{"url_path":"/sec/otex/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Financial Statements","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-02-05","source_url":"https://www.sec.gov/Archives/edgar/data/1002638/0001002638-26-000021-index.html","accession_number":"0001002638-26-000021","cik":"0001002638","ticker":"OTEX","issuer_name":"OPEN TEXT CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/1002638/0001002638-26-000021-index.html","primary_entity_key":"0001002638","primary_entity_name":"OPEN TEXT CORP"},"word_count":16700,"has_tables":true,"body_markdown":"Item 1. Financial Statements\n\nOPEN TEXT CORPORATION\n\nCONDENSED CONSOLIDATED BALANCE SHEETS\n\n(In thousands of U.S. dollars, except share data)\n\nDecember 31, 2025June 30, 2025\n\nASSETS\n(Unaudited)\n\nCash and cash equivalents$1,271,374 $1,156,496 \n\nAccounts receivable trade, net of allowance for credit losses of $15,116 as of December 31, 2025 and $14,258 as of June 30, 2025\n665,617 659,675 \n\nContract assets (Note 3)\n73,965 77,920 \n\nIncome taxes recoverable (Note 13)\n38,583 108,792 \n\nPrepaid expenses and other current assets (Note 7)\n186,383 198,575 \n\nAssets held for sale (Note 17)\n116,105 — \n\nTotal current assets2,352,027 2,201,458 \n\nProperty and equipment, net of accumulated depreciation of $727,520 as of December 31, 2025 and $835,324 as of June 30, 2025\n389,366 375,252 \n\nOperating lease right of use assets (Note 4)\n156,402 197,977 \n\nLong-term contract assets (Note 3)\n55,133 49,293 \n\nGoodwill (Note 5)\n7,433,913 7,517,463 \n\nAcquired intangible assets (Note 6)\n1,729,983 1,976,591 \n\nDeferred tax assets (Note 13)\n1,071,236 1,080,575 \n\nOther assets (Note 7)\n308,115 307,693 \n\nLong-term income taxes recoverable (Note 13)\n73,987 67,762 \n\nTotal assets$13,570,162 $13,774,064 \n\nLIABILITIES AND SHAREHOLDERS’ EQUITY\n\nCurrent liabilities:\n\nAccounts payable and accrued liabilities (Note 8)\n$929,508 $1,026,583 \n\nCurrent portion of long-term debt (Note 9)\n35,850 35,850 \n\nOperating lease liabilities (Note 4)\n66,600 75,914 \n\nDeferred revenues (Note 3)\n1,456,883 1,515,382 \n\nIncome taxes payable (Note 13)\n2,804 93,325 \n\nLiabilities held for sale (Note 17)\n13,019 — \n\nTotal current liabilities2,504,664 2,747,054 \n\nLong-term liabilities:\n\nAccrued liabilities (Note 8)\n41,214 42,312 \n\nPension liability, net (Note 10)\n132,511 132,215 \n\nLong-term debt (Note 9)\n6,335,758 6,342,071 \n\nLong-term operating lease liabilities (Note 4)\n155,217 189,949 \n\nLong-term deferred revenues (Note 3)\n165,191 168,757 \n\nLong-term income taxes payable (Note 13)\n68,654 79,604 \n\nDeferred tax liabilities (Note 13)\n121,559 141,514 \n\nTotal long-term liabilities7,020,104 7,096,422 \n\nShareholders’ equity:\n\nShare capital and additional paid-in capital (Note 11)\n\n251,676,295 and 254,784,391 Common Shares issued and outstanding at December 31, 2025 and June 30, 2025, respectively; authorized Common Shares: unlimited\n2,183,939 2,193,985 \n\nAccumulated other comprehensive income (loss) (Note 19)\n(38,432)(67,067)\n\nRetained earnings1,971,950 1,940,113 \n\nTreasury stock, at cost (2,584,014 and 4,648,036 shares at December 31, 2025 and June 30, 2025, respectively)\n(73,863)(138,164)\n\nTotal OpenText shareholders’ equity\n4,043,594 3,928,867 \n\nNon-controlling interests1,800 1,721 \n\nTotal shareholders’ equity4,045,394 3,930,588 \n\nTotal liabilities and shareholders’ equity$13,570,162 $13,774,064 \n\nGuarantees and contingencies (Note 12)\n\nRelated party transactions (Note 23)\n\nSubsequent events (Note 24)\n\nSee accompanying Notes to Condensed Consolidated Financial Statements.\n\n3\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nOPEN TEXT CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF INCOME\n\n(In thousands of U.S. dollars and shares, except per share data)\n\n(Unaudited)\n\nThree Months Ended\nDecember 31,Six Months Ended\nDecember 31,\n\n2025202420252024\n\nRevenues (Note 3):\n\nCloud services and subscriptions$478,084 $462,306 $962,593 $919,330 \n\nCustomer support581,921 590,595 1,168,766 1,186,085 \n\nLicense184,227 188,923 318,775 314,736 \n\nProfessional service and other82,504 92,676 164,737 183,354 \n\nTotal revenues1,326,736 1,334,500 2,614,871 2,603,505 \n\nCost of revenues:\n\nCloud services and subscriptions170,252 172,288 342,469 347,545 \n\nCustomer support58,497 62,656 122,561 125,230 \n\nLicense9,046 6,336 16,142 12,993 \n\nProfessional service and other62,537 68,041 125,575 134,956 \n\nAmortization of acquired technology-based intangible assets (Note 6)\n44,204 47,203 88,408 94,447 \n\nTotal cost of revenues344,536 356,524 695,155 715,171 \n\nGross profit982,200 977,976 1,919,716 1,888,334 \n\nOperating expenses:\n\nResearch and development158,309 180,727 327,437 371,420 \n\nSales and marketing287,995 273,929 545,050 519,811 \n\nGeneral and administrative110,111 99,356 215,874 206,086 \n\nDepreciation35,267 31,879 71,188 64,050 \n\nAmortization of acquired customer-based intangible assets (Note 6)\n78,645 81,048 158,206 162,552 \n\nSpecial charges (recoveries) (Note 16)\n20,118 15,238 40,257 62,374 \n\nTotal operating expenses690,445 682,177 1,358,012 1,386,293 \n\nIncome from operations\n291,755 295,799 561,704 502,041 \n\nOther income (expense), net (Note 21)\n2,932 68,615 (44)32,960 \n\nInterest and other related expense, net(79,227)(83,615)(160,341)(167,897)\n\nIncome before income taxes\n215,460 280,799 401,319 367,104 \n\nProvision for income taxes (Note 13)\n47,334 50,893 86,533 52,776 \n\nNet income\n$168,126 $229,906 $314,786 $314,328 \n\nNet (income) attributable to non-controlling interests\n(35)(44)(79)(98)\n\nNet income attributable to OpenText\n$168,091 $229,862 $314,707 $314,230 \n\nEarnings per share—basic attributable to OpenText (Note 22)\n$0.67 $0.87 $1.24 $1.18 \n\nEarnings per share—diluted attributable to OpenText (Note 22)\n$0.66 $0.87 $1.24 $1.18 \n\nWeighted average number of Common Shares outstanding—basic\n251,983 265,099 252,814 266,252 \n\nWeighted average number of Common Shares outstanding—diluted\n253,733 265,193 253,406 266,505 \n\nSee accompanying Notes to Condensed Consolidated Financial Statements.\n\n4\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nOPEN TEXT CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n(In thousands of U.S. dollars)\n\n(Unaudited)\n\n Three Months Ended\nDecember 31,Six Months Ended\nDecember 31,\n\n 2025202420252024\n\nNet income\n$168,126 $229,906 $314,786 $314,328 \n\nOther comprehensive income (loss)—net of tax:\n\nNet foreign currency translation adjustments6,843 1,167 29,020 (4,023)\n\nUnrealized gain (loss) on cash flow hedges:\n\nUnrealized gain (loss)—net of tax (1)\n668 (4,188)(1,007)(3,534)\n\n(Gain) loss reclassified into net income—net of tax (2)\n45 1,010 (67)1,272 \n\nUnrealized gain (loss) on available-for-sale financial assets:\n\nUnrealized gain (loss)—net of tax (3)\n510 436 671 684 \n\nActuarial gain (loss) relating to defined benefit pension plans:\n\nActuarial gain (loss)—net of tax (4)\n— — — (1,045)\n\nAmortization of actuarial (gain) loss into net income—net of tax (5)\n13 252 18 486 \n\nTotal other comprehensive income (loss), net\n8,079 (1,323)28,635 (6,160)\n\nTotal comprehensive income\n176,205 228,583 343,421 308,168 \n\nComprehensive income attributable to non-controlling interests\n(35)(44)(79)(98)\n\nTotal comprehensive income attributable to OpenText\n$176,170 $228,539 $343,342 $308,070 \n\n______________________\n\n(1)Net of tax expense (recovery) of $241 and $(1,510) for the three months ended December 31, 2025 and 2024, respectively; $(363) and $(1,274) for the six months ended December 31, 2025 and 2024, respectively.\n\n(2)Net of tax expense (recovery) of $16 and $364 for the three months ended December 31, 2025 and 2024, respectively; $(25) and $458 for the six months ended December 31, 2025 and 2024, respectively.\n\n(3)Net of tax expense (recovery) of $243 and $18 for the three months ended December 31, 2025 and 2024, respectively; $309 and $225 for the six months ended December 31, 2025 and 2024, respectively.\n\n(4)Net of tax expense (recovery) of $— and $— for the three months ended December 31, 2025 and 2024, respectively; $— and $(43) for the six months ended December 31, 2025 and 2024, respectively.\n\n(5)Net of tax expense (recovery) of $(21) and $92 for the three months ended December 31, 2025 and 2024, respectively; $(17) and $184 for the six months ended December 31, 2025 and 2024, respectively.\n\nSee accompanying Notes to Condensed Consolidated Financial Statements.\n\n5\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nOPEN TEXT CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY\n\n(In thousands of U.S. dollars and shares)\n\n(Unaudited)\n\nThree Months Ended December 31, 2025\n\nCommon Shares and Additional Paid in CapitalTreasury StockRetained\nEarnings\nAccumulated \n\nOther\n\nComprehensive\n\nIncome\nNon-Controlling InterestsTotal\n\nSharesAmountSharesAmount\n\nBalance as of September 30, 2025\n251,964 $2,189,340 (4,452)$(130,561)$1,938,716 $(46,511)$1,765 $3,952,749 \n\nIssuance of Common Shares\n\nUnder employee stock option plans857 26,746 — — — — — 26,746 \n\nUnder employee stock purchase plans245 7,826 — — — — — 7,826 \n\nShare-based compensation— 21,119 — — — — — 21,119 \n\nIssuance of treasury stock— (51,375)1,868 56,698 — — — 5,323 \n\nRepurchase of Common Shares(1,390)(9,717)— — (65,455)— — (75,172)\n\nDividends declared\n\n($0.275 per Common Share)\n— — — — (69,402)— — (69,402)\n\nOther comprehensive income (loss) - net— — — — — 8,079 — 8,079 \n\nNet income for the period— — — — 168,091 — 35 168,126 \n\nBalance as of December 31, 2025\n251,676 $2,183,939 (2,584)$(73,863)$1,971,950 $(38,432)$1,800 $4,045,394 \n\nThree Months Ended December 31, 2024\n\nCommon Shares and Additional Paid in CapitalTreasury StockRetained\nEarnings\nAccumulated\n\nOther\n\nComprehensive\n\nIncome\nNon-Controlling InterestsTotal\n\nSharesAmountSharesAmount\n\nBalance as of September 30, 2024\n265,546 $2,290,191 (3,900)$(145,646)$2,065,221 $(74,456)$1,577 $4,136,887 \n\nIssuance of Common Shares\n\nUnder employee stock option plans65 1,739 — — — — — 1,739 \n\nUnder employee stock purchase plans330 9,308 — — — — — 9,308 \n\nShare-based compensation— 30,355 — — — — — 30,355 \n\nPurchase of treasury stock— — (1,363)(40,013)— — — (40,013)\n\nIssuance of treasury stock— (39,906)1,037 41,227 — — — 1,321 \n\nRepurchase of Common Shares(2,213)(16,104)— — (50,990)— — (67,094)\n\nDividends declared\n\n($0.2625 per Common Share)\n— — — — (69,579)— — (69,579)\n\nOther comprehensive income (loss) - net— — — — — (1,323)— (1,323)\n\nNet income for the period— — — — 229,862 — 44 229,906 \n\nBalance as of December 31, 2024\n263,728 $2,275,583 (4,226)$(144,432)$2,174,514 $(75,779)$1,621 $4,231,507 \n\n6\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nOPEN TEXT CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY\n\n(In thousands of U.S. dollars and shares)\n\n(unaudited)\n\nSix Months Ended December 31, 2025\n\nCommon Shares and Additional Paid in CapitalTreasury StockRetained\nEarnings\nAccumulated\n\nOther\n\nComprehensive\n\nIncome\nNon-Controlling InterestsTotal\n\nSharesAmountSharesAmount\n\nBalance as of June 30, 2025\n254,784 $2,193,985 (4,648)$(138,164)$1,940,113 $(67,067)$1,721 $3,930,588 \n\nIssuance of Common Shares\n\nUnder employee stock option plans882 27,301 — — — — — 27,301 \n\nUnder employee stock purchase plans556 15,422 — — — — — 15,422 \n\nShare-based compensation— 38,800 — — — — — 38,800 \n\nIssuance of treasury stock— (58,777)2,064 64,301 — — — 5,524 \n\nRepurchase of Common Shares(4,546)(32,792)— — (144,103)— — (176,895)\n\nDividends declared\n\n($0.55 per Common Share)\n— — — — (138,767)— — (138,767)\n\nOther comprehensive income (loss) - net— — — — — 28,635 — 28,635 \n\nNet income for the period— — — — 314,707 — 79 314,786 \n\nBalance as of December 31, 2025\n251,676 $2,183,939 (2,584)$(73,863)$1,971,950 $(38,432)$1,800 $4,045,394 \n\nSix Months Ended December 31, 2024\n\nCommon Shares and Additional Paid in CapitalTreasury StockRetained\nEarnings\nAccumulated \n\nOther\n\nComprehensive\n\nIncome\nNon-Controlling InterestsTotal\n\nSharesAmountSharesAmount\n\nBalance as of June 30, 2024\n267,801 $2,271,886 (3,136)$(123,268)$2,119,159 $(69,619)$1,523 $4,199,681 \n\nIssuance of Common Shares\n\nUnder employee stock option plans70 1,880 — — — — — 1,880 \n\nUnder employee stock purchase plans719 19,171 — — — — — 19,171 \n\nShare-based compensation— 59,801 — — — — — 59,801 \n\nPurchase of treasury stock— — (2,187)(65,023)— — — (65,023)\n\nIssuance of treasury stock— (41,836)1,097 43,859 (702)— — 1,321 \n\nRepurchase of Common Shares(4,862)(35,319)— — (118,256)— — (153,575)\n\nDividends declared\n\n($0.525 per Common Share)\n— — — — (139,917)— — (139,917)\n\nOther comprehensive income (loss) - net— — — — — (6,160)— (6,160)\n\nNet income for the period— — — — 314,230 — 98 314,328 \n\nBalance as of December 31, 2024\n263,728 $2,275,583 (4,226)$(144,432)$2,174,514 $(75,779)$1,621 $4,231,507 \n\nSee accompanying Notes to Condensed Consolidated Financial Statements\n\n7\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nOPEN TEXT CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(In thousands of U.S. dollars)\n\n(Unaudited)\n\nSix Months Ended December 31,\n\n20252024\n\nCash flows from operating activities:\n\nNet income\n$314,786 $314,328 \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\nDepreciation and amortization of intangible assets317,802 321,049 \n\nShare-based compensation expense38,913 59,919 \n\nPension expense6,228 6,813 \n\nAmortization of debt discount and issuance costs\n11,612 10,795 \n\nWrite-off of right of use assets7,844 1,385 \n\nAdjustment to gain on AMC Divestiture\n— 4,175 \n\nLoss on sale and write down of property and equipment, net\n2,823 439 \n\nDeferred taxes(32,799)(52,977)\n\nShare in net (income) of equity investees\n(7,633)(1,993)\n\nChanges in derivative instruments\n(10,749)(20,614)\n\nChanges in operating assets and liabilities:\n\nAccounts receivable60,490 41,879 \n\nContract assets(69,678)(59,946)\n\nPrepaid expenses and other current assets10,168 54,578 \n\nIncome taxes(32,664)(196,727)\n\nAccounts payable and accrued liabilities(98,492)(128,110)\n\nDeferred revenue(49,415)(71,407)\n\nOther assets7,377 (1,436)\n\nOperating lease assets and liabilities, net(10,191)(11,964)\n\nNet cash provided by operating activities\n466,422 270,186 \n\nCash flows from investing activities:\n\nAdditions of property and equipment(85,749)(80,585)\n\nAdjustment to proceeds from AMC Divestiture\n— (11,686)\n\nProceeds from interest on derivative instruments\n870 2,519 \n\nOther investing activities632 5,892 \n\nNet cash used in investing activities\n(84,247)(83,860)\n\nCash flows from financing activities:\n\nProceeds from issuance of Common Shares from exercise of\n\nstock options and ESPP\n41,499 17,740 \n\nRepayment of long-term debt and Revolver(17,926)(17,926)\n\nNet change in transition services agreement obligation\n— 21,938 \n\nDebt issuance costs— (1,066)\n\nRepurchase of Common Shares(157,625)(153,406)\n\nPurchase of treasury stock— (65,023)\n\nPayments of dividends to shareholders(136,735)(137,374)\n\nNet cash used in financing activities\n(270,787)(335,117)\n\nForeign exchange gain (loss) on cash held in foreign currencies\n3,503 (9,794)\n\nIncrease (decrease) in cash, cash equivalents and restricted cash during the period\n114,891 (158,585)\n\nCash, cash equivalents and restricted cash at beginning of the period1,158,106 1,282,793 \n\nCash, cash equivalents and restricted cash at end of the period$1,272,997 $1,124,208 \n\n8\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nOPEN TEXT CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(In thousands of U.S. dollars)\n\n(Unaudited)\n\nReconciliation of cash, cash equivalents and restricted cash:December 31, 2025December 31, 2024\n\nCash and cash equivalents$1,271,374 $1,122,192 \n\nRestricted cash (1)\n1,623 2,016 \n\nTotal cash, cash equivalents and restricted cash$1,272,997 $1,124,208 \n\n______________________\n\n(1)Restricted cash is classified under the Prepaid expenses and other current assets and Other assets line items on the Condensed Consolidated Balance Sheets (Note 7).\n\nSupplemental cash flow disclosures (Note 4 and Note 20)\n\nSee accompanying Notes to Condensed Consolidated Financial Statements.\n\n9\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nOPEN TEXT CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nFor the Three and Six Months Ended December 31, 2025\n\n(Unless otherwise noted, tabular amounts in thousands of U.S. dollars, except share and per share data)\n\n(Unaudited)\n\nNOTE 1—BASIS OF PRESENTATION\n\nThe accompanying Condensed Consolidated Financial Statements include the accounts of Open Text Corporation and our subsidiaries, collectively referred to as “OpenText” or the “Company.” We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd., which as of December 31, 2025, was 70% owned by OpenText. All intercompany balances and transactions have been eliminated.\n\nThe Company’s fiscal year begins on July 1 and ends on June 30. Unless otherwise noted, any reference to a year preceded by the word “Fiscal” refers to the fiscal year ended June 30 of that year. For example, references to “Fiscal 2026” refer to the fiscal year ended June 30, 2026.\n\nThese Condensed Consolidated Financial Statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented.\n\nUse of estimates\n\nThe preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements. These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. In particular, key estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) accounting for income taxes, (iii) testing of goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) restructuring accruals, (viii) acquisition accruals and pre-acquisition contingencies, (ix) the valuation of stock options granted and obligations related to share-based compensation, including the valuation of our long-term incentive plans, (x) the valuation of pension obligations and pension assets, (xi) the valuation of available-for-sale investments, (xii) the valuation of derivative instruments and (xiii) the accounting for disposals of assets and liabilities.\n\nLong-lived Asset Reclassified to Held for Sale\n\nDuring the second quarter of Fiscal 2026, the Company commenced a plan to sell an office building with a carrying value of $4.5 million as of December 31, 2025. Accordingly, the office building was reclassified from Property and equipment to Assets held for sale in our Condensed Consolidated Balance Sheets as of December 31, 2025.\n\nNOTE 2—ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS\n\nAccounting Pronouncements Adopted in Fiscal 2026\n\nDuring Fiscal 2026, we have not adopted any accounting pronouncements that have had a material impact to our Condensed Consolidated Financial Statements or disclosures.\n\nAccounting Pronouncements Not Yet Adopted in Fiscal 2026\n\nIncome Taxes\n\nIn December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” that addresses requests for improved annual income tax disclosures from investors that use the financial statements to make capital allocation decisions. Public entities must adopt the new guidance for annual reporting periods beginning after December 15, 2024. The amendments in this ASU may be applied on a prospective or retrospective basis, with early adoption permitted. The impact of our adoption of such guidance will be reflected in our 2026 annual consolidated financial statements.\n\n10\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nDisaggregation of Income Statement Expenses\n\nIn November 2024, the FASB issued ASU 2024-03 “Disaggregation of Income Statement Expenses (Subtopic 220-40),” which requires additional disclosures of specific expense categories included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The amendments in this ASU may be applied on a prospective or retrospective basis, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2024-03 on the Company’s financial disclosures.\n\nCredit Losses\n\nIn July 2025, the FASB issued ASU 2025-05 “Financial Instruments - Credit Losses (Topic 326)”, which provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Topic 606, Revenue from Contracts with Customers. The guidance will be effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The amendments in this ASU may be applied on a prospective basis, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2025-05 on the Company’s financial disclosures.\n\nInternal-Use Software\n\nIn September 2025, the FASB issued ASU 2025-06 “Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40),” which amends guidance related to the accounting for internal-use software development costs. The guidance will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The amendments in this ASU may be applied on a prospective, modified prospective or retrospective basis, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2025-06 on the Company’s financial disclosures.\n\nDerivatives and Hedging and Revenue from Contracts with Customers\n\nIn September 2025, the FASB issued ASU 2025-07 “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606),” which clarifies the application of derivative accounting to contracts that have features based on the operations or activities of one of the parties to the contract and to reduce diversity in the accounting for share-based payments in revenue contracts. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this ASU may be applied on a prospective or modified retrospective basis, with early adoption permitted. We do not expect ASU 2025-07 to have an impact on the Company’s financial disclosures.\n\n11\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 3—REVENUES\n\nDisaggregation of Revenue\n\nWe have four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. The following tables disaggregate our revenue by significant geographic area, based on the location of our direct end customer, by type of performance obligation and timing of revenue recognition for the periods indicated:\n\nThree Months Ended December 31,Six Months Ended December 31,\n\n2025202420252024\n\nTotal Revenues by Geography:\n\nAmericas (1)\n$708,440 $765,857 $1,442,016 $1,494,100 \n\nEMEA (2)\n496,726 449,068 935,528 868,299 \n\nAsia Pacific (3)\n121,570 119,575 237,327 241,106 \n\nTotal revenues$1,326,736 $1,334,500 $2,614,871 $2,603,505 \n\n______________________\n\n(1)Americas consists of countries in North, Central and South America.\n\n(2)EMEA consists of countries in Europe, the Middle East and Africa.\n\n(3)Asia Pacific primarily consists of Australia, Japan, Singapore, India and China.\n\nThree Months Ended December 31,Six Months Ended December 31,\n\n2025202420252024\n\nTotal Revenues by Type of Performance Obligation:\n\nRecurring revenues (1)\n\nCloud services and subscriptions revenue\n$478,084 $462,306 $962,593 $919,330 \n\nCustomer support revenue\n581,921 590,595 1,168,766 1,186,085 \n\nTotal recurring revenues\n$1,060,005 $1,052,901 $2,131,359 $2,105,415 \n\nLicense revenue (perpetual, term and subscriptions) 184,227 188,923 318,775 314,736 \n\nProfessional service and other revenue82,504 92,676 164,737 183,354 \n\nTotal revenues$1,326,736 $1,334,500 $2,614,871 $2,603,505 \n\n______________________\n\n(1)Recurring revenue is defined as the sum of Cloud services and subscriptions revenue and Customer support revenue.\n\nThree Months Ended December 31,Six Months Ended December 31,\n\n2025202420252024\n\nTotal Revenues by Timing of Revenue Recognition:\n\nPoint in time $184,227 $188,923 $318,775 $314,736 \n\nOver time (including professional service and other revenue)1,142,5091,145,577 2,296,096 2,288,769\n\nTotal revenues$1,326,736 $1,334,500 $2,614,871 $2,603,505 \n\nRevenue by Product Categories\n\nWe have seven product categories (previously referred to as business clouds) as part of our Information Management solutions: Content, Business Network, IT Operations Management (ITOM, also known as Observability and Service Management (OSM)), Cybersecurity (Enterprise), Cybersecurity (Small and Medium-Sized Businesses (SMB) & Consumer), Application Delivery Management (ADM, also known as DevOps), and Analytics. The following table disaggregates total revenue and total cloud services and subscription revenue by product category for the periods indicated. The Company believes this presentation is useful as it provides additional information:\n\n12\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nThree Months Ended December 31,Six Months Ended December 31,\n\n2025202420252024\n\nTotal Revenues by Product Categories\n\nContent$573,335 $548,656 $1,096,799 $1,055,547 \n\nBusiness Network159,770 159,479 320,481 316,699 \n\nITOM\n113,262 114,095 226,706 234,304 \n\nCybersecurity (Enterprise)174,483 192,842 355,230 363,401 \n\nCybersecurity (SMB & Consumer)127,646 135,183 259,373 273,583 \n\nADM (1)\n120,125 123,333 242,221 242,279 \n\nAnalytics58,115 60,912 114,061 117,692 \n\nTotal revenues by product categories\n$1,326,736 $1,334,500 $2,614,871 $2,603,505 \n\nTotal Cloud Services and Subscriptions Revenue by Product Categories\n\nContent$137,907 $116,626 $273,519 $228,916 \n\nBusiness Network151,379 150,036 303,578 297,604 \n\nITOM\n7,843 4,709 14,606 8,979 \n\nCybersecurity (Enterprise)17,939 21,047 38,956 42,344 \n\nCybersecurity (SMB & Consumer)117,337 123,853 238,658 251,082 \n\nADM (1)\n27,933 26,810 59,100 51,813 \n\nAnalytics17,746 19,225 34,176 38,592 \n\nTotal cloud services and subscriptions revenues by product categories\n$478,084 $462,306 $962,593 $919,330 \n\n______________________\n\n(1)ADM was previously named Application Automation.\n\nContract Balances\n\nA contract asset, net of allowance for credit losses, will be recorded if we have recognized revenue but do not have an unconditional right to the related consideration from the customer. For example, this will be the case if implementation services offered in a cloud arrangement are identified as a separate performance obligation and are provided to a customer prior to us being able to bill the customer. In addition, a contract asset may arise in relation to subscription licenses if the license revenue that is recognized upfront exceeds the amount that we are able to invoice the customer at that time. Contract assets are reclassified to accounts receivable when the rights become unconditional.\n\nThe balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows:\n\nAs of December 31, 2025As of June 30, 2025\n\nShort-term contract assets\n$73,965 $77,920 \n\nLong-term contract assets\n55,133 49,293 \n\nShort-term deferred revenues (1)\n1,456,883 1,515,382 \n\nLong-term deferred revenues (1)\n165,191 168,757 \n\n______________________\n\n(1)Excludes $11.8 million of short-term deferred revenues and $0.2 million of long-term deferred revenues that have been reclassified to Liabilities held for sale as of December 31, 2025, related to the divestiture of the eDOCS business that closed on January 12, 2026. See Note 17 “Acquisitions and Divestitures” and Note 24 “Subsequent Events” for more details.\n\nThe difference in the opening and closing balances of our contract assets and deferred revenues primarily results from the timing difference between our performance and customer payments. We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. During the six months ended December 31, 2025, we reclassified $67.8 million (six months ended December 31, 2024 — $57.3 million) of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional. During the three and six months ended December 31, 2025 and 2024, respectively, there was no significant impairment loss recognized related to contract assets.\n\n13\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nWe recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer for future obligations to transfer products or services. Our deferred revenues primarily relate to cloud services and customer support agreements which have been paid for by customers prior to the performance of those services. The amount of revenue that was recognized during the six months ended December 31, 2025 that was included in the deferred revenue balances at June 30, 2025 was $1,128 million (six months ended December 31, 2024—$1,131 million).\n\nIncremental Costs of Obtaining a Contract with a Customer\n\nIncremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. The following table summarizes the changes in total capitalized costs to obtain a contract, since June 30, 2025:\n\nCapitalized costs to obtain a contract as of June 30, 2025\n$129,026 \n\nNew capitalized costs incurred33,223 \n\nAmortization of capitalized costs(25,188)\n\nImpact of foreign exchange rate changes437 \n\nCapitalized costs to obtain a contract as of December 31, 2025\n$137,498 \n\nDuring the three and six months ended December 31, 2025 and 2024, respectively, there was no significant impairment loss recognized related to capitalized costs to obtain a contract. Refer to Note 7 “Prepaid Expenses and Other Assets” for additional information on incremental costs of obtaining a contract.\n\nRemaining Performance Obligations\n\nRemaining performance obligations (RPO) represent contracted revenue that has not yet been recognized. They include amounts recognized as deferred revenue and amounts that are contracted but will be billed and recognized as revenue in future periods.\n\nThe following table provides RPO information as of December 31, 2025. The 12-month periods noted below are as of the dates presented, with the remaining balances recognized substantially over the next three years thereafter.\n\n($ in billions)As of December 31, 2025\n\nTotal RPO (1)\n$4.5 \n\n% recognized as revenue over the following 12 months\n60%\n\nCloud services and subscriptions RPO\n$2.6 \n\n% recognized as revenue over the following 12 months\n48%\n\nCustomer support and other RPO (2)\n$1.9 \n\n% recognized as revenue over the following 12 months\n76%\n\n______________________\n\n(1)RPO amounts presented may be impacted by certain estimates including currency fluctuations, estimates of customers’ deployment of contracted solutions, changes in the scope or termination of contracts, among other factors, and are therefore subject to change.\n\n(2)Customer support and other RPO is primarily comprised of obligations related to customer support revenues, and to a lesser extent license, professional services and other revenues.\n\nThe table above includes RPO related to the divestiture of the eDOCS business, which are reported within Liabilities held for sale. As of December 31, 2025, the total RPO above includes $16.5 million of revenue from remaining performance obligations on existing contracts related to eDOCS, of which $15.9 million relates to Customer support. Approximately 97% of the total RPO related to eDOCS is expected to be recognized over the next 12 months.\n\n14\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 4—LEASES\n\nWe enter into operating leases, both domestically and internationally, for certain facilities, automobiles, data centers and equipment for use in the ordinary course of business. The duration of the majority of these leases generally ranges from 1 to 10 years, some of which include options to extend for an additional 3 to 5 years after the initial term. Additionally, the land upon which our headquarters in Waterloo, Ontario, Canada is located is leased from the University of Waterloo for a period of 49 years beginning in December 2005, with an option to renew for an additional term of 49 years. We also have finance lease liabilities comprised of equipment lease arrangements with an average duration of 4 to 5 years, of which all are currently being sublet. Leases with an initial term of 12 months or less are not recorded on our Condensed Consolidated Balance Sheets.\n\nThe following illustrates the Condensed Consolidated Balance Sheets information related to leases:\n\nBalance Sheet LocationAs of December 31, 2025As of June 30, 2025\n\nOperating Leases\n\nOperating lease right of use assets\nOperating lease right of use assets$156,402 $197,977 \n\nOperating lease liabilities (current)\nOperating lease liabilities$66,600 $75,914 \n\nOperating lease liabilities (non-current)\nLong-term operating lease liabilities155,217 189,949 \n\nTotal operating lease liabilities$221,817 $265,863 \n\nFinance Leases\n\nFinance lease receivables (current)Prepaid expenses and other current assets$1,540 $1,867 \n\nFinance lease receivables (non-current)\nOther assets— 457 \n\nTotal finance lease receivables$1,540 $2,324 \n\nFinance lease liabilities (current)Accounts payable and accrued liabilities$1,381 $1,877 \n\nFinance lease liabilities (non-current)\nAccrued liabilities— 457 \n\nTotal finance lease liabilities$1,381 $2,334 \n\nThe weighted average remaining lease term and discount rate for the periods indicated below were as follows:\n\nAs of December 31, 2025As of June 30, 2025\n\nWeighted-average remaining lease term\n\nOperating leases4.49 years4.59 years\n\nFinance leases0.76 years1.23 years\n\nWeighted-average discount rate\n\nOperating leases4.97 %4.92 %\n\nFinance leases5.32 %5.33 %\n\nLease Costs and Other Information\n\nThe following illustrates the various components of lease costs for the period indicated:\n\nThree Months Ended December 31,Six Months Ended December 31,\n\n2025202420252024\n\nOperating lease cost$18,252 $20,643 $37,956 $41,748 \n\nShort-term lease cost207 639 424 978 \n\nVariable lease cost834 836 1,810 1,891 \n\nSublease income(2,836)(2,692)(4,868)(5,466)\n\nTotal lease cost$16,457 $19,426 $35,322 $39,151 \n\n15\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nSupplemental Cash Flow Information\n\nThe following table presents supplemental information relating to cash flows arising from lease transactions. Cash payments made for variable lease costs and short-term leases are not included in the measurement of lease liabilities, and, as such, are excluded from the amounts below:\n\nSix Months Ended December 31,\n\n20252024\n\nCash paid for amounts included in the measurement of lease liabilities:\n\nOperating leases$45,713 $52,044 \n\nFinance leases$1,000 $1,952 \n\nRight of use assets obtained in exchange for new lease liabilities, net of terminations:\n\nOperating leases (1)\n$(4,734)$30,211 \n\n______________________\n\n(1)During the six months ended December 31, 2025, we modified certain lease agreements, resulting in a net reduction of our right of use assets and related lease liabilities, of which $13.7 million was attributable to a facility in the Americas.\n\nMaturity of Lease Liabilities\n\nThe following table presents the future minimum lease payments under our lease liabilities as of December 31, 2025:\n\nFiscal years ending June 30,Operating LeasesFinance Leases\n\n2026 (six months ended)\n$40,587 $947 \n\n2027\n67,001 459 \n\n2028\n50,187 — \n\n2029\n34,831 — \n\n2030\n20,709 — \n\nThereafter31,637 — \n\nTotal lease payments$244,952 $1,406 \n\nLess: Imputed interest(23,135)(25)\n\nTotal$221,817 $1,381 \n\nOperating lease maturity amounts included in the table above do not include sublease income expected to be received under our various sublease agreements with third parties. Under the agreements initiated with third parties, we expect to receive sublease income of $4.4 million over the remainder of Fiscal 2026 and $0.9 million thereafter.\n\nNOTE 5—GOODWILL\n\nGoodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets. The following table summarizes the changes in goodwill since June 30, 2025:\n\nBalance as of June 30, 2025\n$7,517,463 \n\nReclassification to Assets held for sale (1)\n(92,190)\n\nImpact of foreign exchange rate changes8,640 \n\nBalance as of December 31, 2025\n$7,433,913 \n\n______________________\n\n(1)Adjustment to reclassify Goodwill to Assets held for sale related to the divestiture of our eDOCS business. See Note 17 “Acquisitions and Divestitures” and Note 24 “Subsequent Events” for more details.\n\n16\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 6—ACQUIRED INTANGIBLE ASSETS\n\nAs of December 31, 2025\n\nCost\n\nAccumulated Amortization\n\nNet\n\nTechnology assets\n$1,064,433 $(530,136)$534,297 \n\nCustomer assets\n2,305,987 (1,110,301)1,195,686 \n\nTotal$3,370,420 $(1,640,437)$1,729,983 \n\nAs of June 30, 2025\n\nCostAccumulated AmortizationNet\n\nTechnology assets$1,064,400 $(441,705)$622,695 \n\nCustomer assets2,635,686 (1,281,790)1,353,896 \n\nTotal$3,700,086 $(1,723,495)$1,976,591 \n\nWhere applicable, the above balances as of December 31, 2025 have been reduced to reflect the impact of intangible assets where the gross cost became fully amortized during the six months ended December 31, 2025. This impact resulted in reductions to the cost and accumulated amortization of customer assets of $330.4 million. The weighted average amortization periods for acquired technology and customer intangible assets are approximately six years and nine years, respectively.\n\nThe following table shows the estimated future amortization expense for the fiscal years indicated. This calculation assumes no future adjustments to acquired intangible assets:\n\nFiscal years ending June 30,\n\n2026 (six months ended)\n$220,903 \n\n2027396,747 \n\n2028379,767 \n\n2029283,041 \n\n2030209,515 \n\n2031 and Thereafter\n240,010 \n\nTotal$1,729,983 \n\n \n\n17\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 7—PREPAID EXPENSES AND OTHER ASSETS\n\nPrepaid expenses and other current assets:\n\nAs of December 31, 2025As of June 30, 2025\n\nDeposits and restricted cash$5,099 $2,456 \n\nCapitalized costs to obtain a contract\n44,211 44,311 \n\nShort-term prepaid expenses and other current assets (1)\n136,294 148,824 \n\nDerivative asset (2)\n779 2,984 \n\nTotal$186,383 $198,575 \n\n______________________\n\n(1)Excludes prepaid expenses and other current assets that have been reclassified to Assets held for sale as of December 31, 2025, related to the divestiture of the eDOCS business. See Note 17 “Acquisitions and Divestitures” and Note 24 “Subsequent Events” for more details.\n\n(2)Represents the asset related to our derivative instrument activity. See Note 15 “Derivative Instruments and Hedging Activities” for more details.\n\nOther assets:\n\nAs of December 31, 2025As of June 30, 2025\n\nDeposits and restricted cash\n$17,188 $22,720 \n\nCapitalized costs to obtain a contract\n93,287 84,715 \n\nInvestments123,704 116,704 \n\nAvailable-for-sale financial assets46,775 45,074 \n\nLong-term prepaid expenses and other long-term assets\n27,161 38,480 \n\nTotal$308,115 $307,693 \n\nDeposits and restricted cash primarily relate to security deposits provided to landlords in accordance with facility lease agreements and cash restricted per the terms of certain contractual-based agreements.\n\nCapitalized costs to obtain a contract relate to incremental costs of obtaining a contract, such as sales commissions, which are eligible for capitalization on contracts to the extent that such costs are expected to be recovered (see Note 3 “Revenues”).\n\nInvestments relate to certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4% to below 20%. These investments are accounted for using the equity method. Our share of net income or losses based on our interest in these investments, which approximates fair value and is subject to volatility based on market trends and business conditions, is recorded as a component of Other income (expense), net in our Condensed Consolidated Statements of Income (see Note 21 “Other Income (Expense), Net”). During the three and six months ended December 31, 2025, our share of income (loss) from these investments was $5.2 million and $7.6 million, respectively (three and six months ended December 31, 2024—$1.5 million and $2.0 million, respectively).\n\nA portion of the available-for-sale financial assets relate to contractual arrangements under insurance policies held by the Company with guaranteed interest rates that are utilized to meet certain pension and post-retirement obligations but do not meet the definition of a plan asset. The remaining portion of available-for-sale financial assets are primarily comprised of various debt and equity funds, which are valued utilizing market quotes provided by our third-party custodian. These arrangements are treated as available-for-sale financial assets measured at fair value quarterly (see Note 14 “Fair Value Measurement”) with unrealized gains and losses recorded within Other comprehensive income (loss), net (see Note 19 “Accumulated Other Comprehensive Income (Loss)”).\n\nPrepaid expenses and other assets, both short-term and long-term, include advance payments on licenses that are being amortized over the applicable terms of the licenses and other miscellaneous assets.\n\n18\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 8—ACCOUNTS PAYABLE AND ACCRUED LIABILITIES\n\nAccounts payable and accrued liabilities:\n\nAs of December 31, 2025As of June 30, 2025\n\nAccounts payable—trade (1)\n$130,614 $136,204 \n\nAccrued salaries, incentives and commissions (1)\n213,433 254,230 \n\nAccrued liabilities228,751 229,070 \n\nAccrued sales and other tax liabilities36,516 32,964 \n\nDerivative liability (2)\n248,597 275,810 \n\nAccrued interest on long-term debt37,729 37,729 \n\nAmounts payable in respect of restructuring and other special charges24,964 53,771 \n\nAsset retirement obligations8,904 6,805 \n\nTotal\n$929,508 $1,026,583 \n\n______________________\n\n(1)Excludes $0.8 million of Accounts payable and accrued liabilities that have been reclassified to Liabilities held for sale as of December 31, 2025, related to the divestiture of the eDOCS business. See Note 17 “Acquisitions and Divestitures” and Note 24 “Subsequent Events” for more details.\n\n(2)Represents the liability related to our derivative instrument activity (see Note 15 “Derivative Instruments and Hedging Activities” for more details).\n\nLong-term accrued liabilities:\n\nAs of December 31, 2025As of June 30, 2025\n\nAmounts payable in respect of restructuring and other special charges$9,566 $8,591 \n\nOther accrued liabilities11,193 10,801 \n\nAsset retirement obligations20,455 22,920 \n\nTotal\n$41,214 $42,312 \n\nAsset retirement obligations\n\nWe are required to return certain of our leased facilities to their original state at the conclusion of our lease. As of December 31, 2025, the present value of this obligation was $29.4 million (June 30, 2025—$29.7 million), with an undiscounted value of $31.5 million (June 30, 2025—$32.2 million).\n\n19\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 9—LONG-TERM DEBT\n\nAs of December 31, 2025As of June 30, 2025\n\nTotal debt\n\nSenior Notes 2031$650,000 $650,000 \n\nSenior Notes 2030900,000 900,000 \n\nSenior Notes 2029850,000 850,000 \n\nSenior Notes 2028900,000 900,000 \n\nSenior Secured Notes 20271,000,000 1,000,000 \n\nAcquisition Term Loan2,167,450 2,185,375 \n\nTotal principal payments due6,467,450 6,485,375 \n\nUnamortized debt discount and issuance costs\n(95,842)(107,454)\n\nTotal amount outstanding6,371,608 6,377,921 \n\nLess:\n\nCurrent portion of long-term debt\n\nAcquisition Term Loan35,850 35,850 \n\nTotal current portion of long-term debt35,850 35,850 \n\nNon-current portion of long-term debt$6,335,758 $6,342,071 \n\nSenior Unsecured Fixed Rate Notes\n\nSenior Notes 2031\n\nOn November 24, 2021, a subsidiary of the Company issued $650 million in aggregate principal amount of 4.125% senior notes due 2031 guaranteed by the Company (Senior Notes 2031) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (Securities Act), and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2031 bear interest at a rate of 4.125% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2022. Senior Notes 2031 will mature on December 1, 2031, unless earlier redeemed, in accordance with their terms, or repurchased.\n\nFor the three and six months ended December 31, 2025, we recorded interest expense of $6.7 million and $13.4 million, respectively, relating to Senior Notes 2031 (three and six months ended December 31, 2024—$6.7 million and $13.4 million, respectively).\n\nSenior Notes 2030\n\nOn February 18, 2020, a 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. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2030 bear interest at a rate of 4.125% per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2030 will mature on February 15, 2030, unless earlier redeemed, in accordance with their terms, or repurchased.\n\nFor the three and six months ended December 31, 2025, we recorded interest expense of $9.3 million and $18.6 million, respectively, relating to Senior Notes 2030 (three and six months ended December 31, 2024—$9.3 million and $18.6 million, respectively).\n\nSenior Notes 2029\n\nOn 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\n\n20\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\n1, 2022. Senior Notes 2029 will mature on December 1, 2029, unless earlier redeemed, in accordance with their terms, or repurchased.\n\nFor the three and six months ended December 31, 2025, we recorded interest expense of $8.2 million and $16.4 million, respectively, relating to Senior Notes 2029 (three and six months ended December 31, 2024—$8.2 million and $16.4 million, respectively).\n\nSenior Notes 2028\n\nOn February 18, 2020, the Company issued $900 million in aggregate principal amount of 3.875% senior notes due 2028 (Senior Notes 2028) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2028 bear interest at a rate of 3.875% per annum, payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2020. Senior Notes 2028 will mature on February 15, 2028, unless earlier redeemed, in accordance with their terms, or repurchased.\n\nFor the three and six months ended December 31, 2025, we recorded interest expense of $8.7 million and $17.4 million, respectively, relating to Senior Notes 2028 (three and six months ended December 31, 2024—$8.7 million and $17.4 million, respectively).\n\nSenior Secured Fixed Rate Notes\n\nSenior Secured Notes 2027\n\nOn December 1, 2022, the Company issued $1.0 billion in aggregate principal amount of senior secured notes due 2027 (Senior Secured Notes 2027, and together with the Senior Notes 2031, Senior Notes 2030, Senior Notes 2029, and Senior Notes 2028, the Senior Notes) in connection with the financing of the acquisition of Micro Focus International Limited, formerly Micro Focus International plc, and its subsidiaries (Micro Focus) (the Micro Focus Acquisition) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Secured Notes 2027 bear interest at a rate of 6.90% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on June 1, 2023. Senior Secured Notes 2027 will mature on December 1, 2027, unless earlier redeemed, in accordance with their terms, or repurchased.\n\nThe Senior Secured Notes 2027 are guaranteed on a senior secured basis by certain of the Company’s subsidiaries and are secured with the same priority as the Company’s senior credit facilities. The Senior Secured Notes 2027 and the related guarantees are effectively senior to all of the Company’s and the guarantors’ senior unsecured debt to the extent of the value of the Collateral (as defined in the indenture to the Senior Secured Notes 2027) and are structurally subordinated to all existing and future liabilities of each of the Company’s existing and future subsidiaries that do not guarantee the Senior Secured Notes 2027. As of December 31, 2025, the Senior Secured Notes 2027 bear an effective interest rate of 7.39%. The effective interest rate includes interest expense of $34.6 million and amortization of debt discount and issuance costs of $1.5 million.\n\nFor the three and six months ended December 31, 2025, we recorded interest expense of $17.3 million and $34.6 million, respectively, relating to Senior Secured Notes 2027 (three and six months ended December 31, 2024—$17.3 million and $34.6 million, respectively).\n\nRevolver\n\nOn 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.\n\nThe Revolver has no fixed repayment date prior to the end of the term. Borrowings under the Revolver bear interest per annum at a floating rate of interest equal to Term SOFR (as defined in the Revolver) and a fixed margin dependent on our consolidated net leverage ratio ranging from 1.25% to 1.75%.\n\nUnder the Revolver, we must maintain a “consolidated net leverage” ratio of no more than 4.50:1.00 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of our total debt reduced by unrestricted cash, including guarantees and letters of credit, over our trailing twelve months net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. As of December 31, 2025, our consolidated net leverage ratio, as calculated in accordance with the Revolver, was 3.35:1.00.\n\n21\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nThe Revolver requires us to pay a facility fee on unused commitments based on the consolidated net leverage ratio. As of December 31, 2025, the facility fee under the Revolver was 0.30%. For the three and six months ended December 31, 2025, we recorded $0.5 million and $1.1 million, respectively, of facility fees in Interest and other related expense, net, in our Condensed Consolidated Statements of Income (three and six months ended December 31, 2024 —$0.6 million and $1.2 million, respectively).\n\nAs of December 31, 2025, we had no outstanding balance under the Revolver (June 30, 2025—nil). For the three and six months ended December 31, 2025, we did not record any interest expense relating to the Revolver (three and six months ended December 31, 2024—nil and nil, respectively).\n\nAcquisition Term Loan\n\nOn December 1, 2022, we amended our first lien term loan facility (the Acquisition Term Loan), dated as of August 25, 2022, to increase the aggregate commitments under the senior secured delayed-draw term loan facility from an aggregate principal amount of $2.585 billion to an aggregate principal amount of $3.585 billion. On August 14, 2023, we entered into the second amendment to the Acquisition Term Loan to reduce the applicable interest rate margin by 0.75% over the remaining term of the Acquisition Term Loan. On May 15, 2024, we entered into the third amendment to the Acquisition Term Loan to reduce the applicable interest rate margin by 0.5% and remove the 10-basis point credit spread adjustment for loans bearing interest based on the Secured Overnight Financing Rate (SOFR). On November 27, 2024, we entered into the fourth amendment to the Acquisition Term Loan to reduce the applicable interest rate margin by 0.5% over the remaining term of the Acquisition Term Loan. The reductions in interest rate margin on the Acquisition Term Loan resulting from the amendments were all accounted for by the Company as debt modifications.\n\nThe Acquisition Term Loan has a seven-year term from the date of funding, and repayments under the Acquisition Term Loan are equal to 0.25% of the principal amount in equal quarterly installments for the life of the Acquisition Term Loan, with the remainder due at maturity. Borrowings under the Acquisition Term Loan currently bear a floating rate of interest equal to Term SOFR (as defined in the Acquisition Term Loan) plus an applicable margin of 1.75%. As of December 31, 2025, the outstanding balance on the Acquisition Term Loan bears an interest rate of 5.67%. As of December 31, 2025, the Acquisition Term Loan bears an effective interest rate of 6.70%. The effective interest rate includes interest expense of $66.1 million and amortization of debt discount and issuance costs of $7.8 million.\n\nThe Acquisition Term Loan has incremental facility capacity of (i) $250 million plus (ii) additional amounts, subject to meeting a “consolidated senior secured net leverage” ratio not exceeding 2.75:1.00, in each case subject to certain conditions. Consolidated senior secured net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, that is secured by the Company’s or any of the Company’s subsidiaries’ assets, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges. Under the Acquisition Term Loan, we must maintain a “consolidated net leverage” ratio of no more than 4.50:1.00 at the end of each financial quarter. Consolidated net leverage ratio is defined for this purpose as the proportion of the Company’s total debt reduced by unrestricted cash, including guarantees and letters of credit, over the Company’s trailing four financial quarter net income before interest, taxes, depreciation, amortization, restructuring, share-based compensation and other miscellaneous charges as defined in the Acquisition Term Loan. As of December 31, 2025, our consolidated net leverage ratio, as calculated in accordance with the applicable agreement, was 3.35:1:00.\n\nThe Acquisition Term Loan is unconditionally guaranteed by certain subsidiary guarantors, as defined in the Acquisition Term Loan, and is secured by a first charge on substantially all of the assets of the Company and the subsidiary guarantors on a pari passu basis with the Revolver and the Senior Secured Notes 2027.\n\nFor the three and six months ended December 31, 2025, we recorded interest expense of $32.1 million and $66.1 million, respectively, relating to the Acquisition Term Loan (three and six months ended December 31, 2024—$38.2 million and $81.1 million, respectively).\n\nOn January 15, 2026, we used the net proceeds from the eDOCS divestiture to prepay $163.0 million of our aggregate outstanding principal balance on the Acquisition Term Loan. See Note 24 “Subsequent Events” for more details.\n\nDebt Discount and Issuance Costs\n\nDebt discount and issuance costs relate primarily to costs incurred for the purpose of obtaining or amending our credit facilities and issuing our Senior Notes and are being amortized through interest expense over the respective terms of the Senior Notes and Acquisition Term Loan using the effective interest method and straight-line method for the Revolver.\n\n22\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 10—PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS\n\nDefined Benefit and Other Post-Retirement Benefit Plans\n\nThe Company has 45 pension and other post-retirement plans in multiple countries. All of our pension and other post-retirement plans are located outside of Canada and the United States. The plans are primarily located in Germany, which, as of December 31, 2025, make up approximately 48% of the total net benefit pension obligations.\n\nOur defined benefit pension plans include a mix of final salary type plans which provide for retirement, old age, disability and survivor’s benefits. Final salary type pension plans provide benefits to members either in the form of a lump sum payment or a guaranteed level of pension payable for life in the case of retirement, disability and death. Benefits under our final salary type plans are generally based on the participant’s age, compensation and years of service as well as the social security ceiling and other factors. Many of these plans are closed to new members. The net periodic costs of these plans are determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs.\n\nOther post-retirement plans include statutory plans that offer termination, indemnity or other end of service benefits. Many of these plans were assumed through our acquisitions or are required by local regulatory and statutory requirements. All of our defined benefit and other post-retirement plans are included in the aggregate projected benefit obligation within Pension liability, net on our Condensed Consolidated Balance Sheets.\n\nThe following are details of net pension expense relating to the defined benefit pension plans:\n\n Three Months Ended December 31,Six Months Ended December 31,\n\n 2025202420252024\n\nPension expense:\n\nService cost$2,887 $2,714 $5,796 $5,542 \n\nInterest cost3,520 3,148 7,040 6,485 \n\nExpected return of plan assets(3,313)(2,842)(6,609)(5,871)\n\nAmortization of actuarial (gains) losses (7)330 1 657 \n\nNet pension expense$3,087 $3,350 $6,228 $6,813 \n\nService-related net periodic pension costs are recorded within operating expense and all other non-service related net periodic pension costs are classified under Interest and other related expense, net on our Condensed Consolidated Statements of Income.\n\nNOTE 11—EQUITY AND SHARE-BASED COMPENSATION\n\nEquity\n\nCash Dividends\n\nFor the three and six months ended December 31, 2025, pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $0.275 and $0.55 per Common Share, respectively, in the aggregate amount of $68.5 million and $136.7 million, respectively, which we paid during the same periods (three and six months ended December 31, 2024—$0.2625 and $0.525 per Common Share, respectively, in the aggregate amount of $68.3 million and $137.4 million, respectively).\n\nShare Capital\n\nOur authorized share capital includes an unlimited number of Common Shares and an unlimited number of Preference Shares. No Preference Shares have been issued.\n\nTreasury Stock\n\nFrom time to time we may provide funds to a third-party agent to facilitate repurchases of our Common Shares in connection with the settlement of awards under the Long-Term Incentive Plans (LTIP) or other plans.\n\nDuring the three and six months ended December 31, 2025, we did not repurchase Common Shares on the open market for potential settlement of awards under our LTIP or other plans as described below (three and six months ended December 31, 2024—1,362,721 and 2,187,135 Common Shares were purchased, respectively, at a cost of $40.0 million and $65.0 million, respectively).\n\n23\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nDuring the three and six months ended December 31, 2025, we delivered to eligible participants 1,868,005 and 2,064,022 Common Shares, respectively, at a cost of $56.7 million and $64.3 million, respectively, that were purchased in the open market in connection with the settlement of awards under our LTIP and other plans (three and six months ended December 31, 2024—1,036,378 and 1,097,265 Common Shares, respectively, at a cost of $41.2 million and $43.8 million, respectively).\n\nEmployee Stock Purchase Plan (ESPP)\n\nOur ESPP offers employees the opportunity to purchase our Common Shares at a purchase price discount of 15%. During the three and six months ended December 31, 2025, 233,007 and 477,457 Common Shares, respectively, were eligible for issuance to employees enrolled in the ESPP (three and six months ended December 31, 2024—213,432 and 602,734 Common Shares, respectively). During the three and six months ended December 31, 2025, cash in the amount of $6.6 million and $14.4 million, respectively, was received from employees relating to the ESPP (three and six months ended December 31, 2024—$6.0 million and $15.9 million, respectively).\n\nShare Repurchase Plan\n\nOn April 30, 2024, the Company’s Board of Directors (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.\n\nOn July 31, 2024, in order to align our share repurchase plan to our fiscal year, the Board approved the early termination of the Fiscal 2024 Repurchase Plan and authorized a share repurchase plan (the Fiscal 2025 Repurchase Plan), pursuant to which we were authorized to purchase for cancellation, 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 March 13, 2025, the Company increased the authorized limit of the Fiscal 2025 Repurchase Plan by $150 million to $450 million.\n\nOn 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 our Common Shares on the Toronto Stock Exchange (TSX) as part of a normal course issuer bid renewed by the Company on August 6, 2025 (the Fiscal 2026 NCIB), 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 2026 Repurchase Plan will be effected in accordance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act) and includes a normal course issuer bid to provide means to execute purchases over the TSX. Further, as part of the renewal of the Fiscal 2026 NCIB, the Company established an automatic share purchase plan (ASPP) with its broker to facilitate repurchases of Common Shares.\n\nDuring the three and six months ended December 31, 2025, we repurchased and cancelled 1,389,600 and 4,545,923 Common Shares for $50.2 million and $152.2 million, respectively, inclusive of 2% Canadian excise taxes recorded (three and six months ended December 31, 2024, 2,212,971 and 4,862,102 Common Shares for $67.1 million and $153.6 million, respectively, inclusive of 2% Canadian excise taxes recorded).\n\nAdditionally, as of December 31, 2025, we recorded an accrual within Accounts payable and accrued liabilities and a corresponding charge to Retained earnings of $50.0 million, representing the estimated value of Common Shares expected to be repurchased following the fiscal quarter ended December 31, 2025 pursuant to the ASPP.\n\n24\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nShare-Based Compensation\n\nShare-based compensation expense for the periods indicated below is detailed as follows: \n\n Three Months Ended\nDecember 31,Six Months Ended\nDecember 31,\n\n 2025202420252024\n\nStock Options (issued under Stock Option Plans)$2,475 $3,841 $3,481 $6,577 \n\nPerformance Share Units (issued under LTIP)4,885 5,510 8,270 12,698 \n\nRestricted Share Units (issued under LTIP)3,675 4,546 7,246 8,313 \n\nRestricted Share Units (other)7,826 13,436 15,291 26,721 \n\nDeferred Share Units (directors)992 1,387 1,906 2,232 \n\nEmployee Stock Purchase Plan1,379 1,641 2,719 3,378 \n\nTotal share-based compensation expense$21,232 $30,361 $38,913 $59,919 \n\nA summary of unrecognized compensation cost for unvested share-based compensation awards is as follows: \n\n As of December 31, 2025\n\n Unrecognized Compensation CostWeighted Average Recognition Period (years)\n\nStock Options (issued under Stock Option Plans)$30,200 2.37\n\nPerformance Share Units (issued under LTIP)56,616 2.25\n\nRestricted Share Units (issued under LTIP)21,997 1.52\n\nRestricted Share Units (other)43,494 1.81\n\nTotal unrecognized share-based compensation cost$152,307 \n\nStock Option Plans\n\nA summary of activity under our stock option plans for the six months ended December 31, 2025 is as follows:\n\nOptions\nWeighted-Average \n\nExercise\n\nPrice\n\nWeighted-\n\nAverage\n\nRemaining\n\nContractual \n\nTerm\n\n(years)\n\nAggregate \n\nIntrinsic Value\n\n($’000's)\n\nOutstanding at June 30, 2025\n12,306,554 $36.73 3.93$5,942 \n\nGranted857,750 33.83 \n\nExercised(881,705)30.96 \n\nForfeited or expired(4,624,040)38.15 \n\nOutstanding at December 31, 2025\n7,658,559 $36.21 4.01$13,555 \n\nExercisable at December 31, 2025\n4,101,353 $39.65 2.67$4,902 \n\nAs of December 31, 2025, 8,546,838 options to purchase Common Shares were available for issuance under our stock option plans.\n\nWe estimate the fair value of stock options using the Black-Scholes option-pricing model consistent with the provisions of ASC Topic 718, “Compensation—Stock Compensation” (Topic 718) and SEC Staff Accounting Bulletin No. 107. The option-pricing models require input of subjective assumptions, including the estimated life of the option and the expected volatility of the underlying stock over the estimated life of the option. We use historical volatility as a basis for projecting the expected volatility of the underlying stock and estimate the expected life of our stock options based upon historical data.\n\nWe believe that the valuation techniques and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair value of our stock option grants. Estimates of fair value are not intended, however, to predict actual future events or the value ultimately realized by employees who receive equity awards.\n\n25\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nFor the periods indicated, the weighted-average fair value of options and weighted-average assumptions estimated under the Black-Scholes option-pricing model were as follows:\n\n Three Months Ended December 31,Six Months Ended December 31,\n\n 2025202420252024\n\nWeighted–average fair value of options granted$8.49 $6.43 $7.83 $5.89 \n\nWeighted-average assumptions used:\n\nExpected volatility31.61 %28.98 %31.38 %28.66 %\n\nRisk–free interest rate3.71 %4.14 %3.73 %3.74 %\n\nExpected dividend yield2.99 %3.42 %3.19 %3.49 %\n\nExpected life (in years)4.314.324.334.31\n\nForfeiture rate (based on historical rates)7 %7 %7 %7 %\n\nAverage exercise share price$30.99 $29.97 $30.96 $28.75 \n\nLong-Term Incentive Plans\n\nWe incentivize certain eligible employees, in part, with long-term compensation pursuant to our LTIP. The LTIP is a rolling three-year program that grants eligible employees a certain number of target Performance Share Units (PSUs) and/or Restricted Share Units (RSUs). Target PSUs become vested upon the achievement of certain financial and/or operational performance criteria (the Performance Conditions) that are determined at the time of the grant. The Performance Conditions for vesting of the outstanding PSUs are based on market conditions or performance-based revenue conditions. RSUs are employee service-based awards and vest subject to an eligible employee’s continued employment throughout the applicable vesting period.\n\nPSUs and RSUs granted under the LTIP have been measured at fair value as of the effective date, consistent with ASC Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan. We estimate the fair value of PSUs with market-based conditions using the Monte Carlo pricing model and RSUs have been valued based upon their grant date fair value. Beginning in Fiscal 2023, certain PSU and RSU grants were eligible to receive dividend equivalent units that vest under the same conditions as the underlying grants.\n\nPerformance Share Units (Issued Under LTIP)\n\nPSUs (issued under the LTIP) vest after three years from the respective date of grants and upon the achievement of Performance Conditions determined at the time of the grant.\n\nA summary of activity under our PSUs issued under the LTIP for the six months ended December 31, 2025 is as follows:\n\nUnitsWeighted-Average\nGrant Date Fair Value\nWeighted-\n\nAverage\n\nRemaining\n\nContractual \n\nTerm\n\n(years)\n\nAggregate \n\nIntrinsic Value\n\n($’000's)\n\nOutstanding at June 30, 2025\n1,972,941 $49.87 1.52$51,956 \n\nGranted (1)\n979,851 49.66 \n\nVested (1)\n(325,768)51.19 \n\nForfeited or expired(773,706)47.19 \n\nOutstanding at December 31, 2025\n1,853,318 $50.65 2.20$60,381 \n\n______________________\n\n(1)PSUs are earned based on market or performance conditions and the actual number of PSUs earned, if any, is dependent upon performance and may range from 0 to 200 percent.\n\n26\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nFor the periods indicated, the weighted-average fair value of market-based PSUs issued under the LTIP, and weighted-average assumptions estimated under the Monte Carlo pricing model were as follows:\n\n Six Months Ended December 31,\n\n 20252024\n\nWeighted–average fair value of performance share units granted$50.18 $47.96 \n\nWeighted-average assumptions used:\n\nExpected volatility\n32.40%\n\n30.26%\n\nRisk–free interest rate\n3.66%\n\n3.67%\n\nExpected dividend yield— %— %\n\nExpected life (in years)3.093.11\n\nRestricted Share Units (Issued Under LTIP)\n\nBeginning in Fiscal 2025, grants of RSUs (issued under the LTIP) vest on a straight-line basis over three years from the respective date of grants. Grants of RSUs (issued under the LTIP) prior to Fiscal 2025 vest after three years from the respective date of grants.\n\nA summary of activity under our RSUs issued under the LTIP for the six months ended December 31, 2025 is as follows:\n\nUnitsWeighted-Average\nGrant Date Fair ValueWeighted-\nAverage\nRemaining\nContractual \nTerm\n(years)Aggregate \nIntrinsic Value\n($’000's)\n\nOutstanding at June 30, 2025\n1,272,015 $33.11 1.70$37,143 \n\nGranted793,715 30.12 \n\nVested(499,783)34.42 \n\nForfeited or expired(241,690)30.22 \n\nOutstanding at December 31, 2025\n1,324,257 $31.35 2.26$43,144 \n\nRestricted Share Units (Other)\n\nIn addition to the grants made in connection with the LTIP discussed above, from time to time, we may grant RSUs to certain employees in accordance with employment and other non-LTIP related agreements. RSUs (other) vest over a specified contract date, typically two to four years from the respective date of grants.\n\nA summary of activity under our RSUs (other) issued for the six months ended December 31, 2025 is as follows:\n\nUnitsWeighted-Average\nGrant Date Fair Value\nWeighted-\n\nAverage\n\nRemaining\n\nContractual \n\nTerm\n\n(years)\n\nAggregate \n\nIntrinsic Value\n\n($’000's)\n\nOutstanding at June 30, 2025\n2,639,883 $33.11 2.00$77,084 \n\nGranted768,888 35.98 \n\nVested(1,237,728)33.82 \n\nForfeited or expired(63,812)33.94 \n\nOutstanding at December 31, 2025\n2,107,231 $33.71 2.36$68,654 \n\nDeferred Share Units (DSUs)\n\nThe DSUs are granted to certain non-employee directors. DSUs are issued under our Deferred Share Unit Plan. DSUs granted as compensation for director fees vest immediately, whereas all other DSUs granted vest at our next annual general meeting following the granting of the DSUs. No DSUs are payable by us until the director ceases to be a member of the Board.\n\n27\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nA summary of activity under our DSUs issued for the six months ended December 31, 2025 is as follows:\n\nUnitsWeighted-Average\nPrice\nWeighted-\n\nAverage\n\nRemaining\n\nContractual \n\nTerm\n\n(years)\n\nAggregate \n\nIntrinsic Value\n\n($’000's)\n\nOutstanding at June 30, 2025 (1)\n903,970 $31.04 0.34$26,415 \n\nGranted 90,564 33.60 \n\nOutstanding at December 31, 2025 (2)\n994,534 $31.27 0.93$33,273 \n\n______________________\n\n(1)    Includes 62,177 unvested DSUs.\n\n(2)    Includes 66,419 unvested DSUs.\n\nNOTE 12—GUARANTEES AND CONTINGENCIES\n\nWe have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows:\n\n Payments due between\n\n TotalJanuary 1, 2026 - June 30, 2026July 1, 2026 - June 30, 2028July 1, 2028 - June 30, 2030July 1, 2030 and beyond\n\nLong-term debt obligations (1)\n$7,645,094 $179,914 $2,582,388 $4,192,573 $690,219 \n\nPurchase obligations for contracts not accounted for as lease obligations (2)\n231,465 129,386 102,079 — — \n\nTotal\n$7,876,559 $309,300 $2,684,467 $4,192,573 $690,219 \n\n______________________\n\n(1)Includes interest up to maturity and principal payments. See Note 9 “Long-Term Debt” for more details.\n\n(2)For more details on contractual obligations relating to leases and purchase obligations accounted for under ASC Topic 842, see Note 4 “Leases.”\n\nGuarantees and Indemnifications\n\nWe have entered into customer agreements which may include provisions to indemnify our customers against third-party claims that our software products or services infringe certain third-party intellectual property rights and for liabilities related to a breach of our confidentiality obligations. We have not made any material payments in relation to such indemnification provisions and have not accrued any liabilities related to these indemnification provisions in our Condensed Consolidated Financial Statements.\n\nOccasionally, we enter into financial guarantees with third parties in the ordinary course of our business, including, among others, guarantees relating to taxes and letters of credit on behalf of parties with whom we conduct business. Such agreements have not had a material effect on our results of operations, financial position or cash flows.\n\nLitigation\n\nWe are currently involved in various claims and legal proceedings.\n\nQuarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20 “Loss Contingencies” (Topic 450-20). Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances.\n\nIf the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with Topic 450-20. As of the date of this Quarterly Report on Form 10-Q, the aggregate of such accrued liabilities was not material to our consolidated financial position or results of operations and we do not believe as of the date of this filing that it is reasonably possible that a loss exceeding the amounts already recognized will be incurred that would be material to our consolidated financial position or results of operations. As described more fully below, we are unable at this time to estimate a possible loss or range of losses in respect of certain disclosed matters.\n\n28\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nContingencies\n\nCRA Matter\n\nAs 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 December 31, 2025, in connection with the CRA’s reassessments for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, to be limited to penalties, interest and provincial taxes that may be due of approximately $88.0 million. As of December 31, 2025, we have provisionally paid approximately $32.0 million in order to fully preserve our rights to object to the CRA’s audit positions, being the minimum payment required under Canadian legislation while the matter is in dispute. This amount is recorded within Long-term income taxes recoverable on the Condensed Consolidated Balance Sheets as of December 31, 2025.\n\nThe notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 would, as drafted, increase our taxable income by approximately $90 million to $100 million for each of those years, as well as impose a 10% penalty on the proposed adjustment to income. Audits by the CRA of our tax returns for fiscal years prior to Fiscal 2012 have been completed with no reassessment of our income tax liability.\n\nWe strongly disagree with the CRA’s positions and believe the reassessments of Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 (including any penalties) are without merit, and we are continuing to contest these reassessments. On June 30, 2022, we filed a notice of appeal with the Tax Court of Canada seeking to reverse all such reassessments (including penalties) in full and the customary court process is ongoing.\n\nEven 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.\n\nThe CRA has audited Fiscal 2017, Fiscal 2018, Fiscal 2019 and Fiscal 2020 on a basis that we strongly disagree with and are contesting. The focus of the CRA audit has been the valuation of certain intellectual property and goodwill when one of our subsidiaries continued into Canada from Luxembourg in July 2016. In accordance with applicable rules, these assets were recognized for tax purposes at fair market value as of that time, which value was supported by an expert valuation prepared by an independent leading accounting and advisory firm. CRA’s position for Fiscal 2017 through Fiscal 2020 relies in significant part on the application of its positions regarding our transfer pricing methodology that are the basis for its reassessment of our fiscal years 2012 to 2016 described above, and that we believe are without merit. Other aspects of CRA’s position for Fiscal 2017 through Fiscal 2020 conflict with the expert valuation prepared by the independent leading accounting and advisory firm that was used to support our original filing position. The CRA issued notices of reassessment in respect of Fiscal 2017 through 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. Any such income tax expense could also have a corresponding cash tax impact that would primarily occur over a period of several future years based upon annual income realization in Canada. We strongly disagree with the CRA’s position for Fiscal 2017 through Fiscal 2020 and intend to vigorously defend our original filing position. We are not required to provisionally pay any cash amounts to the CRA as a result of the reassessment in respect of Fiscal 2017 through Fiscal 2019 due to utilization of available tax attributes; however, for Fiscal 2020 and, to the extent the CRA reassesses subsequent fiscal years on a similar basis, we may make certain minimum payments required under Canadian legislation.\n\nWe will continue to vigorously contest the adjustments to our taxable income and any penalty and interest assessments, as well as any reduction to the basis of our depreciable property. We are confident that our original tax filing positions were appropriate. Accordingly, as of the date of this Quarterly Report on Form 10-Q, we have not recorded any accruals in respect of these reassessments or proposed reassessment in our Condensed Consolidated Financial Statements.\n\nNOTE 13—INCOME TAXES\n\nThe Company’s effective tax rate for the six months ended December 31, 2025 was 21.6%. The Company’s effective tax rate differs from the Canadian federal and provincial statutory rate of 26.5% primarily due to tax benefits related to a net decrease in unrecognized tax benefits and research and development credits.\n\nThe Company’s effective tax rate for the six months ended December 31, 2024 was 14.4%. The Company’s effective tax rate differs from the Canadian federal and provincial statutory rate of 26.5% primarily due to tax benefits related to a net decrease in unrecognized tax benefits, research and development credits and a change in valuation allowance.\n\n29\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nOn July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S., 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 changes had an immaterial impact to the Company’s effective tax rate for the three and six months ended December 31, 2025.\n\nAs of December 31, 2025, the gross amount of unrecognized tax benefits accrued was $126.9 million (June 30, 2025 — $139.8 million), which is inclusive of interest and penalties accrued of $13.5 million (June 30, 2025 — $16.8 million). We believe that it is reasonably possible that the gross unrecognized tax benefits could decrease by $30.8 million in the next 12 months, relating primarily to the expiration of competent authority relief and tax years becoming statute barred for purposes of future tax examinations by local taxing jurisdictions.\n\nNOTE 14—FAIR VALUE MEASUREMENT\n\nASC Topic 820 “Fair Value Measurement” (Topic 820) defines fair value, establishes a framework for measuring fair value, and addresses disclosure requirements for fair value measurements. Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value, in this context, should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including our own credit risk.\n\nIn addition to defining fair value and addressing disclosure requirements, Topic 820 establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: \n\n•Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.\n\n•Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.\n\n•Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques.\n\nFinancial Assets and Liabilities Measured at Fair Value\n\nOur cash and cash equivalents, along with our accounts receivable and accounts payable and accrued liabilities balances, are measured and recognized in our Condensed Consolidated Financial Statements at an amount that approximates the fair value (a Level 2 measurement) due to their short maturities. The carrying value of our other long-term debt facilities approximates the fair value since the interest rate is at market. See Note 9 “Long-Term Debt” for further details.\n\n30\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nThe following table summarizes the fair value of the Company’s financial instruments as of December 31, 2025 and June 30, 2025:\n\nFair Value\n\nFair Value HierarchyDecember 31, 2025June 30, 2025\n\nAssets:\n\nAvailable-for-sale financial assets (Note 7)\nLevel 2$18,353 $17,721 \n\nAvailable-for-sale financial assets (Note 7)\nLevel 328,422 27,353 \n\nDerivative asset (Note 15)\nLevel 2779 2,984 \n\nLiabilities:\n\nDerivative liability (Note 15)\nLevel 2$(248,597)$(275,810)\n\nSenior Notes (Note 9) (1)\nLevel 2(4,200,445)(4,158,921)\n\n______________________\n\n(1)Senior Notes are presented within the Condensed Consolidated Balance Sheets at amortized cost. See Note 9 “Long-Term Debt” for further details.\n\nChanges in Level 3 Fair Value Measurements\n\nThe following table provides a reconciliation of changes in the fair value of our Level 3 available-for-sale financial assets between June 30, 2025 and December 31, 2025.\n\nAvailable-for-sale\nfinancial assets\n\nBalance as of June 30, 2025\n$27,353 \n\nGain recognized in income1,069 \n\nBalance as of December 31, 2025\n$28,422 \n\nOur derivative liabilities and our derivative assets are classified as Level 2 and are comprised of swap contracts. Our valuation techniques used to measure the fair values of the derivative instruments, the counterparties to which have high credit ratings, were derived from pricing models including discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data, as no quoted market prices exist for these instruments. Our discounted cash flow techniques use observable market inputs, such as, where applicable, foreign currency spot and forward rates.\n\nOur available-for-sale financial assets are classified as either Level 2 or Level 3. Our Level 2 available-for-sale financial assets are comprised primarily of various debt and equity funds, which are valued utilizing market quotes provided by our third-party custodian. Our Level 3 available-for-sale financial assets are comprised of insurance contracts which are valued by an external insurance expert by applying a discount rate to the future cash flows and taking into account the fixed interest rate, mortality rates and term of the insurance contracts. See Note 7 “Prepaid Expenses and Other Assets” for further details.\n\nIf applicable, we will recognize transfers between levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the three and six months ended December 31, 2025 and 2024, respectively, we did not have any transfers between Level 1, Level 2 or Level 3.\n\nAssets and Liabilities Measured at Fair Value on a Nonrecurring Basis\n\nWe measure certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the three and six months ended December 31, 2025 and 2024, respectively, no indications of impairments were identified and therefore no fair value measurements were required.\n\n31\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 15—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES\n\nCross Currency Swaps\n\nIn connection with the Micro Focus Acquisition, in August 2022, we entered into EUR/USD cross currency swaps, which are comprised of 5-year EUR/USD cross currency swaps with a notional amount of €690 million and 7-year EUR/USD cross currency swaps with a notional amount of €690 million. In January 2025, we terminated certain of our outstanding 5-year EUR/USD cross currency swaps with an aggregate notional amount of €138 million and made a termination payment of approximately $10.4 million. The 5-year EUR/USD cross currency swaps are non-designated and are measured at fair value with changes to fair value being recognized in the Condensed Consolidated Statements of Income within Other income (expense), net.\n\nNet Investment Hedge\n\nIn connection with the closing of the Micro Focus Acquisition, we designated the €690 million of 7-year EUR/USD cross currency swaps as net investment hedges in accordance with “Derivatives and Hedging” (Topic 815). The Company utilizes the designated cross currency swaps to protect our EUR-denominated operations against exchange rate fluctuations.\n\nThe Company assesses the hedge effectiveness of its net investment hedges on a quarterly basis utilizing a method based on the changes in spot price. As such, for derivative instruments designated as net investment hedges, changes in fair value of the designated hedging instruments attributable to fluctuations in the foreign currency spot exchange rates are initially recorded as a component of currency translation adjustments included within Condensed Consolidated Statements of Comprehensive Income until the hedged foreign operations are either sold or substantially liquidated.\n\nIn accordance with Topic 815 certain components of the designated cross currency swaps relating to counterparty credit risk and forward exchange rates were excluded from the above effectiveness assessment. The fair value of these excluded components will be amortized over the life of the hedging instruments within Interest and other related expense, net within the Condensed Consolidated Statements of Income. Additionally, we will record the cash flows related to the periodic interest settlements on the 7-year EUR/USD cross currency swaps within the investing activities section of the Condensed Consolidated Statements of Cash Flows. Any gains or losses recognized upon settlement of the cross currency swaps will be recorded within the investing activities section of the Condensed Consolidated Statements of Cash Flows.\n\nCash Flow Hedge\n\nWe are engaged in hedging programs with various banks to limit the potential foreign exchange fluctuations incurred on future cash flows relating to a portion of our Canadian dollar payroll expenses. We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of our business, in particular to changes in the Canadian dollar on account of large costs that are incurred from our centralized Canadian operations, which are denominated in Canadian dollars. As part of our risk management strategy, we use foreign currency forward contracts to hedge portions of our payroll exposure with typical maturities of between one and twelve months. We do not use foreign currency forward contracts for speculative purposes.\n\nWe have designated these transactions as cash flow hedges of forecasted transactions under Topic 815. As the critical terms of the hedging instrument and of the entire hedged forecasted transaction are the same, in accordance with Topic 815, we have been able to conclude that changes in fair value or cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, quarterly unrealized gains or losses on the effective portion of these forward contracts have been included within Other comprehensive income (loss), net within the Condensed Consolidated Statements of Comprehensive Income. As of December 31, 2025, the fair value of the contracts is recorded within Prepaid expenses and other current assets within the Condensed Consolidated Balance Sheets and represents the net gain before tax effect that is expected to be reclassified from accumulated other comprehensive income (loss) into earnings within the next twelve months.\n\nAs of December 31, 2025, the notional amount of forward contracts we held to sell U.S. dollars in exchange for Canadian dollars was $94.2 million (June 30, 2025—$93.5 million).\n\n32\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nFair Value of Derivative Instruments and Effect of Derivative Instruments on Financial Performance\n\nThe fair values of outstanding derivative instruments are as follows:\n\nAs of\nDecember 31, 2025As of\nJune 30, 2025\n\nInstrumentBalance Sheet LocationAssetLiabilityAssetLiability\n\nDerivatives designated as hedges:\n\nCash flow hedgePrepaid expenses and other current assets$607 $— $2,068 $— \n\nNet investment hedge\nPrepaid expenses and other current assets (Accounts payable and accrued liabilities)\n— (144,841)124 (161,304)\n\nTotal derivatives designated as hedges\n607 (144,841)2,192 (161,304)\n\nDerivatives not designated as hedges:\n\nCross currency swap contracts\nPrepaid expenses and other current assets (Accounts payable and accrued liabilities)\n172 (103,756)792 (114,506)\n\nTotal derivatives not designated as hedges\n172 (103,756)792 (114,506)\n\nTotal derivatives$779 $(248,597)$2,984 $(275,810)\n\nThe effects of gains (losses) from derivative instruments on our Condensed Consolidated Statements of Income is as follows:\n\nThree Months Ended\nDecember 31,Six Months Ended\nDecember 31,\n\nInstrumentIncome Statement Location2025202420252024\n\nDerivatives designated as hedges:\n\nCash flow hedgeOperating expenses$(61)$(1,374)$92 $(1,730)\n\nNet investment hedgeInterest and other related expense, net113 1,119 237 1,846 \n\nDerivatives not designated as hedges:\n\nCross currency swap contractsOther income (expense), net2,906 45,549 10,749 20,614 \n\nCross currency swap contractsInterest and other related expense, net128 1,031 264 1,712 \n\nTotal$3,086 $46,325 $11,342 $22,442 \n\nThe effects of the cash flow and net investment hedges on our Condensed Consolidated Statements of Comprehensive Income:\n\nCondensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income Location\nThree Months Ended\nDecember 31,Six Months Ended\nDecember 31,\n\n2025202420252024\n\nGain (loss) recognized in OCI (loss) on cash flow hedge (effective portion)Unrealized gain (loss) on cash flow hedge$909 $(5,698)$(1,370)$(4,808)\n\nGain (loss) recognized in OCI (loss) on net investment hedge (effective portion)Net foreign currency translation adjustment$5,767 $42,553 $17,210 $16,476 \n\nGain (loss) reclassified from AOCI into income (effective portion) - cash flow hedgeOperating expenses$(61)$(1,374)$92 $(1,730)\n\nGain (loss) reclassified from AOCI into income (excluded from effectiveness testing) - net investment hedgeInterest and other related expense, net$561 $561 $1,122 $1,122 \n\n33\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 16—SPECIAL CHARGES (RECOVERIES)\n\nSpecial charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition and divestiture-related costs and other similar charges. \n\nThree Months Ended December 31,Six Months Ended December 31,\n\n2025202420252024\n\nBusiness Optimization Plan\n$14,248 $12,347 $26,517 $54,850 \n\nOther historical restructuring plans1,098 71 508 (1,849)\n\nDivestiture-related costs\n3,079 49 4,020 4,209 \n\nAcquisition-related costs— (44)12 692 \n\nOther charges\n1,693 2,815 9,200 4,472 \n\nTotal$20,118 $15,238 $40,257 $62,374 \n\nBusiness Optimization Plan\n\nDuring the first quarter of Fiscal 2025, we made a strategic decision to align the Company’s workforce to support its growth and innovation plans (the Business Optimization Plan). The Business Optimization Plan charges relate to facility costs and workforce reductions. During the fourth quarter of Fiscal 2025, the Board approved an expansion of the Business Optimization Plan to complete strategic initiatives, integration and simplification following the Micro Focus Acquisition, the divestiture of our Application Modernization and Connectivity (AMC) business (the AMC Divestiture) to Rocket Software Inc. (Rocket Software) and other growth and innovation plans including the deployment of AI and automation. This expansion includes costs associated with workforce reduction due to automation, centralization and simplification, and corresponding facility costs related to a reduction of our real estate footprint globally. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate.\n\nAs of December 31, 2025, we expect total costs to be incurred in connection with the Business Optimization Plan to be approximately $260.0 million, of which $154.4 million has been recorded to date. For the three and six months ended December 31, 2025, $14.2 million and $26.5 million, respectively, have been recorded within Special charges (recoveries) within the Condensed Consolidated Statements of Income. The entire Business Optimization Plan is expected to be substantially completed by the second quarter of Fiscal 2027.\n\nA reconciliation of the beginning and ending restructuring liability for the Business Optimization Plan, which is included within Accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets, for the six months ended December 31, 2025 is shown below.\n\nBusiness Optimization Plan\nWorkforce reductionFacility chargesTotal\n\nBalance payable as of June 30, 2025\n$48,283 $2,846 $51,129 \n\nAccruals and adjustments15,732 5,356 21,088 \n\nCash payments(45,960)(599)(46,559)\n\nForeign exchange and other non-cash adjustments820 (1,403)(583)\n\nBalance payable as of December 31, 2025\n$18,875 $6,200 $25,075 \n\nDivestiture-related costs\n\nDivestiture-related costs, recorded within Special charges (recoveries), include direct costs of potential and completed divestitures.\n\nAcquisition-related costs\n\nAcquisition-related costs, recorded within Special charges (recoveries), include direct costs of potential and completed acquisitions.\n\n34\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nOther charges (recoveries)\n\nFor the three and six months ended December 31, 2025, Other charges (recoveries) include $1.7 million and $9.2 million, respectively, of expenses related to severance and other miscellaneous charges.\n\nFor the three and six months ended December 31, 2024, Other charges include $2.8 million and $4.4 million, respectively, of other miscellaneous charges, primarily related to the Micro Focus Acquisition.\n\nNOTE 17—ACQUISITIONS AND DIVESTITURES\n\nDivestiture of eDOCS Business\n\nOn October 2, 2025, the Company entered into an agreement to divest an on-premise solutions (eDOCS), as a part of its Analytics product category, to NetDocuments Software, Inc. (NetDocuments), for $163.0 million in cash before taxes, fees and other adjustments. The transaction was completed on January 12, 2026. Refer to Note 24 “Subsequent Events” for more details.\n\nAs of December 31, 2025, the Company determined that the assets and liabilities of the eDOCS business met the criteria for held for sale classification and the respective assets and liabilities have been reclassified to Assets held for sale and Liabilities held for sale reported in our Condensed Consolidated Balance Sheets. The Company has determined that the eDOCS business does not constitute as a component, as its operations and cash flows cannot be clearly distinguished from the rest of the Company’s operations and cash flows due to significant shared costs, therefore, the transaction does not meet the discontinued operations criteria, and the results of operations from the eDOCS business are presented within Income from operations in our Condensed Consolidated Statements of Income. The sale proceeds less costs to sell exceeded the carrying value of the net assets for the eDOCS business. The carrying value is subject to change based on developments leading up to the closing date.\n\nThe following are classified as held for sale in the Condensed Consolidated Balance Sheets, which are related to the divestiture of our eDOCS business. The following balances incorporate the use of management estimates and are subject to the changes based on developments leading up to the closing date of the transaction.\n\nAs of December 31, 2025\n\nAssets held for sale\n\nAccounts receivable trade, net of allowance for credit losses$1,653 \n\nPrepaid expenses and other current assets21 \n\nGoodwill92,190 \n\nLong-term deferred tax assets\n17,735 \n\nTotal Assets held for sale$111,599 \n\nLiabilities held for sale\n\nAccounts payable and accrued liabilities$849 \n\nDeferred revenues11,838 \n\nPension liability, net105 \n\nLong-term deferred revenues227 \n\nTotal Liabilities held for sale\n$13,019 \n\nBeginning in Fiscal 2026, the Company presents deferred tax assets and liabilities associated with transactions structured as share sales within Assets held for sale or Liabilities held for sale.\n\nDivestiture of AMC Business\n\nOn May 1, 2024, the Company completed the AMC Divestiture. In connection with the AMC Divestiture, the Company entered into a transition services agreement (TSA) with Rocket Software, for which transition service costs were reimbursable by Rocket Software. For the three and six months ended December 31, 2024, the Company billed Rocket Software $12.7 million and $27.2 million, respectively, under the TSA. All transition services pursuant to the TSA were completed as of June 30, 2025.\n\nNOTE 18—SEGMENT INFORMATION\n\nASC Topic 280, “Segment Reporting” (Topic 280), establishes standards for reporting, by public business enterprises, information about operating segments, products and services, geographic areas and major customers. The method of\n\n35\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\ndetermining what information, under Topic 280, to report is based on the way that an entity organizes operating segments for making operational decisions and how the entity’s management and the chief operating decision maker (CODM) assess an entity’s financial performance.\n\nThe Company’s CODM is its Interim Chief Executive Officer. Our operations are analyzed by the CODM as being part of a single industry segment: the design, development, marketing and sale of Information Management software and solutions. As such, segment revenues and significant segment expenses are as presented in the Condensed Consolidated Statements of Income. The CODM uses Net income attributable to OpenText and Adjusted EBITDA (as defined below), a non-GAAP measure, on a consolidated Company basis to evaluate and measure financial performance and to make key decisions, including those that involve the preparation of financial projections, strategic decisions and allocation of resources. 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).\n\nThe following tables present Total revenue, significant segment expenses and Adjusted EBITDA for the periods presented:\n\n Three Months Ended December 31,Six Months Ended December 31,\n\n 2025202420252024\n\nTotal revenues$1,326,736 $1,334,500 $2,614,871 $2,603,505 \n\nAdjusted cost of revenues (1)\n296,826 304,113 599,940 610,674 \n\nAdjusted gross profit (1)\n1,029,910 1,030,387 2,014,931 1,992,831 \n\nLess:\n\nAdjusted Research and development (2)\n153,470 173,071 318,989 355,597 \n\nAdjusted Sales and marketing (2)\n280,158 262,706 530,317 499,273 \n\nAdjusted General and administrative (2)\n105,061 93,082 206,949 192,578 \n\nAdd:\n\nNet (income) attributable to non-controlling interests\n(35)(44)(79)(98)\n\nAdjusted EBITDA\n491,186 501,484 958,597 945,285 \n\nLess:\n\nReconciling items (3)\n323,095 271,622 643,890 631,055 \n\nNet income attributable to OpenText$168,091 $229,862 $314,707 $314,230 \n\n______________________\n\n(1)Total Adjusted cost of revenues excludes Amortization of acquired technology-based intangible assets and share-based compensation expense, which are costs that are excluded from the CODM’s evaluation of segment performance.\n\n(2)Adjusted operating expenses exclude share-based compensation expense, which are costs that are excluded from the CODM’s evaluation of segment performance.\n\n(3)The following adjustments are made to reconcile Adjusted EBITDA to Net income attributable to OpenText:\n\n Three Months Ended December 31,Six Months Ended\nDecember 31,\n\n 2025202420252024\n\nProvision for (recovery of) income taxes$47,334 $50,893 $86,533 $52,776 \n\nInterest and other related expense, net79,227 83,615 160,341 167,897 \n\nAmortization of acquired technology-based intangible assets44,204 47,203 88,408 94,447 \n\nAmortization of acquired customer-based intangible assets78,645 81,048 158,206 162,552 \n\nDepreciation35,267 31,879 71,188 64,050 \n\nShare-based compensation21,232 30,361 38,913 59,919 \n\nSpecial charges (recoveries)\n20,118 15,238 40,257 62,374 \n\nOther (income) expense, net(2,932)(68,615)44 (32,960)\n\nTotal reconciling items$323,095 $271,622 $643,890 $631,055 \n\n36\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 19—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)\n\nThree Months Ended December 31, 2025\n\nForeign Currency Translation Adjustments (1)\nCash Flow HedgesAvailable-for-Sale Financial AssetsDefined Benefit Pension PlansAccumulated Other Comprehensive Income (Loss)\n\nBalance as of September 30, 2025\n$(41,131)$(267)$918 $(6,031)$(46,511)\n\nOther comprehensive income (loss) before reclassifications, net of tax6,843 668 510 — 8,021 \n\nAmounts reclassified into net income, net of tax— 45 — 13 58 \n\nTotal other comprehensive income (loss), net for the period\n6,843 713 510 13 8,079 \n\nBalance as of December 31, 2025\n$(34,288)$446 $1,428 $(6,018)$(38,432)\n\nSix Months Ended December 31, 2025\n\nForeign Currency Translation Adjustments (1)\nCash Flow Hedges\nAvailable-for-Sale Financial Assets\nDefined Benefit Pension PlansAccumulated Other Comprehensive Income (Loss)\n\nBalance as of June 30, 2025\n$(63,308)$1,520 $757 $(6,036)$(67,067)\n\nOther comprehensive income (loss) before reclassifications, net of tax29,020 (1,007)671 — 28,684 \n\nAmounts reclassified into net income, net of tax— (67)— 18 (49)\n\nTotal other comprehensive income (loss), net for the period\n29,020 (1,074)671 18 28,635 \n\nBalance as of December 31, 2025\n$(34,288)$446 $1,428 $(6,018)$(38,432)\n\n______________________\n\n(1)The amount of foreign currency translation recognized in other comprehensive income during the three and six months ended December 31, 2025 included net gains (losses) relating to our net investment hedge of $5.8 million and $17.2 million, respectively, as further discussed in Note 15 “Derivative Instruments and Hedging Activities.”\n\nThree Months Ended December 31, 2024\n\nForeign Currency Translation Adjustments (1)\nCash Flow HedgesAvailable-for-Sale InvestmentsDefined Benefit Pension PlansAccumulated Other Comprehensive Income (Loss)\n\nBalance as of September 30, 2024\n$(64,950)$308 $(126)$(9,688)$(74,456)\n\nOther comprehensive income (loss) before reclassifications, net of tax1,167 (4,188)436 — (2,585)\n\nAmounts reclassified into net income, net of tax— 1,010 — 252 1,262 \n\nTotal other comprehensive income (loss), net for the period1,167 (3,178)436 252 (1,323)\n\nBalance as of December 31, 2024\n$(63,783)$(2,870)$310 $(9,436)$(75,779)\n\n37\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nSix Months Ended December 31, 2024\n\nForeign Currency Translation Adjustments (1)\nCash Flow HedgesAvailable-for-Sale InvestmentsDefined Benefit Pension PlansAccumulated Other Comprehensive Income (Loss)\n\nBalance as of June 30, 2024\n$(59,760)$(608)$(374)$(8,877)$(69,619)\n\nOther comprehensive income (loss) before reclassifications, net of tax(4,023)(3,534)684 (1,045)(7,918)\n\nAmounts reclassified into net income, net of tax— 1,272 — 486 1,758 \n\nTotal other comprehensive income (loss), net for the period(4,023)(2,262)684 (559)(6,160)\n\nBalance as of December 31, 2024\n$(63,783)$(2,870)$310 $(9,436)$(75,779)\n\n______________________\n\n(1)The amount of foreign currency translation recognized in other comprehensive income during the three and six months ended December 31, 2024 included net gains (losses) relating to our net investment hedge of $42.6 million and $16.5 million, respectively, as further discussed in Note 15 “Derivative Instruments and Hedging Activities.”\n\nNOTE 20—SUPPLEMENTAL CASH FLOW DISCLOSURES\n\n Six Months Ended December 31,\n\n20252024\n\nCash paid during the period for interest$167,539 $183,698 \n\nCash received during the period for interest21,141 24,563 \n\nCash paid during the period for income taxes 158,756 299,404 \n\nNOTE 21—OTHER INCOME (EXPENSE), NET\n\nThree Months Ended December 31,Six Months Ended December 31,\n\n2025202420252024\n\nForeign exchange gains (losses)\n$(6,752)$25,539 $(19,907)$14,160 \n\nUnrealized gains on derivatives\n\nnot designated as hedges (1)\n2,906 45,549 10,749 20,614 \n\nOpenText share in net income of equity investees (2)\n5,216 1,538 7,633 1,993 \n\nAdjustment to gain on AMC Divestiture (3)\n— (4,175)— (4,175)\n\nOther miscellaneous income\n1,562 164 1,481 368 \n\nTotal other income (expense), net\n$2,932 $68,615 $(44)$32,960 \n\n______________________\n\n(1)Represents the unrealized gains (losses) on our derivatives not designated as hedges (see Note 15 “Derivative Instruments and Hedging Activities” for more details).\n\n(2)Represents our share in net income (loss) of equity investees, which approximates fair value and subject to volatility based on market trends and business conditions, based on our interest in certain investment funds in which we are a limited partner. Our interests in each of these investees range from 4% to below 20% and these investments are accounted for using the equity method (see Note 7 “Prepaid Expenses and Other Assets” for more details).\n\n(3)Represents final settlement of working capital and other adjustments related to the AMC Divestiture (see Note 17 “Acquisitions and Divestitures” for more details).\n\n38\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nNOTE 22—EARNINGS PER SHARE\n\nBasic earnings per share are computed by dividing net income attributable to OpenText by the weighted average number of Common Shares outstanding during the period. Diluted earnings per share are computed by dividing net income attributable to OpenText by the shares used in the calculation of basic earnings per share plus the dilutive effect of Common Share equivalents, such as stock options, using the treasury stock method. Common Share equivalents are excluded from the computation of diluted earnings per share if their effect is anti-dilutive.\n\n Three Months Ended December 31,Six Months Ended December 31,\n\n 2025202420252024\n\nBasic earnings per share\n\nNet income attributable to OpenText$168,091 $229,862 $314,707 $314,230 \n\nBasic earnings per share attributable to OpenText$0.67 $0.87 $1.24 $1.18 \n\nDiluted earnings per share\n\nNet income attributable to OpenText$168,091 $229,862 $314,707 $314,230 \n\nDiluted earnings per share attributable to OpenText$0.66 $0.87 $1.24 $1.18 \n\nWeighted-average number of shares outstanding\n\n(in ‘000’s)\n\nBasic251,983 265,099 252,814 266,252 \n\nEffect of dilutive securities1,750 94 592 253 \n\nDiluted253,733 265,193 253,406 266,505 \n\nExcluded as anti-dilutive (1)\n5,142 11,338 6,647 10,982 \n\n______________________\n\n(1)Represents options to purchase Common Shares excluded from the calculation of diluted earnings per share because the exercise price of the stock options was greater than or equal to the average price of the Common Shares during the period.\n\nNOTE 23—RELATED PARTY TRANSACTIONS\n\nOur procedure regarding the approval of any related party transaction requires that the material facts of such transaction be reviewed by the independent members of the Audit Committee and the transaction be approved by a majority of the independent members of the Audit Committee. The Audit Committee reviews all transactions in which we are, or will be, a participant and any related party has or will have a direct or indirect interest in the transaction. In determining whether to approve a related party transaction, the Audit Committee generally takes into account, among other facts it deems appropriate, whether the transaction is on terms no less favourable than terms generally available to an unaffiliated third-party under the same or similar circumstances; the extent and nature of the related person’s interest in the transaction; the benefits to the Company of the proposed transaction; if applicable, the effects on a director’s independence; and if applicable, the availability of other sources of comparable services or products.\n\nDuring the six months ended December 31, 2025, Mr. Stephen Sadler earned immaterial consulting fees from OpenText for assistance with acquisition-related business activities. Mr. Sadler did not participate in any Board deliberations relating to matters for which he could potentially receive consulting fees. Mr. Sadler ceased to be a member of the Board as of December 9, 2025.\n\nDuring the six months ended December 31, 2025, Mr. P. Thomas Jenkins earned approximately $1.6 million in consulting fees as Chief Strategy Officer, for which such payments are approved by the Audit Committee of the Board in accordance with its policies and practices.\n\nNOTE 24—SUBSEQUENT EVENTS\n\nCash Dividends\n\nAs part of our quarterly, non-cumulative cash dividend program, we declared, on February 4, 2026, a dividend of $0.275 per Common Share. The record date for this dividend is March 6, 2026 and the payment date is March 20, 2026. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board.\n\n39\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)\n\nDivestiture of eDOCS Business\n\nOn January 12, 2026, the Company completed the previously announced divestiture of an on-premise solution, eDOCS, a part of its Analytics product category, to NetDocuments, for $163.0 million in cash before taxes, fees and other adjustments. The Company used the net proceeds from the transaction to prepay a portion of the outstanding principal balance of the Acquisition Term Loan, as further described below under “Debt Prepayment.”\n\nDebt Prepayment\n\nOn January 15, 2026, we used the proceeds from the eDOCS divestiture to prepay $163.0 million of our aggregate outstanding principal balance on the Acquisition Term Loan. Following this prepayment, the remaining balance of the Acquisition Term Loan is $2.004 billion. Refer to Note 9 “Long-Term Debt” for more information.\n\nProposed Divestiture of Vertica\n\nOn February 2, 2026, the Company reached a definitive agreement to divest Vertica, a part of its Analytics product category, to Rocket Software Inc. for $150.0 million in cash, before taxes, fees and other adjustments. The Company intends to use the proceeds from the divestiture to reduce outstanding debt. The transaction remains subject to customary approvals and closing conditions and is expected to close during fiscal year 2026.\n\n40\n\n[Table of Contents](#ia3aa1934741a4fd6b5be0892c1a28106_7)"}