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1. Company Snapshot

1.a. Company Description

Progress Software Corporation develops, deploys, and manages business applications.The company offers OpenEdge, a development software, which builds multi-language applications for secure deployment across various platforms and devices, as well as cloud; developer tools that consists of components for user interface development for Web, mobile, desktop, chat, and AR/VR apps, as well as automated application testing and reporting tools; Sitefinity, a web content management and customer analytics platform; Corticon, a business rules management system that provides applications with decision automation and change process, and decision-related insight capabilities.It also offers DataDirect Connect, which provides data connectivity using industry-standard interfaces to connect applications running on various platforms; MOVEit that offers secure collaboration and automated file transfers of critical business information; Chef, an infrastructure automation platform to build, deploy, manage, and secure applications in multi-cloud and hybrid environments, and on-premises; and WhatsUp Gold, a network monitoring solution.


In addition, the company provides Kemp LoadMaster, a load balancing solutions; and Kemp Flowmon network performance monitoring and diagnostic solutions that collect and analyze network telemetry from various sources.Further, it provides project management, implementation, custom development, programming, and other services, as well as web-enable applications; and training services.The company sells its products to end users, independent software vendors, original equipment manufacturers, and system integrators.


It has operations in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific.The company was founded in 1981 and is headquartered in Burlington, Massachusetts.

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1.b. Last Insights on PRGS

Negative drivers behind Progress Software Corporation's recent performance include a 14.7% decline in short interest in January, which may indicate a decrease in investor confidence. The company's stock price hit a new 52-week low on April 1, following an analyst downgrade from Jefferies Financial Group. Additionally, Progress Software's reliance on international sales may pose a risk, as highlighted in a January 26 article. Furthermore, the company's Q1 earnings preview on March 25 suggested slowing operations, with analysts projecting conservative revenue and EPS figures.

1.c. Company Highlights

2. Progress Software Q1 2026: Solid Growth, AI‑Driven Momentum

Progress Software Corp. delivered a robust first‑quarter 2026 performance, with revenue of $248 million—up 4% YoY—and earnings per share of $1.60, beating the $1.57 estimate by 2%. Operating margins held above 41%, and the company generated $99 million in adjusted free cash flow, reinforcing its strong cash generation profile.

Publication Date: Apr -20

📋 Highlights
  • Revenue & ARR Growth:: Q1 revenue rose 4% to $248M YoY, with ARR up 2% in constant currency despite SaaS revenue decline due to ShareFile cleanup.
  • EPS & Margins:: EPS surged 22% to $1.60 YoY, with operating margins exceeding 41%, reflecting operational efficiency.
  • Free Cash Flow Strength:: Generated $99M adjusted free cash flow and $111M unlevered free cash flow, with $60M debt paid down and $20M stock repurchased.
  • Guidance & Leverage:: 2026 guidance forecasts $988M-$1B revenue (1-2% growth), 39% operating margin, and $263M-$275M adjusted free cash flow, with net leverage at 3.1x.
  • AI & Product Momentum:: AI-driven value creation in workflow automation and ShareFile, despite $7M+ churn from a canceled Eastern Europe contract, still achieving 2% ARR growth.

Financial Performance

Revenue rose 4% year‑over‑year to $248 million, while ARR grew 2% in constant currency, underscoring the resilience of the subscription business despite a Q4 spike that led to a sequential decline in SaaS revenue. Operating margin stayed above 41%, and the company reported $99 million in adjusted free cash flow and $111 million in unlevered free cash flow, supporting aggressive debt repayment and share repurchases. The net debt position of $1.24 billion translates to a net leverage of 3.1x, indicating a solid balance sheet. CFO Anthony Folger projected full‑year revenue between $988 million and $1 billion, a modest 1–2% growth over 2025, with operating margin at 39% and EPS between $5.91 and $6.03.

Strategic Highlights

CEO Yogesh Gupta highlighted AI as a key driver of customer value, noting measurable gains in workflow automation, productivity, and monetization across the portfolio. Progress continues to pursue disciplined M&A opportunities, focusing on synergistic integrations that generate excess returns. The company also emphasized its commitment to investing in the business, aggressively reducing debt, and opportunistic share repurchases, while remaining vigilant about macro‑economic trends.

Growth Outlook

After a Q4 surge, SaaS revenue is expected to normalize at $72–$73 million per quarter, with isolated churn from a canceled Eastern European government contract not undermining the 2% ARR growth or the 100% NRR target. Progress’s products, including Chef and ShareFile, continue to perform well, buoyed by AI initiatives. The company’s guidance for Q2 and full‑year 2026 remains positive, with adjusted free cash flow projected at $263–$275 million and EPS at $5.91–$6.03.

Valuation Snapshot

At current pricing, Progress trades at a P/E of 15.34, a P/B of 2.61, and a P/S of 1.32, with an EV/EBITDA of 11.77. Free cash flow yield stands at 19.8%, ROIC at 9.03%, and ROE at 17.82%. Net debt/EBITDA is 4.33x, reflecting a disciplined capital structure. These metrics suggest the stock is attractively priced relative to peers, with upside potential as AI adoption and product momentum continue.

Cash Flow & Capital Allocation

3. NewsRoom

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PRGS vs. SNPS: Which Stock Is the Better Value Option?

Apr -30

Source: zacks.com

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Does Progress Software (PRGS) Have the Potential to Rally 62.29% as Wall Street Analysts Expect?

Apr -21

Source: zacks.com

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Progress Software Releases 2025 Corporate Social Responsibility Report, Underscoring Global Commitment to Giving Back

Apr -21

Source: globenewswire.com

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Progress Software Expands AI and Workforce Operations in India with New Bengaluru Innovation Hub

Apr -14

Source: globenewswire.com

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Progress Software Corporation $PRGS Shares Sold by Allspring Global Investments Holdings LLC

Apr -03

Source: defenseworld.net

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Contrasting Progress Software (NASDAQ:PRGS) and Pegasystems (NASDAQ:PEGA)

Apr -02

Source: defenseworld.net

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After Plunging 34% in 4 Weeks, Here's Why the Trend Might Reverse for Progress Software (PRGS)

Apr -01

Source: zacks.com

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Progress Software Q1 Earnings Call Highlights

Apr -01

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.85%)

6. Segments

Maintenance

Expected Growth: 3.5%

Progress Software Corporation's 3.5% growth in Maintenance is driven by increasing demand for digital transformation, adoption of cloud-based solutions, and expansion into new markets. Additionally, the company's strategic acquisitions and partnerships have enhanced its product offerings, leading to higher maintenance revenue.

Software Licenses

Expected Growth: 4.5%

Progress Software Corporation's 4.5% growth in software licenses is driven by increasing demand for digital transformation, adoption of cloud-based solutions, and expansion into new markets. Additionally, the company's strategic acquisitions, innovative product offerings, and strong partnerships contribute to its growth momentum.

Professional Services

Expected Growth: 3.8%

Progress Software Corporation's 3.8% growth in Professional Services is driven by increasing demand for digital transformation, adoption of cloud-based solutions, and growing need for IT consulting services. Additionally, the company's strategic acquisitions and partnerships have expanded its service offerings, contributing to revenue growth.

7. Detailed Products

Progress Telerik

A suite of UI components and tools for building web, mobile and desktop applications

Progress Sitefinity

A web content management system for building and managing websites and mobile applications

Progress OpenEdge

A platform for building and deploying business applications

Progress Corticon

A business rules management system for automating decision-making processes

Progress WhatsUp Gold

A network monitoring and management tool for IT infrastructure

Progress Chef

An automation platform for infrastructure, applications and compliance

Progress Kemp

A load balancer and application delivery controller for high-availability and scalability

8. Progress Software Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Progress Software Corporation is medium because while there are some alternative products available, they are not as comprehensive or widely adopted as Progress Software's offerings.

Bargaining Power Of Customers

The bargaining power of customers for Progress Software Corporation is low because the company's products are often critical to customers' operations, making it difficult for customers to negotiate prices or switch to alternative products.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Progress Software Corporation is medium because while the company relies on some key suppliers for certain components, it also has some flexibility to negotiate prices and switch to alternative suppliers if needed.

Threat Of New Entrants

The threat of new entrants for Progress Software Corporation is low because the company has a strong brand and established customer base, making it difficult for new entrants to gain traction in the market.

Intensity Of Rivalry

The intensity of rivalry for Progress Software Corporation is high because the company operates in a highly competitive market with several established players, and the company must continually innovate and invest in marketing and sales to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 61.91%
Debt Cost 4.68%
Equity Weight 38.09%
Equity Cost 8.67%
WACC 6.20%
Leverage 162.52%

11. Quality Control: Progress Software Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
PTC

A-Score: 5.1/10

Value: 2.1

Growth: 8.3

Quality: 8.9

Yield: 0.0

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Aspen Technology

A-Score: 4.6/10

Value: 3.3

Growth: 5.1

Quality: 5.9

Yield: 0.0

Momentum: 7.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Progress Software

A-Score: 4.2/10

Value: 4.4

Growth: 6.4

Quality: 5.9

Yield: 1.0

Momentum: 0.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Manhattan Associates

A-Score: 4.1/10

Value: 0.8

Growth: 7.9

Quality: 8.7

Yield: 0.0

Momentum: 1.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Elastic

A-Score: 3.8/10

Value: 3.2

Growth: 8.0

Quality: 4.9

Yield: 0.0

Momentum: 3.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Agilysys

A-Score: 3.8/10

Value: 0.0

Growth: 7.9

Quality: 7.5

Yield: 0.0

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.94$

Current Price

28.94$

Potential

-0.00%

Expected Cash-Flows