10-Q · June 30, 2026
Progress Software Corporation reported second quarter fiscal 2026 revenue of $253.5 million, a 7% year-over-year increase, exceeding estimates. Although diluted EPS of $0.50 fell short of the expected $1.42, operating…
Earnings analysis · 10-Q
PRGS earnings analysis
Filed September 30, 2026 · Our reading of the company's report
The latest report
Progress delivered mixed third-quarter results: revenue declined 2% year over year to $246.005 million, primarily due to multiyear renewal timing, while recurring revenue indicators were stable with ARR up 1% to $873…
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Progress delivered mixed third-quarter results: revenue declined 2% year over year to $246.005 million, primarily due to multiyear renewal timing, while recurring revenue indicators were stable with ARR up 1% to $873 million and net retention of 99% to 100%. Profitability and cash generation remained strong, with approximately 18.9% operating margin and $265.474 million of nine-month operating cash flow, but ongoing MOVEit costs, Domo acquisition funding of approximately $400 million and elevated leverage remain material risks. The 10-Q provides no new numeric EPS or revenue guidance, though management believes liquidity is sufficient for at least the next 12 months.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
What stood out
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Revenue down sequentially year over year
Third-quarter revenue was $246.005 million versus $249.795 million in the prior-year quarter, a 2% decline; nine-month revenue increased 3% to $747.269 million from $725.165 million.
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Margins remained strong
Gross margin was approximately 82.7% and operating margin approximately 18.9%, calculated from reported revenue of $246.005 million, revenue costs of $42.467 million and operating expenses of $156.988 million. Lower personnel and contractor costs supported the quarter.
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Operating cash flow improved materially
Operating cash flow rose to $265.474 million for the first nine months from $172.389 million in the prior-year period. Property and equipment purchases were $6.264 million, implying approximately $259.210 million of operating cash flow less capex.
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Working capital and liquidity improved
Cash and cash equivalents increased to $113.653 million from $94.807 million at fiscal year-end. Gross accounts receivable declined by $78.8 million, while DSO improved to 42 days from 55 days in the comparable quarter and 73 days in the prior quarter.
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Recurring metrics were stable
Annualized recurring revenue increased 1% to $873 million from $861 million, while net retention rates remained between 99% and 100%. SaaS revenue grew 2% to $72.623 million, partially offsetting a 5% decline in maintenance revenue to $100.016 million.
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License growth led year-to-date gains
Software license revenue was $63.556 million, flat year over year for the quarter but up 16% to $200.116 million for the first nine months, primarily reflecting growth in DataDirect and OpenEdge.
What to watch
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Continuing MOVEit litigation and costs
MOVEit vulnerability response expense increased 424% to $3.455 million in the quarter from $0.659 million, and the company states that no insurance recovery remains available as of August 31, 2026. In the related MDL, 23 of 33 bellwether claims have been dismissed in whole or in part, but the matter is not expected to conclude within the next 12 months.
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Acquisition and leverage risk
The company expects to fund the approximately $400 million Domo acquisition with borrowings under its existing revolving credit facility. It also received $360.0 million of revolver proceeds to redeem the 2026 Notes, increasing financing and integration exposure.
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Renewal timing pressured revenue
Maintenance revenue declined 5% to $100.016 million and professional services revenue declined 2% to $9.810 million in the quarter; management attributed the total revenue decline primarily to the timing of renewals on multiyear subscription contracts.
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Debt service and capital allocation
The company paid down $170.0 million on its revolving credit facility and repurchased $72.0 million of stock during the first nine months, while stating that capital-market and credit-market volatility could adversely affect liquidity and that it expects to continue making revolver payments.
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Acquisition and cyber charges
Acquisition-related expense increased 383% to $3.928 million in the quarter, primarily due to the Domo acquisition, while cyber vulnerability expense was $3.455 million; these charges continue to pressure GAAP profitability despite strong cash generation.
Management's outlook
The 10-Q does not provide explicit numeric revenue or EPS guidance. Management states that existing cash, operating cash flow and available revolver capacity should fund foreseeable requirements for at least the next 12 months, including the approximately $400 million Domo acquisition.
Earlier filings 4
10-Q · March 31, 2026
Progress reported Q1 revenue of $247.8M, up $9.8M (+4.1%) versus Q1 FY2025 but down ~$5.2M (-2.1%) versus the prior quarter. Gross margin expanded to 82.3% and operating margin widened to 18.8%, driving diluted EPS of…
10-Q · September 29, 2025
Progress delivered strong top-line growth in the quarter with revenue of $249.8M, driven largely by Maintenance, SaaS and professional services. Gross profit was $202.3M (≈81.0% margin) but net income and EPS were…
10-Q · June 30, 2025
Progress reported quarterly revenue of $237.4M, up 35.6% year-over-year driven by maintenance, SaaS and professional services growth, while software license revenue declined. Gross margin compressed to 80.1% but…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.