Progress Software Delivers Strong Q3 Results: ARR Growth, Record Operating Margins, and Enhanced Customer Loyalty
Progress Software, a leading provider of application development and deployment software, has reported another solid quarter with impressive results in its third fiscal quarter 2026 financial performance.
The company's Annual Recurring Revenue (ARR) grew over 1% in constant currency to $873 million, exceeding expectations. The net retention rate remained steady at 99%, consistent with the previous few quarters. Q3 revenue was $246 million, around the midpoint of Progress Software's guidance, with significant contributions from products such as OpenEdge, DataDirect, MOVEit, and LoadMaster.
Operating margins were exceptionally strong, reaching 43% in the quarter, while earnings per share increased by 13% to $1.69, surpassing the high end of the company's guidance. Cash flow continued to be robust, with Days Sales Outstanding (DSOs) improving substantially, and Progress Software strengthened its balance sheet through aggressive debt paydown.
"We're pleased with our third quarter results," stated Yogesh Gupta, President and CEO of Progress Software. "Our performance once again demonstrated the strength and durability of our portfolio, which is used by some of the world's largest enterprises and government agencies." He highlighted several major customers across various industries and geographies who recommitted to and expanded their relationship with Progress Software.
Progress Software's strong quarter was not limited to revenue growth. The company has also been making significant strides in highly regulated and security-sensitive environments, where trust and performance are paramount. These organizations are utilizing Progress products for mission-critical systems to securely manage and leverage data and content, automate complex processes, and modernize infrastructure.
The acquisition of Domo, which closed last week, is another strategic move by Progress Software to expand its capabilities and offerings. The company's solid quarter and positive outlook for Q4 indicate a promising future for Progress Software as it continues to deliver value to customers and investors alike.
