Can Support Hold PRGS Stock as Progress Software Signals Strong Q3, New Acquisition?

Quick overview

Progress Software Corporation reported stronger-than-expected Q2 earnings but fell short on revenue, sending its shares lower even as it unveiled new tech ambitions.

Market Reaction and Valuation

Progress Software Corporation (NASDAQ: PRGS), valued at $2.76 billion before earnings, saw its market cap decline to about $2.46 billion after its latest quarterly report. The stock gapped down at the US open, dropping roughly 11% in early trading.

Despite this sharp selloff, the longer-term trend remains positive, with the price now approaching the purple 200-week simple moving average (SMA) around $52.50. Historically, that level has offered strong technical support—making it a potential zone for long-term investors to consider new positions.

Earnings Snapshot

Q2 Adjusted EPS came at $1.40, beating consensus estimate of $1.30, while  Revenue came at $237.36 million, slightly below expectations. Earnings outperformance highlights disciplined cost management and robust demand for Progress’s modernization and integration solutions.

While sales narrowly missed consensus, the company demonstrated consistent ability to deliver positive EPS surprises—building investor confidence in its operational execution.

PGRS Stock Chart Weekly – The 200 SA Has Been A Solid Support

Progress Software Q2 Earnings Highlights

Earnings Per Share (EPS) Beat Expectations

• Reported adjusted EPS: $1.40 per share
• Surpassed the Consensus Estimate of $1.30
• Year-ago EPS was $1.09, marking solid year-over-year growth

Consistent Outperformance

• Latest result represents an earnings surprise of +7.69% over expectations
• Previous quarter saw an even bigger beat: expected $1.04, delivered $1.31
• Surprise that quarter was +25.96%, showcasing strong momentum
• Over the past four quarters, Progress Software has consistently beaten EPS estimates

Revenue Performance

• Q2 Revenue Came In Slightly Below Expectations
• Reported revenue: $237.36 million
• Slight miss vs. Zacks Consensus Estimate by 0.21%
• Nonetheless, strong growth from $175.08 million in the same quarter last year

Revenue Trends Show Resilience

• Company has topped consensus revenue estimates in three of the last four quarters
• Reflects solid demand for its business software offerings and expanding client base

Q3 2025 Earnings Guidance

• Expected EPS Range: $1.28 – $1.34
• Analyst Consensus: $1.30
• Guidance suggests earnings roughly in line with market expectations, with slight potential upside

Analyst Revisions Over Last 90 Days

• 6 positive EPS revisions
• 1 negative EPS revision
• Indicates generally bullish sentiment among analysts toward Progress’s earnings outlook.

Q3 2025 Guidance

Management maintained a favorable outlook, forecasting Q3 EPS between $1.28 and $1.34, roughly in line with Wall Street expectations. This guidance supports the view that underlying demand remains healthy despite near-term revenue volatility.

New Acquisition: Nuclia

Progress also announced the acquisition of Nuclia, a company specializing in agentic Retrieval-Augmented Generation (RAG) AI systems. The deal was completed for an undisclosed but “immaterial” sum.

Nuclia’s RAG-as-a-service platform enables companies to use their private data to build verifiable AI solutions without large upfront costs. This acquisition expands Progress’s AI offerings, aligning with its strategy to help customers modernize infrastructure while tapping into fast-growing AI-driven integration demand.

Financial Strength and Outlook

Progress Software maintains a high financial health rating (per InvestingPro), supporting its capacity to fund acquisitions and strategic growth.

Despite the revenue miss this quarter, strong year-over-year growth and consistent earnings beats underscore the company’s solid fundamentals. As demand for integration, modernization, and AI-powered solutions rises, Progress is well-positioned for steady, profitable growth in the competitive enterprise software sector.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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