PRGS · Progress Software Corporation

Progress Software delivered strong Q1 FY2026 results with revenue of $247.8 million, up 4% year-over-year (2% constant currency), driven by 16% growth in software licenses to $67.6 million while maintenance, SaaS, and services held steady at $180.2 million. Gross profit rose 6% to $203.9 million, reflecting a 5% decline in costs of revenue. Operating expenses dipped 1% to $157.5 million, with notable reductions in restructuring (90%) and acquisition-related costs (67%), though product development increased 9%. This propelled GAAP operating income up 43% to $46.5 million (19% margin) and non-GAAP to $102.2 million (41% margin). Net income surged 108% to $22.8 million, with GAAP EPS at $0.53 (+121% YoY). CEO Yogesh Gupta highlighted momentum from 2025, strong operations, and AI product value driving profitable growth and cash flow. CFO Anthony Folger noted exceptional margins and a strengthened balance sheet supporting investments. Cash from operations jumped 43% to $98.6 million, enabling $60 million debt repayment (long-term debt to $540 million from $600 million) and $15 million in share repurchases. Cash ended at $113.2 million. Updated FY2026 guidance slightly raised revenue to $988-$1,000 million (prior $986-$1,000 million) with non-GAAP EPS to $5.91-$6.03 (prior $5.82-$5.96), reflecting $9.4 million positive FX impact. Q2 guides revenue $240-$246 million, non-GAAP EPS $1.47-$1.53. Days sales outstanding rose to 52 from 48 YoY but improved from 73 in Q4. ARR grew 2% constant currency to $863 million; NRR at 99%. Management emphasized disciplined M&A, debt paydown targeting $250 million FY2026, and 40% margins post-integration.