Progress Software Q1 Earnings & Revenues Beat Estimates, Stock Up

Core Insights - Progress Software (PRGS) shares increased by 14.5% to close at $58.98 following strong first-quarter fiscal 2025 results, with non-GAAP earnings of $1.31 per share, surpassing estimates by 25.96% and showing a 4.8% year-over-year increase [1][2] Financial Performance - Non-GAAP revenues reached $238 million, exceeding consensus by 0.92% and reflecting a 29% year-over-year increase; on a constant currency basis, the growth was 30% [2] - Annualized Recurring Revenue (ARR) was reported at $836 million, up 48% year-over-year, driven by strong performance from ShareFile and other solutions, with a net retention rate above 100% [2] - Software license revenues decreased to $58.4 million, down 8.8% year-over-year, while maintenance and service revenues rose to $179.6 million, up 48.9% year-over-year [3] - Non-GAAP operating margin was reported at 39.3%, a contraction of 220 basis points year-over-year [4] Expense Management - Sales and marketing expenses increased by 40 basis points to 21.6% of revenues, while product development expenses rose by 50 basis points to 19.5% [3] - General and administrative expenses decreased by 80 basis points to 10.8% of revenues [4] Balance Sheet and Cash Flow - As of February 28, 2025, cash and cash equivalents were $124.2 million, up from $118.1 million as of November 30, 2024; total debt stood at $1.51 billion with a net debt position of $1.39 billion [5] - The company generated $73.2 million in adjusted free cash flow and allocated $30 million for debt repayment and $30 million for share repurchases [5][6] Future Outlook - For fiscal 2025, non-GAAP revenues are projected between $958 million and $970 million, with an expected non-GAAP operating margin of 38% [7] - Non-GAAP earnings per share are forecasted to be between $5.25 and $5.37, an increase from previous guidance [7] - For the second quarter of fiscal 2025, non-GAAP revenues are anticipated to be between $235 million and $241 million, with earnings per share expected between $1.28 and $1.34 [8]