The 10-second takeaway
For the quarter ended Feb. 29 (Q1), Progress Software beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped significantly.
Margins dropped across the board.
Progress Software tallied revenue of $124.4 million. The six analysts polled by S&P Capital IQ foresaw net sales of $120.4 million on the same basis. GAAP reported sales were 7.3% lower than the prior-year quarter's $134.2 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.28. The five earnings estimates compiled by S&P Capital IQ averaged $0.25 per share on the same basis. GAAP EPS of $0.12 for Q1 were 59% lower than the prior-year quarter's $0.29 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 82.6%, 240 basis points worse than the prior-year quarter. Operating margin was 9.7%, 1,300 basis points worse than the prior-year quarter. Net margin was 6.0%, 930 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $125.9 million. On the bottom line, the average EPS estimate is $0.28.
Next year's average estimate for revenue is $521.3 million. The average EPS estimate is $1.26.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 40 members out of 49 rating the stock outperform, and nine members rating it underperform. Among 18 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 15 give Progress Software a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Progress Software is outperform, with an average price target of $22.80.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.