Q1 2026 Progress Software Corp Earnings Call Transcript
Key Points
- Progress Software Corp (PRGS) reported a revenue increase of 4% year-over-year, reaching $248 million for Q1 2026.
- The company achieved a 22% year-over-year increase in EPS, reaching $1.60, with operating margins at 41%.
- Record cash flows were reported, with adjusted free cash flow at $99 million and unlevered free cash flow at $111 million.
- Progress Software Corp (PRGS) continues to aggressively pay down debt and repurchase shares, maintaining a strong balance sheet.
- AI and other innovations across the product portfolio are resonating with customers, contributing to strong performance and customer loyalty.
- The net retention rate (NRR) was slightly below the target at 99%, indicating some challenges in maintaining customer retention.
- There was isolated churn due to specific customer events, such as a government contract termination in Eastern Europe.
- SaaS revenue declined sequentially, attributed to data cleanup and billing system transitions, causing fluctuations in reported numbers.
- The company faces challenges in finding suitable M&A opportunities due to high valuation expectations in private markets.
- Macroeconomic and geopolitical uncertainties remain a concern, although they have not yet impacted the business significantly.
Hello, and thank you for standing by. Welcome to Progress Software's Q1 2026 earnings conference call. (Operator Instructions)
I would now like to hand the call over to Michael Micciche, Senior Vice President of Investor Relations. You may begin.
Okay. Thank you, Tawanda. Good afternoon, everyone, and thanks for joining us for Progress Software's first fiscal quarter 2026 financial results conference call. Joining me on the call are Yogesh Gupta, President and CEO; and Anthony Folger, our Chief Financial Officer.
Before we get started, please consider our Safe Harbor statement as follows. During this call, we will discuss our outlook for future financial and operating performance, corporate strategies, product plans, cost initiatives, and other information that might be considered forward-looking. But forward-looking information represents Progress Software's outlook and guidance only as of today, is subject to risks and uncertainties, and our actual results
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