Financial Data and Key Metrics Changes - For fiscal year 2025, the company reported annual revenue of $978 million, representing a 30% increase year-over-year, and earnings per share of $5.72, up 16% from fiscal year 2024 [6][19] - The fourth quarter revenue was $253 million, an 18% increase year-over-year, with earnings of $1.51, exceeding the high end of guidance [7][20] - The company achieved a 100% net retention rate and a 2% year-over-year growth in annual recurring revenue (ARR) to $852 million, which now constitutes over 87% of total revenue [6][18] Business Line Data and Key Metrics Changes - The growth in ARR was driven by multiple products, including ShareFile, OpenEdge, WhatsUp Gold, and DevTools [18] - The strong performance of ShareFile and OpenEdge contributed significantly to revenue growth, with ShareFile being a major driver of the overall 30% revenue increase for the year [19][20] Market Data and Key Metrics Changes - The company noted that its investment in AI projects by customers has been a significant factor in driving business momentum, particularly in the second half of fiscal year 2025 [9][12] - The U.S. Department of Defense added Progress Federal Solutions Group to its list of pre-approved providers of AI products, enhancing the company's market position [12] Company Strategy and Development Direction - The company completed the integration of ShareFile and Nuclia, which has been well-received and is adding significant functionality to its product offerings [9][10] - The company is focused on maintaining a total growth strategy, with an emphasis on selective M&A opportunities in infrastructure software [15][16] - The company plans to continue investing in AI innovations to enhance its product portfolio and meet customer needs [9][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fiscal year 2026 guidance, projecting revenue between $986 million and $1 billion, with an operating margin of 39% [24] - The management highlighted that fears regarding AI disruption in the software industry are overblown, emphasizing the continued need for reliable software solutions [28][32] - The company expects to maintain ARR growth consistent with the 2% growth seen in fiscal year 2025 [22][34] Other Important Information - The company ended the fiscal year with cash and cash equivalents of $95 million and a net debt position of $1.3 billion, with a net leverage ratio of approximately 3.4 times [20] - The company repurchased $40 million in stock during the fourth quarter and $105 million for the full fiscal year 2025 [21] Q&A Session Summary Question: How does Progress view the evolution of software in the context of AI? - Management believes that fears regarding AI disruption are overblown, as businesses will continue to rely on established software solutions rather than developing their own [28][32] Question: Why hasn't there been a more significant uptick in net retention rates despite AI investments? - Management indicated that most AI investments are currently limited to a small number of tech companies, and broader business spending on AI is still developing [43] Question: What is the outlook for free cash flow and its seasonality in fiscal 2026? - Management expects free cash flow to grow significantly in 2026, with no major changes in seasonality compared to historical trends [47] Question: What drove the strong sequential increase in SaaS revenues in Q4? - The increase was attributed to strong performance in ShareFile and other SaaS offerings, although management cautioned that this growth is not expected to be dramatically different in 2026 [54] Question: Have retention rates changed for potential acquisition targets in light of AI fears? - Management noted that smaller companies are facing challenges with customer retention as clients question their stability, leading to a more selective acquisition strategy [57]

Progress Financial Results Q4 2025 Supplemental Information January 20, 2026 Forward Looking Statements This presentation contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Progress has identified some of these forward-looking statements with words like "believe," "may," "could," "would," "might," "should," "expect," "intend," "plan," "target," "anticipate" ...

Progress Software Corp. (NASDAQ:PRGS) shares climbed in Tuesday's extended trading after the company released its fourth quarter earnings report and strong forward guidance. Here's a look at the key figures from the quarter. PRGS stock is moving. Watch the price action here.The Details: Progress Software reported quarterly earnings of $1.51 per share, which beat the Street estimate of $1.31. Quarterly revenue came in at $252.67 million, which just missed the consensus estimate of $252.86 million. Annualized ...

Financial Performance - Total revenue for fiscal year 2025 was $977.8 million, an increase of 29.9% from $753.4 million in fiscal year 2024 [251]. - Software licenses revenue decreased to $237.9 million in fiscal year 2025 from $249.3 million in fiscal year 2024, a decline of 4.8% [251]. - Maintenance, SaaS, and professional services revenue increased significantly to $739.9 million, up 46.7% from $504.1 million in fiscal year 2024 [251]. - Gross profit for fiscal year 2025 was $790.3 million, representing a gross margin of approximately 80.8% [251]. - Net income for fiscal year 2025 was $73.1 million, an increase of 6.3% compared to $68.4 million in fiscal year 2024 [251]. - Comprehensive income for the fiscal year ended November 30, 2025, was $76,199,000, compared to $64,389,000 in 2024, reflecting a significant increase of 18.3% [253]. - Cash flows from operating activities for the fiscal year ended November 30, 2025, totaled $235,187,000, up from $211,494,000 in 2024, indicating a growth of 11.2% [256]. - The company reported $595.336 million in revenue from the United States for fiscal year 2025, compared to $421.890 million in 2024, reflecting a growth of approximately 41.0% [384]. - Basic earnings per share for the fiscal year ended November 30, 2025, was $1.70, an increase from $1.58 in 2024 [410]. - Diluted earnings per share for the fiscal year ended November 30, 2025, was $1.66, compared to $1.54 in 2024 [410]. Debt and Financial Obligations - As of November 30, 2025, the company had approximately $1.4 billion in consolidated indebtedness, which could limit cash flow and expose it to financial risks [131]. - The company has a $1.5 billion secured revolving credit facility that matures in July 2030, which may be used for operations, strategic acquisitions, and share repurchases [134]. - The company reported a total of $600.0 million outstanding under the revolving credit facility at a borrowing rate of 5.92% as of November 30, 2025 [234]. - The company repaid $130 million on the Credit Facility during fiscal year 2025, with an interest rate of 5.92% as of November 30, 2025 [353]. - As of November 30, 2025, total debt was $1.4 billion, down from $1.5 billion in 2024, with a current portion of long-term debt of $359.2 million [339]. Tax Liabilities and Impacts - The company is subject to various tax liabilities, including income and non-income taxes, which could adversely affect its financial condition and results of operations [127][128]. - The company may incur additional tax liabilities due to audits by tax authorities, which could negatively impact cash flows and financial results [127]. - The provision for income taxes for the fiscal year ended November 30, 2025, was $8.5 million, a decrease from $25.8 million in 2024 [401]. - Deferred tax assets totaled $137.9 million as of November 30, 2025, with significant components including $20.1 million in deferred revenue and $19.6 million in tax credit and loss carryforwards [402]. - The total deferred tax liabilities were $61.6 million as of November 30, 2025, with goodwill accounting for $31.0 million of this total [402]. - The total amount of unrecognized tax benefits as of November 30, 2025, was $4.8 million, with $0.9 million recorded in other noncurrent liabilities [406]. Currency and Exchange Rate Risks - Approximately one-third of the company's revenue is denominated in foreign currencies, making it susceptible to fluctuations in exchange rates, which have historically impacted revenue results [120]. - The company has entered into foreign exchange forward contracts to hedge against currency fluctuations, but these may not fully mitigate the adverse impacts [120]. - A hypothetical 10% adverse movement in foreign currency exchange rates would negatively impact revenue by approximately $20.0 million, or 2% [236]. - The company recognized realized and unrealized gains of $0.9 million from forward contracts in foreign currency loss for fiscal year 2025 [235]. - The company reported a foreign currency translation adjustment of $3,066,000 in 2025, a recovery from a loss of $2,914,000 in 2024 [253]. Acquisitions and Related Costs - The company acquired Nuclia in 2025, enhancing its SaaS offerings, following the acquisition of ShareFile in 2024 [260]. - The acquisition of ShareFile was completed for an aggregate purchase price of $875.0 million, funded through $730.0 million in borrowings and cash on hand [319]. - The acquisition of MarkLogic was completed for a base purchase price of $355.0 million, with $161.8 million recorded as goodwill [329][334]. - Acquisition-related costs for ShareFile were approximately $15.6 million in fiscal year 2024 and $3.8 million in fiscal year 2025 [323]. - The fair value of the contingent consideration related to the Nuclia acquisition is estimated at $1.1 million, with a total purchase price of $21.4 million allocated primarily to purchased technology and goodwill [317]. Stock and Equity - The number of shares outstanding as of November 30, 2025, was 42,336,000, a decrease from 43,361,000 in 2024, indicating a reduction in share count [254]. - The company repurchased and retired 2.1 million shares of common stock for $105 million in fiscal year 2025, with $202.2 million remaining under the current share repurchase authorization [368]. - The company has 200 million shares of authorized common stock, with 42,335,700 shares issued and outstanding as of November 30, 2025 [366]. - The total intrinsic value of stock options exercised in fiscal year 2025 was $5.646 million [380]. - The fair value of stock options granted in fiscal year 2025 was estimated at $15.22 per share [378]. Operational and Other Expenses - The company incurred restructuring expenses of $3.8 million for the fiscal year ended November 30, 2025, following a 4% reduction in global workforce [393]. - Stock-based compensation increased to $64,768,000 in 2025 from $46,756,000 in 2024, marking a rise of 38.5% [256]. - The total net operating lease cost for the fiscal year ended November 30, 2025, was $11.1 million, compared to $10.9 million in 2024 and $9.1 million in 2023 [359]. - The company recorded no asset impairment charges in the years presented [282]. - The company recognized depreciation and amortization expense related to property and equipment of $6.2 million for the year ended November 30, 2025 [313].

Financial Performance - Revenue for Q4 2025 was $253 million, representing an 18% year-over-year growth[5] - Annualized Recurring Revenue (ARR) reached $852 million, growing 2% year-over-year on a constant currency basis[5] - Operating margin for Q4 2025 was 15%, with a non-GAAP operating margin of 38%[5] - Diluted earnings per share for Q4 2025 increased to $0.59 from $0.03 in the same quarter last year, a growth of 1,867%[5] - Full year revenue for 2025 was $977.8 million, a 30% increase compared to $753.4 million in 2024[7] - Net income for the full year 2025 was $73.1 million, up 7% from $68.4 million in 2024[7] - Total revenue for the three months ended November 30, 2025, was $252,666,000, representing an 18% increase compared to $214,961,000 for the same period in 2024[13] - Net income for the three months ended November 30, 2025, was $25,745,000, a significant increase of 2,145% from $1,147,000 in Q3 2024[13] - Earnings per share (EPS) for the three months ended November 30, 2025, was $0.60, compared to $0.03 in the same period last year, reflecting a 1,900% increase[13] Guidance and Projections - The company expects FY 2026 revenue guidance between $986 million and $1,000 million[8] - Diluted earnings per share guidance for FY 2026 is projected to be between $1.74 and $1.91[8] - Fiscal Year 2026 non-GAAP operating margin is projected to be between 39%[18] - Non-GAAP diluted earnings per share for Fiscal Year 2026 is expected to range from $5.82 to $5.96[19] - GAAP net income for Fiscal Year 2026 is forecasted to be between $75.8 million and $84.1 million[19] - Cash flows from operations (GAAP) for Fiscal Year 2026 are estimated to be between $263 million and $277 million[22] Cash and Assets - Cash and cash equivalents at the end of Q4 2025 were $95 million[6] - Cash and cash equivalents decreased to $94,807,000 as of November 30, 2025, from $118,077,000 a year earlier[14] - Total assets decreased to $2,457,658,000 as of November 30, 2025, from $2,526,966,000 in 2024[14] Expenses and Cash Flow - Operating expenses increased by 7% to $167,766,000 for the three months ended November 30, 2025, compared to $156,923,000 in the same period last year[13] - The company reported a net cash flow from operating activities of $62,798,000 for the three months ended November 30, 2025, compared to $19,651,000 in the same period last year[15] - Capital expenditures for the fiscal year ended November 30, 2025, were $5,702,000, slightly higher than $5,206,000 in 2024[15] Adjustments and Exclusions - Total adjustments for Fiscal Year 2026, including restructuring and stock-based compensation, are estimated at $220.7 million[19] - The company anticipates a non-GAAP effective tax rate of approximately 20% for Fiscal Year 2026[20] - The company excludes amortization of acquired intangibles to focus on core operating performance, with adjustments including preliminary estimates related to the valuation of intangible assets from Nuclia[28] - Stock-based compensation is excluded from operating plans as it is not controllable in the short term and can vary significantly[28] - Restructuring expenses are excluded to avoid distortion of trends in core operating results[28] - Acquisition-related expenses are excluded to provide a meaningful comparison of financial results to historical operations and peer companies[28] Revenue Metrics - Revenue growth rates are presented on a constant currency basis to account for fluctuations in foreign currency exchange rates, improving understanding of revenue results[28] - Annual Recurring Revenue (ARR) includes revenue from maintenance, software upgrade rights, public cloud, and on-premises subscription-based transactions, helping to mitigate revenue fluctuations[29] - The company calculates Net Retention Rate (NRR) by comparing ARR from the same customer cohort over a 12-month period, excluding new customers[34] - The company emphasizes that ARR is not a GAAP measure and should be viewed independently of revenue and deferred revenue[34] Legal and Operational Considerations - The company expects to incur ongoing legal and professional service expenses related to the MOVEit Vulnerability, which will impact operating expenses[28] - Forward-looking statements include expectations regarding future acquisition activity and financial guidance, with various risks that could impact actual results[35]

BURLINGTON, Mass., Jan. 20, 2026 (GLOBE NEWSWIRE) -- Progress Software (Nasdaq: PRGS), a member of the Russell 2000 Index, today announced its financial results for the fiscal fourth quarter and full year 2025, which ended on November 30, 2025. Progress is the trusted provider of AI-powered digital experience and infrastructure software. The company’s earnings release and a supplemental slide presentation can be accessed via the Investor Events & Presentations link on the Progress Investor Relations webpage ...

Core Insights - Progress Software (PRGS) is expected to release its fourth-quarter 2025 results on January 20, 2026, with anticipated non-GAAP revenues between $250 million and $256 million and non-GAAP earnings projected between $1.29 and $1.35 per share, reflecting a 1.5% year-over-year decline in earnings [1][2] Revenue and Earnings Expectations - The consensus estimate for revenues stands at $252.68 million, indicating a year-over-year growth of 17.55% [2] - Progress Software has consistently beaten the Zacks Consensus Estimate in the past four quarters, achieving an average earnings surprise of 14.74% [2] Performance Drivers - The company's performance in Q4 2025 is expected to benefit from a diversified product portfolio, including ShareFile, OpenEdge, DevTools, MarkLogic, WhatsUp Gold, Sitefinity, and Corticon, supported by solid customer retention rates [3] - Progress Software reported a net retention rate of 100% in Q3 2025, indicating strong customer loyalty and expansion, which is anticipated to continue into the upcoming quarter [3] AI Integration and Growth - The integration of AI capabilities across its product suite, such as retrieval augmented generation (RAG)-enabled MarkLogic and AI coding assistants for developer tools, is expected to enhance customer retention and acquisition [4] - The acquisition of ShareFile has significantly contributed to the company's Annual Recurring Revenue (ARR), which grew 47% year-over-year to $849 million in Q3 2025, with AI features driving customer adoption and retention [5] Cost Management and Economic Environment - Stringent cost management practices are expected to support bottom-line growth despite challenges posed by persistent inflation, higher interest rates, and a difficult macroeconomic environment [6] Earnings Prediction Model - According to the Zacks model, Progress Software currently has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold), indicating that the odds of an earnings beat are not favorable at this time [7]

Core Insights - Wall Street analysts expect Progress Software (PRGS) to report quarterly earnings of $1.31 per share, reflecting a year-over-year decline of 1.5% [1] - Revenue is anticipated to be $252.68 million, which represents a 17.5% increase from the same quarter last year [1] - There have been no revisions in the consensus EPS estimate over the past 30 days, indicating stability in analysts' projections [1] Revenue Estimates - Analysts project 'Revenue- Software licenses' to reach $59.82 million, indicating a year-over-year decline of 18.5% [4] - The consensus for 'Revenue- Maintenance' is expected to be $105.12 million, reflecting a 2.1% increase from the prior-year quarter [4] - 'Revenue- Maintenance and services (Maintenance, SaaS, and professional services)' is estimated at $187.82 million, showing a significant year-over-year increase of 32.7% [5] Stock Performance - Over the past month, Progress Software shares have declined by 2.8%, contrasting with the Zacks S&P 500 composite's increase of 2.1% [5] - Based on its Zacks Rank 3 (Hold), PRGS is expected to perform in line with the overall market in the near term [5]

Core Viewpoint - Progress Software will release its financial results for the fiscal fourth quarter and full year 2025 on January 20, 2026, after market close, with a conference call scheduled for the same day at 5:00 p.m. ET [1]. Group 1: Financial Results Announcement - The financial results will cover the fourth quarter of fiscal year 2025, which ended on November 30, 2025 [1]. - A live webcast of the conference call will be available, and participants are encouraged to join 15 minutes early to avoid delays [2]. Group 2: Company Overview - Progress Software is a provider of AI-powered digital experience and infrastructure software, helping organizations achieve success amid disruptive changes [3]. - The company supports businesses of all sizes in developing, deploying, and managing AI-powered applications and personalized digital experiences [3]. - Millions of developers and technologists rely on Progress Software daily, indicating its significant presence in the market [3].

Core Viewpoint - Jefferies has lowered the price target for Progress Software (PRGS) to $45 from $50 while maintaining a Hold rating on the shares, indicating a cautious outlook on the company's growth potential in the AI sector [1] Group 1: Price Target and Rating - The price target for Progress Software has been reduced to $45 from $50 [1] - Jefferies maintains a Hold rating on Progress Software shares [1] Group 2: Growth Outlook - The firm anticipates that 2026 will be "another year of gradual AI monetization" [1] - More significant growth contributions and acceleration are necessary to alleviate fears of AI disintermediation [1] - The analyst suggests that investors may need to exercise patience as sector valuations return to historical averages [1]