Progress Software (PRGS) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $248 million, up 4% year-over-year, with ARR growing 2% to $863 million and NRR at 99%.

• Non-GAAP EPS was $1.60, up 22% YoY; GAAP EPS was $0.53, up 121% YoY; operating margins were 41% (non-GAAP) and 19% (GAAP).

• Record cash flows: adjusted free cash flow at $99 million, unlevered free cash flow at $111 million, and cash from operations at $98.6 million.

• AI-driven innovation, disciplined execution, and ShareFile integration supported customer retention and new customer acquisition.

• $60 million in debt repaid and $20 million in share repurchases during Q1.

Financial highlights

• Software license revenue grew 16% YoY to $67.6 million, while maintenance, SaaS, and professional services revenue totaled $180.2 million, flat YoY.

• Gross profit was $204 million, with a gross margin of 82% for the quarter.

• Net income more than doubled YoY to $22.8 million (GAAP); non-GAAP net income was $68.3 million, up 16%.

• Cash and equivalents ended at $113 million; total debt at $1.35 billion; net leverage ratio at 3.1x, down from prior year.

• DSO improved to 52 days from 73 days in Q4; deferred revenue rose to $425 million, up $25 million YoY.

Outlook and guidance

• Q2 2026 revenue expected between $240 million and $246 million; non-GAAP EPS between $1.47 and $1.53.

• Full-year 2026 revenue guided to $988 million–$1 billion (1%-2% YoY growth); non-GAAP EPS: $5.91–$6.03; GAAP EPS: $1.71–$1.87.

• Full-year adjusted free cash flow expected at $263 million–$275 million; unlevered free cash flow at $315 million–$326 million.

• Net leverage ratio targeted to decrease to ~2.7x by year-end.

• Currency translation expected to positively impact FY 2026 revenue by $9.4 million and EPS by $0.10.