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OpenText (TSE:OTEX) Beats Fiscal Q2 Earnings Estimates — Here are the Numbers

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OpenText’s Fiscal Q2-2023 financial results beat analysts’ earnings and revenue estimates. Revenue growth was solid, but earnings growth was non-existent.

Canadian tech information management company Open Text (TSE:OTEX) (NASDAQ:OTEX) reported its Fiscal Q2-2023 results earlier today. OTEX’s results beat both revenue and earnings-per-share (EPS) expectations. Please note that the following figures are in U.S. dollars unless otherwise stated.

OTEX’s revenue reached $897 million (2.4% year-over-year growth, 7.8% growth in constant currency), which beat expectations of $867.2 million. Importantly, the company’s Cloud revenues grew by 16% on a constant-currency basis, reaching $409 million, and annual recurring revenues reached $725 million (8.7% constant-currency growth), making up 81% of the company’s revenues. Also, enterprise cloud bookings increased by 12%, hitting $144.7 million.

Meanwhile, diluted adjusted earnings per share were $0.89, just higher than the $0.79 per consensus estimate but flat compared to last year. Additionally, the company’s adjusted EBITDA margin was 38% compared to 39.2% last year, and adjusted EBITDA fell by 0.8% to $341 million.

OpenText also reported cash flow from operations of $195 million (a 9.9% decline), with free cash flow of $163 million.

Lastly, OpenText completed its Micro Focus acquisition at the end of January.

Is OTEX Stock a Buy, According to Analysts?

According to analysts, OpenText stock earns a Strong Buy consensus rating based on three Buys and one Hold assigned in the past three months. The average OTEX stock price forecast of C$51.24 implies 15.7% upside potential. Analyst price targets range from a high of C$66.55 to a low of C$39.93.


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