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4-Traders Homepage  >  Equities  >  Nasdaq  >  Progress Software Corporation    PRGS

Delayed Quote. Delayed  - 01/20 10:00:01 pm
28.18 USD   +0.57%
01/17 PROGRESS SOFTWA : reports 4Q loss
01/16 PROGRESS SOFTWA : reports 4Q loss
01/16 PROGRESS : Reports 2016 Fiscal Fourth Quarter and Year End Results
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Progress Software Corporation : Post Earnings Coverage as Progress Software Adjusted Earnings Up; Announced Approximately 20% Reduction in Workforce

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01/19/2017 | 02:23pm CET

Upcoming AWS Coverage on Salesforce.com

LONDON, UK / ACCESSWIRE / January 19, 2017 / Active Wall St. announces its post-earnings coverage on Progress Software Corp. (NASDAQ: PRGS). The Company disclosed its fourth quarter and fiscal 2016 results on January 16, 2017. The business software maker earnings results outperformed market estimates, however revenue numbers lagged behind expectations. Register with us now for your free membership at:

http://www.activewallst.com/register/

One of Progress Software's competitors within the Application Software space, Salesforce.com Inc. (NYSE: CRM), is estimated to report earnings on February 22, 2017. AWS will be initiating a research report on Salesforce.com following the release of its earnings results.

Today, AWS is promoting its earnings coverage on PRGS; touching on CRM. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=PRGS

http://www.activewallst.com/registration-3/?symbol=CRM

Earnings Reviewed

For the three months ended November 30, 2016, Progress Software reported revenue of $117.7 million compared to $112.7 million in Q4 FY15, a y-o-y increase of 4% on an actual currency basis and 5% on a constant currency basis. On a non-GAAP basis, revenue was $118.0 million in the reported quarter compared to $115.4 million in the year earlier same quarter. For FY16, the Company's revenue was $405.3 million compared to $377.6 million in FY15.

During Q4 FY16, Progress Software's operating margin was 36%, up 100 basis points versus Q4 FY15. For FY16, the Company's operating margin was 30% compared to 29% in FY15, primarily due to lower G&A expenses related to decreased costs for external services.

On a GAAP basis, diluted loss per share was $1.52 in Q4 FY16 (reflecting the impairment charge $92.0 million, or a diluted loss per share of $1.89, as a result of reduced future growth expectations within its Application Development & Deployment (AD&D) segment) compared to a diluted loss per share of $0.19 in Q4 FY15. On a non-GAAP basis, diluted earnings per share were $0.62 in the reported quarter compared to $0.53 in the year earlier comparable quarter. Analysts were expecting the Company to post earnings of $0.56 per share on revenue of $124 million.

Segment Results

For Q4 FY16, Progress Software generated License revenue of $49 million, an increase of 8% compared to $45 million in the year ago corresponding period. The increase in license revenue for Q4 FY16 was primarily due to a multi-million dollar perpetual license deal for its Rollbase product within its AD&D segment and increased revenue from the DCI OEM partners as a result of an earlier-than-expected OEM renewal.

The Company's Maintenance revenue during the reported quarter was $60.19 million, a decrease of 3% from $60.46 million. The decrease was primarily due to lower OpenEdge maintenance revenue in both North America and EMEA, in part due to a new multi-year distribution agreement that we signed with one of its OpenEdge partners in Q4 FY15.

On segmental basis, Progress Software's OpenEdge revenue was $79 million for Q4 FY16, a decrease of 3%. For FY16, OpenEdge revenue was $282 million, down 5% compared to FY15. OpenEdge maintenance renewals were well above 90% for both Q4 FY16 and FY16. SaaS-influenced revenue was $5 million for the reported quarter, growth of 10% on a y-o-y basis, and $19 million for FY16, growth of 8%.

Progress' DCI segment revenues were up 13% for the reported quarter and 27% for FY16. The Company's multi-year license backlog at the end of Q4 FY16 is $25.2 million, an increase of 41% on a y-o-y basis. Progress Software's AD&D segment's bookings were $24 million for the reported quarter, a decrease of 1% versus Q4 FY15. For FY16, bookings were $85 million, flat compared to FY15. Revenue for the Company's AD&D segment was $23 million for Q4 FY16, an increase of 22% versus Q4 FY15, and $83 million for FY15, an increase of 6% on a y-o-y basis.

Workforce Reductions and other Developments

Progress Software announced that with the adoption of its new product strategy, Progress Software will discontinue its investment in its Digital Factory offering and will re-align its resources consistent with its core operating approach. To that end, the Company will implement restructuring efforts that will include consolidating facilities, implementing a simplified organizational structure, and reducing marketing and other external expenses. In addition, Progress Software intends to reduce headcount by approximately 450 employees, totaling over 20% of the Company's workforce. Progress Software expects to reduce net annual run-rate costs by approximately $20 million by the end of FY17.

Balance Sheet

Progress Software ended Q4 FY16 with cash, cash equivalents, and short-term investments of $249.8 million. After making scheduled principal payments during the reported quarter, the Company's ending debt balance for Q4 FY16 was $135 million. Deferred revenue was $138 million at the end of Q4 FY16 compared to $134 million in Q4 FY15, an increase of $4 million.

For Q4 FY16, Progress Software's adjusted free cash flow was approximately $32 million, a 14% increase compared to Q4 FY15. The Company's FY16 adjusted free cash flow was $101 million. Cash from operations was $33.9 million in Q4 FY16 compared to $27.6 million in the same quarter last year.

Progress Software repurchased 287,000 shares in Q4 FY16 at a cost of approximately $7.7 million. For FY16, the Company repurchased 3.1 million shares at a cost of approximately $79 million. On January 11, 2017, Progress Software's Board of Directors declared a quarterly dividend of $0.125 per share of common stock payable on March 15, 2017, to shareholders of record as of the close of business on March 01, 2017.

Outlook

For FY17, Progress Software is forecasting revenue to be in the range of $388 million and $396 million. The Company is projecting earnings per share of $1.64 to $1.69. The Company expects operating margin for FY17 in the range of 32% to 33%. Adjusted free cash flow is projected to be between $95 million to $100 million.

For Q1 FY 17, Progress Software is estimating revenue to be between $86 million and $89 million, and earnings per share in the band of $0.25 to $0.27 compared to $0.27 in Q1 FY16.

Stock Performance

On Wednesday, January 18, 2017, the stock closed the trading session at $28.07, climbing 1.59% from its previous closing price of $27.63. A total volume of 493.01 thousand shares have exchanged hands, which was higher than the 3-month average volume of 219.92 thousand shares. Progress Software's stock price advanced 3.98% in the last three months. The Company's shares have a dividend yield of 1.78%.

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AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

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Financials ($)
Sales 2017 390 M
EBIT 2017 128 M
Net income 2017 31,0 M
Debt 2017 2,33 M
Yield 2017 -
P/E ratio 2017 75,05
P/E ratio 2018 31,66
EV / Sales 2017 3,51x
EV / Sales 2018 3,51x
Capitalization 1 369 M
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Progress Software Corporat Technical Analysis Chart | PRGS | US7433121008 | 4-Traders
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Mean consensus OUTPERFORM
Number of Analysts 4
Average target price 30,0 $
Spread / Average Target 6,5%
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Managers
NameTitle
Yogesh K. Gupta Chief Executive Officer & Director
John Richard Egan Non-Executive Chairman
Jerry Rulli Chief Operating Officer
Kurt J. Abkemeier Chief Financial Officer
Michael L. Mark Lead Independent Director
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