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Progress Software (PRGS) Q4 Earnings & Revenues Top Estimates

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Progress Software (PRGS - Free Report) reported fourth-quarter fiscal 2021 non-GAAP earnings of 92 cents per share that beat the Zacks Consensus Estimate by 24.32% and surged 51.3% year over year.  

Non-GAAP revenues of $143.7 million surpassed the consensus mark by 5.59% and increased 11.4% year over year, driven by solid uptake of the company’s core products, namely, DataDirect, Chef and DevTools.

On a constant-currency basis, annualized recurring revenues (ARR) came in at $486 million, up 12% year over year. Net dollar retention rate surpassed 100% in fiscal fourth quarter.

Quarter Details

Software license revenues were $41.2 million, up 10.1% year over year. Maintenance and service revenues were $98.9 million, up 16.4% year over year.
 

 

Sales and marketing expenses, as a percentage of revenues, increased 50 basis points (bps) from the year-ago quarter’s level to 26.7%.

Product development expenses, as a percentage of revenues, declined 90 bps from the year-ago quarter’s tally to 19.1%.

General and administration expenses, as a percentage of revenues, increased 90 bps from the year-ago quarter’s level to 13.4%.

Progress reported non-GAAP operating margin of 35.9%, which contracted 130 bps year over year due to higher variable expense and expenses related to the Kemp acquisition.

Balance Sheet

As of Nov 30, 2021, cash and cash equivalents (and short-term investments) were $157.4 million compared with $383.7 million as of Aug 31, 2021.

Progress Software generated $42.4 million in adjusted free cash flow compared with $35 million in the previous quarter.

Guidance

For first-quarter fiscal 2022, Progress Software expects non-GAAP revenues between $139 million and $142 million. The Zacks Consensus Estimate for revenues is currently pegged at $129.7 million, indicating a decline of 1.6% from the year-ago quarter’s reported figure.

Progress Software expects non-GAAP earnings in the range of 83-85 cents per share. The consensus mark is currently pegged at 89 cents per share, indicating a decline of 6.3% 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 $569.84 million and $3.62 per share, respectively.

Zacks Rank & Stocks to Pick

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

Progress Software shares have gained 6.6% in the past year compared with the Computer and Technology sector’s return of 15.7%.

Investors interested in the sector are eagerly awaiting earnings releases from players like Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) and Advanced Micro Devices (AMD - Free Report) .

Apple, a Zacks Rank #1 (Strong Buy) stock, is scheduled to release first-quarter fiscal 2022 results on Jan 27. 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 0.9% to $5.82 per share in the past 60 days.

Microsoft, carrying a Zacks Rank #2 (Buy), is set to report second-quarter fiscal 2022 results on Jan 25. The Zacks Consensus Estimate for fiscal 2022 earnings is pegged at $9.13 per share, up by a penny in the past 60 days.

Another Zacks Rank #2 stock, AMD is scheduled to report fourth-quarter 2021 results on Feb 1. The consensus mark for 2022 earnings is pegged at $2.65 per share, up by a penny in the past 60 days.