OpenText Q2 Revenue Beats Estimates, Cloud Bookings Jump 18% as Divestitures Advance
OpenText reported $1.33 billion in Q2 revenue, beating $1.29 billion estimates despite a 0.6% year-over-year decline as management attributes the contraction to shedding non-core assets. Cloud revenue rose 3.4% to $478 million, with enterprise cloud bookings up 18% to $295 million and Content Cloud representing 43% of total revenue.
1. Q2 Financial Results
OpenText generated $1.33 billion in revenue for the December quarter, reflecting a 0.6% year-over-year decline but surpassing analyst expectations of $1.29 billion. Management noted the slight top-line contraction resulted from its strategic pivot away from non-core assets.
2. Cloud Segment Performance
Organic cloud revenue grew 3.4% to $478 million, marking the twentieth consecutive quarter of growth. The Content Cloud business accounted for 43% of total revenue with 4.5% growth, while enterprise cloud bookings jumped 18% to $295 million, exceeding full-year targets.
3. Divestiture of Non-Core Assets
During the quarter, OpenText completed the $163 million sale of its eDOCS on-premise solution and agreed to divest the Vertica analytics unit for $150 million in cash, subject to regulatory approval. These transactions are part of the company’s effort to streamline operations and focus on core growth areas.
4. Fiscal 2026 Guidance
The company reaffirmed its fiscal 2026 outlook, projecting total revenue growth of 1%–2% and cloud revenue growth of 3%–4%, reflecting the impact of recent divestitures. Management emphasized the importance of core asset expansion to drive future performance.