Open Text (OTEXN) Q1 2027 Earnings Report

The call was broadly positive, with solid core and cloud growth, sustained Content Cloud momentum, strong cash flow, debt reduction, AI commercialization, and maintained full-year guidance. The main challenges were double-digit declines in ITOM and cybersecurity, declining support and non-core revenue, a year-over-year EBITDA margin decrease, and the need to execute planned investments and improve performance in weaker product categories.

For fiscal 27, OpenText expects to increase growth investments over the course of the year, with a greater weighting in the second half, and expects these investments to support stronger revenue growth in its core product categories as it works to meet or exceed its target of 2% to 3% year over year growth in constant currency; growth investments are 100 million dollars for this year. For Q2 fiscal 27, it expects total revenues between $1.26 billion and $1.29 billion and adjusted EBITDA margin between 33% to 34%. Adjusted EBITDA margin in the second half of fiscal 27 is expected to be lower than the first half as growth investments are completed, with typical seasonality starting in January, its fiscal Q3, including employee benefit and salary resets and vacation accruals. The company maintained its full year fiscal 27 outlook ranges on all metrics and expects core every category, including ITOM and cyber, to show growth for the full year, with material improvement expected in the second quarter, third and fourth.