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Earnings analysis · 10-Q

OTEX earnings analysis

Filed May 7, 2026 · Our reading of the company's report

The latest report

OpenText's Q3 FY2026 report reflects a modest revenue growth of 2.2% year-over-year, primarily driven by increases in cloud services and subscriptions despite challenges in certain product areas. Operating cash flow saw…

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OpenText's Q3 FY2026 report reflects a modest revenue growth of 2.2% year-over-year, primarily driven by increases in cloud services and subscriptions despite challenges in certain product areas. Operating cash flow saw a significant increase, and both EPS and margins improved from the prior year, highlighting operational efficiency amidst strategic divestitures and ongoing investments.

Read the original on SEC.gov

From revenue to operating profit

Where each $100 of revenue went in this report.

Of every $100 of revenue Cost of sales $27 Operating expenses $57 Left as operating profit $16

Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.

Reported figures

Earnings per share
$0.7
Segment
Cloud Services and Subscriptions
Segment
Customer Support
Segment
License
Segment
Professional Service and Other

What stood out

  • Revenue Growth of 2.2% YoY

    Total revenue for Q3 FY2026 reached $1.28 billion, up from $1.25 billion year-over-year.

  • Increased Gross Margin to 73.1%

    GAAP-based gross margin improved from 71.6% in the previous year.

  • Significant Increase in EPS

    GAAP-diluted EPS rose to $0.70, compared to $0.35 in the prior year.

  • Strong Cash Flow Performance

    Operating cash flow increased by 22.1%, reaching $821 million for the nine months.

  • Strategic Growth in Cloud Revenue

    Cloud services and subscriptions revenue increased by 6.6%, driven by demand across multiple categories.

  • Positive Free Cash Flow Growth

    Free cash flow for Q3 FY2026 was $304.9 million, reflecting solid financial health.

What to watch

  • Decline in Cybersecurity Segment

    Cybersecurity revenues saw notable decreases, contributing to overall revenue challenges in specific categories.

  • Ongoing Restructuring Costs

    Special charges related to restructuring initiatives increased by $70 million, indicating operational adjustments.

  • Market Volatility from Geopolitical Tensions

    Uncertainties from geopolitical tensions and trade policies could pose risks to future performance.

Management's outlook

Management anticipates revenue growth of 1% to 2% for FY2026, including effects of business divestitures.

This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.