Progress Software Reports 36% Revenue Growth in Q2 2025, Driven by ShareFile Acquisition

Progress Software Corporation reported significant financial results for the second quarter and first half of fiscal year 2025, highlighting a total revenue of $237.4 million for the three months ended May 31, 2025, a 36% increase from $175.1 million in the same period last year. For the first six months, revenue reached $475.4 million, up 32% from $359.8 million year-over-year. The growth was primarily driven by the acquisition of ShareFile, which contributed $65.9 million and $129.6 million to revenue in the second quarter and first half, respectively. However, software license revenue decreased by 6% in the second quarter and 7% in the first half, attributed to a decline in the DataDirect product offering.

The company’s net income for the second quarter was $17.0 million, a 5% increase from $16.2 million in the prior year, while net income for the first half fell 28% to $28.0 million from $38.8 million. The decline in net income for the first half was influenced by increased interest expenses, which rose significantly due to the financing of the ShareFile acquisition. Operating income also saw a year-over-year increase of 42% in the second quarter, totaling $38.6 million, while the first half's operating income increased by 14% to $71.0 million.

Progress Software's operational metrics showed a notable increase in annualized recurring revenue (ARR), which reached $838 million as of May 31, 2025, marking a 46% year-over-year growth. This increase was largely driven by the ShareFile acquisition. The company reported a net retention rate consistently between 100% and 102%, indicating stable customer retention and expansion. The total number of employees increased as well, reflecting the integration of ShareFile and the expansion of operations.

In terms of strategic developments, Progress Software completed the acquisition of ShareFile on October 31, 2024, for $875 million, funded through a combination of cash and debt. The acquisition is expected to enhance the company’s SaaS offerings and contribute to future revenue growth. The company also reported restructuring expenses related to the integration of ShareFile, amounting to $8.1 million for the first half of fiscal year 2025, as it streamlined operations post-acquisition.

Looking ahead, Progress Software anticipates continued revenue growth driven by the integration of ShareFile and the expansion of its SaaS offerings. The company plans to focus on debt repayment and maintaining liquidity, especially following the suspension of its quarterly dividend to redirect capital towards these priorities. Despite the challenges posed by increased interest expenses and ongoing legal matters related to the MOVEit vulnerability, the company remains optimistic about its operational and financial outlook for the remainder of the fiscal year.