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What changed in PROGRESS SOFTWARE CORP /MA's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PROGRESS SOFTWARE CORP /MA's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+226 added−234 removedSource: 10-K (2026-01-20) vs 10-K (2025-01-21)

Top changes in PROGRESS SOFTWARE CORP /MA's 2025 10-K

226 paragraphs added · 234 removed · 193 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe have kept entry costs, consisting primarily of the initial purchase of development licenses, low to encourage a wide variety of ISVs to build applications. If an ISV succeeds in marketing its applications, we obtain recurring revenue as the ISV licenses our products to allow its application to be installed and used by customers.
Biggest changeOur ISVs cover a broad range of markets, offer an extensive library of business applications, and are a source of recurring revenue. We have kept entry costs, consisting primarily of the initial purchase of development licenses, low to encourage a wide variety of ISVs to build applications.
Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website at www.progress.com as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission (the "SEC") at www.sec.gov.
Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are available free of charge on our website at www.progress.com as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission (the "SEC") at www.sec.gov.
Customers We sell our products globally through several channels: directly to end users and various indirect sales channels. Sales of our products through our direct sales force have historically been to business managers or IT managers in corporations and governmental agencies. We also target developers who create business applications, from individuals to teams, within enterprises of all sizes.
Customers We sell our products globally directly to end users and through various indirect sales channels. Sales of our products through our direct sales force have historically been to business managers or IT managers in corporations and governmental agencies. We also target developers who create business applications, from individuals to teams, within enterprises of all sizes.
However, we have invested, and expect to continue to invest in new product development and enhancements of our current products to maintain our competitive position. Our primary development offices are located in Sofia, Bulgaria; Brno, Czech Republic; Bengaluru, India; Hyderabad, India; Limerick, Ireland; Alpharetta, Georgia; Burlington, Massachusetts; Madison, Wisconsin; Morrisville, North Carolina and Raleigh, North Carolina.
However, we have invested, and expect to continue to invest, in new product development and enhancements of our current products to maintain our competitive position. Our primary development offices are located in Sofia, Bulgaria; Brno, Czech Republic; Bengaluru, India; Hyderabad, India; Limerick, Ireland; Manresa, Spain; Alpharetta, Georgia; Burlington, Massachusetts; Madison, Wisconsin; and Raleigh, North Carolina.
In April 2019, we acquired Ipswitch; in October 2020, we acquired Chef Software; in November 2021, we acquired Kemp Technologies; in February 2023, we acquired MarkLogic; and in October 2024, we acquired ShareFile. Our capital allocation policy emphasizes accretive M&A, which we believe allows us to expand our business and drive significant stockholder returns.
In April 2019, we acquired Ipswitch; in October 2020, we acquired Chef Software; in November 2021, we acquired Kemp Technologies; in February 2023, we acquired MarkLogic; in October 2024, we acquired ShareFile; and in June 2025, we acquired Nuclia. Our capital allocation policy emphasizes accretive M&A, which we believe allows us to expand our business and drive significant stockholder returns.
The information posted on our website is not incorporated into this Annual Report on Form 10-K. 8
The information posted on our website is not incorporated into this Annual Report on Form 10-K. 9
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. As we operate as one operating segment, the required financial segment information can be found in the condensed consolidated financial statements.
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. As we operate as one operating segment, the required financial segment information can be found in the consolidated financial statements.
Progress Kemp LoadMaster : Flexible application delivery and security product offering cloud-native, virtual and hardware load balancers. Progress MarkLogic: Data agility platform to securely connect data and metadata, create and interpret meaning, and consume high-quality contextualized data across the enterprise software system.
Progress Flowmon : AI-powered network security and visibility product with automated response across hybrid cloud ecosystems. Progress Kemp LoadMaster : Flexible application delivery and security product offering cloud-native, virtual, and hardware load balancers. Progress MarkLogic: Data agility platform to securely connect data and metadata, create and interpret meaning, and consume high-quality contextualized data across the enterprise software system.
We provide support to customers primarily through our main regional customer support centers in Sofia, Bulgaria; San Jose, Costa Rica; Brno, Czech Republic; Bengaluru, India; Hyderabad, India; Limerick, Ireland; Rotterdam, The Netherlands; Singapore; Alpharetta, Georgia; Burlington, Massachusetts; Madison, Wisconsin; Morrisville, North Carolina and Raleigh, North Carolina. Local technical support for specific products is provided in certain other countries as well.
We provide support to customers primarily through our main regional customer support centers in Sofia, Bulgaria; San Jose, Costa Rica; Brno, Czech Republic; Bengaluru, India; Hyderabad, India; Limerick, Ireland; Rotterdam, The Netherlands; Singapore; Alpharetta, Georgia; Burlington, Massachusetts; Madison, Wisconsin; and Raleigh, North Carolina.
Historically, most of our OEMs have renewed their agreements upon the expiration of the initial term. Value Added Resellers, Systems Integrators and Distributors We enter into arrangements with VARs in which the VARs add features or services to our product, then resell it as an integrated product or complete "turn-key" solution.
Value Added Resellers, Systems Integrators and Distributors We enter into arrangements with VARs in which the VARs add features or services to our product, then resell it as an integrated product or complete "turn-key" solution.
Our organizational philosophy and operating principles focus primarily on customer and partner retention and success, and a streamlined operating approach to drive predictable and stable recurring revenue and high levels of profitability.
We offer our products and tools to both new customers and partners, as well as our existing partner and customer ecosystems. Our organizational philosophy and operating principles focus primarily on customer and partner retention and success, and a streamlined operating approach to drive predictable and stable recurring revenue and high levels of profitability.
Progress Semaphore: Semantic AI platform that transforms data into meaningful insights, empowering organizations to leverage Retrieval Augmented Generation (RAG) for accurate, contextually relevant Gen AI responses, manage knowledge models, and to automatically extract and classify meaning from both structured and unstructured data.
Progress Semaphore: Semantic AI platform that transforms data into meaningful insights, empowering organizations to leverage RAG for accurate, contextually relevant Gen AI responses, manage knowledge models, and to automatically extract and classify meaning from both structured and unstructured data. Progress ShareFile: SaaS-native AI-powered document centric collaboration platform that includes workflow automation, client portals, file synchronization, and sharing and integrated eSignature.
Refer to Note 14: Revenue Recognition and Note 18: Business Segments and International Operations to our Consolidated Financial Statements in Part II, Item 8 of this Form 10-K for information by geographic area. 7 Human Capital As of November 30, 2024, we had 2,815 employees worldwide, including 975 in sales and marketing, 503 in customer support and services, 1,055 in product development and 282 in administration.
Refer to Note 12, Revenue Recognition and Note 16, Segment Information and Geographic Information, in Part II, Item 8 of this Form 10-K for information by geographic area. Human Capital As of November 30, 2025, we had 2,801 employees worldwide, including 932 in sales and marketing, 523 in customer support and services, 1,048 in product development and 298 in administration.
We use distributors and resellers, both internationally and domestically, in certain locations where we do not have a direct presence or where it is more economically or contractually feasible for us to do so.
We use distributors and resellers, both internationally and domestically, in certain locations where we do not have a direct presence or where it is more economically or contractually feasible for us to do so. 5 Independent Software Vendors ISVs develop and market applications using our technology and resell our products in conjunction with sales of their own products that incorporate our technology.
Business Segment and Geographical 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.
In addition, we believe that the nature of our customers, the importance of our products to them, and their need for continuing product support may reduce the risk of unauthorized reproduction, although no assurances can be made in this regard. 7 Business Segment and Geographical 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.
Inclusion and Diversity As a multicultural company serving a global community, we encourage a wide range of views and celebrate our diverse backgrounds. We are committed to creating a culture of innovation and inspiration, where employees feel a strong sense of community and pride in the company and the successes they have helped to achieve.
These efforts align with our core values and reinforce our dedication to ethical governance and long-term environmental stewardship. 8 As a multicultural company serving a global community, we are committed to creating a culture of innovation and inspiration, where employees feel a strong sense of community and pride in the company and the successes they have helped to achieve.
Progress Developer Tools: The comprehensive software development tooling collection including .NET and JavaScript UI components for web, desktop and mobile applications, AI-prompt components, reporting and report management tools and automated testing and mocking tools. 4 Progress Flowmon : AI-powered network security and visibility product with automated response across hybrid cloud ecosystems.
Progress DataDirect : Secure data connectivity tools for Relational, NoSQL, Big Data, and SaaS data sources. Progress Developer Tools: The comprehensive software development tooling collection including .NET and JavaScript UI components for web, desktop and mobile applications, AI-prompt components, reporting and report management tools and automated testing and mocking tools.
Item 1. Business 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. 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.
Item 1. Business 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 with agility and ease.
Flexible Work Approach The COVID‐19 pandemic significantly changed the way employees think about where and how they work. For most of our employees, productivity is no longer tied to being in an office and collaboration can happen between people anywhere.
Flexible Work Approach In 2021, we announced a modern approach to work that gives our employees more flexibility to choose where to work. For most of our employees, productivity is no longer tied to being in an office and collaboration can happen between people anywhere.
We enter into arrangements with OEMs in which the OEM embeds our products into its solutions, typically either software or technology devices. OEMs typically license the right to embed our products into their solutions and distribute those solutions for initial terms ranging from one to three years.
Original Equipment Manufacturers OEMs are companies that embed our products into their own software products or devices. We enter into arrangements with OEMs in which the OEM embeds our products into its solutions, typically either software or technology devices.
Progress WhatsUp Gold : Network infrastructure monitoring software providing complete visibility of all network devices, servers, virtual machines, cloud and wireless environments to find and fix network problems.
Progress Sitefinity: Digital experience platform foundation, delivering intelligent, AI-powered, ROI-driving tools for marketers and an extensible platform for developers to create engaging, cross-channel digital experiences. Progress WhatsUp Gold : Network infrastructure monitoring software providing complete visibility of all network devices, servers, virtual machines, cloud and wireless environments to find and fix network problems.
A key element of our strategy is centered on the goal of building and maintaining leading products and tools enterprises need to build, deploy, and manage modern, strategic business applications. We offer our products and tools to both new customers and partners, as well as our existing partner and customer ecosystems.
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. A key element of our strategy is centered on the goal of building and maintaining leading products and tools organizations need to build, deploy, and manage modern, strategic business applications.
Our view of our offices has evolved to places for collaboration and in-person interactions rather than the only places where productive work can occur. In 2021, we announced a modern approach to work that gives our employees more flexibility to choose where to work.
Our view of our offices has evolved to places for collaboration and in-person interactions rather than the only places where productive work can occur. Depending on their role, this means that employees can choose their office location, as well as continue to work from home some or all the time.
Professional Services Our global professional services organization delivers business solutions for customers through a combination of products, consulting and education. Our consulting organization offers project management, implementation services, custom software development, programming and other services. Our consulting organization also provides services to web-enable existing applications or to take advantage of the capabilities of new Progress product releases.
Local technical support for specific products is provided in certain other countries as well. 6 Professional Services Our global professional services organization delivers business solutions for customers through a combination of products, consulting, and education. Our consulting organization offers project management, implementation services, custom software development, programming, and other services.
Our education organization offers numerous training options, from traditional instructor-led courses to advanced learning modules available via the web or on digital media. Our services offerings include: application modernization; infrastructure automation; development operations; data management, managed database services; performance enhancements and tuning; and analytics/business intelligence. 6 Competition The software industry is intensely competitive.
Our services offerings include: application modernization; infrastructure automation; development operations; data management; managed database services; performance enhancements and tuning; and analytics/business intelligence. Competition The software industry is intensely competitive. We experience significant competition from a variety of sources with respect to all of our products.
In recent years, a significantly increasing amount of our revenue from ISVs has been generated from ISVs who have chosen to enable their business applications under a software-as-a-service ("SaaS") platform. 5 Original Equipment Manufacturers OEMs are companies that embed our products into their own software products or devices.
If an ISV succeeds in marketing its applications, we obtain recurring revenue as the ISV licenses our products to allow its application to be installed and used by customers. In recent years, a significantly increasing amount of our revenue from ISVs has been generated from ISVs who have chosen to enable their business applications under a SaaS platform.
Progress Corticon : Decision automation platform to transform user experiences by streamlining and automating complex business rules using AI—without having to code. Progress DataDirect : Secure data connectivity tools for Relational, NoSQL, Big Data and SaaS data sources.
Progress Automate MFT : Scalable, cloud-native Software-as-a-Service ("SaaS") platform for automated and secure file transfers. Progress Chef: DevOps/DevSecOps automation software to achieve secure, continuous delivery of critical applications and infrastructure. 4 Progress Corticon : Decision automation platform to transform user experiences by streamlining and automating complex business rules using AI—without having to code.
Our Products In recent years, our total growth strategy, described above, has resulted in the expansion of our product portfolio. Described below are the leading products in our portfolio. Progress Chef: DevOps/DevSecOps automation software to achieve secure, continuous delivery of critical applications and infrastructure.
Our Products In recent years, our total growth strategy, described above, has resulted in the expansion of our product portfolio. Described below are the leading products in our portfolio. Progress Agentic RAG: A next-generation Agentic Rag-as-a-Service platform offering fast, flexible, and modular retrieval functionality to artificial intelligence ("AI") agents from a wide variety of unstructured data formats.
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Progress ShareFile: SaaS-native AI-powered document centric collaboration platform that includes workflow automation, client portals, file synchronization and sharing and integrated eSignature. Progress Sitefinity: Digital experience platform foundation, delivering intelligent, AI-powered, ROI-driving tools for marketers and an extensible platform for developers to create engaging, cross-channel digital experiences.
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OEMs typically license the right to embed our products into their solutions and distribute those solutions for initial terms ranging from one to three years. Historically, most of our OEMs have renewed their agreements upon the expiration of the initial term.
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Independent Software Vendors ISVs develop and market applications using our technology and resell our products in conjunction with sales of their own products that incorporate our technology. Our ISVs cover a broad range of markets, offer an extensive library of business applications and are a source of recurring revenue.
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Our consulting organization also provides services to web-enable existing applications or to take advantage of the capabilities of new Progress product releases. Our education organization offers numerous training options, from traditional instructor-led courses to advanced learning modules available via the web or on digital media.
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We experience significant competition from a variety of sources with respect to all of our products.
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We expect this flexible approach will help us recruit and retain employees. Corporate Social Responsibility Progress' corporate social responsibility program, Progress for Tomorrow, reflects our commitment to responsible business practices and positive societal impact.
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In addition, we believe that the nature of our customers, the importance of our products to them and their need for continuing product support may reduce the risk of unauthorized reproduction, although no assurances can be made in this regard.
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Built on three pillars—Our People, Our Global Community, and Our Planet—the program focuses on fostering an inclusive and empowering workplace, supporting education and charitable initiatives worldwide, and advancing sustainability through emissions tracking and carbon neutrality strategies.
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Depending on their role, this means that employees can choose their office location, as well as continue to work from home some or all the time. We expect this flexible approach will help us recruit and retain employees.
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We encourage the development of cultural intelligence in our employees to promote a greater understanding of the unique characteristics across our global teams, which allows us to leverage multicultural teams to foster a more creative work environment and better serve our global customer base.
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We have an Inclusion and Diversity Advisory Committee, made up of Progress employees from around the globe with varying backgrounds, skill sets and viewpoints.
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This committee supports our Chief Inclusion and Diversity Officer in the formation and implementation of enterprise-wide Inclusion and Diversity initiatives and ensuring a clear Inclusion and Diversity vision is established and articulated in a way that is authentic for all Progress employees.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe have also been cooperating with inquires and investigations from: (i) several domestic and foreign data privacy regulators (as of the date of this filing, we have assisted with all inquiries and investigations, a number of which have been formally closed without regulatory action), (ii) several state attorneys general (as of the date of this filing, we have assisted with all inquiries and investigations, and are not aware of any enforcement or regulatory actions directed against Progress), (iii) a U.S. federal law enforcement agency (as of the date of this filing, we have assisted with all inquiries under this investigation and this is not an enforcement action or formal governmental investigation targeting Progress), and (iv) on December 21, 2023, we received a preservation notice from the Federal Trade Commission (the "FTC"), but have not otherwise received a request for information, nor is Progress aware of any formal FTC investigation.
Biggest changeAs previously disclosed, we have also cooperated with inquiries and investigations from various domestic and foreign governmental authorities (data privacy regulators, a U.S. federal law enforcement agency, the Federal Trade Commission, and the SEC), a number of which have been formally closed and, as the date of this filing, have not resulted in any prosecution or enforcement actions against us.
Even if an acquisition is successful, the integration of a new business involves a number of risks that could have a material adverse effect on our business, financial condition, operating results or cash flows, including: 9 • difficulties of assimilating the operations and personnel, products or systems of acquired companies; • our potential inability to realize the value of the acquired assets relative to the price paid; • distraction of our management from our ongoing businesses; • potential product disruptions associated with the sale of the acquired business's products; • the potential that an acquisition may not further our business strategy as we expected, may not result in revenue and cash flow growth to the degree we expected or at all, or may not achieve expected synergies; • the possibility of incurring significant restructuring charges and amortization expense; • the risk that an acquired company’s cybersecurity may not have been sufficient and could cause a post-acquisition risk once integrated into our systems; • risks related to the assumption of the acquired business's liabilities or any ongoing lawsuits; • potential impairment to assets that we recorded as a part of an acquisition, including intangible assets and goodwill; and • to the extent that we issue stock to pay for an acquisition, dilution to existing stockholders and decreased earnings per share.
Even if an acquisition is successful, the integration of a new business involves a number of risks that could have a material adverse effect on our business, financial condition, operating results, or cash flows, including: • difficulties of assimilating the operations and personnel, products, or systems of acquired companies; • our potential inability to realize the value of the acquired assets relative to the price paid; • distraction of our management from our ongoing businesses; • potential product disruptions associated with the sale of the acquired business's products; • the potential that an acquisition may not further our business strategy as we expected, may not result in revenue and cash flow growth to the degree we expected or at all, or may not achieve expected synergies; • the possibility of incurring significant restructuring charges and amortization expense; • the risk that an acquired company's cybersecurity may not have been sufficient and could cause a post-acquisition risk once integrated into our systems; • risks related to the assumption of the acquired business's liabilities or any ongoing lawsuits; • potential impairment to assets that we recorded as a part of an acquisition, including intangible assets and goodwill; and • to the extent that we issue stock to pay for an acquisition, dilution to existing stockholders and decreased earnings per share.
Our indebtedness could have significant adverse consequences for our security holders and our business, results of operations and financial condition by, among other things: • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing; • requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; • limiting our flexibility to plan for, or react to, changes in our business; • diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of our Convertible Senior Notes with an aggregate principal amount of $360 million, due April 15, 2026, and an aggregate principal amount of $450 million, due March 1, 2030 (together, the "Notes"); and • placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
Our indebtedness could have significant adverse consequences for our security holders and our business, results of operations, and financial condition by, among other things: • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing; • requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; • limiting our flexibility to plan for, or react to, changes in our business; • diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of our Convertible Senior Notes with an aggregate principal amount of $360.0 million, due April 15, 2026 (the "2026 Notes"), and an aggregate principal amount of $450.0 million, due March 1, 2030 (the "2030 Notes" and, together with the 2026 Notes, the "Notes"); and • placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
The capped call transactions are generally expected to reduce the potential dilution to our common stock upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/ 18 or offset subject to a cap.
The capped call transactions are generally expected to reduce the potential dilution to our common stock upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap.
Our failure to comply with any of these covenants or to meet any payment obligations under the facility could result in an event of default which, if not cured or waived, would result in any amounts outstanding, including any accrued interest and unpaid fees, becoming immediately due and payable.
Our failure to comply with any of these covenants or to meet any payment obligations under the Credit Facility could result in an event of default which, if not cured or waived, would result in any amounts outstanding, including any accrued interest and unpaid fees, becoming immediately due and payable.
Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade 15 secrets or to determine the validity and scope of the proprietary rights of others. This litigation could result in substantial costs and diversion of resources, whether or not we ultimately prevail on the merits.
Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others. This litigation could result in substantial costs and diversion of resources, whether or not we ultimately prevail on the merits.
The steps we take to protect our proprietary rights may be inadequate to prevent misappropriation of our technology; moreover, others could independently develop similar technology. We could be subject to claims that we infringe intellectual property rights of others, which could harm our business, financial condition, and results of operations.
The steps we take to protect our proprietary rights may be inadequate to prevent misappropriation of our technology; moreover, others could independently develop similar technology. 16 We could be subject to claims that we infringe intellectual property rights of others, which could harm our business, financial condition, and results of operations.
We have relationships with third parties to provide, develop, and create applications that integrate with certain of our products, and our business could be harmed if we are unable to continue these relationships. We use software and services licensed and procured 14 from third parties.
We have relationships with third parties to provide, develop, and create applications that integrate with certain of our products, and our business could be harmed if we are unable to continue these relationships. We use software and services licensed and procured from third parties.
In addition, the existence of the Notes may encourage short selling by market participants because the conversion of the Notes could be used to satisfy short positions, or anticipated conversion of the Notes into shares of our common stock could depress the price of our common stock.
In addition, the existence of the Notes may encourage short selling by market participants because the conversion of the Notes could be used to satisfy short positions, or anticipated conversion of the Notes into shares of our common stock could depress the price of our common stock. 20
Further, as geopolitical volatility around the world increases, there is increasing risk of the imposition of exchange or price controls, or other restrictions on the conversion of foreign currencies, which could have a material adverse effect on our business, financial condition and operating results. 16 Revenue forecasting is uncertain, and the failure to meet our forecasts could result in a decline in the market price of our common stock.
Further, as geopolitical volatility around the world increases, there is increasing risk of the imposition of exchange or price controls, or other restrictions on the conversion of foreign currencies, which could have a material adverse effect on our business, financial condition and operating results. 17 Revenue forecasting is uncertain, and the failure to meet our forecasts could result in a decline in the market price of our common stock.
A key element of our strategy includes the acquisition of businesses that offer complementary products, services and technologies, augment our revenues and cash flows, and meet our strict financial and other criteria. We may not be able to identify suitable acquisition opportunities or consummate any such transactions on favorable terms or at all.
A key element of our total growth strategy includes the acquisition of businesses that offer complementary products, services, and technologies, augment our revenues and cash flows, and meet our strict financial and other criteria. We may not be able to identify suitable acquisition opportunities or consummate any such transactions on favorable terms or at all.
Depending upon the severity of any such matters, the detection and correction of such matters can be time consuming and costly. If any such issues are exploited by malicious threat actors, we could experience, among other things, material adverse impact to our revenues due to loss of customers and increased liabilities due to costly governmental 11 investigations or litigation.
Depending upon the severity of any such matters, the detection and correction of such matters can be time consuming and costly. If any such issues are exploited by malicious threat actors, we could experience, among other things, a material adverse impact to our revenues due to loss of customers and increased liabilities due to costly governmental investigations or litigation.
We rely on our network infrastructure and enterprise applications, internal technology systems and website for our development, marketing, operations, support and sales activities. In addition, we rely on third-party hosted services, and we do not control the operation of third-party data center facilities, which increases our vulnerability.
We rely on our network infrastructure and enterprise applications, internal technology systems, and websites for our development, marketing, operations, support, and sales activities. In addition, we rely on third-party hosted services, and we do not control the operation of third-party data center facilities, which increases our vulnerability.
If customers’ buying patterns, decision-making processes, timing of expected deliveries and timing of new projects unfavorably change due to economic or political conditions, there would be a material adverse effect on our business, financial condition and operating results.
If customers' buying patterns, decision-making processes, timing of expected deliveries, or timing of new projects unfavorably change due to economic or political conditions, there could be a material adverse effect on our business, financial condition, and operating results.
Further, the failure to consummate an acquisition may result in negative publicity and adversely impact our relationships with our customers, vendors and employees. We may become subject to legal proceedings relating to the acquisition and the integration of acquired businesses may not be successful.
Further, the failure to consummate an acquisition may result in negative publicity and adversely impact our relationships with our customers, vendors, and employees. We may become subject to legal proceedings relating to an acquisition, and the integration of an acquired business may not be successful.
In addition, our future effective tax rates could be favorably or unfavorably affected by changes in tax rates, changes in the valuation of our deferred tax assets or liabilities, or changes in tax laws including Pillar Two legislation adopted as part of the Organization for Economic Cooperation and Development (“OECD”) inclusion Framework, which established a global minimum corporate tax rate of 15% for certain multinational enterprises, or the interpretation of such laws.
In addition, our future effective tax rates could be favorably or unfavorably affected by changes in tax rates, changes in the valuation of our deferred tax assets or liabilities, or changes in tax laws including Pillar Two legislation adopted as part of the Organization for Economic Cooperation and Development Inclusive Framework, which established a global minimum corporate tax rate of 15% for certain multinational enterprises, or the interpretation of such laws.
We could incur substantial cost in protecting our proprietary software technology and if we fail to protect our technology, we could incur material harm to our business. We rely principally on a combination of contract provisions and copyright, trademark, patent and trade secret laws to protect our proprietary technology.
We could incur substantial costs in protecting our proprietary software technology, and if we fail to protect our technology we could incur material harm to our business. We rely principally on a combination of contract provisions and copyright, trademark, patent, and trade secret laws to protect our proprietary technology.
Our third-party service providers along with their datacenters and other facilities are also vulnerable to damage or interruption from human error, intentional bad acts, security breaches and other catastrophic events, any of which could disrupt the availability of our products and/or compromise or destroy user content, which could be harmful to our business, results of operations, and financial condition.
Our third-party service providers along with their data centers and other facilities are also vulnerable to damage or interruption from human error, intentional bad acts, security breaches, and other catastrophic events, any of which could disrupt the availability of our products and/or compromise or destroy user content, which could be harmful to our business, results of operations, and financial condition.
Any adverse effect on any of our ISV's, distributors'/resellers', or OEMs’ businesses related to competition, pricing and other factors could also have a material adverse effect on our business, financial condition and operating results.
Any adverse effect on any of our ISVs', distributors'/resellers', or OEMs' businesses related to competition, pricing, and other factors could also have a material adverse effect on our business, financial condition, and operating results.
Difficulties associated with any acquisitions we may pursue, and their integration may be complicated by factors such as: • the size of the business or entity acquired; • geographic and cultural differences; • lack of experience operating in the industry or markets of the acquired business (e.g., satisfying the requirements of public-sector customers); • potential loss of key employees and customers; • the potential for deficiencies in internal controls at the acquired or combined business, including but not limited to with regard to any weaknesses or vulnerabilities in the acquired company’s cybersecurity controls; • performance problems with the acquired business’s technology; • exposure to unanticipated liabilities of the acquired business, including any cybersecurity issues; • insufficient revenue to offset increased expenses associated with the acquisition; and • adverse tax consequences.
Difficulties associated with any acquisitions we may pursue, and their integration, may be complicated by factors such as: • the size of the business or entity acquired; • geographic and cultural differences; • lack of experience operating in the industry or markets of the acquired business (e.g., satisfying the highly technical requirements of government and other quasi-public-sector customers); • potential loss of key employees and customers; • the potential for deficiencies in internal controls at the acquired or combined business, including but not limited to any weaknesses or vulnerabilities in the acquired company's cybersecurity controls; • performance problems with the acquired business's technology; • exposure to unanticipated liabilities of the acquired business, including any cybersecurity issues; • insufficient revenue to offset increased expenses associated with the acquisition; and • adverse tax consequences.
The MDL has also consolidated the previously disclosed insurance subrogation claim (where an insurer is seeking recovery for expenses incurred on behalf of its insured in connection with the MOVEit Vulnerability) and, as of the date of this filing, one customer cross-claim.
The MDL has also consolidated the insurance subrogation complaint (where an insurer is seeking recovery for expenses incurred on behalf of its insured in connection with the MOVEit Vulnerability) and, as of the date of this filing, one customer cross-claim.
Risks Related to the Operation of Our Business Our international operations expose us to additional risks, and changes in global economic and political conditions could adversely affect our international operations, our revenue and our net income . Approximately 41% of our total fiscal 2024 revenue was generated from sales outside North America.
Risks Related to the Operation of Our Business Our international operations expose us to additional risks, and changes in global economic and political conditions could adversely affect our international operations, our revenue, and our net income . Approximately 36% of our total fiscal 2025 revenue was generated from sales outside North America.
If our security measures are breached, our products and services may be perceived as not being secure, customers may curtail or stop using our products and services, and we may incur significant legal and financial exposure, including but not limited to from loss of customer or company data, loss of customers or otherwise.
If our security measures are breached, our products and services may be perceived as not being secure, customers may curtail or stop using our products and services, and we may incur significant legal and financial exposure from loss of customer or company data, loss of customers, or otherwise.
We may be required to record a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or amortizable intangible assets is determined, adversely affecting our results of operations.
We may be required to record a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or amortizable intangible assets is determined, adversely affecting our results of operations. We may have exposure to additional tax liabilities .
These factors include: • changes in demand for our products; • introduction, enhancement or announcement of products by us or our competitors; • market acceptance of our new products, including acquired products; • the growth rates of certain market segments in which we compete; • size and timing of significant orders; • a high percentage of our revenue is generated in the third month of each fiscal quarter and any failure to receive, complete or process orders at the end of any quarter could cause us to fall short of our revenue targets; • budgeting cycles of customers; • mix of distribution channels; • mix of products and services sold; • mix of international and North American revenues; • fluctuations in currency exchange rates; • changes in the level of operating expenses, including unforeseen expenses incurred in connection with items such as cyber security instances; • changes in management; • restructuring programs; • changes in our sales force; • completion or announcement of acquisitions by us or our competitors; • integration of acquired businesses or inability to realize expected synergies; • customer order deferrals in anticipation of new products announced by us or our competitors; • general economic conditions in regions in which we conduct business; and • other factors such as political or social unrest, terrorist attacks, other hostilities, natural disasters, cyber-attacks, and potential public health crises, such as pandemics.
We have experienced, and may in the future experience, fluctuations in our quarterly operating results that may be caused by a variety of factors, including: • changes in demand for our products; • introduction, enhancement or announcement of products by us or our competitors; • the increasing prominence of new technologies, including AI, in the markets in which we compete; • market acceptance of our new products, including acquired products; • the growth rates of certain market segments in which we compete; • size and timing of significant orders; • a high percentage of our revenue is generated in the third month of each fiscal quarter and any failure to receive, complete or process orders at the end of any quarter could cause us to fall short of our revenue targets; • budgeting cycles of customers; • mix of distribution channels; • mix of products and services sold; • mix of international and North American revenues; • fluctuations in currency exchange rates; • changes in the level of operating expenses, including unforeseen expenses incurred in connection with items such as cybersecurity instances; • changes in management; • restructuring programs; • changes in our sales force; • completion or announcement of acquisitions by us or our competitors; • integration of acquired businesses or inability to realize expected synergies; • customer order deferrals in anticipation of new products announced by us or our competitors; • general economic conditions in regions in which we conduct business; and • other factors such as political or social unrest, terrorist attacks, other hostilities, natural disasters, cyber-attacks, and potential public health crises, such as pandemics.
Other U.S. state legislatures have also implemented varying privacy laws and regulations, or are considering implementing legislation that we expect to become effective in the near term. Moreover, several privacy bills are under congressional review at the U.S. federal level.
For example, approximately twenty U.S. state legislatures have implemented varying privacy laws and regulations, or are considering implementing legislation that we expect to become effective in the near term. Moreover, several privacy bills are under congressional review at the U.S. federal level.
Changes in the value of foreign currencies relative to the U.S. dollar and related changes in interest rates have adversely affected our results of operations and financial position and could continue to do so.
Changes in the value of foreign currencies relative to the U.S. Dollar and related changes in interest rates have adversely affected our results of operations and financial position in the past and could do so again in the future. In the past, as the value of the U.S.
Given our meaningful reliance on revenue generated outside of North America (which constituted 41% of our total revenue in fiscal 2024) and our reliance on revenue generated in EMEA (which constituted 33% of our total revenue in fiscal 2024), disruption of commercial activities in these regions may materially adversely affect our financial condition and results of operations.
Given our meaningful reliance on revenue generated outside of North America (which constituted 36% of our total revenue in fiscal 2025) and our reliance on revenue generated in EMEA (which constituted 29% of our total revenue in fiscal 2025), disruption of commercial activities in these regions may materially adversely affect our financial condition and results of operations.
As of November 30, 2024, we had approximately $1.5 billion of consolidated indebtedness. We may also incur additional indebtedness to meet future financing needs.
As of November 30, 2025, we had approximately $1.4 billion of consolidated indebtedness. We may also incur additional indebtedness to meet future financing needs.
In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock. We can provide no assurances as to the financial stability or viability of the option counterparties. Provisions in the indenture could delay or prevent an otherwise beneficial takeover of us.
In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock. We can provide no assurances as to the financial stability or viability of the option counterparties.
Our future success will depend upon our ability to develop, acquire and introduce new products in a timely manner that take advantage of technological advances and respond to new customer and partner requirements.
Our future success will depend upon our ability to develop, acquire and introduce new products in a timely manner that leverage technological advances, including AI, and respond to new customer and partner requirements.
If consumer demand declines, or new technologies emerge that are superior to, or are more responsive to customer requirements than OpenEdge, such that we are unable to maintain OpenEdge’s competitive position within its marketplace, our business, financial condition and operating results may be materially adversely affected.
If consumer demand declines, or new technologies emerge that are superior to, or are more responsive to customer requirements than, OpenEdge or ShareFile, such that we are unable to maintain these products' competitive position within their respective marketplaces, our business, financial condition, and operating results may be materially adversely affected.
The activities of these third parties are not within our direct control. Our failure to manage our relationships with these third parties effectively could impair the success of our sales, marketing and support activities.
Our failure to manage our relationships with these third parties effectively could impair the success of our sales, marketing, and support activities.
We may not be successful in developing or acquiring new products incorporating new technology on a timely basis, and any new products we develop or acquire may not adequately address the changing needs of the marketplace or may not be accepted by the market.
We may not be successful in developing or acquiring new products that incorporate new technologies on a timely basis, and any new products we develop or acquire may not adequately address the changing needs of our customers or may not be accepted by the market.
These restrictions may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our product offerings or business practices, or prevent or limit our use of AI. 13 Catastrophic events, including but not limited to cyber events, may disrupt our business.
Any legislation concerning AI adopted domestically or globally may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our product offerings or business practices, or prevent or limit our use of AI. 14 Catastrophic events, including but not limited to cyber events, may disrupt our business.
If the repayment of such other indebtedness were to be accelerated after any applicable notice or grace periods, then we may not have sufficient funds to repay that indebtedness and repurchase the Notes or make cash payments upon their conversion.
If the repayment of such other indebtedness were to be accelerated after any applicable notice or grace periods, then we may not have sufficient funds to repay that indebtedness and repurchase the Notes or make cash payments upon their conversion. Provisions in the indenture could delay or prevent an otherwise beneficial takeover of us.
The value of our Chef software assets may be limited by open source development and licensing practices . Our Chef offerings incorporate software components licensed to the general public under open source licenses. We obtain many components from software developed and released by contributors to independent open source components of our offerings.
Our Chef offerings incorporate software components licensed to the general public under open source licenses. We obtain many components from software developed and released by contributors to independent open source components of our offerings.
Significant judgment is required in determining our global provision for income taxes and other tax liabilities. In the ordinary course of a global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain. Our income tax returns are routinely subject to audits by tax authorities.
As a multinational corporation, we are subject to income taxes in the U.S. and various foreign jurisdictions. Significant judgment is required in determining our global provision for income taxes and other tax liabilities. In the ordinary course of a global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain.
Such products depend on accessibility across these third-party systems and applications, which are constantly evolving and usually outside of our control. We may not always be able to modify our products to ensure compatibility with these third-party services following their updates and upgrades. If we cannot ensure compatibility, our business, results of operations, and financial condition could be adversely affected.
We may not always be able to modify our products to ensure compatibility with these third-party services following their updates and upgrades. If we cannot ensure compatibility, our business, results of operations, and financial condition could be adversely affected.
Our financial liability arising from any of the foregoing will depend on many factors, including the progression of the MDL; therefore, we are unable at this time to estimate the quantitative impact of any such liability with any reasonable degree of certainty.
Our financial liability arising from the MOVEit Vulnerability will depend on many factors, including the progression of the MDL and additional litigation or indemnification claims, and any settlements resulting from remaining or additional governmental or regulatory investigations; therefore, we are unable at this time to estimate the quantitative impact of any such liability with any reasonable degree of certainty.
Security risks in recent years have increased significantly given the increased sophistication and activities of hackers, organized crime, including state-sponsored organizations and nation-states, and other outside parties. Cyber threats are continuously evolving, increasing the difficulty of defending against them. Increased risks of such attacks and disruptions also exist due to the Russian invasion of Ukraine beginning in February 2022.
Security risks in recent years have increased significantly given the increased sophistication and activities of hackers, organized crime, including state-sponsored organizations and nation-states, and other outside parties. 12 Cyber threats are continuously evolving, including through the utilization of AI, increasing the difficulty of defending against them.
We are required to comply with certain financial and operating covenants under our Credit Facility and to make scheduled debt payments as they become due; any failure to comply with those covenants or to make scheduled payments could cause amounts borrowed under the facility to become immediately due and payable or prevent us from borrowing under the facility.
If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full. 19 We are required to comply with certain financial and operating covenants under our Credit Facility and to make scheduled debt payments as they become due; any failure to comply with those covenants or to make scheduled payments could cause amounts borrowed under the facility to become immediately due and payable or prevent us from borrowing under the facility.
If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty.
Global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions. If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty.
Failure to manage and successfully integrate acquired businesses, achieve anticipated levels of profitability of the acquired business, improve margins of the acquired businesses and products, or realize other anticipated benefits of an acquisition could materially harm our business, operating results and margins.
Failure to manage and successfully integrate an acquired business, achieve anticipated levels of profitability of an acquired business, improve margins of an acquired business and its products, or realize other anticipated benefits of an acquisition could materially harm our business, operating results, and margins. 11 Adverse developments in our relationships with sales channel partners could harm our revenues and results of operations.
Political and/or financial instability, oil price shocks and armed conflict in various regions of the world, including, but not limited to, Russia/Ukraine conflict and the armed conflicts involving Israel, can lead to economic uncertainty and may adversely impact our business. Political instability may lead to significant, continuing volatility in global stock markets and currency exchange rate fluctuations.
Political and/or financial instability, tariffs, the imposition of import/export controls, or armed conflict in various regions of the world can lead to economic uncertainty and may adversely impact our business. Political instability may lead to significant, continuing volatility in global stock markets and currency exchange rate fluctuations.
Adverse developments in our relationships with sales channel partners could harm our revenues and results of operations. We recognize a substantial portion of our revenue from sales made through third parties, including our ISVs, distributors/resellers, and OEMs, and our future results depend in large part upon our continued successful distribution of our products through these channels.
We recognize a substantial portion of our revenue from sales made through third parties, including our ISVs, distributors/resellers, and OEMs, and our future results depend in large part upon our continued successful distribution of our products through these channels. The activities of these third parties are not within our direct control.
Changes in accounting principles and guidance, or their interpretation or implementation, may materially adversely affect our reported results of operations or financial position.
These broad stock market fluctuations may adversely affect the market price of our common stock, regardless of our operating performance. Changes in accounting principles and guidance, or their interpretation or implementation, may materially adversely affect our reported results of operations or financial position.
Our failure to repurchase Notes or to pay the cash amounts due upon conversion when required will constitute a default under the indenture governing the terms of the Notes.
In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the Notes or pay the cash amounts due upon conversion. Our failure to repurchase Notes or to pay the cash amounts due upon conversion when required will constitute a default under the indenture governing the terms of the Notes.
Failure to develop new products and product enhancements that meet market needs in a timely manner could have a material adverse effect on our business, financial condition and operating results. We are substantially dependent on our OpenEdge products.
Failure to develop new products and product enhancements that meet market needs in a timely manner could have a material adverse effect on our business, financial condition, and operating results. We may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation, or financial results.
Although we regularly assess the likelihood of adverse outcomes resulting from these examinations to determine our tax estimates, a final determination of tax audits that is inconsistent with such assessments or tax disputes could have an adverse effect on our financial condition, results of operations and cash flows. 17 We are also subject to non-income taxes, such as payroll, sales, use, value-added, net worth, property and goods and services taxes in the U.S. and various foreign jurisdictions.
Our income tax returns are routinely subject to audits by tax authorities. Although we regularly assess the likelihood of adverse outcomes resulting from these examinations to determine our tax estimates, a final determination of tax audits that is inconsistent with such assessments or tax disputes could have an adverse effect on our financial condition, results of operations, and cash flows.
Any one or more of these factors could have a material adverse effect on our international operations, and, consequently, on our business, financial condition and operating results. In addition, our business has been, and could in the future be, adversely affected by regional or global health crises.
Any one or more of these factors could have a material adverse effect on our international operations, and, consequently, on our business, financial condition, and operating results.
Our business could be damaged, and we could be subject to liability, in the event of any unauthorized access to our data or our customers’ data, including through privacy and data security breach.
As our litigation response continues, we will continue to assess the potential impact of the MOVEit Vulnerability on our business, operations, and financial results. Our business could be damaged, and we could be subject to liability, in the event of any unauthorized access to our data or our customers' data, including through privacy and data security breach.
We are subject to counterparty risk with respect to the capped call transactions, and the capped call may not operate as planned. The option counterparties are financial institutions, and we are subject to the risk that any or all of them might default under the capped call transactions.
The option counterparties are financial institutions, and we are subject to the risk that any or all of them might default under the capped call transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral.
We review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. We test goodwill for impairment at least annually.
We acquire other companies and intangible assets and may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangibles. We review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. We test goodwill for impairment at least annually.
Ongoing enhancements to our product sets (both organically and through acquisitions) will be required to enable us to maintain our competitive position and the competitive position of our ISVs, distributors/resellers, and OEMs.
The markets for our products are characterized by rapid technological advancement, including the introduction of new technologies such as AI. Ongoing enhancements to our product sets (both organically and through acquisitions) will be required to enable us to maintain our competitive position and the competitive position of our ISVs, distributors/resellers, and OEMs.
Noteholders may require us to repurchase their Notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any. In addition, all conversions of Notes will be settled partially or entirely in cash.
The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results. Noteholders may require us to repurchase their Notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any.
We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the Notes or pay the cash amounts due upon conversion. In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the Notes or pay the cash amounts due upon conversion.
In addition, all conversions of Notes will be settled partially or entirely in cash. We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the Notes or pay the cash amounts due upon conversion.
Certain of our products depend on interoperability with various devices, operating systems, and third-party applications that we do not control. An important feature of many of our products is their compatibility with a wide range of devices, operating systems, and third-party applications.
An important feature of many of our products is their compatibility with a wide range of devices, operating systems, and third-party applications. Such products depend on accessibility across these third-party systems and applications, which are constantly evolving and usually outside of our control.
We derive a significant portion of our revenue from software license and maintenance revenue attributable to our OpenEdge product set, which in fiscal year 2024 accounted for approximately 34% of our aggregate revenue on a consolidated basis. Accordingly, our future results depend on continued market acceptance of OpenEdge.
We derive a significant portion of our revenue from software license and maintenance revenue attributable to our OpenEdge product set, as well as SaaS revenue attributable to our ShareFile product set, which in fiscal year 2025 together accounted for slightly more than half of our aggregate revenue on a consolidated basis.
Other potential risks inherent in our international business include: • longer payment cycles; 10 • credit risk and higher levels of payment fraud; • greater difficulties in accounts receivable collection; • varying regulatory and legal requirements; • compliance with international and local trade, labor and export control laws; • restrictions on the transfer of funds; • difficulties in developing, staffing, and simultaneously managing a large number of varying foreign operations as a result of distance, legal impediments and language and cultural differences; • reduced or minimal protection of intellectual property rights in some countries; • laws and business practices that favor local competitors or prohibit foreign ownership of certain businesses; • changes in U.S. or foreign trade policies or practices that increase costs or restrict the distribution of products; • seasonal reductions in business activity during the summer months in Europe and certain other parts of the world; • economic instability in emerging markets; and • potentially adverse tax consequences.
Other potential risks inherent in our international business include: • longer payment cycles and credit and collectability risk on our accounts receivables; • varying regulatory and legal requirements, including international trade and labor laws; • restrictions on the transfer of funds; • management of our international operations, including increased administrative and compliance expenses, geographical distance, and language and cultural differences; • difficulties in enforcing contractual and intellectual property rights; • laws and business practices that favor local competitors or prohibit foreign ownership of certain businesses; • seasonal reductions in business activity during the summer months in Europe and certain other parts of the world; • economic instability in emerging markets; • regional or global health crises; and • potentially adverse tax consequences.
A "zero-day vulnerability" is a vulnerability that has been publicly disclosed and/or exploited (e.g., by an independent researcher or threat actor) before the software vendor has an opportunity to patch it. We continue to monitor the impact of the MOVEit Vulnerability on our business, operations, and financial results.
A "zero-day vulnerability" is a vulnerability that has been publicly disclosed and/or exploited (e.g., by an independent researcher or threat actor) before the software vendor has an opportunity to patch it. Following the discovery of the MOVEit Vulnerability and the various remedial actions previously described, we discovered and patched additional vulnerabilities within the MOVEit Transfer and MOVEit Cloud platforms.
In recent periods, as the value of the U.S. dollar has strengthened in comparison to certain foreign currencies (particularly in EMEA), our reported international revenue has been reduced because foreign currencies translate into fewer U.S. dollars.
Dollar has strengthened in comparison to certain foreign currencies (particularly in EMEA), our reported international revenue has been reduced because foreign currencies translate into fewer U.S. Dollars. As approximately one-third of our revenue is denominated in foreign currencies, these exchange rate fluctuations have impacted, and we expect will continue to impact, our revenue results.
Our products and services involve the storage and transmission of our customers’ proprietary information and may be vulnerable to unauthorized access, computer viruses, cyber-attacks, distributed denial of service attacks and other disruptive problems.
Our business requires the storage and transmission of our proprietary information and customer information within Progress' enterprise information technology systems, which may be vulnerable to unauthorized access, distributed denial of service attacks, and other cyber-attacks.
Current and potential competitors may also be more successful than we are in having their products or technologies widely accepted. We may be unable to compete successfully against current and future competitors, and our failure to do so could have a material adverse effect on our business, prospects, financial condition and operating results.
We may be unable to compete successfully against current and future competitors, and our failure to do so could have a material adverse effect on our business, prospects, financial condition, and operating results. 10 The value of our Chef software assets may be limited by open source development and licensing practices .
The market price of our common stock, like that of other technology companies, is volatile and is subject to wide fluctuations in response to quarterly variations in operating results, announcements of technological innovations or new products by us or our competitors, changes in financial estimates by securities analysts or other events or factors.
The market price of our common stock, like that of other technology companies, is volatile and is subject to wide fluctuations in response to a variety of factors, including operating results, announcements of technological innovations or new products by us or our competitors; the proliferation and anticipated impact of AI on the technology sector; changes in financial estimates by securities analysts; purchases or sales of our stock by our officers or directors; repurchases of shares of our common stock; the issuance of additional shares or securities convertible into, or exchangeable or exercisable for, shares of our common stock, including upon the conversion of the Notes (as defined below) or under our equity compensation plans, general economic conditions and other macroeconomic factors; or other events or factors.
We have integrated, and plan to further integrate, artificial intelligence (“AI”) capabilities into certain components of product offerings, and we use and expect to increase the use of AI in our operations. Such integration and use of AI may become more important in our product offerings and operations over time.
Such integration and use of AI may become more important in our product offerings and operations over time.
We are required to comply with specified financial and operating covenants and to make scheduled repayments of our term loan, which may limit our ability to operate our business as we otherwise might operate it.
We may wish to borrow additional amounts under the facility in the future to support our operations, including for strategic acquisitions and share repurchases. We are required to comply with specified financial and operating covenants of the Credit Facility, which may limit our ability to operate our business as we otherwise might operate it.
While we endeavor to continue mitigating security risks for our products, malicious threat actors might use techniques to exploit other zero-day vulnerabilities or use other means that we are unable to defend against, in order to compromise and infiltrate our systems, infrastructure, networks, and products, including, but not limited to, MOVEit, ShareFile or other products. 12 While we devote significant resources to cyber security related matters in the operation of our business, we may fail to detect the existence of a breach and be unable to prevent unauthorized access to user and company content across our systems, infrastructure, products, and networks.
While we devote significant resources to cybersecurity related matters in the operation of our business, we may fail to detect the existence of a breach and be unable to prevent unauthorized access to user and company content across our systems, infrastructure, products, and networks.
As approximately one-third of our revenue is denominated in foreign currencies, these exchange rate fluctuations have impacted, and we expect will continue to impact, our revenue results. Please see Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 for additional information.
Please see Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 for additional information.
A change in these principles or guidance, or in their interpretations, may have a significant effect on our reported results, as well as our processes and related controls. We may have exposure to additional tax liabilities . As a multinational corporation, we are subject to income taxes in the U.S. and various foreign jurisdictions.
A change in these principles or guidance, or in their interpretations, may have a significant effect on our reported results, as well as our processes and related controls. 18 If our goodwill or amortizable intangible assets become impaired, we may be required to record a significant charge to earnings.
We anticipate that these threats will continue to grow in scope and complexity over time, particularly as we acquire new products and a larger proportion of our revenues derive from products that transmit or store sensitive data.
We anticipate that these threats will continue to grow in scope and complexity over time, particularly as the use of AI by malicious threat actors increases, we acquire new products, and a larger proportion of our revenues derive from products that transmit or store sensitive data. 13 While we endeavor to continue mitigating security risks for our products, malicious threat actors might use techniques to exploit other zero-day vulnerabilities or use other means that we are unable to defend against in order to compromise and infiltrate our systems, infrastructure, networks, and products, including, but not limited to MOVEit or ShareFile.
These AI-related initiatives, whether successful or not, could cause us to incur substantial costs and could result in delays in our software release cadence. Our competitors or other third parties may incorporate AI into their products or operations more quickly or more successfully than we do, which could impair our ability to compete effectively.
Our AI efforts may not be successful and our competitors or other third parties may incorporate AI into their offerings more successfully and efficiently than we do and achieve greater and faster adoption, which could impair our ability to compete effectively and adversely affect our business and financial results.
There is significant competition for such personnel in the software industry. We may not continue to be successful in attracting and retaining the personnel we require to develop new and enhanced products and to continue to grow and operate profitably.
We may not continue to be successful in attracting and retaining the personnel we require to develop new and enhanced products and to continue to grow and operate profitably. 15 Certain of our products depend on interoperability with various devices, operating systems, and third-party applications that we do not control.
Our revenue and quarterly results may fluctuate, which could adversely affect the market price of our common stock. We have experienced, and may in the future experience, significant fluctuations in our quarterly operating results that may be caused by many factors.
Our stock price has been, and may continue to be, volatile, and your investment could lose value. Our revenue and quarterly results may fluctuate, which could adversely affect the market price of our common stock.
In March 2024, we entered into a Fourth Amended and Restated Credit Agreement (the "Credit Agreement"), which provides for a $900.0 million secured revolving credit facility (which may be increased if the existing or additional lenders are willing to make such increased commitments) (the "Credit Facility").
In July 2025, we entered into an amended and restated credit agreement (the "Credit Agreement") with certain lenders, which provides for a $1.5 billion secured revolving credit facility (the "Credit Facility").
This activity could cause a decrease in the market price of our common stock. The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.
This activity could cause a decrease in the market price of our common stock. We are subject to counterparty risk with respect to the capped call transactions, and the capped call may not operate as planned.
This Credit Facility matures in March 2029, at which time any amounts outstanding will be due and payable in full. We may wish to borrow additional amounts under the facility in the future to support our operations, including for strategic acquisitions and share repurchases.
This Credit Facility matures on the earlier of July 2030 or the date that is 91 days prior to the maturity date of our 2030 Notes (subject to certain conditions), at which time any amounts outstanding will be due and payable in full.
Removed
If our goodwill or amortizable intangible assets become impaired, we may be required to record a significant charge to earnings. We acquire other companies and intangible assets and may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangibles.
Added
We have made, and expect to continue to make, investments to integrate AI into our products and update our products to enable our customers to use AI for insights, digital experiences, and applications, as well as to use AI to enhance our own engineering and business operations.
Removed
A significant outbreak of contagious diseases, other adverse public health developments, or the fear of such events that results in a widespread health crisis could adversely affect global supply chains and the economies and financial markets of many countries.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur focus on cybersecurity risk management, including risk identification, analysis, and response, centers on the following areas: • Enterprise security: We reference industry-accepted control frameworks, compliance regulations, privacy requirements and best practices. • Product security: Our development teams participate in regular training and adopt industry best practices to enhance the security of our product portfolio. • Threat landscape analysis: We continuously assess emerging threat vectors and the evolving data privacy regulatory environment. • Incident response: We continuously monitor the threat landscape and our systems in coordination with an external monitoring firm and regularly test our incident response preparedness. 19 We actively participate in the cybersecurity community to stay current regarding best practices and continuously improve our security awareness posture.
Biggest changeOur focus on cybersecurity risk management, including risk identification, analysis, and response, centers on the following areas: • Enterprise security: We reference industry-accepted control frameworks, compliance regulations, privacy requirements and best practices. • Product security: Our development teams participate in regular training and adopt industry best practices to enhance the security of our product portfolio. • Threat landscape analysis: We continuously assess emerging threat vectors and the evolving data privacy regulatory environment. • Incident response: We continuously monitor the threat landscape and our systems in coordination with an external monitoring firm and regularly test our incident response preparedness.
Our CISO has significant information technology experience, having served in various roles in information technology and information security for more than 20 years, including serving in various cybersecurity leadership roles within public and private companies. He holds an undergraduate degree in management and obtained CISO Executive Education Certification from Carnegie Mellon University.
Our CISO has significant information technology experience, having served in various roles in information technology and information security for more than 20 years, including serving in various cybersecurity leadership roles within public and private companies. He holds an undergraduate degree in management and obtained a CISO Executive Education Certification from Carnegie Mellon University.
Notwithstanding our commitments to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. Please see Item 1A. "Risk Factors" for a discussion of our cybersecurity risks.
Notwithstanding our commitments to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. Please see Item 1A. "Risk Factors" for a discussion of our cybersecurity risks. 21
Governance Our multi-level cybersecurity governance and risk management structure begins with our management-level Enterprise Risk Management ("ERM") Committee, which consists of cross-functional management representatives throughout Progress.
Governance Our multi-level cybersecurity governance and risk management structure begins with our management-level Enterprise Risk Management ("ERM") Committee, which consists of cross-functional management representatives from throughout Progress.
Cybersecurity leaders reporting to our CISO also have significant relevant experience and industry recognized certifications. Our CISO has routinely reported to the Audit Committee of our Board of Directors at the Audit Committee’s regular quarterly meetings, or more frequently as needed.
Cybersecurity leaders reporting to our CISO also have significant relevant experience and industry recognized certifications. Our CISO routinely reports to the Audit Committee of our Board of Directors at the Audit Committee's regular quarterly meetings, or more frequently as needed.
The ERM Committee receives detailed cybersecurity information from key security personnel, led by our Chief Information Security Officer ("CISO"), and reports to Progress’ Chief Executive Officer, Chief Financial Officer, Chief Information Officer, Chief Legal Officer, and other members of CEO Staff at least quarterly.
The ERM Committee receives detailed cybersecurity information from key security personnel, led by our Chief Information Security Officer ("CISO"), and reports to Progress' Chief Executive Officer, Chief Financial Officer, Chief Information Officer, Chief Legal Officer, and other members of our executive team at least quarterly.
Our employees are engaged in security and privacy awareness training to enhance the protection of our systems and data. In addition, we incorporate data and privacy protection education in our customer engagement through ongoing resources, such as best practices content and security consultations. We also assess third-party service providers for cybersecurity risks at onboarding, refreshing as needed throughout our engagement.
In addition, we incorporate data and privacy protection education in our customer engagement through ongoing resources, such as best practices content and security consultations. We also assess third-party service providers for cybersecurity risks at onboarding, refreshing as needed throughout our engagement.
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We actively participate in the cybersecurity community to stay current regarding best practices and continuously improve our security awareness posture. Our employees are engaged in security and privacy awareness training to enhance the protection of our systems and data.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also maintain offices for administrative, sales, support, marketing, product development and/or distribution purposes in leased facilities in various other locations in North America, including Morrisville and Raleigh, North Carolina, Alpharetta, Georgia, Vienna, Virginia and outside North America, including Sofia, Bulgaria, Limerick, Ireland, Brno, Czech Republic, Bengaluru and Hyderabad, India, Singapore, Singapore and Rotterdam, the Netherlands.
Biggest changeWe also maintain offices for administrative, sales, support, marketing, product development, and/or distribution purposes in leased facilities in various other locations in North America, including Raleigh, North Carolina, Alpharetta, Georgia, Vienna, Virginia and outside North America, including Sofia, Bulgaria, Limerick, Ireland, Brno, Czech Republic, Bengaluru and Hyderabad, India, Singapore, Singapore and Rotterdam, the Netherlands.
Depending on their role, this means that employees can choose their office location, as well as continue to work from home some or all the time. As of November 30, 2024, we have not terminated any significant lease arrangements. We believe our facilities are adequate for the conduct of our business.
Depending on their role, this means that employees can choose their office location, as well as continue to work from home some or all the time. As of November 30, 2025, we have not terminated any significant lease arrangements. We believe our facilities are adequate for the conduct of our business.
The terms of our leases generally range from one to fifteen years. At the end of fiscal year 2021, we adopted an approach to work that gives our employees more flexibility to choose where to work.
The terms of our leases generally range from one to twelve years. At the end of fiscal year 2021, we adopted a modern approach to work that gives our employees more flexibility to choose where to work.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeLegal Proceedings Please refer to Note 19: Cyber Related Matters to our Consolidated Financial Statements included in Part II Item 8 of this Form 10-K for a discussion of legal proceedings related to the MOVEit Vulnerability. 20 We are also subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business.
Biggest changeItem 3. Legal Proceedings Please refer to Note 17, Cyber Related Matters, in Part II, Item 8 of this Form 10-K for a discussion of legal proceedings 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the fourth quarter of fiscal year 2024, our Board of Directors suspended 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. 21 Stock Performance Graph and Cumulative Total Return The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the NASDAQ Composite Index and the NASDAQ Computer Index for each of the last five fiscal years ended November 30, 2024, assuming an investment of $100 at the beginning of such period and the reinvestment of any dividends.
Biggest changeDuring the fourth quarter of fiscal year 2024, our Board of Directors suspended 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.
Comparison of 5 Year Cumulative Total Return (1) Among Progress Software Corporation, the NASDAQ Composite Index and the NASDAQ Computer Index (1) $100 invested on November 30, 2019 in stock or index, including reinvestment of dividends.
Comparison of 5 Year Cumulative Total Return (1) Among Progress Software Corporation, the NASDAQ Composite Index and the NASDAQ Computer Index (1) $100 invested on November 30, 2020 in stock or index, including reinvestment of dividends.
Recent Sales of Unregistered Equity Securities and Use of Proceeds All issuances of unregistered securities during fiscal year 2024, if any, have previously been disclosed in filings with the SEC.
Recent Sales of Unregistered Equity Securities and Use of Proceeds All issuances of unregistered securities during fiscal year 2025, if any, have previously been disclosed in filings with the SEC.
We have declared aggregate per share quarterly cash dividends totaling $0.53 for the year ended November 30, 2024 and $0.70 for the years ended November 30, 2023 and 2022. We paid aggregate cash dividends totaling $31.5 million, $31.6 million and $31.1 million for the years ended November 30, 2024, 2023 and 2022, respectively.
We have declared aggregate per share quarterly cash dividends totaling $0.53 and $0.70 for the years ended November 30, 2024 and 2023, respectively. We paid aggregate cash dividends totaling $31.5 million and $31.6 million for the years ended November 30, 2024, and 2023, respectively.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market and Stockholders Our common stock trades on the NASDAQ Global Select Market under the symbol "PRGS". As of December 31, 2024, our common stock was held by approximately 111 stockholders of record.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market and Stockholders Our common stock trades on the NASDAQ Global Select Market under the symbol "PRGS". As of December 31, 2025, our common stock was held by approximately 109 stockholders of record.
Stock Repurchases and Dividends Repurchases of our common stock by month in the fourth quarter of fiscal year 2024 were 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 Period September 2024 — $ — — $ 107,220 October 2024 — — — 107,220 November 2024 — — — 107,220 Total — $ — — $ 107,220 On January 10, 2023, our Board of Directors increased our share repurchase authorization by $150.0 million, to an aggregate authorization of $228.0 million.
Stock Repurchases and Dividends Repurchases of our common stock by month in the fourth quarter of fiscal year 2025 were 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 Period September 2025 — $ — — $ 242,220 October 2025 708,916 45.65 708,916 209,844 November 2025 180,179 42.29 180,179 202,220 Total 889,095 $ 44.97 889,095 $ 202,220 22 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.
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November 30, 2019 2020 2021 2022 2023 2024 Progress Software Corporation $ 100.00 $ 97.50 $ 117.80 $ 129.64 $ 130.95 $ 166.08 NASDAQ Composite 100.00 142.38 181.35 133.85 166.04 226.47 NASDAQ Computer 100.00 151.46 215.66 155.04 224.69 316.73 Item 6. [Reserved]
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Stock Performance Graph and Cumulative Total Return The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the NASDAQ Composite Index and the NASDAQ Computer Index for each of the last five fiscal years ended November 30, 2025, assuming an investment of $100 at the beginning of such period and the reinvestment of any dividends.
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November 30, 2020 2021 2022 2023 2024 2025 Progress Software Corporation $ 100.00 $ 120.82 $ 132.97 $ 134.31 $ 170.35 $ 104.61 NASDAQ Composite 100.00 127.37 94.01 116.62 159.07 190.81 NASDAQ Computer 100.00 142.39 102.36 148.35 209.11 272.68 Item 6. [Reserved] 23

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeProduct Development Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 Change Product development $ 146,342 $ 132,401 $ 13,941 11 % As a percentage of total revenue 19 % 19 % Components of product development costs: Personnel related costs $ 139,646 $ 126,680 $ 12,966 10 % Contractors and outside services 5,651 4,743 908 19 % Other product development costs 1,045 978 67 7 % Total product developments costs $ 146,342 $ 132,401 $ 13,941 11 % Product development expenses increased in fiscal year 2024 primarily due to increased personnel related costs associated with our acquisitions of MarkLogic and ShareFile, as well as an increase in contractors and outside services costs. 26 General and Administrative Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 Change General and administrative $ 89,518 $ 83,157 $ 6,361 8 % As a percentage of total revenue 12 % 12 % Components of general and administrative: Personnel Related Costs $ 72,911 $ 65,858 $ 7,053 11 % Contractors and Outside Services 12,186 12,888 (702) (5) % Other general and administrative costs 4,421 4,411 10 — % Total cost of general and administrative $ 89,518 $ 83,157 $ 6,361 8 % General and administrative expenses include the costs of our finance, human resources, legal, information systems and administrative departments.
Biggest changeProduct Development Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Product development $ 192,265 $ 146,342 31 % As a percentage of total revenue 20 % 19 % Product development expenses increased in fiscal year 2025 primarily due to increased personnel related costs, as well as an increase in contractors and outside services costs, each associated with our acquisition of ShareFile. 26 General and Administrative Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change General and administrative $ 108,215 $ 89,518 21 % As a percentage of total revenue 11 % 12 % General and administrative expenses include the costs of our finance, human resources, legal, information systems, and administrative departments.
Dividends Upon closing of the ShareFile acquisition on October 31, 2024, our Board of Directors approved the suspension of our quarterly dividends. We plan 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.
Dividends Upon the closing of the ShareFile acquisition on October 31, 2024, our Board of Directors approved the suspension of our quarterly dividends. We plan 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.
Other agreements with our customers provide indemnification for claims relating to property damage or personal injury resulting from the performance of services by us or our subcontractors. Historically, our costs to defend lawsuits or settle claims relating to such indemnity agreements have been insignificant. Accordingly, the estimated fair value of these indemnification provisions is immaterial.
Other agreements with our customers provide indemnification for claims relating to property damage or personal injury resulting from the performance of services by us or our subcontractors. Historically, our costs to defend lawsuits or settle claims relating to such indemnity agreements have been insignificant. Accordingly, the estimated fair value of these indemnification provisions is insignificant.
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.
However, based on our current business plan, we believe that existing cash balances, together with funds generated from operations and amounts available under the Credit Facility, will be sufficient to finance our operations and meet our foreseeable cash requirements through at least the next twelve months.
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 titled "Risk Factors", including increased disruption and volatility in capital markets and credit markets that could adversely affect our liquidity and capital resources in the future.
Liquidity Outlook Cash from operations in fiscal year 2026 could be affected by various risks and uncertainties, including, but not limited to, the effects of various risks detailed in Part I, Item 1A titled "Risk Factors", including increased disruption and volatility in capital markets and credit markets that could adversely affect our liquidity and capital resources in the future.
Therefore, we have not recorded a loss contingency liability for the MOVEit Vulnerability as of November 30, 2024. The Company could incur judgments or enter into settlements regarding the outcome of these claims and proceedings, which could have a material effect on the estimated amount of the liability in the period in which the effect becomes probable and reasonably estimable.
Therefore, we have not recorded a loss contingency liability for the MOVEit Vulnerability as of November 30, 2025. The Company could incur judgments or enter into settlements regarding the outcome of these claims and proceedings, which could have a material effect on the estimated amount of the liability in the period in which the effect becomes probable and reasonably estimable.
MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, Item 8 of this Form 10-K). This section generally discusses the results of our operations for the year ended November 30, 2024 compared to the year ended November 30, 2023.
MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements in Part II, Item 8 of this Form 10-K. This section generally discusses the results of our operations for the year ended November 30, 2025 compared to the year ended November 30, 2024.
Since the MDL remains in the early stages; and 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, we are currently unable to develop an estimate of the losses or range of losses incurred (if any).
Since the MDL remains in a relatively early stage, 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, we are currently unable to develop an estimate of the losses or range of losses incurred (if any).
We incurred expenses of $5.6 million and $1.5 million, net, related to the MOVEit Vulnerability for the fiscal years ended November 30, 2024 and 2023, respectively. 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.
We incurred expenses of $2.8 million, $5.6 million, and $1.5 million, net, related to the MOVEit Vulnerability for the fiscal years ended November 30, 2025, 2024, and 2023, respectively. 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.
In April 2019, we acquired Ipswitch; in October 2020, we acquired Chef Software; in November 2021, we acquired Kemp Technologies; in February 2023, we acquired MarkLogic; and in October 2024, we acquired ShareFile. Our capital allocation policy emphasizes accretive M&A, which we believe allows us to expand our business and drive significant stockholder returns.
In April 2019, we acquired Ipswitch; in October 2020, we acquired Chef Software; in November 2021, we acquired Kemp Technologies; in February 2023, we acquired MarkLogic; in October 2024, we acquired ShareFile; and in June 2025, we acquired Nuclia. Our capital allocation policy emphasizes accretive M&A, which we believe allows us to expand our business and drive significant stockholder returns.
Our licenses are sold as perpetual or term licenses, and the arrangements typically contain various combinations of maintenance and services, which are generally accounted for as separate performance obligations.
Our licenses are sold as perpetual or term licenses, and the arrangements typically contain various combinations of maintenance, SaaS, and professional services, which are generally accounted for as separate performance obligations.
If management made different estimates or judgments, material differences in the fair values of the net assets acquired may result. Recent Accounting Pronouncements Refer to Note 1: Nature of Business and Summary of Significant Accounting Policies to our Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.
If management made different estimates or judgments, material differences in the fair values of the net assets acquired may result. Recent Accounting Pronouncements Refer to Note 1, Nature of Business and Summary of Significant Accounting Policies , in Part II, Item 8 of this Form 10-K.
The increase year-over-year was primarily due to increased headcount and hosting costs resulting from our acquisitions of MarkLogic and ShareFile, partially offset by decreased contractors and outside services costs.
The increase year-over-year was primarily due to increased headcount and hosting costs resulting from our acquisition of ShareFile, partially offset by decreased contractors and outside services costs.
ARR mitigates fluctuations in revenue due to seasonality, contract term and the sales mix of subscriptions for term-based licenses and SaaS. Management uses ARR to understand customer trends and the overall health of the Company’s business, helping it to formulate strategic business decisions.
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 the Company's business, helping it to formulate strategic business decisions.
These costs primarily consist of professional services fees, including third-party legal and valuation-related fees, as well as retention fees. Acquisition-related expenses in fiscal year 2024 were primarily related to the acquisition of ShareFile, as well as our pursuit of other acquisition opportunities.
These costs primarily consist of professional services fees, including third-party legal and valuation-related fees, as well as retention fees. Acquisition-related expenses in fiscal year 2025 were primarily related to the acquisitions of ShareFile and Nuclia, as well as our pursuit of other acquisition opportunities.
Cash and cash equivalents held by our foreign subsidiaries were $69.2 million at November 30, 2024. As a result of 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.
Cash and cash equivalents held by our foreign subsidiaries were $55.1 million at November 30, 2025. As a result of 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. Refer to Note 16: Income Taxes for further information.
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.
Our gross accounts receivable as of November 30, 2024, increased by $37.6 million from the end of fiscal year 2023. Days sales outstanding ("DSO") in accounts receivable increased to 67 days as compared to 62 days in fiscal year 2023 due to the timing of billings and collections.
Our gross accounts receivable as of November 30, 2025, increased by $37.7 million from the end of fiscal year 2024. Days sales outstanding ("DSO") in accounts receivable increased to 73 days as compared to 67 days in fiscal year 2024 due to the timing of billings and collections.
Amortization of Acquired Intangibles Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 % Change Amortization of acquired intangibles $ 29,222 $ 30,169 (3) % As a percentage of total revenue 4 % 4 % 25 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.
Amortization of Acquired Intangibles - Costs of Revenue Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Amortization of acquired intangibles $ 41,226 $ 29,222 41 % As a percentage of total revenue 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.
We generally use the residual approach to allocate the transaction price to our software license performance obligations because, due to the pricing of our licenses being highly variable, they do not have an observable SSP. Maintenance revenue is recognized ratably over the contract period.
For certain product offerings, we use the residual approach to allocate the transaction price to our software license performance obligations because, due to the pricing of our licenses being highly variable, they do not have an observable SSP. Revenue related to maintenance and SaaS offerings is recognized ratably over the contract period.
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.
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 accounting principles generally accepted in the United States of America ("GAAP").
Acquisition-Related Expenses Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 % Change Acquisition-related expenses $ 17,109 $ 4,704 264 % As a percentage of total revenue 2 % 1 % Acquisition-related costs are expensed as incurred and include those costs incurred as a result of a business combination.
Acquisition-Related Expenses Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Acquisition-related expenses $ 5,317 $ 17,109 (69) % As a percentage of total revenue 1 % 2 % Acquisition-related costs are expensed as incurred and include those costs incurred as a result of a business combination.
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.
"Risk Factors" of this Annual Report on Form 10-K. 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.
See Note 15: Restructuring to our Consolidated Financial Statements in Part II, Item 8 of this Form 10-K for additional details, including types of expenses incurred and the timing of future expenses and cash payments.
See Note 13, Restructuring , in Part II, Item 8 of this Form 10-K for additional details, including types of expenses incurred and the timing of future expenses and cash payments.
Amortization of Intangibles Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 % Change Amortization of intangibles $ 65,290 $ 66,430 (2) % As a percentage of total revenue 9 % 10 % Amortization of 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 - Operating Expenses Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Amortization of acquired intangibles $ 104,266 $ 65,290 60 % As a percentage of total revenue 11 % 9 % Amortization of 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.
We also repurchased $86.8 million of our common 30 stock under our share repurchase plan in fiscal year 2024, compared to $34.0 million in fiscal year 2023.
We also repurchased $105.0 million of our common stock under our share repurchase plan in fiscal year 2025 as compared to $86.8 million in fiscal year 2024.
The SSP of maintenance services is a percentage of the net selling price of the related software license. Professional services revenue is generally recognized as the services are delivered to the customer. The SSP of services is based upon observable prices in similar transactions using the hourly rates sold in stand-alone services transactions.
The SSP of maintenance services is a percentage of the net selling price of the related software license. The SSP of SaaS performance obligations is determined based upon observable prices in stand-alone SaaS transactions. Professional services revenue is generally recognized as the services are delivered to the customer.
Cash Flows from (used in) Financing Activities During fiscal year 2024 we received $748.5 million in net proceeds from debt related to the refinancing of our debt in the second quarter of fiscal year 2024 and the draw down on our revolving line of credit in the fourth quarter of 2024, each as described above.
During fiscal year 2024 we received $748.5 million in net proceeds from debt related to the refinancing of our debt in the second quarter of fiscal year 2024 and the draw down on our revolving line of credit in the fourth quarter of 2024.
Provision for Income Taxes Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 % Change Provision for income taxes $ 25,826 $ 9,460 173 % As a percentage of income before income taxes 27 % 12 % Our effective income tax rate was 27% and 12% for fiscal years 2024 and 2023, respectively.
Provision for Income Taxes Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Provision for income taxes $ 8,495 $ 25,826 (67) % As a percentage of income before income taxes 10 % 27 % Our effective income tax rate was 10% and 27% for fiscal years 2025 and 2024, respectively.
Prior to the suspension of the quarterly dividend in the fourth fiscal quarter of 2024, we had paid aggregate cash dividends totaling $31.5 million, $31.6 million and $31.1 million for the years ended November 30, 2024, 2023, and 2022, respectively. Convertible Senior Notes and Long-Term Debt See Note 8: Debt to the consolidated financial statements.
Prior to the suspension of the quarterly dividend in the fourth fiscal quarter of 2024, we had paid aggregate cash dividends totaling $31.5 million and $31.6 million for the years ended November 30, 2024 and 2023, respectively. Convertible Senior Notes and Long-Term Debt See Note 6, Debt , in Part II, Item 8 of this Form 10-K for further information.
Restructuring Expenses Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 % Change Restructuring expenses $ 10,454 $ 8,407 24 % As a percentage of total revenue 1 % 1 % Restructuring expenses recorded in fiscal year 2024 primarily relate to headcount reductions in connection with the restructuring action related to the ShareFile acquisition in November 2024 and to a facility closure in connection with the restructuring action related to the MarkLogic acquisition.
Restructuring Expenses Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Restructuring expenses $ 13,109 $ 10,454 25 % As a percentage of total revenue 1 % 1 % Restructuring expenses recorded in fiscal year 2025 primarily relate to headcount reductions in connection with the restructuring action related to the ShareFile acquisition in November 2024 and to a headcount reduction action in November 2025.
Acquisition-related expenses in fiscal year 2023 were primarily related to our acquisition of MarkLogic. 27 Cyber Incident and Vulnerability Response Expenses, Net Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 % Change Cyber incident and vulnerability responses expenses, net $ 5,641 $ 6,164 (8) % As a percentage of total revenue 1 % 1 % As previously disclosed, following (i) the detection of irregular activity on certain portions of our corporate network that was disclosed on December 19, 2022 ("November 2022 Cyber Incident"), and (ii) the discovery of the MOVEit Vulnerability that was disclosed on June 5, 2023, in each instance, we engaged outside cybersecurity experts and other incident response professionals to conduct a forensic investigation and assess the extent and scope of these matters.
Acquisition-related expenses in fiscal year 2024 were primarily related to our acquisition of ShareFile, as well as our pursuit of other acquisition opportunities. 27 Cyber Incident and Vulnerability Response Expenses, Net Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Cyber incident and vulnerability responses expenses, net $ 2,775 $ 5,641 (51) % As a percentage of total revenue — % 1 % As previously disclosed, following the discovery of the MOVEit Vulnerability that was disclosed on June 5, 2023, in each instance, we engaged outside cybersecurity experts and other incident response professionals to conduct a forensic investigation and assess the extent and scope of these matters.
We will pursue recoveries to the maximum extent available under our insurance policies. 32 Business Combinations We allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values.
As of November 30, 2025, we have approximately $4.5 million of remaining cybersecurity insurance coverage under the applicable policy. We will pursue recoveries to the maximum extent available under our insurance policies. 32 Business Combinations We allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values.
Determining whether products and services are distinct performance obligations that should be accounted for separately requires significant judgment. Significant judgment is also required to determine the stand-alone selling price ("SSP") of each distinct performance obligation.
Revenue Recognition Our contracts with customers typically include promises to license one or more products and services to a customer. Determining whether products and services are distinct performance obligations that should be accounted for separately requires significant judgment. Significant judgment is also required to determine the stand-alone selling price ("SSP") of each distinct performance obligation.
The Company expects to recognize additional services revenue, as well as increased amortization expense and interest expense, in future periods as a result of this acquisition.
We expect to recognize additional Software-as-a-Service ("SaaS") revenue, as well as increased amortization expense and interest expense, in future periods as a result of this acquisition.
However, we currently believe that existing cash balances, together with funds generated from operations and amounts available under our Credit Facility, will be sufficient to finance our operations and meet our foreseeable cash requirements, including stock repurchases to Progress stockholders, through at least the next twelve months. 23 Results of Operations Business Development On October 31, 2024, we acquired certain assets and liabilities that comprise the ShareFile Business ("ShareFile") from Cloud Software Group, Inc. and its subsidiaries ("Cloud") for an aggregate purchase price of $875.0 million in cash, subject to a $25.0 million working capital credit and certain customary adjustments.
However, we currently believe that existing cash balances, together with funds generated from operations and amounts available under our Credit Facility, will be sufficient to finance our operations and meet our foreseeable cash requirements, including stock repurchases, through at least the next twelve months. 24 Results of Operations Business Development On October 31, 2024, we acquired ShareFile from Cloud Software Group, Inc.
General and administrative expenses increased in fiscal year 2024 primarily due to higher personnel related costs associated with our acquisitions of MarkLogic and ShareFile, partially offset by a decrease in contractors and outside services costs.
General and administrative expenses increased in fiscal year 2025 primarily due to higher personnel related costs, contractors and outside services, and other general and administrative costs, each associated with our acquisition of ShareFile.
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.
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.
For a discussion of the year ended November 30, 2023 compared to the year ended November 30, 2022, please refer to Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended November 30, 2023. 22 Forward-Looking Statements Certain statements below about anticipated results and our products and markets are forward-looking statements that are based on our current plans and assumptions.
For a discussion of the year ended November 30, 2024 compared to the year ended November 30, 2023, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended November 30, 2024.
Important information about the bases for these plans and assumptions and factors that may cause our actual results to differ materially from these statements is contained below and in Part I, Item 1A. "Risk Factors" of this Annual Report on Form 10-K.
Forward-Looking Statements Certain statements below about anticipated results and our products and markets are forward-looking statements that are based on our current plans and assumptions. Important information about the bases for these plans and assumptions and factors that may cause our actual results to differ materially from these statements is contained below and in Part I, Item 1A.
As of November 30, 2024, there was $107.2 million remaining under the current share repurchase authorization. The timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors, and the Board of Directors may choose to suspend, expand, or discontinue the repurchase program at any time.
The timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors, and the Board of Directors may choose to suspend, expand, or discontinue the repurchase program at any time. Excise tax was insignificant for all years presented.
In addition, in fiscal year 2024, we received $27.8 million from the exercise of stock options and the issuance of shares under our employee stock purchase plan as compared to $26.0 million in fiscal year 2023.
In addition, in fiscal year 2025, we received $19.0 million from the exercise of stock options and the issuance of shares under our employee stock purchase plan as compared to $27.8 million in fiscal year 2024. 30 Share Repurchases In fiscal years 2025, 2024, and 2023, we repurchased and retired 2.1 million, 1.6 million, and 0.6 million shares of our common stock for $105.0 million, $86.8 million, and $34.0 million, respectively.
Cost of software licenses as a percentage of software license revenue varies from period to period depending upon the relative product mix.
Cost of software licenses as a percentage of software licenses revenue varies from period to period depending upon the relative product mix. The increase as compared to the same period last year was primarily due to increased hardware sales.
Our foreseeable cash needs include capital expenditures, acquisitions, debt repayments, share repurchases, lease commitments, restructuring obligations and other long-term obligations. Critical Accounting Estimates Management’s discussion and analysis of financial condition and results of operations are based on our consolidated financial statements which have been prepared in accordance with GAAP.
Critical Accounting Estimates Management's discussion and analysis of financial condition and results of operations are based on our consolidated financial statements which have been prepared in accordance with GAAP.
Cost of Software Licenses Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 Change Cost of software licenses $ 10,942 $ 11,153 $ (211) (2) % As a percentage of software license revenue 4 % 5 % Cost of software licenses consists primarily of royalties, electronic software distribution, duplication, and packaging.
Professional services revenue decreased compared to the same period last year primarily due to a decrease in MarkLogic professional services revenue. 25 Cost of Software Licenses Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Cost of software licenses $ 12,605 $ 10,942 15 % As a percentage of software license revenue 5 % 4 % Cost of software licenses consists primarily of royalties, electronic software distribution, duplication, and packaging.
As more fully discussed in Note 19: Cyber Related Matters to the consolidated financial statements, in May 2023, the Company discovered a zero-day vulnerability in its MOVEit Transfer and MOVEit Cloud software product offerings ("the MOVEit Vulnerability"), which resulted in government inquiries and investigations, and private litigation that the Judicial Panel on Multidistrict Litigation transferred to the District of Massachusetts for coordinated and consolidated proceedings (the "MDL"), which may result in adverse judgments, settlements, fines, penalties, or other resolutions, the amount, scope and timing of which could be material, but which the Company is currently unable to predict.
As more fully discussed in Note 17, Cyber Related Matters , in Part II, Item 8 of this Form 10-K, in May 2023, the Company discovered the MOVEit Vulnerability, which resulted in government inquiries and investigations, as well as the MDL, which may result in adverse judgments, settlements, fines, penalties, or other resolutions, the amount, scope and timing of which could be material, but which the Company is currently unable to predict.
Services are either sold on a time and materials basis or prepaid upfront. Revenue related to software-as-a-service ("SaaS") offerings is recognized ratably over the contract period. The SSP of SaaS performance obligations is determined based upon observable prices in stand-alone SaaS transactions.
The SSP of professional services is based upon observable prices in similar transactions using the hourly rates sold in stand-alone services transactions. Professional services are either sold on a time and materials basis or prepaid upfront.
Liquidity and Capital Resources Cash and Cash Equivalents (in thousands) November 30, 2024 November 30, 2023 Cash and cash equivalents $ 118,077 $ 126,958 The decrease in cash and cash equivalents of $8.9 million from the end of fiscal year 2023 was primarily due to cash outflows of $852.7 million to acquire ShareFile, $261.3 million to pay off the balance of the term loan, $110.0 million to pay off the revolving line of credit, repurchases of common stock of $86.8 million, dividend payments of $31.5 million, payment of debt issuance costs of $6.8 million, purchases of property and equipment of $5.2 million, and the effect of exchange rates on cash of $3.2 million.
We believe net retention rates can be a helpful indicator of the durability of top line performance. 29 Liquidity and Capital Resources Cash and Cash Equivalents (in thousands) November 30, 2025 November 30, 2024 Cash and cash equivalents $ 94,807 $ 118,077 The decrease in cash and cash equivalents of $23.3 million from the end of fiscal year 2024 was primarily due to cash outflows of $130.0 million to pay down the revolving line of credit, repurchases of common stock of $105.0 million, $20.3 million to acquire Nuclia, payment of debt issuance costs of $6.2 million, and purchases of property and equipment of $5.7 million.
These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.
These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. 31 We have identified the following critical accounting policies and estimates that require the use of significant judgments and estimates in the preparation of our consolidated financial statements.
Other (Expense) Income Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 % Change Interest expense $ (32,012) $ (30,780) 4 % Interest income and other, net 4,734 2,538 87 % Foreign currency loss, net (2,461) (2,624) (6) % Total other expense, net $ (29,739) $ (30,866) 4 % As a percentage of total revenue (4) % (4) % Total other expense, net, decreased in fiscal year 2024 due to increases in interest income and other, net, resulting from higher interest rates on our invested cash balance.
Other (Expense) Income Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Interest expense $ (70,850) $ (32,012) 121 % Interest income and other, net 1,759 4,734 (63) % Foreign currency loss, net (2,571) (2,461) 4 % Total other expense, net $ (71,662) $ (29,739) (141) % As a percentage of total revenue (7) % (4) % Total other expense, net, increased in fiscal year 2025 due to increases in interest expense resulting from costs associated with drawing on our revolving line of credit to acquire ShareFile.
Fiscal Year Ended November 30, 2024 November 30, 2023 November 30, 2022 Net cash flows from operating activities $ 211,494 $ 173,920 $ 192,160 Net cash flows (used in) from investing activities $ (857,908) $ (360,382) $ 21,992 Net cash flows from (used in) financing activities $ 640,823 $ 51,188 $ (101,423) Cash Flows from Operating Activities The increase in cash generated from operations in fiscal year 2024 as compared to fiscal year 2023 was primarily due to higher billings and collections, lower taxes paid as compared to fiscal year 2023, and slightly lower interest rates because of our debt refinancing in the second quarter of fiscal year 2024.
Fiscal Year Ended November 30, 2025 November 30, 2024 November 30, 2023 Net cash flows from operating activities $ 235,187 $ 211,494 $ 173,920 Net cash flows used in investing activities $ (26,919) $ (857,908) $ (360,382) Net cash flows (used in) from financing activities $ (238,369) $ 640,823 $ 51,188 Cash Flows from Operating Activities The increase in cash generated from operations in fiscal year 2025 as compared to fiscal year 2024 was primarily due to higher billings and collections, partially offset by increased interest expense resulting from the draw down on our revolving line of credit in the fourth quarter of fiscal year 2024, and increased costs of revenue and operating expenses associated with our acquisition of ShareFile.
Refer to Note 8: Debt, for further discussion. Foreign currency loss decreased year over year due to rate volatility and timing of intercompany and hedge settlement activities.
Refer to Note 6, Debt , in Part II, Item 8 of this Form 10-K for further discussion. Foreign currency loss, net increased year-over-year due to rate volatility and timing of intercompany and hedge settlement activities. Interest income and other, net decreased in fiscal year 2025 due to decreases in interest income on our invested cash balances.
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").
Our ARR was $852.0 million and $837.0 million as of November 30, 2025 and 2024, respectively, which is an increase of 2% year-over-year. 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").
Net retention rate is not calculated in accordance with GAAP. 29 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.
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.
Cash Flows (used in) from 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 addition, our deferred revenue as of November 30, 2025, increased by $20.7 million from the end of fiscal year 2024. Cash Flows used in Investing Activities Net cash outflows and inflows of our net investment activity are generally a result of the timing of acquisitions.
For indemnification claims related to the MOVEit Vulnerability. Please see Note 19: Cyber Related Matters to the consolidated financial statements for further details.
Please see Note 17, Cyber Related Matters , in Part II, Item 8 of this Form 10-K for further details regarding indemnification claims related to the MOVEit Vulnerability.
Sales and Marketing Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 Change Sales and marketing $ 164,570 $ 156,076 $ 8,494 5 % As a percentage of total revenue 22 % 22 % Components of sales and marketing: Personnel related costs $ 142,479 $ 134,820 $ 7,659 6 % Contractors and outside services 3,456 3,890 (434) (11) % Marketing programs and other 18,635 17,366 1,269 7 % Total sales and marketing $ 164,570 $ 156,076 $ 8,494 5 % Sales and marketing expenses increased in fiscal year 2024 due to increased personnel related, marketing, and sales events costs associated with our acquisitions of MarkLogic and ShareFile, partially offset by decreases in contractors and outside services costs.
Sales and Marketing Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Sales and marketing $ 211,013 $ 164,570 28 % As a percentage of total revenue 22 % 22 % Sales and marketing expenses increased in fiscal year 2025 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.
Cost of Maintenance and Services Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 Change Cost of maintenance and services $ 90,318 $ 85,255 $ 5,063 6 % As a percentage of maintenance and services revenue 18 % 18 % Components of cost of maintenance and services: Personnel Related Costs $ 67,732 $ 63,471 $ 4,261 7 % Contractors and Outside Services 12,827 13,969 (1,142) (8) % Hosting and Other 9,759 7,815 1,944 25 % Total cost of maintenance and services $ 90,318 $ 85,255 $ 5,063 6 % Cost of maintenance and services consists primarily of costs of hosting, personnel costs for providing customer support, consulting, and education.
Cost of Maintenance, SaaS, and Professional Services Fiscal Year Ended (in thousands) November 30, 2025 November 30, 2024 Percentage Change Cost of maintenance, SaaS, and professional services $ 133,750 $ 90,318 48 % As a percentage of maintenance, SaaS, and professional services revenue 18 % 18 % Cost of maintenance, SaaS, and professional services consists primarily of costs of hosting, personnel costs for providing customer support, consulting, and education.
Fiscal Year 2024 Compared to Fiscal Year 2023 Revenue Fiscal Year Ended Percentage Change (in thousands) November 30, 2024 November 30, 2023 As Reported Constant Currency Revenue $ 753,409 $ 694,439 8 % 8 % The increase in revenue in fiscal year 2024 was driven by the acquisitions of MarkLogic and ShareFile, and growth in sales of our OpenEdge product offerings.
Fiscal Year 2025 Compared to Fiscal Year 2024 Revenue Fiscal Year Ended Percentage Change (in thousands) November 30, 2025 November 30, 2024 As Reported Constant Currency Revenue $ 977,831 $ 753,409 30 % 29 % 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.
Cyber incident and MOVEit Vulnerability costs relate to the engagement of external cybersecurity experts and other incident response professionals and are net of received and expected insurance recoveries. We did not incur costs related to the November 2022 cyber incident during fiscal year 2024 and do not expect to incur additional costs as the investigation is closed.
Cyber incident and MOVEit Vulnerability costs relate to the engagement of external cybersecurity experts and other incident response professionals and are net of received and expected insurance recoveries. See Note 17, Cyber Related Matters , in Part II, Item 8 of this Form 10-K for further discussion.
Software License Revenue Fiscal Year Ended Percentage Change (in thousands) November 30, 2024 November 30, 2023 As Reported Constant Currency License $ 249,331 $ 220,789 13 % 13 % As a percentage of total revenue 33 % 32 % Software license revenue increased in fiscal year 2024 primarily due to the acquisition of MarkLogic, as well as increases in license sales in OpenEdge.
Software Licenses Revenue Fiscal Year Ended Percentage Change (in thousands) November 30, 2025 November 30, 2024 As Reported Constant Currency Software licenses $ 237,887 $ 249,331 (5) % (5) % As a percentage of total revenue 24 % 33 % Software licenses revenue decreased by $11.4 million as compared to the same period last year primarily due to timing of multi-year subscription renewals in our DataDirect product offering.
Included in investing activities in fiscal years 2024 and 2023 were the acquisitions of ShareFile and MarkLogic for a net cash paid amount of $852.7 million and $355.3 million, respectively. In fiscal year 2022 we received $26.0 million net proceeds from the sale of long-lived assets.
Included in investing activities in fiscal year 2025 was the acquisition of Nuclia for a net cash paid amount of $20.0 million, as well as $1.2 million of additional ShareFile purchase consideration. In fiscal year 2024 we acquired ShareFile for a net cash paid amount of $852.7 million.
The transaction was funded through $730.0 million in borrowings under our existing $900.0 million revolving credit facility and cash on hand, resulting in a payment at closing of $852.7 million. As a result of this acquisition, we recorded $96.2 million of deferred revenue and $465.0 million of intangible assets, as further described in Note 7: Business Combinations.
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 5, Business Combinations , in Part II, Item 8 of this Form 10-K. During fiscal 2025, the revenue from ShareFile was $261.6 million.
The Company recorded a liability of $13.7 million related to the taxes expected to be imposed upon the repatriation of unremitted foreign earnings that are not considered indefinitely reinvested. 28 Net Income Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 % Change Net income $ 68,438 $ 70,197 (3) % As a percentage of total revenue 9 % 10 % Select Performance Metrics: Management evaluates our financial performance using a number of financial and operating metrics.
The primary reason for the year-over-year decrease in the effective rate was because the Company recorded tax expense of $13.7 million in fiscal year 2024 related to the taxes expected to be imposed upon the repatriation of unremitted foreign earnings that were not considered indefinitely reinvested.
Maintenance and Services Revenue Fiscal Year Ended Percentage Change (in thousands) November 30, 2024 November 30, 2023 As Reported Constant Currency Maintenance $ 410,556 $ 401,501 2 % 2 % As a percentage of total revenue 55 % 58 % Services $ 93,522 $ 72,149 30 % 29 % As a percentage of total revenue 12 % 10 % Total maintenance and services revenue $ 504,078 $ 473,650 6 % 6 % As a percentage of total revenue 67 % 68 % Maintenance revenue increased in fiscal year 2024 primarily due to the acquisition of MarkLogic, as well as an increase in maintenance revenue from our OpenEdge product offerings.
Maintenance, SaaS, and Professional Services Revenue Fiscal Year Ended Percentage Change (in thousands) November 30, 2025 November 30, 2024 As Reported Constant Currency Maintenance $ 410,174 $ 410,556 — % (1) % As a percentage of total revenue 42 % 55 % SaaS $ 287,928 $ 44,564 546 % 546 % As a percentage of total revenue 29 % 6 % Professional services $ 41,842 $ 48,958 (15) % (15) % As a percentage of total revenue 4 % 6 % Total maintenance, SaaS, and professional services revenue $ 739,944 $ 504,078 47 % 46 % As a percentage of total revenue 76 % 67 % Maintenance revenue remained relatively flat as compared to the same period last year.
These metrics are periodically reviewed and revised to reflect changes in our business.
We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available. 28 Select Performance Metrics: Management evaluates our financial performance using a number of financial and operating metrics. These metrics are periodically reviewed and revised to reflect changes in our business.
Removed
MarkLogic was acquired in February 2023 and as a result, only contributed approximately ten months to our fiscal year 2023 results. ShareFile was acquired in November 2024 and its one-month contribution to our fiscal year 2024 results is $21.1 million.
Added
ShareFile revenue in fiscal year 2025 was $261.6 million. With an acquisition date of November 2024, ShareFile only contributed one month of revenue in fiscal year 2024 totaling $21.1 million.
Removed
The increase in maintenance revenue was partially offset by a decrease in Kemp LoadMaster and Chef maintenance revenue.
Added
SaaS revenue increased as compared to the same period last year due to our acquisition of ShareFile.
Removed
Services revenue increased primarily due to our acquisition of ShareFile. 24 Revenue by Region Fiscal Year Ended Percentage Change (in thousands) November 30, 2024 November 30, 2023 As Reported Constant Currency North America $ 446,995 $ 411,670 9 % 9 % As a percentage of total revenue 59 % 59 % EMEA $ 245,287 $ 222,862 10 % 9 % As a percentage of total revenue 33 % 32 % Latin America $ 20,305 $ 21,112 (4) % — % As a percentage of total revenue 3 % 3 % Asia Pacific $ 40,822 $ 38,795 5 % 6 % As a percentage of total revenue 5 % 6 % Total revenue generated in North America increased $35.3 million, and total revenue generated outside North America increased $23.6 million, in fiscal year 2024.
Added
The year-over-year increase was due to the acquisitions of ShareFile and Nuclia.
Removed
The increases in North America and EMEA were primarily due to the acquisitions of MarkLogic and ShareFile, as well as growth in sales of our OpenEdge product offerings. Revenue from Latin America decreased slightly due to the negative impact of foreign exchange. Revenue from Asia Pacific increased due to contributions from multiple products.
Added
The year-over-year increase was due to the acquisitions of ShareFile and Nuclia.
Removed
Total revenue generated in markets outside North America represented 41% of total revenue in fiscal year 2024 and fiscal year 2023.
Added
In fiscal year 2025, the Company recorded a tax benefit of $7.5 million as a result of a change in the Company’s estimate of its deferred tax liability associated with unremitted foreign earnings. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law, introducing significant changes to the U.S. federal income tax system.
Removed
The year over year decrease was due to certain intangible assets becoming fully amortized in the second quarter of fiscal year 2024, partially offset by the addition of MarkLogic and ShareFile acquired intangibles.
Added
The legislation contains key modifications to the provisions of the 2017 Tax Cuts and Jobs Act and has multiple effective dates. There is no material impact to the tax provision for fiscal 2025. The majority of the legislative provisions become effective in our fiscal years 2026 and 2027.
Removed
Gross Profit Fiscal Year Ended (in thousands) November 30, 2024 November 30, 2023 % Change Gross profit $ 622,927 $ 567,862 10 % As a percentage of total revenue 83 % 82 % Our gross profit increased primarily due to the increase in revenue, partially offset by the increase in costs of maintenance and services.
Added
The enactment of OBBBA is not expected to materially impact our fiscal year 2026 provision for income taxes; however, we do expect a reduction in current taxes payable as a result of OBBBA because beginning in our fiscal 2026, provisions under OBBBA allow for an immediate deduction for U.S. R&E expenditures.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe rates range from 1.50% to 3.00% above the Term Benchmark Rate or from 0.50% to 2.00% above the defined base rate for base rate borrowings, in each case based upon our consolidated total net leverage ratio.
Biggest changeThe rates range from 1.25% to 2.50% above the Term Benchmark Rate 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.
Based on a hypothetical 10% adverse movement in all foreign currency exchange rates, our revenue would be adversely affected by approximately 2%, or $18.3 million, and our net income would be adversely affected by approximately 2%, or $1.3 million (excluding any offsetting positive impact from our ongoing hedging programs), although the actual effects may differ materially from the hypothetical analysis. 33
Based on a hypothetical 10% adverse movement in all foreign currency exchange rates, our revenue would be adversely affected by approximately 2%, or $20.0 million, and our net income would be adversely affected by approximately 1%, or $0.9 million (excluding any offsetting positive impact from our ongoing hedging programs), although the actual effects may differ materially from the hypothetical analysis. 33
All forward contracts are recorded at fair value in other current assets, other assets, other accrued liabilities, or other noncurrent liabilities on the consolidated balance sheets at the end of each reporting period and expire between 30 days and 3 years from the date the contract was entered.
All forward contracts are recorded at fair value in other current assets, other assets, other accrued liabilities, or other noncurrent liabilities on the consolidated balance sheets at the end of each reporting period and expire between thirty days and three years from the date the contract was entered.
In fiscal year 2024, we recognized realized and unrealized gains of $1.5 million from our forward contracts in foreign currency loss, net on the consolidated statements of operations. These losses were substantially offset by realized and unrealized gains and losses on the offsetting positions.
In fiscal year 2025, we recognized realized and unrealized gains of $0.9 million from our forward contracts in foreign currency loss, net on the consolidated statements of operations. These losses were substantially offset by realized and unrealized gains and losses on the offsetting positions.
A quarterly commitment fee on the undrawn portion of the revolving credit facility is required, ranging from 0.150% to 0.400% per annum, based upon our consolidated total net leverage ratio. As of November 30, 2024, there was $730.0 million outstanding under the revolving credit facility at a borrowing rate of 6.67%.
A quarterly commitment fee on the undrawn portion of the revolving credit facility is required, ranging from 0.150% to 0.350% per annum, based upon our consolidated total net leverage ratio. As of November 30, 2025, there was $600.0 million outstanding under the revolving credit facility at a borrowing rate of 5.92%.

Other PRGS 10-K year-over-year comparisons