# Open Text (OTEX.TO)

Canonical: https://gigainvestors.com/s/OTEX.TO

Analysis as of: 2026-10-16T07:37:01.120Z. Financial observations: FY1997–FY2026.

Listing currency: CAD. Reporting currency: USD.

## Verdict

A wonderful business at a fair price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: yes.

Share price: CAD 36.63 per share; close as of 2026-10-15.

Estimated value: low CAD 66.28 per share, central CAD 74.74 per share, high CAD 85.99 per share. Buy at or below the central value CAD 74.74 per share. Valuation as of 2026-10-16T07:37:01.120Z; scenarios are not confidence intervals.

Expected annual return: 18.9% at the stated quote. About 18.9% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CA 10-year bond 3.8% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.18×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.15×

- FY2018: 0.18×

- FY2019: 0.20×

- FY2020: 0.16×

- FY2021: 0.22×

- FY2022: 0.18×

- FY2023: 0.12×

- FY2024: 0.15×

- FY2025: 0.17×

- FY2026: 0.23×

### moat: pass

- ROIC, median of available years: 23.9%

- ROIC, second-lowest year: 15.7%

- Typical minus recent gross margin: -3.1 pp

- Typical gross margin (annual median): 69.5%

- Recent gross margin (lower of latest and 3-year median): 72.6%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.8%

- ROIC including acquisitions, ten-year median: 10.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 15.7%

- FY2018: 15.8%

- FY2019: 20.6%

- FY2020: 16.2%

- FY2021: 28.8%

- FY2022: 31.7%

- FY2023: 10.4%

- FY2024: 27.2%

- FY2025: 42.5%

- FY2026: 53.5%

### economics: pass

- Owner earnings / net income, 5-yr: 2.06×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $4.3B

- Net income, five-year total: $2.1B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -0.6 pp

- Working capital / revenue, change between three-year averages: -4.7 pp

- Working capital / revenue, final three-year average: 13.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.91×

- FY2023: 4.07×

- FY2024: 2.27×

- FY2025: 2.02×

- FY2026: 1.57×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 15.8% vs 42.5%

- Per-share earnings: 1.15 to 1.71 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.1%

- Ordinary dilution, 5-year annual growth: -1.8%

- Market cap gain: -$2.3B

- Cumulative retained earnings: $118M

- Diluted shares, 10-year annual growth: 0.1%

- Diluted shares, 5-year annual growth: -1.8%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 5.1%

- Per-share value change: $0.56

- Per-share value, starting three-year median: $1.15

- Per-share value, ending three-year median: $1.71

- Buybacks concentrated in cheaper years (correlation): 0.35

- Average buyback yield: 2.7%

- Buyback history: 9 years

- Debt-funded buybacks: No

- Acquisition spending: $10B

- Cumulative net income, 10 years: $4.2B

- ROIC, first three-year median: 15.8%

- ROIC, last three-year median: 42.5%

Chart: Earnings per share; fiscal year observations.

- FY2017: $3.84

- FY2018: $0.90

- FY2019: $1.05

- FY2020: $0.86

- FY2021: $1.14

- FY2022: $1.47

- FY2023: $0.55

- FY2024: $1.71

- FY2025: $1.65

- FY2026: $2.58

### accounting: pass

- Sloan accruals: -2.8%

- Receivables to sales index (DSRI): 1.08×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 8.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.57×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 2.19×

Chart: Sloan accruals; fiscal year observations.

- FY2017: 7.8%

- FY2018: -6.0%

- FY2019: -7.4%

- FY2020: -7.0%

- FY2021: -5.9%

- FY2022: -5.7%

- FY2023: -3.7%

- FY2024: -3.5%

- FY2025: -2.9%

- FY2026: -2.8%

## Holders

- [Sarah Ketterer](https://gigainvestors.com/CAU): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 41% since Oct 2021 · sales +1.5%

Story as of 2026-10-16T10:00:08.486Z; price observation 2026-10-15.

Price needs cash profits to shrink 9.1% a year for ten years

- 2026-05-07: Open Text Up 1.3% After Hours as its Fiscal Q3 Profit Jumps, Beats Estimates ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/open-text-1-3-hours-202930348.html))

### Sales · FY2025–2026

sales +1.5%; source https://www.sec.gov/Archives/edgar/data/1002638/000100263826000068/otex-20260630.htm; observed 2026-08-06.

- FY2017: $2.3B 

- FY2018: $2.8B 

- FY2019: $2.9B 

- FY2020: $3.1B 

- FY2021: $3.4B 

- FY2022: $3.5B 

- FY2023: $4.5B 

- FY2024: $5.8B 

- FY2025: $5.2B 

- FY2026: $5.2B 

### Gross margin · FY2026

gross margin 73.7%; source https://www.sec.gov/Archives/edgar/data/1002638/000100263826000068/otex-20260630.htm; observed 2026-08-06.

- FY2017: 66.7% 

- FY2018: 66.2% 

- FY2019: 67.6% 

- FY2020: 67.7% 

- FY2021: 69.4% 

- FY2022: 69.6% 

- FY2023: 70.6% 

- FY2024: 72.6% 

- FY2025: 72.3% 

- FY2026: 73.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software application; annual sales are USD 5.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1002638/000100263826000068/otex-20260630.htm (filed 2026-08-06); FY2026: revenue 5246401000; grossProfit 3868461000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); OTEX.TO: Open Text Corporation provides data management solutions for enterprise AI in North, Central and South America, Europe, the Middle East, Africa, Australia, Japan, Singapore, India, and China. Its products and solutions help organizations collect, connect, contextualize, protect, govern, use, and secure data across their operations. The company offers cloud services and subscriptions, including software as a service offerings, application programming interfaces and data services, and private cloud products, such as hosted services and managed service arrangements; foundational platform of technology services; and packaged business applications, as well as managed services and outsourced B2B integration solutions, including program implementation, operational management, and customer support. It also engages in licensing software products to customers; and consulting and learning services, such as implementation, training, and integration of licensed product offerings into the customer's systems. In addition, the company offers content, business network, observability and service management, cybersecurity, application delivery management, and analytics. It has partnerships with SAP SE, Google Cloud, Amazon Web Services, Microsoft Corporation, Oracle Corporation, and SALESFORCE, INC., as well as global systems integrators, including Accenture plc, Capgemini Technology Services SAS, Deloitte Consulting LLP, Hewlett Packard Enterprises, and Tata Consultancy Services. The company serves global 10,000 organizations, enterprise companies, public sector agencies, mid-market companies, SMBS, and direct consumers. The company has a strategic partnership with Cohere to develops and provides agentic AI to governments and regulated industries. Open Text Corporation was incorporated in 1991 and is headquartered in Waterloo, Canada.

### Why customers stay

Margins ranged from 72.3% to 73.7% during 2024–26; it earns 23.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2024: grossProfit / revenue = 72.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2025: grossProfit / revenue = 72.3%.

- Source: https://www.sec.gov/Archives/edgar/data/1002638/000100263826000068/otex-20260630.htm (filed 2026-08-06); FY2026: grossProfit / revenue = 73.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); 10-year return on capital observations [[2017,0.15741353187613763],[2018,0.158420324708862],[2019,0.2061951442753114],[2020,0.16157913363632456],[2021,0.28827357400678805],[2022,0.3167022921971708],[2023,0.10414167678142341],[2024,0.2724279744980255],[2025,0.42529167592459255],[2026,0.5345787177119018]]; median 0.23931155938666848. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 70% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1002638/000100263826000068/otex-20260630.htm (filed 2026-08-06); Gross margin observations: [[2021,0.6944976765408145],[2022,0.6959792709691675],[2023,0.7064452907259341]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 469.3 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2017: growth capex 0; upkeep 79592000; owner earnings 1291782000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2018: growth capex 0; upkeep 105318000; owner earnings 593835000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2019: growth capex 0; upkeep 63837000; owner earnings 692592000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2020: growth capex 0; upkeep 72709000; owner earnings 620002800. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2021: growth capex 0; upkeep 63675000; owner earnings 711048400. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2022: growth capex 0; upkeep 93109000; owner earnings 756919000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2023: growth capex 0; upkeep 123832000; owner earnings 611297200. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2024: growth capex 0; upkeep 159295000; owner earnings 1054796000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); FY2025: growth capex 0; upkeep 143222000; owner earnings 880717400. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1002638/000100263826000068/otex-20260630.htm (filed 2026-08-06); FY2026: growth capex 0; upkeep 199300000; owner earnings 1010464600. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); Dividend observations: [[2017,120581000],[2018,145613000],[2019,168859000],[2020,186012904],[2021,218255834],[2022,233610741],[2023,262294588],[2024,267362000],[2025,271523000],[2026,268357000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1002638/000100263826000068/otex-20260630.htm (filed 2026-08-06); FY2026: cash repurchases 469312000 USD.

### Are managers owners

Insiders own 2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); OTEX.TO SharesStats.PercentInsiders = 2.023 percentage points; cache date 2026-10-16.

### What could break it

"Our indebtedness could limit our operations and opportunities." (SEC filing, Aug 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1002638/000100263826000068/otex-20260630.htm (filed 2026-08-06); Our indebtedness could limit our operations and opportunities.

### What the price says

The price assumes cash profits shrink 9.1% yearly over ten years; actual growth was 8.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-06); Ten-year compound average after fade. Initial solved rate -0.13994607726384484. Price 36.63; FX 1.4190435646374344; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 1.8457945624462124 → FY2026 4.052020868337791. Closing-price date 2026-10-15.

## Monthly share-price history (CAD per share)

- 2016-10: CAD 41.64 per share

- 2016-11: CAD 42.80 per share

- 2016-12: CAD 41.46 per share

- 2017-01: CAD 44.54 per share

- 2017-02: CAD 43.78 per share

- 2017-03: CAD 45.20 per share

- 2017-04: CAD 47.33 per share

- 2017-05: CAD 44.09 per share

- 2017-06: CAD 40.93 per share

- 2017-07: CAD 41.70 per share

- 2017-08: CAD 40.18 per share

- 2017-09: CAD 40.26 per share

- 2017-10: CAD 45.11 per share

- 2017-11: CAD 42.08 per share

- 2017-12: CAD 44.71 per share

- 2018-01: CAD 42.12 per share

- 2018-02: CAD 45.05 per share

- 2018-03: CAD 44.82 per share

- 2018-04: CAD 45.33 per share

- 2018-05: CAD 45.23 per share

- 2018-06: CAD 46.27 per share

- 2018-07: CAD 48.41 per share

- 2018-08: CAD 51.18 per share

- 2018-09: CAD 49.15 per share

- 2018-10: CAD 44.44 per share

- 2018-11: CAD 45.53 per share

- 2018-12: CAD 44.50 per share

- 2019-01: CAD 46.71 per share

- 2019-02: CAD 49.88 per share

- 2019-03: CAD 51.31 per share

- 2019-04: CAD 51.50 per share

- 2019-05: CAD 53.74 per share

- 2019-06: CAD 54.04 per share

- 2019-07: CAD 56.29 per share

- 2019-08: CAD 52.09 per share

- 2019-09: CAD 54.04 per share

- 2019-10: CAD 53.22 per share

- 2019-11: CAD 57.83 per share

- 2019-12: CAD 57.22 per share

- 2020-01: CAD 59.56 per share

- 2020-02: CAD 56.20 per share

- 2020-03: CAD 49.21 per share

- 2020-04: CAD 52.60 per share

- 2020-05: CAD 57.20 per share

- 2020-06: CAD 57.65 per share

- 2020-07: CAD 60.29 per share

- 2020-08: CAD 59.16 per share

- 2020-09: CAD 56.28 per share

- 2020-10: CAD 48.95 per share

- 2020-11: CAD 57.33 per share

- 2020-12: CAD 57.84 per share

- 2021-01: CAD 57.28 per share

- 2021-02: CAD 56.68 per share

- 2021-03: CAD 59.92 per share

- 2021-04: CAD 57.88 per share

- 2021-05: CAD 56.85 per share

- 2021-06: CAD 62.95 per share

- 2021-07: CAD 64.80 per share

- 2021-08: CAD 69.21 per share

- 2021-09: CAD 61.82 per share

- 2021-10: CAD 62.34 per share

- 2021-11: CAD 60.56 per share

- 2021-12: CAD 60.04 per share

- 2022-01: CAD 60.84 per share

- 2022-02: CAD 55.16 per share

- 2022-03: CAD 53.01 per share

- 2022-04: CAD 51.45 per share

- 2022-05: CAD 51.84 per share

- 2022-06: CAD 48.69 per share

- 2022-07: CAD 52.38 per share

- 2022-08: CAD 41.37 per share

- 2022-09: CAD 36.51 per share

- 2022-10: CAD 39.46 per share

- 2022-11: CAD 39.50 per share

- 2022-12: CAD 40.12 per share

- 2023-01: CAD 44.63 per share

- 2023-02: CAD 46.97 per share

- 2023-03: CAD 52.13 per share

- 2023-04: CAD 51.31 per share

- 2023-05: CAD 56.44 per share

- 2023-06: CAD 55.10 per share

- 2023-07: CAD 56.64 per share

- 2023-08: CAD 54.45 per share

- 2023-09: CAD 47.67 per share

- 2023-10: CAD 46.30 per share

- 2023-11: CAD 54.29 per share

- 2023-12: CAD 55.69 per share

- 2024-01: CAD 58.63 per share

- 2024-02: CAD 52.19 per share

- 2024-03: CAD 52.56 per share

- 2024-04: CAD 48.61 per share

- 2024-05: CAD 39.88 per share

- 2024-06: CAD 41.08 per share

- 2024-07: CAD 43.52 per share

- 2024-08: CAD 42.88 per share

- 2024-09: CAD 45.02 per share

- 2024-10: CAD 41.76 per share

- 2024-11: CAD 42.64 per share

- 2024-12: CAD 40.68 per share

- 2025-01: CAD 42.76 per share

- 2025-02: CAD 37.36 per share

- 2025-03: CAD 36.32 per share

- 2025-04: CAD 37.32 per share

- 2025-05: CAD 38.86 per share

- 2025-06: CAD 39.79 per share

- 2025-07: CAD 40.78 per share

- 2025-08: CAD 45.42 per share

- 2025-09: CAD 52.02 per share

- 2025-10: CAD 53.81 per share

- 2025-11: CAD 47.05 per share

- 2025-12: CAD 44.70 per share

- 2026-01: CAD 34.78 per share

- 2026-02: CAD 33.79 per share

- 2026-03: CAD 31.00 per share

- 2026-04: CAD 30.79 per share

- 2026-05: CAD 32.78 per share

- 2026-06: CAD 31.39 per share

- 2026-07: CAD 35.54 per share

- 2026-08: CAD 34.58 per share

- 2026-09: CAD 31.91 per share

- 2026-10: CAD 35.49 per share

## Annual estimated value (CAD per share)

- FY2017: low CAD 32.60 per share, central CAD 36.80 per share, high CAD 42.39 per share

- FY2018: low CAD 39.40 per share, central CAD 44.38 per share, high CAD 51.00 per share

- FY2019: low CAD 44.17 per share, central CAD 49.62 per share, high CAD 56.88 per share

- FY2020: low CAD 51.24 per share, central CAD 57.13 per share, high CAD 64.98 per share

- FY2021: low CAD 48.60 per share, central CAD 54.19 per share, high CAD 61.64 per share

- FY2022: low CAD 50.84 per share, central CAD 56.67 per share, high CAD 64.43 per share

- FY2023: low CAD 59.63 per share, central CAD 67.03 per share, high CAD 76.88 per share

- FY2024: low CAD 71.52 per share, central CAD 80.54 per share, high CAD 92.56 per share

- FY2025: low CAD 61.26 per share, central CAD 68.92 per share, high CAD 79.12 per share

- FY2026: low CAD 64.50 per share, central CAD 72.73 per share, high CAD 83.68 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1002638/000100263826000068/otex-20260630.htm); period 2026-06-30, filed 2026-08-06.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.