Press Release

Q4 and FY21 Revenue and EPS Significantly Ahead of Guidance
Integration of Kemp On Target as Acquisition Drives Projected Fiscal 2022 Revenue Growth

BEDFORD, Mass., Jan. 18, 2022 (GLOBE NEWSWIRE) -- Progress (NASDAQ: PRGS), the leading provider of products to develop, deploy and manage high-impact applications, today announced financial results for its fiscal fourth quarter and fiscal year ended November 30, 2021.

Fourth Quarter 2021 Highlights:

• Revenue of $140.1 million increased 14% year-over-year on an actual currency basis and 15% year-over-year on a constant currency basis.
• Non-GAAP revenue of $143.7 million increased 11% on both an actual currency basis and a constant currency basis.
• Annualized Recurring Revenue ("ARR") of $486 million increased 12% year-over-year on a constant currency basis.
• Operating margin was 15% and Non-GAAP operating margin was 36%.
• Diluted earnings per share was $0.33 compared to $0.39 in the same quarter last year, a decrease of 15%.
• Non-GAAP diluted earnings per share was $0.92 compared to $0.91 in the same quarter last year, an increase of 1%.

“We're very pleased with our performance throughout 2021, and especially our Q4 results that significantly beat our guidance for revenue and earnings,” said Yogesh Gupta, CEO at Progress. “We're also thrilled with the customer response and rapid integration pace of Kemp, whose acquisition we completed in November. As a leader in the Application Experience ("AX") space, Kemp fits our total growth strategy perfectly, and the acquisition will enable us to drive significant value to our shareholders while bringing a very talented team to Progress that will contribute to our future success.”

Additional financial highlights included⁽¹⁾:

	Three Months Ended
	GAAP											Non-GAAP
(In thousands, except percentages and per share amounts)	November 30, 2021				November 30, 2020				% Change			November 30, 2021				November 30, 2020				% Change
Revenue	$	140,128			$	122,385			14	%		$	143,725			$	129,063			11	%
Income from operations	$	20,358			$	18,514			10	%		$	51,627			$	48,081			7	%
Operating margin		15	%			15	%		—				36	%			37	%		(100) bps
Net income	$	14,926			$	17,661			(15)	%		$	41,292			$	41,118			—	%
Diluted earnings per share	$	0.33			$	0.39			(15)	%		$	0.92			$	0.91			1	%
Cash from operations (GAAP) /Adjusted free cash flow (Non-GAAP)	$	43,928			$	42,762			3	%		$	42,447			$	40,656			4	%

⁽¹⁾See Legal Notice Regarding Non-GAAP Financial Information

Other fiscal fourth quarter 2021 metrics and recent results included:

• Cash, cash equivalents and short-term investments were $157.4 million at the end of the quarter.
• DSO was 60 days compared to 54 days in the fiscal fourth quarter of 2020 and 54 days in the fiscal third quarter of 2021.
• On January 10, 2022, our Board of Directors declared a quarterly dividend of $0.175 per share of common stock that will be paid on March 15, 2022 to shareholders of record as of the close of business on March 1, 2022.
• On November 1, 2021, the company completed the acquisition of Kemp Technologies, Inc., a leader in the Application Experience space.

“Q4 results were outstanding across every metric and we're very pleased with such a strong close to our fiscal 2021,” said Anthony Folger, CFO at Progress. “As we begin to realize synergies from the acquisition of Kemp, we are very well positioned to deliver strong financial results in 2022 and beyond. We exit 2021 having grown our ARR by 12%, while at the same time, achieving Non-GAAP operating margins of over 40% for the second year in a row.”

Full Year Results

	Fiscal Year Ended
	GAAP											Non-GAAP
(In thousands, except percentages and per share amounts)	November 30, 2021				November 30, 2020				% Change			November 30, 2021				November 30, 2020				% Change
Revenue	$	531,313			$	442,150			20	%		$	557,304			$	456,212			22	%
Income from operations	$	116,102			$	107,728			8	%		$	229,159			$	182,761			25	%
Operating margin		22	%			24	%		(200) bps				41	%			40	%		100 bps
Net income	$	78,420			$	79,722			(2)	%		$	172,886			$	140,082			23	%
Diluted earnings per share	$	1.76			$	1.76			—	%		$	3.87			$	3.09			25	%
Cash from operations (GAAP) /Adjusted free cash flow (Non-GAAP)	$	178,530			$	144,847			23	%		$	179,395			$	142,453			26	%

2022 Business Outlook

Progress provides the following guidance for the fiscal year ending November 30, 2022 and the fiscal first quarter ending February 28, 2022, together with actual results for the same periods in the fiscal year ending November 30, 2021:

	FY 2022 Guidance				FY 2021 Actual
(In millions, except percentages and per share amounts)	FY 2022 GAAP		FY 2022 Non-GAAP		FY 2021 GAAP			FY 2021 Non-GAAP
Revenue	$597 - $607		$605 - $615		$	531		$	557
Diluted earnings per share	$1.93 - $2.03		$3.95 - $4.05		$	1.76		$	3.87
Operating margin	21%		39%			22%			41%
Cash from operations (GAAP) / Adjusted free cash flow (Non-GAAP)	$188 - $193		$185 - $190		$	179		$	179
Effective tax rate	20 - 21%		20 - 21%			18%			20%

 

	Q1 2022 Guidance				Q1 2021 Actual
(In millions, except per share amounts)	Q1 2022 GAAP		Q1 2022 Non-GAAP		Q1 2021 GAAP			Q1 2021 Non-GAAP
Revenue	$136 - $139		$139 - $142		$	121		$	132
Diluted earnings per share	$0.32 - $0.34		$0.83 - $0.85		$	0.42		$	0.95

Based on current exchange rates, the expected negative currency translation impact on Progress' fiscal year 2022 business outlook compared to 2021 exchange rates is approximately $7.5 million on GAAP and non-GAAP revenue, and approximately $0.03 on GAAP and non-GAAP diluted earnings per share. The expected negative currency translation impact on Progress' fiscal Q1 2022 business outlook compared to 2021 exchange rates on GAAP and non-GAAP revenue is approximately $2.5 million. The expected negative currency translation impact on GAAP and non-GAAP diluted earnings per share for fiscal Q1 2022 is approximately $0.01. To the extent that there are changes in exchange rates versus the current environment, this may have an impact on Progress' business outlook.

Conference Call

Progress will hold a conference call to review its financial results for the fiscal fourth quarter of 2021 at 5:00 p.m. ET on Tuesday, January 18, 2022. The call 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 800-773-2954 or +1 847-413-3731, pass code 50242105. The conference call will include 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.  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' 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 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, other offerings or our internal information technology infrastructure are compromised or subject to a successful cyber-attack, or if our software offerings contain significant coding or configuration errors, we may experience reputational harm, legal claims and financial exposure. (8) We have made acquisitions, and 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. (9) Delay or failure to realize the expected synergies and benefits of the Kemp acquisition could negatively impact our future results of operations and financial condition; and (10) The continuing impact of the coronavirus disease (COVID-19) outbreak on our employees, customers, partners, and the global financial markets could adversely affect our business, results of operations and financial condition.

For further information regarding risks and uncertainties associated with Progress' business, please refer to Progress' filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended November 30, 2020 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended February 28, 2021, May 31, 2021 and August 31, 2021. Progress undertakes no obligation to update any forward-looking statements, which speak only as of the date of this press release.

About Progress

Progress (NASDAQ: PRGS) provides the best products to develop, deploy and manage high-impact applications. Our comprehensive product stack is designed to make technology teams more productive and we have a deep commitment to the developer community, both open source and commercial alike. With Progress, organizations can accelerate the creation and delivery of strategic business applications, automate the process by which apps are configured, deployed and scaled, and make critical data and content more accessible and secure—leading to competitive differentiation and business success. Over 1,700 independent software vendors, 100,000 enterprise customers, and three million developers rely on Progress to power their applications. Learn about Progress at www.progress.com or +1-800-477-6473.

Progress and Progress Software are trademarks or registered trademarks of Progress Software Corporation and/or its subsidiaries or affiliates in the U.S. and other countries. Any other names contained herein may be trademarks of their respective owners.

Investor Contact:           
Michael Micciche           
Progress        
+1-781-850-8450            
Investor-Relations@progress.com

Press Contact:           
Erica McShane          
Progress        
+1 781-280-4000           
pr@progress.com

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended											Fiscal Year Ended
(In thousands, except per share data)	November 30, 2021				November 30, 2020				% Change			November 30, 2021				November 30, 2020				% Change
Revenue:
Software licenses	$	41,236			$	37,443			10	%		$	156,590			$	115,249			36	%
Maintenance and services		98,892				84,942			16	%			374,723				326,901			15	%
Total revenue		140,128				122,385			14	%			531,313				442,150			20	%
Costs of revenue:
Cost of software licenses		1,508				1,171			29	%			5,271				4,473			18	%
Cost of maintenance and services		15,355				14,137			9	%			58,242				49,744			17	%
Amortization of acquired intangibles		4,217				2,923			44	%			14,936				7,897			89	%
Total costs of revenue		21,080				18,231			16	%			78,449				62,114			26	%
Gross profit		119,048				104,154			14	%			452,864				380,036			19	%
Operating expenses:
Sales and marketing		37,422				32,013			17	%			125,890				100,113			26	%
Product development		26,759				24,482			9	%			103,338				88,599			17	%
General and administrative		18,793				15,302			23	%			65,128				54,004			21	%
Amortization of acquired intangibles		9,160				7,565			21	%			31,996				20,049			60	%
Restructuring expenses		5,175				4,080			27	%			6,308				5,906			7	%
Acquisition-related expenses		1,381				2,198			(37)%				4,102				3,637			13	%
Total operating expenses		98,690				85,640			15	%			336,762				272,308			24	%
Income from operations		20,358				18,514			10	%			116,102				107,728			8	%
Other expense, net		(6,159	)			(1,887	)		(226)%				(20,568	)			(11,093	)		(85)%
Income before income taxes		14,199				16,627			(15)%				95,534				96,635			(1)%
(Benefit) provision for income taxes		(727	)			(1,034	)		(30)%				17,114				16,913			1	%
Net income	$	14,926			$	17,661			(15)%			$	78,420			$	79,722			(2)%
Earnings per share:
Basic	$	0.34			$	0.39			(13)%			$	1.79			$	1.78			1	%
Diluted	$	0.33			$	0.39			(15)%			$	1.76			$	1.76			—	%
Weighted average shares outstanding:
Basic		43,974				44,723			(2)%				43,916				44,886			(2)%
Diluted		44,853				45,140			(1)%				44,620				45,321			(2)%
Cash dividends declared per common share	$	0.175			$	0.175			—	%		$	0.700			$	0.670			4	%

 

Stock-based compensation is included in the condensed consolidated statements of operations, as follows:
Cost of revenue	$	327			$	357			(8)	%		$	1,561			$	1,336			17	%
Sales and marketing		1,376				1,267			9	%			6,055				4,462			36	%
Product development		1,925				1,768			9	%			8,104				7,286			11	%
General and administrative		4,111				2,731			51	%			14,004				10,398			35	%
Total	$	7,739			$	6,123			26	%		$	29,724			$	23,482			27	%

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands)	November 30, 2021			November 30, 2020
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	157,373		$	105,995
Accounts receivable, net		99,815			84,040
Unbilled receivables and contract assets		25,816			24,917
Other current assets		39,549			23,983
Assets held for sale		15,255			—
Total current assets		337,808			238,935
Property and equipment, net		14,345			29,817
Goodwill and intangible assets, net		958,337			704,473
Right-of-use lease assets		25,253			30,635
Long-term unbilled receivables and contract assets		17,464			17,133
Other assets		10,330			20,789
Total assets	$	1,363,537		$	1,041,782
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and other current liabilities	$	84,215		$	70,899
Current portion of long-term debt, net		25,767			18,242
Short-term operating lease liabilities		7,926			7,015
Short-term deferred revenue		205,021			166,387
Total current liabilities		322,929			262,543
Long-term debt, net		239,992			364,260
Long-term operating lease liabilities		23,130			26,966
Long-term deferred revenue		47,359			26,908
Convertible senior notes, net		294,535			—
Other long-term liabilities		23,103			15,092
Shareholders' equity:
Common stock and additional paid-in capital		354,676			306,244
Retained earnings		57,813			39,769
Total shareholders' equity		412,489			346,013
Total liabilities and shareholders' equity	$	1,363,537		$	1,041,782

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)  

	Three Months Ended								Fiscal Year Ended
(In thousands)	November 30, 2021				November 30, 2020				November 30, 2021				November 30, 2020
Cash flows from operating activities:
Net income	$	14,926			$	17,661			$	78,420			$	79,722
Depreciation and amortization		18,105				12,044				61,179				34,765
Stock-based compensation		7,739				6,123				29,724				23,482
Other non-cash adjustments		5,631				(2,024	)			9,763				6,287
Changes in operating assets and liabilities		(2,473	)			8,958				(556	)			591
Net cash flows from operating activities		43,928				42,762				178,530				144,847
Capital expenditures		(1,913	)			(3,098	)			(4,654	)			(6,517	)
Issuances of common stock, net of repurchases		5,786				(37,927	)			(19,967	)			(48,901	)
Dividend payments to shareholders		(8,189	)			(7,542	)			(31,561	)			(29,900	)
Payments for acquisitions, net of cash acquired		(253,961	)			(213,057	)			(253,961	)			(213,057	)
Proceeds from the issuance of debt, net of payment of issuance costs		—				98,500				—				98,500
Payments of principal on long-term debt		(5,644	)			(3,763	)			(117,313	)			(11,288	)
Proceeds from issuance of Notes, net of issuance costs		—				—				349,196				—
Purchase of capped calls		—				—				(43,056	)			—
Proceeds from sale of long-lived assets, net		—				889				—				889
Other		(6,311	)			(888	)			(5,836	)			(2,263	)
Net change in cash, cash equivalents and short-term investments		(226,304	)			(124,124	)			51,378				(67,690	)
Cash, cash equivalents and short-term investments, beginning of period		383,677				230,119				105,995				173,685
Cash, cash equivalents and short-term investments, end of period	$	157,373			$	105,995			$	157,373			$	105,995

RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES - FOURTH QUARTER
(Unaudited)

	Three Months Ended														% Change
(In thousands, except per share data)	November 30, 2021							November 30, 2020							Non-GAAP
Adjusted revenue:
GAAP revenue	$	140,128						$	122,385
Acquisition-related revenue(1)		3,597							6,678
Non-GAAP revenue	$	143,725			100	%		$	129,063			100	%		11	%
Adjusted income from operations:
GAAP income from operations	$	20,358			15	%		$	18,514			15	%
Amortization of acquired intangibles		13,377			9	%			10,488			8	%
Stock-based compensation		7,739			5	%			6,123			4	%
Restructuring expenses and other		5,175			4	%			4,080			3	%
Acquisition-related revenue(1) and expenses		4,978			3	%			8,876			7	%
Non-GAAP income from operations	$	51,627			36	%		$	48,081			37	%		7	%
Adjusted net income:
GAAP net income	$	14,926			11	%		$	17,661			14	%
Amortization of acquired intangibles		13,377			9	%			10,488			8	%
Stock-based compensation		7,739			5	%			6,123			5	%
Restructuring expenses and other		5,175			4	%			4,080			3	%
Acquisition-related revenue(1) and expenses		4,978			3	%			8,876			7	%
Amortization of discount on Notes		2,861			2	%			—			—	%
Provision for income taxes		(7,764	)		(5)%				(6,110	)		(5)%
Non-GAAP net income	$	41,292			29	%		$	41,118			32	%		—	%
Adjusted diluted earnings per share:
GAAP diluted earnings per share	$	0.33						$	0.39
Amortization of acquired intangibles		0.30							0.23
Stock-based compensation		0.17							0.14
Restructuring expenses and other		0.12							0.09
Acquisition-related revenue(1) and expenses		0.11							0.20
Amortization for discount on Notes		0.06							—
Provision for income taxes		(0.17	)						(0.14	)
Non-GAAP diluted earnings per share	$	0.92						$	0.91						1	%
Non-GAAP weighted avg shares outstanding - diluted		44,853							45,140						(1)%
(1)Acquisition-related revenue constitutes revenue reflected as pre-acquisition deferred revenue that would otherwise have been recognized but for the purchase accounting treatment of acquisitions. Since GAAP accounting requires the elimination of this revenue, GAAP results alone do not fully capture all of our economic activities.

RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES - FISCAL YEAR
(Unaudited)

	Fiscal Year Ended														% Change
(In thousands, except per share data)	November 30, 2021							November 30, 2020							Non-GAAP
Adjusted revenue:
GAAP revenue	$	531,313						$	442,150
Acquisition-related revenue(1)		25,991							14,062
Non-GAAP revenue	$	557,304			100	%		$	456,212			100	%		22	%
Adjusted income from operations:
GAAP income from operations	$	116,102			22	%		$	107,728			24	%
Amortization of acquired intangibles		46,932			8	%			27,946			6	%
Stock-based compensation		29,724			5	%			23,482			5	%
Restructuring expenses and other		6,308			1	%			5,906			1	%
Acquisition-related revenue(1) and expenses		30,093			5	%			17,699			4	%
Non-GAAP income from operations	$	229,159			41	%		$	182,761			40	%		25	%
Adjusted net income:
GAAP net income	$	78,420			15	%		$	79,722			18	%
Amortization of acquired intangibles		46,932			8	%			27,946			6	%
Stock-based compensation		29,724			6	%			23,482			5	%
Restructuring expenses and other		6,308			1	%			5,906			1	%
Acquisition-related revenue(1) and expenses		30,093			5	%			17,699			4	%
Amortization of discount on Notes		7,209			1	%			—			—	%
Provision for income taxes		(25,800	)		(5)%				(14,673	)		(3)%
Non-GAAP net income	$	172,886			31	%		$	140,082			31	%		23	%
Adjusted diluted earnings per share:
GAAP diluted earnings per share	$	1.76						$	1.76
Amortization of acquired intangibles		1.05							0.62
Stock-based compensation		0.67							0.51
Restructuring expenses and other		0.14							0.13
Acquisition-related revenue(1) and expenses		0.67							0.39
Amortization of discount on Notes		0.16							—
Provision for income taxes		(0.58	)						(0.32	)
Non-GAAP diluted earnings per share	$	3.87						$	3.09						25	%
Non-GAAP weighted avg shares outstanding - diluted		44,620							45,321						(2)%
(1)Acquisition-related revenue constitutes revenue reflected as pre-acquisition deferred revenue that would otherwise have been recognized but for the purchase accounting treatment of acquisitions. Since GAAP accounting requires the elimination of this revenue, GAAP results alone do not fully capture all of our economic activities.

OTHER NON-GAAP FINANCIAL MEASURES
(Unaudited)

Quarter to Date Adjusted Free Cash Flow
(In thousands)	Q4 2021				Q4 2020				% Change
Cash flows from operations	$	43,928			$	42,762			3	%
Purchases of property and equipment		(1,913	)			(3,098	)		(38)%
Free cash flow		42,015				39,664			6	%
Add back: restructuring payments		432				992			(56)%
Adjusted free cash flow	$	42,447			$	40,656			4	%

 

Year to Date Adjusted Free Cash Flow
(In thousands)	FY 2021				FY 2020				% Change
Cash flows from operations	$	178,530			$	144,847			23	%
Purchases of property and equipment		(4,654	)			(6,517	)		(29)%
Free cash flow		173,876				138,330			26	%
Add back: restructuring payments		5,519				4,123			34	%
Adjusted free cash flow	$	179,395			$	142,453			26	%

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2022 GUIDANCE
(Unaudited)

Fiscal Year 2022 Revenue Guidance
	Fiscal Year Ended			Fiscal Year Ending
	November 30, 2021			November 30, 2022
(In millions)				Low			% Change			High			% Change
GAAP revenue	$	531.3		$	596.5		12	%		$	606.5		14	%
Acquisition-related adjustments - revenue(1)		26.0			8.5		(67)%				8.5		(67)%
Non-GAAP revenue	$	557.3		$	605.0		9	%		$	615.0		10	%
(1)Acquisition-related revenue constitutes revenue reflected as pre-acquisition deferred revenue that would otherwise have been recognized but for the purchase accounting treatment of acquisitions. Since GAAP accounting requires the elimination of this revenue, GAAP results alone do not fully capture all of our economic activities. Acquisition-related revenue adjustments relate to Ipswitch and Chef.

 

Fiscal Year 2022 Non-GAAP Operating Margin Guidance
	Fiscal Year Ending November 30, 2022
(In millions)	Low				High
GAAP income from operations	$	125.0			$	130.0
GAAP operating margin		21	%			21	%
Acquisition-related revenue		8.5				8.5
Restructuring expense		1.2				1.2
Stock-based compensation		33.0				33.0
Acquisition-related expenses		0.8				0.8
Amortization of intangibles		69.3				69.3
Total adjustments		112.8				112.8
Non-GAAP income from operations	$	237.8			$	242.8
Non-GAAP operating margin		39	%			39	%

 

Fiscal Year 2022 Non-GAAP Earnings per Share and Effective Tax Rate Guidance
	Fiscal Year Ending November 30, 2022
(In millions, except per share data)	Low				High
GAAP net income	$	86.1			$	90.6
Adjustments (from previous table)		112.8				112.8
Income tax adjustment(2)		(22.5	)			(22.5	)
Non-GAAP net income	$	176.4			$	180.9
GAAP diluted earnings per share	$	1.93			$	2.03
Non-GAAP diluted earnings per share	$	3.95			$	4.05
Diluted weighted average shares outstanding		44.7				44.7
(2)Tax adjustment is based on a non-GAAP effective tax rate of approximately 21% for Low and 20% for High, calculated as follows:
Non-GAAP income from operations	$	237.8			$	242.8
Other (expense) income		(15.7	)			(15.7	)
Non-GAAP income from continuing operations before income taxes		222.1				227.1
Non-GAAP net income		176.4				180.9
Tax provision	$	45.7			$	46.2
Non-GAAP tax rate		21	%			20	%

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2022 GUIDANCE
(Unaudited)

Fiscal Year 2022 Adjusted Free Cash Flow Guidance
	Fiscal Year Ending November 30, 2022
(In millions)	Low				High
Cash flows from operations (GAAP)	$	188			$	193
Purchases of property and equipment		(6	)			(6	)
Add back: restructuring payments		3				3
Adjusted free cash flow (non-GAAP)	$	185			$	190

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1 2022 GUIDANCE
(Unaudited)

Q1 2022 Revenue Guidance
	Three Months Ended			Three Months Ending
	February 28, 2021			February 28, 2022
(In millions)				Low			% Change			High			% Change
GAAP revenue	$	121.3		$	136.4		12	%		$	139.4		15	%
Acquisition-related adjustments - revenue(1)		10.5			2.6		(75)%				2.6		(75)%
Non-GAAP revenue	$	131.8		$	139.0		5	%		$	142.0		8	%
(1)Acquisition-related revenue constitutes revenue reflected as pre-acquisition deferred revenue that would otherwise have been recognized but for the purchase accounting treatment of acquisitions. Since GAAP accounting requires the elimination of this revenue, GAAP results alone do not fully capture all of our economic activities. Acquisition-related revenue adjustments relate to Ipswitch and Chef.

 

Q1 2022 Non-GAAP Earnings per Share Guidance
	Three Months Ending February 28, 2022
	Low				High
GAAP diluted earnings per share	$	0.32			$	0.34
Acquisition-related revenue		0.06				0.06
Acquisition-related expense		0.01				0.01
Stock-based compensation		0.17				0.17
Amortization of intangibles		0.38				0.38
Restructuring expense		0.02				0.02
Total adjustments		0.64				0.64
Income tax adjustment		(0.13	)			(0.13	)
Non-GAAP diluted earnings per share	$	0.83			$	0.85

Source: Progress Software Corporation