NASDAQ:PRGS

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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.
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Author
The Investor 09-30-26
Progress Software (PRGS) Stock Slips Premarket Despite Strong Q2 Results and Higher Full-Year Outlook

Progress Software (NASDAQ: PRGS) shares edged 1.5% lower in premarket trading on Wednesday despite reporting better-than-expected second-quarter results, as investors focused on a more cautious earnings outlook and modest recurring revenue growth.

The AI-powered enterprise software provider delivered solid revenue growth, improved profitability, and raised its full-year revenue guidance, but the market reaction suggests much of the positive news had already been priced into the stock.

# Revenue Beats Expectations

Progress reported second-quarter revenue of $253.5 million, up 7% year over year, driven by broad-based demand across its software portfolio and continued momentum in its AI-powered products.

Annualized Recurring Revenue (ARR) increased 2% to $868 million, while net retention remained at 100%, reflecting stable customer demand despite a challenging enterprise software spending environment.

# Profitability Continues to Improve

The company reported GAAP diluted earnings per share of $0.50, up 28% from a year earlier, while non-GAAP EPS increased 16% to $1.62.

Cash generation remained a highlight, with operating cash flow surging 163% year over year to $78.8 million. Progress also continued strengthening its balance sheet by reducing debt and repurchasing $35 million of shares during the quarter.

# Guidance Mixed Despite Revenue Increase

Management raised its full-year revenue guidance to a range of $990 million to $1.002 billion from the prior outlook of $988 million to $1.000 billion.

However, the updated forecast also lowered GAAP earnings guidance to $1.60-$1.74 per share from the previous range of $1.71-$1.87, even as non-GAAP EPS guidance was increased to $6.09-$6.21 from $5.91-$6.03.

The mixed guidance may have contributed to the modest premarket decline.

# Why PRGS Stock Is Lower Today

Investors appeared to focus on several factors:

* ARR growth remained relatively modest at 2%.
* Full-year GAAP EPS guidance was lowered.
* Revenue growth was largely in line with expectations despite a solid quarterly beat.
* Shares had already performed well ahead of the earnings release.

Although Progress delivered another quarter of revenue growth, expanding profitability, and strong cash generation, investors appeared to take a cautious view of the company's outlook, sending the stock about 1.5% lower in premarket trading.
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Author
The Investor 07-01-26
Progress Software (Nasdaq: PRGS) reported strong third-quarter fiscal 2025 results, highlighted by revenue of $250 million, up 40% year-over-year, and annualized recurring revenue (ARR) of $849 million, a 47% increase. Non-GAAP earnings per share rose 19% to $1.50, though GAAP EPS declined 32% to $0.44 due to higher expenses. Operating margin came in at 18% on a GAAP basis and 40% on a non-GAAP basis.

CEO Yogesh Gupta praised the company’s performance, pointing to steady net retention at 100% and meaningful contributions from ShareFile following its integration. He noted continued investment in AI, including embedding agentic RAG technology across the portfolio to enhance customer data value.

CFO Anthony Folger emphasized durable revenue streams, disciplined cost control, and debt reduction. The company repurchased $15 million in stock during the quarter, added $200 million to its repurchase program, and secured a new $1.5 billion revolving credit facility to boost liquidity.

Progress raised its full-year guidance, now expecting revenue of $975–$981 million, non-GAAP EPS of $5.50–$5.56, and cash from operations of $221–$231 million. For Q4, it forecasts revenue of $250–$256 million and non-GAAP EPS of $1.29–$1.35.

Management said these results demonstrate resilience, strong cash generation, and progress toward long-term growth objectives.
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Author
The Investor 09-29-25
Progress Software (Nasdaq: PRGS) reported strong financial results for Q4 and the full fiscal year 2024, highlighting a 21% year-over-year revenue growth in Q4 to $215 million and an impressive 46% increase in Annualized Recurring Revenue (ARR) to $842 million. Non-GAAP diluted earnings per share for Q4 grew 30% to $1.33. However, GAAP diluted earnings per share dropped 91% to $0.03, primarily due to acquisition and restructuring-related expenses.

For the full year 2024, revenue reached $753 million, an 8% increase, while non-GAAP diluted EPS rose 13% to $4.93. Cash flow from operations grew 22% year-over-year to $212 million.

The company completed its acquisition of ShareFile, an AI-powered SaaS content collaboration platform, in Q4. This acquisition contributed to Progress' strategy of expanding its portfolio and is expected to enhance both top-line and bottom-line performance in 2025.

Progress issued fiscal year 2025 guidance, forecasting revenue between $958 million and $970 million and non-GAAP EPS between $5.00 and $5.12. The company also expects significant free cash flow generation, targeting $225 million to $237 million in adjusted free cash flow.

CEO Yogesh Gupta emphasized Progress' commitment to innovation and acquisitions to drive growth, while CFO Anthony Folger highlighted strong operating margins and the expected synergies from the ShareFile integration. The company’s strategic focus remains on customer success, operational excellence, and enhancing shareholder value.
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Author
Global Finance News 01-22-25