PROGRESS SOFTWARE CORP /MAPRGS
PROGRESS SOFTWARE CORP /MA Fair Value Disclosure
Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at November 30, 2025:
| Fair Value Measurements Using | |||||||||||||||||||||||
| (in thousands) | Total Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Money market funds | $ | 779 | $ | 779 | $ | — | $ | — | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| 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:
| Fair Value Measurements Using | |||||||||||||||||||||||
| (in thousands) | Total Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Money market funds | $ | 1,823 | $ | 1,823 | $ | — | $ | — | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| 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 | $ | (1,080) | |||
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
Fair Value of the Convertible Senior Notes
The following table details the fair value and carrying value of the Notes:
| November 30, 2025 | November 30, 2024 | ||||||||||||||||||||||
| (in thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||
Convertible senior notes due 2026(1) | $ | 359,163 | $ | 357,300 | $ | 356,946 | $ | 449,094 | |||||||||||||||
Convertible senior notes due 2030(2) | 441,186 | 452,295 | 439,321 | 550,827 | |||||||||||||||||||
| Total | $ | 800,349 | $ | 809,595 | $ | 796,267 | $ | 999,921 | |||||||||||||||
(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.
Fair Value of Other Financial Assets and Liabilities
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.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jan 20, 2026 | Showing above |
| 2024 | Jan 21, 2025 | |
| 2023 | Jan 26, 2024 | |
| 2022 | Jan 27, 2023 | |
| 2021 | Jan 27, 2022 | |
| 2020 | Jan 27, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.