Progress Software Stock Rallies After-Hours On Beat-And-Raise Q1: Retail Mood Stays Depressed
Annualized recurring revenue, a key operating metric, jumped 48% YoY to $836 million, with the growth rate accelerating from the 46% pace in the previous quarter.
Progress Software, Inc.’s (PRGS) shares rose sharply in the after-hours trading on Monday after the Burlington, Massachusetts-based application development platform company announced above-consensus quarterly results and raised its bottom-line guidance for the fiscal year 2025.
The company reported adjusted earnings per share (EPS) of $1.31 and revenue of $238 million for the first quarter of 2025, exceeding the Finchat-compiled consensus estimate of $1.06, and $235.64 million, respectively.
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The bottom-line result bettered the $1.01-$1.08 guidance issued in late January and the revenue came within the $232 million to $238 million guidance range.
The year-over-year (YoY) revenue growth accelerated to 29% from 21% in the fourth quarter of 2024.
The annualized recurring revenue (ARR) jumped 48% YoY to $836 million, with the growth rate accelerating from the 46% pace in the previous quarter.
Non-GAAP operating margin came in at 39%.
CEO Yogesh Gupta said, “Our solid performance on the top line was again driven by our product portfolio across the board, with our data platform and infrastructure management products having a particularly solid quarter.”
The executive noted that the company’s Net Retention Rate once again surpassed 100%.
Looking ahead, Gupta said Progress Software was ahead, or on plan, with all its ShareFile integration milestones, which were providing significant contributions to ARR and revenues, as well as expense savings.
The company completed its acquisition of ShareFile, a unit of CloudSoftware Group that provides a software-as-a-service (SaaS) artificial intelligence (AI)-powered document-centric collaboration platform in late October.
Progress Software guided second-quarter adjusted EPS and revenue to $1.28-$1.34 and $235 million-$241 million, respectively. Analysts, on average, estimate $1.17 and $233.78 million, respectively for the quarter.
The company raised its fiscal year 2025 adjusted EPS to $5.25-$5.37 from $5 to $5.12. It maintained the revenue guidance at $958 million to $970 million. The outlook compares to the consensus estimates of $5.06 and $964.32 million, respectively.
It now expects an adjusted operating margin of 38% versus the 37%-38% guidance it issued in late January.
On Stocktwits, retail sentiment toward the stock remained ‘extremely bearish’ (5/100), while retail chatter grew to ‘extremely high’ levels.
Ahead of the earnings release, a bearish user expressed worries about the huge debt pile as opposed to the cash flow.
The company had long-term debt of $700 million at the end of the first quarter and it generated adjusted free cash flow of $73.21 million during the quarter.
Progress Software stock, which ended Monday’s regular session up 0.23% at $51.51, rallied nearly 6% to $54.59 in after-hours trading. The stock has lost nearly 21% this year.
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