Progress Software (PRGS) investor relations material

Executive summary

• Q1 2026 revenue reached $248 million, up 4% year-over-year, with ARR growing 2% to $863 million and NRR at 99%.

• Non-GAAP EPS rose 22% to $1.60, GAAP EPS increased 121% to $0.53, and operating margin was 41% (non-GAAP) and 19% (GAAP).

• Record cash flows: adjusted free cash flow at $99 million, unlevered free cash flow at $111 million, and cash from operations at $98.6 million.

• AI-driven innovation, ShareFile integration, and disciplined execution supported customer retention and new customer acquisition.

• Continued capital returns through $60 million debt repayment and $20 million share repurchases in Q1.

Financial highlights

• Software license revenue grew 16% year-over-year to $67.6 million, while maintenance, SaaS, and professional services revenue totaled $180.2 million, flat year-over-year.

• Gross profit was $204 million, with a gross margin of 82% for the quarter.

• Net income more than doubled year-over-year to $22.8 million (GAAP); non-GAAP net income was $68.3 million, up 16%.

• Cash and equivalents ended at $113 million; total debt at $1.35 billion; net leverage ratio at 3.1x, down from prior year.

• DSO improved to 52 days from 73 days in Q4; deferred revenue rose $25 million YoY to $425 million.

Outlook and guidance

• FY 2026 revenue guidance: $988–$1,000 million; non-GAAP EPS: $5.91–$6.03; GAAP EPS: $1.71–$1.87.

• FY 2026 adjusted free cash flow: $263–$275 million; unlevered free cash flow: $315–$326 million.

• Q2 2026 revenue guidance: $240–$246 million; non-GAAP EPS: $1.47–$1.53.

• Full-year operating margin expected at 39% (non-GAAP) and 16–17% (GAAP).

• Targeting $250 million in debt repayment for 2026, reducing net leverage to ~2.7x by year-end.