Progress Software Corporation (PRGS.O): F2Q26 Review + Callback Color: Steady As She Goes

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Progress Software Corporation (PRGS.O): F2Q26 Review + Callback Color: Steady As She Goes

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02 Jul 2026 13:16:27 ET │ 17 pages

Progress Software Corporation

(PRGS.O)

F2Q26 Review + Callback Color: Steady As She Goes

CITI'S TAKE

A solid overall print featured meaningful license revenue upside driving a Buy

~5pt beat on revenue growth, where pulled-forward deals coming at Price (01 Jul 26 16:00) US$39.16

favorable incremental margins also benefitted profitability (~1pt beat on Target price US$46.00

OPM). All in, this was another quarter of commendable execution with the

company tapping tangible AI-driven/enhanced use-case opportunities Expected share price return 17.5%

inside a reliable base of customers, defying persistent (and overblown, in Expected dividend yield 0.0%

our view) concerns of tech obsolescence ("AI Loser"). Against an Expected total return 17.5%incrementally more favorable acquisition target backdrop, portfolio-

advancing M&A should continue powering a profitable growth-by- Market Cap US$1,606M

acquisition narrative, where we believe ~11x EV/FCF’CY26E and ~6x

P/E’CY26E remains compelling for an asset with a sticky large enterprise

customer base showing scant evidence of wallet/logo churn. Steady infra-

skewing SaaS/AI-credibility status gains and consistent execution - a PRGS Price Performance

hallmark - continue to be undermined at current levels. Reaffirm Buy with (RIC: PRGS.O, BB: PRGS US)

$46 TP, against intact out-year multiples and modestly adjusted estimates.

Fatima Boolani AC

+1-212-816-9115EPS (US$) Q1 Q2 Q3 Q4 FY FC Cons VA Cons

fatima.boolani@citi.com

2025A 1.31A 1.40A 1.50A 1.51A 5.73A 5.72A -0.04A

Joel Omino2026E 1.60A 1.62A 1.54E 1.41E 6.17E 6.07E 6.16E

+1-212-519-9383

Previous 1.60A 1.49E 1.41E 1.45E 5.95E na na joel.omino@citi.com