Progress targets $1 billion revenue with acquisition; expands Bangalore team

US-based Progress, a provider of AI-driven infrastructure software, is expected to reach almost $1 billion in revenue by 2025 following its acquisition of ShareFile, according to company CEO Yogesh Gupta. This acquisition will expand the company’s Bengaluru team by adding 150 employees, increasing its India workforce to around 650.

“Financially, we are in a robust position. This year, our revenue is projected to be $740-750 million. Pre-acquisition, we’re seeing around $750 million in revenue, over $300 million in operating income, and $200 million in annual cash flow. This financial strength enables us to invest in acquisitions and enhance our product portfolio. The acquisition is anticipated to bring us close to $1 billion in revenue next year,” said Gupta.

ShareFile, which provides software facilitating collaboration between businesses on shared content, operates as a business within a larger company called Cloud Software Group. The ShareFile business the company is acquiring generates approximately $240 million in revenue, which, adding to Progress’ current revenue, takes it close to $1 billion next year.

Growth strategy

The CEO explained the company’s growth strategy centres around key pillars including acquiring complementary companies and ensuring its customer net retention rate remains strong, with a target of over 100 per cent.

“When we acquire companies, we invest in both products and customer relationships, often improving net retention rates post-acquisition. This approach has fuelled our growth from under $400 million in revenue five years ago to an expected $1 billion next year. During this period, our market cap has more than tripled, and our enterprise value has nearly quadrupled,” Gupta noted. He added that over the past three years, Progress achieved an average net dollar retention rate of about 101 per cent, sometimes reaching 102 per cent.

The company has offices in Bengaluru, Hyderabad, and Delhi. While Delhi is primarily a software engineering hub, he explained, the Hyderabad office, with over 200 employees, focuses on engineering and other functions like marketing. The Bengaluru office has over 200 people across marketing, sales, engineering, product management, and back-office roles.

“Altogether, we employ nearly 500 people in India, with a legal team based in Hyderabad. India is a critical and holistic part of our organisation, both in terms of workforce and market reach. Five years ago, we had just 20 people in Bengaluru; today, we have over 220. Our growth here has been dramatic, and we anticipate continued expansion,” he said.

AI capabilities

On the product side, the teams in India are involved in both developing new products and enhancing existing ones, including adding AI capabilities and building cloud and SaaS offerings. The company is also building a data platform in India that supports businesses in creating “secure and reliable” GenAI applications.

“India is integral to our global operations, not just as a development centre but as a fully-fledged operational hub, providing value on par with any other location worldwide. This current acquisition will add more people to our Bengaluru team. We project additional growth of 15-20 per cent next year, depending on our global business trajectory, making India a significant area of ongoing investment,” the CEO said.

Progress’ software supports key national infrastructure, such as the PAN Card and ID system, ensuring it runs smoothly, he said. Banks like SBI rely on its software, which also supports operations at the Bhabha Atomic Research Centre.

“Over half of our revenue comes from North America. Europe, and the Middle East contribute about a third of our business. The Asia Pacific region, including India, accounts for around 8-9 per cent of our overall revenue. South America contributes roughly 6-8 per cent. Although the dollar contribution from India may be relatively small, the impact is significant. For instance, our software is crucial for the Indian Postal Service, without which operations would be hampered,” Gupta explained.