Categories: Wire Stories

Progress Reports 2021 Fiscal Fourth Quarter and Year End Results

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:   Press Contact:
Michael Micciche   Erica McShane
Progress Software   Progress Software
+1 781 850 8450   +1 781 280 4000
Investor-Relations@progress.com   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  

Alex

Recent Posts

Step into Hong Kong: Experience the “Immersive Hong Kong” Exhibition in Dubai

HONG KONG SAR - Media OutReach Newswire - 20 December 2024 - The "Immersive Hong…

18 hours ago

ZJLD Awarded the 2024 Hong Kong Corporate Governance and ESG Excellence Award by the Chamber of Hong Kong Listed Companies

HONG KONG SAR - Media OutReach Newswire - 20 December 2024 - The first baijiu…

23 hours ago

Japan’s first overseas JOYPOLIS SPORTS flagship complex opens in Kai Tak Sports Park

The all-weather indoor sportainment complex, JOYPOLIS SPORTS HONG KONG, grandly opens today. With five stories…

23 hours ago

XTransfer and OCBC Jointly Announce Comprehensive Partnership

"Global Multi-Currency Accounts" Empowers SMEs with New Market Opportunities SHANGHAI, CHINA - Media OutReach Newswire…

1 day ago

XTransfer and OCBC Jointly Announce Comprehensive Partnership

"Global Multi-Currency Accounts" Empowers SMEs with New Market Opportunities SHANGHAI, CHINA - Media OutReach Newswire…

1 day ago

Guangzhou Development Zone Aims to Build a Bridgehead for the opening up of Guangzhou, China

GUANGZHOU, CHINA - Media OutReach Newswire - 20 December 2024 - This year marks the…

1 day ago