Open Text Q1 2027: Buybacks Power an EPS Beat as Revenue Slips

Open Text posted adjusted non-GAAP EPS of $1.05 for its fiscal first quarter of 2027, clearing the consensus estimate of $0.93 by 12.3%. Non-GAAP net income fell 4.5% to $254 million, and a shrinking diluted share count, down to roughly 242.1 million from 253.8 million a year earlier, kept per-share results from declining alongside it.

On the top line, revenue of $1.24 billion fell 2.9% year over year and came in just 0.47% below analyst estimates. The company pointed to divestitures and weakness in legacy segments as the primary drags, with customer support revenue down 9%, license revenue off 8%, and professional services revenue falling 11%. Those declines were only partially offset by growth elsewhere.

Core Cloud Revenues rose 11.2% to $339 million, and overall cloud services and subscriptions grew 4.3%, marking the 23rd consecutive quarter of cloud organic growth. Free cash flow also jumped 36.8% to $138.5 million, supported by higher operating cash flow and lower capital expenditures. Open Text also repurchased $23 million of common shares during the quarter and declared a quarterly dividend of $0.28 per share.

The company did not provide numeric guidance with the release, leaving the February 10, 2027 Investor Day in Toronto as the next meaningful catalyst for investors. Management has said that event will cover the results of its Enterprise Assessment, including strategic priorities, growth initiatives, and a financial framework for the remainder of fiscal 2027. Until then, the trajectory of core cloud growth and the pace of debt reduction, with net leverage at 2.55x and roughly $949 million of debt retired over the past twelve months, are the metrics most worth tracking.

Open Text has now beaten consensus EPS estimates for five consecutive quarters, a streak that stretches back to Q1 fiscal 2025. That consistency has been built as much on financial engineering through share count reduction as on operating momentum, a distinction that matters as the company navigates declining annual recurring revenue, down 3% year over year, and ongoing headwinds from divestitures and legacy line erosion.