Summary
OpenText's fiscal 2025 first quarter results carry the imprint of the AMC divestiture. Total revenue fell 11.0% to $1.27 billion from $1.43 billion in the prior-year quarter, and the company said the decline was 1.8% when adjusted for the divestiture. The AMC business contributed $132.8 million to total revenues in the year-ago quarter. Cloud services and subscriptions revenue rose 1.3% to $457 million, the fifteenth consecutive quarter of organic cloud growth. Annual recurring revenue of $1.05 billion fell 8.4%, or 1.1% adjusted for AMC, and represented 83% of total revenue. Enterprise cloud bookings of $133 million rose 10.3%.
Profitability held up better than the top line. Gross profit was $910.4 million, down 10.6%, while gross margin improved to 71.7% from 71.4%. Operating income slipped 3.1% to $206.2 million, but operating margin rose to 16.3% from 14.9% as operating expenses fell $101.4 million. Net income attributable to OpenText rose 4.3% to $84.4 million, and diluted EPS rose 6.7% to $0.32 from $0.30. Adjusted EBITDA was $443.8 million, a 35.0% margin, which the company said was above its first quarter targets. Non-GAAP diluted EPS was $0.93, down from $1.01. Special charges of $47.1 million rose $33.3 million, driven by $42.5 million of restructuring costs tied to the Business Optimization Plan.
Cash generation was the weak spot. Operating cash flow was negative $77.8 million, down 265.1% from $47.1 million a year earlier, reflecting an expected one-time tax payment tied to the AMC divestiture. Free cash flow was negative $117 million. Capital expenditures were $39.3 million, up 4.7%. Deferred revenue, current portion, fell 9.1% to $1.45 billion, while remaining performance obligations rose 4.0% to $2.60 billion. The company returned $154 million to shareholders in the quarter through $69 million of dividends and $85 million of buybacks, and repurchased and cancelled 2,649,131 shares for $86.5 million. It declared a quarterly dividend of $0.2625 per share.
Management framed the quarter around capital returns and margin discipline. OpenText said it remains on track to return approximately $570 million of capital to shareholders in the full fiscal year 2025, and noted it purchased and cancelled 7.72 million shares over the last two quarters. The company pointed to a defined path for future margin and cash flow growth and said it has the capital flexibility to deliver on its fiscal 2025 targets. It did not give specific revenue or earnings guidance for the next quarter.
Risks remain concentrated in tax and integration. The Canada Revenue Agency continues to dispute OpenText's transfer pricing for fiscal 2012 through 2016 and has reassessed fiscal 2017 through 2019 on a depreciable basis issue. If the company loses, it could record income tax expense reducing deferred tax assets by up to approximately $470 million, with a corresponding cash tax impact spread over several years. Canada's new Global Minimum Tax Act imposes a 15.0% minimum tax, though the company said the impact was not material in the quarter. The cloud net renewal rate was 94% and the customer support net renewal rate was 91%. The company employed approximately 21,800 people as of September 30, 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.27B | $1.36B | -6.8% | $1.43B | -11.0% |
| Gross profit | $910.4M | $987.7M | -7.8% | $1.02B | -10.6% |
| Gross margin | 71.7% | 72.5% | -0.8 pp | 71.5% | +0.3 pp |
| Research & development | $190.7M | $205.3M | -7.1% | $234.4M | -18.7% |
| Sales & marketing | $245.9M | $285.4M | -13.8% | $271.8M | -9.5% |
| General & administrative | $106.7M | $126.6M | -15.7% | $131.2M | -18.7% |
| Total operating expenses | $704.1M | $794.5M | -11.4% | $805.5M | -12.6% |
| Operating income (loss) | $206.2M | $193.3M | +6.7% | $212.9M | -3.1% |
| Operating margin | 16.3% | 14.2% | +2.1 pp | 14.9% | +1.3 pp |
| Net income (loss) | $84.4M | $248.3M | -66.0% | $80.9M | +4.3% |
| Net margin | 6.7% | 18.2% | -11.6 pp | 5.7% | +1.0 pp |
| Diluted EPS | $0.32 | $0.91 | -$0.59 | $0.30 | +$0.02 |
Risks
The Canada Revenue Agency has disputed transfer pricing for fiscal 2012-2016 and depreciable basis for fiscal 2017-2019; if unsuccessful, the estimated impact could result in an income tax expense of up to approximately $470 million.
Total revenue decreased 11.0% in the quarter ended September 30, 2024, primarily due to the exclusion of the AMC business, which contributed $132.8 million in the prior-year quarter; customer support revenue declined 14.7% and license revenue declined 27.3%.
Operating cash flow was negative $77.8 million for the quarter ended September 30, 2024, down 265.1% from the prior-year quarter, primarily due to tax payments related to the AMC Divestiture and working capital changes.
Special charges increased by $33.3 million in the quarter ended September 30, 2024, mainly due to $42.5 million of restructuring costs related to the Business Optimization Plan, which may lead to further execution risk.
Canada enacted the Global Minimum Tax Act imposing a 15.0% global minimum tax on profits; implementation could impact our liability for taxes, though the impact was not material as of the quarter ended September 30, 2024.
We continue to monitor the Russia-Ukraine and Middle East conflicts, including ongoing operations in Israel; while not currently material, broader consequences could adversely affect our business and customers.
SaaS KPIs
All quarters →Adjusted EBITDA
Adjusted EBITDA Margin
Non-GAAP Gross Margin
Enterprise Cloud Bookings
Cloud Revenues
Free Cash Flow
Cloud Services Contracts > $1.0M
Non-GAAP Operating Income
Annual Recurring Revenue (ARR)
Cloud Net Renewal Rate
Customer Support Net Renewal Rate
ARR as % of Total Revenues
Summary, forecast, risks and KPIs are extracted from OPEN TEXT CORP's SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.