Progress Software PRGS shares jumped 14.5% over the last two trading sessions to close at $58.98 on Wednesday following impressive first-quarter fiscal 2025 results on Monday. The company reported first-quarter fiscal 2025 non-GAAP earnings of $1.31 per share, beating the Zacks Consensus Estimate by 25.96% and increasing 4.8% year over year.
Non-GAAP revenues of $238 million beat the consensus mark by 0.92% and increased 29% year over year on a reported basis and 30% on a constant currency (cc) basis. The upside can be attributed to strong demand for Progress Software solutions, including ShareFile.
On a cc basis, Annualized Recurring Revenue (ARR) came in at $836 million, up 48% year over year, driven by strong contributions from ShareFile and other solutions. Net retention rate surpassed 100%.
Progress Software Corporation Price, Consensus and EPS Surprise
Progress Software Corporation price-consensus-eps-surprise-chart | Progress Software Corporation Quote
PRGS’ Quarter in Details
Software license revenues were $58.4 million, down 8.8% year over year. Maintenance and service revenues were $179.6 million, up 48.9% year over year.
Sales and marketing expenses, as a percentage of revenues, increased 40 basis points (bps) from the year-ago quarter’s level to 21.6%.
Product development expenses, as a percentage of revenues, increased 50 bps year over year to 19.5%.
General and administrative expenses, as a percentage of revenues, declined 80 bps from the year-ago quarter’s level to 10.8%.
Progress reported a non-GAAP operating margin of 39.3%, which contracted 220 bps year over year.
PRGS Balance Sheet Details
As of Feb. 28, 2025, cash and cash equivalents were $124.2 million compared with $118.1 million as of Nov. 30, 2024. Total debt was $1.51 billion, with a net debt position of $1.39 billion.
Progress generated $73.2 million in adjusted free cash flow.
In first-quarter fiscal 2025, Progress Software continued its strategic capital allocation efforts. The company allocated $30 million toward debt repayment on its revolving credit line and repurchased $30 million worth of shares.
This led to a revision in its annual share repurchase forecast, lowering it from $80 million to $70 million, with the $10 million difference redirected toward debt reduction.
At the end of the fiscal first quarter, PRGS’ revolving credit line balance was $700 million, and it had $77 million remaining under its current share repurchase authorization.
PRGS Raises 2025 Outlook
For fiscal 2025, non-GAAP revenues are projected between $958 million and $970 million.
Non-GAAP operating margin is expected to be 38%.
Non-GAAP earnings per share are projected between $5.25 and $5.37, up from the previous guidance of $5.00-$5.12.
Adjusted free cash flow is expected between $283 million and $294 million for fiscal 2025.
For second-quarter fiscal 2025, Progress expects non-GAAP revenues between $235 million and $241 million.
PRGS expects non-GAAP earnings per share to be between $1.28 and $1.34.
Zacks Rank & Stocks to Consider
Progress currently carries a Zacks Rank #3 (Hold).
DoorDash DASH, CSG Systems International CSGS and Meta Platforms META are some better-ranked stocks in the broader technology sector. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DoorDash shares have gained 13% year to date. DASH is scheduled to report its first-quarter 2025 results on May 7.
CSG Systems shares have gained 19.7% year to date. CSGS is slated to report its first-quarter 2025 results on May 7.
Meta Platforms shares have lost 0.2% year to date. META is set to report its first-quarter 2025 results on April 30.
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