OpenText Corporation, headquartered in Waterloo, Ontario, is a global leader in enterprise information management (EIM) and cloud-based software.
Strong FY2025 Execution and Cloud Momentum
OpenText delivered a strong finish to Fiscal 2025, supported by operational discipline and accelerating momentum in its cloud segment. CEO and CTO Mark J. Barrenechea highlighted that cloud bookings surged 32%, driven by demand for the company’s AI-powered Titanium X platform. Total cloud remaining performance obligations grew 13%, while cloud revenue increased 2%, reflecting healthy adoption trends. The company also achieved an adjusted EBITDA margin of 34.5% and returned a record $683 million to shareholders through dividends and share repurchases. Excluding the impact of divestitures, total growth declined 3%, but management emphasized that AI, Cloud, and Security will remain core growth pillars for the next fiscal year.
FY2026 Outlook: Targeted Growth and Shareholder Value
For Fiscal 2026, OpenText expects total revenue growth of 1%–2% in constant currency, supported by 3%–4% cloud revenue growth and new cloud bookings expansion of 12%–16%. The company anticipates adjusted EBITDA margin improvement of 50–100 basis points and free cash flow growth of 17%–20%. In addition, OpenText plans to increase its annual dividend by 5% and repurchase approximately $300 million of its stock, demonstrating continued focus on shareholder returns. CFO Chadwick Westlake expressed confidence in the company’s ability to reinvest in high-performing products while maintaining strong execution and disciplined financial management.
Analyst View
CIBC remains constructive on OpenText’s ongoing transition toward a cloud-first and AI-driven business model. However, the firm anticipates that short-term growth may be moderated by seasonal softness and the timing of planned divestitures. The revised price target of $40 reflects a balanced view, recognizing OpenText’s improving fundamentals while maintaining a cautious stance on near-term catalysts.
Stock Rating:
Considering the above facts, we give a “Buy” rating at the closing market price of CAD 53.17 per share as on 29th October 2025. While revenue growth guidance remains modest, OpenText’s continued shift toward high-margin, recurring cloud revenue and its focus on AI-enabled solutions underpin a compelling long-term story. The Titanium X platform is gaining strong customer traction, and the divestiture of non-core assets should enhance operational focus and margin expansion. With rising free cash flow, disciplined capital allocation, and consistent dividend growth, OpenText represents an attractive opportunity for investors seeking exposure to Canada’s growing enterprise software and AI innovation landscape.
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