Open Text Corp Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Raimo Lenschow - Barclays Bank - Analyst : Thanks for all the clarity in the presentation. Mark and team, obviously, there's the stuff that you can do, but then there's the stuff that is given to you in terms of the economy. You talked a lot about what you're doing at the moment. What are you seeing though from end demand, customer behavior, et cetera, at the moment given all the uncertainties? And maybe just kind of break it down by region. And then I had one quick follow-up.

Question: Raimo Lenschow - Barclays Bank - Analyst : Okay. Perfect. And then the -- I like the additions to talk about Maintenance a little bit. Bringing that to that 2% decline line, is that -- how much of that is operations? And then is there also an element that you can do to think about pricing?

Question: Billy Fitzsimmons, CFA - Jefferies LLC - Analyst : This is actually Billy Fitzsimmons on for Samad. The new disclosures on cloud growth and cloud as a percentage of revenue are very helpful for us. But can we dig into those numbers a little more, what cloud or business units are seeing outsized growth simply because of accelerated on-prem to cloud migrations in the base? What is seeing growth from sell end customer and product demand? And at this point, what are some of the businesses where you believe there's kind of extra work to be done to get growth higher?

Question: Richard Tse - National Bank Financial, Inc. - Analyst : Yes, thanks for all those disclosures. With respect to the fiscal '26 growth numbers, how much of that is already visible in your RPO?

Question: Richard Tse - National Bank Financial, Inc. - Analyst : Okay. And then a second question here. It was sort of interesting to hear your comments on restarting M&A. So, what conditions would sort of have you doing that? Would it be deleveraging the balance sheet more? You noted sort of divestitures. And then subsequent to those conditions, what type of assets would you be sort of looking to focus on? Like you're obviously doing content management, so would you sort of lean into that market more? Or are you kind of looking at sort of new potential sort of opportunities outside of that?

Question: Stephanie Price - CIBC Capital Markets - Analyst : Thanks as well for the additional disclosures this morning. Just curious, as you think about the different business segments, where are you investing the most at this point and where you see the most opportunity going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2025 / 12:30PM, OTEX.TO - Q4 2025 Open Text Corp Earnings Call

Question: Stephanie Price - CIBC Capital Markets - Analyst : Thanks for the color. And then maybe switching over just to the expanded restructuring initiatives. It looks like the timelines changed a bit. It looks like you've had some earlier wins than maybe you were expecting. If you could talk a little bit about what you've accomplished so far with the restructuring and what remains to be done.

Question: Paul Treiber - RBC Capital Markets - Analyst : Just the comments on the pipeline growth both for cloud and license are quite encouraging. Obviously, you've seen the trend for a while in terms of pipeline. What's changed now that that's fundamentally driving the improvement? And then could you comment on like the sustainability or durability of that uplift in pipeline?

Question: Paul Treiber - RBC Capital Markets - Analyst : Just a second question --

Question: Paul Treiber - RBC Capital Markets - Analyst : That's great to hear about the team. Just on my second question, just on free cash flow, the 17% to 20% growth for '26 is great to see. Are there any headwinds per se or onetime items that we should take into account when we think about free cash flow conversion in '26?

Question: Kevin Krishnaratne - Scotiabank GBM - Analyst : I joined a bit late. Apologies if some of these have been asked. But thanks also for the disclosure on the cloud breakdown. I just want to clarify, are you saying that you will grow Cybersecurity this year? Or do you hope to grow that in time? Is it a goal for this year that will be positive? And then also related on the slide, can you remind us on the Business Network, 30%, how much of that is transactional based?

Question: Kevin Krishnaratne - Scotiabank GBM - Analyst : Okay. No worries. And the second question is on your capital allocation. You provided the midterm sort of guide. Can you talk about the divestitures element, sort of what you're thinking about there? I know on your last call; you broke down the business perform and outperform. Just wondering if you can talk us through the thought process there, timing and valuations and things of that nature?

Question: Seth Gilbert - UBS Investment Bank - Analyst : Maybe to start, free cash flow in 4Q was a bit stronger than we modeled. And I was wondering if you could talk about some of the drivers here and if there's anything onetime in 4Q, knowing that there's nothing onetime in FY26, but maybe there is early renewal pull forward or something else. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2025 / 12:30PM, OTEX.TO - Q4 2025 Open Text Corp Earnings Call

Question: Seth Gilbert - UBS Investment Bank - Analyst : Got it. And then maybe as a follow-up, I'll echo the positive sentiment around the additional cloud growth disclosures. With those in mind, I was wondering if you could talk through the drivers of what's leading to the cloud acceleration. Is it the 35% of the business which is the Content, OSM and DevOps kind of like continuing to accelerate? Or the Business Network, Cyber and others turning around, which, of course, represents a larger piece of the pie?