AI-powered software firm Progress' Q3 revenue up 40%, beats estimates
Overview
Progress Software fiscal Q3 revenue grows 40% yr/yr, beating analyst expectations
Adjusted EPS for fiscal Q3 beats consensus, reflecting operational efficiency
Company raises full-year guidance for revenue, EPS, and cash flow
Outlook
Progress Software raises FY25 revenue guidance to $975 mln - $981 mln
Company expects FY25 GAAP EPS of $1.38 - $1.45
Progress sees Q4 revenue between $250 mln and $256 mln
Company projects Q4 non-GAAP EPS of $1.29 - $1.35
Result Drivers
ARR GROWTH - Annualized Recurring Revenue increased 47% year-over-year, driven by strong customer retention and expansion
SHAREFILE INTEGRATION - Successful integration of ShareFile contributed significantly to revenue and earnings growth
AI INVESTMENT - Continued investment in AI capabilities, including agentic RAG technology, to enhance product offerings and customer value
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | $249.80 mln | ||
Q3 Adjusted Revenue | Beat | $249.80 mln | $240.10 mln (6 Analysts) |
Q3 Adjusted EPS | Beat | $1.5 | $1.3 (6 Analysts) |
Q3 EPS | $0.44 | ||
Q3 Adjusted Net Income | Beat | $65.72 mln | $57.90 mln (6 Analysts) |
Q3 Adjusted Income from Operations | $99.42 mln | ||
Q3 Adjusted Operating Margin | 40.0% | ||
Q3 ARR | $849 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the software peer group is "buy"
Wall Street's median 12-month price target for Progress Software Corp is $72.50, about 42% above its September 26 closing price of $42.02
The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 11 three months ago
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