OpenText Reports Third Quarter Fiscal Year 2026 Financial Results

OpenText Reports Third Quarter Fiscal Year 2026 Financial Results Total Revenues of $1.28B, Cloud Revenue Grows 6.6% Y/Y

Delivers Net Income Margin of 13%, Robust Adjusted EBITDA Margin of 34%

Ayman Antoun Officially Joins as OpenText CEO effective April 20, 2026

Fiscal 2026 Third Quarter Highlights (in millions) (1)

Total

Revenues

Cloud

Revenues

Profitability

Diluted EPS

Cash Flows

Net Income

A-EBITDA

GAAP

Non-GAAP

Operating

Free Cash

Flows

$1,283

$493

$173

$438

$0.70

$1.01

$355

$305

+2.2% Y/Y

+6.6% Y/Y

13.5% margin

34.1% margin

+100.0% Y/Y

+23.2% Y/Y

-11.8% Y/Y

-18.4% Y/Y

WATERLOO, ON, May 7, 2026 /PRNewswire/ -- Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), today announced its financial results for the third quarter ended March 31, 2026.

"I am delighted to join OpenText at a defining moment for our clients and our industry. Data is a company's most precious natural resource, and OpenText is uniquely positioned to help clients securely unlock the value of that data to solve complex challenges and win," said Ayman Antoun, OpenText CEO. "I am focused on listening and learning, energized by the momentum already built, and the opportunity ahead to drive disciplined execution, strong client outcomes, and sustainable growth."

Ayman Antoun, OpenText Chief Executive Officer

"OpenText had a strong quarter, driven by 6.6% year-over-year revenue growth in our cloud business as our clients continue to manage and secure their data for enterprise AI," said James McGourlay, OpenText President, CCO. "As large enterprises move to the cloud, we enable choice and flexibility to help them innovate, while meeting data regulation requirements. I am pleased to welcome Ayman Antoun as OpenText's Chief Executive Officer, and I look forward to working closely with him as we remain focused on delivering solutions that support our clients' success."

James McGourlay, OpenText President, Chief Client Officer

(OpenText Interim Chief Executive Officer in Q3 FY'26)

"Operational discipline supported our resilient business model delivering solid margin and free cash flow performance in the quarter," said Steve Rai, OpenText EVP, CFO. "Our strong cash flow and capital allocation flexibility enabled the repurchase and cancellation of 9.7 million shares in Q3. We ended the quarter with 242.2 million shares outstanding, a reduction of 6.7% year-over-year."

Steve Rai, OpenText Executive Vice President, Chief Financial Officer

Third Quarter Financial Highlights Y/Y

(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 clients.

(3)

Please see Note 2 "Use of Non-GAAP Financial Measures" to the condensed consolidated financial statements below.

Financial Highlights for Q3 Fiscal 2026 with Year Over Year Comparisons

Summary of Quarterly Results

(In millions, except per share data)

Q3 FY'26

Q3 FY'25

$ Change

% Change

Q3 FY'26

in CC*

% Change

in CC*

Revenues:

Cloud services and subscriptions

$ 493

$ 463

$ 30

6.6 %

$ 477

3.2 %

Customer support

$ 565

$ 567

$ (3)

(0.4) %

$ 538

(5.1) %

Total annual recurring revenues**

$ 1,058

$ 1,030

$ 28

2.7 %

$ 1,016

(1.4) %

License

$ 145

$ 138

$ 7

4.9 %

$ 137

(0.7) %

Professional service and other

$ 80

$ 86

$ (6)

(7.4) %

$ 75

(13.0) %

Total revenues

$ 1,283

$ 1,254

$ 28

2.2 %

$ 1,228

(2.1) %

GAAP-based operating income

$ 201

$ 209

$ (8)

(3.8) %

N/A

Non-GAAP-based operating income (1)

$ 404

$ 363

$ 41

11.3 %

$ 376

3.7 %

GAAP-based net income attributable to OpenText

$ 173

$ 93

$ 80

86.0 %

N/A

Non-GAAP-based net income attributable to OpenText (1)

$ 250

$ 216

$ 34

15.9 %

$ 231

6.9 %

GAAP-based EPS, diluted

$ 0.70

$ 0.35

100.0 %

N/A

Non-GAAP-based EPS, diluted (1)

$ 1.01

$ 0.82

$ 0.19

23.2 %

$ 0.93

13.4 %

Adjusted EBITDA (1)

$ 438

$ 395

$ 43

10.8 %

$ 410

3.7 %

Operating cash flows

$ 355

$ 402

$ (48)

(11.8) %

N/A

Free cash flows (1)

$ 305

$ 374

$ (69)

(18.4) %

N/A

Summary of YTD Results

(In millions, except per share data)

FY'26

YTD

FY'25

YTD

$ Change

% Change

FY'26

YTD in

CC*

% Change

in CC*

Revenues:

Cloud services and subscriptions

$ 1,456

$ 1,382

$ 74

5.3 %

$ 1,425

3.1 %

Customer support

$ 1,734

$ 1,753

$ (20)

(1.1) %

$ 1,680

(4.2) %

Total annual recurring revenues**

$ 3,189

$ 3,135

$ 54

1.7 %

$ 3,104

(1.0) %

License

$ 464

$ 453

$ 11

2.4 %

$ 449

(1.0) %

Professional service and other

$ 244

$ 269

$ (25)

(9.3) %

$ 235

(12.8) %

Total revenues

$ 3,897

$ 3,858

$ 40

1.0 %

$ 3,788

(1.8) %

GAAP-based operating income

$ 763

$ 711

$ 52

7.3 %

N/A

Non-GAAP-based operating income (1)

$ 1,291

$ 1,244

$ 47

3.8 %

$ 1,227

(1.4) %

GAAP-based net income attributable to OpenText

$ 487

$ 407

$ 80

19.7 %

N/A

Non-GAAP-based net income attributable to OpenText (1)

$ 803

$ 758

$ 45

5.9 %

$ 757

(0.2) %

GAAP-based EPS, diluted

$ 1.94

$ 1.53

$ 0.41

26.8 %

N/A

Non-GAAP-based EPS, diluted (1)

$ 3.19

$ 2.85

$ 0.34

11.9 %

$ 3.01

5.6 %

Adjusted EBITDA (1)

$ 1,397

$ 1,341

$ 56

4.2 %

$ 1,331

(0.7) %

Operating cash flows

$ 821

$ 672

$ 149

22.1 %

N/A

Free cash flows (1)

$ 686

$ 563

$ 122

21.7 %

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 May 5, 2026, a cash dividend of $0.275 per common share. The record date for this dividend is June 5, 2026 and the payment date is June 19, 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

Summary of Quarterly Results

Q3 FY'26

Q2 FY'26

Q3 FY'25

% Change

(Q3 FY'26 vs

Q2 FY'26)

% Change

(Q3 FY'26 vs

Q3 FY'25)

Revenue (millions)

$ 1,283

$ 1,327

$ 1,254

(3.3) %

2.2 %

GAAP-based gross margin

73.1 %

74.0 %

71.6 %

(90)

bps

150

bps

Non-GAAP-based gross margin (1)

76.7 %

77.6 %

75.7 %

(90)

bps

100

bps

GAAP-based EPS, diluted

$ 0.70

$ 0.66

$ 0.35

6.1 %

100.0 %

Non-GAAP-based EPS, diluted (1)

$ 1.01

$ 1.13

$ 0.82

(10.6) %

23.2 %

(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, May 7, 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

About OpenText

OpenText™ is a global leader in data management for enterprise 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 enterprise 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; client 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 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 share repurchase program, including execution thereof; future tax rates; renewal rates; new platform and product offerings, including reinvestment therein and associated benefits to clients; 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 ( https://investors.opentext.com). 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)

March 31, 2026

June 30, 2025

ASSETS

(unaudited)

Cash and cash equivalents

$ 1,254,144

$ 1,156,496

Accounts receivable trade, net of allowance for credit losses of $14,950 as of March 31, 2026 and $14,258 as of June 30, 2025

620,742

659,675

Contract assets

66,891

77,920

Income taxes recoverable

49,740

108,792

Prepaid expenses and other current assets

215,216

198,575

Assets held for sale

176,822

—

Total current assets

2,383,555

2,201,458

Property and equipment, net of accumulated depreciation of $738,215 as of March 31, 2026 and $835,324 as of June 30, 2025

391,182

375,252

Operating lease right of use assets

138,829

197,977

Long-term contract assets

49,435

49,293

Goodwill

7,325,034

7,517,463

Acquired intangible assets

1,582,880

1,976,591

Deferred tax assets

1,059,913

1,080,575

Other assets

307,720

307,693

Long-term income taxes recoverable

86,553

67,762

Total assets

$ 13,325,101

$ 13,774,064

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$ 898,681

$ 1,026,583

Current portion of long-term debt

35,850

Operating lease liabilities

62,606

75,914

Deferred revenues

1,508,469

1,515,382

Income taxes payable

—

93,325

Liabilities held for sale

29,197

—

Total current liabilities

2,534,803

2,747,054

Long-term liabilities:

Accrued liabilities

38,292

42,312

Pension liability, net

139,889

132,215

Long-term debt

6,174,658

6,342,071

Long-term operating lease liabilities

141,239

189,949

Long-term deferred revenues

159,858

168,757

Long-term income taxes payable

66,634

79,604

Deferred tax liabilities

105,601

141,514

Total long-term liabilities

6,826,171

7,096,422

Shareholders' equity:

Share capital and additional paid-in capital

242,230,377 and 254,784,391 Common Shares issued and outstanding at March 31, 2026 and June 30, 2025, respectively; authorized Common Shares: unlimited

2,137,801

2,193,985

Accumulated other comprehensive income (loss)

(47,251)

(67,067)

Retained earnings

1,945,539

1,940,113

Treasury stock, at cost (2,584,757 and 4,648,036 shares at March 31, 2026 and June 30, 2025, respectively)

(73,863)

(138,164)

Total OpenText shareholders' equity

3,962,226

3,928,867

Non-controlling interests

1,901

1,721

Total shareholders' equity

3,964,127

3,930,588

Total liabilities and shareholders' equity

$ 13,325,101

$ 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

March 31,

Nine Months Ended

March 31,

2026

2025

2026

2025

Revenues:

Cloud services and subscriptions

$ 492,929

$ 462,614

$ 1,455,522

$ 1,381,944

Customer support

564,845

567,379

1,733,611

1,753,464

License

145,085

138,363

463,860

453,099

Professional service and other

79,645

86,007

244,382

269,361

Total revenues

1,282,504

1,254,363

3,897,375

3,857,868

Cost of revenues:

Cloud services and subscriptions

177,360

174,186

519,829

521,731

Customer support

56,064

61,733

178,625

186,963

License

4,976

7,504

21,118

20,497

Professional service and other

63,509

65,487

189,084

200,443

Amortization of acquired technology-based intangible assets

43,322

47,199

131,730

141,646

Total cost of revenues

345,231

356,109

1,040,386

1,071,280

Gross profit

937,273

898,254

2,856,989

2,786,588

Operating expenses:

Research and development

171,166

197,333

498,603

568,753

Sales and marketing

282,624

260,102

827,674

779,913

General and administrative

108,667

115,718

324,541

321,804

Depreciation

34,311

32,474

105,499

96,524

Amortization of acquired customer-based intangible assets

65,408

79,683

223,614

242,235

Special charges (recoveries)

73,884

3,854

114,141

66,228

Total operating expenses

736,060

689,164

2,094,072

2,075,457

Income from operations

201,213

209,090

762,917

711,131

Other income (expense), net

80,231

(26,578)

80,187

6,382

Interest and other related expense, net

(74,409)

(78,816)

(234,750)

(246,713)

Income before income taxes

207,035

103,696

608,354

470,800

Provision for income taxes

34,282

10,842

120,815

63,618

Net income for the period

$ 172,753

$ 92,854

$ 487,539

$ 407,182

Net (income) attributable to non-controlling interests

(101)

(49)

(180)

(147)

Net income attributable to OpenText

$ 172,652

$ 92,805

$ 487,359

$ 407,035

Earnings per share—basic attributable to OpenText

$ 0.70

$ 0.35

$ 1.94

$ 1.54

Earnings per share—diluted attributable to OpenText

$ 0.70

$ 0.35

$ 1.94

$ 1.53

Weighted average number of Common Shares outstanding—basic (in '000's)

247,837

262,841

251,179

265,132

Weighted average number of Common Shares outstanding—diluted (in '000's)

247,962

263,834

251,577

265,610

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands of U.S. dollars)

(unaudited)

Three Months Ended

March 31,

Nine Months Ended

March 31,

2026

2025

2026

2025

Net income for the period

$ 172,753

$ 92,854

$ 487,539

$ 407,182

Other comprehensive income (loss)—net of tax:

Net foreign currency translation adjustments

(168)

(1,511)

28,852

(5,534)

Unrealized gain (loss) on cash flow hedges:

Unrealized gain (loss)—net of tax (1)

(1,199)

(46)

(2,206)

(3,580)

(Gain) loss reclassified into net income—net of tax (2)

(256)

1,371

(323)

2,643

Unrealized gain (loss) on available-for-sale financial assets:

Unrealized gain (loss)—net of tax (3)

(270)

(395)

401

289

Actuarial gain (loss) relating to defined benefit pension plans:

Actuarial gain (loss)—net of tax (4)

(6,945)

—

(6,945)

(1,045)

Amortization of actuarial (gain) loss into net income—net of tax (5)

513

999

Total other comprehensive income (loss), net for the period

(8,819)

(68)

19,816

(6,228)

Total comprehensive income

163,934

92,786

507,355

400,954

Comprehensive income attributable to non-controlling interests

(101)

(49)

(180)

(147)

Total comprehensive income attributable to OpenText

$ 163,833

$ 92,737

$ 507,175

$ 400,807

______________________________

(1)

Net of tax expense (recovery) of $(432) and $(17) for the three months ended March 31, 2026 and 2025, respectively; $(795) and $(1,291) for the nine months ended March 31, 2026 and 2025, respectively.

(2)

Net of tax expense (recovery) of $(92) and $494 for the three months ended March 31, 2026 and 2025, respectively; $(117) and $952 for the nine months ended March 31, 2026 and 2025, respectively.

(3)

Net of tax expense (recovery) of $(129) and $91 for the three months ended March 31, 2026 and 2025, respectively; $180 and $316 for the nine months ended March 31, 2026 and 2025, respectively.

(4)

Net of tax expense (recovery) of $(2,432) and $— for the three months ended March 31, 2026 and 2025, respectively; $(2,432) and $(43) for the nine months ended March 31, 2026 and 2025, respectively.

(5)

Net of tax expense (recovery) of $(20) and $83 for the three months ended March 31, 2026 and 2025, respectively; $(37) and $267 for the nine months ended March 31, 2026 and 2025, respectively.

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands of U.S. dollars and shares)

(unaudited)

Three Months Ended March 31, 2026

Common Shares and

Additional Paid in Capital

Treasury Stock

Retained

Earnings

Accumulated

Other

Comprehensive

Income

Non-

Controlling

Interests

Total

Amount

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

Issuance of Common Shares

Under employee stock option plans

—

Under employee stock purchase plans

233

6,557

—

6,557

Share-based compensation

—

20,008

—

20,008

Purchase of treasury stock

—

(87)

(2,849)

—

(2,849)

Issuance of treasury stock

—

(2,849)

2,849

—

Repurchase of Common Shares

(9,679)

(69,864)

—

(131,846)

—

(201,710)

Dividends declared

($0.275 per Common Share)

—

(67,217)

—

(67,217)

Other comprehensive income (loss) - net

—

(8,819)

—

(8,819)

Net income for the period

—

172,652

—

101

172,753

Balance as of March 31, 2026

242,230

$ 2,137,801

(2,585)

$ (73,863)

$ 1,945,539

$ (47,251)

$ 1,901

$ 3,964,127

Three Months Ended March 31, 2025

Common Shares and

Additional Paid in Capital

Treasury Stock

Retained

Earnings

Accumulated

Other

Comprehensive

Income

Non-

Controlling

Interests

Total

Amount

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

Issuance of Common Shares

Under employee stock option plans

—

Under employee stock purchase plans

273

6,551

—

6,551

Share-based compensation

—

23,000

—

23,000

Purchase of treasury stock

—

(297)

(7,564)

—

(7,564)

Issuance of treasury stock

—

(73,720)

2,010

74,322

(425)

—

177

Repurchase of Common Shares

(4,351)

(31,405)

—

(115,412)

—

(146,817)

Dividends declared

($0.2625 per Common Share)

—

(69,235)

—

(69,235)

Other comprehensive income (loss) - net

—

(68)

—

(68)

Net income for the period

—

92,805

—

92,854

Balance as of March 31, 2025

259,650

$ 2,200,012

(2,513)

$ (77,674)

$ 2,082,247

$ (75,847)

$ 1,670

$ 4,130,408

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands of U.S. dollars and shares)

(unaudited)

Nine Months Ended March 31, 2026

Common Shares and

Additional Paid in Capital

Treasury Stock

Retained

Earnings

Accumulated

Other

Comprehensive

Income

Non-

Controlling

Interests

Total

Amount

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

27,311

—

27,311

Under employee stock purchase plans

789

21,979

—

21,979

Share-based compensation

—

58,808

—

58,808

Purchase of treasury stock

—

(87)

(2,849)

—

(2,849)

Issuance of treasury stock

—

(61,626)

2,150

67,150

—

5,524

Repurchase of Common Shares

(14,225)

(102,656)

—

(275,949)

—

(378,605)

Dividends declared

($0.825 per Common Share)

—

(205,984)

—

(205,984)

Other comprehensive income (loss) - net

—

19,816

—

19,816

Net income for the period

—

487,359

—

180

487,539

Balance as of March 31, 2026

242,230

$ 2,137,801

(2,585)

$ (73,863)

$ 1,945,539

$ (47,251)

$ 1,901

$ 3,964,127

Nine Months Ended March 31, 2025

Common Shares and

Additional Paid in Capital

Treasury Stock

Retained

Earnings

Accumulated

Other

Comprehensive

Income

Non-

Controlling

Interests

Total

Amount

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

1,883

—

1,883

Under employee stock purchase plans

992

25,722

—

25,722

Share-based compensation

—

82,801

—

82,801

Purchase of treasury stock

—

(2,484)

(72,587)

—

(72,587)

Issuance of treasury stock

—

(115,556)

3,107

118,181

(1,127)

—

1,498

Repurchase of Common Shares

(9,213)

(66,724)

—

(233,668)

—

(300,392)

Dividends declared

($0.7875 per Common Share)

—

(209,152)

—

(209,152)

Other comprehensive income (loss) - net

—

(6,228)

—

(6,228)

Net income for the period

—

407,035

—

147

407,182

Balance as of March 31, 2025

259,650

$ 2,200,012

(2,513)

$ (77,674)

$ 2,082,247

$ (75,847)

$ 1,670

$ 4,130,408

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(unaudited)

Three Months Ended

March 31,

Nine Months Ended

March 31,

2026

2025

2026

2025

Cash flows from operating activities:

Net income for the period

$ 172,753

$ 92,854

$ 487,539

$ 407,182

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of intangible assets

143,041

159,356

460,843

480,405

Share-based compensation expense

19,877

23,000

58,790

82,919

Pension expense

3,066

3,381

9,294

10,194

Amortization of debt discount and issuance costs

5,564

5,539

17,176

16,334

Write-off of right of use assets

3,329

11,173

1,431

Gain on divestiture

(64,311)

—

(64,311)

—

Adjustment to gain on AMC Divestiture

—

4,175

Loss on extinguishment of debt

5,301

—

5,301

—

Loss on sale and write down of property and equipment, net

3,545

289

6,368

728

Deferred taxes

(1,942)

(38,794)

(34,741)

(91,771)

Share in net (income) of equity investees

(16)

(1,644)

(7,649)

(3,637)

Changes in derivative instruments

(14,513)

9,836

(25,262)

(10,778)

Changes in operating assets and liabilities:

Accounts receivable

53,501

70,030

113,991

111,909

Contract assets

(25,881)

(36,155)

(95,559)

(96,101)

Prepaid expenses and other current assets

(30,055)

(17,401)

(19,887)

37,177

Income taxes

(23,263)

12,578

(55,927)

(184,149)

Accounts payable and accrued liabilities

43,167

46,802

(55,325)

(81,308)

Deferred revenue

68,173

82,367

18,758

10,960

Other assets

(1,946)

(6,146)

5,431

(7,582)

Operating lease assets and liabilities, net

(4,797)

(3,697)

(14,988)

(15,661)

Net cash provided by operating activities

354,593

402,241

821,015

672,427

Cash flows from investing activities:

Additions of property and equipment

(49,720)

(28,412)

(135,469)

(108,997)

Proceeds from divestiture

162,879

—

162,879

—

Adjustment to proceeds from AMC Divestiture

—

(11,686)

Proceeds from interest on derivative instruments

(865)

2,647

5,166

Settlement of derivative instruments

—

(10,380)

—

(10,380)

Other investing activities

—

582

632

6,474

Net cash provided by (used in) investing activities

112,294

(35,563)

28,047

(119,423)

Cash flows from financing activities:

Proceeds from issuance of Common Shares from exercise of stock options and ESPP

7,964

8,185

49,463

25,925

Repayment of long-term debt and Revolver

(171,963)

(8,962)

(189,889)

(26,888)

Net change in transition services agreement obligation

1,371

(37,215)

1,371

(15,277)

Debt issuance costs

—

(1,066)

Repurchase of Common Shares

(246,952)

(114,563)

(404,577)

(267,969)

Purchase of treasury stock

(1,326)

(5,136)

(1,326)

(70,159)

Payments of dividends to shareholders

(66,233)

(67,961)

(202,968)

(205,335)

Other financing activities

(1,523)

—

(1,523)

—

Net cash used in financing activities

(478,662)

(225,652)

(749,449)

(560,769)

Foreign exchange gain (loss) on cash held in foreign currencies

(5,838)

14,660

(2,335)

4,866

Increase (decrease) in cash, cash equivalents and restricted cash during the period

(17,613)

155,686

97,278

(2,899)

Cash, cash equivalents and restricted cash at beginning of the period

1,272,997

1,124,208

1,158,106

1,282,793

Cash, cash equivalents and restricted cash at end of the period

$ 1,255,384

$ 1,279,894

$ 1,255,384

$ 1,279,894

OPEN TEXT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(unaudited)

Reconciliation of cash, cash equivalents and restricted cash:

March 31, 2026

March 31, 2025

Cash and cash equivalents

$ 1,254,144

$ 1,277,950

Restricted cash (1)

1,240

1,944

Total cash, cash equivalents and restricted cash

$ 1,255,384

$ 1,279,894

(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 March 31, 2026

(In thousands, except for per share data)

Three Months Ended March 31, 2026

GAAP-based

Measures

GAAP-based

Measures

% of Total

Revenue

Adjustments

Note

Non-GAAP-

based

Measures

Non-GAAP-

based

Measures

% of Total

Revenue

Cost of revenues

Cloud services and subscriptions

$ 177,360

$ (1,473)

(1)

$ 175,887

Customer support

56,064

(789)

(1)

55,275

Professional service and other

63,509

(654)

(1)

62,855

Amortization of acquired technology-based intangible assets

43,322

(43,322)

(2)

—

GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%)

937,273

73.1 %

46,238

(3)

983,511

76.7 %

Operating expenses

Research and development

171,166

(2,786)

(1)

168,380

Sales and marketing

282,624

(8,323)

(1)

274,301

General and administrative

108,667

(5,852)

(1)

102,815

Amortization of acquired customer-based intangible assets

65,408

(65,408)

(2)

—

Special charges (recoveries)

73,884

(73,884)

(4)

—

GAAP-based income from operations / Non-GAAP-based income from operations

201,213

202,491

(5)

403,704

Other income (expense), net

80,231

(80,231)

(6)

—

Provision for income taxes

34,282

44,749

(7)

79,031

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

172,652

77,511

(8)

250,163

GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText

$ 0.70

$ 0.31

(8)

$ 1.01

(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 17% 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 March 31, 2026

Per share diluted

GAAP-based net income, attributable to OpenText

$ 172,652

$ 0.70

Add:

Amortization

108,730

0.43

Share-based compensation

19,877

0.08

Special charges (recoveries)

73,884

0.30

Other (income) expense, net

(80,231)

(0.32)

GAAP-based provision for income taxes

34,282

0.14

Non-GAAP-based provision for income taxes

(79,031)

(0.32)

Non-GAAP-based net income, attributable to OpenText

$ 250,163

$ 1.01

Reconciliation of Adjusted EBITDA

Three Months Ended March 31, 2026

GAAP-based net income, attributable to OpenText

$ 172,652

Add:

Provision for income taxes

34,282

Interest and other related expense, net

74,409

Amortization of acquired technology-based intangible assets

43,322

Amortization of acquired customer-based intangible assets

65,408

Depreciation

34,311

Share-based compensation

19,877

Special charges (recoveries)

73,884

Other (income) expense, net

(80,231)

Adjusted EBITDA

$ 437,914

GAAP-based net income margin

13.5 %

Adjusted EBITDA margin

34.1 %

Reconciliation of Free Cash Flows

Three Months Ended March 31, 2026

GAAP-based cash flows provided by operating activities

$ 354,593

Add:

Capital expenditures (1)

(49,720)

Free cash flows

$ 304,873

(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 nine months ended March 31, 2026

(In thousands, except for per share data)

Nine Months Ended March 31, 2026

GAAP-based

Measures

GAAP-based

Measures

% of Total

Revenue

Adjustments

Note

Non-GAAP-

based

Measures

Non-GAAP-

based

Measures

% of Total

Revenue

Cost of revenues

Cloud services and subscriptions

$ 519,829

$ (4,819)

(1)

$ 515,010

Customer support

178,625

(2,929)

(1)

175,696

Professional service and other

189,084

(1,975)

(1)

187,109

Amortization of acquired technology-based intangible assets

131,730

(131,730)

(2)

—

GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%)

2,856,989

73.3 %

141,453

(3)

2,998,442

76.9 %

Operating expenses

Research and development

498,603

(11,234)

(1)

487,369

Sales and marketing

827,674

(23,056)

(1)

804,618

General and administrative

324,541

(14,777)

(1)

309,764

Amortization of acquired customer-based intangible assets

223,614

(223,614)

(2)

—

Special charges (recoveries)

114,141

(114,141)

(4)

—

GAAP-based income from operations / Non-GAAP-based income from operations

762,917

528,275

(5)

1,291,192

Other income (expense), net

80,187

(80,187)

(6)

—

Provision for income taxes

120,815

132,731

(7)

253,546

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

487,359

315,357

(8)

802,716

GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText

$ 1.94

$ 1.25

(8)

$ 3.19

(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)

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

(7)

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 20% 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:

Nine Months Ended March 31, 2026

Per share diluted

GAAP-based net income, attributable to OpenText

$ 487,359

$ 1.94

Add (deduct):

Amortization

355,344

1.41

Share-based compensation

58,790

0.23

Special charges (recoveries)

114,141

0.46

Other (income) expense, net

(80,187)

(0.32)

GAAP-based provision for income taxes

120,815

0.48

Non-GAAP-based provision for income taxes

(253,546)

(1.01)

Non-GAAP-based net income, attributable to OpenText

$ 802,716

$ 3.19

Reconciliation of Adjusted EBITDA

Nine Months Ended March 31, 2026

GAAP-based net income, attributable to OpenText

$ 487,359

Add:

Provision for income taxes

120,815

Interest and other related expense, net

234,750

Amortization of acquired technology-based intangible assets

131,730

Amortization of acquired customer-based intangible assets

223,614

Depreciation

105,499

Share-based compensation

58,790

Special charges (recoveries)

114,141

Other (income) expense, net

(80,187)

Adjusted EBITDA

$ 1,396,511

GAAP-based net income margin

12.5 %

Adjusted EBITDA margin

35.8 %

Reconciliation of Free Cash Flows

Nine Months Ended March 31, 2026

GAAP-based cash flows provided by operating activities

$ 821,015

Add:

Capital expenditures (1)

(135,469)

Free cash flows

$ 685,546

(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, 2025

(In thousands, except for per share data)

Three Months Ended December 31, 2025

GAAP-based

Measures

GAAP-based

Measures

% of Total

Revenue

Adjustments

Note

Non-GAAP-

based

Measures

Non-GAAP-

based

Measures

% of Total

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)

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

(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 flows

$ 279,444

(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 March 31, 2025

(In thousands, except for per share data)

Three Months Ended March 31, 2025

GAAP-based

Measures

GAAP-based

Measures

% of Total

Revenue

Adjustments

Note

Non-GAAP-

based

Measures

Non-GAAP-

based

Measures

% of Total

Revenue

Cost of revenues

Cloud services and subscriptions

$ 174,186

$ (1,846)

(1)

$ 172,340

Customer support

61,733

(812)

(1)

60,921

Professional service and other

65,487

(922)

(1)

64,565

Amortization of acquired technology-based intangible assets

47,199

(47,199)

(2)

—

GAAP-based gross profit and gross margin (%) /Non-GAAP-based gross profit and gross margin (%)

898,254

71.6 %

50,779

(3)

949,033

75.7 %

Operating expenses

Research and development

197,333

(4,737)

(1)

192,596

Sales and marketing

260,102

(6,842)

(1)

253,260

General and administrative

115,718

(7,841)

(1)

107,877

Amortization of acquired customer-based intangible assets

79,683

(79,683)

(2)

—

Special charges (recoveries)

3,854

(3,854)

(4)

—

GAAP-based income from operations / Non-GAAP-based income from operations

209,090

153,736

(5)

362,826

Other income (expense), net

(26,578)

26,578

(6)

—

Provision for income taxes

10,842

57,320

(7)

68,162

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

92,805

122,994

(8)

215,799

GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText

$ 0.35

$ 0.47

(8)

$ 0.82

(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)

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

(7)

Adjustment relates to differences between the GAAP-based tax provision rate of approximately 10% 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 March 31, 2025

Per share diluted

GAAP-based net income, attributable to OpenText

$ 92,805

$ 0.35

Add:

Amortization

126,882

0.49

Share-based compensation

23,000

0.09

Special charges (recoveries)

3,854

0.01

Other (income) expense, net

26,578

0.10

GAAP-based provision for income taxes

10,842

0.04

Non-GAAP-based provision for income taxes

(68,162)

(0.26)

Non-GAAP-based net income, attributable to OpenText

$ 215,799

$ 0.82

Reconciliation of Adjusted EBITDA

Three Months Ended March 31, 2025

GAAP-based net income, attributable to OpenText

$ 92,805

Add:

Provision for income taxes

10,842

Interest and other related expense, net

78,816

Amortization of acquired technology-based intangible assets

47,199

Amortization of acquired customer-based intangible assets

79,683

Depreciation

32,474

Share-based compensation

23,000

Special charges (recoveries)

3,854

Other (income) expense, net

26,578

Adjusted EBITDA

$ 395,251

GAAP-based net income margin

7.4 %

Adjusted EBITDA margin

31.5 %

Reconciliation of Free Cash Flows

Three Months Ended March 31, 2025

GAAP-based cash flows provided by operating activities

$ 402,241

Add:

Capital expenditures (1)

(28,412)

Free cash flows

$ 373,829

(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 nine months ended March 31, 2025

(In thousands, except for per share data)

Nine Months Ended March 31, 2025

GAAP-based

Measures

GAAP-based

Measures

% of Total

Revenue

Adjustments

Note

Non-GAAP-

based

Measures

Non-GAAP-

based

Measures

% of Total

Revenue

Cost of revenues

Cloud services and subscriptions

$ 521,731

$ (6,828)

(1)

$ 514,903

Customer support

186,963

(3,293)

(1)

183,670

Professional service and other

200,443

(3,509)

(1)

196,934

Amortization of acquired technology-based intangible assets

141,646

(141,646)

(2)

—

GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%)

2,786,588

72.2 %

155,276

(3)

2,941,864

76.3 %

Operating expenses

Research and development

568,753

(20,560)

(1)

548,193

Sales and marketing

779,913

(27,380)

(1)

752,533

General and administrative

321,804

(21,349)

(1)

300,455

Amortization of acquired customer-based intangible assets

242,235

(242,235)

(2)

—

Special charges (recoveries)

66,228

(66,228)

(4)

—

GAAP-based income from operations / Non-GAAP-based income from operations

711,131

533,028

(5)

1,244,159

Other income (expense), net

6,382

(6,382)

(6)

—

Provision for income taxes

63,618

175,768

(7)

239,386

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

407,035

350,878

(8)

757,913

GAAP-based earnings per share / Non-GAAP-based earnings per share-diluted, attributable to OpenText

$ 1.53

$ 1.32

(8)

$ 2.85

(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)

(3)

GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4)

(5)

GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6)

(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:

Nine Months Ended March 31, 2025

Per share diluted

GAAP-based net income, attributable to OpenText

$ 407,035

$ 1.53

Add (deduct):

Amortization

383,881

1.45

Share-based compensation

82,919

0.31

Special charges (recoveries)

66,228

0.25

Other (income) expense, net

(6,382)

(0.02)

GAAP-based provision for income taxes

63,618

0.24

Non-GAAP-based provision for income taxes

(239,386)

(0.90)

Non-GAAP-based net income, attributable to OpenText

$ 757,913

$ 2.85

Reconciliation of Adjusted EBITDA

Nine Months Ended March 31, 2025

GAAP-based net income, attributable to OpenText

$ 407,035

Add:

Provision for income taxes

63,618

Interest and other related expense, net

246,713

Amortization of acquired technology-based intangible assets

141,646

Amortization of acquired customer-based intangible assets

242,235

Depreciation

96,524

Share-based compensation

82,919

Special charges (recoveries)

66,228

Other (income) expense, net

(6,382)

Adjusted EBITDA

$ 1,340,536

GAAP-based net income margin

10.6 %

Adjusted EBITDA margin

34.7 %

Reconciliation of Free Cash Flows

Nine Months Ended March 31, 2025

GAAP-based cash flows provided by operating activities

$ 672,427

Add:

Capital expenditures (1)

(108,997)

Free cash flows

$ 563,430

(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 nine months ended March 31, 2026 and 2025:

Three Months Ended March 31, 2026

Three Months Ended March 31, 2025

Currencies

% of Revenue

% of Expenses (1)

% of Revenue

% of Expenses (1)

EURO

26 %

14 %

23 %

12 %

GBP

5 %

6 %

5 %

6 %

CAD

3 %

14 %

3 %

11 %

USD

55 %

42 %

58 %

48 %

Other

11 %

24 %

11 %

23 %

Total

100 %

Nine Months Ended March 31, 2026

Nine Months Ended March 31, 2025

Currencies

% of Revenue

% of Expenses (1)

% of Revenue

% of Expenses (1)

EURO

25 %

14 %

23 %

12 %

GBP

5 %

6 %

5 %

6 %

CAD

3 %

13 %

3 %

11 %

USD

56 %

44 %

58 %

48 %

Other

11 %

23 %

11 %

23 %

Total

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).

SOURCE Open Text Corporation