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United States securities and exchange commission logo
March 13, 2024
Anthony Folger
Executive Vice President and Chief Financial Officer
Progress Software Corporation
15 Wayside Road, Suite 400
Burlington, Massachusetts 01803
Re: Progress Software
Corporation
Form 10-K for the
fiscal year ended November 30, 2023
File No. 000-19417
Dear Anthony Folger:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for the fiscal year ended November 30, 2023
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations, page 24
1. We note you describe
multiple factors that impacted your results of operations; however,
you do not appear to
quantify the impact of, or explain the drivers behind, each factor. For
example:
You attribute the
increase in revenue for fiscal 2023 to the acquisition of MarkLogic,
as well as
increases in various product offerings such as OpenEdge, Kemp
LoadMaster,
Sitefinity, Ipswitch, DevTools, Corticon, and Chef.
You state that the
increase in maintenance revenue was primarily due to the
acquisition of
MarkLogic, as well as an increase in maintenance revenue from
OpenEdge, Chef, and
DevTools product offerings, which was partially offset by a
decrease in Kemp
LoadMaster maintenance revenue.
You attribute the
increase in professional services revenue to MarkLogic, which was
partially offset by
a decrease in professional services revenue of Chef.
Anthony Folger
Progress Software Corporation
March 13, 2024
Page 2
Please revise throughout to quantify each material factor, including
any offsetting factors
that contributed to your results of operations, including a quantified
discussion for each of
the acquisitions or product offerings that contributed to such change.
In addition, you
should refrain from using qualitative terms such as "primarily" in
lieu of providing
specific quantitative disclosure. Refer to Item 303(b) of Regulation
S-K.
Select Performance Metrics
Annual Recurring Revenue (ARR), page 29
2. Please address the following as it relates to your measure of annual
recurring revenue
(ARR) and revise your disclosures as necessary:
Clarify what is meant by "monthly recurring revenue from committed
contractual
amounts," which you use to determine monthly recurring revenue
(MRR). In this
regard, tell us whether the committed contractual amount includes
any portion of the
contract value that has been allocated to the software license and
recognized as
revenue up-front at the point in time when control was
transferred.
Explain what is meant by "additional usage" used in determining
MRR and how you
determined it is appropriate to annualize such usage.
Revise your discussion of ARR to describe further how ARR differs
from GAAP
revenue and specifically address the timing of revenue recognition
related to the
license performance obligation, if applicable.
Recent Developments: MOVEit Vulnerability, page 34
3. In an effort to provide additional context to assist investors in
understanding your
definition of "MOVEit Vulnerability," please revise to explain what is
meant by "zero-day
vulnerability."
Financial Statements and Supplementary Data
Notes to Consolidated Financial Statements
Note 18. Business Segments and International Operations, page 72
4. We note your qualitative discussion both here and in the earnings call
transcripts
regarding the impact of your various product offerings on revenues and
certain operating
metrics. Please tell us how you considered the guidance in ASC
280-10-50-40 to provide
FirstName LastNameAnthony Folger
revenue by each product or service or similar product or services. In
your response,
Comapany NameProgress
provide Software Corporation
us with a breakdown of revenue for each of the products
identified on pages 4 and
March 5.
13, 2024 Page 2
FirstName LastName
Anthony Folger
FirstName LastNameAnthony
Progress Software Corporation Folger
Comapany
March NameProgress Software Corporation
13, 2024
March3 13, 2024 Page 3
Page
FirstName LastName
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Please contact Chen Chen at 202-551-7351 or Kathleen Collins at
202-551-3499 with any
questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Jon Venick