Progress Software reported fiscal third-quarter 2026 revenue of $246 million, down 2% year-over-year, while annualized recurring revenue increased 1% on a constant-currency basis to $873 million.
GAAP operating income increased 6% to $46.6 million, while operating margin expanded to 19% from 18% a year earlier. Non-GAAP operating income increased 6% to $105.3 million, and non-GAAP operating margin reached 43%, compared with 40% in the prior-year quarter.
GAAP net income increased 17% to $22.8 million, while diluted EPS increased 25% to $0.55. Non-GAAP net income rose 7% to $70.2 million and non-GAAP diluted EPS increased 13% to $1.69.
Cash from operations reached $88.0 million, up 20%, while adjusted free cash flow increased 17% to $87.2 million. Unlevered free cash flow totaled $100.7 million.
Progress ended the quarter with $113.7 million in cash and cash equivalents. Days sales outstanding improved to 42 days from 55 days in the same quarter of fiscal 2025.
The quarter also included the closing of Progress Software’s acquisition of Domo’s AI and Data Platform business. Progress said the transaction expands its ability to help organizations manage data and deploy AI-driven applications as part of its broader Total Growth Strategy.
For the first nine months of fiscal 2026, Progress generated $747.3 million in revenue, up 3% from $725.2 million in the prior-year period. Nine-month GAAP net income increased 41% to $66.7 million.
Progress raised its full-year fiscal 2026 revenue guidance to between $1.044 billion and $1.052 billion, compared with its previous range of $990 million to $1.002 billion. Non-GAAP diluted EPS is expected between $6.15 and $6.23.
The company expects fourth-quarter revenue of $297 million to $305 million, with non-GAAP diluted EPS between $1.24 and $1.33.
KEY QUOTES:
“This quarter’s results reflect the strength of our strategy, the resilience of our business model, and the value our differentiated software portfolio delivers to customers worldwide. As organizations seek the context and control required to realize the full potential of AI, Progress is uniquely positioned to help them drive business outcomes with confidence. We delivered steady growth in ARR and earnings through strong execution and disciplined expense management, while continuing to improve our balance sheet. With the recent close of the Domo AI and Data platform acquisition, we are further strengthening our ability to help customers unlock the value of their data and accelerate AI-powered innovation.”
Yogesh Gupta, CEO of Progress Software
“Our execution in the third quarter was very strong with year-over-year growth in ARR and adjusted free cash flow of more than 1% and 17%, respectively. In addition, we delivered a non-GAAP operating margin of 43%. All of this is a testament to the stability and durability of our business and the efficiency of our operating model. With the acquisition of Domo’s AI and data platform business now closed, we look forward to integrating Domo and continuing to deliver on our Total Growth Strategy.”
Anthony Folger, CFO of Progress Software
