Progress Software buys Domo's AI platform for $400 million in cash

Progress Software Corp. agreed to acquire Domo Inc.'s AI and data platform business for a headline price of $400 million, adding more than 2,400 customers as it pushes deeper into enterprise AI infrastructure.

"The acquisition fits into Progress' AI product strategy by combining Domo's cloud-native AI and data platform with Progress' capabilities in structured and unstructured data management," Yogesh Gupta, chief executive officer of Progress Software, said on a conference call. He said the combined platform will help AI agents use only relevant subsets of enterprise data, improving accuracy and lowering costs.

The net purchase price stands at about $355 million after accounting for a minimum acquired cash balance of $25 million and an estimated $35 million in net present value of tax benefits, Chief Financial Officer Anthony Folger said. Based on Domo's fiscal 2026 results, the net price represents a revenue multiple of slightly more than one. Progress plans to finance the deal with cash on hand and its revolving credit facility.

The transaction positions Progress against larger data platform rivals in a market where enterprises are racing to make fragmented organizational data usable for AI. Domo brings a consumption-based revenue model — more than 85% of its annual recurring revenue is usage-driven — and partnerships with cloud data warehouses including Snowflake and Databricks.

Deal Structure and Timeline

The acquisition is structured as an asset purchase, with Progress taking on substantially all of Domo's operating assets and employees while leaving behind the company's debt and accumulated net operating loss carryforwards of more than $900 million. Domo Inc. will remain a publicly listed entity under a new name and ticker, retaining its NOLs and a debt-free balance sheet with net cash of approximately $246 million, or $4.84 per share — an 81% premium to the 30-day volume-weighted average price.

Folger said Progress expects pro forma net leverage to remain under three times and plans to "deleverage quickly and aggressively" after closing. The deal is subject to regulatory approvals and is expected to close within Progress' fiscal year ending Nov. 30, 2026. Progress reiterated its third-quarter guidance at or above the high end of the range provided in June.

Citi served as exclusive financial advisor to Progress, with DLA Piper as legal counsel. Jefferies advised Domo, with Goodwin Procter as legal counsel.

What Domo Brings

Domo's platform automates data ingestion and transformation from a wide range of sources, allowing customers to store data either in Domo's cloud or in partner warehouses. Gupta said the combination with Progress' data platform will help enterprises aggregate and interpret knowledge across both structured and unstructured data, a challenge he described as critical for effective AI deployment.

More than 85% of Domo's annual recurring revenue is now consumption-based, and the company has been migrating customers from seat-based licensing for roughly two and a half to three years. Gupta said Domo's net retention and gross retention rates are "very similar to overall Progress," and noted that data platform businesses tend to be sticky.

Progress declined to detail specific cost synergies before the deal closes but said it has a track record of acquiring companies that were barely break-even and bringing margins closer to Progress' profile over time. Gupta said Progress is not expecting rapid growth overall, noting the company previously discussed expectations for approximately 2% ARR growth this year.

This article is for informational purposes only and does not constitute investment advice.