Progress Software (PRGS - Free Report) reported second-quarter fiscal 2021 non-GAAP earnings of 82 cents per share that beat the Zacks Consensus Estimate by 13.9%. The figure increased 30% from the year-ago quarter’s levels.
Non-GAAP revenues of $129.2 million also surpassed the consensus mark by 5.7%. Non-GAAP revenues increased 26% year over year on actual currency basis (up 23% on constant currency basis) driven by solid uptake of the company’s core products namely OpenEdge, MOVEit and WhatsUp Gold along with Chef.
Quarter Details
Total revenues of $122.5 million increased 22% on actual currency basis (up 19% on constant currency) on a year-over-year basis.
Software license GAAP revenues were $30.1 million, up 53% year over year. Maintenance and service GAAP revenues were $92.4 million, up 14% from the year-ago quarter’s figures.
GAAP sales and marketing expenses, as a percentage of revenues, expanded 230 basis points (bps) from the year-ago quarter’s levels to 23.9%. GAAP product development expenses, as a percentage of revenues, contracted 10 bps from the year-ago quarter’s tally to 21.6%.
However, GAAP general and administration expenses, as a percentage of revenues, expanded 100 bps from the year-ago quarter’s levels to 13.4%.
Progress Software reported non-GAAP operating margin of 38%, which contracted 100 bps from the year-ago quarter’s figures.
On a constant-currency basis, annualized recurring revenue (ARR) came in at $437 million, up 23% year over year. Net dollar retention rate surpassed 100% in fiscal second quarter.
Balance Sheet
As of May 31, 2021, cash and cash equivalents (and short-term investments) were $362.7 million compared with $114.4 million as of Feb 28, 2021.
Progress Software generated $55.4 million as adjusted free cash flow compared with $38.4 million reported in the year-ago quarter and $46.5 million in the previous quarter.
Progress Software repurchased 0.4 million shares for $20 million during second-quarter fiscal 2021. As of May 31, 2021, $155 million remained under this authorization.
The company declared a quarterly cash dividend of $0.175 per share to be paid out on Sep 15, 2021 to shareholders as of Sep 1.
Guidance
For third-quarter fiscal 2021, Progress Software expects non-GAAP revenues between $129 million and $132 million. The Zacks Consensus Estimate for revenues is currently pegged at $129.6 million, indicating growth of 16.9% from the year-ago quarter’s reported figure.
The company expects non-GAAP earnings in the range of 81-83 cents per share. The consensus mark is currently pegged at 81 cents per share, indicating an improvement of 3.9% from the year-ago quarter’s reported figure.
For 2021, non-GAAP revenues are now projected between $529 and $535 million compared with $519-$527 million guided previously. Non-GAAP operating margin is expected to be 39% compared with 38% projected earlier.
Non-GAAP earnings are projected between $3.46 and $3.50 per share against $3.38 and $3.42 sper share.
The Zacks Consensus Estimate for 2021 revenues and earnings are currently pegged at $523.9 million and $3.39 per share, respectively.
Zacks Rank & Stocks to Consider
Progress Software currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader computer and technology sector worth consideration include Facebook , Zoom Video (ZM - Free Report) and Silicon Motion Technology (SIMO - Free Report) . All the stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Facebook, Zoom Video and Silicon Motion is currently pegged at 20.1%, 15.6% and 8%, respectively.
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Progress Software (PRGS - Free Report) reported second-quarter fiscal 2021 non-GAAP earnings of 82 cents per share that beat the Zacks Consensus Estimate by 13.9%. The figure increased 30% from the year-ago quarter’s levels.
Non-GAAP revenues of $129.2 million also surpassed the consensus mark by 5.7%. Non-GAAP revenues increased 26% year over year on actual currency basis (up 23% on constant currency basis) driven by solid uptake of the company’s core products namely OpenEdge, MOVEit and WhatsUp Gold along with Chef.
Quarter Details
Total revenues of $122.5 million increased 22% on actual currency basis (up 19% on constant currency) on a year-over-year basis.
Software license GAAP revenues were $30.1 million, up 53% year over year. Maintenance and service GAAP revenues were $92.4 million, up 14% from the year-ago quarter’s figures.
GAAP sales and marketing expenses, as a percentage of revenues, expanded 230 basis points (bps) from the year-ago quarter’s levels to 23.9%. GAAP product development expenses, as a percentage of revenues, contracted 10 bps from the year-ago quarter’s tally to 21.6%.
However, GAAP general and administration expenses, as a percentage of revenues, expanded 100 bps from the year-ago quarter’s levels to 13.4%.
Progress Software reported non-GAAP operating margin of 38%, which contracted 100 bps from the year-ago quarter’s figures.
On a constant-currency basis, annualized recurring revenue (ARR) came in at $437 million, up 23% year over year. Net dollar retention rate surpassed 100% in fiscal second quarter.
Balance Sheet
As of May 31, 2021, cash and cash equivalents (and short-term investments) were $362.7 million compared with $114.4 million as of Feb 28, 2021.
Progress Software generated $55.4 million as adjusted free cash flow compared with $38.4 million reported in the year-ago quarter and $46.5 million in the previous quarter.
Progress Software repurchased 0.4 million shares for $20 million during second-quarter fiscal 2021. As of May 31, 2021, $155 million remained under this authorization.
The company declared a quarterly cash dividend of $0.175 per share to be paid out on Sep 15, 2021 to shareholders as of Sep 1.
Guidance
For third-quarter fiscal 2021, Progress Software expects non-GAAP revenues between $129 million and $132 million. The Zacks Consensus Estimate for revenues is currently pegged at $129.6 million, indicating growth of 16.9% from the year-ago quarter’s reported figure.
The company expects non-GAAP earnings in the range of 81-83 cents per share. The consensus mark is currently pegged at 81 cents per share, indicating an improvement of 3.9% from the year-ago quarter’s reported figure.
For 2021, non-GAAP revenues are now projected between $529 and $535 million compared with $519-$527 million guided previously. Non-GAAP operating margin is expected to be 39% compared with 38% projected earlier.
Non-GAAP earnings are projected between $3.46 and $3.50 per share against $3.38 and $3.42 sper share.
The Zacks Consensus Estimate for 2021 revenues and earnings are currently pegged at $523.9 million and $3.39 per share, respectively.
Zacks Rank & Stocks to Consider
Progress Software currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader computer and technology sector worth consideration include Facebook , Zoom Video (ZM - Free Report) and Silicon Motion Technology (SIMO - Free Report) . All the stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Facebook, Zoom Video and Silicon Motion is currently pegged at 20.1%, 15.6% and 8%, respectively.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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