OPEN TEXT CORP 10-Q

Item 1. Financial Statements OPEN TEXT CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share data) March 31, 2025 June 30, 2024 ASSETS (Unaudited) Cash and cash equivalents $ 1,277,950 $ 1,280,662 Accounts receivable trade, net of allowance for credit losses of $ 13,379 as of March 31, 2025 and $ 12,108 as of June 30, 2024 593,069 626,189 Contract assets (Note 3) 70,878 66,450 Income taxes recoverable (Note 13) 18,767 61,113 Prepaid expenses and other current assets (Note 7) 200,969 242,911 Total current assets 2,161,633 2,277,325 Property and equipment, net of accumulated depreciation of $ 806,609 as of March 31, 2025 and $ 751,174 as of June 30, 2024 367,741 367,740 Operating lease right of use assets (Note 4) 209,121 219,774 Long-term contract assets (Note 3) 47,961 38,684 Goodwill (Note 5) 7,493,952 7,488,367 Acquired intangible assets (Note 6) 2,102,476 2,486,264 Deferred tax assets (Note 13) 1,004,429 932,657 Other assets (Note 7) 303,124 298,281 Long-term income taxes recoverable (Note 13) 64,389 96,615 Total assets $ 13,754,826 $ 14,205,707 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities (Note 8) $ 847,735 $ 931,116 Current portion of long-term debt (Note 9) 35,850 35,850 Operating lease liabilities (Note 4) 75,538 76,446 Deferred revenues (Note 3) 1,526,829 1,521,416 Income taxes payable (Note 13) 37,231 235,666 Total current liabilities 2,523,183 2,800,494 Long-term liabilities: Accrued liabilities (Note 8) 42,555 46,483 Pension liability, net (Note 10) 132,066 127,255 Long-term debt (Note 9) 6,345,390 6,356,943 Long-term operating lease liabilities (Note 4) 195,394 218,174 Long-term deferred revenues (Note 3) 171,890 162,401 Long-term income taxes payable (Note 13) 84,294 145,644 Deferred tax liabilities (Note 13) 129,646 148,632 Total long-term liabilities 7,101,235 7,205,532 Shareholders’ equity: Share capital and additional paid-in capital (Note 11) 259,649,857 and 267,800,517 Common Shares issued and outstanding at March 31, 2025 and June 30, 2024, respectively; authorized Common Shares: unlimited 2,200,012 2,271,886 Accumulated other comprehensive income (loss) (Note 18) ( 75,847 ) ( 69,619 ) Retained earnings 2,082,247 2,119,159 Treasury stock, at cost ( 2,512,726 and 3,135,980 shares at March 31, 2025 and June 30, 2024, respectively) ( 77,674 ) ( 123,268 ) Total OpenText shareholders' equity 4,128,738 4,198,158 Non-controlling interests 1,670 1,523 Total shareholders’ equity 4,130,408 4,199,681 Total liabilities and shareholders’ equity $ 13,754,826 $ 14,205,707 Guarantees and contingencies (Note 12) Related party transactions (Note 22) Subsequent events (Note 23) See accompanying Notes to Condensed Consolidated Financial Statements. 3 Table of Contents OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands of U.S. dollars and shares, except per share data) (Unaudited) Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Revenues (Note 3): Cloud services and subscriptions $ 462,614 $ 454,528 $ 1,381,944 $ 1,355,633 Customer support 567,379 691,441 1,753,464 2,084,916 License 138,363 200,363 453,099 662,627 Professional service and other 86,007 100,799 269,361 304,252 Total revenues 1,254,363 1,447,131 3,857,868 4,407,428 Cost of revenues: Cloud services and subscriptions 174,186 186,400 521,731 537,960 Customer support 61,733 74,639 186,963 223,027 License 7,504 6,769 20,497 16,591 Professional service and other 65,487 75,455 200,443 230,836 Amortization of acquired technology-based intangible assets (Note 6) 47,199 48,094 141,646 195,702 Total cost of revenues 356,109 391,357 1,071,280 1,204,116 Gross profit 898,254 1,055,774 2,786,588 3,203,312 Operating expenses: Research and development 197,333 226,521 568,753 665,608 Sales and marketing 260,102 303,750 779,913 871,384 General and administrative 115,718 145,924 321,804 450,399 Depreciation 32,474 32,109 96,524 99,615 Amortization of acquired customer-based intangible assets (Note 6) 79,683 100,841 242,235 334,958 Special charges (recoveries) (Note 16) 3,854 19,561 66,228 87,521 Total operating expenses 689,164 828,706 2,075,457 2,509,485 Income from operations 209,090 227,068 711,131 693,827 Other income (expense), net (Note 20) ( 26,578 ) 9,950 6,382 ( 38,664 ) Interest and other related expense, net ( 78,816 ) ( 132,663 ) ( 246,713 ) ( 413,719 ) Income before income taxes 103,696 104,355 470,800 241,444 Provision for income taxes (Note 13) 10,842 6,028 63,618 24,434 Net income $ 92,854 $ 98,327 $ 407,182 $ 217,010 Net (income) attributable to non-controlling interests ( 49 ) ( 42 ) ( 147 ) ( 149 ) Net income attributable to OpenText $ 92,805 $ 98,285 $ 407,035 $ 216,861 Earnings per share—basic attributable to OpenText (Note 21) $ 0.35 $ 0.36 $ 1.54 $ 0.80 Earnings per share—diluted attributable to OpenText (Note 21) $ 0.35 $ 0.36 $ 1.53 $ 0.80 Weighted average number of Common Shares outstanding—basic 262,841 272,272 265,132 271,671 Weighted average number of Common Shares outstanding—diluted 263,834 273,033 265,610 272,349 See accompanying Notes to Condensed Consolidated Financial Statements. 4 Table of Contents OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands of U.S. dollars) (Unaudited) Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Net income $ 92,854 $ 98,327 $ 407,182 $ 217,010 Other comprehensive income (loss)—net of tax: Net foreign currency translation adjustments ( 1,511 ) 11,765 ( 5,534 ) ( 18,614 ) Unrealized gain (loss) on cash flow hedges: Unrealized gain (loss)—net of tax (1) ( 46 ) ( 1,634 ) ( 3,580 ) ( 1,953 ) (Gain) loss reclassified into net income—net of tax (2) 1,371 118 2,643 455 Unrealized gain (loss) on available-for-sale financial assets: Unrealized gain (loss)—net of tax (3) ( 395 ) 90 289 319 Actuarial gain (loss) relating to defined benefit pension plans: Actuarial gain (loss)—net of tax (4) — — ( 1,045 ) ( 110 ) Amortization of actuarial (gain) loss into net income—net of tax (5) 513 115 999 417 Total other comprehensive income (loss), net ( 68 ) 10,454 ( 6,228 ) ( 19,486 ) Total comprehensive income 92,786 108,781 400,954 197,524 Comprehensive income attributable to non - controlling interests ( 49 ) ( 42 ) ( 147 ) ( 149 ) Total comprehensive income attributable to OpenText $ 92,737 $ 108,739 $ 400,807 $ 197,375 ______________________ (1) Net of tax expense (recovery) of $( 17 ) and $( 589 ) for the three months ended March 31, 2025 and 2024, respectively; $( 1,291 ) and $( 704 ) for the nine months ended March 31, 2025 and 2024, respectively. (2) Net of tax expense (recovery) of $ 494 and $ 42 for the three months ended March 31, 2025 and 2024, respectively; $ 952 and $ 163 for the nine months ended March 31, 2025 and 2024, respectively. (3) Net of tax expense (recovery) of $ 91 and $ 24 for the three months ended March 31, 2025 and 2024, respectively; $ 316 and $ 84 for the nine months ended March 31, 2025 and 2024, respectively. (4) Net of tax expense (recovery) of $ — and $ — for the three months ended March 31, 2025 and 2024, respectively; $( 43 ) and $ 110 for the nine months ended March 31, 2025 and 2024, respectively. (5) Net of tax expense (recovery) of $ 83 and $ 50 for the three months ended March 31, 2025 and 2024, respectively; $ 267 and $ 175 for the nine months ended March 31, 2025 and 2024, respectively . See accompanying Notes to Condensed Consolidated Financial Statements. 5 Table of Contents OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands of U.S. dollars and shares) (Unaudited) Three Months Ended March 31, 2025 Common Shares and Additional Paid in Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income Non-Controlling Interests Total Shares Amount Shares Amount Balance as of December 31, 2024 263,728 $ 2,275,583 ( 4,226 ) $ ( 144,432 ) $ 2,174,514 $ ( 75,779 ) $ 1,621 $ 4,231,507 Issuance of Common Shares Under employee stock option plans — 3 — — — — — 3 Under employee stock purchase plans 273 6,551 — — — — — 6,551 Share-based compensation — 23,000 — — — — — 23,000 Purchase of treasury stock — — ( 297 ) ( 7,564 ) — — — ( 7,564 ) Issuance of treasury stock — ( 73,720 ) 2,010 74,322 ( 425 ) — — 177 Repurchase of Common Shares ( 4,351 ) ( 31,405 ) — — ( 115,412 ) — — ( 146,817 ) Dividends declared ($ 0.2625 per Common Share) — — — — ( 69,235 ) — — ( 69,235 ) Other comprehensive income (loss) - net — — — — — ( 68 ) — ( 68 ) Net income for the period — — — — 92,805 — 49 92,854 Balance as of March 31, 2025 259,650 $ 2,200,012 ( 2,513 ) $ ( 77,674 ) $ 2,082,247 $ ( 75,847 ) $ 1,670 $ 4,130,408 Three Months Ended March 31, 2024 Common Shares and Additional Paid in Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income Non-Controlling Interests Total Shares Amount Shares Amount Balance as of December 31, 2023 271,855 $ 2,261,856 ( 4,400 ) $ ( 179,089 ) $ 2,029,643 $ ( 83,499 ) $ 1,436 $ 4,030,347 Issuance of Common Shares Under employee stock option plans 517 17,315 — — — — — 17,315 Under employee stock purchase plans 190 6,698 — — — — — 6,698 Share-based compensation — 35,947 — — — — — 35,947 Issuance of treasury stock — ( 45,058 ) 1,023 45,483 ( 425 ) — — — Dividends declared ($ 0.25 per Common Share) — — — — ( 68,443 ) — — ( 68,443 ) Other comprehensive income (loss) - net — — — — — 10,454 — 10,454 Net income for the period — — — — 98,285 — 42 98,327 Balance as of March 31, 2024 272,562 $ 2,276,758 ( 3,377 ) $ ( 133,606 ) $ 2,059,060 $ ( 73,045 ) $ 1,478 $ 4,130,645 6 Table of Contents OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands of U.S. dollars and shares) (unaudited) Nine Months Ended March 31, 2025 Common Shares and Additional Paid in Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income Non-Controlling Interests Total Shares Amount Shares Amount Balance as of June 30, 2024 267,801 $ 2,271,886 ( 3,136 ) $ ( 123,268 ) $ 2,119,159 $ ( 69,619 ) $ 1,523 $ 4,199,681 Issuance of Common Shares Under employee stock option plans 70 1,883 — — — — — 1,883 Under employee stock purchase plans 992 25,722 — — — — — 25,722 Share-based compensation — 82,801 — — — — — 82,801 Purchase of treasury stock — — ( 2,484 ) ( 72,587 ) — — — ( 72,587 ) Issuance of treasury stock — ( 115,556 ) 3,107 118,181 ( 1,127 ) — — 1,498 Repurchase of Common Shares ( 9,213 ) ( 66,724 ) — — ( 233,668 ) — — ( 300,392 ) Dividends declared ($ 0.7875 per Common Share) — — — — ( 209,152 ) — — ( 209,152 ) Other comprehensive income (loss) - net — — — — — ( 6,228 ) — ( 6,228 ) Net income for the period — — — — 407,035 — 147 407,182 Balance as of March 31, 2025 259,650 $ 2,200,012 ( 2,513 ) $ ( 77,674 ) $ 2,082,247 $ ( 75,847 ) $ 1,670 $ 4,130,408 Nine Months Ended March 31, 2024 Common Shares and Additional Paid in Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income Non-Controlling Interests Total Shares Amount Shares Amount Balance as of June 30, 2023 270,903 $ 2,176,947 ( 3,536 ) $ ( 151,597 ) $ 2,048,984 $ ( 53,559 ) $ 1,329 $ 4,022,104 Issuance of Common Shares Under employee stock option plans 942 31,318 — — — — — 31,318 Under employee stock purchase plans 717 23,709 — — — — — 23,709 Share-based compensation — 112,944 — — — — — 112,944 Purchase of treasury stock — — ( 1,400 ) ( 53,085 ) — — — ( 53,085 ) Issuance of treasury stock — ( 68,160 ) 1,559 71,076 ( 2,916 ) — — — Dividends declared ($ 0.75 per Common Share) — — — — ( 203,869 ) — — ( 203,869 ) Other comprehensive income (loss) - net — — — — — ( 19,486 ) — ( 19,486 ) Net income for the period — — — — 216,861 — 149 217,010 Balance as of March 31, 2024 272,562 $ 2,276,758 ( 3,377 ) $ ( 133,606 ) $ 2,059,060 $ ( 73,045 ) $ 1,478 $ 4,130,645 See accompanying Notes to Condensed Consolidated Financial Statements 7 Table of Contents OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars) (Unaudited) Nine Months Ended March 31, 2025 2024 Cash flows from operating activities: Net income $ 407,182 $ 217,010 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of intangible assets 480,405 630,275 Share-based compensation expense 82,919 113,312 Pension expense 10,194 9,579 Amortization of debt discount and issuance costs 16,334 19,587 Write-off of right of use assets 1,431 15,241 Adjustment to gain on AMC Divestiture 4,175 — Loss on extinguishment of debt — 10,803 Loss on sale and write down of property and equipment, net 728 1,715 Deferred taxes ( 91,771 ) ( 249,174 ) Share in net (income) loss of equity investees ( 3,637 ) 19,013 Changes in derivative instruments ( 10,778 ) 3,551 Changes in operating assets and liabilities: Accounts receivable 111,909 51,487 Contract assets ( 96,101 ) ( 71,486 ) Prepaid expenses and other current assets 37,177 4,717 Income taxes ( 184,149 ) 75,676 Accounts payable and accrued liabilities ( 81,308 ) ( 72,887 ) Deferred revenue 10,960 14,338 Other assets ( 7,582 ) 5,868 Operating lease assets and liabilities, net ( 15,661 ) ( 16,154 ) Net cash provided by operating activities 672,427 782,471 Cash flows from investing activities: Additions of property and equipment ( 108,997 ) ( 119,316 ) Purchase of Micro Focus, net of cash acquired — ( 9,272 ) Settlement of derivative instruments ( 10,380 ) — Adjustment to proceeds from AMC Divestiture ( 11,686 ) — Proceeds from interest on derivative instruments 5,166 4,456 Other investing activities 6,474 ( 468 ) Net cash used in investing activities ( 119,423 ) ( 124,600 ) Cash flows from financing activities: Proceeds from issuance of Common Shares from exercise of stock options and ESPP 25,925 57,027 Repayment of long-term debt and Revolver ( 26,888 ) ( 559,389 ) Net change in transition services agreement obligation ( 15,277 ) — Debt issuance costs ( 1,066 ) ( 2,792 ) Repurchase of Common Shares ( 267,969 ) — Purchase of treasury stock ( 70,159 ) ( 53,085 ) Payments of dividends to shareholders ( 205,335 ) ( 200,672 ) Other financing activities — ( 1,447 ) Net cash used in financing activities ( 560,769 ) ( 760,358 ) Foreign exchange gain (loss) on cash held in foreign currencies 4,866 ( 3,982 ) Decrease in cash, cash equivalents and restricted cash during the period ( 2,899 ) ( 106,469 ) Cash, cash equivalents and restricted cash at beginning of the period 1,282,793 1,233,952 Cash, cash equivalents and restricted cash at end of the period $ 1,279,894 $ 1,127,483 8 Table of Contents OPEN TEXT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars) (Unaudited) Reconciliation of cash, cash equivalents and restricted cash: March 31, 2025 March 31, 2024 Cash and cash equivalents $ 1,277,950 $ 1,125,323 Restricted cash (1) 1,944 2,160 Total cash, cash equivalents and restricted cash $ 1,279,894 $ 1,127,483 ______________________ (1) Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Condensed Consolidated Balance Sheets (Note 7). Supplemental cash flow disclosures (Note 4 and Note 19) See accompanying Notes to Condensed Consolidated Financial Statements. 9 Table of Contents OPEN TEXT CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the Three and Nine Months Ended March 31, 2025 (Tabular amounts in thousands of U.S. dollars, except share and per share data) (Unaudited) NOTE 1— BASIS OF PRESENTATION The accompanying Condensed Consolidated Financial Statements include the accounts of Open Text Corporation and our subsidiaries, collectively referred to as “OpenText” or the “Company.” We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd. (OT South Africa), which as of March 31, 2025, was 70 % owned by OpenText. All intercompany balances and transactions have been eliminated. The Company's fiscal year begins on July 1 and ends on June 30. Unless otherwise noted, any reference to a year preceded by the word “Fiscal” refers to the fiscal year ended June 30 of that year. For example, references to “Fiscal 2025” refer to the fiscal year ended June 30, 2025. These Condensed Consolidated Financial Statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented. Beginning in the first quarter of Fiscal 2025, for the three and nine months ended March 31, 2024, the Company reclassified expenses of $ 7.5 million and $ 23.1 million, respectively, from Research and development to Sales and marketing in the Condensed Consolidated Statements of Income to provide a better representation of the function of the expenses. We also reclassified prior period information to conform to current presentation. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements. These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. In particular, key estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) accounting for income taxes, (iii) testing of goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) restructuring accruals, (viii) acquisition accruals and pre-acquisition contingencies, (ix) the valuation of stock options granted and obligations related to share-based compensation, including the valuation of our long-term incentive plans, (x) the valuation of pension obligations and pension assets, (xi) the valuation of available-for-sale investments, (xii) the valuation of derivative instruments and (xiii) the accounting for disposals of assets and liabilities. Divestiture of AMC Business On May 1, 2024, the Company completed the sale of its Application Modernization and Connectivity (AMC) business to Rocket Software, Inc. (Rocket Software), for $ 2.275 billion in cash before taxes, fees and other adjustments (the AMC Divestiture). See Note 17 “Acquisitions and Divestitures” for more details. The Company determined that the AMC business did not constitute a component, as its operations and cash flows could not be clearly distinguished from the rest of the Company’s operations and cash flows due to significant shared costs. Therefore, the transaction did not meet the discontinued operations criteria, and the results of operations from the AMC business were presented within Income from operations in our Condensed Consolidated Statements of Income up to the date of disposition. NOTE 2— ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements Adopted in Fiscal 2025 During Fiscal 2025, we have not adopted any accounting pronouncements that have had a material impact to our Condensed Consolidated Financial Statements or disclosures. 10 Table of Contents Accounting Pronouncements Not Yet Adopted in Fiscal 2025 Segment Reporting In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which provides guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. Public entities must adopt the new guidance for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. We are currently evaluating the potential impact of the adoption of ASU 2023-07 on the Company’s financial disclosures. Income Taxes In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” that addresses requests for improved income tax disclosures from investors that use the financial statements to make capital allocation decisions. Public entities must adopt the new guidance for fiscal years beginning after December 15, 2024. The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. We are currently evaluating the potential impact of the adoption of ASU 2023-09 on the Company’s financial disclosures. Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03 “Disaggregation of Income Statement Expenses (Subtopic 220-40),” which requires additional disclosures of specific expense categories included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The amendments in this ASU are to be applied on a prospective basis with the option for retrospective application, and early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2024-03 on the Company’s financial disclosures. 11 Table of Contents NOTE 3— REVENUES Disaggregation of Revenue We have four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. The following tables disaggregate our revenue by significant geographic area, based on the location of our direct end customer, by type of performance obligation and timing of revenue recognition for the periods indicated: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Total Revenues by Geography: Americas (1) $ 719,804 $ 828,830 $ 2,213,904 $ 2,558,344 EMEA (2) 420,134 481,175 1,288,433 1,431,500 Asia Pacific (3) 114,425 137,126 355,531 417,584 Total revenues $ 1,254,363 $ 1,447,131 $ 3,857,868 $ 4,407,428 Total Revenues by Type of Performance Obligation: Recurring revenues (4) Cloud services and subscriptions revenue $ 462,614 $ 454,528 $ 1,381,944 $ 1,355,633 Customer support revenue 567,379 691,441 1,753,464 2,084,916 Total recurring revenues $ 1,029,993 $ 1,145,969 $ 3,135,408 $ 3,440,549 License revenue (perpetual, term and subscriptions) 138,363 200,363 453,099 662,627 Professional service and other revenue 86,007 100,799 269,361 304,252 Total revenues $ 1,254,363 $ 1,447,131 $ 3,857,868 $ 4,407,428 Total Revenues by Timing of Revenue Recognition: Point in time $ 138,363 $ 200,363 $ 453,099 $ 662,627 Over time (including professional service and other revenue) 1,116,000 1,246,768 3,404,769 3,744,801 Total revenues $ 1,254,363 $ 1,447,131 $ 3,857,868 $ 4,407,428 ______________________ (1) Americas consists of countries in North, Central and South America. (2) EMEA consists of countries in Europe, the Middle East and Africa. (3) Asia Pacific primarily consists of Japan, Australia, China, Korea, Philippines, Singapore, India and New Zealand. (4) Recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue. Contract Balances A contract asset, net of allowance for credit losses, will be recorded if we have recognized revenue but do not have an unconditional right to the related consideration from the customer. For example, this will be the case if implementation services offered in a cloud arrangement are identified as a separate performance obligation and are provided to a customer prior to us being able to bill the customer. In addition, a contract asset may arise in relation to subscription licenses if the license revenue that is recognized upfront exceeds the amount that we are able to invoice the customer at that time. Contract assets are reclassified to accounts receivable when the rights become unconditional. The balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows: As of March 31, 2025 As of June 30, 2024 Short-term contract assets $ 70,878 $ 66,450 Long-term contract assets 47,961 38,684 Short-term deferred revenues 1,526,829 1,521,416 Long-term deferred revenues 171,890 162,401 The difference in the opening and closing balances of our contract assets and deferred revenues primarily results from the timing difference between our performance and customer payments. We fulfill our obligations under a contract with a customer 12 Table of Contents by transferring products and services in exchange for consideration from the customer. During the nine months ended March 31, 2025, we reclassified $ 82.1 million (nine months ended March 31, 2024 — $ 90.6 million) of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional. During the three and nine months ended March 31, 2025 and 2024, respectively, there was no impairment loss recognized related to contract assets. We recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer for future obligations to transfer products or services. Our deferred revenues primarily relate to cloud services and customer support agreements which have been paid for by customers prior to the performance of those services. The amount of revenue that was recognized during the nine months ended March 31, 2025 that was included in the deferred revenue balances at June 30, 2024 was $ 1,390 million (nine months ended March 31, 2024—$ 1,566 million). Incremental Costs of Obtaining a Contract with a Customer Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. The following table summarizes the changes in total capitalized costs to obtain a contract, since June 30, 2024: Capitalized costs to obtain a contract as of June 30, 2024 $ 109,488 New capitalized costs incurred 37,289 Amortization of capitalized costs ( 31,518 ) Impact of foreign exchange rate changes 193 Capitalized costs to obtain a contract as of March 31, 2025 $ 115,452 During the three and nine months ended March 31, 2025 and 2024, respectively, there was no significant impairment loss recognized related to capitalized costs to obtain a contract. Refer to Note 7 “Prepaid Expenses and Other Assets” for additional information on incremental costs of obtaining a contract. Remaining Performance Obligations Remaining performance obligations (RPO) represent contracted revenue that has not yet been recognized. They include amounts recognized as deferred revenue and amounts that are contracted but will be billed and recognized as revenue in future periods. Beginning December 31, 2024, the Company elected to include RPO for contracts with an original expected duration of one year or less in accordance with ASC 606-10-50-14, and discontinued use of the practical expedient relating to the disclosure of RPO within a contract. The Company believes this presentation is preferable as it provides additional information. Comparative amounts have not been provided for the quarter ended March 31, 2024 as such information cannot be practically determined for comparison purposes. The following chart provides RPO information as of the following periods. The 12-month periods noted below are as of the dates presented, with the remaining balances recognized substantially over the next three years thereafter. ($ in billions) As of March 31, 2025 As of December 31, 2024 As of September 30, 2024 As of June 30, 2024 Total RPO (1) $ 4.1 $ 4.1 $ 3.9 $ 4.0 % recognized as revenue over the following 12 months 63 % 63 % 63 % 63 % Cloud services and subscription RPO $ 2.3 $ 2.3 $ 2.2 $ 2.2 % recognized as revenue over the following 12 months 51 % 50 % 51 % 51 % Customer support and other RPO (2) $ 1.8 $ 1.8 $ 1.7 $ 1.8 % recognized as revenue over the following 12 months 78 % 79 % 78 % 78 % ______________________ (1) RPO amounts presented may be impacted by certain estimates including currency fluctuations, estimates of customers’ deployment of contracted solutions, changes in the scope or termination of contracts, among other factors, and are therefore subject to change. (2) Customer support and other RPO is primarily comprised of obligations related to customer support revenues, and to a lesser extent license, professional services and other revenues. 13 Table of Contents NOTE 4— LEASES We enter into operating leases, both domestically and internationally, for certain facilities, automobiles, data centers and equipment for use in the ordinary course of business. The duration of the majority of these leases generally ranges from 1 to 10 years, some of which include options to extend for an additional 3 to 5 years after the initial term. Additionally, the land upon which our headquarters in Waterloo, Ontario, Canada is located is leased from the University of Waterloo for a period of 49 years beginning in December 2005, with an option to renew for an additional term of 49 years. We also have finance lease liabilities comprised of equipment lease arrangements with an average duration of 4 to 5 years, of which all are currently being sublet. Leases with an initial term of 12 months or less are not recorded on our Condensed Consolidated Balance Sheets. The following illustrates the Condensed Consolidated Balance Sheets information related to leases: Balance Sheet Location As of March 31, 2025 As of June 30, 2024 Operating Leases Operating lease right of use assets Operating lease right of use assets $ 209,121 $ 219,774 Operating lease liabilities (current) Operating lease liabilities $ 75,538 $ 76,446 Operating lease liabilities (non-current) Long-term operating lease liabilities 195,394 218,174 Total operating lease liabilities $ 270,932 $ 294,620 Finance Leases Finance lease receivables (current) Prepaid expenses and other current assets $ 2,265 $ 4,031 Finance lease receivables (non-current) Other assets 907 2,329 Total finance lease receivables $ 3,172 $ 6,360 Finance lease liabilities (current) Accounts payable and accrued liabilities $ 2,025 $ 3,173 Finance lease liabilities (non-current) Accrued liabilities 907 2,327 Total finance lease liabilities $ 2,932 $ 5,500 The weighted average remaining lease term and discount rate for the periods indicated below were as follows: As of March 31, 2025 As of June 30, 2024 Weighted-average remaining lease term Operating leases 4.68 years 5.13 years Finance leases 1.42 years 1.85 years Weighted-average discount rate Operating leases 4.96 % 5.00 % Finance leases 5.36 % 5.47 % Lease Costs and Other Information The following illustrates the various components of lease costs for the period indicated: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Operating lease cost $ 20,433 $ 22,068 $ 62,181 $ 68,402 Short-term lease cost 613 675 1,591 2,567 Variable lease cost 1,142 1,342 3,033 3,798 Sublease income ( 2,866 ) ( 2,955 ) ( 8,332 ) ( 9,668 ) Total lease cost $ 19,322 $ 21,130 $ 58,473 $ 65,099 14 Table of Contents Supplemental Cash Flow Information The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payments made for variable lease costs and short-term leases are not included in the measurement of lease liabilities, and, as such, are excluded from the amounts below: Nine Months Ended March 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating leases $ 75,001 $ 82,449 Finance leases $ 2,730 $ 4,427 Right of use assets obtained in exchange for new lease liabilities: Operating leases $ 42,591 $ 19,360 Maturity of Lease Liabilities The following table presents the future minimum lease payments under our lease liabilities as of March 31, 2025: Fiscal years ending June 30, Operating Leases Finance Leases 2025 (three months ended) $ 22,178 $ 639 2026 84,382 1,940 2027 70,714 458 2028 49,755 — 2029 28,166 — Thereafter 45,800 — Total lease payments $ 300,995 $ 3,037 Less: Imputed interest ( 30,063 ) ( 105 ) Total $ 270,932 $ 2,932 Operating lease maturity amounts included in the table above do not include sublease income expected to be received under our various sublease agreements with third parties. Under the agreements initiated with third parties, we expect to receive sublease income of $ 2.5 million over the remainder of Fiscal 2025 and $ 24.8 million thereafter. NOTE 5— GOODWILL Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets. The following table summarizes the changes in goodwill since June 30, 2024: Balance as of June 30, 2024 $ 7,488,367 Acquisition of Pillr (Note 17) (1) 196 Divestiture of AMC business (Note 17) (2) 1,390 Impact of foreign exchange rate changes 3,999 Balance as of March 31, 2025 $ 7,493,952 ______________________ (1) Adjustment relates to the open measurement period. (2) Relates to the final settlement of working capital and other adjustments. 15 Table of Contents NOTE 6— ACQUIRED INTANGIBLE ASSETS As of March 31, 2025 Cost Accumulated Amortization Net Technology assets $ 1,142,327 $ ( 473,032 ) $ 669,295 Customer assets 2,644,301 ( 1,211,120 ) 1,433,181 Total $ 3,786,628 $ ( 1,684,152 ) $ 2,102,476 As of June 30, 2024 Cost Accumulated Amortization Net Technology assets $ 1,153,457 $ ( 342,528 ) $ 810,929 Customer assets 2,762,371 ( 1,087,036 ) 1,675,335 Total $ 3,915,828 $ ( 1,429,564 ) $ 2,486,264 Where applicable, the above balances as of March 31, 2025 have been reduced to reflect the impact of intangible assets where the gross cost has become fully amortized during the nine months ended March 31, 2025. The impact of this resulted in reductions to the cost and accumulated amortization of technology assets and customer assets of $ 11 million and $ 118 million, respectively. The weighted average amortization periods for acquired technology and customer intangible assets are approximately six years and nine years , respectively. The following table shows the estimated future amortization expense for the fiscal years indicated. This calculation assumes no future adjustments to acquired intangible assets: Fiscal years ending June 30, 2025 (three months ended) $ 126,696 2026 467,051 2027 396,722 2028 379,288 2029 283,145 2030 and Thereafter 449,574 Total $ 2,102,476 16 Table of Contents NOTE 7— PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other current assets: As of March 31, 2025 As of June 30, 2024 Deposits and restricted cash $ 676 $ 4,142 Capitalized costs to obtain a contract 40,926 44,577 Short-term prepaid expenses and other current assets 158,422 192,065 Derivative asset (1) 945 2,127 Total $ 200,969 $ 242,911 ______________________ (1) Represents the asset related to our derivative instrument activity (see Note 15 “Derivative Instruments and Hedging Activities” for more details). Other assets: As of March 31, 2025 As of June 30, 2024 Deposits and restricted cash $ 23,089 $ 20,063 Capitalized costs to obtain a contract 74,526 64,911 Investments 120,651 124,168 Available-for-sale financial assets 41,860 40,541 Long-term prepaid expenses and other long-term assets 42,998 48,598 Total $ 303,124 $ 298,281 Deposits and restricted cash primarily relate to security deposits provided to landlords in accordance with facility lease agreements and cash restricted per the terms of certain contractual-based agreements. Capitalized costs to obtain a contract relate to incremental costs of obtaining a contract, such as sales commissions, which are eligible for capitalization on contracts to the extent that such costs are expected to be recovered (see Note 3 “Revenues”). Investments relate to certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4 % to below 20 %. These investments are accounted for using the equity method. Our share of net income or losses based on our interest in these investments, which approximates fair value and is subject to volatility based on market trends and business conditions, is recorded as a component of Other income (expense), net in our Condensed Consolidated Statements of Income (see Note 20 “Other Income (Expense), Net”). During the three and nine months ended March 31, 2025, our share of income (loss) from these investments was $ 1.6 million and $ 3.6 million, respectively (three and nine months ended March 31, 2024—$( 0.8 ) million and $( 19.0 ) million, respectively). A portion of the available-for-sale financial assets relate to contractual arrangements under insurance policies held by the Company with guaranteed interest rates that are utilized to meet certain pension and post-retirement obligations but do not meet the definition of a plan asset. The remaining portion of available-for-sale financial assets are primarily comprised of various debt and equity funds, which are valued utilizing market quotes provided by our third-party custodian. These arrangements are treated as available-for-sale financial assets measured at fair value quarterly (see Note 14 “Fair Value Measurement”) with unrealized gains and losses recorded within “Other comprehensive income (loss), net” (see Note 18 “Accumulated Other Comprehensive Income (Loss)”). Prepaid expenses and other assets, both short-term and long-term, include advance payments on licenses that are being amortized over the applicable terms of the licenses and other miscellaneous assets. 17 Table of Contents NOTE 8— ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities: As of March 31, 2025 As of June 30, 2024 Accounts payable—trade $ 130,481 $ 151,202 Accrued salaries, incentives and commissions 232,804 267,991 Accrued liabilities 240,629 262,190 Accrued sales and other tax liabilities 16,927 21,167 Derivative liability (1) 151,780 159,234 Accrued interest on long-term debt 51,917 38,670 Amounts payable in respect of restructuring and other special charges 17,759 22,489 Asset retirement obligations 5,438 8,173 Total $ 847,735 $ 931,116 ______________________ (1) Represents the liability related to our derivative instrument activity (see Note 15 “Derivative Instruments and Hedging Activities” for more details). Long-term accrued liabilities: As of March 31, 2025 As of June 30, 2024 Amounts payable in respect of restructuring and other special charges $ 6,967 $ 9,682 Other accrued liabilities 11,910 15,390 Asset retirement obligations 23,678 21,411 Total $ 42,555 $ 46,483 Asset retirement obligations We are required to return certain of our leased facilities to their original state at the conclusion of our lease. As of March 31, 2025, the present value of this obligation was $ 29.1 million (June 30, 2024—$ 29.6 million), with an undiscounted value of $ 31.7 million (June 30, 2024—$ 32.8 million). 18 Table of Contents NOTE 9— LONG-TERM DEBT As of March 31, 2025 As of June 30, 2024 Total debt Senior Notes 2031 $ 650,000 $ 650,000 Senior Notes 2030 900,000 900,000 Senior Notes 2029 850,000 850,000 Senior Notes 2028 900,000 900,000 Senior Secured Notes 2027 1,000,000 1,000,000 Acquisition Term Loan 2,194,338 2,221,225 Total principal payments due 6,494,338 6,521,225 Unamortized debt discount and issuance costs (1) ( 113,098 ) ( 128,432 ) Total amount outstanding 6,381,240 6,392,793 Less: Current portion of long-term debt Acquisition Term Loan 35,850 35,850 Total current portion of long-term debt 35,850 35,850 Non-current portion of long-term debt $ 6,345,390 $ 6,356,943 ______________________ (1) During the three and nine months ended March 31, 2025, we recorded nil and $ 1.0 million of debt issuance costs, respectively, related to the modification of the Acquisition Term Loan (as defined below) (three and nine months ended March 31, 2024— nil and $ 2.4 million, respectively, related to the amendment of the Revolver and the modification of the Acquisition Term Loan, each as defined below). Senior Unsecured Fixed Rate Notes Senior Notes 2031 On November 24, 2021, Open Text Holdings, Inc. (OTHI) a wholly-owned indirect subsidiary of the Company, issued $ 650 million in aggregate principal amount of 4.125 % senior notes due 2031 guaranteed by the Company (Senior Notes 2031) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (Securities Act), and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2031 bear interest at a rate of 4.125 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022. Senior Notes 2031 will mature on December 1, 2031, unless earlier redeemed, in accordance with their terms, or repurchased. On July 1, 2024, OTHI merged with and into Open Text Inc. (OTI), a wholly-owned indirect subsidiary of the Company. As a result of the merger, OTI assumed all rights and obligations of OTHI concerning the Senior Notes 2031, effective July 1, 2024. For the three and nine months ended March 31, 2025, we recorded interest expense of $ 6.7 million and $ 20.1 million, respectively, relating to Senior Notes 2031 (three and nine months ended March 31, 2024—$ 6.7 million and $ 20.1 million, respectively). Senior Notes 2030 On February 18, 2020, OTHI issued $ 900 million in aggregate principal amount of 4.125 % senior notes due 2030 guaranteed by the Company (Senior Notes 2030) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2030 bear interest at a rate of 4.125 % per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2030 will mature on February 15, 2030, unless earlier redeemed, in accordance with their terms, or repurchased. As a result of the merger of OTHI with and into OTI, OTI assumed all rights and obligations of OTHI concerning the Senior Notes 2030, effective July 1, 2024. For the three and nine months ended March 31, 2025, we recorded interest expense of $ 9.3 million and $ 27.9 million, respectively, relating to Senior Notes 2030 (three and nine months ended March 31, 2024—$ 9.3 million and $ 27.9 million, respectively). 19 Table of Contents Senior Notes 2029 On November 24, 2021, the Company issued $ 850 million in aggregate principal amount of 3.875 % senior notes due 2029 (Senior Notes 2029) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2029 bear interest at a rate of 3.875 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022. Senior Notes 2029 will mature on December 1, 2029, unless earlier redeemed, in accordance with their terms, or repurchased. For the three and nine months ended March 31, 2025, we recorded interest expense of $ 8.2 million and $ 24.6 million, respectively, relating to Senior Notes 2029 (three and nine months ended March 31, 2024—$ 8.2 million and $ 24.6 million, respectively). Senior Notes 2028 On February 18, 2020, the Company issued $ 900 million in aggregate principal amount of 3.875 % senior notes due 2028 (Senior Notes 2028) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2028 bear interest at a rate of 3.875 % per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2028 will mature on February 15, 2028, unless earlier redeemed, in accordance with their terms, or repurchased. For the three and nine months ended March 31, 2025, we recorded interest expense of $ 8.7 million and $ 26.1 million, respectively, relating to Senior Notes 2028 (three and nine months ended March 31, 2024—$ 8.7 million and $ 26.1 million, respectively). Senior Secured Fixed Rate Notes Senior Secured Notes 2027 On December 1, 2022, the Company issued $ 1 billion in aggregate principal amount of senior secured notes due 2027 (Senior Secured Notes 2027, and together with the Senior Notes 2031, Senior Notes 2030, Senior Notes 2029, and Senior Notes 2028, the Senior Notes) in connection with the financing of the acquisition of Micro Focus International Limited, formerly Micro Focus International plc, and its subsidiaries (Micro Focus) (the Micro Focus Acquisition) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Secured Notes 2027 bear interest at a rate of 6.90 % per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2023. Senior Secured Notes 2027 will mature on December 1, 2027, unless earlier redeemed, in accordance with their terms, or repurchased. The Senior Secured Notes 2027 are guaranteed on a senior secured basis by certain of the Company’s subsidiaries, and are secured with the same priority as the Company’s senior credit facilities. The Senior Secured Notes 2027 and the related guarantees are effectively senior to all of the Company’s and the guarantors’ senior unsecured debt to the extent of the value of the Collateral (as defined in the indenture to the Senior Secured Notes 2027) and are structurally subordinated to all existing and future liabilities of each of the Company’s existing and future subsidiaries that do not guarantee the Senior Secured Notes 2027. As of March 31, 2025, the Senior Secured Notes 2027 bear an effective interest rate of 7.39 %. The effective interest rate includes interest expense of $ 51.9 million and amortization of debt discount and issuance costs of $ 2.1 million. For the three and nine months ended March 31, 2025, we recorded interest expense of $ 17.3 million and $ 51.9 million, respectively, relating to Senior Secured Notes 2027 (three and nine months ended March 31, 2024—$ 17.3 million and $ 51.9 million, respectively). Term Loan B On May 30, 2018, we entered into a credit facility that provides for a $ 1 billion term loan facility (Term Loan B), and borrowed $ 1 billion under the facility to, among other things, repay in full the loans under our prior $ 800 million term loan facility originally entered into on January 16, 2014. On May 6, 2024, we used a portion of the net proceeds from the AMC Divestiture to prepay in full the then outstanding principal balance of $ 940 million under Term Loan B, at which point all remaining commitments under Term Loan B were reduced to zero and Term Loan B was terminated . For the three and nine months ended March 31, 2025, we did not record any interest expense relating to Term Loan B (three and nine months ended March 31, 2024—$ 17.1 million and $ 51.6 million, respectively). 20 Table of Contents Revolver On December 19, 2023, we amended our committed revolving credit facility (the Revolver) to, among other things, extend the maturity to December 19, 2028. Borrowings under the Revolver are secured by a first charge over substantially all of our assets, on a pari passu basis with the Acquisition Term Loan (as defined below) and Senior Secured Notes 2027. The Revolver has no fixed repayment date prior to the end of the term. Borrowings under the Revolver bear interest per annum at a floating rate of interest equal to Term SOFR (as defined in the Revolver) and a fixed margin dependent on our consolidated net leverage ratio ranging from 1.25 % to 1.75 %. Under the Revolver, we must maintain a “consolidated net leverage” ratio of no more than 4.50 :1.00 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of our total debt reduced by unrestricted cash, including guarantees and letters of credit, over our trailing twelve months net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. As of March 31, 2025, our consolidated net leverage ratio, as calculated in accordance with the Revolver, was 2.48 :1.00. As of March 31, 2025, we had no outstanding balance under the Revolver (June 30, 2024— nil ). For the three and nine months ended March 31, 2025, we did not record any interest expense relating to the Revolver (three and nine months ended March 31, 2024— nil and $ 2.2 million, respectively). Acquisition Term Loan On December 1, 2022, we amended our first lien term loan facility (the Acquisition Term Loan), dated as of August 25, 2022, to increase the aggregate commitments under the senior secured delayed-draw term loan facility from an aggregate principal amount of $ 2.585 billion to an aggregate principal amount of $ 3.585 billion. On August 14, 2023, we entered into the second amendment to the Acquisition Term Loan to reduce the applicable interest rate margin by 0.75 % over the remaining term of the Acquisition Term Loan. On May 15, 2024, we entered into the third amendment to the Acquisition Term Loan to reduce the applicable interest rate margin by 0.5 % and remove the 10 -basis point credit spread adjustment for loans bearing interest based on the Secured Overnight Financing Rate (SOFR). On November 27, 2024, we entered into the fourth amendment to the Acquisition Term Loan to reduce the applicable interest rate margin by 0.5 % over the remaining term of the Acquisition Term Loan. The reductions in interest rate margin on the Acquisition Term Loan resulting from the amendments were all accounted for by the Company as debt modifications. The Acquisition Term Loan has a seven-year term from the date of funding, and repayments under the Acquisition Term Loan are equal to 0.25 % of the principal amount in equal quarterly installments for the life of the Acquisition Term Loan, with the remainder due at maturity. Borrowings under the Acquisition Term Loan currently bear a floating rate of interest equal to Term SOFR (as defined in the Acquisition Term Loan) plus an applicable margin of 1.75 %. As of March 31, 2025, the outstanding balance on the Acquisition Term Loan bears an interest rate of 6.07 %. As of March 31, 2025, the Acquisition Term Loan bears an effective interest rate of 7.12 %. The effective interest rate includes interest expense of $ 114.6 million and amortization of debt discount and issuance costs of $ 10.9 million. The Acquisition Term Loan has incremental facility capacity of (i) $ 250 million plus (ii) additional amounts, subject to meeting a “consolidated senior secured net leverage” ratio not exceeding 2.75 :1.00, in each case subject to certain conditions. Consolidated senior secured net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, that is secured by the Company’s or any of the Company’s subsidiaries’ assets, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. Under the Acquisition Term Loan, we must maintain a “consolidated net leverage” ratio of no more than 4.50 :1.00 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges as defined in the Acquisition Term Loan. As of March 31, 2025, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 2.48 :1:00. The Acquisition Term Loan is unconditionally guaranteed by certain subsidiary guarantors, as defined in the Acquisition Term Loan, and is secured by a first charge on substantially all of the assets of the Company and the subsidiary guarantors on a pari passu basis with the Revolver and the Senior Secured Notes 2027. On October 20, 2023, and January 22, 2024, the Company made prepayments of $ 75 million and $ 175 million, respectively, on the Acquisition Term Loan using cash on hand. On May 6, 2024, the Company used a portion of the net proceeds from the AMC Divestiture to prepay $ 1.06 billion of the outstanding principal balance of the Acquisition Term Loan. For the three and nine months ended March 31, 2025, we recorded interest expense of $ 33.5 million and $ 114.6 million, respectively, relating to the Acquisition Term Loan (three and nine months ended March 31, 2024—$ 69.2 million and $ 219.5 million, respectively). 21 Table of Contents Debt Discount and Issuance Costs Debt discount and issuance costs relate primarily to costs incurred for the purpose of obtaining or amending our credit facilities and issuing our Senior Notes and are being amortized through interest expense over the respective terms of the Senior Notes and Acquisition Term Loan using the effective interest method and straight-line method for the Revolver. NOTE 10— PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS Defined Benefit and Other Post-Retirement Benefit Plans The Company has 48 pension and other post-retirement plans in multiple countries. All of our pension and other post-retirement plans are located outside of Canada and the United States. The plans are primarily located in Germany, which, as of March 31, 2025, make up approximately 55 % of the total net benefit pension obligations. Our defined benefit pension plans include a mix of final salary type plans which provide for retirement, old age, disability and survivor’s benefits. Final salary type pension plans provide benefits to members either in the form of a lump sum payment or a guaranteed level of pension payable for life in the case of retirement, disability and death. Benefits under our final salary type plans are generally based on the participant’s age, compensation and years of service as well as the social security ceiling and other factors. Many of these plans are closed to new members. The net periodic costs of these plans are determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. Other post-retirement plans include statutory plans that offer termination, indemnity or other end of service benefits. Many of these plans were assumed through our acquisitions or are required by local regulatory and statutory requirements. All of our defined benefit and other post-retirement plans are included in the aggregate projected benefit obligation within Pension liability, net on our Condensed Consolidated Balance Sheets. The following are details of net pension expense relating to the defined benefit pension plans: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Pension expense: Service cost $ 2,758 $ 2,789 $ 8,300 $ 8,342 Interest cost 3,242 3,092 9,727 9,303 Expected return of plan assets ( 2,936 ) ( 2,864 ) ( 8,807 ) ( 8,575 ) Amortization of actuarial (gains) losses 317 179 974 509 Net pension expense $ 3,381 $ 3,196 $ 10,194 $ 9,579 Service-related net periodic pension costs are recorded within operating expense and all other non-service related net periodic pension costs are classified under Interest and other related expense, net on our Condensed Consolidated Statements of Income. NOTE 11— EQUITY AND SHARE-BASED COMPENSATION Equity Cash Dividends For the three and nine months ended March 31, 2025, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $ 0.2625 and $ 0.7875 per Common Share, respectively, in the aggregate amount of $ 67.9 million and $ 205.3 million, respectively, which we paid during the same periods (three and nine months ended March 31, 2024—$ 0.25 and $ 0.75 per Common Share, respectively, in the aggregate amount of $ 67.3 million and $ 200.7 million, respectively). Share Capital Our authorized share capital includes an unlimited number of Common Shares and an unlimited number of Preference Shares. No Preference Shares have been issued. 22 Table of Contents Treasury Stock From time to time we may provide funds to a third-party agent to facilitate repurchases of our Common Shares in connection with the settlement of awards under the Long-Term Incentive Plans (LTIP) or other plans. During the three and nine months ended March 31, 2025, we repurchased 296,831 and 2,483,966 Common Shares on the open market at a cost of $ 7.6 million and $ 72.6 million, respectively, for potential settlement of awards under our LTIP or other plans as described below (three and nine months ended March 31, 2024— nil and 1,400,000 Common Shares were purchased at a cost of nil and $ 53.1 million, respectively). During the three and nine months ended March 31, 2025, we delivered to eligible participants 2,009,955 and 3,107,220 Common Shares, respectively, that were purchased in the open market in connection with the settlement of awards under our LTIP and other plans (three and nine months ended March 31, 2024— 1,022,821 and 1,559,381 Common Shares, respectively). Employee Stock Purchase Plan (ESPP) Our ESPP offers employees the opportunity to purchase our Common Shares at a purchase price discount of 15 %. During the three and nine months ended March 31, 2025, 376,945 and 979,679 Common Shares, respectively, were eligible for issuance to employees enrolled in the ESPP (three and nine months ended March 31, 2024— 312,990 and 786,736 Common Shares, respectively). During the three and nine months ended March 31, 2025, cash in the amount of $ 8.1 million and $ 24.0 million, respectively, was received from employees relating to the ESPP (three and nine months ended March 31, 2024—$ 10.3 million and $ 25.6 million, respectively). Share Repurchase Plan On April 30, 2024, the Board authorized a share repurchase plan (Fiscal 2024 Repurchase Plan) pursuant to which we were authorized to purchase for cancellation, in open market transactions from time to time over the 12-month period commencing on May 7, 2024 until May 6, 2025, up to $ 250 million of our Common Shares. The Fiscal 2024 Repurchase Plan included a normal course issuer bid to provide means to execute purchases over the Toronto Stock Exchange (TSX). On July 31, 2024, in order to align our share repurchase plan to our fiscal year, the Board approved the early termination of the Fiscal 2024 Repurchase Plan and authorized a new share repurchase plan (the Fiscal 2025 Repurchase Plan), pursuant to which we may purchase for cancellation in open market transactions, from time to time over the 12-month period commencing on August 7, 2024 until August 6, 2025, if considered advisable, up to an aggregate of $ 300 million of our Common Shares on the TSX, NASDAQ and/or alternative trading systems in Canada and/or the United States, if eligible, subject to applicable law and stock exchange rules. On March 13, 2025, we increased the authorized limit of the Fiscal 2025 Repurchase Plan by $ 150 million to $ 450 million and established an automatic share purchase plan (ASPP). The price that we are authorized to pay for Common Shares in open market transactions is the market price at the time of purchase or such other price as is permitted by applicable law or stock exchange rules. The Fiscal 2025 Repurchase Plan will be effected in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the Exchange Act), and includes a normal course issuer bid to provide means to execute purchases over the TSX. During the three and nine months ended March 31, 2025, we repurchased and cancelled 4,350,716 and 9,212,818 Common Shares for $ 116.7 million and $ 270.3 million, respectively, inclusive of 2% Canadian excise taxes recorded. During the three and nine months ended March 31, 2024, we did not repurchase any Common Shares. Additionally, as of March 31, 2025, we recorded an accrual and a corresponding charge to retained earnings of $ 30.1 million, representing the estimated value of Common Shares expected to be repurchased following the fiscal quarter ended March 31, 2025 pursuant to the ASPP. 23 Table of Contents Share-Based Compensation Share-based compensation expense for the periods indicated below is detailed as follows: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Stock Options (issued under Stock Option Plans) $ 4,126 $ 3,580 $ 10,703 $ 13,840 Performance Share Units (issued under LTIP) 3,344 6,999 16,042 19,816 Restricted Share Units (issued under LTIP) 3,878 2,489 12,191 8,404 Restricted Share Units (other) 9,613 21,002 36,334 64,673 Deferred Share Units (directors) 883 776 3,115 2,378 Employee Stock Purchase Plan 1,156 1,196 4,534 4,201 Total share-based compensation expense $ 23,000 $ 36,042 $ 82,919 $ 113,312 A summary of unrecognized compensation cost for unvested share-based compensation awards is as follows: As of March 31, 2025 Unrecognized Compensation Cost Weighted Average Recognition Period (years) Stock Options (issued under Stock Option Plans) $ 37,448 2.37 Performance Share Units (issued under LTIP) 49,288 2.00 Restricted Share Units (issued under LTIP) 18,562 1.44 Restricted Share Units (other) 44,052 1.69 Total unrecognized share-based compensation cost $ 149,350 Stock Options A summary of activity under our stock option plans for the nine months ended March 31, 2025 is as follows: Options Weighted-Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000's) Outstanding at June 30, 2024 12,207,412 $ 38.51 4.31 $ 6,142 Granted 2,240,920 28.61 Exercised ( 70,251 ) 26.81 Forfeited or expired ( 1,415,057 ) 37.97 Outstanding at March 31, 2025 12,963,024 $ 36.92 4.07 $ — Exercisable at March 31, 2025 5,659,227 $ 40.61 2.79 $ — As of March 31, 2025, 4,192,904 options to purchase Common Shares were available for issuance under our stock option plans. We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo pricing model, consistent with the provisions of ASC Topic 718, “Compensation—Stock Compensation” (Topic 718) and SEC Staff Accounting Bulletin No. 107. The option-pricing models require input of subjective assumptions, including the estimated life of the option and the expected volatility of the underlying stock over the estimated life of the option. We use historical volatility as a basis for projecting the expected volatility of the underlying stock and estimate the expected life of our stock options based upon historical data. We believe that the valuation techniques and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair value of our stock option grants. Estimates of fair value are not intended, however, to predict actual future events or the value ultimately realized by employees who receive equity awards. 24 Table of Contents For the periods indicated, the weighted-average fair value of options and weighted-average assumptions estimated under the Black-Scholes option-pricing model were as follows: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Weighted–average fair value of options granted $ 5.89 $ 11.10 $ 5.89 $ 9.84 Weighted-average assumptions used: Expected volatility 29.22 % 31.52 % 28.75 % 31.15 % Risk–free interest rate 4.22 % 4.07 % 3.82 % 4.36 % Expected dividend yield 3.68 % 2.29 % 3.52 % 2.53 % Expected life (in years) 4.34 4.28 4.31 4.26 Forfeiture rate (based on historical rates) 7 % 7 % 7 % 7 % Average exercise share price $ 27.86 $ 43.07 $ 28.61 $ 38.87 Long-Term Incentive Plans We incentivize certain eligible employees, in part, with long-term compensation pursuant to our LTIP. The LTIP is a rolling three-year program that grants eligible employees a certain number of target Performance Share Units (PSUs) and/or Restricted Share Units (RSUs). Target PSUs become vested upon the achievement of certain financial and/or operational performance criteria (the Performance Conditions) that are determined at the time of the grant. The Performance Conditions for vesting of the outstanding PSUs are based on market conditions or performance-based revenue conditions. RSUs are employee service-based awards and vest subject to an eligible employee’s continued employment throughout the applicable vesting period. PSUs and RSUs granted under the LTIP have been measured at fair value as of the effective date, consistent with ASC Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan. We estimate the fair value of PSUs with market-based conditions using the Monte Carlo pricing model and RSUs have been valued based upon their grant date fair value. The fair value of PSUs with performance-based conditions have been valued based upon their grant date fair value. Beginning in Fiscal 2023, certain PSU and RSU grants were eligible to receive dividend equivalent units that vest under the same conditions as the underlying grants. Performance Share Units (Issued Under LTIP) PSUs (issued under LTIP) vest after three years from the respective date of grants and upon the achievement of Performance Conditions determined at the time of the grant. A summary of activity under our PSUs issued under the LTIP for the nine months ended March 31, 2025 is as follows: Units Weighted-Average Grant Date Fair Value Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000's) Outstanding at June 30, 2024 1,605,116 $ 56.09 1.70 $ 48,218 Granted (1) 926,437 46.77 Vested (1) ( 257,611 ) 75.14 Forfeited or expired ( 207,021 ) 53.12 Outstanding at March 31, 2025 2,066,921 $ 50.00 1.82 $ 46,683 ______________________ (1) PSUs are earned based on market or performance conditions and the actual number of PSUs earned, if any, is dependent upon performance and may range from 0 to 200 percent. 25 Table of Contents For the periods indicated, the weighted-average fair value of market-based PSUs issued under LTIP, and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows: Nine Months Ended March 31, 2025 2024 Weighted–average fair value of performance share units granted $ 47.96 $ 59.48 Weighted-average assumptions used: Expected volatility 30.26 % 28.05 % Risk–free interest rate 3.67 % 4.38 % Expected dividend yield — % — % Expected life (in years) 3.11 3.10 Restricted Share Units (Issued Under LTIP) Beginning in Fiscal 2025, grants of RSUs (issued under LTIP) vest on a straight-line basis over three years from the respective date of grants. Grants of RSUs (issued under LTIP) prior to Fiscal 2025 vest after three years from the respective date of grants. A summary of activity under our RSUs issued under the LTIP for the nine months ended March 31, 2025 is as follows: Units Weighted-Average Grant Date Fair Value Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000's) Outstanding at June 30, 2024 956,325 $ 39.61 1.77 $ 28,728 Granted 665,759 28.52 Vested ( 170,370 ) 49.92 Forfeited or expired ( 124,092 ) 35.46 Outstanding at March 31, 2025 1,327,622 $ 33.14 1.96 $ 33,536 Restricted Share Units (Other) In addition to the grants made in connection with the LTIP discussed above, from time to time, we may grant RSUs to certain employees in accordance with employment and other non-LTIP related agreements. RSUs (other) vest over a specified contract date, typically two or four years from the respective date of grants. A summary of activity under our RSUs (other) issued for the nine months ended March 31, 2025 is as follows: Units Weighted-Average Grant Date Fair Value Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000's) Outstanding at June 30, 2024 4,555,955 $ 35.87 1.79 $ 136,861 Granted 906,344 27.34 Vested ( 2,459,944 ) 35.63 Forfeited or expired ( 265,514 ) 36.81 Outstanding at March 31, 2025 2,736,841 $ 33.17 2.25 $ 69,133 Deferred Share Units (DSUs) The DSUs are granted to certain non-employee directors. DSUs are issued under our Deferred Share Unit Plan. DSUs granted as compensation for director fees vest immediately, whereas all other DSUs granted vest at our next annual general meeting following the granting of the DSUs. No DSUs are payable by us until the director ceases to be a member of the Board. During the three and nine months ended March 31, 2025, we settled 296,831 DSUs at a cost of $ 7.6 million (three and nine months ended March 31, 2024— nil DSUs at a cost of nil ). 26 Table of Contents A summary of activity under our DSUs issued for the nine months ended March 31, 2025 is as follows: Units Weighted-Average Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000's) Outstanding at June 30, 2024 (1) 1,082,471 $ 30.67 0.42 $ 32,517 Granted 108,920 31.26 Settled ( 296,831 ) $ 29.69 Outstanding at March 31, 2025 (2) 894,560 $ 31.07 0.59 $ 22,787 ______________________ (1) Includes 47,871 unvested DSUs. (2) Includes 62,177 unvested DSUs. NOTE 12— GUARANTEES AND CONTINGENCIES We have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows: Payments due between Total April 1, 2025 - June 30, 2025 July 1, 2025 - June 30, 2027 July 1, 2027 - June 30, 2029 July 1, 2029 and beyond Long-term debt obligations (1) $ 7,973,621 $ 107,028 $ 738,504 $ 2,491,651 $ 4,636,438 Purchase obligations for contracts not accounted for as lease obligations (2) 395,898 103,998 265,900 26,000 — Total $ 8,369,519 $ 211,026 $ 1,004,404 $ 2,517,651 $ 4,636,438 ______________________ (1) Includes interest up to maturity and principal payments. See Note 9 “Long-Term Debt” for more details. (2) For more details on contractual obligations relating to leases and purchase obligations accounted for under ASC Topic 842, see Note 4 “Leases.” Guarantees and Indemnifications We have entered into customer agreements which may include provisions to indemnify our customers against third-party claims that our software products or services infringe certain third-party intellectual property rights and for liabilities related to a breach of our confidentiality obligations. We have not made any material payments in relation to such indemnification provisions and have not accrued any liabilities related to these indemnification provisions in our Condensed Consolidated Financial Statements. Occasionally, we enter into financial guarantees with third parties in the ordinary course of our business, including, among others, guarantees relating to taxes and letters of credit on behalf of parties with whom we conduct business. Such agreements have not had a material effect on our results of operations, financial position or cash flows. Litigation We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20 “Loss Contingencies” (Topic 450-20). Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with Topic 450-20. As of the date of this Quarterly Report on Form 10-Q, the aggregate of such accrued liabilities was not material to our consolidated financial position or results of operations and we do not believe as of the date of this filing that it is reasonably possible that a loss exceeding the amounts already recognized will be incurred that would be material to our consolidated financial position or results of operations. As 27 Table of Contents described more fully below, we are unable at this time to estimate a possible loss or range of losses in respect of certain disclosed matters. Contingencies CRA Matter As part of its ongoing audit of our Canadian tax returns, the Canada Revenue Agency (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 March 31, 2025, in connection with the CRA's reassessments for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, to be limited to penalties, interest and provincial taxes that may be due of approximately $ 80.0 million. As of March 31, 2025, we have provisionally paid approximately $ 32.0 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 Condensed Consolidated Balance Sheets as of March 31, 2025. The notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and 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, Fiscal 2013, Fiscal 2014, Fiscal 2015 and 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. Even if we are unsuccessful in challenging the CRA’s reassessments to increase our taxable income for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, we have elective deductions available for those years (including carry-backs from later years) that would offset such increased amounts so that no additional cash tax would be payable, exclusive of any assessed penalties and interest, as described above. The CRA has audited Fiscal 2017, Fiscal 2018, Fiscal 2019 and Fiscal 2020 on a basis that we strongly disagree with and are contesting. The focus of the CRA audit has been the valuation of certain intellectual property and goodwill when one of our subsidiaries continued into Canada from Luxembourg in July 2016. In accordance with applicable rules, these assets were recognized for tax purposes at fair market value as of that time, which value was supported by an expert valuation prepared by an independent leading accounting and advisory firm. CRA’s position for Fiscal 2017 through Fiscal 2020 relies in significant part on the application of its positions regarding our transfer pricing methodology that are the basis for its reassessment of our fiscal years 2012 to 2016 described above, and that we believe are without merit. Other aspects of CRA’s position for Fiscal 2017 through Fiscal 2020 conflict with the expert valuation prepared by the independent leading accounting and advisory firm that was used to support our original filing position. The CRA issued notices of reassessment in respect of Fiscal 2017 through 2020 on a basis consistent with its proposal to reduce the available depreciable basis of assets in Canada. We have filed notices of objection to the reassessments for each of these years. If we are ultimately unsuccessful in defending our position, the estimated impact of the proposed adjustment could result in us recording an income tax expense, with no immediate cash payment, to reduce the stated value of our deferred tax assets of up to approximately $ 470 million. Any such income tax expense could also have a corresponding cash tax impact that would primarily occur over a period of several future years based upon annual income realization in Canada. We strongly disagree with the CRA’s position for Fiscal 2017 through Fiscal 2020 and intend to vigorously defend our original filing position. We are not required to provisionally pay any cash amounts to the CRA as a result of the reassessment in respect of Fiscal 2017 through Fiscal 2019 due to utilization of available tax attributes; however, for Fiscal 2020 and, to the extent the CRA reassesses subsequent fiscal years on a similar basis, we may make certain minimum payments required under Canadian legislation. We will continue to vigorously contest the adjustments to our taxable income and any penalty and interest assessments, as well as any reduction to the basis of our depreciable property. We are confident that our original tax filing positions were appropriate. Accordingly, as of the date of this Quarterly Report on Form 10-Q, we have not recorded any accruals in respect of these reassessments or proposed reassessment in our Condensed Consolidated Financial Statements. NOTE 13— INCOME TAXES The Company’s effective tax rate for the three months ended March 31, 2025, increased to a provision of 10.5 %, compared to a provision of 5.8 % for the three months ended March 31, 2024. 28 Table of Contents The Company’s effective tax rate for the nine months ended March 31, 2025, increased to a provision of 13.5 %, compared to a provision of 10.1 % for the nine months ended March 31, 2024. The Company’s effective tax rate for the three months ended March 31, 2025 differs from the Canadian statutory rate of 26.5 % primarily due to tax benefits related to foreign tax credits, research and development credits, and the effect of foreign rate differences, partially offset by withholding taxes, foreign source income inclusion in the U.S. and a net increase in unrecognized tax benefits. The Company’s effective tax rate for the three months ended March 31, 2024 differs from the Canadian statutory rate primarily due to tax benefits related to change in valuation allowance, foreign tax credits, and research and development credits, partially offset by U.S. Base Erosion and Anti-Abuse Tax (BEAT), withholding taxes, and an increase to uncertain tax positions. The Company’s effective tax rate for the nine months ended March 31, 2025 differs from the Canadian statutory rate of 26.5 % primarily due to tax benefits related to a net decrease in unrecognized tax benefits, foreign tax credits, research and development credits, partially offset by withholding taxes and foreign source income inclusion in the U.S. The Company’s effective tax rate for the nine months ended March 31, 2024 differs from the Canadian statutory rate primarily due to tax benefits related to foreign tax credits, research and development credits, and a change in valuation allowance, partially offset by U.S. BEAT and withholding taxes. As of March 31, 2025, the gross amount of unrecognized tax benefits accrued was $ 150.6 million (June 30, 2024 — $ 180.4 million), which is inclusive of interest and penalties accrued of $ 19.2 million (June 30, 2024 — $ 24.3 million). We believe that it is reasonably possible that the gross unrecognized tax benefit could decrease by $ 31.4 million in the next 12 months, relating primarily to the expiration of competent authority relief and tax years becoming statute barred for purposes of future tax examinations by local taxing jurisdictions. As of March 31, 2025, we have recognized a deferred income tax liability of $ 18.1 million (June 30, 2024—$ 15.9 million) on taxable temporary differences related to the undistributed earnings of certain non-United States subsidiaries and planned periodic repatriations from certain German subsidiaries, that will be subject to withholding taxes upon distribution. We have not provided for additional foreign withholding taxes or deferred income tax liabilities related to undistributed earnings of all other non-Canadian subsidiaries, since such earnings are considered permanently invested in those subsidiaries or are not subject to withholding taxes. It is not practicable to reasonably estimate the amount of additional deferred income tax liabilities or foreign withholding taxes that may be payable should these earnings be distributed in the future. State Aid Matter As of June 30, 2024, the Company had a long-term income tax receivable related to the payment it made in regard to a State Aid charging notice it received as a result of the European Commission’s final decision on its State Aid investigation into the UK’s “Financing Company Partial Exemption” legislation where it concluded that part of the legislation was in breach of the EU State Aid rules. Micro Focus, along with the UK government and certain other UK-based international companies, appealed the decision to the General Court of the Court of Justice of the European Union (CJEU). The CJEU’s judgment was handed down on September 19, 2024. The CJEU broadly followed the Advocate General’s opinion, setting aside the judgment of the General Court and annulling the Commission’s ruling. As a result, a refund of the State Aid charging notice, in the amount of $ 43.8 million plus interest of $ 4.0 million, was received in March 2025. NOTE 14— FAIR VALUE MEASUREMENT ASC Topic 820 “Fair Value Measurement” (Topic 820) defines fair value, establishes a framework for measuring fair value, and addresses disclosure requirements for fair value measurements. Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value, in this context, should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including our own credit risk. In addition to defining fair value and addressing disclosure requirements, Topic 820 establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. 29 Table of Contents • Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques. Financial Assets and Liabilities Measured at Fair Value Our cash and cash equivalents, along with our accounts receivable and accounts payable and accrued liabilities balances, are measured and recognized in our Condensed Consolidated Financial Statements at an amount that approximates the fair value (a Level 2 measurement) due to their short maturities. The carrying value of our other long-term debt facilities approximates the fair value since the interest rate is at market. See Note 9 “Long-Term Debt” for further details. The following table summarizes the fair value of the Company’s financial instruments as of March 31, 2025 and June 30, 2024: Fair Value Fair Value Hierarchy March 31, 2025 June 30, 2024 Assets: Available-for-sale financial assets (Note 7) Level 2 $ 16,327 $ 15,603 Available-for-sale financial assets (Note 7) Level 3 25,533 24,938 Derivative asset (Note 15) Level 2 945 2,127 Liabilities: Derivative liability (Note 15) Level 2 $ ( 151,780 ) $ ( 159,234 ) Senior Notes (Note 9) (1) Level 2 ( 4,054,904 ) ( 4,006,771 ) ______________________ (1) Senior Notes are presented within the Condensed Consolidated Balance Sheets at amortized cost. See Note 9 “Long-Term Debt” for further details. Changes in Level 3 Fair Value Measurements The following table provides a reconciliation of changes in the fair value of our Level 3 available-for-sale financial assets between June 30, 2024 and March 31, 2025. Available-for-sale financial assets Balance as of June 30, 2024 $ 24,938 Gain recognized in income 595 Balance as of March 31, 2025 $ 25,533 Our derivative liabilities and our derivative assets are classified as Level 2 and are comprised of foreign currency forward and swap contracts. Our valuation techniques used to measure the fair values of the derivative instruments, the counterparties to which have high credit ratings, were derived from pricing models including discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data, as no quoted market prices exist for these instruments. Our discounted cash flow techniques use observable market inputs, such as, where applicable, foreign currency spot and forward rates. Our available-for-sale financial assets are classified as either Level 2 or Level 3. Our Level 2 available-for-sale financial assets are comprised primarily of various debt and equity funds, which are valued utilizing market quotes provided by our third-party custodian. Our Level 3 available-for-sale financial assets are comprised of insurance contracts which are valued by an external insurance expert by applying a discount rate to the future cash flows and taking into account the fixed interest rate, mortality rates and term of the insurance contracts. See Note 7 “Prepaid Expenses and Other Assets” for further details. If applicable, we will recognize transfers between levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the three and nine months ended March 31, 2025 and 2024, respectively, we did not have any transfers between Level 1, Level 2 or Level 3. 30 Table of Contents Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We measure certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the three and nine months ended March 31, 2025 and 2024, respectively, no indications of impairments were identified and therefore no fair value measurements were required. NOTE 15— DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Non-designated Hedges In connection with the Micro Focus Acquisition, in August 2022, we entered into certain derivative transactions to meet certain foreign currency obligations under UK cash confirmation requirements related to the purchase price of the Micro Focus Acquisition, mitigate the risk of foreign currency appreciation in the GBP denominated purchase price and mitigate the risk of foreign currency appreciation in the EUR denominated existing debt held by Micro Focus. We entered into the following derivatives: (i) three deal-contingent forward contracts, (ii) a non-contingent forward contract, and (iii) EUR/USD cross currency swaps. The deal-contingent forward contracts had an aggregate notional amount of £ 1.475 billion. The non-contingent forward contract had a notional amount of £ 350 million. The cross currency swaps are comprised of 5-year EUR/USD cross currency swaps with a notional amount of € 690 million and 7-year EUR/USD cross currency swaps with a notional amount of € 690 million. On January 7, 2025, we terminated certain of our outstanding 5-year EUR/USD cross currency swaps with an aggregate notional amount of € 138 million and made a termination payment of approximately $ 10.4 million on January 9, 2025. These instruments were entered into as economic hedges to mitigate foreign currency risks associated with the Micro Focus Acquisition. The instruments did not initially qualify for hedge accounting at the time they were entered into. In connection with the closing of the Micro Focus Acquisition, the deal-contingent forward and non-deal contingent forward contracts were settled and we designated the 7-year EUR/USD cross currency swaps as net investment hedges (see further details below). The 5-year EUR/USD cross currency swaps are non-designated and are measured at fair value with changes to fair value being recognized in the Condensed Consolidated Statements of Income within Other income (expense), net. Net Investment Hedge During the third quarter of Fiscal 2023, the Company designated the € 690 million of 7-year EUR/USD cross currency swaps as net investment hedges in accordance with “Derivatives and Hedging” (Topic 815). The Company utilizes the designated cross currency swaps to protect our EUR-denominated operations against exchange rate fluctuations. The Company assesses the hedge effectiveness of its net investment hedges on a quarterly basis utilizing a method based on the changes in spot price. As such, for derivative instruments designated as net investment hedges, changes in fair value of the designated hedging instruments attributable to fluctuations in the foreign currency spot exchange rates are initially recorded as a component of currency translation adjustments included within Condensed Consolidated Statements of Comprehensive Income until the hedged foreign operations are either sold or substantially liquidated. In accordance with Topic 815 certain components of the designated cross currency swaps relating to counterparty credit risk and forward exchange rates were excluded from the above effectiveness assessment. The fair value of these excluded components will be amortized over the life of the hedging instruments within Interest and other related expense, net within the Condensed Consolidated Statements of Income. Additionally, we will record the cash flows related to the periodic interest settlements on the 7-year EUR/USD cross currency swaps within the investing activities section of the Condensed Consolidated Statements of Cash Flows. Any gains or losses recognized upon settlement of the cross currency swaps will be recorded within the investing activities section of the Condensed Consolidated Statements of Cash Flows. Cash Flow Hedge We are engaged in hedging programs with various banks to limit the potential foreign exchange fluctuations incurred on future cash flows relating to a portion of our Canadian dollar payroll expenses. We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of our business, in particular to changes in the Canadian dollar on account of large costs that are incurred from our centralized Canadian operations, which are denominated in Canadian dollars. As part of our risk management strategy, we use foreign currency forward contracts to hedge portions of our payroll exposure with typical maturities of between one and twelve months . We do not use foreign currency forward contracts for speculative purposes. 31 Table of Contents We have designated these transactions as cash flow hedges of forecasted transactions under Topic 815. As the critical terms of the hedging instrument and of the entire hedged forecasted transaction are the same, in accordance with Topic 815, we have been able to conclude that changes in fair value or cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, quarterly unrealized gains or losses on the effective portion of these forward contracts have been included within Other comprehensive income (loss), net within the Condensed Consolidated Statements of Comprehensive Income. As of March 31, 2025, the fair value of the contracts is recorded within Accounts payable and accrued liabilities within the Condensed Consolidated Balance Sheets and represents the net loss before tax effect that is expected to be reclassified from accumulated other comprehensive income (loss) into earnings within the next twelve months. As of March 31, 2025, the notional amount of forward contracts we held to sell U.S. dollars in exchange for Canadian dollars was $ 92.7 million (June 30, 2024—$ 95.7 million). Fair Value of Derivative Instruments and Effect of Derivative Instruments on Financial Performance The fair values of outstanding derivative instruments are as follows: As of March 31, 2025 As of June 30, 2024 Instrument Balance Sheet Location Asset Liability Asset Liability Derivatives designated as hedges: Cash flow hedge Accounts payable and accrued liabilities $ — $ ( 2,103 ) $ — $ ( 828 ) Net investment hedge Prepaid expenses and other current assets (Accounts payable and accrued liabilities) 378 ( 90,235 ) 654 ( 88,186 ) Total derivatives designated as hedges 378 ( 92,338 ) 654 ( 89,014 ) Derivatives not designated as hedges: Cross currency swap contracts Prepaid expenses and other current assets (Accounts payable and accrued liabilities) 567 ( 59,442 ) 1,473 ( 70,220 ) Total derivatives not designated as hedges 567 ( 59,442 ) 1,473 ( 70,220 ) Total derivatives $ 945 $ ( 151,780 ) $ 2,127 $ ( 159,234 ) 32 Table of Contents The effects of gains (losses) from derivative instruments on our Condensed Consolidated Statements of Income is as follows: Three Months Ended March 31, Nine Months Ended March 31, Instrument Income Statement Location 2025 2024 2025 2024 Derivatives designated as hedges: Cash flow hedge Operating expenses $ ( 1,865 ) $ ( 160 ) $ ( 3,595 ) $ ( 618 ) Net investment hedge Interest and other related expense, net 1,204 920 3,050 2,735 Derivatives not designated as hedges: Cross currency swap contracts Other income (expense), net ( 20,216 ) 16,671 398 ( 3,551 ) Cross currency swap contracts Interest and other related expense, net 905 854 2,617 2,540 Total $ ( 19,972 ) $ 18,285 $ 2,470 $ 1,106 The effects of the cash flow and net investment hedges on our Condensed Consolidated Statements of Comprehensive Income: Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income Location Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Gain (loss) recognized in OCI (loss) on cash flow hedge (effective portion) Unrealized gain (loss) on cash flow hedge $ ( 63 ) $ ( 2,223 ) $ ( 4,871 ) $ ( 2,657 ) Gain (loss) recognized in OCI (loss) on net investment hedge (effective portion) Net foreign currency translation adjustment $ ( 18,525 ) $ 15,096 $ ( 2,049 ) $ ( 10,919 ) Gain (loss) reclassified from AOCI into income (effective portion) - cash flow hedge Operating expenses $ ( 1,865 ) $ ( 160 ) $ ( 3,595 ) $ ( 618 ) Gain (loss) reclassified from AOCI into income (excluded from effectiveness testing) - net investment hedge Interest and other related expense, net $ 561 $ 561 $ 1,683 $ 1,683 NOTE 16— SPECIAL CHARGES (RECOVERIES) Special charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition and divestiture-related costs and other similar charges. Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Business Optimization Plan $ 2,256 $ — $ 57,106 $ — Micro Focus Acquisition Restructuring Plan ( 33 ) 9,597 ( 1,049 ) 61,221 Other historical restructuring plans 15 ( 152 ) ( 818 ) ( 535 ) Divestiture-related costs 436 7,331 4,645 14,313 Acquisition-related costs ( 143 ) 676 549 1,796 Other charges 1,323 2,109 5,795 10,726 Total $ 3,854 $ 19,561 $ 66,228 $ 87,521 33 Table of Contents Business Optimization Plan During the first quarter of Fiscal 2025, we made a strategic decision to align the Company’s workforce to support its growth and innovation plans (Business Optimization Plan). The Business Optimization Plan charges relate to workforce reductions. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. As of March 31, 2025, $ 57.1 million has been recorded to date within Special charges (recoveries) within the Condensed Consolidated Statements of Income. On April 29, 2025, the Board approved an expansion of the Business Optimization Plan. Please see Note 23 “Subsequent Events” for additional details. A reconciliation of the beginning and ending restructuring liability for the Business Optimization Plan, which is included within Accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets, for the nine months ended March 31, 2025 is shown below. Business Optimization Plan Workforce reduction Facility charges Total Balance payable as of June 30, 2024 $ — $ — $ — Accruals and adjustments 54,605 1,104 55,709 Cash payments ( 44,439 ) ( 26 ) ( 44,465 ) Foreign exchange and other non-cash adjustments 30 ( 487 ) ( 457 ) Balance payable as of March 31, 2025 $ 10,196 $ 591 $ 10,787 Micro Focus Acquisition Restructuring Plan During the third quarter of Fiscal 2023, as part of the Micro Focus Acquisition, we made a strategic decision to implement restructuring activities to reduce our overall workforce and further reduce our real estate footprint around the world (Micro Focus Acquisition Restructuring Plan). The Micro Focus Acquisition Restructuring Plan charges relate to facility costs and workforce reductions. Facility costs include the accelerated amortization associated with the abandonment of right of use assets, the write-off of property and equipment and other related variable lease and exit costs. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. Since the inception of the Micro Focus Acquisition Restructuring Plan, $ 145.5 million has been recorded within Special charges (recoveries) within the Condensed Consolidated Statements of Income to date. We do not expect to incur any further significant charges relating to the Micro Focus Acquisition Restructuring Plan. A reconciliation of the beginning and ending restructuring liability for the Micro Focus Acquisition Restructuring Plan, which is included within Accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets, for the nine months ended March 31, 2025 is shown below. Micro Focus Acquisition Restructuring Plan Workforce reduction Facility charges Total Balance payable as of June 30, 2024 $ 11,765 $ 16,326 $ 28,091 Accruals and adjustments ( 406 ) 719 313 Cash payments ( 9,263 ) ( 7,221 ) ( 16,484 ) Foreign exchange and other non-cash adjustments 79 ( 889 ) ( 810 ) Balance payable as of March 31, 2025 $ 2,175 $ 8,935 $ 11,110 34 Table of Contents Divestiture-related costs Divestiture-related costs, recorded within Special charges (recoveries), include the direct costs related to the AMC Divestiture. Acquisition-related costs Acquisition-related costs, recorded within Special charges (recoveries), include direct costs of potential and completed acquisitions. Other charges For the three and nine months ended March 31, 2025, Other charges include $ 1.3 million and $ 5.7 million, respectively, of other miscellaneous charges primarily associated with the Micro Focus Acquisition. For the three and nine months ended March 31, 2024, Other charges include $ 0.1 million and $ 5.5 million, respectively, of compensation related charges, $ 1.7 million and $ 4.1 million, respectively, of other miscellaneous charges, both associated with the Micro Focus Acquisition, and $ 0.3 million and $ 1.2 million, respectively, related to pre-acquisition equity incentives of Zix Corporation, which upon acquisition were replaced by equivalent value cash settlements. NOTE 17— ACQUISITIONS AND DIVESTITURES Fiscal 2024 Divestiture Divestiture of AMC Business On May 1, 2024, the Company completed the sale of its AMC business to Rocket Software for $ 2.275 billion in cash before taxes, fees and other adjustments. The results of the AMC business were recorded and presented within our Condensed Consolidated and Consolidated Financial Statements during Fiscal 2024 for the period of July 1, 2023 through April 30, 2024. In connection with the sale, a gain of $ 429.1 million was recorded in Other income (expense), net within our Consolidated Statements of Income for the year ended June 30, 2024. During the quarter ended December 31, 2024, working capital and other adjustments were finalized, which resulted in a payment of $ 11.7 million, and a decrease to the gain on the AMC Divestiture by $ 4.2 million. The Company determined that the AMC business did not constitute a component, as its operations and cash flows cannot be clearly distinguished from the rest of the Company’s operations and cash flows due to significant shared costs, therefore, the transaction did not meet the discontinued operations criteria, and the results of operations from the AMC business are presented within Income from operations in our Condensed Consolidated Statements of Income up to the date of disposition. The Company used the net proceeds from the transaction to prepay in full the outstanding principal balances of the Term Loan B and prepay a portion of the outstanding principal balance of the Acquisition Term Loan, as further described in Note 9 “Long-Term Debt.” The Company has also agreed to provide certain transition services to Rocket Software following the completion of the divestiture for up to 24 months after the closing date of May 1, 2024, which are included in financing activities on the Condensed Consolidated Statements of Cash Flows. These transition service costs are reimbursable by Rocket Software. For the three and nine months ended March 31, 2025, we billed Rocket Software $ 4.2 million and $ 31.4 million, respectively, under the Transition Services Agreement. Substantially all of the transition services were completed as of the quarter ended March 31, 2025. 35 Table of Contents The finalization of working capital and other adjustments during the quarter ended December 31, 2024 resulted in immaterial changes to the carrying amounts of major classes of assets and liabilities. The following table presents the carrying amounts of major classes of assets and liabilities disposed of in the AMC Divestiture as of April 30, 2024: AMC Assets Accounts receivable trade, net of allowance for credit losses $ 58,733 Contract assets 10,355 Prepaid expenses and other current assets 6,099 Property and equipment 1,091 Goodwill 1,138,013 Acquired intangible assets 930,771 Deferred tax assets 2,820 Other assets 1,775 Total AMC Assets $ 2,149,657 AMC Liabilities Accounts payable and accrued liabilities $ 11,312 Deferred revenues 188,648 Long-term accrued liabilities 8,128 Pension liability, net 1,640 Long-term operating lease liabilities 672 Long-term deferred revenues 23,623 Long-term income taxes payable 9,845 Deferred tax liabilities 116,086 Total AMC Liabilities $ 359,954 Fiscal 2024 Acquisitions Other Acquisitions On August 23, 2023, we acquired all of the equity interest in KineMatik Ltd. (KineMatik), a provider of automated business process and project management solutions built on OpenText’s Content Server. In accordance with ASC Topic 805, “Business Combinations”, this acquisition was accounted for as a business combination. The results of operations of KineMatik have been consolidated with those of OpenText beginning August 24, 2023. The results of KineMatik are not considered to be material to our business. On May 22, 2024, we acquired Pillr, a cloud native, multi-tenant Managed Detection and Response platform from Novacoast, Inc. for Managed Service Providers that includes powerful threat-hunting capabilities. In accordance with ASC Topic 805, “Business Combinations”, this acquisition was accounted for as a business combination. The results of operations of Pillr have been consolidated with those of OpenText beginning May 22, 2024. The results of Pillr are not considered to be material to our business. 36 Table of Contents NOTE 18— ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Three Months Ended March 31, 2025 Foreign Currency Translation Adjustments (1) Cash Flow Hedges Available-for-Sale Financial Assets Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2024 $ ( 63,783 ) $ ( 2,870 ) $ 310 $ ( 9,436 ) $ ( 75,779 ) Other comprehensive income (loss) before reclassifications, net of tax ( 1,511 ) ( 46 ) ( 395 ) — ( 1,952 ) Amounts reclassified into net income, net of tax — 1,371 — 513 1,884 Total other comprehensive income (loss), net for the period ( 1,511 ) 1,325 ( 395 ) 513 ( 68 ) Balance as of March 31, 2025 $ ( 65,294 ) $ ( 1,545 ) $ ( 85 ) $ ( 8,923 ) $ ( 75,847 ) Nine Months Ended March 31, 2025 Foreign Currency Translation Adjustments (1) Cash Flow Hedges Available-for-Sale Investments Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of June 30, 2024 $ ( 59,760 ) $ ( 608 ) $ ( 374 ) $ ( 8,877 ) $ ( 69,619 ) Other comprehensive income (loss) before reclassifications, net of tax ( 5,534 ) ( 3,580 ) 289 ( 1,045 ) ( 9,870 ) Amounts reclassified into net income, net of tax — 2,643 — 999 3,642 Total other comprehensive income (loss), net for the period ( 5,534 ) ( 937 ) 289 ( 46 ) ( 6,228 ) Balance as of March 31, 2025 $ ( 65,294 ) $ ( 1,545 ) $ ( 85 ) $ ( 8,923 ) $ ( 75,847 ) ______________________ (1) The amount of foreign currency translation recognized in other comprehensive income during the three and nine months ended March 31, 2025 included net gains (losses) relating to our net investment hedge of $( 18.5 ) million and $( 2.0 ) million, respectively, as further discussed in Note 15 “Derivative Instruments and Hedging Activities.” Three Months Ended March 31, 2024 Foreign Currency Translation Adjustments (1) Cash Flow Hedges Available-for-Sale Investments Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2023 $ ( 74,493 ) $ 1,142 $ ( 373 ) $ ( 9,775 ) $ ( 83,499 ) Other comprehensive income (loss) before reclassifications, net of tax 11,765 ( 1,634 ) 90 — 10,221 Amounts reclassified into net income, net of tax — 118 — 115 233 Total other comprehensive income (loss), net for the period 11,765 ( 1,516 ) 90 115 10,454 Balance as of March 31, 2024 $ ( 62,728 ) $ ( 374 ) $ ( 283 ) $ ( 9,660 ) $ ( 73,045 ) 37 Table of Contents Nine Months Ended March 31, 2024 Foreign Currency Translation Adjustments (1) Cash Flow Hedges Available-for-Sale Investments Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balance as of June 30, 2023 $ ( 44,114 ) $ 1,124 $ ( 602 ) $ ( 9,967 ) $ ( 53,559 ) Other comprehensive income (loss) before reclassifications, net of tax ( 18,614 ) ( 1,953 ) 319 ( 110 ) ( 20,358 ) Amounts reclassified into net income, net of tax — 455 — 417 872 Total other comprehensive income (loss), net for the period ( 18,614 ) ( 1,498 ) 319 307 ( 19,486 ) Balance as of March 31, 2024 $ ( 62,728 ) $ ( 374 ) $ ( 283 ) $ ( 9,660 ) $ ( 73,045 ) ______________________ (1) The amount of foreign currency translation recognized in other comprehensive income during the three and nine months ended March 31, 2024 included net gains (losses) relating to our net investment hedge of $ 15.1 million and $( 10.9 ) million, respectively, as further discussed in Note 15 “Derivative Instruments and Hedging Activities.” NOTE 19— SUPPLEMENTAL CASH FLOW DISCLOSURES Nine Months Ended March 31, 2025 2024 Cash paid during the period for interest $ 253,751 $ 409,452 Cash received during the period for interest 37,786 31,587 Cash paid during the period for income taxes 341,987 198,271 NOTE 20— OTHER INCOME (EXPENSE), NET Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Foreign exchange gains (losses) $ ( 8,269 ) $ 3,806 $ 5,891 $ ( 4,384 ) Unrealized gains (losses) on derivatives not designated as hedges (1) ( 9,836 ) 16,671 10,778 ( 3,551 ) Realized losses on derivatives not designated as hedges (2) ( 10,380 ) — ( 10,380 ) — OpenText share in net income (loss) of equity investees (3) 1,644 ( 835 ) 3,637 ( 19,013 ) Adjustment to gain on AMC Divestiture (4) — — ( 4,175 ) — Loss on debt extinguishment (5) — ( 10,803 ) — ( 10,803 ) Other miscellaneous income (expense) 263 1,111 631 ( 913 ) Total other income (expense), net $ ( 26,578 ) $ 9,950 $ 6,382 $ ( 38,664 ) ______________________ (1) Represents the unrealized gains (losses) on our derivatives not designated as hedges related to the Micro Focus Acquisition (see Note 15 “Derivative Instruments and Hedging Activities” for more details). (2) Represents the realized gains (losses) from the early termination of cross currency swaps on our derivatives not designated as hedges related to the Micro Focus Acquisition (see Note 15 “Derivative Instruments and Hedging Activities” for more details). (3) Represents our share in net income (loss) of equity investees, which approximates fair value and subject to volatility based on market trends and business conditions, based on our interest in certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4 % to below 20 % and these investments are accounted for using the equity method (see Note 7 “Prepaid Expenses and Other Assets” for more details). (4) Represents final settlement of working capital and other adjustments (see Note 17 “Acquisitions and Divestitures” for more details). (5) During the three and nine months ended March 31, 2024, we recognized a loss on debt extinguishment of $ 10.8 million related to the acceleration and recognition of unamortized debt discount and issuance costs resulting from the optional repayments of the Acquisition Term Loan in Fiscal 2024. 38 Table of Contents NOTE 21— EARNINGS PER SHARE Basic earnings per share are computed by dividing net income attributable to OpenText by the weighted average number of Common Shares outstanding during the period. Diluted earnings per share are computed by dividing net income attributable to OpenText by the shares used in the calculation of basic earnings per share plus the dilutive effect of Common Share equivalents, such as stock options, using the treasury stock method. Common Share equivalents are excluded from the computation of diluted earnings per share if their effect is anti-dilutive. Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Basic earnings per share Net income attributable to OpenText $ 92,805 $ 98,285 $ 407,035 $ 216,861 Basic earnings per share attributable to OpenText $ 0.35 $ 0.36 $ 1.54 $ 0.80 Diluted earnings per share Net income attributable to OpenText $ 92,805 $ 98,285 $ 407,035 $ 216,861 Diluted earnings per share attributable to OpenText $ 0.35 $ 0.36 $ 1.53 $ 0.80 Weighted-average number of shares outstanding (in ‘000’s) Basic 262,841 272,272 265,132 271,671 Effect of dilutive securities 993 761 478 678 Diluted 263,834 273,033 265,610 272,349 Excluded as anti-dilutive (1) 12,864 7,414 12,424 7,631 ______________________ (1) Represents options to purchase Common Shares excluded from the calculation of diluted earnings per share because the exercise price of the stock options was greater than or equal to the average price of the Common Shares during the period. NOTE 22— RELATED PARTY TRANSACTIONS Our procedure regarding the approval of any related party transaction requires that the material facts of such transaction be reviewed by the independent members of the Audit Committee and the transaction be approved by a majority of the independent members of the Audit Committee. The Audit Committee reviews all transactions in which we are, or will be, a participant and any related party has or will have a direct or indirect interest in the transaction. In determining whether to approve a related party transaction, the Audit Committee generally takes into account, among other facts it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; the extent and nature of the related person’s interest in the transaction; the benefits to the Company of the proposed transaction; if applicable, the effects on a director’s independence; and if applicable, the availability of other sources of comparable services or products. During the nine months ended March 31, 2025, Mr. Stephen Sadler, a member of the Board of Directors, earned consulting fees from OpenText for assistance with acquisition-related business activities. The fees earned were not material. Mr. Sadler abstained from voting on all transactions from which he would potentially derive consulting fees. NOTE 23— SUBSEQUENT EVENTS Cash Dividends As part of our quarterly, non-cumulative cash dividend program, we declared, on April 29, 2025, a dividend of $ 0.2625 per Common Share. The record date for this dividend is June 6, 2025 and the payment date is June 20, 2025. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board. Expansion of Business Optimization Plan On April 29, 2025, the Board approved an expansion of our previously announced Business Optimization Plan to complete strategic initiatives, integration and simplification following the Micro Focus acquisition, AMC Divestiture and other growth and innovation plans including the deployment of AI and automation. We expect up to approximately $ 200.0 million of additional costs to be incurred to complete this final phase of the Business Optimization Plan, bringing the combined plan up to approximately $ 260.0 million. As of March 31, 2025, $ 57.1 39 Table of Contents million of the original $ 60.0 million has been recorded within Special charges (recoveries) within the Condensed Consolidated Statements of Income to date. The entire Business Optimization Plan is expected to be substantially completed by the second quarter of Fiscal 2027. This expansion includes costs associated with workforce reduction due to automation, centralization and simplification, and corresponding facility costs related to a reduction of our real estate footprint globally. On an overall basis, the expansion is expected to result in a total net reduction of approximately 2,000 positions, an increase of approximately 1,600 positions from the previously announced plan. Facility costs include the accelerated amortization associated with the abandonment of right of use assets, the write-off of fixed assets, and other related variable lease and exit costs. 40 Table of Contents