Summary
Progress opened fiscal 2025 with revenue of $238.0 million, up 29% from $184.7 million in the prior-year quarter and up 30% at constant currency. Annualized recurring revenue reached $836 million, up 48% from $566 million a year earlier. ShareFile, acquired on October 31, 2024, did most of that work, contributing $63.6 million of quarterly revenue and adding roughly $250 million of ARR. Pro forma ARR growth, which counts ShareFile in every period, was 3%. Net retention again came in above 100%, and management says the metric has generally ranged between 100% and 102%. The revenue mix shifted hard toward recurring sources. Software license revenue fell 9% while maintenance, SaaS and professional services revenue rose 49%, and management credited the data platform and infrastructure management products with a particularly solid quarter.
GAAP profit lines moved the other way. Gross profit rose 26.3% to $191.8 million, but gross margin slipped to 80.6% from 82.2% as hosting costs, headcount and intangible amortization scaled up with the acquisition. Operating income fell 7.4% to $32.4 million, and operating margin dropped to 13.6% from 19.0%. Net income fell 51.6% to $10.9 million. Diluted earnings per share fell 52.9% to $0.24 from $0.51. Restructuring expenses rose 199% and acquisition-related costs rose 255%, and higher interest expense on the revolver used to fund ShareFile pushed total other expense, net, up 158%. Non-GAAP results strip out amortization of acquired intangibles, stock-based compensation, restructuring and acquisition-related fees. On that basis, income from operations was $93.6 million, up 22%, operating margin was 39%, and diluted earnings per share was $1.31, up 5% from $1.25.
Cash remained the strong part of the story. Operating cash flow was $68.9 million, down 2.2% from $70.5 million, as higher billings and collections were offset by bigger operating costs and interest. Capital expenditures rose to $1.3 million from $0.3 million. Adjusted free cash flow came to $73.2 million, up 1%, and unlevered free cash flow to $88.0 million, up 13%. Deferred revenue of $400.3 million rose 35.2%, and remaining performance obligations of $478.3 million rose 37.4%, both lifted by the larger recurring base. Days sales outstanding improved to 48 days from 50 days a year earlier and 67 days at the end of fiscal 2024. The company repaid $30 million on its revolving line of credit, repurchased $30 million of stock, and is modeling $160 million of debt repayment for the full fiscal year. The quarterly dividend stays suspended.
Guidance for the full fiscal year keeps the revenue range unchanged and lifts the profit outlook. Non-GAAP diluted earnings per share is now guided to $5.25 to $5.37, up from an earlier range of $5.00 to $5.12. Non-GAAP operating margin guidance is 38%, and the non-GAAP effective tax rate is 20%. For the second quarter, non-GAAP diluted earnings per share is guided to $1.28 to $1.34. Full-year adjusted free cash flow guidance sits at $226 million to $238 million, with unlevered free cash flow guidance of $283 million to $294 million. Currency translation is expected to take a modest bite out of full-year revenue while leaving earnings per share roughly untouched.
Risks here are execution and liability, not demand. MOVEit litigation remains at an early stage. Motions to dismiss have been filed but not ruled on, and management does not expect the matter to conclude within the fiscal year, with insurance expected to cover part of the cost. ShareFile integration is on or ahead of plan and should finish by year-end, but the promised synergies and expense savings may not arrive as planned. Renewal timing, foreign exchange swings and the broader economic and geopolitical backdrop could move results, and the debt taken on for the acquisition keeps interest expense elevated.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $238.0M | $215.0M | +10.7% | $184.7M | +28.9% |
| Gross profit | $191.8M | $178.4M | +7.5% | $151.9M | +26.3% |
| Gross margin | 80.6% | 83.0% | -2.4 pp | 82.2% | -1.7 pp |
| Sales & marketing | $51.3M | $50.4M | +1.7% | $39.1M | +31.2% |
| General & administrative | $25.6M | $25.7M | -0.3% | $21.3M | +20.0% |
| Total operating expenses | $159.4M | $156.9M | +1.6% | $116.9M | +36.4% |
| Operating income (loss) | $32.4M | $21.5M | +50.8% | $35.0M | -7.4% |
| Operating margin | 13.6% | 10.0% | +3.6 pp | 18.9% | -5.3 pp |
| Net income (loss) | $10.9M | $1.1M | +854.3% | $22.6M | -51.6% |
| Net margin | 4.6% | 0.5% | +4.1 pp | 12.3% | -7.7 pp |
| Diluted EPS | $0.24 | $0.03 | +$0.21 | $0.51 | -$0.27 |
| Net retention rate | 100.0% | 100.0% | ±0.0 pp | 99.0% | +1.0 pp |
Risks
The MOVEit Vulnerability litigation remains in a relatively early stage with motions to dismiss filed but not yet ruled upon, and the MDL is not expected to conclude within this fiscal year. The company is cooperating with governmental inquiries and expects future response and liability costs, partly offset by insurance.
The ShareFile acquisition was funded in part by drawing on the revolving line of credit, and the quarterly dividend was suspended to redirect capital toward debt repayment. Increased leverage may limit liquidity for future M&A, share repurchases, or other capital needs.
The ShareFile acquisition drove the FY2025 Q1 revenue increase of 28.9%, but operating income declined 7.4% and net income declined 51.6% year over year. Integration, increased amortization, and restructuring may continue to pressure profitability.
Restructuring actions in FY2025 Q1 included headcount reductions and a facility closure tied to the ShareFile acquisition. Execution risk and potential inability to realize expected cost savings could disrupt operations.
Foreign currency rate volatility affected FY2025 Q1 results, and a substantial portion of revenue is generated outside North America. Currency fluctuations can continue to impact reported revenue and expenses.
Timing of renewals on multiyear subscription contracts contributed to lower DataDirect product revenue in FY2025 Q1. Period-to-period volatility in license and maintenance revenue may continue.
ARR grew 48% year over year to $836 million as of February 28, 2025, primarily driven by the ShareFile acquisition. Net retention rate ranged between 100% and 102%, indicating limited organic expansion and reliance on acquisitions for growth.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Annualized Recurring Revenue (ARR)
Net Retention Rate (NRR)
Summary, forecast, risks and KPIs are extracted from PROGRESS SOFTWARE CORP /MA's SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.