Progress Software (PRGS) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $238 million, up 29–30% year-over-year, driven by ShareFile integration and robust product demand.

• Annualized recurring revenue (ARR) grew 48% year-over-year to $836 million, with ShareFile contributing $250 million.

• Net retention rate remained above 100%, reflecting strong customer loyalty and business resiliency.

• ShareFile integration is ahead of schedule, contributing significantly to ARR, revenue, and expense savings.

• Non-GAAP EPS was $1.31, well above guidance; non-GAAP operating margin was 39%.

Financial highlights

• Q1 revenue: $238 million, up 29–30% year-over-year; ARR: $836 million, up 48% year-over-year.

• Non-GAAP operating margin: 39%; GAAP operating margin: 14% (down from 19% prior year).

• Non-GAAP EPS: $1.31 (up 5% year-over-year); GAAP EPS: $0.24 (down 53% year-over-year).

• Cash from operations: $68.9 million; unlevered free cash flow: $88 million.

• Interest expense rose 151% to $18.4 million due to debt for the ShareFile acquisition.

Outlook and guidance

• FY 2025 revenue guidance: $958–$970 million; non-GAAP EPS: $5.25–$5.37; non-GAAP operating margin: 38%.

• Q2 2025 revenue guidance: $235–$241 million; non-GAAP EPS: $1.28–$1.34.

• Adjusted free cash flow for FY 2025: $225–$238 million; unlevered free cash flow: $283–$294 million.

• Expecting low single-digit ARR growth for 2025.

• Currency translation impact expected to be immaterial for EPS; revenue impact of $2.8 million for FY 2025.