OTEX

Open Text Corporation

DOUBTFUL

Score: 50/100

stock

Is OTEX Halal?

Enterprise content management software — permissible business but elevated debt from acquisitions raises financial-screen concerns.

What You Should Know

Open Text is a Canadian enterprise software company providing information management products including content services, business network and supply-chain integration, cybersecurity (Carbonite, Webroot, Micro Focus security portfolio), AI and analytics, and developer tools. Enterprise software is unambiguously permissible at the activity level. The Sharia concern is the financial screen. Open Text has financed multiple large acquisitions (Documentum, Carbonite, Micro Focus) with substantial term-loan debt, and the debt-to-market-cap ratio has historically sat above the 33% Sharia threshold. The company has been deleveraging through strong free cash flow and the partial divestiture of the Application Modernization and Connectivity (AMC) business in 2024. Muslim investors should verify the most recent debt-to-market-cap ratio at their preferred screening platform before initiating a position. Some Sharia advisory boards classify Open Text as doubtful or non-compliant on financial grounds; others permit it once the ratio drops below 33%.

⚠️ Concerns

•Elevated debt from the 2023 Micro Focus acquisition — ratio has historically sat above the 33% Sharia threshold
•Financial screen is the binding constraint at most major Sharia advisory boards (verify current ratio)
•Minor interest income on cash reserves
•Some Sharia advisory boards classify all heavily acquired software roll-ups with elevated debt as non-compliant on financial grounds