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What were the key takeaways from Open Text’s earnings call?

- **Revenue Growth**: Q1 total revenue of $1.3 billion exceeded expectations, with cloud revenue up 6% YoY and Content Cloud growing 21% YoY.
- **AI Strategy**: Leveraging 35 years of legacy data connectors to train enterprise AI, with hybrid deployment options for sovereign clouds.
- **Financial Strength**: Non-GAAP EPS of $1.05 (12.9% YoY growth) and free cash flow of $101 million, driven by cost optimization and reduced tax payments.
- **Strategic Moves**: Divesting 15%-20% of non-core revenue over the next year to focus on high-growth AI and cloud businesses.
- **Margin Discipline**: Adjusted EBITDA margin of 36.3% reflects disciplined cost control and business optimization initiatives.

**【Management Opening Remarks】**
- Greg Secord provided details on the earnings call, including upcoming investor events and a safe harbor statement. The company emphasized forward-looking statements and non-GAAP financial measures.

**【CEO Summary Section】**
- Q1 total revenues of $1.3 billion exceeded expectations, driven by 6% year-over-year (YoY) growth in cloud revenue ($485 million). Content Cloud grew 21% YoY, while enterprise cybersecurity revenue increased 20% YoY.
- The company closed 33 deals over $1 million, up 43% YoY, with wins in healthcare, financial services, and government sectors.
- Fiscal 2026 outlook remains unchanged, with Q2 revenue expected between $1.275 billion and $1.295 billion and adjusted EBITDA margin of 35.5%-36%. The second half of the year is expected to skew higher due to new product cycles.

**【CFO Financial Commentary】**
- Steve Rai highlighted strong financial performance: GAAP net income of $420 million and non-GAAP EPS of $1.05, up 12.9% YoY. Free cash flow was $101 million, a $218 million YoY increase due to reduced tax payments.
- Cost optimization initiatives contributed to a 130 basis point YoY improvement in adjusted EBITDA margin (36.3%).

**【Q&A Highlights】**
- **Competitive Edge**: 35 years of legacy data connectors and hybrid deployment options (on-prem, cloud, managed services) provide unique AI training capabilities.
- **Content Cloud Growth**: Driven by AI readiness and customer demand for cloud-based data curation, with 21% YoY growth in Q1.
- **Divestiture Strategy**: Plans to divest 15%-20% of non-core revenue over the next year, with a methodical, quarterly cadence to minimize EBITDA volatility.
- **Margin Discipline**: Committed to maintaining margins regardless of revenue mix, with disciplined cost control and business optimization initiatives reducing operating expenses by 5% YoY.

Open Text Corporation (OTEX) Q1 2026 Earnings Call Transcript

Revenue

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OTEX

OTEX fundamentals

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