The 10-second takeaway
For the quarter ended May 31 (Q2), Progress Software beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly. Non-GAAP earnings per share expanded significantly. GAAP earnings per share grew.
Gross margins grew, operating margins dropped, net margins grew.
Progress Software recorded revenue of $81.7 million. The four analysts polled by S&P Capital IQ wanted to see revenue of $79.8 million on the same basis. GAAP reported sales were 10% higher than the prior-year quarter's $74.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.27. The four earnings estimates compiled by S&P Capital IQ predicted $0.21 per share. Non-GAAP EPS of $0.27 for Q2 were 29% higher than the prior-year quarter's $0.21 per share. (The prior-year quarter included -$0.17 per share in earnings from discontinued operations.) GAAP EPS were $0.07 for Q2 versus -$0.03 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 89.8%, 120 basis points better than the prior-year quarter. Operating margin was 22.5%, 120 basis points worse than the prior-year quarter. Net margin was 4.8%, 740 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $76.7 million. On the bottom line, the average EPS estimate is $0.24.
Next year's average estimate for revenue is $333.4 million. The average EPS estimate is $1.13.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 46 members out of 54 rating the stock outperform, and eight members rating it underperform. Among 16 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 16 give Progress Software a green thumbs-up, and 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 $25.50.
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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. The Motley Fool has no position in any of the stocks mentioned. 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.