MeritValue

OPEN TEXT CORP

OTEXdata completeness 100%19 fiscal years on file
The thesis, from the filings

OPEN TEXT CORP earns about 2% on invested capital, and has bought back 4% of its shares over 5 years. The applicable estimate puts fair value near $15.61 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$3.39B1$3.49B2$4.48B3$5.77B3$5.17B3
Net income$310.7M4$397.1M5$150.4M6$465.1M6$435.9M6
Operating cash flow$876.1M7$981.8M8$779.2M9$967.7M9$830.6M9
Capital expenditure$63.7M10$93.1M11$123.8M12$159.3M12$143.2M12
Free cash flow (derived)$812.4M7$888.7M8$655.4M9$808.4M9$687.4M9
Total debt$7.18B13$8.44B14$17.8B15$12.8B16$12.8B16
Cash & equivalents$1.61B17$1.69B18$1.23B19$1.28B19$1.16B19
Diluted shares273.5M271.9M270.5M272.6M263.6M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$149.02
your share of equity
Profit it earned you last year
$16.53
Free cash flow it threw off
$26.07
Debt you’d be carrying
$483.82

10 shares is a claim on $149.02 of net worth that earned you $16.53 and generated $26.07 of cash last year, against $483.82 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
2% avg · 5y
FY21 3%FY22 3%FY23 -0%FY24 3%FY25 3%

It earned an average 2% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−4% shares · 5y

Share count is down 4% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 78% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$687.4M
DCF · Growth Exit 5Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$687.4M
Earnings Power Value
$15.61
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$397.1M
  • growthAssumed0.0%
Graham Number
$23.52
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-06-30 · accession 0001002638-23-000022 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-06-30 · accession 0001002638-24-000052 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-06-30 · accession 0001002638-25-000053 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-06-30 · accession 0001002638-23-000022 (NetIncomeLoss)
  5. 10-K · period ending 2022-06-30 · accession 0001002638-24-000052 (NetIncomeLoss)
  6. 10-K · period ending 2023-06-30 · accession 0001002638-25-000053 (NetIncomeLoss)
  7. 10-K · period ending 2021-06-30 · accession 0001002638-23-000022 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-06-30 · accession 0001002638-24-000052 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-06-30 · accession 0001002638-25-000053 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-06-30 · accession 0001002638-23-000022 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-06-30 · accession 0001002638-24-000052 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-06-30 · accession 0001002638-25-000053 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-06-30 · accession 0001002638-22-000029 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-06-30 · accession 0001002638-23-000022 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-06-30 · accession 0001002638-24-000052 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-06-30 · accession 0001002638-25-000053 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-06-30 · accession 0001002638-23-000022 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-06-30 · accession 0001002638-24-000052 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-06-30 · accession 0001002638-25-000053 (CashAndCashEquivalentsAtCarryingValue)