Progress Software (PRGS) Q2 2026 Financial Results Summary
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Progress Software (PRGS) Q2 2026: Revenue Growth and EPS Beat — Positive Outlook
Progress Software (Nasdaq: PRGS) reported its financial results for the fiscal second quarter ended May 31, 2026, showcasing a solid performance with key metrics indicating growth compared to the previous year.
Key Findings
- Revenue: $253 million, an increase of $17 million or +7% YoY.
- Annualized Recurring Revenue (ARR): $868 million, up $17 million or +2% YoY.
- Diluted Earnings Per Share (EPS): $0.50, up $0.11 or +28% YoY.
- Non-GAAP Diluted EPS: $1.62, up $0.22 or +16% YoY.
Analyst Opinion
This quarter is a positive outcome for shareholders, as Progress Software not only achieved revenue growth but also delivered a notable increase in earnings per share. The company's ability to grow revenue by 7% year-over-year, alongside a significant 28% increase in diluted EPS, reflects strong operational execution and effective cost management. The growth in ARR, although modest at 2%, indicates stability in recurring revenue streams, which is crucial for long-term sustainability.
Detailed Metrics
- Operating Margin: 18%
- Non-GAAP Operating Margin: 40%
- Cash and Cash Equivalents: $103 million
- Days Sales Outstanding: 49 days, improved from 53 days in Q2 2025.
The operating margins, particularly the non-GAAP figure of 40%, suggest that the company is maintaining a healthy profitability level while investing in growth initiatives. The reduction in days sales outstanding from 53 to 49 days indicates improved efficiency in collections, which is a positive sign for cash flow management.
Shareholder Returns and Guidance
During the quarter, Progress Software repurchased $35 million of its shares, demonstrating a commitment to returning value to shareholders. The company also provided an optimistic outlook for the fiscal third quarter, projecting revenue between $244 million and $250 million and diluted EPS in the range of $0.35 to $0.41.
Forward Catalysts
Investors should closely monitor the company's performance in the upcoming quarter, particularly how it manages to sustain its revenue growth and improve ARR. Additionally, the ongoing momentum in AI-powered offerings will be critical, as the company highlighted this as a key driver of demand. The market will also be watching for any updates on the impact of currency fluctuations on revenue and earnings, as well as any developments related to the MOVEit vulnerability that could affect operational performance.
In summary, Progress Software's Q2 2026 results reflect a strong operational performance with significant growth in revenue and earnings, positioning the company favorably for future quarters.
Note: All amounts are in thousands.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| May 31, 2026 | May 31, 2025 | % Change | Six Months Ended May 31, 2026 | Six Months Ended May 31, 2025 | % Change | |
|---|---|---|---|---|---|---|
| Revenue | $ 68,xxx | $ 50,xxx | 36 % | $ 13,xxx | $ 109,xxx | 25 % |
| Cost of Revenue | $ 1,508,000 | $ 1,560,000 | -3 % | $ 3,126,000 | $ 2,755,000 | 13 % |
| Sales and Marketing | $ 4,059,000 | $ 3,663,000 | 11 % | $ 8,142,000 | $ 6,695,000 | 22 % |
| Product Development | $ 5,847,000 | $ 4,984,000 | 17 % | $ 11,442,000 | $ 9,394,000 | 22 % |
| General and Administrative | $ 9,095,000 | $ 6,534,000 | 39 % | $ 16,273,000 | $ 12,580,000 | 29 % |
| Total Costs | $ 20,509,000 | $ 16,741,000 | 23 % | $ 38,983,000 | $ 31,424,000 | 24 % |
Note: All amounts are in thousands.
CONDENSED CONSOLIDATED BALANCE SHEETS
| May 31, 2026 | November 30, 2025 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 102,978 | $ 94,807 |
| Accounts receivable, net | $ 125,209 | $ 195,783 |
| Unbilled receivables, current | $ 51,297 | $ 46,599 |
| Other current assets | $ 57,018 | $ 62,776 |
| Total current assets | $ 336,502 | $ 399,965 |
| Property and equipment, net | $ 14,938 | $ 13,694 |
| Goodwill and intangible assets, net | $ 1,824,329 | $ 1,893,082 |
| Right-of-use lease assets | $ 31,526 | $ 25,842 |
| Unbilled receivables, non-current | $ 44,139 | $ 29,950 |
| Other assets | $ 94,189 | $ 95,125 |
| Total assets | $ 2,345,623 | $ 2,457,658 |
| Liabilities and stockholders' equity | ||
| Current liabilities: | ||
| Accounts payable and other current liabilities | $ 83,422 | $ 117,331 |
| Convertible senior notes, current portion, net | $ — | $ 359,163 |
| Operating lease liabilities, current portion | $ 8,144 | $ 8,490 |
| Deferred revenue, current portion | $ 324,469 | $ 324,750 |
| Total current liabilities | $ 416,035 | $ 809,734 |
| Long-term debt | $ 850,000 | $ 600,000 |
| Operating lease liabilities, non-current portion | $ 26,467 | $ 21,077 |
| Deferred revenue, non-current portion | $ 98,756 | $ 100,329 |
| Convertible senior notes, non-current portion, net | $ 442,147 | $ 441,186 |
| Other non-current liabilities | $ 6,135 | $ 6,983 |
| Stockholders' equity: | ||
| Common stock and additional paid-in capital | $ 416,043 | $ 384,119 |
| Retained earnings | $ 90,040 | $ 94,230 |
| Total stockholders' equity | $ 506,083 | $ 478,349 |
| Total liabilities and stockholders' equity | $ 2,345,623 | $ 2,457,658 |
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