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Progress Software (PRGS) Q1 Earnings Beat, Revenues Rise Y/Y

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Zacks Equity Research
·3-min read
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Progress Software PRGS reported first-quarter fiscal 2021 non-GAAP earnings of 95 cents per share that beat the Zacks Consensus Estimate by 26.7%. The figure increased 25% from the year-ago quarter.

Non-GAAP revenues of $131.8 million also surpassed the consensus mark by 8.2%.

Quarter Details

Software license GAAP revenues were $33.3 million, up 8.8% year over year. Maintenance and service GAAP revenues were $88 million, up 11.3% from the year-ago quarter.

GAAP sales and marketing expenses, as a percentage of revenues, expanded 220 basis points (bps) from the year-ago quarter to 24.3%.

Progress Software Corporation Price and Consensus

Progress Software Corporation Price and Consensus
Progress Software Corporation Price and Consensus

Progress Software Corporation price-consensus-chart | Progress Software Corporation Quote

GAAP product development expenses, as a percentage of revenues, expanded 50 bps from the year-ago quarter to 20.2%.

However, GAAP general and administration expenses, as a percentage of revenues, declined 60 bps from the year-ago quarter to 11.1%.

Progress Software reported adjusted operating margin of 43%, which expanded 80 bps from the year-ago quarter.

Balance Sheet

As of Feb 28, 2021, cash and cash equivalents (and short-term investments) were $114.4 million compared with $106 million as of Nov 30, 2020.

Progress Software generated $44.7 million in cash from operations compared with $33 million reported in the year-ago quarter and $42.8 million in the previous quarter.

Progress Software repurchased 0.4 million shares for $15 million during first-quarter fiscal 2021. As of Feb 28, 2021, $175 million remained under this authorization.

The company declared a quarterly cash dividend of $0.175 per share to be paid out on Jun 15, 2021.

Guidance

For the second quarter of fiscal 2021, Progress Software expects non-GAAP revenues between $119 million and $123 million. The Zacks Consensus Estimate for revenues is currently pegged at $122 million, indicating growth of 7.1% from the year-ago quarter’s reported figure.

The company expects non-GAAP earnings to be in the range of 72-74 cents per share. The consensus mark is currently pegged at 75 cents per share, indicating decline of 1.3% from the year-ago quarter’s reported figure.

For 2021, non-GAAP revenues are projected between $519 and $527 million. Adjusted operating margin is expected to be 37%. Non-GAAP earnings are projected between $3.38 and $3.42 per share.

The Zacks Consensus Estimate for 2021 revenues and earnings are currently pegged at $516.3 million and $3.24 per share, respectively.

Zacks Rank & Stocks to Consider

Progress Software currently has a Zacks Rank #3 (Hold).

Amkor Technology AMKR, Apple AAPL and Arrow Electronics ARW are better-ranked stocks in the broader computer and technology sector. While Amkor sports a Zacks Rank #1 (Strong Buy), both Apple and Arrow Electronics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Amkor Technology is likely to report its quarterly results on Apr 26. Both Apple and Arrow are likely to report the same on Apr 29.

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