Progress Software (PRGS) Reports Strong Q3 FY2025 Earnings
Reporting Date: September 29, 2025 (After Market Close)
Fiscal Quarter End: August 31, 2025
Financial Highlights
- Revenue: $249.8M, up 40% YoY (vs. $178.7M)
- ARR (Annualized Recurring Revenue): $849M, up 47% YoY
- GAAP EPS: $0.44, down 32% YoY (vs. $0.65)
- Non-GAAP EPS: $1.50, up 19% YoY (vs. $1.26)
- GAAP Operating Margin: 18% (down 500 bps YoY)
- Non-GAAP Operating Margin: 40% (down 100 bps YoY)
- GAAP Net Income: $19.4M, down 32% YoY
- Non-GAAP Net Income: $65.7M, up 19% YoY
- Cash from Operations: $73.4M, up 27% YoY
- Unlevered Free Cash Flow: $88.6M, up 40% YoY
Management Commentary
- CEO Yogesh Gupta highlighted 100% net retention, steady ARR growth, and strong integration of ShareFile, contributing to both top and bottom-line results.
- Company is embedding AI/GenAI agentic RAG technology across its portfolio.
- CFO Anthony Folger emphasized durable revenue streams, cost discipline, debt reduction, and a new $1.5B revolving credit facility.
- Board expanded share repurchase authorization by $200M to $242M; $15M repurchased in Q3.
Business Outlook
Updated FY2025 Guidance (Raised)
- Revenue: $975M–$981M (prior $962M–$974M)
- GAAP EPS: $1.38–$1.45 (prior $1.27–$1.43)
- Non-GAAP EPS: $5.50–$5.56 (prior $5.28–$5.40)
- GAAP Operating Margin: 15%
- Non-GAAP Operating Margin: 38–39%
- Cash from Operations: $221M–$231M (raised from $218M–$230M)
- Adjusted Free Cash Flow: $232M–$242M (raised from $228M–$240M)
- Unlevered Free Cash Flow: $289M–$299M
Q4 FY2025 Guidance
- Revenue: $250M–$256M
- GAAP EPS: $0.31–$0.37
- Non-GAAP EPS: $1.29–$1.35
Key Takeaways
- Top-line strength: 40% YoY revenue growth and 47% ARR growth highlight strong demand and ShareFile integration.
- Profitability mixed: GAAP EPS declined on higher expenses and amortization, but non-GAAP EPS rose 19% due to adjusted expense treatment.
- Cash flow strong: Operating cash flow and unlevered free cash flow both rose sharply YoY.
- Guidance raised: Revenue, EPS, and cash flow outlook all upgraded, signaling confidence heading into Q4 and FY close.
Stock is up After hours 43.79 +1.18 (2.77%)