Artificial intelligence (AI) and cybersecurity are two of the fastest-growing sectors in tech today. For Canadian investors, finding a company that taps into both is a rare opportunity. That’s why OpenText (TSX:OTEX) stands out. It isn’t just Canada’s largest software company, it’s evolving into a major player in AI and cybersecurity. And if things keep moving in the right direction, it could dominate these sectors for years to come.
About OpenText
OpenText has come a long way from its origins in document management. Today, it’s a global information-management leader, serving over 100,000 customers in more than 160 countries. The AI stock provides software solutions that help businesses manage, secure and use their data more effectively. What’s changed in recent years is its push into high-growth areas like AI-driven analytics, machine learning and security platforms. These aren’t side projects, but quickly becoming the core of its business strategy.
The most recent earnings report shows OpenText is managing this transition well. In its fiscal first quarter of 2025, the AI stock delivered total revenues of US$1.27 billion, down 1.8% after adjusting for the AMC divestiture. Annual recurring revenue reached US$1.05 billion, or 83% of total revenues, highlighting the stability of its subscription base. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin was 35%, equating to roughly US$445 million of EBITDA.
More to come
OpenText is also gaining ground in the cloud. Cloud revenues came in at US$457 million, up 1.3% year over year. While that growth may seem modest, it comes amid economic uncertainty and after digesting its acquisition of Micro Focus. Integrating such a large business takes time, but OpenText is already seeing cost savings and stronger recurring revenue as a result.
One of the most exciting areas for investors is AI. In April 2025, OpenText launched its latest Cloud Editions platform with new features powered by OpenText Aviator, its in-house AI framework. This includes tools for cyber defence, customer-service automation and predictive analytics. These aren’t just ideas, but already being used by customers across banking, healthcare and logistics.
Cybersecurity is the other key pillar. Through its acquisitions of Webroot, Carbonite and ArcSight, OpenText has built a serious security portfolio. Its Security and Protection Cloud now includes endpoint defence, threat detection and data-loss prevention tools. In 2024, the AI stock joined the U.S. Joint Cyber Defense Collaborative, underscoring its role in protecting critical infrastructure. And as the company states, OpenText uses these products themselves, as “OpenText trusts OpenText.”
Considerations
Despite these growth areas, OpenText isn’t without its risks. The integration of Micro Focus remains a work in progress. Interest rates and macroeconomic pressures can also impact enterprise software budgets. And while recurring revenue is solid, investors should watch for stronger top-line growth in the quarters ahead.
That said, OpenText continues to reward shareholders. It pays an annual dividend of $1.44, which translates to a yield of about 3.6% at recent share prices. Management also returned a record US$570 million of capital to shareholders in fiscal 2025 through dividends and share repurchases. This combination of income and capital return is rare in a tech company, especially one still undergoing strategic transformation.
Bottom line
If you’re looking for an AI stock with global exposure, strong recurring revenue and long-term potential in two of tech’s hottest sectors, OpenText deserves your attention. It isn’t a speculative AI play or a trendy initial public offering. It’s a mature company that’s making smart moves into the future. As the need for secure, intelligent data solutions grows, OpenText is one Canadian name that could quietly become a global leader.
