Progress Software (PRGS) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $253.5 million, up 7% year-over-year, driven by strong software license sales and AI-powered offerings.

• Annualized Recurring Revenue (ARR) grew 2% year-over-year to $868 million, with a net retention rate of 100%.

• Non-GAAP EPS was $1.62 (up 16% year-over-year), GAAP EPS was $0.50 (up 28%), both above guidance.

• Operating margin was 40% (non-GAAP) and 18% (GAAP), reflecting operational discipline and investment in innovation.

• Strong performance was broad-based, especially in data platform, infrastructure management, and workflow automation products.

Financial highlights

• Q2 2026 revenue: $253.5 million, up 7% year-over-year, exceeding guidance.

• ARR: $868 million, up 2% year-over-year; net retention rate at 100%.

• Non-GAAP operating income: $102.6 million; GAAP operating income: $45.2 million.

• Adjusted free cash flow: $79.2 million in Q2; cash from operations: $78.8 million.

• Software license revenue grew 36% year-over-year; maintenance, SaaS, and professional services revenue remained flat or declined slightly.

Outlook and guidance

• Q3 2026 revenue expected between $244 million and $250 million; non-GAAP EPS between $1.53 and $1.59.

• Full-year 2026 revenue guidance raised to $990 million–$1.01 billion; non-GAAP EPS guidance increased to $6.09–$6.21.

• Adjusted free cash flow for FY 2026 expected between $271 million and $283 million; unlevered free cash flow at $323 million–$334 million.

• FY 2026 non-GAAP operating margin projected at 39%; effective tax rate at 20%.

• Currency translation expected to positively impact FY 2026 revenue by $8.8 million and EPS by $0.11.