Progress Software Q3 revenue falls on weakness in maintenance, SaaS

Overview

• AI infrastructure software firm's fiscal Q3 revenue was $246 mln

• Fiscal Q3 adjusted EPS beat analyst expectations

• Fiscal Q3 annual recurring revenue was $873 mln

Outlook

• Progress reaffirms FY26 revenue guidance of $1.044-$1.052 bln, unchanged from its June outlook

• The company lowers FY26 GAAP EPS guidance to $1.18-$1.28 and raises non-GAAP EPS to $6.15-$6.23

• Q4 revenue guidance is $297-$305 mln, with GAAP diluted loss per share of $0.41 to $0.32

Result Drivers

• MAINTENANCE AND SAAS DECLINE - Revenue fell 2% to $246 mln as maintenance, SaaS and professional-services revenue declined 2% to $182 mln, while software licenses were flat

• LOWER COST OF REVENUE - Total costs of revenue fell 11% to $42 mln, lifting gross profit 1% to $204 mln despite lower revenue

• CYBER AND DEAL COSTS - Cyber-vulnerability response expenses rose to $3.5 mln from $0.7 mln, while acquisition-related expenses increased to $3.9 mln from $0.8 mln

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy."

• Wall Street's median 12-month price target for Progress Software Corp is $53.00, about 34.4% above its September 29 closing price of $39.44

• The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 5 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)