Press Release

BEDFORD, Mass.--(BUSINESS WIRE)-- Progress Software Corporation (NASDAQ: 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, 2014.

Revenue from continuing operations was $97.9 million in the fourth quarter compared to $91.0 million in the same quarter last year, a year over year increase of 8% on an actual currency basis and 10% on a constant currency basis.

Additional financial highlights included:

On a GAAP basis in the fiscal fourth quarter of 2014:

• Income from operations was $27.0 million compared to $23.9 million in the same quarter last year;
• Income from continuing operations was $14.5 million compared to $14.6 million in the same quarter last year;
• Net income was $14.5 million compared to $15.0 million in the same quarter last year; and
• Diluted earnings per share from continuing operations was $0.28, unchanged from the same quarter last year.

On a non-GAAP basis in the fiscal fourth quarter of 2014:

• Income from operations was $38.0 million compared to $33.5 million in the same quarter last year;
• Operating margin was 39% compared to 37% in the same quarter last year;
• Income from continuing operations was $24.1 million compared to $22.5 million in the same quarter last year; and
• Diluted earnings per share from continuing operations was $0.47 compared to $0.43 in the same quarter last year.

"Our positive momentum continued in 2014, resulting in significant growth in operating income and cash flow over the previous year," said Phil Pead, President and CEO of Progress Software. "Entering 2015, we are now able to offer application developers an unrivaled choice. With Progress, developers have seamless access to the broadest range of data sources, tools to create the most engaging user experiences and a leading platform to build mobile apps. They also benefit from the choice to build and deploy apps from scratch or take advantage of our productivity platform. Further, the recent addition of Telerik Sitefinity to our portfolio provides developers with an intuitive end-to-end web content management, digital marketing and customer analytics solution. These choices underscore our commitment to becoming the preferred destination for application developers."

Other fiscal fourth quarter 2014 metrics and recent results included:

• Cash, cash equivalents and short-term investments were $283.3 million;
• Cash from operations was $39.2 million compared to $17.9 million in the same quarter in fiscal year 2013; and
• DSO from continuing operations was 63 days, compared to 66 days in the fiscal third quarter of 2014.

In addition, as previously announced, during the fourth quarter, Progress began operating as three distinct business units: OpenEdge, Application Development and Deployment, and Data Connectivity and Integration, each with dedicated sales, product management and product marketing functions. Progress adopted segment reporting for its three business units in the fourth quarter, and this press release includes quarterly results of operations by segment for fiscal 2013 and fiscal 2014.

Also during the fourth quarter of fiscal year 2014, Progress acquired 100% of the capital stock of BravePoint, Inc. (BravePoint) from Chesapeake Utilities Corporation in exchange for an aggregate sum of $12.0 million in cash. BravePoint is based in Norcross, Georgia and is a leading provider of consulting, training and application development services designed to increase customers' profitability and competitiveness through the use of technology.

Furthermore, shortly after the fourth quarter ended, Progress completed the acquisition of privately held Telerik AD, a leading provider of application development tools, for $262.5 million. Telerik enables its 1.4 million strong developer community to create compelling user experiences across cloud, web, mobile and desktop applications. Through this acquisition, Progress now provides comprehensive cloud and on-premise platform offerings that enable developers to rapidly create beautiful applications, driven by data for any web, desktop or mobile platform. Progress funded the purchase price from a combination of existing cash resources and a $150 million term loan, which is part of a new $300 million term and revolving credit facility with JPMorgan Chase Bank, N.A. and a syndicate of other lenders. This new credit facility replaced Progress' prior $150 million revolving credit facility.

Full Year Results

On a GAAP basis in the fiscal year 2014:

• Revenue from continuing operations was $332.5 million compared to $334.0 million in fiscal year 2013;
• Income from operations was $80.7 million compared to $63.7 million in the prior fiscal year;
• Income from continuing operations was $49.5 million compared to $39.8 million in the prior fiscal year;
• Net income was $49.5 million compared to $74.9 million in the prior fiscal year;
• Diluted earnings per share from continuing operations was $0.96 compared to $0.72 in the prior fiscal year; and
• Cash from operations was $107.7 million compared to $4.6 million in the prior fiscal year.

On a non-GAAP basis in the fiscal year 2014:

• Income from operations was $117.4 million compared to $100.1 million in fiscal year 2013;
• Operating margin was 35% compared to 30% in the prior fiscal year;
• Income from continuing operations was $77.9 million compared to $66.0 million in the prior fiscal year; and
• Diluted earnings per share from continuing operations was $1.51 compared to $1.19 in the prior fiscal year.

2015 Business Outlook

Progress Software provides the following guidance for the fiscal year ending November 30, 2015:

• Non-GAAP revenue is expected to be between $425 million and $435 million;
• Non-GAAP earnings per share is expected to be between $1.37 and $1.47;
• Non-GAAP operating margin is expected to be approximately 27%;
• Free cash flow is expected to be between $90 million and $93 million; and
• Non-GAAP effective tax rate is expected to be between 33% and 34%.

Progress Software provides the following guidance for the first fiscal quarter ending February 28, 2015:

• Non-GAAP revenue is expected to be between $93 million and $96 million; and
• Non-GAAP earnings per share is expected to be between $0.22 and $0.24.

Our fiscal 2015 business outlook reflects the following:

• Full year impact of the Modulus, BravePoint, and Telerik acquisitions and related financing; and
• Our financial guidance includes the impact of the recent significant strengthening of the US dollar and is based on current exchange rates. With approximately 55% of our revenue stream outside of North America, this has a negative impact on our 2015 business outlook of $17-$18 million on non-GAAP revenue and $0.10-$0.11 cents on our non-GAAP earnings per share, when compared to 2014 actual exchange rates. To the extent that there are further changes in exchange rates versus the current environment, this may have an additional impact on our business outlook.

Free cash flow is equal to cash flows from operating activities less purchases of property and equipment and capitalized software development costs.

Conference Call

The Progress Software quarterly investor conference call to review its fiscal fourth quarter of 2014 will be broadcast live at 5:00 p.m. ET on Tuesday, January 13, 2015 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 1-888-539-3612, pass code 7867622. 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 Software website within the investor relations section after the live conference call.

Legal Notice Regarding Non-GAAP Financial Information

Progress Software 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 Software 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. 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 available on the Progress website at www.progress.com 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 strategic plans; future revenue growth, operating margin and cost savings; product development, strategic partnering and marketing initiatives; the growth rates of certain markets; and other statements regarding the future operation, direction and success of Progress's business. 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) Market acceptance of Progress's strategy and product development initiatives; (2) pricing pressures and the competitive environment in the software industry and Platform-as-a-Service market; (3) Progress's ability to successfully manage transitions to new business models and markets, including an increased emphasis on a cloud and subscription strategy; (4) uncertainties relating to Progress' acquisition of Telerik, including whether Progress will be able to realize expected benefits and anticipated synergies of the acquisition and whether Telerik's business will be successfully integrated with Progress Software's business; (5) Progress's ability to make acquisitions and to realize the expected benefits and anticipated synergies from such acquisitions; (6) the continuing uncertainty in the U.S. and international economies, which could result in fewer sales of Progress's products and may otherwise harm Progress's business; (7) business and consumer use of the Internet and the continuing adoption of Cloud technologies; (8) the receipt and shipment of new orders; (9) Progress's ability to expand its relationships with channel partners and to manage the interaction of channel partners with its direct sales force; (10) the timely release of enhancements to Progress's products and customer acceptance of new products; (11) the positioning of Progress's products in its existing and new markets; (12) variations in the demand for professional services and technical support; (13) Progress's ability to penetrate international markets and manage its international operations; and (14) changes in exchange rates. 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, 2013 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended February 28, 2014, May 31, 2014 and August 31, 2014. 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 (NASDAQ: 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 30, 2014					November 30, 2013					% Change					November 30, 2014					November 30, 2013					% Change
Revenue:
Software licenses				$	41,154				$	37,392				10	%				$	117,801				$	122,312				(4	)%
Maintenance and services				56,740					53,588					6	%				214,732					211,684					1	%
Total revenue				97,894					90,980					8	%				332,533					333,996					—	%
Costs of revenue:
Cost of software licenses				1,445					1,856					(22	)%				6,396					6,889					(7	)%
Cost of maintenance and services				8,574					5,710					50	%				24,864					26,753					(7	)%
Amortization of acquired intangibles				1,106					529					109	%				2,999					1,340					124	%
Total costs of revenue				11,125					8,095					37	%				34,259					34,982					(2	)%
Gross profit				86,769					82,885					5	%				298,274					299,014					—	%
Operating expenses:
Sales and marketing				30,085					26,911					12	%				101,496					105,997					(4	)%
Product development				13,397					14,428					(7	)%				58,965					57,336					3	%
General and administrative				13,056					13,604					(4	)%				48,292					55,994					(14	)%
Amortization of acquired intangibles				225					211					7	%				653					760					(14	)%
Restructuring expenses				265					2,856					(91	)%				2,266					11,983					(81	)%
Acquisition-related expenses				2,714					975					178	%				5,862					3,204					83	%
Total operating expenses				59,742					58,985					1	%				217,534					235,274					(8	)%
Income from operations				27,027					23,900					13	%				80,740					63,740					27	%
Other (expense) income, net				(357		)			(294		)			(21	)%				(2,936		)			(957		)			207	%
Income from continuing operations before income taxes				26,670					23,606					13	%				77,804					62,783					24	%
Provision for income taxes				12,207					8,988					36	%				28,346					23,006					23	%
Income from continuing operations				14,463					14,618					(1	)%				49,458					39,777					24	%
Income (loss) from discontinued operations, net				—					418					(100	)%				—					35,130					(100	)%
Net income				$	14,463				$	15,036				(4	)%				$	49,458				$	74,907				(34	)%
Earnings per share:
Basic:
Continuing operations				$	0.29				$	0.28				4	%				$	0.97				$	0.73				33	%
Discontinued operations				—					0.01					(100	)%				—					0.64					(100	)%
Net income per share				$	0.29				$	0.29				—	%				0.97					$	1.37				(29	)%
Diluted:
Continuing operations				$	0.28				$	0.28				—	%				$	0.96				$	0.72				33	%
Discontinued operations				—					0.01					(100	)%				—					0.63					(100	)%
Net income per share				$	0.28				$	0.29				(3	)%				$	0.96				$	1.35				(29	)%
Weighted average shares outstanding:
Basic				50,432					51,731					(3	)%				50,840					54,516					(7	)%
Diluted				51,121					52,655					(3	)%				51,466					55,379					(7	)%

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)				November 30, 2014						November 30, 2013
Assets
Current assets:
Cash, cash equivalents and short-term investments				$	283,268					$	231,440
Accounts receivable, net				68,311						66,784
Other current assets				34,094						39,587
Total current assets				385,673						337,811
Property and equipment, net				59,351						57,030
Goodwill and intangible assets, net				253,414						234,236
Other assets				4,623						53,110
Total assets				$	703,061					$	682,187
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and other current liabilities				$	60,746					$	68,186
Short-term deferred revenue				92,557						96,393
Total current liabilities				153,303						164,579
Long-term deferred revenue				3,683						1,144
Other long-term liabilities				2,830						2,810
Shareholders' equity:
Common stock and additional paid-in capital				209,778						205,307
Retained earnings				333,467						308,347
Total shareholders' equity				543,245						513,654
Total liabilities and shareholders' equity				$	703,061					$	682,187

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
				Three Months Ended											Fiscal Year Ended
(In thousands)				November 30, 2014					November 30, 2013						November 30, 2014					November 30, 2013
Cash flows from operating activities:
Net income				$	14,464				$	15,036					$	49,458				$	74,907
Depreciation and amortization				4,311					3,061						15,296					14,435
Stock-based compensation				6,679					5,039						24,873					21,399
Net gains on sales of dispositions				—					(610		)				—					(71,601		)
Other non-cash adjustments				15,545					8,985						17,777					9,432
Changes in operating assets and liabilities				(1,774		)			(13,652		)				290					(43,992		)
Net cash flows from operating activities				39,225					17,859						107,694					4,580
Capital expenditures				(1,610		)			(2,073		)				(11,801		)			(5,062		)
Redemptions and sales of auction-rate-securities				—					—						26,196					25
Issuances of common stock, net of repurchases				5,774					(30,032		)				(36,116		)			(222,107		)
Payments for acquisitions, net of cash acquired				(12,000		)			—						(24,493		)			(9,450		)
Proceeds from divestitures, net				—					—						3,300					111,120
Other				(9,413		)			3,704						(12,952		)			(2,883		)
Net change in cash, cash equivalents and short-term investments				21,976					(10,542		)				51,828					(123,777		)
Cash, cash equivalents and short-term investments, beginning of period				261,292					241,982						231,440					355,217
Cash, cash equivalents and short-term investments, end of period				$	283,268				$	231,440					$	283,268				$	231,440

RESULTS OF OPERATIONS BY SEGMENT
(In thousands)				Q1 2014					Q2 2014					Q3 2014					Q4 2014					FY 2014
Segment revenue:
OpenEdge				$	66,734				$	73,192				$	71,847				$	84,948				$	296,721
Data Connectivity and Integration				7,639					7,407					7,175					12,551					34,772
Application Development and Deployment				165					228					252					395					1,040
Total revenue				74,538					80,827					79,274					97,894					332,533
Segment costs of revenue and operating expenses:
OpenEdge				17,391					15,855					15,524					22,041					70,811
Data Connectivity and Integration				2,797					2,601					2,515					4,395					12,308
Application Development and Deployment				1,553					1,763					2,446					3,592					9,354
Total costs of revenue and operating expenses				21,741					20,219					20,485					30,028					92,473
Segment contribution margin:
OpenEdge				49,343					57,337					56,323					62,907					225,910
Data Connectivity and Integration				4,842					4,806					4,660					8,156					22,464
Application Development and Deployment				(1,388		)			(1,535		)			(2,194		)			(3,197		)			(8,314		)
Total contribution margin				52,797					60,608					58,789					67,866					240,060
Corporate expenses (1)				31,415					32,187					29,216					29,850					122,668
Non-GAAP operating income				21,382					28,421					29,573					38,016					117,392
GAAP adjustment (2)				7,380					8,141					10,142					10,989					36,652
GAAP operating income				14,002					20,280					19,431					27,027					80,740
(In thousands)				Q1 2013					Q2 2013					Q3 2013					Q4 2013					FY 2013
Segment revenue:
OpenEdge				$	74,368				$	70,929				$	69,406				$	78,805				$	293,508
Data Connectivity and Integration				9,365					10,772					7,955					11,997					40,089
Application Development and Deployment				—					4					217					178					399
Total revenue				83,733					81,705					77,578					90,980					333,996
Segment costs of revenue and operating expenses:
OpenEdge				24,579					20,063					18,988					20,045					83,675
Data Connectivity and Integration				2,582					3,132					3,090					3,593					12,397
Application Development and Deployment				—					—					589					1,023					1,612
Total costs of revenue and operating expenses				27,161					23,195					22,667					24,661					97,684
Segment contribution margin:
OpenEdge				49,789					50,866					50,418					58,760					209,833
Data Connectivity and Integration				6,783					7,640					4,865					8,404					27,692
Application Development and Deployment				—					4					(372		)			(845		)			(1,213		)
Total contribution margin				56,572					58,510					54,911					66,319					236,312
Corporate expenses (1)				35,020					34,795					33,552					32,809					136,176
Non-GAAP operating income				21,552					23,715					21,359					33,510					100,136
GAAP adjustment (2)				5,759					9,329					11,698					9,610					36,396
GAAP operating income				15,793					14,386					9,661					23,900					63,740

(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, and general and administration.
(2) The following expenses are included in the GAAP adjustment: amortization of acquired intangibles, stock-based compensation, restructuring, acquisition related, and transition expenses.

SUPPLEMENTAL INFORMATION

Revenue from continuing operations by Type
(In thousands)				Q4 2013				Q1 2014				Q2 2014				Q3 2014				Q4 2014				FY 2014				FY 2013
License				$	37,392			$	22,264			$	27,988			$	26,393			$	41,154			$	117,799			$	122,312
Maintenance				51,230				50,181				50,305				50,746				51,268				202,500				202,857
Professional services				2,358				2,093				2,534				2,135				5,472				12,234				8,827
Total revenue				$	90,980			$	74,538			$	80,827			$	79,274			$	97,894			$	332,533			$	333,996
Revenue from continuing operations by Region
(In thousands)				Q4 2013				Q1 2014				Q2 2014				Q3 2014				Q4 2014				FY 2014				FY 2013
North America				$	42,833			$	34,586			$	36,827			$	35,654			$	43,654			$	150,721			$	154,279
EMEA				35,256				29,315				33,698				32,995				35,327				131,335				133,600
Latin America				6,526				5,108				5,703				5,695				8,406				24,912				25,370
Asia Pacific				6,365				5,529				4,599				4,930				10,507				25,565				20,747
Total revenue				$	90,980			$	74,538			$	80,827			$	79,274			$	97,894			$	332,533			$	333,996

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
				Three Months Ended											Fiscal Year Ended
(In thousands, except per share data)				November 30, 2014					November 30, 2013						November 30, 2014					November 30, 2013
GAAP income from operations				$	27,027				$	23,900					$	80,740				$	63,740
GAAP operating margin				28		%			26		%				24		%			19		%
Amortization of acquired intangibles				1,331					740						3,652					2,100
Stock-based compensation (1)				6,679					5,039						24,873					19,109
Restructuring expenses				265					2,856						2,266					11,983
Acquisition-related expenses				2,427					975						5,575					3,204
Transition expenses				287					—						287					—
Total operating adjustments				10,989					9,610						36,653					36,396
Non-GAAP income from operations				$	38,016				$	33,510					$	117,393				$	100,136
Non-GAAP operating margin				39		%			37		%				35		%			30		%
GAAP income from continuing operations				$	14,463				$	14,618					$	49,458				$	39,777
Operating adjustments (from above)				10,989					9,610						36,653					36,396
Realized loss on sales of auction-rate-securities				—					—						2,554					—
Income tax adjustment				(1,383		)			(1,759		)				(10,768		)			(10,159		)
Total income from continuing operations adjustments				9,606					7,851						28,439					26,237
Non-GAAP income from continuing operations				$	24,069				$	22,469					$	77,897				$	66,014
GAAP diluted earnings per share from continuing operations				$	0.28				$	0.28					$	0.96				$	0.72
Income from continuing operations adjustments (from above)				0.19					0.15						0.55					0.47
Non-GAAP diluted earnings per share from continuing operations				$	0.47				$	0.43					$	1.51				$	1.19
Diluted weighted average shares outstanding				51,121					52,655						51,466					55,379
(1) Stock-based compensation is included in the GAAP statements of income, as follows:
Cost of revenue				$	173				$	101					$	612				$	601
Sales and marketing				907					931						4,642					3,599
Product development				1,103					1,036						5,289					4,723
General and administrative				4,496					2,971						14,330					10,186
Stock-based compensation from continuing operations				$	6,679				$	5,039					$	24,873				$	19,109

				Three Months Ended								Fiscal Year Ended
(In thousands, except per share data)				November 30, 2014				November 30, 2013				November 30, 2014				November 30, 2013
GAAP costs of revenue				$	11,125			$	8,095			$	34,259			$	34,982
GAAP operating expenses				59,742				58,985				217,534				235,274
GAAP expenses				70,867				67,080				251,793				270,256
Operating adjustments (from above)				10,989				9,610				36,653				36,396
Non-GAAP expenses				$	59,878			$	57,470			$	215,140			$	233,860

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2015 GUIDANCE
(Unaudited)
Fiscal Year 2015 Revenue Growth Guidance
				Fiscal Year Ended						Fiscal Year Ending
				November 30, 2014						November 30, 2015
(In millions)										Low					% Change				High					% Change
GAAP revenue				$	332.5					$	390.0				17	%			$	400.0				20	%
Acquisition-related adjustments - revenue (1)				$	—					$	35.0				100	%			$	35.0				100	%
Non-GAAP revenue				$	332.5					$	425.0				28	%			$	435.0				31	%

(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 2015 Non-GAAP Operating Margin Guidance
				Fiscal Year Ending November 30, 2015
(In millions)				Low						High
GAAP income from operations				$	22.4					$	26.2
GAAP operating margins				6		%				7		%
Acquisition-related revenue				35.0						35.0
Restructuring expense				5.5						5.5
Stock-based compensation				30.6						30.6
Acquisition related expense				3.4						3.4
Amortization of intangibles				16.8						16.8
Total adjustments				91.3						91.3
Non-GAAP income from operations				$	113.7					$	117.5
Non-GAAP operating margin				27		%				27		%

Fiscal Year 2015 Non-GAAP Earnings per Share and Effective Tax Rate Guidance
				Fiscal Year Ending November 30, 2015
(In millions, except per share data)				Low						High
GAAP net income				$	11.7					$	14.3
Adjustments (from above)				91.3						91.3
Income tax adjustment (2)				(30.5		)				(29.5		)
Non-GAAP net income				$	72.5					$	76.1
GAAP diluted earnings per share				$	0.22					$	0.28
Non-GAAP diluted earnings per share				$	1.37					$	1.47
Diluted weighted average shares outstanding				53.0						51.7
(2) Tax adjustment is based on a non-GAAP effective tax rate of 34% for Low and 33% for High, calculated as follows:
Non-GAAP income from operations				$	113.7					$	117.5
Other income (expense)				(3.9		)				(3.9		)
Non-GAAP income from continuing operations before income taxes				109.8						113.6
Non-GAAP net income				72.5						76.1
Tax provision				37.3						37.5
Non-GAAP tax rate				34		%				33		%

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1 2015 GUIDANCE
(Unaudited)
Q1 2015 Revenue Growth Guidance
				Three Months Ended						Three Months Ending
				February 28, 2014						February 28, 2015
(In millions)										Low					% Change				High					% Change
GAAP revenue				$	74.5					$	79.5				7	%			$	82.5				11	%
Acquisition-related adjustments - revenue (1)				$	—					$	13.5				100	%			$	13.5				100	%
Non-GAAP revenue				$	74.5					$	93.0				25	%			$	96.0				29	%

(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 2015 Non-GAAP Earnings per Share Guidance
				Three Months Ending February 28, 2015
				Low						High
GAAP diluted earnings per share				$	(0.14	)				$	(0.12	)
Acquisition-related revenue				0.26						0.26
Restructuring expense				0.03						0.03
Stock-based compensation				0.15						0.15
Acquisition related expense				0.02						0.02
Amortization of intangibles				0.08						0.08
Total adjustments				0.54						0.54
Income tax adjustment				$	(0.18	)				$	(0.18	)
Non-GAAP diluted earnings per share				$	0.22					$	0.24

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

Source: Progress Software Corporation

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