UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
Progress Software Corporation
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission file number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices, including zip code)
(781 ) 280-4000
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On March 29, 2022, Progress Software Corporation ("Progress") issued a press release announcing its financial results for the fiscal first quarter ended February 28, 2022. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not deemed incorporated by reference into any other filing of the company, whether made before or after the date of this report, regardless of any general incorporation language in the filing.
Non-GAAP Financial Information - Progress provides non-GAAP supplemental information to its financial results. We use this non-GAAP information to evaluate our period-over-period operating performance because our management believes the information helps illustrate underlying trends in our business and provides us with a more comparable measure of our continuing business, as well as a greater understanding of the results from the primary operations of our business, by excluding the effects of certain items that do not reflect the ordinary earnings of our operations. Management also uses this non-GAAP financial information to establish budgets and operational goals, which are communicated internally and externally, evaluate performance, and allocate resources. In addition, compensation of our executives and non-executive employees is based in part on the performance of our business evaluated using this same non-GAAP information. We believe this non-GAAP financial information enhances investors’ overall understanding of our current financial performance and our prospects for the future by providing more transparency for certain financial measures and providing a level of disclosure that helps investors understand how we plan and measure our business. We believe that providing this non-GAAP information affords investors a view of our operating results that may be more easily compared to our peer companies and enables investors to consider our operating results on both a GAAP and non-GAAP basis during and following the integration period of our 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 often have a material impact on Progress’ financial results. A reconciliation of non-GAAP adjustments to Progress' GAAP financial results is included in the tables in the press release and is available on the Progress website at www.progress.com within the investor relations section.
As described in more detail below, non-GAAP revenue, non-GAAP costs of sales and operating expenses, non-GAAP income from operations and operating margin, non-GAAP net income, and non-GAAP diluted earnings per share exclude the effect of purchase accounting on the fair value of acquired deferred revenue, amortization of acquired intangible assets, stock-based compensation expense, restructuring charges, acquisition-related and transition expenses, amortization of the discount on our convertible senior notes, and the related tax effects of the preceding items. 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.
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 - In all periods presented, 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 results relates to Chef Software, Inc. and Ipswitch, Inc., which we acquired on October 5, 2020 and April 30, 2019, respectively. 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.
•Amortization of acquired intangibles - In all periods presented, 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 - In all periods presented, we exclude stock-based compensation to be consistent with the way management and the 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. Stock-based compensation will continue in future periods.
•Restructuring expenses - 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 and transition expenses - In all periods presented, we exclude acquisition-related expenses because those expenses distort trends and are not part of our core operating results. In recent years, we have completed a number of acquisitions, which result in our incurring operating expenses which would not otherwise have been incurred. By excluding certain transition, integration and other acquisition-related expense items in connection with acquisitions, this provides more meaningful comparisons 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.
•Gain on assets held for sale - We exclude the gain on assets held for sale in fiscal year 2022 associated with the likely sale of our Bedford, Massachusetts headquarters. We don’t believe such gains are part of our core operating results because they are inconsistent in amount and frequency and therefore may distort operating trends. We believe that eliminating these amounts, when significant and not reflective of ongoing business and operating results, facilitates a more meaningful evaluation of our current operating performance and comparisons to our operating performance in other periods.
•Income tax adjustment - In all periods presented, 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. For example, if the local currencies of our foreign subsidiaries strengthen, our consolidated results stated in U.S. dollars are positively impacted.
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.
Annual 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. ARR represents the annualized contract value for all active and contractually binding term-based contracts at the end of a 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.
Item 7.01 Regulation FD Disclosure
In connection with the issuance of the press release attached hereto as Exhibit 99.1, the supplemental data attached as Exhibit 99.2 to this Current Report will be available on the Progress website within the investor relations section prior to the live conference call.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | March 29, 2022 | Progress Software Corporation | |||||||||
| By: | /s/ ANTHONY FOLGER | ||||||||||
| Anthony Folger | |||||||||||
| Chief Financial Officer | |||||||||||
 | Exhibit 99.1 | |||||||
P R E S S A N N O U N C E M E N T
Progress Announces First Quarter 2022 Financial Results
Revenue and Earnings Per Share Exceed Guidance Ranges
Full Year Guidance Increased for Revenue and Earnings Per Share
BEDFORD, Mass, March 29, 2022 (GlobeNewswire) — Progress (Nasdaq: PRGS), the trusted provider of infrastructure software, today announced financial results for its fiscal first quarter ended February 28, 2022.
First Quarter 2022 Highlights:
•Revenue of $144.9 million increased 19% year-over-year on an actual currency basis, and 21% on a constant currency basis.
•Non-GAAP revenue of $147.5 million increased 12% on an actual currency basis, and 14% on a constant currency basis.
•Annualized Recurring Revenue (ARR) of $479 million increased 12% year-over-year on a constant currency basis.
•Operating margin was 20% and Non-GAAP operating margin was 40%.
•Diluted earnings per share was $0.46 compared to $0.42 in the same quarter last year, an increase of 10%.
•Non-GAAP diluted earnings per share was $0.97 compared to $0.95 in the same quarter last year, an increase of 2%.
“We are extremely pleased with our strong first quarter results which built on the momentum from last year,” said Yogesh Gupta, CEO at Progress. “Customer demand and our execution remained solid, the integration of Kemp is on track and going very well, and the M&A deal pipeline remains robust. Although our financial exposure to Russia and Belarus is immaterial, we are nonetheless horrified by the geopolitical events and saddened by the humanitarian tragedy in Ukraine. Our hearts are with all of those in the region.”
Additional financial highlights included(1):
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| GAAP | Non-GAAP | ||||||||||||||||||||||||||||||||||
| (In thousands, except percentages and per share amounts) | February 28, 2022 | February 28, 2021 | % Change | February 28, 2022 | February 28, 2021 | % Change | |||||||||||||||||||||||||||||
| Revenue | $ | 144,922 | $ | 121,280 | 19 | % | $ | 147,505 | $ | 131,784 | 12 | % | |||||||||||||||||||||||
| Income from operations | $ | 29,432 | $ | 27,416 | 7 | % | $ | 58,732 | $ | 56,657 | 4 | % | |||||||||||||||||||||||
| Operating margin | 20 | % | 23 | % | (300) bps | 40 | % | 43 | % | (300) bps | |||||||||||||||||||||||||
| Net income | $ | 20,454 | $ | 18,961 | 8 | % | $ | 43,560 | $ | 42,504 | 2 | % | |||||||||||||||||||||||
| Diluted earnings per share | $ | 0.46 | $ | 0.42 | 10 | % | $ | 0.97 | $ | 0.95 | 2 | % | |||||||||||||||||||||||
| Cash from operations (GAAP) /Adjusted free cash flow (Non-GAAP) | $ | 44,093 | $ | 44,688 | (1) | % | $ | 44,681 | $ | 46,515 | (4) | % | |||||||||||||||||||||||
(1)See Legal Notice Regarding Non-GAAP Financial Information
Other fiscal first quarter 2022 metrics and recent results included:
•Cash, cash equivalents and short-term investments were $173.3 million at the end of the quarter.
•DSO was 52 days compared to 53 days in the fiscal first quarter of 2021 and 60 days in the fiscal fourth quarter of 2021.
•On March 23, 2022, our Board of Directors declared a quarterly dividend of $0.175 per share of common stock that will be paid on June 15, 2022 to shareholders of record as of the close of business on June 1, 2022.
Anthony Folger, CFO, said: “We delivered strong financial results across the board in the first quarter, a continuation of the trend that we saw for much of fiscal year 2021. The integration of Kemp is tracking to plan and Kemp’s first full quarter with Progress contributed in line with our expectations and helped sustain the momentum of our total growth strategy.”
1
2022 Business Outlook
Progress provides the following guidance for the fiscal year ending November 30, 2022 and the fiscal second quarter ending May 31, 2022:
| Updated FY 2022 Guidance (March 29, 2022) | Prior FY 2022 Guidance (January 18, 2022) | ||||||||||||||||||||||
| (In millions, except percentages and per share amounts) | GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||||||||
| Revenue | $601 - $609 | $609 - $617 | $597 - $607 | $605 - $615 | |||||||||||||||||||
| Diluted earnings per share | $2.16 - $2.23 | $4.01 - $4.09 | $1.93 - $2.03 | $3.95 - $4.05 | |||||||||||||||||||
| Operating margin | 23% | 39% - 40% | 21% | 39% | |||||||||||||||||||
| Cash from operations (GAAP) / Adjusted free cash flow (Non-GAAP) | $188 - $193 | $185 - $190 | $188 - $193 | $185 - $190 | |||||||||||||||||||
| Effective tax rate | 21 | % | 20% - 21% | 20% - 21% | 20% - 21% | ||||||||||||||||||
| Q2 2022 Guidance | |||||||||||
| (In millions, except per share amounts) | GAAP | Non-GAAP | |||||||||
| Revenue | $143 - $146 | $145 - $148 | |||||||||
| Diluted earnings per share | $0.62 - $0.64 | $0.94 - $0.96 | |||||||||
Based on current exchange rates, the expected negative currency translation impact on Progress' fiscal year 2022 business outlook compared to 2021 exchange rates is approximately $9.2 million on GAAP and non-GAAP revenue, and approximately $0.03 on GAAP and non-GAAP diluted earnings per share. The expected negative currency translation impact on Progress' fiscal Q2 2022 business outlook compared to 2021 exchange rates on GAAP and non-GAAP revenue is approximately $2.8 million. The expected negative impact on GAAP and non-GAAP diluted Q2 2022 earnings per share is $0.01. 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 2022 at 5:00 p.m. ET on Tuesday, March 29, 2022. 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 800-773-2954 or +1 847-413-3731, passcode 50242106. 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.
2
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, 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, we may experience reputational harm, legal claims and financial exposure. (8) We have made acquisitions, 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) Delay or failure to realize the expected synergies and benefits of the Kemp acquisition could negatively impact our future results of operations and financial condition; (10) The continuing impact of the coronavirus disease (COVID-19) outbreak 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, 2021. Progress undertakes no obligation to update any forward-looking statements, which speak only as of the date of this press release.
About Progress
Dedicated to propelling business forward in a technology-driven world, Progress (Nasdaq: PRGS) helps businesses drive faster cycles of innovation, fuel momentum and accelerate their path to success. As the trusted provider of the best products to develop, deploy and manage high-impact applications, Progress enables customers to develop the applications and experiences they need, deploy where and how they want and manage it all safely and securely. Hundreds of thousands of enterprises, including 1,700 software companies and 3.5 million developers, depend on Progress to achieve their goals—with confidence. 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 | |||||||
3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | |||||||||||||||||
| (In thousands, except per share data) | February 28, 2022 | February 28, 2021 | % Change | ||||||||||||||
| Revenue: | |||||||||||||||||
| Software licenses | $ | 42,750 | $ | 33,317 | 28 | % | |||||||||||
| Maintenance and services | 102,172 | 87,963 | 16 | % | |||||||||||||
| Total revenue | 144,922 | 121,280 | 19 | % | |||||||||||||
| Costs of revenue: | |||||||||||||||||
| Cost of software licenses | 2,609 | 1,151 | 127 | % | |||||||||||||
| Cost of maintenance and services | 15,145 | 13,319 | 14 | % | |||||||||||||
| Amortization of acquired intangibles | 5,458 | 3,521 | 55 | % | |||||||||||||
| Total costs of revenue | 23,212 | 17,991 | 29 | % | |||||||||||||
| Gross profit | 121,710 | 103,289 | 18 | % | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Sales and marketing | 33,469 | 29,469 | 14 | % | |||||||||||||
| Product development | 28,673 | 24,548 | 17 | % | |||||||||||||
| General and administrative | 16,991 | 13,424 | 27 | % | |||||||||||||
| Amortization of acquired intangibles | 11,722 | 6,879 | 70 | % | |||||||||||||
| Restructuring expenses | 511 | 1,157 | (56) | % | |||||||||||||
| Acquisition-related expenses | 912 | 396 | 130 | % | |||||||||||||
| Total operating expenses | 92,278 | 75,873 | 22 | % | |||||||||||||
| Income from operations | 29,432 | 27,416 | 7 | % | |||||||||||||
| Other expense, net | (3,480) | (2,652) | (31) | % | |||||||||||||
| Income before income taxes | 25,952 | 24,764 | 5 | % | |||||||||||||
| Provision for income taxes | 5,498 | 5,803 | (5) | % | |||||||||||||
| Net income | $ | 20,454 | $ | 18,961 | 8 | % | |||||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | 0.47 | $ | 0.43 | 9 | % | |||||||||||
| Diluted | $ | 0.46 | $ | 0.42 | 10 | % | |||||||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 43,981 | 44,108 | — | % | |||||||||||||
| Diluted | 44,708 | 44,652 | — | % | |||||||||||||
| 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 | $ | 411 | $ | 392 | 5 | % | |||||||||||
| Sales and marketing | 1,402 | 1,503 | (7) | % | |||||||||||||
| Product development | 2,222 | 1,919 | 16 | % | |||||||||||||
| General and administrative | 4,079 | 2,970 | 37 | % | |||||||||||||
| Total | $ | 8,114 | $ | 6,784 | 20 | % | |||||||||||
4
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (In thousands) | February 28, 2022 | November 30, 2021 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash, cash equivalents and short-term investments | $ | 173,322 | $ | 157,373 | |||||||
| Accounts receivable, net | 86,601 | 99,815 | |||||||||
| Unbilled receivables and contract assets | 27,043 | 25,816 | |||||||||
| Other current assets | 40,401 | 39,549 | |||||||||
| Assets held for sale | 15,255 | 15,255 | |||||||||
| Total current assets | 342,622 | 337,808 | |||||||||
| Property and equipment, net | 13,933 | 14,345 | |||||||||
| Goodwill and intangible assets, net | 944,326 | 958,337 | |||||||||
| Right-of-use lease assets | 23,604 | 25,253 | |||||||||
| Long-term unbilled receivables and contract assets | 16,233 | 17,464 | |||||||||
| Other assets | 12,398 | 10,330 | |||||||||
| Total assets | $ | 1,353,116 | $ | 1,363,537 | |||||||
| Liabilities and shareholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and other current liabilities | $ | 59,650 | $ | 84,215 | |||||||
| Current portion of long-term debt, net | 6,234 | 25,767 | |||||||||
| Short-term operating lease liabilities | 8,075 | 7,926 | |||||||||
| Short-term deferred revenue | 209,771 | 205,021 | |||||||||
| Total current liabilities | 283,730 | 322,929 | |||||||||
| Long-term debt, net | 263,896 | 239,992 | |||||||||
| Convertible senior notes, net | 351,038 | 294,535 | |||||||||
| Long-term operating lease liabilities | 21,230 | 23,130 | |||||||||
| Long-term deferred revenue | 51,771 | 47,359 | |||||||||
| Other long-term liabilities | 13,128 | 23,103 | |||||||||
| Shareholders’ equity: | |||||||||||
| Common stock and additional paid-in capital | 303,678 | 354,676 | |||||||||
| Retained earnings | 64,645 | 57,813 | |||||||||
| Total shareholders’ equity | 368,323 | 412,489 | |||||||||
| Total liabilities and shareholders’ equity | $ | 1,353,116 | $ | 1,363,537 | |||||||
5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended | |||||||||||
| (In thousands) | February 28, 2022 | February 28, 2021 | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 20,454 | $ | 18,961 | |||||||
| Depreciation and amortization | 19,218 | 11,862 | |||||||||
| Stock-based compensation | 8,114 | 6,784 | |||||||||
| Other non-cash adjustments | 4,442 | 2,415 | |||||||||
| Changes in operating assets and liabilities | (8,135) | 4,666 | |||||||||
| Net cash flows from operating activities | 44,093 | 44,688 | |||||||||
| Capital expenditures | (831) | (1,166) | |||||||||
| Issuances of common stock, net of repurchases | (20,906) | (11,515) | |||||||||
| Dividend payments to shareholders | (7,784) | (7,854) | |||||||||
| Proceeds from the issuance of debt, net of payment of issuance costs | 5,517 | — | |||||||||
| Payments of principal on long-term debt | (1,719) | (18,763) | |||||||||
| Other | (2,421) | 2,986 | |||||||||
| Net change in cash, cash equivalents and short-term investments | 15,949 | 8,376 | |||||||||
| Cash, cash equivalents and short-term investments, beginning of period | 157,373 | 105,995 | |||||||||
| Cash, cash equivalents and short-term investments, end of period | $ | 173,322 | $ | 114,371 | |||||||
6
RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES
(Unaudited)
| Three Months Ended | % Change | ||||||||||||||||||||||||||||
| (In thousands, except per share data) | February 28, 2022 | February 28, 2021 | Non-GAAP | ||||||||||||||||||||||||||
| Adjusted revenue: | |||||||||||||||||||||||||||||
| GAAP revenue | $ | 144,922 | $ | 121,280 | |||||||||||||||||||||||||
Acquisition-related revenue(1) | 2,583 | 10,504 | |||||||||||||||||||||||||||
| Non-GAAP revenue | $ | 147,505 | 100 | % | $ | 131,784 | 100 | % | 12 | % | |||||||||||||||||||
| Adjusted income from operations: | |||||||||||||||||||||||||||||
| GAAP income from operations | $ | 29,432 | 20 | % | $ | 27,416 | 23 | % | |||||||||||||||||||||
| Amortization of acquired intangibles | 17,180 | 12 | % | 10,400 | 8 | % | |||||||||||||||||||||||
| Restructuring expenses and other | 511 | — | % | 1,157 | 1 | % | |||||||||||||||||||||||
| Stock-based compensation | 8,114 | 6 | % | 6,784 | 3 | % | |||||||||||||||||||||||
Acquisition-related revenue(1) and expenses | 3,495 | 2 | % | 10,900 | 8 | % | |||||||||||||||||||||||
| Non-GAAP income from operations | $ | 58,732 | 40 | % | $ | 56,657 | 43 | % | 4 | % | |||||||||||||||||||
| Adjusted net income: | |||||||||||||||||||||||||||||
| GAAP net income | $ | 20,454 | 14 | % | $ | 18,961 | 16 | % | |||||||||||||||||||||
| Amortization of acquired intangibles | 17,180 | 12 | % | 10,400 | 8 | % | |||||||||||||||||||||||
| Restructuring expenses and other | 511 | — | % | 1,157 | 1 | % | |||||||||||||||||||||||
| Stock-based compensation | 8,114 | 6 | % | 6,784 | 3 | % | |||||||||||||||||||||||
Acquisition-related revenue(1) and expenses | 3,495 | 2 | % | 10,900 | 8 | % | |||||||||||||||||||||||
| Provision for income taxes | (6,194) | (4) | % | (5,698) | (4) | % | |||||||||||||||||||||||
| Non-GAAP net income | $ | 43,560 | 30 | % | $ | 42,504 | 32 | % | 2 | % | |||||||||||||||||||
| Adjusted diluted earnings per share: | |||||||||||||||||||||||||||||
| GAAP diluted earnings per share | $ | 0.46 | $ | 0.42 | |||||||||||||||||||||||||
| Amortization of acquired intangibles | 0.38 | 0.23 | |||||||||||||||||||||||||||
| Restructuring expenses and other | 0.01 | 0.03 | |||||||||||||||||||||||||||
| Stock-based compensation | 0.18 | 0.16 | |||||||||||||||||||||||||||
Acquisition-related revenue(1) and expenses | 0.08 | 0.24 | |||||||||||||||||||||||||||
| Provision for income taxes | (0.14) | (0.13) | |||||||||||||||||||||||||||
| Non-GAAP diluted earnings per share | $ | 0.97 | $ | 0.95 | 2 | % | |||||||||||||||||||||||
| Non-GAAP weighted avg shares outstanding - diluted | 44,708 | 44,652 | — | % | |||||||||||||||||||||||||
| (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. | |||||||||||||||||||||||||||||
7
OTHER NON-GAAP FINANCIAL MEASURES
(Unaudited)
| Adjusted Free Cash Flow | |||||||||||||||||
| (In thousands) | Q1 2022 | Q1 2021 | % Change | ||||||||||||||
| Cash flows from operations | $ | 44,093 | $ | 44,688 | (1) | % | |||||||||||
| Purchases of property and equipment | (831) | (1,166) | (29) | % | |||||||||||||
| Free cash flow | 43,262 | 43,522 | (1) | % | |||||||||||||
| Add back: restructuring payments | 1,419 | 2,993 | (53) | % | |||||||||||||
| Adjusted free cash flow | $ | 44,681 | $ | 46,515 | (4) | % | |||||||||||
8
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2022 GUIDANCE
(Unaudited)
| Fiscal Year 2022 Updated Revenue Guidance | |||||||||||||||||||||||||||||
| Fiscal Year Ended | Fiscal Year Ending | ||||||||||||||||||||||||||||
| November 30, 2021 | November 30, 2022 | ||||||||||||||||||||||||||||
| (In millions) | Low | % Change | High | % Change | |||||||||||||||||||||||||
| GAAP revenue | $ | 531.3 | $ | 600.5 | 13 | % | $ | 608.5 | 15 | % | |||||||||||||||||||
Acquisition-related adjustments - revenue(1) | 26.0 | 8.5 | (67) | % | 8.5 | (67) | % | ||||||||||||||||||||||
| Non-GAAP revenue | $ | 557.3 | $ | 609.0 | 9 | % | $ | 617.0 | 11 | % | |||||||||||||||||||
(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 Ipswitch and Chef. | |||||||||||||||||||||||||||||
| Fiscal Year 2022 Updated Non-GAAP Operating Margin Guidance | |||||||||||
| Fiscal Year Ending November 30, 2022 | |||||||||||
| (In millions) | Low | High | |||||||||
| GAAP income from operations | $ | 137.0 | $ | 141.2 | |||||||
| GAAP operating margins | 23 | % | 23 | % | |||||||
| Acquisition-related revenue | 8.5 | 8.5 | |||||||||
| Acquisition-related expense | 1.6 | 1.6 | |||||||||
| Restructuring expense | 0.9 | 0.9 | |||||||||
| Stock-based compensation | 33.5 | 33.5 | |||||||||
| Amortization of acquired intangibles | 69.3 | 69.3 | |||||||||
| Gain on sale of assets held for sale | (10.7) | (10.7) | |||||||||
Total adjustments(2) | 103.1 | 103.1 | |||||||||
| Non-GAAP income from operations | $ | 240.1 | $ | 244.3 | |||||||
| Non-GAAP operating margin | 39 | % | 40 | % | |||||||
(2)Total adjustments include preliminary estimates relating to the valuation of intangible assets acquired from Kemp and restructuring expenses. The final amounts will not be available until the Company’s internal procedures and reviews are completed. | |||||||||||
| Fiscal Year 2022 Updated Non-GAAP Earnings per Share and Effective Tax Rate Guidance | |||||||||||
| Fiscal Year Ending November 30, 2022 | |||||||||||
| (In millions, except per share data) | Low | High | |||||||||
| GAAP net income | $ | 96.0 | $ | 99.3 | |||||||
| Adjustments (from previous table) | 103.1 | 103.1 | |||||||||
Income tax adjustment(3) | (20.8) | (20.3) | |||||||||
| Non-GAAP net income | $ | 178.3 | $ | 182.1 | |||||||
| GAAP diluted earnings per share | $ | 2.16 | $ | 2.23 | |||||||
| Non-GAAP diluted earnings per share | $ | 4.01 | $ | 4.09 | |||||||
| Diluted weighted average shares outstanding | 44.5 | 44.5 | |||||||||
(3)Tax adjustment is based on a non-GAAP effective tax rate of approximately 21% for Low and 20% for High, calculated as follows: | |||||||||||
| Non-GAAP income from operations | $ | 240.1 | $ | 244.3 | |||||||
| Other (expense) income | (15.5) | (15.5) | |||||||||
| Non-GAAP income from continuing operations before income taxes | 224.6 | 228.8 | |||||||||
| Non-GAAP net income | 178.3 | 182.1 | |||||||||
| Tax provision | $ | 46.3 | $ | 46.7 | |||||||
| Non-GAAP tax rate | 21 | % | 20 | % | |||||||
9
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2022 GUIDANCE
(Unaudited)
| Fiscal Year 2022 Adjusted Free Cash Flow Guidance | |||||||||||
| Fiscal Year Ending November 30, 2022 | |||||||||||
| (In millions) | Low | High | |||||||||
| Cash flows from operations (GAAP) | $ | 188 | $ | 193 | |||||||
| Purchases of property and equipment | (6) | (6) | |||||||||
| Add back: restructuring payments | 3 | 3 | |||||||||
| Adjusted free cash flow (non-GAAP) | $ | 185 | $ | 190 | |||||||
10
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q2 2022 GUIDANCE
(Unaudited)
| Q2 2022 Revenue Guidance | |||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ending | ||||||||||||||||||||||||||||
| May 31, 2021 | May 31, 2022 | ||||||||||||||||||||||||||||
| (In millions) | Low | % Change | High | % Change | |||||||||||||||||||||||||
| GAAP revenue | $ | 122.5 | $ | 142.9 | 17 | % | $ | 145.9 | 19 | % | |||||||||||||||||||
Acquisition-related adjustments - revenue(1) | 6.7 | 2.1 | (69) | % | 2.1 | (69) | % | ||||||||||||||||||||||
| Non-GAAP revenue | $ | 129.2 | $ | 145.0 | 12 | % | $ | 148.0 | 15 | % | |||||||||||||||||||
(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 Ipswitch and Chef. | |||||||||||||||||||||||||||||
| Q2 2022 Non-GAAP Earnings per Share Guidance | |||||||||||
| Three Months Ending May 31, 2022 | |||||||||||
| Low | High | ||||||||||
| GAAP diluted earnings per share | $ | 0.62 | $ | 0.64 | |||||||
| Acquisition-related revenue | 0.05 | 0.05 | |||||||||
| Acquisition-related expense | 0.01 | 0.01 | |||||||||
| Stock-based compensation | 0.19 | 0.19 | |||||||||
| Amortization of acquired intangibles | 0.39 | 0.39 | |||||||||
| Gain on sale of assets held for sale | (0.24) | (0.24) | |||||||||
Total adjustments(2) | 0.40 | 0.40 | |||||||||
| Income tax adjustment | (0.08) | (0.08) | |||||||||
| Non-GAAP diluted earnings per share | $ | 0.94 | $ | 0.96 | |||||||
(2)Total adjustments include preliminary estimates relating to the valuation of intangible assets acquired from Kemp. The final amounts will not be available until the Company’s internal procedures and reviews are completed. | |||||||||||
11
March 29, 2022 Progress Financial Results Q1 2022 Supplemental Data
2© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. Safe Harbor This presentation 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 presentation include, but are not limited to, statements regarding Progress’s strategy; acquisitions; future revenue growth, operating margin and cost savings; strategic partnering and marketing initiatives; and other statements regarding the future operation, direction, prospects and success of Progress’s business. There are many factors that could cause actual results or future events to differ materially from those anticipated by the forward-looking statements, including, without limitation: • 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. • 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. • 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. • 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. • We depend upon our extensive partner channel, and we may not be successful in retaining or expanding our relationships with channel partners. • 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. • 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, we may experience reputational harm, legal claims and financial exposure. • We have made acquisitions, 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. • The continuing impact of the coronavirus disease (COVID-19) outbreak 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 our business, please refer to our filings with the Securities and Exchange Commission. Progress undertakes no obligation to update any forward-looking statements, which speak only as of the date of this presentation, except for statements relating to Progress' projected results for the quarter ended May 31, 2022, and fiscal year ended November 30, 2022, which speak only as of March 29, 2022. Finally, in this presentation we will be referring to non-GAAP financial measures such as non-GAAP revenue, non-GAAP income from operations and operating margin, adjusted free cash flow and non-GAAP diluted earnings per share. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation between non-GAAP and the most directly comparable GAAP financial measures appears in our earnings press release for the fiscal quarter ended February 28, 2022 and is available in the Investor Relations section of our Web site.
3© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. What: Progress Q1 2022 Financial Results Conference Call When: Tuesday, March 29, 2022 Time: 5:00 p.m. ET Live Call: (800) 773-2954 (847) 413-3731 Conf ID: 50242106 Live / Recorded Webcast: https://edge.media-server.com/mmc/p/38n7sbqv Conference Call Details Please note: Webcast is listen-only.
4© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. Strong Financial Results, Good Start to FY22 Summary Highlights Q1 2022 ▪ Kemp integration proceeding at or ahead of plan…no major speedbumps or surprises. ▪ Broad top-line strength and momentum continued from FY21. ▪ Strong demand and solid execution, including disciplined expense management, drove results above high end of guidance range. ▪ ARR growth (up 12% on an as reported basis and 3.5% on a pro-forma basis, both in constant currency) and consistently strong net retention rates of >100% reflect continued strong performance across the board.
© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. Recurring Revenue Revenue ARR Operating Margins YoY Revenue Growth Free Cash Flow Progress is the leading provider of the best products to develop, deploy and manage high- impact cloud applications and systems Revenue: $613M EPS : $4.05 FCF: $188M Operating margin: 39.5% ----------- Q2E Revenue: $146.5M Q2E EPS: $0.95 # Guidance provided/updated March 29, 2022, non-GAAP; midpoint of guidance shown. $147.5М 12% $479М ~80% 40%$44.7M All results shown are for FQ1 ‘22, non-GAAP, as reported March 29, 2022 Results Overview & Guidance $0.97 Q1’22 Earnings Per Share Updated Guidance#: FY22E and Q1’22E
6© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. • Double revenue every 5 years • Make accretive acquisitions in our key markets • Invest in R&D to improve retention • Maximize operational synergies • Maintain best in class operating margins Total Growth Strategy Goals Pillars of our Total Growth Strategy Strengthen Profitable Core Business Disciplined M&A Strategy Continued Focus on Operational Excellence
7© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. M&A Approach Infrastructure Software Tighter alignment increases synergy potential End Market Alignment 5-yrs - Double Revenues ~10-20% of revenue annually can be financed and integrated efficiently Sizing Durable top line High mix of recurring revenue Strong customer retention rates Business Model Characteristics Venture Backed, Founder Led and PE Sponsor-Owned Targets Massive Market Opportunity Experienced Corp Dev Team ROIC > WACC Business Case with attainable synergies – target +40% operating margins Knowledge of end markets, GTM model and/or technology
8© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. Q1 2022 Results Prior Q1 2022 Outlook (provided on January 18, 2022) GAAP Revenue $144.9M $136M - $139M Non-GAAP Revenue $147.5M $139M - $142M GAAP earnings per share (Diluted) $0.46 $0.32 - $0.34 Non-GAAP earnings per share (Diluted) $0.97 $0.83 - $0.85 GAAP Operating Margin 20% Not guided Non-GAAP Operating Margin 40% Not guided Adjusted Free Cash Flow $44.7 M Not guided Summary Q1 2022 Financial Results
9© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. $379 $432 $456 $557 $613 2018 2019 2020 2021 2022 (F)* Revenue (non GAAP) Driving Total Growth FY’22* revenue growth of 10% Revenue CAGR of 13% 2018 – 2022(F)* Represents the mid-point of our updated FY’22 guidance range, does not include future acquisitions.
10© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. Annualized Recurring Revenue Trend (“pro-forma”) Kemp ARR ~$40M ARR growth = 3.5% year-over-year + Net Retention Rate between 98%-101% = Predictable and durable top line performance All periods reported in constant currency, using current year budgeted exchange rates $464 $463 $469 $477 $480 $479 98.2% 100.0% 99.8% 101.0% 100.2% 100.2% Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 ARR Net Retention % TTM
11© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. “As Reported” Kemp adds ~$40M of ARR ARR growth = 12.4% year-over-year Net Retention Rate has ranged between 100%-102% “Pro Forma” Kemp ARR included in both periods presented ARR growth = 3.5% year-over-year Net Retention Rate has ranged between 100%-101% Note: ARR is a Non-GAAP operating metric and does not have a standardized definition. It 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. Annualized Recurring Revenue (amounts reported in constant currency) All periods reported in constant currency, using current year budgeted exchange rates $463 $479 100.0% 100.2% Q1 '21 Q1 '22 ARR Net Retention % TTM $426 $479 99.9% 100.2% Q1 '21 Q1 '22 ARR Kemp Net Retention % TTM
12© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. ARR Exchange Rate Comparison (“pro-forma”) ARR is presented in constant currency, using our current year budgeted exchange rates “ARR at FY21 Rates” represents results reported translated using our FY21 budgeted exchange rates “ARR at FY22 Rates” represents those same results translated using our FY22 budgeted exchange rates $463 $469 $477 $480 $469 $476 $484 $486 Q1 '21 Q2 '21 Q3 '21 Q4 '21 ARR at FY22 Rates ARR at FY21 Rates
13© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. $134 $162 $183 $229 $242 2018 2019 2020 2021 2022(F)* Operating Income (non GAAP) Growing Profitability * Represents the mid-point of our FY’22 guidance range updated March 29, 2022 Consistent growth in operating income FY’18 – FY’22(F)* Best-in-class operating margins consistently above 35%
14© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. Continue to prioritize accretive M&A opportunities that meet our disciplined criteria Capital Allocation Strategy Primary focus Continue returning capital to shareholders in the form of dividends only to the extent that doing so does not constrain our M&A capabilities Repurchase shares to offset dilution from our equity programs only to the extent that doing so does not constrain our M&A capabilities • Existing authorization $250M; $130M remaining • Flexibility to increase, reduce or suspend repurchases, depending on market conditions and size and timing of M&A
15© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. Q2 2022 Current Outlook FY 2022 Prior Outlook (Provided on January 18, 2022) FY 2022 Current Outlook Non-GAAP Revenue $145M – $148M $605 – $615M $609M – $617M Non-GAAP EPS $0.94 – $0.96 $3.95 - $4.05 $4.01 – $4.09 Non-GAAP Operating Margin Not guided 39% 39% - 40% Non-GAAP Adjusted Free Cash Flow Not guided $185M - $190M $185M – $190M Non-GAAP Effective Tax Rate Not guided 20%- 21% 20% - 21% Business Outlook (as of March 29, 2022)
Supplemental Financial Information * * The following supplemental financial information is presented on a GAAP basis. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP numbers can be found in the financial results press release that we issued today.
17© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. Supplemental Revenue Information (Unaudited) (in thousands) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Revenue by Type License 33,317 30,107 51,930 41,236 42,750 Maintenance 76,977 80,069 82,875 85,942 89,963 Services 10,986 12,312 12,612 12,950 12,209 Total Revenue 121,280$ 122,488$ 147,417$ 140,128$ 144,922$ Revenue by Region North America 71,505 71,094 93,880 81,335 78,093 EMEA 40,240 41,321 40,999 46,775 53,702 Latin America 3,493 3,753 5,298 4,492 3,883 Asia Pacific 6,042 6,320 7,240 7,526 9,244 Total Revenue 121,280$ 122,488$ 147,417$ 140,128$ 144,922$ QTD GAAP Basis
18© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. Other NON-GAAP Financial Measures (Unaudited) YTD YTD YTD GAAP Non-GAAP Non-GAAP (in thousands) Q1 2022 Adjustment Q1 2022 Revenue by Type License 42,750 132 42,882 Maintenance 89,963 2,433 92,396 Services 12,209 18 12,227 Total Revenue 144,922$ 2,583$ 147,505$ Revenue by Region North America 78,093 1,769 79,862 EMEA 53,702 602 54,304 Latin America 3,883 7 3,890 Asia Pacific 9,244 205 9,449 Total Revenue 144,922$ 2,583$ 147,505$
