The Investor
30 Sep 2026, 20:25
Progress Software Stock Falls 3% Despite Higher Earnings and Raised Revenue Outlook
Progress Software shares fell 3% after the company reported fiscal third-quarter results showing modest recurring revenue growth and lower overall revenue, despite stronger earnings and cash generation.
Third-quarter revenue declined 2% year over year to $246.0 million, while annualized recurring revenue increased 1% on a constant-currency basis to $873 million. GAAP operating margin improved to 19% from 18%, while non-GAAP operating margin expanded to 43% from 40%.
Adjusted diluted EPS rose 13% to $1.69 from $1.50, while adjusted free cash flow increased 17% to $87.2 million. GAAP operating cash flow rose 20% to $88.0 million.
Progress also closed its acquisition of Domo’s AI and data platform business, which management said strengthens its ability to help customers manage data and deploy AI applications.
The company raised its fiscal 2026 revenue outlook to $1.044 billion to $1.052 billion from $990 million to $1.002 billion previously. However, non-GAAP operating margin guidance was trimmed to 38% from 39%, while GAAP EPS guidance was reduced to $1.18-$1.28 from $1.60-$1.74.
For the fourth quarter, Progress expects revenue of $297 million to $305 million and non-GAAP EPS of $1.24 to $1.33.
The 3% decline suggests investors focused on the 2% revenue contraction, only 1% ARR growth, lower margin expectations and weaker GAAP earnings outlook, despite solid adjusted profitability and the higher full-year revenue forecast.
Progress Software shares fell 3% after the company reported fiscal third-quarter results showing modest recurring revenue growth and lower overall revenue, despite stronger earnings and cash generation.
Third-quarter revenue declined 2% year over year to $246.0 million, while annualized recurring revenue increased 1% on a constant-currency basis to $873 million. GAAP operating margin improved to 19% from 18%, while non-GAAP operating margin expanded to 43% from 40%.
Adjusted diluted EPS rose 13% to $1.69 from $1.50, while adjusted free cash flow increased 17% to $87.2 million. GAAP operating cash flow rose 20% to $88.0 million.
Progress also closed its acquisition of Domo’s AI and data platform business, which management said strengthens its ability to help customers manage data and deploy AI applications.
The company raised its fiscal 2026 revenue outlook to $1.044 billion to $1.052 billion from $990 million to $1.002 billion previously. However, non-GAAP operating margin guidance was trimmed to 38% from 39%, while GAAP EPS guidance was reduced to $1.18-$1.28 from $1.60-$1.74.
For the fourth quarter, Progress expects revenue of $297 million to $305 million and non-GAAP EPS of $1.24 to $1.33.
The 3% decline suggests investors focused on the 2% revenue contraction, only 1% ARR growth, lower margin expectations and weaker GAAP earnings outlook, despite solid adjusted profitability and the higher full-year revenue forecast.
