[September 28, 2016] |
|
Progress Reports 2016 Fiscal Third Quarter Results
Progress (NASDAQ: PRGS) today announced results for its fiscal third
quarter ended August 31, 2016.
Revenue was $102.0 million during the quarter compared to $94.6 million
in the same quarter last year, a year over year increase of 8% on an
actual currency basis and 9% on a constant currency basis. On a non-GAAP
basis, revenue was $102.4 million during the quarter compared to $100.7
million in the same quarter last year, an increase of 2% on an actual
currency basis and 3% on a constant currency basis.
Additional financial highlights included:
On a GAAP basis in the fiscal third quarter of 2016:
-
Revenue was $102.0 million compared to $94.6 million in the same
quarter in fiscal year 2015;
-
Income from operations was $13.6 million compared to $8.6 million in
the same quarter last year;
-
Net income was $7.6 million compared to a net loss of $4.1 million in
the same quarter last year;
-
Diluted earnings per share was $0.15 compared to a diluted loss per
share of $0.08 in the same quarter last year; and
-
Cash from operations was $19.7 million compared to $19.3 million in
the same quarter last year.
On a non-GAAP basis in the fiscal third quarter of 2016:
-
Revenue was $102.4 million compared to $100.7 million in the same
quarter last year;
-
Income from operations was $32.0 million compared to $31.7 million in
the same quarter last year;
-
Operating margin was 31%, unchanged from the same quarter last year;
-
Net income was $21.6 million compared to $20.0 million in the same
quarter last year;
-
Diluted earnings per share was $0.44 compared to $0.39 in the same
quarter last year; and
-
Adjusted free cash flow was $19.1 million compared to $18.8 million in
the same quarter last year.
Phil Pead, CEO at Progress, said, "Our third quarter was highlighted by
a strong performance from our Data Connectivity and Integration segment,
along with healthy maintenance renewals for both OpenEdge and our
Telerik solutions, and solid cash flows. We're looking forward to a
strong fourth quarter, and the upcoming release of our DigitalFactory
solutions will provide us with additional growth opportunities for the
future."
Other fiscal third quarter 2016 metrics and recent results included:
-
Cash, cash equivalents and short-term investments were $232.7 million
at the end of the quarter;
-
DSO was 49 days, compared to 54 days in the fiscal third quarter of
2015; and
-
Under the previously announced authorization by the Board of Directors
to repurchase up to $200 million of shares of common stock, Progress
repurchased 0.4 million shares for $11.5 million during the fiscal
third quarter of 2016.
Business Outlook
Progress provides the following guidance for the fiscal year ending
November 30, 2016 and the fourth fiscal quarter ending November 30, 2016:
|
|
|
|
|
|
|
|
|
|
(In millions, except percentages and per share amounts)
|
|
|
FY 2016 GAAP
|
|
FY 2016 Non-GAAP
|
|
Q4 2016 GAAP
|
|
Q4 2016 Non-GAAP
|
Revenue
|
|
|
$410 - $413
|
|
$412 - $415
|
|
$122 - $125
|
|
$123 - $126
|
Diluted earnings per share
|
|
|
$0.61 - $0.63
|
|
$1.57 - $1.60
|
|
$0.25 - $0.28
|
|
$0.55 - $0.58
|
Operating margin
|
|
|
15%
|
|
30%
|
|
*
|
|
*
|
Adjusted free cash flow
|
|
|
$88 - $93
|
|
$85 - $90
|
|
*
|
|
*
|
Effective tax rate
|
|
|
45%
|
|
32%
|
|
*
|
|
*
|
|
|
|
|
|
|
|
|
|
|
*We do not provide guidance for this financial measure.
Progress' fiscal 2016 financial guidance is based on current exchange
rates. The negative currency translation impact on Progress' fiscal year
2016 business outlook compared to 2015 exchange rates is approximately
$5.0 million on GAAP and non-GAAP revenue and $0.04 on GAAP and non-GAAP
diluted earnings per share. The negative currency translation impact on
Progress' fiscal Q4 2016 business outlook compared to 2015 exchange
rates is approximately $0.3 million on GAAP and non-GAAP revenue and
$0.01 on GAAP and non-GAAP diluted earnings per share. To the extent
that there are further changes in exchange rates versus the current
environment, this may have an additional impact on Progress' business
outlook.
Conference Call
The Progress quarterly investor conference call to review its fiscal
third quarter of 2016 will be broadcast live at 5:00 p.m. ET on
Wednesday, September 28, 2016 and 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
1-877-591-4951, pass code 4374563. The conference call will include
brief 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.
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.
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 below 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,
impairment of acquired intangible assets, stock-based compensation
expense, restructuring charges, acquisition-related expenses, certain
identified non-operating gains and losses, 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 and capitalized software development
costs, 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 by Telerik AD
("Telerik") that would otherwise have been recognized but for the
purchase accounting treatment of the acquisition of Telerik. We
acquired Telerik on December 2, 2014. Since GAAP accounting requires
the elimination of this revenue, 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 (and Telerik) have
historically experienced high renewal rates on maintenance and support
agreements and other customer contracts. Additionally, although
acquisition-related revenue adjustments are non-recurring with respect
to past acquisitions, we expect to incur these adjustments in
connection with any future acquisitions.
-
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.
-
Impairment of acquired intangibles - In the current period, we
exclude an impairment charge applicable to acquired intangible assets
because such expense distorts trends and is not part of our core
operating results. Such impairment charges are inconsistent in amount
and frequency and 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.
-
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.
-
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. In addition, in the current
period, we adjusted our income tax provision to remove from non-GAAP
income the positive impact of an out-of-period adjustment recorded to
the income tax provision during the fiscal second quarter of 2016.
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 weaken, our consolidated
results stated in U.S. dollars are negatively 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.
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, including the
uncertain economic environment in Europe as a result of the recent
Brexit vote, and the continued difficult economic environment in Brazil
and other parts of the world, 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 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,
2015. Progress undertakes no obligation to update any forward-looking
statements, which speak only as of the date of this press release.
About Progress
Progress (NASDAQ:
PRGS) is a global leader in application development, empowering the
digital transformation organizations need to create and sustain engaging
user experiences in today's evolving marketplace. With offerings
spanning web, mobile and data for on-premise and cloud environments,
Progress powers startups and industry titans worldwide, promoting
success one customer at a time. Learn about Progress at www.progress.com or
1-781-280-4000.
Progress is a trademark or registered trademarks of Progress Software
Corporation or one of its subsidiaries or affiliates in the U.S. and
other countries. Any other trademarks contained herein are the property
of their respective owners.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
(In thousands, except per share data)
|
|
|
August 31, 2016
|
|
August 31, 2015
|
|
% Change
|
|
|
August 31, 2016
|
|
August 31, 2015
|
|
% Change
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software licenses
|
|
|
$
|
33,624
|
|
|
$
|
31,840
|
|
|
6
|
%
|
|
$
|
86,366
|
|
|
$
|
85,794
|
|
|
1
|
%
|
Maintenance and services
|
|
|
|
68,394
|
|
|
|
62,797
|
|
|
9
|
%
|
|
|
201,251
|
|
|
|
179,042
|
|
|
12
|
%
|
Total revenue
|
|
|
|
102,018
|
|
|
|
94,637
|
|
|
8
|
%
|
|
|
287,617
|
|
|
|
264,836
|
|
|
9
|
%
|
Costs of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of software licenses
|
|
|
|
1,424
|
|
|
|
1,441
|
|
|
(1
|
)%
|
|
|
4,139
|
|
|
|
4,526
|
|
|
(9
|
)%
|
Cost of maintenance and services
|
|
|
|
11,825
|
|
|
|
9,612
|
|
|
23
|
%
|
|
|
33,217
|
|
|
|
31,174
|
|
|
7
|
%
|
Amortization of acquired intangibles
|
|
|
|
3,940
|
|
|
|
4,079
|
|
|
(3
|
)%
|
|
|
11,818
|
|
|
|
12,805
|
|
|
(8
|
)%
|
Total costs of revenue
|
|
|
|
17,189
|
|
|
|
15,132
|
|
|
14
|
%
|
|
|
49,174
|
|
|
|
48,505
|
|
|
1
|
%
|
Gross profit
|
|
|
|
84,829
|
|
|
|
79,505
|
|
|
7
|
%
|
|
|
238,443
|
|
|
|
216,331
|
|
|
10
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
29,852
|
|
|
|
30,004
|
|
|
(1
|
)%
|
|
|
88,648
|
|
|
|
92,607
|
|
|
(4
|
)%
|
Product development
|
|
|
|
21,706
|
|
|
|
20,422
|
|
|
6
|
%
|
|
|
65,800
|
|
|
|
65,533
|
|
|
-
|
%
|
General and administrative
|
|
|
|
11,411
|
|
|
|
14,076
|
|
|
(19
|
)%
|
|
|
36,055
|
|
|
|
42,065
|
|
|
(14
|
)%
|
Amortization of acquired intangibles
|
|
|
|
3,186
|
|
|
|
3,186
|
|
|
-
|
%
|
|
|
9,556
|
|
|
|
9,559
|
|
|
-
|
%
|
Impairment of intangible assets
|
|
|
|
5,051
|
|
|
|
-
|
|
|
100
|
%
|
|
|
5,051
|
|
|
|
-
|
|
|
100
|
%
|
Restructuring (credits) expenses
|
|
|
|
(36
|
)
|
|
|
2,561
|
|
|
(101
|
)%
|
|
|
229
|
|
|
|
8,715
|
|
|
(97
|
)%
|
Acquisition-related expenses
|
|
|
|
53
|
|
|
|
662
|
|
|
(92
|
)%
|
|
|
449
|
|
|
|
3,180
|
|
|
(86
|
)%
|
Total operating expenses
|
|
|
|
71,223
|
|
|
|
70,911
|
|
|
-
|
%
|
|
|
205,788
|
|
|
|
221,659
|
|
|
(7
|
)%
|
Income (loss) from operations
|
|
|
|
13,606
|
|
|
|
8,594
|
|
|
58
|
%
|
|
|
32,655
|
|
|
|
(5,328
|
)
|
|
713
|
%
|
Other expense, net
|
|
|
|
(1,288
|
)
|
|
|
(1,165
|
)
|
|
11
|
%
|
|
|
(4,474
|
)
|
|
|
(1,258
|
)
|
|
256
|
%
|
Income (loss) before income taxes
|
|
|
|
12,318
|
|
|
|
7,429
|
|
|
66
|
%
|
|
|
28,181
|
|
|
|
(6,586
|
)
|
|
528
|
%
|
Provision (benefit) for income taxes
|
|
|
|
4,742
|
|
|
|
11,555
|
|
|
(59
|
)%
|
|
|
10,114
|
|
|
|
(7,256
|
)
|
|
(239
|
)%
|
Net income (loss)
|
|
|
$
|
7,576
|
|
|
$
|
(4,126
|
)
|
|
284
|
%
|
|
$
|
18,067
|
|
|
$
|
670
|
|
|
2,597
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.16
|
|
|
$
|
(0.08
|
)
|
|
300
|
%
|
|
$
|
0.36
|
|
|
$
|
0.01
|
|
|
3,500
|
%
|
Diluted
|
|
|
$
|
0.15
|
|
|
$
|
(0.08
|
)
|
|
288
|
%
|
|
$
|
0.36
|
|
|
$
|
0.01
|
|
|
3,500
|
%
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
48,611
|
|
|
|
50,120
|
|
|
(3
|
)%
|
|
|
49,765
|
|
|
|
50,377
|
|
|
(1
|
)%
|
Diluted
|
|
|
|
49,135
|
|
|
|
50,120
|
|
|
(2
|
)%
|
|
|
50,310
|
|
|
|
51,117
|
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
(In thousands)
|
|
|
August 31, 2016
|
|
November 30, 2015
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash, cash equivalents and short-term investments
|
|
|
$
|
232,684
|
|
$
|
241,279
|
Accounts receivable, net
|
|
|
|
55,758
|
|
|
66,459
|
Other current assets
|
|
|
|
20,521
|
|
|
15,671
|
Total current assets
|
|
|
|
308,963
|
|
|
323,409
|
Property and equipment, net
|
|
|
|
50,778
|
|
|
54,226
|
Goodwill and intangible assets, net
|
|
|
|
457,781
|
|
|
484,098
|
Other assets
|
|
|
|
15,257
|
|
|
15,390
|
Total assets
|
|
|
$
|
832,779
|
|
$
|
877,123
|
Liabilities and shareholders' equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable and other current liabilities
|
|
|
$
|
53,508
|
|
$
|
65,314
|
Current portion of long-term debt
|
|
|
|
13,125
|
|
|
9,375
|
Short-term deferred revenue
|
|
|
|
129,354
|
|
|
125,227
|
Total current liabilities
|
|
|
|
195,987
|
|
|
199,916
|
Long-term deferred revenue
|
|
|
|
8,529
|
|
|
8,844
|
Long-term debt
|
|
|
|
123,750
|
|
|
135,000
|
Other long-term liabilities
|
|
|
|
9,934
|
|
|
10,899
|
Shareholders' equity:
|
|
|
|
|
|
Common stock and additional paid-in capital
|
|
|
|
237,136
|
|
|
227,930
|
Retained earnings
|
|
|
|
257,443
|
|
|
294,534
|
Total shareholders' equity
|
|
|
|
494,579
|
|
|
522,464
|
Total liabilities and shareholders' equity
|
|
|
$
|
832,779
|
|
$
|
877,123
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
(In thousands)
|
|
|
August 31, 2016
|
|
August 31, 2015
|
|
August 31, 2016
|
|
August 31, 2015
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
7,576
|
|
|
$
|
(4,126
|
)
|
|
$
|
18,067
|
|
|
$
|
670
|
|
Depreciation and amortization
|
|
|
|
9,887
|
|
|
|
10,115
|
|
|
|
29,796
|
|
|
|
31,610
|
|
Stock-based compensation
|
|
|
|
5,779
|
|
|
|
6,537
|
|
|
|
19,009
|
|
|
|
18,812
|
|
Other non-cash adjustments
|
|
|
|
2,803
|
|
|
|
5,606
|
|
|
|
3,780
|
|
|
|
(19,800
|
)
|
Changes in operating assets and liabilities
|
|
|
|
(6,395
|
)
|
|
|
1,125
|
|
|
|
(1,742
|
)
|
|
|
45,896
|
|
Net cash flows from operating activities
|
|
|
|
19,650
|
|
|
|
19,257
|
|
|
|
68,910
|
|
|
|
77,188
|
|
Capital expenditures
|
|
|
|
(1,127
|
)
|
|
|
(1,952
|
)
|
|
|
(3,744
|
)
|
|
|
(7,740
|
)
|
Issuances of common stock, net of repurchases
|
|
|
|
(10,832
|
)
|
|
|
4,103
|
|
|
|
(63,340
|
)
|
|
|
(22,409
|
)
|
Payments for acquisitions
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(246,275
|
)
|
Proceeds from the issuance of debt, net of payments of principle and
debt issuance costs
|
|
|
|
(1,875
|
)
|
|
|
(1,955
|
)
|
|
|
(7,500
|
)
|
|
|
142,588
|
|
Proceeds from divestitures, net
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,500
|
|
Other
|
|
|
|
(2,241
|
)
|
|
|
(270
|
)
|
|
|
(2,921
|
)
|
|
|
(12,816
|
)
|
Net change in cash, cash equivalents and short-term investments
|
|
|
|
3,575
|
|
|
|
19,183
|
|
|
|
(8,595
|
)
|
|
|
(64,964
|
)
|
Cash, cash equivalents and short-term investments, beginning of
period
|
|
|
|
229,109
|
|
|
|
199,121
|
|
|
|
241,279
|
|
|
|
283,268
|
|
Cash, cash equivalents and short-term investments, end of period
|
|
|
$
|
232,684
|
|
|
$
|
218,304
|
|
|
$
|
232,684
|
|
|
$
|
218,304
|
|
|
|
|
|
|
|
|
|
|
|
|
RESULTS OF OPERATIONS BY SEGMENT
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
(In thousands)
|
|
|
August 31, 2016
|
|
August 31, 2015
|
|
% Change
|
|
August 31, 2016
|
|
August 31, 2015
|
|
% Change
|
Segment revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OpenEdge
|
|
|
$
|
67,534
|
|
|
$
|
73,398
|
|
|
(8
|
)%
|
|
$
|
198,595
|
|
|
$
|
214,775
|
|
|
(8
|
)%
|
Data Connectivity and Integration
|
|
|
|
14,251
|
|
|
|
8,281
|
|
|
72
|
%
|
|
|
30,852
|
|
|
|
22,669
|
|
|
36
|
%
|
Application Development and Deployment
|
|
|
|
20,233
|
|
|
|
12,958
|
|
|
56
|
%
|
|
|
58,170
|
|
|
|
27,392
|
|
|
112
|
%
|
Total revenue
|
|
|
|
102,018
|
|
|
|
94,637
|
|
|
8
|
%
|
|
|
287,617
|
|
|
|
264,836
|
|
|
9
|
%
|
Segment costs of revenue and operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OpenEdge
|
|
|
|
18,180
|
|
|
|
18,550
|
|
|
(2
|
)%
|
|
|
53,539
|
|
|
|
56,529
|
|
|
(5
|
)%
|
Data Connectivity and Integration
|
|
|
|
2,828
|
|
|
|
3,180
|
|
|
(11
|
)%
|
|
|
8,863
|
|
|
|
9,563
|
|
|
(7
|
)%
|
Application Development and Deployment
|
|
|
|
11,021
|
|
|
|
9,933
|
|
|
11
|
%
|
|
|
29,555
|
|
|
|
30,169
|
|
|
(2
|
)%
|
Total costs of revenue and operating expenses
|
|
|
|
32,029
|
|
|
|
31,663
|
|
|
1
|
%
|
|
|
91,957
|
|
|
|
96,261
|
|
|
(4
|
)%
|
Segment contribution:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OpenEdge
|
|
|
|
49,354
|
|
|
|
54,848
|
|
|
(10
|
)%
|
|
|
145,056
|
|
|
|
158,246
|
|
|
(8
|
)%
|
Data Connectivity and Integration
|
|
|
|
11,423
|
|
|
|
5,101
|
|
|
124
|
%
|
|
|
21,989
|
|
|
|
13,106
|
|
|
68
|
%
|
Application Development and Deployment
|
|
|
|
9,212
|
|
|
|
3,025
|
|
|
205
|
%
|
|
|
28,615
|
|
|
|
(2,777
|
)
|
|
1,130
|
%
|
Total contribution
|
|
|
|
69,989
|
|
|
|
62,974
|
|
|
11
|
%
|
|
|
195,660
|
|
|
|
168,575
|
|
|
16
|
%
|
Other unallocated expenses (1)
|
|
|
|
56,383
|
|
|
|
54,380
|
|
|
4
|
%
|
|
|
163,005
|
|
|
|
173,903
|
|
|
(6
|
)%
|
Income (loss) from operations
|
|
|
|
13,606
|
|
|
|
8,594
|
|
|
58
|
%
|
|
|
32,655
|
|
|
|
(5,328
|
)
|
|
713
|
%
|
Other expense, net
|
|
|
|
(1,288
|
)
|
|
|
(1,165
|
)
|
|
11
|
%
|
|
|
(4,474
|
)
|
|
|
(1,258
|
)
|
|
256
|
%
|
Income (loss) before provision for income taxes
|
|
|
$
|
12,318
|
|
|
$
|
7,429
|
|
|
66
|
%
|
|
$
|
28,181
|
|
|
$
|
(6,586
|
)
|
|
528
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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: product development, corporate marketing,
administration, amortization and impairment of acquired intangibles,
stock-based compensation, restructuring, and acquisition related
expenses.
|
SUPPLEMENTAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Q3 2015
|
|
Q4 2015
|
|
Q1 2016
|
|
Q2 2016
|
|
Q3 2016
|
License
|
|
|
$
|
31,840
|
|
$
|
44,457
|
|
$
|
23,955
|
|
$
|
28,787
|
|
$
|
33,624
|
Maintenance
|
|
|
|
55,365
|
|
|
60,458
|
|
|
58,336
|
|
|
59,485
|
|
|
60,368
|
Services
|
|
|
|
7,432
|
|
|
7,803
|
|
|
7,190
|
|
|
7,846
|
|
|
8,026
|
Total revenue
|
|
|
$
|
94,637
|
|
$
|
112,718
|
|
$
|
89,481
|
|
$
|
96,118
|
|
$
|
102,018
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Q3 2015
|
|
Q4 2015
|
|
Q1 2016
|
|
Q2 2016
|
|
Q3 2016
|
North America
|
|
|
$
|
49,810
|
|
$
|
68,112
|
|
$
|
49,065
|
|
$
|
53,392
|
|
$
|
58,275
|
EMEA
|
|
|
|
30,656
|
|
|
34,504
|
|
|
31,221
|
|
|
31,577
|
|
|
32,719
|
Latin America
|
|
|
|
4,621
|
|
|
3,617
|
|
|
3,693
|
|
|
4,389
|
|
|
4,667
|
Asia Pacific
|
|
|
|
9,550
|
|
|
6,485
|
|
|
5,502
|
|
|
6,760
|
|
|
6,357
|
Total revenue
|
|
|
$
|
94,637
|
|
$
|
112,718
|
|
$
|
89,481
|
|
$
|
96,118
|
|
$
|
102,018
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Q3 2015
|
|
Q4 2015
|
|
Q1 2016
|
|
Q2 2016
|
|
Q3 2016
|
OpenEdge
|
|
|
$
|
73,398
|
|
$
|
81,159
|
|
$
|
64,133
|
|
$
|
66,928
|
|
$
|
67,534
|
Data Connectivity and Integration
|
|
|
|
8,281
|
|
|
15,257
|
|
|
6,596
|
|
|
10,005
|
|
|
14,251
|
Application Development and Deployment
|
|
|
|
12,958
|
|
|
16,302
|
|
|
18,752
|
|
|
19,185
|
|
|
20,233
|
Total revenue
|
|
|
$
|
94,637
|
|
$
|
112,718
|
|
$
|
89,481
|
|
$
|
96,118
|
|
$
|
102,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES
- QTD
|
|
|
|
|
|
|
|
|
|
Three Months Ended August 31,
|
|
% Change
|
|
|
|
2016
|
|
2015
|
|
(In thousands, except per share data)
|
|
|
GAAP
|
|
Adj.
|
|
Non- GAAP
|
|
GAAP
|
|
Adj.
|
|
Non- GAAP
|
|
Non- GAAP
|
TOTAL REVENUE
|
|
|
$
|
102,018
|
|
|
$
|
405
|
|
|
$
|
102,423
|
|
|
$
|
94,637
|
|
|
$
|
6,086
|
|
|
$
|
100,723
|
|
|
2
|
%
|
Software licenses (1)
|
|
|
|
33,624
|
|
|
|
82
|
|
|
|
33,706
|
|
|
|
31,840
|
|
|
|
1,418
|
|
|
|
33,258
|
|
|
1
|
%
|
Maintenance and services (1)
|
|
|
|
68,394
|
|
|
|
323
|
|
|
|
68,717
|
|
|
|
62,797
|
|
|
|
4,668
|
|
|
|
67,465
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COSTS OF REVENUE
|
|
|
$
|
17,189
|
|
|
$
|
(4,163
|
)
|
|
$
|
13,026
|
|
|
$
|
15,132
|
|
|
$
|
(4,223
|
)
|
|
$
|
10,909
|
|
|
19
|
%
|
Amortization of acquired intangibles
|
|
|
|
3,940
|
|
|
|
(3,940
|
)
|
|
|
-
|
|
|
|
4,079
|
|
|
|
(4,079
|
)
|
|
|
-
|
|
|
|
Stock-based compensation (2)
|
|
|
|
223
|
|
|
|
(223
|
)
|
|
|
-
|
|
|
|
144
|
|
|
|
(144
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN %
|
|
|
|
83
|
%
|
|
|
|
|
87
|
%
|
|
|
84
|
%
|
|
|
|
|
89
|
%
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL OPERATING EXPENSES
|
|
|
$
|
71,223
|
|
|
$
|
(13,810
|
)
|
|
$
|
57,413
|
|
|
$
|
70,911
|
|
|
$
|
(12,803
|
)
|
|
$
|
58,108
|
|
|
(1
|
)%
|
Amortization and impairment of acquired intangibles
|
|
|
|
8,237
|
|
|
|
(8,237
|
)
|
|
|
-
|
|
|
|
3,186
|
|
|
|
(3,186
|
)
|
|
|
-
|
|
|
|
Restructuring expenses
|
|
|
|
(36
|
)
|
|
|
36
|
|
|
|
-
|
|
|
|
2,561
|
|
|
|
(2,561
|
)
|
|
|
-
|
|
|
|
Acquisition-related expenses
|
|
|
|
53
|
|
|
|
(53
|
)
|
|
|
-
|
|
|
|
662
|
|
|
|
(662
|
)
|
|
|
-
|
|
|
|
Stock-based compensation (2)
|
|
|
|
5,556
|
|
|
|
(5,556
|
)
|
|
|
-
|
|
|
|
6,394
|
|
|
|
(6,394
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM OPERATIONS
|
|
|
$
|
13,606
|
|
|
$
|
18,378
|
|
|
$
|
31,984
|
|
|
$
|
8,594
|
|
|
$
|
23,112
|
|
|
$
|
31,706
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING MARGIN
|
|
|
|
13
|
%
|
|
|
|
|
31
|
%
|
|
|
9
|
%
|
|
|
|
|
31
|
%
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL OTHER EXPENSE, NET
|
|
|
$
|
(1,288
|
)
|
|
|
|
$
|
(1,288
|
)
|
|
$
|
(1,165
|
)
|
|
|
|
$
|
(1,165
|
)
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION (BENEFIT) FOR INCOME TAXES
|
|
|
$
|
4,742
|
|
|
$
|
4,324
|
|
|
$
|
9,066
|
|
|
$
|
11,555
|
|
|
$
|
(1,034
|
)
|
|
$
|
10,521
|
|
|
(14
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
|
$
|
7,576
|
|
|
$
|
14,054
|
|
|
$
|
21,630
|
|
|
$
|
(4,126
|
)
|
|
$
|
24,146
|
|
|
$
|
20,020
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE
|
|
|
$
|
0.15
|
|
|
$
|
0.29
|
|
|
$
|
0.44
|
|
|
$
|
(0.08
|
)
|
|
$
|
0.47
|
|
|
$
|
0.39
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED
|
|
|
|
49,135
|
|
|
|
-
|
|
|
|
49,135
|
|
|
|
50,120
|
|
|
|
784
|
|
|
|
50,904
|
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjustments to revenue relate to acquisition-related revenue,
which constitutes revenue reflected as pre-acquisition deferred
revenue by Telerik that would otherwise have been recognized but for
the purchase accounting treatment of the acquisition of Telerik.
Since GAAP accounting requires the elimination of this revenue, GAAP
results alone do not fully capture all of our economic activities.
Note that acquisition-related revenue adjustments entirely relate to
Progress' Application Development and Deployment business unit.
|
(2) Stock-based compensation is included in the GAAP statements of
income, as follows:
|
Cost of revenue
|
|
|
$
|
223
|
|
|
|
|
|
|
$
|
144
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
751
|
|
|
|
|
|
|
|
1,604
|
|
|
|
|
|
|
|
Product development
|
|
|
|
2,524
|
|
|
|
|
|
|
|
912
|
|
|
|
|
|
|
|
General and administrative
|
|
|
|
2,281
|
|
|
|
|
|
|
|
3,878
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
5,779
|
|
|
|
|
|
|
$
|
6,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES
- YTD
|
|
|
|
|
|
|
|
|
|
Nine Months Ended August 31,
|
|
% Change
|
|
|
|
2016
|
|
2015
|
|
(In thousands, except per share data)
|
|
|
GAAP
|
|
Adj.
|
|
Non-GAAP
|
|
GAAP
|
|
Adj.
|
|
Non-GAAP
|
|
Non-GAAP
|
TOTAL REVENUE
|
|
|
$
|
287,617
|
|
|
$
|
1,726
|
|
|
$
|
289,343
|
|
|
$
|
264,836
|
|
|
$
|
32,193
|
|
|
$
|
297,029
|
|
|
(3
|
)%
|
Software licenses (1)
|
|
|
|
86,366
|
|
|
|
289
|
|
|
|
86,655
|
|
|
|
85,794
|
|
|
|
8,181
|
|
|
|
93,975
|
|
|
(8
|
)%
|
Maintenance and services (1)
|
|
|
|
201,251
|
|
|
|
1,437
|
|
|
|
202,688
|
|
|
|
179,042
|
|
|
|
24,012
|
|
|
|
203,054
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COSTS OF REVENUE
|
|
|
$
|
49,174
|
|
|
$
|
(12,417
|
)
|
|
$
|
36,757
|
|
|
$
|
48,505
|
|
|
$
|
(13,267
|
)
|
|
$
|
35,238
|
|
|
4
|
%
|
Amortization of acquired intangibles
|
|
|
|
11,818
|
|
|
|
(11,818
|
)
|
|
|
-
|
|
|
|
12,805
|
|
|
|
(12,805
|
)
|
|
|
-
|
|
|
|
Stock-based compensation (2)
|
|
|
|
599
|
|
|
|
(599
|
)
|
|
|
-
|
|
|
|
462
|
|
|
|
(462
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN %
|
|
|
|
83
|
%
|
|
|
|
|
87
|
%
|
|
|
82
|
%
|
|
|
|
|
88
|
%
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL OPERATING EXPENSES
|
|
|
$
|
205,788
|
|
|
$
|
(33,695
|
)
|
|
$
|
172,093
|
|
|
$
|
221,659
|
|
|
$
|
(39,804
|
)
|
|
$
|
181,855
|
|
|
(5
|
)%
|
Amortization and impairment of acquired intangibles
|
|
|
|
14,607
|
|
|
|
(14,607
|
)
|
|
|
-
|
|
|
|
9,559
|
|
|
|
(9,559
|
)
|
|
|
-
|
|
|
|
Restructuring expenses
|
|
|
|
229
|
|
|
|
(229
|
)
|
|
|
-
|
|
|
|
8,715
|
|
|
|
(8,715
|
)
|
|
|
-
|
|
|
|
Acquisition-related expenses
|
|
|
|
449
|
|
|
|
(449
|
)
|
|
|
-
|
|
|
|
3,180
|
|
|
|
(3,180
|
)
|
|
|
-
|
|
|
|
Stock-based compensation (2)
|
|
|
|
18,410
|
|
|
|
(18,410
|
)
|
|
|
-
|
|
|
|
18,350
|
|
|
|
(18,350
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM OPERATIONS
|
|
|
$
|
32,655
|
|
|
$
|
47,838
|
|
|
$
|
80,493
|
|
|
$
|
(5,328
|
)
|
|
$
|
85,264
|
|
|
$
|
79,936
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING MARGIN
|
|
|
|
11
|
%
|
|
|
|
|
28
|
%
|
|
|
(2
|
)%
|
|
|
|
|
27
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL OTHER (EXPENSE) INCOME, NET (3)
|
|
|
$
|
(4,474
|
)
|
|
|
|
$
|
(4,474
|
)
|
|
$
|
(1,258
|
)
|
|
$
|
266
|
|
|
$
|
(992
|
)
|
|
351
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION (BENEFIT) FOR INCOME TAXES (4)
|
|
|
$
|
10,114
|
|
|
$
|
14,059
|
|
|
$
|
24,173
|
|
|
$
|
(7,256
|
)
|
|
$
|
32,916
|
|
|
$
|
25,660
|
|
|
(6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
$
|
18,067
|
|
|
$
|
33,779
|
|
|
$
|
51,846
|
|
|
$
|
670
|
|
|
$
|
52,614
|
|
|
$
|
53,284
|
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE
|
|
|
$
|
0.36
|
|
|
$
|
0.67
|
|
|
$
|
1.03
|
|
|
$
|
0.01
|
|
|
$
|
1.03
|
|
|
$
|
1.04
|
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED
|
|
|
|
50,310
|
|
|
|
-
|
|
|
|
50,310
|
|
|
|
51,117
|
|
|
|
-
|
|
|
|
51,117
|
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjustments to revenue relate to acquisition-related revenue,
which constitutes revenue reflected as pre-acquisition deferred
revenue by Telerik that would otherwise have been recognized but for
the purchase accounting treatment of the acquisition of Telerik.
Since GAAP accounting requires the elimination of this revenue, GAAP
results alone do not fully capture all of our economic activities.
Note that acquisition-related revenue adjustments entirely relate to
Progress' Application Development and Deployment business unit.
|
(2) Stock-based compensation is included in the GAAP statements of
income, as follows:
|
Cost of revenue
|
|
|
$
|
599
|
|
|
|
|
|
|
$
|
462
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
2,792
|
|
|
|
|
|
|
|
4,328
|
|
|
|
|
|
|
|
Product development
|
|
|
|
7,600
|
|
|
|
|
|
|
|
3,476
|
|
|
|
|
|
|
|
General and administrative
|
|
|
|
8,018
|
|
|
|
|
|
|
|
10,546
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
19,009
|
|
|
|
|
|
|
$
|
18,812
|
|
|
|
|
|
|
|
|
(3) In the prior year period, the adjustment to other income (expense),
net relates to the termination of Progress' prior revolving credit
facility in connection with entering into the new credit facility. Upon
termination, the outstanding debt issuance costs related to the prior
revolving credit facility were written off to other income (expense) in
the GAAP statements of income.
(4) In the current period, the Company identified an error in its prior
year income tax provision whereby income tax expense was overstated for
the year ended November 30, 2015 related to the Company's tax treatment
of an intercompany gain. We corrected this error by recording an out of
period $2.7 million tax benefit in its quarter ended May 31, 2016
financial statements. We adjusted our income tax provision to remove
from non-GAAP income the positive impact of this out-of-period
adjustment.
|
|
|
|
|
|
|
|
OTHER NON-GAAP FINANCIAL MEASURES - QTD
|
|
|
|
|
|
|
|
|
Revenue by Type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Q3 2016
|
|
Non-GAAP Adjustment (1)
|
|
Non-GAAP Revenue
|
License
|
|
|
$
|
33,624
|
|
|
$
|
82
|
|
|
$
|
33,706
|
|
Maintenance
|
|
|
|
60,368
|
|
|
|
323
|
|
|
|
60,691
|
|
Services
|
|
|
|
8,026
|
|
|
|
-
|
|
|
|
8,026
|
|
Total revenue
|
|
|
$
|
102,018
|
|
|
$
|
405
|
|
|
$
|
102,423
|
|
|
|
|
|
|
|
|
|
Revenue by Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Q3 2016
|
|
Non-GAAP Adjustment (1)
|
|
Non-GAAP Revenue
|
North America
|
|
|
$
|
58,275
|
|
|
$
|
353
|
|
|
$
|
58,628
|
|
EMEA
|
|
|
|
32,719
|
|
|
|
43
|
|
|
|
32,762
|
|
Latin America
|
|
|
|
4,667
|
|
|
|
1
|
|
|
|
4,668
|
|
Asia Pacific
|
|
|
|
6,357
|
|
|
|
8
|
|
|
|
6,365
|
|
Total revenue
|
|
|
$
|
102,018
|
|
|
$
|
405
|
|
|
$
|
102,423
|
|
|
|
|
|
|
|
|
|
Revenue by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Q3 2016
|
|
Non-GAAP Adjustment (1)
|
|
Non-GAAP Revenue
|
OpenEdge
|
|
|
$
|
67,534
|
|
|
$
|
-
|
|
|
$
|
67,534
|
|
Data Connectivity and Integration
|
|
|
|
14,251
|
|
|
|
-
|
|
|
|
14,251
|
|
Application Development and Deployment
|
|
|
|
20,233
|
|
|
|
405
|
|
|
|
20,638
|
|
Total revenue
|
|
|
$
|
102,018
|
|
|
$
|
405
|
|
|
$
|
102,423
|
|
|
|
|
|
|
|
|
|
(1) Adjustments to revenue relate to acquisition-related revenue,
which constitutes revenue reflected as pre-acquisition deferred
revenue by Telerik that would otherwise have been recognized but for
the purchase accounting treatment of the acquisition of Telerik.
Since GAAP accounting requires the elimination of this revenue, GAAP
results alone do not fully capture all of our economic activities.
Note that acquisition-related revenue adjustments entirely relate to
Progress' Application Development and Deployment business unit.
|
|
|
|
|
|
|
|
|
Adjusted Free Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Q3 2016
|
|
Q3 2015
|
|
|
% Change
|
|
Cash flows from operations
|
|
|
$
|
19,650
|
|
|
$
|
19,257
|
|
|
|
2
|
%
|
Purchases of property and equipment
|
|
|
|
(1,127
|
)
|
|
|
(1,673
|
)
|
|
|
(33
|
)%
|
Capitalized software development costs
|
|
|
|
-
|
|
|
|
(279
|
)
|
|
|
(100
|
)%
|
Free cash flow
|
|
|
$
|
18,523
|
|
|
$
|
17,305
|
|
|
|
7
|
%
|
Add back: restructuring payments
|
|
|
|
542
|
|
|
|
1,544
|
|
|
|
(65
|
)%
|
Adjusted free cash flow
|
|
|
$
|
19,065
|
|
|
$
|
18,849
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER NON-GAAP FINANCIAL MEASURES - YTD
|
|
|
|
|
|
|
|
|
Revenue by Type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
YTD 2016
|
|
Non-GAAP Adjustment (1)
|
|
Non-GAAP Revenue
|
License
|
|
|
$
|
86,366
|
|
|
$
|
289
|
|
|
$
|
86,655
|
|
Maintenance
|
|
|
|
178,189
|
|
|
|
1,437
|
|
|
|
179,626
|
|
Services
|
|
|
|
23,062
|
|
|
|
-
|
|
|
|
23,062
|
|
Total revenue
|
|
|
$
|
287,617
|
|
|
$
|
1,726
|
|
|
$
|
289,343
|
|
|
|
|
|
|
|
|
|
Revenue by Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
YTD 2016
|
|
Non-GAAP Adjustment (1)
|
|
Non-GAAP Revenue
|
North America
|
|
|
$
|
160,732
|
|
|
$
|
1,503
|
|
|
$
|
162,235
|
|
EMEA
|
|
|
|
95,517
|
|
|
|
183
|
|
|
|
95,700
|
|
Latin America
|
|
|
|
12,749
|
|
|
|
5
|
|
|
|
12,754
|
|
Asia Pacific
|
|
|
|
18,619
|
|
|
|
35
|
|
|
|
18,654
|
|
Total revenue
|
|
|
$
|
287,617
|
|
|
$
|
1,726
|
|
|
$
|
289,343
|
|
|
|
|
|
|
|
|
|
Revenue by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
YTD 2016
|
|
Non-GAAP Adjustment (1)
|
|
Non-GAAP Revenue
|
OpenEdge
|
|
|
$
|
198,595
|
|
|
$
|
-
|
|
|
$
|
198,595
|
|
Data Connectivity and Integration
|
|
|
|
30,852
|
|
|
|
-
|
|
|
|
30,852
|
|
Application Development and Deployment
|
|
|
|
58,170
|
|
|
|
1,726
|
|
|
|
59,896
|
|
Total revenue
|
|
|
$
|
287,617
|
|
|
$
|
1,726
|
|
|
$
|
289,343
|
|
|
|
|
|
|
|
|
|
(1) Adjustments to revenue relate to acquisition-related revenue,
which constitutes revenue reflected as pre-acquisition deferred
revenue by Telerik that would otherwise have been recognized but for
the purchase accounting treatment of the acquisition of Telerik.
Since GAAP accounting requires the elimination of this revenue, GAAP
results alone do not fully capture all of our economic activities.
Note that acquisition-related revenue adjustments entirely relate to
Progress' Application Development and Deployment business unit.
|
|
|
|
|
|
|
|
|
Adjusted Free Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
YTD 2016
|
|
YTD Q3 2015
|
|
% Change
|
Cash flows from operations
|
|
|
$
|
68,910
|
|
|
$
|
77,188
|
|
|
|
(11
|
)%
|
Purchases of property and equipment
|
|
|
|
(3,744
|
)
|
|
|
(6,079
|
)
|
|
|
(38
|
)%
|
Capitalized software development costs
|
|
|
|
-
|
|
|
|
(1,661
|
)
|
|
|
(100
|
)%
|
Free cash flow
|
|
|
$
|
65,166
|
|
|
$
|
69,448
|
|
|
|
(6
|
)%
|
Add back: restructuring payments
|
|
|
|
3,024
|
|
|
|
4,098
|
|
|
|
(26
|
)%
|
Adjusted free cash flow
|
|
|
$
|
68,190
|
|
|
$
|
73,546
|
|
|
|
(7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Bookings from Application Development and Deployment
Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Q1 2015
|
|
Q2 2015
|
|
Q3 2015
|
|
Q4 2015
|
|
FY 2015
|
|
Q1 2016
|
|
Q2 2016
|
|
Q3 2016
|
GAAP revenue
|
|
|
$
|
4,797
|
|
|
$
|
9,636
|
|
$
|
12,958
|
|
$
|
16,302
|
|
$
|
43,693
|
|
|
$
|
18,752
|
|
|
$
|
19,185
|
|
$
|
20,233
|
Add: change in deferred revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
|
|
108
|
|
|
|
23,081
|
|
|
33,440
|
|
|
41,012
|
|
|
108
|
|
|
|
49,252
|
|
|
|
49,237
|
|
|
51,693
|
Ending balance
|
|
|
|
23,081
|
|
|
|
33,440
|
|
|
41,012
|
|
|
49,252
|
|
|
49,252
|
|
|
|
49,237
|
|
|
|
51,693
|
|
|
51,736
|
Change in deferred revenue
|
|
|
|
22,973
|
|
|
|
10,359
|
|
|
7,572
|
|
|
8,240
|
|
|
49,144
|
|
|
|
(15
|
)
|
|
|
2,456
|
|
|
43
|
Less: acquired deferred revenue balance from Telerik
|
|
|
|
(7,915
|
)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(7,915
|
)
|
|
|
-
|
|
|
|
-
|
|
|
-
|
Non-GAAP bookings
|
|
|
$
|
19,855
|
|
|
$
|
19,995
|
|
$
|
20,530
|
|
$
|
24,542
|
|
$
|
84,922
|
|
|
$
|
18,737
|
|
|
$
|
21,641
|
|
$
|
20,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SaaS Revenue (Hosted Services) from Application Development and
Deployment Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Q1 2015
|
|
Q2 2015
|
|
Q3 2015
|
|
Q4 2015
|
|
FY 2015
|
|
Q1 2016
|
|
Q2 2016
|
|
Q3 2016
|
SaaS Revenue - Application Development and Deployment
|
|
|
$567
|
|
$713
|
|
$765
|
|
$975
|
|
$3,020
|
|
$1,071
|
|
$1,079
|
|
$1,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR
FISCAL YEAR 2016 GUIDANCE (Unaudited)
|
|
Fiscal Year 2016 Non-GAAP Revenue Guidance
|
|
|
|
Fiscal Year Ended
|
|
Fiscal Year Ending
|
|
|
|
November 30, 2015
|
|
November 30, 2016
|
(In millions)
|
|
|
|
|
Low
|
|
% Change
|
|
High
|
|
% Change
|
GAAP revenue
|
|
|
$
|
377.6
|
|
$
|
410.0
|
|
9
|
%
|
|
$
|
413.0
|
|
9
|
%
|
Acquisition-related adjustments - revenue (1)
|
|
|
$
|
34.8
|
|
$
|
2.0
|
|
(94
|
)%
|
|
$
|
2.0
|
|
(94
|
)%
|
Non-GAAP revenue
|
|
|
$
|
412.4
|
|
$
|
412.0
|
|
-
|
%
|
|
$
|
415.0
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Acquisition-related revenue constitutes revenue reflected as
pre-acquisition deferred revenue by Telerik that would otherwise have
been recognized but for the purchase accounting treatment of the
acquisition of Telerik. Since GAAP accounting requires the elimination
of this revenue, GAAP results alone do not fully capture all of our
economic activities.
|
Fiscal Year 2016 Non-GAAP Operating Margin Guidance
|
|
|
|
Fiscal Year Ending November 30, 2016
|
(In millions)
|
|
|
Low
|
|
High
|
GAAP income from operations
|
|
|
$
|
60.9
|
|
|
$
|
62.7
|
|
GAAP operating margins
|
|
|
|
15
|
%
|
|
|
15
|
%
|
Acquisition-related revenue
|
|
|
|
2.0
|
|
|
|
2.0
|
|
Stock-based compensation
|
|
|
|
24.9
|
|
|
|
24.9
|
|
Amortization and impairment of intangibles
|
|
|
|
33.5
|
|
|
|
33.5
|
|
Acquisition-related expense
|
|
|
|
0.5
|
|
|
|
0.5
|
|
Restructuring expense
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Total adjustments
|
|
|
|
61.1
|
|
|
|
61.1
|
|
Non-GAAP income from operations
|
|
|
$
|
122.0
|
|
|
$
|
123.8
|
|
Non-GAAP operating margin
|
|
|
|
30
|
%
|
|
|
30
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2016 Non-GAAP Earnings per Share and Effective Tax
Rate Guidance
|
|
|
|
Fiscal Year Ending November 30, 2016
|
(In millions, except per share data)
|
|
|
Low
|
|
High
|
GAAP net income
|
|
|
$
|
30.4
|
|
|
$
|
31.4
|
|
Adjustments (from previous table)
|
|
|
|
61.1
|
|
|
|
61.1
|
|
Income tax adjustment (2)
|
|
|
|
(12.6
|
)
|
|
|
(12.1
|
)
|
Non-GAAP net income
|
|
|
$
|
78.9
|
|
|
$
|
80.4
|
|
|
|
|
|
|
|
GAAP diluted earnings per share
|
|
|
$
|
0.61
|
|
|
$
|
0.63
|
|
Non-GAAP diluted earnings per share
|
|
|
$
|
1.57
|
|
|
$
|
1.60
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
|
50.1
|
|
|
|
50.1
|
|
|
|
|
|
|
|
(2) Tax adjustment is based on a non-GAAP effective tax rate of 32%
for Low and High, calculated as follows:
|
Non-GAAP income from operations
|
|
|
$
|
122.0
|
|
|
$
|
123.8
|
|
Other (expense) income
|
|
|
|
(5.7
|
)
|
|
|
(5.7
|
)
|
Non-GAAP income from operations before income taxes
|
|
|
|
116.3
|
|
|
|
118.1
|
|
Non-GAAP net income
|
|
|
|
78.9
|
|
|
|
80.4
|
|
Tax provision
|
|
|
$
|
37.4
|
|
|
$
|
37.7
|
|
Non-GAAP tax rate
|
|
|
|
32
|
%
|
|
|
32
|
%
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR
FISCAL YEAR 2016 GUIDANCE (Unaudited)
|
|
Fiscal Year 2016 Adjusted Free Cash Flow Guidance
|
|
|
|
Fiscal Year Ending November 30, 2016
|
(In millions)
|
|
|
Low
|
|
High
|
Cash flows from operations (GAAP)
|
|
|
$
|
88
|
|
|
$
|
93
|
|
Purchases of property and equipment
|
|
|
|
(6
|
)
|
|
|
(6
|
)
|
Add back: restructuring payments
|
|
|
|
3
|
|
|
|
3
|
|
Adjusted free cash flow (non-GAAP)
|
|
|
$
|
85
|
|
|
$
|
90
|
|
|
|
|
|
|
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q4
2016 GUIDANCE (Unaudited)
|
|
Q4 2016 Non-GAAP Revenue Guidance
|
|
|
|
Three Months Ended
|
|
Three Months Ending
|
|
|
|
November 30, 2015
|
|
November 30, 2016
|
(In millions)
|
|
|
|
|
Low
|
|
% Change
|
|
High
|
|
% Change
|
GAAP revenue
|
|
|
$
|
112.7
|
|
$
|
122.3
|
|
9
|
%
|
|
$
|
125.3
|
|
11
|
%
|
Acquisition-related adjustments - revenue (1)
|
|
|
$
|
2.7
|
|
$
|
0.3
|
|
(89
|
)%
|
|
$
|
0.3
|
|
(89
|
)%
|
Non-GAAP revenue
|
|
|
$
|
115.4
|
|
$
|
122.6
|
|
6
|
%
|
|
$
|
125.6
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Acquisition-related revenue constitutes revenue reflected as
pre-acquisition deferred revenue by Telerik that would otherwise have
been recognized but for the purchase accounting treatment of the
acquisition of Telerik. Since GAAP accounting requires the elimination
of this revenue, GAAP results alone do not fully capture all of our
economic activities.
|
Q4 2016 Non-GAAP Earnings per Share Guidance
|
|
|
|
Three Months Ending November 30, 2016
|
|
|
|
Low
|
|
High
|
GAAP diluted earnings per share
|
|
|
$
|
0.25
|
|
$
|
0.28
|
Acquisition-related revenue
|
|
|
|
0.01
|
|
|
0.01
|
Stock-based compensation
|
|
|
|
0.12
|
|
|
0.12
|
Amortization of intangibles
|
|
|
|
0.14
|
|
|
0.14
|
Total adjustments
|
|
|
|
0.27
|
|
|
0.27
|
Income tax adjustment
|
|
|
|
0.03
|
|
|
0.03
|
Non-GAAP diluted earnings per share
|
|
|
$
|
0.55
|
|
$
|
0.58
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160928006300/en/
[ Back To Mobile World Congress's Homepage ]
|