管理層發言
Thank you for standing by. This is the conference operator. Welcome to the OpenText Corporation third quarter fiscal 2026 financial results conference call. The conference is being recorded. I would now like to turn the conference over to Greg Secord, Head of Investor Relations. Please go ahead.
Thank you, operator, and good afternoon, everyone. Welcome to OpenText's third quarter fiscal 2026 earnings call. With me on the call today are OpenText Chief Executive Officer, Ayman Antoun; James McGourlay, our President and Chief Client Officer; Steve Rai, our Executive Vice President and Chief Financial Officer; and Tom Jenkins, our Executive Chair. Today's call is being webcast and recorded with a replay available shortly thereafter on the OpenText Investor Relations website, investors.opentext.com. Earlier today, we posted our press release and investor presentation online. These materials will supplement our prepared remarks and can be accessed on the OpenText Investor Relations website. Please see our investor presentation for further details of our core and non-core revenues by product categories. Turning to upcoming investor events. OpenText will be participating in the Needham Technology, Media, & Consumer Conference on May 14; the Barclays Leveraged Finance Conference in Austin, Texas on May 19; the CIBC Technology & Innovation Conference in Toronto on May 21; the TD Cowen TMT Conference in New York on May 27; and the Jefferies Software, Internet & AI Conference in Newport Beach, California on May 28. We look forward to meeting with you there. Now onto the reading of our safe harbor statement. During this call, we'll be making forward-looking statements relating to the future performance of OpenText. These statements are based on current expectations, assumptions, and other material factors that are subject to risks and uncertainties, and actual results could differ materially from the forward-looking statements made today. Additional information about the material factors that could cause actual results to differ materially from such forward-looking statements, as well as the risk factors that may impact future performance results of OpenText, are contained in OpenText's recent Forms 10-K and 10-Q, as well as in our press release that was distributed earlier today. These may all be found on our website. We undertake no obligation to update these forward-looking statements unless required to do so by law. In addition, our conference call may include discussions of certain non-GAAP financial measures. Reconciliations of any non-GAAP financial measures to their most directly comparable GAAP measures may be found within our public filings and other materials, which are available on our website. With that, I'll hand the call over to Ayman.
Good afternoon, everyone. Thank you for joining us today. I'm excited to be here as CEO of this iconic Canadian technology company with global reach. To get started, I wanted to begin by sharing why I joined OpenText. We're living in the world of AI. Reliable, quality, curated, governed, integrated, and secure data is critical for credible AI outcomes that are traceable, explainable, and most importantly, deliver value. Simply put, data is not a feature, data is the foundation. Data is foundational across every organization, every industry, and every economy. Nowhere is that more true than in financial services, healthcare, and regulated sectors, where the cost of getting it wrong is simply too great. OpenText is a global leader in data management. This company is built for this moment. That's why I'm here. Today marks my 14th working day as CEO. I'd like to share where my focus has been and where it will continue to be in the period ahead. Four clear priorities are guiding me right now. First, listen. Listening to our clients, partners, colleagues, investors, and shareholders. On the morning of day one as CEO, I reached out to over 100 clients and 20 business partners to arrange one-on-one conversations with each of them. Those meetings are underway. I'm also meeting with colleagues and individually with investors. There's no substitute for first-hand feedback and data to strengthen our go-forward strategy. My second priority is to learn. I'm spending dedicated time understanding every aspect of our business and the full depth of our portfolio, specifically our core portfolio, where we have a genuinely differentiated value proposition. Our core portfolio is where we will continue to invest, enhance, and build on. My third priority is to assess. I have started a detailed review of every part of the business, understanding the areas that are working well and need to continue, and the places where we can get better outcomes. In particular, I'm focused on where we can sharpen our go-to-market deployment and execution, deepen our strategic relationships with ecosystem partners, and strengthen our core portfolio value proposition. My fourth priority is to build. Using everything I learned from listening, learning, and assessing, we will build a sustainable organic growth plan with a clear set of KPIs to guide our disciplined execution with milestones so that we can measure our progress and hold ourselves accountable along the way. Our intense focus on our clients is the foundation for these priorities. Our methodical approach to execution, our disciplined focus, our data-driven strategy will be anchored in serving our clients. When we consistently partner with clients to solve their most pressing challenges and realize the full value of their AI investment, they reward us with growth, loyalty, and value creation for our shareholders. As we move through these four priorities, I will share progress with you. You should expect transparency and consistency from me going forward on what is working, where we are making changes, and how we're tracking against the clear plan we set out. Before I hand it over to James, let me leave you with this. I am deeply excited about the opportunity and equally confident in where we are headed. I look forward to meeting with many of you in the coming weeks. Thank you.
Thank you, Ayman, and welcome everyone to our Q3 fiscal '26 earnings call. I want to take the opportunity to welcome Ayman to OpenText, and I'm really looking forward to working together with Ayman in my role as President and Chief Client Officer. Since August, our goal has been to ensure that our clients receive strategic support from OpenText as they progress through their cloud journey while rapidly advancing their AI readiness. The secure information management capabilities that we have provided to our clients for 30 years deliver and protect the same data that AI requires to gain additional value and insight from their content, and most importantly, the metadata wrapped around that content. Turning to Q3, we ended the quarter with solid performance in total revenues, beating our own expectations for free cash flow and adjusted EPS. Our results for the quarter and year-to-date of fiscal '26 continue to demonstrate a strengthening business and momentum in the cloud, especially in our flagship business of content management in the cloud. Steve Rai will go through our quarterly results in more detail. However, I would like to highlight that in Q3, we generated total revenues of approximately $1.28 billion, led by overall cloud growth of 6.6% year-on-year. We introduced disclosure on the revenue performance of our product categories in September of last year, and you can see that our total content business, which consists of 44% of our total revenues, grew 6% year-on-year in Q3. If you look specifically at cloud revenue for content, it grew 22% year-on-year. Content, which is our largest and fastest growing business, continues to demonstrate strength, and it also leads our cloud growth. As I mentioned last quarter, the revenues for our core business continue to grow at approximately twice the pace of total revenues. We see opportunity for our core product groups to continue growing in the cloud as our clients make fundamental decisions on their cloud and AI needs. Some notable Q3 and year-to-date metrics include Q3 cloud revenue of $493 million, the highest in company history. Q3 core cloud business up 12% year-on-year. Q3 adjusted EPS of $1.01 is the highest in Q3 company history. Year-to-date adjusted EPS of $3.19 is tied with our highest year-to-date figure ever in Q3 fiscal '24. Year-to-date, we have $651 million in enterprise cloud bookings, also the highest year-to-date in company history. We saw 41 cloud deals greater than $1 million in Q3, an increase of 28% year-on-year. Q3 year-to-date cash flow of $686 million is the highest Q3 in company history. Turning to some of our client wins this quarter that highlight the growth trajectory of our core business. Michelin in our business network. Michelin navigated an increase of market consumption for e-invoices that required integration with Microsoft and our business network as part of the company's innovation program. Through their expanded relationship with OpenText, Michelin can capitalize on the implementation of our business network for self-service, apply AI to those B2B workflows, and supply chain use cases supporting their business needs. HARGASSNER in content. HARGASSNER aimed to establish a single source of truth for enterprise content across all business applications, including their current deployment of SAP public cloud. By implementing a unified content platform, HARGASSNER expects to contextualize their content effectively and ensure every stakeholder has access to the right information, enhancing productivity and decision-making. Third, HPE Aruba Networking in our cyber enterprise. HPE Aruba Networking requires best-in-class threat intelligence to enrich their controllers, access points, and switching products with cyber protection. OpenText provides dynamic real-time threat intelligence for URLs, IPs, and cloud services intelligence for cloud applications. Aydem Energy in our ITOM business. Aydem has a strong focus on renewable energy and operates complex multi-regional systems that demand consistent governance and robust processes. Aydem expanded use of our ITOM platform delivers end-to-end test monitoring powered by GenAI, designed to provide a competitive, efficient, and scalable test environment. Turning to our product news. A few weeks ago, we announced that select enterprise data and AI solutions will be available on the AWS Sovereign Cloud, extending its hybrid cloud deployment options in Europe. The offering is aimed at regulated EU clients requiring strict data residency and sovereignty while leveraging Amazon Web Services infrastructure. Strategically, this extends OpenText's addressable market in Europe and reinforces its positioning in secure content management for AI, though near-term financial impact is likely limited. As a reminder, OpenText data AI platform is shipping this quarter, as well as a host of new tools for orchestration of data integration and agentic AI. Our AI data platform can facilitate any major LLM model and provide over 1,500 connectors to various ERP, CRM, and ITOM systems such as Oracle, Salesforce, SAP, and others. We are seeing our clients accelerate their moves to the cloud, but on their terms, whether that is on-prem, private cloud, public cloud, sovereign cloud, or a hybrid approach. This optionality is a strategic advantage and a differentiator for OpenText. Turning to our outlook, there is no change to our fiscal '26 revenue target of 1% to 2% growth year-on-year once you adjust for $30 million of anticipated revenue that went away with our divestitures. Steve will talk more about this and some of our other metrics in our outlook. I took on the role as interim CEO with the objective to maintain a steady ship for OpenText. This is an exciting time at the company, and we've made the right choices to set us up for the AI opportunity in front of us. We have had some great achievements over the last three quarters, especially in our Content Cloud business. In my role as Chief Client Officer, I'm even closer to our clients, driving a culture at OpenText where client success is at our core. With that, I would like to hand the call over to Steve.
Thanks, James. Good afternoon, everyone, and thank you all for joining the call today. Also, an official warm welcome to Ayman as CEO. We've been working very closely together the past few weeks at the Waterloo headquarters and are very excited to have you on board to help shape the next chapter at OpenText. OpenText had a strong Q3. This momentum positions us well for the final quarter of fiscal '26. Our Q3 and year-to-date performance demonstrates how our cloud and AI offerings are resonating with our clients as they prepare their data for AI. While James talked about our strong cloud performance, I'd also like to highlight how OpenText continues to build on a solid foundation of margin and cash flow, which affords us the flexibility to allocate capital to investments that generate the highest return and adjust our priorities quickly in a rapidly changing environment. Let me get to some key financial highlights for the quarter. We generated total revenues of $1.28 billion. Cloud revenue was $493 million, up 6.6%, mainly driven by Content Cloud. Please see our investor relations presentation for further details of our core and non-core revenues by product category. Q3 represents our 21st consecutive quarter of organic cloud growth. Our cloud net renewal rate was 95%, down slightly by 1% year-over-year and consistent with our annual model. Customer support revenue in the quarter was $565 million, down slightly by 0.4%. Our customer support net renewal rate was 93%, up 3% year-over-year. Annual recurring revenue, or ARR, was $1.06 billion, up 2.7% year-over-year, and representing 82% of our total revenue and consistent year-over-year. Turning to profitability, GAAP gross margin was 73.1%, and non-GAAP gross margin was 76.7%, both up by 150 basis points and 100 basis points respectively year-over-year. This was mainly driven by the increase in cloud, customer support, and license gross margins, partially offset by the decline in gross margins for professional services. Adjusted EBITDA was $438 million or a 34.1% margin. This was up 10.8% and 260 basis points respectively year-over-year. The increase was driven primarily by cost management actions and the business optimization plan. The plan itself remains on track; we still expect to realize this year an additional approximately one-third of the total estimated savings of between $490 million to $550 million. Please see our investor relations presentation for further details. GAAP net income was $173 million, up 86% year-over-year. The increase was largely due to the sale of eDOCS and unrealized derivative gains. Non-GAAP net income was $250 million, up 15.9% year-over-year. Q3 GAAP diluted EPS was $0.70, up 100%. Non-GAAP diluted EPS was $1.01, up 23.2%. Free cash flow was $305 million, down 18.4%. On a year-to-date basis, total revenue was up 1%. Cloud revenue grew 5.3%. License revenue was also up 2.4%, partially offset by a decline of 1.1% in customer support and 9.3% in professional services. Year-to-date adjusted EBITDA margin was 35.8%, up 110 basis points. Non-GAAP diluted EPS of $3.19 was up 11.9%, and our free cash flow was $686 million, up from $563 million for the same period last year. Turning to our full year fiscal '26 outlook. Our expectations remain unchanged at 1% to 2% for total revenue growth year-over-year. With the strong cloud performance this year, and based on higher conversion rates in enterprise cloud bookings, we are increasing our cloud revenue growth range for fiscal '26 from 3% to 4% to 4% to 5% year-over-year. We are also increasing our enterprise cloud bookings growth range, which was 12% to 16%, now moving to 16% to 20% year-over-year, as we are experiencing greater interest from our clients in deploying our cloud offerings, especially for content. In addition, we are also increasing our outlook range for free cash flow growth from 17% to 20% to 22% to 25% year-over-year. In the longer term, OpenText will benefit from clients migrating to the cloud, and as a result, RPO and adjusted EBITDA dollars will grow over time. We are already seeing the early signs of cloud RPO growth over the past couple of quarters and in fiscal Q3. Cloud current RPO is up 5% year-over-year, and cloud long-term RPO is up 19% year-over-year. The strength of our margins, cash flow, and balance sheet gives us a strong platform to run the business. Our board regularly reviews the company's capital allocation strategy, and we are being disciplined with our approach under the current macro and geopolitical environment. Earlier this year, we increased our share buyback program from $300 million to $500 million for fiscal '26. We repurchased and canceled 9.7 million shares in Q3 and reduced our share count by 6.7% year-over-year to 242.2 million shares outstanding. We are maintaining our dividend policy and are being prudent in our portfolio reshaping activities in the current environment. In Q3, we delivered a strong quarter of cloud growth, margin, earnings, and free cash flow. This momentum sets us up well for the final quarter of fiscal '26. I look forward to partnering with Ayman and the rest of the executive leadership team to deliver on our strategy for growth and help our clients migrate faster to the cloud and support their AI journeys. With that, I will hand the call over to Tom.
Thank you, Steve, and thanks everyone for joining the call. My warmest welcome to Ayman, who officially joined in April. Ayman has been deeply engaged with our board, executive leadership, OpenText colleagues, partners, and clients, and he'll be meeting with many of our analysts and investors in the coming months. Now that Ayman officially joined us two weeks ago, I'm stepping away from my role as Chief Strategy Officer and continuing my position as Chair of the Board. In less than a year, we've already achieved most of the important milestones that we set out last August. Our core businesses of content, business networks, ITOM, and cybersecurity are essentially components to train agentic AI. Well-managed governed data is the foundation of enterprise AI. OpenText is uniquely positioned because we manage and secure those three distinct data types at scale: human-generated, machine-generated, and transactional data. From a strategy perspective, we made the right choices for OpenText in both product categorization and leadership, while positioning the company to be at the heart of enterprise AI. Turning to our divestiture strategy, we expect the Vertica divestiture to close shortly, and we remain in the process of continuing to reshape our portfolio. Obviously, there is currently geopolitical and macro uncertainty, and this created a more selective buyer environment. We're disciplined sellers, though, and being disciplined means we do not sell assets at the wrong moment to the wrong buyer. There's still plenty of interest in our assets, but we will not be doing any so-called fire sales. As we wait for improved market stability, our non-core businesses continue to contribute to our overall margin and cash flow. Before I turn the call to Q&A, I'd like to say that I'm proud of what we've accomplished in less than a year, and all the hard work has resulted in putting OpenText in a solid position for the next phase of growth. I'd like to thank all the OpenText staff and you, our investors, for your patience during this transition. Cloud and AI remain at the forefront of our future and will fuel future years' growth. With that, this concludes our prepared remarks. Operator, would you please open the line for questions?
分析師問答
Operator provided instructions. The first question is from Richard Tse with National Bank Capital Markets. Please go ahead.
Ayman, I'm not sure this is an entirely fair question. I'll try, and if you can give us good color, that would be helpful. You've been there for less than three weeks. What would you say are your initial observations on where you see the most opportunity to drive growth here at OpenText, either strategically or operationally? I have a second question on AI monetization. It's been a compelling story in terms of what OpenText has to offer. I'm curious as to bookings — what component or percentage of the bookings is tied to AI, whether it serves an OpenText product or a use case for that?
Hey, Richard. Good afternoon, and thank you for the question. Nothing is an unfair question, so I appreciate it very much. As you heard me say in the opening, even though I'm at the beginning of the journey of listening and learning, I had a number of client interactions, and they are very direct. That's one of the many things I love about our clients: they tell you what you do well, and they give you the opportunity to improve. My early observations, if I were to package them into things that we would build on and continue, informed by what clients, partners, and colleagues have said to me so far in the last 14 days, are as follows. First, the culture is client-focused. Everyone at OpenText wakes up looking for ways to solve client problems in the most efficient and creative way. Second, clients have been vocal about the strength of our core portfolio. They see where we play and understand the value proposition we bring them. Areas of opportunity to strengthen include enhancing our engagements with ecosystem partners. There are some good pockets of success, and we need to scale and accelerate that. That's one of the reasons I reached out to 20 partners on day one, and I was encouraged by the response. Another area is strengthening the muscle of disciplined execution across the operating model — disciplined execution in sales, in prioritizing development efforts, and in capital allocation. Those would be my early observations based on the initial engagements. More to come as I continue to interact with more clients, partners, investors, and colleagues.
Maybe I'll start on the AI monetization portion. In terms of that level of granularity, we don't typically provide a breakdown by bookings specifically tied to AI. In terms of general demand and approach, I'll let James comment further on deal activity.
Thanks, Steve. As Steve points out, we don't comment specifically on attach rates or exact numbers, but we are seeing an increase in both the number of deals and the size of deals that are closing. We're seeing larger deals being closed with our Aviator offerings. We closed a deal this quarter that included Aviator and was a seven-figure deal; Aviator was a major component. We are starting to see a continued build of this trend in our pipeline, with similar trends of larger deals and a higher number of deals including Aviator.
The next question is from Kevin Krishnaratne with Scotiabank. Please go ahead.
Ayman, looking forward to working with you. I'd like to ask you a question on your view of OpenText's competitive positioning, specifically from your experience competing with offerings like FileNet and Sterling. What would you say are some of the underappreciated aspects investors may not know about the OpenText assets that you saw when competing against them on deals? Second, on the revenue guide, I see you maintained the 1% to 2% and called out that the core is expected to grow. In your previous slide deck, there was commentary that the core is expected to grow in constant currency. I just want to confirm if you are seeing any change in core performance when excluding FX. Also, previously there was $60 million for eDOCS baked into guidance and the $30 million is taking into account a portion of Vertica being assumed in that deduction. Is that correct?
Hey, Kevin. Good afternoon, and thank you for the question. A couple of early observations based on client interactions: first, the length of time OpenText has had around data and data management is often underestimated. This is a capability built over many years, not an overnight development or pilot phase. The diversification of the portfolio of clients across industries, geographies, and enterprise sizes shows that our capabilities are pervasive and not limited to a single type of customer or industry. We probably take that for granted and need to amplify that brand capability in the marketplace. Second, data is not a single thing. There is human-generated data, machine-generated data (alerts, cybersecurity incidents, system outputs), and transactional data produced when organizations interact with each other. OpenText manages those three data types at scale, and that broader context is a strategic advantage we need to amplify and continue to monetize as we interact with clients. Those are my early reflections after 14 days of engaging with clients.
That's correct regarding the guidance. On a constant currency basis, given FX, it will likely not be growing. Just a reminder, the 1% to 2% range we're maintaining is after taking into account divestitures and the associated revenue, approximately $30 million. We have increased our guide on bookings, largely on the back of the Content business — that remains strong with great pipeline and conversion rates. In response to your question about the prior $60 million for eDOCS and the adjustment, the $30 million reflects the portion of Vertica and related deductions as noted earlier.
The next question is from Stephanie Price with CIBC. Please go ahead.
Welcome, Ayman. I was wondering if you could talk a little bit about cloud bookings conversion. You mentioned conversion was stronger. What are you seeing in terms of the timeline for cloud bookings converting into revenue, and how should we think about that conversion process? Also, congratulations on free cash flow conversion in the quarter. It seems like it's back more in line with historical this quarter. Can you talk a bit about the measures you put in place that have led to the stronger free cash flow conversion and how to think about this quarter relative to the rest of the year?
On clients converting to cloud, we continue to see progress, as reflected in our cloud bookings growth. Regarding conversion into revenue, as we deploy with clients, you'll see that start to roll in. Our current RPO and backlog metrics are continuing to expand, and we expect this to be a multi-year process as we convert clients to the cloud over a number of years. On free cash flow conversion, quarter-to-quarter there can be lumpiness from working capital items such as tax installment payments and the like. However, continued execution on cost savings and business optimization has improved our OpEx profile and is naturally benefitting cash flow. We have been executing on the cost-savings initiatives and are starting to see benefits flow through.
The next question is from Thanos Moschopoulos with BMO Capital Markets. Please go ahead.
Congrats, Ayman, on your new role at OpenText. In terms of the spending environment, it doesn't seem to have been an issue for the quarter or in the guide. More broadly, what are you seeing? There's strong interest in AI, but also geopolitical uncertainty. Any change in sales cycles or buyer behavior to call out? Relatedly, in converting existing clients to a cloud model, might you consider using more incentives or other measures to accelerate that process, or is the current approach appropriate?
Good afternoon. That's an important question. I asked clients how they're thinking about the period ahead and any changes they've made. Based on client feedback and what the team has shared, we have not seen a material slowdown in clients making decisions, particularly around AI opportunities. OpenText's positioning sits in data management, the input into AI engines and agents, and so far I have not heard from clients that they're pausing. In some cases, clients are accelerating to catch up in deploying their AI models. Regarding conversion to cloud, our approach is to meet clients where they are. We offer choice: on-prem, private cloud, public cloud, sovereign cloud, or hybrid. That optionality is a strategic advantage for OpenText. We are aligning our product portfolio, go-to-market coverage, incentives, and operating model with the fact that the cloud journey has begun and is accelerating. I do not see us trying to force clients but rather enabling their path and supporting them as they choose.
I think Ayman covered it completely. The flexibility we offer clients on how and where they run gives them a real benefit. The choice we provide is a key differentiator.
The next question is from Paul Treiber with RBC Capital Markets. Please go ahead.
Ayman, on capital allocation, looking at OpenText's history, where it is right now, the stock, leverage, etc., what would be your top priorities for incremental capital allocation? Also, on internal productivity and product development, can you speak to the benefit you've seen from AI internally, and whether you're using productivity gains to save costs or accelerate product innovation?
Hey, Paul. Thanks for the question. On capital allocation, disciplined execution includes disciplined capital allocation. The categories we discuss with the board frequently are debt reduction, dividend payout, share repurchases (which we've increased this year), and organic growth investments across product portfolio, go-to-market, and ecosystem development. We are evaluating and prioritizing these levers and will recommend actions to the board to maximize shareholder value. On internal AI productivity, we aim for OpenText to be client zero. We have deployed our own products across the enterprise and infused many AI agents into operations. We've committed to save $1 billion over the next ten years by applying AI internally. We're focused on three lenses for AI: serve our clients better in support and operations; make our products better by designing AI into them from the core; and improve colleagues' work experience and productivity. Early internal results include a 50% improvement in time to restore incidents and a roughly 20% reduction in the number of incidents because agents can predict and prevent some issues. This is an ongoing journey, but early indicators show the benefits of using AI both to drive productivity and to enhance product development and client service.
The next question is from George Kurosawa with Citi. Please go ahead.
Thanks for taking the questions and welcome, Ayman. On the Content Cloud business, with further acceleration on the cloud side, could you double-click on what is working well in that product portfolio? Also, looking at your pipeline, is there scope for this business to continue accelerating, or is maintaining the current growth pace the goal? Second, bigger picture on AI strategy: given capacity constraints and increasing token costs from LLM providers, is there a role for OpenText to help customers improve token efficiency, and is that part of the strategy?
Looking at our content business, we are very excited about the opportunity before us. Customers are actively engaging as they move to the cloud, and in many cases are already committed. Content curation is a main focus as organizations prepare for AI, and we're seeing an increase in migration velocity for that reason. Platform upgrades and new product functionality are also helping drive adoption. I expect we will pick up speed on content migration to the cloud and are quite excited about the business.
George, that's an important question about token efficiency. I'll take that away to double-click on with the leadership team. From early client conversations, customers are generally willing to invest where they see ROI. We're seeing a shift from counting use cases to focusing on a smaller number of high-impact initiatives that drive pervasive change in operations and competitiveness. Those larger bets assume well-organized, traceable data with lineage, especially in regulated environments. Your point about token cost and efficiency is a useful consideration for our product and platform strategy as clients scale their AI deployments. We'll review how we can help customers manage those costs and improve efficiency as part of our broader platform and orchestration capabilities.
The next question is from David Kwan with TD Cowen. Please go ahead.
Welcome, Ayman. Could you comment on regional impacts? Last quarter we saw softness in the Americas driven by the U.S. government shutdown; it was still down this quarter but not as bad. Was there lingering impact from the shutdown? By contrast, EMEA was strong again this quarter. Also, regarding the four core businesses, cyber and ITOM were down a bit this quarter — is the expectation to get those back to growth next quarter, and do you see them on a sustainable growth path? Finally, on divestitures and Tom's remarks, are you still committed to selling or announcing non-core assets at a pace of one per quarter, or might that timeline be stretched given current market conditions?
We have seen some lingering impact on government-related contracts in the U.S.; a few contracts haven't closed yet, which affected the Americas. Europe had a strong quarter with some large deals, including those involving Aviator. Overall, we still have a balanced opportunity set and strong pipeline for the current quarter.
David, on the portfolio balance across geographies and across product lines, disciplined execution means ensuring we have balance. Europe was strong, and part of our work is to ensure we have more balanced performance across regions. Regarding cyber and ITOM, we have strong portfolios in those areas and clients are spending money. It is our job to be very articulate with the value proposition and have sharp sales execution to return those businesses to growth and keep them growing. That's a clear example of disciplined execution in practice.
On the divestiture cadence, the one-per-quarter comment was about our operational ability to implement divestitures, not a hard commitment regardless of market conditions. Initially, we had broad interest across business units, but you cannot sell everything at once due to logistics. The current market has been affected by geopolitical uncertainty and financing challenges for buyers, which slowed activity. We're disciplined sellers; we won't conduct fire sales. As market stability returns, we expect to resume divestiture activity, and we will implement transactions at a steady pace consistent with logistics and market conditions. Management and the board will continue to reassess timing.
I'll now hand the call back over to Mr. Antoun for any closing remarks.
Thank you, operator. Let me wrap up on a couple of points. First, sincere thanks for your warm welcome and for joining us and for all of your thoughtful questions. You've given us a couple of ideas that we're going to double-click on. I'd like to close the way I started: I am incredibly excited and equally confident about the road ahead, and I'm very much looking forward to speaking with each of you one-on-one in the coming weeks. Have a great afternoon.
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.