In This Article:
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Revenue: $753 million for FY24, close to the high-end guidance of $755 million.
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Unlevered Free Cash Flow: $238 million for FY24.
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ARR (Annual Recurring Revenue): $842 million, representing 46% growth year-over-year.
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Net Retention Rate: Over 100%, excluding and including ShareFile results.
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Operating Margin: 37% for Q4 FY24.
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Earnings Per Share (EPS): $1.33 for Q4 FY24, $0.08 above the high-end guidance.
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Deferred Revenue: $404 million at the end of Q4 FY24.
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Adjusted Free Cash Flow: $212 million for FY24, a 21% increase over the prior year.
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ShareFile Contribution: $21 million in Q4 FY24 revenue.
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Debt: $1.54 billion, with a net debt position of $1.42 billion.
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FY25 Revenue Guidance: Between $958 million and $970 million.
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FY25 EPS Guidance: Between $5 and $5.12.
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FY25 Operating Margin Guidance: 37% to 38%.
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FY25 Unlevered Free Cash Flow Guidance: Between $282 million and $294 million.
Release Date: January 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Progress Software Corp (NASDAQ:PRGS) exceeded the high end of guidance on earnings and free cash flow, with ARR growing by 46% in constant currency.
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The acquisition of ShareFile is expected to add about $250 million to the top line in FY25, significantly increasing the percentage of recurring revenue.
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The company has a strong focus on innovation, with new AI capabilities integrated into their product offerings, enhancing customer value.
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Progress Software Corp (NASDAQ:PRGS) has a disciplined M&A strategy, focusing on acquiring great businesses with exceptional products and strong customer bases.
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The company maintains a strong employee culture, with low turnover and high employee engagement, contributing to operational efficiency and reduced hiring costs.
Negative Points
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The integration of ShareFile is still in progress, with reliance on transition services from Cloud Software Group, which could pose operational challenges.
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Interest expenses are expected to increase significantly in FY25 due to the financing of the ShareFile acquisition, impacting earnings per share.
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The operating margin for ShareFile is currently below 20%, which may affect overall profitability until full integration and synergies are realized.
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The company's revenue can be lumpy due to the timing of contract renewals, which may affect financial predictability.
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There is a risk associated with managing multiple go-to-market strategies, which could impact operational focus and efficiency.
Q & A Highlights
Q: What is driving the revitalization in organic demand for Progress Software's flagship solutions like OpenEdge, DataDirect, and MarkLogic? Are there differences in demand by geography or end market? A: Yogesh Gupta, CEO, explained that the demand is driven by the increasing importance of data, as these products are critical for mission-critical data management. The demand is strong globally, particularly in North America and Europe. Anthony Folger, CFO, added that AI capabilities in their platform are bolstering upsell opportunities across geographies and channels.