Summary
Progress Software closed fiscal 2025 with fourth-quarter revenue of $252.67 million, up 17.5% from $214.96 million in the prior-year quarter. GAAP operating income rose 78.5% to $38.37 million. GAAP net income was $25.74 million, compared with $1.15 million a year earlier. The quarter's operating margin was 15.2%, up 5.2 percentage points, while gross margin slipped 1.4 percentage points to 81.6%.
Full-year revenue reached $977.83 million, up 29.8% from $753.41 million. Operating income rose 23.6% to $153.29 million. Net income rose 6.9% to $73.13 million, and diluted earnings per share came in at $1.66, up from $1.54. Full-year operating margin was 15.7%, down 0.8 percentage points, and full-year gross margin was 80.8%, down 1.9 percentage points. Non-GAAP operating margin was 38% in the quarter and 39% for the year. Non-GAAP diluted earnings per share was $1.51.
Recurring revenue held up. Annualized recurring revenue was $852 million, up 2% year over year in constant currency, and net retention was 100%. Deferred revenue rose 5.1% to $425.08 million, and remaining performance obligations rose 9.8% to $536.30 million. Progress describes its playbook as buying high-retention software, integrating quickly, and pushing acquired businesses toward 40% operating margins. The supplemental deck puts the ARR compound annual growth rate at 15% from the fourth quarter of 2020 to the fourth quarter of 2025, and the revenue CAGR at 15% from 2021 to 2025.
Cash generation was the standout in the quarter. Operating cash flow was $62.80 million, up 219.6% from $19.65 million a year earlier. For the full year, operating cash flow was $235.19 million, up 11.2%. Capital expenditures were $2.86 million in the quarter, down 0.6%, and $5.70 million for the year, up 9.5%. Days sales outstanding was 73 days, against 67 days in the prior-year fourth quarter and 55 days in the fiscal third quarter of 2025. Management tied the increase to the timing of billings and collections. Unlevered free cash flow for fiscal 2025 was $303.8 million, up 28%.
Guidance covers both the fiscal first quarter and the full fiscal year. For the fiscal year ending November 30, 2026, the company guides revenue of $986 million to $1 billion, non-GAAP diluted earnings per share of $5.82 to $5.96, and adjusted free cash flow of $260 million to $274 million. For the fiscal first quarter ending February 28, 2026, the outlook is revenue of $244 million to $250 million and non-GAAP diluted earnings per share of $1.56 to $1.62. Unlevered free cash flow for fiscal 2026 is guided to $313 million to $326 million.
The MOVEit Vulnerability remains the largest open risk. Progress recorded no loss contingency as of November 30, 2025 because it cannot estimate possible losses, and it incurred $2.8 million of cyber vulnerability response expenses, net, for the fiscal year. About $4.5 million of cybersecurity insurance coverage remains. The balance sheet carries $600 million drawn on a $1.5 billion revolver, plus convertible notes of $360 million due in April 2026 and $450 million due in 2030. Interest expense on the revolver is the reason debt paydown sits high on the priority list. Management plans to model $250 million of debt repayment in fiscal 2026, having repaid $20 million in the fourth quarter and $130 million for the year. Share repurchases totaled $105 million in fiscal 2025, including $40 million in the fourth quarter, and $202.2 million remained authorized at year end.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $252.7M | $249.8M | +1.1% | $215.0M | +17.5% |
| Gross profit | $206.1M | $202.3M | +1.9% | $178.4M | +15.5% |
| Gross margin | 81.6% | 81.0% | +0.6 pp | 83.0% | -1.4 pp |
| Sales & marketing | $58.2M | $51.9M | +12.2% | $50.4M | +15.4% |
| General & administrative | $28.6M | $28.3M | +1.2% | $25.7M | +11.5% |
| Total operating expenses | $167.8M | $158.4M | +5.9% | $156.9M | +6.9% |
| Operating income (loss) | $38.4M | $43.9M | -12.5% | $21.5M | +78.5% |
| Operating margin | 15.2% | 17.6% | -2.4 pp | 10.0% | +5.2 pp |
| Net income (loss) | $25.7M | $19.4M | +32.6% | $1.1M | +2144.6% |
| Net margin | 10.2% | 7.8% | +2.4 pp | 0.5% | +9.7 pp |
| Diluted EPS | $0.58 | $0.44 | +$0.14 | $0.03 | +$0.55 |
| Net retention rate | 100.0% | 100.0% | ±0.0 pp | 100.0% | ±0.0 pp |
Risks
The MOVEit Vulnerability has led to the MDL, government inquiries and investigations, and possible material liability; as of November 30, 2025, Progress had not recorded a loss contingency because the loss was not reasonably estimable and had only approximately $4.5 million of remaining cybersecurity insurance coverage.
The filing expands AI risk, stating competitors or third parties may incorporate AI more successfully and achieve greater adoption, and that Progress's AI efforts may not succeed despite investments to integrate AI into products and operations.
Growth strategy depends on acquisitions such as ShareFile and Nuclia; ShareFile generated $261.6 million of revenue in fiscal 2025 and drove increases in SaaS revenue, amortization, and operating expenses, while integration, synergy, cybersecurity, and goodwill impairment risks remain.
As of November 30, 2025, consolidated indebtedness was approximately $1.4 billion, including $360.0 million of 2026 Notes due April 15, 2026 and $450.0 million of 2030 Notes; interest expense increased 121% in fiscal 2025 because of borrowings used for the ShareFile acquisition, and Credit Facility covenants could restrict operations or cause default.
OpenEdge and ShareFile together accounted for slightly more than half of aggregate revenue in fiscal year 2025, so any decline in demand or superior competing technology could materially harm results.
Customers and partners may delay implementation, delay payment, decline renewals, or reduce use of products; net retention rates ranged only between 100% and 102%, and DSO increased to 73 days in fiscal 2025 from 67 days in fiscal 2024.
Approximately 36% of fiscal 2025 revenue was generated outside North America and 29% from EMEA, exposing Progress to geopolitical instability, tariffs, import/export controls, armed conflict, and economic weakness that could delay or reduce technology purchases.
Data privacy and AI regulations are evolving rapidly with potentially punitive penalties, including GDPR fines up to 4% of worldwide revenue, and compliance could require costly changes to products or business practices.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Adjusted Free Cash Flow
Annualized Recurring Revenue
Net Retention Rate (NRR)
Unlevered Free Cash Flow
Summary, forecast, risks and KPIs are extracted from PROGRESS SOFTWARE CORP /MA's SEC filings for Q4 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.