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Item 8. Financial Statements and Supplementary Data

2026-01-20 compared with 2025-01-21 · 347 added, 350 removed, 859 unchanged (45% of the section changed)

Financial Statements and Supplementary Data

PROGRESS SOFTWARE CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Financial Statements:

Consolidated Balance Sheets as of November 30, 2025 and 2024

Consolidated Statements of Operations for the years ended November 30, 2025, 2024 and 2023

Consolidated Statements of Comprehensive Income for the years ended November 30, 2025, 2024 and 2023

Consolidated Statements of Stockholders ' Equity for the years ended November 30, 2025, 2024 and 2023

Consolidated Statements of Cash Flows for the years ended November 30, 2025, 2024 and 2023

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Critical Audit Matter Description

The Company derives its revenue from multiple sources, including software licenses, maintenance, and services.

The Company derives its revenue from software licenses, maintenance, software-as-a-service (SaaS), and professional services.

Frequently, the customer arrangements provide software licenses combined with maintenance resulting in multiple performance obligations under ASC 606, Revenue from Contracts with Customers .

The identification of distinct performance obligations, particularly for more complex customer arrangements, requires a detailed analysis of the contractual terms and application of more complex accounting guidance.

In addition, the allocation of the transaction price to each performance obligation within a contract (license, maintenance, and services) requires the application of management judgment.

In addition, the allocation of the transaction price to each performance obligation within a contract (license, maintenance, SaaS and professional services) requires the application of management judgment.

Revenue arrangements with higher contract values frequently require more complex management judgments.

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

Accounts receivable (less allowances of $ 749 and $ 851 , respectively)

163,575 125,825

Unbilled receivables 34,672 29,965

Accounts receivable, net 195,783 163,575

Unbilled receivables, current portion 46,599 34,672

Other current assets 62,776 52,489

Total current assets 399,965 368,813

Long-term unbilled receivables 28,893 28,373

Unbilled receivables, non-current portion 29,950 28,893

Property and equipment, net 13,694 13,746

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Current liabilities:

Current portion of long-term debt, net $ — $ 13,109

Accounts payable $ 15,934 $ 13,910

Accrued compensation and related payroll taxes 71,804 64,672

Dividends payable to stockholders — 8,376

Short-term operating lease liabilities 9,202 10,114

Other accrued liabilities 35,219 22,499

Short-term deferred revenue, net 332,142 236,090

Convertible senior notes, current portion, net 359,163 —

Operating lease liabilities, current portion 8,490 9,202

Other accrued current liabilities 29,593 35,219

Deferred revenue, current portion 324,750 332,142

Total current liabilities 809,734 455,145

Long-term debt, net 730,000 356,111

Convertible senior notes, net 796,267 354,772

Long-term operating lease liabilities 26,259 13,000

Long-term deferred revenue, net 72,270 58,946

Long-term debt 600,000 730,000

Convertible senior notes, non-current portion, net 441,186 796,267

Operating lease liabilities, non-current portion 21,077 26,259

Deferred revenue, non-current portion 100,329 72,270

Deferred tax liabilities 1,158 2,279

Other noncurrent liabilities 5,958 4,547

Commitments and contingencies (Note 10 and Note 19)

Other non-current liabilities 5,825 5,958

Stockholders' equity:

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Software licenses $ 237,887 $ 249,331 $ 220,789

Maintenance and services 504,078 473,650 413,677

Maintenance, SaaS, and professional services 739,944 504,078 473,650

Total revenue 977,831 753,409 694,439

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Cost of software licenses 12,605 10,942 11,153

Cost of maintenance and services 90,318 85,255 62,177

Cost of maintenance, SaaS, and professional services 133,750 90,318 85,255

Amortization of acquired intangibles 41,226 29,222 30,169

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Cyber incident and vulnerability response expenses, net 2,775 5,641 6,164

Gain on sale of assets held for sale — — ( 10,770 )

Total operating expenses 636,960 498,924 457,339

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Net income $ 73,133 $ 68,438 $ 70,197

Other comprehensive (loss) income, net of tax:

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments 3,066 ( 2,914 ) 5,289

Unrealized (loss) gain on hedging activity, net of tax benefit of $ 360 and $ 698 in 2024 and 2023, respectively and net of tax provision of $ 1,797 in 2022

Unrealized loss on hedging activity, net of tax benefit of $ 360 and $ 698 in 2024 and 2023, respectively

— ( 1,135 ) ( 2,214 )

Unrealized loss on investments, net of tax benefit of $ 4 in 2022

Total other comprehensive (loss) income, net of tax ( 4,049 ) 3,075 ( 2,792 )

Total other comprehensive income (loss), net of tax 3,066 ( 4,049 ) 3,075

Comprehensive income $ 76,199 $ 64,389 $ 73,272

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Balance, December 1, 2022 43,257 $ 433 $ 331,650 $ 101,656 $ ( 35,235 ) $ 398,504

Cumulative effect of adoption of ASU 2020-06 — — ( 47,456 ) 4,893 — ( 42,563 )

Issuance of stock under employee stock purchase plan 279 2 10,287 — — 10,289

Exercise of stock options 485 5 15,270 — — 15,275

Vesting of restricted stock units and release of deferred stock units 448 5 ( 5 ) — — —

Withholding tax payments related to net issuance of restricted stock units ( 117 ) ( 1 ) ( 8,487 ) — — ( 8,488 )

Vesting of RSUs 615 6 ( 6 ) — — —

Withholding tax payments related to net issuance of RSUs ( 229 ) ( 2 ) ( 12,375 ) — — ( 12,377 )

Stock-based compensation — — 40,529 — — 40,529

Dividends declared — — — ( 31,815 ) — ( 31,815 )

Treasury stock repurchases and retirements ( 1,695 ) ( 17 ) ( 19,715 ) ( 57,309 ) — ( 77,041 )

Common stock repurchases and retirements ( 611 ) ( 6 ) ( 14,776 ) ( 19,180 ) — ( 33,962 )

Net income — — — 70,197 — 70,197

Other comprehensive loss — — — — ( 2,792 ) ( 2,792 )

Other comprehensive income — — — — 3,075 3,075

Balance, November 30, 2023 43,796 $ 438 $ 370,579 $ 120,858 $ ( 32,160 ) $ 459,715

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Exercise of stock options 379 4 15,462 — — 15,466

Vesting of restricted stock units and release of deferred stock units 615 6 ( 6 ) — — —

Withholding tax payments related to net issuance of restricted stock units ( 229 ) ( 2 ) ( 12,375 ) — — ( 12,377 )

Vesting of RSUs 796 8 ( 8 ) — — —

Withholding tax payments related to net issuance of RSUs ( 292 ) ( 3 ) ( 17,167 ) — — ( 17,170 )

Stock-based compensation — — 46,756 — — 46,756

Purchase of capped calls, net of tax — — ( 32,080 ) — — ( 32,080 )

Dividends declared — — — ( 23,844 ) — ( 23,844 )

Treasury stock repurchases and retirements ( 611 ) ( 6 ) ( 14,776 ) ( 19,180 ) — ( 33,962 )

Common stock repurchases and retirements ( 1,642 ) ( 16 ) ( 41,714 ) ( 45,047 ) — ( 86,777 )

Net income — — — 68,438 — 68,438

Other comprehensive income — — — — 3,075 3,075

Other comprehensive loss — — — — ( 4,049 ) ( 4,049 )

Balance, November 30, 2024 43,361 $ 434 $ 354,158 $ 120,405 $ ( 36,209 ) $ 438,788

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Exercise of stock options 185 2 5,160 — — 5,162

Vesting of restricted stock units and release of deferred stock units 796 8 ( 8 ) — — —

Withholding tax payments related to net issuance of restricted stock units ( 292 ) ( 3 ) ( 17,167 ) — — ( 17,170 )

Vesting of RSUs 822 8 ( 8 ) — — —

Withholding tax payments related to net issuance of RSUs ( 293 ) ( 3 ) ( 15,181 ) — — ( 15,184 )

Stock-based compensation — — 64,768 — — 64,768

Purchase of capped calls, net of tax — — ( 32,080 ) — — ( 32,080 )

Dividends declared — — — ( 23,844 ) — ( 23,844 )

Treasury stock repurchases and retirements ( 1,642 ) ( 16 ) ( 41,714 ) ( 45,047 ) — ( 86,777 )

Common stock repurchases and retirements ( 2,063 ) ( 21 ) ( 38,970 ) ( 66,165 ) — ( 105,156 )

Net income — — — 73,133 — 73,133

Other comprehensive loss — — — — ( 4,049 ) ( 4,049 )

Other comprehensive income — — — — 3,066 3,066

Balance, November 30, 2025 42,336 $ 423 $ 383,696 $ 127,373 $ ( 33,143 ) $ 478,349

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Non-cash lease expense 11,181 11,723 9,393

Gain on sale of assets held for sale — — ( 10,770 )

Deferred income taxes ( 23,429 ) ( 7,750 ) ( 28,641 )

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Income taxes payable 3,165 442 ( 553 )

Deferred revenue, net 16,183 ( 24,102 ) 36,268

Deferred revenue 13,544 16,183 ( 24,102 )

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

Cash flows (used in) from investing activities:

Cash flows used in investing activities:

Purchases of investments — — ( 15,262 )

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Payments for acquisitions, net of cash acquired ( 21,217 ) ( 852,702 ) ( 355,250 )

Proceeds from sale of long-lived assets, net — — 25,998

Other investing activities — — 134

Net cash flows (used in) from investing activities ( 857,908 ) ( 360,382 ) 21,992

Cash flows from (used in) financing activities:

Net cash flows used in investing activities ( 26,919 ) ( 857,908 ) ( 360,382 )

Cash flows (used in) from financing activities:

Proceeds from equity plans 18,968 27,761 25,956

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Purchase of capped calls — ( 42,210 ) —

Dividend payments to stockholders ( 31,460 ) ( 31,554 ) ( 31,063 )

Dividend equivalent and dividend payments to stockholders ( 786 ) ( 31,460 ) ( 31,554 )

Proceeds from the issuance of debt — 730,000 195,000

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Payment of credit facility debt issuance costs ( 6,211 ) ( 6,821 ) —

Net cash flows from (used in) financing activities 640,823 51,188 ( 101,423 )

Net cash flows (used in) from financing activities ( 238,369 ) 640,823 51,188

Effect of exchange rate changes on cash 6,831 ( 3,290 ) 5,955

Net (decrease) increase in cash and cash equivalents ( 8,881 ) ( 129,319 ) 100,871

Net decrease in cash and cash equivalents ( 23,270 ) ( 8,881 ) ( 129,319 )

Cash and cash equivalents, beginning of year 118,077 126,958 256,277

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Supplemental disclosure:

Cash paid for income taxes, net of refunds of $ 2,881 in 2024, $ 965 in 2023 and $ 968 in 2022

Cash paid for income taxes, net of refunds of $ 2,509 , $ 2,881 , and $ 965 in 2025, 2024, and 2023, respectively

$ 34,353 $ 32,386 $ 39,771

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Dividends declared and unpaid $ — $ — $ 8,376

Contingent consideration payable in Nuclia acquisition $ 1,080 $ — $ —

See notes to consolidated financial statements.

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Nature of Business and Summary of Significant Accounting Policies

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.

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, which is a software-as-a-service ("SaaS") offering.

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

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

OEMs 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.

In 2024, we acquired ShareFile, which has a SaaS offering.

Progress provides software products that enable our customers to develop, deploy, and manage responsible AI-powered applications and digital experiences.

Many of our products are sold as perpetual licenses, but certain products use term licensing models and our cloud-based offerings are marketed as Software-as-a-Service ("SaaS") offerings.

In 2024, we acquired ShareFile and in 2025 we acquired Nuclia, each of which is a SaaS offering.

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.

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We perform ongoing credit evaluations of our customers, and the risk with respect to trade receivables is further mitigated by the diversity, both by geography and by industry, of the customer base.

No single customer represented more than 10% of consolidated accounts receivable or revenue in fiscal years 2024, 2023 or 2022.

No single customer represented more than 10% of consolidated accounts receivable or revenue in the years presented.

Fair Value Measurements

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Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies.

Our Level 2 derivative assets and liabilities include certain over-the-counter forward and swap contracts, In addition, our disclosures related to the fair value of our 2026 Notes and 2030 Notes (together referred to as "the Notes") are Level 2 measurements.

Our Level 2 derivative assets and liabilities include certain over-the-counter forward contracts.

In addition, our disclosures related to the fair value of our 2026 Notes and 2030 Notes (together referred to as "the Notes") are Level 2 measurements.

• Level 3 – inputs are generally unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

We do not have any Level 3 fair value measurements.

Our disclosures related to the fair value of the contingent consideration payable from the Nuclia acquisition are Level 3 measurements.

When developing fair value estimates, we maximize the use of observable inputs and minimize the use of unobservable inputs.

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If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings, and currency rates.

In certain cases, where market rate assumptions are not available, we are required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument.

Derivative Instruments

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We use derivative instruments to manage exposures to fluctuations in the value of foreign currencies, which exist as part of our ongoing business operations.

Cash Flow Hedge

We entered into an interest rate swap contract in July 2019 to manage the variability of cash flows associated with approximately one-half of our variable rate debt.

The interest rate swap, which matured on April 30, 2024, was designated as a cash flow hedge and the effectiveness of the hedge was assessed both at the onset of the hedge and at regular intervals throughout the life of the derivative.

As the interest rate swap was highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the derivative were included as a component of accumulated other comprehensive loss on our consolidated balance sheets until the debt was retired and the swap matured.

Forward Contracts

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The gains or losses from changes in the fair value of such derivative instruments that are not accounted for as hedges are recognized in earnings in foreign currency loss, net in the consolidated statements of operations.

In fiscal year 2024, we recognized realized and unrealized losses of $ 1.5 million from our forward contracts.

The realized and unrealized gains and losses from our forward contracts were not significant in the periods presented.

Property and Equipment

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Repairs and maintenance costs are expensed as incurred.

Software Development Costs

Internal and external costs incurred in the preliminary project stage of internal-use software development and content are expensed as incurred.

Internal costs that cannot be reasonably separated between maintenance and relatively minor upgrades and enhancements are also expensed as incurred.

The direct costs associated with computer software developed or purchased for internal use incurred during the application development stage have not been significant in the periods presented.

Goodwill, Intangible Assets, and Long-Lived Assets

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We did no t recognize any asset impairment charges in the years presented.

Comprehensive (Loss) Income

The components of comprehensive loss include, in addition to net income, foreign currency translation adjustments and unrealized gains and losses on investments and hedging activity.

Comprehensive Income

The components of comprehensive income include, in addition to net income, foreign currency translation adjustments and unrealized gains (losses) on investments and hedging activity.

Accumulated other comprehensive loss by components, net of tax:

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Balance, December 1, 2023 $ ( 33,234 ) $ ( 61 ) $ 1,135 $ ( 32,160 )

Other comprehensive income (loss) 5,289 — ( 2,214 ) 3,075

Balance, December 1, 2023 $ ( 33,234 ) $ ( 61 ) $ 1,135 $ ( 32,160 )

Other comprehensive loss ( 2,914 ) — ( 689 ) ( 3,603 )

Amounts reclassified from accumulated other comprehensive loss into net income, net of tax ( 61 ) 61 ( 446 ) ( 446 )

Amounts reclassified into net income ( 61 ) 61 ( 446 ) ( 446 )

Balance, November 30, 2024 $ ( 36,209 ) $ — $ — $ ( 36,209 )

The tax effect on accumulated unrealized gains on hedging activity was a deferred tax liability of $ 0.4 million and $ 1.1 million as of November 30, 2023 and 2022, respectively.

Other comprehensive income 3,066 — — 3,066

Balance, November 30, 2025 $ ( 33,143 ) $ — $ — $ ( 33,143 )

Revenue Recognition

Revenue Policy

We derive our revenue primarily from software licenses and maintenance and services.

We derive our revenue primarily from software licenses and maintenance, SaaS, and professional services.

Our license arrangements generally contain multiple performance obligations, including software maintenance services.

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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, we do not have an observable stand-alone selling price ("SSP") for licenses.

For certain products, 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, we do not have an observable SSP for licenses.

As required, we evaluate the residual approach estimate compared to all available observable data in order to conclude the estimate is representative of its SSP.

Perpetual licenses are generally invoiced upon execution of the contract and payable within 30 days.

Perpetual licenses are generally invoiced upon execution of the contract and payable within thirty days .

Term licenses are generally invoiced in advance on an annual basis over the term of the arrangement, which is typically one to three years .

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Maintenance services are generally invoiced in advance on an annual basis over the term of the arrangement, which is typically one to three years .

Services revenue primarily includes consulting and customer education services.

In general, services are distinct performance obligations.

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

We apply the practical expedient of recognizing revenue upon invoicing for time and materials-based arrangements as the invoiced amount corresponds to the value of the services provided.

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.

We also offer products via a SaaS model, which is a subscription-based model.

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SaaS arrangements are generally invoiced in advance on a monthly, quarterly, or annual basis over the term of the arrangement, which is typically one to three years .

Professional Services

Professional services revenue primarily includes consulting and customer education services.

In general, professional services are distinct performance obligations.

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

We apply the practical expedient of recognizing revenue upon invoicing for time and materials-based arrangements as the invoiced amount corresponds to the value of the services provided.

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.

Arrangements with Multiple Performance Obligations

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Advertising Costs

Advertising costs are expensed as incurred and were $ 1.5 million, $ 1.1 million, and $ 1.1 million in fiscal years 2024, 2023, and 2022, respectively.

Advertising costs are expensed as incurred and were insignificant in the periods presented.

Warranty Costs

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Historically, warranty costs have been insignificant.

Litigation and Loss Contingencies

We recognize losses for various claims, legal proceedings, and investigations when we believe the potential losses are probable and reasonably estimable.

Legal fees and other defense costs are recognized as incurred, and insurance recoveries are recognized when collection is probable.

Stock-Based Compensation

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We first determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes.

The second step is that we measure the tax benefit as the largest amount that is more likely than not to be realized upon ultimate settlement.

We then measure the tax benefit as the largest amount that is more likely than not to be realized upon ultimate settlement.

We recognize interest and penalties related to uncertain tax positions in our provision for income taxes on our consolidated statements of operations.

Operating leases are included in right-of-use ("ROU") lease assets and operating lease liabilities in our consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the remaining lease payments over the lease term.

When a lease does not provide an implicit rate, we use our incremental borrowing rate in determining the present value of lease payments.

We use the implicit rate when readily determinable.

The operating lease ROU asset excludes lease incentives.

The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease expense is recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components, which are generally accounted for separately.

We have made an accounting policy election not to recognize ROU assets and lease liabilities that arise from short-term leases for facilities and equipment.

Instead, we recognize the lease payments in the consolidated statements of operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023-07, Segment Reporting (Topic 280):

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ASU 2023-07 updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

This update is effective beginning with the Company’s 2025 fiscal year annual reporting period, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

ASU 2023-07 did not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

Under ASU 2023-07, public entities with a single reportable segment must apply all of ASU 2023-07's disclosure requirements and the existing segment disclosure and reconciliation requirements in ASC 280 – Segment Reporting on an annual and interim basis.

We implemented ASU 2023-07 with retrospective application in the 2025 annual financial statements and have included the additional disclosures in Note 16, Segment Information and Geographic Information .

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

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ASU 2023-09 is intended to improve the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information.

ASU 2023-09 is effective for the Company beginning with the annual period ending November 30, 2026, allowing for adoption on a prospective basis or a retrospective option.

Early adoption is permitted.

The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company's consolidated financial statements.

In November 2024, the FASB issued Accounting Standards Update No.

ASU 2023-09 is effective for us beginning with the annual period ending November 30, 2026, allowing for adoption on a prospective basis or a retrospective option.

The adoption of this standard only impacts disclosures and is not expected to have a material impact on our consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) :

Disaggregation of Income Statement Expenses ("ASU 2024-03"), and in January 2025, the FASB issued Accounting Standards Update No.

Disaggregation of Income Statement Expenses ("ASU 2024-03"), and in January 2025, the FASB issued ASU No.

2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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Both early adoption and retrospective application are permitted.

The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.

Cash and Cash Equivalents

A summary of our cash and cash equivalents at November 30, 2024 is as follows:

(in thousands) Amortized Cost Basis Unrealized

Gains Unrealized

Losses Fair Value

Cash $ 116,254 $ — $ — $ 116,254

Money market funds 1,823 — — 1,823

Total $ 118,077 $ — $ — $ 118,077

A summary of our cash and cash equivalents at November 30, 2023 is as follows:

(in thousands) Amortized Cost Basis Unrealized

Gains Unrealized

Losses Fair Value

Cash $ 126,958 $ — $ — $ 126,958

Derivative Instruments

Cash Flow Hedge

Our interest rate swap contract with an initial notional amount of $ 150.0 million matured on April 30, 2024.

We entered into the contract to manage the variability of cash flows associated with approximately one-half of our variable rate debt.

The contract required periodic interest rate settlements, and we received a floating rate based on the greater of 1-month SOFR or 0.00 % and paid a fixed rate of 1.855 % on the outstanding notional amount.

The interest rate swap was designated as a cash flow hedge and the effectiveness of the hedge was assessed both at the onset of the hedge and at regular intervals throughout the life of the derivative.

As the interest rate swap was highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the derivative were included as a component of other comprehensive loss on our condensed consolidated balance sheets through the first quarter of fiscal year 2024.

On March 1, 2024, we repaid our variable rate debt in full and concurrently reclassified an unrealized gain of $ 0.6 million from accumulated other comprehensive loss to interest expense in our condensed consolidated statements of operations upon the maturity of the interest rate swap.

As of November 30, 2023, the fair value of the hedge was a gain of $ 1.5 million, and was included in other assets on our consolidated balance sheets.

The net amount of accumulated other comprehensive loss reclassified to interest expense during fiscal years 2024, 2023, and 2022 resulted in income of $ 1.5 million and $ 3.6 million, and expense of $ 0.7 million, respectively.

The fair value of the derivative represented the discounted value of the expected future discounted cash flows for the interest rate swap, based on the payment schedule and the current forward curve for the remaining term of the contract, as of the date of each reporting period:

November 30, 2024 November 30, 2023

(in thousands) Notional Value Fair Value Notional Value Fair Value

Interest rate swap contracts designated as cash flow hedges $ — $ — $ 103,125 $ 1,495

Forward Contracts

We generally use forward contracts that are not designated as hedging instruments to hedge economically the impact of the variability in exchange rates on intercompany accounts receivable and loans receivable denominated in certain foreign currencies.

We generally do not hedge the net assets of our international subsidiaries.

All forward contracts are recorded at fair value 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.

At November 30, 2024, $ 0.2 million and $ 0.8 million was recorded in other current assets and other noncurrent liabilities on the consolidated balance sheets, respectively.

At November 30, 2023, $ 2.5 million was recorded in other accrued liabilities on the consolidated balance sheets.

In fiscal years 2024, 2023 and 2022, net realized and unrealized losses of $ 1.5 million, gains of $ 2.3 million and losses of $ 7.7 million respectively, from our forward contracts were recognized in foreign currency loss, net on the consolidated statements of operations.

The table below details outstanding foreign currency forward contracts where the notional amount is determined using contract exchange rates:

November 30, 2024 November 30, 2023

(in thousands) Notional Value Fair Value Notional Value Fair Value

Forward contracts to sell U.S.

dollars $ 94,020 $ ( 618 ) $ 102,229 $ ( 2,526 )

Forward contracts to purchase U.S.

dollars 1,195 ( 6 ) 844 ( 4 )

Total $ 95,215 $ ( 624 ) $ 103,073 $ ( 2,530 )

We are currently evaluating the impact that the adoption of these standards will have on our consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"), which modernizes the accounting for internal-use software.

ASU 2025-06 removes all references to software development stages and requires capitalization of software costs when management has committed to the software project and it is probable the software will be completed and perform its intended use.

ASU 2025-06 will be effective for us in our first quarter of 2029, and may be adopted on a prospective basis, full retrospective basis, or modified prospective basis with a cumulative-effect adjustment through retained earnings.

Early adoption is permitted.

We are currently evaluating the timing, method of adoption, and impact of ASU 2025-06 on our consolidated financial statements and disclosures.

Fair Value Measurements

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Foreign exchange derivatives $ ( 95 ) $ — $ ( 95 ) $ —

Contingent consideration $ ( 1,080 ) $ — $ — $ ( 1,080 )

The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at November 30, 2024:

2 unchanged sentences

Value Level 1 Level 2 Level 3

Interest rate swap $ 1,495 $ — $ 1,495 $ —

Money market funds $ 1,823 $ 1,823 $ — $ —

Foreign exchange derivatives $ ( 624 ) $ — $ ( 624 ) $ —

For financial assets and liabilities that utilize Level 1 and Level 2 inputs, we utilize both direct and indirect observable price quotes, including price quotes and foreign exchange forward prices.

Money market funds are measured at fair value using the quoted market prices in active markets at the reporting date.

Foreign exchange derivative contracts are valued using quoted forward foreign exchange prices at the reporting date.

We classified contingent consideration related to the Nuclia acquisition, which occurred in the third fiscal quarter of 2025, within Level 3 of the fair value hierarchy because the fair value is derived using significant unobservable inputs.

We utilized the Monte Carlo simulation method to estimate the fair value of the contingent liability as of the reporting date.

The fair value of the contingent consideration is primarily dependent on the revenue of the acquired business in fiscal 2026, will be remeasured each reporting period, and any required adjustment will be recorded to acquisition-related expenses in our consolidated statement of operations.

See Note 5, Business Combinations for additional details.

The following table reflects the activity for our contingent consideration obligation measured at fair value using Level 3 inputs for the fiscal year ended November 30, 2025:

(in thousands)

Balance, December 1, 2024 $ —

Acquisition date fair value of contingent consideration ( 1,080 )

Balance, November 30, 2025

There were no transfers between levels of the fair value measurement hierarchy during the fiscal years ended November 30, 2025 and 2024.

Assets and Liabilities Not Carried at Fair Value

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Total $ 800,349 $ 809,595 $ 796,267 $ 999,921

(1) The carrying value of the 2026 Notes are reflected net of $ 3.1 million and $ 5.2 million of unamortized debt issuance costs as of November 30, 2024 and November 30, 2023, respectively.

(2) The carrying value of the 2030 Notes are reflected net of $ 10.7 million of unamortized debt issuance costs as of November 30, 2024.

(1) The carrying value of the convertible senior notes due 2026 (the "2026 Notes"), is reflected net of $ 0.8 million and $ 3.1 million of unamortized debt issuance costs as of November 30, 2025 and 2024, respectively.

(2) The carrying value of the convertible senior notes due 2030 (the "2030 Notes"), is reflected net of $ 8.8 million and $ 10.7 million of unamortized debt issuance costs as of November 30, 2025 and 2024, respectively.

The fair value of the Notes is based on the quoted prices in an over-the-counter market on the last trading day of the reporting period and classified within Level 2 in the fair value hierarchy.

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The carrying amounts of other financial assets and liabilities including cash and cash equivalents, accounts receivable, unbilled accounts receivable, accounts payable, and accrued liabilities approximate their respective fair values due to their immediate or short-term maturities.

Borrowings under our revolving credit facility are recorded at carrying value, which approximates fair value due to the short maturity and frequent nature of such borrowings and repayments.

The Company considers this a Level 2 input.

Property and Equipment

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Balance, beginning of year $ 1,292,177 $ 832,101

Additions (1)

Additions from business combinations (1)

15,397 459,459

Measurement period adjustments (2)

Measurement period adjustments (2) and other

Translation adjustments — ( 83 )

Balance, end of year $ 1,309,054 $ 1,292,177

(1) The additions to goodwill during fiscal years 2024 and 2023 are related to the acquisition of ShareFile and MarkLogic, respectively.

Refer to Note 7:

Business Combinations for further information.

(2) Represents final measurement period adjustments related to MarkLogic during fiscal year 2024.

Refer to Note 7:

Business Combinations for further information.

During fiscal year 2024, we performed a quantitative assessment as of October 31, 2024 and concluded that there was no impairment.

We did no t recognize any goodwill impairment charges during the years presented.

(1) The additions to goodwill during fiscal years 2025 and 2024 are related to the acquisitions of Nuclia and ShareFile, respectively.

Refer to Note 5, Business Combinations for further information.

(2) Represents measurement period adjustments related to ShareFile during fiscal year 2025 and MarkLogic during fiscal year 2024.

Refer to Note 5, Business Combinations for further information.

We performed a quantitative assessment as of October 31, 2025 and concluded that there was no impairment of goodwill during fiscal year 2025.

We did no t recognize goodwill impairment charges during any of the years presented.

Business Combinations

Nuclia Acquisition

On June 30, 2025, we completed the acquisition of Nuclia, an innovator in agentic Retrieval-Augmented Generation AI solutions, for a purchase price with an aggregate fair value of $ 21.4 million, which was primarily allocated to purchased technology and goodwill.

The purchase consideration consisted of $ 20.3 million of cash paid at closing and contingent consideration with an estimated fair value of $ 1.1 million.

We are required to pay contingent earn-out consideration of up to $ 5.0 million to former Nuclia shareholders, based on the achievement of certain revenue targets during fiscal year 2026.

The fair value of the contingent consideration was determined to be $ 1.1 million as of the acquisition date.

We have not disclosed the amount of revenues and earnings of Nuclia since acquisition, nor pro forma financial information, as those amounts are not significant to our consolidated financial statements.

ShareFile Acquisition

On October 31, 2024, we completed the acquisition of ShareFile from 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.

We funded the acquisition through $ 730.0 million in borrowings under our existing $ 900.0 million revolving credit facility and cash on hand.

Refer to Note 8:

Debt for further information.

The acquisition consideration for ShareFile has been preliminarily allocated to ShareFile’s assets and assumed liabilities based on estimated fair values.

The preliminary fair value estimates of the net assets acquired are based upon preliminary calculations and valuations, and those estimates and assumptions are subject to change as we obtain additional information for those estimates during the measurement period, which is up to one year from the acquisition date.

The preliminary allocation of the purchase price is as follows:

(in thousands) Preliminary Purchase Price Allocation Life

On October 31, 2024, we completed the acquisition of ShareFile from Cloud Software Group, Inc.

and its subsidiaries for an aggregate purchase price of $ 875.0 million in cash, subject to a $ 25.0 million working capital credit and certain customary adjustments, including $ 1.2 million paid in fiscal 2025.

We funded the acquisition through $ 730.0 million in borrowings under our existing revolving credit facility and cash on hand.

The acquisition consideration for ShareFile has been allocated to ShareFile's assets and assumed liabilities based on estimated fair values.

The excess of total consideration over the assets and assumed liabilities was recorded to goodwill.

During fiscal year 2025, the measurement period adjustments were completed, which resulted in a $ 1.5 million increase in goodwill, primarily related to customer relationships and net working capital adjustments.

The purchase price allocation is now complete.

The allocation of the purchase price is as follows:

(in thousands) Purchase Price Allocation Life

Net working capital $ 2,048

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Acquisition-related transaction costs (e.g., legal, due diligence, valuation, and other professional fees) and certain acquisition restructuring and related charges are not included as a component of consideration transferred but are required to be expensed as incurred.

During the fiscal year ended November 30, 2024, we incurred approximately $ 15.6 million of acquisition-related costs, which are included in acquisition-related expenses on our consolidated statement of operations.

The amount of revenue of ShareFile included in our consolidated statement of operations during the fiscal year ended November 30, 2024, was approximately $ 21.1 million.

We determined that disclosing the amount of ShareFile related earnings included in the consolidated statement of operations is impracticable, as certain operations of ShareFile were integrated into the operations of the Company from the date of acquisition.

In connection and concurrent with the ShareFile acquisition, we entered into a Transition Services Agreement ("TSA") with Cloud for a period of six months from the date of acquisition, with the option to extend the TSA beyond this period for certain services.

Expenses related to the TSA are not expected to be significant.

Pro Forma Information

The following pro forma financial information presents the combined results of operations of Progress and ShareFile as if the acquisition had occurred on December 1, 2022, after giving effect to certain pro forma adjustments.

During the fiscal years ended November 30, 2025, and 2024, we incurred approximately $ 3.8 million and $ 15.6 million, respectively, of acquisition-related costs, which are included in acquisition-related expenses on our consolidated statement of operations.

The amount of revenue of ShareFile included in our consolidated statements of operations during the fiscal years ended November 30, 2025 and 2024, was approximately $ 261.6 million and $ 21.1 million, respectively.

We determined that disclosing the amount of ShareFile related earnings included in the consolidated statement of operations is impracticable, as the operations of ShareFile were integrated into the operations of the Company from the date of acquisition.

In connection and concurrent with the ShareFile acquisition, we entered into a Transition Services Agreement ("TSA") with Cloud Software Group, Inc.

for a period of six months from the date of acquisition, with the option to extend the TSA beyond this period for certain services.

The TSA was terminated during the second quarter of fiscal year 2025 and expenses related to the TSA were not significant during the fiscal years ended November 30, 2025 and 2024.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents the combined results of operations of Progress and ShareFile as if the acquisition had occurred on December 1, 2022, after giving effect to certain pro forma adjustments.

The pro forma adjustments reflected herein include only those adjustments that are directly attributable to the ShareFile acquisition and factually supportable.

These pro forma adjustments include:

(i) a net increase in amortization expense to record amortization expense relating to the $ 465.0 million of acquired identifiable intangible assets, (ii) an increase in interest expense to record interest for the periods presented as a result of drawing down our revolving line of credit in connection with the acquisition, (iii) an increase in acquisition-related expenses in connection with the acquisition that were not included in the purchase price, (iv) additional expense related to the TSA entered into between Progress and Cloud, and (v) the income tax effect of the adjustments made at the statutory tax rate of the U.S.

(approximately 24.0%).

The pro forma financial information does not reflect any adjustments for anticipated expense savings resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on December 1, 2022.

(i) a net increase in amortization expense to record amortization expense relating to the $ 464.0 million of acquired identifiable intangible assets, (ii) an increase in interest expense to record interest for the periods presented as a result of drawing down our revolving line of credit in connection with the acquisition, (iii) an increase in acquisition-related expenses in connection with the acquisition that were not included in the purchase price, (iv) additional expense related to the TSA entered into between Progress and Cloud Software Group, Inc., and (v) the income tax effect of the adjustments made at the statutory tax rate of 24.0%.

The unaudited pro forma financial information does not reflect any adjustments for anticipated expense savings resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on December 1, 2022.

(in thousands, except per share data) Pro Forma Fiscal Year Ended November 30, 2024 Pro Forma Fiscal Year Ended November 30, 2023

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MarkLogic Acquisition

On February 7, 2023, we completed the acquisition of the parent company of MarkLogic Corporation ("MarkLogic"), pursuant to the Stock Purchase Agreement (the "Purchase Agreement"), dated as of January 3, 2023.

The acquisition was completed for a base purchase price of $ 355.0 million, subject to certain customary adjustments, in cash.

On February 7, 2023, we completed the acquisition of the parent company of MarkLogic Corporation ("MarkLogic"), for a base purchase price of $ 355.0 million, subject to certain customary adjustments, in cash.

The acquisition consideration for MarkLogic has been allocated to MarkLogic's tangible assets, identifiable intangible assets and assumed liabilities based on their estimated fair values.

The excess of total consideration over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill.

During the first fiscal quarter of 2024, the measurement period adjustments were completed, which resulted in a $ 0.7 million increase in goodwill primarily related to net working capital adjustments, as compared to the amounts previously reported.

The purchase price allocation is now complete.

We recorded measurement period adjustments based on our valuation and purchase price allocation procedures.

The measurement period adjustments were completed during the first fiscal quarter of 2024.

The allocation of the purchase price is as follows:

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We determined that disclosing the amount of MarkLogic related earnings included in the consolidated statement of operations is impracticable, as certain operations of MarkLogic were integrated into the operations of the Company from the date of acquisition.

Pro Forma Information

The following pro forma financial information presents the combined results of operations of Progress and MarkLogic as if the acquisition had occurred on December 1, 2021, after giving effect to certain pro forma adjustments.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents the combined results of operations of Progress and MarkLogic as if the acquisition had occurred on December 1, 2021, after giving effect to certain pro forma adjustments.

The pro forma adjustments reflected herein include only those adjustments that are directly attributable to the MarkLogic acquisition and factually supportable.

2 unchanged sentences

(approximately 24.5%).

(in thousands, except per share data) Pro Forma Fiscal Year Ended November 30, 2023 Pro Forma Fiscal Year Ended November 30, 2022

(in thousands, except per share data) Pro Forma Fiscal Year Ended November 30, 2023

Revenue $ 733,289

2 unchanged sentences

Net income per diluted share $ 1.78

In March of 2024, the Company refinanced its debt by issuing the 2030 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.

We also entered into an amended and restated credit facility as described below.

As of November 30, 2025 and 2024, we had the following debt obligations:

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

Current portion of long-term debt:

1.0 % convertible senior notes due 2026

$ 360,000 $ —

Unamortized discount and issuance costs for the Notes ( 837 ) —

Total current portion of long-term debt 359,163 —

Long-term debt:

1.0 % convertible senior notes due 2026

3.5 % convertible senior notes due 2030

450,000 450,000

Revolving credit facility (1)

600,000 730,000

Total face value of long-term debt 1,050,000 1,540,000

Unamortized discount and issuance costs for the Notes ( 8,814 ) ( 13,733 )

Total long-term debt 1,041,186 1,526,267

Total debt $ 1,400,349 $ 1,526,267

(1) Unamortized debt issuance costs related to the revolving credit facility of $ 10.4 million and $ 6.0 million are included in other assets on the consolidated balance sheets as of November 30, 2025 and 2024, respectively.

Notes Payable

2030 Convertible Senior Notes

On March 1, 2024, the Company issued, in a private placement, convertible senior notes with an aggregate principal amount of $ 450 million, due March 1, 2030, unless earlier repurchased, redeemed or converted.

The proceeds from the 2030 Notes were used in part to enter into the 2024 Capped Call Transactions, described below, for working capital, and for other general corporate purposes, including paying off the existing term loan and revolving line of credit.

In March 2024, we issued, in a private placement, convertible senior notes with an aggregate principal amount of $ 450 million, due March 1, 2030, unless earlier repurchased, redeemed, or converted.

In April 2021, we issued, in a private placement, convertible senior notes with an aggregate principal amount of $ 360.0 million, due April 15, 2026, unless earlier repurchased, redeemed, or converted.

There are no required principal payments prior to the maturity of the Notes.

The 2030 Notes bear interest at an annual rate of 3.5 %, payable semi-annually in arrears on September 1 and March 1 of each year, beginning on September 1, 2024.

The Company incurred approximately $ 12.0 million in issuance costs for the issuance of the 2030 Notes.

During the fiscal year ending November 30, 2025, we reclassified the 2026 Notes from long-term debt to current liabilities.

Further details of the Notes are as follows:

Issuance Maturity Date Interest Rate Effective Interest Rate Semi-Annual Interest Payment Dates Initial Conversion Rate per $1,000 Principal Initial Conversion Price per share of common stock

2030 Notes March 1, 2030 3.50 % 4.00 % March 1 and September 1 14.7622 $ 67.74

2026 Notes April 15, 2026 1.00 % 1.63 % April 15 and October 15 17.4525 $ 57.30

Conversion Rights

Before November 1, 2029, Noteholders may convert their 2030 Notes in the following circumstances:

• During any fiscal quarter commencing after the fiscal quarter ending on May 31, 2024, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for each of at least twenty trading days (whether or not consecutive) during the thirty consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter;

• During the five consecutive business days immediately after any ten consecutive trading day period (the "Measurement Period"), if the trading price per $1,000 principal amount of 2030 Notes for each trading day of the Measurement Period was less than 98 % of the product of the last reported sale price per share of Company’s common stock on such trading day and the conversion rate on such trading day;

Before November 1, 2029 and January 15, 2026, Noteholders may convert their 2030 Notes and 2026 Notes, respectively, in the following circumstances:

• During any fiscal quarter commencing after the fiscal quarter ending on May 31, 2024 in the case of the 2030 Notes and May 31, 2021 in the case of the 2026 Notes, if the last reported sale price per share of the Company's common stock exceeds 130 % of the conversion price for each of at least twenty trading days (whether or not consecutive) during the thirty consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter;

• During the five consecutive business days immediately after any ten consecutive trading day period (the "Measurement Period"), if the trading price per $1,000 principal amount of the applicable Notes for each trading day of the Measurement Period was less than 98 % of the product of the last reported sale price per share of Company's common stock on such trading day and the conversion rate on such trading day;

• Upon the occurrence of distributions on the Company's common stock, which distribution per share of common stock has a value exceeding 10 % of the last reported sale price per share on the trading day immediately before the date such distribution is announced;

• Upon the occurrence of certain corporate events or if the Company calls such 2030 Notes for redemption, then the Noteholder of any Note may convert such Note.

From and after November 1, 2029, Noteholders may convert their 2030 Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.

The Company will satisfy its conversion obligations by paying cash up to the aggregate principal amount of 2030 Notes to be converted, by issuing shares of its common stock or a combination of cash and shares of its common stock, at its election.

The initial conversion rate is 14.7622 shares of common stock per $1,000 principal amount of the 2030 Notes, representing an initial conversion price of approximately $ 67.74 per share of common stock.

• Upon the occurrence of certain corporate events or if the Company calls such applicable Notes for redemption, then the Noteholder of any applicable Note may convert such Note.

From and after November 1, 2029 and January 15, 2026, Noteholders may convert their 2030 Notes and 2026 Notes, respectively, at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.

The Company will satisfy its conversion obligations by paying cash up to the aggregate principal amount of the Notes to be converted, by issuing shares of its common stock or a combination of cash and shares of its common stock, at its election.

The conversion rate will be adjusted upon the occurrence of certain events, including spin-offs, tender offers, exchange offers, make-whole fundamental change, and certain stockholder distributions.

Repurchase Rights

On or after March 5, 2027, and on or before the 60th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the 2030 Notes, subject to partial redemption limitation, at a repurchase price equal to the principal amount, plus accrued and unpaid interest, if the last reported sale price per share of the Company’s common stock exceeded 130 % of the conversion price on (1) each of at least twenty trading days (whether or not consecutive) during any thirty consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a redemption notice

and (2) the trading day immediately before the date the Company sends such notice.

Pursuant to the partial redemption limitation, the Company may not elect to redeem less than all of the outstanding 2030 Notes unless at least $ 100.0 million aggregate principal amount of 2030 Notes are outstanding and not subject to redemption as of the time it sends the related redemption notice.

On or after March 5, 2027, and on or before the 60th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the 2030 Notes.

On or after April 20, 2024, and on or before the 50th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the 2026 Notes.

These redemptions are subject to the partial redemption limitation, at a repurchase price equal to the principal amount, plus accrued and unpaid interest, if the last reported sale price per share of the Company's common stock exceeded 130 % of the conversion price on (1) each of at least twenty trading days (whether or not consecutive) during any thirty consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a redemption notice and (2) the trading day immediately before the date the Company sends such notice.

Pursuant to the partial redemption limitation, the Company may not elect to redeem less than all of the outstanding 2030 Notes or 2026 Notes unless at least $ 100.0 million aggregate principal amount of the 2030 Notes or 2026 Notes, respectively, are outstanding and not subject to redemption as of the time it sends the related redemption notice.

If certain corporate events that constitute a fundamental change (e.g., events such as business combination transactions involving the Company, shareholder approval of liquidation or dissolution of the Company, and certain de-listing events with respect to the Company's common stock) occur at any time, holders may, subject to certain exceptions, require the Company to purchase their Notes in whole or in part for cash at a price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, to, but excluding, the fundamental change repurchase date.

Accounting for the Notes

The 2030 Notes are classified within non-current liabilities on our consolidated balance sheets.

During fiscal year 2025, the 2026 Notes were reclassified from non-current liabilities to current liabilities on our consolidated balance sheets.

The conversion option of the Notes does not require bifurcation as an embedded derivative.

Issuance costs of $ 12.0 million and $ 10.8 million were recorded as a reduction to the principal balance of the 2030 Notes and 2026 Notes, respectively, and will be amortized as interest expense using the effective interest method over the contractual term.

Fiscal Year Ended

November 30, 2025 November 30, 2024 November 30, 2023

(in thousands) 2030 Notes 2026 Notes 2030 Notes 2026 Notes 2026 Notes

Contractual interest expense $ 15,750 $ 3,600 $ 11,813 $ 3,610 $ 3,600

Amortization of debt discount and issuance costs 1,865 2,216 1,351 2,174 2,147

$ 17,615 $ 5,816 $ 13,164 $ 5,784 $ 5,747

Capped Call Transactions

On February 27, 2024, in connection with the pricing of the 2030 Notes, the Company entered into privately negotiated capped call transactions ("2024 Capped Call Transactions").

On February 27, 2024, in connection with the pricing of the 2030 Notes, the Company entered into privately negotiated capped call transactions (the "2024 Capped Call Transactions").

The 2024 Capped Call Transactions cover approximately 6.6 million shares of the Company's common stock, which represent the number of shares of common stock initially underlying the 2030 Notes.

1 unchanged sentence

The cap price of the 2024 Capped Call Transactions was initially $ 92.98 per share of common stock, which represents a premium of 75 % over the last reported sale price of the common stock of $ 53.13 per share on February 27, 2024, and is subject to certain adjustments under the terms of the 2024 Capped Call Transactions.

The adjusted cap price of the 2024 Capped Call Transactions was approximately $ 91.57 per share of common stock at November 30, 2025.

The cost of the purchased capped calls of $ 42.2 million was recorded as a reduction to additional paid-in-capital upon settlement in March 2024.

Accounting for the 2030 Notes

The 2030 Notes are classified as a non-current liability on our condensed consolidated balance sheets and the conversion option does not require bifurcation as an embedded derivative.

Issuance costs of $ 12.0 million were recorded as a reduction to the principal balance of the 2030 Notes and will be amortized as interest expense using the effective interest method over the contractual term.

Fiscal Year Ended

(in thousands) November 30, 2024

Contractual interest expense ( 3.5 % coupon)

Amortization of debt discount and issuance costs (1)

(1) Amortization based upon an effective interest rate of 4.0 % .

2026 Convertible Senior Notes

In April 2021, the Company issued, in a private placement, convertible senior notes with an aggregate principal amount of $ 360 million, due April 15, 2026, unless earlier repurchased, redeemed or converted.

There are no required principal payments prior to the maturity of the 2026 Notes.

The 2026 Notes bear interest at an annual rate of 1 %, payable semi-annually in arrears on April 15 and October 15 of each year.

The Company incurred approximately $ 10.8 million in issuance costs for the issuance of the 2026 Notes.

Conversion Rights

Before January 15, 2026, Noteholders may convert their 2026 Notes in the following circumstances:

• During any fiscal quarter (and only during such fiscal quarter) commencing after the fiscal quarter ending on May 31, 2021, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for each of at least twenty trading days (whether or not consecutive) during the thirty consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter;

• During the five consecutive business days immediately after any ten consecutive trading day period (the "Measurement Period"), if the trading price per $1,000 principal amount of 2026 Notes for each trading day of the Measurement Period was less than 98 % of the product of the last reported sale price per share of Company’s common stock on such trading day and the conversion rate on such trading day;

• Upon the occurrence of certain corporate events or distributions on the Company’s common stock, or if the Company calls such 2026 Notes for redemption, then the Noteholder of any Note may convert such Note at any time before the close of business on the business day immediately before the related redemption date.

From and after January 15, 2026, Noteholders may convert their 2026 Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.

The Company will satisfy its conversion obligations by paying cash up to the aggregate principal amount of 2026 Notes to be converted, by issuing shares of its common stock or a combination of cash and shares of its common stock, at its election.

The initial conversion rate is 17.4525 shares of common stock per $1,000 principal amount of the 2026 Notes, representing an initial conversion price of approximately $ 57.30 per share of common stock.

The conversion rate will be adjusted upon the occurrence of certain events, including spin-offs, tender offers, exchange offers, make-whole fundamental change and certain stockholder distributions.

Repurchase Rights

On or after April 20, 2024, and on or before the 50th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the 2026 Notes, subject to the partial redemption limitation, at a repurchase price equal to 100 % of the principal amount, plus accrued and unpaid interest, if the last reported sale price per share of the Company’s common stock exceeded 130 % of the conversion price on (1) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a redemption notice and (2) the trading day immediately before the date the Company sends such notice.

Pursuant to the partial redemption limitation, the Company may not elect to redeem less than all of the outstanding 2026 Notes unless at least $ 100.0 million aggregate principal amount of 2026 Notes are outstanding and not subject to redemption as of the time it sends the related redemption notice.

2021 Capped Call Transactions

On April 8, 2021, in connection with the pricing of the 2026 Notes, the Company entered into privately negotiated capped call transactions ("2021 Capped Call Transactions") with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions.

The 2021 Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2026 Notes, approximately 6.3 million shares (representing the number of shares of common stock initially underlying the 2026 Notes) of the Company’s common stock.

On April 8, 2021, in connection with the pricing of the 2026 Notes, the Company entered into privately negotiated capped call transactions (the "2021 Capped Call Transactions").

The 2021 Capped Call Transactions cover approximately 6.3 million shares of the Company's common stock, which represent the number of shares of common stock initially underlying the 2026 Notes.

The 2021 Capped Call Transactions are generally expected to reduce potential dilution to our common stock upon any conversion of the 2026 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2026 Notes, as the case may be, with such reduction and/or offset subject to a cap.

The cap price of the 2021 Capped Call Transactions will initially be $ 89.88 per share of common stock, which represents a premium of 100 % over the last reported sale price of the common stock of $ 44.94 per share on April 8, 2021, and is subject to certain adjustments under the terms of the 2021 Capped Call Transactions.

The cap price of the 2021 Capped Call Transactions was initially $ 89.88 per share of common stock, which represents a premium of 100 % over the last reported sale price of the common stock of $ 44.94 per share on April 8, 2021, and is subject to certain adjustments under the terms of the 2021 Capped Call Transactions.

The adjusted cap price of the 2021 Capped Call Transactions was approximately $ 77.72 per share of common stock at November 30, 2025.

The cost of the purchased capped calls of $ 43.1 million was recorded as a reduction to additional paid-in-capital upon settlement in April 2021.

We elected to integrate the 2021 capped call options with the applicable 2026 Notes for federal income tax purposes pursuant to applicable U.S.

We elected to integrate the 2021 Capped Call Transactions and the 2024 Capped Call Transactions with the applicable Notes for federal income tax purposes pursuant to applicable U.S.

Treasury Regulations.

Accordingly, the $ 43.1 million gross cost of the purchased 2021 capped calls will be deductible for income tax purposes as original discount interest over the term of the 2026 Notes.

Accounting for the 2026 Notes

The Company adopted ASU 2020-06 using the modified retrospective approach on December 1, 2021.

Under ASU 2020-06, we no longer separate the Notes into liability and equity components.

We recognized the cumulative effect of applying this new standard as of December 1, 2021.

In accounting for the transaction, prior to the adoption of ASU 2020-06, the 2026 Notes were separated into liability and equity components.

The initial carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated conversion feature.

The amount initially recognized for the equity component totaled $ 64.8 million.

The excess of the 2026 Notes’ principal amount over the initial carrying amount of the liability component, referred to as the debt discount, was amortized as interest expense over the 2026 Notes’ contractual term.

The equity component, which represented the difference between the gross proceeds and the initial liability component, was recorded as an increase to additional paid-in capital and was not remeasured.

Upon adoption of ASU 2020-06 on December 1, 2021, using the modified retrospective method, the Company reversed the separation of the debt and equity components and accounted for the 2026 Notes wholly as debt.

The Company also reversed the amortization of the debt discount that was due to the equity component, with a cumulative adjustment to retained earnings on the adoption date.

Further, the Company reversed the allocation of the issuance costs to the equity component and accounted for the entire amount as debt issuance cost that will be amortized as interest expense over the remaining term at an effective interest rate of 1.63 % with a cumulative adjustment to retained earnings on the adoption date.

We recognized the cumulative effect of initially applying this new standard as of December 1, 2021 as an adjustment to the December 1, 2021 opening balance of retained earnings.

The conversion option that was previously accounted for in equity under the cash conversion model was recombined into the convertible debt outstanding, and as a result, additional paid in capital and the related unamortized debt discount on the 2026 convertible senior notes were reduced.

The removal of the remaining debt discount recorded for this previous separation has the effect of increasing our net debt balance.

We recorded a $ 47.5 million decrease to additional paid-in capital, a $ 56.0 million decrease to debt discount, a $ 4.9 million increase to retained earnings, and a $ 13.4 million decrease to long-term deferred tax liabilities.

As a result of the adoption of ASU 2020-06, non-cash interest expense decreased by approximately $ 11.5 million in 2022 and 2023 as well as in future periods due to the de-recognition of the debt discount associated with the previously bifurcated equity components of the 2026 Notes.

Further, the standard requires the use of the if converted method to calculate diluted earnings per share.

Fiscal Year Ended

(in thousands) November 30, 2024 November 30, 2023 November 30, 2022

Contractual interest expense ( 1 % coupon)

$ 3,610 $ 3,600 $ 3,600

Amortization of debt discount and issuance costs (1)

2,174 2,147 2,112

$ 5,784 $ 5,747 $ 5,712

(1) After the adoption of ASU 2020-06, the effective interest rate for the 2026 Notes was 1.63 %.

Prior to adoption of ASU 2020-06, the effective interest rate for the 2026 Notes was 5.71 %.

Accordingly, the $ 43.1 million gross cost of the purchased 2021 Capped Call Transactions and the $ 42.2 million gross cost of the purchased 2024 Capped Call Transactions will be deductible for income tax purposes as original discount interest over the term of the applicable Notes.

Credit Facility

On March 7, 2024, the Company entered into the Credit Agreement with certain lenders, which provides a $ 900.0 million secured revolving credit facility.

The revolving credit facility may be made available in U.S.

Dollars and certain other currencies and may be increased, and new term loan commitments may be entered into, by up to an additional $ 260.0 million if the existing or additional lenders are willing to make such increased commitments.

The revolving credit facility has sublimits for swing line loans up to $ 25.0 million and for the issuance of standby letters of credit in a face amount up to $ 25.0 million.

Interest rates for the revolving credit facility are determined by reference to a Term Benchmark Rate or a base rate at our option and would range from 1.50 % to 3.00 % above the Term Benchmark Rate for Term Benchmark-based borrowings 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.

Additionally, we may borrow certain foreign currencies at rates set in the same range above the respective Term Benchmark Rates for those currencies, based on our consolidated total net leverage ratio.

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.

The average interest rate of the revolving credit facility during the fiscal year ended November 30, 2024 was 6.80 %, and the interest rate as of November 30, 2024 was 6.67 %.

The credit facility matures on March 7, 2029.

The revolving credit facility does not require amortization of principal.

On July 21, 2025, the Company 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").

The Credit Facility has sublimits for swing line loans up to $ 25.0 million and for the issuance of standby letters of credit in a face amount up to $ 25.0 million.

The amount outstanding under our prior secured credit facility is now outstanding under the Credit Facility.

Interest rates for the Credit Facility are determined by reference to a Term Benchmark Rate or a base rate at our option and range from 1.25 % to 2.50 % above the Term Benchmark Rate for Term Benchmark-based borrowings 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.

During fiscal year 2025, we repaid $ 130.0 million on the Credit Facility.

The interest rate as of November 30, 2025 was 5.92 %.

The Credit Facility matures on the earlier of (i) July 21, 2030, and (ii) the date that is 91 days prior to the maturity date of our 2030 Notes subject to certain conditions as set forth in the Credit Agreement, including the repayment of the 2030 Notes, the refinancing of the 2030 Notes including a maturity date that is on or after October 21, 2030, and compliance with a liquidity test when all amounts outstanding will be due and payable in full.

Revolving loans may be borrowed, repaid, and reborrowed until the maturity date, at which time all amounts outstanding must be repaid.

Accrued interest on the loans is payable quarterly in arrears.

During October 2024, we partially funded our acquisition of ShareFile by drawing down $ 730.0 million under the revolving line of credit.

As of November 30, 2025, there was $ 600.0 million outstanding under the revolving credit facility and $ 2.1 million of letters of credit.

Costs incurred to obtain our long-term debt of $ 6.0 million, along with $ 1.0 million of unamortized debt issuance costs related to the previous credit agreement, were recorded as debt issuance costs and will be amortized over the term of the debt agreement using the effective interest method.

Unamortized debt issuance costs related to the repaid term loan were expensed.

We are the sole borrower under the credit facility and our obligations under the Credit Agreement are guaranteed by each of our material domestic subsidiaries and are secured by substantially all of our assets and each of our material domestic subsidiaries.

Costs incurred to obtain the Credit Agreement of $ 6.2 million, along with $ 5.2 million of unamortized debt issuance costs related to the previous credit agreement, were recorded as debt issuance costs and will be amortized over the term of the debt agreement.

The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict our ability to, among other things, grant liens, make investments, make acquisitions, incur indebtedness, merge or consolidate, dispose of assets, pay dividends or make distributions, repurchase stock, change the nature of the business, enter into certain transactions with affiliates, and enter into burdensome agreements, in each case subject to customary exceptions for a credit facility of this size and type.

We are also required to maintain compliance with a consolidated interest charge coverage ratio, a consolidated senior secured net leverage ratio and a consolidated total net leverage ratio.

We are also required to maintain compliance with a consolidated interest charge coverage ratio and a consolidated senior secured net leverage ratio.

The Company has operating leases for facilities, vehicles, and equipment under various non-cancelable lease agreements.

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The Company makes variable payments on certain of its leases related to taxes, insurance, common area maintenance, and utilities, among other things.

We sublease certain facilities to third parties, which have remaining lease terms of up to two years .

We sublease certain facilities to third parties, which have remaining lease terms of up to one year .

The components of net operating lease cost for the years ended November 30, 2025, 2024, and 2023 were as follows:

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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.

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

Purchase Obligations

In connection with our acquisition of ShareFile, we assumed an existing agreement for cloud-based hosting services through May 2029 with a third-party provider that was entered into by Cloud in the ordinary course of business.

In connection with our acquisition of ShareFile, we assumed an existing agreement for cloud-based hosting services through May 2029 with a third-party provider in the ordinary course of business.

The agreement requires a purchase obligation of $ 130.0 million throughout the term of the agreement.

As of November 30, 2025, we had $ 76.5 million of remaining obligations under this agreement.

For the twelve months ended November 30, 2024, the total expense related to this purchase obligation was $ 2.5 million and is recorded in cost of maintenance and services.

For the twelve months ended November 30, 2025 and 2024, the total expense related to this purchase obligation was $ 37.3 million and $ 2.5 million, respectively, and is recorded in cost of maintenance and services.

Legal Proceedings

Please see Note 19:

Cyber Related Matters for a discussion of legal proceedings related to the MOVEit Vulnerability.

Please see Note 17, Cyber Related Matters for a discussion of legal proceedings related to the MOVEit Vulnerability.

We also are subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business.

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Each DSU represents one share of our common stock and all DSU grants have been made to non-employee members of our Board of Directors.

DSUs do not have voting rights and

can only be converted into common stock when the recipient ceases to be a member of the Board of Directors or a change in control of the Company occurs.

DSUs do not have voting rights and can only be converted into common stock when the recipient ceases to be a member of the Board of Directors or a change in control of the Company occurs.

Common Stock Repurchases

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.

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.

As of November 30, 2025, there was $ 202.2 million remaining under the current authorization.

Excise tax was insignificant for all years presented.

Stock-Based Compensation

We currently have one stockholder-approved stock plan from which we can issue stock-based awards, which was approved by our stockholders in fiscal year 2008 and most recently amended and approved by stockholders in May 2024 ("2008 Plan").

The 2008 Plan permits the granting of stock awards to officers, members of the Board of Directors, employees, and consultants.

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A total of 4,476,791 shares were available for issuance as of November 30, 2025.

We had previously adopted two stock plans for which the approval of stockholders is not required:

the 2002 Nonqualified Stock Plan ("2002 Plan") and the 2004 Inducement Stock Plan ("2004 Plan").

We previously adopted two stock plans for which the approval of stockholders was not required:

the 2002 Nonqualified Stock Plan (the "2002 Plan") and the 2004 Inducement Stock Plan (the "2004 Plan").

The 2002 Plan permits the granting of stock awards to non-executive officer employees and consultants.

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For the 2025, 2024, and 2023 plans, the vesting terms were based on the following:

(i) 75 % is based on achievement of a three-year cumulative operating income, and (ii) 25 % is based on our level of attainment of specified TSR targets relative to the percentage appreciation of a specified index of companies for the respective three-year periods.

(i) 75 % is based on achievement of a three-year cumulative operating income, and (ii) 25 % is based on our level of attainment of specified total stockholder return targets relative to the percentage appreciation of a specified index of companies for the respective three-year periods.

The vesting of LTIP awards is also subject to continued employment of the grantees through the performance period, except in the event of a qualifying termination.

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The expected annual dividend yield is based on the weighted-average of the dividend yield assumptions used for options granted during the applicable period.

For each ESPP award, the

expected life in years is based on the period of time between the beginning of the offering period and the date of purchase, plus an additional holding period of three months .

For each ESPP award, the expected life in years is based on the period of time between the beginning of the offering period and the date of purchase, plus an additional holding period of three months .

Based on the above assumptions, the weighted average estimated fair value of stock options granted in fiscal years 2025, 2024, and 2023 was $ 15.22 , $ 15.79 , and $ 14.40 per share, respectively.

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Total unrecognized stock-based compensation expense, net of expected forfeitures, related to unvested stock options and unvested restricted stock awards amounted to $ 78.6 million at November 30, 2025.

These costs are expected to be recognized over a weighted average period of two years .

These costs are expected to be recognized over a weighted average period of 2 years.

The following additional activity occurred under our plans:

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(in thousands) November 30, 2025 November 30, 2024 November 30, 2023

Cost of maintenance and services $ 3,540 $ 2,976 $ 1,969

Cost of maintenance, SaaS, and professional services $ 5,818 $ 3,540 $ 2,976

Sales and marketing 13,277 8,964 6,797

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Timing of Revenue Recognition

Our revenues are derived from licensing our products, and from related services, which consist of maintenance, hosting services, SaaS and consulting and education.

Our revenues are derived from licensing our products, and from related services, which consist of maintenance, SaaS, and professional services.

Information relating to revenue from external customers by revenue type is as follows:

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Maintenance 410,174 410,556 401,501

Services 93,522 72,149 51,342

SaaS 287,928 44,564 20,693

Professional services 41,842 48,958 51,456

Total revenue $ 977,831 $ 753,409 $ 694,439

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Our multi-year term license arrangements, which are typically billed annually, result in revenue recognition in advance of billing and the recognition of unbilled receivables.

As of November 30, 2024, billing of our long-term unbilled receivables is expected to occur as follows:

As of November 30, 2025, billing of our non-current unbilled receivables is expected to occur as follows:

(in thousands)

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Deferred revenue expected to be recognized as revenue more than one year subsequent to the balance sheet date is included in long-term liabilities on the consolidated balance sheets.

Our net deferred revenue balance is primarily made up of deferred maintenance and deferred revenue related to our SaaS offerings.

As of November 30, 2024, the changes in net deferred revenue were as follows:

Our deferred revenue balance is primarily made up of deferred maintenance and deferred revenue related to our SaaS offerings.

As of November 30, 2025, the changes in deferred revenue were as follows:

(in thousands)

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Acquired from business combinations 96,159

Revenue recognized ( 694,439 )

Revenue recognized that was deferred in prior periods ( 270,965 )

Revenue recognized from current period arrangements ( 482,444 )

Balance, November 30, 2024 $ 404,412

Billings and other 998,498

Acquired from business combinations 96,159

Revenue recognized that was deferred in prior periods ( 372,029 )

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These costs include a large majority of our sales incentive programs as we have determined that annual compensation is commensurate with annual sales activities.

Certain of our sales incentive programs do meet the requirements to be capitalized.

Certain of our sales incentive programs meet the requirements to be capitalized.

Depending upon the sales incentive program and the related revenue arrangement, such capitalized costs are amortized over the longer of (i) the product life, which is generally three to five years ;

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Costs incurred 2,871 10,238 13,109

Cash disbursements ( 2,768 ) ( 2,833 ) ( 5,601 )

Translation adjustments and other — ( 6 ) ( 6 )

Cash disbursements and other ( 4,625 ) ( 12,679 ) ( 17,304 )

Balance, November 30, 2025 $ 2,585 $ 3,254 $ 5,839

Cash disbursements for expenses incurred from restructuring actions are expected to be made through fiscal year 2027.

Accordingly, the balance of the restructuring reserve is included in short-term and long-term operating lease liabilities, and other accrued current liabilities on the consolidated balance sheets at November 30, 2025.

We expect to incur additional expenses as part of the 2025 action during fiscal year 2026, but we do not expect these costs to be significant.

2025 Restructurings

During the fourth quarter of fiscal year 2025, we restructured our operations to optimize efficiency and sustainability, while ensuring alignment with the company's long-term financial objectives.

In connection with this restructuring, we reduced our global workforce by 4 %.

These workforce reductions occurred within all functions and across most geographies in which we operate.

Restructuring expenses are related to employee costs, including severance, health benefits, and outplacement services.

For the fiscal year ended November 30, 2025, we incurred expenses of $ 3.8 million.

A summary of activity for this restructuring action is as follows:

(in thousands) Employee Severance and Related Benefits Total

Balance, December 1, 2024 $ — $ —

Costs incurred 3,796 3,796

Cash disbursements and other ( 955 ) ( 955 )

Balance, November 30, 2025 $ 2,841 $ 2,841

2024 Restructurings

During the fourth quarter of fiscal year 2024, we restructured our operations in connection with the acquisition of ShareFile and to streamline our organization to better align with our strategy.

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Restructuring expenses are related to employee costs, including severance, health benefits, and outplacement services.

For the fiscal year ended November 30, 2024, we incurred expenses of $ 5.7 million.

Cash disbursements for expenses incurred to date under this restructuring are expected to be made through the fourth quarter of fiscal year 2025.

Accordingly, the balance of the restructuring reserve is included in other accrued liabilities on the consolidated balance sheets at November 30, 2024.

We expect to incur additional expenses as part of this action during fiscal year 2025, but we do not expect these costs to be material.

For the fiscal years ended November 30, 2025 and 2024, we incurred expenses of $ 8.2 million and $ 5.7 million, respectively.

A summary of activity for this restructuring action is as follows:

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Balance, November 30, 2024 $ — $ 5,206 $ 5,206

Costs incurred 1,942 6,218 8,160

Cash disbursements and other ( 1,447 ) ( 11,010 ) ( 12,457 )

Balance, November 30, 2025 $ 495 $ 414 $ 909

2023 Restructurings

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These workforce reductions occurred within all functions and across most geographies in which we operate.

Restructuring expenses are related to employee costs, including severance, health benefits and outplacement services (but excluding stock-based compensation).

For the fiscal years ended November 30, 2024 and 2023, we incurred expenses of $ 0.9 million and $ 1.7 million, respectively.

Cash disbursements for expenses incurred to date under this restructuring are expected to be made through fiscal year 2025.

The restructuring reserve is included in other accrued liabilities on the consolidated balance sheets as of November 30, 2024.

We do not expect to incur additional material expenses in connection with this restructuring.

Restructuring expenses are related to employee costs, including severance, health benefits, and outplacement services.

For the fiscal years ended November 30, 2025, 2024, and 2023, we incurred expenses of $ 0.1 million, $ 0.9 million, and $ 1.7 million, respectively.

During the first quarter of fiscal year 2023, we restructured our operations in connection with the acquisition of MarkLogic.

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Additionally, in 2024, we terminated MarkLogic leases.

For the fiscal years ended November 30, 2024 and 2023, we incurred expenses of $ 2.9 million and $ 5.7 million, respectively.

Cash disbursements for expenses incurred to date under this restructuring are expected to be made through fiscal year 2027.

Accordingly, the balance of the restructuring reserve is included in short-term and long-term operating lease liabilities on the consolidated balance sheets at November 30, 2024.

We expect to incur additional expenses as part of this action related to facility closures as we consolidate offices during fiscal year 2025.

2020 Restructurings

During the fourth quarter of fiscal year 2020, we restructured our operations in connection with the acquisition of Chef.

This restructuring resulted in a reduction in redundant positions, primarily within the administrative functions of Chef.

For the fiscal years ended November 30, 2025, 2024, and 2023, we incurred expenses of $ 0.2 million, $ 2.9 million, and $ 5.7 million, respectively.

Cash disbursements for expenses incurred to date under this restructuring are expected to be made through fiscal year 2027.

Accordingly, the balance of the restructuring reserve is included in short-term and long-term operating lease liabilities on the consolidated balance sheets at November 30, 2024.

We expect to incur additional expenses as part of this action related to facility closures as we consolidate offices in various locations during fiscal year 2025, but we do not expect these costs to be material.

The components of income before income taxes are as follows:

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Tax on unremitted earnings ( 7,497 ) 13,889 —

Tax on intercompany restructuring 2,502 — —

Other ( 563 ) ( 115 ) ( 412 )

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Tax credit and loss carryforwards 19,570 23,654

Interest expense carryforward 5,142 —

Operating lease liabilities 4,861 6,335

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Total $ 76,284 $ 53,900

Under provisions of the Tax Cuts and Jobs Act pursuant to Internal Revenue Code Section 174, beginning in fiscal year 2023 specific research and experimental ("R&E") expenditures are now required to be capitalized and amortized over five years for U.S.

R&E and fifteen years for foreign R&E.

On July 4, 2025, the 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 valuation allowance primarily applies to net operating loss carryforwards in foreign jurisdictions under conditions where realization is not more likely than not.

The $ 0.9 million decrease in the valuation allowance during fiscal year 2024 primarily relates to losses in a foreign subsidiary that have expired prior to utilization.

The $ 0.2 million decrease in the valuation allowance during fiscal year 2025 primarily relates to the release of the valuation allowance on certain foreign losses.

At November 30, 2025, we have federal and foreign net operating loss carryforwards of $ 23.7 million expiring on various dates through 2035 and $ 27.5 million that do not expire.

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federal, state, and foreign withholding taxes expected to be imposed upon the repatriation of unremitted foreign earnings that are not considered indefinitely reinvested.

There is approximately $ 30.0 million of unremitted foreign earnings which are deemed to be indefinitely reinvested to support the working capital requirements of our foreign subsidiaries.

There are approximately $ 29.6 million of unremitted foreign earnings which are deemed to be indefinitely reinvested to support the working capital requirements of our foreign subsidiaries.

A determination of the deferred tax liability on this amount is not practicable due to the complexities, variables, and assumptions inherent in the hypothetical calculations.

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There was a minimal amount of estimated interest and penalties recorded in the provision for income taxes in the periods presented.

We have accrued $ 0.3 million and $ 0.5 million of estimated interest and penalties at November 30, 2024 and 2023, respectively.

We have accrued $ 0.3 million of estimated interest and penalties for both periods ending November 30, 2025 and 2024, respectively.

We do not expect any significant changes to the amount of unrecognized tax benefits in the next twelve months.

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Tax authorities for certain non-U.S.

jurisdictions are also examining tax returns for various years dating back to 2016 and the Company does not expect the results of these examinations to be material to our consolidated balance sheets, cash flows or statements of income.

With some exceptions, we are generally no longer subject to tax examinations in non-U.S.

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We compute diluted earnings per share using the weighted average number of common shares outstanding plus the effect of outstanding dilutive stock options, restricted stock units, and deferred stock units, using the treasury stock method and the effect of our convertible debt using the if-converted method.

The following table sets forth the calculation of basic and diluted earnings per share from continuing operations:

The following table sets forth the calculation of basic and diluted earnings per share:

Fiscal Year Ended

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During the fiscal years ended November 30, 2025, 2024, and 2023, we included the 2026 Notes in our diluted earnings per share calculation.

During the fiscal year ended November 30, 2022, we excluded the 2026 Notes in our diluted earnings per share calculation because the conversion feature in the 2026 Notes was out of the money.

During the fiscal year ended November 30, 2024, we excluded the 2030 Notes in our diluted earnings per share calculation because the conversion feature in the 2030 Notes was out of the money.

Business Segments and International Operations

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.

During the fiscal years ended November 30, 2025 and 2024, we excluded the 2030 Notes in our diluted earnings per share calculation because the conversion feature in the 2030 Notes was out of the money.

Segment Information and Geographic Information

Operating segments are components of an enterprise that engages 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.

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.

Long-lived assets, comprised of our property and equipment, totaled $ 7.9 million and $ 8.2 million in the U.S.

We operate as one operating and reportable segment that is managed on a consolidated basis and derives substantially all of its revenue from the sale and support of one group of similar products and services, comprised of software products for the development, deployment, and management of responsible, AI-powered applications and digital experiences.

The accounting policies of the Company's operating segment are the same as those described in Note 1, Nature of Business and Summary of Significant Accounting Policies .

Our CODM does not receive profitability information at a lower level than consolidated results, and evaluates net income on a consolidated basis to set financial performance targets, assess performance, and make resource allocation decisions, primarily through comparison of actual results to forecasted results, year-over-year analysis, and review of historical performance trends.

The measure of segment assets is reported on the Company's consolidated balance sheets as total consolidated assets.

The Company's significant expenses and other segment items are provided in the table below:

Fiscal Year Ended

(in thousands) November 30, 2025 November 30, 2024 November 30, 2023

$ 977,831 $ 753,409 $ 694,439

Cost of revenue (1)

140,537 97,720 93,432

Sales and marketing (2)

197,736 155,606 149,279

Product development (2)

172,855 132,791 120,187

General and administrative (2)

81,952 68,817 64,615

Stock-based compensation

64,768 46,756 40,529

Amortization of intangibles

145,492 94,512 96,599

Other segment items, net (3)

101,358 88,769 59,601

$ 73,133 $ 68,438 $ 70,197

(1) Excludes amortization of intangibles and stock-based compensation.

(2) Excludes stock-based compensation.

(3) Includes restructuring expenses, acquisition-related expenses, cyber incident and vulnerability response expenses, net, interest expense, interest income and other, net, foreign currency loss, net, and provision for income taxes.

Geographic Information

See Note 12, Revenue Recognition , for a disaggregation of revenue by geographic region.

Long-lived assets

Long-lived assets, comprised of our property and equipment, net, and operating lease right-of-use, net, totaled $ 15.9 million and $ 23.0 million in the U.S.

and $ 23.6 million and $ 21.6 million outside of the U.S.

at November 30, 2025 and 2024, respectively.

At November 30, 2024, Bulgaria accounted for more than 10% of our consolidated long-lived assets.

At November 30, 2023, India accounted for more than 10% of our consolidated long-lived assets.

No individual country outside of the U.S.

accounted for more than 10% of our consolidated long-lived assets.

Cyber Related Matters

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Costs for this incident were primarily related to the engagement of external cybersecurity experts and other incident response professionals.

We did not incur costs related to this incident during fiscal year 2024 and do not expect to incur additional costs as the investigation is closed.

We did not incur costs related to this incident during fiscal year 2024 or 2025 and do not expect to incur additional costs as the investigation is closed.

For the fiscal year ended November 30, 2023, we incurred expenses of $ 4.7 million, net of insurance reimbursements, related to this incident.

MOVEit Vulnerability

Description of Event

As previously disclosed, on the evening of May 28, 2023, we learned that our MOVEit Transfer (the on-premise version) and MOVEit Cloud (a cloud-hosted version of MOVEit Transfer) products were attacked via a "zero-day vulnerability" that could provide for unauthorized escalated privileges and access to the customer’s underlying environment (the "MOVEit Vulnerability").

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.

MOVEit Transfer and MOVEit Cloud represented less than 4 % of our revenue in the periods presented.

Litigation and Governmental Investigations Arising from the MOVEit Vulnerability

As a result of the MOVEit Vulnerability, we are party to certain class action lawsuits filed by individuals who claim to have been impacted by the exfiltration of data from the environments of our MOVEit Transfer customers, which the Judicial Panel on Multidistrict Litigation transferred to the District of Massachusetts for coordinated and consolidated proceedings (the "MDL").

The MDL has also consolidated the previously disclosed insurance subrogation claims (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.

We 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 inquires 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 inquires 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 are we aware of any formal FTC investigation.

Such claims and investigations may have an adverse effect on how we operate our business and our results of operations, and in the future, we may be subject to additional governmental or regulatory investigations, as well as additional litigation or indemnification claims.

Our financial liability arising from any of the foregoing will depend on many factors, including the extent to which governmental entities investigate the matter and limitations contained within our customer contracts;

As previously disclosed, on the evening of May 28, 2023, we learned that our MOVEit Transfer (the on-premise version) and MOVEit Cloud (a cloud-hosted version of MOVEit Transfer) products were attacked by a threat actor who compromised and exfiltrated personal data from various customer-controlled MOVEit Transfer environments (the "MOVEit Vulnerability").

As a result of the MOVEit Vulnerability, we are party to certain class action lawsuits filed by individuals who claim to have been impacted by the exfiltration of data from the environments of our MOVEit Transfer customers, which have been centralized in multi-district litigation in the District of Massachusetts (the "MDL").

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.

The MDL remains in a relatively early stage and is not expected to conclude within the next twelve months.

Motions to dismiss were filed and partially granted in July 2025, then further partially granted in January 2026 in response to our motions for reconsideration.

In all, the court has dismissed 20 of the 33 claims asserted by the plaintiffs in the MDL.

As 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 of the date of this filing, have not resulted in any prosecution or enforcement actions against us.

We continue to support inquiries and investigations from several state attorneys general, one of which has been formally closed without any enforcement or regulatory actions directed against us.

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.

As our litigation response continues, we will continue to assess the potential impact of the MOVEit Vulnerability on our business, operations, and financial results.

Also, each of the governmental inquiries and investigations mentioned above could result in adverse judgments, settlements, fines, penalties, or other resolutions, the amount, scope and timing of which could be material, but which we are currently unable to predict.

MOVEit Transfer and MOVEit Cloud represented less than 3% in aggregate of our revenue for the fiscal year ended November 30, 2025.

Expenses Incurred and Future Costs

For the fiscal years ended November 30, 2024 and 2023, we incurred net costs of $ 5.6 million and $ 1.5 million, respectively, related to the MOVEit Vulnerability.

The costs recognized are net of insurance recoveries of $ 2.1 million and $ 3.7 million, respectively.

For the fiscal years ended November 30, 2025, 2024, and 2023, we incurred net costs of $ 2.8 million, $ 5.6 million, and $ 1.5 million, respectively, related to the MOVEit Vulnerability.

The costs recognized are net of insurance recoveries of $ 2.2 million, $ 2.1 million, and $ 3.7 million, respectively.

The timing of recognizing insurance recoveries may differ from the timing of recognizing the associated expenses.

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While a loss from these matters is reasonably possible, we cannot reasonably estimate a range of possible losses at this time, particularly while the foregoing matters remain ongoing.

Furthermore, with respect to the MDL, the proceedings remain in the early stages, 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.

Also, each of the governmental inquiries and investigations mentioned above could result in adverse judgements, settlements, fines, penalties, or other resolutions, the amount, scope and timing of which could be material, but of which we are currently unable to reasonably estimate.

Furthermore, with respect to the MDL, the proceedings remain in the relatively early stages, 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.

With respect to governmental inquiries and investigations, we are currently unable to reasonably estimate any possible adverse judgments, settlements, fines, or penalties.

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

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During the period when the November 2022 Cyber Incident and 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 $ 8.3 million in insurance recoveries, of which $ 2.5 million was related to the

November 2022 Cyber Incident and $ 5.8 million was related to the May 2023 MOVEit Vulnerability, providing us with approximately $ 6.7 million of additional cybersecurity insurance coverage under the applicable policy (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.

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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 8. Financial Statements and Supplementary Data