Summary
Progress Software closed fiscal 2024 with a revenue surge powered by acquisitions, even as GAAP profitability thinned at the bottom line. Fourth quarter revenue reached $214.96 million, up 21.5% from $176.97 million in the prior-year quarter, and full-year revenue was $753.41 million, up 8.5%. Gross profit for the quarter was $178.42 million, up 24.5%, with gross margin expanding to 83.0% from 81.0%. Full-year gross margin came in at 82.7%.
The October 31, 2024 acquisition of ShareFile reshaped both the balance sheet and the recurring revenue base. Progress paid $852.7 million in cash for the asset purchase, funded in part by $730.0 million drawn on its revolving credit facility. Annualized recurring revenue hit $842 million, up 46% year over year, and the net retention rate closed above 100%. Management said the deal adds roughly $250 million of ARR. Deferred revenue climbed to $404.41 million, up 37.1% from the prior-year quarter, and remaining performance obligations reached $488.50 million, up 65.0%.
GAAP operating income for the quarter slipped to $21.50 million, down 4.6% from $22.54 million, and operating margin narrowed to 10.0% from 12.7%. Net income fell sharply to $1.15 million from $15.34 million, a 92.5% decline. Part of that drop traces to a $13.7 million deferred tax liability recorded after the company determined a substantial portion of unremitted foreign earnings are no longer indefinitely reinvested. Full-year operating income was $124.00 million, up 12.2%, while full-year net income was $68.44 million, down 2.5%. Full-year diluted EPS was $1.54, down $0.03. On a non-GAAP basis, quarterly diluted EPS was $1.33 compared to $1.02, and non-GAAP operating margin was 37%.
Cash generation was mixed. Operating cash flow for the quarter was $19.65 million, down 40.7% from $33.16 million, but full-year operating cash flow was $211.49 million, up 21.6%. Capital expenditures for the quarter were $2.88 million, up 20.5%, while full-year capital expenditures were $5.21 million, down 6.5%. Days sales outstanding was 67 days compared to 62 days a year earlier. The board suspended the quarterly dividend alongside the ShareFile deal and plans to redirect that capital toward debt repayment. Management is modeling about $150 million in debt repayment for fiscal 2025.
Guidance for the full fiscal year 2025 sets non-GAAP diluted earnings per share at $5.00 to $5.12, a non-GAAP operating margin of 37% to 38%, adjusted free cash flow of $225 million to $237 million and unlevered free cash flow of $282 million to $294 million. For the first quarter of fiscal 2025, non-GAAP diluted earnings per share guidance is $1.02 to $1.08. A negative currency translation impact of roughly $5.6 million on full-year revenue is expected.
Risks stay concentrated in integration and litigation. The MOVEit Vulnerability litigation, consolidated in the District of Massachusetts, carries no recorded loss contingency because the company cannot estimate a range. Cyber incident and vulnerability response expenses, net, were $5.6 million for fiscal 2024. Progress held $15.0 million of cybersecurity insurance coverage during the incident period, with $6.7 million of additional coverage remaining and $5.8 million recorded in recoveries. ShareFile synergy realization, higher debt levels, and foreign currency swings round out the watch list.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $215.0M | $178.7M | +20.3% | $177.0M | +21.5% |
| Gross profit | $178.4M | $149.6M | +19.2% | $143.3M | +24.5% |
| Gross margin | 83.0% | 83.7% | -0.7 pp | 81.0% | +2.0 pp |
| Sales & marketing | $50.4M | $37.1M | +35.8% | $43.6M | +15.8% |
| General & administrative | $25.7M | $20.5M | +25.3% | $22.1M | +16.2% |
| Total operating expenses | $156.9M | $109.3M | +43.6% | $120.8M | +29.9% |
| Operating income (loss) | $21.5M | $40.3M | -46.7% | $22.5M | -4.6% |
| Operating margin | 10.0% | 22.6% | -12.6 pp | 12.7% | -2.7 pp |
| Net income (loss) | $1.1M | $28.5M | -96.0% | $15.3M | -92.5% |
| Net margin | 0.5% | 15.9% | -15.4 pp | 8.7% | -8.1 pp |
| Diluted EPS | $0.03 | $0.65 | -$0.62 | $0.34 | -$0.31 |
| Net retention rate | 100.0% | 99.0% | +1.0 pp | 100.0% | ±0.0 pp |
Risks
The MOVEit Vulnerability has resulted in consolidated class action litigation in the District of Massachusetts, domestic and foreign data privacy regulator inquiries, state attorney general inquiries, and an FTC preservation notice. The Company is unable to estimate the quantitative impact of potential liabilities, and MOVEit Transfer and MOVEit Cloud represented less than 4% of revenue for the fiscal year ended November 30, 2024.
Progress has experienced cybersecurity incidents including the November 2022 Cyber Incident and the MOVEit Vulnerability, with evidence of unauthorized access and data exfiltration. The Company may discover additional vulnerabilities in MOVEit or other products, and its security measures could prove inadequate or fail.
The October 31, 2024 ShareFile acquisition for $875.0 million was funded by $730.0 million of revolving credit borrowings and cash. Integration risks include failure to realize value, product disruption, deficiencies in acquired cybersecurity or internal controls, and impairment of $465.0 million of intangible assets.
As of November 30, 2024, Progress had approximately $1.5 billion of consolidated indebtedness, including $360 million of convertible notes due 2026 and $450 million due 2030. The Board suspended quarterly dividends to redirect capital toward debt repayment, and debt covenants may limit operations.
OpenEdge accounted for approximately 34% of aggregate revenue in fiscal year 2024. A decline in demand or new technologies that are superior or more responsive to customer requirements could materially adversely affect results.
Progress has integrated and plans to further integrate AI into product offerings and operations, and competitors may incorporate AI more quickly or successfully. AI-related legal and regulatory developments, including the October 30, 2023 Executive Order, may require significant resources or limit AI use.
Approximately 41% of total fiscal 2024 revenue was generated outside North America and 33% was generated in EMEA. Geopolitical instability including the Russia/Ukraine conflict and armed conflicts involving Israel, and a stronger U.S. dollar, can reduce reported international revenue.
Weak U.S. and international economic conditions may cause customers to delay, reduce, or forego technology purchases, leading to lower sales, longer sales cycles, and increased price competition. Inflationary pressures may increase expenses including labor costs.
Customers and partners may seek refunds, delay implementation or payment, decline renewals, or reduce use of products. Days sales outstanding increased to 67 days in fiscal 2024 from 62 days in fiscal 2023, and gross accounts receivable increased $37.6 million.
A substantial portion of revenue is recognized from sales through third parties including ISVs, distributors/resellers, and OEMs. A reduction in their sales efforts, technical capabilities, financial viability, or termination of a major relationship could adversely affect sales.
Chef offerings incorporate open source components, and open source licensing can create low barriers to entry. New competitors could develop software based on open source programs that competes with Chef products, reducing demand and imposing price pressure.
Progress is subject to expanding global privacy and AI laws, including GDPR fines of up to 4% of worldwide revenue, and U.S. state laws such as Texas and Oregon that took effect in 2024. Compliance may involve significant costs or require changes to business practices.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Adjusted Free Cash Flow
Annualized Recurring Revenue (ARR)
Net Retention Rate (NRR)
Summary, forecast, risks and KPIs are extracted from PROGRESS SOFTWARE CORP /MA's SEC filings for Q4 FY2024 (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.