What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-01-20 compared with 2025-01-21 · 109 added, 159 removed, 196 unchanged (58% of the section changed)

1 unchanged sentence

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand the results of operations and financial condition of Progress Software Corporation.

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).

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.

11 unchanged sentences

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.

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").

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.

7 unchanged sentences

in February 2023, we acquired MarkLogic;

and in October 2024, we acquired ShareFile.

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.

3 unchanged sentences

As a result, our expected uses of cash could change, our cash position could be reduced, and we may incur additional debt obligations to the extent we complete additional acquisitions.

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.

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.

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.

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.

On October 31, 2024, we acquired ShareFile from Cloud Software Group, Inc.

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.

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.

Fiscal Year 2025 Compared to Fiscal Year 2024

2 unchanged sentences

Revenue $ 977,831 $ 753,409 30 % 29 %

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.

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.

Software License Revenue

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.

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.

Software Licenses Revenue

Fiscal Year Ended Percentage Change

(in thousands) November 30, 2025 November 30, 2024 As Reported Constant

License $ 249,331 $ 220,789 13 % 13 %

Software licenses $ 237,887 $ 249,331 (5) % (5) %

As a percentage of total revenue 24 % 33 %

Software license revenue increased in fiscal year 2024 primarily due to the acquisition of MarkLogic, as well as increases in license sales in OpenEdge.

Maintenance and Services Revenue

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.

Maintenance, SaaS, and Professional Services Revenue

Fiscal Year Ended Percentage Change

2 unchanged sentences

As a percentage of total revenue 42 % 55 %

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.

The increase in maintenance revenue was partially offset by a decrease in Kemp LoadMaster and Chef maintenance revenue.

Services revenue increased primarily due to our acquisition of ShareFile.

Revenue by Region

Fiscal Year Ended Percentage Change

(in thousands) November 30, 2024 November 30, 2023 As Reported Constant

North America $ 446,995 $ 411,670 9 % 9 %

As a percentage of total revenue 59 % 59 %

EMEA $ 245,287 $ 222,862 10 % 9 %

SaaS $ 287,928 $ 44,564 546 % 546 %

As a percentage of total revenue 29 % 6 %

Latin America $ 20,305 $ 21,112 (4) % — %

Professional services $ 41,842 $ 48,958 (15) % (15) %

As a percentage of total revenue 4 % 6 %

Asia Pacific $ 40,822 $ 38,795 5 % 6 %

Total maintenance, SaaS, and professional services revenue $ 739,944 $ 504,078 47 % 46 %

As a percentage of total revenue 76 % 67 %

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.

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.

Total revenue generated in markets outside North America represented 41% of total revenue in fiscal year 2024 and fiscal year 2023.

Maintenance revenue remained relatively flat as compared to the same period last year.

SaaS revenue increased as compared to the same period last year due to our acquisition of ShareFile.

Professional services revenue decreased compared to the same period last year primarily due to a decrease in MarkLogic professional services revenue.

Cost of Software Licenses

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 Change

(in thousands) November 30, 2025 November 30, 2024 Percentage Change

Cost of software licenses $ 12,605 $ 10,942 15 %

1 unchanged sentence

Cost of software licenses consists primarily of royalties, electronic software distribution, duplication, and packaging.

Cost of software licenses as a percentage of software license revenue varies from period to period depending upon the relative product mix.

Cost of Maintenance and Services

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.

Cost of Maintenance, SaaS, and Professional 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.

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.

Amortization of Acquired Intangibles

(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.

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.

Amortization of Acquired Intangibles - Costs of Revenue

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 % Change

(in thousands) November 30, 2025 November 30, 2024 Percentage Change

Amortization of acquired intangibles $ 41,226 $ 29,222 41 %

1 unchanged sentence

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.

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.

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.

The year-over-year increase was due to the acquisitions of ShareFile and Nuclia.

Sales and Marketing

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 Change

(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 %

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 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.

Product Development

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 Change

(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 %

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.

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.

General and Administrative

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 Change

(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 %

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.

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.

Amortization of Intangibles

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.

Amortization of Acquired Intangibles - Operating Expenses

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 % Change

Amortization of intangibles $ 65,290 $ 66,430 (2) %

(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.

The year-over-year increase was due to the acquisitions of ShareFile and Nuclia.

Restructuring Expenses

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 % Change

(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 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 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.

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.

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.

Acquisition-Related Expenses

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 % Change

(in thousands) November 30, 2025 November 30, 2024 Percentage Change

Acquisition-related expenses $ 5,317 $ 17,109 (69) %

2 unchanged sentences

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.

Acquisition-related expenses in fiscal year 2023 were primarily related to our acquisition of MarkLogic.

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.

Acquisition-related expenses in fiscal year 2024 were primarily related to our acquisition of ShareFile, as well as our pursuit of other acquisition opportunities.

Cyber Incident and Vulnerability Response Expenses, Net

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 % Change

(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 (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.

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.

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 Related Matters for further discussion.

Income from Operations

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 % Change

Income from operations $ 124,003 $ 110,523 12 %

As a percentage of total revenue 16 % 16 %

Income from operations increased year over year due to an increase in revenue, offset by an increase in costs of revenue and operating expenses, as shown above.

See Note 17, Cyber Related Matters , in Part II, Item 8 of this Form 10-K for further discussion.

Other (Expense) Income

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 % Change

(in thousands) November 30, 2025 November 30, 2024 Percentage Change

Interest expense $ (70,850) $ (32,012) 121 %

3 unchanged sentences

As a percentage of total revenue (7) % (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.

Interest expense increased due to costs associated with drawing on our revolving line of credit to acquire ShareFile, offset by lower interest rates as a result of our debt refinancing in the second quarter of fiscal year 2024, in which we issued the 2030 Notes and entered into an amended and restated credit facility.

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.

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.

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.

Provision for Income Taxes

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 % Change

(in thousands) November 30, 2025 November 30, 2024 Percentage Change

Provision for income taxes $ 8,495 $ 25,826 (67) %

1 unchanged sentence

Our effective income tax rate was 10% and 27% for fiscal years 2025 and 2024, respectively.

The primary reason for the increase in the effective rate was due to the increase in tax expense recorded associated with the change in the Company’s indefinite reinvestment assertion during 2024.

As a result of the ShareFile acquisition, the Company has determined that a substantial portion of unremitted foreign earnings are no longer indefinitely reinvested.

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.

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 %

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.

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.

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.

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.

We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.

Select Performance Metrics:

6 unchanged sentences

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.

We use ARR to understand customer trends and the overall health of the Company's business, helping it to formulate strategic business decisions.

We calculate the annualized value of annual and multi-year contracts, and contracts with terms less than one year, by dividing the total contract value of each contract by the number of months in the term and then multiplying by 12.

14 unchanged sentences

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.

The growth in ARR was primarily driven by the acquisition of ShareFile.

Net Retention Rate

3 unchanged sentences

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.

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.

4 unchanged sentences

Cash and cash equivalents $ 94,807 $ 118,077

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.

These cash outflows were partially offset by $730 million in proceeds from our revolving line of credit to partially fund the acquisition of ShareFile, the issuance of convertible senior notes of $396.5 million (net of purchases of capped calls in connection with the convertible notes offering of $42.2 million and issuance costs of $11.2 million), cash inflows from operations of $211.5 million, and $10.6 million in cash received from the issuance of common stock.

We refinanced our debt by issuing the convertible senior notes and used the proceeds to pay off the outstanding balance of the term loan and revolving line of credit under our previous credit agreement.

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 cash outflows were partially offset by cash inflows from operations of $235.2 million, the effect of exchange rates on cash of $6.8 million, and $3.8 million in cash received from the issuance of common stock.

Except as described below, there are no limitations on our ability to access our cash and cash equivalents.

4 unchanged sentences

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.

Refer to Note 14, Income Taxes , in Part II, Item 8 of this Form 10-K for further information.

Fiscal Year Ended

1 unchanged sentence

Net cash flows from operating activities $ 235,187 $ 211,494 $ 173,920

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)

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 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.

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.

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.

In addition, our net deferred revenue as of November 30, 2024, increased by $109.4 million from the end of fiscal year 2023, primarily due to the acquisition of ShareFile in November 2024.

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.

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.

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.

We received proceeds from the issuance of debt of $195.0 million in fiscal year 2023.

The debt proceeds were offset by payments on our long-term debt of $91.9 million in fiscal year 2023 (including a $85.0 million repayment on the revolving line of credit).

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.

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.

Cash Flows (used in) from Financing Activities

During fiscal year 2025 we made payments on our revolving line of credit of $130.0 million and made $6.2 million in payments for issuance costs related to the amendment of the revolving credit facility.

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.

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.

We also repurchased $86.8 million of our common

stock under our share repurchase plan in fiscal year 2024, compared to $34.0 million in fiscal year 2023.

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.

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.

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.

As of November 30, 2025, there was $202.2 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.

Upon closing of the ShareFile acquisition on October 31, 2024, our Board of Directors approved the suspension of our quarterly dividends.

Excise tax was insignificant for all years presented.

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.

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.

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

Debt to the consolidated financial statements.

See Note 6, Debt , in Part II, Item 8 of this Form 10-K for further information.

Indemnification Obligations

3 unchanged sentences

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.

For indemnification claims related to the MOVEit Vulnerability.

Please see Note 19:

Cyber Related Matters to the consolidated financial statements for further details.

Accordingly, the estimated fair value of these indemnification provisions is insignificant.

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.

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.

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.

Our foreseeable cash needs include capital expenditures, acquisitions, debt repayments, share repurchases, lease commitments, restructuring obligations, and other long-term obligations.

We expect to continue to make payments on the Credit Facility and are also continuously evaluating additional financing options, the net proceeds of which could be used for general corporate purposes or to repay outstanding indebtedness.

In the future, we expect to use the available capacity under the Credit Facility for any payments made in connection with any settlement of the 2026 Notes upon conversion, redemption, or repayment of our 2026 Notes at or prior to the 2026 Notes maturity.

We may also use the available capacity for general corporate purposes.

Critical Accounting Estimates

9 unchanged sentences

Significant judgment is also required to determine the stand-alone selling price ("SSP") of each distinct performance obligation.

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.

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.

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.

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 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.

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.

Professional services revenue is generally recognized as the services are delivered to the customer.

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.

We also consider whether an arrangement has any discounts, material rights, or specified future upgrades that may represent additional performance obligations, although we do not have a history of offering these elements.

3 unchanged sentences

The Company has not incurred any significant litigation costs or entered into large settlements in recent history.

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.

There is complexity in applying this accounting framework for the potential losses arising from the MOVEit Vulnerability and in determining whether a loss is probable and estimable as these claims and proceedings are subject to inherent uncertainties and potential damages for which we are unable to arrive at a reasonable estimate.

Further, the outcome of these matters may not be known for prolonged periods of time.

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).

Therefore, we have not recorded a loss contingency liability for the MOVEit Vulnerability as of November 30, 2025.

2 unchanged sentences

Expenses are recognized as they are incurred and are recognized net of expected insurance recoveries, although the timing of recognizing insurance recoveries may differ from the timing of recognizing the associated expenses.

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.

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.

As of November 30, 2024, we have recorded approximately $5.8 million in insurance recoveries, and we have $6.7 million of additional cybersecurity insurance coverage (which is subject to a $0.5 million retention per claim).

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.

9 unchanged sentences

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.

Refer to Note 1, Nature of Business and Summary of Significant Accounting Policies , in Part II, Item 8 of this Form 10-K.

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 7. Management’s Discussion and Analysis