Progress (Nasdaq: PRGS), the trusted provider of infrastructure
software, today announced financial results for its fiscal first
quarter ended February 29, 2024.
First Quarter
2024
Highlights¹:
- Revenue of $185 million increased 12% year-over-year on both an
actual and a constant currency basis.
- Non-GAAP revenue of $185 million increased 12% year-over-year
on an actual currency basis and 11% on a constant currency
basis.
- Annualized Recurring Revenue ("ARR") of $571 million remained
consistent year-over-year on a constant currency basis.
- Operating margin was 19% and non-GAAP operating margin was
42%.
- Diluted earnings per share was $0.51 compared to $0.53 in the
same quarter last year, a decrease of 4%.
- Non-GAAP diluted earnings per share was $1.25 compared to $1.19
in the same quarter last year, an increase of 5%.
"It was another strong, steady quarter for Progress
and I'm very pleased with our results, which again exceeded
estimates and were driven by stable demand and continued resilience
in renewals. I am also thrilled that we significantly fortified our
balance sheet with a new revolving credit facility and a
convertible notes offering," said Yogesh Gupta, CEO of Progress.
"These new arrangements lower our costs and provide Progress with
significant capital and flexibility for accretive M&A for the
coming years."
Additional financial highlights
included:
|
|
Three Months Ended |
|
|
GAAP |
|
Non-GAAP¹ |
(In thousands, except percentages and per share amounts) |
|
February 29, 2024 |
|
February 28, 2023 |
|
% Change |
|
February 29, 2024 |
|
February 28, 2023 |
|
% Change |
Revenue |
|
$ |
184,685 |
|
|
$ |
164,226 |
|
|
12 |
% |
|
$ |
184,685 |
|
|
$ |
165,611 |
|
|
12 |
% |
Income from operations |
|
$ |
35,006 |
|
|
$ |
35,588 |
|
|
(2 |
)% |
|
$ |
76,756 |
|
|
$ |
72,432 |
|
|
6 |
% |
Operating margin |
|
|
19 |
% |
|
|
22 |
% |
|
(300) bps |
|
|
42 |
% |
|
|
44 |
% |
|
(200) bps |
Net income |
|
$ |
22,639 |
|
|
$ |
23,674 |
|
|
(4 |
)% |
|
$ |
55,928 |
|
|
$ |
52,759 |
|
|
6 |
% |
Diluted earnings per share |
|
$ |
0.51 |
|
|
$ |
0.53 |
|
|
(4 |
)% |
|
$ |
1.25 |
|
|
$ |
1.19 |
|
|
5 |
% |
Cash from operations (GAAP) /Adjusted free cash flow
(non-GAAP) |
|
$ |
70,504 |
|
|
$ |
46,767 |
|
|
51 |
% |
|
$ |
72,204 |
|
|
$ |
46,871 |
|
|
54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other fiscal
first quarter
2024 metrics and recent results
included:
- Cash and cash equivalents were $133.2 million at the end of the
quarter.
- Days sales outstanding was 50 days compared to 42 days in the
fiscal first quarter of 2023 and 62 days in the fiscal fourth
quarter of 2023.
- On March 19, 2024, our Board of Directors declared a quarterly
dividend of $0.175 per share of common stock, which will be paid on
June 17, 2024 to shareholders of record as of the close of business
on June 3, 2024.
"In addition to another strong quarter of financial
results, we're very pleased with the recent closing of our $450
million convertible notes offering and a new $900 million credit
facility. We used proceeds from the convertible notes offering to
repay all previously outstanding bank debt, and now have three
times more capacity on our new revolving credit facility," said
Anthony Folger, CFO. "These transactions give Progress substantial
financial scale and greater flexibility to continue executing our
Total Growth Strategy."
_____________________________¹ See Important
Information Regarding Non-GAAP Financial Information and a
reconciliation of non-GAAP adjustments to Progress' GAAP financial
results at the end of this press release.
2024 Business
Outlook
Progress provides the following guidance for the
fiscal year ending November 30, 2024 and the fiscal first quarter
ending February 29, 2024:
|
|
Updated FY 2024 Guidance(March 26,
2024) |
|
Prior FY 2024 Guidance(January 16, 2024) |
(In millions, except percentages and per share amounts) |
|
GAAP |
|
Non-GAAP¹ |
|
GAAP |
|
Non-GAAP¹ |
Revenue |
|
$722 – $732 |
|
$722 – $732 |
|
$722 – $732 |
|
$722 – $732 |
Diluted earnings per share |
|
$1.94 – $2.06 |
|
$4.65 – $4.75 |
|
$1.94 – $2.06 |
|
$4.58 – $4.68 |
Operating margin |
|
19% – 20% |
|
39% – 40% |
|
19% – 20% |
|
39% – 40% |
Cash from operations (GAAP) / Adjusted free cash flow
(non-GAAP) |
|
$205 – $215 |
|
$205 – $215 |
|
$202 – $212 |
|
$202 – $212 |
Effective tax rate |
|
20% |
|
20% |
|
21% |
|
20% |
|
|
Q2 2024 Guidance |
(In millions, except per share amounts) |
|
GAAP |
|
Non-GAAP¹ |
Revenue |
|
$166 – $170 |
|
$166 – $170 |
Diluted earnings per share |
|
$0.22 – $0.26 |
|
$0.93 – $0.97 |
|
|
|
|
|
Based on current exchange rates, the expected
positive currency translation impact on Progress' fiscal year 2024
business outlook compared to 2023 exchange rates on GAAP and
non-GAAP revenue is approximately $2.0 million, and approximately
$0.02 on GAAP and non-GAAP diluted earnings per share. The expected
positive currency translation impact on Progress' fiscal Q2 2024
business outlook compared to 2023 exchange rates on GAAP and
non-GAAP revenue is approximately $0.5 million, and approximately
$0.01 on GAAP and non-GAAP diluted Q2 2024 earnings per share. To
the extent that there are changes in exchange rates versus the
current environment, this may have an impact on Progress' business
outlook.
Conference Call
Progress will hold a conference call to review its
financial results for the fiscal first quarter of 2024 at 5:00 p.m.
ET on Tuesday, March 26, 2024. Participants must register for
the conference call here:
https://register.vevent.com/register/BI87e8a75fdf654aaf8e91ad2419ee7625.
The webcast can be accessed at:
https://edge.media-server.com/mmc/p/agraecam/. The conference call
will include comments followed by questions and answers. Attendees
must register for the webcast and an archived version of the
conference call and supporting materials will be available on the
Progress website within the investor relations section after the
live conference call.
Important Information Regarding Non-GAAP
Financial Information
Progress furnishes certain non-GAAP supplemental
information to our financial results. We use such non-GAAP
financial measures to evaluate our period-over-period operating
performance because our management team believes that by excluding
the effects of certain GAAP-related items that in their opinion do
not reflect the ordinary earnings of our operations, such
information helps to illustrate underlying trends in our business
and provides us with a more comparable measure of our continuing
business, as well as greater understanding of the results from the
primary operations of our business. Management also uses such
non-GAAP financial measures to establish budgets and operational
goals, evaluate performance, and allocate resources. In addition,
the compensation of our executives and non-executive employees is
based in part on the performance of our business as evaluated by
such non-GAAP financial measures. We believe these non-GAAP
financial measures enhance investors' overall understanding of our
current financial performance and our prospects for the future by:
(i) providing more transparency for certain financial measures,
(ii) presenting disclosure that helps investors understand how we
plan and measure the performance of our business, (iii) affords a
view of our operating results that may be more easily compared to
our peer companies, and (iv) enables investors to consider our
operating results on both a GAAP and non-GAAP basis (including
following the integration period of our prior and proposed
acquisitions). However, this non-GAAP information is not in
accordance with, or an alternative to, generally accepted
accounting principles in the United States ("GAAP") and should be
considered in conjunction with our GAAP results as the items
excluded from the non-GAAP information may have a material impact
on Progress' financial results. A reconciliation of non-GAAP
adjustments to Progress' GAAP financial results is included in the
tables at the end of this press release.
In the noted fiscal periods, we adjusted for the
following items from our GAAP financial results to arrive at our
non-GAAP financial measures:
- Acquisition-related revenue – We include
acquisition-related revenue, which constitutes revenue reflected as
pre-acquisition deferred revenue that would have been recognized
prior to our adoption of Accounting Standards Update No. 2021-08,
Business Combinations (Topic 805): Accounting for Contract Assets
and Contract Liabilities from Contracts with Customers ("ASU
2021-08") during the fourth quarter of fiscal year 2021. The
acquisition-related revenue in our prior period results relates to
Chef Software, Inc. which we acquired on October 5, 2020. Since
GAAP accounting required the elimination of this revenue prior to
the adoption of ASU 2021-08, GAAP results alone do not fully
capture all of our economic activities. We believe these
adjustments are useful to management and investors as a measure of
the ongoing performance of the business because, although we cannot
be certain that customers will renew their contracts, we have
historically experienced high renewal rates on maintenance and
support agreements and other customer contracts. Upon our adoption
of ASU 2021-08, this adjustment is no longer applicable to
subsequent acquisitions.
- Amortization of acquired intangibles – We exclude
amortization of acquired intangibles because those expenses are
unrelated to our core operating performance and the intangible
assets acquired vary significantly based on the timing and
magnitude of our acquisition transactions and the maturities of the
businesses acquired.
- Stock-based compensation – We exclude stock-based
compensation to be consistent with the way management and, in our
view, the overall financial community evaluates our performance and
the methods used by analysts to calculate consensus estimates. The
expense related to stock-based awards is generally not controllable
in the short-term and can vary significantly based on the timing,
size and nature of awards granted. As such, we do not include these
charges in operating plans.
- Restructuring expenses and other – In all periods
presented, we exclude restructuring expenses incurred because those
expenses distort trends and are not part of our core operating
results.
- Acquisition-related expenses – We exclude
acquisition-related expenses in order to provide a more meaningful
comparison of the financial results to our historical operations
and forward-looking guidance and the financial results of less
acquisitive peer companies. We consider these types of costs and
adjustments, to a great extent, to be unpredictable and dependent
on a significant number of factors that are outside of our control.
Furthermore, we do not consider these acquisition-related costs and
adjustments to be related to the organic continuing operations of
the acquired businesses and are generally not relevant to assessing
or estimating the long-term performance of the acquired assets. In
addition, the size, complexity and/or volume of past acquisitions,
which often drives the magnitude of acquisition-related costs, may
not be indicative of the size, complexity and/or volume of future
acquisitions.
- Cyber incident and vulnerability response expenses, net
- November 2022 Cyber Incident – We exclude certain expenses
resulting from the detection of irregular activity on certain
portions of our corporate network, as more thoroughly described in
the Form 8-K that we filed on December 19, 2022.
- MOVEit Vulnerability – We exclude certain expenses
resulting from the zero-day MOVEit Vulnerability, as more
thoroughly described in our filings with the Securities and
Exchange Commission since June 5, 2023, including our Form 10-K for
the fiscal year ended November 30, 2023.Expenses include costs to
investigate and remediate these cyber related matters, as well as
legal and other professional services related thereto. Expenses
related to such cyber matters are provided net of expected
insurance recoveries, although the timing of recognizing insurance
recoveries may differ from the timing of recognizing the associated
expenses. Costs associated with the enhancement of our
cybersecurity program are not included within this adjustment. We
expect to continue to incur legal and other professional services
expenses in future periods associated with the MOVEit
Vulnerability. We do not expect to incur additional costs
associated with the November 2022 Cyber Incident as the
investigation is closed. Expenses related to such cyber matters are
expected to result in operating expenses that would not have
otherwise been incurred in the normal course of business
operations. We believe that excluding these costs facilitates a
more meaningful evaluation of our operating performance and
comparisons to our past operating performance.
- Provision for income taxes – We adjust our income tax
provision by excluding the tax impact of the non-GAAP adjustments
discussed above.
- Constant currency – Revenue from our international
operations has historically represented a substantial portion of
our total revenue. As a result, our revenue results have been
impacted, and we expect will continue to be impacted, by
fluctuations in foreign currency exchange rates. As exchange rates
are an important factor in understanding period-to-period
comparisons, we present revenue growth rates on a constant currency
basis, which helps improve the understanding of our revenue results
and our performance in comparison to prior periods. The constant
currency information presented is calculated by translating current
period results using prior period weighted average foreign currency
exchange rates. These results should be considered in addition to,
not as a substitute for, results reported in accordance with
GAAP.
- Annualized Recurring Revenue ("ARR") – We provide an
ARR performance metric to help investors better understand and
assess the performance of our business because our mix of revenue
generated from recurring sources has increased in recent years and
comprises the vast majority of our total revenue. ARR represents
the annualized contract value for all active and contractually
binding term-based contracts at the end of a reporting period. ARR
includes maintenance, software upgrade rights, public cloud and
on-premises subscription-based transactions and managed services.
ARR does not have any standardized meaning and is therefore
unlikely to be comparable to similarly titled measures presented by
other companies. ARR should be viewed independently of revenue and
deferred revenue and is not intended to be combined with, or to
replace, either of those items. ARR is not a forecast and the
active contracts at the end of a reporting period used in
calculating ARR may or may not be extended or renewed by our
customers.
- Net Retention Rate – We calculate net retention rate
as of a period end by starting with the ARR from the cohort of all
customers as of 12 months prior to such period end ("Prior Period
ARR"). We then calculate the ARR from these same customers as of
the current period end ("Current Period ARR"). Current Period ARR
includes any expansion and is net of contraction or attrition over
the last 12 months but excludes ARR from new customers in the
current period. We then divide the total Current Period ARR by the
total Prior Period ARR to arrive at the net retention rate. Net
retention rate is not calculated in accordance with GAAP.
We also provide guidance on adjusted free cash
flow, which is equal to cash flows from operating activities less
purchases of property and equipment, plus restructuring
payments.
Note Regarding Forward-Looking
Statements
This press release contains statements that are
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Progress has
identified some of these forward-looking statements with words like
"believe," "may," "could," "would," "might," "should," "expect,"
"intend," "plan," "target," "anticipate" and "continue," the
negative of these words, other terms of similar meaning or the use
of future dates. Forward-looking statements in this press release
include, but are not limited to, statements regarding Progress'
business outlook (including future acquisition activity) and
financial guidance. There are a number of factors that could cause
actual results or future events to differ materially from those
anticipated by the forward-looking statements, including, without
limitation: (i) economic, geopolitical and market conditions can
adversely affect our business, results of operations and financial
condition, including our revenue growth and profitability, which in
turn could adversely affect our stock price; (ii) our international
sales and operations subject us to additional risks that can
adversely affect our operating results, including risks relating to
foreign currency gains and losses; (iii) we may fail to achieve our
financial forecasts due to such factors as delays or size
reductions in transactions, fewer large transactions in a
particular quarter, fluctuations in currency exchange rates, or a
decline in our renewal rates for contracts; (iv) if the security
measures for our software, services, other offerings or our
internal information technology infrastructure are compromised or
subject to a successful cyber-attack, or if our software offerings
contain significant coding or configuration errors or zero-day
vulnerabilities, we may experience reputational harm, legal claims
and financial exposure; (v) the results of inquiries,
investigations and legal claims regarding the MOVEit Vulnerability
remain uncertain and the ultimate resolution of these matters could
result in losses that may be material to our financial results for
a particular period; and (vi) our acquisitions may not be
successful or may involve unanticipated costs or other integration
issues that could disrupt our existing operations. For further
information regarding risks and uncertainties associated with
Progress' business, please refer to Progress' filings with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K for the fiscal year ended November 30, 2023. Progress
undertakes no obligation to update any forward-looking statements,
which speak only as of the date of this press release.
About Progress
Progress (Nasdaq: PRGS) provides software that
enables organizations to develop and deploy their mission-critical
applications and experiences, as well as effectively manage their
data platforms, cloud and IT infrastructure. As an experienced,
trusted provider, we make the lives of technology professionals
easier. Over 4 million developers and technologists at hundreds of
thousands of enterprises depend on Progress. Learn
more at www.progress.com.
Progress and Progress Software are
trademarks or registered trademarks of Progress Software
Corporation and/or its subsidiaries or affiliates in
the U.S. and other countries. Any other names
contained herein may be trademarks of their respective owners.
Investor Contact: |
Press Contact: |
Michael Micciche |
Erica McShane |
Progress Software |
Progress Software |
+1 781 850 8450 |
+1 781 280 4000 |
Investor-Relations@progress.com |
PR@progress.com |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
|
Three Months Ended |
(In thousands, except per share data) |
|
February 29, 2024 |
|
February 28, 2023 |
|
% Change |
Revenue: |
|
|
|
|
|
|
Software licenses |
|
$ |
64,100 |
|
|
$ |
57,568 |
|
|
11 |
% |
Maintenance and services |
|
|
120,585 |
|
|
|
106,658 |
|
|
13 |
% |
Total revenue |
|
|
184,685 |
|
|
|
164,226 |
|
|
12 |
% |
Costs of revenue: |
|
|
|
|
|
|
Cost of software licenses |
|
|
2,731 |
|
|
|
2,452 |
|
|
11 |
% |
Cost of maintenance and services |
|
|
22,219 |
|
|
|
17,501 |
|
|
27 |
% |
Amortization of acquired intangibles |
|
|
7,859 |
|
|
|
6,264 |
|
|
25 |
% |
Total costs of revenue |
|
|
32,809 |
|
|
|
26,217 |
|
|
25 |
% |
Gross profit |
|
|
151,876 |
|
|
|
138,009 |
|
|
10 |
% |
Operating expenses: |
|
|
|
|
|
|
Sales and marketing |
|
|
39,111 |
|
|
|
33,754 |
|
|
16 |
% |
Product development |
|
|
34,988 |
|
|
|
30,438 |
|
|
15 |
% |
General and administrative |
|
|
21,344 |
|
|
|
18,786 |
|
|
14 |
% |
Amortization of acquired intangibles |
|
|
17,389 |
|
|
|
13,611 |
|
|
28 |
% |
Cyber incident and vulnerability response expenses, net |
|
|
987 |
|
|
|
2,692 |
|
|
(63 |
)% |
Restructuring expenses |
|
|
2,349 |
|
|
|
1,397 |
|
|
68 |
% |
Acquisition-related expenses |
|
|
702 |
|
|
|
1,743 |
|
|
(60 |
)% |
Total operating expenses |
|
|
116,870 |
|
|
|
102,421 |
|
|
14 |
% |
Income from operations |
|
|
35,006 |
|
|
|
35,588 |
|
|
(2 |
)% |
Other expense, net |
|
|
(7,399 |
) |
|
|
(5,664 |
) |
|
31 |
% |
Income before income taxes |
|
|
27,607 |
|
|
|
29,924 |
|
|
(8 |
)% |
Provision for income taxes |
|
|
4,968 |
|
|
|
6,250 |
|
|
(21 |
)% |
Net income |
|
$ |
22,639 |
|
|
$ |
23,674 |
|
|
(4 |
)% |
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
Basic |
|
$ |
0.52 |
|
|
$ |
0.55 |
|
|
(5 |
)% |
Diluted |
|
$ |
0.51 |
|
|
$ |
0.53 |
|
|
(4 |
)% |
Weighted average shares outstanding: |
|
|
|
|
|
|
Basic |
|
|
43,802 |
|
|
|
43,300 |
|
|
1 |
% |
Diluted |
|
|
44,826 |
|
|
|
44,353 |
|
|
1 |
% |
|
|
|
|
|
|
|
Cash dividends declared per common share |
|
$ |
0.175 |
|
|
$ |
0.175 |
|
|
— |
% |
Stock-based compensation is included in the condensed consolidated
statements of operations, as follows: |
Cost of revenue |
|
$ |
986 |
|
|
$ |
620 |
|
|
59 |
% |
Sales and marketing |
|
|
2,312 |
|
|
|
1,495 |
|
|
55 |
% |
Product development |
|
|
3,665 |
|
|
|
2,998 |
|
|
22 |
% |
General and administrative |
|
|
5,501 |
|
|
|
4,639 |
|
|
19 |
% |
Total |
|
$ |
12,464 |
|
|
$ |
9,752 |
|
|
28 |
% |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited)
(In thousands) |
|
February 29, 2024 |
|
November 30, 2023 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
133,222 |
|
|
$ |
126,958 |
|
Accounts receivable, net |
|
|
88,811 |
|
|
|
125,825 |
|
Unbilled receivables |
|
|
43,778 |
|
|
|
29,965 |
|
Other current assets |
|
|
46,048 |
|
|
|
48,040 |
|
Total current assets |
|
|
311,859 |
|
|
|
330,788 |
|
Property and equipment, net |
|
|
14,081 |
|
|
|
15,225 |
|
Goodwill and intangible assets, net |
|
|
1,160,815 |
|
|
|
1,186,379 |
|
Right-of-use lease assets |
|
|
15,318 |
|
|
|
18,711 |
|
Long-term unbilled receivables |
|
|
44,617 |
|
|
|
28,373 |
|
Other assets |
|
|
26,658 |
|
|
|
23,307 |
|
Total assets |
|
$ |
1,573,348 |
|
|
$ |
1,602,783 |
|
Liabilities and shareholders' equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and other current liabilities |
|
$ |
69,821 |
|
|
$ |
92,805 |
|
Current portion of long-term debt, net |
|
|
14,828 |
|
|
|
13,109 |
|
Short-term operating lease liabilities |
|
|
9,821 |
|
|
|
10,114 |
|
Short-term deferred revenue, net |
|
|
247,169 |
|
|
|
236,090 |
|
Total current liabilities |
|
|
341,639 |
|
|
|
352,118 |
|
Long-term debt, net |
|
|
321,115 |
|
|
|
356,111 |
|
Convertible senior notes, net |
|
|
355,319 |
|
|
|
354,772 |
|
Long-term operating lease liabilities |
|
|
11,208 |
|
|
|
13,000 |
|
Long-term deferred revenue, net |
|
|
74,543 |
|
|
|
58,946 |
|
Other long-term liabilities |
|
|
7,781 |
|
|
|
8,121 |
|
Shareholders' equity: |
|
|
|
|
Common stock and additional paid-in capital |
|
|
372,710 |
|
|
|
371,017 |
|
Retained earnings |
|
|
89,033 |
|
|
|
88,698 |
|
Total shareholders' equity |
|
|
461,743 |
|
|
|
459,715 |
|
Total liabilities and shareholders' equity |
|
$ |
1,573,348 |
|
|
$ |
1,602,783 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)
|
|
Three Months Ended |
(In thousands) |
|
February 29, 2024 |
|
February 28, 2023 |
Cash flows from operating activities: |
|
|
|
|
Net income |
|
$ |
22,639 |
|
|
$ |
23,674 |
|
Depreciation and amortization |
|
|
27,544 |
|
|
|
22,142 |
|
Stock-based compensation |
|
|
12,464 |
|
|
|
9,752 |
|
Other non-cash adjustments |
|
|
1,327 |
|
|
|
(4,207 |
) |
Changes in operating assets and liabilities |
|
|
6,530 |
|
|
|
(4,594 |
) |
Net cash flows from operating activities |
|
|
70,504 |
|
|
|
46,767 |
|
Capital expenditures |
|
|
(309 |
) |
|
|
(385 |
) |
Issuances of common stock, net of repurchases |
|
|
(14,917 |
) |
|
|
(5,643 |
) |
Dividend payments to shareholders |
|
|
(8,171 |
) |
|
|
(8,023 |
) |
Payments for acquisitions, net of cash acquired |
|
|
— |
|
|
|
(355,821 |
) |
Proceeds from the issuance of debt, net of payment of issuance
costs |
|
|
— |
|
|
|
195,000 |
|
Principal payment on term loan and repayment of revolving line of
credit |
|
|
(33,437 |
) |
|
|
(1,719 |
) |
Other |
|
|
(7,406 |
) |
|
|
(3,528 |
) |
Net change in cash and cash equivalents |
|
|
6,264 |
|
|
|
(133,352 |
) |
Cash, cash equivalents and short-term investments, beginning of
period |
|
|
126,958 |
|
|
|
256,277 |
|
Cash, cash equivalents and short-term investments, end of
period |
|
$ |
133,222 |
|
|
$ |
122,925 |
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP
SELECTED FINANCIAL MEASURES¹(Unaudited)
|
|
Three Months Ended |
(In thousands, except per share data) |
|
February 29, 2024 |
|
February 28, 2023 |
Adjusted revenue: |
|
|
|
|
GAAP revenue |
|
$ |
184,685 |
|
|
$ |
164,226 |
|
Acquisition-related revenue |
|
|
— |
|
|
|
1,385 |
|
Non-GAAP revenue |
|
$ |
184,685 |
|
|
$ |
165,611 |
|
|
|
|
|
|
Adjusted income from operations: |
|
|
|
|
GAAP income from operations |
|
$ |
35,006 |
|
|
$ |
35,588 |
|
Amortization of acquired intangibles |
|
|
25,248 |
|
|
|
19,875 |
|
Stock-based compensation |
|
|
12,464 |
|
|
|
9,752 |
|
Restructuring expenses and other |
|
|
2,349 |
|
|
|
1,397 |
|
Acquisition-related revenue and expenses |
|
|
702 |
|
|
|
3,128 |
|
Cyber incident and vulnerability response expenses, net |
|
|
987 |
|
|
|
2,692 |
|
Non-GAAP income from operations |
|
$ |
76,756 |
|
|
$ |
72,432 |
|
|
|
|
|
|
Adjusted net income: |
|
|
|
|
GAAP net income |
|
$ |
22,639 |
|
|
$ |
23,674 |
|
Amortization of acquired intangibles |
|
|
25,248 |
|
|
|
19,875 |
|
Stock-based compensation |
|
|
12,464 |
|
|
|
9,752 |
|
Restructuring expenses and other |
|
|
2,349 |
|
|
|
1,397 |
|
Acquisition-related revenue and expenses |
|
|
702 |
|
|
|
3,128 |
|
Cyber incident and vulnerability response expenses, net |
|
|
987 |
|
|
|
2,692 |
|
Provision for income taxes |
|
|
(8,461 |
) |
|
|
(7,759 |
) |
Non-GAAP net income |
|
$ |
55,928 |
|
|
$ |
52,759 |
|
|
|
|
|
|
Adjusted diluted earnings per share: |
|
|
|
|
GAAP diluted earnings per share |
|
$ |
0.51 |
|
|
$ |
0.53 |
|
Amortization of acquired intangibles |
|
|
0.56 |
|
|
|
0.45 |
|
Stock-based compensation |
|
|
0.28 |
|
|
|
0.22 |
|
Restructuring expenses and other |
|
|
0.05 |
|
|
|
0.03 |
|
Acquisition-related revenue and expenses |
|
|
0.02 |
|
|
|
0.07 |
|
Cyber incident and vulnerability response expenses, net |
|
|
0.02 |
|
|
|
0.06 |
|
Provision for income taxes |
|
|
(0.19 |
) |
|
|
(0.17 |
) |
Non-GAAP diluted earnings per share |
|
$ |
1.25 |
|
|
$ |
1.19 |
|
|
|
|
|
|
Non-GAAP weighted avg shares outstanding –
diluted |
|
|
44,826 |
|
|
|
44,353 |
|
|
|
|
|
|
OTHER NON-GAAP FINANCIAL
MEASURES¹(Unaudited)
Adjusted Free Cash Flow |
|
|
|
|
|
|
|
|
Three Months Ended |
(In thousands) |
|
February 29, 2024 |
|
February 28, 2023 |
|
% Change |
Cash flows from operations |
|
$ |
70,504 |
|
|
$ |
46,767 |
|
|
51 |
% |
Purchases of property and equipment |
|
|
(309 |
) |
|
|
(385 |
) |
|
(20 |
)% |
Free cash flow |
|
|
70,195 |
|
|
|
46,382 |
|
|
51 |
% |
Add back: restructuring payments |
|
|
2,009 |
|
|
|
489 |
|
|
311 |
% |
Adjusted free cash flow |
|
$ |
72,204 |
|
|
$ |
46,871 |
|
|
54 |
% |
|
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES FOR FISCAL YEAR 2024
GUIDANCE¹(Unaudited)
Fiscal
Year 2024 Updated
Revenue Guidance |
|
|
Fiscal Year Ended |
|
Fiscal Year Ending |
|
|
November 30, 2023 |
|
November 30, 2024 |
(In millions) |
|
|
|
Low |
|
% Change |
|
High |
|
% Change |
GAAP revenue |
|
$ |
694.4 |
|
|
$ |
722.0 |
|
|
4 |
% |
|
$ |
732.0 |
|
|
5 |
% |
Acquisition-related adjustments – revenue |
|
|
3.8 |
|
|
|
— |
|
|
(100 |
)% |
|
|
— |
|
|
(100 |
)% |
Non-GAAP revenue |
|
$ |
698.2 |
|
|
$ |
722.0 |
|
|
3 |
% |
|
$ |
732.0 |
|
|
5 |
% |
Fiscal
Year 2024 Updated
Non-GAAP Operating Margin Guidance |
|
|
Fiscal Year Ending November 30, 2024 |
(In millions) |
|
Low |
|
High |
GAAP income from operations |
|
$ |
134.7 |
|
|
$ |
142.8 |
|
GAAP operating margins |
|
|
19 |
% |
|
|
20 |
% |
Acquisition-related expense |
|
|
3.4 |
|
|
|
3.4 |
|
Restructuring expense |
|
|
3.7 |
|
|
|
3.7 |
|
Stock-based compensation |
|
|
48.4 |
|
|
|
48.4 |
|
Amortization of acquired intangibles |
|
|
89.0 |
|
|
|
89.0 |
|
Cyber incident and vulnerability response expenses, net |
|
|
5.8 |
|
|
|
5.8 |
|
Total adjustments |
|
|
150.3 |
|
|
|
150.3 |
|
Non-GAAP income from operations |
|
$ |
285.0 |
|
|
$ |
293.1 |
|
Non-GAAP operating margin |
|
|
39 |
% |
|
|
40 |
% |
Fiscal
Year 2024 Updated
Non-GAAP Earnings per Share and Effective Tax Rate
Guidance |
|
|
Fiscal Year Ending November 30, 2024 |
(In millions, except per share data) |
|
Low |
|
High |
GAAP net income |
|
$ |
86.0 |
|
|
$ |
92.2 |
|
Adjustments (from previous table) |
|
|
150.3 |
|
|
|
150.3 |
|
Income tax adjustment(2) |
|
|
(30.1 |
) |
|
|
(29.8 |
) |
Non-GAAP net income |
|
$ |
206.2 |
|
|
$ |
212.7 |
|
|
|
|
|
|
GAAP diluted earnings per share |
|
$ |
1.94 |
|
|
$ |
2.06 |
|
Non-GAAP diluted earnings per share |
|
$ |
4.65 |
|
|
$ |
4.75 |
|
|
|
|
|
|
Diluted weighted average shares outstanding |
|
|
44.4 |
|
|
|
44.8 |
|
|
|
|
|
|
² Tax adjustment is based on a non-GAAP effective tax rate of
approximately 20%, calculated as follows: |
|
|
Fiscal Year Ending November 30, 2024 |
|
|
Low |
|
High |
Non-GAAP income from operations |
|
$ |
285.0 |
|
|
$ |
293.1 |
|
Other (expense) income |
|
|
(27.2 |
) |
|
|
(27.2 |
) |
Non-GAAP income from continuing operations before income taxes |
|
|
257.8 |
|
|
|
265.9 |
|
Non-GAAP net income |
|
|
206.2 |
|
|
|
212.7 |
|
Tax provision |
|
$ |
51.6 |
|
|
$ |
53.2 |
|
Non-GAAP tax rate |
|
|
20 |
% |
|
|
20 |
% |
|
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES FOR FISCAL YEAR 2024
GUIDANCE¹(Unaudited)
Fiscal
Year 2024 Adjusted Free
Cash Flow Guidance |
|
|
Fiscal Year Ending November 30, 2024 |
(In millions) |
|
Low |
|
High |
Cash flows from operations (GAAP) |
|
$ |
205 |
|
|
$ |
215 |
|
Purchases of property and equipment |
|
|
(5 |
) |
|
|
(5 |
) |
Add back: restructuring payments |
|
|
5 |
|
|
|
5 |
|
Adjusted free cash flow (non-GAAP) |
|
$ |
205 |
|
|
$ |
215 |
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES FOR Q2 2024
GUIDANCE¹(Unaudited)
Q2 2024 Revenue
Guidance |
|
|
Three Months Ended |
|
Three Months Ending |
|
|
May 31, 2023 |
|
May 31, 2024 |
(In millions) |
|
|
|
Low |
|
% Change |
|
High |
|
% Change |
GAAP revenue |
|
$ |
178.3 |
|
|
$ |
166.0 |
|
|
(7 |
)% |
|
$ |
170.0 |
|
|
(5 |
)% |
Acquisition-related adjustments – revenue |
|
|
0.9 |
|
|
|
— |
|
|
(100 |
)% |
|
|
— |
|
|
(100 |
)% |
Non-GAAP revenue |
|
$ |
179.2 |
|
|
$ |
166.0 |
|
|
(7 |
)% |
|
$ |
170.0 |
|
|
(5 |
)% |
Q2 2024 Non-GAAP Earnings per Share
Guidance |
|
|
Three Months Ending May 31, 2024 |
|
|
Low |
|
High |
GAAP diluted earnings per share |
|
$ |
0.22 |
|
|
$ |
0.26 |
|
Acquisition-related expense |
|
|
0.02 |
|
|
|
0.02 |
|
Restructure expense |
|
|
0.01 |
|
|
|
0.01 |
|
Stock-based compensation |
|
|
0.28 |
|
|
|
0.28 |
|
Amortization of acquired intangibles |
|
|
0.05 |
|
|
|
0.05 |
|
Cyber incident and vulnerability response expenses, net |
|
|
0.53 |
|
|
|
0.53 |
|
Total adjustments |
|
|
0.89 |
|
|
|
0.89 |
|
Income tax adjustment |
|
|
(0.18 |
) |
|
|
(0.18 |
) |
Non-GAAP diluted earnings per share |
|
$ |
0.93 |
|
|
$ |
0.97 |
|
Progress Software (NASDAQ:PRGS)
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De Abr 2024 a May 2024
Progress Software (NASDAQ:PRGS)
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