OpenText posted first‑quarter fiscal 2026 results that included total revenue of $1.29 billion, a 1.5% year‑over‑year increase, and cloud services and subscriptions revenue of $485 million, up 6.0% from the prior quarter. Customer‑support revenue was $567 million, down from $587 million in Q1 FY25, a decline of roughly 3.4%. Adjusted EBITDA margin rose to 36.3%, up from 33.9% in Q4 FY25, reflecting a higher mix of cloud‑based contracts and disciplined cost management under the Business Optimization Plan.
The 1.5% revenue gain is modest compared with the 6.0% growth in cloud services, which drove the majority of the top‑line increase. The decline in customer‑support revenue, while a small portion of total sales, signals a shift away from legacy support contracts toward higher‑margin cloud offerings. The company’s operating cash flow reached $148 million and free cash flow $101 million, both strong year‑over‑year gains that support its dividend policy.
GAAP earnings per share climbed to $0.58 from $0.32 in Q1 FY25, a 81.3% increase that beat consensus estimates of $0.39. Non‑GAAP EPS reached $1.05, up 12.9% from $0.93 and beating the $0.98 consensus. The earnings beat is largely attributable to cost discipline, higher pricing power in cloud contracts, and a favorable mix shift toward higher‑margin services.
OpenText declared a quarterly cash dividend of $0.275 per share, with a record date of December 5 and payment scheduled for December 19. The dividend policy is supported by the company’s robust free‑cash‑flow generation and its commitment to returning value to shareholders.
Management guidance for fiscal 2026 projects total revenue growth of 1–2% and cloud revenue growth of 3–4%, while adjusted EBITDA margin is expected to expand by 50–100 basis points. The guidance reflects confidence in sustained cloud demand and continued execution of the Business Optimization Plan, which has already delivered margin expansion and cost savings.
James McGourlay, interim CEO, said the quarter “demonstrates the strength of our cloud‑first strategy and the effectiveness of our operating model.” Chief Financial Officer Steve Rai added that the company’s “business‑optimization plan is well underway, driving operational efficiencies and freeing capital for growth.” Executive Chair P. Thomas Jenkins noted the divestiture of the eDOCS solution as part of a broader portfolio‑shaping effort to focus on high‑growth AI and cloud businesses.
OpenText’s stock closed at $38.02, up 2.23% on the day of the results. The positive market reaction was driven by the revenue and earnings beats, the margin expansion, and the company’s clear guidance for continued cloud growth and profitability.
Overall, the results reinforce OpenText’s trajectory toward higher‑margin cloud operations, a disciplined cost structure, and a strategic focus on AI‑enabled information management. The company’s guidance and management commentary suggest confidence in sustaining momentum while continuing to optimize its portfolio and invest in high‑return verticals.
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