UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~May~~August 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to _____.

Commission File Number: 0-19417

PROGRESS SOFTWARE CORPORATION

(Exact name of registrant as specified in its charter)


Delaware						04-2746201
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


15 Wayside Road, Suite 400, Burlington, Massachusetts						01803
(Address of principal executive offices)						(Zip code)

Registrant’s telephone number, including area code: (781) 280-4000

Not applicable

(Former name or former address and formal fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	PRGS	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~June~~September 2625, 2025, there were 4342,~~108~~907,~~347~~573 shares of the registrant’s common stock, $.01 par value per share, outstanding.

PROGRESS SOFTWARE CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~MAY~~AUGUST 31, 2025

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of May 31, 2025 and November 30, 2024	3
	Condensed Consolidated Balance Sheets as of August 31, 2025 and November 30, 2024	3
	Condensed Consolidated Statements of Operations for the three and six months ended May 31, 2025 and 2024	4
	Condensed Consolidated Statements of Operations for the three and nine months ended August 31, 2025 and 2024	4
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended May 31, 2025 and 2024	5
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended August 31, 2025 and 2024	5
	Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended May 31, 2025 and 2024	6
	Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended August 31, 2025 and 2024	6
	Condensed Consolidated Statements of Cash Flows for the six months ended May 31, 2025 and 2024	8
	Condensed Consolidated Statements of Cash Flows for the nine months ended August 31, 2025 and 2024	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1921
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3132
Item 4.	Controls and Procedures	3132
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	3334
Item 1A.	Risk Factors	3334
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3334
Item 5.	Other Information	34
Item 6.	Exhibits	3536
	Signatures	3637

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets

(in thousands, except share data)	~~May~~August 31, 2025		November 30, 2024
Assets
Current assets:
Cash and cash equivalents	$	~~102~~99,~~006~~008	$	118,077
Accounts receivable, net	~~140~~151,~~122~~431		163,575
Unbilled receivables, current portion	3435,~~136~~930		34,672
Other current assets	49,~~387~~176		52,489
Total current assets	~~325~~335,~~651~~545		368,813
Unbilled receivables, non-current portion	2930,~~890~~760		28,893
Property and equipment, net	1213,~~474~~134		13,746
Intangible assets, net	~~650~~619,~~557~~363		723,571
Goodwill	1,~~293~~309,~~830~~252		1,292,177
Right-of-use lease assets	27,~~351~~727		30,894
Deferred tax assets	6268,~~048~~823		56,179
Other assets	1117,~~791~~107		12,693
Total assets	$	2,~~413~~421,~~592~~711	$	2,526,966
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	912,~~043~~847	$	13,910
Deferred revenue, current portion, net	~~308~~298,~~360~~716		332,142
Convertible senior notes, current portion, net	358,~~051~~619		—
Accrued compensation and related payroll taxes	4163,~~727~~323		64,672
Operating lease liabilities, current portion	8,~~250~~788		9,202
Other accrued liabilities	2427,~~840~~516		35,219
Total current liabilities	~~750~~769,~~271~~809		455,145
Deferred revenue, non-current portion, net	8082,~~219~~346		72,270
Convertible senior notes, non-current portion, net	440,~~244~~713		796,267
Long-term debt, net	~~660~~620,000		730,000
Operating lease liabilities, non-current portion	22,~~548~~705		26,259
Deferred tax liabilities	2,~~481~~599		2,279
Other non-current liabilities	5,~~128~~857		5,958
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; authorized, 10,000,000 shares; issued, none	—		—
Common stock, $0.01 par value; authorized, 200,000,000 shares; issued and outstanding, 43,100,936 shares in 2025 and 43,360,695 shares in 2024	431		434
Common stock, $0.01 par value; authorized, 200,000,000 shares; issued and outstanding, 42,905,397 shares in 2025 and 43,360,695 shares in 2024	429		434
Additional paid-in capital	~~362~~371,~~091~~623		354,158
Retained earnings	~~123~~138,~~254~~051		120,405
Accumulated other comprehensive loss	(3332,~~075~~421)		(36,209)
Total stockholders’ equity	~~452~~477,~~701~~682		438,788
Total liabilities and stockholders’ equity	$	2,~~413~~421,~~592~~711	$	2,526,966

See notes to unaudited condensed consolidated financial statements.

Condensed Consolidated Statements of Operations

Three Months Ended

~~Six~~Nine Months Ended

(in thousands, except per share data)

~~May~~August 31, 2025

~~May~~August 31, 2024

~~May~~August 31, 2025

~~May~~August 31, 2024

Revenue:

Software licenses

5063,~~795~~437

5357,~~979~~850

~~109~~172,~~240~~677

~~118~~175,~~079~~929

Maintenance, SaaS, and professional services

186,~~560~~358

~~121~~120,~~098~~836

~~366~~552,~~130~~488

~~241~~362,~~683~~519

Total revenue

~~237~~249,~~355~~795

~~175~~178,~~077~~686

~~475~~725,~~370~~165

~~359~~538,~~762~~448

Costs of revenue:

Cost of software licenses

2,~~987~~833

2,~~497~~700

58,~~912~~745

57,~~228~~928

Cost of maintenance, SaaS, and professional services

33,~~764~~919

2220,~~176~~057

66100,~~648~~567

4464,~~395~~452

Amortization of acquired intangibles

10,~~537~~784

76,~~398~~307

2031,~~959~~743

1521,~~257~~564

Total costs of revenue

47,~~288~~536

3229,~~071~~064

93141,~~519~~055

6493,~~880~~944

Gross profit

~~190~~202,~~067~~259

~~143~~149,~~006~~622

~~381~~584,~~851~~110

~~294~~444,~~882~~504

Operating expenses:

Sales and marketing

4951,~~677~~850

37,~~889~~141

~~100~~152,~~973~~823

77114,~~000~~141

Product development

4649,~~570~~432

3534,~~435~~720

92142,~~945~~377

70105,~~423~~143

General and administrative

2528,~~637~~308

2120,~~983~~503

5179,~~260~~568

4363,~~327~~830

Amortization of acquired intangibles

26,~~063~~415

1613,~~316~~810

5178,~~871~~286

3347,~~705~~515

Cyber vulnerability response expenses, net

~~730~~659

~~3,036~~927

12,~~467~~126

4,~~023~~950

Restructuring expenses

~~1,043~~907

~~651~~308

8,~~072~~979

3,~~000~~308

Acquisition-related expenses

~~1,731~~814

~~548~~1,864

45,~~221~~035

13,~~250~~114

Total operating expenses

~~151~~158,~~451~~385

~~115~~109,~~858~~273

~~310~~469,~~809~~194

~~232~~342,~~728~~001

Income from operations

3843,~~616~~874

2740,~~148~~349

71114,~~042~~916

62102,~~154~~503

Other (expense) income:

Interest expense

(1817,~~138~~737)

(76,~~007~~765)

(3654,~~567~~304)

(1421,~~351~~116)

Interest income and other, net

~~294~~260

~~928~~1,896

~~781~~1,041

13,~~552~~448

Foreign currency loss, net

(~~908~~191)

(~~941~~1,201)

(2,~~090~~281)

(12,~~620~~821)

Total other expense, net

(1817,~~752~~668)

(76,~~020~~070)

(3755,~~876~~544)

(1420,~~419~~489)

Income before income taxes

1926,~~864~~206

2034,~~128~~279

3359,~~166~~372

4782,~~735~~014

Provision for income taxes

26,~~835~~793

35,~~940~~815

511,~~191~~984

814,~~908~~723

Net income

1719,~~029~~413

1628,~~188~~464

2747,~~975~~388

3867,~~827~~291

Earnings per share:

Basic

0.4045

0.3766

01.6510

01.8955

Diluted

0.3944

0.3765

01.6307

01.8752

Weighted average shares outstanding:

Basic

4342,~~053~~988

4342,~~213~~872

43,~~154~~099

43,~~508~~296

Diluted

4443,~~156~~717

43,~~964~~711

44,~~522~~253

44,~~395~~167

Cash dividends declared per common share

—

0.175

—

0.~~350~~525

See notes to unaudited condensed consolidated financial statements.

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended

~~Six~~Nine Months Ended

(in thousands)

~~May~~August 31, 2025

~~May~~August 31, 2024

~~May~~August 31, 2025

~~May~~August 31, 2024

Net income

1719,~~029~~413

1628,~~188~~464

2747,~~975~~388

3867,~~827~~291

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments

~~4,546~~654

~~105~~2,084

3,~~134~~788

~~(1,441)~~643

Unrealized loss on hedging activity, net of tax benefit of $142 and $360 for the three and six months ended May 31, 2024, respectively

—

(445)

—

(1,135)

Unrealized loss on hedging activity, net of tax benefit of $0 and $360 for the three and nine months ended August 31, 2024, respectively

—

(1,135)

Total other comprehensive income (loss), net of tax

~~4,546~~654

~~(340)~~2,084

3,~~134~~788

(~~2,576~~492)

Comprehensive income

2120,~~575~~067

1530,~~848~~548

3151,~~109~~176

3666,~~251~~799

See notes to unaudited condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity

	Six Months Ended May 31, 2025
	Nine Months Ended August 31, 2025
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(in thousands)	Number of Shares	Amount
Balance, December 1, 2024	43,361	$	434	$	354,158	$	120,405	$	(36,209)	$	438,788
Issuance of stock under employee stock purchase plan	~~176~~250	12		711,~~402~~002		—		—		711,~~403~~004
Exercise of stock options	~~155~~170	2		4,~~250~~587		—		—		4,~~252~~589
Vesting of restricted stock units	477	5		(5)		—		—		—
Withholding tax payments related to net issuance of RSUs	(~~178~~180)	(2)		(10,099)		—		—		(10,101)
Stock-based compensation	—	—		3147,~~424~~394		—		—		3147,~~424~~394
Treasury stock repurchases and retirements, including excise tax	(~~890~~1,173)	(912)		(2535,~~039~~414)		(2529,~~126~~742)		—		(5065,~~174~~168)
Net income	—	—		—		2747,~~975~~388		—		2747,~~975~~388
Other comprehensive income	—	—		—		—		3,~~134~~788		3,~~134~~788
Balance, May 31, 2025	43,101	$	431	$	362,091	$	123,254	$	(33,075)	$	452,701
Balance, August 31, 2025	42,905	$	429	$	371,623	$	138,051	$	(32,421)	$	477,682

	Three Months Ended May 31, 2025
	Three Months Ended August 31, 2025
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(in thousands)	Number of Shares	Amount
Balance, March 1, 2025	43,022	$	430	$	353,039	$	115,999	$	(37,621)	$	431,847
Balance, June 1, 2025	43,101	$	431	$	362,091	$	123,254	$	(33,075)	$	452,701
Issuance of stock under employee stock purchase plan	~~119~~74	1		53,~~206~~600		—		—		53,~~207~~601
Exercise of stock options	~~118~~15	2—		~~2,780~~337		—		—		~~2,782~~337
Vesting of restricted stock units	290	3		(3)		—		—		—
Withholding tax payments related to net issuance of RSUs	(2)	—		—		—		—		—
Withholding tax payments related to net issuance of RSUs	(97)	(1)		(5,459)		—		—		(5,460)
Stock-based compensation	—	—		15,970		—		—		15,970
Stock-based compensation	—	—		16,741		—		—		16,741
Treasury stock repurchases and retirements, including excise tax	(283)	(3)		(10,375)		(4,616)		—		(14,994)
Treasury stock repurchases and retirements, including excise tax	(351)	(4)		(10,213)		(9,774)		—		(19,991)
Net income	—	—		—		19,413		—		19,413
Net income	—	—		—		17,029		—		17,029
Other comprehensive income	—	—		—		—		654		654
Other comprehensive income	—	—		—		—		4,546		4,546
Balance, August 31, 2025	42,905	$	429	$	371,623	$	138,051	$	(32,421)	$	477,682
Balance, May 31, 2025	43,101	$	431	$	362,091	$	123,254	$	(33,075)	$	452,701

	Six Months Ended May 31, 2024
	Nine Months Ended August 31, 2024
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(in thousands)	Number of Shares	Amount
Balance, December 1, 2023	43,796	$	438	$	370,579	$	120,858	$	(32,160)	$	459,715
Issuance of stock under employee stock purchase plan	~~182~~260	23		69,~~918~~889		—		—		69,~~920~~892
Exercise of stock options	~~134~~179	12		57,~~545~~538		—		—		57,~~546~~540
Vesting of restricted stock units	498	5		(5)		—		—		—
Withholding tax payments related to net issuance of RSUs	(192)	(13)		(10,~~591~~624)		—		—		(10,~~592~~627)
Stock-based compensation	—	—		2435,~~453~~011		—		—		2435,~~453~~011
Purchase of capped calls, net of tax	—	—		(32,080)		—		—		(32,080)
Dividends declared	—	—		—		(1623,~~097~~861)		—		(1623,~~097~~861)
Treasury stock repurchases and retirements	(1,~~355~~642)	(1416)		(3441,~~437~~714)		(3745,~~998~~047)		—		(7286,~~449~~777)
Net income	—	—		—		3867,~~827~~291		—		3867,~~827~~291
Other comprehensive loss	—	—		—		—		(~~2,576~~492)		(~~2,576~~492)
Balance, May 31, 2024	43,063	$	431	$	330,382	$	105,590	$	(34,736)	$	401,667
Balance, August 31, 2024	42,899	$	429	$	338,594	$	119,241	$	(32,652)	$	425,612

	Three Months Ended May 31, 2024
	Three Months Ended August 31, 2024
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(in thousands)	Number of Shares	Amount
Balance, March 1, 2024	43,689	$	437	$	372,273	$	123,429	$	(34,396)	$	461,743
Balance, June 1, 2024	43,063	$	431	$	330,382	$	105,590	$	(34,736)	$	401,667
Issuance of stock under employee stock purchase plan	~~116~~78	1		42,~~388~~971		—		—		42,~~389~~972
Exercise of stock options	5445	—1		21,~~296~~993		—		—		21,~~296~~994
Vesting of restricted stock units	254	3		(3)		—		—		—
Withholding tax payments related to net issuance of RSUs	—	(2)		(33)		—		—		(35)
Withholding tax payments related to net issuance of RSUs	(89)	—		(4,702)		—		—		(4,702)
Stock-based compensation	—	—		10,558		—		—		10,558
Stock-based compensation	—	—		11,989		—		—		11,989
Dividends declared	—	—		—		(7,764)		—		(7,764)
Purchase of capped calls, net of tax	—	—		(32,080)		—		—		(32,080)
Treasury stock repurchases and retirements	(287)	(2)		(7,277)		(7,049)		—		(14,328)
Dividends declared	—	—		—		(7,867)		—		(7,867)
Net income	—	—		—		28,464		—		28,464
Treasury stock repurchases and retirements	(961)	(10)		(23,779)		(26,160)		—		(49,949)
Other comprehensive income	—	—		—		—		2,084		2,084
Net income	—	—		—		16,188		—		16,188
Balance, August 31, 2024	42,899	$	429	$	338,594	$	119,241	$	(32,652)	$	425,612
Other comprehensive loss	—	—		—		—		(340)		(340)
Balance, May 31, 2024	43,063	$	431	$	330,382	$	105,590	$	(34,736)	$	401,667

Condensed Consolidated Statements of Cash Flows

	Six Months Ended
	Nine Months Ended
(in thousands)	~~May~~August 31, 2025		~~May~~August 31, 2024
Cash flows from operating activities:
Net income	$	2747,~~975~~388	$	3867,~~827~~291
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	34,~~217~~753		34,~~171~~806
Amortization of acquired intangibles and other	73111,~~532~~081		5070,~~367~~835
Amortization of debt discount and issuance costs	23,~~028~~064		12,~~535~~540
Stock-based compensation	3147,~~424~~394		2435,~~453~~011
Non-cash lease expense	58,~~878~~749		68,~~532~~898
Deferred income taxes	(612,~~131~~884)		(614,~~404~~840)
Credit losses and other sales allowances	13,~~991~~510		~~387~~329
Changes in operating assets and liabilities:
Accounts receivable	239,~~635~~129		3425,~~171~~407
Other assets	34,~~656~~575		1015,~~421~~090
Accounts payable and accrued liabilities	(3815,~~869~~016)		(216,~~484~~796)
Lease liabilities	(69,~~988~~533)		(58,~~734~~682)
Income taxes payable	(1,~~020)~~131		~~(389)~~1,341
Deferred revenue, net	(2130,~~385~~952)		(19,~~668~~387)
Net cash flows from operating activities	98172,~~943~~389		~~134~~191,~~185~~843
Net cash flows used in investing activities:
Purchases of property and equipment	(12,~~785~~840)		(12,~~264~~328)
Payments for acquisitions	(1,195)		—
Payments for acquisitions, net of cash acquired	(20,653)		—
Net cash flows used in investing activities	(223,~~980~~493)		(12,~~264~~328)
Net cash flows used in financing activities:
Proceeds from equity plans	1216,~~760~~040		1217,~~896~~474
Payments for taxes related to net share settlements of equity awards	(10,101)		(10,~~592~~627)
Repurchases of common stock, including excise tax	(5065,108)		(7286,~~449~~777)
Proceeds from issuance of senior convertible notes, net of issuance costs of $11,200	—		438,750
Purchase of capped calls	—		(42,210)
Dividend equivalent and dividend payments to stockholders	(654)		(1623,~~122~~814)
Repayment of revolving line of credit	(70110,000)		(110,000)
Principal payment on term loan	—		(261,250)
Payment of credit facility debt issuance costs	—(5,961)		(6,821)
Net cash flows used in financing activities	(~~118~~175,~~103~~784)		(6785,~~798~~275)
Effect of exchange rate changes on cash and cash equivalents	67,~~069~~819		(1,~~661)~~515
Net (decrease) increase in cash and cash equivalents	(1619,~~071~~069)		63105,~~462~~755
Cash and cash equivalents, beginning of period	118,077		126,958
Cash and cash equivalents, end of period	$	~~102~~99,~~006~~008	$	~~190~~232,~~420~~713

Condensed Consolidated Statements of Cash Flows, continued

	Six Months Ended
	Nine Months Ended
(in thousands)	~~May~~August 31, 2025		~~May~~August 31, 2024
Supplemental disclosure:
Cash paid for income taxes, net of refunds of $1,101 in 2025 and $1,028 in 2024	$	6,740	$	6,346
Cash paid for income taxes, net of refunds of $1,875 in 2025 and $2,242 in 2024	$	13,412	$	15,865
Cash paid for interest	$	3344,~~387~~202	$	7,961
Non-cash investing and financing activities:
Total fair value of restricted stock awards, restricted stock units and deferred stock units on date vested	$	30,075	$	2829,~~987~~036
Dividends declared and unpaid	$	—	$	8,~~351~~423
Contingent consideration payable in Nuclia acquisition	$	1,080	$	—

See notes to unaudited condensed consolidated financial statements.

Notes to Condensed Consolidated Financial Statements

Note 1: Basis of Presentation

Company Overview - Progress Software Corporation ("Progress," the "Company," "we," "us," or "our") provides software products that enable our customers to develop, deploy and manage responsible AI-powered applications and digital experiences.

Many of our products are sold as perpetual licenses, but certain products use term licensing models and our cloud-based offerings are marketed as software-as-a-service ("SaaS") offerings. More than half of our worldwide license revenue is realized through relationships with indirect channel partners, principally independent software vendors ("ISVs"), original equipment manufacturers ("OEMs"), distributors and value-added resellers. ISVs develop and market applications using our technology and resell our products in conjunction with sales of their own products that incorporate our technology. OEMs are companies that embed our products into their own software products or devices. Value-added resellers are companies that add features or services to our product, then resell it as an integrated product or complete "turn-key" solution. In October 2024, we acquired ShareFile, a SaaS offering.

We operate in North America, Latin America, Europe, the Middle East and Africa ("EMEA"), and Asia and Australia ("Asia Pacific"), through local subsidiaries as well as independent distributors.

Basis of Presentation and Significant Accounting Policies - We prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements and these unaudited financial statements should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024, as filed with the SEC on January 21, 2025 (our "2024 Annual Report").

We made no material changes in the application of our significant accounting policies that were disclosed in our 2024 Annual Report. We have prepared the accompanying unaudited condensed consolidated financial statements on the same basis as the audited financial statements included in our 2024 Annual Report, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full fiscal year.

Use of Estimates

The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an on-going basis, management evaluates its estimates and records changes in estimates in the period in which they become known. These estimates are based on historical data and experience, as well as various other assumptions that management believes to be reasonable under the circumstances. The most significant estimates relate to revenue recognition, loss contingencies and the MOVEit Vulnerability (as defined herein), and business combinations. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective beginning with the Company’s 2025 fiscal year annual reporting period. The Company is currently evaluating the impact that the adoption of this standard and will include the additional disclosures in the financial statements for the fiscal year ending November 30, 2025.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 is intended to improve the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for the Company beginning with the annual period ending November 30, 2026, allowing for adoption on a prospective basis or

a retrospective option. Early adoption is permitted. The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company's consolidated financial statements.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), and in January 2025, the FASB issued Accounting Standards Update No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for us for our annual reporting for fiscal 2028 and for interim period reporting beginning in fiscal 2029 on a prospective basis. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"). ASU 2025-06 modernizes the accounting for internal-use software costs by increasing the operability of the recognition guidance considering different methods of software development. ASU 2025-06, which can be applied prospectively, retrospectively, or with a modified transition approach, is effective for the Company for annual reporting as well as interim period reporting beginning in fiscal year 2029. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.

Note 2: Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at ~~May~~August 31, 2025:

			Fair Value Measurements Using
(in thousands)	Total Fair Value		Level 1		Level 2		Level 3
Assets
Money market funds	$	1,~~170~~175	$	1,~~170~~175	$	—	$	—
Foreign exchange derivatives	$	~~239~~112	$	—	$	~~239~~112	$	—
Liabilities
Contingent consideration	$	(1,080)	$	—	$	—	$	(1,080)

The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at November 30, 2024:


			Fair Value Measurements Using
(in thousands)	Total Fair Value		Level 1		Level 2		Level 3
Assets

Money market funds	$	1,823	$	1,823	$	—	$	—
Liabilities
Foreign exchange derivatives	$	(624)	$	—	$	(624)	$	—

When developing fair value estimates, we maximize the use of observable inputs and minimize the use of unobservable inputs. When available, we use quoted market prices to measure fair value. The valuation technique used to measure fair value for our Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases,

where market rate assumptions are not available, we are required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument.

We classified contingent consideration related to the Nuclia acquisition, which occurred in the third fiscal quarter of 2025, within Level 3 of the fair value hierarchy because the fair value is derived using significant unobservable inputs. We utilized the Monte Carlo simulation method to estimate the fair value of the contingent liability as of the reporting date. Thousands of iterations of the simulation were performed using forecasted financial data to develop a distribution of future values which, in turn, provide indicated earn-out payments. The total estimated fair value equals the sum of the average present values of the indicated earn-out payments. The fair value of the contingent consideration will be remeasured each reporting period and any required adjustment will be recorded to acquisition-related expenses in our condensed consolidated statement of operations. See Note 4: Business Combinations for additional details.

The following table reflects the activity for our contingent consideration obligation measured at fair value using Level 3 inputs for the nine months ended August 31, 2025:


(in thousands)
Balance, December 1, 2024	$	—
Acquisition date fair value of contingent consideration	(1,080)

Balance, August 31, 2025	$	(1,080)

There were no transfers between levels of the fair value measurement hierarchy during the nine months ended August 31, 2025 and 2024.

Assets and Liabilities Not Carried at Fair Value

Fair Value of the Convertible Senior Notes

The following table details the fair value and carrying value of our Convertible Senior Notes due 2026 and 2030 (together referred to as "the Notes"):

	May 31, 2025				November 30, 2024
	August 31, 2025				November 30, 2024
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Convertible senior notes due 2026(1)	$	358,~~051~~619	$	~~416~~362,~~531~~778	$	356,946	$	449,094
Convertible senior notes due 2030(2)	440,~~244~~713		~~511~~460,~~875~~752		439,321		550,827
Total	$	~~798~~799,~~295~~332	$	~~928~~823,~~406~~530	$	796,267	$	999,921

(1) The carrying value of the convertible senior notes due 2026 (the "2026 Notes"), is reflected net of $1.94 million and $3.1 million of unamortized debt issuance costs as of ~~May~~August 31, 2025 and November 30, 2024, respectively.

(2) The carrying value of the convertible senior notes due 2030 (the "2030 Notes"), is reflected net of $9.83 million and $10.7 million of unamortized debt issuance costs as of ~~May~~August 31, 2025 and November 30, 2024, respectively.

The fair value of the Notes is based on quoted prices in an over-the-counter market on the last trading day of the reporting period and classified within Level 2 in the fair value hierarchy.

Fair Value of Other Financial Assets and Liabilities

The carrying amounts of other financial assets and liabilities including cash and cash equivalents, accounts receivable, unbilled accounts receivable, accounts payable, and accrued liabilities approximate their respective fair values due to their immediate or short-term maturities.

Borrowings under our revolving credit facility are recorded at carrying value, which approximates fair value due to the frequent nature of such borrowings and repayments. The Company considers this as a Level 2 input.

Note 3: Intangible Assets and Goodwill

Intangible Assets

Intangible assets are comprised of the following significant classes:

	May 31, 2025						November 30, 2024
	August 31, 2025						November 30, 2024
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Purchased technology	$	~~399~~403,~~000~~236	$	(~~231~~242,~~224~~008)	$	~~167~~161,~~776~~228	$	399,000	$	(210,264)	$	188,736
Customer-related	~~776~~777,~~608~~969		(~~329~~353,~~348~~280)		~~447~~424,~~260~~689		777,608		(282,384)		495,224
Trademarks and trade names	77,111		(4143,~~590~~665)		3533,~~521~~446		77,111		(37,500)		39,611
Total	$	1,~~252~~258,~~719~~316	$	(~~602~~638,~~162~~953)	$	~~650~~619,~~557~~363	$	1,253,719	$	(530,148)	$	723,571

In the three and ~~six~~nine months ended ~~May~~August 31, 2025, amortization expense related to intangible assets was $3637.62 million and $72110.80 million, respectively. In the three and ~~six~~nine months ended ~~May~~August 31, 2024, amortization expense related to intangible assets was $2320.71 million and $4969.01 million, respectively.

12Future amortization expense for intangible assets as of August 31, 2025, is as follows:

Future amortization expense for intangible assets as of May 31, 2025, is as follows:


(in thousands)
Remainder of 2025	$	35,246
2026	137,423
2027	112,146
2028	100,562
2029	100,562
Thereafter	133,424
Total	$	619,363

(in thousands)
Remainder of 2025	$	71,805
2026	136,070
2027	111,026
2028	99,443
2029	99,443
Thereafter	132,770
Total	$	650,557

Goodwill

Changes in the carrying amount of goodwill in the ~~six~~nine months ended ~~May~~August 31, 2025 are as follows:

(in thousands)
Balance, December 1, 2024	$	1,292,177
Additions(1)	1,632
Additions from business combinations(1)	15,397
Translation adjustments	21
Measurement period adjustments(2)	1,632
Balance, May 31, 2025	$	1,293,830
Translation adjustments	46
Balance, August 31, 2025	$	1,309,252

(1) The additions to goodwill during fiscal year 2025 ~~represent~~are ~~measurement period adjustments~~ related to the acquisition of ~~ShareFile in October 2024~~Nuclia. ~~See~~Refer to Note 4: Business Combinations for additional information.

(2) Represents measurement period adjustments related to ShareFile during fiscal year 2025. Refer to Note 4: Business Combinations for additional information.

Note 4: Business Combinations

Nuclia Acquisition

On June 30, 2025, we completed the acquisition of Nuclia, an innovator in agentic Retrieval-Augmented Generation AI solutions, for a purchase price with an aggregate fair value of $21.4 million, which was primarily allocated to purchased technology and goodwill. The purchase consideration consisted of $20.3 million of cash paid at closing and contingent consideration with an estimated fair value of $1.1 million.

We are required to pay contingent earn-out consideration of up to $5.0 million to former Nuclia shareholders, based on the achievement of certain revenue targets during fiscal year 2026. The fair value of the earn-out liability was determined to be $1.1 million as of the acquisition date. See Note 2: Fair Value Measurements for additional details.

We have not disclosed the amount of revenues and earnings of Nuclia since acquisition, nor pro forma financial information, as those amounts are not significant to our condensed consolidated financial statements.

ShareFile Acquisition

On October 31, 2024, we completed the acquisition of ShareFile from Cloud Software Group, Inc. and its subsidiaries for an aggregate purchase price of $875.0 million in cash, subject to a $25.0 million working capital credit and certain customary adjustments. We funded the acquisition through $730.0 million in borrowings under our existing ~~$900.0 million~~ revolving credit facility and cash on hand. Refer to Note 5: Debt for further information.

The acquisition consideration for ShareFile has been preliminarily allocated to ShareFile’s assets and assumed liabilities based on estimated fair values. The preliminary fair value estimates of the net assets acquired are based upon preliminary calculations and valuations, and those estimates and assumptions are subject to change as we obtain additional information for those estimates during the measurement period, which is up to one year from the acquisition date. During the first quarter of fiscal year 2025, the Company identified measurement period adjustments that resulted in increases in goodwill totaling $1.6 million. There were no measurement period adjustments identified in the second or third quarter of fiscal year 2025.

The preliminary allocation of the purchase price, including the measurement period adjustments, is as follows:


(in thousands)	Initial Purchase Price Allocation		Measurement Period Adjustments		Adjusted Purchase Price Allocation		Life
Net working capital	$	892	$	940	$	1,832
Property, plant and equipment	54		—		54
Purchased technology	119,000		—		119,000		7 years
Trade name	27,000		—		27,000		7 years
Customer relationships	319,000		(1,000)		318,000		7 years
Deferred taxes	23,456		(377)		23,079
Deferred revenue	(96,159)		—		(96,159)
Goodwill	459,459		1,632		461,091
Net assets acquired	$	852,702	$	1,195	$	853,897

The fair value of the intangible assets was estimated using the income approach in which the after-tax cash flows are discounted to present value. The cash flows are based on estimates used to value the acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model as well as the weighted average cost of capital. The valuation assumptions take into consideration our estimates of customer attrition, technology obsolescence, and revenue growth projections.

We recorded the excess of the purchase price over the identified tangible and intangible assets as goodwill. We believe that the investment value of the future enhancement of our product and solution offerings created as a result of this acquisition has principally contributed to a purchase price that resulted in the recognition of $461.1 million of goodwill, of which a portion is deductible for tax purposes.

Acquisition-related transaction costs (e.g., legal, due diligence, valuation, and other professional fees) and certain acquisition restructuring and related charges are not included as a component of consideration transferred but are required to be expensed as incurred. During the three and six months ended May 31, 2025, we incurred approximately $1.4 million and $3.7 million, respectively, of acquisition-related costs, which are included in acquisition-related expenses on our condensed consolidated statement of operations.14

~~The~~Acquisition-related ~~amount~~transaction ofcosts ~~revenue~~(e.g., oflegal, ~~ShareFile~~due ~~included~~diligence, invaluation, ~~our~~and ~~condensed~~other ~~consolidated~~professional ~~statement~~fees) and certain acquisition restructuring and related charges are not included as a component of ~~operations~~consideration ~~during~~transferred but are required to be expensed as incurred. During the three and ~~six~~nine months ended ~~May~~August 31, 2025, ~~was~~we incurred approximately $650.91 million and $~~129~~3.68 million, respectively., Weof ~~determined~~acquisition-related ~~that~~costs, ~~disclosing~~which ~~the~~are ~~amount~~included ofin ~~ShareFile~~ acquisition-related ~~earnings~~expenses ~~included~~on inour ~~the~~ condensed consolidated statement of operations ~~is impracticable, as certain operations of ShareFile were integrated into the operations of the Company from the date of acquisition~~.

InThe ~~connection~~amount ~~and~~of ~~concurrent~~revenue ~~with~~of ~~the~~ ShareFile ~~acquisition,~~included wein ~~entered~~our ~~into~~condensed aconsolidated ~~Transition~~statement ~~Services~~of ~~Agreement~~operations ~~("TSA")~~during ~~with~~the ~~Cloud~~three ~~Software~~and ~~Group,~~nine ~~Inc.~~months ~~for~~ended aAugust 31, ~~period~~2025, ofwas ~~six~~$64.6 million ~~months~~and ~~from~~$194.1 million, ~~the~~respectively. ~~date~~We ofdetermined ~~acquisition,~~that ~~with~~disclosing the ~~option~~amount toof ~~extend~~ShareFile ~~the~~related ~~TSA~~earnings ~~beyond~~included ~~this~~in ~~period~~the ~~for~~condensed ~~certain~~consolidated ~~services.~~statement ~~The~~of ~~TSA~~operations ~~was~~is ~~terminated~~impracticable, ~~during~~as ~~the~~certain ~~second~~operations ~~quarter~~ of ~~fiscal~~ShareFile ~~year~~were ~~2025~~integrated ~~and~~into ~~expenses~~the ~~related~~operations toof the ~~TSA~~Company ~~were~~from ~~not significant during~~ the ~~three~~date ~~and~~of ~~six months ended May 31, 2025~~acquisition.

In connection and concurrent with the ShareFile acquisition, we entered into a Transition Services Agreement ("TSA") with Cloud Software Group, Inc. for a period of six months from the date of acquisition, with the option to extend the TSA beyond this period for certain services. The TSA was terminated during the second quarter of fiscal year 2025 and expenses related to the TSA were not significant during the three and nine months ended August 31, 2025.

Pro Forma Information

The following pro forma financial information presents the combined results of operations of Progress and ShareFile as if the acquisition had occurred on December 1, 2022, after giving effect to certain pro forma adjustments. The pro forma adjustments reflected herein include only those adjustments that are directly attributable to the ShareFile acquisition and factually supportable. These pro forma adjustments include: (i) a net increase in amortization expense to record amortization expense relating to the $464.0 million of acquired identifiable intangible assets, (ii) an increase in interest expense to record interest for the periods presented as a result of drawing down our revolving line of credit in connection with the acquisition, (iii) an increase in acquisition-related expenses in connection with the acquisition that were not included in the purchase price, (iv) additional expense related to the TSA entered into between Progress and Cloud Software Group, Inc., and (v) the income tax effect of the adjustments made at the statutory tax rate of the U.S. (approximately 24.0%).

The pro forma financial information does not reflect any adjustments for anticipated expense savings resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on December 1, 2022.

(in thousands, except per share data)	Pro Forma Three Months Ended ~~May~~August 31, 2024
Revenue	$	~~236~~240,~~565~~872
Net income	$	720,~~276~~082
Net income per basic share	$	0.1747
Net income per diluted share	$	0.1746

(in thousands, except per share data)	Pro Forma ~~Six~~Nine Months Ended ~~May~~August 31, 2024
Revenue	$	~~481~~722,~~160~~032
Net income	$	1939,~~804~~886
Net income per basic share	$	0.4692
Net income per diluted share	$	0.4590

1415

Note 5: Debt

As of ~~May~~August 31, 2025, we had the following debt obligations:

(in thousands)

Outstanding Principal

Unamortized Discount and Issuance Costs for the Notes

Net Carrying Amount

Long-term debt:

3.5% convertible senior notes due 2030

450,000

(9,~~756~~287)

440,~~244~~713

Revolving credit facility

~~660~~620,000

—

~~660~~620,000

Total long-term debt

1,~~110~~070,000

(9,~~756~~287)

1,~~100~~060,~~244~~713

Current portion of long-term debt:

1.0% convertible senior notes due 2026

360,000

(1,~~949~~381)

358,~~051~~619

Total debt

1,~~470~~430,000

(1110,~~705~~668)

1,~~458~~419,~~295~~332

As of November 30, 2024, we had the following debt obligations:

(in thousands)	Outstanding Principal		Unamortized Discount and Issuance Costs for the Notes		Net Carrying Amount
Long-term debt:
1.0% convertible senior notes due 2026	$	360,000	$	(3,~~053~~054)	$	356,~~947~~946
3.5% convertible senior notes due 2030	450,000		(10,~~680~~679)		439,~~320~~321
Revolving credit facility	730,000		—		730,000
Total debt	$	1,540,000	$	(13,733)	$	1,526,267

~~During~~Credit the six months ended May 31, 2025, we repaid $70.0 million on the revolving credit facility and reclassified the 1.0% convertible senior notes due April 15, 2026 from long-term debt to current liabilities. The average interest rate of the revolving credit facility during the three and six months ended May 31, 2025 was 6.67% and 6.64%, respectively, and the interest rate as of May 31, 2025 was 6.67%.Facility

On July 21, 2025, the Company entered into an amended and restated credit agreement (the "Credit Agreement") with certain lenders, which provides a $1.5 billion secured revolving credit facility (the "revolving credit facility"). The revolving credit facility has sublimits for swing line loans up to $25.0 million and for the issuance of standby letters of credit in a face amount up to $25.0 million.

The amount outstanding under our prior secured credit facility is now outstanding under the amended and restated credit facility.

Interest rates for the revolving credit facility are determined by reference to a Term Benchmark Rate or a base rate at our option and would range from 1.25% to 2.50% above the Term Benchmark Rate for Term Benchmark-based borrowings or from 0.25% to 1.50% above the defined base rate for base rate borrowings, in each case based upon our consolidated total net leverage ratio. During the third fiscal quarter of 2025, we repaid $40.0 million on the revolving credit facility. The interest rate as of August 31, 2025 was 6.32%.

The revolving credit facility matures on the earlier of (i) July 21, 2030, and (ii) the date that is 91 days prior to the maturity date of our 2030 Notes subject to certain conditions as set forth in the Credit Agreement, including the repayment of the 2030 Notes, the refinancing of the 2030 Notes including a maturity date that is on or after October 21, 2030, and compliance with a liquidity test when all amounts outstanding will be due and payable in full. Revolving loans may be borrowed, repaid and reborrowed until the maturity date, at which time all amounts outstanding must be repaid. Accrued interest on the loans is payable quarterly in arrears. As of August 31, 2025, there was $620.0 million outstanding under the revolving credit facility and $2.1 million of letters of credit.

Costs incurred to obtain the Credit Agreement of $6.2 million, along with $5.2 million of unamortized debt issuance costs related to the previous credit agreement, were recorded as debt issuance costs and will be amortized over the term of the debt agreement.

The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict our ability to, among other things, grant liens, make investments, make acquisitions, incur indebtedness, merge or consolidate,

dispose of assets, pay dividends or make distributions, repurchase stock, change the nature of the business, enter into certain transactions with affiliates and enter into burdensome agreements, in each case subject to customary exceptions for a credit facility of this size and type. We are also required to maintain compliance with a consolidated interest charge coverage ratio and a consolidated senior secured net leverage ratio.

Note 6: Common Stock Repurchases

In ~~January 2023, our Board of Directors increased~~ the ~~share repurchase authorization by $150.0 million to an aggregate authorization of $228.0 million. In the~~ three months ended ~~May~~August 31, 2025 and ~~May~~August 31, 2024, we repurchased and retired 0.43 million shares for $2015.0 million and 1.0.3 million shares for $4914.93 million, respectively. In the ~~six~~nine months ended ~~May~~August 31, 2025 and ~~May~~August 31, 2024, we repurchased and retired 01.92 million shares for $5065.0 1 million and 1.46 million shares for $7286.48 million, respectively. As of ~~May~~August 31, 2025, there was $5742.2 million remaining under the current authorization. On September 23, 2025, our Board of Directors increased the share repurchase authorization by $200.0 million to an aggregate authorization of $242.2 million.

Note 7: Stock-Based Compensation

Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date and recognized over the relevant service period. We estimate the fair value of each stock-based award on the measurement date using either the current market price of the stock, the Black-Scholes option valuation model, or the Monte Carlo Simulation valuation model. The Black-Scholes and Monte Carlo Simulation valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate, and dividend yield. We recognize stock-based compensation expense related to options and restricted stock units on a straight-line basis over the service period of the award, which is generally four or five years for options and three or four years for restricted stock units, and adjust the expense each period for actual forfeitures. We recognize stock-based compensation expense related to performance stock units and our employee stock purchase plan using an accelerated attribution.

In 2025, 2024, and 2023, we granted performance-based restricted stock units that include two performance metrics under our Long-Term Incentive Plan ("LTIP") where the performance measurement period is three years. For the 2025, 2024, and 2023 plans, the vesting terms were based on the following: (i) 75% is based on achievement of a three-year cumulative operating income, and (ii) 25% is based on our level of attainment of specified TSR targets relative to the percentage appreciation of a specified index of companies for the respective three-year periods. The vesting of LTIP awards is also subject to continued employment of the grantees through the performance period, except in the event of a qualifying termination. In order to estimate the fair value of such awards, we use a Monte Carlo Simulation valuation model for the market condition portion of the award, and used the closing price of our common stock on the date of grant, less the present value of expected dividends when applicable, for the portion related to the performance condition.

The following table provides the classification of stock-based compensation as reflected on our condensed consolidated statements of operations:

Three Months Ended

~~Six~~Nine Months Ended

(in thousands)

~~May~~August 31, 2025

~~May~~August 31, 2024

~~May~~August 31, 2025

~~May~~August 31, 2024

Cost of maintenance, SaaS, and professional services

1,~~560~~486

~~912~~834

24,~~755~~241

12,~~898~~732

Sales and marketing

3,~~663~~275

2,~~458~~169

69,~~695~~970

46,~~770~~939

Product development

4,~~984~~709

3,~~391~~199

914,~~394~~103

710,~~056~~255

General and administrative

6,~~534~~500

54,~~228~~356

1219,~~580~~080

1015,~~729~~085

Total stock-based compensation

1615,~~741~~970

1110,~~989~~558

3147,~~424~~394

2435,~~453~~011

Note 8: Revenue Recognition

Timing of Revenue Recognition

Our revenues are derived from licensing our products and from related services, which consist of maintenance, SaaS, and professional services. Information relating to revenue from external customers by revenue type is as follows:

Three Months Ended

~~Six~~Nine Months Ended

(in thousands)

~~May~~August 31, 2025

~~May~~August 31, 2024

~~May~~August 31, 2025

~~May~~August 31, 2024

Performance obligations transferred at a point in time:

Software licenses

5063,~~795~~437

5357,~~979~~850

~~109~~172,~~240~~677

~~118~~175,~~079~~929

Performance obligations transferred over time:

Maintenance

~~103~~104,~~491~~849

~~102~~103,~~503~~088

~~203~~307,~~026~~875

~~204~~307,~~528~~616

SaaS

7271,~~105~~512

56,~~988~~082

~~141~~213,~~515~~027

1117,~~559~~641

Professional services

109,~~964~~997

1211,~~607~~666

2131,~~589~~586

2537,~~596~~262

Total revenue

~~237~~249,~~355~~795

~~175~~178,~~077~~686

~~475~~725,~~370~~165

~~359~~538,~~762~~448

Geographic Revenue

In the following table, revenue attributed to North America includes sales to customers in the U.S. and Canada and sales to certain multinational organizations. Revenue from EMEA, Latin America and the Asia Pacific region includes sales to customers in each region plus sales from the U.S. to distributors in these regions. Information relating to revenue from external customers from different geographical areas is as follows:

Three Months Ended

~~Six~~Nine Months Ended

(in thousands)

~~May~~August 31, 2025

~~May~~August 31, 2024

~~May~~August 31, 2025

~~May~~August 31, 2024

North America

~~147~~163,~~326~~404

~~102~~104,~~902~~369

~~301~~465,~~972~~376

~~210~~314,~~184~~553

EMEA

7368,~~039~~339

57,~~538~~031

~~139~~208,~~982~~321

~~120~~177,~~625~~656

Latin America

46,~~853~~221

45,~~599~~363

916,~~905~~126

914,~~267~~630

Asia Pacific

1211,~~137~~831

1011,~~038~~923

2335,~~511~~342

1931,~~686~~609

Total revenue

~~237~~249,~~355~~795

~~175~~178,~~077~~686

~~475~~725,~~370~~165

~~359~~538,~~762~~448

16No single customer, partner, or country outside the U.S. accounted for more than 10% of our total revenue for the three and nine months ended August 31, 2025 or August 31, 2024.

No single customer, partner, or country outside the U.S. accounted for more than 10% of our total revenue for the three and six months ended May 31, 2025 or May 31, 2024.

Contract Balances

Unbilled Receivables and Contract Assets

As of ~~May~~August 31, 2025, billing of our non-current unbilled receivables is expected to occur as follows:

(in thousands)
2026	$	1913,~~667~~945
2027	1016,~~223~~815
Total	$	2930,~~890~~760

Contract assets arise when revenue is recognized in excess of billings and the right to the amount due from customers is conditioned on something other than the passage of time, such as the completion of a related performance obligation. We did not have any net contract assets as of ~~May~~August 31, 2025 or November 30, 2024.

Deferred Revenue

Deferred revenue is recorded when revenue is recognized subsequent to customer invoicing. Deferred revenue expected to be recognized as revenue more than one year subsequent to the balance sheet date is included in long-term liabilities on the condensed consolidated balance sheets. Our net deferred revenue balance is primarily made up of deferred maintenance and deferred revenue related to our SaaS offerings.

As of ~~May~~August 31, 2025, the changes in net deferred revenue were as follows:

(in thousands)
Balance, December 1, 2024	$	404,412
Billings and other	~~459~~701,~~537~~815
Revenue recognized that was deferred in prior periods	(~~252~~328,~~819~~553)
Revenue recognized from current period arrangements	(~~222~~396,~~551~~612)
Balance, May 31, 2025	$	388,579
Balance, August 31, 2025	$	381,062

Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. As of ~~May~~August 31, 2025, transaction price allocated to remaining performance obligations was $~~497~~592.5 3 million. We expect to recognize approximately 7674% of the revenue within the next year and the remainder thereafter.

Deferred Contract Costs

Certain of our sales incentive programs meet the requirements to be capitalized. Depending upon the sales incentive program and the related revenue arrangement, such capitalized costs are amortized over the longer of (i) the product life, which is generally three to five years; or (ii) the term of the related revenue contract. We determined that a three to five year product life represents the period of benefit that we receive from these incremental costs based on both qualitative and quantitative factors, which include customer contracts, industry norms, and product upgrades. Total deferred contract costs were $5.58 million and $6.7 million as of ~~May~~August 31, 2025 and November 30, 2024, respectively, and are included in other current assets and other assets on our condensed consolidated balance sheets. Amortization of deferred contract costs is included in sales and marketing expense on our condensed consolidated statement of operations and was minimal in all periods presented.

Note 9: Restructuring

The following table provides a summary of activity for our restructuring actions:

(in thousands)	Excess Facilities and Other Costs		Employee Severance and Related Benefits		Total
Balance, December 1, 2024	$	4,339	$	5,695	$	10,034
Costs incurred	12,~~752~~466		6,~~320~~513		8,~~072~~979
Cash disbursements	(23,~~694~~604)		(1011,~~427~~554)		(1315,~~121~~158)
Translation and other adjustments	—		2425		2425
Balance, May 31, 2025	$	3,397	$	1,612	$	5,009
Balance, August 31, 2025	$	3,201	$	679	$	3,880

Costs incurred during the three and ~~six~~nine months ended ~~May~~August 31, 2025 are primarily related to our restructuring action that commenced in fiscal year 2024, arising from the integration of the ShareFile business. Cash disbursements for expenses incurred to date under this restructuring are expected to be made through the fourth quarter of fiscal year 2025. The restructuring reserve is included in other accrued liabilities on the condensed consolidated balance ~~sheets~~sheet as of ~~May~~August 31, 2025. We do not expect to incur additional material expenses in connection with this restructuring.

Note 10: Earnings Per Share

We compute basic earnings per share using the weighted average number of common shares outstanding. We compute diluted earnings per share using the weighted average number of common shares outstanding plus the effect of outstanding dilutive stock options, restricted stock units, and deferred stock units, using the treasury stock method and the effect of our convertible debt using the if-converted method. The following table sets forth the calculation of basic and diluted earnings per share on an interim basis:

	Three Months Ended				~~Six~~Nine Months Ended
(in thousands, except per share data)	~~May~~August 31, 2025		~~May~~August 31, 2024		~~May~~August 31, 2025		~~May~~August 31, 2024
Net income	$	1719,~~029~~413	$	1628,~~188~~464	$	2747,~~975~~388	$	3867,~~827~~291
Weighted average shares outstanding	4342,~~053~~988		4342,~~213~~872		43,~~154~~099		43,~~508~~296
Effect of dilution from common stock equivalents	~~1,043~~729		~~751~~839		~~1,104~~978		~~887~~871
Effect of dilution from if-converted convertible notes	60—		—		~~264~~176		—
Diluted weighted average shares outstanding	4443,~~156~~717		43,~~964~~711		44,~~522~~253		44,~~395~~167
Earnings per share:
Basic	$	0.4045	$	0.3766	$	01.6510	$	01.8955
Diluted	$	0.3944	$	0.3765	$	01.6307	$	01.8752

We excluded stock awards representing approximately ~~776~~844,000 and ~~586~~672,000 shares of common stock, respectively, from the calculation of diluted earnings per share in the three and ~~six~~nine months ended ~~May~~August 31, 2025 as these awards were anti-dilutive. We excluded stock awards representing approximately 1560,~~273,~~000 and ~~993~~849,000 shares of common stock, respectively, from the calculation of diluted earnings per share in the three and ~~six~~nine months ended ~~May~~August 31, 2024, as these awards were anti-dilutive.

The dilutive impact of the Notes on our calculation of diluted earnings per share is measured using the if-converted method. However, because the principal amount of the Notes will be settled in cash, the dilutive impact of applying the if-converted method is limited to the in-the-money portion, if any. During the ~~three~~nine ~~and six~~ months ended ~~May~~August 31, 2025, we included the 2026 Notes in our diluted earnings per share calculation and we excluded the 2030 Notes in our diluted earnings per share calculation because the conversion feature in the 2030 Notes was out of the money. During the three months ended August 31, 2025, we did not include the Notes in our diluted earnings per share calculation because the conversion feature in the Notes was out of the money. During the three and ~~six~~nine months ended ~~May~~August 31, 2024, we did not include the Notes in our diluted earnings per share calculation because the conversion feature in the Notes was out of the money.

Note 11: Segment Information

Operating segments are components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. Our CODM is our Chief Executive Officer.

We operate as one operating segment: software products for the development, deployment, and management of responsible, AI-powered applications and digital experiences. Our CODM evaluates financial information on a consolidated basis.

Note 12: Cyber Related Matters

MOVEit Vulnerability

As previously disclosed, on the evening of May 28, 2023, we learned that our MOVEit Transfer (the on-premise version) and MOVEit Cloud (a cloud-hosted version of MOVEit Transfer) products were attacked by a threat actor who compromised and exfiltrated personal data from various customer-controlled MOVEit Transfer environments (the "MOVEit Vulnerability"). As a result of the MOVEit Vulnerability, we are party to certain class action lawsuits filed by individuals who claim to have been impacted by the exfiltration of data from the environments of our MOVEit Transfer customers, which have been centralized in multi-district litigation in the District of Massachusetts (the "MDL"). The MDL remains in a relatively early litigation stage in which motions to dismiss ~~have~~were ~~been~~ filed ~~but~~and ~~not~~partially ~~yet~~granted ~~ruled~~in ~~upon~~July 2025, resulting in the dismissal of approximately half of the pending claims. InFollowing the ~~event~~court’s ~~dismissals~~ruling ~~are~~on ~~not~~the ~~granted~~motions to dismiss, we filed a motion for reconsideration in which we asked the court to reconsider its ruling on some of the undismissed claims. The MDL is not expected to conclude within this fiscal year. We have also been cooperating with ~~inquires~~inquiries and investigations from various governmental authorities, none of which have, as of this filing, resulted in any prosecution or enforcement actions.

Expenses Incurred and Future Costs

During the three and ~~six~~nine months ended ~~May~~August 31, 2025, we incurred net costs of approximately $0.7 million and $12.51 million, respectively, related to the MOVEit Vulnerability. The costs recognized are net of insurance recoveries of $0.64 million and $1.37 million for the three and ~~six~~nine months ended ~~May~~August 31, 2025, respectively. During the three and ~~six~~nine months ended ~~May~~August 31, 2024, we incurred net costs of approximately $3.0.9 million and $45.0 million, respectively, related to the MOVEit Vulnerability. The costs recognized are net of insurance recoveries of $10.96 million and $2.5 million for the three and ~~six~~nine months ended ~~May~~August 31, 2024, respectively. The timing of recognizing insurance recoveries may differ from the timing of recognizing the associated expenses.

We expect to continue to incur investigation, legal and professional services expenses associated with the MOVEit Vulnerability in future periods. We will recognize these expenses as services are received, net of insurance recoveries. While a loss from these matters is reasonably possible, we cannot reasonably estimate a range of possible losses at this time, particularly while the foregoing matters remain ongoing. Furthermore, with respect to the MDL, the proceedings remain in the early stages, alleged damages have not been specified, there is uncertainty as to the likelihood of a class or classes being certified or the ultimate size of any class if certified, and there are significant factual and legal issues to be resolved. Also, each of the governmental inquiries and investigations mentioned above could result in adverse ~~judgements~~judgments, settlements, fines, penalties, or other resolutions, the amount, scope and timing of which could be material, but of which we are currently unable to reasonably estimate. Therefore, we have not recorded a loss contingency liability for the MOVEit Vulnerability as of ~~May~~August 31, 2025.

Insurance Coverage

During the period when the MOVEit Vulnerability occurred, we maintained $15.0 million of cybersecurity insurance coverage, which is expected to reduce our exposure to expenses and liabilities arising from these events. As of ~~May~~August 31, 2025, we have ~~recorded~~ approximately $~~7.1 million of insurance recoveries related to the MOVEit Vulnerability, providing us with approximately $~~5.40 million of remaining cybersecurity insurance coverage under the applicable policy. We will pursue recoveries to the maximum extent available under our insurance policies.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain information that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended; Section 21E of the Securities Exchange Act of 1934, as amended; and the Private Securities Litigation Reform Act of 1995. Whenever we use words such as "believe," "may," "could," "would," "might," "should," "expect," "intend," "plan," "estimate," "target," "anticipate" and negatives and derivatives of these or similar expressions, or when we make statements concerning future financial results, product offerings or other events that have not yet occurred, we are making forward-looking statements. Actual future results may differ materially from those contained in or implied by our forward-looking statements due to various factors which are more fully described in Part I, Item 1A. Risk Factors in our 2024 Annual Report as well as any risk factors described in Part II, Item 1A of this Quarterly Report on Form 10-Q. Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what extent, any of such risks may be realized. We also cannot assure you that we have identified all possible issues that we might face. We undertake no obligation to update any forward-looking statements that we make.

1921

Factors in our 2024 Annual Report as well as any risk factors described in Part II, Item 1A of this Quarterly Report on Form 10-Q. Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what extent, any of such risks may be realized. We also cannot assure you that we have identified all possible issues that we might face. We undertake no obligation to update any forward-looking statements that we make.

Overview

Progress provides software products that enable our customers to develop, deploy and manage responsible AI-powered applications and digital experiences.

Critical Accounting Policies

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. We make estimates and assumptions in the preparation of our consolidated financial statements that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances. However, actual results may differ from these estimates. The most significant estimates relate to revenue recognition, loss contingencies and the MOVEit Vulnerability, and business combinations. For further information regarding the application of these and other accounting policies, see Note 1: Basis of Presentation to our Consolidated Financial Statements in Item 8 of our 2024 Annual Report. There have been no significant changes to our critical accounting policies and estimates since our 2024 Annual Report.

Use of Constant Currency

Revenue from our international operations has historically represented a substantial portion of our total revenue. As a result, our revenue results have been impacted, and we expect will continue to be impacted, by fluctuations in foreign currency exchange rates. For example, if the local currencies of our foreign subsidiaries strengthen, our consolidated results stated in U.S. dollars are positively impacted.

As exchange rates are an important factor in understanding period to period comparisons, we believe the presentation of revenue growth rates on a constant currency basis enhances the understanding of our revenue results and evaluation of our performance in comparison to prior periods. The constant currency information presented is calculated by translating current period results using prior period weighted average foreign currency exchange rates. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP.

Results of Operations

Business Development

On October 31, 2024, we acquired ShareFile from Cloud Software Group, Inc. As a result of this acquisition, we recorded $96.2 million of deferred revenue and $464.0 million of intangible assets, as further described in Note 4: Business Combinations. We expect to recognize additional SaaS revenue, as well as increased amortization expense and interest expense, in future periods as a result of this acquisition.

Revenue

Three Months Ended

% Change

(in thousands)

~~May~~August 31, 2025

~~May~~August 31, 2024

As Reported

Constant Currency

Revenue

~~237~~249,~~355~~795

~~175~~178,~~077~~686

3640

3538

Six Months Ended

% Change

Nine Months Ended

% Change

(in thousands)

~~May~~August 31, 2025

~~May~~August 31, 2024

As Reported

Constant Currency

Revenue

~~475~~725,~~370~~165

~~359~~538,~~762~~448

3235

3234

Total revenue increased as compared to the same period last year primarily due to our acquisition of ShareFile in the fourth quarter of fiscal year 2024. ShareFile revenue in the ~~second~~third quarter and first ~~six~~nine months of fiscal year 2025 was $6564.96 million and $~~129~~194.61 million, respectively. ~~These increases were partially offset by a decrease in our DataDirect product offering in all periods presented as a result of the timing of renewals on multiyear subscription contracts.~~

Software License Revenue

Three Months Ended

% Change

(in thousands)

~~May~~August 31, 2025

~~May~~August 31, 2024

As Reported

Constant Currency

Software licenses

5063,~~795~~437

5357,~~979~~850

~~(6)~~10

~~(7)~~8

As a percentage of total revenue

2125

3132

	Six Months Ended						% Change
	Nine Months Ended						% Change
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			As Reported		Constant Currency
Software licenses	$	~~109~~172,~~240~~677		$	~~118~~175,~~079~~929		(72)	%	(72)	%
As a percentage of total revenue	2324		%	33		%

Software license revenue ~~decreased~~increased ~~compared~~in to the ~~same~~third ~~period~~quarter ~~last~~of fiscal year ~~primarily~~2025 due to ~~the~~increases ~~decrease~~ in our DataDirect and MarkLogic product ~~offering,~~offerings asdue ~~described~~to ~~above~~the timing of renewals on multiyear subscription contracts. Software license revenue was relatively flat in the first nine months of fiscal year 2025 compared to the same period last year.

Maintenance, SaaS, and Professional Services Revenue

	Three Months Ended						% Change
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			As Reported		Constant Currency
Maintenance	$	~~103~~104,~~491~~849		$	~~102~~103,~~503~~088		12	%	—	%
As a percentage of total revenue	4442		%	5958		%
SaaS	7271,~~105~~512			56,~~988~~082			1,~~104~~076	%	1,~~104~~075	%
As a percentage of total revenue	3029		%	3		%
Professional services	109,~~964~~997			1211,~~607~~666			(1314)	%	(1415)	%
As a percentage of total revenue	54		%	7		%
Total maintenance, SaaS, and professional services revenue	$	186,~~560~~358		$	~~121~~120,~~098~~836		54	%	5453	%
As a percentage of total revenue	7975		%	6968		%

	Six Months Ended						% Change
	Nine Months Ended						% Change
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			As Reported		Constant Currency
Maintenance	$	~~203~~307,~~026~~875		$	~~204~~307,~~528~~616		~~(1)~~—	%	—	%
As a percentage of total revenue	4342		%	57		%
SaaS	~~141~~213,~~515~~027			1117,~~559~~641			1,~~124~~108	%	1,~~124~~107	%
As a percentage of total revenue	3029		%	3		%
Professional services	2131,~~589~~586			2537,~~596~~262			(1615)	%	(16)	%
As a percentage of total revenue	54		%	7		%
Total maintenance, SaaS, and professional services revenue	$	~~366~~552,~~130~~488		$	~~241~~362,~~683~~519		5152	%	52	%
As a percentage of total revenue	7776		%	67		%

Maintenance revenue increased in the third quarter of fiscal year 2025 due to increases in our OpenEdge product offerings. Maintenance revenue in the first nine months of fiscal year 2025 remained relatively flat as compared to the same period last year. SaaS revenue increased as compared to the same periods last year due to our acquisition of ShareFile. Professional services revenue decreased as compared to the same periods last year primarily due to a decrease in MarkLogic professional services revenue.

2223

Revenue by Region

	Three Months Ended						% Change
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			As Reported		Constant Currency
North America	$	~~147~~163,~~326~~404		$	~~102~~104,~~902~~369		4357	%	4357	%
As a percentage of total revenue	6265		%	5958		%
EMEA	$	7368,~~039~~339		$	57,~~538~~031		2720	%	2415	%
As a percentage of total revenue	3127		%	3332		%
Latin America	$	46,~~853~~221		$	45,~~599~~363		616	%	1317	%
As a percentage of total revenue	2		%	3		%
Asia Pacific	$	1211,~~137~~831		$	1011,~~038~~923		21(1)	%	21(1)	%
As a percentage of total revenue	5		%	57		%

	Six Months Ended						% Change
	Nine Months Ended						% Change
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			As Reported		Constant Currency
North America	$	~~301~~465,~~972~~376		$	~~210~~314,~~184~~553		4448	%	4448	%
As a percentage of total revenue	64		%	58		%
EMEA	$	~~139~~208,~~982~~321		$	~~120~~177,~~625~~656		1617	%	16	%
As a percentage of total revenue	29		%	3433		%
Latin America	$	916,~~905~~126		$	914,~~267~~630		710	%	17	%
As a percentage of total revenue	2		%	3		%
Asia Pacific	$	2335,~~511~~342		$	1931,~~686~~609		1912	%	2113	%
As a percentage of total revenue	5		%	56		%

Total revenue generated in North America increased $4459.40 million and $91150.8 million in the ~~second~~third quarter and first ~~six~~nine months of fiscal year 2025, respectively. Total revenue generated outside North America increased $1712.91 million and $2335.89 million over the same periods. The increases in each region were primarily due to the acquisition of ShareFile.

Total revenue generated in markets outside North America represented 3835% and 4142% of total revenue in the ~~second~~third quarter of fiscal year 2025 and fiscal year 2024, respectively. In the first ~~six~~nine months of fiscal year 2025 and fiscal year 2024 total revenue generated in markets outside North America represented 36% and 42%, respectively.

Cost of Software Licenses

	Three Months Ended										~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			Change				~~May~~August 31, 2025			~~May~~August 31, 2024			Change
Cost of software licenses	$	2,~~987~~833		$	2,~~497~~700		$	~~490~~133	205	%	$	58,~~912~~745		$	57,~~228~~928		$	~~684~~817	1310	%
As a percentage of software license revenue	64		%	5		%					5		%	45		%

Cost of software licenses consists primarily of royalties, electronic software distribution, duplication, and packaging. Cost of software licenses as a percentage of software license revenue varies from period to period depending upon the relative product mix. The increase in the ~~second~~third quarter of fiscal year 2025 compared to the same period last year was related to increased royalty costs, credit card fees, and hardware sales. The increase in the first ~~six~~nine months of fiscal year 2025 as compared to the same period last year was primarily due to increased hardware sales.

2324

Cost of Maintenance, SaaS, and Professional Services

	Three Months Ended										~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			Change				~~May~~August 31, 2025			~~May~~August 31, 2024			Change
Cost of maintenance, SaaS, and professional services	$	33,~~764~~919		$	2220,~~176~~057		$	1113,~~588~~862	5269	%	$	66100,~~648~~567		$	4464,~~395~~452		$	2236,~~253~~115	5056	%
As a percentage of maintenance, SaaS, and professional services revenue	18		%	1817		%					18		%	18		%
Components of cost of maintenance, SaaS, and professional services:
Personnel related costs	$	2122,~~283~~081		$	1615,~~770~~503		$	46,~~513~~578	2742	%	$	4264,~~053~~133		$	3349,~~814~~317		$	814,~~239~~816	2430	%
Hosting and other	98,~~047~~942			1,~~904~~790			7,~~143~~152		~~375~~400	%	1726,~~957~~899			35,~~670~~460			1421,~~287~~439		~~389~~393	%
Contractors and outside services	32,~~434~~896			32,~~502~~764			~~(68)~~132		~~(2)~~5	%	69,~~638~~535			69,~~911~~675			(~~273~~140)		(41)	%
Total cost of maintenance, SaaS, and professional services	$	33,~~764~~919		$	2220,~~176~~057		$	1113,~~588~~862	5269	%	$	66100,~~648~~567		$	4464,~~395~~452		$	2236,~~253~~115	5056	%

Cost of maintenance, SaaS, and professional services consists primarily of hosting costs, and personnel related costs attributable to customer support, cloud operations, consulting, and education. The increase year-over-year in all periods presented was primarily due to increased hosting and headcount related costs resulting from our acquisition of ShareFile.

Amortization of Acquired Intangibles

	Three Months Ended								~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			% Change		~~May~~August 31, 2025			~~May~~August 31, 2024			% Change
Amortization of acquired intangibles	$	10,~~537~~784		$	76,~~398~~307		4271	%	$	2031,~~959~~743		$	1521,~~257~~564		3747	%
As a percentage of total revenue	4		%	4		%			4		%	4		%

Amortization of acquired intangibles included in costs of revenue primarily represents the amortization of the value assigned to technology-related intangible assets obtained in business combinations. The year-over-year increase in all periods presented is due to the ~~acquisition~~acquisitions of ShareFile and Nuclia.

Gross Profit

	Three Months Ended								~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			% Change		~~May~~August 31, 2025			~~May~~August 31, 2024			% Change
Gross profit	$	~~190~~202,~~067~~259		$	~~143~~149,~~006~~622		3335	%	$	~~381~~584,~~851~~110		$	~~294~~444,~~882~~504		2931	%
As a percentage of total revenue	8081		%	8284		%			8081		%	8283		%

Our gross profit increased in all periods presented primarily due to the increase in revenue, partially offset by the increases in costs of maintenance, SaaS, and professional services, and amortization of acquired intangibles. Gross profit as a percentage of total revenue decreased due to higher hosting costs associated with our acquisition of ShareFile.

2425

Sales and Marketing

	Three Months Ended										~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			Change				~~May~~August 31, 2025			~~May~~August 31, 2024			Change
Sales and marketing	$	4951,~~677~~850		$	37,~~889~~141		$	1114,~~788~~709	3140	%	$	~~100~~152,~~973~~823		$	77114,~~000~~141		$	2338,~~973~~682	3134	%
As a percentage of total revenue	21		%	2221		%					21		%	21		%
Components of sales and marketing:
Personnel related costs	$	4144,~~486~~172		$	3332,~~241~~774		$	811,~~245~~398	2535	%	$	85129,~~305~~476		$	6699,~~334~~108		$	1830,~~971~~368	2931	%
Marketing programs and other	6,~~553~~309			3,~~811~~439			2,~~742~~870		7283	%	1319,~~014~~324			912,~~236~~675			36,~~778~~649		4152	%
Contractors and outside services	1,~~638~~369			~~837~~928			~~801~~441		9648	%	24,~~654~~023			12,~~430~~358			1,~~224~~665		8671	%
Total sales and marketing	$	4951,~~677~~850		$	37,~~889~~141		$	1114,~~788~~709	3140	%	$	~~100~~152,~~973~~823		$	77114,~~000~~141		$	2338,~~973~~682	3134	%

Sales and marketing expenses in all periods presented increased primarily due to increased personnel related costs, increased marketing and sales events costs, and increased contractors and outside services costs, each associated with our acquisition of ShareFile.

Product Development

	Three Months Ended										~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			Change				~~May~~August 31, 2025			~~May~~August 31, 2024			Change
Product development costs	$	4649,~~570~~432		$	3534,~~435~~720		$	1114,~~135~~712	3142	%	$	92142,~~945~~377		$	70105,~~423~~143		$	2237,~~522~~234	3235	%
As a percentage of total revenue	20		%	2019		%					20		%	20		%
Components of product development costs:
Personnel related costs	$	4446,~~392~~924		$	3432,~~151~~952		$	1013,~~241~~972	3042	%	$	88135,~~929~~852		$	67100,~~747~~700		$	2135,~~182~~152	3135	%
Contractors and outside services	1,~~791~~940			1,~~161~~503			~~630~~437		5429	%	35,~~302~~241			23,~~243~~746			1,~~059~~495		4740	%
Other product development costs	~~387~~568			~~123~~265			~~264~~303		~~215~~114	%	~~714~~1,284			~~433~~697			~~281~~587		6584	%
Total product development costs	$	4649,~~570~~432		$	3534,~~435~~720		$	1114,~~135~~712	3142	%	$	92142,~~945~~377		$	70105,~~423~~143		$	2237,~~522~~234	3235	%

Product development expenses in all periods presented increased primarily due to increased personnel related costs, as well as increased contractors and outside services costs, each associated with our acquisition of ShareFile.

2526

General and Administrative

	Three Months Ended										~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			Change				~~May~~August 31, 2025			~~May~~August 31, 2024			Change
General and administrative	$	2528,~~637~~308		$	2120,~~983~~503		$	37,~~654~~805	1738	%	$	5179,~~260~~568		$	4363,~~327~~830		$	715,~~933~~738	1825	%
As a percentage of total revenue	11		%	1311		%					11		%	12		%
Components of general and administrative:
Personnel related costs	$	2023,~~541~~119		$	1716,~~963~~925		$	26,~~578~~194	1437	%	$	3962,~~380~~499		$	3552,~~926~~852		$	39,~~454~~647	1018	%
Contractors and outside services	3,~~619~~191			2,~~602~~772			~~1,017~~419		3915	%	710,~~683~~874			57,~~177~~949			2,~~506~~925		4837	%
Other general and administrative costs	1,~~477~~998			~~1,418~~806			591,192		4148	%	46,~~197~~195			23,~~224~~029			13,~~973~~166		89105	%
Total cost of general and administrative	$	2528,~~637~~308		$	2120,~~983~~503		$	37,~~654~~805	1738	%	$	5179,~~260~~568		$	4363,~~327~~830		$	715,~~933~~738	1825	%

General and administrative expenses include the costs of our finance, human resources, legal, information systems and administrative departments. The increases in all periods presented in personnel related costs, contractors and outside services, and other general and administrative costs were primarily related to our acquisition of ShareFile.

Amortization of Acquired Intangibles

	Three Months Ended								~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			% Change		~~May~~August 31, 2025			~~May~~August 31, 2024			% Change
Amortization of acquired intangibles	$	26,~~063~~415		$	1613,~~316~~810		6091	%	$	5178,~~871~~286		$	3347,~~705~~515		5465	%
As a percentage of total revenue	11		%	98		%			11		%	9		%

Amortization of acquired intangibles included in operating expenses primarily represents the amortization of value assigned to intangible assets obtained in business combinations other than assets identified as purchased technology. Amortization of acquired intangibles increased in all periods presented due to the addition of ShareFile and Nuclia intangible assets, as discussed above.

Cyber Vulnerability Response Expenses, Net

	Three Months Ended								~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			% Change		~~May~~August 31, 2025			~~May~~August 31, 2024			% Change
Cyber vulnerability response expenses, net	$	~~730~~659		$	~~3,036~~927		(7629)	%	$	12,~~467~~126		$	4,~~023~~950		(6457)	%
As a percentage of total revenue	—		%	21		%			—		%	1		%

As previously disclosed, following the discovery of the MOVEit Vulnerability that was disclosed on June 5, 2023, we engaged outside cybersecurity experts and other incident response professionals to conduct a forensic investigation and assess the extent and scope of this matter. Cyber vulnerability response costs relate to the engagement of external cybersecurity experts and other incident response professionals and are net of received and expected insurance recoveries. Please refer to Note 12: Cyber Related Matters for additional details and updates regarding the MOVEit Vulnerability.

2627

Restructuring Expenses

	Three Months Ended								~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			% Change		~~May~~August 31, 2025			~~May~~August 31, 2024			% Change
Restructuring expenses	$	~~1,043~~907		$	~~651~~308		60194	%	$	8,~~072~~979		$	3,~~000~~308		~~169~~171	%
As a percentage of total revenue	—		%	—		%			21		%	1		%

Restructuring expenses recorded in the ~~second~~third quarter and first ~~six~~nine months of fiscal year 2025 primarily relate to headcount reductions and a facility closure in connection with the restructuring action related to the ShareFile acquisition in November 2024. See Note 9: Restructuring for additional details, including types of expenses incurred and the timing of future expenses and cash payments.

Acquisition-Related Expenses

	Three Months Ended								~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			% Change		~~May~~August 31, 2025			~~May~~August 31, 2024			% Change
Acquisition-related expenses	$	~~1,731~~814		$	~~548~~1,864		~~216~~(56)	%	$	45,~~221~~035		$	13,~~250~~114		~~238~~62	%
As a percentage of total revenue	1—		%	—1		%			1		%	—1		%

Acquisition-related costs are expensed as incurred and include those costs incurred as a result of a business ~~combination~~combinations. These costs consist of professional service fees, including third-party legal and valuation-related fees. Acquisition-related expenses in the ~~second~~third quarter and first ~~six~~nine months of fiscal year 2025 were primarily related to our ~~acquisition~~acquisitions of Nuclia and ShareFile. Acquisition-related expenses in the same periods of fiscal year 2024 were primarily related to our pursuit of other acquisition opportunities.

Income from Operations

	Three Months Ended								~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			% Change		~~May~~August 31, 2025			~~May~~August 31, 2024			% Change
Income from operations	$	3843,~~616~~874		$	2740,~~148~~349		429	%	$	71114,~~042~~916		$	62102,~~154~~503		1412	%
As a percentage of total revenue	1618		%	1623		%			1516		%	1719		%

Income from operations increased year-over-year due to an increase in revenue, offset by increases in costs of revenue and operating expenses, as shown above.

Other (Expense) Income

	Three Months Ended								~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			% Change		~~May~~August 31, 2025			~~May~~August 31, 2024			% Change
Interest expense	$	(1817,~~138~~737)		$	(76,~~007~~765)		~~159~~162	%	$	(3654,~~567~~304)		$	(1421,~~351~~116)		~~155~~157	%
Interest income and other, net	~~294~~260			~~928~~1,896			(6886)	%	~~781~~1,041			13,~~552~~448			(5070)	%
Foreign currency loss, net	(~~908~~191)			(~~941~~1,201)			(484)	%	(2,~~090~~281)			(12,~~620~~821)			29(19)	%
Total other expense, net	$	(1817,~~752~~668)		$	(76,~~020~~070)		~~167~~191	%	$	(3755,~~876~~544)		$	(1420,~~419~~489)		~~163~~171	%
As a percentage of total revenue	(87)		%	(43)		%			(8)		%	(4)		%

Total other expense, net, increased in the ~~second~~third quarter and first ~~six~~nine months of fiscal year 2025 as compared to the same periods last year primarily due to an increase in interest expense resulting from costs associated with drawing on our revolving line of credit to acquire ShareFile. Refer to Note 5: Debt, for further discussion. Foreign currency loss ~~increased~~decreased year-over-year due to rate volatility and timing of intercompany and hedge settlement activities.

2728

Provision for Income Taxes

	Three Months Ended								~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			% Change		~~May~~August 31, 2025			~~May~~August 31, 2024			% Change
Provision for income taxes	$	26,~~835~~793		$	35,~~940~~815		~~(28)~~17	%	$	511,~~191~~984		$	814,~~908~~723		(4219)	%
As a percentage of income before income taxes	1426		%	2017		%			1620		%	1918		%

Our effective tax rate was 1426% and 2017% in the ~~second~~third fiscal quarter of 2025 and 2024, respectively. The primary reason for the ~~decrease~~increase in the effective rate was ~~due~~a todiscrete ~~$1.1~~tax ~~million~~expense of ~~discrete~~$2.0 ~~tax~~million ~~benefits~~ in the ~~second~~third fiscal quarter of 2025 compared to ~~$0.2~~a ~~million~~minimal amount of discrete tax ~~benefits~~expense in the ~~second~~third fiscal quarter of 2024.

On July 4, 2025, the One Big Beautiful Bill Act was enacted into law, introducing significant changes to the U.S. federal income tax system. The legislation contains key modifications to the provisions of the 2017 Tax Cuts and Jobs Act and has multiple effective dates. The Company is currently evaluating the full implications of the recently enacted legislation. Based on preliminary analysis, no material impact is expected to the tax provision for fiscal year 2025. The majority of the legislative provisions become effective in our fiscal years 2026 and 2027.

Net Income

	Three Months Ended								~~Six~~Nine Months Ended
(in thousands)	~~May~~August 31, 2025			~~May~~August 31, 2024			% Change		~~May~~August 31, 2025			~~May~~August 31, 2024			% Change
Net income	$	1719,~~029~~413		$	1628,~~188~~464		5(32)	%	$	2747,~~975~~388		$	3867,~~827~~291		(2830)	%
As a percentage of total revenue	78		%	916		%			67		%	1112		%

Select Performance Metrics:

We evaluate our financial performance using a number of financial and operating metrics. These metrics are periodically reviewed and revised to reflect changes in our business.

Annualized Recurring Revenue ("ARR")

We disclose ARR as a performance metric to help investors better understand and assess the performance of our business because our mix of revenue generated from recurring sources currently represents the substantial majority of our revenues and is expected to continue in the future. We define ARR as the annualized revenue of all active and contractually binding term-based contracts from all customers at a point in time. ARR includes revenue from maintenance, software upgrade rights, public cloud, and on-premises subscription-based transactions and managed services. ARR mitigates fluctuations in revenue due to seasonality, contract term and the sales mix of subscriptions for term-based licenses and SaaS. We use ARR to understand customer trends and the overall health of our business, helping us to formulate strategic business decisions.

We calculate the annualized value of annual and multi-year contracts, and contracts with terms less than one year, by dividing the total contract value of each contract by the number of months in the term and then multiplying by 12. Annualizing contracts with terms less than one-year results in amounts being included in our ARR that are in excess of the total contract value for those contracts at the end of the reporting period. We generally do not sell non-SaaS-based contracts with a term of less than one year unless a customer is purchasing additional licenses under an existing annual or multi-year contract. The expectation is that at the time of renewal, such contracts with a term less than one year will renew with the same term as the existing contracts being renewed, such that both contracts are co-termed. Historically, such contracts with a term of less than one year renew at rates equal to or better than annual or multi-year contracts.

For SaaS-based contracts, there is a meaningful percentage of monthly auto-renewing contracts for which annualizing the contracts results in amounts being included in our ARR that are in excess of the total contract value for those contracts at the end of the reporting period.

Revenue from term-based license and on-premises subscription arrangements include a portion of the arrangement consideration that is allocated to the software license that is recognized up-front at the point in time control is transferred under ASC 606 revenue recognition principles. ARR for these arrangements is calculated as described above. The expectation is that the total contract value, inclusive of revenue recognized as software license, will be renewed at the end of the contract term.

The calculation is done at constant currency using the current year budgeted exchange rates for all periods presented.

ARR is not defined in GAAP and is not derived from a GAAP measure. Rather, ARR generally aligns to billings (as opposed to GAAP revenue which aligns to the transfer of control of each performance obligation). ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

28Our ARR was $849.0 million and $576.0 million as of August 31, 2025 and August 31, 2024, respectively, which is an increase of 47% year-over-year. The growth in ARR was primarily driven by the acquisition of ShareFile.

items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

Our ARR was $838 million and $573 million as of May 31, 2025 and May 31, 2024, respectively, which is an increase of 46% year-over-year. The growth in ARR was primarily driven by the acquisition of ShareFile.

Net Retention Rate

We calculate net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period end ("Prior Period ARR"). We then calculate the ARR from these same customers as of the current period end ("Current Period ARR"). Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the net retention rate. Net retention rate is not calculated in accordance with GAAP and is not derived from a GAAP measure.

Our net retention rates have generally ranged between 100% and 102% for all periods presented. We believe net retention rates can be a helpful indicator of the durability of top line performance.

Liquidity and Capital Resources

Cash and Cash Equivalents

(in thousands)			~~May~~August 31, 2025						November 30, 2024
Cash and cash equivalents			$	~~102~~99,~~006~~008					$	118,077

The decrease in cash and cash equivalents of $1619.1 million from the end of fiscal year 2024 was due to cash outflows of $70110.0 million to pay down the revolving line of credit, repurchases of common stock of $5065.1 million, $20.7 million for acquisitions, payment of debt issuance costs of $6.0 million, purchases of property and equipment of $12.8 million, a $1.2 million payment related to the acquisition of ShareFile, and $0.7 million in dividend equivalent payments to stockholders. The cash outflows described above were offset by cash inflows from operations of $98172.94 million, the effect of exchange rates on cash of $67.18 million, and $25.79 million in cash received from the issuance of common stock. Except as described below, there are no limitations on our ability to access our cash and cash equivalents.

As of ~~May~~August 31, 2025, $6265.98 million of our cash and cash equivalents was held by our foreign subsidiaries. As a result of the debt obligations arising from the ShareFile acquisition, in the fourth quarter of fiscal 2024 we determined that a substantial portion of unremitted foreign earnings are no longer indefinitely reinvested. As a result of this, we plan to utilize worldwide cash based on the needs of the parent entity. These amounts will be repatriated as needed. Deferred taxes are recorded for earnings of our foreign operations that we determine are not indefinitely reinvested.

Six Months Ended

Nine Months Ended

(in thousands)

~~May~~August 31, 2025

~~May~~August 31, 2024

Net cash flows from operating activities

98172,~~943~~389

~~134~~191,~~185~~843

Net cash flows used in investing activities

(223,~~980~~493)

(12,~~264~~328)

Net cash flows used in financing activities

(~~118~~175,~~103~~784)

(6785,~~798~~275)

Cash Flows From Operating Activities

The decrease in cash generated from operations in the first ~~six~~nine months of fiscal year 2025 as compared to the same period last year was primarily due to increased interest expense resulting from the draw down on our revolving line of credit in the fourth quarter of fiscal year 2024.

Our gross accounts receivable as of May 31, 2025, decreased by $21.0 million from the end of fiscal year 2024. Our days sales outstanding (DSO) in accounts receivable increased to 53 days in the second quarter of fiscal year 2025 from 41 days in the second fiscal quarter of 2024 due to the timing of billings and collections.30

29Our gross accounts receivable as of August 31, 2025, decreased by $8.6 million from the end of fiscal year 2024. Our days sales outstanding ("DSO") in accounts receivable increased to 55 days in the third quarter of fiscal year 2025 from 45 days in the third fiscal quarter of 2024 due to the timing of billings and collections.

Cash Flows Used in Investing Activities

Net cash outflows and inflows of our net investment activity are generally a result of the timing of our purchases and maturities of securities, which are classified as cash equivalents, as well as the timing of acquisitions and divestitures. In the first ~~six~~nine months of fiscal year 2025, we ~~purchased~~had ~~$1.8~~payments ~~million~~for acquisitions of ~~property~~$20.7 ~~and equipment~~million, and ~~had~~purchased ~~payments~~$2.8 ~~for~~million ~~acquisitions~~ of ~~$1.2~~property ~~million~~and equipment. Through the ~~second~~third quarter of fiscal year 2024 we had $12.3 million of purchases of property and equipment.

Cash Flows Used in Financing Activities

We received $1216.80 million from the exercise of stock options and the issuance of shares under our employee stock purchase plan in the first ~~six~~nine months of fiscal year 2025 as compared to $1217.95 million in the first ~~six~~nine months of fiscal year 2024. We made withholding tax payments related to net share settlements of equity awards of $10.1 million in the first ~~six~~nine months of fiscal year 2025 as compared to $10.6 million in the first ~~six~~nine months of fiscal year 2024. We repurchased $5065.1 million of our common stock under our share repurchase plan in the first ~~six~~nine months of fiscal year 2025 as compared to $7286.48 million in the same period of the prior year. Further, we made payments on our revolving line of credit of $~~70.0 million and $~~110.0 million through the ~~second~~third quarters of fiscal years 2025 and 2024. During the third quarter of fiscal year 2025, ~~respectively~~we paid debt issuance costs of $6.0 million to increase our revolving line of credit to $1.5 billion. During the second quarter of fiscal year 2024, we received net proceeds from the issuance of debt of $51.9 million (we refinanced our debt by issuing the convertible senior notes and used the proceeds to pay off the outstanding balance of the term loan and revolving line of credit under our previous credit agreement). In the first quarter of fiscal year 2024, we made payments on our long-term debt of $33.4 million (including a $30.0 million repayment on the revolving line of credit). Finally, we made dividend equivalent payments of $0.7 million to our stockholders during the first ~~six~~nine months of fiscal year 2025, as compared to $1623.18 million of dividend and dividend equivalent payments made to stockholders through the first ~~six~~nine months of fiscal year 2024.

Share Repurchase Program

In ~~January 2023, our Board of Directors increased our share repurchase authorization by $150 million, to an aggregate authorization of $228.0 million. In~~ the three months ended ~~May~~August 31, 2025 and ~~May~~August 31, 2024, we repurchased and retired 0.43 million shares for $2015.0 million and 1.0.3 million shares for $4914.93 million, respectively. In the ~~six~~nine months ended ~~May~~August 31, 2025 and ~~May~~August 31, 2024, we repurchased and retired 01.92 million shares for $5065.01 million and 1.46 million shares for $7286.48 million, respectively. The shares were repurchased in both periods as part of the share repurchase program as authorized by our Board of Directors. As of ~~May~~August 31, 2025, there was $5742.2 million remaining under the current authorization. On September 23, 2025, our Board of Directors increased the share repurchase authorization by $200.0 million to an aggregate authorization of $242.2 million.

Dividends

As announced on September 9, 2024, our Board of Directors approved the suspension of our quarterly dividend in connection with the ShareFile acquisition and plans to redirect such capital toward the repayment of debt to increase liquidity for future M&A and for share repurchases, both of which are prioritized in our capital allocation policy.

Restructuring Activities

See Note 9: Restructuring to the condensed consolidated financial statements.

Long-term Debt and Credit Facility

See Note 5: Debt to the condensed consolidated financial statements.

Liquidity Outlook

Cash from operations in fiscal year 2025 could be affected by various risks and uncertainties, including, but not limited to, the effects of various risks detailed in Part I, Item 1A. Risk Factors in our 2024 Annual Report, including increased disruption and volatility in capital markets and credit markets that could adversely affect our liquidity and capital resources in the future. However, based on our current business plan, we believe that existing cash balances, together with funds generated from operations and amounts available under our revolving credit facility, will be sufficient to finance our operations and meet our foreseeable cash requirements through at least the next twelve months. Our foreseeable cash needs include capital expenditures, acquisitions, debt repayments, share repurchases, lease commitments, restructuring obligations, and other long-term obligations.

3031

We expect to continue to make payments on the revolving credit facility and are also continuously evaluating additional financing options, the net proceeds of which could be used for general corporate purposes or to repay amounts outstanding under our revolving credit facility. In the future, we may use the available capacity under our revolving credit facility for general corporate purposes, which may include payments made in connection with any settlement of the 2026 Notes upon conversion, redemption or repayment of our 2026 Notes at or prior to the 2026 Notes maturity.

Legal and Other Regulatory Matters

MOVEit Vulnerability

As previously disclosed, on the evening of May 28, 2023, we learned that our MOVEit Transfer (the on-premise version) and MOVEit Cloud (a cloud-hosted version of MOVEit Transfer) products were attacked by a threat actor who compromised and exfiltrated personal data from various customer-controlled MOVEit Transfer environments. As a result of the MOVEit Vulnerability, we are party to certain class action lawsuits filed by individuals who claim to have been impacted by the exfiltration of data from the environments of our MOVEit Transfer customers, which have been centralized in the MDL. The MDL remains in a relatively early litigation stage in which motions to dismiss ~~have~~were ~~been~~ filed ~~but~~and ~~not~~partially ~~yet~~granted, ~~ruled~~resulting ~~upon~~in the dismissal of approximately half of the pending claims. InFollowing the ~~event~~court’s ~~dismissals~~ruling ~~are~~on ~~not~~the ~~granted~~motions to dismiss, we filed a motion for reconsideration in which we asked the court to reconsider its ruling on some of the undismissed claims. The MDL is not expected to conclude within this fiscal year. We have also been cooperating with inquires and investigations from various governmental authorities, none of which have, as of this filing, resulted in any prosecution or enforcement actions. Please see our 2024 Annual Report and previous SEC filings for additional information, including risk factors, related to the MOVEit Vulnerability.

We are subject to litigation and governmental investigations related to the MOVEit Vulnerability, for which we have incurred expenses and will incur future costs. We expect our exposure to such expenses and liabilities to be reduced by insurance. Please refer to Note 12: Cyber Related Matters to the condensed consolidated financial statements for additional details and updates regarding the MOVEit Vulnerability.

Recent Accounting Pronouncements

Refer to Note 1: Basis of Presentation to the condensed consolidated financial statements for further discussion.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

During the first ~~six~~nine months of fiscal year 2025, with the exception of repayments on our revolving credit facility and changes to our debt as described in Note 7: Debt, there were no significant changes to our quantitative and qualitative disclosures about market risk. Please refer to Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk included in our 2024 Annual Report, for a more complete discussion of the market risks we encounter.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures

Our management maintains disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (the "Exchange Act") that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure.

Our management, including our principal executive and principal financial officers, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. The Company acquired ShareFile on October 31, 2024. Management excluded ShareFile from its assessment of the effectiveness of the Company’s disclosure controls as of May 31, 2025. ShareFile represented, in aggregate, approximately 2% of the Company’s total consolidated assets (excluding goodwill and intangibles, which are included in the scope of the assessment) and approximately 27% of total consolidated revenues, as of and for the six months ended May 31, 2025. Based on this evaluation, we concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of ~~May~~August 31, 2025.

(b) Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended May 31, 2025 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

(b) Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended August 31, 2025 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Please refer to Note 12: Cyber Related Matters to the condensed consolidated financial statements for a discussion of legal proceedings related to the MOVEit Vulnerability. Our 2024 Annual Report and previous SEC filings also contain additional information, including risk factors, related to the MOVEit Vulnerability.

We are also subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material effect on our financial position, results of operations, or cash flows.

Item 1A. Risk Factors

We operate in a rapidly changing environment that involves certain risks and uncertainties, some of which are beyond our control. In addition to the information provided in this report, please refer to Part I, Item 1A. Risk Factors in our 2024 Annual Report for a more complete discussion regarding certain factors that could materially affect our business, financial condition or future results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Information related to the repurchases of our common stock by month in the ~~second~~third quarter of fiscal year 2025 is as follows:

(in thousands, except per share and share data)	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs~~(1)~~
Period
March 2025	—	$	—	—	$	77,220
June 2025	—	$	—	—	$	57,220
April 2025	351,216	56.93		351,216	57,220
July 2025	283,412	52.91		283,412	42,220
May 2025	—	—		—	57,220
August 2025	—	—		—	42,220
Total	~~351~~283,~~216~~412	$	5652.9391	~~351~~283,~~216~~412	$	5742,220

~~(1)~~As of August 31, 2025, there was $42.2 million remaining under the current authorization. On ~~January~~September 1023, ~~2023~~2025, our Board of Directors increased the share repurchase authorization by ~~150~~$200.0 million, to an aggregate authorization of $~~228~~242.0 2 million. AsThe timing and amount of ~~May 31~~any shares repurchased will be determined by management based on its evaluation of market conditions and other factors, ~~2025~~and the Board of Directors may choose to suspend, ~~there~~expand, ~~was~~or ~~$57.2~~discontinue ~~million~~the ~~remaining~~repurchase ~~under~~program ~~this~~at ~~authorization~~any time.

Item 5. Other Information

~~(c)~~Stock ~~Insider~~Option ~~Adoption~~Grant ~~or Termination of Trading Arrangements~~Agreement

During the ~~second~~third quarter of fiscal year 2025, ~~none~~in oforder ~~our~~to ~~directors~~make orcertain ~~officers~~administrative ~~informed~~updates, uswe ofadopted ~~the~~a ~~adoption~~new orForm ~~termination~~of Notice of aGrant ~~"Rule~~of ~~10b5-1~~Stock ~~trading~~Options ~~arrangement"~~and orGrant ~~"non-Rule~~Agreement ~~10b5-1~~under ~~trading~~the ~~arrangement,"~~Progress asSoftware ~~those~~Corporation ~~terms~~2008 ~~are~~Stock ~~defined~~Option inand ~~Regulation~~Incentive ~~S-K~~Plan, ~~Item~~a ~~408,~~copy ~~except~~of aswhich ~~described~~is infiled ~~the~~herewith ~~table~~as ~~below:~~Exhibit 10.2.

Name and Title

Character of Trading Arrangement1

Date Adopted

Duration2

Aggregate Number of Shares of Common Stock to be Sold Pursuant to Trading Arrangement

Anthony Folger,EVP & Chief Financial Officer

Rule 10b5-1Trading Arrangement

April 8, 2025

February 28, 2026

Up to 20,5703

Yogesh Gupta,President & Chief Executive Officer

Rule 10b5-1Trading Arrangement

May 13, 2025

August 15, 2026

Up to 83,586

Domenic LoCoco ,SVP, Chief Accounting Officer

Rule 10b5-1Trading Arrangement

May 12, 2025

November 30, 2026

Up to 6,0494

1. Except as indicated by footnote, each trading arrangement marked as a "Rule 10b5-1 Trading Arrangement" is intended to satisfy the affirmative defense of Rule 10b5-1(c), as amended (the "Rule").

2. Except as indicated by footnote, each trading arrangement permits transactions through and including the earlier to occur of (a) the completion of all sales or (b) the date listed in the table. Each trading arrangement marked as a "Rule 10b5-1 Trading Arrangement" only permits transactions upon expiration of the applicable mandatory cooling-off period under the Rule.

3. Includes: (i) 6,529 shares of our common stock; (ii) all common stock, net of shares withheld to cover tax withholding obligations, to be issued upon the anticipated vesting of 8,041 Restricted Stock Units; and (iii) up to 6,000 shares of common stock, net of shares withheld to cover tax withholding obligations, to be issued upon the anticipated vesting of a maximum of 50,574 Performance Stock Units.

4. Includes: (i) 1,195 shares of our common stock; and (ii) 4,854 employee stock options expected to be exercised via same-day sale.

During the third quarter of fiscal year 2025, none of our directors or officers informed us of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as those terms are defined in Regulation S-K, Item 408.

Item 6. Exhibits

The following exhibits are filed or furnished as part of this Quarterly Report on Form 10-Q:

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

Filing Date

Exhibit

Filed Herewith

10.1

Fifth Amended and Restated Credit Agreement, dated as of July 21, 2025, by and among Progress Software Corporation, each of the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A. and Wells Fargo Bank, N.A., as Syndication Agents, Bank of America, N.A., PNC Bank, National Association, TD Bank, N.A., Citizens Bank N.A. and First-Citizens Bank & Trust Company, as Documentation Agents, JPMorgan Chase Bank, N.A., Citibank, N.A. and Wells Fargo Securities, LLC, as Joint Bookrunners and Joint Lead Arrangers, and BofA Securities, Inc., PNC Bank, National Association and TD Bank, N.A., as Joint Lead Arrangers

8-K

7/22/25

10.1

10.2

Form of Notice of Grant of Stock Options and Grant Agreement under the Progress Software Corporation 2008 Stock Option and Incentive Plan

31.1

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act – Yogesh K. Gupta

31.2

Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act – Anthony Folger

32.1*

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

101*

The following materials from Progress Software Corporation’s Quarterly Report on Form 10-Q for the three and nine months ended ~~May~~August 31, 2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of ~~May~~August 31, 2025 and November 30, 2024; (ii) Condensed Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~May~~August 31, 2025 and 2024; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and ~~six~~nine months ended ~~May~~August 31, 2025 and 2024; (iv) Condensed Consolidated Statements of Stockholders' Equity for the three and ~~six~~nine months ended ~~May~~August 31, 2025 and 2024; (v) Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~May~~August 31, 2025 and 2024; and (vi) Notes to Condensed Consolidated Financial Statements.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


*			Furnished herewith

3536

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PROGRESS SOFTWARE CORPORATION

(Registrant)

Dated:	~~June~~September 3029, 2025	/s/ YOGESH K. GUPTA
		Yogesh K. Gupta
		President and Chief Executive Officer
		(Principal Executive Officer)
Dated:	~~June~~September 3029, 2025	/s/ ANTHONY FOLGER
		Anthony Folger
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)
Dated:	~~June~~September 3029, 2025	/s/ DOMENIC LOCOCO
		Domenic LoCoco
		Senior Vice President and Chief Accounting Officer
		(Principal Accounting Officer)

3637

Filing Compare · PROGRESS SOFTWARE CORP /MA