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Progress Reports 2020 Fiscal Fourth Quarter and Year End Results

Solid Execution Drove Growth and Operating Leverage
Acquisition of Chef Bolsters Position in DevOps Market and Drives Fiscal 2021 Revenue Growth

BEDFORD, Mass., Jan. 14, 2021 (GLOBE NEWSWIRE) -- Progress (NASDAQ: PRGS), the leading provider of products to develop, deploy and manage high-impact business applications, today announced results for its fiscal fourth quarter and fiscal year ended November 30, 2020.

Fourth Quarter 2020 Highlights:

  • Revenue of $122.4 million increased 5% year-over-year on an actual currency basis, and 4% on a constant currency basis.
  • Non-GAAP revenue of $129.1 million increased 5% on an actual currency basis, and 4% constant currency basis.
  • Operating margin was 15% and Non-GAAP operating margin was 37%.
  • Diluted earnings per share was $0.39 compared to diluted loss per share of $0.11 in the same quarter last year.
  • Non-GAAP diluted earnings per share was $0.91 compared to $0.79 in the same quarter last year, an increase of 15%.
  • On October 5, 2020, the company completed the acquisition of Chef Software, a global leader in the growing DevOps and DevSecOps markets.

“I am thrilled with our results both for the fourth quarter and the full year 2020 and believe they reflect the durability of our business and our success in executing our total growth strategy,” said Yogesh Gupta, CEO at Progress. “Chef extends our long-standing leadership position in the developer ecosystem, we are very pleased with the customer response and the rapid pace of the integration. The investments we’ve made to bolster our M&A capabilities, combined with the large, fragmented and growing DevOps market opportunity, position us well to execute on our total growth strategy for years to come, enabling us to deliver sustained shareholder value.”

Additional financial highlights included:

 Three Months Ended
 GAAP Non-GAAP
(In thousands, except percentages and per share amounts)November 30,
2020
 November 30,
2019
 Change November 30,
2020
 November 30,
2019
 Change
Revenue$122,385  $117,038  5% $129,063  $123,416  5%
Income (loss) from operations$18,514  $(6,026) * $48,081  $47,285  2%
Operating margin15% (5)% * 37% 38% (100) bps
Net income (loss)$17,661  $(4,740) * $41,118  $35,720  15%
Diluted earnings (loss) per share$0.39  $(0.11) * $0.91  $0.79  15%
Cash from operations (GAAP) /
Adjusted free cash flow (Non-GAAP)
$42,762  $36,601  17% $40,656  $36,705  11%
                    
*Not meaningful                   
                    

Other fiscal fourth quarter 2020 metrics and recent results included:

  • Cash, cash equivalents and short-term investments were $106.0 million at the end of the quarter.
  • DSO was 54 days, compared to 56 days in the fiscal fourth quarter of 2019 and 49 days in the fiscal third quarter of 2020.
  • Pursuant to the $250 million share authorization by the Board of Directors, Progress repurchased 1.0 million shares for $40 million during the fiscal fourth quarter of 2020. As of November 30, 2020, there was $190 million remaining under this authorization.
  • On January 12, 2020, Progress' Board of Directors declared a quarterly dividend of $0.175 per share of common stock that will be paid on March 15, 2021 to shareholders of record as of the close of business on March 1, 2021.

“We’re excited to deliver results that reflect a strong and durable top line, expanded operating margin and meaningful growth in earnings per share,” said Anthony Folger, CFO at Progress. “As we begin to realize synergies from the acquisition of Chef, we are very well positioned to deliver strong fiscal 2021 results.”

Full Year Results

 Fiscal Year Ended
 GAAP Non-GAAP
(In thousands, except percentages and per share amounts)November 30,
2020
 November 30,
2019
 Change November 30,
2020
 November 30,
2019
 Change
Revenue$442,150  $413,298  7% $456,212  $431,961  6%
Income from operations$107,728  $40,084  169% $182,761  $162,258  13%
Operating margin24% 10% 1400 bps 40% 38% 200 bps
Net income$79,722  $26,400  202% $140,082  $121,745  15%
Diluted earnings per share$1.76  $0.58  203% $3.09  $2.69  15%
Cash from operations (GAAP) /
Adjusted free cash flow (Non-GAAP)
$144,847  $128,484  13% $142,453  $128,893  11%
                    

2021 Business Outlook

Progress provides the following guidance for the fiscal year ending November 30, 2021 and for the fiscal first quarter ending February 28, 2021, together with actual results for the same periods in the fiscal year ending November 30, 2020:

 FY 2021 Guidance FY 2020 Actual
(In millions, except percentages and per share amounts)FY 2021
GAAP
 FY 2021
Non-GAAP
 FY 2020
GAAP
 FY 2020
Non-GAAP
Revenue$487 - $495 $513 - $521 $442 $456
Diluted earnings per share$1.40 - $1.46 $3.22 - $3.28 $1.76 $3.09
Operating margin19% 37%  24%  40%
Cash from operations (GAAP) /
Adjusted free cash flow (Non-GAAP)
$151 - $156 $150 - $155 $145 $142
Effective tax rate21% 20%  18%  18%


 Q1 2021 Guidance Q1 2020 Actual
(In millions, except per share amounts)Q1 2021
GAAP
 Q1 2021
Non-GAAP
 Q1 2020
GAAP
 Q1 2020
Non-GAAP
Revenue$109 - $113 $119 - $123 $110 $114
Diluted earnings per share$0.21 - $0.25 $0.72 - $0.76 $0.46 $0.76

Based on current exchange rates, the expected positive currency translation impact on Progress' fiscal year 2021 business outlook compared to 2020 exchange rates is approximately $6.4 million on GAAP and non-GAAP revenue, and approximately $0.02 on GAAP and non-GAAP diluted earnings per share. The expected positive currency translation impact on Progress' fiscal Q1 2021 business outlook compared to 2020 exchange rates on GAAP and non-GAAP revenue is approximately $1.4 million. The expected currency translation impact on GAAP and non-GAAP earnings per share for fiscal Q1 2021 is not material. 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 2020 at 5:00 p.m. ET on Thursday, January 14, 2021. 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 1-888-458-4121, pass code 6657134. 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 Chef acquisition could negatively impact our future results of operations and financial condition; (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, 2019 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended February 29, 2020, May 31, 2020 and August 31, 2020. 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 business 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:
Garo Toomajanian Erica McShane
Progress Software Progress Software
+1 781 280 4817 +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, 2020 November 30, 2019 % Change November 30, 2020 November 30, 2019 % Change
Revenue:           
Software licenses$37,443  $39,336  (5)% $115,249  $122,552  (6)%
Maintenance and services84,942  77,702  9 % 326,901  290,746  12 %
Total revenue122,385  117,038  5 % 442,150  413,298   %
Costs of revenue:           
Cost of software licenses1,171  1,598  (27)% 4,473  4,894  (9)%
Cost of maintenance and services14,137  12,281  15 % 49,744  44,463  12 %
Amortization of acquired intangibles2,923  6,887  (58)% 7,897  25,884  (69)%
Total costs of revenue18,231  20,766  (12)% 62,114  75,241  (17)%
Gross profit104,154  96,272  8 % 380,036  338,057  12  %
Operating expenses:           
Sales and marketing32,013  29,369  9 % 100,113  101,701  (2)%
Product development24,482  23,868  3 % 88,599  88,572   %
General and administrative15,302  14,915  3 % 54,004  53,360  1 %
Amortization of acquired intangibles7,565  7,414  2 % 20,049  22,255  (10)%
Impairment of intangible & long-lived assets(1)  24,096  (100)%   24,096  (100)%
Restructuring expenses4,080  2,338  75 % 5,906  6,331  (7)%
Acquisition-related expenses2,198  298  638 % 3,637  1,658  119 %
Total operating expenses85,640  102,298  (16)% 272,308  297,973  (9)%
Income (loss) from operations18,514  (6,026) * 107,728  40,084  169 %
Other expense, net(1,887) (3,551) 47 % (11,093) (11,589) 4 %
Income (loss) before income taxes16,627  (9,577) * 96,635  28,495  239 %
(Benefit) provision for income taxes(1,034) (4,837) (79)% 16,913  2,095  (707)%
Net income (loss)$17,661  $(4,740) * $79,722  $26,400  202 %
            
Earnings (loss) per share:           
Basic$0.39  $(0.11) * $1.78  $0.59  202 %
Diluted$0.39  $(0.11) * $1.76  $0.58  203 %
Weighted average shares outstanding:           
Basic44,723  44,882   % 44,886  44,791   %
Diluted45,140  44,882  1 % 45,321  45,340   %
            
Cash dividends declared per common share$0.175  $0.165  6 % $0.670  $0.630  6 %
(1)Primarily represents a reduction in the carrying values of the intangible assets associated with Kinvey and DataRPM.


Stock-based compensation is included in the condensed consolidated statements of operations, as follows:      
            
Cost of revenue$357  $323  11 % $1,336  $1,134  18 %
Sales and marketing1,267  950  33 % 4,462  4,155  7 %
Product development1,768  1,812  (2)% 7,286  7,205  1 %
General and administrative2,731  2,815  (3)% 10,398  10,817  (4)%
Total$6,123  $5,900  4 % $23,482  $23,311  1 %
                        
*Not meaningful                       
                        


CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands)November 30,
2020
 November 30,
2019
Assets   
Current assets:   
Cash, cash equivalents and short-term investments$105,995  $173,685 
Accounts receivable, net84,040  72,820 
Unbilled receivables and contract assets24,917  10,880 
Other current assets23,983  27,280 
Total current assets238,935  284,665 
Property and equipment, net29,817  29,765 
Goodwill and intangible assets, net704,473  532,216 
Right-of-use lease assets30,635   
Long-term unbilled receivables and contract assets17,133  12,492 
Other assets20,789  22,133 
Total assets$1,041,782  $881,271 
Liabilities and shareholders' equity   
Current liabilities:   
Accounts payable and other current liabilities$70,899  $72,674 
Current portion of long-term debt, net18,242  10,717 
Short-term operating lease liabilities7,015   
Short-term deferred revenue166,387  157,494 
Total current liabilities262,543  240,885 
Long-term debt, net364,260  284,002 
Long-term operating lease liabilities26,966   
Long-term deferred revenue26,908  19,752 
Other long-term liabilities15,092  6,350 
Shareholders' equity:   
Common stock and additional paid-in capital306,244  295,953 
Retained earnings39,769  34,329 
Total shareholders' equity346,013  330,282 
Total liabilities and shareholders' equity$1,041,782  $881,271 
        

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)  

 Three Months Ended Fiscal Year Ended
(In thousands)November 30,
2020
 November 30,
2019
 November 30,
2020
 November 30,
2019
Cash flows from operating activities:       
Net income (loss)$17,661  $(4,740) $79,722  $26,400 
Depreciation and amortization12,044  16,519  34,765  56,679 
Stock-based compensation6,123  5,900  23,482  23,311 
Impairment of intangible and long-lived assets(1)  24,096    24,096 
Other non-cash adjustments(2,024) (8,252) 6,287  (13,947)
Changes in operating assets and liabilities8,958  3,078  591  11,945 
Net cash flows from operating activities42,762  36,601  144,847  128,484 
Capital expenditures(3,098) (2,168) (6,517) (3,998)
Repurchases of common stock, net of issuances(37,927) 2,918  (48,901) (15,735)
Dividend payments to shareholders(7,542) (6,941) (29,900) (27,760)
Payments for acquisitions, net of cash acquired(213,057)   (213,057) (225,298)
Proceeds from the issuance of debt, net of payment of issuance costs98,500    98,500  183,374 
Proceeds from sale of long-lived assets, net889    889  6,146 
Payments of principal on long-term debt(3,763) (1,882) (11,288) (5,309)
Other(888) (240) (2,263) (5,732)
Net change in cash, cash equivalents and short-term investments(124,124) 28,288  (67,690) 34,172 
Cash, cash equivalents and short-term investments, beginning of period230,119  145,397  173,685  139,513 
Cash, cash equivalents and short-term investments, end of period$105,995  $173,685  $105,995  $173,685 
(1)Primarily represents a reduction in the carrying values of the intangible assets associated with Kinvey and DataRPM.
 

RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES - FOURTH QUARTER
(Unaudited)

 Three Months Ended     % Change  
(In thousands, except per share data)November 30, 2020   November 30, 2019   Non-GAAP  
Adjusted revenue:               
GAAP revenue$122,385      $117,038         
Acquisition-related revenue(1)6,678      6,378         
Non-GAAP revenue$129,063  100 % $123,416  100 % 5 %
                
Adjusted income from operations:               
GAAP income (loss) from operations$18,514  15 % $(6,026) (5)%    
Amortization of acquired intangibles10,488  8 % 14,301  12 %    
Stock-based compensation6,123  4 % 5,900  4 %    
Impairment of intangible and long-lived assets(2)   % 24,096  20 %    
Restructuring expenses and other4,080  3 % 2,338  2 %    
Acquisition-related revenue(1) and expenses8,876  7 % 6,676  5 %    
Non-GAAP income from operations$48,081  37 % $47,285  38 % 2 %
                
Adjusted net income:               
GAAP net income (loss)$17,661  14 % $(4,740) (4)%    
Amortization of acquired intangibles10,488  8 % 14,301  12 %    
Stock-based compensation6,123  5 % 5,900  4 %    
Impairment of intangible and long-lived assets(2)   % 24,096  20 %    
Restructuring expenses and other4,080  3 % 2,338  2 %    
Acquisition-related revenue(1) and expenses8,876  7 % 6,676  5 %    
Provision for income taxes(6,110) (5)% (12,851) (10)%    
Non-GAAP net income$41,118  32 % $35,720  29 % 15 %
                
Adjusted diluted earnings per share:               
GAAP diluted earnings (loss) per share$0.39      $(0.11)        
Amortization of acquired intangibles0.23      0.32         
Stock-based compensation0.14      0.13         
Impairment of intangible and long-lived assets(2)      0.53         
Restructuring expenses and other0.09      0.05         
Acquisition-related revenue(1) and expenses0.20      0.15         
Provision for income taxes(0.14)     (0.28)        
Non-GAAP diluted earnings per share$0.91      $0.79      15 %
                
Non-GAAP weighted avg shares outstanding - diluted45,140      45,484      (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. Acquisition-related revenue adjustments relate to Progress' Application Development and Deployment business segment for Chef in fiscal year 2020 and Progress' OpenEdge business segment for Ipswitch in fiscal year 2019.
(2)Primarily represents a reduction in the carrying values of the intangible assets associated with Kinvey and DataRPM.
                
                

RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES - FISCAL YEAR
(Unaudited)

 Fiscal Year Ended    % Change 
(In thousands, except per share data)November 30, 2020   November 30, 2019   Non-GAAP 
Adjusted revenue:              
GAAP revenue$442,150      $413,298        
Acquisition-related revenue(1)14,062      18,663        
Non-GAAP revenue$456,212  100 % $431,961  100 % %
               
Adjusted income from operations:              
GAAP income from operations$107,728  24 % $40,084  10 %   
Amortization of acquired intangibles27,946  6 % 48,139  11 %   
Stock-based compensation23,482  5 % 23,311  5 %   
Impairment of intangible and long-lived assets(2)   % 24,096  6 %   
Restructuring expenses and other5,906  1 % 6,307  1 %   
Acquisition-related revenue(1) and expenses17,699  4 % 20,321  5 %   
Non-GAAP income from operations$182,761  40 % $162,258  38 % 13%
               
Adjusted net income:              
GAAP net income$79,722  18 % $26,400  6 %   
Amortization of acquired intangibles27,946  6 % 48,139  11 %   
Stock-based compensation23,482  5 % 23,311  5 %   
Impairment of intangible and long-lived assets(2)   % 24,096  6 %   
Restructuring expenses and other5,906  1 % 6,307  1 %   
Acquisition-related revenue(1) and expenses17,699  4 % 20,321  5 %   
Provision for income taxes(14,673) (3)% (26,829) (6)%   
Non-GAAP net income$140,082  31 % $121,745  28 % 15%
               
Adjusted diluted earnings per share:              
GAAP diluted earnings per share$1.76      $0.58        
Amortization of acquired intangibles0.62      1.07        
Stock-based compensation0.51      0.51        
Impairment of intangible and long-lived assets(2)      0.53        
Restructuring expenses and other0.13      0.14        
Acquisition-related revenue(1) and expenses0.39      0.45        
Provision for income taxes(0.32)     (0.59)       
Non-GAAP diluted earnings per share$3.09      $2.69      15%
               
Non-GAAP weighted avg shares outstanding - diluted45,321      45,340      %
 
(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 Progress' Application Development and Deployment business segment for Chef in fiscal year 2020 and Progress' OpenEdge business segment for Ipswitch in fiscal year 2019.
(2)Primarily represents a reduction in the carrying values of the intangible assets associated with Kinvey and DataRPM.
 
 

OTHER NON-GAAP FINANCIAL MEASURES
(Unaudited)

Quarter to Date Adjusted Free Cash Flow     
      
(In thousands)Q4 2020 Q4 2019 % Change
Cash flows from operations$42,762  $36,601  17 %
Purchases of property and equipment(3,098) (2,168) 43 %
Free cash flow39,664  34,433  15 %
Add back: restructuring payments992  2,272  (56)%
Adjusted free cash flow$40,656  $36,705  11 %


Year to Date Adjusted Free Cash Flow     
      
(In thousands)FY 2020 FY 2019 % Change
Cash flows from operations$144,847  $128,484  13 %
Purchases of property and equipment(6,517) (3,998) 63 %
Free cash flow138,330  124,486  11 %
Add back: restructuring payments4,123  4,407  (6)%
Adjusted free cash flow$142,453  $128,893  11 %
            
            

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2021 GUIDANCE
(Unaudited)

Fiscal Year 2021 Revenue Guidance
 Fiscal Year Ended Fiscal Year Ending
 November 30, 2020 November 30, 2021
(In millions)  Low % Change High % Change
GAAP revenue$442.1  $487.3  10% $495.3  12%
Acquisition-related adjustments - revenue(1)14.1  25.7  82% 25.7  82%
Non-GAAP revenue$456.2  $513.0  12% $521.0  14%
          
(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 Progress' Application Development and Deployment business segment for Chef and Progress' OpenEdge business segment for Ipswitch.


Fiscal Year 2021 Non-GAAP Operating Margin Guidance
 Fiscal Year Ending November 30, 2021
(In millions)Low High
GAAP income from operations$91.2  $94.6 
GAAP operating margin19% 19%
Acquisition-related revenue25.7  25.7 
Restructuring expense1.9  1.9 
Stock-based compensation27.3  27.3 
Acquisition-related expenses0.3  0.3 
Amortization of intangibles44.9  44.9 
Total adjustments100.1  100.1 
Non-GAAP income from operations$191.3  $194.7 
Non-GAAP operating margin37% 37%


Fiscal Year 2021 Non-GAAP Earnings per Share and Effective Tax Rate Guidance
 Fiscal Year Ending November 30, 2021
(In millions, except per share data)Low High
GAAP net income$62.4  $65.1 
Adjustments (from previous table)100.1  100.1 
Income tax adjustment(2)(19.2) (19.2)
Non-GAAP net income$143.3  $146.0 
    
GAAP diluted earnings per share$1.40  $1.46 
Non-GAAP diluted earnings per share$3.22  $3.28 
    
Diluted weighted average shares outstanding44.5  44.5 
    
(2)Tax adjustment is based on a non-GAAP effective tax rate of approximately 20% for Low and High, calculated as follows:
Non-GAAP income from operations$191.3  $194.7 
Other (expense) income(12.2) (12.2)
Non-GAAP income from continuing operations before income taxes179.1  182.5 
Non-GAAP net income143.3  146.0 
Tax provision$35.8  $36.5 
Non-GAAP tax rate20 % 20 %
      

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2021 GUIDANCE
(Unaudited)

Fiscal Year 2021 Adjusted Free Cash Flow Guidance
 Fiscal Year Ending November 30, 2021
(In millions)Low High
Cash flows from operations (GAAP)$151  $156 
Purchases of property and equipment(7) (7)
Add back: restructuring payments6  6 
Adjusted free cash flow (non-GAAP)$150  $155 
        

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1 2021 GUIDANCE
(Unaudited)

Q1 2021 Revenue Guidance
 Three Months Ended Three Months Ending
 February 29, 2020 February 28, 2021
(In millions)  Low % Change High % Change
GAAP revenue$109.7  $108.8  (1)% $112.8  3%
Acquisition-related adjustments - revenue(1)4.1  10.2  149   10.2  149 
Non-GAAP revenue$113.8  $119.0  5 % $123.0  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 Progress; Application Development and Deployment business segment for Chef and Progress' OpenEdge business segment for Ipswitch.


Q1 2021 Non-GAAP Earnings per Share Guidance
 Three Months Ending February 28, 2021
 Low High
GAAP diluted earnings per share$0.21  $0.25 
Acquisition-related revenue0.23  0.23 
Stock-based compensation0.15  0.15 
Amortization of intangibles0.23  0.23 
Restructuring expense0.03  0.03 
Total adjustments0.64  0.64 
Income tax adjustment(0.13) (0.13)
Non-GAAP diluted earnings per share$0.72  $0.76 


 


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