Press Release

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Jun 25, 2020
Progress 2020 Second Quarter Revenue Exceeds Guidance

Increases 2020 Guidance for Revenue and Earnings Per Share

BEDFORD, Mass., June 25, 2020 (GLOBE NEWSWIRE) -- Progress (NASDAQ: PRGS), the leading provider of application development and digital experience technologies, today announced financial results for its fiscal second quarter ended May 31, 2020.

Second Quarter 2020 Highlights:

  • Revenue of $100.4 million remained flat year-over-year on an actual currency basis, and increased 2% year-over-year on a constant currency basis.
  • Non-GAAP revenue of $102.5 million decreased 1% on an actual currency basis and increased 1% year-over-year on a constant currency basis.
  • Diluted earnings per share was $0.37 compared to $0.18 in the same quarter last year, an increase of 106%.
  • Non-GAAP diluted earnings per share was $0.63 compared to $0.65 in the same quarter last year, a decrease of 3%.

“Q2 was a very strong quarter for us,” said Yogesh Gupta, CEO at Progress. “We had solid performances across our segments and products, and our business has proven to be extremely durable, despite the ongoing economic disruption caused by COVID-19. Our confidence in our ability to execute is reflected in our increased full year guidance for revenue and EPS.”

Additional financial highlights included:

  Three Months Ended
  GAAP   Non-GAAP
(In thousands, except percentages and per share amounts) May 31,
2020
  May 31,
2019
  %
Change
  May 31,
2020
  May 31,
2019
  %
Change
Revenue $ 100,383     $ 99,995     %   $ 102,505     $ 103,475     (1 )%
Income from operations $ 25,309     $ 14,741     72 %   $ 39,590     $ 38,888     2 %
Operating margin 25 %   15 %   67 %   39 %   38 %   3 %
Net income $ 16,968     $ 8,181     107 %   $ 28,656     $ 29,417     (3 )%
Diluted earnings per share $ 0.37     $ 0.18     106 %   $ 0.63     $ 0.65     (3 )%
Cash from operations (GAAP) /Adjusted free cash flow (Non-GAAP) $ 37,957     $ 40,674     (7 )%   $ 38,399     $ 40,438     (5 )%

Other fiscal second quarter 2020 metrics and recent results included:

  • Cash, cash equivalents and short-term investments were $203.6 million at the end of the quarter;
  • DSO was 47 days compared to 42 days in the fiscal second quarter of 2019 and 49 days in the fiscal first quarter of 2020; and
  • On June 23, 2020, our Board of Directors declared a quarterly dividend of $0.165 per share of common stock that will be paid on September 15, 2020 to shareholders of record as of the close of business on September 1, 2020.

Anthony Folger, CFO, said: “We are confident in the stability of our business model and our ability to deliver solid results even in this uncertain environment, and will utilize our strong balance sheet to execute aggressively on our strategy to drive long-term value through accretive M&A.”

2020 Business Outlook

Progress provides the following updated guidance for the fiscal year ending November 30, 2020 and the fiscal third quarter ending August 31, 2020:

  Prior FY 2020 Guidance
(March 26, 2020)
  Updated FY 2020 Guidance
(June 25, 2020)
(In millions, except percentages and per share amounts) FY 2020
GAAP
  FY 2020
Non-GAAP
  FY 2020
GAAP
  FY 2020
Non-GAAP
Revenue $420 - $430   $428 - $438   $425 - $435   $433 - $443
Diluted earnings per share $1.73 - $1.80   $2.73 - $2.80   $1.81 - $1.85   $2.82 - $2.86
Operating margin 27%   39%   27%   40%
Cash from operations (GAAP) /
Adjusted free cash flow (Non-GAAP)
$128 - $138   $125 - $135   $129 - $139   $125 - $135
Effective tax rate 22%   21%   22%   21%


  Q3 2020 Guidance
(In millions, except per share amounts) Q3 2020
GAAP
  Q3 2020
Non-GAAP
Revenue $103 - $108   $104 - $109
Diluted earnings per share $0.47 - $0.49   $0.69 - $0.71

The expected economic impact of the COVID-19 crisis on our current 2020 business outlook is a reduction of approximately $10 to $13 million on GAAP and non-GAAP revenue, and approximately $0.06 to $0.08 on GAAP and non-GAAP earnings per share.

Based on current exchange rates, the expected negative currency translation impact on Progress' fiscal year 2020 business outlook compared to 2019 exchange rates is approximately $2.2 million on GAAP and non-GAAP revenue, and approximately $0.02 on GAAP and non-GAAP diluted earnings per share. The expected negative currency translation impact on Progress' fiscal Q3 2020 business outlook compared to 2019 exchange rates on GAAP and non-GAAP revenue and earnings per share is not meaningful. 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 second quarter of 2020 at 5:00 p.m. ET on Thursday, June 25, 2020. The call can be accessed on the investor relations section of the company’s website, located at www.progress.com.  Additionally, you can listen to the call by telephone by dialing 1-800-458-4121, pass code 5687996. The conference call will include comments followed by questions and answers. 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.

Legal Notice Regarding Non-GAAP Financial Information

Progress provides non-GAAP financial information as additional information for investors. These non-GAAP measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States ("GAAP"). Progress believes that the non-GAAP results described in this release are useful for an understanding of its ongoing operations and provide additional detail and an alternative method of assessing its operating results.  A reconciliation of non-GAAP adjustments to the company's GAAP financial results is included in the tables below and is available on the Progress website at www.progress.com within the investor relations section. Additional information regarding the company's non-GAAP financial information is contained in the company's Current Report on Form 8-K furnished to the Securities and Exchange Commission in connection with this press release, which is also available on the Progress website within the investor relations section.

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 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:

(1) 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. (2) 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. (3) Our ability to successfully manage transitions to new business models and markets, including an increased emphasis on a cloud and subscription strategy, may not be successful. (4) If we are unable to develop new or sufficiently differentiated products and services, or to enhance and improve our existing products and services in a timely manner to meet market demand, partners and customers may not purchase new software licenses or subscriptions or purchase or renew support contracts. (5) We depend upon our extensive partner channel and we may not be successful in retaining or expanding our relationships with channel partners. (6) 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. (7) If the security measures for our software, services or other offerings are compromised or subject to a successful cyber-attack, or if such offerings contain significant coding or configuration errors, we may experience reputational harm, legal claims and financial exposure. (8) We have made acquisitions, including our recent acquisition of Ipswitch, and may make acquisitions in the future, and those acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. (9) The coronavirus disease (COVID-19) outbreak and the impact it could have on our employees, customers, partners, and the global financial markets could adversely affect our business, results of operations and financial condition. 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, 2019. 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) offers the leading platform for developing and deploying strategic business applications. We enable customers and partners to deliver modern, high-impact digital experiences with a fraction of the effort, time and cost. Progress offers powerful tools for easily building adaptive user experiences across any type of device or touchpoint, the flexibility of a cloud-native app dev platform to deliver modern apps, leading data connectivity technology, web content management, business rules, secure file transfer, network monitoring, plus award-winning machine learning that enables cognitive capabilities to be a part of any application. Over 1,700 independent software vendors, 100,000 enterprise customers, and two million developers rely on Progress to power their applications. Learn about Progress at www.progress.com or +1-800-477-6473.

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:
Brian Flanagan   Erica McShane
Progress Software   Progress Software
+1 781 280 4817   +1 888 365 2779 (x3135)
Investor-Relations@progress.com   PR@progress.com


       
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
     
  Three Months Ended   Six Months Ended
(In thousands, except per share data) May 31,
2020
  May 31,
2019
  % Change   May 31,
2020
  May 31,
2019
  %
Change
Revenue:                      
Software licenses $ 19,663     $ 29,728     (34 )%   $ 50,292     $ 52,530     (4 )%
Maintenance and services 80,720     70,267     15 %   159,774     137,014     17 %
Total revenue 100,383     99,995     %   210,066     189,544     11 %
Costs of revenue:                      
Cost of software licenses 810     925     (12 )%   2,199     2,092     5 %
Cost of maintenance and services 11,785     10,580     11 %   23,636     20,019     18 %
Amortization of acquired intangibles 1,664     6,106     (73 )%   3,310     11,539     (71 )%
Total costs of revenue 14,259     17,611     (19 )%   29,145     33,650     (13 )%
Gross profit 86,124     82,384     5 %   180,921     155,894     16 %
Operating expenses:                      
Sales and marketing 21,716     24,832     (13 )%   45,914     47,155     (3 )%
Product development 21,787     21,688     %   43,441     41,578     4 %
General and administrative 12,440     12,654     (2 )%   25,188     24,939     1 %
Amortization of acquired intangibles 4,177     4,585     (9 )%   8,308     7,773     7 %
Restructuring expenses 695     2,777     (75 )%   1,735     3,192     (46 )%
Acquisition-related expenses     1,107     *     314     1,107     (72 )%
Total operating expenses 60,815     67,643     (10 )%   124,900     125,744     (1 )%
Income from operations 25,309     14,741     72 %   56,021     30,150     86 %
Other expense, net (2,847 )   (2,317 )   (23 )%   (6,244 )   (4,320 )   (45 )%
Income before income taxes 22,462     12,424     81 %   49,777     25,830     93 %
Provision for income taxes 5,494     4,243     29 %   11,693     8,247     42 %
Net income $ 16,968     $ 8,181     107 %   $ 38,084     $ 17,583     117 %
                       
Earnings per share:                      
Basic $ 0.38     $ 0.18     111 %   $ 0.85     $ 0.39     118 %
Diluted $ 0.37     $ 0.18     106 %   $ 0.84     $ 0.39     115 %
Weighted average shares outstanding:                      
Basic 44,889     44,611     1 %   44,893     44,784     %
Diluted 45,267     45,287     %   45,391     45,287     %
                       
Cash dividends declared per common share $ 0.165     $ 0.155     6 %   $ 0.330     $ 0.310     6 %
*Not meaningful


Stock-based compensation is included in the condensed consolidated statements of operations, as follows:            
                       
Cost of revenue $ 338     $ 250     35 %   $ 657     $ 494     33 %
Sales and marketing 1,110     1,190     (7 )%   2,160     2,238     (3 )%
Product development 1,899     1,936     (2 )%   3,825     3,864     (1 )%
General and administrative 2,276     2,740     (17 )%   5,032     5,326     (6 )%
Total $ 5,623     $ 6,116     (8 )%   $ 11,674     $ 11,922     (2 )%


CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
     
       
(In thousands) May 31,
2020
  November 30,
 2019
Assets      
Current assets:      
Cash, cash equivalents and short-term investments $ 203,645     $ 173,685  
Accounts receivable, net 54,527     72,820  
Unbilled receivables and contract assets 12,540     10,880  
Other current assets 20,686     27,280  
Total current assets 291,398     284,665  
Long-term unbilled receivables and contract assets 10,194     12,492  
Property and equipment, net 27,693     29,765  
Goodwill and intangible assets, net 519,643     532,216  
Right-of-use lease assets 24,681      
Other assets 21,993     22,133  
Total assets $ 895,602     $ 881,271  
Liabilities and shareholders’ equity      
Current liabilities:      
Accounts payable and other current liabilities $ 50,525     $ 72,674  
Current portion of long-term debt, net 14,480     10,717  
Short-term lease liability 6,618      
Short-term deferred revenue 153,549     157,494  
Total current liabilities 225,172     240,885  
Long-term debt, net 276,762     284,002  
Long-term lease liability 19,896      
Long-term deferred revenue 19,741     19,752  
Other long-term liabilities 14,070     6,350  
Shareholders’ equity:      
Common stock and additional paid-in capital 304,282     295,953  
Retained earnings 35,679     34,329  
Total shareholders’ equity 339,961     330,282  
Total liabilities and shareholders’ equity $ 895,602     $ 881,271  


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
     
       
  Three Months Ended   Six Months Ended
(In thousands) May 31,
2020
  May 31,
2019
  May 31,
2020
  May 31,
2019
Cash flows from operating activities:              
Net income $ 16,968     $ 8,181     $ 38,084     $ 17,583  
Depreciation and amortization 7,572     12,852     15,241     23,338  
Stock-based compensation 5,623     6,116     11,674     11,922  
Other non-cash adjustments 2,309     (3,611 )   7,656     (6,438 )
Changes in operating assets and liabilities 5,485     17,136     (1,682 )   18,713  
Net cash flows from operating activities 37,957     40,674     70,973     65,118  
Capital expenditures (609 )   (834 )   (1,757 )   (1,080 )
Issuances of common stock, net of repurchases 3,063     2,409     (12,692 )   (20,697 )
Dividend payments to shareholders (7,438 )   (6,894 )   (14,906 )   (13,886 )
Payments for acquisitions, net of cash acquired     (225,298 )       (225,298 )
Proceeds from the issuance of debt, net of payment of issuance costs     183,374         183,374  
Proceeds from sale of property, plant and equipment, net     6,146         6,146  
Payments of principal on long-term debt (1,880 )       (3,762 )   (1,547 )
Other (4,503 )   (4,482 )   (7,896 )   (3,090 )
Net change in cash, cash equivalents and short-term investments 26,590     (4,905 )   29,960     (10,960 )
Cash, cash equivalents and short-term investments, beginning of period 177,055     133,458     173,685     139,513  
Cash, cash equivalents and short-term investments, end of period $ 203,645     $ 128,553     $ 203,645     $ 128,553  


       
RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES - SECOND QUARTER
(Unaudited)
   
       
  Three Months Ended   % Change
(In thousands, except per share data) May 31, 2020   May 31, 2019   Non-GAAP
Adjusted revenue:                  
GAAP revenue $ 100,383         $ 99,995          
Acquisition-related revenue(1) 2,122         3,480          
Non-GAAP revenue $ 102,505     100 %   $ 103,475     100 %   (1 )%
                   
Adjusted income from operations:                  
GAAP income from operations $ 25,309     25 %   $ 14,741     15 %    
Amortization of acquired intangibles 5,841     6 %   10,691     10 %    
Restructuring expenses and other 695     1 %   2,753     3 %    
Stock-based compensation 5,623     5 %   6,116     6 %    
Acquisition-related revenue(1) and expenses 2,122     2 %   4,587     4 %    
Non-GAAP income from operations $ 39,590     39 %   $ 38,888     38 %   2 %
                   
Adjusted net income:                  
GAAP net income $ 16,968     17 %   $ 8,181     8 %    
Amortization of acquired intangibles 5,841     6 %   10,691     10 %    
Restructuring expenses and other 695     1 %   2,753     2 %    
Stock-based compensation 5,623     5 %   6,116     6 %    
Acquisition-related revenue(1) and expenses 2,122     2 %   4,587     5 %    
Provision for income taxes (2,593 )   (3 )%   (2,911 )   (3 )%    
Non-GAAP net income $ 28,656     28 %   $ 29,417     28 %   (3 )%
                   
Adjusted diluted earnings per share:                  
GAAP diluted earnings per share $ 0.37         $ 0.18          
Amortization of acquired intangibles 0.13         0.24          
Restructuring expenses and other 0.02         0.06          
Stock-based compensation 0.12         0.13          
Acquisition-related revenue(1) and expenses 0.05         0.10          
Provision for income taxes (0.06 )       (0.06 )        
Non-GAAP diluted earnings per share $ 0.63         $ 0.65         (3 )%
                   
Non-GAAP weighted avg shares outstanding - diluted 45,267         45,287         %
                   
(1)Acquisition-related revenue constitutes revenue reflected as pre-acquisition deferred revenue that would otherwise have been recognized but for the purchase accounting treatment of acquisitions. Since GAAP accounting requires the elimination of this revenue, GAAP results alone do not fully capture all of our economic activities. Acquisition-related revenue adjustments relate to Progress' OpenEdge business segment for Ipswitch.


     
RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES - YEAR TO DATE
(Unaudited)
   
       
  Six Months Ended   % Change
(In thousands, except per share data) May 31, 2020   May 31, 2019   Non-GAAP
Adjusted revenue:                  
GAAP revenue $ 210,066         $ 189,544          
Acquisition-related revenue(1) 6,201         3,480          
Non-GAAP revenue $ 216,267     100 %   $ 193,024     100 %   12 %
                   
Adjusted income from operations:                  
GAAP income from operations $ 56,021     27 %   $ 30,150     16 %    
Amortization of acquired intangibles 11,618     5 %   19,312     10 %    
Restructuring expenses and other 1,735     %   3,168     2 %    
Stock-based compensation 11,674     5 %   11,922     6 %    
Acquisition-related revenue(1) and expenses 6,515     3 %   4,587     2 %    
Non-GAAP income from operations $ 87,563     40 %   $ 69,139     36 %   27 %
                   
Adjusted net income:                  
GAAP net income $ 38,084     18 %   $ 17,583     9 %    
Amortization of acquired intangibles 11,618     6 %   19,312     10 %    
Restructuring expenses and other 1,735     1 %   3,168     2 %    
Stock-based compensation 11,674     5 %   11,922     6 %    
Acquisition-related revenue(1) and expenses 6,515     2 %   4,587     2 %    
Provision for income taxes (6,267 )   (3 )%   (4,395 )   (2 )%    
Non-GAAP net income $ 63,359     29 %   $ 52,177     27 %   21 %
                   
Adjusted diluted earnings per share:                  
GAAP diluted earnings per share $ 0.84         $ 0.39          
Amortization of acquired intangibles 0.26         0.43          
Restructuring expenses and other 0.04         0.07          
Stock-based compensation 0.26         0.26          
Acquisition-related revenue(1) and expenses 0.14         0.10          
Provision for income taxes (0.14 )       (0.10 )        
Non-GAAP diluted earnings per share $ 1.40         $ 1.15         22 %
                   
Non-GAAP weighted avg shares outstanding - diluted 45,391         45,287         %
                   
(1)Acquisition-related revenue constitutes revenue reflected as pre-acquisition deferred revenue that would otherwise have been recognized but for the purchase accounting treatment of acquisitions. Since GAAP accounting requires the elimination of this revenue, GAAP results alone do not fully capture all of our economic activities. Acquisition-related revenue adjustments relate to Progress' OpenEdge business segment for Ipswitch.


 
OTHER NON-GAAP FINANCIAL MEASURES
(Unaudited)
 
Quarter to Date Adjusted Free Cash Flow          
           
(In thousands) Q2 2020   Q2 2019   % Change
Cash flows from operations $ 37,957     $ 40,674     (7 )%
Purchases of property and equipment (609 )   (834 )   (27 )%
Free cash flow 37,348     39,840     (6 )%
Add back: restructuring payments 1,051     598     76 %
Adjusted free cash flow $ 38,399     $ 40,438     (5 )%


Year to Date Adjusted Free Cash Flow          
           
(In thousands) YTD 2020   YTD Q2 2019   % Change
Cash flows from operations $ 70,973     $ 65,118     9 %
Purchases of property and equipment (1,757 )   (1,080 )   63 %
Free cash flow 69,216     64,038     8 %
Add back: restructuring payments 2,480     757     228 %
Adjusted free cash flow $ 71,696     $ 64,795     11 %


 
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2020 GUIDANCE
(Unaudited)
 
Fiscal Year 2020 Updated Revenue Guidance
  Fiscal Year Ended   Fiscal Year Ending
  November 30, 2019   November 30, 2020
(In millions)     Low   % Change   High   % Change
GAAP revenue $ 413.3     $ 424.7     3 %   $ 434.7     5 %
Acquisition-related adjustments - revenue(1) 18.7     8.3     (56 )%   8.3     (56 )%
Non-GAAP revenue $ 432.0     $ 433.0     %   $ 443.0     3 %
(1)Acquisition-related revenue constitutes revenue reflected as pre-acquisition deferred revenue that would otherwise have been recognized but for the purchase accounting treatment of acquisitions. Since GAAP accounting requires the elimination of this revenue, GAAP results alone do not fully capture all of our economic activities. Acquisition-related revenue adjustments relate to Progress' OpenEdge business segment for Ipswitch.


Fiscal Year 2020 Updated Non-GAAP Operating Margin Guidance
  Fiscal Year Ending November 30, 2020
(In millions) Low   High
GAAP income from operations $ 116.6     $ 118.8  
GAAP operating margins 27 %   27 %
Acquisition-related revenue 8.3     8.3  
Acquisition-related expense 0.3     0.3  
Restructuring expense 1.7     1.7  
Stock-based compensation 22.9     22.9  
Amortization of acquired intangibles 23.2     23.2  
Total adjustments 56.4     56.4  
Non-GAAP income from operations $ 173.0     $ 175.2  
Non-GAAP operating margin 40 %   40 %


Fiscal Year 2020 Updated Non-GAAP Earnings per Share and Effective Tax Rate Guidance
  Fiscal Year Ending November 30, 2020
(In millions, except per share data) Low   High
GAAP net income $ 82.1     $ 83.9  
Adjustments (from previous table) 56.4     56.4  
Income tax adjustment(2) (10.8 )   (10.8 )
Non-GAAP net income $ 127.7     $ 129.5  
       
GAAP diluted earnings per share $ 1.81     $ 1.85  
Non-GAAP diluted earnings per share $ 2.82     $ 2.86  
       
Diluted weighted average shares outstanding 45.3     45.3  
       
(2)Tax adjustment is based on a non-GAAP effective tax rate of approximately 21% for Low and High, calculated as follows:
Non-GAAP income from operations $ 173.0     $ 175.2  
Other (expense) income (11.3 )   (11.3 )
Non-GAAP income from continuing operations before income taxes 161.7     163.9  
Non-GAAP net income 127.7     129.5  
Tax provision $ 34.0     $ 34.4  
Non-GAAP tax rate 21 %   21 %


 
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2020 GUIDANCE
(Unaudited)
 
Fiscal Year 2020 Adjusted Free Cash Flow Guidance
  Fiscal Year Ending November 30, 2020
(In millions) Low   High
Cash flows from operations (GAAP) $ 129     $ 139  
Purchases of property and equipment (7 )   (7 )
Add back: restructuring payments 3     3  
Adjusted free cash flow (non-GAAP) $ 125     $ 135  


 
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q3 2020 GUIDANCE
(Unaudited)
 
Q3 2020 Revenue Guidance
  Three Months Ended   Three Months Ending
  August 31, 2019   August 31, 2020
(In millions)     Low   % Change   High   % Change
GAAP revenue $ 106.7     $ 102.8     (4 )%   $ 107.8     1 %
Acquisition-related adjustments - revenue(1) 8.8     1.2     (86 )%   1.2     (86 )%
Non-GAAP revenue $ 115.5     $ 104.0     (10 )%   $ 109.0     (6 )%
(1)Acquisition-related revenue constitutes revenue reflected as pre-acquisition deferred revenue that would otherwise have been recognized but for the purchase accounting treatment of acquisitions. Since GAAP accounting requires the elimination of this revenue, GAAP results alone do not fully capture all of our economic activities. Acquisition-related revenue adjustments relate to Progress' OpenEdge business segment for Ipswitch.


Q3 2020 Non-GAAP Earnings per Share Guidance
  Three Months Ending August 31, 2020
  Low   High
GAAP diluted earnings per share $ 0.47     $ 0.49  
Acquisition-related revenue 0.03     0.03  
Stock-based compensation 0.12     0.12  
Amortization of acquired intangibles 0.13     0.13  
Total adjustments 0.28     0.28  
Income tax adjustment (0.06 )   (0.06 )
Non-GAAP diluted earnings per share $ 0.69     $ 0.71  

 


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Source: Progress Software Corporation