Progress Software Reports Q3 Revenue Decline, Net Income Increase, and Strategic Acquisition

Progress Software Corporation reported its financial results for the third quarter and nine months ended August 31, 2026, revealing a total revenue of $246.0 million for the quarter, a decrease of 2% compared to $249.8 million in the same period last year. For the nine-month period, revenue increased by 3% to $747.3 million, up from $725.2 million in the prior year. The company attributed the quarterly decline primarily to the timing of renewals on multiyear subscription contracts, while the year-to-date growth was driven by increased software license sales and favorable foreign currency exchange impacts.

In terms of profitability, Progress Software reported a net income of $22.8 million for the third quarter, an increase from $19.4 million in the same quarter of the previous year. For the nine-month period, net income rose to $66.7 million from $47.4 million, reflecting a significant year-over-year improvement. Earnings per share for the third quarter were $0.55, compared to $0.45 in the prior year, while diluted earnings per share for the nine months increased to $1.58 from $1.07.

The company has also made strategic moves, including the acquisition of Domo, Inc. for approximately $400 million, which closed on September 22, 2026. This acquisition is expected to enhance Progress Software's capabilities in AI and data products. Additionally, the company has been actively repurchasing its common stock, having repurchased 2.2 million shares for $71.6 million in the first nine months of fiscal 2026, compared to $65.1 million in the same period last year.

Operationally, Progress Software reported a decrease in accounts receivable, which fell by $78.8 million from the end of fiscal year 2025, contributing to a reduction in days sales outstanding (DSO) to 42 days from 55 days in the previous year. The company’s annualized recurring revenue (ARR) was reported at $873 million, reflecting a 1% increase year-over-year. The net retention rate remained stable, generally ranging between 99% and 100%, indicating strong customer retention and expansion.

Looking ahead, Progress Software expects to continue generating cash from operations, supported by its existing cash balances and funds from operations. The company anticipates that these resources will be sufficient to meet its foreseeable cash requirements, including capital expenditures, acquisitions, and debt repayments. However, it acknowledges potential risks and uncertainties that could impact its liquidity and capital resources in the future.