OTEX

Open Text is a mature enterprise information-management software vendor (content services, cybersecurity, business AI/clouds) with the classic high-margin, sticky-revenue economics: a 72.3% gross margin and a 17.3% operating margin. The FY2025 revenue decline of 10.4% to $5.17B looks alarming but is largely the result of the Application Modernization & Connectivity (AMC) divestiture rather than core erosion — operating income was essentially flat (+0.6% to $893M) and net income held up at $436M (-6.3%). Crucially, management's FY2026 outlook calls for a return to total revenue growth of 1-2%, cloud services/subscriptions growth of 3-4%, Adjusted EBITDA margin expansion of 50-100 bps, and double-digit free-cash-flow growth.

Read the full thesis with Pro →