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OpenText (OTEX) Delivers Cloud Growth While Shedding Non-Core Assets

Open Text Corporation (NASDAQ:OTEX) is one of the best affordable tech stocks to buy right now. Open Text Corporation (NASDAQ:OTEX) released its earnings for the December-ending quarter on February 5 and reported $1.33 billion quarterly revenue. The revenue is a 0.6% year over year decline but surpassed the $1.29 billion that analysts anticipated. Management attributed the modest top-line contraction to the company’s strategic pivot away from non-core assets. They noted that the faster-growing core business, particularly content management, is expanding at roughly twice the pace of total revenues.

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Management stated that Cloud revenue grew 3.4% year over year to $478 million. This is the twentieth consecutive quarter of organic cloud growth. This growth was driven by the Content Cloud business, which generated 43% of total revenue and grew 4.5% overall, noted management. Enterprise cloud bookings jumped 18% year over year to $295 million, outpacing the company’s full-year guidance range of 12-16% growth.

Management reiterated its FY2026 guidance for total revenue growth of 1% to 2% and cloud revenue growth of 3% to 4%. This outlook, stated management, reflects the completed divestiture of eDOCS and Vertica.

OpenText divested the Vertica analytics business on February 2 to Rocket Software Inc. for US $150 million in cash. The deal will close during FY 2026 subject to customary regulatory approvals and closing conditions. Before that, the company had on January 12 divested its eDOCS on-premise solution to NetDocuments. The deal was finalized for $163 million in cash.

Open Text Corporation (NASDAQ:OTEX) develops and sells enterprise information management software. This includes solutions for content services, business networks, cybersecurity, and digital experience. Its products help organizations manage, secure, and analyze large volumes of data across cloud and on-premises environments.

While we acknowledge the potential of Open Text Corporation (NASDAQ:OTEX) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than OTEX and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 10 Best Affordable Long Term Stocks to Buy According to Hedge Funds and 7 Best Used Car Stocks To Buy According to Hedge Funds.

Disclosure: None. This article is originally published at Insider Monkey.

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