Thank you for standing by. This is the conference operator. Welcome to the Open Text Corporation Third Quarter Fiscal 2025 Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an analyst Q&A session. [Operator Instructions] I would now like to turn the conference over to Greg Secord, Head of Investor Relations. Please go ahead.

Thank you, Gayvaine, and good morning, everyone. Welcome to Open Text third quarter fiscal 2025 earnings call. With me on the call today are Open Text's Chief Executive Officer and Chief Technology Officer, Mark Barrenechea, and OpenText's Executive Vice President and Chief Financial Officer, Chadwick Westlake. Today's call is being webcast live and recorded with replay available shortly thereafter. All of this is available on Open Text Investor Relations website, which as a reminder is investors.opentext.com. On today's webcast we're trying something new and we'll have our prepared remarks coordinated with the slides from our Q3 financial results presentation. This presentation is available on the IR website to download and please note that if you're logged in for the live webcast, you're already set up for the slideshow. I'll also point out that there are two presentations posted on our IR website, the Q3 Fiscal ‘25 IR Financial Results Slideshow that will be used during the call and our broader Q3 Fiscal ‘25 Investor presentation, which is posted for reference throughout the quarter and used during our investor meetings. Now turning to upcoming investor events, Open Text will be participating in the following investor conferences on May 8, the Needham Technology Media and Consumer Virtual Conference. On May 20, the Barclays Leveraged Finance Conference in Austin, Texas. On May 22, the CIBC Technology Conference in Toronto. May 29, Jefferies Public Technology Conference in Newport Coast, California. And the BMO Bank of Montreal Virtual Software Conference on June 9. Finally, back in Toronto on June 12 for the RBC Technology, Internet, Media and Telecommunications Symposium. It will be a busy quarter. We look forward to meeting with you. And now for the reading of our Safe Harbor Statement. During this call, we'll be making forward-looking statements relating to the future performance of Open Text. 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 risk factors that may impact future performance results of Open Text are contained in Open Text's recent forms 10-K and 10-Q, as well as in our press release that was distributed last night. Each of these can be found on our IR 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 and 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 also available on our website. And with that, I'll hand the call over to Mark.

Thank you, Greg. And good morning and welcome everyone to our Q3 earnings call. There are three key areas I plan to cover this morning. First, I want to refresh our listeners on why Open Text is so distinct. Designed to perform across business cycles, and is critically significant to organizations across industries and geographies. There may be external factors we cannot control that makes revenue harder to forecast, but we intend to perform in the areas we do control like EBITDA, earnings, free cash flow, and capital return. Secondly, I'll take you through some important product, customer, and financial updates for the quarter, as well as my perspective on market volatility and how Open Text is positioned to help our customers create value through this deep uncertainty. This includes discussing the transformative expansion of our business optimization plan, which is led by AI First. Third, I'll confirm progress on our three strategic priorities, including competitive advantage, total revenue growth, and operational excellence. Our differentiation is getting stronger through AI first. And this will help lead us to upper quartile returns. Before I start, I'd like to thank Madhu for the seven years of service to Open Text and for the transition, excuse me, over the last few months. All the best in her continued journey. Let me formally welcome our new CFO and business partner, Chadwick Westlake. Chadwick joined us from publicly traded EQ Bank in Canada. And as you know, he's an outstanding executive and was just recognized as one of this year's best executives in Canada by the Globe and Mail. The leadership team and I look forward to working with him as we bring Open Text to its next level of performance and value potential. Chadwick will speak to the highlights of the quarter here shortly.…

Thanks, Mark, and good morning. As a very proud Canadian, I'm pleased to now be serving this proud Canadian company. Since joining the team in March, listening has been job one. I spent my first couple weeks meeting with our shareholders, capital markets analysts, and partners. I understand the opportunities and I’m enthusiastic about the growth journey ahead. As Mark referenced, in Q4 we will introduce fiscal 2026 targets and reframed medium-term aspirations. There should be no surprises. You will continue to see targets on what you know us best for, including adjusted EBITDA margin, free cash flow and adjusted EPS growth, capital returns and our expectations for annual total revenue growth. We will simplify more performance metrics and look to add increasing transparency. This includes for how more of our businesses are performing, particularly ones that are outperforming and revenue growth. For today, I'll focus on Q3 results with brief added context on enterprise cloud bookings, revenue, adjusted EBITDA margin, free cash flow, and overall earnings. As you reviewed in our material, total enterprise bookings were $151 million, down 8.4% year-over-year. While below expectations, I would contextualize the outcome in a few ways. We had good results in a few key segments. Importantly, in content management bookings, from the financial services and technology sectors, we won more competitive business and tangible pipeline momentum. As Mark indicated, our bookings difference to target was primarily attributed to the macro disruption in the quarter, which resulted in some pauses to later quarters. And on the cloud net renewal rate, a metric we introduced in Q1, we expanded again 100 bps sequentially to 96%. You may recall we introduced total RPO and CRPO last quarter. Once we have that year-over-year comparable in Q4, you'll have a trend, and we'll add more context. Shifting…

Certainly. We'll now begin the analyst question-and-answer session. [Operator Instructions] Our first question is from Raimo Lenschow with Barclays. Please go ahead.

Perfect, thank you. Mark, I have two questions, one for Mark, one for Chadwick. Mark, first one, if you look at the performance this quarter, obviously you pointed out some of the uncertainty, but we also have seen other guys in the space report numbers and kind of in relative terms likely better than you guys. Can you talk a little bit about, you know, maybe there were some geographic or vertical kind of split that is different for you than for other guys to try to understand that a little bit better? Thank you on that one. And then Chadwick, now with you having joined, can you talk a little bit about your priorities now that you're in the seat and thinking about capital structure, you know, portfolio of the different products, et cetera. Thank you very much.

Yes, thanks Raimo. Appreciate the question. Well, as we know, we ended up 50 bps below our range and actually in the low-end of the range in constant currency. But for us, demand was disrupted. And I think the tipping point for us was the auto tariffs and the rumor of them and the actualization of them around March 12. And so, you know, we have exposure in auto materials, U.S. government and energy. And that Q4 impact, as I said on the call, was $40 million to $50 million. Roughly, I'd say two-thirds of that was bookings, one-third was revenue. And in a normal world, we were on target to be right within that range. But we acquired Covisint. We've always had a very important business in auto, auto parts, auto ecosystem, materials, U.S. government and energy. On the government side, you just read the headlines, Nations to Health, U.S. AID, Department of Education, and we have some business in there. So as we've said, on the $40 million to $50 million, roughly two-thirds bookings to one-third revenue. With some of the relief in auto tariffs announced this week are rumored still data being worked out. Some of our auto customers are reengaging deeply now that they can manage and predict. And if you can't kind of predict your spend, you don't know how to invest. So like we said, if we can't control the top line in the volatile times, we will control well that which we can control. And we did an extraordinary job the company did on its expenses, margin, earnings record free cash flow with our operations. Yes, we had a onetime item in there, but we still performed extremely well. And the business will come back. I'm confident it will all come back just like it did during COVID. Maybe Chadwick, over to you for the second part.

Yes, sure. Thank you, Mark. Thanks for the question. Three things I would say briefly, and again, I'm not at the two month mark. But I'd say three things very simply. Number one, capital allocation, maximization and working together with Mark and our great leadership team to making sure we're picking the top choices for where our free cash flow and capital is going. And that's why you heard us speak about that even more today and more to the tradition of Open Text where our strengths are. But number one, capital allocation, number two, importantly, on the reframe guidance, and how we're simplifying and providing more clarity and more transparency going forward to help our investors and analysts understand the business, understand where we're outperforming as we said, and understand we're going to continuously improve. And within all that, executing that guidance consistently period. And then three, I'd say, listening and simplifying. So I'll continue to listen, continue to work with our businesses, understand the business, but I will be listening and engaging as a top priority with our investor shareholders and teammates. So those three would be top early priorities.

Perfect. Thank you. And very clear. Thank you.

Thanks, Raimo.

The next question is from Stephanie Price with CIBC. Please go ahead.

Hi. Good morning. Maybe start off one with you, Chadwick. Just on the restructuring and the expanded scope. Press release noted annualized savings of about $400 million starting in fiscal '26, just trying to understand if you expect these to be additive to current margins? Or should we think about a portion of the savings being reinvested back into the business? And maybe just a little bit more in terms of where the restructuring will be done. It sounds like there's some technology work being done on the AI side.

Yes. Maybe I'll go first, but then Mark, I think should answer the second part of that question. What I would just say simply, we will provide more clarity in Q4 in terms of how that business optimization benefit will show up, you will see some of the costs that we noted incurred in Q4, all within our existing outlook, and then you'll see more of that clarity come again in Q4. But for now, it's still a good compass on the kind of equal split between F '26 and F '27 for that benefit realization right across the board, though, right? This is -- and that head count is a net number. So there's a gross impact, and there's a net reinvestment aspect, especially in the top products and countries of focus for centers of excellence. But I think Mark should take some of the AI first component, which is huge here.

Yes. Stephanie, thanks for the question. Thanks, Chadwick. Yes, I mean the business optimization and our AI first strategy go hand-in-hand, Stephanie. Our business optimization is transformative. And it's reflective of we're building an AI operating model. So if you'll allow me, just talk a little bit about our AI-first strategy. Look, leadership is a choice, and we've decided to lead in AI. We're building a great AI products in company. We're helping our customers transform and we're going to operate like an AI-centric company. And with from and centering on this business optimization program. So we've been moving very rapidly. We created the knowledge work over the last three decades with Titanium X. We've introduced 100 digital workers, with Aviator Studio coming out in the summer, we'll introduce a tool where customers can out create their own digital workers and thus now have tools built on our platform to create limitless digital workers, not just within our software, but across other software companies. We've begun to partner with Microsoft in CoPilot, and building on their incredible success with our security offering. And we've now created an AI-first corporate operating plan with AI turned on for our employees. And as I said on the call, we were no longer to hire roles that could be done with AI. As part of our hiring skills learning and performance. And through that lens, right, we looked at expanding our business optimization plan, which is AI led, taking out up to $400 million of new expense over the next two years. We're focused on roles like the general knowledge worker support, document generation, QA, entry-level program, administrative work, help desks, everything that can be accomplished through AI. And we had many wins in Q3. So the AI first lens and building an operating model around AI first is really central to us and the expanded view of the business optimization.

Thanks for that. And maybe one more for me, just on the customer support side of the business. We calculated, I think, a 6.4% organic decline in that business in the quarter. And I know the DXC contract on maybe impacted that a little bit. Could you just dig in to what's going on in that customer support line? Thanks.

Absolutely. So let me just start with, it is an amazing business. It remains a pillar of strength, and I'm confident that we're going to return maintenance to growth in the future. As you were noting a bit, the maintenance business here is primarily under pressure due to ITOM and ADM license performance, DXC, some FX and some goodness of customers transitioning to the cloud. But without DXC, our renewal rate for off-cloud would actually be moving up quarter-over-quarter, not down, if you take out DXC. And that's going to be behind us as we enter fiscal '26. The core operating metrics, Stephanie, in the business are very positive. APA up, past due down, cancel rate down and quarter renewal rates up, the year-over-year decline in constant currency is cut in half again without DXC cut in half in constant currency without DXC. So -- and F ‘26, we're definitely going to improve the business and the rate of decline is slowing. And when we get to our F '26 outlook in August, we will provide those specifics.

Thank you very much.

The next question is from Thanos Moschopoulos with BMO Capital Markets. Please go ahead.

Hi, good morning. Mark, could you perhaps expand on what you're doing within ITOM and ADM to work towards further stabilizing those businesses?

Yes, absolutely. So thanks, Dan. Let me throw security in there first. We're on an incredible trajectory with security. And we showed live last month from Europe. Our new threat detection and response platform, deeply integrated into Microsoft technology, including copilot and we're going deeper in our integration. So as Microsoft obviously continued to gain success in AI, just as we partner with SAP and their success, we're going to partner Microsoft and their success and bringing threat detection and response into their AI and into their installed base. So we are -- we got security right on track where we want it to be. In relation to ITOM, we're making really good progress. We are -- I always like to think that if you can run the platform at scale yourself than everyone else should be able to. And we've just completed going live across discovery, observability and service management. So I believe we have ITOM on a very good trajectory. The product is there. Sales force expanded and trained titanium in the market, the cloud offerings are there, new wins on SaaS. We've also studied our biggest competitor extremely well, ServiceNow. And where we feel that we can differentiate and win on the service management side is in regulated industries. And that's, I don't know, $10 billion part of the TAM. And so we're very happy to go after these very regulated industries that need content management, that need security, need process automation and really go into our core strengths. So, I feel we have ITOM on a good trajectory, and it's going to contribute to our improved performance in fiscal '26. And ADM is going to take a couple more quarters. We have focused ADM on the top end of the market to really go after the top 1,000 software companies in the world. So every company is a software company today, but auto, financial services, insurance, biotech, the next generation of software companies as well. So we've been -- that's going to take us another couple of quarters or so to get the ADM engine really performing at its best. But I love where we are in security. We just -- we're in the right swim lane. Our stores are now in the pool with ITOM, given our deployment in titanium and consumers are approaching the pool on ADM to use a swimming lane analogy. So that's a quick insight into ITOM and ADM.

I appreciate the color. And then just secondly, you have a meaningful government business. I'm just curious whether you're seeing any impact from the dose cuts?

Yes. There's no doubt there's some impact from the U.S. government expense reductions. And -- but it's not as significant as the tariffs, right? So there's in the normal world, we would just be absorbing this, but we are calling out a little bit. But it's really secondary to our message on tariffs. And look, at the end of the day, the U.S. government governments are a great partner of ours. We provide critical services and defense, intelligence and running critical citizen applications. But the effects have been de minimis, and we're still very optimistic on that business.

Great, I'll pass the line, thank you.

The next question is from Samad Samana with Jefferies. Please go ahead.

Hi, good morning. Thanks for taking my questions and Chadwick congrats on the new role. Maybe Mark, I'll kick off with you. If we think about last year, we've seen deals getting longer going to maybe two to four years in terms of duration. And now you're calling out some destruction what happened there. I would characterize if there had not been for tariff, would you say that the demand environment was better this year than last. And maybe how are customers chatting before then to get a sense of what it could look like if this all goes away or if we had a pause on care have one follow-up together.

Yes, sounds great. Thanks, Samad. The -- look, the deal terms and ramping has stabilized. So we're not seeing kind of a change of deals getting longer or more effects to ramping, if you will. That was sort of kind of a little bit of a -- it's stabilized. So there's no real changes there. Well, customers are still spending. Clearly, I mean this is -- it was a shock when you put out 25% auto tariffs. And there were so -- and then it's a list of countries and companies paused. They had to assess the information. Some of the information was accurate. Some of it was marketing. Some of it was wrong, right? So I know, I paused on spending, right, until I could just understand the landscape. I also think there's a dynamic, as I highlighted in the script, we're a Canadian company, and we love all our markets. And in the non-U.S. markets, if you will, customers are over their disappointment, I'm going to speak candidly, they're over their disappointment, they're over their disbelief and they are in full action mode to take control, because they got businesses to run. And I'm personally in dozens and dozens of conversations of how we can support our customers in France, in France and not rely on U.S. technology, because they just don't know is coming next, right? And whether rational or irrational based on prudent economic theory or not, they're going to take control because they got their priorities. So we're going to help our business in France, our customers in France, run and deploy France. We're going to help our customers in Germany run and deploy in Germany. Same in the U.K., same in Canada, same in Japan, same in Australia. Same in South Korea, same in Singapore, same in India, all across the world another U.S. customers, run and deploy in the U.S. as well. So and I also think coupled with we got momentum in AI. So this is a very different scenario, if you want to make comparisons like COVID, right? This is a very different scenario for us. Customers are spending. They're going to spend differently locally. I think this -- I hope that tariff thing rationalizes and normalize if it does, it's gained back on fully. And we're in a nice place being able to help customers deploy locally and create efficiency through the digital worker. So it feels different and positive difference actually for us.

Great. I appreciate that color. And then Chadwick, maybe just appreciate all of [Technical Difficulty], and you're still early in executing the game plan. But if you think about the different components of capital management, what would you say are the higher RPU of where your folks purchase right? Is it on being more aggressive with the buyback? Is it on some of the divestitures that you mentioned maybe tactically? How are you [Technical Difficulty] where your early focus will be?

Thanks, Samad. I think we outlined that our flexibility is number one. And it's going to depend on the environment at the time and the opportunities at the time. So that's why it was so key in the last quarter, you saw some of the greatest opportunity for us was to continue to buy back and buy back a heavily discounted share price. So we were doing that as smart aligned opportunities come up on the M&A front. Certainly, we're going to look at those tuck-ins going to come up. And same thing as Mark indicated very clearly, more mature products or portfolios if there's better opportunities to monetize those. We'll take those as they come up. But it's going to be that sequence. So we're going to continue to invest in the business as we're, we’re going to reinvest in the business. We're going to focus on our innovation. We're going to pay that dividend, but then it's flexibly month-by-month, quarter-by-quarter as the opportunities are rolling for the other two. I don't know, Mark, if there's anything you want to add?

No extremely well said. I mean, the -- our execution, our performance and the addition of our transformative business authorization plan returns us back to capital flexibility, yes. And these are the levers we've traditionally had when we've treated our highest multiples. And so we're excited to bring these levers back as we come into '26.

The next question is from Richard Tse with Nashville Bank Financials. Please go ahead.

Yes, thank you. So obviously, a big push here on AI. Just wondering if you may be able to provide some metrics just really to help us understand how that's being adopted by your base, like I don't know if you sort of have numbers on Aviator that you could sort of share just kind of any growth metrics, so we can kind of get a sense of that trajectory?

Yes. Thanks, Richard, and thanks for being with us, and thanks for being on the call. As I noted, our leadership is a choice, and we've decided to lead in AI. And it's starting with building our AI products. It's having a 3,000-person professional service organization that everyone is trained on AI and helping transform our customers' AI. It's creating an operating model inside of Open Text that is AI-centric and a new model for us that the business optimization is kicking off. And so I look at metrics around first adoption, it's adoption on the rise. Adoption is on the rise everywhere across what we're doing is our frequency of use up right? Our frequency of use is skyrocketing internally. We only hire people that have AI skills now as part of our interviewing if you don't know AI skills, if you're not using them, if you don't know how to prompt, if you -- then we just disqualify you. We are training. We've turned tools on for all our employees. So frequency of use is up. I think another measurement is reduction of events. And I think we couldn't be clear with our expanded business optimization plan that we're going to lead first, and then we're going to lead our 100,000 customers, that reduction of expense. Win rates are increasing for us of where we engage, because of AI. If we look at the wins in the quarter that we have in our deck, Criteo, ABN, JTI were all AI-led in winning those. Our partnerships are up with Microsoft. Just as we've had an amazing partnership with SAP, we have an incredible joint value proposition and product into their installed base, we're about to do the same, layering in on their incredible success in AI with our security. And then hopefully, instead of Gen Z will be Gen revenue, as we lead into AI first. So look, adoption, frequency, reduction of expense, win rates, new partnerships, that's how we're measuring right now. And as we get into ‘26, we can think about -- we'll keep talking about customer wins, booking rates, et cetera, Richard. But I think those are some of the metrics I've been looking at as this race goes on.

Okay. Great. So my second question, I don't know if this is for Chadwick or yourself. But as you make that shift, are you considering shifting the revenue model to more sort of usage or value-based pricing, similar to some of your competitors? And how should we expect if you do that, the relative impact would be to the current model?

Yes. We're not looking at a disruptive pricing model -- excuse me, a disruptive change in how we commercially engage with our customers. We have A couple additional pieces to bring to market. Next quarter, we're bringing My Aviator to market, which is if you think on every screen you use today, you have a search button that our class. You have what I call the hamburger those three lines, the menu called the Hamburger. We're going to have a My Aviator button. It's a personal digital assistant that every user of Open Text software regards of screen regardless of BU, regardless of product, just like you have the hamburger, the search button, the search glass, you'll have My Aviator. And we'll bring up a personal digital worker for you to be able to do rack style capabilities across one document across 100 documents, complex cases, things you're working on, how do you collaborate. We also have a very important new capability with Aviator or studio where we're going to now allow our customers to create their limited digital workforce. That is a step function for us where they can create their own digital workers. And we're also going to be introducing conjunctive with that, what we call an always on AI platform. Today, you have to go through some work to turn AI on. We will have it always on inside our SaaS and inside our private cloud. So we're going to think through how to keep monetizing that. But I think it's too early to say, but I don't think we're going to do something radical and a move from you have to commit to just a consumptive model. But more to follow on that. It is going to really follow this very aggressive and impactful road map of my Aviator, Aviator Studio and always on Aviator.

The next question is from Paul Treiber with RBC Capital Markets. Please go ahead.

Thanks very much and good morning. Question on AI and then also the magnitude of the reductions that you're doing. So it does sound like you're seeing good usage and traction of AI internally, but how do you arrive at the magnitude of these headcount reductions? And did you contemplate a slower move and sort of dip your toe in the water as you make the transition more towards AI internally?

Yes, Paul, thanks for the question. We appreciate it. We've been at this for over a year. So -- and we're moving at just an incredible pace. So when we look across how Aviator has advanced. Some of our partners AI tools have advanced like Microsoft, SAP and looking at totality of our usage, we've looked -- we can already see productivity gains in sales, presales, professional services, education, onboarding, general productivity and very specifically, and roles of customer support, documentation, QA, general administrative work and the general knowledge worker. And so we've been doing a very deep analysis of what roles we can -- the work still needs to be done, it's just going to be done with a machine via AI. And this shows the totality, right. Look, I remember when ERP came into the market many years ago. As a leader in Oracle applications, really bringing ERP to market. We took G&A expense in the ERP world from upper teens, right to low to mid to high-single-digit. That was a step function. This is a step function. AI is a step function and be able to reduce expense in companies over time. And look, you can count if what percent of OpEx this is going to reduce for Open Text or other companies, but ERP was a step function of high-teens to high-single-digit. AI is a step function of expense efficiency. So we're leading the way in doing it in our business optimization. And look, I think this if you'll allow me, Paul, I think this goes into how we're going to think about F '26 a little bit. We're going to provide F ‘26 guidance in August. And maybe just a little bit, I won't go -- there's an F '26 question, I'm happy to answer it. Some of this will flow to the bottom line for sure. Some of this will be reinvested in the business. It will be reinvested back into AI, be reinvested into sales. So let me just pause there, Paul. But I'm going to keep talking about this analogy of ERP as a step function in G&A expense. AI is the same.

Thanks for that explanation. Second question, just for Chadwick, one of the metrics that you're considering giving guidance on is going forward is EPS. The -- which is a metric that the company hasn't guided for in the past. Can you just elaborate on the philosophy around EPS as a metric that you guide for?

Sure. Well, I think we are strong, very strong and distinctly strong and growing profitably. And at the end of the day, how does that translate to your earnings per share, which is very consistent no matter what company no matter what sector. And that shows also the benefits of when we're deploying our capital strategically, they also repurchase shares, right? How are we deploying every dollar capital period, EPS is a bottom line strength period. So I think it is valuable to show that and have some expectations. And frankly, at the level we're growing, I don't think we're getting credit for it compared to many businesses in many sectors. So it's just a good, consistent guidepost from my perspective.

The next question is from Kevin Krishnaratne with Scotiabank. Please go ahead.

Hey there, good morning. I do have a question on guidance. I know we're going to get more detail in August. But on one of your slides, and I think you talked about in the script, an expectation of a return to organic growth in 2016? Can you just -- what gives you the sort of the confidence there? I know you've got the RPO, maybe some of the drivers to get there? And then the second thing you point out is striving for a milestone of $1 billion in free cash flow. So is the expectation that you'll do the $1 billion plus in ‘26. I'm just trying to think about some of the puts and takes there with restructurings and just a shift in the business.

Yes, thanks, Kevin. Thanks for the question. Look, as you started, we will provide our F '26 guidance in August. But with that said, F '26 is a very different year than F '25. I couldn't be happier that the phrase AMC is done. And with F '26, it's about AI first. And we have some very positive levers coming into F ‘26. Product cycle, transformative business optimization plan, which is going to allow flexibility continued flexibility and strength and our capital model for new AI investments. The business optimization, look, somewhat dropped to the bottom line. Some will be reinvested in the business, but it's going to return us to this capital flexibility, but expect some positives, right? When we talk about F '26 in August, we will have improved growth rates year-over-year. We will have improved maintenance year-over-year. We expect to have higher free cash flows. And we'll talk about all the dials that get us there when we get into '26. As Chadwick mentioned, we'll continue to have strong capital return in our buyback and our dividend program. This flexibility is going to allow us to return to programmatic M&A. And we are, as we've noted, going to consider divestitures of more mature offerings that will create a greater return and/or increase our growth rate or both. And these are the levers we've traditionally had when we traded at our highest multiples, and we expect to have these levers back in 2016. So it's a very different year. AI first. And we want to finish out the year. And we -- as we traditionally do when we get our August call, we'll outline what 26 look like, but expect it to be very different.

Got it. Appreciate that. One final one then. We talked about the enterprise booking softness, but about 10% of revenue basis XMB. So I'm wondering what the trends are looking like there? That's a sensitive part of the business when there's uncertainty. So just curious on what’s happened there? Thanks.

Absolutely. As I said on the call, we had given the sudden shock to the system of tariffs, 25% auto tariffs and then rolling tariffs. We did have a bookings impact in Q3 as we noted. And we're unlikely to get to our aspirations of our targets of 20% plus, but we are looking to be in mid-teens growth for the year, which means a strong Q4. So we actually have strong visibility into the bookings Todd and Paul in the field are executing to the deals in front of us. I think the news on the week of lightening some auto tariffs is helpful. But it still remains a little unpredictable. And so we're still at the -- it's still volatile, but we think we're going to execute well in the volatility.

I'll now hand the call back over to Mr. Barrencechea for closing remarks.

All right. Well, thank you, everyone. Chadwick, welcome, and thank you, everyone, for joining us today. We have just three things I'd end with. It's a whole new narrative for us with AI first and everything from product initiatives through building and operating model centered on AI. We're very excited about F '26 and all the positive levers that are in front of us. And we look forward to very strong direct in candidate engagement in the quarter. As Greg noted, we'll Chadwick and the team and myself will be out in the field, spending time with you, and we look forward to hearing your voice. Thanks for joining today's call.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.