What the changes say
- Canadian tax disputes now include Fiscal 2012–2021 audits, approximately $87.4 million in potential liability, and $32 million provisionally paid.
- The company highlights growing dependence on third-party cloud infrastructure and risks from expanding in-office requirements across a mixed workforce.
- Strategy now centers on data management for AI-enabled applications, while restructuring includes a Fiscal 2026 enterprise assessment.
- GDPR transfer restrictions create added uncertainty and potential costs for moving personal data to the U.S., Canada, and other third countries.
What changed since the prior 10-K
New
- NewRisks Related to our Business and Industry
Other companies may claim that we infringe their intellectual property, which could materially increase costs and materially harm our ability to generate future revenues and profits
Third parties, including counterparties in OpenText patent litigation, may claim infringement involving proprietary, third-party, or open-source software and force licensing or litigation costs.
- NewRisks Related to our Business and Industry
Our use of a mixed workforce model, including remote, hybrid and in-office employees, and changes to our in-office requirements, subject us to operational challenges and risks, including risks to employee retention and morale
Managing remote, hybrid, and increasingly in-office employees may reduce productivity, morale, retention, and cybersecurity protections across OpenText’s global operations.
- NewRisks Related to Laws and Regulatory Compliance
As part of the ongoing audit of our Canadian tax returns by the CRA, we have received notices of, and are appealing, reassessments for Fiscal 2012 through Fiscal 2021. An adverse outcome of these ongoing audits could have a material adverse effect on our financial position and results of operations
CRA transfer-pricing reassessments for Fiscal 2012–2016 could create approximately $87.4 million of penalties, interest, and provincial taxes; OpenText has paid about $32 million provisionally.
- NewRisks Related to Laws and Regulatory Compliance
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
CRA audits for Fiscal 2017–2021 challenge the valuation of intellectual property and goodwill transferred when a subsidiary continued into Canada from Luxembourg.
- NewRisks Related to Laws and Regulatory Compliance
liabilities and damage to our reputation in the event of an actual or perceived violation of the GDPR, such a violation may have a material adverse effect on our business and operations
GDPR restrictions and uncertainty around transferring personal data from the EEA and UK to third countries may require additional safeguards and costs.
Dropped
- DroppedRisks Related to our Business and Industry
Claims of infringement (including misappropriation and/or other intellectual property violation) are common in the software industry and increasing as related legal protections, including copyrights and patents, are applied to software products
- DroppedRisks Related to our Business and Industry
individually at the time of their occurrence. Furthermore, it is possible that the risk of cyber-attacks and other data security breaches or thefts to us or our customers may increase due to global geopolitical uncertainty, in particular such as the ongoing Russia-Ukraine and Middle East conflicts
- DroppedRisks Related to our Business and Industry
We may be unable to maintain or expand our base of SMBs and consumer customers, which could adversely affect our anticipated future growth and operating results
- DroppedRisks Related to our Business and Industry
We have implemented flexible remote and hybrid work models across many of our operations. As a result, we continue to be subject to the challenges and risks of having a remote work environment, as well as operational challenges and risks from having a flexible workforce
- DroppedRisks Related to Acquisitions and Divestitures
Loss of key personnel could impair the integration of acquired businesses, lead to loss of customers and a decline in revenues, or otherwise could have an adverse effect on our operations
- DroppedRisks Related to Laws and Regulatory Compliance
For further details on certain tax matters relating to the Company see Note 14 “Guarantees and Contingencies” and Note 15 “Income Taxes” to the Consolidated Financial Statements included in this Annual Report on Form 10-K
Claims that OpenText infringes software-related intellectual property, including rights covering third-party and open-source components.
- DroppedRisks Related to Laws and Regulatory Compliance
legislation while the matter is in dispute. This amount is recorded within Long-term income taxes recoverable on the Consolidated Balance Sheets as of June 30, 2025
Reworded
- 76% rewrittenRisks Related to our Business and Industry
Our software products rely on the stability of third-party software, cloud infrastructure and platforms that, if not stable, could negatively impact the effectiveness of our products, resulting in harm to our reputation and business
The risk now covers third-party cloud infrastructure and platform providers hosting and delivering OpenText’s cloud offerings, in addition to infrastructure software.
Was: Our software products rely on the stability of infrastructure software that, if not stable, could negatively impact the effectiveness of our products, resulting in harm to our reputation and business
- 48% rewrittenRisks Related to Laws and Regulatory Compliance
Risks associated with data privacy issues, including evolving laws and regulations and associated compliance efforts, may adversely impact our business
The privacy risk is materially unchanged, with clients replacing customers; evolving EU, UK, U.S., and other privacy laws remain central.
- 47% rewrittenRisks Related to our Business and Industry
The restructuring of certain of our operations may be ineffective, may adversely affect our business and our finances, and we may incur additional restructuring charges in connection with such actions, and our enterprise assessment may not achieve its intended objectives
OpenText added a Fiscal 2026 end-to-end enterprise assessment covering go-to-market, portfolio, sales enablement, and execution, alongside multiyear savings targets.
Was: The restructuring of certain of our operations may be ineffective, may adversely affect our business and our finances, and we may incur additional restructuring charges in connection with such actions
- 45% rewrittenRisks Related to our Business and Industry
Unauthorized disclosures, cyber-attacks, breaches of data security and other information technology risks may adversely affect our operations
The wording now calls customers clients; the described information-security protections and changing legal requirements are otherwise unchanged.
- 44% rewrittenRisks Related to our Business and Industry
If our software products and services do not gain market acceptance, our operating results may be negatively affected
The strategy now emphasizes data management for enterprise AI-enabled applications rather than primarily cloud-based information management solutions.
- 42% rewrittenRisks Related to our Business and Industry
Our existing clients might cancel contracts with us, fail to renew contracts on their renewal dates and/or fail to purchase additional services and products, and we may be unable to attract new clients, which could adversely affect our operating results
The risk now omits the explicit statement that cancellations, nonrenewals, or reduced purchases could materially reduce revenue and operating results.
Was: Our existing customers might cancel contracts with us, fail to renew contracts on their renewal dates and/or fail to purchase additional services and products, and we may be unable to attract new customers, which could adversely affect our operating results
- 39% rewrittenRisks Related to our Business and Industry
Increasing corporate citizenship expectations, regulatory complexity, and disclosure obligations may negatively impact our business, financial performance, and reputation
The wording changes customers to clients and makes the U.S. legislative reference grammatically singular; the substance is unchanged.
- 38% rewrittenRisks Related to Laws and Regulatory Compliance
Our provision for income taxes and effective income tax rate may vary significantly and may adversely affect our results of operations and cash resources
No substantive change: the same tax-rate drivers remain listed, including audits, transfer pricing, tax-law changes, and jurisdictional income mix.
- 38% rewrittenRisks Related to our Business and Industry
Geopolitical instability, political unrest, war and other global conflicts, including the Russia-Ukraine and Middle East conflicts have affected and may continue to affect our business
- 35% rewrittenRisks Related to our Business and Industry
We must continue to manage our internal resources during periods of company growth, or our operating results could be adversely affected
- 31% rewrittenRisks Related to Acquisitions and Divestitures
We may fail to realize all of the anticipated benefits of our acquisitions and divestitures, or those benefits may take longer to realize than expected
- 28% rewrittenRisks Related to our Business and Industry
Current and future competitors could have a significant impact on our ability to generate future revenues and profits, including through the use of AI and other emerging technologies
Was: Current and future competitors could have a significant impact on our ability to generate future revenues and profits
- 25% rewrittenRisks Related to our Business and Industry
Risks associated with the evolving use of the Internet and AI, including changing standards, competition and regulation and associated compliance efforts, may adversely impact our business
Was: Risks associated with the evolving use of the Internet, including changing standards, competition and regulation and associated compliance efforts, may adversely impact our business
- 23% rewrittenRisks Related to our Business and Industry
Our compensation structure may hinder our efforts to attract and retain vital employees
- 20% rewrittenGeneral Risks
We may fail to achieve our financial forecasts due to inaccurate sales forecasts or other factors
All 49 risk factors
Headings as the filing states them, in filing order.
Risks Related to our Business and Industry
- 01If we do not continue to develop technologically advanced products that successfully integrate with the software products and enhancements used by our clients, future revenues and our operating results may be negatively affected
- 02Product development is a long, expensive and uncertain process, and we may terminate one or more of our development programs
- 03Our investment in our current research and development efforts may not provide a sufficient or timely return
- 04If our software products and services do not gain market acceptance, our operating results may be negatively affected44% rewritten
- 05Failure to protect our intellectual property could harm our ability to compete effectively
- 06Other companies may claim that we infringe their intellectual property, which could materially increase costs and materially harm our ability to generate future revenues and profitsNew
- 07Our software products and services may contain defects that could harm our reputation, be costly to correct, delay revenues and expose us to litigation
- 08Our software products rely on the stability of third-party software, cloud infrastructure and platforms that, if not stable, could negatively impact the effectiveness of our products, resulting in harm to our reputation and business76% rewritten
- 09Risks associated with the evolving use of the Internet and AI, including changing standards, competition and regulation and associated compliance efforts, may adversely impact our business25% rewritten
- 10Unauthorized disclosures, cyber-attacks, breaches of data security and other information technology risks may adversely affect our operations45% rewritten
- 11Business disruptions, including those arising from disasters, pandemics or catastrophic events, may adversely affect our operations
- 12Our success depends on our relationships with strategic partners, distributors and third-party service providers and any reduction in the sales efforts by distributors, cooperative efforts from our partners or service from third-party providers could materially impact our revenues
- 13The loss of licenses to resell or use third-party software or the lack of support or enhancement of such software could adversely affect our business
- 14Current and future competitors could have a significant impact on our ability to generate future revenues and profits, including through the use of AI and other emerging technologies28% rewritten
- 15The length of our sales cycle can fluctuate significantly, which could result in significant fluctuations in revenues being recognized from quarter to quarter
- 16Our existing clients might cancel contracts with us, fail to renew contracts on their renewal dates and/or fail to purchase additional services and products, and we may be unable to attract new clients, which could adversely affect our operating results42% rewritten
- 17Consolidation in the industry, particularly by large, well-capitalized companies, could place pressure on our operating margins which could, in turn, have a material adverse effect on our business
- 18Our sales to government clients expose us to business volatility and risks, including government budgeting cycles and appropriations, early termination, audits, investigations, sanctions, penalties and changes in government spending and policies
- 19Geopolitical instability, political unrest, war and other global conflicts, including the Russia-Ukraine and Middle East conflicts have affected and may continue to affect our business38% rewritten
- 20Our global operations expose us to risks associated with an evolving international trade and tariff environment, which may adversely affect our business, financial condition, and results of operations
- 21The restructuring of certain of our operations may be ineffective, may adversely affect our business and our finances, and we may incur additional restructuring charges in connection with such actions, and our enterprise assessment may not achieve its intended objectives47% rewritten
- 22We must continue to manage our internal resources during periods of company growth, or our operating results could be adversely affected35% rewritten
- 23If we lose the services of our executive officers or other key employees or if we are not able to attract or retain top employees, our business could be significantly harmed
- 24Our compensation structure may hinder our efforts to attract and retain vital employees23% rewritten
- 25Increasing corporate citizenship expectations, regulatory complexity, and disclosure obligations may negatively impact our business, financial performance, and reputation39% rewritten
- 26Our use of a mixed workforce model, including remote, hybrid and in-office employees, and changes to our in-office requirements, subject us to operational challenges and risks, including risks to employee retention and moraleNew
Risks Related to Acquisitions and Divestitures
- 27Acquisitions, investments, joint ventures and other business initiatives may negatively affect our operating results
- 28We may fail to realize all of the anticipated benefits of our acquisitions and divestitures, or those benefits may take longer to realize than expected31% rewritten
- 29We may be unable to successfully integrate acquired businesses or do so within the intended timeframes, which could have an adverse effect on our financial condition, results of operations and business prospects
- 30Businesses we acquire may have disclosure controls and procedures and internal controls over financial reporting, cybersecurity and compliance with data privacy laws that are weaker than or otherwise not in conformity with ours
Risks Related to Laws and Regulatory Compliance
- 31Our provision for income taxes and effective income tax rate may vary significantly and may adversely affect our results of operations and cash resources38% rewritten
- 32As part of the ongoing audit of our Canadian tax returns by the CRA, we have received notices of, and are appealing, reassessments for Fiscal 2012 through Fiscal 2021. An adverse outcome of these ongoing audits could have a material adverse effect on our financial position and results of operationsNew
- 33the 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 liabilityNew
- 34Risks associated with data privacy issues, including evolving laws and regulations and associated compliance efforts, may adversely impact our business48% rewritten
- 35liabilities and damage to our reputation in the event of an actual or perceived violation of the GDPR, such a violation may have a material adverse effect on our business and operationsNew
- 36Certain of our products may be perceived as, or determined by the courts to be, a violation of privacy rights and related laws. Any such perception or determination could adversely affect our revenues and results of operations
- 37AI and other machine learning technology is being integrated into some of our products, systems or solutions, which could present risks and challenges to our business, and rapid advances in AI could intensify competitive pressures, accelerate technological change and reduce demand for certain of our existing offerings
Risks Related to our Financial Condition
- 38We may not generate sufficient cash flow to satisfy our unfunded pension obligations
- 39Fluctuations in foreign currency exchange rates could materially affect our financial results
- 40Our indebtedness could limit our operations and opportunities
Risks Related to Ownership of our Common Shares
- 41Our revenues and operating results are likely to fluctuate, which could materially impact the market price of our Common Shares
- 42Changes in the market price of our Common Shares and credit ratings of our outstanding debt securities could lead to losses for shareholders and debt holders
General Risks
- 43Unexpected events may materially harm our ability to align when we incur expenses with when we recognize revenues
- 44We may fail to achieve our financial forecasts due to inaccurate sales forecasts or other factors20% rewritten
- 45Our international operations expose us to business, political and economic risks
- 46We may become involved in litigation that may materially adversely affect us
- 47The declaration, payment and amount of dividends will be made at the discretion of our Board of Directors and will depend on a number of factors
- 48Our operating results could be adversely affected by any weakening of economic conditions
- 49Stress in the global financial system may adversely affect our finances and operations
Other Open Text 10-Ks
- FY2025 10-K risk factors51 risks
Open Text faces major risks from integration challenges following acquisitions like Carbonite, Zix, and Micro Focus, ongoing tax audits by the Canada Revenue Agency, and heavy dependence on complex software development and cloud information management markets.
Filed Aug 07, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.