================================================================
GAAP-based net
income margin 12.0 %
Adjusted EBITDA
margin 36.7 %
Reconciliation of Free cash flows
Six Months Ended December 31, 2025
------------------------------------------------------------------
GAAP-based
cash flows
provided by
operating
activities $ 466,422
Add:
Capital
expenditures
(1) (85,749)
------------------------------------------------------------------
Free cash $ 380,673
flows
==================================================================
(1) Defined as "Additions of property and equipment" in the Condensed
Consolidated Statements of Cash Flows.
Reconciliation of selected GAAP-based measures to Non-GAAP-based measures
for the three months ended September 30, 2025
(In thousands, except for per share data)
---------------------------------------------------------------------------------------------
Three Months Ended September 30, 2025
--------------------------------------------------------------------------
Non-GAAP-
GAAP-based based
Measures % Non-GAAP- Measures
GAAP-based of Total based % of Total
Measures Revenue Adjustments Note Measures Revenue
------------- ---------- ------------- ---- ------------- -----------
Cost of revenues
Cloud services
and
subscriptions $ 172,217 $ (1,749) (1) $ 170,468
Customer support 64,064 (1,053) (1) 63,011
Professional
service and
other 63,038 (499) (1) 62,539
Amortization of
acquired
technology-based
intangible
assets 44,204 (44,204) (2) --
GAAP-based gross
profit and gross
margin (%)
/Non-GAAP-based
gross profit and
gross margin
(%) 937,516 72.8 % 47,505 (3) 985,021 76.5 %
Operating
expenses
Research and
development 169,128 (3,609) (1) 165,519
Sales and
marketing 257,055 (6,896) (1) 250,159
General and
administrative 105,763 (3,875) (1) 101,888
Amortization of
acquired
customer-based
intangible
assets 79,561 (79,561) (2) --
Special charges
(recoveries) 20,139 (20,139) (4) --
GAAP-based income
from operations
/ Non-GAAP-based
income from
operations 269,949 161,585 (5) 431,534
Other income
(expense), net (2,976) 2,976 (6) --
Provision for
income taxes 39,199 44,902 (7) 84,101
GAAP-based net
income /
Non-GAAP-based
net income,
attributable to
OpenText 146,616 119,659 (8) 266,275
GAAP-based
earnings per
share /
Non-GAAP-based
earnings per
share-diluted,
attributable to
OpenText $ 0.58 $ 0.47 (8) $ 1.05
(1) Adjustment relates to the exclusion of share-based compensation expense
from our Non-GAAP-based operating expenses as this expense is excluded
from our internal analysis of operating results.
(2) Adjustment relates to the exclusion of amortization expense from our
Non-GAAP-based operating expenses as the timing and frequency of
amortization expense is dependent on our acquisitions and is hence
excluded from our internal analysis of operating results.
(3) GAAP-based and Non-GAAP-based gross profit stated in dollars and gross
margin stated as a percentage of total revenue.
(4) Adjustment relates to the exclusion of special charges (recoveries) from
our Non-GAAP-based operating expenses as special charges (recoveries) are
generally incurred in the periods relevant to an acquisition and include
certain charges or recoveries that are not indicative or related to
continuing operations and are therefore excluded from our internal
analysis of operating results.
(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.
(6) Adjustment relates to the exclusion of other income (expense) from our
Non-GAAP-based operating expenses as other income (expense) generally
relates to the transactional impact of foreign exchange and is generally
not indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other income
(expense) also includes our share of income (losses) from our holdings in
investments as a limited partner. We do not actively trade equity
securities in these privately held companies nor do we plan our ongoing
operations based around any anticipated fundings or distributions from
these investments. We exclude gains and losses on these investments as we
do not believe they are reflective of our ongoing business and operating
results. Other income (expense) also includes unrealized and realized
gains (losses) on our derivatives which are not designated as hedges. We
exclude gains and losses on these derivatives as we do not believe they
are reflective of our ongoing business and operating results.
(7) Adjustment relates to differences between the GAAP-based tax provision
rate of approximately 21% and a Non-GAAP-based tax rate of approximately
24%; these rate differences are due to the income tax effects of items
that are excluded for the purpose of calculating Non-GAAP-based net
income. Such excluded items include amortization, share-based
compensation, special charges (recoveries) and other income (expense),
net. Also excluded are tax benefits/expense items unrelated to current
period income such as changes in reserves for tax uncertainties and
valuation allowance reserves and "book to return" adjustments for tax
return filings and tax assessments. Beginning in Fiscal 2025, net tax
benefits arising from the internal reorganization that occurred in Fiscal
2017 have been fully utilized and are no longer included. In arriving at
our Non-GAAP-based tax rate of approximately 24%, we analyzed the
individual adjusted expenses and took into consideration the impact of
statutory tax rates from local jurisdictions incurring the expense.
(8) Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Three Months Ended September 30, 2025
----------------------------------------------------------
Per share diluted
-------------------------- ------------------------------
GAAP-based net
income,
attributable to
OpenText $ 146,616 $ 0.58
Add:
Amortization 123,765 0.49
Share-based
compensation 17,681 0.07
Special charges
(recoveries) 20,139 0.08
Other (income)
expense, net 2,976 0.01
GAAP-based
provision for
income taxes 39,199 0.15
Non-GAAP-based
provision for
income taxes (84,101) (0.33)
-------------------------- ------------------------------
Non-GAAP-based net
income,
attributable to
OpenText $ 266,275 $ 1.05
========================== ==============================
Reconciliation of Adjusted EBITDA
Three Months Ended September 30, 2025
--------------------------------------------------------------
GAAP-based net
income,
attributable to
OpenText $ 146,616
Add:
Provision for
income taxes 39,199
Interest and
other related
expense, net 81,114
Amortization of
acquired
technology-based
intangible
assets 44,204
Amortization of
acquired
customer-based
intangible
assets 79,561
Depreciation 35,921
Share-based
compensation 17,681
Special charges
(recoveries) 20,139
Other (income)
expense, net 2,976
--------------------------------------------------------------
Adjusted EBITDA $ 467,411
==============================================================
GAAP-based net
income margin 11.4 %
Adjusted EBITDA
margin 36.3 %
Reconciliation of Free Cash Flows
Three Months Ended September 30, 2025
----------------------------------------------------------------
GAAP-based
cash flows
provided by
operating
activities $ 147,763
Add:
Capital
expenditures
(1) (46,534)
----------------------------------------------------------------
Free cash
flows $ 101,229
================================================================
(1) Defined as "Additions of property and equipment" in the Condensed
Consolidated Statements of Cash Flows.
Reconciliation of selected GAAP-based measures to Non-GAAP-based measures
for the three months ended December 31, 2024
(In thousands, except for per share data)
---------------------------------------------------------------------------------------------
Three Months Ended December 31, 2024
--------------------------------------------------------------------------
Non-GAAP-
GAAP-based based
Measures % Non-GAAP- Measures
GAAP-based of Total based % of Total
Measures Revenue Adjustments Note Measures Revenue
------------- ---------- ------------- ---- ------------- -----------
Cost of revenues
Cloud services
and
subscriptions $ 172,288 $ (2,796) (1) $ 169,492
Customer support 62,656 (1,139) (1) 61,517
Professional
service and
other 68,041 (1,273) (1) 66,768
Amortization of
acquired
technology-based
intangible
assets 47,203 (47,203) (2) --
GAAP-based gross
profit and gross
margin (%)
/Non-GAAP-based
gross profit and
gross margin
(%) 977,976 73.3 % 52,411 (3) 1,030,387 77.2 %
Operating
expenses
Research and
development 180,727 (7,656) (1) 173,071
Sales and
marketing 273,929 (11,223) (1) 262,706
General and
administrative 99,356 (6,274) (1) 93,082
Amortization of
acquired
customer-based
intangible
assets 81,048 (81,048) (2) --
Special charges
(recoveries) 15,238 (15,238) (4) --
GAAP-based income
from operations
/ Non-GAAP-based
income from
operations 295,799 173,850 (5) 469,649
Other income
(expense), net 68,615 (68,615) (6) --
Provision for
income taxes 50,893 41,755 (7) 92,648
GAAP-based net
income /
Non-GAAP-based
net income,
attributable to
OpenText 229,862 63,480 (8) 293,342
GAAP-based
earnings per
share /
Non-GAAP-based
earnings per
share-diluted,
attributable to
OpenText $ 0.87 $ 0.24 (8) $ 1.11
(1) Adjustment relates to the exclusion of share-based compensation expense
from our Non-GAAP-based operating expenses as this expense is excluded
from our internal analysis of operating results.
(2) Adjustment relates to the exclusion of amortization expense from our
Non-GAAP-based operating expenses as the timing and frequency of
amortization expense is dependent on our acquisitions and is hence
excluded from our internal analysis of operating results.
(3) GAAP-based and Non-GAAP-based gross profit stated in dollars and gross
margin stated as a percentage of total revenue.
(4) Adjustment relates to the exclusion of special charges (recoveries) from
our Non-GAAP-based operating expenses as special charges (recoveries) are
generally incurred in the periods relevant to an acquisition and include
certain charges or recoveries that are not indicative or related to
continuing operations and are therefore excluded from our internal
analysis of operating results.
(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.
(6) Adjustment relates to the exclusion of other income (expense) from our
Non-GAAP-based operating expenses as other income (expense) generally
relates to the transactional impact of foreign exchange and is generally
not indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other income
(expense) also includes our share of income (losses) from our holdings in
investments as a limited partner. We do not actively trade equity
securities in these privately held companies nor do we plan our ongoing
operations based around any anticipated fundings or distributions from
these investments. We exclude gains and losses on these investments as we
do not believe they are reflective of our ongoing business and operating
results. Other income (expense) also includes unrealized and realized
gains (losses) on our derivatives which are not designated as hedges. We
exclude gains and losses on these derivatives as we do not believe they
are reflective of our ongoing business and operating results.
(7) Adjustment relates to differences between the GAAP-based tax provision
rate of approximately 18% and a Non-GAAP-based tax rate of approximately
24%; these rate differences are due to the income tax effects of items
that are excluded for the purpose of calculating Non-GAAP-based net
income. Such excluded items include amortization, share-based
compensation, special charges (recoveries) and other income (expense),
net. Also excluded are tax benefits/expense items unrelated to current
period income such as changes in reserves for tax uncertainties and
valuation allowance reserves and "book to return" adjustments for tax
return filings and tax assessments. Beginning in Fiscal 2025, net tax
benefits arising from the internal reorganization that occurred in Fiscal
2017 have been fully utilized and are no longer included. In arriving at
our Non-GAAP-based tax rate of approximately 24%, we analyzed the
individual adjusted expenses and took into consideration the impact of
statutory tax rates from local jurisdictions incurring the expense.
(8) Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Three Months Ended December 31, 2024
----------------------------------------------------------
Per share diluted
-------------------------- ------------------------------
GAAP-based net
income,
attributable to
OpenText $ 229,862 $ 0.87
Add:
Amortization 128,251 0.49
Share-based
compensation 30,361 0.11
Special charges
(recoveries) 15,238 0.06
Other (income)
expense, net (68,615) (0.26)
GAAP-based
provision for
income taxes 50,893 0.19
Non-GAAP-based
provision for
income taxes (92,648) (0.35)
-------------------------- ------------------------------
Non-GAAP-based net
income,
attributable to
OpenText $ 293,342 $ 1.11
========================== ==============================
Reconciliation of Adjusted EBITDA
Three Months Ended December 31, 2024
--------------------------------------------------------------
GAAP-based net
income,
attributable to
OpenText $ 229,862
Add:
Provision for
income taxes 50,893
Interest and
other related
expense, net 83,615
Amortization of
acquired
technology-based
intangible
assets 47,203
Amortization of
acquired
customer-based
intangible
assets 81,048
Depreciation 31,879
Share-based
compensation 30,361
Special charges
(recoveries) 15,238
Other (income)
expense, net (68,615)
--------------------------------------------------------------
Adjusted EBITDA $ 501,484
==============================================================
GAAP-based net
income margin 17.2 %
Adjusted EBITDA
margin 37.6 %
Reconciliation of Free Cash Flows
Three Months Ended December 31, 2024
------------------------------------------------------------------
GAAP-based
cash flows
provided by
operating
activities $ 347,992
Add:
Capital
expenditures
(1) (41,269)
------------------------------------------------------------------
Free cash $ 306,723
flows
==================================================================
(1) Defined as "Additions of property and equipment" in the Condensed
Consolidated Statements of Cash Flows.
Reconciliation of selected GAAP-based measures to Non-GAAP-based measures
for the six months ended December 31, 2024
(In thousands, except for per share data)
---------------------------------------------------------------------------------------------
Six Months Ended December 31, 2024
--------------------------------------------------------------------------
Non-GAAP-
GAAP-based based
Measures % Non-GAAP- Measures
GAAP-based of Total based % of Total
Measures Revenue Adjustments Note Measures Revenue
------------- ---------- ------------- ---- ------------- -----------
Cost of revenues
Cloud services
and
subscriptions $ 347,545 $ (4,982) (1) $ 342,563
Customer support 125,230 (2,481) (1) 122,749
Professional
service and
other 134,956 (2,587) (1) 132,369
Amortization of
acquired
technology-based
intangible
assets 94,447 (94,447) (2) --
GAAP-based gross
profit and gross
margin (%) /
Non-GAAP-based
gross profit and
gross margin
(%) 1,888,334 72.5 % 104,497 (3) 1,992,831 76.5 %
Operating
expenses
Research and
development 371,420 (15,823) (1) 355,597
Sales and
marketing 519,811 (20,538) (1) 499,273
General and
administrative 206,086 (13,508) (1) 192,578
Amortization of
acquired
customer-based
intangible
assets 162,552 (162,552) (2) --
Special charges
(recoveries) 62,374 (62,374) (4) --
GAAP-based income
from operations
/ Non-GAAP-based
income from
operations 502,041 379,292 (5) 881,333
Other income
(expense), net 32,960 (32,960) (6) --
Provision for
income taxes 52,776 118,448 (7) 171,224
GAAP-based net
income /
Non-GAAP-based
net income,
attributable to
OpenText 314,230 227,884 (8) 542,114
GAAP-based
earnings per
share /
Non-GAAP-based
earnings per
share-diluted,
attributable to
OpenText $ 1.18 $ 0.85 (8) $ 2.03
(1) Adjustment relates to the exclusion of share-based compensation expense
from our Non-GAAP-based operating expenses as this expense is excluded
from our internal analysis of operating results.
(2) Adjustment relates to the exclusion of amortization expense from our
Non-GAAP-based operating expenses as the timing and frequency of
amortization expense is dependent on our acquisitions and is hence
excluded from our internal analysis of operating results.
(3) GAAP-based and Non-GAAP-based gross profit stated in dollars and gross
margin stated as a percentage of total revenue.
(4) Adjustment relates to the exclusion of special charges (recoveries) from
our Non-GAAP-based operating expenses as special charges (recoveries) are
generally incurred in the periods relevant to an acquisition and include
certain charges or recoveries that are not indicative or related to
continuing operations and are therefore excluded from our internal
analysis of operating results.
(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.
(6) Adjustment relates to the exclusion of other income (expense) from our
Non-GAAP-based operating expenses as other income (expense) generally
relates to the transactional impact of foreign exchange and is generally
not indicative or related to continuing operations and is therefore
excluded from our internal analysis of operating results. Other income
(expense) also includes our share of income (losses) from our holdings in
investments as a limited partner. We do not actively trade equity
securities in these privately held companies nor do we plan our ongoing
operations based around any anticipated fundings or distributions from
these investments. We exclude gains and losses on these investments as we
do not believe they are reflective of our ongoing business and operating
results. Other income (expense) also includes unrealized and realized
gains (losses) on our derivatives which are not designated as hedges. We
exclude gains and losses on these derivatives as we do not believe they
are reflective of our ongoing business and operating results.
(7) Adjustment relates to differences between the GAAP-based tax provision
rate of approximately 14% and a Non-GAAP-based tax rate of approximately
24%; these rate differences are due to the income tax effects of items
that are excluded for the purpose of calculating Non-GAAP-based net
income. Such excluded items include amortization, share-based
compensation, special charges (recoveries) and other income (expense),
net. Also excluded are tax benefits/expense items unrelated to current
period income such as changes in reserves for tax uncertainties and
valuation allowance reserves and "book to return" adjustments for tax
return filings and tax assessments. Beginning in Fiscal 2025, net tax
benefits arising from the internal reorganization that occurred in Fiscal
2017 have been fully utilized and are no longer included. In arriving at
our Non-GAAP-based tax rate of approximately 24%, we analyzed the
individual adjusted expenses and took into consideration the impact of
statutory tax rates from local jurisdictions incurring the expense.
(8) Reconciliation of GAAP-based net income to Non-GAAP-based net income:
Six Months Ended December 31, 2024
----------------------------------------------------------
Per share diluted
-------------------------- ------------------------------
GAAP-based net
income,
attributable to
OpenText $ 314,230 $ 1.18
Add (deduct):
Amortization 256,999 0.96
Share-based
compensation 59,919 0.22
Special charges
(recoveries) 62,374 0.23
Other (income)
expense, net (32,960) (0.12)
GAAP-based
provision for
income taxes 52,776 0.20
Non-GAAP-based
provision for
income taxes (171,224) (0.64)
-------------------------- ------------------------------
Non-GAAP-based net
income,
attributable to
OpenText $ 542,114 $ 2.03
========================== ==============================
Reconciliation of Adjusted EBITDA
Six Months Ended December 31, 2024
------------------------------------------------------------
GAAP-based net
income,
attributable to
OpenText $ 314,230
Add:
Provision for
income taxes 52,776
Interest and
other related
expense, net 167,897
Amortization of
acquired
technology-based
intangible
assets 94,447
Amortization of
acquired
customer-based
intangible
assets 162,552
Depreciation 64,050
Share-based
compensation 59,919
Special charges
(recoveries) 62,374
Other (income)
expense, net (32,960)
------------------------------------------------------------
Adjusted EBITDA $ 945,285
============================================================
GAAP-based net
income margin 12.1 %
Adjusted EBITDA
margin 36.3 %
Reconciliation of Free cash flows
Six Months Ended December 31, 2024
------------------------------------------------------------------
GAAP-based
cash flows
provided by
operating
activities $ 270,186
Add:
Capital
expenditures
(1) (80,585)
------------------------------------------------------------------
Free cash $ 189,601
flows
==================================================================
(1) Defined as "Additions of property and equipment" in the Condensed
Consolidated Statements of Cash Flows.
(3) The following tables provide a composition of our major currencies for
revenue and expenses, expressed as a percentage, for the three and six months
ended December 31, 2025 and 2024:
Three Months Ended December Three Months Ended December 31,
31, 2025 2024
------------------------------ -------------------------------
Currencies % of Revenue % of Expenses(1) % of Revenue % of Expenses(1)
------------ ---------------- ------------- ----------------
EURO 26 % 14 % 23 % 13 %
GBP 5 % 6 % 5 % 7 %
CAD 3 % 13 % 3 % 10 %
USD 55 % 43 % 58 % 46 %
Other 11 % 24 % 11 % 24 %
------------ ---------------- ------------- ----------------
Total 100 % 100 % 100 % 100 %
============ ================ ============= ================
Six Months Ended December 31, Six Months Ended December 31,
2025 2024
------------------------------ -------------------------------
Currencies % of Revenue % of Expenses(1) % of Revenue % of Expenses(1)
------------ ---------------- ------------- ----------------
EURO 25 % 13 % 23 % 12 %
GBP 5 % 6 % 5 % 7 %
CAD 3 % 13 % 3 % 10 %
USD 56 % 45 % 59 % 48 %
Other 11 % 23 % 10 % 23 %
------------ ---------------- ------------- ----------------
Total 100 % 100 % 100 % 100 %
============ ================ ============= ================
(1) Expenses include all cost of revenues and operating expenses included
within the Condensed Consolidated Statements of Income, except for
amortization of intangible assets, share-based compensation and special
charges (recoveries).
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SOURCE Open Text Corporation
(END) Dow Jones Newswires
February 05, 2026 16:01 ET (21:01 GMT)