Progress Software Q2 2026 Earnings Call: Complete Transcript

Progress Software (NASDAQ: PRGS ) reported second-quarter financial results on Tuesday. The transcript from the company's second-quarter earnings call has been provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

The full earnings call is available at Summary Progress Software reported Q2 2026 revenue of $253 million, a 7% increase year-over-year, with ARR of $868 million and an operating margin of 40%. 62, exceeding expectations. The company highlighted strong performance in its data platform products and infrastructure management. Strategic initiatives include launching Chef Enterprise Management for Nvidia's DGX Spark and focusing on AI capabilities across its portfolio.

21. The company plans to reduce debt by approximately $220 million and repurchase $75 million in shares. Operationally, the company improved collections, reducing day sales outstanding, and paid down $110 million in debt in the first half of the fiscal year. Management remains optimistic about AI opportunities and the potential for disciplined M&A, with sellers adjusting expectations, and Progress Software's strong balance sheet allowing for strategic acquisitions.

Full Transcript OPERATOR Hello and welcome to Progress Software second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press Star one one on your telephone.

You would then hear an automated message advising your hand is raised. To withdraw your question, please press Star one one again. I would now like to hand the conference over to Michael Micciche. Sir, you may begin.

Michael Micciche Thank you. Good afternoon, everybody. Thanks for joining us for Progress Software's second fiscal quarter 2026 financial results conference call. With me tonight are Yogesh Gupta, our President and CEO, and Anthony Folger, our Chief Financial Officer.

Before we get started, let's go through the Safe Harbor statement. During this call, we will discuss our outlook for future financial and operating performance, corporate strategies, product plans, cost initiatives, and other information that might be considered forward-looking. Such forward-looking information represents Progress Software's outlook and guidance only as of today and is subject to risks and uncertainties, and our actual results may differ materially.

For a description of the factors that may affect our future results and operations, please refer to the risk factors in our SEC filings, particularly the risk factor section of our most recent Form 10-K and the latest 10-Q, which was filed in conjunction with this announcement evening. Progress assumes no obligation to update forward-looking statements included in this call. Additionally, please note that all the financial figures referenced in this call tonight are non-GAAP measures unless otherwise indicated.

You can find a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP figures in our earnings press release, which was issued after the market closed today. This document contains additional information related to our financial results for the second quarter of fiscal 2026, and I recommend that you reference it for specific details. We've also provided a slide presentation that contains supplemental data for our second quarter and provides additional highlights and financial metrics. com.

And of course, today's call is being recorded in its entirety and it should be available for replay shortly after we finish tonight on the Investor Relations section of our website. So with that out of the way, Yogesh, I'll turn it over to you. Yogesh Gupta, President And CEO Thank you, Mike, and good afternoon, everyone. Q2 was another strong quarter for Progress as our results exceeded our expectations and we were able to raise our guidance again for the full year.

Our Q2 26 results reflect the resilience of our product portfolio, strong execution by all our teams, and the continued loyalty of our customers. Revenue of $253 million was up 7% year over year with ARR of $868 million, up 2% year over year in constant currency. 62, well ahead of the high end of our guidance. We also generated approximately $79 million of adjusted free cash flow and delivered a net retention rate of 100%.

These results exceeded our expectations and guidance across every metric and were driven by broad-based strength throughout the portfolio. We saw particularly strong performance in our data platform products as our customers increasingly leverage their business data to provide context for AI. We also saw strength across the rest of our portfolio, including infrastructure management and content-driven workflow automation, demonstrating the benefits of our diversified product strategy and the mission-critical role our software continues to play for customers of all sizes around the world.

When viewed against the backdrop of the last several quarters, I believe Q2 reinforces the strength and consistency of our business model. Over the past year, we have continued to demonstrate our ability to generate durable recurring revenue, strong margins, and significant cash flows while integrating acquisitions, reducing debt, investing in innovation, and navigating a rapidly evolving technology environment. Over the past year, investors have tried to sort out whether AI ultimately will benefit or disrupt software.