OpenText beats expectations thanks to strong cloud growth in Q2

OpenText has beat analyst expectations in its latest earnings report, thanks to the growth of the Kitchener-Waterloo-based company’s cloud services.

The company, which announced its Q2 earnings after market hours on Thursday, reported $1.33 billion USD in revenue, a dip of 0.6 percent year over year, but above the $1.29 billion USD expected. That’s contrasted by 3.4 percent growth in the company’s cloud business and an 18 percent year-over-year increase in its content management enterprise cloud bookings—meaning its cloud service and subscription contracts—representing some $295 million USD.

Earnings per share beat expectations by more than 10%.

“Our results for this quarter and the first half of ‘26 demonstrate our commitment to deliver on our objectives and maintain a steady ship as we continue to implement our strategy of reshaping our business to focus on our faster growing core businesses,” said interim CEO James McGourlay on Thursday’s earnings call.

Despite the flat revenue, McGourlay said the company’s current performance—especially its growing profit margin and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of 37%—broadly shore up OpenText’s financial outlook of one to two percent revenue growth as the company looks ahead to the 2026 fiscal year.

Founded in 1991, OpenText provides a suite of cloud-based information management solutions to businesses, competing with the likes of IBM, Abbyy, and Hyland. It employs more than 21,000 people, and brings in annual recurring revenue of more than $1 billion USD.

Over the last few years, the company has made AI one of its core business priorities. Last week, OpenText announced it would bring on Ayman Antoun, former president of IBM Americas where he led cloud and digital modernization, as its next CEO.

OpenText’s stock has had a rough start to 2026; shares of $OTEX are down 28 percent year-to-date on the Toronto Stock Exchange. However, it received a small bump after hours in response to the news of its Q2 performance, in a week where tech stocks—especially software—were broadly down.

Having just recently sold off analytics database Vertica (using the proceeds to pay down debt) as well as its eDOCS business, OpenText said it intends to continue divestment of non-core branches of the organization in favour of segments like cloud content management and AI.

“We remain committed to building a leaner OpenText, focused on growth and helping clients leverage enterprise content to train agentic AI,” P. Thomas Jenkins, OpenText’s executive chair and chief strategy officer, said in a statement.

Feature image courtesy Wikimedia Commons