Progress' (PRGS) Q3 Earnings Top Estimates, Revenues Up Y/Y
Progress Software PRGS reported third-quarter fiscal 2023 non-GAAP earnings of $1.08 per share, which beat the Zacks Consensus Estimate by 8% and increased 8% year over year.
Non-GAAP revenues of $175.8 million beat the consensus mark by 1.43% and increased 14.8% year over year.
On a constant-currency basis, annualized recurring revenues came in at $577 million, up 18% year over year, driven by strong contributions from MarkLogic and a net retention rate of more than 100%.
Quarter Details
Software license revenues were $50.5 million, up 6.1% year over year. Maintenance and service revenues were $124.4 million, up 20.1% year over year.
Top-line growth benefited from strong demand for Progress solutions, including OpenEdge and MarkLogic offerings.
Sales and marketing expenses, as a percentage of revenues, decreased 80 basis points (bps) from the year-ago quarter’s level to 22.1%.
Product development expenses, as a percentage of revenues, stayed flat at 18.9%.
General and administrative expenses, as a percentage of revenues, decreased 140 bps from the year-ago quarter’s level to 11.9%.
Progress reported a non-GAAP operating margin of 38.9%, which contracted 30 bps year over year.
Balance Sheet
As of Aug 31, 2023, cash and cash equivalents (and short-term investments) were $138 million compared with $125.5 million as of May 31, 2023.
Progress generated $46 million in adjusted free cash flow compared with $48 million in the previous quarter.
Guidance
For fourth-quarter fiscal 2023, Progress expects non-GAAP revenues between $171 million and $177 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 87 cents and 93 cents 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 $692 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 $4.20 and $4.26 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 $177 million and $183 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 International Business Machines IBM, Badger Meter BMI and Cadence Design Systems CDNS.
IBM, currently carrying a Zacks Rank #2 (Buy), is scheduled to release its third-quarter 2023 results on Oct 25. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for IBM’s third-quarter 2023 earnings has been steady at $2.13 per share in the past 30 days.
Badger Meter, carrying a Zacks Rank #2, is likely to report its third-quarter 2023 results on Oct 18.
The Zacks Consensus Estimate for BMI’s third-quarter 2023 earnings is pegged at 74 cents per share, unchanged over the past 30 days.
Cadence, also carrying a Zacks Rank #2 at present, is likely to report its third-quarter 2023 results on Oct 23.
The consensus mark for Cadence’s earnings is pegged at $1.21 per share, unchanged over the past 30 days.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Badger Meter, Inc. (BMI) : Free Stock Analysis Report
Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
Progress Software Corporation (PRGS) : Free Stock Analysis Report
