Slide 1: Progress Financial Results Q3 2023 Supplemental Data
Progress Financial Results Q3 2023 Supplemental Data September 26, 2023
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 FY2023 Financial Results When: Tuesday, September 26, 2023 Time: 5:00 p.m. ET To register for the Live Call: Please go to this link to retrieve dial-in details. Live / Recorded Webcast: https://edge.media-server.com/mmc/p/sbf62nuj Please note: Webcast
Slide 4: Summary Highlights Q3 FY2023
Summary Highlights Q3 FY2023 Revenue and EPS ahead of estimates; Retention Rate 101%; FY23 guidance raised • Revenues of $176M increased 13% year over year in constant currency and at the high end of prior guidance of $172-$176M. • ARR: $577M, up 18% year-over-year in constant currency, 2% pro-forma
Slide 5: Annualized Recurring Revenue Trend
Annualized Recurring Revenue Trend* MarkLogic ARR ~$80M ARR growth = 2% year-over-year + Net Retention Rate between 100%-103% = Predictable and durable top line performance © 2023 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. All periods reported in consta
Slide 6: Annualized Recurring Revenue
Annualized Recurring Revenue (amounts reported in constant currency) “As Reported” “Pro Forma” MarkLogic adds ~$80M of ARR MarkLogic ARR included in both periods presented ARR growth = 18% year-over-year ARR growth = 2% year-over-year Net Retention Rate has ranged between 101%-102% Net Retention Rat
Slide 7: Driving Total Growth
Driving Total Growth Revenue CAGR of 13% 2018 – 2023(F)* * Represents the mid-point of our updated FY’23 guidance range; guidance includes expected contribution from MarkLogic. © 2023 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 7
Slide 8: Growing Profitability
Growing Profitability Operating Income CAGR of 15% 2018 – 2023(F)* Best-in-class non-GAAP operating margins consistently above 35% * Represents the mid-point of our updated FY’23 guidance range. © 2023 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 8
Slide 9: Unlevered Free Cash Flow
Unlevered Free Cash Flow Unlevered AFCF CAGR of 12% 2018 – 2023(F)* ** Note: FY‘23 Adj Unlevered Free Cash Flow normalized $15.2M related to impact of Section 174 of the U.S. Tax Code. Tax-effected interest expense was also added back to our reported and guided free cash flow. © 2023 Progress Softwa
Slide 10: Well Defined M&A Framework
Well Defined M&A Framework End Market ▪ Cast a wide net across infrastructure software Alignment and all aspects of the development lifecycle ▪ Tight alignment increases synergy potential Appropriate ▪ ~10-25% of current Progress revenues Sizing ▪ Can be financed and integrated efficiently Financial
Slide 11: Capital Allocation Strategy
Capital Allocation Strategy PRIMARY Continue to prioritize accretive M&A opportunities that meet our disciplined FOCUS criteria to create the strongest returns. Repurchase shares to offset dilution from our equity programs. • Management has flexibility to increase, reduce, or suspend repurchases dep
Slide 12: Summary Q3 2023 Financial Results
Summary Q3 2023 Financial Results Q3 2023 Results Prior Q3 2023 Outlook (provided on June 29, 2023) GAAP Revenue $175M $171M - $175M Non-GAAP Revenue $176M $172M - $176M GAAP earnings per share (Diluted) $0.42 $0.27 - $0.31 Non-GAAP earnings per share (Diluted) $1.08 $0.98- $1.02 GAAP Operating Marg
Slide 13: Business Outlook (as of September 26, 2023)
Business Outlook (as of September 26, 2023) Q4 2023 FY 2023 FY 2023 Current Outlook Prior Outlook Current Outlook (as of June 29, 2023) GAAP Revenue $171M - $177M $686M - $694M $688M - $694M Non-GAAP Revenue $171M - $177M $690M - $698M $692M - $698M GAAP EPS $0.13 - $0.19 $1.35 - $1.43 $1.36 - $1.42
Slide 14: Supplemental Financial Information
Supplemental Financial Information
Slide 15: Supplemental Revenue Information (Unaudited)
Supplemental Revenue Information (Unaudited) © 2023 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 15
Slide 16: Supplemental Revenue Information (Unaudited)
Supplemental Revenue Information (Unaudited) © 2023 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 16
Slide 17: Important Information Regarding Non-GAAP Financial Information
Important Information Regarding Non-GAAP Financial Information Progress furnishes certain non-GAAP supplemental information to its 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 18: Important Information Regarding Non-GAAP Financial Information
Important Information Regarding Non-GAAP Financial Information • Gain on sale of assets held for sale - We exclude the gain associated with the sale of our Bedford, Massachusetts headquarters during fiscal year 2022. We don’t believe such gains are part of our core operating results because they are
Slide 19: Progress
D Progress