Open Text Corporation
Open Text Corporation provides data management solutions for enterprise AI in North, Central and South America, Europe, the Middle East, Africa, Australia, Japan, Singapore, India, and China. Its products and solutions help organizations collect, connect, contextualize, protect, govern, use, and secure data across their operations. The company offers cloud services and subscriptions, including software as a service offerings, application programming interfaces and data services, and private cloud products, such as hosted services and managed service arrangements; foundational platform of technology services; and packaged business applications, as well as managed services and outsourced B2B integration solutions, including program implementation, operational management, and customer support. It also engages in licensing software products to customers; and consulting and learning services, such as implementation, training, and integration of licensed product offerings into the customer's systems. In addition, the company offers content, business network, observability and service management, cybersecurity, application delivery management, and analytics. It has partnerships with SAP SE, Google Cloud, Amazon Web Services, Microsoft Corporation, Oracle Corporation, and SALESFORCE, INC., as well as global systems integrators, including Accenture plc, Capgemini Technology Services SAS, Deloitte Consulting LLP, Hewlett Packard Enterprises, and Tata Consultancy Services. The company serves global 10,000 organizations, enterprise companies, public sector agencies, mid-market companies, SMBS, and direct consumers. The company has a strategic partnership with Cohere to develops and provides agentic AI to governments and regulated industries. Open Text Corporation was incorporated in 1991 and is headquartered in Waterloo, Canada.
What does it do?
Open Text (OTEX) is a Canadian software company that helps large businesses manage their information — think contracts, invoices, emails, and compliance documents — all in one place. Imagine a hospital system drowning in patient records, or a bank buried in loan paperwork: Open Text builds the software that organizes, stores, and secures all of it. Their tools also help companies automate boring but critical tasks, like routing an invoice through approvals without a single human touching it. They serve over 100,000 customers globally, including many Fortune 500 companies.
Open Text sits at the intersection of two powerful trends: the explosion of enterprise data and the growing pressure on companies to manage it securely and efficiently. Their 2023 acquisition of Micro Focus — a $6 billion deal — made them one of the largest enterprise software companies in the world, which is either a massive opportunity or a massive headache depending on execution. Right now, investors are watching closely to see if the company can successfully absorb that acquisition and use AI to modernize its aging product portfolio.
How does it make money?
Open Text makes money in three main ways. First, cloud services and subscriptions — recurring payments from customers using their software online — which is the fastest-growing and most valuable part of the business. Second, customer support revenues from long-term maintenance contracts on older software. Third, professional services, where they charge for implementation and consulting. Revenue came in at $5.2 billion this past year, down from $5.8 billion the prior year, which reflects ongoing divestitures (selling off parts of the Micro Focus business they didn't want to keep) rather than pure organic decline.
Why do investors care?
The core investment argument is simple: Open Text is a deeply unsexy but deeply embedded software company that large enterprises can't easily rip out, giving it sticky, recurring revenue. The exciting part is that management is now layering AI features — called 'Aviator' — on top of their existing products, which could justify price increases and slow customer churn (the rate at which customers leave). For the thesis to work, the company needs to successfully shed the unwanted Micro Focus assets, reduce its debt load (currently around $8–9 billion), and prove that cloud revenue can grow faster than legacy revenues shrink.
Deep Dive
MemberA full investor briefing on Open Text Corporation — history, leadership, risks, and outlook.