Open Text (TSX:OTEX) reported first-quarter financial results on Thursday. The transcript from the company’s first-quarter earnings call has been provided below.
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Summary
Open Text Corporation reported 2.7% year-over-year growth in its core business in constant currency for Q1 FY27, with core cloud revenue growing by 11.7%.
The company launched an enterprise assessment to shape a multi-year growth plan focused on an integrated go-to-market model, a differentiated solutions portfolio and a world-class culture of execution.
Total revenues for Q1 were $1.237 billion, with an adjusted EBITDA margin of 35.8%, exceeding expectations.
The company raised $1 billion in a volatile bond market to manage debt, reducing gross debt by $949 million from a year ago and maintaining a leverage ratio of 2.55x.
Open Text’s Content Cloud led with 20.7% year-over-year growth, marking the fifth consecutive quarter of approximately 20% growth.
The company plans to increase growth investments in the latter half of FY27, targeting 2 to 3% year-over-year growth in constant currency.
Client support revenue declined by 9% due to non-core product categories, while core license revenue increased by 8%.
Open Text is activating its partner ecosystem to extend sales capacity, focusing on reactivating partners across hyperscalers, global system integrators, ISVs and regional system integrators.
The company is focusing R&D investments on AI-infused innovation, prioritizing core product categories and cloud capabilities.
Management is confident in achieving full-year FY27 growth targets and plans to share the detailed multi-year growth plan in February 2027.
Full Transcript
OPERATOR
Thank you for standing by. This is the conference operator. Welcome to the Open Text Corporation First Quarter Fiscal 2027 Financial Results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an analyst Q and A session. To join the question queue, simply press star then one on your touchtone phone. Should anyone need assistance during the conference call, they will reach an operator by pressing star then zero.
I would now like to turn the conference over to Greg Secord, Head of Investor Relations. Please go ahead.
Greg Secord (Head of Investor Relations)
Thank you, operator, and good morning, everyone. Welcome to Open Text First Quarter Fiscal 2027 earnings call. With me on the call today are Open Text Chief Executive Officer Eamon Anton as well as Steve Ray, our Executive Vice President and Chief Financial Officer. Today’s call is being webcast and recorded with a replay available shortly thereafter on the Open Text investor relations website. That’s investors.opentext.com. Earlier today we posted our press release and investor presentation online.
Those materials will supplement our prepared remarks and can be found and accessed on our Open Text investor relations website. Please see the website from the presentation on the website for further details of our core and non-core revenues by product category. Now turning to upcoming investor events, Open Text will be participating in the BMO Bank of Montreal Tech Conference in New York on Nov. 12, the RBC TTM conference in New York on Nov. 17, the TD Cowen tech conference in Toronto on Nov. 24, and the UBS Global Technology and AI Conference in Scottsdale on December 2, as well as the NASDAQ Morgan Stanley Investor Conference in London on December 8. We look forward to meeting with you there, and now onto the reading of our Safe Harbor Statement.
During this call we will be making forward-looking statements relating to the future performance of Open Text. These statements are based on current expectations, assumptions and other material factors that are subject to risks and uncertainties, and actual results could differ materially from the forward-looking statements made today. Additional information about the material factors that could cause actual results to differ materially from such forward-looking statements, as well as risk factors that may impact future performance results of Open Text are contained in Open Text’s recent Forms 10-K and 10-Q, as well as in our press release that was distributed earlier today, which of course can be found on our website. We undertake no obligation to update these forward-looking statements unless required to do so by law.
In addition, our conference call may include discussions of certain non-GAAP financial measures. Reconciliations of any non-GAAP financial measures to their most directly comparable GAAP measures may be found within our public filings and other materials which are available on our website. And with that, I’ll turn the call over to Ayman.
Ayman Antoun (Chief Executive Officer)
Good morning, everyone, and thank you for being here today. For Q1 fiscal year 2027, we continue to deliver year-over-year core solutions portfolio growth in constant currency. Q1 was a strong start to our foundation year across our geographies and markets, in line with the outlook we shared in August. Our CFO, Steve Ray, will take you through the numbers in more detail shortly. Here are some highlights. Our core business grew 2.7% year over year in constant currency, core cloud revenue grew 11.7% year over year in constant currency, and our adjusted EBITDA margin was 35.1% in constant currency.
Our momentum starts with our clients in 180 countries. They trust Open Text with the data that runs their businesses and organizations. Our solutions give them trusted context and connected data for credible AI outcomes. That differentiated value is what drives our results. In August I shared that we launched our enterprise assessment to review every part of our business. Our enterprise assessment work is now moving into its next phase. We are molding its findings into our multi-year growth plan, which will have three clear components. First, a strategic framework that sets out what we will focus on. Second, a financial model that sets out the value we will create and results we will deliver. And third, an execution plan that sets out how we will deliver with clear owners, milestones and KPIs to measure our progress.
Last quarter I committed to sharing our plan in early calendar year 2027. Members of our executive leadership team and I will share our multi-year growth plan with you at our Open Text Investor Day on February 10th in Toronto. Today I will walk you through three areas that demonstrate our progress to date. First, the actions we continue to take to build a strong foundation for our growth plan. Second, the client feedback we continue to receive on a go-to-market model we launched in July and our differentiated role in the AI stack. And finally, a real-world example of the value we continue to deliver for our clients with our Aviator AI agents.
Let’s start with our continued progress as we build our multi-year growth plan. As I mentioned, we launched an enterprise assessment across every part of our company. Our leadership team led this important work. The assessment identified the following five strategic themes that are shaping our multi-year growth plan. Each theme is already driving actions. First, an integrated One Open Text go-to-market model that serves our clients the way they want to be served.
Second, a focused and differentiated solutions portfolio where every part strengthens the whole. Third, an operating model built for speed, simplicity and consistency. Fourth theme, a brand promise that sets clearly the value we bring to clients and our right to win. And fifth, underpinning it all, a world-class culture of disciplined execution and accountability. To operationalize these themes and drive measurable outcomes, I’m building on the leadership already in place and added some new enterprise-wide roles. As I shared in August, our integrated go-to-market model brings the full strength of our solutions portfolio to every client through one relationship. Our go-to-market leaders continue to own their markets end to end, are accountable for client success and are empowered to act locally with clear decision rights.
For a focused and differentiated solutions portfolio, we now have one development organization to drive AI-infused innovation and an optimized solutions portfolio for our clients. We continuously assess our core portfolio down to the subcategory level so every part is optimized for growth. Steve will share more about our solutions portfolio work in progress. Next, for speed and simplicity, we now have in place a Cloud Acceleration leader to help clients move to the cloud of their choice with ease and efficiency.
For our brand promise, an integrated marketing organization that communicates our value with clarity and consistency, bringing together product messaging, field enablement and digital presence to drive opportunity pipeline. And for disciplined execution and accountability, an Enterprise Transformation leader to ensure our actions are operationalized with consistent KPIs, owners and detailed execution plans. For our multi-year growth plan, which we will share with you in February, our first theme—go-to-market—is where our clients feel the positive change already. Now let’s turn to what we are hearing from our clients about their experience with our One Open Text go-to-market approach. As I shared with you before, clients asked for a more integrated Open Text. We acted on that with a go-to-market model that puts the client at the center of everything we do with one client executive as their main point of contact.
Delivering on the commitment I made last quarter, all 300 client executive roles are now filled across our geos and markets. Our model is fully in place and every strategic account has one accountable point of contact, armed with new cross-sell bundles so that they can bring our full solutions portfolio to every client, making us easier to do business with. Two examples of many stand out. Take a leading energy client in Asia Pacific with a long-standing Open Text relationship. As their environment aged, their client executive brought together our content, cloud and professional services teams, growing that relationship into an expanded multi-year cloud and managed services engagement. For the client, that meant stronger governance and compliance and the freedom to innovate in the cloud of their choice.
For us, this is growth delivered by disciplined execution. A European bank told me recently that their local Open Text team brought them the right combination of solutions across our portfolio to meet their needs. Our team listened, coordinated the right technical, commercial and professional services expertise, and made every decision locally within clear guardrails. The bank had an answer it could act on right away. That is what an empowered team looks like.
The early success of our go-to-market model extends to our ecosystem partners who bring more reach and value to every client. Our partnership with Cohere, announced in July, pairs their AI orchestration and enterprise-grade language models with our trusted context and connected data layer to power the AgentIQ enterprise. Now let’s look at how Open Text Aviator AI agents bring that to life. With a foundation of trusted context and connected data, our clients are moving from AI pilots to enterprise AI at scale.
Aviator AI agents put that foundation to work, turning it into action and measurable outcomes. Our Open Text Aviator AI agents continue to drive growth in Content Cloud. We continue to see that deals that include Aviator AI agents, on average, are four times larger. We have more than 150 Aviator AI agents infused across our solutions portfolio, and with Aviator Studio, clients and partners can build their own agents. The real value is in our client stories.
Let me share a few. A major American retailer runs its supply chain on Open Text Business Network. With Aviator, teams ask the Aviator agent logistics questions in plain language. Aviator flags trading partners that have gone quiet or are slipping. Teams act early, problems get fixed faster, partner relationships get stronger, and goods keep moving. A leading health system recently moved to Open Text Service Management from a competitor system. With our professional services team, they are now deploying Aviator AI agents across their operational data. Aviator agents help prevent IT issues before they start. They answer staff questions inside Microsoft Teams and give IT leaders a live view of operations. Time saved here means clinicians spend less time on IT and more time with patients.
Take an energy provider in Europe. Its contract managers oversee more than 50,000 long and complex agreements. With Content Aviator, they ask questions in plain language and get clear answers in seconds. No more reading page by page. Dense contracts become decisions they can act on, and the entire contract estate becomes a searchable knowledge base. Different clients, different industries. One common thread across our core portfolio: trusted context and connected data power credible AI outcomes. That is our role, and we deliver it with our client success at the heart of it. Now to close, I have never been more confident in the path ahead. I look forward to sharing our multi-year growth plan at our Investor Day in Toronto on February 10th. More details on the Investor Day will follow shortly.
I will now hand it over to our CFO, Steve Ray, who will take you through our Q1 FY27 results. Thank you.
OPERATOR
We will now begin the analyst question-and-answer session. Analysts who wish to ask a question may press star then one on the touchtone telephone to join the question queue. You will hear a tone acknowledging your request. If you are using a speakerphone, please ensure you lift the handset before pressing any keys. If you wish to remove yourself from the question queue, you may press star then one. Anyone who has a question may press star then one at this time.
The first question comes from Thanos Moscopoulos with BMO Capital Markets. Please go ahead.
Thanos Moscopoulos (Analyst at BMO Capital Markets)
Hi, good morning. With respect to the reclassification from core to non-core, could you provide just a bit more color in terms of the nature of those products and why they were deemed non-core? Thank you.
Rick
Thank you. Important question. I would put it in a couple of categories, so think of it as products that are legacy products primarily on-prem, and in the life cycle of those products it is in what we would call maintenance and support mode. So areas where we would be limiting the investment but continue to support our clients. And there are also products that you would think of through the acquisition path that we’ve had for the last number of years are duplicate products.
So as we move them, because we don’t feel that they’re warranting the investment because we do have alternatives where we’re investing, I would give you two examples, if you will. One example is a product portfolio called Security Analytics. Think of it as, you know, putting a dashboard with all the security messaging that a client environment would get relative to their security posture. It’s a commodity at best. We have alternatives already in our core portfolio. Another example would be a product that does asset configuration and automation.
Think of it as something that a client would use to inventory their system estates before they do an upgrade to make sure that they have all the right capacities, and again duplicated in other capabilities that we have, long in the tooth, so to speak, from a life cycle point of view, and would not warrant investment to give us the return that we’d expect. Hopefully that answers your question.
Thanos Moscopoulos (Analyst at BMO Capital Markets)
It does. Thank you. And just one more with respect to go-to-market, I mean you’ve talked about taking a more partner-friendly approach. Can you update us in terms of any initiatives in that regard and what you’ve implemented to date? Rick, thank you.
Ayman Antoun (Chief Executive Officer)
Yes. And I would start you with this: a couple weeks back we finished our annual client conference, where we had over 750 of our clients across the globe and 400-plus of our partners that we’re reactivating join us across the four categories of hyperscalers, global system integrators, ISVs, and regional system integrators. And I would say that the energy and the feedback that we’ve received relative to the enablement we put in place for our partners, the financial models, and the well-articulated, at-a-market-level go-to-market — joint selling, if you will, building account plans together.
And the way I would wrap that up is, you remember me saying in other calls earlier that we have three geographies with 15 markets. That’s kind of the footprint of how we go to serve our clients. We now have a partner map for every single one of the markets across those four pillars, of those partners that we’re partnering with, and the sales motion in detail of who does what to whom by when, so that it is an increase to our sales capacity. The partners become an extension of our own sales force.
Great energy. It’s a journey — I use the word reactivating the ecosystem. We now have to be consistent and disciplined in continuing to provide them the value proposition, the financial model that would be attractive for them, and the enablement to make them a true extension of our sales force.
OPERATOR
Thank you. The next question comes from Raymond Lansjel with Barclays. Please go ahead.
Raymond Lansjel (Analyst at Barclays)
Thank you. Congrats from me as well, Eamonn. I really like the progress on the Content Cloud. If you think about there, there seems to be a very big market opportunity to reinvigorate the base because there’s so much that needs to be done and can be done around AI. If you think about the progress you’ve done so far and how many clients you’ve dealt with, what you kind of achieved on making them aware around your AI offering, etc. Where are we on that journey in terms of early success versus actually making that a motion that goes for the whole organization?
Ayman Antoun (Chief Executive Officer)
Yeah. Another really important question, and I would just step you back for a minute. One of the things that you would have heard me say before, and I want to reiterate: we are going to be, and continue to be, very disciplined in the way we allocate our R&D investments, our sales investments, our partner investment, and our marketing investments relative to the core set of products, product capabilities. And inside of Core — I’ll just use content as an example, but it applies to Business Network, ITOM, and Cyber — we are prioritizing the investments around AI infusion in the portfolio, innovation around new capabilities that we will add, and the cloud version of those products, if you will.
So to use Aviator as the example, to answer you directly, we now have over 150 Aviator agents that have been developed and infused across our core portfolio, with a good chunk of them in content. In addition to this, our clients now have access to what we call Aviator Studio, where they can build their own Open Text Aviators in addition to the 150 that get embedded in our products. And then I’ll take it a step further to the question you heard earlier around partners.
I’ll use SAP — one of our great, great partners — where we now have integrated our Aviator platform with their own AI dual platform. So now clients can orchestrate between us and them. And the same applies to the rest of our partner ecosystem, if you will. So I can’t say enough about the dedication of R&D investment to continue to enhance the AI capabilities, not just in content, but the rest of Core.
Raymond Lansjel (Analyst at Barclays)
Okay, perfect. Thank you. And then one more question on the balance sheet. You’ve made really good progress so far. If you think about it, what’s the end game for you? At the moment it looks like creating more financial flexibility for you. Is that just adjusting the balance sheet for timing and maturity, or how do you think about that broader picture there? Thank you.
Eamonn (Chief Financial Officer)
Yeah, I think you hit the nail on the head with really just improving our posture overall. I mean, we’ve consistently been working on debt reduction and we’ve made some really good strides in that regard — just under a billion dollars of reduction in our gross debt in the last 12 months. So that flexibility, especially given the transformation work that we’re doing, remains very important. And it was a normal cycle of just extending our maturities on the more near-term towers that were coming up.
We’re very pleased with the result that we’ve achieved.
Raymond Lansjel (Analyst at Barclays)
Okay, perfect. Thank you. Well done.
OPERATOR
The next question comes from Kevin Krishnaratna with Scotiabank. Please go ahead.
Kevin Krishnaratna (Analyst at Scotiabank)
Hey there. Good morning. Thanks for taking the question — just one from me. It’s nice to see the momentum in the Core, 2.7%. But can you talk about some of the divergence in trends you’re seeing? You saw obviously very strong growth in Content, but ITOM and Cyber were down double digits, I guess. What are you seeing there? Is there anything to note on either competitive headwinds, or are we just lapping tough comps in the prior year? And just how do we think about these businesses in Q2 and the remainder of the year?
Ayman Antoun (Chief Executive Officer)
Hey Kevin, good to have you with us. Another really important question. And again, in the spirit of what I said at the very beginning when I joined in May, you will get complete transparency from me. This I would put in a category of: we need to improve our execution. Let me explain to you what I mean by that. I’ll just use Cyber as an example, but the same would apply for ITOM. So just in the spirit of time, if you think of Cyber, we have a broad set of offerings. We’re one of very few firms that have data security, application security, identity and access management. And these are deep-skilled domains. And what we have had in the past — and that’s what we’re changing as we speak — we would have a Cyber seller accountable for the entire Cyber portfolio.
And it is very difficult in a domain that technical, that important to clients, to have the same person knowing at depth all the pieces of the Cyber portfolio. So what we’re transitioning now to is having Cyber specialists by vertical, because, candidly, most of our competitors only have one or two of these verticals versus us having all of them. And they go to market with that deep skill. So first is deepening the skills of the seller by being more specialized at a pillar level. Second, back to my partner ecosystem activation: we had not in the past spent enough money, time, energy, and enablement to have our partners be an extension of that cybersecurity sales capacity. And third, putting more investment around our marketing capabilities, from events that are cybersecurity-specific to demand generation for the sellers to be able to create additional pipeline.
So I lump all this on sales execution and enhancements that are in flight as we speak, and the same set of logic and elements would apply to ITOM. Hopefully that answers your question.
Kevin Krishnaratna (Analyst at Scotiabank)
Yeah, thanks for that. No, appreciate the color. So I can appreciate that you say you’re putting these investments in today, but when do we think you start to see the returns materialize and that execution improve? Do we see this in Q2? Is it more back of the year? Is it into the next year? Just maybe help us understand when you expect to see improvement on the execution.
Ayman Antoun (Chief Executive Officer)
Yeah, and by the way, I’m more impatient than you are, but I appreciate the question. Two things I would share. First, we had committed that FY27, being our foundation year, that our Core — every category in Core — is going to grow for the full year. That includes ITOM and Cyber. And my expectation is, as we get into the second quarter, third, and fourth, that we will see the material improvements. This isn’t about, you know, bet on the hope that the hockey stick happens in 4Q.
I expect us to improve every single quarter between now and the end so that for the full year ITOM and Cyber are showing growth.
OPERATOR
The next question comes from Paul Pravor with RBC Capital Markets. Please go ahead.
Paul Pravor (Analyst at RBC Capital Markets)
Good morning, and thanks for taking the question. First question on the nature of the investments that are expected in the second half of the year. I mean, you’ve already added 300 quota-carrying reps. What are the additional investments? And then, related to that, R&D has been trending down. Should we expect that to stabilize? What affects the trend in R&D there?
Ayman Antoun (Chief Executive Officer)
Paul, thank you for the question. Another really important item, so I’m going to address this in two buckets, if I may. So first, the investment, in addition to the sales capacity — which is not just adding our own, but the discussion you’ve heard me talk about regarding ecosystem and activation. Another important and material part of our investment is in the product innovation component. So you heard me talk about Aviator, the theme for the next set of developments around Business Network and what we call Trading Grid, the next generation of Business Network, and the investments there; just as importantly, the investment we’re putting into the tooling to make the migration for our clients from on-prem to cloud simple and fast so that they can receive a return on their investment to move to cloud much faster. Plus adding new capabilities across each one of the four Core product categories.
As far as the R&D investment stabilizing, yes. However, what you heard me say up front is we are going to be much more differentiated, where the majority of our R&D investment is going to go in Core; and inside of Core, it will be prioritized on continuing the acceleration of AI infusion across the entire portfolio, and my comment about the cloud version of all the Core product offerings along with the migration tools. So that’s kind of how you should look at it going forward.
Paul Pravor (Analyst at RBC Capital Markets)
Okay, that’s helpful. Secondly, just on the trend in RPO, specifically CRPO — obviously strong growth in Cloud, whereas Client Support is down, I imagine on the divestitures. Cloud versus Client Support — is that primarily taking into account the divestitures? Does that reflect Core versus non-Core? Is there also an element of cloud migration there?
Eamonn (Chief Financial Officer)
So in the RPO — yeah, I mean, obviously the clear leading item there is Content Cloud. There is contribution from the other areas in the Cloud. And even though from a current period revenue standpoint there’s some of the items at play that Ayman discussed, the Cloud growth has been pretty good across the board, including in some of the non-Core.
OPERATOR
The next question comes from David Kwan with TD Cowen. Please go ahead.
David Kwan (Analyst at TD Cowen)
Morning, Eamonn. I just want to clarify, as it relates to sales structure: you talked about clients having one single point of contact; then, in the response on cybersecurity, you talk about having more specialized cybersecurity salespeople, given how technical the sale is. So would it be just the responsibility of that primary sales rep to bring in these specialized salespeople, or are you taking a different approach?
Ayman Antoun (Chief Executive Officer)
Yeah, let me very precisely clarify that, David, because that is an important component of our go-to-market. I want you to imagine, and I’m going to use a market because remember a market is either a country like Canada or a market is two, three countries aggregated together if they’re not large enough in Europe, for instance. And we have a market leader that owns the execution. That market leader, he or she has a number of client executives that are assigned to our strategic clients as their focal point of contact with the role and responsibility of owning the relationship, integrating Open Text in front of the client, generating the demand, if you will, and then based on understanding the client pain points and their priorities and knowing what Open Text has the capability for, he or she, the client executive, will bring in front of that client the deep skilled sellers and deep skilled technical sellers for whatever the domain happens to be, whether it’s the cyber domain — and now cyber, we’re going to be more specific by pillar as I said earlier — or the BN sellers or the content sellers.
So think of the client executive as the coordinator, the quarterback, where the deep skills come from the brand individual sellers. And the client executive needs to make sure that we’re not going to the clients in force, whether they need cyber at the moment or content, but in a coordinated fashion. And part of the coordination is this cross-selling motion where, in my humble opinion, everybody is buying cyber capabilities, and cyber is a very natural attach to a content opportunity or a BN opportunity or an ITOM opportunity.
So they also bring that cross-selling motion in front of the client as well.
David Kwan (Analyst at TD Cowen)
No, appreciate it. That’s helpful. And just in terms of the growth investments that you talked about, the $100 to $200 million for this year, could you — I guess that you’ve talked about as it relates to the breakdown being mostly in sales and marketing, not so much R&D where it’s more of a reallocation — there within the sales and marketing though, how much of that is going to be allocated to your partner channel versus your kind of your direct sales and marketing teams?
Ayman Antoun (Chief Executive Officer)
Yeah, we don’t really break down that externally, but if you think of our investment in those two domains — our own sales force and the partner sales force — I equate the value of increasing the capacity and enabling the partners as equal in value and return. So you can translate that into if there’s a buck we’re investing, I think of those as two important, critically equal value, and we allocate it accordingly.
OPERATOR
The next question comes from Stephanie Price with CIBC. Please go ahead.
Stephanie Price (Analyst at CIBC)
Hi, good morning. I wanted to circle back on customer support for a minute. So it was down 9% in constant currency and you mentioned it’s primarily driven by the non-core businesses. Wonder if you could dig into that a little bit more — like was the customer support in the core business down year over year, and how should we kind of think about the core customer support growth in fiscal ’27?
Eamonn (Chief Financial Officer)
So yeah, I mean the underlying trend has been pretty consistent and predictable. I mean there is an element there of, you know, with the migration work that we’re doing and preparation for migrations that the clients are working on. So it’s a consistent theme, but it is overall — I think if I look at the trend line from the past couple years — the rate of decline is slowing on that, and we’ve obviously got initiatives in play to keep that balance as we work through the cloud migration, and we should be providing more color around this at the investor day.
Stephanie Price (Analyst at CIBC)
Okay. Thank you. And then just on the divestiture process — appreciate the comment in the prepared remarks. Just curious if you’ve seen any change to the valuation environment just as the AI disruption trade seems to start to revert here. Any further update on the divestiture process would be great. Thank you.
Eamonn (Chief Financial Officer)
Yes, I mean it remains an active process. As we’ve said before, no significant change from the previous time last quarter when we discussed. So things remain in play, and I’m confident things will happen, but as we’ve said, we’re not going to rush it on a fire-sale basis. So we’ve got to remain disciplined.
OPERATOR
Once again, if you have a question, please press star then 1. The next question comes from Steve Enders with Citi. Please go ahead.
Steve Enders (Analyst at Citi)
Okay, great. Thanks for taking the questions. I wanted to ask about the sales investments you’ve made so far. I know it’s early, but what you’ve seen from a productivity standpoint, how those new reps are coming up the curve, and if that informs some of that confidence you had in starting to see some broadening improvement in Q2, Q3, Q4.
Ayman Antoun (Chief Executive Officer)
Yeah. Thank you, Steve. Let me start from the outside and work back in, because candidly, the only feedback in my book that matters is the client feedback. And I spend a significant amount of my time face to face with clients, not just those that I had the privilege of meeting with at Open Text World a couple weeks ago. But every single week I am overwhelmed with the positive feedback where the clients go out of their way in every single meeting to say thank you for the client executive role.
Many of them, Steve, what they have said to me is, we’re here at Open Text World because you have a client executive. Because before, you were coming at me by brand, and I was a bit overwhelmed. The client executive gets in the seat in July, Eamonn. They come, they get to understand my business. They’re educating me on your capabilities, and they’re saying to me, I want to host you at Open Text World. We will have a crafted agenda for who you’re going to meet and which solution breakout session you’re going to go through, and it will match your priorities.
So that’s an example of feedback that I’m receiving. The other feedback — and I kind of highlighted a couple examples in my recorded remarks — are clients that reached out to me unsolicited. I’ll use the example in Europe, where they said the client executive brought all the pieces of Open Text, coordinated things for me, and a very significant deal got closed, Eamonn, with the decision right in the geography, in the market. They didn’t have to phone home. And I just wanted to let you know I’m seeing a different rhythm of speed from Open Text.
And our job now, Steve, is to scale that, scale that consistently across all 15 markets, across the 300 client executives. But early signs, based on client feedback, are very encouraging.
Steve Enders (Analyst at Citi)
Okay, that’s great color. And then I did want to dig in on the performance in the quarter. Revenue came in pretty squarely in the middle of the guidance range. I’m sure you went into the quarter with aspirations of hitting the high end or maybe exceeding the high end. You just think about the variables that led to that outcome — what would you put as kind of the top factors?
Ayman Antoun (Chief Executive Officer)
Yeah, I would say candidly, we landed in the quarter where I would expect us to land. We knew that we had some ramping up to do with the client executive. Remember, the hiring started because we did not want to disrupt our 4Q execution. So we made the announcements internally and externally and started the hiring in July. We had to do the enablement. So there’s nothing that happened in the quarter in terms of client delays or client acceleration one way or another.
The rhythm was what I expected. If I were to step back, I would say with all the geopolitical environment that we’re in, the only place across our 15 markets where I felt clients were just a little bit taking a pause — and you’ll appreciate why — is our market in the Middle East. There is enough on their plates that they’re dealing with. But those transactions were not significant in size. But that’s where I felt there was a bit of a pause on the client side. But that’s one out of 15 markets.
Everything else is what we expected as part of the natural ramp up.
OPERATOR
I’ll now hand the call back to Mr. Antoun for closing remarks. Please go ahead.
Ayman Antoun (Chief Executive Officer)
Thank you, everybody. Let me just wrap up stitching a few points together. As we wrap up this morning’s call, I want you to take away five key components that you would have heard from me and Steve in our recorded remarks, but also in the Q&A session. Number one is our One Open Text is fully staffed and deployed. Every strategic client of ours has a dedicated client executive. Today they’re in market, in the seat, understand their jobs, continue to get enablement and support and coaching to do what is right for our clients.
Number two, our ecosystem partners are accelerating our sales motion in the field. We’re building shared pipeline together. We have go-to-market account planning together, and think of those partners across the four categories of global SIs, regional SIs, the hyperscalers, and the ISVs. Third, we are investing our R&D dollars where growth is — that is the core product categories, Aviator AI, infusing it across the entire core portfolio, the cloud capabilities of every one of those product categories, and the set of tools to simplify and speed the client’s migration.
Fourth, the Enterprise Assessment that you’ve heard me talk about now came back with outcomes that are informing our multi-year growth plan, which we are looking forward to sharing with you the details on the 10th of February in 2027. And finally, my fifth point is, along the way throughout this FY27 — our foundation year — we continue to execute with discipline across the firm, and that is around the components that you would have heard me talk about before: an integrated marketing team that has all the pieces of marketing, AI infusion and development. And now we’re also standing up our Transformation Office to help us operationalize the Enterprise Assessment components into that cohesive plan with KPIs and milestones that will guide our progress.
With that, I look forward to speaking to you throughout the next few weeks and seeing you back on our earnings call in February. Thank you.
OPERATOR
This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
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