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Progress Software (PRGS) Q2 Earnings & Revenues Top Estimates

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Progress Software (PRGS - Free Report) reported second-quarter fiscal 2022 non-GAAP earnings of $1.04 per share that beat the Zacks Consensus Estimate by 9.47% and increased 26.8% year over year.  

Non-GAAP revenues of $150.9 million surpassed the consensus mark by 2.98% and increased 16.8% year over year, driven by strong contribution from the Kemp acquisition as well as strong demand for DataDirect and DevTools.

The reported figure was better than management’s guided range of $145-$148 million.

On a constant-currency basis, annualized recurring revenues or ARR came in at $486 million, up 13% year over year, driven by strong demand for OpenEdge, DevTools, Sitefinity and DataDirect products.

Quarter Details

Software license revenues were $44.8 million, up 44.8% year over year. Maintenance and service revenues were $103.9 million, up 12.5% year over year.
 

 

Sales and marketing expenses, as a percentage of revenues, decreased 190 basis points (bps) from the year-ago quarter’s level to 22%.

Product development expenses, as a percentage of revenues, declined 230 bps from the year-ago quarter’s tally to 19.3%.

General and administrative expenses, as a percentage of revenues, decreased 50 bps from the year-ago quarter’s level to 12.9%.

Progress reported non-GAAP operating margin of 40.6%, which expanded 210 bps year over year.

Balance Sheet

As of May 31, 2022, cash and cash equivalents (and short-term investments) were $225.9 million compared with $173.3 million as of Feb 28, 2022.

Progress Software generated $68 million in adjusted free cash flow compared with $44.7 million in the previous quarter.

Progress Software repurchased $26.5 million worth of stock and, at the end of the reported quarter, had $104 million remaining under its share repurchase authorization.

Guidance

For third-quarter fiscal 2022, Progress Software expects non-GAAP revenues between $147 million and $150 million. The Zacks Consensus Estimate for revenues is currently pegged at $159.74 million, indicating growth of 4.68% from the year-ago quarter’s reported figure.

Progress Software expects non-GAAP earnings to be 96-98 cents per share. The consensus mark is currently pegged at $1.12 per share, indicating a decline of 5.08% from the year-ago quarter’s reported figure.

For fiscal 2022, non-GAAP revenues are projected between $609 million and $617 million compared with $557 million reported in fiscal 2021.

Non-GAAP operating margin is expected between 39% and 40% compared with 41% reported in fiscal 2021.

Non-GAAP earnings are projected between $4.05 and $4.11 per share compared with $3.87 reported in fiscal 2021.

The Zacks Consensus Estimate for fiscal 2022 revenues and earnings is currently pegged at $613.35 million and $4.05 per share, respectively.

Zacks Rank & Upcoming Earnings to Watch

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

Investors interested in the Zacks Computer & Technology sector are eagerly awaiting earnings releases from players like Aspen Group (ASPU - Free Report) , SAP SE (SAP - Free Report) and FormFactor (FORM - Free Report) .

Aspen, a Zacks Rank #2 (Buy) stock, is scheduled to release fourth-quarter fiscal 2022 results on Jul 19. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Aspen’s fourth-quarter fiscal 2022 loss has been steady at 7 cents per share in the past 30 days.

SAP, carrying a Zacks Rank #2, is set to report second-quarter 2022 results on Jul 21.

The Zacks Consensus Estimate for SAP’ssecond-quarter 2022 earnings is pegged at $1.19 per share, down 2.5% in the past 30 days.

Another Zacks Rank #2 stock, FormFactor is likely to report second-quarter 2022 results on Jul 27.

The consensus mark for FormFactor’s second-quarter 2022 earnings is pegged at 43 cents per share, unchanged in the past 30 days.