What changed in this filing

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Item 1. Business

2025-01-21 compared with 2024-01-26 · 67 added, 61 removed, 129 unchanged (50% of the section changed)

Progress Software Corporation ("Progress," the "Company," "we," "us," or "our") provides enterprise software products for the development, deployment and management of high-impact business applications.

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.

Our products are generally sold as perpetual licenses, but certain products also use term licensing models and our cloud-based offerings use a subscription-based model.

More than half of our worldwide license revenue is realized through relationships with indirect channel partners, principally independent software vendors, original equipment manufacturers, distributors and value-added resellers.

Independent software vendors develop and market applications using our technology and resell our products in conjunction with sales of their own products that incorporate our technology.

Original equipment manufacturers are companies that embed our products into their own software products or devices.

Value-added resellers are companies that add features or services to our product, then resell it as an integrated product or complete "turn-key" solution.

With Progress, businesses can automate and optimize the process by which applications are developed, deployed and managed.

This makes critical data and content more accessible and secure and technology teams more productive.

We have a deep commitment to the developer community, both open source and commercial alike.

Described below are some of the products that make up our comprehensive product portfolio.

Progress OpenEdge:

An application development platform for running business-critical applications needing high-performance, high availability and flexible deployment options for extensibility, scalability, security and performance.

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.

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 are pursuing a total growth strategy driven by accretive acquisitions of businesses and products that meet our strict strategic, financial, and operating criteria, which help to further our goal of providing 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;

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.

We also utilize share repurchases to return capital to stockholders.

We currently intend to continue to repurchase our shares in sufficient quantities to offset dilution from our equity plans and may elect to conduct additional repurchases based on market conditions and other factors.

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.

Progress Developer Tools:

The comprehensive software development tooling collection including .NET and JavaScript UI components for web, desktop and mobile applications, reporting and report management tools and automated testing and mocking tools.

Progress Kemp LoadMaster :

Flexible application delivery and security product offering cloud-native, virtual and hardware load balancers.

Progress MOVEit:

Managed File Transfer software for managing and controlling the movement of sensitive files, providing the ability to secure them both at-rest and in-transit, and ensuring strict adherence to compliance requirements.

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 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, ROI-driving tools for marketers and an extensible platform for developers to create engaging, cross-channel digital experiences.

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.

Progress Flowmon :

Network security and visibility product with automated response across hybrid cloud ecosystems.

Progress Corticon :

Decision automation platform to transform user experiences by streamlining and automating complex business rules—without having to code.

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.

Progress MOVEit:

Managed file transfer software for managing and controlling the movement of sensitive files, providing the ability to secure them both at-rest and in-transit, and meeting strict compliance requirements.

Progress OpenEdge:

Progress Semaphore:

Semantic AI platform that transforms data into meaningful insights, empowering organizations to manage knowledge models, and to automatically extract and classify meaning from both structured and unstructured data.

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 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.

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.

Product Development

We believe that the features and performance of our products are competitive with those of other available infrastructure software products and that none of the current versions of our products are approaching obsolescence.

We believe that the features and performance of our products are competitive with those of other available digital experience and infrastructure software products and that none of the current versions of our products are approaching obsolescence.

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 Burlington, Massachusetts;

Morrisville, North Carolina;

Our primary development offices are located in Sofia, Bulgaria;

Brno, Czech Republic;

Bengaluru, India;

Hyderabad, India;

Limerick, Ireland;

Alpharetta, Georgia;

Burlington, Massachusetts;

Madison, Wisconsin;

Sofia, Bulgaria;

Limerick, Ireland;

Brno, Czech Republic;

and Bengaluru and Hyderabad, India.

Morrisville, North Carolina and Raleigh, North Carolina.

We sell our products globally through several channels:

directly to end users and indirectly through ISVs, OEMs, systems integrators, VARs and distributors.

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.

We also sell our products through indirect channels, primarily ISVs.

OEMs, and value-added resellers ("VARs"), who embed or add features to our products as part of an integrated solution.

Nearly half of our worldwide revenue is realized through relationships with indirect channel partners, principally independent software vendors ("ISVs"), original equipment manufacturers ("OEMs"), distributors and value-added resellers ("VARs").

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.

More than half of our license revenues are derived from these indirect channels.

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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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.

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Historically, most of our OEMs have renewed their agreements upon the expiration of the initial term.

However, there is no assurance that they will continue to renew in the future.

If any of our largest OEM customers were not to renew their agreements in the future, this could materially impact our DataDirect product line.

Value Added Resellers, Systems Integrators and Distributors

We enter into arrangements with VARs in which the VAR adds features or services to our products, then resells those products as an integrated product or complete "turn-key" solution .

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.

Systems integrators typically have expertise in vertical or functional markets:

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Sales and Marketing

Many of our products are sold as perpetual licenses, but certain products also use term licensing models, and our cloud-based offerings use a subscription-based model.

We sell our products through our direct sales force and indirect channel partners.

Our sales and field marketing groups are organized primarily by geographic region (i.e.

North America, EMEA, Latin America, and Asia Pacific).

Our sales and field marketing groups are organized primarily by geographic region (i.e., North America, EMEA, Latin America, and Asia Pacific).

We believe this structure allows us to maintain direct contact with our customers and partners, while supporting their diverse market requirements.

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Sales personnel are responsible for developing new direct end user accounts, recruiting new indirect channel partners and new independent distributors, managing existing channel partner relationships and servicing existing customers.

We use our inside sales teams to enhance our direct sales efforts and to generate new business and follow-on business from existing customers.

Our marketing personnel conduct a variety of marketing engagement programs designed to create demand for our products, enhance the market readiness of our products, raise the general awareness of our company and our products, generate leads for the sales organization and promote our various products.

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Customer Support

Our customer support staff provides telephone and Web-based support to end users, application developers and OEMs.

Our customer support staff provides telephone, email and web-based support to end users, application developers and OEMs.

Customers purchase maintenance services entitling them to software updates, technical support and technical bulletins.

Maintenance is generally not required with those products sold under perpetual license agreements and is purchased at the customer's option.

We provide support to customers primarily through our main regional customer support centers in Burlington, Massachusetts;

Morrisville, North Carolina;

Alpharetta, Georgia;

Madison, Wisconsin;

Limerick, Ireland;

Rotterdam, The Netherlands;

SaaS products are sold as a subscription that includes maintenance and support.

We provide support to customers primarily through our main regional customer support centers in Sofia, Bulgaria;

San Jose, Costa Rica;

Brno, Czech Republic;

1 unchanged sentence

Hyderabad, India;

and Sofia, Bulgaria.

Limerick, Ireland;

Rotterdam, The Netherlands;

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.

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We believe the relative importance of each of these factors depends upon the concerns and needs of each specific customer.

We compete with multiple companies, some that have single or narrow solutions, and some that have a range of enterprise infrastructure solutions.

We compete with multiple companies, some that have single or narrow solutions, and some that have a range of software solutions.

Many companies offer platform-as-a-service, application development, data integration and other tools in conjunction with offerings such as customer relationship management, web services, operating systems, and relational database management systems.

We compete with software vendors that offer their products under a proprietary software license model, and various other vendors that offer their solutions in an open-source licensing or freely available distribution model.

We do not believe that there is a dominant vendor in the infrastructure software markets in which we compete.

We do not believe that there is a dominant vendor in the markets in which we compete.

However, some of our competitors have greater and/or more experienced financial, marketing or technical resources than we have, or may be able to adapt more quickly to new or emerging technologies and changes in customer requirements or to devote greater resources to the development, promotion and sale of their products than we are able.

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We rely on a combination of contractual provisions and copyright, patent, trademark and trade secret laws to protect our proprietary rights in our products.

Except as described below with respect to our Chef products, we frequently distribute our products under software license agreements that grant customers a perpetual nonexclusive license to use our products and contain terms and conditions prohibiting the unauthorized reproduction or transfer of our products.

Except as described below with respect to our Chef products, we primarily distribute or offer our products as a service under software license agreements that grant customers a nonexclusive license to use our products, but contain terms and conditions prohibiting the unauthorized reproduction, use or transfer of our products.

We generally offer our products through various models, including perpetual, term or subscription licensing models.

Our cloud or SaaS offerings are generally provided under a subscription model.

We also distribute products through various channel partners, including ISVs, OEMs and systems integrators.

We also license products under term or subscription arrangements.

In addition, we attempt to protect our trade secrets and other proprietary information through agreements with employees, consultants and channel partners.

Although we intend to protect our rights vigorously, and do not intend to infringe upon the intellectual property rights of other parties, there is no assurance that our efforts will be successful.

We seek to protect the source code of our products as trade secrets and as unpublished copyrighted works.

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Where possible, we seek to obtain protection of our product names and service offerings through trademark registration and other similar procedures throughout the world.

We also protect our trade secrets and other proprietary information through agreements with employees, consultants and channel partners.

Our Chef offerings incorporate software components licensed to the general public under open source licenses.

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We operate as one operating segment:

software products to develop, deploy, and manage high-impact business applications.

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.

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To match the location and learning specifics of our people, we combine various channels for personal and technical development:

on-demand videos, webinars, classroom trainings, text-based resources, coaching, and more.

on-demand online training including videos, webinars, classroom trainings, text-based resources, coaching, and more.

We also believe strongly in fostering our employees’ personal growth and offer programs like tuition reimbursement.

Our efforts to recruit and retain a diverse and inclusive workforce include providing competitive compensation and benefit packages worldwide and ensuring we listen to our employees.

To that end, we regularly survey our employees to obtain their views and assess employee satisfaction.

To that end, we regularly survey our employees to obtain their views and assess employee satisfaction and engagement.

We use the views expressed in the surveys to influence our people strategy and policies.

We also use employee survey information to gain insights into how and where we work.

Flexible Work Approach

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business