PROGRESS SOFTWARE CORP /MA
For the period ended May 31, 2025. Filed Jun 30, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 31, 2025 · Filed Jun 30, 2025
PRGS$43.50-2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-02-28; filed 2025-03-31.
0000876167-25-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-05-31; filed 2025-06-30.
0000876167-25-000085
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 92 previous paragraphs and 93 current paragraphs.
62 unchanged; 28 reworded; 3 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 21 previous and 25 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Amortization of Acquired Intangibles
Current report
Amortization of Acquired Intangibles
Current report
We expect to continue to make payments on the revolving credit facility and are also continuously evaluating additional financing options, the net proceeds of which could be used for general corporate purposes or to repay amounts outstanding under our revolving credit facility. In the future, we may use the available capacity under our revolving credit facility for general corporate purposes, which may include payments made in connection with any settlement of the 2026 Notes upon conversion, redemption or repayment of our 2026 Notes at or prior to the 2026 Notes maturity.
Removed paragraphs (2)
Previous report
Amortization of Intangibles
Previous report
Amortization of Intangibles
Reworded paragraphs (28)
Previous wording
This Quarterly Report on Form 10-Q may contain information that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended; Section 21E of the Securities Exchange Act of 1934, as amended; and the Private Securities Litigation Reform Act of 1995. Whenever we use words such as "believe," "may," "could," "would," "might," "should," "expect," "intend," "plan," "estimate," "target," "anticipate" and negatives and derivatives of these or similar expressions, or when we make statements concerning future financial results, product offerings or other events that have not yet occurred, we are making forward-looking statements. Actual future results may differ materially from those contained in or implied by our forward-looking statements due to various factors which are more fully described in Part I, Item 1A. Risk Factors in our 2024 Annual Report as well as any risk factors described in Part II, Item 1A of this Quarterly Report on Form 10-Q. Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what
Current wording
This Quarterly Report on Form 10-Q may contain information that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended; Section 21E of the Securities Exchange Act of 1934, as amended; and the Private Securities Litigation Reform Act of 1995. Whenever we use words such as "believe," "may," "could," "would," "might," "should," "expect," "intend," "plan," "estimate," "target," "anticipate" and negatives and derivatives of these or similar expressions, or when we make statements concerning future financial results, product offerings or other events that have not yet occurred, we are making forward-looking statements. Actual future results may differ materially from those contained in or implied by our forward-looking statements due to various factors which are more fully described in Part I, Item 1A. Risk
Previous wording
extent, any of such risks may be realized. We also cannot assure you that we have identified all possible issues that we might face. We undertake no obligation to update any forward-looking statements that we make.
Current wording
Factors in our 2024 Annual Report as well as any risk factors described in Part II, Item 1A of this Quarterly Report on Form 10-Q. Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what extent, any of such risks may be realized. We also cannot assure you that we have identified all possible issues that we might face. We undertake no obligation to update any forward-looking statements that we make.
Previous wording
On October 31, 2024, we acquired ShareFile from Cloud. As a result of this acquisition, we recorded $96.2 million of deferred revenue and $464.0 million of intangible assets, as further described in Note 4: Business Combinations. We expect to recognize additional SaaS revenue, as well as increased amortization expense and interest expense, in future periods as a result of this acquisition.
Current wording
On October 31, 2024, we acquired ShareFile from Cloud Software Group, Inc. As a result of this acquisition, we recorded $96.2 million of deferred revenue and $464.0 million of intangible assets, as further described in Note 4: Business Combinations. We expect to recognize additional SaaS revenue, as well as increased amortization expense and interest expense, in future periods as a result of this acquisition.
Previous wording
Total revenue increased as compared to the same period last year primarily due to our acquisition of ShareFile in the fourth quarter of fiscal year 2024. ShareFile revenue in the first quarter of fiscal year 2025 was $63.6 million. These increases were partially offset by a decrease in our DataDirect product offering as a result of the timing of renewals on multiyear subscription contracts.
Current wording
Total revenue increased as compared to the same period last year primarily due to our acquisition of ShareFile in the fourth quarter of fiscal year 2024. ShareFile revenue in the second quarter and first six months of fiscal year 2025 was $65.9 million and $129.6 million, respectively. These increases were partially offset by a decrease in our DataDirect product offering in all periods presented as a result of the timing of renewals on multiyear subscription contracts.
Previous wording
Maintenance revenue slightly decreased as compared to the same period last year primarily due to the negative impact of foreign exchange. SaaS revenue increased as compared to the same period last year due to our acquisition of ShareFile. Professional services revenue decreased as compared to the same period last year primarily due to a decrease in MarkLogic professional services revenue.
Current wording
Maintenance revenue remained relatively flat as compared to the same period last year. SaaS revenue increased as compared to the same periods last year due to our acquisition of ShareFile. Professional services revenue decreased as compared to the same periods last year primarily due to a decrease in MarkLogic professional services revenue.
Previous wording
Total revenue generated in North America increased $47.4 million, and total revenue generated outside North America increased $6.0 million, as compared to the same period last year. The increases in each region were primarily due to the acquisition of ShareFile.
Current wording
Total revenue generated in North America increased $44.4 million and $91.8 million in the second quarter and first six months of fiscal year 2025, respectively. Total revenue generated outside North America increased $17.9 million and $23.8 million over the same periods. The increases in each region were primarily due to the acquisition of ShareFile.
Previous wording
Total revenue generated in markets outside North America represented 35% and 42% of total revenue in the first three months of fiscal year 2025 and fiscal year 2024, respectively.
Current wording
Total revenue generated in markets outside North America represented 38% and 41% of total revenue in the second quarter of fiscal year 2025 and fiscal year 2024, respectively. In the first six months of fiscal year 2025 and fiscal year 2024 total revenue generated in markets outside North America represented 36% and 42%, respectively.
Previous wording
Cost of software licenses consists primarily of royalties, electronic software distribution, duplication, and packaging. Cost of software licenses as a percentage of software license revenue varies from period to period depending upon the relative product mix.
Current wording
Cost of software licenses consists primarily of royalties, electronic software distribution, duplication, and packaging. Cost of software licenses as a percentage of software license revenue varies from period to period depending upon the relative product mix. The increase in the second quarter of fiscal year 2025 compared to the same period last year was related to increased royalty costs, credit card fees, and hardware sales. The increase in the first six months of fiscal year 2025 as compared to the same period last year was primarily due to increased hardware sales.
Previous wording
Cost of maintenance, SaaS, and professional services consists primarily of hosting costs, and personnel related costs attributable to customer support, cloud operations, consulting, and education. The increase year-over-year was primarily due to increased hosting and headcount related costs resulting from our acquisition of ShareFile.
Current wording
Cost of maintenance, SaaS, and professional services consists primarily of hosting costs, and personnel related costs attributable to customer support, cloud operations, consulting, and education. The increase year-over-year in all periods presented was primarily due to increased hosting and headcount related costs resulting from our acquisition of ShareFile.
Previous wording
Amortization of intangibles included in costs of revenue primarily represents the amortization of the value assigned to technology-related intangible assets obtained in business combinations. The year-over-year increase is due to the acquisition of ShareFile.
Current wording
Amortization of acquired intangibles included in costs of revenue primarily represents the amortization of the value assigned to technology-related intangible assets obtained in business combinations. The year-over-year increase in all periods presented is due to the acquisition of ShareFile.
Previous wording
Our gross profit increased primarily due to the increase in revenue, partially offset by the increases in costs of maintenance, SaaS, and professional services, and amortization of intangibles.
Current wording
Our gross profit increased in all periods presented primarily due to the increase in revenue, partially offset by the increases in costs of maintenance, SaaS, and professional services, and amortization of acquired intangibles.
Previous wording
Sales and marketing expenses increased primarily due to increased personnel related costs, increased marketing and sales events costs, and increased contractors and outside services costs, each associated with our acquisition of ShareFile.
Current wording
Sales and marketing expenses in all periods presented increased primarily due to increased personnel related costs, increased marketing and sales events costs, and increased contractors and outside services costs, each associated with our acquisition of ShareFile.
Previous wording
Product development expenses increased primarily due to increased personnel related costs, as well as increased contractors and outside services costs, each associated with our acquisition of ShareFile.
Current wording
Product development expenses in all periods presented increased primarily due to increased personnel related costs, as well as increased contractors and outside services costs, each associated with our acquisition of ShareFile.
Previous wording
General and administrative expenses include the costs of our finance, human resources, legal, information systems and administrative departments. The increases in personnel related costs, contractors and outside services, and other general and administrative costs were primarily related to our acquisition of ShareFile.
Current wording
General and administrative expenses include the costs of our finance, human resources, legal, information systems and administrative departments. The increases in all periods presented in personnel related costs, contractors and outside services, and other general and administrative costs were primarily related to our acquisition of ShareFile.
Previous wording
Amortization of intangibles included in operating expenses primarily represents the amortization of value assigned to intangible assets obtained in business combinations other than assets identified as purchased technology. Amortization of intangibles increased due to the addition of ShareFile intangible assets, as discussed above.
Current wording
Amortization of acquired intangibles included in operating expenses primarily represents the amortization of value assigned to intangible assets obtained in business combinations other than assets identified as purchased technology. Amortization of acquired intangibles increased in all periods presented due to the addition of ShareFile intangible assets, as discussed above.
Previous wording
Restructuring expenses recorded in the first quarter of fiscal year 2025 primarily relate to headcount reductions and a facility closure in connection with the restructuring action related to the ShareFile acquisition in November 2024. See Note 9: Restructuring for additional details, including types of expenses incurred and the timing of future expenses and cash payments.
Current wording
Restructuring expenses recorded in the second quarter and first six months of fiscal year 2025 primarily relate to headcount reductions and a facility closure in connection with the restructuring action related to the ShareFile acquisition in November 2024. See Note 9: Restructuring for additional details, including types of expenses incurred and the timing of future expenses and cash payments.
Previous wording
Acquisition-related costs are expensed as incurred and include those costs incurred as a result of a business combination. These costs consist of professional service fees, including third-party legal and valuation-related fees. Acquisition-related expenses in the first quarter of fiscal year 2025 were primarily related to our acquisition of ShareFile. Acquisition-related expenses in the same periods of fiscal year 2024 were primarily related to our pursuit of other acquisition opportunities.
Current wording
Acquisition-related costs are expensed as incurred and include those costs incurred as a result of a business combination. These costs consist of professional service fees, including third-party legal and valuation-related fees. Acquisition-related expenses in the second quarter and first six months of fiscal year 2025 were primarily related to our acquisition of ShareFile. Acquisition-related expenses in the same periods of fiscal year 2024 were primarily related to our pursuit of other acquisition opportunities.
Previous wording
Income from operations decreased year-over-year due to an increase in costs of revenue and operating expenses, offset by an increase in revenue, as shown above.
Current wording
Income from operations increased year-over-year due to an increase in revenue, offset by increases in costs of revenue and operating expenses, as shown above.
Previous wording
Total other expense, net, increased in the first quarter of fiscal year 2025 as compared to the same period last year primarily due to an increase in interest expense resulting from costs associated with drawing on our revolving line of credit to acquire ShareFile. Refer to Note 5: Debt, for further discussion. Foreign currency loss increased year-over-year due to rate volatility and timing of intercompany and hedge settlement activities.
Current wording
Total other expense, net, increased in the second quarter and first six months of fiscal year 2025 as compared to the same periods last year primarily due to an increase in interest expense resulting from costs associated with drawing on our revolving line of credit to acquire ShareFile. Refer to Note 5: Debt, for further discussion. Foreign currency loss increased year-over-year due to rate volatility and timing of intercompany and hedge settlement activities.
Previous wording
Our effective income tax rate was 18% in the first fiscal quarter of both 2025 and 2024. In the first fiscal quarter of 2024, there were discrete tax benefits related to stock-based compensation and the statute of limitations expiring on uncertain tax positions. While there were no significant discrete tax benefits in the first fiscal quarter of 2025, the overall effective tax rate is lower due to the geographical mix of profit.
Current wording
Our effective tax rate was 14% and 20% in the second fiscal quarter of 2025 and 2024, respectively. The primary reason for the decrease in the effective rate was due to $1.1 million of discrete tax benefits in the second fiscal quarter of 2025 compared to $0.2 million of discrete tax benefits in the second fiscal quarter of 2024.
Previous wording
Our ARR was $836 million and $566 million as of February 28, 2025 and February 29, 2024, respectively, which is an increase of 48% year-over-year. The growth in ARR was primarily driven by the acquisition of ShareFile.
Current wording
Our ARR was $838 million and $573 million as of May 31, 2025 and May 31, 2024, respectively, which is an increase of 46% year-over-year. The growth in ARR was primarily driven by the acquisition of ShareFile.
Previous wording
The increase in cash and cash equivalents of $6.1 million from the end of fiscal year 2024 was due to cash inflows from operations of $68.7 million, and $1.6 million in cash received from the issuance of common stock. The cash inflows described above were offset by cash outflows of $30.0 million to pay down the revolving line of credit, repurchases of common stock of $30.1 million, the effect of exchange rates on cash of $1.5 million, purchases of property and equipment of $1.3 million, and a $1.2 million payment related to the acquisition of ShareFile. Except as described below, there are no limitations on our ability to access our cash and cash equivalents.
Current wording
The decrease in cash and cash equivalents of $16.1 million from the end of fiscal year 2024 was due to cash outflows of $70.0 million to pay down the revolving line of credit, repurchases of common stock of $50.1 million, purchases of property and equipment of $1.8 million, a $1.2 million payment related to the acquisition of ShareFile, and $0.7 million in dividend equivalent payments to stockholders. The cash outflows described above were offset by cash inflows from operations of $98.9 million, the effect of exchange rates on cash of $6.1 million, and $2.7 million in cash received from the issuance of common stock. Except as described below, there are no limitations on our ability to access our cash and cash equivalents.
Previous wording
As of February 28, 2025, $63.3 million of our cash and cash equivalents was held by our foreign subsidiaries. As a result of the debt obligations arising from the ShareFile acquisition, in the fourth quarter of fiscal 2024 we determined that a substantial portion of unremitted foreign earnings are no longer indefinitely reinvested. As a result of this, we plan to utilize worldwide cash based on the needs of the parent entity. These amounts will be repatriated as needed. Deferred taxes are recorded for earnings of our foreign operations that we determine are not indefinitely reinvested.
Current wording
As of May 31, 2025, $62.9 million of our cash and cash equivalents was held by our foreign subsidiaries. As a result of the debt obligations arising from the ShareFile acquisition, in the fourth quarter of fiscal 2024 we determined that a substantial portion of unremitted foreign earnings are no longer indefinitely reinvested. As a result of this, we plan to utilize worldwide cash based on the needs of the parent entity. These amounts will be repatriated as needed. Deferred taxes are recorded for earnings of our foreign operations that we determine are not indefinitely reinvested.
Previous wording
The decrease in cash generated from operations in the first quarter of fiscal year 2025 as compared to the same period last year was primarily due to increased costs of maintenance, SaaS, and professional services, and operating expenses, as well as increased interest expense resulting from the draw down on our revolving line of credit in the fourth quarter of fiscal year 2024. This was offset by higher billings and collections.
Current wording
The decrease in cash generated from operations in the first six months of fiscal year 2025 as compared to the same period last year was primarily due to increased interest expense resulting from the draw down on our revolving line of credit in the fourth quarter of fiscal year 2024.
Previous wording
Our gross accounts receivable as of February 28, 2025, decreased by $36.0 million from the end of fiscal year 2024. Our days sales outstanding (DSO) in accounts receivable decreased to 48 days the first quarter of fiscal year 2025 from 50 days in the first fiscal quarter of 2024 due to the timing of billings and collections.
Current wording
Our gross accounts receivable as of May 31, 2025, decreased by $21.0 million from the end of fiscal year 2024. Our days sales outstanding (DSO) in accounts receivable increased to 53 days in the second quarter of fiscal year 2025 from 41 days in the second fiscal quarter of 2024 due to the timing of billings and collections.
Previous wording
Net cash outflows and inflows of our net investment activity are generally a result of the timing of our purchases and maturities of securities, which are classified as cash equivalents, as well as the timing of acquisitions and divestitures. In the first three months of fiscal year 2025, we purchased $1.3 million of property and equipment, and had payments for acquisitions of $1.2 million. In the first quarter of fiscal year 2024 we had $0.3 million of purchases of property and equipment.
Current wording
Net cash outflows and inflows of our net investment activity are generally a result of the timing of our purchases and maturities of securities, which are classified as cash equivalents, as well as the timing of acquisitions and divestitures. In the first six months of fiscal year 2025, we purchased $1.8 million of property and equipment, and had payments for acquisitions of $1.2 million. Through the second quarter of fiscal year 2024 we had $1.3 million of purchases of property and equipment.
Previous wording
We received $6.2 million from the exercise of stock options and the issuance of shares under our employee stock purchase plan in the first three months of fiscal year 2025 as compared to $7.6 million in the first three months of fiscal year 2024. We made withholding tax payments related to net share settlements of equity awards of $4.6 million in the three months of fiscal year 2025 as compared to $5.9 million in the first three months of fiscal year 2024. We repurchased $30.1 million of our common stock under our share repurchase plan in the first three months of fiscal year 2025 as compared to $22.5 million in the same period of the prior year. Further, we made payments on our revolving line of credit of $30.0 million in the first quarter of fiscal years 2025 and 2024. Finally, we made dividend payments of $8.2 million to our stockholders during the first three months of fiscal year 2024. We also made payments on our pre-existing term loan of $3.4 million in the first quarter of fiscal year 2024.
Current wording
We received $12.8 million from the exercise of stock options and the issuance of shares under our employee stock purchase plan in the first six months of fiscal year 2025 as compared to $12.9 million in the first six months of fiscal year 2024. We made withholding tax payments related to net share settlements of equity awards of $10.1 million in the first six months of fiscal year 2025 as compared to $10.6 million in the first six months of fiscal year 2024. We repurchased $50.1 million of our common stock under our share repurchase plan in the first six months of fiscal year 2025 as compared to $72.4 million in the same period of the prior year. Further, we made payments on our revolving line of credit of $70.0 million and $110.0 million through the second quarters of fiscal years 2025 and 2024, respectively. During the second quarter of fiscal year 2024, we received net proceeds from the issuance of debt of $51.9 million (we refinanced our debt by issuing the convertible senior notes and used the proceeds to pay off the outstanding balance of the term loan and revolving line of credit under our previous credit agreement). In the first quarter of fiscal year 2024 we made payments on our long-term debt of $33.4 million (including a $30.0 million repayment on the revolving line of credit). Finally, we made dividend equivalent payments of $0.7 million to our stockholders during the first six months of fiscal year 2025, as compared to $16.1 million of dividend and dividend equivalent payments made to stockholders through the first six months of fiscal year 2024.
Previous wording
In January 2023, our Board of Directors increased our share repurchase authorization by $150 million, to an aggregate authorization of $228.0 million. In the three months ended February 28, 2025 and February 29, 2024, we repurchased and retired 0.5 million shares for $30.0 million and 0.4 million shares for $22.5 million, respectively. The shares were repurchased in both periods as part of the share repurchase program as authorized by our Board of Directors. As of February 28, 2025, there was $77.2 million remaining under the current authorization.
Current wording
In January 2023, our Board of Directors increased our share repurchase authorization by $150 million, to an aggregate authorization of $228.0 million. In the three months ended May 31, 2025 and May 31, 2024, we repurchased and retired 0.4 million shares for $20.0 million and 1.0 million shares for $49.9 million, respectively. In the six months ended May 31, 2025 and May 31, 2024, we repurchased and retired 0.9 million shares for $50.0 million and 1.4 million shares for $72.4 million, respectively. The shares were repurchased in both periods as part of the share repurchase program as authorized by our Board of Directors. As of May 31, 2025, there was $57.2 million remaining under the current authorization.