OPEN TEXT CORP (OTEX): Results of Operations and Financial Condition
OPEN TEXT CORP (OTEX) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 OpenText Reports Fourth Quarter and Fiscal Year 2026 Financial Results $1.96B of Cloud Revenues, growth of 5.5% Y/Y Core Revenue* growth of 3% Y/Y Fiscal 2026 Fourth Quarter Highlights (in millions) (1) Total Revenues Cloud Revenues Profitability EPS Cash Flows Net I
How this was made
The 30-second read
Why it matters
Traders can update models and positioning based on the disclosed cloud growth, enterprise cloud bookings, profitability, EPS, and cash flow, plus the declared dividend schedule for near-term income and event-driven flows.
Market read
Company-specific earnings release with multiple fresh financial metrics and a declared dividend, making it actionable for short- to medium-term positioning.
What to watch
Customer support revenue declined in Q4 (-4.6% Y/Y), so investors may scrutinize retention and services mix even as cloud bookings rose (+24.1% Y/Y).
OpenText Reports Fourth Quarter and Fiscal Year 2026 Financial Results
Fourth-quarter total revenue grew 2.9% year over year, cloud services and subscriptions grew 6.0%, and enterprise cloud bookings rose 24.1%. Profitability and operating cash flow improved materially, while customer support, professional service and other revenue, and free cash flow declined year over year.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q4 FY'26 total revenuesother | $1,349.0 million | – | 2.9% |
| Q4 FY'26 total annual recurring revenuesother | $1,056.9 million | – | 0.2% |
| Q4 FY'26 GAAP-based operating incomeGAAP | $319.7 million | – | 76.1% |
| Q4 FY'26 non-GAAP-based operating incomenon-GAAP | $468.3 million | – | 14.2% |
| Q4 FY'26 GAAP-based net income attributable to OpenTextGAAP | $155.7 million | – | 439.9% |
| Q4 FY'26 non-GAAP net incomenon-GAAP | $299 million | – | 19.7% |
| Q4 FY'26 GAAP-based EPS, dilutedGAAP | $0.64 | – | 481.8% |
| Q4 FY'26 non-GAAP-based EPS, dilutednon-GAAP | $1.23 | – | 26.8% |
| Q4 FY'26 Adjusted EBITDAnon-GAAP | $506.7 million | – | 14.1% |
| Q4 FY'26 Adjusted EBITDA marginnon-GAAP | 37.6% | – | – |
| Q4 FY'26 operating cash flowsother | $185.8 million | – | 17.5% |
| Q4 FY'26 free cash flownon-GAAP | $122.0 million | – | (1.6)% |
| FY'26 total revenuesother | $5,246.4 million | – | 1.5% |
| FY'26 total annual recurring revenuesother | $4,246.0 million | – | 1.3% |
| FY'26 GAAP-based operating incomeGAAP | $1,082.6 million | – | 21.3% |
| FY'26 non-GAAP-based operating incomenon-GAAP | $1,759.5 million | – | 6.4% |
| FY'26 GAAP-based net income attributable to OpenTextGAAP | $643.0 million | – | 47.5% |
| FY'26 GAAP-based net income marginGAAP | 12.3% | – | – |
| FY'26 GAAP-based EPS, dilutedGAAP | $2.58 | – | 56.4% |
| FY'26 non-GAAP-based EPS, dilutednon-GAAP | $4.42 | – | 15.7% |
| FY'26 Adjusted EBITDAnon-GAAP | $1,903.2 million | – | 6.7% |
| FY'26 Adjusted EBITDA marginnon-GAAP | 36.3% | – | – |
| FY'26 operating cash flowsother | $1,006.8 million | – | 21.2% |
| FY'26 free cash flownon-GAAP | $807.5 million | – | 17.5% |
| Q4 FY'26 total revenues in CCother | $1,322.4 million | – | 0.9% |
| Q4 FY'26 non-GAAP-based operating income in CCnon-GAAP | $451.7 million | – | 10.2% |
| Q4 FY'26 non-GAAP-based EPS, diluted in CCnon-GAAP | $1.18 | – | 21.6% |
| Q4 FY'26 Adjusted EBITDA in CCnon-GAAP | $490.0 million | – | 10.4% |
| FY'26 total revenues in CCother | $5,110.4 million | – | (1.1)% |
| FY'26 non-GAAP-based operating income in CCnon-GAAP | $1,678.2 million | – | 1.5% |
| FY'26 non-GAAP-based EPS, diluted in CCnon-GAAP | $4.19 | – | 9.7% |
| FY'26 Adjusted EBITDA in CCnon-GAAP | $1,821.4 million | – | 2.1% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Q4 FY'26 Cloud services and subscriptionsThe company reported 22 consecutive quarters of cloud organic growth and enterprise cloud bookings of $295 million, up 24.1% year over year. | $503.0 million | – | 6.0% |
| Q4 FY'26 Customer supportCustomer support was included in total annual recurring revenues of $1,056.9 million. | $553.8 million | – | (4.6)% |
| Q4 FY'26 LicenseLicense revenue increased by $42.1 million year over year. | $214.6 million | – | 24.4% |
| Q4 FY'26 Professional service and otherProfessional service and other revenue decreased by $5.4 million year over year. | $77.6 million | – | (6.5)% |
| FY'26 Cloud services and subscriptionsEnterprise cloud bookings were $947 million, up 22.5% year over year. | $1,958.6 million | – | 5.5% |
| FY'26 Customer supportCustomer support was included in total annual recurring revenues of $4,246.0 million. | $2,287.4 million | – | (2.0)% |
| FY'26 LicenseLicense revenue increased by $52.9 million year over year. | $678.5 million | – | 8.4% |
| FY'26 Professional service and otherProfessional service and other revenue decreased by $30.3 million year over year. | $321.9 million | – | (8.6)% |
Capital returns
- Repurchased $12 million of common shares for cancellation in the fourth quarter.
- Record capital returns of $677 million including $268 million via dividends and $409 million of share repurchases in Fiscal 2026.
- The Board declared on August 5, 2026, a cash dividend of $0.28 per common share. The record date is September 4, 2026 and the payment date is September 18, 2026.
- The renewed Repurchase Plan authorizes purchases of up to 23,846,439 common shares, representing 10% of the Company's public float, from August 12, 2026 through August 11, 2027, subject to earlier termination.
- The maximum number of Common Shares that may be purchased on a single day is 447,218 Common Shares.
What drove it
- Q4 cloud services and subscriptions revenue increased 6.0% year over year to $503.0 million.
- Q4 enterprise cloud bookings increased 24.1% year over year to $295 million.
- Q4 license revenue increased 24.4% year over year to $214.6 million.
- FY'26 cloud services and subscriptions revenue increased 5.5% year over year to $1,958.6 million.
- Management identified expansion of sales capacity, ecosystem-partner reach, and increased organic investment in the core portfolio as Fiscal 2027 priorities.
- The company completed a US$150 Million divestiture of non-core Vertica to Rocket Software.
Concerns
- Q4 total annual recurring revenues increased only 0.2% year over year, as customer support revenue declined 4.6% year over year.
- Q4 free cash flow declined 1.6% year over year to $122.0 million despite operating cash flow growth of 17.5%.
- FY'26 total revenue growth was 1.5% year over year and was (1.1)% in constant currency.
- FY'26 customer support revenue declined 2.0% year over year and professional service and other revenue declined 8.6% year over year.
- Q4 total revenue growth was 0.9% in constant currency, compared with 2.9% as reported.
What to watch
- Cloud services and subscriptions revenue growth and enterprise cloud bookings following the reported $503.0 million and $295 million in Q4 FY'26.
- Whether expansion of sales capacity, ecosystem partners, and core-portfolio investment produces the stated objective of core organic growth in constant currency.
- The trajectory of customer support revenue after its Q4 FY'26 decline of 4.6% year over year.
- Free-cash-flow performance after Q4 FY'26 free cash flow declined 1.6% year over year.
- Execution of the renewed Repurchase Plan, which may commence on August 12, 2026.
Balance sheet and cash flow
- Q4 FY'26 operating cash flows were $185.8 million, compared with $158.2 million in Q4 FY'25.
- Q4 FY'26 free cash flow was $122.0 million, compared with $124.0 million in Q4 FY'25.
- FY'26 operating cash flows were $1,006.8 million, compared with $830.6 million in FY'25.
- FY'26 free cash flow was $807.5 million, compared with $687.4 million in FY'25.
- Management said it strengthened the balance sheet and remains focused on cash generation and debt reduction.
Analysis
OpenText closed fiscal 2026 with Q4 total revenue of $1,349.0 million, up 2.9% year over year, while revenue growth was 0.9% in constant currency. Cloud services and subscriptions were the principal recurring-revenue growth component, increasing 6.0% to $503.0 million. Enterprise cloud bookings rose 24.1% to $295 million. License revenue increased 24.4% to $214.6 million, offset in part by a 4.6% decline in customer support and a 6.5% decline in professional service and other revenue. As a result, total annual recurring revenues rose only 0.2% to $1,056.9 million.
Fourth-quarter earnings and operating cash flow advanced substantially. GAAP-based operating income increased 76.1% to $319.7 million, GAAP-based net income attributable to OpenText increased 439.9% to $155.7 million, and GAAP diluted EPS increased 481.8% to $0.64. On a non-GAAP basis, operating income grew 14.2% to $468.3 million, adjusted EBITDA grew 14.1% to $506.7 million, and diluted EPS grew 26.8% to $1.23. Adjusted EBITDA margin was 37.6%. Operating cash flows increased 17.5% to $185.8 million, but free cash flow declined 1.6% to $122.0 million.
For FY'26, total revenue grew 1.5% to $5,246.4 million, although it declined 1.1% in constant currency. Cloud services and subscriptions increased 5.5% to $1,958.6 million and enterprise cloud bookings rose 22.5% to $947 million. Customer support declined 2.0% to $2,287.4 million and professional service and other declined 8.6% to $321.9 million. FY'26 total annual recurring revenues rose 1.3% to $4,246.0 million, showing that growth in cloud services and subscriptions was moderated by the customer-support decline.
Annual profitability and cash generation improved. FY'26 GAAP-based operating income rose 21.3% to $1,082.6 million, GAAP-based net income attributable to OpenText rose 47.5% to $643.0 million, and GAAP diluted EPS increased 56.4% to $2.58. Adjusted EBITDA increased 6.7% to $1,903.2 million, with a 36.3% margin. Operating cash flows increased 21.2% to $1,006.8 million and free cash flow increased 17.5% to $807.5 million. The company returned $677 million of capital during Fiscal 2026, including $268 million via dividends and $409 million of share repurchases.
Management described Fiscal 2027 as a foundation year focused on sales capacity, ecosystem partnerships, and organic investment in the core portfolio, with an objective of core organic growth in constant currency. No quantitative Fiscal 2027 financial guidance was included in the provided filing text. The company also completed the US$150 Million divestiture of non-core Vertica and renewed a repurchase authorization for up to 23,846,439 common shares, linking capital allocation to operational execution, cash flows, M&A activity, and its dividend program.
Management, verbatim
AI is creating urgency for every organization, but trusted data determines whether AI delivers value. OpenText is the secure data foundation in the AI stack. Enterprise-grade data is our differentiator, and it is how we will turn the AI opportunity into sustainable growth
Ayman Antoun, OpenText Chief Executive Officer
In Fiscal 2027, our focus is disciplined execution: expanding sales capacity, deepening reach through ecosystem partners, and increasing organic investment in our core portfolio, giving clients the choice of deployment, type of cloud, and AI models they need to trust their AI outcomes. This is our foundation year where we will drive core organic growth in constant currency and put in place the launch pad for sustained, enhanced performance going forward.
Ayman Antoun, OpenText Chief Executive Officer
Fiscal 2026 was an important year of financial and operational discipline for OpenText. We strengthened the balance sheet, managed costs, and delivered 36.3% in Adjusted EBITDA Margin, which demonstrates the durability of our operating model. As we enter Fiscal 2027, our focus remains on cash generation, debt reduction, and capital allocation that positions OpenText well in the year ahead.
Steve Rai, OpenText Executive Vice President, Chief Financial Officer
Not in the filing
stated, not guessed- Quantitative Fiscal 2027 revenue, gross-margin, operating-expense, tax-rate, EPS, EBITDA, cash-flow, and capital-return guidance.
- Previous-period outlook and therefore comparisons of reported results with prior guidance.
- Gross profit and gross margin.
- Operating expenses.
- Tax expense and tax rate.
- Cash balance, debt balance, net debt, and other detailed balance-sheet figures.
- Quarter-over-quarter comparisons for reported metrics.
- FY'26 non-GAAP net income and its comparative figures.
- Prior-year values for adjusted EBITDA margins and GAAP net income margin.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This SEC 8-K (Item 2.02) reports OpenText’s fourth quarter and fiscal year ended June 30, 2026 financial results, with an attached earnings release exhibit.
Ticker impact
OpenText reported Q4 and FY2026 results, including $503M cloud revenue (+6% Y/Y) and GAAP EPS of $0.64 for the quarter.
Likely supportive for the stock given cloud growth, higher GAAP net income, and disclosed cash generation, though the market may focus on free cash flow softness in Q4.
The filing includes multiple concrete, decision-relevant metrics (revenue, cloud growth, bookings, EPS, cash flow) and a declared dividend with record and payment dates.
Market effects
Reinforces demand narrative for enterprise content, cloud, security, and AI data infrastructure, potentially supporting sentiment across enterprise software data platforms.
Limited direct regional read-through beyond North American enterprise software sentiment.
Moderate, as results are company-specific but contribute to the broader AI-enablement and enterprise cloud spending signal.
Counterpoint
Despite strong GAAP earnings, Q4 free cash flow was slightly down Y/Y (-1.6%), which could temper enthusiasm for near-term cash-flow multiple expansion.
Key entities
- issuerOpenText Corporation
NASDAQ-listed company reporting Q4 and FY2026 financial results and capital return actions.
- executiveAyman Antoun
CEO quoted on AI urgency, trusted data, and Fiscal 2027 execution priorities.
- executiveSteve Rai
CFO quoted on balance sheet strengthening, cost management, and cash generation/debt reduction focus.
