Open Text shares drop as revenue outlook raises investor concerns

Open Text Corp. reported a revenue drop of 11% in its fiscal first quarter, totaling $1.27 billion. This decline raised concerns among investors, especially as the company faces a weak outlook for the second quarter, with organic revenue expected to fall by 5% to 8%. Despite these challenges, CEO Mark Barrenechea reaffirmed a target of 1% organic growth for the fiscal year. He emphasized that the company plans to recover in the second half through new product releases and an expanded sales force. Open Text also announced plans to return $570 million to shareholders through buybacks and increased dividends. The company remains profitable, with adjusted operating earnings of $444 million, but its high debt levels limit future acquisitions.