Open Text (NASDAQ:OTEX) Posts Earnings Results, Beats Estimates By $0.07 EPS

Open Text (NASDAQ:OTEX) (TSE:OTC) posted its earnings results on Thursday. The software maker reported $1.01 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.94 by $0.07, Briefing.com reports. Open Text had a net margin of 9.91% and a return on equity of 24.76%. The business had revenue of $1.28 billion for the quarter, compared to analysts’ expectations of $1.26 billion. During the same period in the prior year, the company posted $0.82 EPS. The business’s revenue for the quarter was up 2.2% compared to the same quarter last year.

Here are the key takeaways from Open Text’s conference call:

• Cloud and Content momentum: Company reported a record Q3 cloud revenue of $493M with Content cloud up 22% YoY, ARR of $1.06B, 41 deals >$1M (up 28%), and $651M enterprise cloud bookings YTD—driving the core business growth.
• Improving profitability and cash generation: Q3 non‑GAAP EPS of $1.01 (a Q3 record), adjusted EBITDA margin of 34.1% and YTD free cash flow of $686M (highest Q3 YTD), plus an increased FCF growth outlook to 22%–25%.
• Full‑year revenue outlook unchanged: FY26 total revenue guidance remains 1%–2% growth after ~ $30M of divestiture adjustments, while management raised cloud revenue guidance to 4%–5% and enterprise cloud bookings to 16%–20%.
• Divestiture timing and market constraints: Vertica is expected to close soon, but other non‑core asset sales are being delayed or done selectively due to geopolitical and financing headwinds, as management avoids “fire sales.”
• New CEO focus and AI roadmap: Ayman Antoun (14 days in) set four priorities—listen, learn, assess, build—emphasizing client‑first execution, core portfolio focus and using OpenText as “client zero” to scale AI and realize productivity gains.

Open Text Stock Up 4.4%

NASDAQ:OTEX traded up $1.04 during trading hours on Friday, reaching $24.73. 5,153,457 shares of the company traded hands, compared to its average volume of 1,739,512. Open Text has a 1 year low of $20.00 and a 1 year high of $39.90. The company has a current ratio of 0.94, a quick ratio of 0.94 and a debt-to-equity ratio of 1.57. The business’s 50-day moving average price is $23.08 and its two-hundred day moving average price is $28.75. The stock has a market capitalization of $5.99 billion, a P/E ratio of 12.06 and a beta of 1.04.

Open Text Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Friday, June 19th. Stockholders of record on Friday, June 5th will be issued a dividend of $0.275 per share. This represents a $1.10 dividend on an annualized basis and a dividend yield of 4.4%. The ex-dividend date is Friday, June 5th. Open Text’s payout ratio is 64.71%.

Institutional Trading of Open Text

Institutional investors and hedge funds have recently modified their holdings of the business. FIL Ltd boosted its holdings in shares of Open Text by 5.7% during the 4th quarter. FIL Ltd now owns 12,155,000 shares of the software maker’s stock valued at $395,853,000 after acquiring an additional 655,000 shares during the last quarter. First Trust Advisors LP lifted its position in Open Text by 27.3% during the fourth quarter. First Trust Advisors LP now owns 11,493,714 shares of the software maker’s stock valued at $374,394,000 after purchasing an additional 2,466,264 shares during the period. The Manufacturers Life Insurance Company boosted its holdings in Open Text by 11.7% in the fourth quarter. The Manufacturers Life Insurance Company now owns 10,734,420 shares of the software maker’s stock worth $349,978,000 after purchasing an additional 1,122,320 shares during the last quarter. Dimensional Fund Advisors LP grew its position in Open Text by 28.8% in the 4th quarter. Dimensional Fund Advisors LP now owns 3,340,334 shares of the software maker’s stock worth $108,833,000 after purchasing an additional 747,756 shares during the period. Finally, Morgan Stanley grew its position in Open Text by 76.8% in the 4th quarter. Morgan Stanley now owns 2,884,381 shares of the software maker’s stock worth $93,973,000 after purchasing an additional 1,253,405 shares during the period. Institutional investors own 70.37% of the company’s stock.

Analyst Upgrades and Downgrades

Several analysts have recently weighed in on the stock. Barclays reduced their price objective on Open Text from $30.00 to $25.00 and set an “equal weight” rating on the stock in a research report on Monday, April 20th. Citigroup lowered their price objective on shares of Open Text from $26.00 to $25.00 and set a “neutral” rating for the company in a report on Friday. Scotia reduced their target price on shares of Open Text from $50.00 to $40.00 and set a “sector outperform” rating on the stock in a report on Friday. Raymond James Financial cut their price target on shares of Open Text from $42.00 to $35.00 and set an “outperform” rating for the company in a research report on Friday. Finally, TD Securities raised Open Text to a “hold” rating in a research note on Monday, February 2nd. Four equities research analysts have rated the stock with a Buy rating and ten have issued a Hold rating to the company. According to MarketBeat.com, Open Text currently has an average rating of “Hold” and an average price target of $34.50.

Key Stories Impacting Open Text

Here are the key news stories impacting Open Text this week:

• Positive Sentiment: Open Text reported fiscal Q3 results that beat expectations, with EPS of $0.95 vs. $0.94 expected and revenue of $1.28 billion vs. $1.26 billion expected. Revenue rose 2.2% year over year, which can help reassure investors about business stability. Open Text earnings report
• Positive Sentiment: The company also highlighted cloud revenue growth of 6.6% and strong profitability metrics, including a 34.1% adjusted EBITDA margin and $0.70 of diluted EPS, which support the view that core operations remain healthy. OpenText Q3 financial results
• Positive Sentiment: Open Text declared a quarterly dividend of $0.275 per share, signaling continued shareholder returns and helping attract income-oriented investors.
• Neutral Sentiment: The company updated FY2026 revenue guidance to $5.2 billion-$5.3 billion, roughly in line with consensus, suggesting management is not seeing a major change in the outlook.
• Neutral Sentiment: Open Text also announced that Ayman Antoun officially joined as CEO, which adds a leadership-change angle that investors may watch but has not yet clearly changed the fundamentals.
• Negative Sentiment: Several analysts lowered price targets on Open Text, including Raymond James to $35 from $42, Scotia to $40 from $50, and Citigroup to $25 from $26. While ratings were not cut broadly, the target reductions may pressure sentiment near term. Analyst ratings update
• Negative Sentiment: Investors may also be weighing mixed underlying cash flow trends from the quarter, including weaker operating cash flow and higher capital spending, which could limit enthusiasm despite the earnings beat.

Open Text Company Profile

Open Text Corporation is a Canadian enterprise information management (EIM) software company that develops solutions for organizations seeking to manage, protect and extract insight from their unstructured and structured data. The company’s platform encompasses document management, records management, digital asset management and archiving, enabling companies to govern information across its lifecycle.

Open Text’s product suite includes content services, business process management, customer experience management, analytics and security products.