OTEX 10-K & 10-Q changes, risk factors and insider trading

If we do not continue to develop technologically advanced products that successfully integrate with the software products and enhancements used by our customers,clients, future revenues and our operating results may be negatively affected.

Our success depends upon our ability to design, develop, test, market, license, sell and support new software products and services and enhancements of current products and services on a timely basis in response to both competitive threats and marketplace demands. The software industry is increasingly focused on cloud computing, mobility, social media, SaaS and AI, among other continually evolving shifts. In addition, our software products, services and enhancements must remain compatible with standard platforms and file formats. Often, we must integrate software licensed or acquired from third parties with our proprietary software to create new products or improve our existing products. If we are unable to achieve a successful integration with third-party software, we may not be successful in developing and marketing our new software products, services and enhancements. If we are unable to successfully integrate third-party software to develop new software products, services and enhancements to existing software products and services, or to complete the development of new software products and services which we license or acquire from third parties, our operating results will be materially adversely affected. Further, as we develop, acquire and introduce new products and services, including those that incorporate AI, we may be subject to new or heightened legal, ethical and other challenges, which may impact our ability to continue to innovate. In addition, if the integrated or new products or enhancements do not achieve acceptance by the marketplace, our operating results will be materially adversely affected. Moreover, if new industry standards emerge that we do not anticipate or adapt to, or, if alternatives to our services and solutions are developed by our competitors in times of rapid technological change, our software products and services could be rendered less competitive or obsolete, causing us to lose market share and, as a result, harm our business and operating results and our ability to compete in the marketplace.

The development of informationdata management software products is a costly, complex and time-consuming process, and the investment in informationdata management software product development often involves a long wait until a return is achieved on such an investment. We are making, and will continue to make, significant investments in software research and development and related product and service opportunities. Investments in new technology and processes are inherently speculative. Commercial success depends on many factors, including the degree of innovation of the software products and services developed through our research and development efforts, sufficient support from our strategic partners and effective distribution and marketing. Accelerated software product introductions and short product life cycles require high levels of expenditures for research and development and the potential introduction of government regulation, including thatthose related to the use of AI, and may increase the costs of research and development as well as compliance with such regulation. These expenditures may adversely affect our operating results if they are not offset by corresponding revenue increases. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts in order to maintain our competitive position. However, significant revenues from new software product and service investments may not be achieved for a number of years, if at all. Moreover, new software products and services may not be profitable, and even if they are profitable, operating margins for new software products and services may not be as high as the margins we have experienced for our current or historical software products and services.

We intend to pursue our strategy of beingstrengthening aour marketposition leadingin consolidatordata management by helping organizations manage and govern enterprise data for cloud-basedAI-enabled information management solutions.applications. We intend to grow the capabilities of our informationdata management software offerings through our proprietary research and the development of new software product and service offerings, as well as through acquisitions. It is important to our success that we continue to enhance our software products and services in response to customerclient demand and to seek to set the standard for informationdata management capabilities.capabilities that enable clients’ increasing adoption of enterprise AI. The primary market for our software products and services is rapidly evolving, and the level of acceptance of products and services that have been released recently, or that are planned for future release to the marketplace, is not certain. If the markets for our software products and services fail to develop, develop more slowly than expected or become subject to increased competition, our business may suffer. As a result, we may be unable to: (i) successfully market our current products and services; (ii) develop new software products and services and enhancements to current software products and services; (iii) complete customerclient implementations on a timely basis; or (iv) complete software products and services currently under development. In addition, increased competition and transitioning from perpetual license sales to subscription-based business model could put significant pricing pressures on our products,products and result in revenue mix shifts that affect the timing and recognition of our revenues, which could negatively impact our margins and profitability. If this transition does not proceed as anticipated, or if clients do not adopt our cloud offerings at the rate or on the timeline we expect, our operating results may be adversely affected. If our software products and services are not accepted by our customersclients or by other businesses in the marketplace, our business, operating results and financial condition will be materially adversely affected.

We are highly dependent on our ability to protect our proprietary technology. We rely on a combination of copyright, patent, trademark and trade secret laws, as well as non-disclosure agreements and other contractual provisions, to establish and maintain our proprietary rights. We intend to protect our intellectual property rights vigorously; however, there can be no assurance that these measures will, in all cases, be successful, and these measures can be costly and/or subject us to counterclaims, including challenges to the validity and enforceability of our intellectual property rights. Enforcement of our intellectual property rights may be difficult, particularly in some countries outside of North America in which we seek to market our software products and services. While Canadian and U.S. copyright laws, international conventions and international treaties may provide meaningful protection against unauthorized duplication of software, the laws of some foreign jurisdictions may not protect proprietary rights to the same extent as the laws of Canada or the United States. The absence of internationally harmonized intellectual property laws makes it more difficult to ensure consistent protection of our proprietary rights. Additionally, the laws and enforcement mechanisms to protect our intellectual property from unauthorized use in new technologies like AI and other machine learning technology are evolving and may be inadequate.inadequate, including the risk that third parties may use our proprietary software, content or outputs to train AI models without authorization. Furthermore, our own use of AI in developing our products may create uncertainty regarding the ownership, validity or enforceability of the resulting intellectual property, as the legal framework governing the protectability of AI-generated or AI-assisted works and inventions remains unsettled. Software piracy has been, and is expected to be, a persistent problem for the software industry, and piracy of our software products represents a loss of revenue to us. Where applicable, certain of our license arrangements have required us to make a limited confidential disclosure of portions of the source code for our software products, or to place such source code into escrow for the protection of another party. Despite the precautions we have taken, unauthorized third parties, including our competitors, may be able to copy certain portions of our software products or reverse engineer or obtain and use information that we regard as proprietary. Our competitive position may be adversely affected by our possible inability to effectively protect our intellectual property. In addition, certain of our products or proprietary software contain, link to or are derived from open source software. Licensees of open source software may be required to make public certain source code, to license proprietary software for free or to permit others to create derivative works of proprietary software. The use of certain open source software can also expose us to greater risks than use of third-party commercial software, as open source licensors generally do not provide support warranties, indemnification, or other contractual protection regarding infringement claims or the quality of the code. While we monitor and control the use of open source software in our products and in any third-party software that is incorporated into or linked to our products or software, and try to ensure that no open source software is used in such a way that negatively affects our proprietary software, there can be no guarantee that such use does not occur inadvertently, which in turn, could harm our intellectual property position and have a material adverse effect on our business, results of operations and financial condition. Further, any undetected errors or defects in open source software could prevent the deployment or impair the functionality of our software products, delay the introduction of new solutions, or render our software more vulnerable to breaches or security attacks.

Claims of infringement (including misappropriation and/or other intellectual property violation) are common in the software industry and increasing as related legal protections, including copyrights and patents, are applied to software products. Although most of our technology is proprietary in nature, we do include certain third-party and open source software in our software products. In the case of third-party software, we believe this software is licensed from the entity holding the intellectual property rights. While we believe that we have secured proper licenses for all material third-party intellectual property that is integrated into our products in a manner that requires a license, third parties have and may continue to assert infringement claims against us in the future.

In particular, our efforts to protect our intellectual property through patent litigation may result in counterclaims of patent infringement by counterparties in such suits. Any such assertion, regardless of merit, may result in litigation or require us to obtain a license for the intellectual property rights of third parties. Such licenses may not be available, or they may not be available on commercially reasonable terms. In addition, as we continue to develop software products and expand our portfolio using new technology and innovation, including AI and machine learning technologies, our exposure to threats of infringement may increase. Any infringement claims and related litigation could be time-consuming and disruptive to our ability to generate revenues or enter into new market opportunities and may result in significantly increased costs as a result of our defense against those claims or our attempt to license the intellectual property rights or rework our products to avoid infringement of third-party rights. With certain exceptions, our agreements with our partners and customersclients typically contain provisions that require us to indemnify them for damages sustained by them as a result of any infringement claims involving our products. Any of the foregoing infringement claims and related litigation could have a material adverse impact on our business and operating results as well as on our ability to generate future revenues and profits.

Our software products and services are highly complex and sophisticated and, from time to time, may contain design defects, software errors, hardware failures or other computer system failures that are difficult to detect and correct. Errors, defects and/or other failures may be found in new software products or services or improvements to existing products or services after delivery to our customers,clients, including as a result of the introduction of new and emerging technologies such as AI. If these defects, errors and/or other failures are discovered, we may not be able to successfully correct them in a timely manner. In addition, despite the extensive tests we conduct on all our software products or services, we may not be able to fully simulate the environment in which our products or services will operate and, as a result, we may be unable to adequately detect the design defects or software or hardware errors that may become apparent only after the products are installed in an end-user’s network, and only after users have transitioned to our services. The occurrence of errors, defects and/or other failures in our software products or services could result in the delay or the denial of market acceptance of our products and alleviating such errors, defects and/or other failures may require us to make significant expenditure of our resources. CustomersClients often use our services and solutions for critical business processes and, as a result, any defect or disruption in our solutions, any data breaches or misappropriation of proprietary information or any error in execution, including human error or intentional third-party activity such as denial of service attacks or hacking, may cause customersclients to reconsider renewing their contracts with us. The errors in or failure of our software products and services could also result in us losing customerclient transaction documents and other customerclient files, causing significant customerclient dissatisfaction and possibly giving rise to claims for monetary damages. The harm to our reputation resulting from product and service errors, defects and/or other failures may be material. Since we regularly provide a warranty with our software products, the financial impact of fulfilling warranty obligations may be significant in the future. Our agreements with our strategic partners and end-users typically contain provisions designed to limit our exposure to claims. These agreements regularly contain terms such as the exclusion of all implied warranties and the limitation of the availability of consequential or incidental damages. However, such provisions may not effectively protect us against claims and the attendant liabilities and costs associated with such claims. Any claims for actual or alleged losses to our customers’clients’ businesses may require us to spend significant time and money in litigation or arbitration or to pay significant sums in settlements or damages. Defending a lawsuit, regardless of merit, can be costly and would divert management’s attention and resources. Although we maintain errors and omissions insurance coverage and comprehensive liability insurance coverage, such coverage may not be adequate to cover all such claims. Accordingly, any such claim could negatively affect our business, operating results or financial condition.

Our software products rely on the stability of third-party software, cloud infrastructure softwareand platforms that, if not stable, could negatively impact the effectiveness of our products, resulting in harm to our reputation and business.

Our development of Internetour software products and intranet applicationsservices depends on the stability, functionality and scalability of theunderlying third-party infrastructure software of the underlying intranet,software, such as theoperating infrastructuresystems, softwaredatabases and middleware produced by Hewlett-Packard, Oracle, Microsoft and others. If weaknesses in such infrastructure software exist, we may not be able to correct or compensate for such weaknesses. If we are unable to address weaknesses resulting from problems in the infrastructure software such that our software products do not meet customerclient needs or expectations, our reputation, and consequently, our business, may be significantly harmed.

Risks associated with the evolving use of the Internet,Internet and AI, including changing standards, competition and regulation and associated compliance efforts, may adversely impact our business.

The use of the Internet as a vehicle for electronic data interchange (EDI) and related services continues to raise numerous issues, including those relating to reliability, data security, data integrity and rapidly evolving standards. New competitors, including media, software vendorsvendors, cloud providers and telecommunicationsother technology companies, offer products and services that utilize the Internet and AI in competition with our products and services, which may be less expensive or process transactions and data faster and more efficiently. Internet-based commerce is subject to increasing regulation by Canadian, U.S. federal and state and foreign governments, including in the areas of data privacy and breaches and taxation. Laws and regulations relating to the solicitation, collection, processing or use of personal or consumer information could affect our customers’clients’ ability to use and share data, potentially reducing demand for Internet-based solutions and restricting our ability to store, process, analyze and share data through the Internet. Although we believe that the Internet and AI will continue to provide opportunities to expand the use of our products and services, we cannot guarantee that our efforts to capitalize on these opportunities will be successful or that increased usage of the Internet and AI for business integration products and services, increased competition or heightened regulation will not adversely affect our business, results of operations and financial condition.

Most of the jurisdictions in which we operate have laws and regulations relating to data privacy, security and protection of information. We have certain measures to protect our information systems against unauthorized access and disclosure of personal information and of our confidential information and confidential information belonging to our customers.clients. We have policies and procedures in place dealing with data security and records retention. These measures and policies may change over time as laws and regulations regarding data privacy, security and protection of information change. However, there is no assurance that the security measures we have put in place will be effective in every case, and our response process to incidents may not be adequate, may fail to accurately assess the severity of an incident, may not be fast enough to prevent or limit harm, or may fail to sufficiently remediate an incident. Failures and breaches in security could result in a negative impact for us and for our customers,clients, adversely affecting our and our customers’clients’ businesses, assets, revenues, brands and reputations, disrupting our operations and resulting in penalties, fines, litigation, regulatory proceedings, regulatory investigations, increased insurance premiums, remediation efforts, indemnification expenditures, reputational harm, negative publicity, lost revenues and/or other potential liabilities, in each case depending on the nature of the information disclosed. Security breaches could also affect our relations with our customers,clients, damage our reputation and harm our ability to keep existing customersclients and to attract new customers.clients. Some jurisdictions, including all U.S. states, Canada and the European Union (EU), have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data, and in some cases our agreements with certain customersclients require us to notify them in the event of a data security incident. Such mandatory disclosures could lead to negative publicity and may cause our current and prospective customersclients to lose confidence in the effectiveness of our data security measures. These circumstances could also result in adverse impact on the market price of our Common Shares. These risks to our business may increase as we expand the number of web-based and cloud-based products, systems and solutions we offer and as we increase the number of countries in which we operate.

In particular, we are increasingly relying on virtual environments and communications systems, which have been in recent years and may be in the future subjected to third-party vulnerabilities and security risks of increasing frequency, scope and potential harm. Malicious hackers may attempt to gain access to our network or data centers; steal proprietary information related to our business, products, systems, solutions, employees and customersclients; interrupt our systems and services or those of our customersclients or others; or attempt to exploit any vulnerabilities in our products, systems or solutions, and such acts may go undetected. Also, the development and proliferation of specific AI applications and other machine learning technologies, alongside related technological innovations, may increase our exposure to cyber-attacks and other cybersecurity risks by potentially enhancing the capabilities of third parties to breach our systems. Threat actors may also use AI technologies, including generative AI, to develop attack methods, such as deepfakes and AI-generated phishing, that are more automated and may be more difficult to detect. In addition, our deployment of agentic AI systems with access to our infrastructure and data could expand our attack surface if controls over those systems prove inadequate. To address these challenges, we strive to continuously fortify our defenses through strategic investments in advanced security technologies and practices, comprehensive risk management frameworks, and ongoing staff training in efforts to safeguard the integrity, confidentiality, and availability of our data and systems against sophisticated threats, while also enhancing our security posture. Increased information technology security threats and more sophisticated cybercrimes and cyberattacks, including computer viruses and other malicious codes, ransomware, unauthorized access attempts, denial-of-service attacks, phishing, social engineering, hacking, and other types of attacks, pose a risk to the security and availability of our information technology systems, networks, products, solutions and services, including those that are managed, hosted, provided, or used by third parties (and which may not provide the same level of information security as our own products, systems or solutions), as well as the confidentiality, availability and integrity of our data and the data of our customers,clients, partners, consumers, employees, stockholders, suppliers and others. Although we monitor our networks and continue to enhance our security protections, hackers are increasingly more sophisticated and aggressive and change tactics frequently, and our efforts may be inadequate to prevent or mitigate all incidents of data breach or theft. A series of issues may also be determined to be material at a later date in the aggregate, even if they may not be material individually at the time of their occurrence. Furthermore, it is possible that the risk of cyber-attacks and other data security breaches or thefts to us or our customersclients may increase due to global geopolitical uncertainty, in particular such as the ongoing Russia-Ukraine and Middle East conflicts.

In addition, if data security is compromised, this could materially and adversely affect our operating results given that we have customersclients that use our systems to store and exchange large volumes of proprietary and confidential information and the security and reliability of our services are of significant importance to these customers.clients. We have experienced attempts by third parties to identify and exploit product and services vulnerabilities, penetrate or bypass our security measures and gain unauthorized access to our or our customers’clients’ or service providers’ cloud offerings and other products, systems or solutions. We may experience future security issues, whether due to human error or misconduct, system errors or vulnerabilities in our or our third-party service providers’ products, systems or solutions. If our products, systems or solutions, or the products, systems or solutions of third-party service providers on whom we rely or may rely in the future, are attacked or accessed by unauthorized parties, it could lead to major disruption or denial of service and access to or loss, modification or theft of our and our customers’clients’ data, which may require us to spend material financial or other resources on correcting the breach and indemnifying the relevant parties and/or on litigation, regulatory investigations, regulatory proceedings, increased insurance premiums, lost revenues, penalties, reputational harm, negative publicity, fines and/or other potential liabilities. If third-party service providers fail to implement adequate data security practices or otherwise suffer a security breach, our or our customer’sclient’s data may be improperly accessed, disclosed, used or otherwise lost, which could lead to reputational, business, operating and financial harms. Our efforts to protect against cyber-attacks and data breaches, including increased risks associated with remote and hybrid work from home measures,arrangements, may not be sufficient to prevent or mitigate such incidents, which could have material adverse effects on our reputation, business, operating results and financial condition.

We rely on close cooperation with strategic partners for sales and software product development as well as for the optimization of opportunities that arise in our competitive environment. A portion of our license revenues is derived from the licensing of our software products through third parties. Also, a portion of our service revenues may be impacted by the level of service provided by third-party service providers relating to Internet, telecommunications and power services. Our success will depend, in part, upon our ability to maintain access to and grow existing channels of distribution and to gain access to new channels if and when they develop. We may not be able to retain a sufficient number of our existing distributors or develop a sufficient number of future distributors. Distributors may also give higher priority to the licensing or sale of software products and services other than ours (which could include competitors’ products and services) or may not devote sufficient resources to marketing our software products and services. The performance of third-party distributors and third-party service providers is largely outside of our control, and we are unable to predict the extent to which these distributors and service providers will be successful in either marketing and licensing or selling our software products and services or providing adequate Internet, telecommunication and power services so that disruptions and outages are not experienced by our customers.clients. A reduction in strategic partner cooperation or sales efforts, a decline in the number of distributors, a decision by our distributors to discontinue the licensing of our software products or a decline or disruption in third-party services could cause users and the general public to perceive our software products and services as inferior and could materially reduce our revenues. In addition, our financial results could be materially adversely affected if the financial condition of our distributors or third-party service providers were to weaken. Some of our distributors and third-party service providers may have insufficient financial resources and may not be able to withstand changes in business conditions, including economic weakness, industry consolidation and market trends.

We currently depend upon a limited number of third-party software products. If such software products were not available, we might experience delays or increased costs in the development of our own software products. For a limited number of our product modules, we rely on software products that we license from third parties, including software that is integrated with internally developed software and which is used in our products to perform key functions. These third-party software licenses may not continue to be available to us on commercially reasonable terms and the related software may not continue to be appropriately supported, maintained or enhanced by the licensors. The loss by us of the license to use, or the inability by licensors to support, maintain or enhance any such software, could result in increased costs, lost revenues or delays until equivalent software is internally developed or licensed from another third-party and integrated with our software. Such increased costs, lost revenues or delays could adversely affect our business. For example, with our acquisition of Zix, we extended our partnership with Microsoft by becoming one of their authorized Cloud Solutions Providers in North America. If our key partners were to terminate our relationship, make an adverse change in their resellerregional system integrator program, change their product offerings or experience a major cyber-attack or similar event, it could reduce our revenues and adversely affect our business.

Current and future competitors could have a significant impact on our ability to generate future revenues and profits.profits, including through the use of AI and other emerging technologies.

The markets for our software products and services are intensely competitive and are subject to rapid technological change and other pressures created by changes in our industry. The convergence of many technologies has resulted in unforeseen competitors arising from companies that were traditionally not viewed as threats to our market position. We expect competition to increase and intensify in the future as the pace of technological change and adaptation quickens and as additional companies enter our markets, including those competitors who offer solutions similar to ours, but offer itthem through a different form of delivery. Numerous releases of competitive products have occurred in recent history and are expected to continue in the future. We may not be able to compete effectively with current competitors and potential entrants into our marketplace. We could lose market share if our current or prospective competitors: (i) develop technologies that are perceived to be substantially equivalent or superior to our technologies; (ii) introduce new competitive products or services; (iii) add new functionality to existing products and services, including through new and emerging AI applications; (iv) acquire competitive products and services; (v) reduce prices; or (vi) form strategic alliances or cooperative relationships with other companies.

If other businesses were to engage in aggressive pricing policies with respect to competing products, or if the dynamics in our marketplace resulted in increasing bargaining power by the consumers of our software products and services, we would need to lower the prices we charge for the products and services we offer. This could result in lower revenues or reduced margins, either of which may materially adversely affect our business and operating results. Moreover, our competitors may affect our business by entering into exclusive arrangements with our existing or potential customers,clients, distributors or third-party service providers. Additionally, if prospective consumers choose methods of informationdata management delivery different from thatthose which we offer, our business and operating results could also be materially adversely affected.

The length of our sales cycle can fluctuate significantlysignificantly, which could result in significant fluctuations in revenues being recognized from quarter to quarter.

The decision by a customerclient to license our software products or purchase our services often involves a comprehensive implementation process across the customer’sclient’s network or networks. As a result, the licensing and implementation of our software products and any related services may entail a significant commitment of resources by prospective customers,clients, accompanied by the attendant risks and delays frequently associated with significant technology implementation projects. Given the significant investment and commitment of resources required by an organization to implement our software products, our sales cycle may be longer compared to other companies within our own industry, as well as companies in other industries. Also, because of changes in customerclient spending habits, it may be difficult for us to budget, forecast and allocate our resources properly. In weak economic environments, such as a recession or slowdown, it is not uncommon to see reduced information technology spending. It may take several months, or even several quarters, for marketing opportunities to materialize, especially following a prolonged period of weak economic environment. If a customer’sclient’s decision to license our software or purchase our services is delayed or if the implementation of these software products takes longer than originally anticipated, the date on which we may recognize revenues from these licenses or sales would be delayed. Such delays and fluctuations could cause our revenues to be lower than expected in a particular period and we may not be able to adjust our costs quickly enough to offset such lower revenues, potentially negatively impacting our business, operating results and financial condition.

Our existing customersclients might cancel contracts with us, fail to renew contracts on their renewal dates and/or fail to purchase additional services and products, and we may be unable to attract new customers,clients, which could adversely affect our operating results.

We depend on our installed customerclient base for a significant portion of our revenues. We have significant contracts with our license customersclients for ongoing support and maintenance, as well as significant service contracts that provide recurring services revenues to us. In addition, our installed customerclient base has historically generated additional new license and services revenues for us. Service contracts are generally renewable at a customer’sclient’s option and/or subject to cancellation rights, and there are generally no mandatory payment obligations or obligations to license additional software or subscribe for additional services. As we transition our clients from legacy, perpetual license and client support arrangements to cloud subscriptions, the timing and recognition of our revenues and the mix among our revenue types may shift, including a shift from revenues recognized upfront to revenues recognized ratably over the subscription term.

If our customersclients cancel or fail to renew their service contracts or fail to purchase additional services or products, then our revenues could decrease, and our operating results could be materially adversely affected. Factors influencing such contract terminations and failure to purchase additional services or products could include changes in the financial circumstances of our customers,clients, including as a result of any potential recession, dissatisfaction with our products or services, our retirement or lack of support for our legacy products and services, our customersclients selecting or building alternate technologies to replace our products or services, the cost of our products and services as compared to the cost of products and services offered by our competitors, acceptance of future price increases by us, including due to inflationary pressures, our ability to attract, hire and maintain qualified personnel to meet customerclient needs, consolidating activities in the market, changes in our customers’clients’ business or in regulation impacting our customers’clients’ business that may no longer necessitate the use of our products or services, general economic or market conditions, or other reasons. Further, our customersclients could delay or terminate implementations or use of our services and products or be reluctant to migrate to new products. As a result, such customersclients may not generate the revenues we may have expected within the anticipated timelines, or at all, and may be less likely to invest in additional services or products from us in the future. Any decline in our renewal rates, or our inability to maintain or improve them, could adversely affect our revenues and operating results. We may not be able to adjust our expense levels quickly enough to account for any such revenue losses.

Geopolitical instability, political unrest, war and other global conflicts, including the Russia-Ukraine and Middle East conflicts,conflicts have affected and may continue to affect our business.

Geopolitical instability, political unrest, war and other global conflicts may result in adverse effects on macroeconomic conditions, including volatility in financial markets, adverse changes in trade and tariff policies, inflation, higher interest rates, direct and indirect supply chain disruptions, increased cybersecurity threats andthreats, fluctuations in foreign currency.currency and disruption to global energy supplies and markets. These events may also impact our decision or limit our ability to conduct business in certain areas or with certain entities. For example, sanctions andsanctions, export controls haveand beenrelated laws and regulations imposed by the United States, Canada and other countriescountries, including those targeting Russia in connection with Russia’sits military actions in Ukraine,Ukraine includingrestrict restrictionsthe on sellingsale or exportingexport of goods, services or technology to certain regions, andimpose travel bans and asset freezes impactingand impact political, military, business and financial organizations and individuals in or connected with Russia. To support certain of our cloud customersclients headquartered in the United States or allied countries that rely on our network to manage their global business (including their business in Russia), we have nonetheless allowed these customersclients to continue to use our services to the extent that it can be done in strict compliance with all applicable sanctions and export controls. However, as the situation continues and the regulatory environment further evolves, we may adjust our business practices as required by applicable rules and regulations. Our compliance with sanctions and export controls could impact the fulfillment of certain contracts with customersclients and partners doing business in these affected areas and future revenue streams from impacted parties and certain countries. While the Russia-Ukraine and Middle East conflicts have not had and are not expected to have a material adverse effect on our overall business, results of operations or financial condition, it is not possible to predict how these conflicts will unfold and the broader consequences of these conflicts or other conflicts, which could include sanctions, embargoes, regional instability, tariffs, trade restrictions, changes to regional trade ecosystems, geopolitical shifts and adverse effects on the global economy, on our business and operations as well as those of our customers,clients, partners and third-party service providers.

We conduct business globally and are subject to a complex, dynamic, and evolving international trade, tariff and regulatory environment. Our operations and customerclient base span multiple countries, which subjects us to a broad range of risks arising from international trade laws and policies. In recent years, trade tensions among major global economies, including the United States, China, Canada, the EU, and others, have escalated, resulting in the imposition and threatened imposition of tariffs, export controls, sanctions, and other trade barriers or restrictive measures. Although recent trade and tariff restrictions have primarily targeted physical goods and manufacturing components, we cannot predict the direction of future trade and tariff policy, including whether additional tariffs or non-tariff barriers will be applied to digital goods and services or whether new regulatory frameworks will be introduced to governgoverning cross-border data flows, digital services taxation, or intellectual property transfers,transfers will be expanded or new measures introduced, any of which could impact our business.

Increased protectionist policies, retaliatory trade and tariff actions, or regulatory divergence across jurisdictions may increase our costs, limit our ability to sell products and services in certain markets, delay or prevent the delivery of our services, or compel us to alter our operations to comply with new international trade and tariff laws and policies. Any such developments could disrupt our supply chains, reduce the competitiveness of our offerings, or create uncertainty for our customersclients and partners. Moreover, we cannot predict the broader macroeconomic impacts of global trade disputes or policy changes, including the effects on foreign exchange rates, inflation, capital markets or economic growth in key markets. Adverse changes in global trade dynamics could weaken customerclient demand, delay purchasing decisions, or result in reduced access to critical technologies or skilled talent. These risks could materially and adversely impact our business, financial condition, and results of operations.

The restructuring of certain of our operations may be ineffective, may adversely affect our business and our finances, and we may incur additional restructuring charges in connection with such actions.actions, and our enterprise assessment may not achieve its intended objectives.

We often undertake initiatives to restructure or streamline our operations, particularly during the period post-acquisition,post-acquisition and as part of ongoing efforts to improve operating efficiency, such as the Micro Focus Acquisition Restructuring Plan and Business Optimization Plan (each as defined below). In addition, during the fourth quarter of Fiscal 2026, we launched an end-to-end enterprise assessment to identify actions to drive growth, focusing on areas including our go-to-market strategy, portfolio composition and differentiation, sales and marketing enablement, and our execution model. Under the Business Optimization Plan and other savings initiatives, we are targeting total estimated savings within a range that we have disclosed, to be realized over multiple fiscal years. We may incur costs associated with implementing a restructuring initiative beyond the amount contemplated when we first developed the initiative, and these increased costs may be substantial. Additionally, such costs would adversely impact our results of operations for the periods in which those adjustments are made. We will continue to evaluate our operations and may propose future restructuring actions as a result of changes in the marketplace, including the exit from less profitable operations, the decision to terminate products or services that are not valued by our customersclients or adjusting our workforce. Actions arising from the enterprise assessment may include changes to our operating model, product portfolio and investment priorities, including possible divestitures, workforce changes and additional restructuring. In addition, as a result of the assessment, our outlook metrics, or the categories in which we present them, may be adjusted or removed, which may make period-to-period comparisons of our results more difficult and affect how investors and analysts evaluate our business. Any failure to successfully execute these initiatives on a timely basis, or the failure to realize the expected financial benefits of such strategic initiatives,initiatives within the estimated amounts or on the anticipated timeline, may have a material adverse effect on our business, operating results and financial condition.

The informationdata management market in which we compete continues to evolve at a rapid pace. We have grown significantlyboth organically and through acquisitions and,and inmay conjunctionfrom with our plantime to de-lever,time mayevaluate continue to reviewselective acquisition opportunities as a means of increasing the size and scope of our business.opportunities. Our growth, coupled with the rapid evolution of our markets, has placed, and will continue to place, significant strains on our administrative and operational resources and increased demands on our internal systems, procedures and controls. Our administrative infrastructure, systems, procedures and controls may not adequately support our operations. In addition, our management may not be able to achieve the rapid, effective execution of the product and business initiatives necessary to successfully implement our operational and competitive strategy. If we are unable to manage growth effectively, our operating results will likely suffer, which may, in turn, adversely affect our business.

Our performance is substantially dependent on the performance of our executive officers and key employees and there is a risk that we could lose their services. We do not maintain “key person” life insurance policies on any of our employees. Our success is also highly dependent on our continuing ability to identify, hire, train, retain and motivate highly qualified management, technical, sales and marketing personnel. In particular, the recruitment and retention of top research developers and experienced salespeople, particularly those with specialized knowledge, remains critical to our success, including providing consistent and uninterrupted service to our customers.clients. Competition for such people is intense, substantial and continuous, and we may not be able to attract, integrate or retain highly qualified technical, sales or managerial personnel in the future. In our effort to attract and retain critical personnel, and in responding to inflationary wage pressure, we may experience increased compensation costs that are not offset by either improved productivity or higher prices for our software products or services. In addition, the loss of the services of any of our executive officers or other key employees could significantly harm our business, operating results and financial condition.

A portion of our total compensation program for our executive officers and key personnel includesconsists of equity-based awards, the awardvalue of optionswhich todepends buyin part on the performance of our Common Shares. If the market price of our Common Shares performs poorly, suchthe performancevalue of these awards may decline, which may adversely affect our ability to retain or attract critical personnel. In addition, any changes made to our stockequity-based optioncompensation policies, or to any other of our compensation practices, which are made necessary by governmental regulations or competitive pressures, could adversely affect our ability to retain and motivate existing personnel and recruit new personnel. For example, any limit to total compensation that may be prescribed by the government or applicable regulatory authorities or any significant increases in personal income tax levels levied in countries where we have a significant operational presence may hurt our ability to attract or retain our executive officers or other employees whose efforts are vital to our success. Additionally, payments under our long-term incentive plans (the details of which are described in Item 11 of this Annual Report on Form 10-K), are dependent to a significant extent upon the future performance of our Company both in absolute terms and in comparison to similarly situated companies. Any failure to achieve the targets set under our long-term incentive plan could significantly reduce or eliminate payments made under this plan, which may, in turn, materially and adversely affect our ability to retain the key personnel paid under this plan.

We are facing growing scrutiny and expectations from shareholders, customers,clients, governments, employees, and other key stakeholders regarding corporate citizenship-related practices, disclosures, and performance. These expectations, which continue to evolve, influence business, investment, and procurement decisions and may differ or conflict across stakeholders. At the same time, we are subject to a complex and rapidly changing global regulatory landscape (including laws and emerging frameworks in the U.S., Canada, and the EU) governing corporate citizenship-related disclosures. In particular, legislation in a number of jurisdictions, including the U.S., prohibiting or limiting such disclosures havehas been enacted or proposed. While certain rules and legislation hashave been challengedchallenged, paused or paused,proposed to be rescinded, the imposition of such obligations either now or in the future may cause us to revise our policies and practices, stated targets or disclosure regarding such matters. Further, certain jurisdictions are also introducing anti-ESG (environmental, social and governance) or anti-greenwashing rules, which increase legal uncertainty and reputational risk given the interpretation and application of such rules remain uncertain. Conversely, disclosure mandates, including with respect to climate, tax and other matters, requiring in-scope companies to collect and report specified data and, in some cases, obtain third-party insurance. Complying with these and similar mandates may require us to collect and report data we have not previously tracked and incur additional compliance costs, and the requirements, timing, and implementation of these mandates remain subject to change and legal challenge.

We may incur additional costs and resource demands to meet these expectations, including collecting reliable data (including data such as emissions or waste metrics), complying with inconsistent or contradictory requirements across jurisdictions, and meeting evolving third-party ratings, benchmarks, and regulatory standards. Failure or perceived failure to align with stakeholder values, meet stated targets, or comply with regulatory obligations could harm our reputation, employee engagement, and investor sentiment; reduce customerclient demand and business opportunities, including impacting our ability to attract and retain certain government contracts; expose us to penalties, litigation, or investigations; and ultimately impact our operating results, financial condition, and competitiveness.

Our use of a mixed workforce includesmodel, bothincluding remoteremote, hybrid and hybridin-office employees, whichand subjectschanges to our in-office requirements, subject us to certain operational challenges and risks.risks, including risks to employee retention and morale.

For example, employing a remotehybrid work environment could affect employee productivity, including due to a lower level of employee oversight, health conditions or illnesses, disruptions due to caregiving or childcare obligations or slower or unreliable Internet access. OpenText systems, client, vendor and/or borrower data may be subject to additional risks presented by increased cyber-attacks and phishing activities targeting employees, vendors, third-party service providers and counterparties in transactions, the possibility of attacks on OpenText systems or systems of employees working remotely as well as by decreased physical supervision. In addition, we may rely, in part, on third-party service providers to assist us in managing monitoring and otherwise carrying out aspects of our business and operations. Such events may result in a period of business disruption or reduced operations, which could materially affect our business, financial condition and results of operations.

A flexiblemixed workforceworkforce, and changes to our in-office requirements, may also subject us to other operational challenges and risks. For example, a hybrid work program may adversely affect our ability to recruit and retain personnel who prefer a fully remote work environment. Operating our business with both remote and in-person workers, or workers who work on flexible schedules, could have a negative impact on our corporate culture, decrease the ability of our employees to collaborate and communicate effectively, decrease innovation and productivity, or negatively affect employee morale. InAt addition,the wesame havetime, incurredincreasing costsour relatedin-office requirements may adversely affect our ability to reducingrecruit ourand realretain estatepersonnel footprintwho aroundprefer theremote world.or hybrid work arrangements, particularly in competitive labor markets where other employers continue to offer such flexibility, and could result in employee attrition, including of key personnel. If we are unable to effectively continue a flexible workforce, manage theour cybersecurityworkforce model and otherany riskschanges ofto remoteour work,in-office requirements, retain and attract talent, and maintain our corporate culture and employee morale, our financial condition and operating results may be adversely impacted.

The growth of our Company through the successful acquisition and integration of complementary businesses is a critical component of our corporate strategy. As a result of the continually evolving marketplace in which we operate, we regularly evaluate acquisition opportunities and at any time may be in various stages of discussions with respect to such opportunities. We plan to continue to pursue acquisitions that complement our existing business, represent a strong strategic fit and are consistent with our overall growth strategy and disciplined financial management. We may also target future acquisitions to expand or add functionality and capabilities to our existing portfolio of solutions, as well as to add new solutions to our portfolio. We may also consider, from time to time, opportunities to engage in joint ventures or other business collaborations with third parties to address particular market segments. These activities create risks such as: (i) the need to integrate and manage the businesses and products acquired with our own business and products; (ii) additional demands on our resources, systems, procedures and controls; (iii) disruption of our ongoing business; and (iv) diversion of management’s attention from other business concerns. Moreover, these transactions could involve: (i) substantial investment of funds or financings by issuance of debt or equity or equity-related securities; (ii) substantial investment with respect to technology transfers and operational integration; and (iii) the acquisition or disposition of product lines or businesses. Also, such activities could result in charges and expenses and have the potential to either dilute the interests of existing shareholders or result in the issuance or assumption of debt, which could have a negative impact on the credit ratings of our outstanding debt securities or the market price of our Common Shares. Such acquisitions, investments, joint ventures or other business collaborations may involve significant commitments of financial and other resources of our Company. Any such activity may not be successful in generating revenues, income or other returns to us, and the resources committed to such activities will not be available to us for other purposes. In addition, while we conduct due diligence prior to consummating an acquisition, joint venture or business collaboration, such diligence may not identify all material issues associated with such activities and we may be exposed to additional risk due to such acquisition, joint venture or business collaboration. We may also experience unanticipated difficulties identifying suitable or attractive acquisition candidates that are available for purchase at reasonable prices and that meet our objectives. The identification of suitable acquisition candidates can be difficult, time-consuming and costly, and we may not consummate acquisitions successfully that we target in the future. Even if we are able to identify such candidates, we may be unable to consummate an acquisition on suitable terms or in the face of competition from other bidders. Moreover, if we are unable to access capital markets on acceptable terms or at all, we may not be able to consummate acquisitions, or may have to do so on the basis of a less than optimal capital structure. Our inability (i) to take advantage of growth opportunities for our business or for our products and services, or (ii) to address risks associated with acquisitions or investments in businesses, may negatively affect our operating results and financial condition. Additionally, any impairment of goodwill or other intangible assets acquired in an acquisition or in an investment, or charges associated with any acquisition or investment activity, may materially adversely impact our results of operations and financial condition which, in turn, may have a material adverse effect on the market price of our Common Shares or credit ratings of our outstanding debt securities. Further, we have made, and may in the future make, investments as a limited partner in one or more strategic investment funds that are separate from our business (each, a “Fund”). We do not control the investment decisions of any Fund, our investments may require us to fund capital commitments through capital calls, and losses or fluctuations in the value of our Fund interests may adversely affect our results of operations and financial condition. In addition, certain of our directors, officers or their immediate family members may, from time to time, serve on a Fund’s investment committee or advisory committee, and may also hold positions as directors, executives or significant equity holders (including ownership interests in excess of 10%) in one or more companies in which a Fund invests. See Part III, Item 13 “Certain Relationships and Related Transactions, and Director Independence” of this Annual Report on Form 10-K.

We have divested, and may in the future divest, non-core assets, including the divestitures of eDOCS and Vertica completed in Fiscal 2026. We may be unable to complete planned divestitures on acceptable terms or at all, or may complete them at valuations below our expectations, which could result in losses on sale, impairment charges or the write-down of assets classified as held for sale, and any failure to realize the anticipated proceeds or strategic benefits of a divestiture could adversely affect our business, results of operations and financial condition. We may be required to devote significant management attention and resources to integrating the business practices and operations of our acquisitions. As we integrate our acquisitions, we may experience disruptions to our business and, if implemented ineffectively, it could restrict the realization of the full expected benefits. The failure to meet the challenges involved in the integration process and to realize the anticipated benefits of our acquisitions could cause an interruption of, or loss of momentum in, our operations and could adversely affect our business, financial condition and results of operations. Integrating acquisitions into our business may be disruptive to our business and may adversely affect our existing relationships with employees and business partners. Uncertainties related to the integration of acquisitions may also create uncertainty among current and prospective employees about their future roles, impair our ability to attract, retain and motivate key personnelpersonnel, and could divert the attention of our management and other employees from day-to-day business and operations. The loss of key employees, and their experience and knowledge regarding our business or an acquired business, could adversely affect our operations.

•successfully managing relationships with our strategic partners and combined supplier and customerclient base;

Significant judgment is required in determining our provision for income taxes. Various internal and external factors may have favourable or unfavourable effects on our future provision for income taxes, income taxes receivable and our effective income tax rate. These factors include, but are not limited to, changes in tax laws, regulations and/or rates, results of audits by tax authorities, changing interpretations of existing tax laws or regulations, changes in estimates of prior years’ items, the impact of transactions we complete, future levels of research and development spending, changes in the valuation of our deferred tax assets and liabilities, transfer pricing adjustments, changes in the overall mix of income among the different jurisdictions in which we operate and changes in overall levels of income before taxes. For instance, the provision for income taxes from the Tax Cuts and Jobs Act of 2017, which required capitalization and amortization of research and development costs starting in Fiscal 2023, has increased cash taxes. Subsequent to the year ended June 30, 2025, the One Big Beautiful Bill Act (the OBBBA) was passed on July 4, 2025. Management is still analyzing the impact of the OBBBA on cash taxes and the effective tax rate. Furthermore, new accounting pronouncements or new interpretations of existing accounting pronouncements, and/or any internal restructuring initiatives we may implement from time to time to streamline our operations, can have a material impact on our effective income tax rate.

The Company is also subject to income taxes in numerous jurisdictions and significant judgment has been applied in determining its worldwide provision for income taxes, including historical Micro Focus matters related to the EU State Aid and UK tax authority challenge in respect of prior periods.taxes. The provision for income taxes may be impacted by various internal and external factors that could have favourable or unfavourable effects, including changes in estimates of prior years’ items, the impact of transactions completed, the structuring of activities undertaken, the application of complex transfer pricing rules, changes in the valuation of deferred tax assets and liabilities, changes in overall mix and levels of income before taxes, changes in tax laws, regulations and/or rates and changing interpretations of existing tax laws or regulations. Numerous countries have agreed to a statement in support of the Organization for Economic Co-Operation and Development model rules that propose a global minimum tax rate of 15% for companies with revenue above €750 million, calculated on a country-by-country basis. Countries with significant operations for OpenText that have enacted the legislation include Canada and UK. We are continuing to monitor when and how such rules in other jurisdictions will be enacted into law. However, it is possible that the implementation of relevant legislation could impact our liability for taxes. Further, due to Micro Focus’ complex acquisitive history, we could become subject to additional tax audits in jurisdictions in which we have not historically been subject to examination. As a result, our worldwide provision for income taxes and any ultimate tax liability may differ from the amounts initially recorded and such differences could have an adverse effect on the combined company’sour financial condition and results of operations.

As part of the ongoing audit of our Canadian tax returns by the Canada Revenue Agency (CRA),CRA, we have received notices of, and are appealing, reassessments for Fiscal 2012 through Fiscal 2020.2021. An adverse outcome of these ongoing audits could have a material adverse effect on our financial position and results of operations.

As part of its ongoing audit of our Canadian tax returns, the CRA has disputed our transfer pricing methodology used for certain intercompany transactions with our international subsidiaries and has issued notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016. Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of June 30, 2025,2026, in connection with the CRA’s reassessments for Fiscal 2012,2012 Fiscal 2013, Fiscal 2014, Fiscal 2015 andthrough Fiscal 2016, to be limited to penalties, interest and provincial taxes that may be due of approximately $86$87.4 million. As of June 30, 2025,2026, we have provisionally paid approximately $32 million in order to fully preserve our rights to object to the CRA’s audit positions, being the minimum payment required under Canadian legislation while the matter is in dispute. This amount is recorded within Long-term income taxes recoverable on the Consolidated Balance Sheets as of June 30, 2025.2026.

The notices of reassessment for Fiscal 2012,2012 Fiscal 2013, Fiscal 2014, Fiscal 2015 andthrough Fiscal 2016 would, as drafted, increase our taxable income by approximately $90 million to $100 million for each of those years, as well as impose a 10% penalty on the proposed adjustment to income. Audits by the CRA of our tax returns for fiscal years prior to Fiscal 2012 have been completed with no reassessment of our income tax liability.

We strongly disagree with the CRA's positions and believe the reassessments of Fiscal 2012,2012 Fiscal 2013, Fiscal 2014, Fiscal 2015 andthrough Fiscal 2016 (including any penalties) are without merit, and we are continuing to contest these reassessments. On June 30, 2022, we filed a notice of appeal with the Tax Court of Canada seeking to reverse all such reassessments (including penalties) in full and the customary court process is ongoing.

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) and July 1, 2027 and ending June 30, 2028 (Fiscal 2028) on growth in earnings and cash flows; (ii) creating value through investments in broader Informationdata Managementmanagement 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 data management business as clients increasingly adopt AI 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 customersclients 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 UK and Canada’s newly enacted global minimum tax actrates; (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)capacity (see Note 19 “Acquisitions and Divestitures” to our 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 businessBusiness optimizationOptimization plansPlan; (xxvi) initiatives we establish and targets that we set related to corporate citizenship-related activities; (xvii) integration of Micro Focus, resulting synergies and timing thereof; (xxviiixxvii) divestitures and their expected impact, including in connection with the completed divestiture of the Application, Modernization and Connectivity (AMC) business (the AMC Divestiture) and the accompanying transition services agreement (TSA)impact (see Note 19 “Acquisitions and Divestitures” to our Consolidated Financial Statements for more details); (xxixxxviii) the implementation of or changes to global tariff regimes or other trade policies and the resulting uncertainty to the macroeconomic environment; (xxxxxix) the expected impact of our share repurchase plan on our overall strategic capital allocation; and (xxxixxx) other matters.

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 highervolatile 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; (ix) increased attention from shareholders, governments, customers and other key relationships regarding our corporate citizenship practices and increased regulatory scrutiny of such practices and related disclosures could impact our business activities, financial performance and reputation; and (xix) 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.

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 the divestiture of eDOCS and the divestiture of Vertica; (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,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, and the possibility of not being able to generate sufficient cash to service all indebtednessindebtedness, 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 customersclients; (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 customersclients; (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 conflicts, and other geopolitical tensions, including the Russia-Ukraine and Middle East conflicts, as we continue to increase our international operations; (xix) adverse macroeconomic conditions, such as potential increases or changes in global tariff policies and structures and the timing thereof, the effects of global relations, including escalating tensions, imposition of tariffs, retaliatory measures, restrictive regulations or boycotts, and other trade policies, inflation, disruptions in global supply chains and increased labour costs; (xx) inability to raise capital at all or on not unfavourable terms in the future; (xxi) downward pressure on our share price and the dilutive effect of future sales or issuances of equity securities (including in connection with future acquisitions); and (xxii) potential changes in ratings or outlooks of rating agencies on our outstanding debt securities; and (xxiii) risks related to divestitures and the impact of such divestitures on our remaining business.securities. Other factors that may affect forward-looking statements include, but are not limited to: (i) the future performance, financial and otherwise, of the Company; (ii) the ability of the Company to bring new products and services to market and to increase sales; (iii) the strength of the Company’s product development pipeline; (iv) failure to secure and protect patents, trademarks and other proprietary rights; (v) infringement of third-party proprietary rights triggering indemnification obligations and resulting in significant expenses or restrictions on our ability to provide our products or services; (vi) failure to comply with privacy laws and regulations that are extensive, open to various interpretations and complex to implement; (vii) the Company’s growth and other profitability prospects; (viii) the estimated size and growth prospects of the Informationdata Managementmanagement market; (ix) the Company’s competitive position in the Informationdata Managementmanagement market and its ability to take advantage of future opportunities in this market; (x) the benefits of the Company’s products and services to be realized by customersclients; (xi) the demand for the Company’s products and services and the extent of deployment of the Company’s products and services in the Informationdata Managementmanagement marketplace; (xii) the Company’s financial condition and capital requirements; (xiii) system or network failures or information security, cybersecurity or other data breaches in connection with the Company’s offerings or the information technology systems used by the Company generally, the risk of which may be increased during times of natural disaster or pandemic due to remote working arrangements; (xiv) the integration of AI and other machine learning into some of our products, systems or solutions; (xv) failure to achieve any corporate citizenship-related targets we set; (xvxvi) failure to attract and retain key personnel to develop and effectively manage the Company’s business; and (xvixvii) the ability of the Company’s subsidiaries to make distributions to the Company.Company and (xviii) increased attention from shareholders, governments, clients and other key relationships regarding our corporate citizenship practices and increased regulatory scrutiny of such practices and related disclosures, which could impact our business activities, financial performance and reputation.

As of June 30, 2025,2026, we employedhad aapproximately total19,900 employees, of approximately 21,400 individuals. Of the total 21,400 individuals we employed as of June 30, 2025,which approximately 7,1006,900 or 33%35% are in the Americas, 4,7004,600 or 22%23% are in EMEA and 9,6008,400 or 45%42% 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.clients. See “Results of Operations” below for our definitions of geographic regions.

•Total annual recurring revenue, which we define as the sum of cloud services and subscriptions revenue and customer support revenue, was $4,190.5$4,246.0 million, downup 7.6%1.3% compared to the prior fiscal year; down 7.5%1.2% after factoring inexcluding the unfavourablefavourable impact of $4.3$105.7 million of foreign exchange rate changes.

•Cloud services and subscriptions revenue was $1,856.5$1,958.6 million, up 2.0%5.5% compared to the prior fiscal year; up 2.1%3.4% after factoring inexcluding the unfavourablefavourable impact of $1.5$39.1 million of foreign exchange rate changes.

•Adjusted EBITDA (as defined below),EBITDA, a non-GAAP measure, was $1,784.5$1,903.2 million compared to $1,970.2$1,784.5 million in the prior fiscal year.

•Operating cash flow was $830.6$1,006.8 million for the year ended June 30, 2025,2026, compared to $967.7$830.6 million in the prior fiscal year, downup 14.2%.21.2%.

•Cash andFree cash equivalentsflow werewas $1,156.5$807.5 million asfor ofthe year ended June 30, 2025,2026, compared to $1,280.7$687.4 million asin ofthe Juneprior 30,fiscal 2024.year, up $120.1 million.

•Enterprise cloud bookings were $946.7 million for the year ended June 30, 2026, compared to $772.5 million for the year ended June 30, 2025, compared to $701.4 million for the year ended June 30, 2024.2025. We define Enterprise cloud bookings as the total value from cloud services and subscriptions contracts entered into in the fiscal year that are new, committed and incremental to our existing contracts, entered into with our enterprise-based customers.clients.

•During the year ended June 30, 2025,2026, we repurchased and canceled 14,524,66414,761,123 Common Shares for $418.3$415.7 million, inclusive of 2% Canadian excise taxes recorded (year ended June 30, 20242025 and 20232024— 5,073,91314,524,664 and nil5,073,913 Common Shares for $152.3$418.3 million and nil,$152.3 million, respectively).

We continue to monitor the geopolitical conflicts and diplomatic tensions around the world, including the Russia-Ukraine and Middle East conflicts. We have ceased all direct business in Russia and Belarus. We continue to operate our Israeli-based business and support our employees in the region. While our operations within these locations are not material and we do not expect these geopolitical conflicts to have a material adverse effect on our overall business, results of operations or financial condition, it is not possible to predict the broader consequences or broader expansion of these conflicts, including adverse effects on the global economy, on our business and operations as well as those of our customers,clients, partners and third-party service providers. For more information, see Part I, Item 1A “Risk Factors” included in this Annual Report on Form 10-K.

In addition, we intend to continue our strong capital allocation programprog ram with our quarterly dividend and renewed share repurchase program. See Note 26 “Subsequent Events” to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

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,economies have led to the dissolution of trade agreements,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,clients, which could adversely impact our business and our results of operations.

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, highervolatile interest rates, potential increases or changes in global tariff policies and structures and other trade policies, financial market volatility, or other impacts from the Russia-Ukraine and Middle East conflicts and other geopolitical disputes on our business. See Part I, Item 1A, “Risk Factors” included within this Annual Report on Form 10-K.

As part of cloud services and subscriptions revenues, in connection with cloud subscription and managed service contracts, we often agree to perform a variety of services before the customer goes live, such as,as converting and migrating customer data, building interfaces and providing training. These services are considered an outsourced suite of professional services which can involve certain project-based activities. These services can be provided at the initiation of a contract, during the implementation or on an ongoing basis as part of the customer life cycle. These services can be charged separately on a fixed fee or a time and materials basis, or the costs associated may be recovered as part of the ongoing cloud subscription or managed services fee. These outsourced professional services are considered to be distinct from the ongoing hosting services and represent a separate performance obligation within our cloud subscriptions or managed services arrangements. The obligation to provide outsourced professional services is satisfied over time, with the customer simultaneously receiving and consuming the benefits as we satisfy our performance obligations. For outsourced professional services, we recognize revenue by measuring progress toward the satisfaction of our performance obligation. Progress for services that are contracted for a fixed price is generally measured based on hours incurred as a portion of total estimated hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we recognize revenue at that amount.

Customer support revenue is associated with perpetual, term license and off-cloudon-premise subscription arrangements. As customer support is not critical to the customers’ ability to derive benefit from their right to use our software, customer support is considered a distinct performance obligation when sold together in a bundled arrangement along with the software.

Our license revenue can be broadly categorized as perpetual licenses, term licenses and subscription licenses, all of which are primarily deployed on the customer’s premises (off-cloudon-premise).

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 andconflict, the conflict involving Iran , the broader Middle East conflictsinstability 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 global tariff regimes or other trade policies and the resulting uncertainty to the macroeconomic environment; (xxix) the expected impact of our share repurchase plan on our overall strategic capital allocation; and (xxx) other matters.

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 the divestiture of eDOCS and the proposed divestiture of Vertica; (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 exposure to international business risks including the impact of geopolitical instability, political unrest, war and other global conflicts, and other geopolitical tensions, including the Russia-Ukraine conflict, the conflict involving Iran, and the broader Middle East conflicts,instability, as we continue to increase our international operations; (xix) adverse macroeconomic conditions, such as potential increases or changes in global tariff policies and structures and the timing thereof, the effects of global relations, including escalating tensions, imposition of tariffs, retaliatory measures, restrictive regulations or boycotts, and other trade policies, inflation, disruptions in global supply chains and increased labour costs; (xx) inability to raise capital at all or on not unfavourable terms in the future; (xxi) downward pressure on our share price and the dilutive effect of future sales or issuances of equity securities (including in connection with future acquisitions); and (xxii) potential changes in ratings or outlooks of rating agencies on our outstanding debt securities. Other factors that may affect forward-looking statements include, but are not limited to: (i) the future performance, financial and otherwise, of the Company; (ii) the ability of the Company to bring new products and services to market and to increase sales; (iii) the strength of the Company’s product development pipeline; (iv) failure to secure and protect patents, trademarks and other proprietary rights; (v) infringement of third-party proprietary rights triggering indemnification obligations and resulting in significant expenses or restrictions on our ability to provide our products or services; (vi) failure to comply with privacy laws and regulations that are extensive, open to various interpretations and complex to implement; (vii) the Company’s growth and other profitability prospects; (viii) the estimated size and growth prospects of the Information Management market; (ix) the Company’s competitive position in the Information Management market and its ability to take advantage of future opportunities in this market; (x) the benefits of the Company’s products and services to be realized by customers; (xi) the demand for the Company’s products and services and the extent of deployment of the Company’s products and services in the Information Management marketplace; (xii) the Company’s financial condition and capital requirements; (xiii) system or network failures or information security, cybersecurity or other data breaches in connection with the Company’s offerings or the information technology systems used by the Company generally, the risk of which may be increased during times of natural disaster or pandemic due to remote working arrangements; (xiv) the integration of AI and other machine learning into some of our products, systems or solutions; (xv) failure to achieve any corporate citizenship-related targets we set; (xvi) failure to attract and retain key personnel to develop and effectively manage the Company’s business; (xvii) the ability of the Company’s subsidiaries to make distributions to the Company; and (xviii) increased attention from shareholders, governments, customers and other key relationships regarding our corporate citizenship practices and increased regulatory scrutiny of such practices and related disclosures, which could impact our business activities, financial performance and reputation.

All dollar and percentage comparisons made herein refer to the three and sixnine months ended DecemberMarch 31, 2025,2026, compared with the three and sixnine months ended DecemberMarch 31, 2024,2025, unless otherwise noted.

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 (Small and Medium-Sized Businesses (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.

As of DecemberMarch 31, 2025,2026, we employed a total of approximately 21,30020,500 individuals. Of the total 21,30020,500 individuals we employed as of DecemberMarch 31, 2025,2026, approximately 7,3007,000 or 34% are in the Americas, 4,800 or 23% are in EMEA and 9,2008,700 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.

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

•Total revenue was $1,326.7$1,282.5 million, downup 0.6%2.2% compared to the same period in the prior fiscal year; down 2.6%2.1% after factoring in the favourable impact of $27.4$54.6 million of foreign exchange rate changes. Total revenue was downup as increases in the Content andContent, Business Network and ADM product categories were offset by decreases in the Cybersecurity (Enterprise), CybsecurityCybersecurity (SMB & Consumer), ADM, ITOM and Analytics product categories.

•Non-GAAP-based EPS, diluted, was $1.13$1.01 compared to $1.11$0.82 in the same period in the prior fiscal year.

•Operating cash flow was $466.4$821.0 million for the sixnine months ended DecemberMarch 31, 20252026 compared to $270.2$672.4 million in the same period in the prior fiscal year, up 72.6%.22.1%.

•Cash and cash equivalents were $1,271.4$1,254.1 million as of DecemberMarch 31, 2025,2026, compared to $1,156.5 million as of June 30, 2025.

•During the three months ended DecemberMarch 31, 2025,2026, we repurchased and cancelled 1,389,6009,679,300 Common Shares for $50.2$251.7 million, inclusive of 2% Canadian excise taxes recorded (2,212,9714,350,716 for $67.1$116.7 million in the three months ended DecemberMarch 31, 20242025).

OnEffective JanuaryApril 29, 2026, the Company announced the appointment of20,2026, Ayman Antoun was appointed as Chief Executive Officer and a member of the Board, effective April 20, 2026.Board. Mr. Antoun succeedssucceeded James McGourlay, who continues to serveserved as Interim Chief Executive Officer.Officer until April 20,2026. Upon the transition, Mr. McGourlay willwas move to a role within the Executive Leadership Team at OpenText and P. Thomas Jenkins, currently servingappointed as OpenText’s Executive Chair andPresident, Chief StrategyClient Officer, will return to the role of Chair of the Board.Officer.

Proposed Divestiture of Vertica Business

On February 2, 2026, the Company reached a definitive agreement to divest Vertica, a part of its Analytics product category, to Rocket Software Inc. (Rocket Software) for $150$150.0 million in cash, before taxes, fees and other adjustments. The Company intends to use the proceeds from the divestiture to reduce outstanding debt. The transaction remains subject to customary approvals and closing conditions and is expected to close during fiscal yearFiscal 2026. See Note 17 “Acquisitions and Divestitures” to our Condensed Consolidated Financial Statements for more information.

We continue to monitor the geopolitical conflicts and diplomatic tensions around the world, including the Russia-Ukraine conflict, the conflict involving Iran and the broader Middle East conflicts.instability. We have ceased all direct business in Russia and Belarus. We continue to operate our Israeli-based business and support our employees in the region. While our operations within these locations are not material and we do not expect these geopolitical conflicts to have a material adverse effect on our overall business, results of operations or financial condition, it is not possible to predict the broader consequences or broader expansion of these conflicts, including adverse effects on the global economy, on our business and operations as well as those of our customers, partners and third-party service providers. See also “Outlook for Remainder of Fiscal 2026” for significant tariff and trade developments. For more information, see Part I, Item 1A “Risk Factors” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for Fiscal 2025.

As of FebruaryMay 5,7, 2026, the Company maintainsupdated its full year Fiscal 2026 outlook, which remainsis as follows:

(1)Our Fiscal 2026 growth metric for Total Revenues includes $15$30 million of lower revenues in the second half of Fiscal 2026, resultingof which $15 million resulted from the divestiture of the eDOCS business,business whichand $15 million resulted from the proposed divestiture of the Vertica business. The eDOCS and Vertica businesses contributed approximately $30 million and $80 million, respectively, of full year revenue during Fiscal 2025.

As of DecemberMarch 31, 2025,2026, we have incurred $154.4$215.0 million of the total expected costs of up to approximately $260.0 million. These costs primarily related to workforce reduction driven by automation, centralization, and simplification, as well as associated real estate footprint reductions globally.

Transition Services AgreementAgreements

On May 1, 2024, the Company completed the sale of its AMC business to Rocket Software, Inc. (Rocket Software).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, wethe Company entered into a Transition Services Agreement (TSA) with Rocket Software, whereby wethe Company agreed to provide certain transition services to Rocket Software for up to 24 months fromfollowing 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 and six months ended December 31, 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 with Rocket Software were completed as of June 30, 2025.

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 December 31, 2025, our cloud net renewal rate, excluding the impact of Carbonite Inc. and Zix Corporation, remained stable at 95%, as compared to the quarter ended December 31, 2024.

Cloud services and subscriptions revenues increased by $15.8$30.3 million or 3.4%6.6% during the three months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year; up 1.9%3.2% after factoring in the favourable impact of $7.0$15.7 million of foreign exchange rate changes. The change was primarily driven by increases in the Content, ITOM, Business Network, ITOM, and ADM product categories, partly offset by decreases in the Cybersecurity (EnterpriseSMB & Consumer), Cybersecurity (SMB & ConsumerEnterprise) and Analytics product categories. Geographically, the overall change was primarily attributable to an increase in EMEA of $25.3$28.3 million, an increase in Asia Pacific of $1.6 million partiallyand offsetan by a decreaseincrease in Americas of $9.6$0.4 million.

There were 5341 cloud services contracts greater than $1.0 million that closed during the secondthird quarter of Fiscal 2026, compared to 5132 contracts during the secondthird quarter of Fiscal 2025.

Cost of Cloud services and subscriptions revenues decreasedincreased by $2.0$3.2 million during the three months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year. This was primarily due to aan decreaseincrease in labour-relatedthird-party costsnetwork usage fees of $2.1$2.7 million. Overall, the gross margin percentage on Cloud services and subscriptions revenues increased to 64% from 63%.62%.

Cloud services and subscriptions revenues increased by $43.3$73.6 million or 4.7%5.3% during the sixnine months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year; up 3.0%3.1% after factoring in the favourable impact of $15.3$31.0 million of foreign exchange rate changes. The change was primarily driven by increases in the Content, Business Network, ITOM and ADM product categories, partly offset by decreases in the Cybersecurity (EnterpriseSMB & Consumer), Cybersecurity (SMB & ConsumerEnterprise) and Analytics product categories. Geographically, the overall change was attributable to an increase in EMEA of $44.3$72.7 million, an increase in Asia Pacific of $1.7 million, partially offset by a decrease in Americas of $1.2$0.8 million.

There were 86127 cloud services contracts greater than $1.0 million that closed during the first sixnine months of Fiscal 2026, compared to 74106 contracts during the first sixnine months of Fiscal 2025.

Cost of Cloud services and subscriptions revenues decreased by $5.1$1.9 million during the sixnine months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $6.5$6.4 million, partially offset by an increase in third-party network usage fees of $2.6$5.3 million. Overall, the gross margin percentage on Cloud services and subscriptions revenues increased to 64% from 62%.

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 December 31, 2025, our customer support net renewal rate remained stable at 92% as compared to the quarter ended December 31, 2024.

Customer support revenues decreased by $8.7$2.5 million or 1.5%0.4% during the three months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year; down 3.7%5.1% after factoring in the favourable impact of $13.1$26.4 million of foreign exchange rate changes. Geographically, the overall change was attributable to a decrease in Americas of $14.6$14.8 million and a decrease in Asia Pacific of $0.6$2.0 million, partially offset by an increase in EMEA of $6.6$14.3 million.

Cost of Customer support revenues decreased by $4.2$5.7 million during the three months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $3.6$6.1 million over the comparative period. Overall, the gross margin percentage on Customer support revenues increased to 90% from 89%.

Customer support revenues decreased by $17.3$19.9 million or 1.5%1.1% during the sixnine months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year; down 3.8%4.2% after factoring in the favourable impact of $27.3$53.7 million of foreign exchange rate changes. Geographically, the overall change was attributable to a decrease in Americas of $30.9$45.7 million, and a decrease in Asia Pacific of $3.5$5.5 million, offset by an increase in EMEA of $17.1$31.4 million.

Cost of Customer support revenues decreased by $2.7$8.3 million during the sixnine months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in third-partylabour-related network usage feescosts of $1.4$7.3 million and a decrease in labour-relatedthird-party costsnetwork usage fees of $1.2$1.0 million. Overall, the gross margin percentage on Customer support revenues increased to 90% from 89%.

License revenues increased by $4.0$6.7 million or 1.3%4.9% during the sixthree months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year; down 1.1%0.7% after factoring in the favourable impact of $7.5$7.7 million of foreign exchange rate changes. Geographically, the overall change was attributable to an increase in EMEA of $10.1$6.6 million and an increase in Asia PacificAmericas of $0.7$1.6 million, partially offset by a decrease in AmericasAsia Pacific of $6.8$1.4 million.

Cost of License revenues increaseddecreased by $3.1$2.5 million during the sixthree months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year. Overall, the gross margin percentage on License revenues decreasedincreased to 95%97% from 96%.95%.

Professional service and other revenues decreased by $10.2$6.4 million or 11.0%7.4% during the three months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year; down 13.1%13.0% after factoring in the favourable impact of foreign exchange rate changes. Geographically, the overall change was attributable to a decrease in Americas of $5.8$4.8 million,million and a decrease in EMEA of $3.0$1.8 millionmillion, andpartially aoffset decreaseby an increase in Asia Pacific of $1.3$0.2 million.

Cost of Professional service and other revenues decreased by $5.5$2.0 million during the three months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $6.1$2.1 million. Overall, the gross margin percentage on Professional service and other revenues decreased to 24%20% from 27%.24%.

Professional service and other revenues decreased by $18.6$25.0 million or 10.2%9.3% during the sixnine months ended DecemberMarch 31, 20252026, as compared to the same period in the prior fiscal year; down 12.7%12.8% after factoring in the favourable impact of foreign exchange rate changes. Geographically, the overall change was attributable to a decrease in Americas of $13.3$18.1 million, a decrease in EMEA of $4.3$6.1 million and a decrease in Asia Pacific of $1.0$0.8 million.

Cost of Professional service and other revenues decreased by $9.4$11.4 million during the sixnine months ended DecemberMarch 31, 20252026 as compared to the same period in the prior fiscal year. This was primarily due to a decrease in labour-related costs of $10.4$12.5 million. Overall, the gross margin percentage on Professional service and other revenues decreased to 24%23% from 26%.

Amortization of acquired technology-based intangible assets decreased during the three months ended DecemberMarch 31, 20252026 by $3.0$3.9 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.amortized and a reduction in amortization related to the proposed divestiture of the Vertica business.