Why Shares of Progress Software Popped Today
What happened
Shares of Progress Software (NASDAQ: PRGS) jumped on Friday after the application development software provider reported second-quarter results that were ahead of analyst estimates. The stock was up about 11% at 12:40 p.m. EDT.
So what
Progress Software reported revenue of $100.0 million for the second quarter under generally accepted accounting principles (GAAP), up 8% year over year. On a non-GAAP basis, revenue was $103.5 million, up 11% year over year and about $5.3 million above the average analyst estimate. The company's results include a contribution from the acquisition of Ipswitch, which was completed during the second quarter.
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Non-GAAP earnings per share came in at $0.65, up from $0.55 in the prior-year period and $0.08 higher than analysts were expecting. GAAP EPS was $0.18, down from $0.28 in the prior-year period, with acquisition and restructuring-related expenses eating into the bottom line.
Progress Software CEO Yogesh Gupta gave an update on the Ipswitch integration process: "I'm very pleased with the integration so far, and we are focused on achieving our targeted shareholder returns for this acquisition even earlier than we had anticipated. Our businesses are performing well, and we are on track to achieve our financial goals for 2019, including our increased guidance for margin and earnings per share."
Now what
Progress Software expects to generate non-GAAP revenue between $109 million and $112 million in the third quarter, along with non-GAAP EPS between $0.68 and $0.70. For the full year, the company forecasts non-GAAP revenue between $422 million and $428 million and non-GAAP EPS between $2.52 and $2.57.
Those earnings guidance ranges were slightly ahead of analyst expectations, giving investors another reason on top of the solid second-quarter results to bid up the stock.
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Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
