Progress Software Reports Q3 2025 Financial Results

“`html

09/29/2025 – 04:02 PM

BURLINGTON, Mass. – Progress Software (Nasdaq: PRGS) has reported stellar Q3 2025 results, exceeding analysts’ expectations and bolstering investor confidence. The company, a key player in AI-powered digital experience and infrastructure software, announced significant revenue growth, a surge in annualized recurring revenue (ARR), and raised its full-year guidance, signaling strong momentum and strategic execution.

• Revenue reached $250 million, a remarkable 40% increase year-over-year, demonstrating the company’s ability to capitalize on market opportunities and deliver robust growth.
• Annualized Recurring Revenue (ARR) soared to $849 million, growing by an impressive 47% year-over-year, reflecting Progress Software’s successful transition to a subscription-based model and its growing customer base.
• Operating margin stood at 18%, while non-GAAP operating margin reached an impressive 40%, revealing the company’s ability to manage costs effectively and generate profitability despite strategic investments.
• Diluted earnings per share came in at $0.44, while non-GAAP diluted earnings per share hit $1.50, a 19% increase year-over-year, indicating strong earnings growth and the positive impact of the company’s business strategy.

Yogesh Gupta, Progress CEO, commented on the results, stating, “Our third-quarter performance was truly exceptional. Net retention remains strong at 100% while ARR continues to grow steadily.” Gupta highlighted the successful integration of ShareFile, which the company has been actively working on, stating, “ShareFile is meaningfully contributing to top and bottom-line results as we successfully passed every major milestone on our integration plan.”

Three Months Ended

GAAP

Non-GAAP

(in thousands, except percentages and per share amounts)

August 31,
2025

August 31,
2024

% Change

August 31,
2025

August 31,
2024

% Change

Revenue
$
249,795

$
178,686

40
%

$
249,795

$
178,686

40
%

Income from operations
$
43,874

$
40,349

9
%

$
99,423

$
74,123

34
%

Operating margin

18
%

23
%
(500) bps

40
%

41
%
(100) bps

Net income
$
19,413

$
28,464

(32
)%

$
65,723

$
55,216

19
%

Diluted earnings per share
$
0.44

$
0.65

(32
)%

$
1.50

$
1.26

19
%

Cash from operations (GAAP) / Adjusted
free cash flow
(non-GAAP) / Unlevered
free cash flow
(non-GAAP)
$
73,446

$
57,658

27
%

$
74,428

$
57,525

29
%

$
88,617

$
63,149

40
%

Progress Software is strategically investing in artificial intelligence (AI) to enhance its product offerings and empower customers. The company highlighted the continued investments and innovation in AI capabilities, including agentic RAG technology, which is now being embedded across its product portfolio to empower customers to extract more value from their data using GenAI.

Cash and cash equivalents were $99.0 million at the end of the quarter.
Days sales outstanding was 55 days compared to 45 days in the fiscal third quarter of 2024 and 53 days in the fiscal second quarter of 2025.
Board of Directors increased our share repurchase authorization by $200.0 million to $242.2 million.

Anthony Folger, Progress CFO, noted the strength and durability of the firm’s revenue streams, cash flow, and earnings generation. He cited continued outperformance in the field, successful ShareFile integration, and ongoing expense control company-wide. These elements, along with debt repayment, positive free cash flow, and a $1.5 billion revolving credit facility, have placed the company in an excellent position going into the end of FY25.

Updated FY 2025 Guidance
(September 29, 2025)

Prior FY 2025 Guidance

(in millions, except percentages and per share amounts)

GAAP

Non-GAAP

GAAP

Non-GAAP

Revenue
$975 – $981

$975 – $981

$962 – $974

$962 – $974

Diluted earnings per share
$1.38 – $1.45

$5.50 – $5.56

$1.27 – $1.43

$5.28 – $5.40

Operating margin
15
%

38% – 39%

15
%

38% – 39%

Cash from operations (GAAP) /
Adjusted free cash flow (non-GAAP) / Unlevered free cash flow (non-GAAP)
$221 – $231

$232 – $242
$289 – $299

$218 – $230

$228 – $240
$285 – $296

Effective tax rate
19
%

20
%

17%

20%

Q4 2025 Guidance

(in millions, except per share amounts)
GAAP

Non-GAAP

Revenue
$250 – $256

$250 – $256

Adjusted diluted earnings per share
$0.31 – $0.37

$1.29 – $1.35

Based on current exchange rates, the expected positive currency translation impact is approximately $4.0 million on revenue of Fiscal year 2025 business outlook compared to 2024 exchange rates. GAAP and non-GAAP diluted earnings per share for fiscal year 2025 is approximately $0.03. Approximately $2.5 million on revenue of Fiscal Q4 2025 business outlook compared to 2024 exchange rates and GAAP and non-GAAP diluted earnings per share for fiscal Q4 2025 is approximately $0.01.

Progress Software’s robust Q3 performance and raised FY25 outlook reflect the company’s commitment to innovation, strategic execution, and shareholder value creation. As the company continues to invest in AI integration and expand its recurring revenue base, Progress Software remains well-positioned to capitalize on the growing demand for digital transformation solutions and deliver sustainable growth in the years ahead.

What were Progress Software’s (PRGS) key financial results for Q3 2025?

Progress Software reported revenue of $250 million (up 40% YoY), ARR of $849 million (up 47% YoY), and non-GAAP diluted EPS of $1.50 (up 19% YoY).

What is Progress Software’s (PRGS) updated guidance for fiscal year 2025?

Progress Software raised guidance to revenue of $975-$981 million, non-GAAP diluted EPS of $5.50-$5.56, and operating margin of 38-39%.

How much did Progress Software (PRGS) increase its share repurchase authorization in Q3 2025?

The Board of Directors increased the share repurchase authorization by $200.0 million to $242.2 million on September 23, 2025.

What was Progress Software’s (PRGS) net retention rate in Q3 2025?

Progress Software maintained a strong net retention rate of 100% during Q3 2025.

What AI initiatives did Progress Software (PRGS) announce in Q3 2025?

Progress Software announced investments in AI capabilities, including agentic RAG technology, which is being embedded across their product portfolio to help customers extract more value from their data using GenAI.

“`