Fourth Quarter Revenues and Earnings Per Share Ahead of EstimatesARR Growth of 17% Year-over-Year
BURLINGTON, Mass., Jan. 16, 2024 (GLOBE NEWSWIRE) -- Progress (NASDAQ: PRGS), the trusted provider of infrastructure software, today announced financial results for its fiscal fourth quarter and fiscal year ended November 30, 2023.
Fourth Quarter 2023Highlights1:
“I am extremely pleased with our strong finish to fiscal 2023,” said Yogesh Gupta, CEO at Progress. “We executed at or ahead of plan each quarter, generated $175 million in adjusted free cash flow, and substantially integrated MarkLogic ahead of schedule. In the fourth quarter, we paid down another $30 million of debt, and we remain well-positioned operationally and financially for our next acquisition. MarkLogic will contribute to full-year results in fiscal 2024, further propelling our operating income and cash flow, as well as revenues. We’re looking forward to another great year ahead.”
Additional financial highlights included(1):
Three Months Ended | |||||||||||||||||||||
GAAP | Non-GAAP1 | ||||||||||||||||||||
(In thousands, except percentages and per share amounts) | November 30,2023 | November 30,2022 | % Change | November 30,2023 | November 30, 2022 | % Change | |||||||||||||||
Revenue | $ | 176,970 | $ | 157,127 | 13 | % | $ | 177,523 | $ | 159,174 | 12 | % | |||||||||
Income from operations | $ | 22,537 | $ | 30,443 | (26 | )% | $ | 62,515 | $ | 61,983 | 1 | % | |||||||||
Operating margin | 13 | % | 19 | % | (600) bps | 35 | % | 39 | % | (400) bps | |||||||||||
Net income | $ | 15,335 | $ | 23,708 | (35 | )% | $ | 45,769 | $ | 49,238 | (7 | )% | |||||||||
Diluted earnings per share | $ | 0.34 | $ | 0.54 | (37 | )% | $ | 1.02 | $ | 1.12 | (9 | )% | |||||||||
Cash from operations (GAAP) /Adjusted free cash flow (non-GAAP) | $ | 33,161 | $ | 40,137 | (17 | )% | $ | 32,893 | $ | 37,462 | (12 | )% |
_______________1 SeeImportant Information Regarding Non-GAAP Financial Information and a reconciliation of non-GAAP adjustments to Progress' GAAP financial results at the end of this press release.
Other fiscal fourthquarter 2023metrics and recent results included:
“Our Q4 2023 results were again strong across nearly every metric, with ARR up 17% year-over-year and net retention again at 100%, in line with our target,” said Anthony Folger, CFO at Progress. “Our balance sheet is in excellent shape, our operations continue to improve, we are continually enhancing our ability to acquire and integrate to achieve solid returns, and the company is poised to deliver another strong performance in the coming year.”
Full Year Results
Fiscal Year Ended | |||||||||||||||||||||
GAAP | Non-GAAP1 | ||||||||||||||||||||
(In thousands, except percentages and per share amounts) | November 30,2023 | November 30,2022 | % Change | November 30,2023 | November 30,2022 | % Change | |||||||||||||||
Revenue | $ | 694,439 | $ | 602,013 | 15 | % | $ | 698,150 | $ | 610,618 | 14 | % | |||||||||
Income from operations | $ | 110,523 | $ | 132,131 | (16 | )% | $ | 270,637 | $ | 242,088 | 12 | % | |||||||||
Operating margin | 16 | % | 22 | % | (600) bps | 39 | % | 40 | % | (100) bps | |||||||||||
Net income | $ | 70,197 | $ | 95,069 | (26 | )% | $ | 194,214 | $ | 182,774 | 6 | % | |||||||||
Diluted earnings per share | $ | 1.57 | $ | 2.15 | (27 | )% | $ | 4.35 | $ | 4.13 | 5 | % | |||||||||
Cash from operations (GAAP) /Adjusted free cash flow (non-GAAP) | $ | 173,920 | $ | 192,160 | (9 | )% | $ | 175,453 | $ | 189,418 | (7 | )% | |||||||||
2024Business Outlook
Progress provides the following guidance for the fiscal year ending November 30, 2024 and the fiscal first quarter ending February 29, 2024, together with actual results for the same periods in the fiscal year ending November 30, 2023:
FY 2024 Guidance | FY 2023 Actual | ||||||||||||
(In millions, except percentages and per share amounts) | FY 2024GAAP | FY 2024 Non-GAAP1 | FY 2023GAAP | FY 2023Non-GAAP1 | |||||||||
Revenue | $722 - $732 | $722 - $732 | $ | 694 | $ | 698 | |||||||
Diluted earnings per share | $1.94 - $2.06 | $4.58 - $4.68 | $ | 1.57 | $ | 4.35 | |||||||
Operating margin | 19% - 20 | % | 39% - 40 | % | 16 | % | 39 | % | |||||
Cash from operations (GAAP) / Adjusted free cash flow (non-GAAP) | $202 - $212 | $202 - $212 | $ | 174 | $ | 175 | |||||||
Effective tax rate | 21 | % | 20 | % | 12 | % | 19 | % | |||||
Q1 2024 Guidance | Q1 2023 Actual | ||||||||
(In millions, except per share amounts) | Q1 2024GAAP | Q1 2024Non-GAAP | Q1 2023GAAP | Q1 2023Non-GAAP | |||||
Revenue | $180 - $184 | $180 - $184 | $ | 164 | $ | 166 | |||
Diluted earnings per share | $0.38 - $0.42 | $1.12 - $1.16 | $ | 0.53 | $ | 1.19 | |||
Based on current exchange rates, the expected positive currency translation impact on our:
To the extent that there are changes in exchange rates versus the current environment and/or our expectations, 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 2023 at 5:00 p.m. ET on Tuesday, January 16, 2024. Participants must register for the conference call here: https://register.vevent.com/register/BI2cac545d106e49b5a6d3d34a92aa7ff4. The webcast can be accessed at: https://edge.media-server.com/mmc/p/fnimqsgo. The conference call will include comments followed by questions and answers. Attendees must register for the webcast and 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.
Important Information Regarding Non-GAAP Financial Information
Progress furnishes certain non-GAAP supplemental information to our financial results. We use such non-GAAP financial measures to evaluate our period-over-period operating performance because our management team believes that by excluding the effects of certain GAAP-related items that in their opinion do not reflect the ordinary earnings of our operations, such information helps to illustrate underlying trends in our business and provides us with a more comparable measure of our continuing business, as well as greater understanding of the results from the primary operations of our business. Management also uses such non-GAAP financial measures to establish budgets and operational goals, evaluate performance, and allocate resources. In addition, the compensation of our executives and non-executive employees is based in part on the performance of our business as evaluated by such non-GAAP financial measures. We believe these non-GAAP financial measures enhance investors’ overall understanding of our current financial performance and our prospects for the future by: (i) providing more transparency for certain financial measures, (ii) presenting disclosure that helps investors understand how we plan and measure the performance of our business, (iii) affords a view of our operating results that may be more easily compared to our peer companies, and (iv) enables investors to consider our operating results on both a GAAP and non-GAAP basis (including following the integration period of our prior and proposed acquisitions). However, this non-GAAP information is not in accordance with, or an alternative to, generally accepted accounting principles in the United States (“GAAP”) and should be considered in conjunction with our GAAP results as the items excluded from the non-GAAP information may have a material impact on Progress’ financial results. A reconciliation of non-GAAP adjustments to Progress' GAAP financial results is included in the tables at the end of this press release.
In the noted fiscal periods, we adjusted for the following items from our GAAP financial results to arrive at our non-GAAP financial measures:
Expenses include costs to investigate and remediate these cyber related matters, as well as legal and other professional services related thereto. Expenses related to such cyber matters are provided net of expected insurance recoveries, although the timing of recognizing insurance recoveries may differ from the timing of recognizing the associated expenses. Costs associated with the enhancement of our cybersecurity program are not included within this adjustment. We expect to continue to incur legal and other professional services expenses in future periods associated with the MOVEit vulnerability. We do not expect to incur additional costs associated with the cyber incident as the investigation is closed. Expenses related to such cyber matters are expected to result in operating expenses that would not have otherwise been incurred in the normal course of business operations. We believe that excluding these costs facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance.
We also provide guidance on adjusted free cash flow, which is equal to cash flows from operating activities less purchases of property and equipment, plus restructuring payments.
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 (including future acquisition activity) 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: (i) 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; (ii) 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; (iii) 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; (iv) 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 or zero-day vulnerabilities (as we experienced in May 2023 with the MOVEit Vulnerability), we may experience reputational harm, legal claims and financial exposure; and the results of inquiries, investigations and legal claims regarding the MOVEit Vulnerability remain uncertain, while the ultimate resolution of these matters could result in losses that may be material to our financial results for a particular period; and (v) future acquisitions may not be successful or may involve unanticipated costs or other integration issues that could disrupt our existing operations; and (vi) expected synergies and benefits of the MarkLogic acquisition may not be realized which could negatively impact our future 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, 2022 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended May 31, 2023 and August 31, 2023. 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 software that enables organizations to develop and deploy their mission-critical applications and experiences, as well as effectively manage their data platforms, cloud and IT infrastructure. As an experienced, trusted provider, we make the lives of technology professionals easier. Over 4 million developers and technologists at hundreds of thousands of enterprises depend on Progress. Learn more at www.progress.com.
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, 2023 | November 30, 2022 | % Change | November 30, 2023 | November 30, 2022 | % Change | |||||||||||||||
Revenue: | |||||||||||||||||||||
Software licenses | $ | 56,270 | $ | 53,154 | 6 | % | $ | 220,789 | $ | 188,336 | 17 | % | |||||||||
Maintenance and services | 120,700 | 103,973 | 16 | % | 473,650 | 413,677 | 14 | % | |||||||||||||
Total revenue | 176,970 | 157,127 | 13 | % | 694,439 | 602,013 | 15 | % | |||||||||||||
Costs of revenue: | |||||||||||||||||||||
Cost of software licenses | 3,155 | 2,574 | 23 | % | 11,153 | 10,243 | 9 | % | |||||||||||||
Cost of maintenance and services | 22,592 | 15,470 | 46 | % | 85,255 | 62,177 | 37 | % | |||||||||||||
Amortization of acquired intangibles | 7,916 | 5,487 | 44 | % | 30,169 | 22,076 | 37 | % | |||||||||||||
Total costs of revenue | 33,663 | 23,531 | 43 | % | 126,577 | 94,496 | 34 | % | |||||||||||||
Gross profit | 143,307 | 133,596 | 7 | % | 567,862 | 507,517 | 12 | % | |||||||||||||
Operating expenses: | |||||||||||||||||||||
Sales and marketing | 43,563 | 39,992 | 9 | % | 156,076 | 140,760 | 11 | % | |||||||||||||
Product development | 34,005 | 28,602 | 19 | % | 132,401 | 114,568 | 16 | % | |||||||||||||
General and administrative | 22,111 | 21,537 | 3 | % | 83,157 | 77,876 | 7 | % | |||||||||||||
Amortization of acquired intangibles | 17,605 | 11,538 | 53 | % | 66,430 | 46,868 | 42 | % | |||||||||||||
Restructuring expenses | 2,177 | 95 | * | 8,407 | 879 | * | |||||||||||||||
Acquisition-related expenses | 271 | 787 | (66 | )% | 4,704 | 4,603 | 2 | % | |||||||||||||
Cyber incident and vulnerability response expenses, net | 1,038 | 602 | 72 | % | 6,164 | 602 | 924 | % | |||||||||||||
Gain on sale of assets held for sale | — | — | * | — | (10,770 | ) | * | ||||||||||||||
Total operating expenses | 120,770 | 103,153 | 17 | % | 457,339 | 375,386 | 22 | % | |||||||||||||
Income from operations | 22,537 | 30,443 | (26 | )% | 110,523 | 132,131 | (16 | )% | |||||||||||||
Other expense, net | (8,365 | ) | (3,667 | ) | (128 | )% | (30,866 | ) | (14,876 | ) | (107 | )% | |||||||||
Income before income taxes | 14,172 | 26,776 | (47 | )% | 79,657 | 117,255 | (32 | )% | |||||||||||||
(Benefit) provision for income taxes | (1,163 | ) | 3,068 | (138 | )% | 9,460 | 22,186 | (57 | )% | ||||||||||||
Net income | $ | 15,335 | $ | 23,708 | (35 | )% | $ | 70,197 | $ | 95,069 | (26 | )% | |||||||||
Earnings per share: | |||||||||||||||||||||
Basic | $ | 0.35 | $ | 0.55 | (36 | )% | $ | 1.62 | $ | 2.19 | (26 | )% | |||||||||
Diluted | $ | 0.34 | $ | 0.54 | (37 | )% | $ | 1.57 | $ | 2.15 | (27 | )% | |||||||||
Weighted average shares outstanding: | |||||||||||||||||||||
Basic | 43,729 | 43,134 | 1 | % | 43,456 | 43,475 | — | % | |||||||||||||
Diluted | 44,829 | 44,091 | 2 | % | 44,658 | 44,247 | 1 | % | |||||||||||||
Cash dividends declared per common share | $ | 0.175 | $ | 0.175 | — | % | $ | 0.700 | $ | 0.700 | — | % |
*not meaningful
Stock-based compensation is included in the condensed consolidated statements of operations, as follows:
Cost of revenue | $ | 830 | $ | 559 | 48 | % | $ | 2,976 | $ | 1,969 | 51 | % | |||||||||
Sales and marketing | 1,770 | 1,461 | 21 | % | 6,797 | 4,884 | 39 | % | |||||||||||||
Product development | 3,102 | 2,778 | 12 | % | 12,214 | 10,326 | 18 | % | |||||||||||||
General and administrative | 4,716 | 6,186 | (24 | )% | 18,542 | 19,915 | (7 | )% | |||||||||||||
Total | $ | 10,418 | $ | 10,984 | (5 | )% | $ | 40,529 | $ | 37,094 | 9 | % | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)
(In thousands) | November 30, 2023 | November 30, 2022 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 126,958 | $ | 256,277 | |||
Accounts receivable, net | 125,825 | 97,834 | |||||
Unbilled receivables | 29,965 | 29,158 | |||||
Other current assets | 48,040 | 42,784 | |||||
Total current assets | 330,788 | 426,053 | |||||
Property and equipment, net | 15,225 | 14,927 | |||||
Goodwill and intangible assets, net | 1,186,379 | 888,392 | |||||
Right-of-use lease assets | 18,711 | 17,574 | |||||
Long-term unbilled receivables | 28,373 | 39,936 | |||||
Other assets | 23,307 | 24,597 | |||||
Total assets | $ | 1,602,783 | $ | 1,411,479 | |||
Liabilities and shareholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable and other current liabilities | $ | 92,805 | $ | 76,629 | |||
Current portion of long-term debt, net | 13,109 | 6,234 | |||||
Short-term operating lease liabilities | 10,114 | 7,471 | |||||
Short-term deferred revenue, net | 236,090 | 227,670 | |||||
Total current liabilities | 352,118 | 318,004 | |||||
Long-term debt, net | 356,111 | 259,220 | |||||
Long-term operating lease liabilities | 13,000 | 15,041 | |||||
Long-term deferred revenue, net | 58,946 | 54,770 | |||||
Convertible senior notes, net | 354,772 | 352,625 | |||||
Other long-term liabilities | 8,121 | 13,315 | |||||
Shareholders' equity: | |||||||
Common stock and additional paid-in capital | 371,017 | 332,083 | |||||
Retained earnings | 88,698 | 66,421 | |||||
Total shareholders' equity | 459,715 | 398,504 | |||||
Total liabilities and shareholders' equity | $ | 1,602,783 | $ | 1,411,479 | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)
Three Months Ended | Fiscal Year Ended | ||||||||||||||
(In thousands) | November 30, 2023 | November 30, 2022 | November 30, 2023 | November 30, 2022 | |||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 15,335 | $ | 23,708 | $ | 70,197 | $ | 95,069 | |||||||
Depreciation and amortization | 27,862 | 19,022 | 105,294 | 76,844 | |||||||||||
Gain on sale of assets held for sale | — | — | — | (10,770 | ) | ||||||||||
Stock-based compensation | 10,418 | 10,984 | 40,529 | 37,094 | |||||||||||
Other non-cash adjustments | (7,669 | ) | (5,390 | ) | (18,760 | ) | 953 | ||||||||
Changes in operating assets and liabilities | (12,785 | ) | (8,187 | ) | (23,340 | ) | (7,030 | ) | |||||||
Net cash flows from operating activities | 33,161 | 40,137 | 173,920 | 192,160 | |||||||||||
Capital expenditures | (2,389 | ) | (3,004 | ) | (5,570 | ) | (6,090 | ) | |||||||
Issuances of common stock, net of repurchases | 1,621 | 4,264 | (8,006 | ) | (60,876 | ) | |||||||||
Dividend payments to shareholders | (7,885 | ) | (7,712 | ) | (31,554 | ) | (31,063 | ) | |||||||
Payments for acquisitions, net of cash acquired | — | — | (355,250 | ) | — | ||||||||||
Proceeds from the issuance of debt, net of payment of issuance costs | — | (304 | ) | 195,000 | 5,213 | ||||||||||
Principal payment on term loan and repayment of revolving line of credit | (31,718 | ) | (1,719 | ) | (91,875 | ) | (6,873 | ) | |||||||
Other | (3,831 | ) | (249 | ) | (5,984 | ) | 6,433 | ||||||||
Net change in cash and cash equivalents | (11,041 | ) | 31,413 | (129,319 | ) | 98,904 | |||||||||
Cash and cash equivalents, beginning of period | 137,999 | 224,864 | 256,277 | 157,373 | |||||||||||
Cash and cash equivalents, end of period | $ | 126,958 | $ | 256,277 | $ | 126,958 | $ | 256,277 | |||||||
RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES1(Unaudited)
Three Months Ended | Fiscal Year Ended | ||||||||||||||
(In thousands, except per share data) | November 30, 2023 | November 30, 2022 | November 30, 2023 | November 30, 2022 | |||||||||||
Adjusted revenue: | |||||||||||||||
GAAP revenue | $ | 176,970 | $ | 157,127 | $ | 694,439 | $ | 602,013 | |||||||
Acquisition-related revenue | 553 | 2,047 | 3,711 | 8,605 | |||||||||||
Non-GAAP revenue | $ | 177,523 | $ | 159,174 | $ | 698,150 | $ | 610,618 | |||||||
Adjusted income from operations: | |||||||||||||||
GAAP income from operations | $ | 22,537 | $ | 30,443 | $ | 110,523 | $ | 132,131 | |||||||
Amortization of acquired intangibles | 25,521 | 17,025 | 96,599 | 68,944 | |||||||||||
Stock-based compensation | 10,418 | 10,984 | 40,529 | 37,094 | |||||||||||
Restructuring expenses and other | 2,177 | 95 | 8,407 | 879 | |||||||||||
Acquisition-related revenue and expenses | 824 | 2,834 | 8,415 | 13,208 | |||||||||||
Cyber incident and vulnerability response expenses, net | 1,038 | 602 | 6,164 | 602 | |||||||||||
Gain on sale of assets held for sale | — | — | — | (10,770 | ) | ||||||||||
Non-GAAP income from operations | $ | 62,515 | $ | 61,983 | $ | 270,637 | $ | 242,088 | |||||||
Adjusted net income: | |||||||||||||||
GAAP net income | $ | 15,335 | $ | 23,708 | $ | 70,197 | $ | 95,069 | |||||||
Amortization of acquired intangibles | 25,521 | 17,025 | 96,599 | 68,944 | |||||||||||
Stock-based compensation | 10,418 | 10,984 | 40,529 | 37,094 | |||||||||||
Restructuring expenses and other | 2,177 | 95 | 8,407 | 879 | |||||||||||
Acquisition-related revenue and expenses | 824 | 2,834 | 8,415 | 13,208 | |||||||||||
Cyber incident and vulnerability response expenses, net | 1,038 | 602 | 6,164 | 602 | |||||||||||
Gain on sale of assets held for sale | — | — | — | (10,770 | ) | ||||||||||
Provision for income taxes | (9,544 | ) | (6,010 | ) | (36,097 | ) | (22,252 | ) | |||||||
Non-GAAP net income | $ | 45,769 | $ | 49,238 | $ | 194,214 | $ | 182,774 | |||||||
Adjusted diluted earnings per share: | |||||||||||||||
GAAP diluted earnings per share | $ | 0.34 | $ | 0.54 | $ | 1.57 | $ | 2.15 | |||||||
Amortization of acquired intangibles | 0.57 | 0.39 | 2.16 | 1.56 | |||||||||||
Stock-based compensation | 0.23 | 0.26 | 0.91 | 0.83 | |||||||||||
Restructuring expenses and other | 0.05 | — | 0.19 | 0.02 | |||||||||||
Acquisition-related revenue and expenses | 0.02 | 0.06 | 0.19 | 0.30 | |||||||||||
Cyber incident and vulnerability response expenses, net | 0.02 | 0.01 | 0.14 | 0.01 | |||||||||||
Gain on sale of assets held for sale | — | — | — | (0.24 | ) | ||||||||||
Provision for income taxes | (0.21 | ) | (0.14 | ) | (0.81 | ) | (0.50 | ) | |||||||
Non-GAAP diluted earnings per share | $ | 1.02 | $ | 1.12 | $ | 4.35 | $ | 4.13 | |||||||
Non-GAAP weighted avg shares outstanding - diluted | 44,829 | 44,091 | 44,658 | 44,247 | |||||||||||
OTHER NON-GAAP FINANCIAL MEASURES1(Unaudited)
Adjusted Free Cash Flow | |||||||||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||||||||
(In thousands) | November 30, 2023 | November 30, 2022 | % Change | November 30, 2023 | November 30, 2022 | % Change | |||||||||||||||
Cash flows from operations | $ | 33,161 | $ | 40,137 | (17 | )% | $ | 173,920 | $ | 192,160 | (9 | )% | |||||||||
Purchases of property and equipment | (2,389 | ) | (3,004 | ) | (20 | )% | (5,570 | ) | (6,090 | ) | (9 | )% | |||||||||
Free cash flow | 30,772 | 37,133 | (17 | )% | 168,350 | 186,070 | (10 | )% | |||||||||||||
Add back: restructuring payments | 2,121 | 329 | 545 | % | 7,103 | 3,348 | 112 | % | |||||||||||||
Adjusted free cash flow | $ | 32,893 | $ | 37,462 | (12 | )% | $ | 175,453 | $ | 189,418 | (7 | )% | |||||||||
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2024GUIDANCE1(Unaudited)
Fiscal Year 2024 Revenue Guidance | |||||||||||||||||
Fiscal Year Ended | Fiscal Year Ending | ||||||||||||||||
November 30, 2023 | November 30, 2024 | ||||||||||||||||
(In millions) | Low | % Change | High | % Change | |||||||||||||
GAAP revenue | $ | 694.4 | $ | 722.0 | 4 | % | $ | 732.0 | 5 | % | |||||||
Acquisition-related adjustments - revenue | 3.8 | — | (100 | )% | — | (100 | )% | ||||||||||
Non-GAAP revenue | $ | 698.2 | $ | 722.0 | 3 | % | $ | 732.0 | 5 | % | |||||||
Fiscal Year 2024 Non-GAAP Operating Margin Guidance | |||||||
Fiscal Year Ending November 30, 2024 | |||||||
(In millions) | Low | High | |||||
GAAP income from operations | $ | 138.1 | $ | 145.4 | |||
GAAP operating margin | 19 | % | 20 | % | |||
Restructuring expense and other | 2.3 | 2.3 | |||||
Stock-based compensation | 47.7 | 47.7 | |||||
Acquisition-related expenses | 3.6 | 3.6 | |||||
Amortization of intangibles | 89.4 | 89.4 | |||||
Cyber incident and vulnerability response expenses, net | 4.0 | 4.0 | |||||
Total adjustments(2) | 147.0 | 147.0 | |||||
Non-GAAP income from operations | $ | 285.1 | $ | 292.4 | |||
Non-GAAP operating margin | 39 | % | 40 | % |
(2)Total adjustments include preliminary estimates relating to the valuation of intangible assets acquired from MarkLogic and restructuring expenses. The final amounts will not be available until the Company's internal procedures and reviews are completed.
Fiscal Year 2024 Non-GAAP Earnings per Share and Effective Tax Rate Guidance | |||||||
Fiscal Year Ending November 30, 2024 | |||||||
(In millions, except per share data) | Low | High | |||||
GAAP net income | $ | 87.2 | $ | 93.0 | |||
Adjustments (from previous table) | 147.0 | 147.0 | |||||
Income tax adjustment(3) | (28.3 | ) | (28.2 | ) | |||
Non-GAAP net income | $ | 205.9 | $ | 211.8 | |||
GAAP diluted earnings per share | $ | 1.94 | $ | 2.06 | |||
Non-GAAP diluted earnings per share | $ | 4.58 | $ | 4.68 | |||
Diluted weighted average shares outstanding | 45.0 | 45.2 |
3 Tax adjustment is based on a non-GAAP effective tax rate of approximately 20%, calculated as follows: | ||||||||
Non-GAAP income from operations | $ | 285.1 | $ | 292.4 | ||||
Other (expense) income | (27.7 | ) | (27.7 | ) | ||||
Non-GAAP income from continuing operations before income taxes | 257.4 | 264.7 | ||||||
Non-GAAP net income | 205.9 | 211.8 | ||||||
Tax provision | $ | 51.5 | $ | 52.9 | ||||
Non-GAAP tax rate | 20 | % | 20 | % |
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2024GUIDANCE1(Unaudited)
Fiscal Year 2024 Adjusted Free Cash Flow Guidance | |||||||
Fiscal Year Ending November 30, 2024 | |||||||
(In millions) | Low | High | |||||
Cash flows from operations (GAAP) | $ | 202 | $ | 212 | |||
Purchases of property and equipment | (5 | ) | (5 | ) | |||
Add back: restructuring payments | 5 | 5 | |||||
Adjusted free cash flow (non-GAAP) | $ | 202 | $ | 212 | |||
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1 2024GUIDANCE1(Unaudited)
Q1 2024 Revenue Guidance | |||||||||||||||||
Three Months Ended | Three Months Ending | ||||||||||||||||
February 28, 2023 | February 29, 2024 | ||||||||||||||||
(In millions) | Low | % Change | High | % Change | |||||||||||||
GAAP revenue | $ | 164.2 | $ | 180.0 | 10 | % | $ | 184.0 | 12 | % | |||||||
Acquisition-related adjustments - revenue | 1.4 | — | (100 | )% | — | (100 | )% | ||||||||||
Non-GAAP revenue | $ | 165.6 | $ | 180.0 | 9 | % | $ | 184.0 | 11 | % | |||||||
Q1 2024 Non-GAAP Earnings per Share Guidance | |||||||
Three Months Ending February 29, 2024 | |||||||
Low | High | ||||||
GAAP diluted earnings per share | $ | 0.38 | $ | 0.42 | |||
Acquisition-related expense | 0.02 | 0.02 | |||||
Stock-based compensation | 0.27 | 0.27 | |||||
Amortization of intangibles | 0.57 | 0.57 | |||||
Restructuring expense and other | 0.02 | 0.02 | |||||
Cyber incident and vulnerability response expenses, net | 0.04 | 0.04 | |||||
Total adjustments | 0.92 | 0.92 | |||||
Income tax adjustment | (0.18 | ) | (0.18 | ) | |||
Non-GAAP diluted earnings per share | $ | 1.12 | $ | 1.16 | |||