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Item 7. Management’s Discussion and Analysis

2025-08-07 compared with 2024-08-01 · 577 added, 258 removed, 824 unchanged (50% of the section changed)

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(ii) creating value through investments in broader Information Management capabilities;

(iii) our future business plans and operations, strategic goals and business planning process, including the Company’s business optimization plan announced in July 2024;

(iii) our future business plans and operations, strategic goals and business planning process, including the Company’s business optimization plan announced in July 2024 (the Business Optimization Plan);

(iv) business trends;

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(viii) the Company’s financial condition, results of operations and earnings;

(ix) the basis for any future growth and for our financial performance;

(ix) the basis for any future growth, including organic and inorganic growth, and for our financial performance;

(x) declaration of quarterly dividends;

(xi) future tax rates;

(xi) future tax rates, including UK and Canada’s newly enacted global minimum tax act;

(xii) the changing regulatory environment;

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(xxiii) tax audits;

(xxiv) the expected impact of the Russia-Ukraine and Israel-Hamas conflicts on our business;(xxv) expected costs of the restructuring and business optimization plans;

(xxvi) targets regarding greenhouse gas emissions, waste diversion, energy consumption and Equity, Diversity and Inclusion (ED&I) initiatives;

(xxiv) the expected impact of the Russia-Ukraine and Middle East conflicts and other geopolitical disputes on our business;(xxv) expected costs of the restructuring and business optimization plans;

(xxvi) initiatives we establish and targets that we set related to corporate citizenship-related activities;

(xvii) integration of Micro Focus, resulting synergies and timing thereof;

(xxviii) divestitures and their expected impact, including in connection with the AMC Divestiture (as defined below) (see Note 19 “Acquisitions and Divestitures” to our Consolidated Financial Statements for more details);

and (xxix) other matters.

(xxviii) divestitures and their expected impact, including in connection with the completed divestiture of the Application, Modernization and Connectivity (AMC) business (the AMC Divestiture) and the accompanying transition services agreement (TSA) (see Note 19 “Acquisitions and Divestitures” to our Consolidated Financial Statements for more details);

(xxix) the implementation of or changes to global tariff regimes or other trade policies and the resulting uncertainty to the macroeconomic environment;

(xxx) the expected impact of our share repurchase plan on our overall strategic capital allocation;

and (xxxi) other matters.

In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking, and based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate.

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(iii) the stability of general political, economic and market conditions;

(iv) our ability to manage inflation, including increased labour costs associated with attracting and retaining employees, and rising interest rates;

(iv) our ability to manage inflation, including increased labour costs associated with attracting and retaining employees, and higher interest rates;

(v) our continued ability to manage certain foreign currency risk through hedging;

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(viii) our continued ability to avoid infringing third-party intellectual property rights;

and (ix) our ability to successfully implement our restructuring plans.

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

and (x) our ability to successfully implement our restructuring plans.

Management’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change.

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Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements.

The risks and uncertainties that may affect forward-looking statements include, but are not limited to:

(i) our inability to realize successfully any anticipated synergy benefits from the acquisition of Micro Focus (Micro Focus Acquisition);

The risks and uncertainties that may affect forward-looking statements include,

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but are not limited to:

(i) our inability to realize successfully any anticipated synergy benefits from acquisitions;

(ii) the actual and potential impacts of the use of cash and incurrence of indebtedness, including the granting of security interests related to such debt;

(iii) the change in scope and size of our operations as a result of the Micro Focus Acquisition and the AMC Divestiture;

(iv) the uncertainty around expectations related to Micro Focus’ business prospects;

(iii) the change in scope and size of our operations as a result of acquisitions or divestitures;

(iv) the uncertainty around expectations related to the business prospects from potential acquisitions;

(v) integration of acquisitions and related restructuring efforts, including the quantum of restructuring charges and the timing thereof;

(vi) the possibility that we may be unable to successfully integrate the assets we acquire or fail

to utilize such assets to their full capacity and not realize the benefits we expect from our acquired portfolios and businesses, including the acquisition of Micro Focus, (vii) the potential for the incurrence of or assumption of debt in connection with acquisitions, its impact on future operations and on the ratings or outlooks of rating agencies on our outstanding debt securities, and the possibility of not being able to generate sufficient cash to service all indebtedness;

(vi) the possibility that we may be unable to successfully integrate the assets we acquire or fail to utilize such assets to their full capacity and not realize the benefits we expect from our acquired portfolios and businesses, (vii) the potential for the incurrence of or assumption of debt in connection with acquisitions, its impact on future operations and on the ratings or outlooks of rating agencies on our outstanding debt securities, and the possibility of not being able to generate sufficient cash to service all indebtedness;

(viii) the possibility that the Company may be unable to meet its future reporting requirements under the Exchange Act, and the rules promulgated thereunder, or applicable Canadian securities regulation;

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(xvii) demand for the Company’s products and services;

(xviii) increase in exposure to international business risks including the impact of geopolitical instability, political unrest, war and other global conflicts, and other geopolitical tensions, including the Russia-Ukraine and the Israel-Hamas conflicts, as we continue to increase our international operations;

(xix) adverse macroeconomic conditions, including inflation, disruptions in global supply chains and increased labour costs;

(xx) inability to raise capital at all or on not unfavorable terms in the future;

(xviii) increase in exposure to international business risks including the impact of geopolitical instability, political unrest, war and other global conflicts, and other geopolitical tensions, including the Russia-Ukraine and Middle East conflicts, as we continue to increase our international operations;

(xix) adverse macroeconomic conditions, such as potential increases or changes in global tariff policies and structures and the timing thereof, the effects of global relations, including escalating tensions, imposition of tariffs, retaliatory measures, restrictive regulations or boycotts, and other trade policies, inflation, disruptions in global supply chains and increased labour costs;

(xx) inability to raise capital at all or on not unfavourable terms in the future;

(xxi) downward pressure on our share price and dilutive effect of future sales or issuances of equity securities (including in connection with future acquisitions);

(xxii) potential changes in ratings or outlooks of rating agencies on our outstanding debt securities;

and (xxiii) risks related to the AMC Divestiture and the impact of the divestiture on our remaining business.

and (xxiii) risks related to divestitures and the impact of such divestitures on our remaining business.

Other factors that may affect forward-looking statements include, but are not limited to:

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(xiii) system or network failures or information security, cybersecurity or other data breaches in connection with the Company’s offerings or the information technology systems used by the Company generally, the risk of which may be increased during times of natural disaster or pandemic due to remote working arrangements;

(xiv) failure to achieve our environmental goals on energy consumption, waste diversion and greenhouse gas emissions or our targets relating to ED&I initiatives;

(xiv) failure to achieve any corporate citizenship-related targets we set;

(xv) failure to attract and retain key personnel to develop and effectively manage the Company’s business;

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The following MD&A is intended to help readers understand our results of operations and financial condition, and is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying Notes to our Consolidated Financial Statements under Part II, Item 8 of this Annual Report on Form 10-K.

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All dollar and percentage comparisons made herein refer to the year ended June 30, 2025 compared with the year ended June 30, 2024, unless otherwise noted.

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We have a complete and integrated portfolio of Information Management solutions delivered at scale in the OpenText Cloud, helping organizations master modern work, automate application delivery and modernization, and optimize their digital supply chains.

To do this, we bring together our Content Cloud, Cybersecurity Cloud, Business Network Cloud, IT Operations Management Cloud, Application Automation Cloud and Analytics Cloud.

We also accelerate information modernization with intelligent tools and services for moving off paper, automating classification and building clean data lakes for Artificial Intelligence (AI), analytics and automation.

To do this, we bring together our Content Cloud, Cybersecurity Cloud, DevOps Cloud, Business Network Cloud, Observability and Service Management Cloud and Analytics Cloud.

We also accelerate information modernization with intelligent tools and services for moving off paper, automating classification and building clean data lakes for AI, analytics and automation.

We are fundamentally integrated into the parts of our customers’ businesses that matter, so they can securely manage the complexity of information flow end to end.

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As of June 30, 2025, we employed a total of approximately 21,400 individuals.

Of the total 22,900 individuals we employed as of June 30, 2024, 8,300 or 36% are in the Americas, 5,000 or 22% are in EMEA and 9,600 or 42% are in Asia Pacific.

Of the total 21,400 individuals we employed as of June 30, 2025, approximately 7,100 or 33% are in the Americas, 4,700 or 22% are in EMEA and 9,600 or 45% are in Asia Pacific.

Currently, we have employees in 42 countries enabling strong access to multiple talent pools while ensuring reach and proximity to our customers.

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Fiscal 2025 Summary:

During Fiscal 2024 (which includes the results of Micro Focus and the AMC Divestiture, which have an impact on period-over-period comparisons) we saw the following activity:

• Total revenue was $5,769.6 million, up 28.6% compared to the prior fiscal year;

up 27.7% after factoring in the favorable impact of $40.5 million of foreign exchange rate changes.

• Total annual recurring revenue, which we define as the sum of cloud services and subscriptions revenue and customer support revenue, was $4,533.8 million, up 25.4% compared to the prior fiscal year;

up 24.6% after factoring in the favorable impact of $28.3 million of foreign exchange rate changes.

During Fiscal 2025, we saw the following activity as compared to Fiscal 2024, which includes the results of the AMC Business prior to the completion of the AMC Divestiture on May 1, 2024, which has an impact on period-over-period comparisons.

See “Divestiture of AMC Business” under “Results of Operations”, below for more details:

• Total revenue was $5,168.4 million, down 10.4% compared to the prior fiscal year;

down 10.4% after factoring in the unfavourable impact of $2.8 million of foreign exchange rate changes.

• Total annual recurring revenue, which we define as the sum of cloud services and subscriptions revenue and customer support revenue, was $4,190.5 million, down 7.6% compared to the prior fiscal year;

down 7.5% after factoring in the unfavourable impact of $4.3 million of foreign exchange rate changes.

• Cloud services and subscriptions revenue was $1,856.5 million, up 2.0% compared to the prior fiscal year;

up 6.8% after factoring in the favorable impact of $5.0 million of foreign exchange rate changes.

up 2.1% after factoring in the unfavourable impact of $1.5 million of foreign exchange rate changes.

• GAAP-based gross margin was 72.3% compared to 72.6% in the prior fiscal year.

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• Non-GAAP-based net income attributable to OpenText was $1,007.8 million compared to $1,137.3 million in the prior fiscal year.

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• GAAP-based earnings per share (EPS), diluted, was $1.65 compared to $1.71 in the prior fiscal year.

• Non-GAAP-based EPS, diluted, was $3.82 compared to $4.17 in the prior fiscal year.

• Adjusted EBITDA, a non-GAAP measure, was $1,970.2 million compared to $1,472.9 million in the prior fiscal year.

• Operating cash flow was $967.7 million for the year ended June 30, 2024, compared to $779.2 million in the prior fiscal year, up 24.2%.

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

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

• Cash and cash equivalents were $1,156.5 million as of June 30, 2025, compared to $1,280.7 million as of June 30, 2024.

• Enterprise cloud bookings were $772.5 million for the year ended June 30, 2025, compared to $701.4 million for the year ended June 30, 2024.

We define Enterprise cloud bookings as the total value from cloud services and subscription contracts entered into in the fiscal year that are new, committed and incremental to our existing contracts, entered into with our enterprise-based customers.

• On May 1, 2024, we completed the sale of our AMC business to Rocket Software, for $2.275 billion in cash before taxes, fees and other adjustments.

As part of this sale, we have agreed to provide certain transition services to Rocket Software following the completion of the divestiture for up to 24 months.

• On May 6, 2024, we prepaid $2.0 billion of our aggregate outstanding debt including $940 million of the aggregate principal amounts outstanding under the Term Loan B (as defined below), representing all outstanding principal thereunder, and $1.06 billion of the aggregate principal amount outstanding under the Acquisition Term Loan (as defined below), using the net proceeds from the AMC Divestiture.

• During the year ended June 30, 2024, we repurchased and canceled 5,073,913 Common Shares for $152.3 million, inclusive of 2% Canadian excise taxes recorded (year ended June 30, 2023 and 2022— nil and 3,809,559 Common Shares for nil and $177.0 million, respectively).

We define Enterprise cloud bookings as the total value from cloud services and subscriptions contracts entered into in the fiscal year that are new, committed and incremental to our existing contracts, entered into with our enterprise-based customers.

• During the year ended June 30, 2025, we repurchased and canceled 14,524,664 Common Shares for $418.3 million, inclusive of 2% Canadian excise taxes recorded (year ended June 30, 2024 and 2023— 5,073,913 and nil Common Shares for $152.3 million and nil, respectively).

• During the year ended June 30, 2025, we declared and paid cash dividends of $1.05 per Common Share in the aggregate amount of $271.5 million, an increase of 2% compared to the prior fiscal year (year ended June 30, 2024 and 2023—$1.00 and $0.972 per Common Share, respectively, in the aggregate amount of $267.4 million and $259.5 million, respectively).

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On January 31, 2023, we acquired all of the issued and to be issued share capital of Micro Focus for a total purchase price of $6.2 billion, inclusive of Micro Focus’ cash and repayment of Micro Focus’ outstanding indebtedness.

The results of operations of Micro Focus have been consolidated with those of OpenText beginning February 1, 2023.

The Micro Focus Acquisition has contributed to the growth in our revenues and impacts period-over-period comparability.

See Note 19 “Acquisitions and Divestitures” to our Consolidated Financial Statements for more details.

Divestiture of AMC Business

On May 1, 2024, we completed the sale of our AMC business to Rocket Software, Inc.

(Rocket Software) for $2.275 billion in cash before taxes, fees and other adjustments (the AMC Divestiture).

On May 1, 2024, the Company completed the AMC Divestiture for $2.275 billion in cash before taxes, fees and other adjustments.

Working capital adjustments were finalized during Fiscal 2025 which resulted in a payment of $11.7 million to Rocket Software, and a decrease to the gain on the AMC Divestiture by $4.2 million.

For Fiscal 2024, the results of the AMC business from July 1, 2023 through April 30, 2024 were recorded and presented within our Consolidated Financial Statements.

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The results of Pillr are not considered to be material to our business.

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Impacts of Geopolitical Conflicts and Diplomatic Tensions

We continue to monitor the geopolitical conflicts and diplomatic tensions around the world, including the Russia-Ukraine and Israel-Hamas conflicts.

We continue to monitor the geopolitical conflicts and diplomatic tensions around the world, including the Russia-Ukraine and Middle East conflicts.

We have ceased all direct business in Russia and Belarus.

We continue to operate our Israeli-based business and support our employees in the region.

While our operations within these locations are not material and we do not expect these geopolitical conflicts to have a material adverse effect on our overall business, results of operations or financial condition, it is not possible to predict the broader consequences of these conflicts, including adverse effects on the global economy, on our business and operations as well as those of our customers, partners and third party service providers.

While our operations within these locations are not material and we do not expect these geopolitical conflicts to have a material adverse effect on our overall business, results of operations or financial condition, it is not possible to predict the broader consequences or broader expansion of these conflicts, including adverse effects on the global economy, on our business and operations as well as those of our customers, partners and third-party service providers.

For more information, see Part I, Item 1A “Risk Factors” included in this Annual Report on Form 10-K.

Outlook for Fiscal 2026

As an organization, we are committed to “Total Growth”, meaning we strive towards delivering value through organic initiatives, innovations and acquisitions.

With an emphasis on increasing recurring revenues and expanding profitability, we believe our Total Growth strategy will ultimately drive cash flow growth, thus helping to fuel our innovation, broaden our go-to-market distribution and identify and execute strategic acquisitions.

With strategic acquisitions, we are well positioned to expand our product portfolio and improve our ability to innovate and grow organically, which helps us to meet our long-term growth targets.

Our Total Growth strategy is a durable model, that we believe will create both near and long-term shareholder value through organic and acquired growth, capital efficiency and profitability.

We are committed to continuous innovation.

Our investments in research and development (R&D) push product innovation, increasing the value of our offerings to our existing customer base and new customers, which includes Global 10,000 companies (G10K), SMBs and consumers.

Financial Outlook

As of August 7, 2025, the Company’s full year Fiscal 2026 outlook is as follows:

Fiscal 2026 Growth

Total revenues 1% to 2%

Total cloud services and subscriptions revenues

Adjusted EBITDA Margin 50 bps to 100 bps

Free Cash Flows

Enterprise Cloud Bookings 12% to 16%

The forward-looking measures and the underlying assumptions involve significant known and unknown risks and uncertainties, and actual results may vary materially.

The Company does not present a reconciliation of the forward-looking non-GAAP financial measure, Adjusted EBITDA (as defined below), to the most directly comparable GAAP financial measure because it is impractical to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting, within a reasonable range, the occurrence and financial impact of and the periods in which such items may be recognized.

In addition, we intend to continue our strong capital allocation program with our quarterly dividend and renewed share repurchase program.

See Note 26 “Subsequent Events” to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

Strategic Priorities

We believe our strategic priorities position us well to create both near and long-term shareholder value through organic and inorganic growth, greater capital efficiency and improved profitability.

As an organization, we are focused on our three strategic priorities:

• Expanding our competitive advantage:

We believe we are well positioned in our key markets to increase our competitive AI-first advantage through our product cycle and leading with Business AI, Business Clouds and Business Security.

We are committed to continuous innovation and invest in our business to increase the value of our offerings to our existing customer base and new customers, which includes Global 10,000 companies (G10K), SMBs and consumers.

The G10K are the world’s largest companies, ranked by estimated total revenues, as well as the world's largest governments and global organizations.

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Over the last three fiscal years, we have invested a cumulative total of $2.28 billion in R&D or 14.8% of cumulative revenue for that three-year period.

On an annual basis, we continue to target to spend 14% to 16% of revenues on R&D expense.

With our innovation roadmap delivered, we believe we have fortified our support for customer choice:

private cloud, public cloud, off-cloud, and API cloud.

Looking ahead, the destination for innovation is cloud.

Businesses of all sizes rely on a combination of public and private clouds, managed services and off-cloud solutions.

As a result, we are committed to continue to modernize our technology infrastructure and leverage our existing investments in the OpenText Cloud and programs to help customers off-cloud.

The combination of OpenText cloud-native applications and managed services, together with the scalability and performance of our partner public cloud providers, offer more secure, reliable and compliant solutions to customers wanting to deploy cloud-based Information Management applications.

The OpenText Cloud is designed to build additional flexibility and scalability for our customers:

becoming cloud-native, connecting anything, and extending capabilities with multi-tenant SaaS applications and services.

On May 1, 2024, we completed the sale of the AMC business to Rocket Software for $2.275 billion in cash before taxes, fees and other adjustments.

For Fiscal 2024, the results of the AMC business from July 1, 2023 through April 30, 2024 were recorded and presented within our Consolidated Financial Statements.

See Note 19 “Acquisitions and Divestitures” to our Consolidated Financial Statements for more details.

During the fourth quarter of Fiscal 2024 we prepaid $2.0 billion of our aggregate outstanding principal balances, including $940 million under the Term Loan B (as defined below), representing all outstanding principal thereunder, and $1.06 billion under the Acquisition Term Loan (as defined below), using the net proceeds from the AMC Divestiture.

See Part I, Item 1A, “Risk Factors” included within this Annual Report on Form 10-K.

On July 3, 2024, the Company announced a business optimization plan which is intended to strategically align the Company’s workforce to support its growth and innovation plans.

The plan is expected to result in the reduction of approximately 1,200 positions across the Company, with an annualized cost savings of approximately $200.0 million, as well as the reinvestment of approximately $50.0 million annually for approximately 800 new roles in Sales, Professional Services and Engineering, resulting in a 1.7% net reduction of the Company’s workforce.

The Company expects to incur approximately $60.0 million in restructuring charges that will be substantially recognized in the first quarter of Fiscal 2025 and we expect the business optimization plan to be completed by the end of Fiscal 2025.

See Note 26 “Subsequent Events” to our Consolidated Financial Statements and Part I, Item 1A, “Risk Factors” included within this Annual Report on Form 10-K for more details.

We will continue to closely monitor the potential impacts of inflation with respect to wages, services and goods, concerns regarding any potential recession, rising interest rates, financial market volatility, and the Russia-Ukraine and Israel-Hamas conflicts on our business.

Looking ahead, innovation continues to move to the cloud.

Businesses rely on a mix of public and private clouds, managed services, and off-cloud options.

We’re modernizing our infrastructure and building on our OpenText Cloud investments to meet customers where they are.

Our cloud-native applications, combined with public cloud partners and managed services, provide secure, scalable solutions.

With multi-tenant SaaS and embedded AI across our portfolio—including Titanium X—we aim to deliver greater flexibility, productivity, and choice.

• Total revenue growth:

We are committed to total revenue growth through organic initiatives, innovation and acquisitions.

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We believe in a programmatic approach to growth through tuck-in acquisitions or when they align with our strategic priorities.

We expect to carry out programmatic divestitures, when that is the best opportunity to monetize long-term returns for mature products.

We will remain flexible and allocate our capital accordingly to the highest return scenario.

We regularly evaluate such opportunities within the Information Management market and at any time may be in various stages of discussions with respect to such opportunities.

This strategy will often align to how we assess which of our products are performing compared to outperforming in growth and our capital allocation revenue growth expectations.

• Achieving Operational Excellence:

We focus on driving margin and earnings expansion, free cash flow growth, and capital return.

We focus on expanding profitability so as to drive cash flow growth, which helps fuel our innovation and capital allocation priorities.

As previously announced, our Business Optimization Plan was designed to support strategic initiatives, integration and simplification efforts following the Micro Focus acquisition, AMC Divestiture and AI-first innovation and growth plans.

As of June 30, 2025, we have incurred $127.9 million of the total expected costs of up to approximately $260.0 million.

These costs primarily related to workforce reduction driven by automation, centralization, and simplification, as well as associated real estate footprint reductions globally.

On a combined basis, the expansion is expected to result in a total net reduction of approximately 2,000 positions.

The Business Optimization Plan along with other savings initiatives, when fully implemented, is expected to generate total annualized savings of approximately $490.0 million to $550.0 million.

The Company has realized approximately 35% of these savings during Fiscal 2025, and expects to realize an additional 35% in Fiscal 2026, with the balance thereafter.

The entire business optimization plan is expected to be substantially completed by the second quarter of Fiscal 2027.

See Part I, Item 1A, “Risk Factors” included within this Annual Report on Form 10-K for more details.

Additional Considerations

We conduct business globally and are subject to a complex and evolving international trade environment.

Recent trade tensions among major economies, including the United States, Canada, China, the European Union and others, have led to the dissolution of trade agreements, the imposition of tariffs and other restrictive measures.

These tariffs and other restrictive measures do not currently target software, services, intangibles or other digital services;

however, we cannot predict future trade policy or tariffs, including whether such digital goods and services will be subject to any form of tariffs or other restrictions in the future, or the timing of any impacts thereof.

We also cannot predict the impact that such tariffs and other restrictive measures will have on the macroeconomic environment or our customers, which could adversely impact our business and our results of operations.

We will continue to closely monitor the potential impacts of inflation with respect to wages, services and goods, concerns regarding any potential recession, higher interest rates, potential increases or changes in global tariff policies and structures and other trade policies, financial market volatility, the Russia-Ukraine and Middle East conflicts and other geopolitical disputes on our business.

See Part I, Item 1A, “Risk Factors” included within this Annual Report on Form 10-K.

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(iv) Income taxes.

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For a full discussion of all our accounting policies, see Note 2 “Accounting Policies and Recent Accounting Pronouncements” to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

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The software application resides on our hardware or that of a third-party, and the customer accesses and uses the software on an as-needed basis.

Our cloud arrangements can be broadly categorized as “platform as a service” (PaaS), “software as a service” (SaaS), cloud subscriptions and managed services.

Our cloud arrangements can be broadly categorized as “platform as a service” (PaaS), SaaS, cloud subscriptions and managed services.

PaaS/ SaaS/ Cloud Subscriptions (collectively referred to here as cloud-based solutions):

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Customers using these managed services are not permitted to take possession of our software and the contract is for a defined period, where customers pay a monthly or quarterly fee.

Our performance obligation is satisfied as we provide services of operating and managing a customer’s electronic data interchange (EDI) environment.

Our performance obligation is satisfied as we provide services of operating and managing a customer’s EDI environment.

Revenue relating to these services is recognized using an output method based on the expected level of service we will provide over the term of the contract.

As part of cloud services and subscription revenues, in connection with cloud subscription and managed service contracts, we often agree to perform a variety of services before the customer goes live, such as, converting and migrating customer data, building interfaces and providing training.

As part of cloud services and subscriptions revenues, in connection with cloud subscription and managed service contracts, we often agree to perform a variety of services before the customer goes live, such as, converting and migrating customer data, building interfaces and providing training.

These services are considered an outsourced suite of professional services which can involve certain project-based activities.

These services can be provided at the initiation of a contract, during the implementation or on an ongoing basis as part of the customer life cycle.

These services can be charged separately on a fixed fee or a time and materials basis, or the costs associated may be recovered as part of the ongoing cloud subscription or managed services fee.

These outsourced professional services are considered to be distinct from the ongoing hosting services and represent a separate performance obligation within our cloud subscription or managed services arrangements.

These services can be charged separately on a fixed fee or a time and materials basis, or the costs associated may be recovered as part of the ongoing cloud subscription or

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managed services fee.

The obligation to provide outsourced professional services is satisfied over time, with the customer simultaneously receiving and consuming the benefits as we satisfy our performance obligations.

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(i) the customer simultaneously receives and consumes the benefits as we perform them, (ii) our performance creates or enhances an asset the customer controls as we perform and (iii) our performance does not create an asset with an alternative use, and we have the enforceable right to payment.

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If all the above criteria are met, we use an input-based measure of progress for recognizing professional service revenue.

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In most cases we can establish the SSP based on observable data.

establish a narrow SSP range for our products and services and assess this range on a periodic basis or when material changes in facts and circumstances warrant a review.

We typically establish a narrow SSP range for our products and services and assess this range on a periodic basis or when material changes in facts and circumstances warrant a review.

If the SSP is not directly observable, then we estimate the amount using either the expected cost plus a margin or residual approach.

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Where the contracts are negotiated as a package, we will account for them as a single arrangement and allocate the consideration for the combined contracts among the performance obligations accordingly.

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We believe there are significant assumptions, judgments and estimates involved in the accounting for revenue recognition as discussed above and these assumptions, judgments and estimates could impact the timing of when revenue is recognized and could have a material impact on our Consolidated Financial Statements.

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We account for our uncertain tax provisions by using a two-step approach.

The first step is to evaluate the tax position for recognition by determining if the weight of the available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained on audit, including the resolution of related appeals or litigation processes, if any.

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The second step is to measure the appropriate amount of the benefit to recognize.

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On subsequent recognition and measurement, the maximum amount which is more likely than not to be recognized at each reporting date will represent the Company’s best estimate, given the information available at the reporting date, although the outcome of the tax position is not absolute or final.

We recognize both accrued interest and penalties related to liabilities for income taxes within the “Provision for (recovery of) income taxes” line of our Consolidated Statements of Income.

We recognize both accrued interest and penalties related to liabilities for income taxes within the Provision for income taxes line of our Consolidated Statements of Income.

Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the Consolidated Financial Statements that will result in taxable or deductible amounts in future years.

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For each of the periods indicated below, we present our revenues by product type, revenues by major geography, cost of revenues by product type, total gross margin, total operating margin, gross margin by product type and their corresponding percentage of total revenue.

In addition, we provide Non-GAAP measures for the periods discussed to provide additional information to investors that we believe will be useful as this presentation is in line with how our management assesses our Company’s performance.

In addition, we provide Non-GAAP measures for the periods discussed to provide additional information to investors that we believe will be useful as this presentation aligns with how our management assesses our Company’s performance.

See “Use of Non-GAAP Financial Measures” below for a reconciliation of GAAP-based measures to Non-GAAP-based measures.

The comparability of our operating results for the year ended June 30, 2024 as compared to the year ended June 30, 2023 was impacted by the Micro Focus Acquisition, the results of which were consolidated with those of OpenText beginning February 1, 2023 and the AMC Divestiture, the results of which were excluded from those of OpenText beginning May 1, 2024.

The comparability of our operating results for the years ended June 30, 2025, June 30, 2024 and June 30, 2023 were impacted by the Micro Focus Acquisition, the results of which were consolidated with those of OpenText beginning February 1, 2023, and the AMC Divestiture, the results of which were excluded from those of OpenText beginning May 1, 2024.

As such, consolidated operating results for the years ended June 30, 2023 and 2024 included five and twelve months, respectively, of Micro Focus operating results, which included five and ten months, respectively, of AMC business operating results.

Acquisition of Micro Focus

Our total revenues increased by $1,284.6 million across all of our product types in the year ended June 30, 2024, relative to the year ended June 30, 2023, primarily due to revenue contributions from the Micro Focus Acquisition, organic revenue growth, and a favorable impact of $40.5 million of foreign exchange rate changes.

Our total revenues increased by $1,284.6 million across all of our product types in the year ended June 30, 2024, relative to the year ended June 30, 2023, primarily due to revenue contributions from the Micro Focus Acquisition, organic revenue growth, and a favourable impact of $40.5 million of foreign exchange rate changes.

The Micro Focus Acquisition contributed $2,210.7 million to our total revenues during the year ended June 30, 2024, of which $1,414.5 million related to customer support revenues and $477.4 million related to license revenues.

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Micro Focus research and development, sales and marketing, and general and administrative expenses were $1,009.8 million in the year ended June 30, 2024, an increase of $459.4 million as compared to the same period in the prior fiscal year.

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The Micro Focus results described above include the results of the AMC business prior to the AMC Divestiture on May 1, 2024.

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The AMC business was comprised of the legacy OpenText connectivity business and the legacy Micro Focus AMC business.

The Company’s Consolidated Financial Statements for the year ended June 30, 2024 include ten months of combined results for the AMC business.

The legacy Micro Focus AMC business operating results were consolidated with those of the Company’s beginning on February 1, 2023, as such, the Company’s Consolidated Financial Statements for the year ended June 30, 2023 reflects five months of legacy Micro Focus AMC business operating results and twelve months of legacy OpenText connectivity business operating results.

The AMC business contributed $441 million of revenue during the year ended June 30, 2024 of which $284 million related to customer support revenues and $139 million related to license revenues.

Total AMC revenues increased by $216 million for the year ended June 30, 2024, relative to the year ended June 30, 2023, primarily driven by increases in customer support and license revenues of $129 million and $77 million, respectively, due to the inclusion of ten months of operating results of the AMC business in Fiscal 2024 compared to five months of operating results in Fiscal 2023.

The comparability of our operating results for the year ended June 30, 2025 as compared to the year ended June 30, 2024 was impacted by the divestiture of our AMC business, the results of which were excluded from those of OpenText beginning May 1, 2024.

As such, AMC business operating results through April 30, 2024 were included in the consolidated operating results for the year ended June 30, 2024, but were not included in the consolidated operating results for the year ended June 30, 2025.

Our total revenues decreased by $601.2 million, primarily across license and customer support product types, in the year ended June 30, 2025 relative to the year ended June 30, 2024, primarily due to the exclusion of revenue contributions from the AMC business, and after factoring the unfavourable impact of $2.8 million of foreign exchange rate changes.

The following table illustrates the revenues contributed by the AMC business during the year ended June 30, 2024.

(In thousands) Year Ended

June 30, 2024

Cloud services and subscriptions $ —

Customer support 283,489

License 138,637

Professional service and other 17,817

Total revenues $ 439,943

Transition Services Agreement

In connection with the AMC Divestiture, we entered into a Transition Service Agreement (TSA) with Rocket Software, whereby we will provide certain transition services to Rocket Software for up to 24 months from the closing date.

In connection with the AMC Divestiture, we entered into a TSA with Rocket Software, whereby we agreed to provide certain transition services to Rocket Software for up to 24 months from the closing date.

These transition service costs are reimbursable by Rocket Software.

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The following table illustrates the financial statement impact of these TSA reimbursements, which have been recorded as an offset to the respective costs incurred, within our Consolidated Statements of Income.

All transition services pursuant to the TSA were completed as of June 30, 2025.

Year Ended June 30,

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Total $ 31,604 $ 11,516 $ —

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Summary of Results of Operations

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(3) EMEA consists of countries in Europe, the Middle East and Africa.

(4) Asia Pacific primarily consists of Japan, Australia, China, Korea, Philippines, Singapore, India and New Zealand.

(4) Asia Pacific primarily consists of Australia, Japan, Singapore, India and China.

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(5) See “Use of Non-GAAP Financial Measures” (discussed later in this MD&A) for definitions and reconciliations of GAAP-based measures to Non-GAAP-based measures.

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1) Cloud Services and Subscriptions:

Cloud services and subscriptions revenues are from hosting arrangements where in connection with the licensing of software, the end user does not take possession of the software, as well as from end-to-end fully outsourced B2B integration solutions to our customers (collectively referred to as cloud arrangements).

Cloud services and subscriptions revenues are from hosting arrangements where in connection with the licensing of software, the end user does not take possession of the software, as well as from end-to-end fully outsourced business-to-business integration solutions to our customers (collectively referred to as cloud arrangements).

The software application resides on our hardware or that of a third-party, and the customer accesses and uses the software on an as-needed basis via an identified line.

Our cloud arrangements can be broadly categorized as PaaS, SaaS, cloud subscriptions and managed services.

For the year ended June 30, 2024, our cloud renewal rate, excluding the impact of Carbonite, Zix and Micro Focus, was approximately 92%, compared to approximately 94% for the year ended June 30, 2023.

Our cloud arrangements can be broadly categorized as platform as a service, software as a service, cloud subscriptions and managed services.

Beginning with the quarter ended September 30, 2024, we have disclosed the cloud renewal rate on a net basis (cloud net renewal rate).

This rate includes increases and decreases in renewed contract values driven by product mix, volume and consumption, and changes for price adjustments relating to renewed contract values, which were not part of the historical calculation of the cloud renewal rate.

For the year ended June 30, 2025, our cloud net renewal rate, excluding the impact of Carbonite Inc.

and Zix Corporation, was 96%.

Cost of Cloud services and subscriptions revenues is comprised primarily of third-party network usage fees, maintenance of in-house data hardware centers, technical support personnel-related costs and some third-party royalty costs.

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Cloud services and subscriptions revenues increased by $36.0 million or 2.0% during the year ended June 30, 2025 as compared to the prior fiscal year;

up 6.8% after factoring in the favorable impact of $5.0 million of foreign exchange rate changes.

The increase was primarily driven by incremental revenues from the Micro Focus Acquisition and organic revenue growth over the comparative period.

Geographically, the overall change was attributable to an increase in Americas of $64.7 million, an increase in EMEA of $47.6 million and an increase in Asia Pacific of $7.8 million.

up 2.1% after factoring in the unfavourable impact of $1.5 million of foreign exchange rate changes.

Geographically, the overall change was attributable to an increase in EMEA of $43.0 million, a decrease in Americas of $5.3 million, and a decrease in Asia Pacific of $1.7 million.

There were 149 cloud services contracts greater than $1.0 million that closed during Fiscal 2025, compared to 129 contracts during Fiscal 2024.

Cost of Cloud services and subscriptions revenues increased by $123.6 million during the year ended June 30, 2024 as compared to the prior fiscal year.

This was primarily due to an increase in third-party network usage fees of $79.2 million partially driven by incremental Cloud services and subscriptions cost of revenues from the Micro Focus Acquisition over the comparative period and an increase in labour-related costs of $44.8 million.

Overall, the gross margin percentage on Cloud services and subscriptions revenues decreased to 61% from 65%.

Cost of Cloud services and subscriptions revenues decreased by $15.8 million during the year ended June 30, 2025 as compared to the prior fiscal year.

This was due to a decrease in labour-related costs of $22.1 million, partially offset by an increase in third-party network usage fees of $5.6 million .

Overall, the gross margin percentage on Cloud services and subscriptions revenues increased to 62% from 61%.

2) Customer Support:

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Therefore, changes in Customer support revenues do not always correlate directly to the changes in license revenues from period to period.

The terms of support and maintenance agreements are typically twelve months, and are renewable, generally on an annual basis, at the option of the customer.

The terms of support and maintenance agreements are typically twelve months, and are renewable, generally

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on an annual basis, at the option of the customer.

Our management reviews our customer support renewal rates on a quarterly basis, and we use these rates as a method of monitoring our customer service performance.

For the year ended June 30, 2024,

our Customer support renewal rate, excluding the impact of Carbonite, Zix and Micro Focus, was approximately 95%, consistent with the year ended June 30, 2023.

Beginning with the quarter ended September 30, 2024, we have disclosed the customer support renewal rate on a net basis (customer support net renewal rate).

This rate includes increases in renewed contract values driven by volume and consumption, and excludes reductions driven by shifts from customer support renewals where customers migrate to other product types, which were not part of the historical calculation of the customer support renewal rate.

For the year ended June 30, 2025, our customer support net renewal rate was 91%.

Cost of Customer support revenues is comprised primarily of technical support personnel and related costs, as well as third-party royalty costs.

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Asia Pacific 9.9 % 9.8 % 8.9 %

Customer support revenues increased by $798.3 million or 41.7% during the year ended June 30, 2024 as compared to the prior fiscal year;

up 40.5% after factoring in the favorable impact of $23.3 million of foreign exchange rate changes.

The increase was primarily driven by incremental Customer support revenues from the Micro Focus Acquisition over the comparative period.

Geographically, the overall change was attributable to an increase in Americas of $372.9 million, an increase in EMEA of $329.2 million and an increase in Asia Pacific of $96.2 million.

Cost of Customer support revenues increased by $83.0 million during the year ended June 30, 2024 as compared to the prior fiscal year.

This was primarily due to an increase in labour-related costs of $81.8 million and an increase in third-party network usage fees of $2.1 million driven by incremental Customer support cost of revenues from the Micro Focus Acquisition over the comparative period.

Overall, the gross margin percentage on Customer support revenues remained stable at approximately 89% compared to the prior fiscal year.

Customer support revenues decreased by $379.3 million or 14.0% during the year ended June 30, 2025 as compared to the prior fiscal year;

down 13.9% after factoring in the unfavourable impact of $2.9 million of foreign exchange rate changes.

The decrease was primarily due to the exclusion of customer support revenue contributions of $283.5 million as a result of the AMC Divestiture.

Geographically, the overall change was attributable to a decrease in Americas of $251.4 million, a decrease in EMEA of $89.7 million and a decrease in Asia Pacific of $38.2 million.

Cost of Customer support revenues decreased by $42.4 million during the year ended June 30, 2025 as compared to the prior fiscal year, primarily due to a decrease in labour-related costs of $39.8 million.

Overall, the gross margin percentage on Customer support revenues remained stable at 89%.

Our License revenue can be broadly categorized as perpetual licenses, term licenses and subscription licenses.

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Cost of License revenues consists primarily of royalties payable to third parties.

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Year Ended June 30,

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Asia Pacific 13.7 % 13.9 % 12.8 %

License revenues increased by $295.1 million or 54.8% during the year ended June 30, 2024 as compared to the prior fiscal year;

up 53.3% after factoring in the favorable impact of $7.6 million of foreign exchange rate changes.

The increase was primarily driven by incremental License revenues from the Micro Focus Acquisition over the comparative period and License revenues relating to the grant of certain IP rights.

Geographically, the overall change was attributable to an increase in EMEA of $138.5 million, an increase in Americas of $109.3 million and an increase in Asia Pacific of $47.4 million.

License revenues decreased by $208.5 million or 25.0% during the year ended June 30, 2025 as compared to the prior fiscal year;

down 25.1% after factoring in the favourable impact of $0.4 million of foreign exchange rate changes.

The decrease was driven by the exclusion of license revenue contributions as a result of the AMC Divestiture of $138.6 million and license revenues in the prior fiscal year relating to the grant of certain IP rights.

Geographically, the overall change was attributable to a decrease in Americas of $115.8 million, a decrease in EMEA of $62.4 million, and a decrease in Asia Pacific of $30.3 million.

During Fiscal 2025, we closed 211 license contracts greater than $0.5 million, of which 79 contracts were greater than $1.0 million, contributing $228.5 million of License revenues.

This was compared to 239 license contracts greater than $0.5 million during Fiscal 2024, of which 103 contracts were greater than $1.0 million, contributing $371.7 million of License revenues.

Cost of License revenues increased by $9.0 million during the year ended June 30, 2024 as compared to the prior fiscal year as a result of increased third-party technology costs over the comparative period.

Overall, the gross margin percentage on License revenues remained stable at 97% as compared to the prior fiscal year.

Cost of License revenues increased by $6.3 million during the year ended June 30, 2025 as compared to the prior fiscal year.

Overall, the gross margin percentage on License revenues decreased to 95% from 97%.

4) Professional Service and Other:

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Asia Pacific 14.1 % 12.6 % 12.9 %

Professional service and other revenues increased by $71.1 million or 21.5% during the year ended June 30, 2024 as compared to the prior fiscal year;

up 20.1% after factoring in the favorable impact of $4.7 million of foreign exchange rate changes.

The increase was primarily driven by incremental Professional service and other revenues from the Micro Focus Acquisition over the comparative period.

Geographically, the overall change was attributable to an increase in EMEA of $53.2 million, an increase in Americas of $10.0 million and an increase in Asia Pacific of $7.9 million.

Cost of Professional service and other revenues increased by $25.6 million during the year ended June 30, 2024 as compared to the prior fiscal year.

This was due to an increase in labour-related costs of $28.2 million primarily driven by incremental Professional service and other cost of revenues from the Micro Focus Acquisition over the comparative period, offset by a decrease in other miscellaneous costs of $2.6 million.

Overall, the gross margin percentage on Professional service and other revenues increased to 25% from 16%.

Tab le of C ontents

Professional service and other revenues decreased by $49.3 million or 12.3% during the year ended June 30, 2025 as compared to the prior fiscal year;

down 12.5% after factoring in the favourable impact of $1.0 million of foreign exchange rate changes.

The decrease was partially due to the exclusion of professional services revenue contributions as a result of the AMC Divestiture.

Geographically, the overall change was attributable to a decrease in Americas of $30.6 million, a decrease in EMEA of $17.8 million, and a decrease in Asia Pacific of $0.9 million.

Cost of Professional service and other revenues decreased by $37.4 million during the year ended June 30, 2025 as compared to the prior fiscal year.

This was primarily due to a decrease in labour-related costs of $38.5 million, Overall, the gross margin percentage on Professional service and other revenues remained stable at 25%.

Amortization of Acquired Technology-based Intangible Assets

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Amortization of acquired technology-based intangible assets $ 188,780 $ (55,142) $ 243,922 $ 20,738 $ 223,184

Amortization of acquired technology-based intangible assets increased during the year ended June 30, 2024 by $20.7 million as compared to the prior fiscal year.

This was primarily due to amortization of newly acquired technology-based intangible assets from the Micro Focus Acquisition, partially offset by intangible assets from previous acquisitions becoming fully amortized and reduced amortization related to the AMC Divestiture.

Amortization of acquired technology-based intangible assets decreased during the year ended June 30, 2025 by $55.1 million as compared to the prior fiscal year.

This was primarily due to reduced amortization related to technology-based intangible assets from previous acquisitions becoming fully amortized, and a reduction in amortization related to the AMC Divestiture.

Operating Expenses

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Research and development (1)

$ 755,936 $ (108,527) $ 864,463 $ 205,249 $ 659,214

Sales and marketing (1)

1,059,497 (103,637) 1,163,134 193,163 969,971

General and administrative 427,811 (149,227) 577,038 157,448 419,590

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Special charges (recoveries) 2.8 % 2.3 % 3.8 %

__________________________

(1) Beginning in the first quarter of Fiscal 2025, the Company reclassified certain expenses previously included within Research and development to Sales and marketing in the Consolidated Statements of Income to provide a better representation of the function of the expenses and reclassified prior period information to conform to the current presentation.

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Research and development expenses consist primarily of payroll and payroll-related benefits expenses, contracted research and development expenses and facility costs.

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Total change in research and development expenses $ (108,527) $ 205,249

Research and development expenses increased by $213.3 million during the year ended June 30, 2024 as compared to the prior fiscal year, primarily as a result of the Micro Focus Acquisition.

Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, increased by $145.8 million, facility-related expenses increased by $50.2 million and contract labour and consulting increased by $6.2 million.

Overall, our research and development expenses, as a percentage of total revenues, remained stable compared to the prior fiscal year at 15%.

Research and development expenses decreased by $108.5 million during the year ended June 30, 2025, as compared to the prior fiscal year, primarily from restructuring and other cost savings initiatives, and the exclusion of research and development expenses as a result of the AMC Divestiture.

Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $53.4 million, facility-related expenses decreased by $19.1 million, contract labour and consulting decreased by $15.3 million and share-based compensation expense decreased by $13.5 million.

Overall, our research and development expenses, as a percentage of total revenues, remained stable at 15% compared to the prior fiscal year.

Our research and development labour resources decreased by 315 employees, from 7,747 employees at June 30, 2024 to 7,432 employees at June 30, 2025.

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increase (decrease)

(In thousands) 2024 and 2023 2023 and 2022

(In thousands) 2025 and 2024

2024 and 2023

Payroll and payroll-related benefits $ (71,022) $ 148,979

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Total change in sales and marketing expenses $ (103,637) $ 193,163

Sales and marketing expenses increased by $185.1 million during the year ended June 30, 2024 as compared to the prior fiscal year, primarily as a result of the Micro Focus Acquisition.

Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, increased by $145.7 million, facility-related expenses increased by $13.1 million, contract labour and consulting expenses increased by $8.7 million, commissions increased by $7.7 million, credit loss expenses increased by $7.7 million and travel and communication expenses increased by $7.5 million.

Overall, our sales and marketing expenses, as a percentage of total revenues, decreased to 20% compared to the prior fiscal year at 21%.

Sales and marketing expenses decreased by $103.6 million during the year ended June 30, 2025, as compared to the prior fiscal year, primarily from the exclusion of sales and marketing expenses as of result of the AMC Divestiture, and restructuring and other cost savings initiatives.

Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $71.0 million, commissions decreased by $13.7 million, share-based compensation expense decreased by $8.9 million, facility-related expenses decreased by $7.7 million and contract labour and consulting expenses decreased by $4.3 million.

Overall, our sales and marketing expenses, as a percentage of total revenues, remained stable at 20% compared to the prior fiscal year.

Our sales and marketing labour resources decreased by 259 employees, from 4,218 employees at June 30, 2024 to 3,959 employees at June 30, 2025.

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General and administrative expenses consist primarily of payroll and payroll related benefits expenses, related overhead, audit fees, other professional fees, contract labour and consulting expenses and public company costs.

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increase (decrease)

(In thousands) 2024 and 2023 2023 and 2022

(In thousands) 2025 and 2024

2024 and 2023

Payroll and payroll-related benefits $ (38,794) $ 48,909

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Total change in general and administrative expenses $ (149,227) $ 157,448

General and administrative expenses increased by $157.4 million during the year ended June 30, 2024 as compared to the prior fiscal year, partially driven by the Micro Focus Acquisition and other miscellaneous costs.

Other miscellaneous costs, which include professional fees such as legal, audit and tax related expenses, increased by $93.9 million partially driven by increased costs related to IP, including the grant of certain IP rights and the resolution of certain historical IP related matters, and higher professional fees.

Additionally, payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, increased by $48.9 million, contract labour and consulting increased by $4.9 million, facility-related expenses increased by $4.9 million, and travel and communication expenses increased by $3.7 million.

Overall, general and administrative expenses, as a percentage of total revenues, increased to 10% from 9% in the prior fiscal year.

Our general and administrative labour resources increased by 25 employees, from 3,396 employees at June 30, 2023 to 3,421 employees at June 30, 2024.

General and administrative expenses decreased by $149.2 million during the year ended June 30, 2025, as compared to the prior fiscal year, primarily from restructuring and other cost savings initiatives.

Additionally, other miscellaneous costs, which include professional fees such as legal, audit and tax related expenses, decreased by $74.0 million primarily driven by a reduction in costs related to IP, including the grant of certain IP rights and the resolution of certain historical IP related matters in the prior fiscal year, and reductions in other professional fees.

Payroll and payroll-related benefits, which is comprised of salaries, benefits and variable short-term incentives, decreased by $38.8 million, contract labour and consulting expenses decreased by $23.6 million.

travel and communication expenses decreased by $10.1 million and share-based compensation expenses decreased by $6.7 million.

Overall, general and administrative expenses, as a percentage of total revenues, decreased to 8% from 10% in the prior fiscal year.

Our general and administrative labour resources decreased by 580 employees, from 3,421 employees at June 30, 2024 to 2,841 employees at June 30, 2025.

Depreciation expenses:

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Depreciation $ 130,573 $ (1,026) $ 131,599 $ 23,838 $ 107,761

Depreciation expenses increased during the year ended June 30, 2024 by $23.8 million compared to the prior fiscal year, primarily as a result of the Micro Focus Acquisition.

Depreciation expenses as a percentage of total revenue remained stable for the year ended June 30, 2024 at 2% compared to the prior fiscal year.

Depreciation expenses decreased during the year ended June 30, 2025 by $1.0 million compared to the prior fiscal year.

Depreciation expenses as a percentage of total revenue increased for the year ended June 30, 2025 to 3% from 2% in the prior fiscal year.

Amortization of acquired customer-based intangible assets:

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Amortization of acquired customer-based intangible assets $ 321,891 $ (110,513) $ 432,404 $ 105,998 $ 326,406

Amortization of acquired customer-based intangible assets increased during the year ended June 30, 2024 by $106.0 million as compared to the prior fiscal year.

This was primarily due to amortization of newly acquired customer-based intangible assets from the Micro Focus Acquisition, partially offset by reduced amortization related to the AMC Divestiture and intangible assets from previous acquisitions becoming fully amortized.

Amortization of acquired customer-based intangible assets decreased during the year ended June 30, 2025 by $110.5 million as compared to the prior fiscal year.

This was primarily due to a reduced amortization related to customer-based intangible assets from previous acquisitions becoming fully amortized and a reduction in amortization related to the AMC Divestiture.

Special charges (recoveries):

Special charges (recoveries) typically relate to amounts that we expect to pay in connection with restructuring plans, acquisition-related costs and other similar charges and recoveries.

Generally, we implement such plans in the context of integrating acquired entities with existing OpenText operations and most recently in response to our return to office planning.

Special charges (recoveries) typically relate to amounts that we expect to pay in connection with restructuring plans, acquisition and divestiture-related costs and other similar charges and recoveries.

Generally, we implement such plans in the context of integrating acquired entities with existing OpenText operations.

Actions related to such restructuring plans are typically completed within a period of one year.

In certain limited situations, if the planned activity does not need to be implemented, or an expense lower than anticipated is paid out, we record a recovery of the originally recorded expense to Special charges (recoveries).

In certain limited situations, if the planned activity does not need to be

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implemented, or an expense lower than anticipated is paid out, we record a recovery of the originally recorded expense to Special charges (recoveries).

Year Ended June 30,

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Special charges (recoveries)

Special charges (recoveries) decreased by $33.9 million during the year ended June 30, 2024 as compared to the prior fiscal year.

Acquisition related costs decreased by $46.9 million, other miscellaneous charges decreased by $30.2 million, which includes severance and other costs associated with the Micro Focus Acquisition and costs related to restructuring activities decreased by $3.4 million.

These decreases were partially offset by increased divestiture costs of $46.6 million related to the AMC Divestiture, as compared to the same period in the prior fiscal year.

$ 145,890 $ 10,585 $ 135,305 $ (33,854) $ 169,159

Special charges (recoveries) increased by $10.6 million during the year ended June 30, 2025 as compared to the prior fiscal year.

This was primarily due to an increase in restructuring costs of $127.9 million related to the Business Optimization Plan, partially offset by a decrease in restructuring costs of $72.7 million, related to the Micro Focus Acquisition, and a decrease in divestiture related costs of $41.9 million as compared to the prior fiscal year.

For more details on Special charges (recoveries), see Note 18 “Special Charges (Recoveries)” to our Consolidated Financial Statements.

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(44,286) (47,402) 3,116 131,957 (128,841)

Realized gains on derivatives not designated as hedges (3)

Realized gains (losses) on derivatives not designated as hedges (3)

(10,380) (10,380) — (137,471) 137,471

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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 9 “Prepaid Expenses and Other Assets” to our Consolidated Financial Statements for more details).

(5) During the year ended June 30, 2024, we recognized a loss on debt extinguishment of $56.4 million related to the acceleration and recognition of unamortized debt discount and issuance costs resulting from the optional repayments and prepayments of the Acquisition Term Loan (as defined below) and Term Loan B (as defined below) in Fiscal 2024.

(5) During the year ended June 30, 2024, the Company recognized a loss on debt extinguishment of $56.4 million related to the acceleration and recognition of unamortized debt discount and issuance costs resulting from the optional repayments and prepayments of the Acquisition Term Loan (as defined below) and Term Loan B (as defined below) in Fiscal 2024.

(see Note 11 “Long-Term Debt” to our Consolidated Financial Statements for more details).

(6) On December 1, 2022, we amended the Acquisition Term Loan and Bridge Loan to reallocate commitments under the Bridge Loan to the Acquisition Term Loan and terminated all remaining commitments under the Bridge Loan which resulted in a loss on debt extinguishment related to unamortized debt issuance costs (see Note 11 “Long-Term Debt” to our Consolidated Financial Statements for more details).

(7) On December 9, 2021, we redeemed Senior Notes 2026 in full, which resulted in a loss on debt extinguishment of $27.4 million.

Of this, $25.0 million related to the early termination call premium, $6.2 million related to unamortized debt issuance costs and $(3.8) million related to unamortized premium (see Note 11 “Long-Term Debt” to our Consolidated Financial Statements for more details).

(6) On December 1, 2022, the Company amended the Acquisition Term Loan (as defined below) to reallocate commitments under the now-terminated bridge loan to the Acquisition Term Loan and terminated all remaining commitments under the now-terminated bridge loan, which resulted in a loss on debt extinguishment related to unamortized debt issuance costs (see Note 11 “Long-Term Debt” to our Consolidated Financial Statements for more details).

(7) On May 1, 2024, the Company completed the sale of its AMC business, which resulted in a gain on disposition (see Note 19 “Acquisitions and Divestitures” to our Consolidated Financial Statements for more details).

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Interest and Other Related Expense, Net

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Provision for (recovery of) income taxes $ 46,005 $ (218,007) $ 264,012 $ 193,245 $ 70,767

The effective tax rate increased to a provision of 36.2% for the year ended June 30, 2024, compared to a provision of 32.0% for the year ended June 30, 2023.

Tax expense increased from $70.8 million during the year ended June 30, 2023 to $264.0 million during the year ended June 30, 2024.

The increase in the effective tax rate was driven by an increase in valuation allowance, the impact of internal reorganizations and the AMC Divestiture, and U.S.

Base Erosion and Anti-Abuse Tax (BEAT), partially offset by tax credits and change in undistributed earnings.

The tax rate for the year ended June 30, 2023 varied from the statutory rate due to withholding taxes, changes in valuation allowance, permanent differences related to foreign source income inclusions, and the impact of internal reorganizations, partially offset by tax credits and permanent differences related to preferential tax treatment of the mark-to-market gains on derivatives.

The effective tax rate decreased to a provision of 9.5% for the year ended June 30, 2025, compared to a provision of 36.2% for the year ended June 30, 2024.

Tax expense decreased from $264.0 million during the year ended June 30, 2024 to $46.0 million during the year ended June 30, 2025.

The decrease in the effective tax rate was driven by a reduced tax impact of internal reorganization, a net decrease in unrecognized tax benefits, change in valuation allowance, a reduction in U.S.

BEAT, and an increase expected amended return benefits, partially offset by a reduction in foreign tax credits, and an increase in undistributed earnings.

Numerous countries have agreed to a statement in support of the Organization for Economic Co-Operation and Development model rules that propose a global minimum tax rate of 15% for companies with revenue above €750 million, calculated on a country-by-country basis.

Countries with significant operations for Open Text that have enacted the legislation include Canada and UK.

We are continuing to monitor when and how such rules in other jurisdictions will be enacted into law.

As of the year ended June 30, 2025, the impact of the global minimum tax is not material.

On July 4, 2025, the OBBBA was enacted, introducing amendments to U.S.

tax laws with various effective dates.

Key income tax-related provisions of the OBBBA include provisions related to bonus depreciation, research and development expenditures, interest expense deductibility, and revisions to international tax regimes.

The Company is currently assessing the future implications of these tax law changes.

For information on certain potential tax contingencies, including the Canada Revenue Agency (CRA) matter, see Note 14 “Guarantees and Contingencies” and Note 15 “Income Taxes” to our Consolidated Financial Statements.

Also see Part I, Item 1A, “Risk Factors” within this Annual Report on Form 10-K.

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LIQUIDITY AND CAPITAL RESOURCES

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For more details, see “Long-term Debt and Credit Facilities” below.

As of June 30, 2024, we have recognized a provision of $15.9 million (June 30, 2023—$28.3 million) in respect of deferred income tax liabilities for 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.

As of June 30, 2025, we have recognized a deferred income tax liability of $20.0 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.

Cash flows from operating activities

Cash flows from operating activities increased by $188.5 million during the year ended June 30, 2024, as compared to the same period in the prior fiscal year due to an increase in net changes from working capital of $198.8 million, offset by a decrease in net income after the impact of non-cash items of $10.4 million.

Cash flows from operating activities decreased by $137.1 million during the year ended June 30, 2025, as compared to the same period in the prior fiscal year due to a decrease in net changes from working capital of $301.1 million primarily from tax payments made related to the AMC Divestiture, offset by an increase in net income after the impact of non-cash items of $164.0 million.

During the fourth quarter of Fiscal 2025 we had a days sales outstanding (DSO) of 45 days, compared to our DSO of 43 days during the fourth quarter of Fiscal 2024.

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Our cash flows from investing activities are primarily on account of acquisitions, divestitures and additions of property and equipment.

Cash flows from investing activities increased by $7.71 billion during the year ended June 30, 2024, as compared to the same period in the prior fiscal year primarily due to cash consideration received from the AMC Divestiture during Fiscal 2024 of $2.23 billion, as compared to the cash paid during Fiscal 2023 for the Micro Focus Acquisition of $5.66 billion.

Cash flows from investing activities decreased by $2.2 billion during the year ended June 30, 2025, as compared to the same period in the prior fiscal year primarily due to a decrease in cash consideration received from the AMC Divestiture during Fiscal 2024 of $2.2 billion.

Cash flows from financing activities

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These inflows are typically offset by scheduled and non-scheduled repayments of our long-term debt financing and, when applicable, the payment of dividends and/or repurchases of our Common Shares.

Cash flows from financing activities decreased by $7.4 billion during the year ended June 30, 2024 as compared to the same period in the prior fiscal year.

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Cash flows used in financing activities decreased by $2.1 billion during the year ended June 30, 2025 as compared to the prior fiscal year.

This is primarily due to the net impact of the following activities:

(i) $4.9 billion decrease in proceeds from the issuance of long-term debt and draw down on the Revolver in the prior fiscal year;

(ii) $2.4 billion increase in prepayments and repayments of long-term debt and the Revolver;

(iii) $181.2 million related to an increase in cash used in the repurchases of Common Shares and treasury stock;

(iv) $7.8 million related to higher cash dividends paid to shareholders.

The decreases in cash flows provided by financing activities above were partially offset by the following increases:

(i) $74.1 million reduction in debt issuance costs;

(ii) $27.6 million related to higher proceeds from the issuance of Common Shares from the exercise of options and the ESPP;

(i) $15.3 million due to net change in Transition Services Agreement (TSA) obligation driven by cash collections on behalf of Rocket Software related to certain transition services performed by the Company related to the divested AMC business.

(i) $2.5 billion decrease in prepayments and repayments of long-term debt and the Revolver.

The decreases in cash flows used in financing activities above were partially offset by the following increases:

(i) $340.8 million related to cash used in the repurchases of Common Shares and treasury stock;

(ii) $31.5 million related to lower proceeds from the issuance of Common Shares from the exercise of options and the ESPP;

(iii) $30.6 million due to net change in TSA obligations driven by cash collections on behalf of Rocket Software related to certain transition services performed by the Company related to the AMC divestiture.

All transition services pursuant to the TSA were completed as of June 30, 2025.

Cash Dividends

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These covenants are subject to a number of important limitations and exceptions as set forth in the 2031 Indenture.

The 2031 Indenture also provides for events of default, which, if any of them occurs, may permit or, in certain circumstances, require the principal, premium, if any, interest and any other monetary obligations on all the then-outstanding Senior Notes 2031 to be due and payable immediately.

The 2031 Indenture also provides for events of default, which, if any of them occurs, may permit or, in certain circumstances, require the principal, premium, if

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any, interest and any other monetary obligations on all the then-outstanding Senior Notes 2031 to be due and payable immediately.

Senior Notes 2031 are guaranteed on a senior unsecured basis by the Company and the Company’s existing and future wholly-owned subsidiaries (other than OTI) that borrow or guarantee the obligations under our senior credit facilities.

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Senior Notes 2030

On February 18, 2020 OTHI, a wholly-owned indirect subsidiary of the Company, 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.

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.

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Senior Notes 2030 will mature on February 15, 2030, unless earlier redeemed, in accordance with their terms, or repurchased.

On July 1, 2024, 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.

OTI may redeem all or a portion of the Senior Notes 2030 at any time prior to February 15, 2025 at a redemption price equal to 100% of the principal amount of the Senior Notes 2030 plus an applicable premium, plus accrued and unpaid interest, if any, to the redemption date.

OTI may also redeem up to 40% of the aggregate principal amount of the Senior Notes 2030, on one or more occasions, prior to February 15, 2025, using the net proceeds from certain qualified equity offerings at a redemption price of 104.125% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, subject to compliance with certain conditions.

OTI may, on one or more occasions, redeem the Senior Notes 2030, in whole or in part, at any time on and after February 15, 2025 at the applicable redemption prices set forth in the indenture governing the Senior Notes 2030, dated as of February 18, 2020, among OTI, the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S.

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.

OTI may, on one or more occasions, redeem the Senior Notes 2030, in whole or in part, at any time at the applicable redemption prices set forth in the indenture governing the Senior Notes 2030, dated as of February 18, 2020, among OTI, the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S.

trustee, and BNY Trust Company of Canada, as Canadian trustee (the 2030 Indenture), plus accrued and unpaid interest, if any, to the redemption date.

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Senior Notes 2029

On November 24, 2021, we 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.

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

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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.

We may redeem all or a portion of the Senior Notes 2029 at any time prior to December 1, 2024 at a redemption price equal to 100% of the principal amount of the Senior Notes 2029 plus an applicable premium, plus accrued and unpaid interest, if any, to the redemption date.

We may also redeem up to 40% of the aggregate principal amount of the Senior Notes 2029, on one or more occasions, prior to December 1, 2024, using the net proceeds from certain qualified equity offerings at a redemption price of 103.875% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, subject to compliance with certain conditions.

We may, on one or more occasions, redeem the Senior Notes 2029, in whole or in part, at any time on and after December 1, 2024 at the applicable redemption prices set forth in the indenture governing the Senior Notes 2029, dated as of November 24, 2021, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S.

We may, on one or more occasions, redeem the Senior Notes 2029, in whole or in part, at any time at the applicable redemption prices set forth in the indenture governing the Senior Notes 2029, dated as of November 24, 2021, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S.

trustee, and BNY Trust Company of Canada, as Canadian trustee (the 2029 Indenture), plus accrued and unpaid interest, if any, to the redemption date.

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Senior Notes 2028

On February 18, 2020 we 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.

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.

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Senior Notes 2028 will mature on February 15, 2028, unless earlier redeemed, in accordance with their terms, or repurchased.

We may, on one or more occasions, redeem the Senior Notes 2028, in whole or in part, at the applicable redemption prices set forth in the indenture governing the Senior Notes 2028, dated as of February 18, 2020, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S.

We may, on one or more occasions, redeem the Senior Notes 2028, in whole or in part, at any time at the applicable redemption prices set forth in the indenture governing the Senior Notes 2028, dated as of February 18, 2020, among the Company, the subsidiary guarantors party thereto, The Bank of New York Mellon, as U.S.

trustee, and BNY Trust Company of Canada, as Canadian trustee (the 2028 Indenture), plus accrued and unpaid interest, if any, to the redemption date.

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Senior Notes 2028 are guaranteed on a senior unsecured basis by our existing and future wholly-owned subsidiaries that borrow or guarantee the obligations under our senior credit facilities.

Senior Notes 2028 and the guarantees rank equally in right of payment with all of our and our guarantors’ existing and future senior unsubordinated debt and will rank senior in right of payment to all of our and our guarantors’ future subordinated debt.

Senior Notes 2028 and the guarantees rank equally in right of payment with all of our and our guarantors’ existing and future senior unsubordinated debt and will rank senior in right of

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payment to all of our and our guarantors’ future subordinated debt.

Senior Notes 2028 and the guarantees will be effectively subordinated to all of our and our guarantors’ existing and future secured debt, including the obligations under the senior credit facilities, to the extent of the value of the assets securing such secured debt.

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For further details relating to our debt, see Note 11 “Long-Term Debt” to our Consolidated Financial Statements.

Senior Notes 2026

On May 31, 2016 we issued $600 million in aggregate principal amount of 5.875% senior notes due 2026 (Senior Notes 2026) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act.

Senior Notes 2026 had interest at a rate of 5.875% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on December 1, 2016.

Senior Notes 2026 would have matured on June 1, 2026.

On December 20, 2016, we issued an additional $250 million in aggregate principal amount by reopening our Senior Notes 2026 at an issue price of 102.75%.

The additional notes had identical terms, were fungible with and were a part of a single series with the previously issued $600 million aggregate principal amount of Senior Notes 2026.

The outstanding aggregate principal amount of Senior Notes 2026, after taking into consideration the additional issuance, was $850 million as of December 9, 2021.

On December 9, 2021, we redeemed Senior Notes 2026 in full at a price equal to 102.9375% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date.

A portion of the net proceeds from the offerings of Senior Notes 2029 and Senior Notes 2031 was used to redeem Senior Notes 2026.

Upon redemption, Senior Notes 2026 were cancelled, and any obligation thereunder was extinguished.

The resulting loss of $27.4 million, consisting of $25.0 million relating to the early termination call premium, $6.2 million relating to unamortized debt issuance costs and $(3.8) million relating to unamortized premium, has been recorded as a component of Other income (expense), net in our Consolidated Statements of Income.

See Note 23 “Other Income (Expense), Net” to our Consolidated Financial Statements.

For further details relating to our debt, see Note 11 “Long-Term Debt” to our Consolidated Financial Statements.

Senior Secured Fixed Rate Notes

Senior Secured Notes 2027

On December 1, 2022, we 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 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.

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 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.

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For further details relating to our debt, see Note 11 “Long-Term Debt” to our Consolidated Financial Statements.

On May 30, 2018, we entered into a credit facility, which provides for a $1 billion term loan facility (Term Loan B) and we borrowed under the facility to, among other things, repay in full the loans under our prior $800 million term loan credit facility originally entered into on January 16, 2014.

On June 6, 2023, we amended the Term Loan B to replace the LIBOR benchmark rate applicable to borrowings under Term Loan B with a SOFR benchmark rate.

On May 6, 2024, we used a portion of the net proceeds from the AMC Divestiture to prepay in full the aggregate principal balance of $940 million outstanding under Term Loan B, at which point all remaining commitments under Term Loan B were reduced to zero and Term Loan B was terminated, which resulted in a loss on debt extinguishment of $1.8 million relating to unamortized debt issuance costs (see Note 23 “Other Income (Expense), Net” for more details) .

As of June 30, 2024, we had no outstanding balance under the Term Loan B (June 30, 2023—$947.5 million).

On May 30, 2018, we entered into a credit facility, that provided 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.

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For further details relating to our debt, see Note 11 “Long-Term Debt” to our Consolidated Financial Statements.

On December 19, 2023, we amended our committed revolving credit facility (the Revolver) to, among other things, extend the maturity from October 31, 2024 to December 19, 2028, and to remove the 10-basis point credit spread adjustment for loans bearing interest based on the SOFR rate.

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.

On June 6, 2023, we amended the Revolver to replace the LIBOR benchmark rate applicable to borrowings with a SOFR benchmark rate.

Borrowings under the Revolver currently 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%.

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.

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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.

During the third quarter of Fiscal 2023, the Company drew down $3.585 billion from the Acquisition Term Loan, net of original issuance discount of 3% and other fees (see Note 19 “Acquisitions and Divestitures” for more details).

On August 14, 2023, we amended 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 further amended 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 SOFR rate.

Both of the above reductions in interest rate margin on the Acquisition Term Loan resulting from the amendments were accounted for by the Company as debt modifications.

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) rate.

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%.

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 plus an applicable margin of 2.25%.

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 June 30, 2025, the outstanding balance on the Acquisition Term Loan bears an interest rate of 6.08%.

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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.

As a result of these prepayments in Fiscal 2024, the Company recognized a loss on debt extinguishment of $54.6 million relating to unamortized debt issuance costs (see Note 23 “Other Income (Expense), Net” to our Consolidated Financial Statements for more details) .

For further details relating to our debt, see Note 11 “Long-Term Debt” to our Consolidated Financial Statements.

On August 25, 2022, we entered into a bridge loan agreement (Bridge Loan) which provided for commitments of up to $2.0 billion to finance a portion of the repayment of Micro Focus’ existing debt.

On December 1, 2022, we entered into an amendment to the Bridge Loan that reallocated commitments under the Bridge Loan to the Acquisition Term Loan.

In connection with the amendment to the Bridge Loan and the receipt of proceeds from the issuance of the Senior Secured Notes 2027, all remaining commitments under the Bridge Loan were reduced to zero and the Bridge Loan was terminated, which resulted in a loss on debt extinguishment of $8.2 million relating to unamortized debt issuance costs (see Note 23 “Other Income (Expense), Net” for more details).

For the year ended June 30, 2024, we did not have any borrowings or record any interest expense relating to the Bridge Loan (year ended June 30, 2023—nil).

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 further details relating to our debt, see Note 11 “Long-Term Debt” to our Consolidated Financial Statements.

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Shelf Registration Statement

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Share Repurchase Plan / Normal Course Issuer Bid

On November 4, 2021, the Board authorized a share repurchase plan (the Fiscal 2022 Repurchase Plan), pursuant to which we were authorized to purchase in open market transactions, from time to time over the 12 month period commencing November 12, 2021, up to an aggregate of $350 million of our Common Shares on the NASDAQ Global Select Market, the TSX (as part of a Fiscal 2022 Normal Course Issuer Bid (NCIB)) and/or other exchanges and alternative trading systems in Canada and/or the United States, if eligible, subject to applicable law and stock exchange rules.

On April 30, 2024, the Board authorized a share repurchase plan (the 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 an aggregate of $250 million of our Common Shares on the NASDAQ, the TSX (as part of a Fiscal 2024 NCIB, defined below) and/or other exchanges and alternative trading systems in Canada and/or the United States, if eligible, subject to applicable law and stock exchange rules.

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 the Fiscal 2025 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 August 7, 2024 until August 6, 2025, if considered advisable, up to an aggregate of $300 million of our Common Shares on the TSX, the 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, the Company increased the authorized limit of the Fiscal 2025 Repurchase Plan by $150 million to $450 million and established an ASPP.

The price that we were authorized to pay for Common Shares in open market transactions was the market price at the time of purchase or such other price as was permitted by applicable law or stock exchange rules.

The Fiscal 2022 Repurchase Plan was effected in accordance with Rule 10b-18.

All Common Shares purchased by us pursuant to the Fiscal 2022 Repurchase Plan were cancelled.

On April 30, 2024, the Board authorized a share repurchase plan (the Fiscal 2024 Repurchase Plan), pursuant to which we could 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 an aggregate of $250 million of our Common Shares on the NASDAQ Global Select Market, the TSX (as part of a Fiscal 2024 NCIB, defined below) and/or other exchanges and alternative trading systems in Canada and/or the United States, if eligible, subject to applicable law and stock exchange rules.

During the year ended June 30, 2024, we repurchased and canceled 5,073,913 Common Shares for $150.0 million (year ended June 30, 2023 and 2022— nil and 3,809,559 Common Shares for nil and $177.0 million, respectively).

The Fiscal 2024 Repurchase Plan was effected in accordance with Rule 10b-18.

On July 31, 2024, in order to align its share repurchase plan to its 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 its common shares on the TSX (as part of a Fiscal 2025 NCIB, defined below), NASDAQ and/or alternative trading systems in Canada and/or the United States, if eligible, subject to applicable law and stock exchange rules.

The Fiscal 2025 Repurchase Plan was effected in accordance with Rule 10b-18 under the Exchange Act, and included a normal course issuer bid to provide means to execute purchases over the TSX.

Under the terms of the ASPP, the Company’s broker was permitted to make purchases at its sole discretion based on parameters set by the Company in accordance with TSX rules, applicable law and the terms of the ASPP, during periods when the Company would ordinarily not be permitted to make purchases, whether due to regulatory restriction or customary self-imposed blackout periods.

Outside of such periods, Common Shares can be purchased based on management's discretion, in compliance with TSX rules and applicable law.

All purchases of Common Shares made under the ASPP are included in determining the number of Common Shares purchased under the NCIB.

During the year ended June 30, 2025, we repurchased and cancelled 14,524,664 Common Shares for $418.3 million, inclusive of 2% Canadian excise taxes recorded (year ended June 30, 2024 and 2023— 5,073,913 and nil Common Shares for $152.3 million and nil, respectively).

Additionally, as of June 30, 2025, we recorded an accrual and a corresponding charge to retained earnings of $24.8 million, representing the estimated value of Common Shares expected to be repurchased following the fiscal quarter ended June 30, 2025 pursuant to the ASPP.

On August 6, 2025, the Company renewed its share 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 12, 2025 until August 11, 2026, if considered advisable, up to an aggregate of $300 million of its common shares on the TSX (as part of a Fiscal 2026 NCIB, defined below), the NASDAQ and/or alternative trading systems in Canada and/or the United States, if eligible, subject to applicable law and stock exchange rules (the Fiscal 2026 Repurchase Plan).

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.

The Fiscal 2026 Repurchase Plan will be effected in accordance with Rule 10b-18 under the Exchange Act, and includes a normal course issuer bid to provide means to execute purchases over the TSX.

Normal Course Issuer Bid

The Company established the NCIB in Fiscal 2022 in order to provide it with a means to execute purchases over the TSX as part of the overall Fiscal 2022 Repurchase Plan.

The TSX approved the Company’s notice of intention to commence the Fiscal 2022 NCIB pursuant to which the Company was authorized to purchase Common Shares over the TSX for the period commencing November 12, 2021 until November 11, 2022 in accordance with the TSX’s normal course issuer bid rules, including that such purchases were to be made at prevailing market prices or as otherwise permitted.

Under the rules of the TSX, the maximum number of Common Shares that could be purchased in this period was 13,638,008 (representing 5% of the Company’s issued and outstanding Common Shares as of October 31, 2021), and the maximum number of Common Shares that could be purchased on a single day was 112,590 Common Shares, which is 25% of 450,361 (the average daily trading volume for the Common Shares on the TSX for the six months ended October 31, 2021), subject to certain exceptions for block purchases, subject in any case to the volume and other limitations under Rule 10b-18.

On April 30, 2024, the Company established a Normal Course Issuer Bid (the Fiscal 2024 NCIB) in order to provide it with a means to execute purchases over the TSX as part of the overall Fiscal 2024 Repurchase Plan.

The TSX approved the Company’s notice of intention to commence the Fiscal 2024 NCIB, pursuant to which the Company could purchase Common Shares over the TSX for the period commencing on May 7, 2024 until May 6, 2025 in accordance with the TSX's normal course issuer bid rules, including that such purchases were to be made at prevailing market prices or as otherwise permitted.

Under the rules of the TSX, the maximum number of Common Shares that could have been purchased in this period is 13,643,472 (representing 5% of the Company’s issued and outstanding Common Shares as of April 26, 2024), and the maximum number of Common Shares that could be purchased on a single day was 138,175 Common Shares, which is 25% of 552,700 (the average daily trading volume for the Common Shares on the TSX for the six months ended March 31, 2024), subject to certain exceptions for block purchases, and subject in any case to the volume and other limitations under Rule 10b-18.

On July 31, 2024, the Company voluntarily terminated the Fiscal 2024 NCIB and established a new normal course issuer bid (the Fiscal 2025 NCIB) in order to provide it with a means to execute purchases over the TSX as part of the overall Fiscal 2025 Repurchase Plan.The TSX approved the Company’s notice of intention to commence the Fiscal 2025 NCIB, pursuant to which the Company may purchase Common Shares over the TSX for the period commencing on August 7, 2024 until August 6, 2025 in accordance with the TSX's normal course issuer bid rules, including that such purchases were to be made at prevailing market prices or as otherwise permitted.

Under the rules of the TSX, the maximum number of Common Shares that may be purchased in this period is 21,179,064 (representing 10% of the Company’s public float (calculated in accordance with TSX rules) as of July 24, 2024, less the 5,073,913 Common Shares purchased under the Fiscal 2024 Repurchase Plan), and the maximum number of Common Shares that can be purchased on a single day is 138,175 Common Shares, which was 25% of 552,700 (the average daily trading volume for the Common Shares on the TSX for the six months ended March 31, 2024), subject to certain exceptions for block purchases, and subject in any case to the volume and other limitations under Rule 10b-18

Under the rules of the TSX, the maximum number of Common Shares that could have been

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purchased in this period was 13,643,472 (representing 5% of the Company’s issued and outstanding Common Shares as of April 26, 2024), and the maximum number of Common Shares that could be purchased on a single day was 138,175 Common Shares, which was 25% of 552,700 (the average daily trading volume for the Common Shares on the TSX for the six months ended March 31, 2024), subject to certain exceptions for block purchases, and subject in any case to the volume and other limitations under Rule 10b-18 of the Exchange Act.

The TSX approved the Company’s notice of intention to commence the Fiscal 2025 NCIB, pursuant to which the Company could purchase Common Shares over the TSX for the period commencing on August 7, 2024 until August 6, 2025 in accordance with the TSX's normal course issuer bid rules, including that such purchases were to be made at prevailing market prices or as otherwise permitted.

Under the rules of the TSX, the maximum number of Common Shares that could have been purchased in this period was 21,179,064 (representing 10% of the Company’s public float (calculated in accordance with TSX rules) as of July 24, 2024, less the 5,073,913 Common Shares purchased under the Fiscal 2024 Repurchase Plan), and the maximum number of Common Shares that could have been purchased on a single day was 138,175 Common Shares, which was 25% of 552,700 (the average daily trading volume for the Common Shares on the TSX for the six months ended March 31, 2024), subject to certain exceptions for block purchases, and subject in any case to the volume and other limitations under Rule 10b-18 of the Exchange Act.

On August 6, 2025, the Company renewed its normal course issuer bid (the "NCIB") in order to provide it with a means to execute purchases over the TSX as part of the overall Fiscal 2026 Repurchase Plan.

The TSX approved the Company’s notice of intention to commence the Fiscal 2026 NCIB, pursuant to which the

Company may purchase Common Shares over the TSX for the period commencing on August 12, 2025 until August 11, 2026 in accordance with the TSX's normal course issuer bid rules, including that such purchases be made at prevailing market prices or as otherwise permitted.

Under the rules of the TSX, the maximum number of Common Shares that may be purchased in this period is 24,906,456 (representing 10% of the Company’s public float calculated in accordance with TSX rules) as of July 31, 2025, and the maximum number of Common Shares that can be purchased on a single day is 224,146 Common Shares, which was 25% of 896,585 (calculated in accordance with TSX rules based on the average daily trading volume for the Common Shares on the TSX for the six months ended July 31, 2025), subject to certain exceptions for block purchases, and subject in any case to the volume and other limitations under Rule 10b-18.

Further, as part of the NCIB renewal, the Company has established an ASPP with its broker to facilitate repurchases of the Common Shares.

As of June 30, 2025, our total unfunded pension plan obligations were $136.9 million, of which $4.7 million is payable within the next twelve months.

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For a detailed discussion on pensions, see Note 12 “Pension Plans and Other Post-Retirement Benefits” to our Consolidated Financial Statements.

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Commitments and Contractual Obligations

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Payments due between

(In thousands)

Total July 1, 2025 - June 30, 2026 July 1, 2026 - June 30, 2028 July 1, 2028 - June 30, 2030 July 1, 2030 and beyond

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$ 7,866,885 $ 370,421 $ 2,600,069 $ 4,206,176 $ 690,219

Operating lease obligations (2)

294,611 86,661 127,580 49,420 30,950

Finance lease obligations (3)

2,406 1,947 459 — —

Purchase obligations for contracts not accounted for as lease obligations

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See Note 11 “Long-Term Debt” to our Consolidated Financial Statements.

(2) For contractual obligations relating to leases and purchase obligations accounted for under ASC Topic 842, see Note 6 “Leases” for more details.

(2) Represents the undiscounted future minimum lease payments under our operating leases liabilities and excludes sublease income expected to be received under our various sublease agreements with third parties.

See Note 6 “Leases” to our Consolidated Financial Statements for more details.

(3) Represents the undiscounted future minimum lease payments under our finance leases liabilities and excludes sublease income expected to be received under our various sublease agreements with third parties.

See Note 6 “Leases” to our Consolidated Financial Statements for more details.

Guarantees and Indemnifications

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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 June 30, 2024, 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 million.

Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of June 30, 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

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and provincial taxes that may be due of approximately $86 million.

As of June 30, 2025, we have provisionally paid approximately $32 million in order to fully preserve our rights to object to the CRA’s audit positions, being the minimum payment required under Canadian legislation while the matter is in dispute.

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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 and Fiscal 2019 on a basis that we strongly disagree with and are contesting.

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.

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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, Fiscal 2018 and Fiscal 2019 on a basis consistent with its proposal to reduce the available depreciable basis of assets in Canada.

On April 19, 2022, we filed our notice of objection regarding the reassessment in respect of Fiscal 2017 and on March 15, 2023, we filed our notice of objection regarding the reassessment in respect of Fiscal 2018.

On December 11, 2023, we filed a notice of objection regarding Fiscal 2019.

The CRA issued notices of reassessment in respect of Fiscal 2017 through Fiscal 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.

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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 the utilization of available tax attributes;

however, to the extent the CRA reassesses subsequent fiscal years on a similar basis, we expect to make certain minimum payments required under Canadian legislation, which may need to be provisionally made starting in Fiscal 2025 while the matter is in dispute.

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 be required to make certain minimum payments required under Canadian legislation on a provisional basis while the matter remains in dispute.

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.

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Accordingly, as of the date of this Annual Report on Form 10-K, we have not recorded any accruals in respect of these reassessments or proposed reassessment in our Consolidated Financial Statements.

The CRA is also in preliminary stages of auditing Fiscal 2020.

Carbonite Class Action Complaint

On August 1, 2019, prior to our acquisition of Carbonite Inc.

(Carbonite), a purported stockholder of Carbonite filed a putative class action complaint against Carbonite, its former Chief Executive Officer, Mohamad S.

Ali, and its former Chief Financial Officer, Anthony Folger, in the United States District Court for the District of Massachusetts captioned Ruben A.

Luna, Individually and on Behalf of All Others Similarly Situated v.

Carbonite, Inc., Mohamad S.

Ali, and Anthony Folger (No.

1:19-cv-11662-LTS) (the Luna Complaint).

The complaint alleges violations of the federal securities laws under Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder.

The complaint generally alleges that the defendants made materially false and misleading statements in connection with Carbonite’s Server Backup VM Edition, and seeks, among other things, the designation of the action as a class action, an award of unspecified compensatory damages, costs and expenses, including counsel fees and expert fees, and other relief as the court deems appropriate.

On August 23, 2019, a nearly identical complaint was filed in the same court captioned William Feng, Individually and on Behalf of All Others Similarly Situated v.

Carbonite, Inc., Mohamad S.

Ali, and Anthony Folger (No.

1:19- cv-11808-LTS) (together with the Luna Complaint, the Securities Actions).

On November 21, 2019, the district court consolidated the Securities Actions, appointed a lead plaintiff, and designated a lead counsel.

On January 15, 2020, the lead plaintiff filed a consolidated amended complaint generally making the same allegations and seeking the same relief as the complaint filed on August 1, 2019.

The defendants moved to dismiss the Securities Actions on March 10, 2020.

On October 22, 2020, the district court granted with prejudice the defendants’ motion to dismiss the Securities Actions.

On November 20, 2020, the lead plaintiff filed a notice of appeal to the United States Court of

Appeals for the First Circuit.

On December 21, 2021, the United States Court of Appeals for the First Circuit issued a decision reversing and remanding the Securities Actions to the district court for further proceedings.

On July 14, 2023, the district court certified the lead plaintiff’s proposed class, following which the defendants filed a motion for class decertification.

On January 31, 2024 the parties filed a motion for preliminary approval of a settlement to fully resolve the litigation.

On February 1, 2024, the court issued a preliminary approval order and on May 15, 2024, the court issued a final approval order for the settlement and dismissal of the case with prejudice.

The settlement was substantially paid from insurance coverage, with any remaining amount not covered by insurance being immaterial to the Company.

All defendants denied the merit of the claims alleged in the case and the final settlement does not reflect any admission of fault, wrongdoing, or liability as to any defendant.

Other Matters

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We do not enter into off-balance sheet financing as a matter of practice, except for guarantees relating to taxes and letters of credit on behalf of parties with whom we conduct business.

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Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S.

GAAP, the Company provides certain financial measures that are not in accordance with U.S.

GAAP (Non-GAAP).

These Non-GAAP financial measures have certain limitations in that they do not have a standardized meaning and thus the Company’s definition may be different from similar Non-GAAP financial measures used by other companies and/or analysts and may differ from period to period.

Thus, it may be more difficult to compare the Company’s financial performance to that of other companies.

However, the Company’s management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of these Non-GAAP financial measures both in its reconciliation to the U.S.

GAAP financial measures and its Consolidated Financial Statements, all of which should be considered when evaluating the Company’s results.

The Company uses these Non-GAAP financial measures to supplement the information provided in its Consolidated Financial Statements, which are presented in accordance with U.S.

The presentation of Non-GAAP financial measures is not meant to be a substitute for financial measures presented in accordance with U.S.

GAAP, but rather should be evaluated in conjunction with and as a supplement to such U.S.

GAAP measures.

OpenText strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.

The Company therefore believes that despite these limitations, it is appropriate to supplement the disclosure of the U.S.

GAAP measures with certain Non-GAAP measures defined below.

Non-GAAP-based net income and Non-GAAP-based EPS, attributable to OpenText, are consistently calculated as GAAP-based net income or earnings (loss) per share, attributable to OpenText, on a diluted basis, excluding the effects of the amortization of acquired intangible assets, other income (expense), share-based compensation, and special charges (recoveries), all net of tax and any tax benefits/expense items unrelated to current period income, as further described in the tables below.

Non-GAAP-based gross profit is the arithmetical sum of GAAP-based gross profit and the amortization of acquired technology-based intangible assets and share-based compensation within cost of sales.

Non-GAAP-based gross margin is calculated as Non-GAAP-based gross profit expressed as a percentage of total revenue.

Non-GAAP-based income from operations is calculated as GAAP-based income from operations, excluding the amortization of acquired intangible assets, special charges (recoveries), and share-based compensation expense.

Adjusted EBITDA is defined and calculated as GAAP-based net income, attributable to OpenText, excluding interest income (expense), provision for (recovery of) income taxes, depreciation and amortization of acquired intangible assets, other income (expense), share-based compensation and special charges (recoveries).

Adjusted EBITDA margin is calculated as adjusted EBITDA expressed as a percentage of total revenue.

Free cash flows is defined and calculated as GAAP-based cash flows provided by operating activities less capital expenditures.

The Company’s management believes that the presentation of the above defined Non-GAAP financial measures provides useful information to investors because they portray the financial results of the Company before the impact of certain non-operational charges.

The use of the term “non-operational charge” is defined for this purpose as an expense that does not impact the ongoing operating decisions taken by the Company’s management.

These items are excluded based upon the way the Company’s management evaluates the performance of the Company’s business for use in the Company’s internal reports and are not excluded in the sense that they may be used under U.S.

The Company does not acquire businesses on a predictable cycle, and therefore believes that the presentation of Non-GAAP measures, which in certain cases adjust for the impact of amortization of intangible assets and the related tax effects that are primarily related to acquisitions, will provide readers of financial statements with a more consistent basis for comparison across accounting periods and be more useful in helping readers understand the Company’s operating results and underlying operational trends.

Additionally, the Company has engaged in various restructuring activities over the past several years, primarily due to acquisitions and most recently in response to our return to office planning, that have resulted in costs associated with reductions in headcount, consolidation of leased facilities and related costs, all which are recorded under the Company’s Special charges (recoveries) caption on the Consolidated Statements of Income.

Each restructuring activity is a discrete event based on a unique set of business objectives or circumstances, and each differs in terms of its operational implementation, business impact and scope, and the size of each restructuring plan can vary significantly from period to period.

Therefore, the Company believes that the exclusion of these special charges (recoveries) will also better aid readers of financial statements in the understanding and comparability of the Company’s operating results and underlying operational trends.

In summary, the Company believes the provision of supplemental Non-GAAP measures allow investors to evaluate the operational and financial performance of the Company’s core business using the same evaluation measures that management uses, and is therefore a useful indication of OpenText’s performance or expected performance of future operations and facilitates period-to-period comparison of operating performance (although prior performance is not necessarily indicative of future performance).

As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S.

GAAP measures, supplementary Non-GAAP financial measures that exclude certain items from the presentation of its financial results.

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The following charts provide unaudited reconciliations of U.S.

GAAP-based financial measures to Non-GAAP-based financial measures for the following periods presented.

The Micro Focus Acquisition significantly impacts period-over-period comparability.

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures

for the year ended June 30, 2025

(In thousands, except for per share data)

Year Ended June 30, 2025

GAAP-based Measures GAAP-based Measures

% of Total Revenue Adjustments Note Non-GAAP-based Measures Non-GAAP-based Measures

% of Total Revenue

Cost of revenues

Cloud services and subscriptions $ 697,929 $ (8,317) (1) $ 689,612

Customer support 250,310 (4,067) (1) 246,243

Professional service and other 265,160 (4,878) (1) 260,282

Amortization of acquired technology-based intangible assets 188,780 (188,780) (2) —

GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%) 3,734,287 72.3% 206,042 (3) 3,940,329 76.2%

Operating expenses

Research and development 755,936 (25,999) (1) 729,937

Sales and marketing 1,059,497 (38,826) (1) 1,020,671

General and administrative 427,811 (22,753) (1) 405,058

Amortization of acquired customer-based intangible assets 321,891 (321,891) (2) —

Special charges (recoveries)

145,890 (145,890) (4) —

GAAP-based income from operations / Non-GAAP-based income from operations

892,689 761,401 (5) 1,654,090

Other income (expense), net (82,787) 82,787 (6) —

Provision for income taxes

46,005 272,296 (7) 318,301

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

435,868 571,892 (8) 1,007,760

GAAP-based EPS / Non-GAAP-based EPS-diluted, attributable to OpenText $ 1.65 $ 2.17 (8) $ 3.82

______________________

(1) Adjustment relates to the exclusion of share-based compensation expense from our Non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results.

(2) Adjustment relates to the exclusion of amortization expense from our Non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results.

(3) GAAP-based and Non-GAAP-based gross profit stated in dollars and gross margin stated as a percentage of total revenue.

(4) Adjustment relates to the exclusion of special charges (recoveries) from our Non-GAAP-based operating expenses as special charges (recoveries) are generally incurred in the periods relevant to an acquisition and include certain charges or recoveries that are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results.

See Note 18 “Special Charges (Recoveries)” to our Consolidated Financial Statements for more details.

(5) GAAP-based and Non-GAAP-based income from operations stated in dollars.

(6) Adjustment relates to the exclusion of other income (expense) from our Non-GAAP-based operating expenses as other income (expense) generally relates to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results.

Other income (expense) also includes our share of income (losses) from our holdings in investments as a limited partner.

We do not actively trade equity securities in these privately held companies nor do we plan our ongoing operations based around any anticipated fundings or distributions from these investments.

We exclude gains and losses on these investments as we do not believe they are reflective of our ongoing business and operating results.

Other income (expense) also includes unrealized and realized gains (losses) on our derivatives which are not designated as hedges.

We exclude gains and losses on these derivatives as we do not believe they are reflective of our ongoing business and operating results.

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(7) Adjustment relates to differences between the GAAP-based tax provision rate of approximately 10% and a Non-GAAP-based tax rate of approximately 24%;

these rate differences are due to the income tax effects of items that are excluded for the purpose of calculating Non-GAAP-based net income.

Such excluded items include amortization, share-based compensation, special charges (recoveries) and other income (expense), net.

Also excluded are tax benefits/expense items unrelated to current period income such as changes in reserves for tax uncertainties and valuation allowance reserves and “book to return” adjustments for tax return filings and tax assessments.

Beginning in Fiscal 2025, net tax benefits arising from the internal reorganization that occurred in Fiscal 2017 have been fully utilized and are no longer included.

In arriving at our Non-GAAP-based tax rate of approximately 24%, we analyzed the individual adjusted expenses and took into consideration the impact of statutory tax rates from local jurisdictions incurring the expense.

(8) Reconciliation of GAAP-based net income to Non-GAAP-based net income:

Year Ended June 30, 2025

Per share diluted

GAAP-based net income, attributable to OpenText

$ 435,868 $ 1.65

Amortization 510,671 1.94

Share-based compensation 104,840 0.40

Special charges (recoveries) 145,890 0.55

Other (income) expense, net 82,787 0.32

GAAP-based provision for income taxes

Non-GAAP-based provision for income taxes

(318,301) (1.21)

Non-GAAP-based net income, attributable to OpenText

$ 1,007,760 $ 3.82

Reconciliation of Adjusted EBITDA

Year Ended June 30, 2025

GAAP-based net income, attributable to OpenText

Provision for income taxes

Interest and other related expense, net 327,831

Amortization of acquired technology-based intangible assets 188,780

Amortization of acquired customer-based intangible assets 321,891

Depreciation 130,573

Share-based compensation 104,840

Special charges (recoveries) 145,890

Other (income) expense, net 82,787

Adjusted EBITDA $ 1,784,465

GAAP-based net income margin

Adjusted EBITDA margin 34.5 %

Reconciliation of Free Cash Flows

Year Ended June 30, 2025

GAAP-based cash flows provided by operating activities $ 830,618

Capital expenditures (143,222)

Free cash flows

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Reconciliation of selected GAAP-based measures to Non-GAAP-based measures

for the year ended June 30, 2024

(In thousands, except for per share data)

Year Ended June 30, 2024

GAAP-based Measures GAAP-based Measures

% of Total Revenue Adjustments Note Non-GAAP-based Measures Non-GAAP-based Measures

% of Total Revenue

Cost of revenues

Cloud services and subscriptions $ 713,759 $ (12,858) (1) $ 700,901

Customer support 292,733 (4,357) (1) 288,376

Professional service and other 302,527 (6,298) (1) 296,229

Amortization of acquired technology-based intangible assets 243,922 (243,922) (2) —

GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%) 4,191,028 72.6% 267,435 (3) 4,458,463 77.3%

Operating expenses

Research and development 864,463 (40,612) (1) 823,851

Sales and marketing 1,163,134 (46,572) (1) 1,116,562

General and administrative 577,038 (29,382) (1) 547,656

Amortization of acquired customer-based intangible assets 432,404 (432,404) (2) —

Special charges (recoveries) 135,305 (135,305) (4) —

GAAP-based income from operations / Non-GAAP-based income from operations

887,085 951,710 (5) 1,838,795

Other income (expense), net 358,391 (358,391) (6) —

Provision for income taxes

264,012 (78,845) (7) 185,167

GAAP-based net income / Non-GAAP-based net income, attributable to OpenText

465,090 672,164 (8) 1,137,254

GAAP-based EPS / Non-GAAP-based EPS-diluted, attributable to OpenText $ 1.71 $ 2.46 (8) $ 4.17