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Progress' (PRGS) Q4 Earnings Top Estimates, Revenues Up Y/Y
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Progress Software (PRGS - Free Report) reported fourth-quarter fiscal 2023 non-GAAP earnings of $1.02 per share, which beat the Zacks Consensus Estimate by 12.09% but decreased 8.9% year over year.
Non-GAAP revenues of $177.5 million beat the consensus mark by 1.99% and increased 11.5% year over year.
On a constant-currency basis, annualized recurring revenues came in at $574 million, up 17% year over year, driven by strong contributions from OpenEdge, MarkLogic, Sitefinity, DevTools products and MOVEit and a net retention rate of 100%.
Quarter Details
Software license revenues were $56.3 million, up 5.9% year over year. Maintenance and service revenues were $120.7 million, up 16.1% year over year.
Top-line growth benefited from strong demand for Progress solutions, including OpenEdge, DataDirect and Sitefinity offerings.
Sales and marketing expenses, as a percentage of revenues, decreased 80 basis points (bps) from the year-ago quarter’s level to 24.6%.
Product development expenses, as a percentage of revenues, increased 100 bps to 19.2%.
General and administrative expenses, as a percentage of revenues, decreased 120 bps from the year-ago quarter’s level to 12.5%.
Progress reported a non-GAAP operating margin of 35.2%, which contracted 370 bps year over year.
Balance Sheet
As of Nov 30, 2023, cash and cash equivalents (and short-term investments) were $127 million compared with $138 million as of Aug 31, 2023.
Progress generated $33 million in adjusted free cash flow compared with $46 million in the previous quarter.
During the fiscal fourth quarter, Progress repurchased $4 million of shares. At the end of the fiscal year, the company had $194 million remaining under its current share repurchase authorization.
Guidance
For first-quarter fiscal 2024, Progress expects non-GAAP revenues between $180 million and $184 million. The Zacks Consensus Estimate for revenues is currently pegged at $180.5 million, indicating growth of 8.99% from the year-ago quarter’s reported figure.
Progress expects non-GAAP earnings between $1.12 and $1.16 per share. The consensus mark is currently pegged at $1.14 per share, indicating a decline of 4.2% from the year-ago quarter’s reported figure.
For fiscal 2024, non-GAAP revenues are projected between $722 million and $732 million compared with $694 million reported in fiscal 2023. Progress expects a strong contribution from MarkLogic.
Non-GAAP operating margin is expected between 39% and 40% for fiscal 2024.
Non-GAAP earnings are projected between $4.58 and $4.68 per share for fiscal 2024.
The Zacks Consensus Estimate for fiscal 2024 revenues and earnings is currently pegged at $730.36 million and $4.68 per share, respectively.
Adjusted free cash flow is expected between $202 million and $212 million for fiscal 2024.
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Progress' (PRGS) Q4 Earnings Top Estimates, Revenues Up Y/Y
Progress Software (PRGS - Free Report) reported fourth-quarter fiscal 2023 non-GAAP earnings of $1.02 per share, which beat the Zacks Consensus Estimate by 12.09% but decreased 8.9% year over year.
Non-GAAP revenues of $177.5 million beat the consensus mark by 1.99% and increased 11.5% year over year.
On a constant-currency basis, annualized recurring revenues came in at $574 million, up 17% year over year, driven by strong contributions from OpenEdge, MarkLogic, Sitefinity, DevTools products and MOVEit and a net retention rate of 100%.
Quarter Details
Software license revenues were $56.3 million, up 5.9% year over year. Maintenance and service revenues were $120.7 million, up 16.1% year over year.
Top-line growth benefited from strong demand for Progress solutions, including OpenEdge, DataDirect and Sitefinity offerings.
Progress Software Corporation Price and Consensus
Progress Software Corporation price-consensus-chart | Progress Software Corporation Quote
Sales and marketing expenses, as a percentage of revenues, decreased 80 basis points (bps) from the year-ago quarter’s level to 24.6%.
Product development expenses, as a percentage of revenues, increased 100 bps to 19.2%.
General and administrative expenses, as a percentage of revenues, decreased 120 bps from the year-ago quarter’s level to 12.5%.
Progress reported a non-GAAP operating margin of 35.2%, which contracted 370 bps year over year.
Balance Sheet
As of Nov 30, 2023, cash and cash equivalents (and short-term investments) were $127 million compared with $138 million as of Aug 31, 2023.
Progress generated $33 million in adjusted free cash flow compared with $46 million in the previous quarter.
During the fiscal fourth quarter, Progress repurchased $4 million of shares. At the end of the fiscal year, the company had $194 million remaining under its current share repurchase authorization.
Guidance
For first-quarter fiscal 2024, Progress expects non-GAAP revenues between $180 million and $184 million. The Zacks Consensus Estimate for revenues is currently pegged at $180.5 million, indicating growth of 8.99% from the year-ago quarter’s reported figure.
Progress expects non-GAAP earnings between $1.12 and $1.16 per share. The consensus mark is currently pegged at $1.14 per share, indicating a decline of 4.2% from the year-ago quarter’s reported figure.
For fiscal 2024, non-GAAP revenues are projected between $722 million and $732 million compared with $694 million reported in fiscal 2023. Progress expects a strong contribution from MarkLogic.
Non-GAAP operating margin is expected between 39% and 40% for fiscal 2024.
Non-GAAP earnings are projected between $4.58 and $4.68 per share for fiscal 2024.
The Zacks Consensus Estimate for fiscal 2024 revenues and earnings is currently pegged at $730.36 million and $4.68 per share, respectively.
Adjusted free cash flow is expected between $202 million and $212 million for fiscal 2024.
Zacks Rank & Stocks to Consider
Progress currently has a Zacks Rank #3 (Hold).
Investors interested in the Zacks Computer & Technology sector are eagerly awaiting earnings releases from players like Apple (AAPL - Free Report) , Advanced Micro Devices (AMD - Free Report) and Fair Isaac (FICO - Free Report) .
Apple, currently sporting a Zacks Rank #1 (Strong Buy), is scheduled to release its first-quarter fiscal 2024 results on Feb 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AAPL’s first-quarter fiscal 2024 earnings has been steady at $2.08 per share in the past 30 days.
Advanced Micro Devices, carrying a Zacks Rank #2 (Buy) at present, is set to report its fourth-quarter 2023 results on Jan 30.
The Zacks Consensus Estimate for AMD’s fourth-quarter 2023 earnings is pegged at $2.65 per share, unchanged over the past 30 days.
Fair Isaac, also carrying a Zacks Rank #2 at present, is scheduled to report its first-quarter fiscal 2024 results on Jan 25.
The consensus mark for Fair Isaac’s earnings is pegged at $4.79 per share, down by a cent over the past 30 days.