Exceeds Annual Guidance for Revenue, Achieves Record Cash Flows
Board of Directors Increases Share Repurchase Authorization to $250 Million
BEDFORD, Mass., Jan. 16, 2020 (GLOBE NEWSWIRE) -- Progress PRGS, the leading provider of application development and digital experience technologies, today announced results for its fiscal fourth quarter and fiscal year ended November 30, 2019.
On a GAAP basis, revenue was $117.0 million during the quarter compared to $98.1 million in the same quarter last year, a year-over-year increase of 19% on an actual currency basis and 21% on a constant currency basis. On a non-GAAP basis, revenue was $123.4 million during the quarter compared to $98.3 million in the same quarter last year, an increase of 26% on an actual currency basis and 27% on a constant currency basis.
On a GAAP basis, diluted loss per share during the quarter was $0.11 compared to diluted earnings per share of $0.19 in the same quarter last year, a decrease of 158%. On a non-GAAP basis, diluted earnings per share during the quarter was $0.79 compared to $0.54 in the same quarter last year, an increase of 46%.
"Our fourth quarter performance was very strong, allowing us to exceed both our revenue and EPS guidance for fiscal 2019," said Yogesh Gupta, CEO at Progress. "Once again, in Q4 we had a better-than-expected contribution from Ipswitch, our recent acquisition, further validating our focus on accretive M&A as our go-forward strategy. We look forward to continued momentum in 2020, as we execute on a strategic plan that will drive sustainable, long-term value for all shareholders."
Additional financial highlights included(1):
| Three Months Ended | |||||||||||||||||||||
| GAAP | Non-GAAP | ||||||||||||||||||||
| (In thousands, except percentages and per share amounts) | November 30, 2019 | November 30, 2018 | % Change | November 30, 2019 | November 30, 2018 | % Change | |||||||||||||||
| Revenue | $ | 117,038 | $ | 98,103 | 19 | % | $ | 123,416 | $ | 98,257 | 26 | % | |||||||||
| (Loss) income from operations | $ | (6,026 | ) | $ | 11,029 | (155 | )% | $ | 47,285 | $ | 30,975 | 53 | % | ||||||||
| Operating margin | (5 | )% | 11 | % | (145 | )% | 38 | % | 32 | % | 19 | % | |||||||||
| Net (loss) income | $ | (4,740 | ) | $ | 8,643 | (155 | )% | $ | 35,720 | $ | 24,440 | 46 | % | ||||||||
| Diluted (loss) earnings per share | $ | (0.11 | ) | $ | 0.19 | (158 | )% | $ | 0.79 | $ | 0.54 | 46 | % | ||||||||
| Cash from operations (GAAP) /Adjusted free cash flow (Non-GAAP) | $ | 36,601 | $ | 24,327 | 50 | % | $ | 36,705 | $ | 23,232 | 58 | % | |||||||||
(1)The Company adopted the new accounting standard related to revenue recognition ("ASC 606") effective December 1, 2018, using the full retrospective method. Prior period results have been adjusted to reflect the adoption of this standard.
Paul Jalbert, CFO, said: "We are very pleased with our financial performance in Q4 and for the full fiscal year. We delivered record cash flow for 2019 and are projecting a very significant increase for 2020, perhaps the best indication of our efficient approach to running our company. With the Ipswitch integration behind us, our business is well-positioned to sustain our momentum in 2020 and beyond."
Other fiscal fourth quarter 2019 metrics and recent results included:
- Cash, cash equivalents and short-term investments were $173.7 million at the end of the quarter;
- DSO was 56 days, compared to 53 days in the fiscal third quarter of 2019 and 47 days in the fiscal fourth quarter of 2018;
- On January 8, 2020, our Board of Directors declared a quarterly dividend of $0.165 per share of common stock that will be paid on March 16, 2020 to shareholders of record as of the close of business on March 2, 2020.
Full Year Results(1)
| Fiscal Year Ended | |||||||||||||||||||||
| GAAP | Non-GAAP | ||||||||||||||||||||
| (In thousands, except percentages and per share amounts) | November 30, 2019 | November 30, 2018 | % Change | November 30, 2019 | November 30, 2018 | % Change | |||||||||||||||
| Revenue | $ | 413,298 | $ | 378,981 | 9 | % | $ | 431,961 | $ | 379,447 | 14 | % | |||||||||
| Income from operations | $ | 40,084 | $ | 67,814 | (41 | )% | $ | 162,258 | $ | 133,952 | 21 | % | |||||||||
| Operating margin | 10 | % | 18 | % | (44 | )% | 38 | % | 35 | % | 9 | % | |||||||||
| Net income | $ | 26,400 | $ | 49,670 | (47 | )% | $ | 121,745 | $ | 101,180 | 20 | % | |||||||||
| Diluted earnings per share | $ | 0.58 | $ | 1.08 | (46 | )% | $ | 2.69 | $ | 2.19 | 23 | % | |||||||||
| Cash from operations (GAAP) /Adjusted free cash flow (Non-GAAP) | $ | 128,484 | $ | 121,352 | 6 | % | $ | 128,893 | $ | 120,213 | 7 | % | |||||||||
(1)The Company adopted the new accounting standard related to revenue recognition ("ASC 606") effective December 1, 2018, using the full retrospective method. Prior period results have been adjusted to reflect the adoption of this standard.
2020 Business Outlook
Progress provides the following guidance for the fiscal year ending November 30, 2020 and for the fiscal first quarter ending February 29, 2020, together with actual results for the same periods in the fiscal year ending November 30, 2019:
| FY 2019 Actual | FY 2020 Guidance | ||||||||||||||||
| (In millions, except percentages and per share amounts) | FY 2019 GAAP | FY 2019 Non-GAAP | FY 2020 GAAP | FY 2020 Non-GAAP | |||||||||||||
| Revenue | $ | 413 | $ | 432 | $440 - $447 | $448 - $455 | |||||||||||
| Diluted earnings per share | $ | 0.58 | $ | 2.69 | $1.96 - $2.01 | $2.87 - $2.92 | |||||||||||
| Operating margin | 10 | % | 38 | % | 27 | % | 39 | % | |||||||||
| Cash from operations (GAAP) / Adjusted free cash flow (Non-GAAP) | $ | 128 | $ | 129 | $149 - $154 | $145 - $150 | |||||||||||
| Effective tax rate | 7 | % | 19 | % | 17% | 20 | % | ||||||||||
| Q1 2019 Actual | Q1 2020 Guidance | ||||||||||
| (In millions, except per share amounts) | Q1 2019 GAAP | Q1 2019 Non-GAAP | Q1 2020 GAAP | Q1 2020 Non-GAAP | |||||||
| Revenue | $ | 90 | $ | 90 | $106 - $109 | $110 - $113 | |||||
| Diluted earnings per share | $ | 0.21 | $ | 0.50 | $0.40 - $0.42 | $0.69 - $0.71 | |||||
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 $0.6 million on GAAP and non-GAAP revenue. The expected negative currency translation impact on Progress' fiscal Q1 2020 business outlook compared to 2019 exchange rates on GAAP and non-GAAP revenue is approximately $0.5 million. The expected currency translation impact on GAAP and non-GAAP earnings per share for fiscal year 2020 and fiscal Q1 2020 is not material. To the extent that there are changes in exchange rates versus the current environment, this may have an impact on Progress' business outlook.
Share Repurchase Program
Progress also announced today that its Board of Directors has increased the total share repurchase authorization from the $75 million remaining on the previous authorization to $250 million.
Conference Call
Progress will hold a conference call to review its financial results for the fiscal fourth quarter of 2019 at 5:00 p.m. ET on Thursday, January 16, 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 4393532. 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. 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, 2018 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended February 28, 2019, May 31, 2019 and August 31, 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 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||||||
| (In thousands, except per share data) | November 30, 2019 | November 30, 2018(1) | % Change | November 30, 2019 | November 30, 2018(1) | % Change | |||||||||||||||
| Revenue: | |||||||||||||||||||||
| Software licenses | $ | 39,336 | $ | 28,367 | 39 | % | $ | 122,552 | $ | 99,800 | 23 | % | |||||||||
| Maintenance and services | 77,702 | 69,736 | 11 | % | 290,746 | 279,181 | 4 | % | |||||||||||||
| Total revenue | 117,038 | 98,103 | 19 | % | 413,298 | 378,981 | 9 | % | |||||||||||||
| Costs of revenue: | |||||||||||||||||||||
| Cost of software licenses | 1,598 | 1,198 | 33 | % | 4,894 | 4,769 | 3 | % | |||||||||||||
| Cost of maintenance and services | 12,281 | 10,025 | 23 | % | 44,463 | 39,470 | 13 | % | |||||||||||||
| Amortization of acquired intangibles | 6,887 | 5,508 | 25 | % | 25,884 | 22,734 | 14 | % | |||||||||||||
| Total costs of revenue | 20,766 | 16,731 | 24 | % | 75,241 | 66,973 | 12 | % | |||||||||||||
| Gross profit | 96,272 | 81,372 | 18 | % | 338,057 | 312,008 | 8 | % | |||||||||||||
| Operating expenses: | |||||||||||||||||||||
| Sales and marketing | 29,369 | 28,198 | 4 | % | 101,701 | 93,036 | 9 | % | |||||||||||||
| Product development | 23,868 | 20,334 | 17 | % | 88,572 | 79,739 | 11 | % | |||||||||||||
| General and administrative | 14,915 | 13,380 | 11 | % | 53,360 | 49,050 | 9 | % | |||||||||||||
| Amortization of acquired intangibles | 7,414 | 3,285 | 126 | % | 22,255 | 13,241 | 68 | % | |||||||||||||
| Impairment of intangible & long-lived assets(2) | 24,096 | — | * | 24,096 | — | * | |||||||||||||||
| Restructuring expenses | 2,338 | (131 | ) | * | 6,331 | 2,251 | 181 | % | |||||||||||||
| Acquisition-related expenses | 298 | 130 | 129 | % | 1,658 | 258 | * | ||||||||||||||
| Loss on assets held for sale | — | 5,147 | * | — | 5,147 | * | |||||||||||||||
| Fees related to shareholder activist | — | — | * | — | 1,472 | * | |||||||||||||||
| Total operating expenses | 102,298 | 70,343 | 45 | % | 297,973 | 244,194 | 22 | % | |||||||||||||
| (Loss) income from operations | (6,026 | ) | 11,029 | (155 | )% | 40,084 | 67,814 | (41 | )% | ||||||||||||
| Other expense, net | (3,551 | ) | (2,188 | ) | (62 | )% | (11,589 | ) | (7,018 | ) | (65 | )% | |||||||||
| (Loss) income before income taxes | (9,577 | ) | 8,841 | (208 | )% | 28,495 | 60,796 | (53 | )% | ||||||||||||
| (Benefit) provision for income taxes | (4,837 | ) | 198 | * | 2,095 | 11,126 | (81 | )% | |||||||||||||
| Net (loss) income | $ | (4,740 | ) | $ | 8,643 | (155 | )% | $ | 26,400 | $ | 49,670 | (47 | )% | ||||||||
| (Loss) earnings per share: | |||||||||||||||||||||
| Basic | $ | (0.11 | ) | $ | 0.19 | (158 | )% | $ | 0.59 | $ | 1.09 | (46 | )% | ||||||||
| Diluted | $ | (0.11 | ) | $ | 0.19 | (158 | )% | $ | 0.58 | $ | 1.08 | (46 | )% | ||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||
| Basic | 44,882 | 45,055 | — | % | 44,791 | 45,561 | (2 | )% | |||||||||||||
| Diluted | 44,882 | 45,401 | (1 | )% | 45,340 | 46,135 | (2 | )% | |||||||||||||
| Cash dividends declared per common share | $ | 0.165 | $ | 0.155 | 6 | % | $ | 0.630 | $ | 0.575 | 10 | % | |||||||||
| (1)The Company adopted ASC 606 effective December 1, 2018, using the full retrospective method. Prior period results have been adjusted to reflect the adoption of this standard. | |||||||||||||||||||||
| (2)Primarily represents a reduction in the carrying values of the intangible assets associated with Kinvey and DataRPM. | |||||||||||||||||||||
| Stock-based compensation is included in the condensed consolidated statements of operations, as follows: | |||||||||||||||||||||
| Cost of revenue | $ | 323 | $ | 197 | 64 | % | $ | 1,134 | $ | 616 | 84 | % | |||||||||
| Sales and marketing | 950 | 832 | 14 | % | 4,155 | 2,959 | 40 | % | |||||||||||||
| Product development | 1,812 | 2,468 | (27 | )% | 7,205 | 8,242 | (13 | )% | |||||||||||||
| General and administrative | 2,815 | 2,356 | 19 | % | 10,817 | 8,752 | 24 | % | |||||||||||||
| Total | $ | 5,900 | $ | 5,853 | 1 | % | $ | 23,311 | $ | 20,569 | 13 | % | |||||||||
*Not meaningful
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (In thousands) | November 30, 2019 | November 30, 2018(1) | ||||||||||||||||
| Assets | ||||||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash, cash equivalents and short-term investments | $ | 173,685 | $ | 139,513 | ||||||||||||||
| Accounts receivable, net | 72,820 | 59,715 | ||||||||||||||||
| Unbilled receivables and contract assets | 10,880 | 1,421 | ||||||||||||||||
| Other current assets | 27,280 | 25,080 | ||||||||||||||||
| Assets held for sale | — | 5,776 | ||||||||||||||||
| Total current assets | 284,665 | 231,505 | ||||||||||||||||
| Property and equipment, net | 29,765 | 30,714 | ||||||||||||||||
| Goodwill and intangible assets, net | 532,216 | 373,911 | ||||||||||||||||
| Long-term unbilled receivables and contract assets | 12,492 | 1,811 | ||||||||||||||||
| Other assets | 22,133 | 6,209 | ||||||||||||||||
| Total assets | $ | 881,271 | $ | 644,150 | ||||||||||||||
| Liabilities and shareholders' equity | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Accounts payable and other current liabilities | $ | 72,674 | $ | 57,005 | ||||||||||||||
| Current portion of long-term debt, net | 10,717 | 5,819 | ||||||||||||||||
| Short-term deferred revenue | 157,494 | 123,210 | ||||||||||||||||
| Total current liabilities | 240,885 | 186,034 | ||||||||||||||||
| Long-term debt, net | 284,002 | 110,270 | ||||||||||||||||
| Long-term deferred revenue | 19,752 | 12,730 | ||||||||||||||||
| Other long-term liabilities | 6,350 | 11,114 | ||||||||||||||||
| Shareholders' equity: | ||||||||||||||||||
| Common stock and additional paid-in capital | 295,953 | 267,053 | ||||||||||||||||
| Retained earnings | 34,329 | 56,949 | ||||||||||||||||
| Total shareholders' equity | 330,282 | 324,002 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 881,271 | $ | 644,150 | ||||||||||||||
| (1)The Company adopted ASC 606 effective December 1, 2018, using the full retrospective method. Prior period results have been adjusted to reflect the adoption of this standard. | ||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended | Fiscal Year Ended | ||||||||||||||
| (In thousands) | November 30, | November 30, 2018(1) | November 30, | November 30, 2018(1) | |||||||||||
| 2019 | 2019 | ||||||||||||||
| Cash flows from operating activities: | |||||||||||||||
| Net (loss) income | $ | (4,740 | ) | $ | 8,643 | $ | 26,400 | $ | 49,670 | ||||||
| Depreciation and amortization | 16,519 | 10,855 | 56,679 | 44,502 | |||||||||||
| Stock-based compensation | 5,900 | 5,853 | 23,311 | 20,569 | |||||||||||
| Loss on assets held for sale | — | 5,147 | — | 5,147 | |||||||||||
| Impairment of intangible and long-lived assets(2) | 24,096 | — | 24,096 | — | |||||||||||
| Other non-cash adjustments | (8,252 | ) | 389 | (13,947 | ) | (1,676 | ) | ||||||||
| Changes in operating assets and liabilities | 3,078 | (6,560 | ) | 11,945 | 3,140 | ||||||||||
| Net cash flows from operating activities | 36,601 | 24,327 | 128,484 | 121,352 | |||||||||||
| Capital expenditures | (2,168 | ) | (1,282 | ) | (3,998 | ) | (7,250 | ) | |||||||
| Issuances of common stock, net of repurchases | 2,918 | (8,738 | ) | (15,735 | ) | (110,795 | ) | ||||||||
| Dividend payments to shareholders | (6,941 | ) | (6,318 | ) | (27,760 | ) | (25,789 | ) | |||||||
| Payments for acquisitions, net of cash acquired | — | — | (225,298 | ) | — | ||||||||||
| Proceeds from the issuance of debt, net of payment of issuance costs | — | — | 183,374 | — | |||||||||||
| Proceeds from sale of property, plant and equipment, net | — | — | 6,146 | — | |||||||||||
| Payments of principal on long-term debt | (1,882 | ) | (1,547 | ) | (5,309 | ) | (6,188 | ) | |||||||
| Other | (240 | ) | (4,810 | ) | (5,732 | ) | (15,426 | ) | |||||||
| Net change in cash, cash equivalents and short-term investments | 28,288 | 1,632 | 34,172 | (44,096 | ) | ||||||||||
| Cash, cash equivalents and short-term investments, beginning of period | 145,397 | 137,881 | 139,513 | 183,609 | |||||||||||
| Cash, cash equivalents and short-term investments, end of period | $ | 173,685 | $ | 139,513 | $ | 173,685 | $ | 139,513 | |||||||
| (1)The Company adopted ASC 606 effective December 1, 2018, using the full retrospective method. Prior period results have been adjusted to reflect the adoption of this standard. | |||||||||||||||
| (2)Primarily represents a reduction in the carrying values of the intangible assets associated with Kinvey and DataRPM. | |||||||||||||||
RESULTS OF OPERATIONS BY SEGMENT
(Unaudited)
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||||||
| (In thousands) | November 30, 2019 | November 30, 2018(1) | % Change | November 30, 2019 | November 30, 2018(1) | % Change | |||||||||||||||
| Segment revenue: | |||||||||||||||||||||
| OpenEdge | $ | 85,250 | $ | 73,016 | 17 | % | $ | 296,929 | $ | 277,806 | 7 | % | |||||||||
| Data Connectivity and Integration | 12,217 | 5,663 | 116 | % | 39,903 | 23,129 | 73 | % | |||||||||||||
| Application Development and Deployment | 19,571 | 19,424 | 1 | % | 76,466 | 78,046 | (2 | )% | |||||||||||||
| Total revenue | 117,038 | 98,103 | 19 | % | 413,298 | 378,981 | 9 | % | |||||||||||||
| Segment costs of revenue and operating expenses: | |||||||||||||||||||||
| OpenEdge | 25,086 | 20,626 | 22 | % | 85,209 | 67,820 | 26 | % | |||||||||||||
| Data Connectivity and Integration | 2,724 | 2,811 | (3 | )% | 7,973 | 7,634 | 4 | % | |||||||||||||
| Application Development and Deployment | 6,926 | 7,019 | (1 | )% | 23,993 | 27,087 | (11 | )% | |||||||||||||
| Total costs of revenue and operating expenses | 34,736 | 30,456 | 14 | % | 117,175 | 102,541 | 14 | % | |||||||||||||
| Segment contribution margin: | |||||||||||||||||||||
| OpenEdge | 60,164 | 52,390 | 15 | % | 211,720 | 209,986 | 1 | % | |||||||||||||
| Data Connectivity and Integration | 9,493 | 2,852 | 233 | % | 31,930 | 15,495 | 106 | % | |||||||||||||
| Application Development and Deployment | 12,645 | 12,405 | 2 | % | 52,473 | 50,959 | 3 | % | |||||||||||||
| Total contribution margin | 82,302 | 67,647 | 22 | % | 296,123 | 276,440 | 7 | % | |||||||||||||
| Other unallocated expenses(2) | 88,328 | 56,618 | 56 | % | 256,039 | 208,626 | 23 | % | |||||||||||||
| (Loss) income from operations | (6,026 | ) | 11,029 | (155 | )% | 40,084 | 67,814 | (41 | )% | ||||||||||||
| Other expense, net | (3,551 | ) | (2,188 | ) | (62 | )% | (11,589 | ) | (7,018 | ) | (65 | )% | |||||||||
| (Loss) income before income taxes | $ | (9,577 | ) | $ | 8,841 | (208 | )% | $ | 28,495 | $ | 60,796 | (53 | )% | ||||||||
| (1)The Company adopted ASC 606 effective December 1, 2018, using the full retrospective method. Prior period results have been adjusted to reflect the adoption of this standard. | |||||||||||||||||||||
| (2)The following expenses are not allocated to our segments as we manage and report our business in these functional areas on a consolidated basis only: certain product development and corporate sales and marketing expenses, customer support, administration, amortization and impairment of acquired intangibles, impairment of long-lived assets, loss on assets held for sale, stock-based compensation, fees related to shareholder activist, restructuring, and acquisition-related expenses. | |||||||||||||||||||||
SUPPLEMENTAL INFORMATION
(Unaudited)
| Revenue by Type | |||||||||||||||||||||||||||
| (In thousands) | Q4 2018(1) | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | FY 2019 | FY 2018(1) | ||||||||||||||||||||
| Software licenses | $ | 28,367 | $ | 22,802 | $ | 29,728 | $ | 30,686 | $ | 39,336 | $ | 122,552 | $ | 99,800 | |||||||||||||
| Maintenance | 61,759 | 59,999 | 62,528 | 67,611 | 68,868 | 259,006 | 249,171 | ||||||||||||||||||||
| Services | 7,977 | 6,748 | 7,739 | 8,419 | 8,834 | 31,740 | 30,010 | ||||||||||||||||||||
| Total revenue | $ | 98,103 | $ | 89,549 | $ | 99,995 | $ | 106,716 | $ | 117,038 | $ | 413,298 | $ | 378,981 | |||||||||||||
| Revenue by Region | |||||||||||||||||||||||||||
| (In thousands) | Q4 2018(1) | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | FY 2019 | FY 2018(1) | ||||||||||||||||||||
| North America | $ | 54,952 | $ | 46,498 | $ | 57,060 | $ | 60,208 | $ | 70,145 | $ | 233,911 | $ | 204,257 | |||||||||||||
| EMEA | 34,047 | 33,372 | 33,633 | 35,109 | 35,187 | 137,301 | 135,055 | ||||||||||||||||||||
| Latin America | 4,260 | 4,461 | 4,108 | 5,470 | 5,626 | 19,665 | 18,046 | ||||||||||||||||||||
| Asia Pacific | 4,844 | 5,218 | 5,194 | 5,929 | 6,080 | 22,421 | 21,623 | ||||||||||||||||||||
| Total revenue | $ | 98,103 | $ | 89,549 | $ | 99,995 | $ | 106,716 | $ | 117,038 | $ | 413,298 | $ | 378,981 | |||||||||||||
| Revenue by Segment | |||||||||||||||||||||||||||
| (In thousands) | Q4 2018(1) | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | FY 2019 | FY 2018(1) | ||||||||||||||||||||
| OpenEdge | $ | 73,016 | $ | 65,252 | $ | 67,820 | $ | 78,607 | $ | 85,250 | $ | 296,929 | $ | 277,806 | |||||||||||||
| Data Connectivity and Integration | 5,663 | 6,000 | 12,932 | 8,754 | 12,217 | 39,903 | 23,129 | ||||||||||||||||||||
| Application Development and Deployment | 19,424 | 18,297 | 19,243 | 19,355 | 19,571 | 76,466 | 78,046 | ||||||||||||||||||||
| Total revenue | $ | 98,103 | $ | 89,549 | $ | 99,995 | $ | 106,716 | $ | 117,038 | $ | 413,298 | $ | 378,981 | |||||||||||||
| (1)The Company adopted ASC 606 effective December 1, 2018, using the full retrospective method. Prior period results have been adjusted to reflect the adoption of this standard. | |||||||||||||||||||||||||||
RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES - FOURTH QUARTER
(Unaudited)
| Three Months Ended | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | November 30, 2019 | November 30, 2018(1) | Non-GAAP | |||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP revenue | $ | 117,038 | $ | 98,103 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related revenue(2) | 6,378 | 154 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP revenue | $ | 123,416 | 100 | % | $ | 98,257 | 100 | % | 26 | % | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted income from operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP (loss) income from operations | $ | (6,026 | ) | (5 | )% | $ | 11,029 | 11 | % | |||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | 14,301 | 8,793 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 5,900 | 5,853 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of intangible and long-lived assets(3) | 24,096 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring expenses and other | 2,338 | (131 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related revenue(2) and expenses | 6,676 | 284 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on assets held for sale | — | 5,147 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP income from operations | $ | 47,285 | 38 | % | $ | 30,975 | 32 | % | 53 | % | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted net income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP net (loss) income | $ | (4,740 | ) | (4 | )% | $ | 8,643 | 9 | % | |||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | 14,301 | 8,793 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 5,900 | 5,853 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of intangible and long-lived assets(3) | 24,096 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring expenses and other | 2,338 | (131 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related revenue(2) and expenses | 6,676 | 284 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on assets held for sale | — | 5,147 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | (12,851 | ) | (4,149 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP net income | $ | 35,720 | 29 | % | $ | 24,440 | 25 | % | 46 | % | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted diluted earnings per share: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP diluted (loss) earnings per share | $ | (0.11 | ) | $ | 0.19 | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | 0.32 | 0.19 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 0.13 | 0.13 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of intangible and long-lived assets(3) | 0.53 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring expenses and other | 0.05 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related revenue(2) and expenses | 0.15 | 0.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on assets held for sale | — | 0.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | (0.28 | ) | (0.09 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP diluted earnings per share | $ | 0.79 | $ | 0.54 | 46 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP weighted avg shares outstanding - diluted | 45,484 | 45,401 | — | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| (1)The Company adopted ASC 606 effective December 1, 2018, using the full retrospective method. Prior period results have been adjusted to reflect the adoption of this standard. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2)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 in fiscal year 2019 and to Progress' OpenEdge business segment for Kinvey and Application Development and Deployment business segment for Telerik in fiscal year 2018. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (3)Primarily represents a reduction in the carrying values of the intangible assets associated with Kinvey and DataRPM. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES - FISCAL YEAR
(Unaudited)
| Fiscal Year Ended | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | November 30, 2019 | November 30, 2018(1) | Non-GAAP | |||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP revenue | $ | 413,298 | $ | 378,981 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related revenue(2) | 18,663 | 466 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP revenue | $ | 431,961 | 100 | % | $ | 379,447 | 100 | % | 14 | % | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted income from operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP income from operations | $ | 40,084 | 10 | % | $ | 67,814 | 18 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | 48,139 | 35,975 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 23,311 | 20,569 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of intangible and long-lived assets(3) | 24,096 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring expenses and other | 6,307 | 2,251 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related revenue(2) and expenses | 20,321 | 724 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on assets held for sale | — | 5,147 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees related to shareholder activist | — | 1,472 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP income from operations | $ | 162,258 | 38 | % | $ | 133,952 | 35 | % | 21 | % | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted net income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP net income | $ | 26,400 | 6 | % | $ | 49,670 | 13 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | 48,139 | 35,975 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 23,311 | 20,569 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of intangible and long-lived assets(3) | 24,096 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring expenses and other | 6,307 | 2,251 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related revenue(2) and expenses | 20,321 | 724 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on assets held for sale | — | 5,147 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees related to shareholder activist | — | 1,472 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | (26,829 | ) | (14,628 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP net income | $ | 121,745 | 28 | % | $ | 101,180 | 27 | % | 20 | % | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted diluted earnings per share: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP diluted earnings per share | $ | 0.58 | $ | 1.08 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | 1.07 | 0.78 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 0.51 | 0.45 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of intangible and long-lived assets(3) | 0.53 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring expenses and other | 0.14 | 0.04 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-related revenue(2) and expenses | 0.45 | 0.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on assets held for sale | — | 0.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees related to shareholder activist | — | 0.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | (0.59 | ) | (0.32 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP diluted earnings per share | $ | 2.69 | $ | 2.19 | 23 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP weighted avg shares outstanding - diluted | 45,340 | 46,135 | (2 | )% | ||||||||||||||||||||||||||||||||||||||||||||||||
| (1)The Company adopted ASC 606 effective December 1, 2018, using the full retrospective method. Prior period results have been adjusted to reflect the adoption of this standard. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2)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 in fiscal year 2019 and to Progress' OpenEdge business segment for Kinvey and Application Development and Deployment business segment for Telerik in fiscal year 2018. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (3)Primarily represents a reduction in the carrying values of the intangible assets associated with Kinvey and DataRPM. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER NON-GAAP FINANCIAL MEASURES - FOURTH QUARTER
(Unaudited)
| Revenue by Type | |||||||||||
| (In thousands) | Q4 2019 | Non-GAAP Adjustment(1) | Non-GAAP Revenue | ||||||||
| Software licenses | $ | 39,336 | $ | 71 | $ | 39,407 | |||||
| Maintenance | 68,868 | 5,694 | 74,562 | ||||||||
| Services | 8,834 | 613 | 9,447 | ||||||||
| Total revenue | $ | 117,038 | $ | 6,378 | $ | 123,416 | |||||
| Revenue by Region | |||||||||||
| (In thousands) | Q4 2019 | Non-GAAP Adjustment(1) | Non-GAAP Revenue | ||||||||
| North America | $ | 70,145 | $ | 4,711 | $ | 74,856 | |||||
| EMEA | 35,187 | 1,140 | 36,327 | ||||||||
| Latin America | 5,626 | 114 | 5,740 | ||||||||
| Asia Pacific | 6,080 | 413 | 6,493 | ||||||||
| Total revenue | $ | 117,038 | $ | 6,378 | $ | 123,416 | |||||
| Revenue by Segment | |||||||||||
| (In thousands) | Q4 2019 | Non-GAAP Adjustment(1) | Non-GAAP Revenue | ||||||||
| OpenEdge | $ | 85,250 | $ | 6,378 | $ | 91,628 | |||||
| Data Connectivity and Integration | 12,217 | — | 12,217 | ||||||||
| Application Development and Deployment | 19,571 | — | 19,571 | ||||||||
| Total revenue | $ | 117,038 | $ | 6,378 | $ | 123,416 | |||||
| (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 in fiscal year 2019. | |||||||||||
| Adjusted Free Cash Flow | |||||||||||
| (In thousands) | Q4 2019 | Q4 2018 | % Change | ||||||||
| Cash flows from operations | $ | 36,601 | $ | 24,327 | 50 | % | |||||
| Purchases of property and equipment | (2,168 | ) | (1,282 | ) | 69 | % | |||||
| Free cash flow | 34,433 | 23,045 | 49 | % | |||||||
| Add back: restructuring payments | 2,272 | 187 | 1,115 | % | |||||||
| Adjusted free cash flow | $ | 36,705 | $ | 23,232 | 58 | % | |||||
OTHER NON-GAAP FINANCIAL MEASURES - FISCAL YEAR
(Unaudited)
| Revenue by Type | |||||||||||
| (In thousands) | FY 2019 | Non-GAAP Adjustment(1) | Non-GAAP Revenue | ||||||||
| Software licenses | $ | 122,552 | $ | 193 | $ | 122,745 | |||||
| Maintenance | 259,006 | 17,289 | 276,295 | ||||||||
| Services | 31,740 | 1,181 | 32,921 | ||||||||
| Total revenue | $ | 413,298 | $ | 18,663 | $ | 431,961 | |||||
| Revenue by Region | |||||||||||
| (In thousands) | FY 2019 | Non-GAAP Adjustment(1) | Non-GAAP Revenue | ||||||||
| North America | $ | 233,911 | $ | 13,885 | $ | 247,796 | |||||
| EMEA | 137,301 | 3,245 | 140,546 | ||||||||
| Latin America | 19,665 | 332 | 19,997 | ||||||||
| Asia Pacific | 22,421 | 1,201 | 23,622 | ||||||||
| Total revenue | $ | 413,298 | $ | 18,663 | $ | 431,961 | |||||
| Revenue by Segment | |||||||||||
| (In thousands) | FY 2019 | Non-GAAP Adjustment(1) | Non-GAAP Revenue | ||||||||
| OpenEdge | $ | 296,929 | $ | 18,663 | $ | 315,592 | |||||
| Data Connectivity and Integration | 39,903 | — | 39,903 | ||||||||
| Application Development and Deployment | 76,466 | — | 76,466 | ||||||||
| Total revenue | $ | 413,298 | $ | 18,663 | $ | 431,961 | |||||
| (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 in fiscal year 2019. | |||||||||||
| Adjusted Free Cash Flow | |||||||||||
| (In thousands) | FY 2019 | FY 2018 | % Change | ||||||||
| Cash flows from operations | $ | 128,484 | $ | 121,352 | 6 | % | |||||
| Purchases of property and equipment | (3,998 | ) | (7,250 | ) | (45 | )% | |||||
| Free cash flow | 124,486 | 114,102 | 9 | % | |||||||
| Add back: restructuring payments | 4,407 | 6,111 | (28 | )% | |||||||
| Adjusted free cash flow | $ | 128,893 | $ | 120,213 | 7 | % | |||||
Non-GAAP Bookings from Application Development and Deployment Segment
(Unaudited)
| (In thousands) | Q1 2018(1) | Q2 2018(1) | Q3 2018(1) | Q4 2018(1) | FY 2018(1) | ||||||||||||||
| GAAP revenue | $ | 19,255 | $ | 19,846 | $ | 19,521 | $ | 19,424 | $ | 78,046 | |||||||||
| Add: change in deferred revenue | |||||||||||||||||||
| Beginning balance, as adjusted | 42,128 | 42,041 | 41,593 | 42,789 | 42,128 | ||||||||||||||
| Ending balance, as adjusted | 42,041 | 41,593 | 42,789 | 45,291 | 45,291 | ||||||||||||||
| Change in deferred revenue | (87 | ) | (448 | ) | 1,196 | 2,502 | 3,163 | ||||||||||||
| Non-GAAP bookings | $ | 19,168 | $ | 19,398 | $ | 20,717 | $ | 21,926 | $ | 81,209 | |||||||||
| (1)The Company adopted ASC 606 effective December 1, 2018, using the full retrospective method. Prior period results have been adjusted to reflect the adoption of this standard. | |||||||||||||||||||
| (In thousands) | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | FY 2019 | ||||||||||||||
| GAAP revenue | $ | 18,297 | $ | 19,243 | $ | 19,355 | $ | 19,571 | $ | 76,466 | |||||||||
| Add: change in deferred revenue | |||||||||||||||||||
| Beginning balance | 45,291 | 43,817 | 44,704 | 44,737 | 45,291 | ||||||||||||||
| Ending balance | 43,817 | 44,704 | 44,737 | 46,909 | 46,909 | ||||||||||||||
| Change in deferred revenue | (1,474 | ) | 887 | 33 | 2,172 | 1,618 | |||||||||||||
| Non-GAAP bookings | $ | 16,823 | $ | 20,130 | $ | 19,388 | $ | 21,743 | $ | 78,084 | |||||||||
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2020 GUIDANCE
(Unaudited)
| Fiscal Year 2020 Revenue Guidance | |||||||||||||||||
| Fiscal Year Ended | Fiscal Year Ending | ||||||||||||||||
| 30-Nov-19 | November 30, 2020 | ||||||||||||||||
| (In millions) | Low | % Change | High | % Change | |||||||||||||
| GAAP revenue | $ | 413.3 | $ | 439.7 | 6 | % | $ | 446.7 | 8 | % | |||||||
| Acquisition-related adjustments - revenue(1) | 18.7 | 8.3 | (56 | )% | 8.3 | (56 | )% | ||||||||||
| Non-GAAP revenue | $ | 432.0 | $ | 448.0 | 4 | % | $ | 455.0 | 5 | % | |||||||
| (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 Non-GAAP Operating Margin Guidance | |||||||
| Fiscal Year Ending November 30, 2020 | |||||||
| (In millions) | Low | High | |||||
| GAAP income from operations | $ | 120.0 | $ | 122.8 | |||
| GAAP operating margin | 27 | % | 27 | % | |||
| Acquisition-related revenue | 8.3 | 8.3 | |||||
| Restructuring expense | 1.0 | 1.0 | |||||
| Stock-based compensation | 23.3 | 23.3 | |||||
| Amortization of intangibles | 23.2 | 23.2 | |||||
| Total adjustments | 55.8 | 55.8 | |||||
| Non-GAAP income from operations | $ | 175.8 | $ | 178.6 | |||
| Non-GAAP operating margin | 39 | % | 39 | % | |||
| Fiscal Year 2020 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 | $ | 89.0 | $ | 91.3 | |||
| Adjustments (from previous table) | 55.8 | 55.8 | |||||
| Income tax adjustment(2) | (14.4 | ) | (14.5 | ) | |||
| Non-GAAP net income | $ | 130.4 | $ | 132.6 | |||
| GAAP diluted earnings per share | $ | 1.96 | $ | 2.01 | |||
| Non-GAAP diluted earnings per share | $ | 2.87 | $ | 2.92 | |||
| Diluted weighted average shares outstanding | 45.4 | 45.4 | |||||
| (2)Tax adjustment is based on a non-GAAP effective tax rate of approximately 20% for Low and High, calculated as follows: | |||||||
| Non-GAAP income from operations | $ | 175.8 | $ | 178.6 | |||
| Other (expense) income | (12.8 | ) | (12.8 | ) | |||
| Non-GAAP income from continuing operations before income taxes | 163.0 | 165.8 | |||||
| Non-GAAP net income | 130.4 | 132.6 | |||||
| Tax provision | $ | 32.6 | $ | 33.2 | |||
| Non-GAAP tax rate | 20 | % | 20 | % | |||
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) | $ | 149 | $ | 154 | |||
| Purchases of property and equipment | (5 | ) | (5 | ) | |||
| Add back: restructuring payments | 1 | 1 | |||||
| Adjusted free cash flow (non-GAAP) | $ | 145 | $ | 150 | |||
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1 2020 GUIDANCE
(Unaudited)
| Q1 2020 Revenue Guidance | |||||||||||||||||
| Three Months Ended | Three Months Ending | ||||||||||||||||
| 28-Feb-19 | February 29, 2020 | ||||||||||||||||
| (In millions) | Low | % Change | High | % Change | |||||||||||||
| GAAP revenue | $ | 89.5 | $ | 105.9 | 18 | % | $ | 108.9 | 22 | % | |||||||
| Acquisition-related adjustments - revenue(1) | — | 4.1 | * | 4.1 | * | ||||||||||||
| Non-GAAP revenue | $ | 89.5 | $ | 110.0 | 23 | % | $ | 113.0 | 26 | % | |||||||
| (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. | |||||||||||||||||
| *Not meaningful | |||||||||||||||||
| Q1 2020 Non-GAAP Earnings per Share Guidance | |||||||
| Three Months Ending February 29, 2020 | |||||||
| Low | High | ||||||
| GAAP diluted earnings per share | $ | 0.40 | $ | 0.42 | |||
| Acquisition-related revenue | 0.09 | 0.09 | |||||
| Stock-based compensation | 0.14 | 0.14 | |||||
| Amortization of intangibles | 0.13 | 0.13 | |||||
| Total adjustments | 0.36 | 0.36 | |||||
| Income tax adjustment | (0.07 | ) | (0.07 | ) | |||
| Non-GAAP diluted earnings per share | $ | 0.69 | $ | 0.71 | |||
| Investor Contact: | Press Contact: | |
| Brian Flanagan | Erica McShane | |
| Progress Software | Progress Software | |
| +1 781 280 4817 | +1 888 365 2779 (x3135) | |
| flanagan@progress.com | erica.mcshane@progress.com |
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Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
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