Quick Summary:
Investor Contact:Press Contact:Michael MiccicheJeff YoungProgress SoftwareProgress Software+1 781 850 8450+1 781 280 4000Investor-Relations@progress.comPR@progress.com CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) Three Months Ended Fiscal Year Ended(In thousands, except per share data)November 30, 2024 November 30, 2023 % Change November 30, 2024 November 30, 2023 % ChangeRevenue: Software licenses$73,402 $56,270 30% $249,331 $220,789 13%Maintenance and services 141,559 120,700 17% 504,078 473,650 6%Total revenue 214,961 176,970 21% 753,409 694,439 8%Costs of revenue: Cost of software licenses 3,014 3,155 (4)% 10,942 11,153 (2)%Cost of maintenance and services 25,866 22,592 14% 90,318 85,255 6%Amortization of acquired intangibles 7,658 7,916 (3)% 29,222 30,169 (3)%Total costs of revenue 36,538 33,663 9% 130,482 126,577 3%Gross profit 178,423 143,307 25% 622,927 567,862 10%Operating expenses: Sales and marketing 50,429 43,563 16% 164,570 156,076 5%Product development 41,199 34,005 21% 146,342 132,401 11%General and administrative 25,688 22,111 16% 89,518 83,157 8%Amortization of acquired intangibles 17,775 17,605 1% 65,290 66,430 (2)%Restructuring expenses 7,146 2,177 228% 10,454 8,407 24%Acquisition-related expenses 13,995 271 * 17,109 4,704 264%Cyber incident and vulnerability response expenses, net 691 1,038 (33)% 5,641 6,164 (8)%Total operating expenses 156,923 120,770 30% 498,924 457,339 9%Income from operations 21,500 22,537 (5)% 124,003 110,523 12%Other expense, net (9,250) (8,365) (11)% (29,739) (30,866) 4%Income before income taxes 12,250 14,172 (14)% 94,264 79,657 18%Provision (benefit) for income taxes 11,103 (1,163) * 25,826 9,460 173%Net income$1,147 $15,335 (93)% $68,438 $70,197 (3)% Earnings per share: Basic$0.03 $0.35 (91)% $1.58 $1.62 (2)%Diluted$0.03 $0.34 (91)% $1.54 $1.57 (2)%Weighted average shares outstanding: Basic 43,183 43,729 (1)% 43,268 43,456 —%Diluted 45,208 44,829 1% 44,427 44,658 (1)% Cash dividends declared per common share$— $0.175 (100)% $0.525 $0.700 (25)% *not meaningful Stock-based compensation is included in the condensed consolidated statements of operations, as follows: Cost of revenue$808 $830 (3)% $3,540 $2,976 19%Sales and marketing 2,025 1,770 14% 8,964 6,797 32%Product development 3,296 3,102 6% 13,551 12,214 11%General and administrative 5,616 4,716 19% 20,701 18,542 12%Total$11,745 $10,418 13% $46,756 $40,529 15% CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited) (In thousands)November 30, 2024 November 30, 2023Assets Current assets: Cash and cash equivalents$118,077 $126,958Accounts receivable, net 163,575 125,825Unbilled receivables 34,672 29,965Other current assets 52,489 48,040Total current assets 368,813 330,788Property and equipment, net 13,746 15,225Goodwill and intangible assets, net 2,015,748 1,186,379Right-of-use lease assets 30,894 18,711Long-term unbilled receivables 28,893 28,373Other assets 68,872 23,307Total assets$2,526,966 $1,602,783Liabilities and stockholders' equity Current liabilities: Accounts payable and other current liabilities$113,801 $92,805Current portion of long-term debt, net — 13,109Short-term operating lease liabilities 9,202 10,114Short-term deferred revenue, net 332,142 236,090Total current liabilities 455,145 352,118Long-term debt, net 730,000 356,111Long-term operating lease liabilities 26,259 13,000Long-term deferred revenue, net 72,270 58,946Convertible senior notes, net 796,267 354,772Other long-term liabilities 8,237 8,121Stockholders' equity: Common stock and additional paid-in capital 354,592 371,017Retained earnings 84,196 88,698Total stockholders' equity 438,788 459,715Total liabilities and stockholders' equity$2,526,966 $1,602,783 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Three Months Ended Fiscal Year Ended(In thousands)November 30, 2024 November 30, 2023 November 30, 2024 November 30, 2023Cash flows from operating activities: Net income$1,147 $15,335 $68,438 $70,197Depreciation and amortization 28,388 27,862 106,569 105,294Stock-based compensation 11,745 10,418 46,756 40,529Other non-cash adjustments 10,130 (7,669) 4,517 (18,760)Changes in operating assets and liabilities (31,759) (12,785) (14,786) (23,340)Net cash flows from operating activities 19,651 33,161 211,494 173,920Capital expenditures (2,878) (2,389) (5,206) (5,570)Issuances of common stock, net of repurchases 10,287 1,621 (59,016) (8,006)Dividend payments to stockholders (7,646) (7,885) (31,460) (31,554)Payments for acquisitions, net of cash acquired (852,702) — (852,702) (355,250)Proceeds from the issuance of debt, net of payment of issuance costs 730,000 — 1,161,929 195,000Principal payment on term loan and repayment of revolving line of credit — (31,718) (371,250) (91,875)Purchase of capped calls — — (42,210) —Other (11,348) (3,831) (20,460) (5,984)Net change in cash and cash equivalents (114,636) (11,041) (8,881) (129,319)Cash and cash equivalents, beginning of period 232,713 137,999 126,958 256,277Cash and cash equivalents, end of period$118,077 $126,958 $118,077 $126,958 RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES¹(Unaudited) Three Months EndedFiscal Year Ended(In thousands, except per share data)November 30, 2024 November 30, 2023 November 30, 2024 November 30, 2023Adjusted revenue: GAAP revenue$214,961 $176,970 $753,409 $694,439Acquisition-related revenue — 553 — 3,711Non-GAAP revenue$214,961 $177,523 $753,409 $698,150 Adjusted income from operations: GAAP income from operations$21,500 $22,537 $124,003 $110,523Amortization of acquired intangibles 25,433 25,521 94,512 96,599Stock-based compensation 11,745 10,418 46,756 40,529Restructuring expenses and other 7,146 2,177 10,454 8,407Acquisition-related revenue and expenses 13,995 824 17,109 8,415Cyber incident and vulnerability response expenses, net 691 1,038 5,641 6,164Non-GAAP income from operations$80,510 $62,515 $298,475 $270,637 Adjusted net income: GAAP net income$1,147 $15,335 $68,438 $70,197Amortization of acquired intangibles 25,433 25,521 94,512 96,599Stock-based compensation 11,745 10,418 46,756 40,529Restructuring expenses and other 7,146 2,177 10,454 8,407Acquisition-related revenue and expenses 13,995 824 17,109 8,415Cyber incident and vulnerability response expenses, net 691 1,038 5,641 6,164Provision for income taxes (180) (9,544) (23,890) (36,097)Non-GAAP net income$59,977 $45,769 $219,020 $194,214 Adjusted diluted earnings per share: GAAP diluted earnings per share$0.03 $0.34 $1.54 $1.57Amortization of acquired intangibles 0.56 0.57 2.13 2.16Stock-based compensation 0.25 0.23 1.04 0.91Restructuring expenses and other 0.16 0.05 0.24 0.19Acquisition-related revenue and expenses 0.31 0.02 0.39 0.19Cyber incident and vulnerability response expenses, net 0.02 0.02 0.13 0.14Provision for income taxes — (0.21) (0.54) (0.81)Non-GAAP diluted earnings per share$1.33 $1.02 $4.93 $4.35 Non-GAAP weighted avg shares outstanding - diluted 45,208 44,829 44,427 44,658 OTHER NON-GAAP FINANCIAL MEASURES¹(Unaudited) Adjusted Free Cash Flow and Unlevered Free Cash Flow Three Months Ended Fiscal Year Ended(In thousands)November 30, 2024 November 30, 2023 % Change November 30, 2024 November 30, 2023 % ChangeCash flows from operations$19,651 $33,161 (41)% $211,494 $173,920 22%Purchases of property and equipment (2,878) (2,389) 20% (5,206) (5,570) (7)%Free cash flow 16,773 30,772 (45)% 206,288 168,350 23%Add back: restructuring payments 1,314 2,121 (38)% 5,601 7,103 (21)%Adjusted free cash flow$18,087 $32,893 (45)% $211,889 $175,453 21%Add back: tax-effected interest expense 26,090 24,932 5%Unlevered free cash flow $237,979 $200,385 19% RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2025 GUIDANCE¹(Unaudited) Fiscal Year 2025 Non-GAAP Operating Margin Guidance Fiscal Year Ending November 30, 2025(In millions)Low HighGAAP income from operations$134.5 $143.0GAAP operating margin 14% 15%Restructuring expense and other 8.2 8.2Stock-based compensation 61.3 61.3Acquisition-related expenses 6.0 6.0Amortization of intangibles 144.9 144.9Cyber incident and vulnerability response expenses, net 4.2 4.2Total adjustments(3) 224.6 224.6Non-GAAP income from operations$359.1 $367.6Non-GAAP operating margin 37% 38% (3) Total adjustments include preliminary estimates relating to the valuation of intangible assets acquired from ShareFile and restructuring expenses.
Fiscal Year 2025 Non-GAAP Earnings per Share and Effective Tax Rate Guidance Fiscal Year Ending November 30, 2025(In millions, except per share data)Low HighGAAP net income$49.4 $56.9Adjustments (from previous table) 224.6 224.6Income tax adjustment(4) (44.3) (44.2)Non-GAAP net income$229.7 $237.3 GAAP diluted earnings per share$1.08 $1.23Non-GAAP diluted earnings per share$5.00 $5.12 Diluted weighted average shares outstanding 46.0 46.4 ⁴ Tax adjustment is based on a non-GAAP effective tax rate of approximately 20%, calculated as follows:Non-GAAP income from operations $359.1 $367.6Other (expense) income (71.9) (70.9)Non-GAAP income from continuing operations before income taxes 287.2 296.7Non-GAAP net income 229.7 237.3Tax provision $57.5 $59.4Non-GAAP tax rate 20% 20% RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2025 GUIDANCE¹(Unaudited) Fiscal Year 2025 Adjusted Free Cash Flow and Unlevered Free Cash Flow Guidance Fiscal Year Ending November 30, 2025(In millions)Low HighCash flows from operations (GAAP)$216 $228Purchases of property and equipment (7) (7)Add back: restructuring payments 16 16Adjusted free cash flow (non-GAAP) 225 237Add back: tax-effected interest expense 57 57Unlevered free cash flow (non-GAAP)$282 $294 RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1 2025 GUIDANCE1(Unaudited) Q1 2025 Non-GAAP Earnings per Share Guidance Three Months Ending February 28, 2025 Low HighGAAP diluted (loss) earnings per share$(0.01) $0.05Acquisition-related expense 0.06 0.06Stock-based compensation 0.31 0.31Amortization of intangibles 0.79 0.79Restructuring expense and other 0.12 0.12Cyber incident and vulnerability response expenses, net 0.01 0.01Total adjustments(3) 1.29 1.29Income tax adjustment (0.26) (0.26)Non-GAAP diluted earnings per share$1.02 $1.08 (3) Total adjustments include preliminary estimates relating to the valuation of intangible assets acquired from ShareFile and restructuring expenses.
Full Year Results Fiscal Year Ended GAAP Non-GAAP¹(In thousands, except percentages and per share amounts)November 30, 2024 November 30, 2023 % Change November 30, 2024 November 30, 2023 % ChangeRevenue$753,409 $694,439 8% $753,409 $698,150 8%Income from operations$124,003 $110,523 12% $298,475 $270,637 10%Operating margin 16% 16% 0 bps 40% 39% 100 bpsNet income$68,438 $70,197 (3)% $219,020 $194,214 13%Diluted earnings per share$1.54 $1.57 (2)% $4.93 $4.35 13%Cash from operations (GAAP)$211,494 $173,920 22% $211,889 $175,453 21%/Adjusted free cash flow (non- GAAP) / Unlevered free cash flow $237,979 $200,385 19%(non-GAAP) 2025 Business Outlook Progress provides the following guidance for the fiscal year ending November 30, 2025 and the fiscal first quarter ending February 28, 2025, together with actual results for the same periods in the fiscal year ending November 30, 2024: FY 2025 Guidance FY 2024 Actual(In millions, except percentages and per share amounts)FY 2025GAAP FY 2025Non-GAAP¹ FY 2024GAAP FY 2024Non-GAAP¹Revenue$958 - $970 $958 - $970 $753 $753Diluted earnings per share$1.08 - $1.23 $5.00 - $5.12 $1.54 $4.93Operating margin14% - 15% 37% - 38% 16% 40%Cash from operations (GAAP) / Adjusted free$216 - $228 $225 - $237 $211 $212cash flow (non-GAAP) / Unlevered free cashflow (non-GAAP) $282 - $294 $238Effective tax rate21% 20% 27% 19% Q1 2025 Guidance Q1 2024 Actual(In millions, except per share amounts)Q1 2025GAAP Q1 2025Non-GAAP¹ Q1 2024GAAP Q1 2024Non-GAAP¹Revenue$232 - $238 $232 - $238 $185 $185Diluted (loss) earnings per share$(0.01) - $0.05 $1.02 - $1.08 $0.51 $1.25 Based on current exchange rates, the expected negative currency translation impact on our: Fiscal year 2025 business outlook compared to 2024 exchange rates is approximately $5.6 million on revenue.
