Progress' (PRGS) Q2 Earnings Top Estimates, Revenues Up Y/Y
Progress Software PRGS reported second-quarter fiscal 2023 non-GAAP earnings of $1.06 per share, which beat the Zacks Consensus Estimate by 17.78% and increased 2% year over year.
Non-GAAP revenues of $179.2 million beat the consensus mark by 5.24% and increased 18.8% year over year.
On a constant-currency basis, annualized recurring revenues came in at $569 million, up 19% year over year, driven by the acquisition of MarkLogic and a net retention rate of more than 101%.
Quarter Details
Software license revenues were $56.4 million, up 25.9% year over year. Maintenance and service revenues were $121.8 million, up 17.2% year over year.
Top-line growth benefited from strong demand for Progress solutions, including OpenEdge, Loadmaster, Chef, Sitefinity Cloud and MarkLogic offerings.
Sales and marketing expenses, as a percentage of revenues, increased 50 basis points (bps) from the year-ago quarter’s level to 22.5%.
Progress Software Corporation Price, Consensus and EPS Surprise
Progress Software Corporation price-consensus-eps-surprise-chart | Progress Software Corporation Quote
Product development expenses, as a percentage of revenues, increased 30 bps from the year-ago quarter’s tally to 19.5%.
General and administrative expenses, as a percentage of revenues, decreased 90 bps from the year-ago quarter’s level to 12%.
Progress reported a non-GAAP operating margin of 37.5%, which contracted 310 bps year over year.
Balance Sheet
As of May 31, 2023, cash and cash equivalents (and short-term investments) were $125.5 million compared with $123 million as of Feb 28, 2023.
Progress generated $48 million in adjusted free cash flow compared with $47 million in the previous quarter.
Guidance
For third-quarter fiscal 2023, Progress expects non-GAAP revenues between $172 million and $176 million. The Zacks Consensus Estimate for revenues is currently pegged at $170.31 million, indicating growth of 12.88% from the year-ago quarter’s reported figure.
Progress expects non-GAAP earnings between 98 cents and $1.02 per share. The consensus mark is currently pegged at $1.02 per share, indicating a decline of 1.92% from the year-ago quarter’s reported figure.
For fiscal 2023, non-GAAP revenues are projected between $690 million and $698 million compared with $610.6 million reported in fiscal 2022.
Non-GAAP operating margin is expected between 38% and 39% for fiscal 2023.
Non-GAAP earnings are projected between $4.16 and $4.24 per share for fiscal 2023.
The Zacks Consensus Estimate for fiscal 2023 revenues and earnings is currently pegged at $684.96 million and $4.14 per share, respectively.
Adjusted free cash flow is expected between $175 million and $185 million for fiscal 2023.
Zacks Rank & Stocks to Consider
Progress currently has a Zacks Rank #3 (Hold).
Investors interested in the Zacks Computer & Technology sector are eagerly awaiting earnings releases from players like Roper Technologies ROP, Badger Meter BMI and Cadence Design Systems CDNS.
Roper, currently carrying a Zacks Rank #2 (Buy), is scheduled to release its second-quarter 2023 results on Jul 21. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for ROP’s second-quarter 2023 earnings has been steady at $4 per share in the past 30 days.
Badger Meter, carrying a Zacks Rank #2, is set to report its second-quarter 2023 results on Jul 20.
The Zacks Consensus Estimate for BMI’s second-quarter 2023 earnings is pegged at 66 cents per share, unchanged over the past 30 days.
Cadence, also carrying a Zacks Rank #2 at present, is likely to report its second-quarter 2023 results on Jul 24.
The consensus mark for CDNS’ earnings is pegged at $1.17 per share, unchanged over the past 30 days.
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