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1. Company Snapshot

1.a. Company Description

Progress Software Corporation develops, deploys, and manages business applications.The company offers OpenEdge, a development software, which builds multi-language applications for secure deployment across various platforms and devices, as well as cloud; developer tools that consists of components for user interface development for Web, mobile, desktop, chat, and AR/VR apps, as well as automated application testing and reporting tools; Sitefinity, a web content management and customer analytics platform; Corticon, a business rules management system that provides applications with decision automation and change process, and decision-related insight capabilities.It also offers DataDirect Connect, which provides data connectivity using industry-standard interfaces to connect applications running on various platforms; MOVEit that offers secure collaboration and automated file transfers of critical business information; Chef, an infrastructure automation platform to build, deploy, manage, and secure applications in multi-cloud and hybrid environments, and on-premises; and WhatsUp Gold, a network monitoring solution.


In addition, the company provides Kemp LoadMaster, a load balancing solutions; and Kemp Flowmon network performance monitoring and diagnostic solutions that collect and analyze network telemetry from various sources.Further, it provides project management, implementation, custom development, programming, and other services, as well as web-enable applications; and training services.The company sells its products to end users, independent software vendors, original equipment manufacturers, and system integrators.


It has operations in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific.The company was founded in 1981 and is headquartered in Burlington, Massachusetts.

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1.b. Last Insights on PRGS

Progress Software Corporation faced negative drivers, including a significant sale of shares by Paradice, which dumped its entire $15.2 million stake in the company. This substantial sale could indicate a lack of confidence in the company's short-term prospects. Additionally, despite the company's announcement of its Progress Data Platform being deemed an "Awardable" vendor for the U.S. Department of Defense's Tradewinds Solutions Marketplace, and the launch of Automate MFT to streamline file transfer solutions, these positive developments seem to be overshadowed by the large institutional sale.

1.c. Company Highlights

2. Progress Software Corporation's Strong Fiscal Year 2025 Results and Outlook

Progress Software Corporation reported a robust fiscal year 2025, with annual revenue reaching $978 million, a 30% year-over-year increase, and earnings per share of $5.72, up 16% from the previous year. The company's Q4 revenue finished at $253 million, an 18% year-over-year increase, with earnings per share of $1.51, exceeding the high end of guidance. The strong performance was driven by the company's product portfolio, particularly ShareFile, and the growing demand for AI projects.

Publication Date: Jan -21

📋 Highlights
  • Annual Revenue Growth:: Revenue surged to $978 million, a 30% YoY increase, with EPS rising to $5.72 (+16% YoY).
  • Q4 Performance:: Revenue reached $253 million (+18% YoY), and EPS hit $1.51, exceeding high-end guidance.
  • Balance Sheet Strength:: Net leverage ratio of 3.4x, with $202 million remaining in share repurchase authorization and $105 million returned to shareholders in FY25.
  • ARR and Retention:: ARR grew 2%, and net retention rate remained above 100%, driven by expansion across customer base.
  • 2026 Guidance:: Revenue forecasted at $986M–$1B (12% growth over FY25), with EPS between $5.82–$5.96.

Financial Performance

The company's financial performance was characterized by significant revenue growth, driven by its overall product portfolio and the integration of ShareFile. The adjusted free cash flow for the year was $247 million, a 16% increase over the prior year. The company's balance sheet remains in excellent shape, with a net leverage ratio of approximately 3.4 times, providing flexibility for M&A activities.

Guidance and Outlook

Progress Software Corporation guided for fiscal year 2026 revenue between $986 million and $1 billion, representing 12% growth over 2025, and earnings per share between $5.82 and $5.96 per share. The company expects to continue its focus on ARR as a key metric, with ARR growth consistent with the 2% growth seen in fiscal year 2025. Analysts estimate next year's revenue growth at 2.2%, slightly higher than the company's guidance.

Valuation

With a current P/E ratio of 34.19, the stock appears to be reasonably valued. Additional valuation metrics such as P/B Ratio at 3.47, P/S Ratio at 1.77, and EV/EBITDA at 8.55 provide further insight into the company's valuation. The Free Cash Flow Yield of 11.2% is also a positive aspect. ROIC is at 5.57% and ROE is at 10.78%, indicating a decent return on investment.

AI Adoption and Business Strategy

The company believes it's early in the AI adoption cycle and that it will take time for investments to accelerate. Progress Software Corporation's business is well-positioned, with a broad footprint across industries and a growing presence in AI-enabled solutions. The company's net retention rate has consistently been over 100%, driven by expansion across its broad customer base.

M&A Strategy

The company remains committed to its total growth strategy, including M&A. Progress Software Corporation is being selective in its acquisitions, focusing on targets with strong potential for growth. The company aims to buy solid businesses that can sustain a 100% net retention rate.

3. NewsRoom

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Sundar Subramanian Sells 1,352 Shares of Progress Software (NASDAQ:PRGS) Stock

Jan -28

Source: defenseworld.net

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Progress Software (PRGS) Reliance on International Sales: What Investors Need to Know

Jan -26

Source: zacks.com

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Consumer Tech News (Jan 19-23): Netflix & Warner Bros. Deal Sparks Trump Investment Criticism, OpenAI Revenue Surges Past $20B & More

Jan -25

Source: feeds.benzinga.com

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PRGS vs. INTU: Which Stock Is the Better Value Option?

Jan -22

Source: zacks.com

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Progress Software: Discipline Over Temptation

Jan -22

Source: seekingalpha.com

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Reviewing The Descartes Systems Group (NASDAQ:DSGX) and Progress Software (NASDAQ:PRGS)

Jan -22

Source: defenseworld.net

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Why Progress Software Popped Today

Jan -21

Source: fool.com

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PRGS Q4 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Up

Jan -21

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.85%)

6. Segments

Maintenance

Expected Growth: 3.5%

Progress Software Corporation's 3.5% growth in Maintenance is driven by increasing demand for digital transformation, adoption of cloud-based solutions, and expansion into new markets. Additionally, the company's strategic acquisitions and partnerships have enhanced its product offerings, leading to higher maintenance revenue.

Software Licenses

Expected Growth: 4.5%

Progress Software Corporation's 4.5% growth in software licenses is driven by increasing demand for digital transformation, adoption of cloud-based solutions, and expansion into new markets. Additionally, the company's strategic acquisitions, innovative product offerings, and strong partnerships contribute to its growth momentum.

Professional Services

Expected Growth: 3.8%

Progress Software Corporation's 3.8% growth in Professional Services is driven by increasing demand for digital transformation, adoption of cloud-based solutions, and growing need for IT consulting services. Additionally, the company's strategic acquisitions and partnerships have expanded its service offerings, contributing to revenue growth.

7. Detailed Products

Progress Telerik

A suite of UI components and tools for building web, mobile and desktop applications

Progress Sitefinity

A web content management system for building and managing websites and mobile applications

Progress OpenEdge

A platform for building and deploying business applications

Progress Corticon

A business rules management system for automating decision-making processes

Progress WhatsUp Gold

A network monitoring and management tool for IT infrastructure

Progress Chef

An automation platform for infrastructure, applications and compliance

Progress Kemp

A load balancer and application delivery controller for high-availability and scalability

8. Progress Software Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Progress Software Corporation is medium because while there are some alternative products available, they are not as comprehensive or widely adopted as Progress Software's offerings.

Bargaining Power Of Customers

The bargaining power of customers for Progress Software Corporation is low because the company's products are often critical to customers' operations, making it difficult for customers to negotiate prices or switch to alternative products.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Progress Software Corporation is medium because while the company relies on some key suppliers for certain components, it also has some flexibility to negotiate prices and switch to alternative suppliers if needed.

Threat Of New Entrants

The threat of new entrants for Progress Software Corporation is low because the company has a strong brand and established customer base, making it difficult for new entrants to gain traction in the market.

Intensity Of Rivalry

The intensity of rivalry for Progress Software Corporation is high because the company operates in a highly competitive market with several established players, and the company must continually innovate and invest in marketing and sales to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 61.91%
Debt Cost 4.68%
Equity Weight 38.09%
Equity Cost 8.67%
WACC 6.20%
Leverage 162.52%

11. Quality Control: Progress Software Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
PTC

A-Score: 5.1/10

Value: 2.1

Growth: 8.3

Quality: 8.9

Yield: 0.0

Momentum: 4.0

Volatility: 7.3

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Aspen Technology

A-Score: 4.6/10

Value: 3.3

Growth: 5.1

Quality: 5.9

Yield: 0.0

Momentum: 7.0

Volatility: 6.0

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Stock-Card
Progress Software

A-Score: 4.2/10

Value: 4.4

Growth: 6.4

Quality: 5.9

Yield: 1.0

Momentum: 0.5

Volatility: 6.7

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Manhattan Associates

A-Score: 4.1/10

Value: 0.8

Growth: 7.9

Quality: 8.7

Yield: 0.0

Momentum: 1.0

Volatility: 6.0

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Stock-Card
Elastic

A-Score: 3.8/10

Value: 3.2

Growth: 8.0

Quality: 4.9

Yield: 0.0

Momentum: 3.0

Volatility: 4.0

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Agilysys

A-Score: 3.8/10

Value: 0.0

Growth: 7.9

Quality: 7.5

Yield: 0.0

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

39.73$

Current Price

39.73$

Potential

-0.00%

Expected Cash-Flows