PRGS Q4 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Up

Progress Software PRGS reported fourth-quarter fiscal 2025 non-GAAP earnings of $1.23 per share, which beat the Zacks Consensus Estimate by 20.59% and increased 14.9% year over year.  

Non-GAAP revenues of $252.7 million missed the consensus mark by 0.01% but increased 18% on a year-over-year basis and 16% on a constant currency basis. The upside can be attributed to strong expected demand for multiple products in PRGS’s portfolio, particularly ShareFile, OpenEdge, WhatsUp Gold and DevTools.

On a constant-currency basis, annualized recurring revenues came in at $852 million, up 2% year over year, driven by strong contributions from ShareFile and other solutions. Net retention rate surpassed 100%.

PRGS shares rose 8.78% in pre-market trading.

PRGS shares have underperformed the Zacks Computer & Technology sector in the trailing 12-month period. While Progress shares have lost 32.6%, the broader sector has returned 22.5%. 

Quarter Details

Software license revenues were $65.2 million, down 11.2% year over year. Maintenance and service revenues were $187.5 million, up 32.4% year over year.

Top-line growth benefited from the strong performance of the overall product portfolio, especially during the second half of the year, fueled by customers’ AI projects, along with the combination of ShareFile.

Sales and marketing expenses, as a percentage of revenues, decreased 40 basis points (bps) from the year-ago quarter’s level to 23%.

Product development expenses, as a percentage of revenues, increased 60 bps to 19.7%.

General and administrative expenses, as a percentage of revenues, decreased 60 bps from the year-ago quarter’s level to 11.3%.

Progress Software reported a non-GAAP operating margin of 38.1%, which expanded 100 bps year over year.

Balance Sheet

As of Nov. 30, 2025, cash and cash equivalents were $95 million compared with $99 million as of Aug. 31, 2025. Total debt was $1.4 billion, with a net debt position of $1.3 billion.

Progress Software generated cash flow from operations of $235.2 million during the trailing 12 months, compared with $211.5 million in the previous year. The company generated $62.099 million in adjusted free cash flow compared with $74.428 million in the previous quarter.

On Sept. 23, 2025, the board of directors increased share repurchase authorization by $200 million to $242.2 million.

Acquisition News

Progress Software provided an update on the ShareFile and Nuclia acquisitions. During fiscal year 2025, the company completed the integration of the largest deal and most significant acquisition, ShareFile, which helped the company to meet every goal ahead of schedule. The company also acquired and integrated Nuclia’s agentic RAG technology, whose feedback is extremely well-received from the clients’ point of view, and has added value to PRGS’ portfolio.

PRGS’ 2026 Guidance

For first-quarter fiscal 2026, Progress Software expects non-GAAP revenues between $244 million and $250 million. The Zacks Consensus Estimate for revenues is currently pegged at $243.59 million, indicating growth of 2.34% from the year-ago quarter’s reported figure.

Progress Software expects non-GAAP earnings between $1.56 and $1.62 per share. The consensus mark is currently pegged at $1.42 per share, indicating growth of 8.4% from the year-ago quarter’s reported figure.

For fiscal 2026, non-GAAP revenues are projected between $986 million and $1 billion compared with $978 million reported in fiscal 2025. Progress Software expects ARR to grow slightly in the fiscal year 2026.

Non-GAAP operating margin is expected to be 39% for fiscal 2026.

Non-GAAP earnings are projected between $5.82 and $5.96 per share, better than the previous guidance range of $5.00-$5.12 per share for fiscal 2025.

The Zacks Consensus Estimate for fiscal 2026 revenues and earnings is currently pegged at $994.62 million and $5.71 per share, respectively.

Adjusted free cash flow is expected to be between $313 million and $326 million for fiscal 2026.

Zacks Rank & Stocks to Consider

Progress Software currently carries a Zacks Rank #3 (Hold).

Ametek AME, Cognizant Technology Solutions CTSH and Amphenol APH are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Ametek have gained 18.9% during the trailing six months. Ametek is set to report fourth-quarter fiscal 2025 results on Feb. 3, 2026.

Shares of Cognizant Technology Solutions have gained 7% during the trailing six months. Cognizant Technology Solutions is slated to report fourth-quarter 2025 results on Feb. 4, 2026.

Shares of Amphenol have gained 49.6% during the trailing six months. Amphenol is set to report fourth-quarter 2025 results on Jan. 28, 2026.

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This article originally published on Zacks Investment Research (zacks.com).

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