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 Progress Software Reports 2015 Fiscal Fourth Quarter and Year End Results
   Tuesday, January 12, 2016 4:44:01 PM ET

Progress (PRGS ), a global software company that simplifies and enables the development, deployment and management of business applications, today announced results for its fiscal fourth quarter and fiscal year ended November 30, 2015.

Revenue in the quarter was $112.7 million compared to $97.9 million in the same quarter last year, a year over year increase of 15% on an actual currency basis and 21% on a constant currency basis. On a non-GAAP basis, revenue was $115.4 million compared to $97.9 million in the same quarter last year, an increase of 18% on an actual currency basis and 24% on a constant currency basis.

Additional financial highlights included:



On a GAAP basis in the fiscal fourth quarter of 2015:

-- Revenue was $112.7 million compared to $97.9 million in the same quarter in fiscal year 2014;

-- Income from operations was $20.1 million compared to $27.0 million in the same quarter last year;

-- Net loss was $9.5 million compared to net income of $14.5 million in the same quarter last year;

-- Diluted loss per share was $0.19 compared to diluted earnings per share of $0.28 in the same quarter last year; and

-- Cash from operations was $27.6 million compared to $39.2 million in the same quarter in fiscal year 2014.

On a non-GAAP basis in the fiscal fourth quarter of 2015:

-- Revenue was $115.4 million compared to $97.9 million in the same quarter last year;

-- Income from operations was $40.5 million compared to $38.0 million in the same quarter last year;

-- Operating margin was 35% compared to 39% in the same quarter last year;

-- Net income was $27.3 million compared to $24.1 million in the same quarter last year;

-- Diluted earnings per share was $0.53 compared to $0.47 in the same quarter last year; and

-- Adjusted free cash flow was $28.7 million compared to $38.3 million in the same quarter last year.

"In FY2015 we achieved revenue growth in every business segment," said Phil Pead, President and CEO of Progress. "In the fourth quarter, we achieved record bookings for our Telerik products, positioning us well for FY2016, and both OpenEdge and our data business showed solid growth."

Other fiscal fourth quarter 2015 metrics and recent results included:

-- Cash, cash equivalents and short-term investments were $241.3 million; and

-- DSO from continuing operations was 52 days, compared to 54 days in the fiscal third quarter of 2015 and 63 days in the fiscal fourth quarter of 2014.

Full Year Results

On a GAAP basis in the fiscal year 2015:

-- Revenue was $377.6 million compared to $332.5 million in fiscal year 2014;

-- Income from operations was $14.8 million compared to $80.7 million in the prior fiscal year;

-- Net loss was $8.8 million compared to net income of $49.5 million in the prior fiscal year;

-- Diluted loss per share was $0.17 compared to diluted earnings per share of $0.96 in the prior fiscal year; and

-- Cash from operations was $104.5 million compared to $107.7 million in the prior fiscal year.

On a non-GAAP basis in the fiscal year 2015:

-- Revenue was $412.4 million compared to $332.5 million in fiscal year 2014;

-- Income from operations was $120.4 million compared to $117.4 million in fiscal year 2014;

-- Operating margin was 29% compared to 35% in the prior fiscal year;

-- Net income was $80.6 million compared to $77.9 million in the prior fiscal year;

-- Diluted earnings per share was $1.58 compared to $1.51 in the prior fiscal year; and

-- Adjusted free cash flow was $102.0 million compared to $99.0 million in the prior fiscal year.

2016 Business Outlook

Progress’s fiscal 2016 financial guidance is based on current exchange rates. The negative currency translation impact on Progress’s fiscal year 2016 business outlook compared to 2015 exchange rates is approximately $7.0 million on non-GAAP revenue and $0.02 to $0.03 on non-GAAP earnings per share. The negative currency translation impact on Progress’s fiscal Q1 2016 business outlook compared to 2015 exchange rates is approximately $3.0 million to $4.0 million on non-GAAP revenue and $0.01 to $0.02 on non-GAAP earnings per share. To the extent that there are further changes in exchange rates versus the current environment, this may have an additional impact on Progress’s business outlook.

Progress Software provides the following guidance for the fiscal year ending November 30, 2016:

-- Non-GAAP revenue is expected to be between $427 million and $433 million;

-- Non-GAAP earnings per share is expected to be between $1.59 and $1.65;

-- Non-GAAP operating margin is expected to be between 29% and 30%;

-- Adjusted free cash flow is expected to be between $97 million and $102 million; and

-- Non-GAAP effective tax rate is expected to be approximately 33%.

Progress Software provides the following guidance for the first fiscal quarter ending February 29, 2016:

-- Non-GAAP revenue is expected to be between $92 million and $94 million; and

-- Non-GAAP earnings per share is expected to be between $0.27 and $0.29.

Conference Call

The Progress quarterly investor conference call to review its fiscal fourth quarter of 2015 will be broadcast live at 5:00 p.m. ET on Tuesday, January 12, 2016 and can be accessed on the investor relations section of the company’s website, located at www.progress.com. Additionally, you can listen to the call by telephone by dialing 1-877-719-9799, pass code 242101. The conference call will include brief comments followed by questions and answers. An archived version of the conference call and supporting materials will be available on the Progress website within the investor relations section after the live conference call.

Legal Notice Regarding Non-GAAP Financial Information

Progress provides non-GAAP financial information as additional information for investors. These non-GAAP measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States (GAAP). Progress believes that the non-GAAP results described in this release are useful for an understanding of its ongoing operations and provide additional detail and an alternative method of assessing its operating results. Management uses these non-GAAP results to compare the company’s performance to that of prior periods for analysis of trends and for budget and planning purposes. A reconciliation of non-GAAP adjustments to the company’s GAAP financial results is included in the tables below and is available on the Progress website at www.progress.com within the investor relations section. Additional information regarding the company’s non-GAAP financial information is contained in the company’s Current Report on Form 8-K furnished to the Securities and Exchange Commission in connection with this press release, which is also available on the Progress website within the investor relations section.

Note Regarding Forward-Looking Statements

This press release 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 with words like "believe," "may," "could," "would," "might," "should,""expect," "intend," "plan," "target," "anticipate" and "continue," the negative of these words, other terms of similar meaning or the use of future dates.

Forward-looking statements in this press release include, but are not limited to, statements regarding Progress’s business outlook and financial guidance. There are a number of factors that could cause actual results or future events to differ materially from those anticipated by the forward-looking statements, including, without limitation:

(1) Economic, geopolitical and market conditions, including the continued slow economic recovery in Europe, parts of the U.S. and other parts of the world, can adversely affect our business, results of operations and financial condition, including our revenue growth and profitability, which in turn could adversely affect our stock price. (2) We may fail to achieve our financial forecasts due to such factors as delays or size reductions in transactions, fewer large transactions in a particular quarter, fluctuations in currency exchange rates, or a decline in our renewal rates for contracts. (3) Our ability to successfully manage transitions to new business models and markets, including an increased emphasis on a cloud and subscription strategy, may not be successful. (4) If we are unable to develop new or sufficiently differentiated products and services, or to enhance and improve our existing products and services in a timely manner to meet market demand, partners and customers may not purchase new software licenses or subscriptions or purchase or renew support contracts. (5) We depend upon our extensive partner channel and we may not be successful in retaining or expanding our relationships with channel partners. (6) Our international sales and operations subject us to additional risks that can adversely affect our operating results, including risks relating to foreign currency gains and losses. (7) If the security measures for our software, services or other offerings are compromised or subject to a successful cyber-attack, or if such offerings contain significant coding or configuration errors, we may experience reputational harm, legal claims and financial exposure. (8) We may make acquisitions in the future and those acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. For further information regarding risks and uncertainties associated with Progress’s business, please refer to Progress’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended November 30, 2014 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended February 28, 2015, May 31, 2015 and August 31, 2015. Progress undertakes no obligation to update any forward-looking statements, which speak only as of the date of this press release.

Progress Software Corporation

Progress Software Corporation (PRGS ) is a global software company that simplifies the development, deployment and management of business applications on-premise or in the cloud, on any platform or device, to any data source, with enhanced performance, minimal IT complexity and low total cost of ownership. Progress Software can be reached at www.progress.com or 1-781-280-4000.

Progress is a trademark or registered trademarks of Progress Software Corporation or one of its subsidiaries or affiliates in the U.S. and other countries. Any other trademarks contained herein are the property of their respective owners.

                                                                                                                                                                                                                                
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                        Three Months Ended                                                                                                                                                                                                                                                  Fiscal Year Ended
                                                                                                                             ------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                    --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)                                                                                                    November                            November                      % Change                                                                                                      November                             November                             % Change
                                                                                                                                         30, 2015                                                                  30, 2014                                                                                                                                                                          30, 2015                                                                   30, 2014
                                                                                                                             -----------------------------                                             -----------------------------                                             ------------------                                                                                      ------------------------------                                             ------------------------------                                             ------------------------------
Revenue:
    Software licenses                                                                                                          $ 44,457                                                                  $ 41,154                                                                             8    %                                                                                       $ 130,250                                                                  $ 117,801                                                                        11                    %
    Maintenance and services                                                                                                     68,261                                                 56,740                                                         20    %                                                                                         247,304                                                 214,732                                                     15                    %
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
        Total revenue                                                                                                           112,718                                                 97,894                                                         15    %                                                                                         377,554                                                 332,533                                                     14                    %
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
Costs of revenue:
    Cost of software licenses                                                                                                     1,453                                                                     1,445                                                                             1    %                                                                                           5,979                                                                      6,396                                                                        (7                   )%
    Cost of maintenance and services                                                                                              9,758                                                                     8,574                                                                            14    %                                                                                          40,933                                                                     24,864                                                                        65                    %
    Amortization of acquired intangibles                                                                                          4,025                                                  1,106                                                        264    %                                                                                          16,830                                                   2,999                                                    461                    %
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
        Total costs of revenue                                                                                                   15,236                                                 11,125                                                         37    %                                                                                          63,742                                                  34,259                                                     86                    %
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
Gross profit                                                                                                                     97,482                                                 86,769                                                         12    %                                                                                         313,812                                                 298,274                                                      5                    %
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
Operating expenses:
    Sales and marketing                                                                                                          32,259                                                                    30,085                                                                             7    %                                                                                         124,867                                                                    101,496                                                                        23                    %
    Product development                                                                                                          21,391                                                                    13,397                                                                            60    %                                                                                          86,924                                                                     58,965                                                                        47                    %
    General and administrative                                                                                                   15,229                                                                    13,056                                                                            17    %                                                                                          57,294                                                                     48,292                                                                        19                    %
    Amortization of acquired intangibles                                                                                          3,186                                                                       225                                                                         1,316    %                                                                                          12,745                                                                        653                                                                     1,852                    %
    Restructuring expenses                                                                                                        4,274                                                                       265                                                                         1,513    %                                                                                          12,989                                                                      2,266                                                                       473                    %
    Acquisition-related expenses                                                                                                  1,059                                                  2,714                                                        (61   )%                                                                                           4,239                                                   5,862                                                    (28                   )%
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
        Total operating expenses                                                                                                 77,398                                                 59,742                                                         30    %                                                                                         299,058                                                 217,534                                                     37                    %
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
Income from operations                                                                                                           20,084                                                 27,027                                                        (26   )%                                                                                          14,754                                                  80,740                                                    (82                   )%
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
Other (expense) income, net                                                                                                      (1,142 )                                                                    (357 )                                                                        (220   )%                                                                                          (2,400 )                                                                   (2,936 )                                                                     (18                   )%
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
Income before income taxes                                                                                                       18,942                                                 26,670                                                        (29   )%                                                                                          12,354                                                  77,804                                                    (84                   )%
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
Provision for income taxes                                                                                                       28,412                                                 12,207                                                        133    %                                                                                          21,155                                                  28,346                                                    (25                   )%
                                                                                                                             -------------------------------                                           -------------------------------                                           -------------- ----                                                                                     --------------------------------                                           --------------------------------                                           ---------- --------------------
Net (loss) income                                                                                                              $ (9,470 )                                                                $ 14,463                                                       (165   )%                                                                                       $  (8,801 )                                                                $  49,458                                                   (118                   )%
                                                                                                                             === ====== ====================                                           === ====== ====================                                           ============== ====                                                                                     === ======= ====================                                           === ======= ====================                                           ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
Earnings per share:
    Basic                                                                                                                      $  (0.19 )                                                                $   0.29                                                                          (166   )%                                                                                       $   (0.17 )                                                                $    0.97                                                                      (118                   )%
    Diluted                                                                                                                    $  (0.19 )                                                                $   0.28                                                                          (168   )%                                                                                       $   (0.17 )                                                                $    0.96                                                                      (118                   )%
Weighted average shares outstanding:
    Basic                                                                                                                        50,435                                                                    50,432                                                                --    %                                                                                          50,391                                                                     50,840                                                                        (1                   )%
    Diluted                                                                                                                      50,435                                                                    51,121                                                                            (1   )%                                                                                          50,391                                                                     51,466                                                                        (2                   )%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                           
CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                                                                                                                                                                                                                                 
(In thousands)                                                                                                                                                               November 30,                                                                November 30,
                                                                                                                                                                                 2015                                                                        2014
                                                                                                                                                                  -------------------------------                                             -------------------------------
Assets
Current assets:
    Cash, cash equivalents and short-term investments                                                                                                                $ 241,279                                                                   $   283,268
    Accounts receivable, net                                                                                                                                            66,459                                                                                           68,311
    Other current assets                                                                                                                                                15,671                                                                        24,028
                                                                                                                                                                  ---------------------------------                                           ----------------------------------
        Total current assets                                                                                                                                           323,409                                                                       375,607
                                                                                                                                                                  ---------------------------------                                           ----------------------------------
Property and equipment, net                                                                                                                                             54,226                                                                                           59,351
Goodwill and intangible assets, net                                                                                                                                    484,098                                                                                          253,414
Other assets                                                                                                                                                            15,390                                                                        14,384
                                                                                                                                                                  ---------------------------------                                           ----------------------------------
        Total assets                                                                                                                                                 $ 877,123                                                $   702,756
                                                                                                                                                                  ==== ======= ====================                                           ==== ==================== =======
Liabilities and shareholders’ equity
Current liabilities:
    Accounts payable and other current liabilities                                                                                                                   $  65,314                                                                   $                       60,746
    Current portion of long-term debt                                                                                                                                    9,375                                                                                   --
    Short-term deferred revenue                                                                                                                                        125,227                                                                        92,557
                                                                                                                                                                  ---------------------------------                                           ----------------------------------
        Total current liabilities                                                                                                                                      199,916                                                                       153,303
                                                                                                                                                                  ---------------------------------                                           ----------------------------------
Long-term deferred revenue                                                                                                                                               8,844                                                                                            3,683
Long-term debt                                                                                                                                                         135,000                                                                                   --
Other long-term liabilities                                                                                                                                             10,899                                                                                            2,525
Shareholders’ equity:
    Common stock and additional paid-in capital                                                                                                                        227,930                                                                                          209,778
    Retained earnings                                                                                                                                                  294,534                                                                       333,467
                                                                                                                                                                  ---------------------------------                                           ----------------------------------
        Total shareholders’ equity                                                                                                          522,464                                                                       543,245
                                                                                                                                                                  ---------------------------------                                           ----------------------------------
        Total liabilities and shareholders’ equity                                                                                        $ 877,123                                                $   702,756
                                                                                                                                                                  ==== ======= ====================                                           ==== ==================== =======
                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                        
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                          Three Months Ended                                                                                                                                                                                       Fiscal Year Ended
                                                                                                                                                         --------------------------------------------------------------------------------------------------------------------                                                                                    --------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                                                                                       November 30,                             November 30,                                                                                                             November 30,                             November 30,
                                                                                                                                                                         2015                                                                           2014                                                                                                                     2015                                                                           2014
                                                                                                                                                         ----------------------------------                                             ----------------------------------                                                                                       ----------------------------------                                             ----------------------------------
Cash flows from operating activities:
    Net income                                                                                                                                                 $  (9,470 )                                                                    $  14,464                                                                                                                $  (8,801 )                                                                    $  49,458
        Depreciation and amortization                                                                                                                             10,069                                                                          4,311                                                                                                                   41,680                                                                         15,296
        Stock-based compensation                                                                                                                                   5,192                                                                          6,679                                                                                                                   24,004                                                                         24,873
        Net gains on sales of dispositions                                                                                                                --                                                                 --                                                                                                           --                                                                 --
        Other non-cash adjustments                                                                                                                                21,776                                                                         15,131                                                                                                                    2,000                                                                         17,363
        Changes in operating assets and liabilities                                                                                                                  (10 )                                                                       (1,360 )                                                                                                                 45,657                                                         704  
                                                                                                                                                         ------------------------------------                                           ------------------------------------                                                                                     ------------------------------------                                           ------------------------------------
            Net cash flows from operating activities                                                                                                              27,557                                                      39,225                                                                                               104,540                                                     107,694  
                                                                                                                                                         ------------------------------------                                           ------------------------------------                                                                                     ------------------------------------                                           ------------------------------------
Capital expenditures                                                                                                                                              (1,126 )                                                                       (1,610 )                                                                                                                 (8,845 )                                                                      (11,801 )
Proceeds from the issuance of debt, net of payments of principle and                                                                                      --                                                                 --                                                                                                                  142,588                                                                 --
debt issuance costs
Issuances of common stock, net of repurchases                                                                                                                      2,610                                                                          5,774                                                                                                                  (19,799 )                                                                      (36,116 )
Payments for acquisitions, net of cash acquired                                                                                                           --                                                                        (12,000 )                                                                                                               (246,275 )                                                                      (24,493 )
Proceeds from divestitures, net                                                                                                                           --                                                                 --                                                                                                                    4,500                                                                          3,300
Other                                                                                                                                                             (6,066 )                                                                       (9,413 )                                                                                                                (18,698 )                                                                       13,244  
                                                                                                                                                         ------------------------------------                                           ------------------------------------                                                                                     ------------------------------------                                           ------------------------------------
Net change in cash, cash equivalents and short-term investments                                                                                                   22,975                                                      21,976                                                                                               (41,989 )                                                                       51,828  
                                                                                                                                                         ------------------------------------                                           ------------------------------------                                                                                     ------------------------------------                                           ------------------------------------
Cash, cash equivalents and short-term investments, beginning of                                                                                                  218,304                                                     261,292                                                                                               283,268                                                     231,440  
period
                                                                                                                                                         --------------  --------------------                                           --------------  --------------------                                                                                     --------------  --------------------                                           --------------  --------------------
Cash, cash equivalents and short-term investments, end of period                                                                                               $ 241,279                                                   $ 283,268                                                                                             $ 241,279                                                   $ 283,268  
                                                                                                                                                         ======= ======= ====================                                           ======= ======= ====================                                                                                     ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                   
RESULTS OF OPERATIONS BY SEGMENT
                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                Three Months Ended                                                                                                                                                                                                                                       Fiscal Year Ended
                                                                                                                                          --------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                    ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                                                                        November                            November                     %                                                                                                    November                             November                           %
                                                                                                                                                      30, 2015                                                                  30, 2014                                                        Change                                                                                                  30, 2015                                                                   30, 2014                                                              Change
                                                                                                                                          -----------------------------                                             -----------------------------                                             --------                                                                                      ------------------------------                                             ------------------------------                                             -------------------
Segment revenue:
    OpenEdge                                                                                                                                $ 81,159                                                                  $ 84,948                                                                   (4  )%                                                                                       $ 295,934                                                                  $ 296,721                                                                --     %
    Data Connectivity and Integration                                                                                                         15,257                                                                    12,551                                                                   22   %                                                                                          37,926                                                                     34,772                                                                             9     %
    Application Development and Deployment                                                                                                    16,302                                                    395                                             4,027   %                                                                                          43,694                                                   1,040                                                      4,101     %
                                                                                                                                          -------------------------------                                           -------------------------------                                           ----- ---                                                                                     --------------------------------                                           --------------------------------                                           -------------- -----
        Total revenue                                                                                                                        112,718                                                 97,894                                                15   %                                                                                         377,554                                                 332,533                                                         14     %
                                                                                                                                          -------------------------------                                           -------------------------------                                           ----- ---                                                                                     --------------------------------                                           --------------------------------                                           -------------- -----
Segment costs of revenue and operating expenses:
    OpenEdge                                                                                                                                  20,556                                                                    22,041                                                                   (7  )%                                                                                          77,085                                                                     70,811                                                                             9     %
    Data Connectivity and Integration                                                                                                          4,256                                                                     4,395                                                                   (3  )%                                                                                          13,819                                                                     12,308                                                                            12     %
    Application Development and Deployment                                                                                                     9,217                                                  3,592                                               157   %                                                                                          39,386                                                   9,354                                                        321     %
                                                                                                                                          -------------------------------                                           -------------------------------                                           ----- ---                                                                                     --------------------------------                                           --------------------------------                                           -------------- -----
        Total costs of revenue and operating expenses                                                                                         34,029                                                 30,028                                                13   %                                                                                         130,290                                                  92,473                                                         41     %
                                                                                                                                          -------------------------------                                           -------------------------------                                           ----- ---                                                                                     --------------------------------                                           --------------------------------                                           -------------- -----
Segment contribution:
    OpenEdge                                                                                                                                  60,603                                                                    62,907                                                                   (4  )%                                                                                         218,849                                                                    225,910                                                                            (3    )%
    Data Connectivity and Integration                                                                                                         11,001                                                                     8,156                                                                   35   %                                                                                          24,107                                                                     22,464                                                                             7     %
    Application Development and Deployment                                                                                                     7,085                                                 (3,197 )                                                                322   %                                                                                           4,308                                                  (8,314 )                                                                         152     %
                                                                                                                                          -------------------------------                                           -------------------------------                                           ----- ---                                                                                     --------------------------------                                           --------------------------------                                           -------------- -----
        Total contribution                                                                                                                    78,689                                                 67,866                                                16   %                                                                                         247,264                                                 240,060                                                          3     %
                                                                                                                                          -------------------------------                                           -------------------------------                                           ----- ---                                                                                     --------------------------------                                           --------------------------------                                           -------------- -----
Other unallocated expenses (1)                                                                                                                58,605                                                 40,839                                                44   %                                                                                         232,510                                                 159,320                                                         46     %
                                                                                                                                          -------------------------------                                           -------------------------------                                           ----- ---                                                                                     --------------------------------                                           --------------------------------                                           -------------- -----
Income (loss) from operations                                                                                                                 20,084                                                 27,027                                               (26  )%                                                                                          14,754                                                  80,740                                                        (82    )%
                                                                                                                                          ===============================                                           ===============================                                           ===== ===                                                                                     ================================                                           ================================                                           ============== =====
Other (expense) income, net                                                                                                                   (1,142 )                                                                    (357 )                                                                220   %                                                                                          (2,400 )                                                                   (2,936 )                                                                         (18    )%
                                                                                                                                          -------------------------------                                           -------------------------------                                           ----- ---                                                                                     --------------------------------                                           --------------------------------                                           -------------- -----
Income (loss) before provision for income taxes                                                                                               18,942                                                 26,670                                               (29  )%                                                                                          12,354                                                  77,804                                                        (84    )%
                                                                                                                                          ===============================                                           ===============================                                           ===== ===                                                                                     ================================                                           ================================                                           ============== =====
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

(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: product development, corporate marketing, administration, amortization of acquired intangibles, stock-based compensation, restructuring, and acquisition related expenses.

                                                                                                                                                                                                                                                                                                                                                                                          
SUPPLEMENTAL INFORMATION
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
Revenue by Type
                                                                                  
(In thousands)                                                                                                                          Q4 2014                                                                   Q1 2015                                                                   Q2 2015                                                                   Q3 2015                                                                   Q4 2015                                                                    FY 2015                                                                    FY 2014
                                                                                                                           --------------------------------                                          --------------------------------                                          --------------------------------                                          --------------------------------                                          ---------------------------------                                          ---------------------------------                                          --------------------------------
License                                                                                                                      $ 41,154                                                                  $ 25,231                                                                  $ 28,722                                                                  $ 31,840                                                                  $  44,457                                                                  $ 130,250                                                                         $              117,801
Maintenance                                                                                                                    51,268                                                                    49,239                                                                    52,656                                                                    55,365                                                                     60,458                                                                    217,718                                                                                        202,496
Professional services                                                                                                           5,472                                                  6,911                                                  7,439                                                  7,432                                                   7,803                                                  29,585                                                                      12,236
                                                                                                                           -------------------------------                                           -------------------------------                                           -------------------------------                                           -------------------------------                                           --------------------------------                                           --------------------------------                                           --------------------------------
Total revenue                                                                                                                $ 97,894                                               $ 81,381                                               $ 88,817                                               $ 94,637                                               $ 112,718                                               $ 377,553                                                      $              332,533
                                                                                                                           === ====== ====================                                           === ====== ====================                                           === ====== ====================                                           === ====== ====================                                           === ======= ====================                                           === ======= ====================                                           ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
Revenue by Region
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
(In thousands)                                                                                                                          Q4 2014                                                                   Q1 2015                                                                   Q2 2015                                                                   Q3 2015                                                                   Q4 2015                                                                    FY 2015                                                                    FY 2014
                                                                                                                           --------------------------------                                          --------------------------------                                          --------------------------------                                          --------------------------------                                          ---------------------------------                                          ---------------------------------                                          --------------------------------
North America                                                                                                                $ 43,654                                                                  $ 42,125                                                                  $ 47,520                                                                  $ 49,810                                                                  $  68,112                                                                  $ 207,567                                                                         $              150,716
EMEA                                                                                                                           35,327                                                                    27,863                                                                    31,146                                                                    30,656                                                                     34,504                                                                    124,169                                                                                        131,335
Latin America                                                                                                                   8,406                                                                     4,967                                                                     4,388                                                                     4,621                                                                      3,617                                                                     17,593                                                                                         24,917
Asia Pacific                                                                                                                   10,507                                                  6,426                                                  5,763                                                  9,550                                                   6,485                                                  28,224                                                                      25,565
                                                                                                                           -------------------------------                                           -------------------------------                                           -------------------------------                                           -------------------------------                                           --------------------------------                                           --------------------------------                                           --------------------------------
Total revenue                                                                                                                $ 97,894                                               $ 81,381                                               $ 88,817                                               $ 94,637                                               $ 112,718                                               $ 377,553                                                      $              332,533
                                                                                                                           === ====== ====================                                           === ====== ====================                                           === ====== ====================                                           === ====== ====================                                           === ======= ====================                                           === ======= ====================                                           ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
Revenue by Segment
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
(In thousands)                                                                                                                          Q4 2014                                                                   Q1 2015                                                                   Q2 2015                                                                   Q3 2015                                                                   Q4 2015                                                                    FY 2015                                                                    FY 2014
                                                                                                                           --------------------------------                                          --------------------------------                                          --------------------------------                                          --------------------------------                                          ---------------------------------                                          ---------------------------------                                          --------------------------------
OpenEdge                                                                                                                     $ 84,948                                                                  $ 69,471                                                                  $ 71,906                                                                  $ 73,398                                                                  $  81,159                                                                  $ 295,934                                                                         $              296,721
Data Connectivity and Integration                                                                                              12,551                                                                     7,113                                                                     7,275                                                                     8,281                                                                     15,257                                                                     37,926                                                                                         34,772
Application Development and Deployment                                                                                            395                                                  4,797                                                  9,636                                                 12,958                                                  16,302                                                  43,693                                                                       1,040
                                                                                                                           -------------------------------                                           -------------------------------                                           -------------------------------                                           -------------------------------                                           --------------------------------                                           --------------------------------                                           --------------------------------
Total revenue                                                                                                                $ 97,894                                               $ 81,381                                               $ 88,817                                               $ 94,637                                               $ 112,718                                               $ 377,553                                                      $              332,533
                                                                                                                           === ====== ====================                                           === ====== ====================                                           === ====== ====================                                           === ====== ====================                                           === ======= ====================                                           === ======= ====================                                           ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                  
RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES
- FOURTH QUARTER
                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                           Three Months Ended November 30,                                                                                                                                                                                                                                                                                   % Change
                                                                                                                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                    ---------------------
                                                                                                                                                                                                              2015                                                                                                                                                                   2014
                                                                                                                                  -------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                    ----------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)                                                                                                           GAAP                           Adj.                  Non-GAAP                                                                                                        GAAP                            Adj.                    Non-GAAP                                                                                                Non-GAAP
                                                                                                                                  ---------------------------------                                          ---------------------                                          -------------------                                                                                    --------------------------------                                          -------------------------                                          -------------------                                                                                    ---------------------
TOTAL REVENUE                                                                                                                       $ 112,718                                                                  $          2,660                                                   $ 115,378                                                                                          $ 97,894                                                                      $ --                                                   $  97,894                                                                                                    18 %
    Software licenses (1)                                                                                                              44,457                                                                               571                                                      45,028                                                                                            41,154                                                                        --                                                      41,154                                                                                                     9 %
    Maintenance and services (1)                                                                                                       68,261                                                                             2,089                                                      70,350                                                                                            56,740                                                                        --                                                      56,740                                                                                                    24 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
TOTAL COSTS OF REVENUE                                                                                                              $  15,236                                                                  $         (4,180 )                                                 $  11,056                                                                                          $ 11,125                                                                      $         (1,279 )                                                 $   9,846                                                                                                    12 %
    Amortization of acquired intangibles                                                                                                4,025                                                                            (4,025 )                                            --                                                                                             1,106                                                                                (1,106 )                                            --
    Stock-based compensation (2)                                                                                                          155                                                                              (155 )                                            --                                                                                               173                                                                                  (173 )                                            --
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
GROSS MARGIN %                                                                                                                             86                    %                                                                                                                       90  %                                                                                             89                    %                                                                                                                           90  %                                                                                     -- %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
TOTAL OPERATING EXPENSES                                                                                                            $  77,398                                                                  $        (13,556 )                                                 $  63,842                                                                                          $ 59,742                                                                      $         (9,710 )                                                 $  50,032                                                                                                    28 %
    Amortization of acquired intangibles                                                                                                3,186                                                                            (3,186 )                                            --                                                                                               225                                                                                  (225 )                                            --
    Restructuring expenses                                                                                                              4,274                                                                            (4,274 )                                            --                                                                                               265                                                                                  (265 )                                            --
    Acquisition-related expenses                                                                                                        1,059                                                                            (1,059 )                                            --                                                                                             2,714                                                                                (2,714 )                                            --
    Stock-based compensation (2)                                                                                                        5,037                                                                            (5,037 )                                            --                                                                                             6,506                                                                                (6,506 )                                            --
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
INCOME FROM OPERATIONS                                                                                                              $  20,084                                                                  $         20,396                                                   $  40,480                                                                                          $ 27,027                                                                      $         10,989                                                   $  38,016                                                                                                     6 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
OPERATING MARGIN                                                                                                                           18                    %                                                                                                                       35  %                                                                                             28                    %                                                                                                                           39  %                                                                                                 (4 )%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
TOTAL OTHER (EXPENSE) INCOME, NET                                                                                                   $  (1,142 )                                                                $ --                                                   $  (1,142 )                                                                                        $   (357 )                                                                    $ --                                                   $    (357 )                                                                                                (220 )%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
PROVISION FOR INCOME TAXES                                                                                                          $  28,412                                                                  $        (16,342 )                                                 $  12,070                                                                                          $ 12,207                                                                      $          1,383                                                   $  13,590                                                                                                   (11 )%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
NET (LOSS) INCOME                                                                                                                   $  (9,470 )                                                                $         36,738                                                   $  27,268                                                                                          $ 14,463                                                                      $          9,606                                                   $  24,069                                                                                                    13 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
DILUTED EARNINGS PER SHARE                                                                                                          $   (0.19 )                                                                $           0.72                                                   $    0.53                                                                                          $   0.28                                                                      $           0.19                                                   $    0.47                                                                                                    13 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED                                                                                          50,435                                                                               691                                                      51,126                                                                                            51,121                                                                        --                                                      51,121                                                                                        -- %
(1) Adjustments to revenue relate to acquisition-related revenue,
which constitutes revenue reflected as pre-acquisition deferred
revenue by Telerik that would otherwise have been recognized but
for the purchase accounting treatment of the acquisition of
Telerik. Since GAAP accounting requires the elimination of this
revenue, GAAP results alone do not fully capture all of our
economic activities. Note that acquisition-related revenue
adjustments entirely relate to Progress’ Application Development
and Deployment business unit.
(2) Stock-based compensation is included in the GAAP statements of
income, as follows:
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
    Cost of revenue                                                                                                                       155                                                                                                                                                                                                                                             173
    Sales and marketing                                                                                                                   477                                                                                                                                                                                                                                             907
    Product development                                                                                                                 1,957                                                                                                                                                                                                                                           1,103
    General and administrative                                                                                                          2,603                                                                                                                                                                                                                        4,496  
                                                                                                                                  --------------------------------                                                                                                                                                                                                                 -------------------------------
    Total                                                                                                                           $   5,192                                                                                                                                                                                                                     $  6,679  
                                                                                                                                  === ======= ====================                                                                                                                                                                                                                 === ====== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                  
RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES
- FISCAL YEAR
                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                        Fiscal Year Ended November 30,                                                                                                                                                                                                                                                                                 % Change
                                                                                                                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                    ---------------------
                                                                                                                                                                                                           2015                                                                                                                                                               2014
                                                                                                                                  ------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                    -----------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)                                                                                                           GAAP                        Adj.              Non-GAAP                                                                                                        GAAP                             Adj.                    Non-GAAP                                                                                                Non-GAAP
                                                                                                                                  ---------------------------------                                          --------------                                          -------------------                                                                                    ---------------------------------                                          -------------------------                                          -------------------                                                                                    ---------------------
TOTAL REVENUE                                                                                                                       $ 377,554                                                                  $  34,852                                                   $ 412,406                                                                                          $ 332,533                                                                      $ --                                                   $ 332,533                                                                                                24 %
    Software licenses (1)                                                                                                             130,250                                                                      8,751                                                     139,001                                                                                            117,801                                                                        --                                                     117,801                                                                                                18 %
    Maintenance and services (1)                                                                                                      247,304                                                                     26,101                                                     273,405                                                                                            214,732                                                                        --                                                     214,732                                                                                                27 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
TOTAL COSTS OF REVENUE                                                                                                              $  63,742                                                                  $ (17,447 )                                                 $  46,295                                                                                          $  34,259                                                                      $         (3,611 )                                                 $  30,648                                                                                                51 %
    Amortization of acquired intangibles                                                                                               16,830                                                                    (16,830 )                                            --                                                                                              2,999                                                                                (2,999 )                                            --
    Stock-based compensation (2)                                                                                                          617                                                                       (617 )                                            --                                                                                                612                                                                                  (612 )                                            --
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
GROSS MARGIN %                                                                                                                             83                    %                                                                                                                89  %                                                                                              90                    %                                                                                                                           91  %                                                                                             (2 )%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
TOTAL OPERATING EXPENSES                                                                                                            $ 299,058                                                                  $ (53,360 )                                                 $ 245,698                                                                                          $ 217,534                                                                      $        (33,042 )                                                 $ 184,492                                                                                                33 %
    Amortization of acquired intangibles                                                                                               12,745                                                                    (12,745 )                                            --                                                                                                653                                                                                  (653 )                                            --
    Restructuring expenses                                                                                                             12,989                                                                    (12,989 )                                            --                                                                                              2,266                                                                                (2,266 )                                            --
    Acquisition-related expenses                                                                                                        4,239                                                                     (4,239 )                                            --                                                                                              5,862                                                                                (5,862 )                                            --
    Stock-based compensation (2)                                                                                                       23,387                                                                    (23,387 )                                            --                                                                                             24,261                                                                               (24,261 )                                            --
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(LOSS) INCOME FROM OPERATIONS                                                                                                       $  14,754                                                                  $ 105,659                                                   $ 120,413                                                                                          $  80,740                                                                      $         36,653                                                   $ 117,393                                                                                                 3 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
OPERATING MARGIN                                                                                                                            4                    %                                                                                                                29  %                                                                                              24                    %                                                                                                                           35  %                                                                                             (6 )%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
TOTAL OTHER (EXPENSE) INCOME, NET (3)                                                                                               $  (2,400 )                                                                $     266                                                   $  (2,134 )                                                                                        $  (2,936 )                                                                    $          2,554                                                   $    (382 )                                                                                            (459 )%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(BENEFIT) PROVISION FOR INCOME TAXES                                                                                                $  21,155                                                                  $  16,574                                                   $  37,729                                                                                          $  28,346                                                                      $         10,768                                                   $  39,114                                                                                                (4 )%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
NET INCOME                                                                                                                          $  (8,801 )                                                                $  89,351                                                   $  80,550                                                                                          $  49,458                                                                      $         28,439                                                   $  77,897                                                                                                 3 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
DILUTED EARNINGS PER SHARE                                                                                                          $   (0.17 )                                                                $    1.75                                                   $    1.58                                                                                          $    0.96                                                                      $           0.55                                                   $    1.51                                                                                                 5 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED                                                                                          50,391                                                                        729                                                      51,120                                                                                             51,466                                                                        --                                                      51,466                                                                                                (1 )%
(1) Adjustments to revenue relate to acquisition-related revenue,
which constitutes revenue reflected as pre-acquisition deferred
revenue by Telerik that would otherwise have been recognized but for
the purchase accounting treatment of the acquisition of Telerik.
Since GAAP accounting requires the elimination of this revenue, GAAP
results alone do not fully capture all of our economic activities.
Note that acquisition-related revenue adjustments entirely relate to
Progress’ Application Development and Deployment business unit.
(2) Stock-based compensation is included in the GAAP statements of
income, as follows:
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
    Cost of revenue                                                                                                                       617                                                                                                                                                                                                                                       612
    Sales and marketing                                                                                                                 4,805                                                                                                                                                                                                                                     4,642
    Product development                                                                                                                 5,433                                                                                                                                                                                                                                     5,289
    General and administrative                                                                                                         13,149                                                                                                                                                                                                                 14,330  
                                                                                                                                  --------------------------------                                                                                                                                                                                                          --------------------------------
    Total                                                                                                                           $  24,004                                                                                                                                                                                                              $  24,873  
                                                                                                                                  === ======= ====================                                                                                                                                                                                                          === ======= ====================
(3) Adjustment to other income (expense), net relates to the
termination of Progress’ prior revolving credit facility with
JPMorgan Chase Bank, N.A. and the other lenders party to the credit
facility in connection with entering into the new credit facility,
which was used to partially fund the acquisition of Telerik. Upon
termination, the outstanding debt issuance costs related to the
prior revolving credit facility were written off to other income
(expense) in the GAAP statements of income.
 
                                                                                                                                          
OTHER NON-GAAP FINANCIAL MEASURES - FOURTH QUARTER
                                                                                                                                                                                                                                                                                                    
Revenue by Type
                                                                                                                                                                                                                                                                                                    
(In thousands)                                                                                                                              Q4 2015                                                                     Non-GAAP Adjustment (1)                                                              Non-GAAP Revenue
                                                                                                                           ----------------------------------------                                          --------------------------------------------                                          ------------------------------------
License                                                                                                                      $         44,457                                                                      $            571                                                                     $  45,028
Maintenance                                                                                                                            60,458                                                                                 2,089                                                                        62,547
Services                                                                                                                                7,803                                                     --                                                      7,803  
                                                                                                                           ---------------------------------------                                           -------------------------------------------                                           -----------------------------------
Total revenue                                                                                                                $        112,718                                                   $          2,660                                                  $ 115,378  
                                                                                                                           === ============== ====================                                           ======= ============== ====================                                           ====== ======= ====================
                                                                                                                                                                                                                                                                                                    
Revenue by Region
                                                                                                                                                                                                                                                                                                    
(In thousands)                                                                                                                              Q4 2015                                                                     Non-GAAP Adjustment (1)                                                              Non-GAAP Revenue
                                                                                                                           ----------------------------------------                                          --------------------------------------------                                          ------------------------------------
North America                                                                                                                $         68,112                                                                      $          2,506                                                                     $  70,618
EMEA                                                                                                                                   34,504                                                                                   126                                                                        34,630
Latin America                                                                                                                           3,617                                                                                     4                                                                         3,621
Asia Pacific                                                                                                                            6,485                                                                 24                                                      6,509  
                                                                                                                           ---------------------------------------                                           -------------------------------------------                                           -----------------------------------
Total revenue                                                                                                                $        112,718                                                   $          2,660                                                  $ 115,378  
                                                                                                                           === ============== ====================                                           ======= ============== ====================                                           ====== ======= ====================
                                                                                                                                                                                                                                                                                                    
Revenue by Segment
                                                                                                                                                                                                                                                                                                    
(In thousands)                                                                                                                              Q4 2015                                                                     Non-GAAP Adjustment (1)                                                              Non-GAAP Revenue
                                                                                                                           ----------------------------------------                                          --------------------------------------------                                          ------------------------------------
OpenEdge                                                                                                                     $         81,159                                                                      $ --                                                                     $  81,159
Data Connectivity and Integration                                                                                            $         15,257                                                                      $ --                                                                     $  15,257
Application Development and Deployment                                                                                       $         16,302                                                   $          2,660                                                  $  18,962  
                                                                                                                           --- -------------- --------------------                                           ------- -------------- --------------------                                           ------ ------- --------------------
Total revenue                                                                                                                $        112,718                                                   $          2,660                                                  $ 115,378  
                                                                                                                           === ============== ====================                                           ======= ============== ====================                                           ====== ======= ====================
                                                                                                                                                                                                                                                                                                    
(1) Adjustments to revenue relate to acquisition-related revenue,
which constitutes revenue reflected as pre-acquisition deferred
revenue by Telerik that would otherwise have been recognized but for
the purchase accounting treatment of the acquisition of Telerik.
Since GAAP accounting requires the elimination of this revenue, GAAP
results alone do not fully capture all of our economic activities.
Note that acquisition-related revenue adjustments entirely relate to
Progress’ Application Development and Deployment business unit.
                                                                                                                                                                                                                                                                                                    
Adjusted Free Cash Flow
                                                                                                                                                                                                                                                                                                    
(In thousands)                                                                                                                              Q4 2015                                                                             Q4 2014                                                                          % Change
                                                                                                                           ----------------------------------------                                          --------------------------------------------                                          ------------------------------------
Cash flows from operations                                                                                                   $         27,557                                                                      $         39,225                                                                           (30 )%
Purchases of property and equipment                                                                                          $         (1,126 )                                                                    $           (802 )                                                                         (40 )%
Capitalized software development costs                                                                                       $ --                                                   $           (808 )                                                                         100 %
                                                                                                                           --- -------------- --------------------                                           ------- -------------- --------------------                                           -----------------------------------
Free cash flow                                                                                                               $         26,431                                                   $         37,615                                                        (30 )%
                                                                                                                           --- -------------- --------------------                                           ------- -------------- --------------------                                           -----------------------------------
Add back: restructuring payments                                                                                             $          2,246                                                   $            714                                                        215 %
                                                                                                                           --- -------------- --------------------                                           ------- -------------- --------------------                                           -----------------------------------
Adjusted free cash flow                                                                                                      $         28,677                                                   $         38,329                                                        (25 )%
                                                                                                                           === ============== ====================                                           ======= ============== ====================                                           ===================================
                                                                                                                                                                                                                                                                                                                   
                                                                                                                                   
OTHER NON-GAAP FINANCIAL MEASURES - FISCAL YEAR
                                                                                                                                                                                                                                                                                             
Revenue by Type
                                                                                                                                                                                                                                                                                             
(In thousands)                                                                                                                          FY 2015                                                                  Non-GAAP Adjustment (1)                                                              Non-GAAP Revenue
                                                                                                                           ---------------------------------                                          --------------------------------------------                                          -------------------------------------
License                                                                                                                      $ 130,250                                                                      $          8,751                                                                      $ 139,001
Maintenance                                                                                                                    217,718                                                                                26,101                                                                        243,819
Services                                                                                                                        29,586                                                     --                                                      29,586  
                                                                                                                           --------------------------------                                           -------------------------------------------                                           ------------------------------------
Total revenue                                                                                                                $ 377,554                                                   $         34,852                                                   $ 412,406  
                                                                                                                           === ======= ====================                                           ======= ============== ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                             
Revenue by Region
                                                                                                                                                                                                                                                                                             
(In thousands)                                                                                                                          FY 2015                                                                  Non-GAAP Adjustment (1)                                                              Non-GAAP Revenue
                                                                                                                           ---------------------------------                                          --------------------------------------------                                          -------------------------------------
North America                                                                                                                $ 207,566                                                                      $         30,301                                                                      $ 237,867
EMEA                                                                                                                           124,171                                                                                 3,400                                                                        127,571
Latin America                                                                                                                   17,594                                                                                   199                                                                         17,793
Asia Pacific                                                                                                                    28,223                                                                952                                                      29,175  
                                                                                                                           --------------------------------                                           -------------------------------------------                                           ------------------------------------
Total revenue                                                                                                                $ 377,554                                                   $         34,852                                                   $ 412,406  
                                                                                                                           === ======= ====================                                           ======= ============== ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                             
Revenue by Segment
                                                                                                                                                                                                                                                                                             
(In thousands)                                                                                                                          FY 2015                                                                  Non-GAAP Adjustment (1)                                                              Non-GAAP Revenue
                                                                                                                           ---------------------------------                                          --------------------------------------------                                          -------------------------------------
OpenEdge                                                                                                                     $ 295,935                                                                      $ --                                                                      $ 295,935
Data Connectivity and Integration                                                                                            $  37,926                                                                      $ --                                                                      $  37,926
Application Development and Deployment                                                                                       $  43,693                                                   $         34,852                                                   $  78,545  
                                                                                                                           --- ------- --------------------                                           ------- -------------- --------------------                                           ------- ------- --------------------
Total revenue                                                                                                                $ 377,554                                                   $         34,852                                                   $ 412,406  
                                                                                                                           === ======= ====================                                           ======= ============== ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                             
(1) Adjustments to revenue relate to acquisition-related revenue,
which constitutes revenue reflected as pre-acquisition deferred
revenue by Telerik that would otherwise have been recognized but for
the purchase accounting treatment of the acquisition of Telerik.
Since GAAP accounting requires the elimination of this revenue, GAAP
results alone do not fully capture all of our economic activities.
Note that acquisition-related revenue adjustments entirely relate to
Progress’ Application Development and Deployment business unit.
                                                                                                                                                                                                                                                                                             
Adjusted Free Cash Flow
                                                                                                                                                                                                                                                                                             
(In thousands)                                                                                                                          FY 2015                                                                          FY 2014                                                                          % Change
                                                                                                                           ---------------------------------                                          --------------------------------------------                                          -------------------------------------
Cash flows from operations                                                                                                   $ 104,540                                                                      $        107,694                                                                             (3 )%
Purchases of property and equipment                                                                                          $  (7,184 )                                                                    $         (7,985 )                                                                           10 %
Capitalized software development costs                                                                                       $  (1,661 )                                                                    $         (3,816 )                                                                           56 %
                                                                                                                           --- ------- --------------------                                           ------- -------------- --------------------                                           ------------------------------------
Free cash flow                                                                                                               $  95,695                                                   $         95,893                                              -- %
                                                                                                                           --- ------- --------------------                                           ------- -------------- --------------------                                           ------------------------------------
Add back: restructuring payments                                                                                             $   6,343                                                   $          3,122                                                         103 %
                                                                                                                           --- ------- --------------------                                           ------- -------------- --------------------                                           ------------------------------------
Adjusted free cash flow                                                                                                      $ 102,038                                                   $         99,015                                                           3 %
                                                                                                                           === ======= ====================                                           ======= ============== ====================                                           ====================================
                                                                                                                                                                                                                                                                                                             
 
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR
FISCAL YEAR 2016 GUIDANCE
(Unaudited)
 
Fiscal Year 2016 Revenue Growth Guidance
                                                      Fiscal Year Ended                                                                               Fiscal Year Ending
                                              ---------------------------------                     ------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      November 30, 2015                                                                                                   November 30, 2016
                                              ---------------------------------                     ------------------------------------------------------------------------------------------------------------------------------------------------------------
(In millions)                                                                                                     Low                 % Change                High                      % Change
GAAP revenue                                      $ 377.6                                             $ 425.0                                             13 %                           $ 431.0                                                   14 %
Acquisition-related adjustments - revenue (1)     $  34.8                          $   2.0                         (94 )%                          $   2.0                               (94 )%
                                              ----- ----- --------------------                      --- ----- --------------------                      ---- ----                      --- ----- --------------------                      ---------- ---------
Non-GAAP revenue                                  $ 412.4                          $ 427.0                           4 %                           $ 433.0                                 5 %
                                              ===== ===== ====================                      === ===== ====================                      ==== ====                      === ===== ====================                      ========== =========
                                                                                                                                                                                                                                            

(1) Acquisition-related revenue constitutes revenue reflected as pre-acquisition deferred revenue by Telerik that would otherwise have been recognized but for the purchase accounting treatment of the acquisition of Telerik. Since GAAP accounting requires the elimination of this revenue, GAAP results alone do not fully capture all of our economic activities.

 
Fiscal Year 2016 Non-GAAP Operating Margin Guidance
                                                                           Fiscal Year Ending November 30, 2016
                                                                                                                    ----------------------------------------------------------------------------------------------------------
(In millions)                                                                                                                      Low                                High
                                                                                                                    --------------------------------                                          --------------------------------
GAAP income from operations                                                                                            $  67.2                                                                   $  71.5
GAAP operating margins                                                                                                      16 %                                                                      17 %
    Acquisition-related revenue                                                                                            2.0                                                                       2.0
    Stock-based compensation                                                                                              27.0                                                                      27.0
    Amortization of intangibles                                                                                           28.5                                                   28.5  
                                                                                                                    -------------------------------                                           -------------------------------
        Total adjustments                                                                                                 57.5                                                   57.5  
                                                                                                                    -------------------------------                                           -------------------------------
Non-GAAP income from operations                                                                                        $ 124.7                                                $ 129.0  
                                                                                                                    ==== ===== ====================                                           ==== ===== ====================
Non-GAAP operating margin                                                                                                   29 %                                                                      30 %
                                                                                                                                                                                                          
 
Fiscal Year 2016 Non-GAAP Earnings per Share and Effective Tax
Rate Guidance
                                                                                                           Fiscal Year Ending November 30, 2016
                                                                                                                                                   -------------------------------------------------------------------------------------------------------------
(In millions, except per share data)                                                                                                                              Low                                 High
                                                                                                                                                   --------------------------------                                          -----------------------------------
GAAP net income                                                                                                                                       $  34.8                                                                     $   37.3
    Adjustments (from above)                                                                                                                             57.5                                                                         57.5
    Income tax adjustment (2)                                                                                                                           (10.1 )                                                                      (10.0 )
                                                                                                                                                   -------------------------------                                           ----------------------------------
Non-GAAP net income                                                                                                                                   $  82.2                                                  $   84.8  
                                                                                                                                                   ==== ===== ====================                                           ====== ====== ====================
                                                                                                                                                                                                                              
GAAP diluted earnings per share                                                                                                                       $  0.67                                                                     $   0.72
Non-GAAP diluted earnings per share                                                                                                                   $  1.59                                                                     $   1.65
                                                                                                                                                                                                                              
Diluted weighted average shares outstanding                                                                                                              51.8                                                                         51.5
                                                                                                                                                                                                                              
(2) Tax adjustment is based on a non-GAAP effective tax rate of
approximately 33% for Low and High, calculated as follows:
Non-GAAP income from operations                                                                                                                       $ 124.7                                                                     $  129.0
    Other (expense) income                                                                                                                               (2.8 )                                                                       (2.5 )
                                                                                                                                                   -------------------------------                                           ----------------------------------
Non-GAAP income from continuing operations before income taxes                                                                                          121.9                                                     126.5  
                                                                                                                                                   -------------------------------                                           ----------------------------------
    Non-GAAP net income                                                                                                                                  82.2                                                      84.8  
                                                                                                                                                   -------------------------------                                           ----------------------------------
Tax provision                                                                                                                                            39.7                                                      41.7  
                                                                                                                                                   ===============================                                           ==================================
Non-GAAP tax rate                                                                                                                                          33 %                                                                         33 %
                                                                                                                                                                                                                                            
 
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1
2016 GUIDANCE
(Unaudited)
 
Q1 2016 Revenue Growth Guidance
                                                              Three Months Ended                                                                                                                   Three Months Ending
                                                                                                                                  -----------------------------------                                                                                    -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           February 28, 2015                                                                                                                                                                                                February 29, 2016
                                                                                                                                  -----------------------------------                                                                                    -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In millions)                                                                                                                                                                                                                                                         Low                  % Change                 High                       % Change
GAAP revenue                                                                                                                           $   81.4                                                                                                           $ 91.2                                                                  12 %                                               $ 93.2                                                                        14 %
Acquisition-related adjustments - revenue (1)                                                                                          $   14.1                                                                                        $  0.8                                              (94 )%                                              $  0.8                                                    (94 )%
                                                                                                                                  ------ ------ --------------------                                                                                     -- ---- --------------------                                           ---- ----                                           -- ---- --------------------                                           ---------- ---------
Non-GAAP revenue                                                                                                                       $   95.5                                                                                        $ 92.0                                               (4 )%                                              $ 94.0                                                     (2 )%
                                                                                                                                  ====== ====== ====================                                                                                     == ==== ====================                                           ==== ====                                           == ==== ====================                                           ========== =========
                                                                                                                                                                                                                                                                                                                                                                                                                                                            

(1) Acquisition-related revenue constitutes revenue reflected as pre-acquisition deferred revenue by Telerik that would otherwise have been recognized but for the purchase accounting treatment of the acquisition of Telerik. Since GAAP accounting requires the elimination of this revenue, GAAP results alone do not fully capture all of our economic activities.

 
Q1 2016 Non-GAAP Earnings per Share Guidance
                                                                               Three Months Ending February 29, 2016
                                                                                                                        ----------------------------------------------------------------------------------------------------------
                                                                                                                                       Low                                High
                                                                                                                        --------------------------------                                          --------------------------------
GAAP diluted earnings per share                                                                                            $  0.06                                                                   $  0.08
    Acquisition-related revenue                                                                                               0.01                                                                      0.01
    Stock-based compensation                                                                                                  0.13                                                                      0.13
    Amortization of intangibles                                                                                               0.14                                                   0.14  
                                                                                                                        -------------------------------                                           -------------------------------
        Total adjustments                                                                                                     0.28                                                   0.28  
                                                                                                                        -------------------------------                                           -------------------------------
    Income tax adjustment                                                                                                  $ (0.07 )                                                                 $ (0.07 )
                                                                                                                        ---- ----- --------------------                                           ---- ----- --------------------
Non-GAAP diluted earnings per share                                                                                        $  0.27                                                $  0.29  
                                                                                                                        ==== ===== ====================                                           ==== ===== ====================
                                                                                                                                                                                                              

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160112006546r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160112006546/en/

SOURCE: Progress Software

Progress Software 
Investor Contact: 
Brian Flanagan, +1-781-280-4817 
flanagan@progress.com 
or 
Press Contact: 
Erica Burns, +1-888-365-2779 (x3135) 
erica.burns@progress.com


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