Progress Announces First Quarter 2025 Financial Results
Annualized Recurring Revenue ("ARR") of $836 million Grew 48% year-over-yearRevenue of $238 million Grew 29% year-over-yearShareFile Integration Underway
BURLINGTON, Mass., March 31, 2025 (GLOBE NEWSWIRE) -- Progress (NASDAQ:PRGS), the trusted provider of AI-powered digital experience and infrastructure software, today announced financial results for its fiscal first quarter ended February 28, 2025.
First Quarter 2025 Highlights:
Revenue and non-GAAP revenue of $238 million increased 29% year-over-year on an actual and 30% on a constant currency basis.
Annualized Recurring Revenue ("ARR") of $836 million increased 48% year-over-year on a constant currency basis.
Operating margin was 14% and non-GAAP operating margin was 39%.
Diluted earnings per share was $0.24 compared to $0.51 in the same quarter last year, a decrease of 53%.
Non-GAAP diluted earnings per share was $1.31 compared to $1.25 in the same quarter last year, an increase of 5%.
"We're extremely pleased with our excellent Q1 results," said Yogesh Gupta, CEO of Progress. "We are ahead, or on plan, with all our ShareFile integration milestones, which are providing significant contributions to ARR and revenues, as well as expense savings. Our solid performance on the top line was again driven by our product portfolio across the board, with our data platform and infrastructure management products having a particularly solid quarter. Our Net Retention Rate again surpassed 100%, which reflects the resiliency of our business and the strength of our customer relationships. Operationally, our first quarter was solid by every metric, and I am extremely proud of our team for their dedication and relentless commitment to our customers."
Additional financial highlights included:
Three Months Ended
GAAP
Non-GAAP
(In thousands, except percentages and per share amounts)
February 28, 2025
February 29, 2024
% Change
February 28, 2025
February 29, 2024
% Change
Revenue
$
238,015
$
184,685
29
%
$
238,015
$
184,685
29
%
Income from operations
$
32,426
$
35,006
(7
)%
$
93,595
$
76,756
22
%
Operating margin
14
%
19
%
(500) bps
39
%
42
%
(300) bps
Net income
$
10,946
$
22,639
(52
)%
$
58,995
$
55,928
5
%
Diluted earnings per share
$
0.24
$
0.51
(53
)%
$
1.31
$
1.25
5
%
Cash from operations (GAAP) / Adjusted free cash flow (non-GAAP) / Unlevered free cash flow (non-GAAP)
$
68,947
$
70,504
(2
)%
$
73,211
$
72,204
1
%
$
87,954
$
78,079
13
%
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 first quarter 2025 metrics and recent results included:
Cash and cash equivalents were $124.2 million at the end of the quarter.
Days sales outstanding was 48 days compared to 50 days in the fiscal first quarter of 2024 and 67 days in the fiscal fourth quarter of 2024.
"We're off to a very strong start for FY25, as our Q1 results demonstrate. Revenues at the high end of guidance reflect steady demand; expenses remain well-controlled; cash flow was again strong; and our bottom-line results and raised EPS guidance reflect numerous positives," said Anthony Folger, CFO of Progress. "Beyond excellent financial performance, we repurchased $30 million of Progress shares and accelerated repayment of the revolving credit line used to partially finance the ShareFile acquisition, paying down $30 million during Q1. The ShareFile integration is tracking well, and we expect to complete the integration by year-end."
2025 Business Outlook
Progress provides the following guidance for the fiscal year ending November 30, 2025 and the fiscal second quarter ending May 31, 2025:
Updated FY 2025 Guidance(March 31, 2025)
Prior FY 2025 Guidance (January 21, 2025)
(In millions, except percentages and per share amounts)
GAAP
Non-GAAP
GAAP
Non-GAAP
Revenue
$958 - $970
$958 - $970
$958 - $970
$958 - $970
Diluted earnings per share
$1.19 - $1.35
$5.25 - $5.37
$1.08 - $1.23
$5.00 - $5.12
Operating margin
14% - 15
%
38
%
14% - 15
%
37% - 38
%
Cash from operations (GAAP) / Adjusted free cash flow (non-GAAP) / Unlevered free cash flow (non-GAAP)
$216 - $228
$226 - $238
$216 - $228
$225 - $237
$283 - $294
$282 - $294
Effective tax rate
19
%
20
%
21
%
20
%
Q2 2025 Guidance
(In millions, except per share amounts)
GAAP
Non-GAAP
Revenue
$235 - $241
$235 - $241
Diluted earnings per share
$0.24 - $0.30
$1.28 - $1.34
Based on current exchange rates, the expected negative currency translation impact on our:
Fiscal year 2025 business outlook compared to 2024 exchange rates is approximately $2.8 million on revenue.
Fiscal Q2 2025 business outlook compared to 2024 exchange rates is approximately $0.1 million on revenue.
Based on current exchange rates, the currency translation impact is expected to be immaterial on our GAAP and non-GAAP diluted earnings per share for both fiscal year 2025 and Q2 2025.
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 first quarter of 2025 at 5:00 p.m. ET on Monday, March 31, 2025. Participants must register for the conference call here: https://register-conf.media-server.com/register/BIb86bb577ced14b9fa67069eb761f36a9. The webcast can be accessed at: https://edge.media-server.com/mmc/p/bt5rgqn7. 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 (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
(In thousands, except per share data)
February 28, 2025
February 29, 2024
% Change
Revenue:
Software licenses
$
58,445
$
64,100
(9
)%
Maintenance, SaaS, and professional services
179,570
120,585
49
%
Total revenue
238,015
184,685
29
%
Costs of revenue:
Cost of software licenses
2,925
2,731
7
%
Cost of maintenance, SaaS, and professional services
32,884
22,219
48
%
Amortization of acquired intangibles
10,422
7,859
33
%
Total costs of revenue
46,231
32,809
41
%
Gross profit
191,784
151,876
26
%
Operating expenses:
Sales and marketing
51,296
39,111
31
%
Product development
46,375
34,988
33
%
General and administrative
25,623
21,344
20
%
Amortization of acquired intangibles
25,808
17,389
48
%
Cyber vulnerability response expenses, net
737
987
(25
)%
Restructuring expenses
7,029
2,349
199
%
Acquisition-related expenses
2,490
702
255
%
Total operating expenses
159,358
116,870
36
%
Income from operations
32,426
35,006
(7
)%
Other expense, net
(19,124
)
(7,399
)
158
%
Income before income taxes
