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Press Release


Progress Announces First Quarter 2024 Financial Results

Mar 26, 2024   

First Quarter Revenues and Earnings Per Share Ahead of Estimates

BURLINGTON, Mass., March 26, 2024 (GLOBE NEWSWIRE) -- 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     0.53       0.53  
Cyber incident and vulnerability response expenses, net     0.05       0.05  
Total adjustments     0.89       0.89  
Income tax adjustment     (0.18 )     (0.18 )
Non-GAAP diluted earnings per share   $ 0.93     $ 0.97  

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Source: Progress Software Corporation