OpenText Reports Q2 Earnings Decline Amid Leadership Transition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 11 2025
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Should l Buy OTEX?
Source: PRnewswire
OpenText Corp's stock fell by 7.94% as it crossed below the 5-day SMA, reflecting investor concerns following its recent earnings report.
The company reported a net income of $168.09 million for Q2, a significant drop from last year's $229.86 million, indicating mounting profitability pressures. Despite a slight revenue decline, OpenText's adjusted earnings of $1.13 per share exceeded expectations by $0.10, showcasing strong profitability amidst challenging market conditions. However, the overall revenue of $1.33 billion, down 0.6% year-over-year, raises concerns about future growth prospects, especially in light of the ongoing strategic restructuring and leadership transition.
Investors are closely monitoring OpenText's strategic adjustments and market recovery efforts, particularly as the software sector faces significant challenges, including a severe market drawdown and widespread negative returns.
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Analyst Views on OTEX
Wall Street analysts forecast OTEX stock price to rise
8 Analyst Rating
1 Buy
7 Hold
0 Sell
Hold
Current: 24.710
Low
26.00
Averages
31.88
High
50.00
Current: 24.710
Low
26.00
Averages
31.88
High
50.00
About OTEX
Open Text Corporation is a Canada-based information management company, which provides software and services. Its comprehensive Information Management platform and services provide secure and scalable solutions for global companies, small and medium-sized businesses (SMBs), governments and consumers around the world. It has a complete and integrated portfolio of information management solutions delivered at scale in the OpenText Cloud, enabling organizations master modern work, automate application delivery and modernization, and optimize their digital supply chains by bringing together content cloud, cybersecurity cloud, business network cloud, information technology (IT) operations management cloud, application modernization cloud and analytics cloud. It also accelerates information modernization with intelligent tools and services for moving off paper, automating classification and building clean data lakes for Artificial Intelligence (AI), analytics and automation.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
OpenText (OTEX) Q2 2026 Earnings Call Transcript
See More
OpenText Q2 2026 Earnings Call Highlights
- Leadership Transition: Interim CEO Christopher McGourlay welcomed new CEO Ayman Antoun, indicating confidence in leadership stability and future strategic execution, which is expected to enhance shareholder value.
- Strong Financial Performance: OpenText reported total revenues of approximately $1.33 billion for Q2, a 0.4% year-over-year increase, with cloud revenue growing by 3.4%, demonstrating sustained growth potential in core business areas despite a slight decline in customer support revenue.
- Strategic Restructuring Plan: The company confirmed a quarterly divestiture plan to optimize its business portfolio, with McGourlay emphasizing that focusing on core content and cloud businesses will enhance overall profitability and market competitiveness.
- Future Outlook: Management reaffirmed the fiscal 2026 total revenue growth target of 1% to 2% and expects Q3 revenues between $1.26 billion and $1.28 billion, reflecting confidence in future performance, although revenue models need adjustment to account for recent divestitures.
See More
Open Text Reports Decline in Q2 Earnings
- Earnings Decline: Open Text reported a net income of $168.09 million for Q2, translating to $0.66 per share, which is a significant drop from last year's $229.86 million and $0.87 per share, indicating mounting profitability pressures.
- Adjusted Earnings: Excluding special items, the company reported adjusted earnings of $286 million or $1.13 per share, showing a decline from the previous year but reflecting efforts in cost control amidst challenging market conditions.
- Revenue Slightly Down: The company's revenue for the quarter was $1.326 billion, down 0.6% from $1.334 billion last year, indicating weak market demand that could impact future growth prospects.
- Market Reaction: Given the earnings and revenue misses, Open Text's stock may face downward pressure, prompting investors to closely monitor the company's strategic adjustments and market recovery efforts.
See More
Open Text Q2 Earnings Exceed Expectations
- Earnings Beat: Open Text reported a Q2 non-GAAP EPS of $1.13, exceeding expectations by $0.10, indicating strong profitability despite slight revenue decline.
- Revenue Decline: The company posted revenue of $1.33 billion, down 0.7% year-over-year, yet it surpassed market expectations by $40 million, demonstrating revenue stability in a competitive environment.
- Ongoing Transformation: Open Text continues to face growth challenges but is actively transforming its business to optimize product offerings and enhance service quality, ensuring long-term sustainability.
- Asset Sale Announcement: The company plans to sell its analytics business Vertica to Rocket Software for $150 million, a move that not only helps refocus on core operations but may also provide additional funding for future strategic investments.
See More
Open Text Q2 Earnings Preview and Performance Analysis
- Earnings Announcement Date: Open Text (OTEX) is set to release its Q2 earnings on February 5th after market close, with consensus estimates predicting an EPS of $1.03 and revenue of $1.29 billion, indicating investor focus on the company's financial performance.
- Performance Exceeding Expectations: Over the past two years, OTEX has surpassed EPS estimates 88% of the time and revenue estimates 63% of the time, demonstrating the company's stability in financial forecasting and market confidence.
- Revision Trends: In the last three months, EPS estimates have seen no upward revisions but 11 downward adjustments, while revenue estimates also faced no upward revisions and 8 downward changes, potentially reflecting market concerns about the company's future growth.
- Management Changes: Open Text recently appointed Ayman Antoun as CEO, which may influence the company's strategic direction and future performance, particularly against the backdrop of growth challenges the company is currently facing.
See More
Software Sector Faces Worst Drawdown in a Decade
- Severe Market Drawdown: The iShares Expanded Tech-Software Sector ETF (NYSE:IGV) has fallen for seven consecutive sessions, resulting in a 16% drop, marking the worst performance since the COVID panic in 2020, indicating immense pressure on the software sector.
- Widespread Negative Returns: Year to date, 100 out of 110 constituents in the software sector have posted negative returns, with over 20 stocks down more than 30%, reflecting growing concerns about the sustainability of software business models.
- Deteriorating Technical Indicators: A striking 97 of the IGV ETF's constituents are trading below their 200-day moving average, highlighting a broad breakdown in technical momentum, while the 14-day RSI has plummeted to 16, the lowest since September 2001, indicating extreme market pessimism.
- Pressure from Business Model Shifts: Macro strategists have noted that the rise of AI tools is replacing expensive SaaS platforms, leading to pricing pressures, slower renewals, and declining customer retention, prompting investors to rethink growth and value in the AI era.
See More
OpenText (OTEX) Q2 2026 Earnings Call Transcript
See More
OpenText Q2 2026 Earnings Call Highlights
- Leadership Transition: Interim CEO Christopher McGourlay welcomed new CEO Ayman Antoun, indicating confidence in leadership stability and future strategic execution, which is expected to enhance shareholder value.
- Strong Financial Performance: OpenText reported total revenues of approximately $1.33 billion for Q2, a 0.4% year-over-year increase, with cloud revenue growing by 3.4%, demonstrating sustained growth potential in core business areas despite a slight decline in customer support revenue.
- Strategic Restructuring Plan: The company confirmed a quarterly divestiture plan to optimize its business portfolio, with McGourlay emphasizing that focusing on core content and cloud businesses will enhance overall profitability and market competitiveness.
- Future Outlook: Management reaffirmed the fiscal 2026 total revenue growth target of 1% to 2% and expects Q3 revenues between $1.26 billion and $1.28 billion, reflecting confidence in future performance, although revenue models need adjustment to account for recent divestitures.
See More
Open Text Reports Decline in Q2 Earnings
- Earnings Decline: Open Text reported a net income of $168.09 million for Q2, translating to $0.66 per share, which is a significant drop from last year's $229.86 million and $0.87 per share, indicating mounting profitability pressures.
- Adjusted Earnings: Excluding special items, the company reported adjusted earnings of $286 million or $1.13 per share, showing a decline from the previous year but reflecting efforts in cost control amidst challenging market conditions.
- Revenue Slightly Down: The company's revenue for the quarter was $1.326 billion, down 0.6% from $1.334 billion last year, indicating weak market demand that could impact future growth prospects.
- Market Reaction: Given the earnings and revenue misses, Open Text's stock may face downward pressure, prompting investors to closely monitor the company's strategic adjustments and market recovery efforts.
See More
Open Text Q2 Earnings Exceed Expectations
- Earnings Beat: Open Text reported a Q2 non-GAAP EPS of $1.13, exceeding expectations by $0.10, indicating strong profitability despite slight revenue decline.
- Revenue Decline: The company posted revenue of $1.33 billion, down 0.7% year-over-year, yet it surpassed market expectations by $40 million, demonstrating revenue stability in a competitive environment.
- Ongoing Transformation: Open Text continues to face growth challenges but is actively transforming its business to optimize product offerings and enhance service quality, ensuring long-term sustainability.
- Asset Sale Announcement: The company plans to sell its analytics business Vertica to Rocket Software for $150 million, a move that not only helps refocus on core operations but may also provide additional funding for future strategic investments.
See More
Open Text Q2 Earnings Preview and Performance Analysis
- Earnings Announcement Date: Open Text (OTEX) is set to release its Q2 earnings on February 5th after market close, with consensus estimates predicting an EPS of $1.03 and revenue of $1.29 billion, indicating investor focus on the company's financial performance.
- Performance Exceeding Expectations: Over the past two years, OTEX has surpassed EPS estimates 88% of the time and revenue estimates 63% of the time, demonstrating the company's stability in financial forecasting and market confidence.
- Revision Trends: In the last three months, EPS estimates have seen no upward revisions but 11 downward adjustments, while revenue estimates also faced no upward revisions and 8 downward changes, potentially reflecting market concerns about the company's future growth.
- Management Changes: Open Text recently appointed Ayman Antoun as CEO, which may influence the company's strategic direction and future performance, particularly against the backdrop of growth challenges the company is currently facing.
See More
Software Sector Faces Worst Drawdown in a Decade
- Severe Market Drawdown: The iShares Expanded Tech-Software Sector ETF (NYSE:IGV) has fallen for seven consecutive sessions, resulting in a 16% drop, marking the worst performance since the COVID panic in 2020, indicating immense pressure on the software sector.
- Widespread Negative Returns: Year to date, 100 out of 110 constituents in the software sector have posted negative returns, with over 20 stocks down more than 30%, reflecting growing concerns about the sustainability of software business models.
- Deteriorating Technical Indicators: A striking 97 of the IGV ETF's constituents are trading below their 200-day moving average, highlighting a broad breakdown in technical momentum, while the 14-day RSI has plummeted to 16, the lowest since September 2001, indicating extreme market pessimism.
- Pressure from Business Model Shifts: Macro strategists have noted that the rise of AI tools is replacing expensive SaaS platforms, leading to pricing pressures, slower renewals, and declining customer retention, prompting investors to rethink growth and value in the AI era.
See More
