Core Insights - Progress MOVEit managed file transfer software has been awarded the 2025 Best Software Award from G2 in the Best IT Infrastructure Products category, marking its continued leadership in the MFT and IT infrastructure sectors [1][2] - MOVEit was one of only 13 products to retain its position on the award list from the previous year, out of 1,856 eligible products [1] - The G2 Best Software Awards are based on authentic user reviews and market presence data, emphasizing the software's value in secure file transfer and compliance [2] Product Features - MOVEit software has evolved to meet the demands of secure file transfer, providing a trusted, scalable, and efficient solution recognized for its leadership and innovation [3] - It promotes secure, automated, and compliant file transfer, contrasting with traditional methods like FTP and email, thereby reducing inefficiencies and risks [4] - The software is trusted by enterprises in highly regulated industries, including banking, healthcare, and government, to automate and protect sensitive file transfers [7] Security and Compliance - MOVEit provides advanced encryption, access controls, and compliance certifications, including ISO 27001, SOC 2 Type 2, FIPS 140-2, GDPR, HIPAA, and PCI 4.0 [7] - The software enhances file transfer automation, reducing manual errors and increasing efficiency through workflow automation [7] Scalability and Control - MOVEit offers flexible cloud and on-premises deployment options with built-in high availability and disaster recovery solutions, ensuring secure and uninterrupted file transfers at scale [7] - It provides broad visibility and control, allowing organizations to maintain oversight from high-level task tracking to granular audit logs [7]

Core Insights - Progress MOVEit managed file transfer software has been awarded the 2025 Best Software Award from G2 in the Best IT Infrastructure Products category, marking its continued leadership in the MFT and IT infrastructure sectors [1][2] - MOVEit was one of only 13 products to retain its position on the award list from the previous year, out of 1,856 eligible products [1] - The G2 Best Software Awards are based on authentic user reviews and market presence data, emphasizing the software's value in secure and efficient file transfers [2] Product Features - MOVEit software has evolved to meet the increasing demands for secure file transfer, providing a trusted, scalable, and efficient solution [3] - It promotes secure, automated, and compliant file transfer, distinguishing itself from traditional methods like FTP and email [4] - The software is recognized for its advanced encryption, access controls, and compliance certifications, including ISO 27001, SOC 2 Type 2, FIPS 140-2, GDPR, HIPAA, and PCI 4.0 [7] - MOVEit offers file transfer automation to reduce manual errors and increase efficiency through workflow automation [7] - It provides broad visibility and control, allowing organizations to maintain oversight from high-level task tracking to granular audit logs [7] - The software supports scalability and high availability with flexible cloud and on-premises deployment options, ensuring secure and uninterrupted file transfers [7]

This presentation contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Progress has identified some of these forward-looking statements 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. ...

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. For th ...

Progress Software (PRGS) came out with quarterly earnings of $1.31 per share, beating the Zacks Consensus Estimate of $1.04 per share. This compares to earnings of $1.25 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 25.96%. A quarter ago, it was expected that this business software maker would post earnings of $1.21 per share when it actually produced earnings of $1.33, delivering a surprise of 9.92%. While Progress Softwar ...

Financial Data and Key Metrics Changes - Annualized recurring revenue (ARR) increased by 48% year-over-year in constant currency, primarily driven by ShareFile, with a net retention rate surpassing 100% [10][35] - Revenues for the quarter reached $238 million, reflecting a 30% increase in constant currency, indicating steady demand for the company's solutions [10][39] - Earnings per share (EPS) of $1.31 significantly exceeded the upper end of the guidance range, demonstrating effective execution and expense management [11][43] - Operating margins stood at 39%, showcasing a focus on expense management and efficient integration of ShareFile [11][43] Business Line Data and Key Metrics Changes - The integration of ShareFile is progressing well, contributing significantly to ARR and revenues, with all integration milestones on track or ahead of plan [12][16] - SaaS revenue has increased from approximately 3% to nearly 30% of total revenue due to the acquisition of ShareFile [17] Market Data and Key Metrics Changes - The company has not observed any disruptions from macroeconomic uncertainties, particularly in its federal government business, and continues to monitor developments closely [14][90] - Customer wins in the financial services sector highlight the effectiveness of ShareFile's AI capabilities in enhancing operational efficiency and compliance [24][25] Company Strategy and Development Direction - The company is focused on prudent capital allocation and plans to continue aggressive debt repayment while exploring M&A opportunities [13][33] - A universal shelf registration statement has been filed to enhance agility in accessing capital markets for future growth strategies [21][23] - The company aims to leverage its expertise in SaaS to pursue acquisitions that align with its growth strategy, with a preference for SaaS assets due to their predictable revenue streams [68][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current operating environment, emphasizing the trust customers have in the company [34][91] - The outlook for Q2 and the full year remains consistent, with expectations for revenue between $958 million and $970 million, reflecting a stable growth trajectory [47][48] Other Important Information - The company repurchased $30 million of its stock and paid down $30 million on its revolving credit line, adjusting its annual share repurchase forecast from $80 million to $70 million [13][45] - The company expects to fully integrate ShareFile by the end of the fiscal year and continue to focus on operational efficiency [33][34] Q&A Session Summary Question: Insights on ShareFile's SMB customer behavior amidst macroeconomic changes - Management noted that ShareFile remains a mission-critical solution for its customers, and business has been healthy despite broader economic uncertainties [56][58] Question: Impact of SaaS acquisitions on gross margins - Management indicated that the ShareFile acquisition had gross margins above 80%, and future acquisitions are expected to maintain similar margins, enhancing overall profitability [60][62] Question: Future focus on SaaS acquisitions - Management confirmed a strategic inclination towards SaaS acquisitions due to their predictable revenue, while not completely ruling out on-premise opportunities [68][70] Question: Guidance and FX headwinds - Management acknowledged a slight FX benefit but maintained a cautious outlook for the full year, emphasizing operational performance over currency fluctuations [73][74] Question: Decline in ARR quarter-over-quarter - Management explained that the slight decline in ARR is typical during the transition from Q4 to Q1 due to the timing of maintenance contract renewals [78] Question: Revenue generation from AI initiatives - Management stated that while AI offerings are gaining traction, they do not yet represent a significant revenue stream, and the focus remains on finding relevant acquisition targets with AI capabilities [81][85] Question: Geopolitical impacts on international operations - Management reported no significant changes in international markets due to geopolitical factors, maintaining steady execution and customer trust [90][92]

Revenue Performance - Total revenue for the three months ended February 28, 2025, was $238.0 million, representing a 29% increase compared to $184.7 million for the same period in 2024[71] - ShareFile contributed $63.6 million to revenue in the first quarter of fiscal year 2025 following its acquisition[71] - Software license revenue decreased by 9% to $58.4 million, down from $64.1 million, accounting for 25% of total revenue[72] - Maintenance, SaaS, and professional services revenue increased by 49% to $179.6 million, representing 75% of total revenue[73] - North America generated $154.6 million in revenue, a 44% increase from $107.3 million, accounting for 65% of total revenue[74] Profitability and Expenses - Gross profit increased by 26% to $191.8 million, with a gross margin of 81%[79] - Sales and marketing expenses rose by 31% to $51.3 million, representing 22% of total revenue[80] - Product development costs increased by 33% to $46.4 million, maintaining 19% of total revenue[81] - General and administrative expenses increased by 20% to $25.6 million, accounting for 11% of total revenue[82] - Amortization of intangibles increased by 48% to $25.8 million, representing 11% of total revenue due to the acquisition of ShareFile[83] - Cyber vulnerability response expenses decreased by 25% year-over-year, totaling $737,000 for the three months ended February 28, 2025, compared to $987,000 for the same period in 2024[84] - Restructuring expenses increased by 199%, amounting to $7,029,000 for the three months ended February 28, 2025, up from $2,349,000 in the prior year[86] - Acquisition-related expenses rose by 255%, reaching $2,490,000 for the three months ended February 28, 2025, compared to $702,000 in the same period of 2024[87] Income and Cash Flow - Income from operations decreased by 7%, totaling $32,426,000 for the three months ended February 28, 2025, down from $35,006,000 in the prior year[88] - Net income fell by 52%, amounting to $10,946,000 for the three months ended February 28, 2025, compared to $22,639,000 for the same period in 2024[91] - Net cash flows from operating activities were $68,947,000 for the three months ended February 28, 2025, compared to $70,504,000 in the same period of 2024[104] - Cash and cash equivalents increased by $6.1 million from the end of fiscal year 2024, totaling $124,161,000 as of February 28, 2025[102] Recurring Revenue and Customer Retention - Annualized Recurring Revenue (ARR) increased by 48% year-over-year, reaching $836 million as of February 28, 2025, up from $566 million in the prior year[99] - Net retention rates remained stable, generally ranging between 100% and 102% for all periods presented, indicating strong customer retention[101] Strategic Decisions and Risks - The company suspended its quarterly dividend to redirect capital towards debt repayment and future M&A activities following the ShareFile acquisition[110] - MOVEit Transfer products were attacked, leading to compromised personal data and ongoing class action lawsuits[114] - The litigation related to the MOVEit Vulnerability is in an early stage, with motions to dismiss filed but not yet ruled upon[114] - Future expenses and liabilities from the MOVEit Vulnerability are expected to be mitigated by insurance[115] - No significant changes to market risk disclosures were noted during the first three months of fiscal year 2025[117]

Financial Performance - Annualized Recurring Revenue (ARR) reached $836 million, growing 48% year-over-year[1] - Total revenue for Q1 2025 was $238 million, an increase of 29% year-over-year[3] - Net income decreased by 52% to $10.946 million compared to $22.639 million in Q1 2024[3] - Diluted earnings per share (EPS) was $0.24, a decrease of 53% from $0.51 in the same quarter last year[3] - Operating margin was 14%, down from 19% in the same quarter last year, a decrease of 500 basis points[3] - Non-GAAP income from operations increased to $93,595,000 for the three months ended February 28, 2025, up 22% from $76,756,000 in the prior year[16] - Cash flows from operations for the three months ended February 28, 2025, were $68,947,000, a decrease of 2% from $70,504,000 in the prior year[17] - Adjusted free cash flow for the three months ended February 28, 2025, was $73,211,000, reflecting a 1% increase from $72,204,000 in the same period last year[17] - The company reported capital expenditures of $1,290,000 for the three months ended February 28, 2025, compared to $309,000 in the same period last year, representing a 317% increase[17] Guidance and Projections - Guidance for FY 2025 revenue is projected between $958 million and $970 million[7] - The company expects GAAP income from operations for fiscal year 2025 to be between $137.2 million and $145.7 million, with an operating margin of 14% to 15%[18] - Non-GAAP diluted earnings per share for fiscal year 2025 is projected to be between $5.25 and $5.37, compared to GAAP diluted earnings per share of $1.19 to $1.35[19] - The company anticipates total adjustments for fiscal year 2025 to be $227.3 million, which includes acquisition-related expenses and restructuring expenses[18] Customer Metrics - Net Retention Rate surpassed 100%, indicating strong customer relationships[2] - The expectation is that contracts with terms less than one year will renew at rates equal to or better than annual or multi-year contracts, historically achieving favorable renewal rates[27] - Net Retention Rate (NRR) is calculated by comparing the ARR from a cohort of customers from 12 months prior to the current period, reflecting expansion and attrition, and is not derived from GAAP measures[31] Cash and Shareholder Actions - Cash and cash equivalents at the end of the quarter were $124.2 million[6] - The company repurchased $30 million of its shares during the quarter[4] Integration and Operational Challenges - The ShareFile integration is on track for completion by year-end 2025[4] - The company has indicated that it will continue to incur expenses related to the MOVEit vulnerability, impacting future operating expenses[25] - The company acknowledges that future acquisitions may involve unanticipated costs or integration issues that could disrupt operations[32] Revenue Recognition and ARR - Annualized Recurring Revenue (ARR) is a significant performance metric, representing the annualized revenue from all active and contractually binding term-based contracts, which is expected to continue as the majority of revenues[27] - The calculation of ARR includes revenue from maintenance, software upgrade rights, public cloud, and on-premises subscription-based transactions, helping to mitigate revenue fluctuations due to seasonality[27] - ARR includes amounts from monthly auto-renewing contracts, which may exceed total contract value at the end of the reporting period[28] - Revenue from term-based licenses is recognized upfront under ASC 606, with expectations for renewal at the end of the contract term[29] - The company emphasizes that ARR is not a forecast and may not be indicative of future revenue, as active contracts may or may not be renewed[31] Risks and Forward-Looking Statements - Forward-looking statements indicate potential risks including economic conditions, international sales risks, and cybersecurity threats that could materially affect business outcomes[32]

First Quarter 2025 Highlights: "We're extremely pleased with our excellent Q1 results," said Yogesh Gupta, CEO of Progress. "We are ahead, or on plan, with all our ShareFile integration milestones, which are providing significant contributions to ARR and revenues, as well as expense savings. Our solid performance on the top line was again driven by our product portfolio across the board, with our data platform and infrastructure management products having a particularly solid quarter. Our Net Retention Rate ...

Core Viewpoint - Progress Software (PRGS) is expected to report quarterly earnings of $1.04 per share, a decline of 16.8% year-over-year, while revenues are forecasted to increase by 27.7% to $235.85 million [1] Earnings Estimates - Analysts have maintained the consensus EPS estimate for the quarter over the last 30 days, indicating a collective reevaluation of initial estimates [1][2] - Revisions to earnings estimates are crucial for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock performance [2] Revenue Projections - Revenue from Services is projected to be $54.18 million, reflecting a year-over-year increase of 191.9% [4] - Revenue from Maintenance is expected to reach $107.98 million, indicating a 5.8% increase from the prior-year quarter [4] - Combined Revenue from Maintenance and Services is forecasted at $162.16 million, representing a 34.5% year-over-year change [4] - Revenue from Software Licenses is estimated at $73.37 million, suggesting a 14.5% increase year-over-year [5] Stock Performance - Progress Software shares have shown a return of -2.7% over the past month, slightly outperforming the Zacks S&P 500 composite's -2.9% change [6] - The company holds a Zacks Rank 3 (Hold), indicating expectations to mirror overall market performance in the near future [6]