# Progress Software (PRGS) Q3 2025 Financial Results Summary
On September 29, 2025, Progress Software (Nasdaq: PRGS) released its financial results for the fiscal third quarter ended August 31, 2025. Below is a summary of the highlights and key financial metrics from the report.
## Third Quarter 2025 Highlights
– **Revenue**
– Total revenue was **$250 million**, representing a **40% increase** year-over-year on an actual currency basis and a **38% increase** on a constant currency basis.
– **Annualized Recurring Revenue (ARR)**
– ARR reached **$849 million**, marking a **47% growth** year-over-year on a constant currency basis.
– **Operating Metrics**
– Operating margin stood at **18%**, down from **23%** in Q3 2024.
– Non-GAAP operating margin was **40%**, slightly down from **41%** in the same period last year.
– **Earnings Per Share (EPS)**
– Diluted EPS was **$0.44**, a **32% decrease** compared to **$0.65** in Q3 2024.
– Non-GAAP diluted EPS was **$1.50**, representing a **19% increase** from **$1.26** in the same quarter last year.
– **Net Income**
– Net income was **$19.4 million**, down by **32%** from **$28.5 million** in Q3 2024.
– **Cash Flow**
– Cash flows from operations (GAAP) were **$73.4 million**, reflecting a **27% increase** year-over-year.
– Adjusted Free Cash Flow was **$74.4 million**, up **29%** compared to the same period last year.
– Unlevered Free Cash Flow was **$88.6 million**, a **40% increase** year-over-year.
## Shareholder Returns
– **Dividends**
– No cash dividends were declared this quarter, a **100% decrease** from **$0.175** per share declared in Q3 2024.
– **Share Repurchase Program**
– On September 23, 2025, the Board of Directors increased the share repurchase authorization by **$200 million** to a total of **$242.2 million**.
– Additionally, **$15 million** of shares were repurchased during the quarter.
## Financial Position
– **Balance Sheet**
– Cash and cash equivalents totaled **$99 million** at the end of the quarter.
– Days Sales Outstanding (DSO) increased to **55 days**, up from **45 days** in Q3 2024.
– **Debt Management**
– Continued efforts to reduce long-term debt, with year-to-date repayments of **$110 million**.
## Business Outlook
Progress Software has raised its guidance for the fiscal year ending November 30, 2025:
– **Revenue** is projected to be between **$975 million and $981 million**.
– **Diluted EPS** guidance is updated to range between **$1.38 and $1.45**.
– **GAAP operating margin** is expected to remain around **15%**.
Overall, Progress Software’s Q3 2025 results demonstrate robust revenue growth driven mainly by a significant increase in ARR, despite challenges reflected in several key earnings metrics. The company’s strategic initiatives, including the integration of ShareFile and investments in AI technology, are expected to contribute positively to future growth.
| Three Months Ended | Nine Months Ended | |||
|---|---|---|---|---|
| August 31, 2025 | % Change | August 31, 2025 | % Change | |
| Revenue: | ||||
| Software licenses | $63,437 | 10% | $172,677 | -2% |
| Maintenance, SaaS, and professional services | $186,358 | 54% | $552,488 | 52% |
| Total revenue | $249,795 | 40% | $725,165 | 35% |
| Costs of revenue: | ||||
| Cost of software licenses | $2,833 | 5% | $8,745 | 10% |
| Cost of maintenance, SaaS, and professional services | $33,919 | 69% | $100,567 | 56% |
| Amortization of acquired intangibles | $10,784 | 71% | $31,743 | 47% |
| Total costs of revenue | $47,536 | 64% | $141,055 | 50% |
| Gross profit | $202,259 | 35% | $584,110 | 31% |
| Operating expenses: | ||||
| Sales and marketing | $51,850 | 40% | $152,823 | 34% |
| Product development | $49,432 | 42% | $142,377 | 35% |
| General and administrative | $28,308 | 38% | $79,568 | 25% |
| Amortization of acquired intangibles | $26,415 | 91% | $78,286 | 65% |
| Cyber vulnerability response expenses, net | $659 | -29% | $2,126 | -57% |
| Restructuring expenses | $907 | 194% | $8,979 | 171% |
| Acquisition-related expenses | $814 | -56% | $5,035 | 62% |
| Total operating expenses | $158,385 | 45% | $469,194 | 37% |
| Income from operations | $43,874 | 9% | $114,916 | 12% |
| Other expense, net | -$17,668 | 191% | -$55,544 | 171% |
| Income before income taxes | $26,206 | -24% | $59,372 | -28% |
| Provision for income taxes | $6,793 | 17% | $11,984 | -19% |
| Net income | $19,413 | -32% | $47,388 | -30% |
| Earnings per share: | ||||
| Basic | $0.45 | -32% | $1.10 | -29% |
| Diluted | $0.44 | -32% | $1.07 | -30% |
| Weighted average shares outstanding | ||||
| Basic | 42,988 | —% | 43,099 | —% |
| Diluted | 43,717 | —% | 44,253 | —% |
| Cash dividends declared per common share | $— | -100% | $— | -100% |
—
| August 31, 2025 | November 30, 2024 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $99,008 | $118,077 |
| Accounts receivable, net | $151,431 | $163,575 |
| Unbilled receivables, current portion | $35,930 | $34,672 |
| Other current assets | $49,176 | $52,489 |
| Total current assets | $335,545 | $368,813 |
| Property and equipment, net | $13,134 | $13,746 |
| Goodwill and intangible assets, net | $1,928,615 | $2,015,748 |
| Right-of-use lease assets | $27,727 | $30,894 |
| Unbilled receivables, non-current portion | $30,760 | $28,893 |
| Other assets | $85,930 | $68,872 |
| Total assets | $2,421,711 | $2,526,966 |
| Liabilities and shareholders’ equity | ||
| Current liabilities: | ||
| Accounts payable and other current liabilities | $103,686 | $113,801 |
| Convertible senior notes, current portion, net | $358,619 | $— |
| Operating lease liabilities, current portion | $8,788 | $9,202 |
| Deferred revenue, current portion, net | $298,716 | $332,142 |
| Total current liabilities | $769,809 | $455,145 |
| Long-term debt, net | $620,000 | $730,000 |
| Convertible senior notes, non-current portion, net | $440,713 | $796,267 |
| Operating lease liabilities, non-current portion | $22,705 | $26,259 |
| Deferred revenue, non-current portion, net | $82,346 | $72,270 |
| Other non-current liabilities | $8,456 | $8,237 |
| Stockholders’ equity: | ||
| Common stock and additional paid-in capital | $372,052 | $354,592 |
| Retained earnings | $105,630 | $84,196 |
| Total stockholders’ equity | $477,682 | $438,788 |
| Total liabilities and stockholders’ equity | $2,421,711 | $2,526,966 |
