Should Progress Software’s AI-Driven, Recurring Revenue Milestones Prompt Portfolio Moves From PRGS Investors?

• Earlier this week, Progress Software Corporation reported past fourth-quarter 2025 revenue of US$252.67 million and net income of US$25.75 million, capping a full year with US$977.83 million in revenue and US$73.13 million in net income.
• The company highlighted successful integration of ShareFile and Nuclea, 100% net retention, and expanding AI-powered products, signaling a business increasingly anchored in recurring software and AI-related demand.
• Next, we’ll examine how Progress Software’s AI-focused product expansion shapes its investment narrative and what it may mean for investors.

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What Is Progress Software's Investment Narrative?

To own Progress Software, you need to believe its pivot toward AI-enabled, recurring-revenue software can keep attracting customers and sustaining profitability even as overall growth expectations are modest. The latest results, with Q4 and full-year 2025 earnings coming in ahead of many expectations and management leaning into AI messaging, appear to strengthen near term catalysts around product uptake and sentiment. The strong price reaction suggests this news is material for the stock in the short term, especially when combined with a long-running buyback that has taken out more than a quarter of the share count. At the same time, the story is not risk free: earnings growth is expected to be steady rather than rapid, interest coverage looks tight, and one off items have distorted headline profitability.

However, there is one financing-related risk here that investors should not ignore. Progress Software's shares have been on the rise but are still potentially undervalued. Find out how large the opportunity might be.

Exploring Other Perspectives

Two fair value estimates from the Simply Wall St Community span roughly US$70 to just under US$91.94, showing how widely private investors can differ. Set that against a business where AI-led product momentum is now a key short term catalyst, but where slower expected growth and balance sheet pressures may still influence how the story plays out.

Explore 2 other fair value estimates on Progress Software - why the stock might be worth over 2x more than the current price!

Build Your Own Progress Software Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Progress Software research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Progress Software research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Progress Software's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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