OTEXOpen Text Corporation
Is the business good?
A genuinely good business: earnings fully cash-backed (1.2×) and margins widening.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
A balanced mix of margins, efficiency, and leverage. ROE 13% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is OTEX?
Open Text Corporation earns 9.7% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 0.69 points above what the capital costs: growth creates value
- Operating margin
- 21%
Operating margin · Software - Application median 6.4% · 12 months to Q4 2026
- Cash conversion
- 1.24×
Cash conversion · 1.03× a year ago · operating cash flow covers the operating profit after tax
- R&D as % of revenue
- 12%
R&D as % of revenue
| Year | Operating margin |
|---|---|
| FY2021 | 22% |
| FY2022 | 18% |
| FY2023 | 12% |
| FY2024 | 15% |
| FY2025 | 17% |
| FY2026 | 21% |
Details›
- Gross margin12 months to Q4 2026
- 74%
- Operating margin12 months to Q4 2026
- 21%
- Net margin12 months to Q4 2026
- 12%
- Free cash flow margin
- 16%
- R&D as % of revenue
- 12%
- Revenue, trailing twelve months
- $5.25B
- Free cash flow, trailing twelve months
- $844M
- Net income, trailing twelve months
- $643M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 9.7%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Software, Application
Ranks #12 of 96 by RyuScore