Mon, Jun 30, 8:22 PM (14 days ago)
**Progress Software Corporation (PRGS) - Q2 2025 Summary** **Financial Health and Performance:** - **Revenue:** $237.4M (Q2 2025) vs. $175.1M (Q2 2024), up 36% YoY, driven by the acquisition of ShareFile. - **Profit Margins:** Gross margin at 80% (Q2 2025) vs. 82% (Q2 2024). Operating margin at 16% (Q2 2025) vs. 16% (Q2 2024). - **Net Income:** $17.0M (Q2 2025) vs. $16.2M (Q2 2024), up 5% YoY. - **Cash Flow:** Operating cash flow of $98.9M (H1 2025) vs. $134.2M (H1 2024), down due to increased interest expense from ShareFile acquisition debt. **Key Metrics and Trends:** - **ARR:** $838M (May 2025) vs. $573M (May 2024), up 46% YoY, primarily due to ShareFile acquisition. - **Net Retention Rate:** Ranged between 100-102% for all periods, indicating stable customer retention. - **Revenue by Region:** North America saw the most significant growth, up 43% YoY in Q2 2025. - **Software License Revenue:** Decreased 6% YoY in Q2 2025 due to timing of renewals on multiyear subscription contracts. - **Maintenance, SaaS, and Professional Services Revenue:** Increased 54% YoY in Q2 2025, driven by ShareFile acquisition. **Uncertainties and Future Operations:** - **MOVEit Vulnerability:** Ongoing legal and regulatory risks, with no loss contingency recorded as of May 2025. - **Debt and Liquidity:** Increased debt from ShareFile acquisition, with $70M repayment on revolving credit facility in H1 2025. Cash and cash equivalents decreased to $102M (May 2025) from $118.1M (Nov 2024). - **Share Repurchase:** $50M spent on share repurchases in H1 2025, with $57.2M remaining under current authorization. - **Dividends:** Suspended in connection with ShareFile acquisition to prioritize debt repayment and share repurchases. **Impact on Future Operations:** - Expected increased SaaS revenue and amortization expense from ShareFile acquisition. - Continued focus on debt repayment, share repurchases, and potential future acquisitions. - Ongoing monitoring of cybersecurity risks and legal proceedings related to MOVEit Vulnerability. **Conclusion:** Progress Software Corporation reported strong revenue growth in Q2 2025, driven by the ShareFile acquisition. However, increased debt and interest expenses, along with ongoing legal and regulatory risks, present challenges. The company remains focused on debt repayment, share repurchases, and future growth opportunities.