Fiscal Third Quarter 2020 Preliminary Results
Progress’ normal financial closing and financial statement preparation processes are in their preliminary stages. However, using the most current information available to management, Progress expects its fiscal third quarter 2020 financial results to be within the following ranges:
Prior Guidance ( |
Preliminary Results ( |
||||||
(In millions, except per share amounts) | Q3 2020 GAAP |
Q3 2020 Non-GAAP |
Q3 2020 GAAP |
Q3 2020 Non-GAAP |
|||
Revenue | |||||||
Diluted earnings per share |
Progress’ preliminary financial results for the fiscal third quarter 2020 reflect better than expected revenue performance across certain of our product lines coupled with a continued focus on cost management and operating efficiency.
These preliminary financial results are subject to revision until Progress reports its fiscal third quarter 2020 results on
2020 Business Outlook
Based on information available as of
Prior FY 2020 Guidance ( |
Updated FY 2020 Guidance ( |
||||||
(In millions, except per share amounts) | FY 2020 GAAP |
FY 2020 Non-GAAP |
FY 2020 GAAP |
FY 2020 Non-GAAP |
|||
Revenue | |||||||
Diluted earnings per share |
The revised business outlook for the full fiscal year of 2020 is subject to revision until Progress reports its business outlook for the full year 2020 on
Conference Call
In conjunction with this announcement, Progress will hold a conference call at
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
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, and may make acquisitions in the future, including our pending acquisition of Chef, and those acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. (9) Delay or failure to consummate the proposed acquisition of Chef could negatively impact our future results of operations and financial condition; (10) 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
About Progress
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: |
+1 781 280 4817 | +1 888 365 2779 (x3135) |
Investor-Relations@progress.com | PR@progress.com |
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q3 2020 PRELIMINARY RESULTS
(Unaudited)
Preliminary Q3 2020 Revenue | |||||||||||||||||
Three Months Ended | Three Months Ending | ||||||||||||||||
(In millions, except percentages) | Low | % Change | High | % Change | |||||||||||||
GAAP revenue | $ | 106.7 | $ | 107.8 | 1 | % | $ | 109.8 | 3 | % | |||||||
Acquisition-related adjustments - revenue(1) | 8.8 | 1.2 | (86 | )% | 1.2 | (86 | )% | ||||||||||
Non-GAAP revenue | $ | 115.5 | $ | 109.0 | (6 | )% | $ | 111.0 | (4 | )% | |||||||
(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. |
Preliminary Q3 2020 Non-GAAP Earnings per Share | |||||||
Three Months Ending |
|||||||
Low | High | ||||||
GAAP diluted earnings per share | $ | 0.50 | $ | 0.53 | |||
Acquisition-related revenue | 0.03 | 0.03 | |||||
Acquisition-related expense | 0.01 | 0.01 | |||||
Stock-based compensation | 0.12 | 0.12 | |||||
Amortization of acquired intangibles | 0.13 | 0.13 | |||||
Total adjustments | 0.29 | 0.29 | |||||
Income tax adjustment | (0.04 | ) | (0.04 | ) | |||
Non-GAAP diluted earnings per share | $ | 0.75 | $ | 0.78 |
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 | ||||||||||||||||
(In millions, except percentages) | Low | % Change | High | % Change | |||||||||||||
GAAP revenue | $ | 413.3 | $ | 438.3 | 6 | % | $ | 442.3 | 7 | % | |||||||
Acquisition-related adjustments - revenue(1) | 18.7 | 13.7 | (27 | )% | 13.7 | (27 | )% | ||||||||||
Non-GAAP revenue | $ | 432.0 | $ | 452.0 | 5 | % | $ | 456.0 | 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 and Progress’ Application Development and Deployment segment for Chef. |
Fiscal Year 2020 Updated Non-GAAP Earnings per Share Guidance | |||||||
Fiscal Year Ending |
|||||||
(In millions, except per share data) | Low | High | |||||
GAAP net income | $ | 75.2 | $ | 76.6 | |||
Acquisition-related revenue | 13.7 | 13.7 | |||||
Acquisition-related expense | 1.4 | 1.4 | |||||
Restructuring expense | 7.5 | 7.5 | |||||
Stock-based compensation | 22.7 | 22.7 | |||||
Amortization of acquired intangibles | 26.6 | 26.6 | |||||
Total adjustments(2) | 71.9 | 71.9 | |||||
Income tax adjustment | (13.4 | ) | (13.5 | ) | |||
Non-GAAP net income | $ | 133.7 | $ | 135.0 | |||
GAAP diluted earnings per share | $ | 1.66 | $ | 1.69 | |||
Non-GAAP diluted earnings per share | $ | 2.94 | $ | 2.97 | |||
Diluted weighted average shares outstanding | 45.4 | 45.4 | |||||
(2)Total adjustments include preliminary estimates relating to the valuation of intangible assets acquired from Chef and restructuring expenses. The final amounts will not be available until the Company’s internal procedures and reviews are completed. |
Source: Progress Software Corporation