Progress Software reported strong financial results for the second quarter of fiscal year 2025, highlighting a continued growth trajectory. The company achieved total revenue of $237 million, reflecting a 36% increase from the same quarter last year. Annualized Recurring Revenue (ARR) reached $838 million, signifying a 46% year-over-year growth.

Operating income for the quarter was $95 million, marking a 42% increase year-over-year. The non-GAAP operating margin stood at 40%, a rise from 38% in the previous fiscal year’s second quarter. Net retention rate remained stable at 100%. Adjusted free cash flow for the quarter was reported at $37 million, while unlevered free cash flow amounted to $52 million.

The company’s earnings per share (EPS) was $1.40, exceeding the high end of its guidance range. Progress software also reported strong performance across its product suite, including meaningful contributions from ShareFile and OpenEdge. The report included guidance revisions for the remainder of the fiscal year.

For FY 2025, the company raised its revenue outlook to a range of $962 million to $974 million, up from the prior guidance of $958 million to $970 million. The estimated operating margin was adjusted to between 38% and 39%. Projected adjusted free cash flow also increased, now expected to be in the range of $228 million to $240 million.

In addition, Progress Software outlined Q3 2025 guidance, forecasting revenue between $237 million and $243 million, with EPS expected to range from $1.28 to $1.34. The company earmarked $40 million for debt repayment during the quarter, bringing the total to $70 million for the first half of the fiscal year, with an overall debt repayment goal of $160 million for fiscal 2025.

Progress Software’s balance sheet shows cash and cash equivalents of $102 million and total debt amounting to $1.47 billion, with a net debt position of $1.37 billion. The company is on track to continue executing its growth strategy while managing debt effectively.