Open Text Corporation

Q4 total revenue was $1.35 billion, up 2.9% year over year, or up 0.9% in constant currency. Q4 core revenue was $1.05 billion, up 5.3% year over year, or up 3.1% in constant currency, and Q4 core cloud revenue was $341 million, up 10.7% year over year, or 8.9% in constant currency. GAAP gross margin was 75.0%, up 270 basis points, and non-GAAP gross margin was 78.3%, up 220 basis points. GAAP diluted EPS was $0.64, up 481.8% year over year, while non-GAAP diluted EPS was $1.23, up 26.8%; adjusted EBITDA margin was 37.1% in Q4. For fiscal 2026, total revenue was $5.2 billion, up 1.5% year over year, core revenue was $4.0 billion, up 2.9%, GAAP operating margin was 20.6%, adjusted EBITDA margin was 36.3%, GAAP diluted EPS was $2.58, and non-GAAP diluted EPS was $4.42. Fiscal 2027 guidance calls for total revenue of $5.135 billion to $5.185 billion, or negative 2% to negative 1% reported, about 0% to 1% constant currency excluding divestitures; core revenue growth of 2% to 3% constant currency; core cloud revenue growth of 8% to 10% constant currency; adjusted EBITDA margin of 32% to 33%; free cash flow of $625 million to $725 million; and Q1 fiscal 2027 total revenue of $1.22 billion to $1.25 billion with adjusted EBITDA margin of 32% to 33%.

Ayman Antoun emphasized that Open Text’s role is to provide a secure, governed data foundation for enterprise AI, saying clients need trusted data and context before AI can create value. He framed the company’s strategy around ruthless prioritization, more speed and simplicity, and a more integrated go-to-market motion, backed by an enterprise assessment that will shape a multiyear growth plan. His tone was confident and constructive, especially around Aviator, where he said deals including Aviator are more than 4x larger and that cloud wins are increasingly driven by new cloud business rather than base migration.

Steve Rai highlighted a solid Q4 and full year, pointing to strong cloud performance, improved margins, and healthy cash generation. He cited Q4 operating cash flow of $186 million, free cash flow of $122 million, full-year operating cash flow of $1.0 billion, and free cash flow of $808 million; he also noted fiscal 2026 free cash flow came in about $31 million below outlook due mainly to collections timing. On capital allocation, he said Open Text reduced debt by $459 million in Q4 and $649 million in fiscal 2026, bringing net leverage down from 3.02x to 2.75x, and returned $268.4 million via dividends while renewing the NCIB to repurchase up to 10% of the public float.

Analysts focused on whether fiscal 2027 core growth can be achieved across segments, and management said content should grow faster than the core average while cyber and ITOM are also expected to grow. Questions also centered on the $100 million to $200 million investment plan, with management saying most of it is going to sales capacity and partner enablement, while R&D is being reallocated more selectively rather than broadly increased. On cloud migration and renewal rates, management said cloud growth is still early but that 92% of cloud bookings in fiscal 2026 came from new cloud clients rather than base conversion, and that the low-to-mid-90s cloud net renewal rate is healthy and should improve over time as AI deployments deepen.