Q1 2025 Open Text Corp Earnings Call Transcript
Key Points
- Open Text Corp (OTEX) exceeded expectations in adjusted EBITDA and adjusted EPS, achieving a 35% adjusted EBITDA margin.
- The company reported $1.27 billion in revenues for Q1, marking the largest Q1 of enterprise cloud bookings in its history, up 10% year-over-year.
- Open Text Corp (OTEX) is strengthening its competitive advantage with the launch of Titanium X, an AI-powered information management platform.
- The company has a strong pipeline and customer engagement, expecting a stronger second half of the fiscal year.
- Open Text Corp (OTEX) is on track to return approximately $570 million of capital via dividends and share buyback programs, marking a record year of capital return.
- Q1 total revenue was down 11% year-over-year, or 1.8% when adjusted for the AMC divestiture.
- The company faces a tougher year-over-year comparison in Q2 due to the large AMC contribution and license revenue from IP rights grants in the previous year.
- Operating cash flows were negative $77.8 million, and free cash flows were negative $117.1 million, impacted by a one-time tax payment.
- Cloud revenue growth was subdued in Q1, attributed to typical seasonality and a lower quarter for cloud revenue.
- The company is experiencing higher costs due to annual employee merit increases and other typical calendar year benefit cost uplifts starting in Q3.
Thank you for standing by. This is the conference operator. Welcome to the OpenText Corporation first-quarter fiscal 2025 financial results conference call. (Operator Instructions) And the conference is being recorded. (Operator Instructions) I would now like to turn the conference over to Greg Secord, Vice President, Investor Relations. Please go ahead.
Good morning, everyone, and welcome to OpenText's First Quarter Fiscal 2025 Earnings Call. With me on the call today are OpenText's Chief Executive Officer and Chief Technology Officer, Mark J. Barrenechea; and OpenText's President and Chief Financial Officer, Madhu Ranganathan. Today's call will be webcast live and recorded with a replay available shortly thereafter on the OpenText Investor Relations website at investors.opentext.com.
Before today's call, we posted a press release and investor presentations online. These materials will supplement our prepared remarks and can also be accessed on the OpenText Investor Relations website. I'd like to take the
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