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Progress Software (PRGS) Q2 Earnings & Revenues Top Estimates

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Progress Software PRGS reported second-quarter fiscal 2022 non-GAAP earnings of $1.04 per share that beat the Zacks Consensus Estimate by 9.47% and increased 26.8% year over year.  

Non-GAAP revenues of $150.9 million surpassed the consensus mark by 2.98% and increased 16.8% year over year, driven by strong contribution from the Kemp acquisition as well as strong demand for DataDirect and DevTools.

The reported figure was better than management’s guided range of $145-$148 million.

On a constant-currency basis, annualized recurring revenues or ARR came in at $486 million, up 13% year over year, driven by strong demand for OpenEdge, DevTools, Sitefinity and DataDirect products.

Quarter Details

Software license revenues were $44.8 million, up 44.8% year over year. Maintenance and service revenues were $103.9 million, up 12.5% year over year.

Progress Software Corporation Price, Consensus and EPS Surprise

Progress Software Corporation Price, Consensus and EPS Surprise
Progress Software Corporation Price, Consensus and EPS Surprise

Progress Software Corporation price-consensus-eps-surprise-chart | Progress Software Corporation Quote

 

Sales and marketing expenses, as a percentage of revenues, decreased 190 basis points (bps) from the year-ago quarter’s level to 22%.

Product development expenses, as a percentage of revenues, declined 230 bps from the year-ago quarter’s tally to 19.3%.

General and administrative expenses, as a percentage of revenues, decreased 50 bps from the year-ago quarter’s level to 12.9%.

Progress reported non-GAAP operating margin of 40.6%, which expanded 210 bps year over year.

Balance Sheet

As of May 31, 2022, cash and cash equivalents (and short-term investments) were $225.9 million compared with $173.3 million as of Feb 28, 2022.

Progress Software generated $68 million in adjusted free cash flow compared with $44.7 million in the previous quarter.

Progress Software repurchased $26.5 million worth of stock and, at the end of the reported quarter, had $104 million remaining under its share repurchase authorization.

Guidance

For third-quarter fiscal 2022, Progress Software expects non-GAAP revenues between $147 million and $150 million. The Zacks Consensus Estimate for revenues is currently pegged at $159.74 million, indicating growth of 4.68% from the year-ago quarter’s reported figure.

Progress Software expects non-GAAP earnings to be 96-98 cents per share. The consensus mark is currently pegged at $1.12 per share, indicating a decline of 5.08% from the year-ago quarter’s reported figure.

For fiscal 2022, non-GAAP revenues are projected between $609 million and $617 million compared with $557 million reported in fiscal 2021.

Non-GAAP operating margin is expected between 39% and 40% compared with 41% reported in fiscal 2021.

Non-GAAP earnings are projected between $4.05 and $4.11 per share compared with $3.87 reported in fiscal 2021.

The Zacks Consensus Estimate for fiscal 2022 revenues and earnings is currently pegged at $613.35 million and $4.05 per share, respectively.

Zacks Rank & Upcoming Earnings to Watch

Progress Software currently has a Zacks Rank #3 (Hold).

Investors interested in the Zacks Computer & Technology sector are eagerly awaiting earnings releases from players like Aspen Group ASPU, SAP SE SAP and FormFactor FORM.

Aspen, a Zacks Rank #2 (Buy) stock, is scheduled to release fourth-quarter fiscal 2022 results on Jul 19. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Aspen’s fourth-quarter fiscal 2022 loss has been steady at 7 cents per share in the past 30 days.

SAP, carrying a Zacks Rank #2, is set to report second-quarter 2022 results on Jul 21.

The Zacks Consensus Estimate for SAP’ssecond-quarter 2022 earnings is pegged at $1.19 per share, down 2.5% in the past 30 days.

Another Zacks Rank #2 stock, FormFactor is likely to report second-quarter 2022 results on Jul 27.

The consensus mark for FormFactor’s second-quarter 2022 earnings is pegged at 43 cents per share, unchanged in the past 30 days.


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