OPEN TEXT CORP

Previous wording

When used in this report, the words “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “may”, “could”, “would”, “might”, “will” and other similar language, as they relate to Open Text Corporation (OpenText or the Company), are intended to identify forward-looking statements under applicable securities laws. Specific forward-looking statements in this report include, but are not limited to, statements regarding: (i) our focus in the fiscal years beginning July 1, 2024 and ending June 30, 2025 (Fiscal 2025) and July 1, 2025 and ending June 30, 2026 (Fiscal 2026) on growth in earnings and cash flows; (ii) creating value through investments in broader Information Management capabilities; (iii) our future business plans and operations, strategic goals and business planning process, including the Company’s business optimization plan announced in July 2024 (the Business Optimization Plan); (iv) business trends; (v) distribution; (vi) the Company’s presence in the cloud and in growth markets; (vii) product and solution developments, enhancements and releases, the timing thereof and the customers targeted; (viii) the Company’s financial condition, results of operations and earnings; (ix) the basis for any future growth and for our financial performance; (x) declaration of quarterly dividends; (xi) future tax rates, including Canada's newly enacted global minimum tax act; (xii) the changing regulatory environment; (xiii) annual recurring revenues; (xiv) research and development and related expenditures; (xv) our building, development and consolidation of our network infrastructure; (xvi) competition and changes in the competitive landscape; (xvii) our management and protection of intellectual property and other proprietary rights; (xviii) existing and foreign sales and exchange rate fluctuations; (xix) cyclical or seasonal aspects of our business; (xx) capital expenditures; (xxi) potential legal and/or regulatory proceedings; (xxii) acquisitions and their expected impact, including our ability to realize the benefits expected from the acquisitions and to successfully integrate the assets we acquire or utilize such assets to their full capacity, including in connection with the acquisition of Micro Focus International Limited, formerly Micro Focus International plc, and its subsidiaries (Micro Focus) (see Note 17 “Acquisitions and Divestitures” to our Condensed Consolidated Financial Statements for more details); (xxiii) tax audits; (xxiv) the expected impact of the Russia-Ukraine and Middle East conflicts on our business;(xxv) expected costs of the restructuring and business optimization plans; (xxvi) targets regarding greenhouse gas emissions, waste diversion, energy consumption and Equity, Diversity and Inclusion (ED&I) initiatives; (xvii) integration of Micro Focus, resulting synergies and timing thereof; (xxviii) divestitures and their expected impact, including in connection with the divestiture of the Application, Moderni…

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Current wording

When used in this report, the words “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “may”, “could”, “would”, “might”, “will” and other similar language, as they relate to Open Text Corporation (OpenText or the Company), are intended to identify forward-looking statements under applicable securities laws. Specific forward-looking statements in this report include, but are not limited to, statements regarding: (i) our focus in the fiscal years beginning July 1, 2025 and ending June 30, 2026 (Fiscal 2026) and July 1, 2026 and ending June 30, 2027 (Fiscal 2027) on growth in earnings and cash flows; (ii) creating value through investments in broader Information Management capabilities; (iii) our future business plans and operations, strategic goals and business planning process, including the Company’s business optimization plan announced in July 2024 (the Business Optimization Plan) and the potential redeployment of capital from non-core assets to enhance focus on our core Information Management for Artificial Intelligence (AI) business and support long-term shareholder returns; (iv) business trends; (v) distribution; (vi) the Company’s presence in the cloud and in growth markets; (vii) product and solution developments, enhancements and releases, the timing thereof and the customers targeted; (viii) the Company’s financial condition, results of operations and earnings; (ix) the basis for any future growth, including organic and inorganic growth, and for our financial performance; (x) declaration of quarterly dividends; (xi) future tax rates, including Canada and United Kingdom’s newly enacted global minimum tax acts; (xii) the changing regulatory environment; (xiii) annual recurring revenues; (xiv) research and development and related expenditures; (xv) our building, development and consolidation of our network infrastructure; (xvi) competition and changes in the competitive landscape; (xvii) our management and protection of intellectual property and other proprietary rights; (xviii) existing and foreign sales and exchange rate fluctuations; (xix) cyclical or seasonal aspects of our business; (xx) capital expenditures; (xxi) potential legal and/or regulatory proceedings; (xxii) acquisitions and their expected impact, including our ability to realize the benefits expected from the acquisitions and to successfully integrate the assets we acquire or utilize such assets to their full capacity (see Note 17 “Acquisitions and Divestitures” to our Condensed Consolidated Financial Statements for more details); (xxiii) tax audits; (xxiv) the expected impact of the Russia-Ukraine and Middle East conflicts and other geopolitical disputes on our business;(xxv) expected costs of the restructuring and business optimization plans; (xxvi) initiatives we establish and targets that we set related to corporate citizenship-related activities; (xvii) divestitures and their expected impact; (xxviii) the implementation of or changes to globa…

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Previous wording

In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking, and based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management’s perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. The forward-looking statements contained in this report are based on certain assumptions including the following: (i) countries continuing to implement and enforce existing and additional customs and security regulations relating to the provision of electronic information for imports and exports; (ii) our continued operation of a secure and reliable business network; (iii) the stability of general political, economic and market conditions; (iv) our ability to manage inflation, including increased labour costs associated with attracting and retaining employees, and higher interest rates; (v) our continued ability to manage certain foreign currency risk through hedging; (vi) equity and debt markets continuing to provide us with access to capital; (vii) our continued ability to identify, source and finance attractive and executable business combination opportunities; (viii) our continued ability to avoid infringing third party intellectual property rights; and (ix) our ability to successfully implement our restructuring plans. Management’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct.

Current wording

In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking, and based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management’s perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. The forward-looking statements contained in this report are based on certain assumptions including the following: (i) countries continuing to implement and enforce existing and additional customs and security regulations relating to the provision of electronic information for imports and exports; (ii) our continued operation of a secure and reliable business network; (iii) the stability of general political, economic and market conditions; (iv) our ability to manage inflation, including increased labour costs associated with attracting and retaining employees, and volatile interest rates; (v) our continued ability to manage certain foreign currency risk through hedging; (vi) equity and debt markets continuing to provide us with access to capital; (vii) our continued ability to identify, source and finance attractive and executable business combination opportunities; (viii) our continued ability to avoid infringing third party intellectual property rights; and (ix) our ability to successfully implement our restructuring plans. Management’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct.

Previous wording

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. The risks and uncertainties that may affect forward-looking statements include, but are not limited to: (i) our inability to realize successfully any anticipated synergy benefits from the acquisition of Micro Focus (Micro Focus Acquisition); (ii) the actual and potential impacts of the use of cash and incurrence of indebtedness, including the granting of security interests related to such debt; (iii) the change in scope and size of our operations as a result of the Micro Focus Acquisition and the AMC Divestiture; (iv) the uncertainty around expectations related to Micro Focus’ business prospects; (v) integration of acquisitions and related restructuring efforts, including the quantum of restructuring charges and the timing thereof; (vi) the possibility that we may be unable to successfully integrate the assets we acquire or fail to utilize such assets to their full capacity and not realize the benefits we expect from our acquired portfolios and businesses, including the acquisition of Micro Focus; (vii) the potential for the incurrence of or assumption of debt in connection with acquisitions, its impact on future operations and on the ratings or outlooks of rating agencies on our outstanding debt securities, and the possibility of not being able to generate sufficient cash to service all indebtedness; (viii) the possibility that the Company may be unable to meet its future reporting requirements under the Exchange Act, and the rules promulgated thereunder, or applicable Canadian securities regulation; (ix) the risks associated with bringing new products and services to market; (x) fluctuations in currency exchange rates (including as a result of the impact of any policy changes resulting from trade and tariff disputes) and the impact of mark-to-market valuation relating to associated derivatives; (xi) delays in the purchasing decisions of the Company’s customers; (xii) competition the Company faces in its industry and/or marketplace; (xiii) the final determination of litigation, tax audits (including tax examinations in Canada, the United States or elsewhere) and other legal proceedings; (xiv) potential exposure to greater than anticipated tax liabilities or expenses, including with respect to changes in Canadian, United States or international tax regimes; (xv) the possibility of technical, logistical or planning issues in connection with the deployment of the Company’s products or services; (xvi) the continuous commitment of the Company’s customers; (xvii) demand for the Company’s products and services; (xviii) increase in exposure to international business risks including the impact of geopolitical instability, political unrest, war and other global conflict…

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Current wording

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. The risks and uncertainties that may affect forward-looking statements include, but are not limited to: (i) our inability to realize successfully any anticipated synergy benefits from acquisitions; (ii) the actual and potential impacts of the use of cash and incurrence of indebtedness, including the granting of security interests related to such debt; (iii) the change in scope and size of our operations as a result of acquisitions or divestitures and risks relating to any such acquisitions or divestitures and the impact of divestitures on our remaining business, including our agreement to divest an on-premise solution (eDOCS); (iv) the uncertainty around expectations related to the business prospects from potential acquisitions; (v) integration of acquisitions and related restructuring efforts, including the quantum of restructuring charges and the timing thereof; (vi) the possibility that we may be unable to successfully integrate the assets we acquire or fail to utilize such assets to their full capacity and not realize the benefits we expect from our acquired portfolios and businesses; (vii) the potential for the incurrence of or assumption of debt in connection with acquisitions, its impact on future operations and on the ratings or outlooks of rating agencies on our outstanding debt securities, the possibility of not being able to generate sufficient cash to service all indebtedness, and our ability to reduce our outstanding debt; (viii) the possibility that the Company may be unable to meet its future reporting requirements under the Exchange Act, and the rules promulgated thereunder, or applicable Canadian securities regulation; (ix) the risks associated with bringing new products and services to market; (x) fluctuations in currency exchange rates (including as a result of the impact of any policy changes resulting from trade and tariff disputes) and the impact of mark-to-market valuation relating to associated derivatives; (xi) delays in the purchasing decisions of the Company’s customers; (xii) competition the Company faces in its industry and/or marketplace; (xiii) the final determination of litigation, tax audits (including tax examinations in Canada, the United States or elsewhere) and other legal proceedings; (xiv) potential exposure to greater than anticipated tax liabilities or expenses, including with respect to changes in Canadian, United States or international tax regimes; (xv) the possibility of technical, logistical or planning issues in connection with the deployment of the Company’s products or services; (xvi) the continuous commitment of the Company’s customers; (xvii) demand for the Company’s products and services; (xviii) increase in e…

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Previous wording

All dollar and percentage comparisons made herein refer to the three and nine months ended March 31, 2025 compared with the three and nine months ended March 31, 2024, unless otherwise noted.

Current wording

All dollar and percentage comparisons made herein refer to the three months ended September 30, 2025, compared with the three months ended September 30, 2024, unless otherwise noted.

Previous wording

Our 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. We have a complete and integrated portfolio of Information Management solutions delivered at scale in the OpenText Cloud, helping organizations master modern work, automate application delivery and modernization and optimize their digital supply chains. To do this, we bring together our Content Cloud, Cybersecurity Cloud, Business Network Cloud, IT Operations Management Cloud, Application Modernization Cloud and Analytics Cloud. We also accelerate 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.

Current wording

Our 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. We have a complete and integrated portfolio of Information Management solutions delivered at scale in the OpenText Cloud, helping organizations master modern work, automate application delivery and modernization, and optimize their digital supply chains. To do this, we bring together our seven product categories (previously referred to as business clouds): Content, Business Network, IT Operations Management (ITOM, also known as Observability and Service Management),Cybersecurity (Enterprise), Cybersecurity (SMB & Consumer), Application Delivery Management (ADM, also known as DevOps and previously named as Application Automation) and Analytics. We also accelerate information modernization with intelligent tools and services for moving off paper, automating classification and building clean data lakes for AI, analytics and automation.

Previous wording

We are fundamentally integrated into the parts of our customers’ businesses that matter, so they can securely manage the complexity of information flow end to end. Through automation and AI, we connect, synthesize and deliver information where it is needed to drive new efficiencies, experiences and insights. We make information more valuable by connecting it to digital business processes, enriching it with analytics, protecting and securing it throughout its entire lifecycle, and leveraging it to create engaging experiences for employees, suppliers, developers, partners, and customers. Our solutions range from connecting large digital supply chains to managing HR processes to driving better IT service management in manufacturing, retail and financial services.

Current wording

We are fundamentally integrated into the parts of our customers’ businesses that matter, so they can securely manage the complexity of information flow end to end. Through automation and AI, we connect, synthesize and deliver information where it is needed to drive new efficiencies, experiences and insights. We make information more valuable by connecting it to digital business processes, enriching it with analytics, protecting and securing it throughout its entire lifecycle, and leveraging it to create engaging experiences for employees, suppliers, developers, partners, and customers. Our solutions connect large digital supply chains, information technology (IT) service management ecosystems, application development and delivery workflows, and processes in many industries including manufacturing, healthcare and life sciences, energy, retail and financial services. Our solutions also enable organizations and consumers to secure their information so that they can collaborate with confidence, stay ahead of the regulatory technology curve and identify threats across their endpoints and networks. With a multi-layered security approach, we have a wide range of OpenText Cybersecurity solutions that power and protect at the data management layer, at the infrastructure and application layers, at the code, and at the edge, offering insights and threat intelligence across it all.

Previous wording

As of March 31, 2025, we employed a total of approximately 21,700 individuals. Of the total 21,700 individuals we employed as of March 31, 2025, 7,500 or 35% are in the Americas, 4,800 or 22% are in EMEA and 9,400 or 43% are in Asia Pacific. Currently, we have employees in 42 countries enabling strong access to multiple talent pools while ensuring reach and proximity to our customers. See “Results of Operations” below for our definitions of geographic regions.

Current wording

As of September 30, 2025, we employed a total of approximately 21,200 individuals. Of the total 21,200 individuals we employed as of September 30, 2025, approximately 7,300 or 34% are in the Americas, 4,800 or 23% are in EMEA and 9,100 or 43% are in Asia Pacific. Currently, we have employees in 42 countries enabling strong access to multiple talent pools while ensuring reach and proximity to our customers. See “Results of Operations” below for our definitions of geographic regions.

Previous wording

During the third quarter of Fiscal 2025 we saw the following activity, as compared to the third quarter of Fiscal 2024, which includes the results of the AMC Business prior to the AMC Divestiture, which has an impact on period-over-period comparisons. See “Divestiture of AMC Business” under “Results of Operations”, below for more details:

Current wording

During the first quarter of Fiscal 2026, we saw the following activity as compared to the first quarter of Fiscal 2025:

Previous wording

•Total annual recurring revenue, which we define as the sum of cloud services and subscriptions revenue and customer support revenue, was $1,030.0 million, down 10.1% compared to the same period in the prior fiscal year; down 8.7% after factoring in the unfavorable impact of $16.2 million of foreign exchange rate changes.

Current wording

•Total annual recurring revenue, which we define as the sum of cloud services and subscriptions revenue and customer support revenue, was $1,071.4 million, up 1.8% compared to the same period in the prior fiscal year; down 0.3% after factoring in the favourable impact of $22.4 million of foreign exchange rate changes.

Previous wording

•Cloud services and subscriptions revenue was $462.6 million, up 1.8% compared to the same period in the prior fiscal year; up 3.0% after factoring in the unfavorable impact of $5.4 million of foreign exchange rate changes.

Current wording

•Cloud services and subscriptions revenue was $484.5 million, up 6.0% compared to the same period in the prior fiscal year; up 4.2% after factoring in the favourable impact of $8.2 million of foreign exchange rate changes.

Previous wording

•GAAP-based earnings per share (EPS), diluted, was $0.35 compared to $0.36 in the same period in the prior fiscal year.

Current wording

•GAAP-based earnings per share (EPS), diluted, was $0.58 compared to $0.32 in the same period in the prior fiscal year.

Previous wording

•Non-GAAP-based EPS, diluted, was $0.82 compared to $0.94 the same period in the prior fiscal year.

Current wording

•Non-GAAP-based EPS, diluted, was $1.05 compared to $0.93 the same period in the prior fiscal year.

Previous wording

•Adjusted EBITDA, a non-GAAP measure, was $395.3 million compared to $463.7 million in the same period in the prior fiscal year.

Current wording

•Adjusted EBITDA, a non-GAAP measure, was $467.4 million compared to $443.8 million in the same period in the prior fiscal year.

Previous wording

•Operating cash flow was $672.4 million for the nine months ended March 31, 2025 compared to $782.5 million in the same period in the prior fiscal year, down 14.1%.

Current wording

•Operating cash flow was $147.8 million for the three months ended September 30, 2025 compared to $(77.8) million in the same period in the prior fiscal year, up 289.9%.

Previous wording

•Cash and cash equivalents were $1,278.0 million as of March 31, 2025, compared to $1,280.7 million as of June 30, 2024.

Current wording

•Cash and cash equivalents were $1,087.1 million as of September 30, 2025, compared to $1,156.5 million as of June 30, 2025.

Previous wording

•Enterprise cloud bookings were $151.2 million, compared to $165.1 million in the same period in the prior fiscal year. We define Enterprise cloud bookings as the total value from cloud services and subscription contracts entered into in the period that is new, committed and incremental to our existing contracts, entered into with our enterprise-based customers.

Current wording

•Enterprise cloud bookings were $160.4 million, compared to $133.5 million in the same period in the prior fiscal year. We define Enterprise cloud bookings as the total value from cloud services and subscriptions contracts entered into in the period that are new, committed and incremental to our existing contracts, entered into with our enterprise-based customers.

Previous wording

•During the three months ended March 31, 2025, we repurchased and cancelled 4,350,716 Common Shares for $116.7 million, inclusive of 2% Canadian excise taxes recorded (nil in the three months ended March 31, 2024).

Current wording

•During the three months ended September 30, 2025, we repurchased and cancelled 3,156,323 Common Shares for $102.0 million, inclusive of 2% Canadian excise taxes recorded (2,649,131 for $86.5 million in the three months ended September 30, 2024).

Previous wording

As a result of the continually changing marketplace in which we operate, we regularly evaluate acquisition opportunities within our market and at any time may be in various stages of discussions with respect to such opportunities.

Current wording

As a result of the continually changing marketplace in which we operate and our strategic objectives, we regularly evaluate acquisition and divestiture opportunities within our market and at any time may be in various stages of discussions with respect to such opportunities.

Previous wording

The expanded Business Optimization Plan along with other savings initiatives, when fully implemented, is expected to generate total annualized savings of approximately $490.0 million to $550.0 million, an increase of $340.0 million to $400.0 million on an annualized basis. Of this, approximately 50% will be realized in Fiscal 2026, with the remaining annualized benefit to be realized in Fiscal 2027. See Note 23 “Subsequent Events” to our Condensed Consolidated Financial Statements for additional details on the expansion of the Business Optimization Plan.

Current wording

The Business Optimization Plan along with other savings initiatives, when fully implemented, is expected to generate total annualized savings of approximately $490.0 million to $550.0 million. The Company has realized approximately 35% of these savings during Fiscal 2025 and expects to realize an additional 35% in Fiscal 2026, with the balance thereafter. The entire business optimization plan is expected to be substantially completed by the second quarter of Fiscal 2027. See Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for Fiscal 2025.

Previous wording

We conduct business globally and are subject to a complex and evolving international trade environment. Recent trade tensions among major economies, including the United States, Canada, China, the European Union and others, have led to the imposition of tariffs and other restrictive measures. These tariffs do not currently include software, services, intangibles, and other digital services; however, we cannot predict future trade policy or tariffs, including the impact or timing thereof, or whether such services will be subject to any form of tariffs or other restrictions in the future. We also cannot predict the impact that such tariffs and other restrictive measures will have on the macroeconomic environment or to our customers, which could impact our business and our results of operations.

Current wording

We conduct business globally and are subject to a complex and evolving international trade environment. Recent trade tensions among major economies, including the United States, Canada, China, the European Union and others, have led to the dissolution of trade agreements and the imposition of tariffs and other restrictive measures. These tariffs and other restrictive measures do not currently target digital goods and services, including software, services, intangibles or other digital services; however, we cannot predict future trade policy or tariffs, including whether such digital goods and services will be subject to any form of tariffs or other restrictions in the future, or the timing of any impacts thereof. We also cannot predict the impact that such tariffs and other restrictive measures will have on the macroeconomic environment or our customers, which could adversely impact our business and our results of operations.

Previous wording

We will continue to closely monitor the potential impacts of inflation with respect to wages, services and goods, concerns regarding any potential recession, higher interest rates, potential increases or changes in global tariff policies and structures and other trade policies, financial market volatility, the Russia-Ukraine and Middle East conflicts and other geopolitical disputes on our business. See Part II, Item 1A “Risk Factors” herein and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for Fiscal 2024.

Current wording

We will continue to closely monitor the potential impacts of changes in global tariff policies and structures and other trade policies, or related impacts on the global economy arising from the current geopolitical climate, such as inflation with respect to wages, services and goods, concerns regarding any potential recession, volatile interest rates, financial market volatility, or other impacts from the Russia-Ukraine and Middle East conflicts and other geopolitical disputes on our business. See Part II, Item 1A “Risk Factors” herein and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for Fiscal 2025.

Previous wording

In connection with the AMC Divestiture, we entered into a TSA with Rocket Software, whereby we agreed to provide certain transition services to Rocket Software for up to 24 months from May 1, 2024. These transition service costs are reimbursable by Rocket Software. During the three and nine months ended March 31, 2025, we billed Rocket Software $4.2 million and $31.4 million, respectively, under the TSA. The following table illustrates the financial statement impact of these TSA reimbursements, which have been recorded as an offset to the respective costs incurred, within our Condensed Consolidated Statements of Income. Substantially all of the transition services pursuant to the TSA were completed as of the quarter ended March 31, 2025.

Current wording

On May 1, 2024, the Company completed the sale of its AMC business to Rocket Software, Inc. (Rocket Software). The AMC business was comprised of the legacy OpenText connectivity business and the legacy Micro Focus AMC business. In connection with the AMC Divestiture, we entered into a Transition Services Agreement (TSA) with Rocket Software, whereby we agreed to provide certain transition services to Rocket Software for up to 24 months from the closing date. These transition service costs were reimbursable by Rocket Software. The following table illustrates the financial statement impact of these TSA reimbursements for the three months ended September 30, 2024 which were recorded as an offset to the respective costs incurred, within our Condensed Consolidated Statements of Income. All transition services pursuant to the TSA were completed as of June 30, 2025.

Previous wording

(4)Asia Pacific primarily consists of Japan, Australia, China, Korea, Philippines, Singapore, India and New Zealand.

Current wording

(4)Asia Pacific primarily consists of Australia, Japan, Singapore, India and China.

Previous wording

Cloud services and subscriptions revenues are from hosting arrangements where in connection with the licensing of software, the end user does not take possession of the software, as well as from end-to-end fully outsourced business-to-business integration solutions to our customers (collectively referred to as cloud arrangements). The software application resides on our hardware or that of a third party, and the customer accesses and uses the software on an as-needed basis via an identified line. Our cloud arrangements can be broadly categorized as platform as a service, software as a service, cloud subscriptions and managed services.

Current wording

Cloud services and subscriptions revenues are from hosting arrangements where in connection with the licensing of software, the end user does not take possession of the software, as well as from end-to-end fully outsourced business-to-business integration solutions to our customers (collectively referred to as cloud arrangements). The software application resides on our hardware or that of a third party, and the customer accesses and uses the software on an as-needed basis via an identified line. Our cloud arrangements can be broadly categorized as platform as a service, software as a service, cloud subscriptions and managed services. For the quarter ended September 30, 2025, our cloud net renewal rate, excluding the impact of Carbonite Inc. and Zix Corporation, increased to 96%, compared to 94% for the quarter ended September 30, 2024.

Previous wording

Cloud services and subscriptions revenues increased by $26.3 million or 1.9% during the nine months ended March 31, 2025 as compared to the same period in the prior fiscal year; up 2.3% after factoring in the unfavorable impact of $4.7 million of foreign exchange rate changes. Geographically, the overall change was attributable to an increase in EMEA of $24.8 million, an increase in Americas of $1.9 million, partially offset by a decrease in Asia Pacific of $0.5 million.

Current wording

Cloud services and subscriptions revenues increased by $27.5 million or 6.0% during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year; up 4.2% after factoring in the favourable impact of $8.2 million of foreign exchange rate changes. The change was primarily driven by increases in the Content, Business Network, ADM and ITOM product categories, partly offset by a decrease in the Cybersecurity (SMB & Consumer) and Analytics product categories. Geographically, the overall change was attributable to an increase in EMEA of $19.1 million, an increase in Americas of $8.5 million, and a decrease in Asia Pacific of $0.1 million.

Previous wording

There were 32 cloud services contracts greater than $1.0 million that closed during the third quarter of Fiscal 2025, compared to 28 contracts during the third quarter of Fiscal 2024.

Current wording

There were 33 cloud services contracts greater than $1.0 million that closed during the first quarter of Fiscal 2026, compared to 23 contracts during the first quarter of Fiscal 2025.

Previous wording

Cost of Cloud services and subscriptions revenues decreased by $12.2 million during the three months ended March 31, 2025 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in third-party network usage fees of $7.3 million and a decrease in labour-related costs of $5.1 million. Overall, the gross margin percentage on Cloud services and subscriptions revenues increased to 62% from 59%.

Current wording

Cost of Cloud services and subscriptions revenues decreased by $3.0 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $4.4 million, partially offset by an increase in third-party network usage fees of $2.0 million. Overall, the gross margin percentage on Cloud services and subscriptions revenues increased to 64% from 62%.

Previous wording

Customer support revenues consist of revenues from our customer support and maintenance agreements. These agreements allow our customers to receive technical support, enhancements and upgrades to new versions of our software products when available. Customer support revenues are generated from support and maintenance relating to current year sales of software products and from the renewal of existing maintenance agreements for software licenses sold in prior periods. Therefore, changes in Customer support revenues do not always correlate directly to the changes in license revenues from period to period. The terms of support and maintenance agreements are typically twelve months, and are renewable, generally on an annual basis, at the option of the customer. Our management reviews our customer support renewal rates on a quarterly basis, and we use these rates as a method of monitoring our customer service performance.

Current wording

Customer support revenues consist of revenues from our customer support and maintenance agreements. These agreements allow our customers to receive technical support, enhancements and upgrades to new versions of our software products when available. Customer support revenues are generated from support and maintenance relating to current year sales of software products and from the renewal of existing maintenance agreements for software licenses sold in prior periods. Therefore, changes in Customer support revenues do not always correlate directly to the changes in license revenues from period to period. The terms of support and maintenance agreements are typically twelve months, and are renewable, generally on an annual basis, at the option of the customer. Our management reviews our customer support renewal rates on a quarterly basis, and we use these rates as a method of monitoring our customer service performance. For the quarter ended September 30, 2025, our customer support net renewal rate remained stable at 91% as compared to the quarter ended September 30, 2024.

Previous wording

Cost of Customer support revenues decreased by $12.9 million during the three months ended March 31, 2025 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $11.5 million over the comparative period. Overall, the gross margin percentage on Customer support revenues remained stable at 89%.

Current wording

Cost of Customer support revenues increased by $1.5 million during the three months ended September 30, 2025 as compared to the same period in the prior fiscal year. This was primarily due to an increase in labour-related costs of $2.4 million, partially offset by a decrease in third-party network usage fees of $0.8 million, as compared to the same period in the prior fiscal year. Overall, the gross margin percentage on Customer support revenues remained stable at 89%.

Previous wording

During the third quarter of Fiscal 2025, we closed 51 license contracts greater than $0.5 million, of which 19 contracts were greater than $1.0 million, contributing $52.2 million of License revenues. This was compared to 55 license contracts greater than $0.5 million during the third quarter of Fiscal 2024, of which 23 contracts were greater than $1.0 million, contributing $92.3 million of License revenues.

Current wording

During the first quarter of Fiscal 2026, we closed 40 license contracts greater than $0.5 million, of which 9 contracts were greater than $1.0 million, contributing $56.1 million of License revenues. This was compared to 39 license contracts greater than $0.5 million during the first quarter of Fiscal 2025, of which 15 contracts were greater than $1.0 million, contributing $39.6 million of License revenues.

Previous wording

Cost of License revenues increased by $0.7 million during the three months ended March 31, 2025 as compared to the same period in the prior fiscal year. Overall, the gross margin percentage on License revenues decreased to 95% from 97%.

Current wording

Cost of License revenues increased by $0.4 million during the three months ended September 30, 2025 as compared to the same period in the prior fiscal year. Overall, the gross margin percentage on License revenues remained stable at 95%.

Previous wording

Cost of Professional service and other revenues decreased by $10.0 million during the three months ended March 31, 2025 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $10.1 million. Overall, the gross margin percentage on Professional service and other revenues decreased to 24% from 25%.

Current wording

Cost of Professional service and other revenues decreased by $3.9 million during the three months ended September 30, 2025 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $4.3 million. Overall, the gross margin percentage on Professional service and other revenues decreased to 23% from 26%.

Previous wording

Amortization of acquired technology-based intangible assets decreased during the three months ended March 31, 2025 by $0.9 million as compared to the same period in the prior fiscal year. This was primarily due to a reduction in amortization related to technology-based intangible assets from previous acquisitions becoming fully amortized.

Current wording

Amortization of acquired technology-based intangible assets decreased during the three months ended September 30, 2025 by $3.0 million as compared to the same period in the prior fiscal year. This was primarily due to a reduction in amortization related to technology-based intangible assets from previous acquisitions becoming fully amortized.

Previous wording

Research and development expenses decreased by $29.2 million during the three months ended March 31, 2025 as compared to the same period in the prior fiscal year. Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $11.8 million, facility-related expenses decreased by $6.1 million, share-based compensation expense decreased by $5.0 million and contract labour and consulting expense decreased by $3.5 million. Overall, our research and development expenses, as a percentage of total revenues, remained stable at 16% as compared to the same period in the prior fiscal year.

Current wording

Research and development expenses decreased by $21.6 million during the three months ended September 30, 2025 as compared to the same period in the prior fiscal year, primarily from restructuring and other cost savings initiatives. Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $13.2 million, share-based compensation expense decreased by $4.6 million, and contract labour and consulting expense decreased by $3.8 million. Overall, our research and development expenses, as a percentage of total revenues, decreased to 13% down from 15% in the same period in the prior fiscal year.

Previous wording

Our research and development labour resources decreased by 608 employees, from 7,980 employees at March 31, 2024 to 7,372 employees at March 31, 2025.

Current wording

Our research and development labour resources decreased by 397 employees, from 7,426 employees at September 30, 2024 to 7,029 employees at September 30, 2025.

Previous wording

Our sales and marketing labour resources decreased by 486 employees, from 4,520 employees at March 31, 2024 to 4,034 employees at March 31, 2025.

Current wording

Our sales and marketing labour resources increased by 154 employees, from 3,922 employees at September 30, 2024 to 4,076 employees at September 30, 2025.

Previous wording

Our general and administrative labour resources decreased by 507 employees, from 3,514 employees at March 31, 2024 to 3,007 employees at March 31, 2025.

Current wording

Our general and administrative labour resources decreased by 446 employees, from 3,242 employees at September 30, 2024 to 2,796 employees at September 30, 2025.

Previous wording

Depreciation expenses decreased during the nine months ended March 31, 2025 by $3.1 million compared to the same period in the prior fiscal year. Depreciation expenses, as a percentage of total revenue, remained stable for the nine months ended March 31, 2025 at 3% as compared to the same period in the prior fiscal year.

Current wording

Depreciation expenses increased during the three months ended September 30, 2025 by $3.8 million compared to the same period in the prior fiscal year. Depreciation expenses, as a percentage of total revenues, remained stable for the three months ended September 30, 2025 at 3% as compared to the same period in the prior fiscal year.

Previous wording

Amortization of acquired customer-based intangible assets decreased during the three months ended March 31, 2025 by $21.2 million, as compared to the same period in the prior fiscal year. This was primarily due to a reduction in amortization related to customer-based intangible assets from previous acquisitions becoming fully amortized.

Current wording

Amortization of acquired customer-based intangible assets decreased during the three months ended September 30, 2025 by $1.9 million as compared to the same period in the prior fiscal year. This was due to a reduction in amortization related to customer-based intangible assets from previous acquisitions becoming fully amortized.

Previous wording

Special charges (recoveries) decreased by $15.7 million during the three months ended March 31, 2025 over the comparative period. This was primarily due to a decrease in restructuring costs related to the Micro Focus Acquisition of $9.6 million and a decrease in divestiture costs of $6.9 million, partially offset by an increase related to the Business Optimization Plan of $2.3 million, as compared to the same period in the prior fiscal year.

Current wording

Special charges (recoveries) decreased by $27.0 million during the three months ended September 30, 2025 as compared to the same period in the prior fiscal year. This was due to a decrease in restructuring costs of $28.9 million, primarily related to the timing of Business Optimization Plan initiatives, and a decrease in divestiture costs of $3.2 million, partially offset by an increase in other miscellaneous charges of $5.9 million, as compared to the same period in the prior fiscal year.