What component or percentage of bookings is tied to AI, whether for an OpenText product or a use case?

Management does not disclose specific AI attach rates but noted an increase in both the number and size of deals, including a 7-figure deal in Q3 that included Aviator as a major component. Similar trends are observed in the pipeline. “We closed a deal this quarter. It was a 7-figure deal with Aviator included. That was a major component there. We are starting to see a continuing build of this.”

From your experience competing against OpenText, what are some underappreciated aspects investors may not know about its assets?

Ayman Antoun highlighted OpenText's long-standing expertise in data management, which is not an overnight acquisition, and its pervasive strength across diverse industries, geographies, and client sizes. He also noted the unique ability to manage human, machine, and transactional data. “My early feedback and observation is what would probably be underestimated is the length of time that OpenText had around this notion of data and data management.”

Are there any changes in sales cycles or buyer behavior due to strong AI interest versus geopolitical uncertainty?

Ayman Antoun stated that based on client feedback and internal observations, there has been no material slowdown in client decision-making, particularly around AI opportunities. Some clients are even accelerating their AI deployments. “Based on the feedback I got from clients, and what the team has shared with me, we have not seen any material slowdown in clients making decisions, in particular, as you pointed out, around AI opportunities.”

OTEX

Open Text (OTEX) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q3 FY26)· Information Technology· May 7, 2026

Source: earnings call transcript

Executive summary

OpenText Q3 FY26 — Strong Cloud Performance and Increased Guidance

OpenText reported a strong Q3 FY26, driven by robust cloud performance and increased guidance for cloud revenue, bookings, and free cash flow. New CEO Ayman Antoun is focused on disciplined execution across the core portfolio, leveraging data management expertise for AI, and meeting diverse client cloud deployment needs. The company is also navigating a challenging divestiture market while prioritizing shareholder value.

Highlights

Total revenues of $1.28 billion, beating internal expectations.
Cloud revenue reached $493 million, up 6.6% year-over-year, marking the highest in company history.
Q3 adjusted EPS of $1.01, the highest Q3 in company history, up 23.2% year-over-year.
Year-to-date enterprise cloud bookings of $651 million, the highest Q3 year-to-date in company history.
Increased fiscal 2026 cloud revenue growth guidance from 3-4% to 4-5% year-over-year.

Concerns

Cloud net renewal rate was 95%, down slightly by 1% year-over-year.
Q3 free cash flow was $305 million, down 18.4% year-over-year.
Customer support revenue declined 0.4% in Q3.
Lingering impact from the U.S. government shutdown affected some contracts in the Americas.
Geopolitical and macro uncertainty created a more selective buyer environment for divestitures.

Guidance & targets

Category	Target	Timeline	Confidence
Total revenue growth	1% to 2% high materiality	FY26	High
Cloud revenue growth	4% to 5% high materiality	FY26	High
Enterprise cloud bookings growth	16% to 20% high materiality	FY26	High
Free cash flow growth	22% to 25% high materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Total Content Business Largest and fastest-growing business, demonstrating strength.	44% of total revenues	6%	—	—
Cloud Revenue for Content Leads overall cloud growth.	—	22%	—	—
Core Cloud Business Continues to grow as clients make fundamental decisions on cloud and AI needs.	—	12%	—	—

OTEX operating KPIs by quarter

OTEX operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q3 FY26	Jun 2026 Q4 FY26	Change vs prior quarter
Cloud deals greater than $1 million	41 We saw 41 cloud deals greater than $1 million in Q3, an increase of 28% year-on-year. Source: earnings call transcript	64 We closed 64 cloud deals greater than $1 million in the quarter, an increase of 49% year-over-year. Source: earnings call transcript	+56.1%
Net renewal rate Cloud	95% Our cloud net renewal rate was 95%, down slightly by 1% year-over-year and consistent with our annual model. Source: earnings call transcript	94% On net renewal rates, our cloud net renewal rate was 94%, down 180 basis points year-over-year and in line with historical levels. Source: earnings call transcript	-1 pt
Net renewal rate Customer support	93% Our customer support net renewal rate was 93%, up 3% year-over-year. Source: earnings call transcript	93% Our customer support net renewal rate was 93%, up from 91% year-over-year and also consistent with historical levels. Source: earnings call transcript	0 pt
Annual recurring revenue (ARR)	$1.06B Annual recurring revenue or ARR was $1.06 billion, up 2.7% year-over-year, and representing 82% of our total revenue and consistent year-over-year. Source: earnings call transcript	$1.06B Annual recurring revenue, or ARR, was $1.06 billion, up 0.2% and representing 78.3% of our total revenue. Source: earnings call transcript	0%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Enterprise cloud bookings $651 million YTD Q3 FY26

highest Q3 year-to-date in company history

Cloud current RPO up 5% Q3 FY26

YoY

Cloud long-term RPO up 19% Q3 FY26

YoY

Product announcements

Product	Type	Timeline	Details
Select enterprise data and AI solutions	expansion	—
OpenText data AI platform	launch	this quarter

Deals & partnerships

eDOCS Sale of a non-core asset

Sale of eDOCS was a factor in the increase of GAAP net income.

Vertica Sale of a non-core asset

Divestiture expected to close shortly.

Risks & headwinds

Cloud net renewal rate decline Q3 FY26

95%, down 1% YoY

Mitigation:Consistent with annual model, implying it's within expectations.

Free cash flow decline in Q3 Q3 FY26

$305 million, down 18.4% YoY

Mitigation:Year-to-date FCF is up; quarter-to-quarter lumpiness due to working capital and tax payments; continued cost savings and business optimizations are expected to benefit cash flow.

Lingering impact from US government shutdown Q3 FY26

Some contracts still not closed

Mitigation:Management acknowledges the impact and expects to see progress.

Geopolitical and macro uncertainty affecting divestitures Ongoing

More selective buyer environment, difficulty getting financing

Mitigation:Being disciplined sellers, not doing 'fire sales,' waiting for improved market stability and capital markets to return to normal.

Performance of Cybersecurity and ITOM businesses Q3 FY26

Down a bit this quarter

Mitigation:Management's focus on balanced execution across the portfolio, articulating value proposition, and sharp sales execution to return these businesses to growth.

What to watch in Q4 FY26

Core business growth acceleration

Next quarter

Current Cybersecurity and ITOM down a bit this quarter

Target Return to growth

Why it matters

Essential for overall revenue growth and demonstrating balanced portfolio execution across all core segments.

You know, cyber security and ITOM were down a bit this quarter. Do you think that it's something kind of looking out beyond this year that if they're on a kind of path of sustainable growth?

Find out whether OTEX delivers this. Inve re-checks your case every morning.

Q&A highlights

What are your initial observations on where you see the most opportunity for growth at OpenText, strategically or operationally?

Ayman Antoun noted the client-focused culture and strong core portfolio as strengths. Opportunities lie in enhancing ecosystem partner engagements and strengthening disciplined execution across sales, development, and capital allocation.

“My early observations, if I were to package them into things that we would build on and continue, and this is informed by what clients and partners and colleagues have said to me so far in the last 14 days, is the culture that is client-focused.”

asked by Richard Tse · answered by Ayman Antoun

2 min read 6 chapters

Detailed narrative

New CEO Priorities and Vision

New CEO Ayman Antoun, in his 14th day on the job, outlined four guiding priorities: listen to clients, partners, colleagues, and investors; learn every aspect of the business; assess areas for improvement; and build a sustainable organic growth plan with clear KPIs.

He emphasized client focus, disciplined execution, and transparency. Antoun highlighted OpenText's position as a global leader in data management, crucial for credible AI outcomes, and expressed confidence in the company's future direction.

Data Management as AI Foundation

OpenText asserts that reliable, quality, curated, governed, integrated, and secure data is critical for credible AI outcomes. The company is uniquely positioned to manage and secure three distinct data types at scale: human-generated, machine-generated, and transactional data. This capability is seen as foundational for enterprise AI, particularly in regulated sectors where data integrity is paramount, and a strategic advantage that needs to be amplified in the marketplace.

Flexible Cloud Strategy and Client Migration

OpenText offers clients flexibility in their cloud journey, supporting on-prem, private cloud, public cloud, sovereign cloud, or hybrid approaches. This optionality is considered a strategic advantage, meeting clients where they are rather than forcing a specific migration path. Management noted that clients are already accelerating their moves to the cloud, and OpenText has aligned its product portfolio, go-to-market, and incentives to support this ongoing transition.

Internal AI Adoption and Productivity Gains

OpenText is leveraging its own products and AI agents internally, aiming to save $1 billion over the next 10 years by becoming 'client zero' for AI. Internal AI initiatives have already demonstrated significant benefits, including a 50% improvement in incident restore time and a 20% reduction in incident frequency.

The focus is on using AI to better serve clients, enhance product offerings, and improve employee productivity.

Disciplined Divestiture Strategy

The company is continuing its portfolio reshaping strategy but is adopting a disciplined approach to divestitures. While the Vertica divestiture is expected to close shortly, other non-core asset sales are being paused due to geopolitical and macro uncertainties, which have created a more selective buyer environment and made financing difficult.

Management emphasized that they would not conduct 'fire sales' and are committed to securing the right return for shareholders.

Capital Allocation Framework

OpenText's management team regularly discusses capital allocation with the board, considering debt reduction, dividend payouts, share repurchases, and organic growth investments. The company increased its share buyback program from $300 million to $500 million for fiscal 2026 and repurchased 9.7 million shares in Q3, reducing the share count by 6.7% year-over-year. The board maintains a disciplined approach to capital allocation in the current environment.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.