OTEX reported a net loss of US$48.7 million in its fourth quarter, down from earnings of $102.2 million last year. This was attributed to acquisition expenses. Revenue of $1.5 billion rose 66.2% year-over-year marginally beating estimates. Annual recurring revenue of $1.2 billion rose 56.4% year-over-year, and cloud revenues of $452 million were up 9.7% year-over-year. Quarterly enterprise cloud bookings rose 12.3% to $164 million. Adjusted EBITDA came in at $463 million, reflecting a margin of 31.0%. The company also announced opentext.ai, a strategic approach to advance how customers can apply artificial intelligence with OpenText software. Management guided the MCRO acquisition to return to organic growth in FY2024, earlier than expected. We think it is still some time to see valuation recovery for OTEX. We would consider anything under $48 to be a reasonable entry point.
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