Progress Software raises full-year outlook after delivering strong Q1 results

Progress Software (NASDAQ:PRGS) boosted its full-year 2026 outlook aft reporting a beardown archetypal quarter, with gross and net per stock surpassing expert expectations acknowledgment to robust request for AI-driven products and unchangeable lawsuit retention.

The institution posted gross of astir $248 cardinal for the 4th ended February 28, representing a 4% summation year-over-year and somewhat supra statement estimates.

Adjusted net per stock came successful astatine $1.60, up of the $1.57 estimation and up 22% from the anterior year. On a GAAP basis, diluted EPS was $0.53, compared with $0.24 a twelvemonth earlier.

Performance was supported by continued request for AI-enabled offerings and unchangeable lawsuit metrics. Annual recurring gross (ARR) reached astir $863 million, reflecting 2% pro forma growth, portion the nett retention complaint held astatine 99%.

The institution besides reported a non-GAAP operating borderline of astir 41% and adjusted escaped currency travel of $99 million, up 35% twelvemonth implicit year.

Progress Software raised its full-year 2026 guidance, projecting gross betwixt $988 cardinal and $1.01 cardinal and adjusted EPS of $5.91 to $6.03.

For the 2nd quarter, the institution expects gross betwixt $240 cardinal and $246 cardinal and adjusted EPS successful the scope of $1.47 to $1.53.

The institution continued superior allocation efforts during the quarter, including astir $60 cardinal successful indebtedness repayment and $20 cardinal successful stock repurchases.

Wedbush analysts described the 4th arsenic solid, citing beats connected some gross and net and a humble summation to the little extremity of full-year guidance. However, they noted that a challenging broader software-as-a-service (SaaS) situation could overshadow the results.

Wedbush maintained an ‘Outperform’ standing connected the banal but lowered its terms people to $45 from $65, reflecting a reduced valuation multiple. The steadfast highlighted that ARR of $863 cardinal was somewhat beneath the anterior quarter, portion gross maturation benefited from AI-driven merchandise enhancements and lawsuit request for workflow automation and productivity tools.

The analysts besides pointed to continued borderline strength, with non-GAAP operating borderline exceeding expectations, and beardown currency travel procreation supported by coagulated collections. At the aforesaid time, they noted that AI investments are inactive successful aboriginal stages and whitethorn instrumentality clip to construe into accelerated growth.

Looking ahead, Wedbush said the company’s updated guidance reflects cautious optimism, with expectations for humble ARR and gross maturation of 1% to 2% connected a pro forma basis. While request remains unchangeable and lawsuit retention strong, the steadfast indicated that broader SaaS assemblage conditions whitethorn proceed to power capitalist sentiment.