Progress Software Stock Tumbles Despite Earnings Topping Estimates

Shares of Progress Software (PRGS) tumbled 11% on Tuesday despite the software provider's second-quarter results topping estimates.

The artificial intelligence software maker reported revenue of $237.36 million, narrowly above what analysts had forecast, and adjusted earnings per share of $1.40, beating the projections compiled by Visible Alpha by 10 cents.

The company lifted its full-year revenue projections to $962 million to $974 million, up from $958 million to $970 million previously. Progress also lifted its adjusted earnings per share (EPS) range by 3 cents on both ends to $5.28 to $5.40. Analysts currently project revenue of $964.10 million, and adjusted EPS of $5.28.

Separately on Monday, Progress announced the acquisition of AI search firm Nuclia for an undisclosed amount.

Oppenheimer analysts said in a note following the earnings report that the quarter was an example of Progress' "solid execution." However, they noted that Progress reported a third straight quarter of declining gross margin, while its annualized recurring revenue rose by just $2 million compared to last quarter.

Last quarter, the company also topped estimates and lifted its outlook in what its CEO called a "particularly solid quarter" for several of its software products.

With Tuesday's move, Progress shares were down more than 10% since the start of the year.