Progress Software : Q1 2022 Earnings Call Supplement

Progress Financial Results

Q1 2022 Supplemental Data

March 29, 2022

Safe Harbor

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. Forward-looking statements in this presentation include, but are not limited to, statements regarding Progress's strategy; acquisitions; future revenue growth, operating margin and cost savings; strategic partnering and marketing initiatives; and other statements regarding the future operation, direction, prospects and success of Progress's business.

There are many factors that could cause actual results or future events to differ materially from those anticipated by the forward-looking statements, including, without limitation:

• • 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.

• • 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.

• • 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.

• • 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.

• • We depend upon our extensive partner channel, and we may not be successful in retaining or expanding our relationships with channel partners.

• • 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.

• • 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.

• • 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.

• • 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 our business, please refer to our filings with the Securities and Exchange Commission. Progress undertakes no obligation to update any forward-looking statements, which speak only as of the date of this presentation, except for statements relating to Progress' projected results for the quarter ended May 31, 2022, and fiscal year ended November 30, 2022, which speak only as of March 29, 2022.

Finally, in this presentation we will be referring to non-GAAP financial measures such as non-GAAP revenue, non-GAAP income from operations and operating margin, adjusted free cash flow and non-GAAP diluted earnings per share. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation between non-GAAP and the most directly comparable GAAP financial measures appears in our earnings press release for the fiscal quarter ended February 28, 2022 and is available in the Investor Relations section of our Web site.

Conference Call Details

What:

Progress Q1 2022 Financial Results Conference Call

When:

Tuesday, March 29, 2022

Time:

5:00 p.m. ET

Live Call:

[phone] [phone] Conf ID: 50242106

Live / Recorded Webcast:

https://edge.media-server.com/mmc/p/38n7sbqv

Please note: Webcast is listen-only.

Summary Highlights Q1 2022

Strong Financial Results, Good Start to FY22

• ▪ Broad top-line strength and momentum continued from FY21.

• ▪ Strong demand and solid execution, including disciplined expense management, drove results above high end of guidance range.

• ▪ ARR growth (up 12% on an as reported basis and 3.5% on a pro-forma basis, both in constant currency) and consistently strong net retention rates of >100% reflect continued strong performance across the board.

• ▪ Kemp integration proceeding at or ahead of plan…no major speedbumps or surprises.

Results Overview & Guidance

Progress is the leading provider of the best products to develop, deploy and manage high-impact cloud applications and systems

All results shown are for FQ1 '22, non-GAAP, as reported March 29, 2022

Updated Guidance#: FY22E and Q1'22E

$0.97

Q1'22 Earnings Per Share

Revenue: $613M

EPS : $4.05

FCF: $188M

Operating margin: 39.5%

-----------

$147.5М

Revenue

$479М

12%

YoY Revenue Growth

~80%

ARR

Recurring Revenue

Q2E Revenue: $146.5M

Q2E EPS: $0.95

# Guidance provided/updated March 29, 2022, non-GAAP; midpoint of guidance shown.

$44.7M

Free Cash Flow

40%

Operating Margins

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