Progress Financial Results

Q3 FY22 Supplemental Data

September 27, 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 fourth quarter and fiscal year ended November 30, 2022, which speak only as of September 27, 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 August 31, 2022 and is available in the Investor Relations section of our Web site.

© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved.

2

Conference Call Details

What:

Progress Q3 2022 Financial Results Conference Call

When:

Tuesday, September 27, 2022

Time:

5:00 p.m. ET

Live Call:

(866) 374-5140

(404) 400-0571

PIN: 824 86 411#

Live / Recorded Webcast:

https://edge.media-server.com/mmc/p/fc4a2hmo

Please note: Webcast is listen-only.

© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved.

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Summary Highlights Q3'22

Strong Revenue & EPS, ARR up 4%, NDRR +101%, Strong Balance Sheet, Raise EPS for Q4

  • Strong execution despite FX/macro headwinds, inflation, and a tough prior-year comp.
  • Continued reliable and predictable revenues, earnings, and FCF.
  • ARR increased to $495M - up 13% year-over-year and 4% pro- forma, both on a constant currency basis.
  • Net retention rates of >101% reflect ongoing customer reliance on Progress products.
  • Balance sheet improved on $39.2M in adjusted FCF (+12% yoy). $225M cash & short-term investments, DSO at 48 days.
  • Share repurchases of $75.5M through Q3'22; ~$80M remaining on current authorization.

© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights

Updated Guidance#

--- FY22E ---

Revenue:$613M

Results Overview

All results shown are for Q3'22, non-GAAP, as reported September 27, 2022

$1.00

Q3'22 Earnings Per Share

EPS :$4.10

Adjusted FCF: $188M

Operating margin: 39.5%

Effective Tax Rate: 20.5%

#

Guidance provided/updated September 27, 2022, non-GAAP; midpoint of guidance shown.

$153.1М

Revenue

$495М

ARR

$39.2M

Adjusted FCF

4%*

Rev Growth

~80%

Recurring Revenue

39%

Operating Margin

*Revenues grew 4% year-over-year in constant currency.

© 2022 Progress Software Corporation and/or its subsidiaries or affiliates. All rights reserved.

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Progress Software Corporation published this content on 27 September 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 September 2022 20:25:03 UTC.