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Progress Software: Making Progress Driven by the AI Revolution
PRGSProgress(PRGS) MarketBeat·2025-04-08 12:46

Core Insights - Progress Software is leveraging AI-powered infrastructure and business application development platforms to enhance data management for businesses [1] - The company has successfully integrated its 875millionacquisitionofShareFile,contributingtoareboundinstockperformanceafterreachinganine−monthlow[2][7]FinancialPerformance−ProgressSoftwarereportedanearnings−per−share(EPS)of875 million acquisition of ShareFile, contributing to a rebound in stock performance after reaching a nine-month low [2][7] Financial Performance - Progress Software reported an earnings-per-share (EPS) of 1.31 for fiscal Q1 2025, exceeding consensus estimates by 0.25,withrevenuesincreasingby28.90.25, with revenues increasing by 28.9% year-over-year to 238.02 million [2][3] - Annualized recurring revenue (ARR) grew by 48% year-over-year to 836million,withtheShareFileacquisitionaddingapproximately836 million, with the ShareFile acquisition adding approximately 250 million to ARR [3][7] - The company achieved an operating margin of 14%, with an adjusted operating margin of 39% [3] Guidance and Projections - For fiscal Q2, Progress Software provided an EPS guidance of 1.28to1.28 to 1.34, with a midpoint of 1.31,surpassingtheconsensusestimateof1.31, surpassing the consensus estimate of 1.17 [4] - Full-year fiscal 2025 EPS guidance is set between 5.25and5.25 and 5.37, with a midpoint of 5.31,comparedtotheconsensusestimateof5.31, compared to the consensus estimate of 5.06 [5] - Expected full-year revenues for 2025 are projected between 958millionand958 million and 970 million, with a midpoint of 964million,aligningcloselywithanalystestimates[5]AcquisitionImpact−TheintegrationofShareFileisontrackforcompletionbySeptember2025,enhancingthecompany′sabilitytopursuefutureSaaSacquisitions[7]−Theacquisitionisexpectedtocontributenearly964 million, aligning closely with analyst estimates [5] Acquisition Impact - The integration of ShareFile is on track for completion by September 2025, enhancing the company's ability to pursue future SaaS acquisitions [7] - The acquisition is expected to contribute nearly 250 million to total revenues for fiscal 2025, with high predictability and gross margins exceeding 80% [7] Valuation Metrics - Progress Software's net debt stands at 1.373billion,withadebt−to−equityratioof3.48,althoughthecompanyhasmadeeffortstoreducedebtby1.373 billion, with a debt-to-equity ratio of 3.48, although the company has made efforts to reduce debt by 30 million in fiscal Q1 [9] - The updated price-sales (P/S) ratio is 2.63, which is lower than competitors like Pegasystems and SS&C Technologies [11] - The forward price-earnings (P/E) ratio is 10.99, significantly lower than Pegasystems' 33.49 and SS&C's 13.9 [11]