Snapshot
Open Text Corp reported $1.31B of revenue in Q4 2025, up -3.8% year over year, with diluted EPS of $0.12 and an operating margin of 13.9%.
- Revenue
- $1.31B
- YoY growth
- +-3.8%
- Diluted EPS
- $0.12
- Operating margin
- 13.9%
$1.31B
Revenue
+-3.8%
YoY growth
$0.12
Diluted EPS
13.9%
Operating margin
01 Key takeaways
What management said
- •Our previously announced business optimization has accelerated our margin opportunity, and our medium-term business model is about approaching the rule of 40.
- •Total revenues of $1.31 billion, and we grew organically year-over-year, excluding the impact of AMC, IP rights, and DXC.
- •Our cloud bookings surged to $238 million, or 32% year-over-year growth, all of which flows directly into cloud RPO.
- •Adjusted EBITDA dollars of $444 million, or 34% margin up strongly, ex-AMC.
- •You can see in our investor presentation a three-year trend at slide, on a reported basis to help illustrate the magnitude of the total revenues, cloud revenues, and cloud growth rates for our business.
- •I would also like to add some further color to our cloud business and revenue performance by business area.
- •Cybersecurity was -4%, which we expect to return to growth this fiscal year.
- •Cloud bookings were $773 million, up 10% and right in our outlook range.
- •Adjusted EPS of $3.82, up strongly, ex-AMC, and free cash flows of $687 million above the high end of our range, and ending cash of $1.156 billion.
- •We were focused on rebuilding our margin post-divestiture, modernizing the Micro Focus platform, executing a large and strategic business optimization, delivering Titanium X, and creating an AI foundation for the future.
- •Make no mistake, we are disappointed that the full fiscal year had negative growth.
- •As you can see on slide 10, it is a clear exception for a very long track record of growth.
What went well
- •Q4 enterprise cloud bookings of $238 million, up 32.3% year-over-year; full-year cloud bookings of $773 million, up 10% and within outlook range
- •Q4 license revenue of $173 million, up 77% ex-AMC; Q4 cloud revenue of $475 million, up 2.1%, marking 18 quarters of cloud organic growth
- •Full-year adjusted EBITDA margin of 34.5%, 50 basis points above the top end of the 33%-34% target range; full-year free cash flow of $687 million, above the high end of range
- •Content, OSM (formerly ITOM), and DevOps each grew faster than 10% year-over-year in cloud; cloud renewal rate of 96% ending Q4
- •Record capital return of $683 million in fiscal 2025 ($272 million dividends, $411 million buybacks canceling 14.5 million shares); ending cash of $1.156 billion
- •Strong pipeline (license up over 10%, cloud up nearly 30% year-over-year) and highest account executive productivity in eight quarters, with 43 cloud deals over $1 million in Q4
What went wrong
- •Full fiscal 2025 posted negative growth (total revenues of $5.17 billion, down approximately 1% ex-IP rights and DXC; down 3% less AMC), which management called disappointing and a clear exception to a long growth track record
- •Cybersecurity cloud revenue declined 4% in fiscal 2025, mainly driven by the SMBC business
- •Customer support/maintenance ended fiscal 2025 at a decline rate of 4% ex-AMC
- •Business Network cloud revenue remained constant (flat) with some supply-chain customers taking longer to make decisions
- •Adjusted EPS of $0.97 diluted in Q4 was down 1% year-over-year on a reported basis (up after normalizing for the AMC divestiture)
Guidance changes
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Performance breakdown
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Earnings call themes & trends
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