Progress Software Corporation (NASDAQ: PRGS) experienced a notable uptick in its stock price during after-hours trading on Tuesday following the release of its fiscal fourth quarter results and an optimistic forecast for fiscal year 2026. While the earnings report was characterized by mixed outcomes, with profitability metrics exceeding expectations but revenues narrowly trailing analyst projections, investors were encouraged by the company’s forward-looking guidance.
For the fourth quarter, Progress Software posted earnings per share of $1.51 on a non-GAAP basis, beating the consensus estimate of $1.31 recorded by financial analysts. This solid performance on the earnings front came despite quarterly revenues totaling $252.67 million, just shy of the expected $252.86 million. The slight revenue underperformance contrasts with the profitability gains but ultimately did not deter the positive market reaction.
Delving deeper into operating metrics, the company reported an operating margin of 15%, while its non-GAAP operating margin reached 38%. These figures signal efficient cost management and strong earnings generation relative to revenue, factors that likely supported investor confidence. Additionally, Progress’s annualized recurring revenue (ARR) stood at $852 million, reflecting a 2% increase year-over-year on a constant currency basis, highlighting the company’s success in maintaining and growing its recurring revenue streams despite a challenging revenue environment.
Comparing profitability year-over-year in the same quarter, diluted earnings per share jumped to 59 cents from a meager three cents, signifying a substantial improvement in net income attributable to common shareholders. The non-GAAP measure of diluted earnings per share also climbed from $1.33 in the prior year to $1.51, underscoring Progress’s effective cost controls and improved operating leverage.
In a statement accompanying the earnings release, Yogesh Gupta, the Chief Executive Officer of Progress Software, emphasized the company’s momentum coming out of 2025, stating that it marked their strongest year to date. According to Gupta, Progress continues to advance its long-term Total Growth strategy, which focuses on investment and innovation initiatives, strategic acquisitions and integrations, and delivering measurable value to customers. This multi-pronged approach appears to have paved the way for running improvements in both top-line growth and profitability.
Looking ahead, the company's outlook for fiscal 2026 appears robust. Progress anticipates adjusted earnings per share to range between $5.82 and $5.96, surpassing analyst forecasts pegged at $5.53. Similarly, revenue guidance projects between $986 million and $1 billion, again exceeding the consensus estimate of approximately $978.1 million. This optimistic guidance signals continued momentum and the confidence of management in sustaining growth and profitability trajectories.
The stock market responded favorably to these results and forward projections. According to Benzinga Pro data, shares of Progress Software closed Tuesday’s extended trading session up 7.51%, reaching a price of $41.50. This clear market enthusiasm reflects investor approval of the company’s earnings beat and encouraging outlook despite some revenue misses.
In sum, the latest quarterly report from Progress Software reveals a company that is navigating a complex environment by leveraging operational efficiencies and a strategic growth framework. While the revenue figure slightly lagged expectations, the company’s stronger-than-expected earnings, expanding recurring revenue base, and confident fiscal 2026 guidance are key highlights supporting investor optimism.