Progress(PRGS) - 2025 Q4 - Annual Results

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]