Corrected: Progress Software Q3 revenue falls on weakness in maintenance, SaaS
CORRECTED-Progress Software Q3 revenue falls on weakness in maintenance, SaaS Corrects fist Outlook bullet to say FY26 revenue guidance was raised, not reafirmmed
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 raises FY26 revenue guidance to $1.044 bln-$1.052 bln from $990 mln-$1.002 bln
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: ID:nGNX6zVLts
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue |
| $246 mln |
|
Q3 Adjusted EPS | Beat | $1.69 | $1.52 (4 Analysts) |
Q3 ARR |
| $873 mln |
|
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.)