Progress Software Announces Second Quarter 2025 Financial Results
Annualized Recurring Revenue ("ARR") of $838 million Grew 46% year-over-yearRevenue of $237 million Grew 36% year-over-yearRaises Full Year Guidance for Revenue, Operating Margin, Earnings Per Share, and Cash FlowAcquires Agentic RAG AI Company
BURLINGTON, Mass., June 30, 2025 (GLOBE NEWSWIRE) -- Progress Software (NASDAQ:PRGS), the trusted provider of AI-powered digital experience and infrastructure software, today announced financial results for its fiscal second quarter ended May 31, 2025.
Second Quarter 2025 Highlights:
Revenue of $237 million increased 36% year-over-year on an actual currency basis and 35% on a constant currency basis.
Annualized Recurring Revenue ("ARR") of $838 million increased 46% year-over-year on a constant currency basis.
Operating margin was 16% and non-GAAP operating margin was 40%.
Diluted earnings per share was $0.39 compared to $0.37 in the same quarter last year, an increase of 5%.
Non-GAAP diluted earnings per share was $1.40 compared to $1.09 in the same quarter last year, an increase of 28%.
"We're extremely pleased with our solid Q2 results" said Yogesh Gupta, CEO of Progress Software. "Revenue contributions were strong across all geographies resulting in ARR of $838 million or 46% year-over-year growth. Our Net Retention Rate was 100%, demonstrating the consistent strength of our product portfolio. Our confidence in the business is reflected in our raised guidance for FY25. Equally important, our integration of ShareFile is going extremely well as we have completed numerous major synergy milestones, and we remain confident in our ability to reach all our ShareFile targets by the end of the year."
Additional financial highlights included:
Three Months Ended
GAAP
Non-GAAP
(in thousands, except percentages and per share amounts)
May 31, 2025
May 31, 2024
% Change
May 31, 2025
May 31, 2024
% Change
Revenue
$
237,355
$
175,077
36
%
$
237,355
$
175,077
36
%
Income from operations
$
38,616
$
27,148
42
%
$
95,461
$
67,086
42
%
Operating margin
16
%
16
%
0 bps
40
%
38
%
200 bps
Net income
$
17,029
$
16,188
5
%
$
61,749
$
47,899
29
%
Diluted earnings per share
$
0.39
$
0.37
5
%
$
1.40
$
1.09
28
%
Cash from operations (GAAP) / Adjusted free cash flow (non-GAAP) / Unlevered free cash flow (non-GAAP)
$
29,996
$
63,681
(53
)%
$
37,068
$
64,073
(42
)%
$
51,579
$
69,679
(26
)%
See Important Information Regarding Non-GAAP Financial Measures, Liquidity Measures, and Select Performance Metrics and a reconciliation of non-GAAP adjustments to Progress' GAAP financial results at the end of this press release.
Other fiscal second quarter 2025 metrics and recent results included:
Cash and cash equivalents were $102.0 million at the end of the quarter.
Days sales outstanding was 53 days compared to 41 days in the fiscal second quarter of 2024 and 48 days in the fiscal first quarter of 2025.
"Our second quarter performance reflects the continued strong execution by our teams and this is further reflected in our increase to full year guidance across the board," said Anthony Folger, CFO of Progress Software. "Our ShareFile business is progressing well and we are ahead of schedule with the integration and moving swiftly towards reaching our synergy targets. On the balance sheet, we again made significant progress on paying down our revolving credit facility, with another $40 million this quarter, putting us on a solid trajectory to hit our goal of $160 million debt paydown this year."
Acquisition of Nuclia
In a separate press release, the Company also announced today its acquisition of Nuclia, an innovator in agentic Retrieval-Augmented Generation ("RAG") AI solutions. Nuclia provides unique, easy-to-use agentic RAG-as-a-service technology enabling organizations to automatically leverage their own proprietary business information to retrieve verifiable, accurate answers using GenAI. Nuclia will extend the end-to-end value of the Progress Data Platform while creating new opportunities to reach a broader market of organizations looking to leverage agentic RAG technology.
The acquisition was signed and closed today and is immaterial to Progress' financials.
To learn more about Nuclia, go to https://nuclia.com/.
2025 Business Outlook
Progress provides the following guidance for the fiscal year ending November 30, 2025 and the fiscal third quarter ending August 31, 2025:
Updated FY 2025 Guidance(June 30, 2025)
Prior FY 2025 Guidance (March 31, 2025)
(in millions, except percentages and per share amounts)
GAAP
Non-GAAP
GAAP
Non-GAAP
Revenue
$962 - $974
$962 - $974
$958 - $970
$958 - $970
Diluted earnings per share
$1.27 - $1.43
$5.28 - $5.40
$1.19 - $1.35
$5.25 - $5.37
Operating margin
15%
38% - 39%
14% - 15%
38%
Cash from operations (GAAP) /Adjusted free cash flow (non-GAAP) / Unlevered free cash flow (non-GAAP)
$218 - $230
$228 - $240
$216 - $228
$226 - $238
$285 - $296
$283 - $294
Effective tax rate
17%
20%
19%
20%
Q3 2025 Guidance
(in millions, except per share amounts)
GAAP
Non-GAAP
Revenue
$237 - $243
$237 - $243
Diluted earnings per share
$0.29 - $0.35
$1.28 - $1.34
Based on current exchange rates, the expected positive currency translation impact on our:
Fiscal year 2025 business outlook compared to 2024 exchange rates is approximately $2.4 million on revenue.
GAAP and non-GAAP diluted earnings per share for fiscal year 2025 is approximately $0.02.
Fiscal Q3 2025 business outlook compared to 2024 exchange rates is approximately $1.7 million on revenue.
GAAP and non-GAAP diluted earnings per share for fiscal Q3 2025 is approximately $0.01.
To the extent that there are changes in exchange rates versus the current environment and/or our expectations, this may have an impact on Progress' business outlook.
Conference Call
Progress will hold a conference call to review its financial results for the fiscal second quarter of 2025 at 5:00 p.m. ET on Monday, June 30, 2025. Participants must register for the conference call here: https://register-conf.media-server.com/register/BIc386d20e6fbd46acbadafca492a42b35. The webcast can be accessed at: https://edge.media-server.com/mmc/p/bujcypbf/. The conference call will include comments followed by questions and answers. Attendees must register for the webcast and an archived version of the conference call and supporting materials will be available on the Progress website within the investor relations section after the live conference call.
About Progress
Progress Software (NASDAQ:PRGS) empowers organizations to achieve transformational success in the face of disruptive change. Our software enables our customers to develop, deploy and manage responsible AI-powered applications and digital experiences with agility and ease. Customers get a trusted provider in Progress, with the products, expertise and vision they need to succeed. Over 4 million developers and technologists at hundreds of thousands of enterprises depend on Progress. Learn more at www.progress.com.
Progress and Progress Software are trademarks or registered trademarks of Progress Software Corporation and/or its subsidiaries or affiliates in the U.S. and other countries. Any other names contained herein may be trademarks of their respective owners.
Investor Contact:
Press Contact:
Michael Micciche
Jeff Young
Progress Software
Progress Software
+1 781 850 8450
+1 781 280 4000
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)
Three Months Ended
Six Months Ended
(in thousands, except per share data)
May 31, 2025
May 31, 2024
% Change
May 31, 2025
May 31, 2024
% Change
Revenue:
Software licenses
$
50,795
$
53,979
(6
)%
$
109,240
$
118,079
(7
)%
Maintenance, SaaS, and professional services
186,560
121,098
54
%
366,130
241,683
51
%
Total revenue
237,355
175,077
36
%
475,370
359,762
32
%
Costs of revenue:
Cost of software licenses
2,987
2,497
20
%
5,912
5,228
13
%
Cost of maintenance, SaaS, and professional services
33,764
22,176
52
%
66,648
44,395
50
%
Amortization of acquired intangibles
10,537
7,398
42
%
20,959
15,257
37
%
Total costs of revenue
47,288
32,071
47
%
93,519
64,880
44
%
Gross profit
190,067
143,006
33
%
381,851
294,882
29
%
Operating expenses:
Sales and marketing
49,677
37,889
31
%
100,973
77,000
31
%
Product development
46,570
35,435
31
%
92,945
70,423
32
%
General and administrative
25,637
21,983
17
%
51,260
43,327
18
%
Amortization of acquired intangibles
26,063
16,316
60
%
51,871
33,705
54
%
Cyber vulnerability response expenses, net
730
3,036
(76
)%
1,467
4,023
(64
)%
Restructuring expenses
1,043
651
60
%
8,072
3,000
169
%
Acquisition-related expenses
1,731
548
216
%
4,221
1,250
238
%
Total operating expenses
151,451
115,858
31
%
310,809
232,728
34
%
Income from operations
38,616
27,148
42
%
71,042
62,154
14
%
Other expense, net
(18,752
)
(7,020
)
167
%
(37,876
)
(14,419
)
163
%
Income before income taxes
19,864
20,128
(1
)%
33,166
47,735
(31
)%
Provision for income taxes
2,835
3,940
(28
)%
5,191
8,908
(42
)%
Net income
$
17,029
$
16,188
5
%
$
27,975
$
38,827
