Slide 1: Progress Financial Results Q3 2024 Supplemental Data
Progress Financial Results Q3 2024 Supplemental Data September 24, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Progress has identified some of these forward-lookin
Slide 3: Conference Call Details
Conference Call Details What: Progress Fiscal Q3’24 Financial Results When: Tuesday, September 24, 2024 Time: 5:00 p.m. ET Register for the Live Call: Please go to this link for dial-in details. Live / Recorded Webcast: https://edge.media-server.com/mmc/p/y8oedrez Please note: Webcast is listen-only
Slide 4: Summary Highlights Q3 2024
Summary Highlights Q3 2024 Revenue and EPS Ahead of High End of Guidance; Balance Sheet Remains Healthy • Q3 Revenues of $179M above high end of prior guidance of $174M - $178M. • ARR: $582M, slight growth year-over-year in constant currency; NRR 99%. • Operating margins strong at 41%. • EPS: $1.26,
Slide 5: Annualized Recurring Revenue Trend
Annualized Recurring Revenue Trend ARR growth = 0.2% year-over-year + Net Retention Rate between 99%-102% = Predictable and durable top line performance © 2024 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 5 ge rates All perio ds rep orted in constant curr
Slide 6: Driving Total Growth
Driving Total Growth Revenue CAGR of 13% 2020 – 2024(F)* * Represents the mid-point of our FY’24 guidance range © 2024 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 6
Slide 7: Growing Profitability
Growing Profitability Operating Income CAGR of 13% 2020 – 2024(F)* Best-in-class non-GAAP operating margins consistently above 35% * Represents the mid-point of our FY’24 guidance range © 2024 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 7
Slide 8: Unlevered Free Cash Flow
Unlevered Free Cash Flow Unlevered AFCF CAGR of 11% 2020 – 2024(F)* * Adjusted free cash flow represents the mid-point of our FY’24 guidance range © 2024 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 8
Slide 9: Capital Allocation Strategy
Capital Allocation Strategy PRIMARY FOCUS Prioritize accretive M&A opportunities that meet our disciplined criteria to create the strongest returns. • Use available cash flow to pay down debt aggressively to increase liquidity for future M&A or share repurchases. Share repurchases to offset dilution
Slide 10: Well Defined M&A Framework
Well Defined M&A Framework ▪ Cast a wide net across infrastructure software End Market and all aspects of the development lifecycle Alignment ▪ Tight alignment increases synergy potential Appropriate ▪ ~10-25% of current Progress revenues Sizing ▪ Can be financed and integrated efficiently Financial
Slide 11: Summary Q3 2024 Financial Results
Summary Q3 2024 Financial Results Q3 2024 Results Prior Q3 2024 Outlook (provided on June 25, 2024) Revenue $179M $174M - $178M GAAP earnings per share (Diluted) $0.65 $0.48 - $0.52 Non-GAAP earnings per share (Diluted) $1.26 $1.11 - $1.15 GAAP Operating Margin 23% Not guided Non-GAAP Operating Marg
Slide 12: Business Outlook (as of September 24, 2024)
Business Outlook (as of September 24, 2024) Q4 2024 FY 2024 FY 2024 Current Outlook Prior Outlook Updated Outlook (provided on June 25, 2024) Revenue $207M - $217M $725M - $735M $745M - $755M GAAP EPS $0.17 - $0.27 $1.98 - $2.10 $1.69 - $1.81 Non-GAAP EPS $1.15 - $1.25 $4.70 - $4.80 $4.75 - $4.85 GA
Slide 13: ShareFile Impact for Q4'24E and FY24E
ShareFile Impact for Q4’24E and FY24E • Q4’24 guidance includes one month of ShareFile revenue, or $18M - $20M at 15% to 20% operating margin (non-GAAP). • We expect $15M - $20M negative cash flow in Q4’24 from ShareFile, due to deal structure: • Asset purchase deal structure excludes ShareFile A/R.
Slide 14: Supplemental Financial Information
Supplemental Financial Information
Slide 15: Supplemental Revenue Information
Supplemental Revenue Information *Unaudited © 2024 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 15
Slide 16: Important Information Regarding Non-GAAP Financial Information
Important Information Regarding Non-GAAP Financial Information Progress furnishes certain non-GAAP supplemental information to our financial results. We use such non-GAAP financial measures to evaluate our period-over-period operating performance because our management team believes that by excludin
Slide 17: Important Information Regarding Non-GAAP Financial Information
Important Information Regarding Non-GAAP Financial Information • Cyber incident and vulnerability response expenses, net • Cyber incident - We exclude certain expenses resulting from the detection of irregular activity on certain portions of our corporate network, as more thoroughly described in the
Slide 18: Important Information Regarding Non-GAAP Financial Information
Important Information Regarding Non-GAAP Financial Information • ARR continued - The calculation is done at constant currency using the current year budgeted exchange rates for all periods presented. ARR is not defined in GAAP and is not derived from a GAAP measure. Rather, ARR generally aligns to b
Slide 19: Progress
D Progress