The news
Progress Software earnings for the fiscal third quarter, reported September 30, 2026, showed revenue down 2% to $246 million and annual recurring revenue up 1% to $873 million in constant currency. Progress (PRGS) also raised its full-year forecast after closing its Domo deal.
The quarter ended August 31, 2026. Revenue compared with $249.8 million a year earlier, according to the company's supplemental presentation, and fell 2% on both an actual and a constant-currency basis. SaaS revenue was $72.6 million, maintenance $100.0 million, software licenses $63.6 million and professional services $9.8 million. Net retention, which measures how much recurring revenue existing customers kept after expansions and losses, was 99%.
Profitability held up. GAAP operating margin was 19% and non-GAAP operating margin was 43%. GAAP diluted earnings per share rose 25% to $0.55 from $0.44, and non-GAAP diluted EPS rose to $1.69 from $1.50. Cash from operations was $88.0 million and adjusted free cash flow rose 17% to $87.2 million. Progress ended the quarter with $113.7 million in cash and $790 million of long-term debt, and bought back $17 million of stock in the quarter, $72 million year to date.
On September 22, Progress completed its purchase of substantially all assets of Domo's AI and data platform business for $400 million, paid with cash and its revolving credit facility. Progress said the platform serves more than 2,400 businesses. Its supplemental presentation put the business's steady-state revenue at $280 million to $290 million and the price at about 1.4 times that revenue and about 3.5 times pro forma EBITDA, with net leverage of about 3.8 times at closing.
Progress now expects fiscal 2026 revenue of $1.044 billion to $1.052 billion, up from $990 million to $1.002 billion, and non-GAAP EPS of $6.15 to $6.23, up from $6.09 to $6.21. It cut its GAAP EPS forecast to $1.18 to $1.28 from $1.60 to $1.74 and lowered its non-GAAP operating margin outlook to 38% from 39%; the reconciliation includes preliminary estimates for intangible assets acquired from Domo. For the fiscal fourth quarter, it guided to revenue of $297 million to $305 million and a GAAP loss of $0.32 to $0.41 per share.
On the earnings call, as summarized by MarketBeat, Chief Executive Yogesh Gupta said Domo adds real-time data integration, analytics, visualization, automation and agentic orchestration. Management said the Domo business should add more than $100 million in annual EBITDA once integration ends in fiscal 2027, while pressuring consolidated operating margin by 100 to 200 basis points that year. Executives also said more than 85% of Domo's ARR comes from consumption-based pricing and that they are evaluating that model across the portfolio.
The numbers
- Fiscal Q3 revenue
- $246 million (down 2%)
- Annual recurring revenue
- $873 million (up 1%, constant currency)
- Net retention rate
- 99%
- Non-GAAP operating margin
- 43%
- Adjusted free cash flow
- $87.2 million (up 17%)
- Domo business purchase price
- $400 million, all cash
- FY2026 revenue guidance
- $1.044 billion to $1.052 billion
Why CEOs should care
For CIOs who run Progress products such as OpenEdge, MOVEit or DataDirect, the figures describe a vendor with a stable installed base: net retention of 99% means existing customers, as a group, are spending slightly less than a year earlier. With organic growth near flat, renewals of those products carry Progress's margins, which gives large customers leverage. Ask for multi-year price caps, written roadmap commitments for the products you depend on, and clear support terms before Progress shifts attention to integrating Domo.
Domo customers have a new owner and should review what that means now. Progress paid with cash and borrowed money, and management told investors it expects more than $100 million in annual EBITDA from the business after integration, according to MarketBeat's summary of the call. That target means Domo will be run differently under Progress. Check your contract's renewal dates, price-increase limits and data export rights, and ask Progress which Domo features and partner connections, including those with cloud data warehouses, it will keep.
CFOs at Progress customers should watch the pricing comment. Executives said they are evaluating Domo's consumption-based model across the portfolio. If that happens, fixed license and maintenance bills could become variable. Ask your account team whether any product you use is moving to usage pricing and how current contracts will be treated.
The bigger picture
Progress describes itself as an AI infrastructure software leader that gives organizations context and control for AI. The numbers show where growth comes from: revenue fell and ARR barely rose on an organic basis, while the Domo purchase adds a business Progress values at $280 million to $290 million of steady-state revenue. Buying at about 1.4 times revenue and running the asset for margin is a strategy built for mature software, and Domo is the latest test of it.
The question for investors and customers is whether AI and data products can lift growth at the core, or whether they mainly add revenue and cash flow to service debt. Net leverage of about 3.8 times at closing, by the company's estimate, likely leaves less room for another large deal until debt comes down.
What’s next
Progress's fiscal year ends November 30, 2026, so the fourth-quarter report will be the first with a full quarter of Domo results. Watch for fiscal 2027 guidance showing the promised margin pressure, any decision to expand consumption pricing, and debt repayment from free cash flow.
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