Progress Software Corporation Beats EPS and Beats Revenue in Q2 2026

Progress Software (Nasdaq: PRGS) reported its fiscal third quarter results for 2026, revealing a mixed performance that has left shareholders with a cautious outlook. The company experienced a revenue decline while achieving notable growth in earnings per share.

Key Findings

• Revenue: $246 million, a decrease of $5 million or -2% YoY.
• Annualized Recurring Revenue (ARR): $873 million, an increase of $8 million or +1% YoY.
• Diluted Earnings Per Share (EPS): $0.55, an increase of $0.11 or +25% YoY.
• Non-GAAP Diluted EPS: $1.69, an increase of $0.19 or +13% YoY.

Analyst Opinion

This quarter presents a mixed bag for shareholders. While the decline in revenue is concerning, the growth in earnings per share indicates effective cost management and operational efficiency. The increase in ARR suggests that the company is maintaining its customer base and recurring revenue streams, which is crucial for long-term stability. However, the revenue drop raises questions about the company's growth trajectory and market demand for its products.

Financial Metrics

• Operating Margin: 19%
• Non-GAAP Operating Margin: 43%
• Cash and Cash Equivalents: $113.7 million
• Days Sales Outstanding: 42 days, down from 55 days YoY.

Strategic Developments

Progress Software recently closed the acquisition of Domo's AI and Data Platform Business, which is expected to enhance its capabilities in AI and data management. This strategic move aligns with the company's focus on providing value through its differentiated software portfolio. CEO Yogesh Gupta emphasized the importance of this acquisition in driving business outcomes for customers.

Guidance and Market Outlook

• Revenue: Expected between $297 million and $305 million.
• GAAP Diluted EPS: Expected to be between $(0.41) and $(0.32).
• Non-GAAP Diluted EPS: Expected to be between $1.24 and $1.33.

The company anticipates a positive currency translation impact of approximately $0.6 million on revenue for Q4 2026, which could provide a slight buffer against the revenue decline.

Forward Catalysts

Investors should closely monitor the integration of the Domo acquisition and its impact on future revenue growth. Additionally, the upcoming fiscal fourth quarter results will be critical in assessing whether the company can reverse its revenue decline and sustain its earnings growth. The market will also be watching for any changes in customer demand and how effectively Progress Software can leverage its enhanced capabilities in AI and data management.

In conclusion, while the quarter's results reflect some challenges, the growth in earnings and ARR, coupled with strategic acquisitions, provide a foundation for cautious optimism moving forward.

Here are the requested tables from the press release:

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

Note: All amounts in the table are in thousands.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

Note: All amounts in the table are in thousands.

Quarterly Earnings — Revenue vs. Estimate

Revenue vs. Estimate — 5 Quarters

EPS vs. Estimate — 5 Quarters

Analyst Ratings & Price Targets

Wall Street analysts have shown growing optimism toward Progress Software Corporation (PRGS), with Citigroup upgrading the stock from Neutral to Buy on October 13, 2025, and setting a $57 price target. Earlier, DA Davidson initiated coverage with a Buy rating and a $65 target in March 2024, while Guggenheim resumed coverage in January 2023 with a Buy rating and a $60 target. Jefferies was more cautious, initiating coverage with a Hold rating and a $52 target in September 2022. The consensus price target currently stands around $58.50, implying a potential upside of approximately 10% from PRGS’s recent trading levels. The majority of analysts maintain positive ratings, suggesting confidence in the company’s growth prospects, though some caution persists with a lone Hold recommendation. Overall, the trend in ratings and targets reflects moderate bullish sentiment.

Technical Analysis — 90-Day Price Chart

Progress Software (PRGS) trades at $39.97, below its declining short-term moving averages ($41.27 SMA20, $41.97 SMA50), signaling bearish near-term momentum, though it holds above the rising SMA200 ($38.50), maintaining a neutral-to-positive long-term trend. The RSI(14) at 47.1 reflects neutral momentum, lacking directional conviction. Elevated volume at 1.17M shares (vs. 544K 20-day avg) suggests heightened interest, potentially marking a near-term inflection. PRGS sits mid-range within its 52-week band ($27.23–$46.36), with immediate resistance near the SMA20/SMA50 convergence and support at the SMA200. A sustained break below $38.50 could test the 38.2% Fibonacci retracement ($36.20), while reclaiming $41.50 may signal trend reversal. The stock's midpoint positioning implies balanced risk-reward, awaiting clearer technical confirmation.