
Q3 Revenue and EPS Significantly Ahead of Guidance
Full Year 2021 Guidance Raised Again
BEDFORD, Mass., Sept. 23, 2021 (GLOBE NEWSWIRE) -- Progress (NASDAQ: PRGS), the leading provider of products to develop, deploy and manage high-impact business applications, today announced financial results for its fiscal third quarter ended August 31, 2021.
Third Quarter 2021 Highlights:
Revenue of $147.4 million increased 34% year-over-year on an actual currency basis, and 33% on a constant currency basis.
Non-GAAP revenue of $152.6 million increased 38% on an actual currency basis, and 36% on a constant currency basis.
Annualized Recurring Revenue (ARR) of $444 million increased 25% year-over-year on a constant currency basis.
Operating margin was 31% and Non-GAAP operating margin was 47%.
Diluted earnings per share was $0.70 compared to $0.53 in the same quarter last year, an increase of 32%.
Non-GAAP diluted earnings per share was $1.18 compared to $0.78 in the same quarter last year, an increase of 51%.
We're very pleased to announce Q3 results that significantly beat our previous guidance for revenue and earnings, and we're raising 2021 guidance for the third time this year, said Yogesh Gupta, CEO at Progress. We also announced the signing of a definitive agreement to acquire Kemp, a leader in the Application Experience ( AX') space. Kemp meets all our acquisition criteria, fits perfectly with our total growth strategy, and brings a very talented team to Progress.
Additional financial highlights included(1):
Three Months Ended
GAAP Non-GAAP
(In thousands, except percentages and per share amounts) August 31,
2021 August 31,
2020 %
Change August 31,
2021 August 31,
2020 %
Change
Revenue $ 147,417 $ 109,699 34 % $ 152,597 $ 110,882 38 %
Income from operations $ 46,046 $ 33,193 39 % $ 71,163 $ 47,117 51 %
Operating margin 31 % 30 % 100 bps 47 % 42 % 500 bps
Net income $ 30,976 $ 23,977 29 % $ 52,577 $ 35,605 48 %
Diluted earnings per share $ 0.70 $ 0.53 32 % $ 1.18 $ 0.78 51 %
Cash from operations (GAAP) /Adjusted free cash flow (Non-GAAP) $ 35,224 $ 31,112 13 % $ 35,022 $ 30,101 16 %
(1)See Legal Notice Regarding Non-GAAP Financial Information
Other fiscal third quarter 2021 metrics and recent results included:
Cash, cash equivalents and short-term investments were $383.7 million at the end of the quarter.
DSO was 54 days compared to 49 days in the fiscal third quarter of 2020 and 44 days in the fiscal second quarter of 2021.
On September 21, 2021, our Board of Directors declared a quarterly dividend of $0.175 per share of common stock that will be paid on December 15, 2021 to shareholders of record as of the close of business on December 1, 2021.
On September 23, 2021, we announced a definitive agreement to acquire Kemp Technologies, a leader in the Application Experience space, for $258 million in cash.
Anthony Folger, CFO, said: Q3 results were outstanding across every metric and our confidence in our business is reflected in the increased outlook for 2021. In addition to our strong financial results and outlook, we continued to execute our total growth strategy while remaining disciplined with the acquisition of Kemp, a deal that positions us exceptionally well for 2022 and beyond.
2021 Business Outlook
Progress provides the following guidance for the fiscal year ending November 30, 2021 and the fiscal fourth quarter ending November 30, 2021:
Updated FY 2021 Guidance
(September 23, 2021) Prior FY 2021 Guidance
(June 24, 2021)
(In millions, except percentages and per share amounts) GAAP Non-GAAP GAAP Non-GAAP
Revenue $520 - $524 $548 - $552 $503 - $509 $529 - $535
Diluted earnings per share $1.56 - $1.58 $3.68 - $3.70 $1.51 - $1.55 $3.46 - $3.50
Operating margin 21% 40% 21% 39%
Cash from operations (GAAP) /
Adjusted free cash flow (Non-GAAP) $168 - $172 $168 - $172 $160 - $164 $158 - $162
Effective tax rate 20% - 21% 20% - 21% 20% - 21% 20% - 21%
Q4 2021 Guidance
(In millions, except per share amounts) GAAP Non-GAAP
Revenue $129 - $133 $134 - $138
Diluted earnings per share $0.13 - $0.15 $0.73 - $0.75
Based on current exchange rates, the expected positive currency translation impact on Progress' fiscal year 2021 business outlook compared to 2020 exchange rates is approximately $6.8 million on GAAP and non-GAAP revenue, and approximately $0.04 on GAAP and non-GAAP diluted earnings per share. The expected positive currency translation impact on Progress' fiscal Q4 2021 business outlook compared to 2020 exchange rates on GAAP and non-GAAP revenue is approximately $0.6 million. The expected positive impact on GAAP and non-GAAP diluted Q4 2021 earnings per share is $0.01. To the extent that there are changes in exchange rates versus the current environment, this may have an impact on Progress' business outlook.
Conference Call
Progress will hold a conference call to review its financial results for the fiscal third quarter of 2021 at 5:00 p.m. ET on Thursday, September 23, 2021. The call can be accessed on the investor relations section of the company's website, located at www.progress.com. Additionally, you can listen to the call by telephone by dialing 800-773-2954 or 1 847-413-3731, passcode 50220857. The conference call will include comments followed by questions and answers. An archived version of the conference call and supporting materials will be available on the Progress website within the investor relations section after the live
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