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

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

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%

Shares of OTEX traded up $1.04 during trading hours on Friday, reaching $24.73. 5,153,457 shares of the stock traded hands, compared to its average volume of 1,739,512. Open Text has a 52 week low of $20.00 and a 52 week high of $39.90. The company has a market cap of $5.99 billion, a price-to-earnings ratio of 12.06 and a beta of 1.04. The stock has a fifty day simple moving average of $23.08 and a 200 day simple moving average of $28.75. The company has a current ratio of 0.94, a quick ratio of 0.94 and a debt-to-equity ratio of 1.57.

Open Text Announces Dividend

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

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.

Analysts Set New Price Targets

A number of research firms recently weighed in on OTEX. Royal Bank Of Canada dropped their price target on Open Text from $30.00 to $27.00 and set a “sector perform” rating on the stock in a research note on Friday. Scotia cut their price target on Open Text from $50.00 to $40.00 and set a “sector outperform” rating for the company in a research note on Friday. Canadian Imperial Bank of Commerce reduced their price objective on shares of Open Text from $40.00 to $37.00 and set a “neutral” rating on the stock in a research note on Friday, January 16th. Wall Street Zen upgraded Open Text from a “buy” rating to a “strong-buy” rating in a research note on Saturday. Finally, Raymond James Financial cut their target price on shares of Open Text from $42.00 to $35.00 and set an “outperform” rating on the stock in a research report on Friday. Four investment analysts have rated the stock with a Buy rating and ten have assigned a Hold rating to the company’s stock. According to MarketBeat, Open Text currently has a consensus rating of “Hold” and a consensus target price of $34.50.

Hedge Funds Weigh In On Open Text

Several large investors have recently modified their holdings of the business. Tidal Investments LLC grew its holdings in Open Text by 2.6% during the 2nd quarter. Tidal Investments LLC now owns 18,059 shares of the software maker’s stock valued at $527,000 after buying an additional 460 shares in the last quarter. WealthCollab LLC boosted its stake in shares of Open Text by 39.5% during the second quarter. WealthCollab LLC now owns 1,640 shares of the software maker’s stock valued at $48,000 after purchasing an additional 464 shares during the period. Vident Advisory LLC boosted its stake in shares of Open Text by 3.7% during the fourth quarter. Vident Advisory LLC now owns 15,715 shares of the software maker’s stock valued at $512,000 after purchasing an additional 555 shares during the period. EverSource Wealth Advisors LLC grew its holdings in shares of Open Text by 39.7% in the second quarter. EverSource Wealth Advisors LLC now owns 2,005 shares of the software maker’s stock worth $59,000 after purchasing an additional 570 shares during the last quarter. Finally, State of Tennessee Department of Treasury increased its stake in shares of Open Text by 0.4% in the fourth quarter. State of Tennessee Department of Treasury now owns 147,862 shares of the software maker’s stock worth $4,817,000 after buying an additional 584 shares during the period. Hedge funds and other institutional investors own 70.37% of the company’s stock.

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.