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Progress Software (PRGS) Q1 Earnings & Revenues Top Estimates

Progress Software PRGS reported first-quarter fiscal 2022 non-GAAP earnings of 97 cents per share that beat the Zacks Consensus Estimate by 14.12% and increased 2.1% year over year.

Non-GAAP revenues of $147.5 million surpassed the consensus mark by 5.37% and increased 11.9% year over year, driven by solid uptake of the company’s core products, namely, Data Direct, Chef and DevTools.

On a constant-currency basis, annualized recurring revenues (ARR) came in at $479 million, up 14% year over year.

Quarter Details

Software license revenues were $42.8 million, up 28.3% year over year. Maintenance and service revenues were $102.2 million, up 16.2% year over year.

Sales and marketing expenses, as a percentage of revenues, decreased 120 basis points (bps) from the year-ago quarter’s level to 23.1%.

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

Product development expenses, as a percentage of revenues, declined 50 bps from the year-ago quarter’s tally to 19.8%.

General and administrative expenses, as a percentage of revenues, increased 70 bps from the year-ago quarter’s level to 11.7%.

Progress reported non-GAAP operating margin of 39.8%, which contracted 320 bps year over year due to higher variable expenses and expenses related to the Kemp acquisition.

Balance Sheet

As of Feb 28, 2022, cash and cash equivalents (and short-term investments) were $173.3 million compared with $157.4 million as of Nov 30, 2021.

Progress Software generated $44.7 million in adjusted free cash flow compared with $42.4 million in the previous quarter.

Guidance

For second-quarter fiscal 2022, Progress Software expects non-GAAP revenues between $145 million and $148 million. The Zacks Consensus Estimate for revenues is currently pegged at $147.91 million, indicating growth of 14.48% from the year-ago quarter’s reported figure.

Progress Software expects non-GAAP earnings to be 94-96 cents per share. The consensus mark is currently pegged at 88 cents, indicating growth of 7.3% from the year-ago quarter’s reported figure.

For fiscal 2022, non-GAAP revenues are projected between $605 million and $615 million compared with $557 million reported in fiscal 2021.

Non-GAAP operating margin is expected to be 39% compared with 41% reported in fiscal 2021.

Non-GAAP earnings are projected between $3.95 and $4.05 per share compared with $3.87 reported in fiscal 2021. The Zacks Consensus Estimate for fiscal 2022 revenues and earnings are currently pegged at $609.53 million and $4.01 per share, respectively.

Zacks Rank & Stocks to Pick

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

Progress Software shares are down 4.3% year to date compared with the Computer and Technology sector’s decline of 9.7%.

Investors interested in the sector are eagerly awaiting earnings releases from players like Apple AAPL, International Business Machines IBM and ASGN ASGN.

Apple, a Zacks Rank #2 (Buy) stock, is scheduled to release second-quarter fiscal 2022 results on Apr 28. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings has moved upward by a penny to $6.16 per share in the past 30 days.

IBM, carrying a Zacks Rank #2, is set to report first-quarter 2022 results on Apr 19.

The Zacks Consensus Estimate for IBM’s 2022 earnings is pegged at $10.09 per share, steady in the past 30 days.

Another Zacks Rank #2 stock, ASGN, is scheduled to report first-quarter 2022 results on Apr 27.

The consensus mark for ASGN’s 2022 earnings is pegged at $6.19 per share, up by 0.8% in the past 30 days.


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