[PRGS] Progress Software: Q3 2026 Earnings Preview After a 36% License Jump

Progress Software is an infrastructure and application software company that grows by buying mature software products and integrating them to high margins; its portfolio spans the OpenEdge application development platform, ShareFile document collaboration, MOVEit secure file transfer and infrastructure tools such as Chef[1]. Heading into its Q3 2026 earnings, Progress will hold its call on 2026-09-30 to report the fiscal third quarter of 2026, ending August 31, 2026[2]. In the fiscal second quarter ended May 31, revenue was $253.5 million, up 7% year over year and above prior guidance of $240 million to $246 million; annualized recurring revenue (ARR) was $868 million, up 2%, net retention was 100%, the non-GAAP operating margin was 40%, non-GAAP EPS was $1.62 and adjusted free cash flow was $79 million[3]. On June 30 the company guided third-quarter revenue to $244 million to $250 million and non-GAAP diluted EPS to $1.53 to $1.59[3], and on July 22, when it announced the Domo asset purchase, it said third-quarter revenue and non-GAAP EPS would land within or above the high end of that range[4]. Outside expectations also sit inside the company's range: the consensus in Drillr's analyst estimates table is $246.7 million of revenue and EPS of $1.515 (three analysts each)[5], while Drillr's earnings calendar carries $248.6 million and $1.525[2].

Three things matter most in this report. First is whether license revenue can hold last year's third-quarter level of $63.4 million[6]: second-quarter license revenue jumped 36% to $69.0 million[7], but management said on the call that roughly half of the second-quarter beat came from deals that closed earlier than planned[8], so the third-quarter license figure will help separate broader demand from shifted signing dates. Second is whether maintenance and SaaS, the roughly 70% of revenue that forms the recurring base, can hold last year's $176.4 million[6], because maintenance revenue already fell 2.2% in the second quarter[9] and a July emergency shutdown of self-hosted ShareFile servers followed; whether net retention stays at 100% will show whether customers left as a result. Third is the financial effect of Domo: the roughly 39% full-year non-GAAP operating margin guidance issued in June excludes Domo[10], while at signing the company said pro forma net leverage would stay below 3.0 times[11]. Whether the new basis including Domo delivers on that will decide if the $400 million purchase, paid with cash and revolver borrowings[12], extends or strains the company's buy, integrate and repay model.

Company Background and Business Structure

Progress Software is at heart a software consolidator rather than only the "AI infrastructure software" vendor it describes itself as. Founded in 1981 and based in Burlington, Massachusetts, it trades on Nasdaq; Yogesh Gupta is CEO and Anthony Folger is CFO[13]. Under its "Total Growth" strategy it buys mature products with recurring revenue at reasonable multiples, quickly integrates them to a non-GAAP operating margin of about 40% and uses free cash flow to repay acquisition debt; recent deals include Ipswitch (WhatsUp Gold, MOVEit), Chef, Kemp, MarkLogic, Nuclia and ShareFile, bought for $875 million in cash in October 2024[14]. On 2026-09-22 it completed the $400 million cash purchase of Domo's AI and data platform business[12].

Progress reports a single segment, but its products fall into roughly four groups[1]. The first is application development and business logic, centered on OpenEdge (a platform for building and running business-critical applications, widely embedded by independent software vendors in their own industry software), plus the Corticon rules engine and Developer Tools components; the second is data and content, including DataDirect connectivity, the MarkLogic data platform, Semaphore semantic AI, Agentic RAG, Sitefinity content management and the newly added Domo. The third is document collaboration and secure file transfer, covering ShareFile (SaaS) and MOVEit; the fourth is infrastructure management, including Chef, Kemp LoadMaster, Flowmon and WhatsUp Gold.

Revenue is concentrated in two product lines, while the MOVEit file-transfer products carry little revenue weight. OpenEdge and ShareFile together accounted for slightly more than half of fiscal 2025 revenue[15], and ShareFile alone generated $261.6 million that year[14]; MOVEit Transfer and MOVEit Cloud together were under 3% of revenue[16]. On the second-quarter call, management said data, content and workflow products together make up more than 67% of revenue[8].

How customers buy determines when revenue is recognized. On-premise products are sold as perpetual or term licenses recognized upfront when the customer can use the software; term licenses usually run one to three years, are invoiced annually in advance and come with maintenance renewed each year[17]. Cloud products such as ShareFile are billed as subscriptions and recognized monthly, and a small amount of professional services sits on top. Progress sells directly to business and IT managers at companies and government agencies and to developers, and nearly half of worldwide revenue comes through independent software vendors (ISVs), OEMs, distributors and value-added resellers, with ISV applications producing recurring revenue once deployed at end customers[18].

The latest quarter shows a revenue base weighted toward maintenance, SaaS and North America. Of second-quarter fiscal 2026 revenue of $253.5 million, license was $69.0 million, maintenance $101.2 million, SaaS $73.0 million and professional services $10.3 million; by region, North America contributed $162.5 million and Europe, the Middle East and Africa $70.6 million[6]. Domo joins as an asset purchase in which Progress takes substantially all of its assets and employees, while Domo, Inc. remains a listed company under a new name[11], so the third-quarter statements through August 31 do not yet include the Domo business.

Financial History and Current Position

The annual filings show that nearly all revenue growth over the past three years came from buying ShareFile. Revenue rose from $694.4 million in fiscal 2023 to $753.4 million in fiscal 2024 and $977.8 million in fiscal 2025, a 30% increase in the last year[19], mainly because ShareFile contributed $261.6 million in fiscal 2025[14]. In fiscal 2025, SaaS revenue was $287.9 million (versus $44.6 million a year earlier), maintenance was roughly flat at $410.2 million and license revenue was $237.9 million, down $11.4 million, which the company attributed to the timing of multi-year DataDirect renewals[19].

Acquisition amortization depressed fiscal 2025 GAAP profit, while cash flow was much stronger. GAAP operating income was $153.3 million (a 15.7% margin), net income was $73.1 million and amortization of acquired intangibles totaled $145.5 million; operating cash flow was $235.2 million, capital spending was only about $5.7 million, and cash went mainly to repaying $130 million of revolver debt and buying back $105.2 million of stock[20]. At fiscal year-end on November 30, 2025, the revolver balance was $600 million, alongside $360 million of convertible notes due 2026 and $450 million of convertible notes due 2030[21].

Revenue growth picked up in the first half of fiscal 2026, but the increase came from licenses. First-quarter revenue (to February 28) was $247.8 million, up 4%[22], with a 41% non-GAAP operating margin[23]; second-quarter revenue was $253.5 million, up 7%, with GAAP operating income of $45.2 million, a 17.8% margin[7], a 40% non-GAAP operating margin and non-GAAP EPS of $1.62, above the $1.53 top of guidance[3]. At the end of the second quarter ARR was $868 million, up 2%[24], net retention was 100%[3] and remaining performance obligations were $518.9 million[25].

Cash flow and the balance sheet both improved in the first half, but the debt mix shifted from convertible notes to a floating-rate revolver. First-half operating cash flow was $177.5 million, against $98.9 million a year earlier[26]; adjusted free cash flow was $99 million in the first quarter[23] and $79 million in the second[3], and days sales outstanding fell from 73 in the fourth quarter of fiscal 2025 to 49 in the second quarter[13]. Cash stood at $103 million at quarter-end[13], the revolver at $850 million (at a 5.37% rate) and the 2030 convertible notes at $450 million; in April the company used the revolver and cash to redeem $360 million of maturing convertible notes[27], and net leverage on the company's definition was 2.9 times[8]. Progress also bought back $34.7 million of stock in the second quarter[28], and on September 22 it paid the $400 million Domo price with cash and revolver borrowings[12].

Operating Model

Progress revenue splits into a slow-growing recurring portion and a license portion that swings with signing dates. Revenue is the sum of license, maintenance, SaaS and professional services: license was 24% of fiscal 2025 revenue and is recognized upfront when the customer can use the software, and because term licenses are usually invoiced annually for one to three years, the signing date of multi-year renewals decides which quarter license revenue lands in[17]; maintenance was 42%, priced as a share of net license price and recognized monthly over the contract; SaaS was 29%, about 90% of it from ShareFile, recognized monthly over the subscription; professional services were 4%[19]. ARR measures the annualized contract value of maintenance, SaaS and term licenses and tracks billings rather than revenue; it was $868 million at the end of the second quarter, up 2%[24]. Revenue growth therefore comes from three forces: about 2% organic ARR growth, quarterly swings from license renewal timing, and acquisitions (ShareFile in fiscal 2025 and Domo from the fourth quarter of fiscal 2026).

Margins hinge on licenses carrying almost no marginal cost, while acquisition amortization opens a wide gap between GAAP and non-GAAP profit. The second-quarter GAAP gross margin was about 82.3%, with license costs of only $3.7 million, mostly royalties; within operating expenses, sales and marketing ran about 21% of revenue, R&D about 19% and G&A about 13%, plus about $26 million a quarter of intangible amortization in operating expenses[7]. Fiscal 2026 guidance calls for non-GAAP operating income of about $388.0 million to $394.9 million, excluding $137.3 million of intangible amortization, $73.5 million of stock-based compensation and restructuring, acquisition and cyber-incident costs, which corresponds to a GAAP operating margin of about 16%[10]. Post-deal margin gains come mainly from cutting duplicate functions and sales costs at acquired businesses, while interest expense of about $16 million a quarter moves with the revolver balance and floating rates.

Cash flow is clearly seasonal and runs consistently above net income. Most customers prepay maintenance, SaaS and term licenses annually, with billing concentrated in the fourth quarter, so days sales outstanding rise in the fourth quarter and fall with collections in the first and second, which lifts first-half operating cash flow[13]. The gap between operating cash flow and net income comes mainly from intangible amortization and stock-based compensation, and capital spending is under $10 million a year[20]; adjusted free cash flow equals operating cash flow minus capital spending plus restructuring payments, and fiscal 2026 guidance excluding Domo is $271 million to $283 million[29]. Cash goes first to repaying acquisition debt, then to buybacks that offset dilution, and then to the next acquisition.

The model has gaps that public data cannot fill. Progress reports one segment and does not disclose quarterly revenue by product, and ShareFile revenue appears only annually, so neither license strength nor maintenance decline can be tied to specific products; "AI-driven demand" rests on management's narrative, with no quantified AI product revenue. Net leverage is computed on the credit agreement's definition without a full public reconciliation of adjusted EBITDA, so outsiders cannot independently check the "pro forma below 3.0 times" claim; Domo is consolidated only from the fourth quarter of fiscal 2026, and its fiscal year ends January 31, one month out of step with Progress's quarters.

Industry and Competitive Position

Progress competes in several fragmented software niches, and the company does not believe any of them has a dominant vendor. Its products span development tools, data connectivity, file sharing and network management, and competitors range from single-product specialists to large vendors with full platforms and free or open-source offerings[30]. That makes scale-driven pricing hard in any one category, so Progress's position depends more on customer switching costs and installed deployments.

The company's edge lies in its business model, not in leadership of any single product. It buys slowing but sticky products, folds their R&D and sales into a common platform, and trades net retention of about 100% and organic ARR growth of about 2% for a non-GAAP operating margin near 40%[3]. The strength of this model is steady cash flow that supports repeated leveraged acquisitions; the weakness is near-stagnant organic growth, so any acceleration must come from large license deals or new purchases.

The main competitive risk is that these mature products get displaced in the AI era, and current disclosure is not enough to verify management's rebuttal. Management argues that near-term fears of AI disruption are overstated because enterprises do not easily abandon critical applications, positions its data platform products as the foundation that gives AI "trusted context," and said data platform products saw the strongest AI-related demand in the second quarter[8]; the Domo purchase extends that positioning. Because Progress does not disclose revenue or share by product, the available material cannot compare its growth or margins line by line with specific competitors.

Core Debates

After second-quarter license revenue jumped 36%, can third-quarter license revenue hold last year's $63.4 million while ARR keeps growing 2%, showing the strength was more than renewals pulled forward?

This question decides whether Progress is a recurring-revenue company growing 2% or one reaccelerating on AI-driven data demand. About 70% of revenue is slow-growing maintenance and SaaS recognized monthly, and about a quarter is license revenue recognized in the quarter of signing, nearly all of which becomes gross profit[19]. First-half fiscal 2026 revenue grew 5%, and all of the increase came from licenses: first-half license revenue was $136.6 million, up 25%, while maintenance, SaaS and services combined were essentially flat[7].

The evidence supports both a demand explanation and a timing explanation. On the demand side, the CFO said the second-quarter outperformance was "largely driven by the success of several AI powered product offerings"[13], the call named DataDirect, Chef, MarkLogic and LoadMaster, and management said renewals are still mostly three to five years and have not shortened[8]. On the timing side, management also said roughly half of the second-quarter beat came from deals that closed early, and it guided third-quarter revenue down sequentially to $244 million to $250 million[3]; fiscal 2025 license revenue had already fallen $11.4 million on the timing of multi-year DataDirect renewals[19], remaining performance obligations slipped from $527.5 million at the end of February[31] to $518.9 million at the end of May[25], and ARR still grew only 2%. On July 22 the company added that third-quarter revenue and EPS would come in within or above the high end of guidance[4], which makes the third-quarter line items even more important for the judgment.

The baselines for testing this are clear. Third-quarter fiscal 2025 license revenue was $63.4 million and total revenue $249.8 million, and license revenue in the first and second quarters of fiscal 2026 was $67.6 million and $69.0 million[6]; ARR was $863 million at the end of February[23] and $868 million at the end of May, and about 74% of remaining performance obligations will be recognized within 12 months[25]. The transmission runs as follows: the signing date of multi-year renewals and customer expansion determine license revenue recognized in the quarter, license is about 27% of total revenue, and because license cost is only royalties, almost all of it flows to gross profit and operating income; renewal contract value moves into ARR and remaining performance obligations and turns into maintenance revenue in later quarters.

What remains unresolved is how much of the second-quarter strength is new demand. In the third quarter, watch whether license revenue is at least last year's $63.4 million and whether it falls below the roughly $59.5 million implied by guidance, whether total revenue delivers the "within or above the $250 million high end" statement, whether ARR keeps growing at 2% or more and remaining performance obligations stop falling above $518.9 million, and whether management describes renewals of data products such as DataDirect and MarkLogic as expansion or timing. If license revenue falls below $59.5 million and is attributed to deals pulled forward, the second quarter borrowed from the future; if remaining performance obligations fall below $502 million and ARR growth drops under 1%, the demand explanation is also falsified.

Maintenance and SaaS make up nearly 70% of revenue. After July's emergency shutdown of self-hosted ShareFile servers, can the two lines hold last year's $176.4 million in the third quarter with net retention at 100% or better?

Retention in maintenance and SaaS determines whether Progress can sustain its roughly 39% non-GAAP operating margin and the cash flow it uses to repay debt. OpenEdge and ShareFile together contributed slightly more than half of fiscal 2025 revenue[15]: OpenEdge is embedded in customers' business applications through ISVs and generates cash through maintenance renewals[18], while ShareFile is a SaaS subscription. This revenue costs little to deliver, so any churn falls almost directly on gross profit and operating income.

The evidence shows a broadly stable base, but maintenance revenue is already drifting lower. On the stable side, net retention returned to 100% in the second quarter (99% in the first) and has stayed between 99% and 101% for nine quarters[3]; SaaS revenue recovered from $70.5 million in the first quarter to $73.0 million in the second[6], management said the ShareFile billing cleanup is nearly finished, and renewals are still mostly three to five years[8]. On the pressure side, second-quarter maintenance revenue fell 2.2% year over year and maintenance plus SaaS fell 0.8%[9], and in the first quarter an Eastern European government customer ended its contract after a court ruling[32]. Separately, The Register reported on 2026-07-13 that on July 10 the company told all customers to shut down self-hosted ShareFile Storage Zone Controllers immediately, citing a "credible external security threat" with no patch yet available, while saying it had no evidence of unauthorized access to customer accounts or data; as of September 25, the company's official filings had not quantified the incident's impact.

The baselines for this debate come from last year's quarter and the last two quarters. Third-quarter fiscal 2025 maintenance revenue was $104.8 million and SaaS $71.5 million, for $176.4 million combined; in the second quarter of fiscal 2026 the two totaled $174.2 million, with maintenance at $101.2 million[6]. The transmission runs from customer renewals and expansion, captured by net retention, to maintenance revenue and ShareFile subscriptions that make up about 69% of revenue, and then to gross profit and operating income; if a security incident or product displacement causes churn and downgrades at renewal, it shows up as lower maintenance and SaaS revenue one to four quarters later.

What remains unresolved is whether stable net retention hides seat losses. An alternative reading holds that net retention looks stable only because ShareFile is counted on a pro forma basis and price increases offset fewer seats; if so, SaaS revenue would stall just above $70 million instead of growing with ARR. In the third quarter, watch whether maintenance plus SaaS is at least $176.4 million, whether SaaS holds above $73.0 million and the company discloses the customer impact and cost of the ShareFile incident, whether net retention stays at 100%, and whether the year-over-year decline in maintenance narrows to within 2%. If SaaS drops back below $70.5 million and is attributed to ShareFile churn, or net retention falls to 98% or lower, the stable-base view is falsified.

Having bought a shrinking Domo largely on its revolver, can Progress keep its full-year non-GAAP operating margin above 38% and pro forma net leverage below 3.0 times?

Acquisitions are Progress's main source of growth, and Domo is its largest deal since ShareFile. Legacy ARR grows only about 2% a year[24], and nearly all of fiscal 2025's 30% revenue growth came from ShareFile[14]. Domo's trailing 12-month revenue is about $318 million[11], which would lift Progress's revenue base by roughly 30%; whether it can be pulled toward the near-40% margins of past deals without letting leverage get out of hand decides EPS and the room for the next acquisition.

The favorable evidence centers on price and Domo's business quality, and the unfavorable evidence centers on Domo's revenue trend and how the deal was financed. On the favorable side, after expected tax benefits, cash at closing and seller transaction expenses, the effective price is about $355 million, roughly 1.1 times Domo's trailing 12-month revenue; Progress says Domo has a 77% gross margin, about 86% of its ARR is usage-based and its net retention exceeds 100%, and it expects full cost synergies by the end of fiscal 2027[11]. Domo's operating expenses were $61.6 million in the quarter ended July 31, 2026, which leaves room for cost synergies[33]. On the unfavorable side, Domo's second-quarter fiscal 2027 revenue fell 3.7% and its remaining performance obligations declined from $430.9 million to $410.8 million[33]; before the sale Domo had breached the minimum ARR covenant in its loan and disclosed substantial doubt about its ability to continue as a going concern, and the deal was reached within the forbearance window its lenders granted[34].

The capital baselines show limited room for more leverage. At the end of the second quarter the revolver already stood at $850 million at 5.37%[27], and net debt of about $1.197 billion corresponded to 2.9 times net leverage (3.1 times at the end of February[32] and 3.4 times at the start of fiscal 2026[8]); second-quarter adjusted free cash flow was $79 million, about $178 million for the first half[3]. Domo's second-quarter fiscal 2027 revenue was $76.8 million, including subscription revenue of $70.4 million, down 3.3%, with an operating loss of $2.39 million[33]. The transmission runs as follows: the roughly $400 million price, paid with revolver borrowings and cash, raises the revolver balance and floating-rate interest and thus net leverage and EPS; Domo's revenue and operating expenses, through cost synergies, set the combined non-GAAP operating margin; and legacy free cash flow sets the pace of repayment and the capacity for the next deal.

What remains unresolved is how the company calculates "pro forma below 3.0 times." Adding roughly $400 million of borrowing to about $1.197 billion of net debt at the end of the second quarter, with Domo contributing almost no EBITDA, means the claim needs a specific definition on the call[11]. An alternative reading is that Domo's revenue decline stemmed from uncertainty during the sale process and can stop after closing; if so, Domo's fourth-quarter contribution would approach its quarterly subscription base of more than $70 million. Watch whether net leverage at the end of the third quarter is no higher than 2.9 times and the revolver falls below $800 million, whether new full-year guidance including Domo keeps the non-GAAP operating margin at 38% or more and pro forma net leverage below 3.0 times and on what definition, what Domo's ARR, fourth-quarter revenue contribution and cost synergies look like, and whether third-quarter adjusted free cash flow is at least $47 million. If pro forma net leverage reaches 3.0 times or more or the repayment plan pauses, or full-year non-GAAP operating margin guidance including Domo falls below 37%, the view that integration and deleveraging can proceed together is falsified.

Risks and Falsifiers

The MOVEit data-breach class action is the company's largest unquantified liability. After MOVEit Transfer was attacked in May 2023, the related class actions were consolidated into multi-district litigation in Massachusetts[16], and 23 of the 33 claims have been dismissed in whole or in part[35]; fact discovery closes on 2026-09-29, class certification briefing began on 2026-08-28 and runs into the fourth quarter, and the case is not expected to conclude within 12 months[36]. The company says it cannot reasonably estimate the possible liability, the size of any judgment or settlement is unknown and insurance may offset part of it; net cyber-incident response costs were $2.8 million in fiscal 2025, the fiscal 2026 non-GAAP adjustment has been raised to $12.4 million[10], and third-quarter EPS guidance carries a separate $0.13 for it[37]. If the third-quarter 10-Q shows no new settlement, judgment amount or regulatory penalty and cyber costs stay within the guided adjustment, the current view of a contained but unquantified risk holds.

License deals pulled into the second quarter may reverse in the third, pushing license revenue back below the roughly $60 million quarterly level of fiscal 2025. License cost is only royalties, just $3.7 million in the second quarter[7], so every $10 million drop in license revenue cuts operating income almost dollar for dollar, equal to about a tenth of quarterly non-GAAP operating income. If third-quarter license revenue is at least $63.4 million[6] and ARR grows at least 2%, this risk is falsified.

The emergency shutdown of self-hosted ShareFile servers could trigger churn or compensation at renewal and extend the security-reputation pressure on Progress's file transfer and sharing products that began with MOVEit. ShareFile generated $261.6 million in fiscal 2025, about 27% of company revenue[14]; each 1-point drop in the renewal rate cuts annualized revenue by about $2.6 million, nearly all of which falls to operating income. If SaaS revenue in the third and fourth quarters is at least $73.0 million[6] and net retention is at least 100%[3], this risk is falsified.

Domo may keep losing customers during the change of ownership, synergies may arrive more slowly than planned and acquisition debt raises floating-rate interest. The revolver rate is 5.37%, so each $100 million of borrowing adds about $5.4 million of annual interest[27]; Domo's quarterly revenue of about $77 million and operating loss of $2.39 million[33] would dilute the combined non-GAAP operating margin by several points from about 39% before synergies arrive. If full-year non-GAAP operating margin guidance including Domo is at least 38% and the company reaffirms pro forma net leverage below 3.0 times[11], this risk is falsified.

What to Watch Next

The three core debates translate into specific checks on the September 30 disclosure and later filings.

• License demand versus timing: third-quarter license revenue against last year's $63.4 million and the second quarter's $69.0 million. A drop below about $59.5 million attributed to deals pulled forward would mean the second quarter borrowed from the future.
• License demand versus timing: ARR at $868 million (up 2%) and remaining performance obligations at $518.9 million. Remaining performance obligations below $502 million with ARR growth under 1% would falsify the demand explanation.
• License demand versus timing: total revenue against guidance of $244 million to $250 million and last year's $249.8 million. A result below the $244 million low end would contradict the July 22 statement.
• Recurring base: maintenance plus SaaS against last year's $176.4 million and the second quarter's $174.2 million, and whether the maintenance decline narrows to within 2%. A combined figure that stays below last year's level would weaken the stable-base view.
• Recurring base: SaaS revenue against the second quarter's $73.0 million, plus any disclosure of the ShareFile incident's impact and cost. A drop below $70.5 million attributed to ShareFile churn would falsify the view.
• Recurring base: net retention at 100%. A reading of 98% or lower would falsify the view.
• Domo integration and deleveraging: net leverage at 2.9 times and the revolver at $850 million, plus the pro forma definition including Domo. Pro forma leverage of 3.0 times or more, or a paused repayment plan, would falsify the view.
• Domo integration and deleveraging: full-year guidance including Domo against the roughly 39% non-GAAP operating margin that excludes it, plus Domo's ARR and synergy scale. Margin guidance below 37% would falsify the view.
• Domo integration and deleveraging: third-quarter adjusted free cash flow against the second quarter's $79 million and full-year guidance of $271 million to $283 million. A figure below $47 million would weaken the deleveraging pace.

Conclusion

Progress runs on buying scale, integrating for margin and repaying debt with free cash flow, and this third-quarter report tests that loop under pressure from two directions at once. Legacy ARR grows only 2%, net retention holds at 100%, and the second quarter's 7% revenue growth came mainly from a 36% jump in license revenue[3]; meanwhile, at 2.9 times net leverage, the company used its revolver to buy Domo, a business with shrinking revenue[12]. The central open question is whether license strength and the recurring base can both hold in the third quarter, so that legacy cash flow is enough to fund Domo's integration and continued debt repayment.

Since the second-quarter report, outside firms have not offered independent analysis that can be relied on. DA Davidson and Oppenheimer kept their existing ratings and Zacks raised its rating, but only summaries of those rating changes are available; reports from Constellation Research (July 23) and MarketBeat (July 22) on the Domo deal only restated the deal terms, Domo's financial distress and management's statements, without independent judgment. For the three debates on license durability, ShareFile retention and Domo integration, the only material available is the company's own disclosure and management's explanations, and outside perspective remains a gap.

From here, the current buy, integrate and repay reading would strengthen materially if third-quarter license revenue is at least $63.4 million, ARR keeps growing at 2% or more, maintenance plus SaaS holds $176.4 million with net retention at 100%, and full-year guidance including Domo puts the non-GAAP operating margin above 38% with pro forma net leverage below 3.0 times. Conversely, it would weaken significantly if license revenue falls below about $59.5 million and is blamed on deals pulled forward, SaaS drops back below $70.5 million because of the ShareFile incident, or margin guidance including Domo comes in below 37% or pro forma net leverage rises above 3.0 times.

Sources

[1] PRGS 10-K filed 2026-01-20 · product portfolio · 2026-01-20 · 10-K · https://www.sec.gov/Archives/edgar/data/876167/000087616726000008/

[2] Drillr earnings calendar (updated 2026-09-24) · PRGS 2026-09-30 call · 2026-09-24 · Drillr earnings calendar · https://gateway.drillr.ai/mcp/private

[3] PRGS 8-K filed 2026-06-30 · 2Q26 results highlights and Q3 guidance · 2026-06-30 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[4] PRGS 8-K filed 2026-07-22 · reiterated Q3 guidance · 2026-07-22 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[5] Drillr analyst_financial_estimates (updated 2026-09-24) · PRGS 3Q FY26 consensus · 2026-09-24 · Drillr analyst_financial_estimates · https://gateway.drillr.ai/mcp/private

[6] PRGS 8-K filed 2026-06-30 · quarterly revenue by type and region FY2025-2Q26 · 2026-06-30 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[7] PRGS 8-K filed 2026-06-30 · 2Q26 statement of operations · 2026-06-30 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[8] PRGS 2Q26 earnings call 2026-06-30 · Drillr summary · 2026-06-30 · earnings-call · https://gateway.drillr.ai/mcp/private

[9] PRGS 10-Q filed 2026-06-30 · 2Q26 revenue by type and drivers · 2026-06-30 · 10-Q · https://www.sec.gov/Archives/edgar/data/876167/000087616726000078/

[10] PRGS 8-K filed 2026-06-30 · FY2026 non-GAAP operating margin guidance · 2026-06-30 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[11] PRGS 8-K filed 2026-07-22 · Domo transaction presentation · 2026-07-22 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[12] PRGS 8-K filed 2026-09-22 · Domo acquisition completed · 2026-09-22 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[13] PRGS 8-K filed 2026-06-30 · 2Q26 CFO commentary, cash and DSO · 2026-06-30 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[14] PRGS 10-K filed 2026-01-20 · ShareFile acquisition and FY2025 revenue · 2026-01-20 · 10-K · https://www.sec.gov/Archives/edgar/data/876167/000087616726000008/

[15] PRGS 10-K filed 2026-01-20 · OpenEdge and ShareFile revenue concentration · 2026-01-20 · 10-K · https://www.sec.gov/Archives/edgar/data/876167/000087616726000008/

[16] PRGS 10-K filed 2026-01-20 · MOVEit litigation and exposure · 2026-01-20 · 10-K · https://www.sec.gov/Archives/edgar/data/876167/000087616726000008/

[17] PRGS 10-K filed 2026-01-20 · revenue recognition policy · 2026-01-20 · 10-K · https://www.sec.gov/Archives/edgar/data/876167/000087616726000008/

[18] PRGS 10-K filed 2026-01-20 · customers and indirect channels · 2026-01-20 · 10-K · https://www.sec.gov/Archives/edgar/data/876167/000087616726000008/

[19] PRGS 10-K filed 2026-01-20 · FY2025 revenue by type · 2026-01-20 · 10-K · https://www.sec.gov/Archives/edgar/data/876167/000087616726000008/

[20] PRGS 10-K filed 2026-01-20 · FY2025 consolidated cash flows · 2026-01-20 · 10-K · https://www.sec.gov/Archives/edgar/data/876167/000087616726000008/

[21] PRGS 10-K filed 2026-01-20 · debt obligations and credit facility · 2026-01-20 · 10-K · https://www.sec.gov/Archives/edgar/data/876167/000087616726000008/

[22] PRGS 10-Q filed 2026-03-31 · 1Q26 revenue by type · 2026-03-31 · 10-Q · https://www.sec.gov/Archives/edgar/data/876167/000087616726000051/

[23] PRGS 8-K filed 2026-03-30 · 1Q26 results highlights and guidance · 2026-03-30 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[24] PRGS 10-Q filed 2026-06-30 · ARR definition and balance · 2026-06-30 · 10-Q · https://www.sec.gov/Archives/edgar/data/876167/000087616726000078/

[25] PRGS 10-Q filed 2026-06-30 · remaining performance obligations · 2026-06-30 · 10-Q · https://www.sec.gov/Archives/edgar/data/876167/000087616726000078/

[26] PRGS 8-K filed 2026-06-30 · 2Q26 cash flow summary · 2026-06-30 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[27] PRGS 10-Q filed 2026-06-30 · debt obligations and 2026 Notes redemption · 2026-06-30 · 10-Q · https://www.sec.gov/Archives/edgar/data/876167/000087616726000078/

[28] PRGS 10-Q filed 2026-06-30 · operating cash flow, DSO and buybacks · 2026-06-30 · 10-Q · https://www.sec.gov/Archives/edgar/data/876167/000087616726000078/

[29] PRGS 8-K filed 2026-06-30 · FY2026 adjusted free cash flow guidance · 2026-06-30 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40

[30] PRGS 10-K filed 2026-01-20 · competition · 2026-01-20 · 10-K · https://www.sec.gov/Archives/edgar/data/876167/000087616726000008/

[31] PRGS 10-Q filed 2026-03-31 · remaining performance obligations · 2026-03-31 · 10-Q · https://www.sec.gov/Archives/edgar/data/876167/000087616726000051/

[32] PRGS 1Q26 earnings call 2026-03-30 · Drillr summary · 2026-03-30 · earnings-call · https://gateway.drillr.ai/mcp/private

[33] DOMO 10-Q filed 2026-09-03 · 2Q FY2027 statement of operations · 2026-09-03 · 10-Q · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001505952&type=10-Q&dateb=&owner=include&count=40

[34] DOMO 10-Q filed 2026-09-03 · covenant default and going concern · 2026-09-03 · 10-Q · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001505952&type=10-Q&dateb=&owner=include&count=40

[35] PRGS 10-Q filed 2026-03-31 · MOVEit claims and costs · 2026-03-31 · 10-Q · https://www.sec.gov/Archives/edgar/data/876167/000087616726000051/

[36] PRGS 10-Q filed 2026-06-30 · MOVEit litigation schedule · 2026-06-30 · 10-Q · https://www.sec.gov/Archives/edgar/data/876167/000087616726000078/

[37] PRGS 8-K filed 2026-06-30 · Q3 2026 non-GAAP EPS guidance reconciliation · 2026-06-30 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000876167&type=8-K&dateb=&owner=include&count=40