Financial Analysis

ACQUISITIONS AND DIVESTITURES Divestiture of eDOCS Business On October 2, 2025, the Company entered into an agreement to divest an on-premise solutions (eDOCS), as a part of its Analytics product category, to NetDocuments Software, Inc. (NetDocuments), for $163.0 million in cash before taxes, fees and other adjustments. The transaction was completed on January 12, 2026. Refer to Note 24 Subsequent Events for more details. As of December 31, 2025, the Company determined that the assets and liabilities of the eDOCS business met the criteria for held for sale classification and the respective assets and liabilities have been reclassified to Assets held for sale and Liabilities held for sale reported in our Condensed Consolidated Balance Sheets. The Company has determined that the eDOCS business does not constitute as a component, as its operations and cash flows cannot be clearly distinguished from the rest of the Companys operations and cash flows due to significant shared costs, therefore, the transaction does not meet the discontinued operations criteria, and the results of operations from the eDOCS business are presented within Income from operations in our Condensed Consolidated Statements of Income. The sale proceeds less costs to sell exceeded the carrying value of the net assets for the eDOCS business. The carrying value is subject to change based on developments leading up to the closing date. The following are classified as held for sale in the Condensed Consolidated B …

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The following tables disaggregate our revenue by significant geographic area, based on the location of our direct end customer, by type of performance obligation and timing of revenue recognition for the periods indicated: Three Months Ended December 31, Six Months Ended December 31, 2025 2024 2025 2024 Total Revenues by Geography: Americas (1) $ 708,440 $ 765,857 $ 1,442,016 $ 1,494,100 EMEA (2) 496,726 449,068 935,528 868,299 Asia Pacific (3) 121,570 119,575 237,327 241,106 Total revenues $ 1,326,736 $ 1,334,500 $ 2,614,871 $ 2,603,505 ______________________ (1) Americas consists of countries in North, Central and South America. (2) EMEA consists of countries in Europe, the Middle East and Africa. (3) Asia Pacific primarily consists of Australia, Japan, Singapore, India and China. Three Months Ended December 31, Six Months Ended December 31, 2025 2024 2025 2024 Total Revenues by Type of Performance Obligation: Recurring revenues (1) Cloud services and subscriptions revenue $ 478,084 $ 462,306 $ 962,593 $ 919,330 Customer support revenue 581,921 590,595 1,168,766 1,186,085 Total recurring revenues $ 1,060,005 $ 1,052,901 $ 2,131,359 $ 2,105,415 License revenue (perpetual, term and subscriptions) 184,227 188,923 318,775 314,736 Professional service and other revenue 82,504 92,676 164,737 183,354 Total revenues $ 1,326,736 $ 1,334,500 $ 2,614,871 $ 2,603,505 ______________________ (1) Recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Custo …

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FAIR VALUE MEASUREMENT ASC Topic 820 Fair Value Measurement (Topic 820) defines fair value, establishes a framework for measuring fair value, and addresses disclosure requirements for fair value measurements. Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value, in this context, should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including our own credit risk. In addition to defining fair value and addressing disclosure requirements, Topic 820 establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or …

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INCOME TAXES The Companys effective tax rate for the six months ended December 31, 2025 was 21.6%. The Companys effective tax rate differs from the Canadian federal and provincial statutory rate of 26.5% primarily due to tax benefits related to a net decrease in unrecognized tax benefits and research and development credits. The Companys effective tax rate for the six months ended December 31, 2024 was 14.4%. The Companys effective tax rate differs from the Canadian federal and provincial statutory rate of 26.5% primarily due to tax benefits related to a net decrease in unrecognized tax benefits, research and development credits and a change in valuation allowance. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S., introducing amendments to U.S. tax laws with various effective dates. Key income tax-related provisions of the OBBBA include provisions related to bonus depreciation, research and development expenditures, interest expense deductibility and revisions to international tax regimes. The changes had an immaterial impact to the Companys effective tax rate for the three and six months ended December 31, 2025. As of December 31, 2025, the gross amount of unrecognized tax benefits accrued was $126.9 million (June 30, 2025 $139.8 million), which is inclusive of interest and penalties accrued of $13.5 million (June 30, 2025 $16.8 million). We believe that it is reasonably possible that the gross unrecognized tax benefits could decrease by $30.8 …

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LEASES We enter into operating leases, both domestically and internationally, for certain facilities, automobiles, data centers and equipment for use in the ordinary course of business. The duration of the majority of these leases generally ranges from 1 to 10 years, some of which include options to extend for an additional 3 to 5 years after the initial term. Additionally, the land upon which our headquarters in Waterloo, Ontario, Canada is located is leased from the University of Waterloo for a period of 49 years beginning in December 2005, with an option to renew for an additional term of 49 years. We also have finance lease liabilities comprised of equipment lease arrangements with an average duration of 4 to 5 years, of which all are currently being sublet. Leases with an initial term of 12 months or less are not recorded on our Condensed Consolidated Balance Sheets. The following illustrates the Condensed Consolidated Balance Sheets information related to leases: Balance Sheet Location As of December 31, 2025 As of June 30, 2025 Operating Leases Operating lease right of use assets Operating lease right of use assets $ 156,402 $ 197,977 Operating lease liabilities (current) Operating lease liabilities $ 66,600 $ 75,914 Operating lease liabilities (non-current) Long-term operating lease liabilities 155,217 189,949 Total operating lease liabilities $ 221,817 $ 265,863 Finance Leases Finance lease receivables (current) Prepaid expenses and other current assets $ 1,540 $ 1,8 …

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LONG-TERM DEBT As of December 31, 2025 As of June 30, 2025 Total debt Senior Notes 2031 $ 650,000 $ 650,000 Senior Notes 2030 900,000 900,000 Senior Notes 2029 850,000 850,000 Senior Notes 2028 900,000 900,000 Senior Secured Notes 2027 1,000,000 1,000,000 Acquisition Term Loan 2,167,450 2,185,375 Total principal payments due 6,467,450 6,485,375 Unamortized debt discount and issuance costs (95,842) (107,454) Total amount outstanding 6,371,608 6,377,921 Less: Current portion of long-term debt Acquisition Term Loan 35,850 35,850 Total current portion of long-term debt 35,850 35,850 Non-current portion of long-term debt $ 6,335,758 $ 6,342,071 Senior Unsecured Fixed Rate Notes Senior Notes 2031 On November 24, 2021, a subsidiary of the Company issued $650 million in aggregate principal amount of 4.125% senior notes due 2031 guaranteed by the Company (Senior Notes 2031) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (Securities Act), and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2031 bear interest at a rate of 4.125% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022. Senior Notes 2031 will mature on December 1, 2031, unless earlier redeemed, in accordance with their terms, or repurchased. For the three and six months ended December 31, 2025, we recorded interest expense of $6.7 mi …

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Accounting Pronouncements Adopted in Fiscal 2026 During Fiscal 2026, we have not adopted any accounting pronouncements that have had a material impact to our Condensed Consolidated Financial Statements or disclosures. Accounting Pronouncements Not Yet Adopted in Fiscal 2026 Income Taxes In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, that addresses requests for improved annual income tax disclosures from investors that use the financial statements to make capital allocation decisions. Public entities must adopt the new guidance for annual reporting periods beginning after December 15, 2024. The amendments in this ASU may be applied on a prospective or retrospective basis, with early adoption permitted. The impact of our adoption of such guidance will be reflected in our 2026 annual consolidated financial statements. Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03 Disaggregation of Income Statement Expenses (Subtopic 220-40), which requires additional disclosures of specific expense categories included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The amendments in this ASU may be applied on a prospective or retrospective basis, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU …

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PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS Defined Benefit and Other Post-Retirement Benefit Plans The Company has 45 pension and other post-retirement plans in multiple countries. All of our pension and other post-retirement plans are located outside of Canada and the United States. The plans are primarily located in Germany, which, as of December 31, 2025, make up approximately 48% of the total net benefit pension obligations. Our defined benefit pension plans include a mix of final salary type plans which provide for retirement, old age, disability and survivors benefits. Final salary type pension plans provide benefits to members either in the form of a lump sum payment or a guaranteed level of pension payable for life in the case of retirement, disability and death. Benefits under our final salary type plans are generally based on the participants age, compensation and years of service as well as the social security ceiling and other factors. Many of these plans are closed to new members. The net periodic costs of these plans are determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. Other post-retirement plans include statutory plans that offer termination, indemnity or other end of service benefits. Many of these plans were assumed through our acquisitions or are required by local regulatory and statutory requirements. All of our defined benefit and othe …

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RELATED PARTY TRANSACTIONS Our procedure regarding the approval of any related party transaction requires that the material facts of such transaction be reviewed by the independent members of the Audit Committee and the transaction be approved by a majority of the independent members of the Audit Committee. The Audit Committee reviews all transactions in which we are, or will be, a participant and any related party has or will have a direct or indirect interest in the transaction. In determining whether to approve a related party transaction, the Audit Committee generally takes into account, among other facts it deems appropriate, whether the transaction is on terms no less favourable than terms generally available to an unaffiliated third-party under the same or similar circumstances; the extent and nature of the related persons interest in the transaction; the benefits to the Company of the proposed transaction; if applicable, the effects on a directors independence; and if applicable, the availability of other sources of comparable services or products. During the six months ended December 31, 2025, Mr. Stephen Sadler earned immaterial consulting fees from OpenText for assistance with acquisition-related business activities. Mr. Sadler did not participate in any Board deliberations relating to matters for which he could potentially receive consulting fees. Mr. Sadler ceased to be a member of the Board as of December 9, 2025. During the six months ended December 31, 2025, M …

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REVENUES Disaggregation of Revenue We have four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. The following tables disaggregate our revenue by significant geographic area, based on the location of our direct end customer, by type of performance obligation and timing of revenue recognition for the periods indicated: Three Months Ended December 31, Six Months Ended December 31, 2025 2024 2025 2024 Total Revenues by Geography: Americas (1) $ 708,440 $ 765,857 $ 1,442,016 $ 1,494,100 EMEA (2) 496,726 449,068 935,528 868,299 Asia Pacific (3) 121,570 119,575 237,327 241,106 Total revenues $ 1,326,736 $ 1,334,500 $ 2,614,871 $ 2,603,505 ______________________ (1) Americas consists of countries in North, Central and South America. (2) EMEA consists of countries in Europe, the Middle East and Africa. (3) Asia Pacific primarily consists of Australia, Japan, Singapore, India and China. Three Months Ended December 31, Six Months Ended December 31, 2025 2024 2025 2024 Total Revenues by Type of Performance Obligation: Recurring revenues (1) Cloud services and subscriptions revenue $ 478,084 $ 462,306 $ 962,593 $ 919,330 Customer support revenue 581,921 590,595 1,168,766 1,186,085 Total recurring revenues $ 1,060,005 $ 1,052,901 $ 2,131,359 $ 2,105,415 License revenue (perpetual, term and subscriptions) 184,227 188,923 318,775 314,736 Professional service and other revenue 82,504 92,676 164,737 183,354 Total revenues $ 1,32 …

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SEGMENT INFORMATION ASC Topic 280, Segment Reporting (Topic 280), establishes standards for reporting, by public business enterprises, information about operating segments, products and services, geographic areas and major customers. The method of determining what information, under Topic 280, to report is based on the way that an entity organizes operating segments for making operational decisions and how the entitys management and the chief operating decision maker (CODM) assess an entitys financial performance. The Companys CODM is its Interim Chief Executive Officer. Our operations are analyzed by the CODM as being part of a single industry segment: the design, development, marketing and sale of Information Management software and solutions. As such, segment revenues and significant segment expenses are as presented in the Condensed Consolidated Statements of Income. The CODM uses Net income attributable to OpenText and Adjusted EBITDA (as defined below), a non-GAAP measure, on a consolidated Company basis to evaluate and measure financial performance and to make key decisions, including those that involve the preparation of financial projections, strategic decisions and allocation of resources. Adjusted EBITDA is defined and calculated as GAAP-based net income, attributable to OpenText, excluding interest income (expense), provision for (recovery of) income taxes, depreciation and amortization of acquired intangible assets, other income (expense), share-based compensatio …

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SUBSEQUENT EVENTS Cash Dividends As part of our quarterly, non-cumulative cash dividend program, we declared, on February 4, 2026, a dividend of $0.275 per Common Share. The record date for this dividend is March 6, 2026 and the payment date is March 20, 2026. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board. Divestiture of eDOCS Business On January 12, 2026, the Company completed the previously announced divestiture of an on-premise solution, eDOCS, a part of its Analytics product category, to NetDocuments, for $163.0 million in cash before taxes, fees and other adjustments. The Company used the net proceeds from the transaction to prepay a portion of the outstanding principal balance of the Acquisition Term Loan, as further described below under Debt Prepayment. Debt Prepayment On January 15, 2026, we used the proceeds from the eDOCS divestiture to prepay $163.0 million of our aggregate outstanding principal balance on the Acquisition Term Loan. Following this prepayment, the remaining balance of the Acquisition Term Loan is $2.004 billion. Refer to Note 9 Long-Term Debt for more information. Proposed Divestiture of Vertica On February 2, 2026, the Company reached a definitive agreement to divest Vertica, a part of its Analytics product category, to Rocket Software Inc. for $150.0 million in cash, before taxes, fees and other adjustments. The Company intends to use th …

SubsequentEventsTextBlock · excerpt; the full note is in the filing