Progress Software Corporation · NASDAQ:PRGS
Progress Software — Q3 2020 Earnings Presentation
19 slides from Progress Software's earnings presentation, Sep 29, 2020
Slide 1: Progress Financial Results Q3 2020 Supplemental Data
Progress Financial Results Q3 2020 Supplemental Data
Slide 2: Legal Notice
Legal Notice 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-looking statements w
Slide 3: Conference Call Details
Conference Call Details What: Progress Q3 2020 Financial Results Conference Call When: Tuesday, September 29th, 2020 Time: 5:00 p.m. ET Live Call: 888-204-4368 or 323-994-2093, passcode 7969757 Live / Recorded Webcast: http://investors.progress.com © 2020 Progress Software Corporation and/or its sub
Slide 4: Summary Highlights
Summary Highlights • Delivered strong financial results — Revenue and EPS above high end of guidance, and strong cash flows — Strong performance from OpenEdge product line, and continued efficiency improvements — Increased full year guidance for revenue and EPS, excluding impact of Chef acquisition
Slide 5: M&A Framework
M&A Framework --- Goal is to double the size of the company in 5 years --- Accretive M&A enables us to add scale and cash flows, and generate strong shareholder returns ▪ Target acquisition profile: ➢ Complementary to our business (product, audience & growth profile) ➢ Significant recurring revenue
Slide 6: Progress Investment Highlights
Progress Investment Highlights Durable, predictable financial model High quality revenue base and highly recurring revenue model Accretive M&A and operational efficiencies driving margin improvement Track record of successful acquisition integration and synergy achievement Delivering meaningful earn
Slide 7: Summary Q3 2020 Financial Results
Summary Q3 2020 Financial Results Q3 2020 Outlook Q3 2020 Results (6/25/2020) GAAP Revenue $103 M - $108 M $109.7 M (+3% YoY) Non-GAAP Revenue $104 M - $109 M $110.9 M (-4% YoY) GAAP earnings per share (Diluted) $0.47 - $0.49 $0.53 (+77%) Non-GAAP earnings per share (Diluted) $0.69 - $0.71 $0.78 (+4
Slide 8: Recurring Revenue Contributing to Stability
Recurring Revenue Contributing to Stability Recurring Revenue % * Mission critical nature of the applications we power 80% 78% + 76% Net revenue retention rate on maintenance – 74% well over 90% = High percentage of recurring revenue and durability during uncertain times 2017 2018 2019 2020 YTD Recu
Slide 9: DCI Revenue vs. ACV -- the impact of ASC 606
DCI Revenue vs. ACV -- the impact of ASC 606 DCI Revenue ($M) - ASC 606 DCI ACV ($M) • Variability in revenue primarily caused by multi- year term license $40 contracts 17% Decrease $32 $32 $32 -$33 $29 • Annual Contract $23 Value shows consistent performance FY17 FY18 FY19 FY20 FY18 FY19 FY20 Guida
Slide 10: Driving Operating Leverage
Driving Operating Leverage (% of non-GAAP revenue) Non-GAAP Operating Income Non-GAAP Operating Margin $180 40% $162 38% 35% $134 $132 34% 2017 2018 2019 2020 Guidance (Mid-point) 2017 2018 2019 2020 Guidance Focus on cost management and running a lean, profitable business Integrating acquisitions i
Slide 11: Strong Liquidity/Debt Capacity
Strong Liquidity/Debt Capacity Non-GAAP Adjusted Free Cash Flow Leverage Ratios $135- $140 Net Leverage Ratio Gross Leverage Ratio $129 $122 $120 $101 1.8 1.7 1.7 1.6 1.6 1.6 1.0 0.9 0.7 0.6 0.5 0.3 2016 2017 2018 2019 2020 Guidance Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Strong free cash fl
Slide 12: Capital Allocation
Capital Allocation Primary focus Capital Allocation 2016 – 2020 • Continue to return capital to Cash shareholders in the form of dividends Dividends Share $100 Repurchases $318 Debt Principal Payments • Accretive M&A that meets our $40 disciplined criteria Capital Spending • Repurchase shares to off
Slide 13: Business Outlook (as of September 29, 2020)
Business Outlook (as of September 29, 2020) Q4 2020 FY 2020 FY 2020 Outlook Prior Outlook Current Outlook (9/29/2020) (6/25/2020) (9/29/2020) Non-GAAP Revenue $125 M - $129 M $433 M – $443 M $452 M – $456 M Non-GAAP EPS $0.76 - $0.79 $2.82 – $2.86 $2.94 – $2.97 Non-GAAP Operating Margin Not guided 4
Slide 14: Supplemental Financial Information
Supplemental Financial Information
Slide 15: Results of Operations by Segment (Unaudited)
Results of Operations by Segment (Unaudited) (1)The following expenses are not allocated to our segments as we manage and report our business in these functional areas on a consolidated basis only: certain product development and corporate sales and marketing expenses, customer support, administrati
Slide 16: Supplemental Revenue Information (Unaudited)
Supplemental Revenue Information (Unaudited) © 2020 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 16
Slide 17: Other Non-GAAP Financial Measures (Unaudited)
Other NON-GAAP Financial Measures (Unaudited) © 2020 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 17
Slide 18: Other Non-GAAP Financial Measures (Unaudited)
Other NON-GAAP Financial Measures (Unaudited) © 2020 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved. 18
Slide 19: D Progress
D Progress