Progress Announces First Quarter 2024 Financial Results

First Quarter Revenues and Earnings Per Share Ahead of Estimates

BURLINGTON, Mass., March 26, 2024 (GLOBE NEWSWIRE) -- Progress (Nasdaq: PRGS), the trusted provider of infrastructure software, today announced financial results for its fiscal first quarter ended February 29, 2024.

First Quarter 2024 Highlights¹:

  • Revenue of $185 million increased 12% year-over-year on both an actual and a constant currency basis.
  • Non-GAAP revenue of $185 million increased 12% year-over-year on an actual currency basis and 11% on a constant currency basis.
  • Annualized Recurring Revenue ("ARR") of $571 million remained consistent year-over-year on a constant currency basis.
  • Operating margin was 19% and non-GAAP operating margin was 42%.
  • Diluted earnings per share was $0.51 compared to $0.53 in the same quarter last year, a decrease of 4%. 
  • Non-GAAP diluted earnings per share was $1.25 compared to $1.19 in the same quarter last year, an increase of 5%.

"It was another strong, steady quarter for Progress and I'm very pleased with our results, which again exceeded estimates and were driven by stable demand and continued resilience in renewals. I am also thrilled that we significantly fortified our balance sheet with a new revolving credit facility and a convertible notes offering," said Yogesh Gupta, CEO of Progress. "These new arrangements lower our costs and provide Progress with significant capital and flexibility for accretive M&A for the coming years."

Additional financial highlights included:

  Three Months Ended
(In thousands, except percentages and per share amounts) February 29, 2024 February 28, 2023 % Change February 29, 2024 February 28, 2023 % Change
Revenue $184,685  $164,226  12% $184,685  $165,611  12%
Income from operations $35,006  $35,588  (2)% $76,756  $72,432  6%
Operating margin  19%  22% (300) bps  42%  44% (200) bps
Net income $22,639  $23,674  (4)% $55,928  $52,759  6%
Diluted earnings per share $0.51  $0.53  (4)% $1.25  $1.19  5%
Cash from operations (GAAP) /Adjusted free cash flow (non-GAAP) $70,504  $46,767  51% $72,204  $46,871  54%

Other fiscal first quarter 2024 metrics and recent results included:

  • Cash and cash equivalents were $133.2 million at the end of the quarter.
  • Days sales outstanding was 50 days compared to 42 days in the fiscal first quarter of 2023 and 62 days in the fiscal fourth quarter of 2023.
  • On March 19, 2024, our Board of Directors declared a quarterly dividend of $0.175 per share of common stock, which will be paid on June 17, 2024 to shareholders of record as of the close of business on June 3, 2024.

"In addition to another strong quarter of financial results, we're very pleased with the recent closing of our $450 million convertible notes offering and a new $900 million credit facility. We used proceeds from the convertible notes offering to repay all previously outstanding bank debt, and now have three times more capacity on our new revolving credit facility," said Anthony Folger, CFO. "These transactions give Progress substantial financial scale and greater flexibility to continue executing our Total Growth Strategy."

¹ See Important Information Regarding Non-GAAP Financial Information and a reconciliation of non-GAAP adjustments to Progress' GAAP financial results at the end of this press release.

2024 Business Outlook

Progress provides the following guidance for the fiscal year ending November 30, 2024 and the fiscal first quarter ending February 29, 2024:

  Updated FY 2024 Guidance
(March 26, 2024)
 Prior FY 2024 Guidance
(January 16, 2024)
(In millions, except percentages and per share amounts) GAAP Non-GAAP¹ GAAP Non-GAAP¹
Revenue $722 – $732 $722 – $732 $722 – $732 $722 – $732
Diluted earnings per share $1.94 – $2.06 $4.65 – $4.75 $1.94 – $2.06 $4.58 – $4.68
Operating margin 19% – 20% 39% – 40% 19% – 20% 39% – 40%
Cash from operations (GAAP) / Adjusted free cash flow (non-GAAP) $205 – $215 $205 – $215 $202 – $212 $202 – $212
Effective tax rate 20% 20% 21% 20%

  Q2 2024 Guidance
(In millions, except per share amounts) GAAP Non-GAAP¹
Revenue $166 – $170 $166 – $170
Diluted earnings per share $0.22 – $0.26 $0.93 – $0.97

Based on current exchange rates, the expected positive currency translation impact on Progress' fiscal year 2024 business outlook compared to 2023 exchange rates on GAAP and non-GAAP revenue is approximately $2.0 million, and approximately $0.02 on GAAP and non-GAAP diluted earnings per share. The expected positive currency translation impact on Progress' fiscal Q2 2024 business outlook compared to 2023 exchange rates on GAAP and non-GAAP revenue is approximately $0.5 million, and approximately $0.01 on GAAP and non-GAAP diluted Q2 2024 earnings per share. To the extent that there are changes in exchange rates versus the current environment, this may have an impact on Progress' business outlook.

Conference Call

Progress will hold a conference call to review its financial results for the fiscal first quarter of 2024 at 5:00 p.m. ET on Tuesday, March 26, 2024. Participants must register for the conference call here: The webcast can be accessed at: The conference call will include comments followed by questions and answers. Attendees must register for the webcast and 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.

Important Information Regarding Non-GAAP Financial Information

Progress furnishes certain non-GAAP supplemental information to our financial results. We use such non-GAAP financial measures to evaluate our period-over-period operating performance because our management team believes that by excluding the effects of certain GAAP-related items that in their opinion do not reflect the ordinary earnings of our operations, such information helps to illustrate underlying trends in our business and provides us with a more comparable measure of our continuing business, as well as greater understanding of the results from the primary operations of our business. Management also uses such non-GAAP financial measures to establish budgets and operational goals, evaluate performance, and allocate resources. In addition, the compensation of our executives and non-executive employees is based in part on the performance of our business as evaluated by such non-GAAP financial measures. We believe these non-GAAP financial measures enhance investors' overall understanding of our current financial performance and our prospects for the future by: (i) providing more transparency for certain financial measures, (ii) presenting disclosure that helps investors understand how we plan and measure the performance of our business, (iii) affords a view of our operating results that may be more easily compared to our peer companies, and (iv) enables investors to consider our operating results on both a GAAP and non-GAAP basis (including following the integration period of our prior and proposed acquisitions). However, this non-GAAP information is not in accordance with, or an alternative to, generally accepted accounting principles in the United States ("GAAP") and should be considered in conjunction with our GAAP results as the items excluded from the non-GAAP information may have a material impact on Progress' financial results. A reconciliation of non-GAAP adjustments to Progress' GAAP financial results is included in the tables at the end of this press release.

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 – We include acquisition-related revenue, which constitutes revenue reflected as pre-acquisition deferred revenue that would have been recognized prior to our adoption of Accounting Standards Update No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08") during the fourth quarter of fiscal year 2021. The acquisition-related revenue in our prior period results relates to Chef Software, Inc. which we acquired on October 5, 2020. Since GAAP accounting required the elimination of this revenue prior to the adoption of ASU 2021-08, GAAP results alone do not fully capture all of our economic activities. We believe these adjustments are useful to management and investors as a measure of the ongoing performance of the business because, although we cannot be certain that customers will renew their contracts, we have historically experienced high renewal rates on maintenance and support agreements and other customer contracts. Upon our adoption of ASU 2021-08, this adjustment is no longer applicable to subsequent acquisitions.
  • Amortization of acquired intangibles – We exclude amortization of acquired intangibles because those expenses are unrelated to our core operating performance and the intangible assets acquired vary significantly based on the timing and magnitude of our acquisition transactions and the maturities of the businesses acquired.
  • Stock-based compensation – We exclude stock-based compensation to be consistent with the way management and, in our view, the overall 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.
  • Restructuring expenses and other – 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 expenses – We exclude acquisition-related expenses in order to provide a more meaningful comparison 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.
  • Cyber incident and vulnerability response expenses, net
    • November 2022 Cyber Incident – We exclude certain expenses resulting from the detection of irregular activity on certain portions of our corporate network, as more thoroughly described in the Form 8-K that we filed on December 19, 2022.
    • MOVEit Vulnerability – We exclude certain expenses resulting from the zero-day MOVEit Vulnerability, as more thoroughly described in our filings with the Securities and Exchange Commission since June 5, 2023, including our Form 10-K for the fiscal year ended November 30, 2023.
      Expenses include costs to investigate and remediate these cyber related matters, as well as legal and other professional services related thereto. Expenses related to such cyber matters are provided net of expected insurance recoveries, although the timing of recognizing insurance recoveries may differ from the timing of recognizing the associated expenses. Costs associated with the enhancement of our cybersecurity program are not included within this adjustment. We expect to continue to incur legal and other professional services expenses in future periods associated with the MOVEit Vulnerability. We do not expect to incur additional costs associated with the November 2022 Cyber Incident as the investigation is closed. Expenses related to such cyber matters are expected to result in operating expenses that would not have otherwise been incurred in the normal course of business operations. We believe that excluding these costs facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance.
  • Provision for income taxes – We adjust our income tax provision by excluding the tax impact of the non-GAAP adjustments discussed above.
  • Constant currency  Revenue from our international operations has historically represented a substantial portion of our total revenue. As a result, our revenue results have been impacted, and we expect will continue to be impacted, by fluctuations in foreign currency exchange rates. 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.
  • Annualized Recurring Revenue ("ARR")  We provide an ARR performance metric to help investors better understand and assess the performance of our business because our mix of revenue generated from recurring sources has increased in recent years and comprises the vast majority of our total revenue. ARR represents the annualized contract value for all active and contractually binding term-based contracts at the end of a reporting period. ARR includes maintenance, software upgrade rights, public cloud and on-premises subscription-based transactions and managed services. ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with, or to replace, either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.
  • Net Retention Rate  We calculate net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period end ("Prior Period ARR"). We then calculate the ARR from these same customers as of the current period end ("Current Period ARR"). Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the net retention rate. Net retention rate is not calculated in accordance with GAAP.

We also provide guidance on adjusted free cash flow, which is equal to cash flows from operating activities less purchases of property and equipment, plus restructuring payments.

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 (including future acquisition activity) 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: (i) 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; (ii) 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; (iii) 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; (iv) if the security measures for our software, services, other offerings or our internal information technology infrastructure are compromised or subject to a successful cyber-attack, or if our software offerings contain significant coding or configuration errors or zero-day vulnerabilities, we may experience reputational harm, legal claims and financial exposure; (v) the results of inquiries, investigations and legal claims regarding the MOVEit Vulnerability remain uncertain and the ultimate resolution of these matters could result in losses that may be material to our financial results for a particular period; and (vi) our acquisitions may not be successful or may involve unanticipated costs or other integration issues that could 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, 2023. 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) provides software that enables organizations to develop and deploy their mission-critical applications and experiences, as well as effectively manage their data platforms, cloud and IT infrastructure. As an experienced, trusted provider, we make the lives of technology professionals easier. Over 4 million developers and technologists at hundreds of thousands of enterprises depend on Progress. Learn more at

Progress and Progress Software are trademarks or registered trademarks of Progress Software Corporation and/or its subsidiaries or affiliates in the U.S. and other countries. Any other names contained herein may be trademarks of their respective owners.

Investor Contact:Press Contact:
Michael MiccicheErica McShane
Progress SoftwareProgress Software
+1 781 850 8450+1 781 280 4000


  Three Months Ended
(In thousands, except per share data) February 29, 2024 February 28, 2023 % Change
Software licenses $64,100  $57,568  11%
Maintenance and services  120,585   106,658  13%
Total revenue  184,685   164,226  12%
Costs of revenue:      
Cost of software licenses  2,731   2,452  11%
Cost of maintenance and services  22,219   17,501  27%
Amortization of acquired intangibles  7,859   6,264  25%
Total costs of revenue  32,809   26,217  25%
Gross profit  151,876   138,009  10%
Operating expenses:      
Sales and marketing  39,111   33,754  16%
Product development  34,988   30,438  15%
General and administrative  21,344   18,786  14%
Amortization of acquired intangibles  17,389   13,611  28%
Cyber incident and vulnerability response expenses, net  987   2,692  (63)%
Restructuring expenses  2,349   1,397  68%
Acquisition-related expenses  702   1,743  (60)%
Total operating expenses  116,870   102,421  14%
Income from operations  35,006   35,588  (2)%
Other expense, net  (7,399)  (5,664) 31%
Income before income taxes  27,607   29,924  (8)%
Provision for income taxes  4,968   6,250  (21)%
Net income $22,639  $23,674  (4)%
Earnings per share:      
Basic $0.52  $0.55  (5)%
Diluted $0.51  $0.53  (4)%
Weighted average shares outstanding:      
Basic  43,802   43,300  1%
Diluted  44,826   44,353  1%
Cash dividends declared per common share $0.175  $0.175  %

Stock-based compensation is included in the condensed consolidated statements of operations, as follows:
Cost of revenue $986  $620  59%
Sales and marketing  2,312   1,495  55%
Product development  3,665   2,998  22%
General and administrative  5,501   4,639  19%
Total $12,464  $9,752  28%


(In thousands) February 29, 2024 November 30, 2023
Current assets:    
Cash and cash equivalents $133,222  $126,958 
Accounts receivable, net  88,811   125,825 
Unbilled receivables  43,778   29,965 
Other current assets  46,048   48,040 
Total current assets  311,859   330,788 
Property and equipment, net  14,081   15,225 
Goodwill and intangible assets, net  1,160,815   1,186,379 
Right-of-use lease assets  15,318   18,711 
Long-term unbilled receivables  44,617   28,373 
Other assets  26,658   23,307 
Total assets $1,573,348  $1,602,783 
Liabilities and shareholders' equity    
Current liabilities:    
Accounts payable and other current liabilities $69,821  $92,805 
Current portion of long-term debt, net  14,828   13,109 
Short-term operating lease liabilities  9,821   10,114 
Short-term deferred revenue, net  247,169   236,090 
Total current liabilities  341,639   352,118 
Long-term debt, net  321,115   356,111 
Convertible senior notes, net  355,319   354,772 
Long-term operating lease liabilities  11,208   13,000 
Long-term deferred revenue, net  74,543   58,946 
Other long-term liabilities  7,781   8,121 
Shareholders' equity:    
Common stock and additional paid-in capital  372,710   371,017 
Retained earnings  89,033   88,698 
Total shareholders' equity  461,743   459,715 
Total liabilities and shareholders' equity $1,573,348  $1,602,783 


  Three Months Ended
(In thousands) February 29, 2024 February 28, 2023
Cash flows from operating activities:    
Net income $22,639  $23,674 
Depreciation and amortization  27,544   22,142 
Stock-based compensation  12,464   9,752 
Other non-cash adjustments  1,327   (4,207)
Changes in operating assets and liabilities  6,530   (4,594)
Net cash flows from operating activities  70,504   46,767 
Capital expenditures  (309)  (385)
Issuances of common stock, net of repurchases  (14,917)  (5,643)
Dividend payments to shareholders  (8,171)  (8,023)
Payments for acquisitions, net of cash acquired     (355,821)
Proceeds from the issuance of debt, net of payment of issuance costs     195,000 
Principal payment on term loan and repayment of revolving line of credit  (33,437)  (1,719)
Other  (7,406)  (3,528)
Net change in cash and cash equivalents  6,264   (133,352)
Cash, cash equivalents and short-term investments, beginning of period  126,958   256,277 
Cash, cash equivalents and short-term investments, end of period $133,222  $122,925 


  Three Months Ended
(In thousands, except per share data) February 29, 2024 February 28, 2023
Adjusted revenue:    
GAAP revenue $184,685  $164,226 
Acquisition-related revenue     1,385 
Non-GAAP revenue $184,685  $165,611 
Adjusted income from operations:    
GAAP income from operations $35,006  $35,588 
Amortization of acquired intangibles  25,248   19,875 
Stock-based compensation  12,464   9,752 
Restructuring expenses and other  2,349   1,397 
Acquisition-related revenue and expenses  702   3,128 
Cyber incident and vulnerability response expenses, net  987   2,692 
Non-GAAP income from operations $76,756  $72,432 
Adjusted net income:    
GAAP net income $22,639  $23,674 
Amortization of acquired intangibles  25,248   19,875 
Stock-based compensation  12,464   9,752 
Restructuring expenses and other  2,349   1,397 
Acquisition-related revenue and expenses  702   3,128 
Cyber incident and vulnerability response expenses, net  987   2,692 
Provision for income taxes  (8,461)  (7,759)
Non-GAAP net income $55,928  $52,759 
Adjusted diluted earnings per share:    
GAAP diluted earnings per share $0.51  $0.53 
Amortization of acquired intangibles  0.56   0.45 
Stock-based compensation  0.28   0.22 
Restructuring expenses and other  0.05   0.03 
Acquisition-related revenue and expenses  0.02   0.07 
Cyber incident and vulnerability response expenses, net  0.02   0.06 
Provision for income taxes  (0.19)  (0.17)
Non-GAAP diluted earnings per share $1.25  $1.19 
Non-GAAP weighted avg shares outstanding – diluted  44,826   44,353 


Adjusted Free Cash Flow      
  Three Months Ended
(In thousands) February 29, 2024 February 28, 2023 % Change
Cash flows from operations $70,504  $46,767  51%
Purchases of property and equipment  (309)  (385) (20)%
Free cash flow  70,195   46,382  51%
Add back: restructuring payments  2,009   489  311%
Adjusted free cash flow $72,204  $46,871  54%


Fiscal Year 2024 Updated Revenue Guidance
  Fiscal Year Ended Fiscal Year Ending
  November 30, 2023 November 30, 2024
(In millions)   Low % Change High % Change
GAAP revenue $694.4  $722.0  4% $732.0  5%
Acquisition-related adjustments – revenue  3.8     (100)%    (100)%
Non-GAAP revenue $698.2  $722.0  3% $732.0  5%

Fiscal Year 2024 Updated Non-GAAP Operating Margin Guidance
  Fiscal Year Ending November 30, 2024
(In millions) Low High
GAAP income from operations $134.7  $142.8 
GAAP operating margins  19%  20%
Acquisition-related expense  3.4   3.4 
Restructuring expense  3.7   3.7 
Stock-based compensation  48.4   48.4 
Amortization of acquired intangibles  89.0   89.0 
Cyber incident and vulnerability response expenses, net  5.8   5.8 
Total adjustments  150.3   150.3 
Non-GAAP income from operations $285.0  $293.1 
Non-GAAP operating margin  39%  40%

Fiscal Year 2024 Updated Non-GAAP Earnings per Share and Effective Tax Rate Guidance
  Fiscal Year Ending November 30, 2024
(In millions, except per share data) Low High
GAAP net income $86.0  $92.2 
Adjustments (from previous table)  150.3   150.3 
Income tax adjustment(2)  (30.1)  (29.8)
Non-GAAP net income $206.2  $212.7 
GAAP diluted earnings per share $1.94  $2.06 
Non-GAAP diluted earnings per share $4.65  $4.75 
Diluted weighted average shares outstanding  44.4   44.8 

² Tax adjustment is based on a non-GAAP effective tax rate of approximately 20%, calculated as follows:
  Fiscal Year Ending November 30, 2024
  Low High
Non-GAAP income from operations $285.0  $293.1 
Other (expense) income  (27.2)  (27.2)
Non-GAAP income from continuing operations before income taxes  257.8   265.9 
Non-GAAP net income  206.2   212.7 
Tax provision $51.6  $53.2 
Non-GAAP tax rate  20%  20%


Fiscal Year 2024 Adjusted Free Cash Flow Guidance
  Fiscal Year Ending November 30, 2024
(In millions) Low High
Cash flows from operations (GAAP) $205  $215 
Purchases of property and equipment  (5)  (5)
Add back: restructuring payments  5   5 
Adjusted free cash flow (non-GAAP) $205  $215 


Q2 2024 Revenue Guidance
  Three Months Ended Three Months Ending
  May 31, 2023 May 31, 2024
(In millions)   Low % Change High % Change
GAAP revenue $178.3  $166.0  (7)% $170.0  (5)%
Acquisition-related adjustments – revenue  0.9     (100)%    (100)%
Non-GAAP revenue $179.2  $166.0  (7)% $170.0  (5)%

Q2 2024 Non-GAAP Earnings per Share Guidance
  Three Months Ending May 31, 2024
  Low High
GAAP diluted earnings per share $0.22  $0.26 
Acquisition-related expense  0.02   0.02 
Restructure expense  0.01   0.01 
Stock-based compensation  0.28   0.28 
Amortization of acquired intangibles  0.05   0.05 
Cyber incident and vulnerability response expenses, net  0.53   0.53 
Total adjustments  0.89   0.89 
Income tax adjustment  (0.18)  (0.18)
Non-GAAP diluted earnings per share $0.93  $0.97 

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