Snapshot
Open Text Corp reported $1.29B of revenue in Q1 2026, up 1.5% year over year, with diluted EPS of $0.58 and an operating margin of 21.0%.
- Revenue
- $1.29B
- YoY growth
- +1.5%
- Diluted EPS
- $0.58
- Operating margin
- 21.0%
$1.29B
Revenue
+1.5%
YoY growth
$0.58
Diluted EPS
21.0%
Operating margin
01 Key takeaways
What management said
- •Q1 total revenues, ARR, adjusted EBITDA, margin, adjusted EPS are all above street expectations.
- •Q1 cloud revenue was $485 million, up 6% year over year, which is well on track towards our F2026 outlook range of 3%-4% growth.
- •This puts us in a good position towards achieving our F2026 outlook range of 12%-16%.
- •For Q1, you can see that content being our largest business continues to lead our growth in cloud.
- •We saw strength in retail, automotive, and manufacturing verticals, which also contributed to our business network positive growth in Q1.
- •We are pleased with our enterprise cybersecurity business growth this quarter and mainly driven by a few sizable wins.
- •We are very excited to see how our customers unlock the power of their own data using OpenText's products to foster innovation and spur growth.
- •As we look ahead to the rest of the fiscal year, we are not changing our fiscal 2026 annual outlook.
- •With that said, we expect Q2 total revenue to be between $1.275 billion and $1.295 billion and the adjusted EBITDA margin to be between 35.5% and 36%.
- •For the second half of fiscal 2026, we expect revenue to skew higher towards a strong Q4.
- •We continue to expect ARR to return to growth in fiscal 2026, with cloud growth outpacing maintenance declines, while customer support revenue is on track to meet our fiscal 2026 annual outlook.
- •We have always given our customers the choice of where they want to deploy and note that the on-premise deployment is still being sought after in heavily regulated industries and governments.
What went well
- •Total revenues, ARR, adjusted EBITDA, margin, and adjusted EPS all came in above street expectations
- •Content Cloud grew 21% year-over-year (accelerating from 17% the prior year), driven by bookings in financial services, energy and utilities, and telecom verticals
- •Cloud revenue of $485 million, up 6% year-over-year, well ahead of the 3%-4% fiscal 2026 outlook range; enterprise cloud bookings up 20% year-over-year
- •Adjusted EBITDA of $467 million at a 36.3% margin, up 130 basis points year-over-year, with cloud gross margins up roughly 280 basis points
- •Closed 33 deals greater than $1 million, up 43% year-over-year; long-term cloud RPO up 16% and total cloud RPO up 11% year-over-year
- •Free cash flow of $101 million, a significant $218 million year-over-year increase (prior-year quarter included a one-time tax payment from the AMC divestiture gain)
What went wrong
- •Customer support revenue of $587 million was down 1.5% year-over-year
- •Cybersecurity enterprise cloud component was declining, which management acknowledged as moving in the wrong direction despite ongoing product investment
- •ITOM total revenue stabilization remains TBD, with no committed timeline for returning the business to total growth
- •Q2 revenue guide implied a possible quarter-over-quarter decline and a double-digit decline in license revenue, reflecting customer mix shifts toward cloud
- •Company still operating without a permanent CEO, with the search ongoing across internal and external candidates
Guidance changes
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Performance breakdown
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Earnings call themes & trends
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