OpenText Corporation disclosed its fourth quarter and full fiscal 2026 results on August 6, showing a significant divergence between profitability metrics and core revenue expansion. Quarterly net income surged to $156 million, representing a 439.9% increase year over year, while diluted earnings per share climbed to $0.64, up 481.8%. For the full fiscal year, net income rose 47.5% to $643 million with a 12.3% net margin, and GAAP-based gross margin expanded to 75.0% in the quarter compared to 72.3% a year earlier.
Cloud operations remained the primary growth driver for the company. Cloud revenue increased 6.0% year over year to $503 million in the fourth quarter, marking the 22nd consecutive quarter of organic cloud growth. Enterprise cloud bookings jumped 24.1% to $295 million in the quarter. For the full year, cloud revenue grew 5.5% to nearly $1.96 billion, while enterprise cloud bookings climbed 22.5% to $947 million. This performance contrasted sharply with the company’s core subscription business, as total annual recurring revenue growth reached only 0.2% in the quarter and 1.3% for the full year.
Customer support revenue, the company’s largest revenue line, declined 4.6% to $553.8 million in the quarter and fell 2.0% for the full year. Professional services and other revenue also weakened, dropping 6.5% in the quarter and 8.6% for the year. License revenue showed strength with a 24.4% quarterly increase and 8.4% annual growth, though such sales typically depend on individual large contracts rather than recurring subscriptions. Free cash flow declined 1.6% in the quarter to $122 million despite operating cash flow rising 17.5%.
OpenText returned a record $677 million to shareholders in fiscal 2026, comprising $268 million in dividends and $409 million in share repurchases. The company raised its dividend by 5% and renewed authorization to repurchase up to 23,846,439 shares. Additionally, OpenText sold non-core Vertica operations to Rocket Software for $150 million and committed €105 million toward expansion in Cork and Galway, creating 400 positions focused on agentic artificial intelligence and sovereign cloud capabilities in Europe. Chief Executive Officer Ayman Antoun characterized fiscal 2027 as a “foundation year,” suggesting emphasis on steady execution rather than accelerated growth expansion.
Hedge fund ownership of OpenText increased from 14 to 18 funds quarter over quarter, indicating growing institutional interest. Short interest stood at 5.99% of float. The stock traded at a forward price-to-earnings multiple of just 6.31 as of September 3.
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