Progress Software (NASDAQ:PRGS) Releases Quarterly Earnings Results, Beats Expectations By $0.17 EPS

Progress Software (NASDAQ:PRGS) posted its earnings results on Wednesday. The software maker reported $1.69 earnings per share for the quarter, topping analysts’ consensus estimates of $1.52 by $0.17, FiscalAI reports. Progress Software had a net margin of 9.24% and a return on equity of 43.68%. The business had revenue of $246.01 million for the quarter, compared to analyst estimates of $247.33 million. During the same quarter in the prior year, the firm posted $0.44 EPS. Progress Software’s revenue was down 1.5% on a year-over-year basis. Progress Software updated its Q4 2026 guidance to 1.240-1.330 EPS and its FY 2026 guidance to 6.150-6.230 EPS.

Here are the key takeaways from Progress Software’s conference call:

• Q3 execution was strong: ARR rose more than 1% year over year in constant currency to $873 million, revenue reached $246 million, operating margin was 43%, and EPS increased 13% to $1.69, above the high end of guidance.
• Cash generation and balance-sheet metrics improved materially, with adjusted free cash flow up 17% to $87 million, DSO improving to 42 days, and $170 million of year-to-date debt repayment. Progress also raised its FY2026 outlook to $1.044 billion-$1.052 billion of revenue and $6.15-$6.23 of EPS.
• Progress completed its $400 million acquisition of Domo’s AI and data platform business, viewing its consumption-based data, analytics, and agentic workflow capabilities as strategically complementary. Management expects Domo’s steady-state revenue to settle at approximately $280 million-$290 million as declining seat-based and services revenue offsets the more durable consumption business.
• Domo is expected to dilute Progress’ FY2027 operating margin by roughly 100-200 basis points during integration, while adding about $21 million in annual interest expense from acquisition financing. Management expects these effects to reverse as synergies ramp, with Domo ultimately contributing more than $100 million of annual EBITDA.
• Management sees significant upside from applying Domo’s consumption-based pricing model across more of Progress’ portfolio, as rising AI-related data volumes and infrastructure complexity could drive greater usage and capacity demand. Potential cross-selling between the two customer bases is not included in current forecasts and represents additional upside.

Progress Software Stock Performance

Shares of PRGS stock traded down $0.29 during mid-day trading on Friday, reaching $36.29. 252,034 shares of the company’s stock traded hands, compared to its average volume of 847,004. The firm has a market capitalization of $1.49 billion, a PE ratio of 16.73, a price-to-earnings-growth ratio of 1.68 and a beta of 0.89. Progress Software has a 12 month low of $23.82 and a 12 month high of $47.37. The firm has a 50 day moving average price of $42.09 and a two-hundred day moving average price of $35.10. The company has a debt-to-equity ratio of 2.55, a quick ratio of 0.81 and a current ratio of 0.81.

Key Headlines Impacting Progress Software

Here are the key news stories impacting Progress Software this week:

• Positive Sentiment: Progress reported fiscal Q3 adjusted EPS of $1.69, exceeding analyst estimates by $0.17. GAAP net income rose 17% year over year, operating income increased 6%, and operating cash flow climbed 20% to $88 million. Progress Software Q3 earnings and guidance
• Positive Sentiment: The company raised or reaffirmed its fiscal 2026 adjusted EPS outlook to $6.15-$6.23, broadly in line with the $6.18 FactSet consensus and above some earlier estimates. The outlook incorporates contributions from the Domo AI and Data Platform acquisition. Progress Software fiscal 2026 outlook
• Positive Sentiment: Progress launched new Agentic RAG capabilities designed to connect enterprise data across business systems for AI agents and large language models. The release supports management’s strategy to reposition the company as an AI infrastructure provider. Progress Software Agentic RAG announcement
• Neutral Sentiment: Management highlighted an AI-led shift and the Domo acquisition on its earnings call. Investors are looking for evidence that the transaction can accelerate growth and improve recurring revenue, which rose only 1% year over year on a constant-currency basis. Progress Software earnings call highlights
• Negative Sentiment: Q3 revenue of $246 million came in slightly below the $247.3 million consensus and declined about 1.5%-2% year over year. More importantly, fourth-quarter adjusted EPS guidance of $1.24-$1.33 was below the $1.37 analyst estimate, creating a near-term earnings concern despite projected revenue of $297-$305 million. Progress Software Q4 2026 earnings guidance
• Negative Sentiment: Some investors and analysts remain concerned that AI-related execution and integration risks warrant a lower valuation discount, particularly while core revenue growth remains muted. Progress Software AI risk analysis

Analyst Ratings Changes

PRGS has been the subject of several research reports. DA Davidson reaffirmed a “buy” rating and issued a $55.00 target price on shares of Progress Software in a research note on Friday. Jefferies Financial Group upgraded Progress Software to a “hold” rating in a report on Friday, September 25th. Weiss Ratings upgraded Progress Software from a “sell (d+)” rating to a “hold (c-)” rating in a report on Tuesday, August 11th. Guggenheim restated a “buy” rating and issued a $83.00 price objective on shares of Progress Software in a report on Wednesday, July 1st. Finally, Oppenheimer reduced their price target on shares of Progress Software from $57.00 to $50.00 and set an “outperform” rating on the stock in a research report on Wednesday, July 1st. Five analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company. According to data from MarketBeat.com, Progress Software has a consensus rating of “Moderate Buy” and a consensus target price of $52.17.

Progress Software Company Profile

Progress Software Corporation develops enterprise software that helps organizations build, deploy, integrate, and manage business applications and digital services. Its offerings are designed to support application development, data connectivity, integration, messaging, user experiences, and infrastructure performance across on-premises, cloud, and hybrid environments.

The company’s product portfolio includes OpenEdge for application development and deployment, DataDirect for data connectivity, MOVEit for managed file transfer, WhatsUp Gold for network monitoring, and Sitefinity for digital experience management.