PRGS - Earnings call transcript Q2 2021 | Progress Software Corporation

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Operator

Good day, ladies and gentlemen. And welcome to the Progress Software Corporation Q2 2021 investor relations call. At this time, I would like to turn the conference over to Michael Micciche, Vice President of Investor Relations. Please go ahead.

Michael Micciche

Thank you Keith. thanks financial us results and second Progress everyone XXXX quarter conference afternoon for for joining Software's Good call. Chief With President me Officer. Folger, and Gupta, Financial Chief Executive today Officer and is Yogesh Anthony

I This we subject be we forward-looking the performance, Chef, integration on call, our corporate pandemic would Before business product discuss other started, considered like our outlook forward remind might guidance cost during will only financial you looking. future for of and plans, the represents to of of the outlook strategies, COVID-XX and information impact information this and Software's to that operating Progress today our get that uncertainties. as and risks is initiatives,

please section our particular XX-K. in For to filings, whether the in Risk refer captioned Progress SEC otherwise. obligation update a most statements developments new of our forward-looking to Software factors description recent recent the risk or in that Factors as of included our may no a Form result call, assumes results, this affect

call, the indicated. are measures discuss non-GAAP financial we figures otherwise this unless on Additionally

you a market find the press numbers which financial results document it on available measures after the recommend our XXXX our for of the also for is directly and comparable can You of GAAP these most in specific website. issued was release, closed financial reconciliation today contains the non-GAAP reference to financial of details I and results This details. our full fiscal quarter second

and of are that, in available conference be release I presentation additional presentation recorded available will With metrics. will quarter results and XXXX also this replay section turn that website. the of financial Also, Relations call on the Yogesh, supplemental to Investor investors.progress.com. second over you. its today's our earnings at Relations Investor be now it the website providing our via have contains section will entirety in We prepared data our a for Both highlights and

Yogesh Gupta

thank you QX all conference and financial results Welcome Mike. you call. XXXX our for everyone Thank joining

our confirmation full again projects. was guidance improving in nearly product strong mission business We critical strong markets to run our from in and nature validation we belt confident I are results all businesses. our The are invest in our do our the We built QX margin, for software portfolio. XXXX, and technology comprehensive pleased QX. to into a board. line, in demands benefited summary on of of saw by cash strength with investments Demand comments QX discussion revenue, of on two some the operating quarter very executing how our the flow. demand solutions our of and year With for EPS of and which under product and by strategy across followed and their performance consecutive we our we customers we an across Anthony. every which from guidance strategic in infrastructure the is of IT quarter of in again of positive and momentum raising are We exceeded fiscal over growing carried again second in-depth quarter strategy, continuation will partners in Progress second our result our continue provide and on outlook a systems as business and increased

key challenges importance grow complexity their developers DataDirect, data products and in content, provides and technologies As application, address to and DevTools more support efforts. their to more, the strategy their MOVEit cloud-first Chef, the continues companies enterprise. and shift within and to for role Sitefinity, our What's mobile-first of OpenEdge,

lifecycle. applications and their Our applications entire through manage mission and developers development, equipped to products deploy DevOps management infrastructure data critical and develop,

ecosystem to their ongoing. on rely who product our three of proud over this are developers We serve for critical million

mainstay the QX, OpenEdge in way sales among as In driven continued our performance many by of our direct partners revenue, terms partners. ISV again the and of topline our once strength led

and product. global Nielsen products as like companies Reuters Thompson in strength and DevTools our other shipping saw meaningful company Our core Data additional MSC investments made

performance our and the the this primarily year-over-year core quarter revenue driven driven and by primarily growth Gold, was Chef. OpenEdge led by While again with products, MOVEit WhatsUp are we topline was for Ipswitch our success continued our by products, seeing

spaces, With DevOps growth tremendous expanded customers. in key relationships and the DevSecOps and Chef marquee with landed

that significant our renewals in New Yahoo Japan, services industry competitive well win Chef as several very set Pinterest. goals with major the expense customers FB the and insurer at timeline of acquisition. ahead include we product a Rakuten, pleased when customers am for financial we and and set cloud-native and such integration announced for the Chef months we for manufacturing reached already a have U.S. as the for I expansion as companies synergies several se

our strategy in Our detail discuss in a progress I to-date will validates total growth which moment.

and doing spend rate. net dollar about retention annual revenue so, like Before talking would I recurring a to moment

provide net ARR into may and insight quarter year-over-year XX% on by up performance. to the currency metric was visibility $XXX investors underlying our introduced million of As and driven of you retention primarily we our revenue dollar recall, to more nature provide Chef. rate a into better last basis, constant recurring ARR

part strength, XXX% highlight business. Chef our and exceeded OpenEdge. and the driven Our from well quarter, stability this dollar DevTools contributions of durability again as large net by retention as metrics These rate in

our total strategy. to Turning growth

in infrastructure We are evaluating software the actively space. dozens of opportunities

sourcing strategy more pipeline is sheet improving deal recognize acquisition convertible during unsecured and want must of products the step we competitive strong is million senior I our that remain to want competitive corporate recurring that that of effort criteria forum, breadth our the Despite as also market remain the mix confident We a Any As our balance is I QX, right nimble bond around mention discussed although and the we and through development size, in meet M&A. offering it strategy in team our with M&A eliminates these substantial an took is and complementary positioning corporate that headwinds, pleased financing. very finding of opportunity. which in In development are us. our and even we strengthened of an remain have financial high. our important further target our for the completed generating. the we competitive with uncertainty us April, we valuations right pipeline made we other activity towards high $XXX our to improve and revenue strict retention reiterate consider to we rates. and committed with

our We cash this remain compound future. that drive excess allow and to us we strategy and believe expense committed of we We deploy on it flow, the when solid demonstrated cost because acquisition, capital. return optimize well to into maximize return margins in the of we have capitals shareholder will shareholder

to allocation to our a balances patient allocation shareholders. we with not significant shareholder remaining In committed capital M&A our value to and directly are growth value we total friendly free capital are which strategy, to increasing return we with addition strategy. disciplined focused capital cash with flow deploying shareholder When use acquisitions, for

For companies example, software one we are dividend. of the a who few pays

our shareholder growing dilution also at of to ESG recognize on importance upon capped Anthony repurchase to And the purchased Progress as with their to as have to potential share investors. current convert, execution our the value, Consistent program. in in us remain We efforts our focus call owners. we meaningful we the very will minimize explain, share place important

new monitor and already global program. We and noteworthy continue for sustainability, which to corporate reporting responsibility standards enhance measurement evaluate metrics, social our

Journal makes to by in Progress as XXXX the Stevie where our than Forbes the numerous are of We additional a I our and a employer In on have our magazine entire in our our received it preserving of positive Inclusion am for was awards Diversity strategy. the great came Chief was for for team quarter, place Forbes of time environment growth This my by close fact, the of Best the on total investor America's highlighted received inclusion Officer a and success a as will Progress second highlighted deck one and globe. Places who which very website in one best announced like of and Bulgaria employees Work the as corporate being Progress the few the more diversity proud of recognition that superb recently. the lead at execution programs ago we same the a received so the to and addition for based. proud we social Progress row, employers. weeks we in second their of around And to culture midsized comment an our quarter chose Tomorrow the another heels Boston while to time The acknowledging would Massachusetts. immensely In formal Progress point And Progress new have best of all, I the inclusive work. are efforts proof named Business excellent program. responsibility

well to of financial QX demand execute the QX of performance for and well strong are details provide We as and that, segments, let the product to as I our remainder With past world our move continuing will COVID-XX. as begins geographies outlook the across XXXX. see Anthony industries, Anthony?

Anthony Folger

call. quarter Mike. indeed for joining another for afternoon QX Thanks Yogesh. thanks was Good everyone strong our and Progress. Thanks

ago quarter lines. environment the $X.X expected Our Chef to reflecting March. and a in again quarter the million Total virtually all of a results growth in high-end we than results basis, reflect range our for year-over-year $XXX.X the year million second On we saw across was provided improving guidance over the the mentioned we biggest back product demand contributor stronger our continuation was of in XX% And growth. above is QX, QX. revenue the of

and MOVEit Gold. However, lines contributed many our products, and also of notably growth, OpenEdge our WhatsUp most other to product Ipswitch

revenue, a In ARR closed million Chef's constant X.X% forma all annualized forma currency growth with second in results XX% pro recurring approximately basis $XXX include a and addition, on on quarter of in the basis. we Pro representing periods.

stable Chef. in focus XX-month growth as applications of topline. growth, power on with was DevTools our coming net retention by still critical and expected At our significant improvement our rate in multiple QX improving and products nature QX, trailing The end OpenEdge, DevTools products. a the above the ARR, driven resulted revenue customer and XXX% experience very our than better was primarily Chef, mission durable Sitefinity not have QX the as of including consistent we and slightly Our and OpenEdge, although from

to Turning expenses. now

million of factors. $XX.X This the primary of $XX.X XXXX. were is the expenses compared for operating and quarter, year-over-year costs million of increase increase an to total QX two Our result

more is and increase. Chef approximately operating margin our the And XX% ago in Operating the XX% income to quarter. compared to was million the which our was on our the quarter. than variable are business topline. XX% commissions for quarter, $XX.X of up the year-over-year that year with as such the bonuses ago to approximately of year associated are up compared costs half performance First second makes addition And

in earnings earnings XX% quarter On share for share the above of our $X.XX bottomline, year quarter. above per the and per our of guidance our $X.XX of the high-end the was approximately range ago $X.XX

interest million QX $XXX.X are used of of are the convertible Moving debt negotiated new the an the may, privately with a we completed The an of that this metrics. adopting from credit also the like the and closing the ending premium XXX% offering from on ASU or to to net fiscal Because our balance carry and rate for I transaction our notes to X%, XX including five offering effective million. standard. existing XXXX-XX, was April would cash balance flow transactions capped X. call a proceeds that our of I few of accounting million. and standard maturity The price they these over adoption shares convertible overview of conversion repay year-end, on revolving XXXX. $XX.XX does $XX allotment we will our an call proceeds of million the November shares We then in transaction the not early $XXX to of mention after start offering with The year fiscal facility and closed. notes amount, sheet $XX.X debt during utilized quarter. repurchase precluded total option, reflect capped

fair be debt as equity at the classified our of our through notes premium GAAP value gradually over the expense initially time as sheet. and and balance As the flow same P&L value will the a of increase the non-cash result, face on the on conversion time shareholders' interest will

will our December of adopt on to using expect And QX million. days approximately having DSO facility total we in liquidity compared our the full $XXX interest for Adoption and revolving net $XXX untapped of cash in less We of in on X, updated of during fiscal million quarter expense improvement down credit ASU income from increased have statement excess to short QX, expect ended term increasing reducing value debt days, We issuance income costs. the million sheet also for our cash investments have three reported quarter our profitability was for and balance the any the XX million. non-GAAP will of and XXXX method XXXX the the our collections of to $XXX was no or paid capacity an XXXX-XX with have flow impact $XX was the unamortized quarter. cash increase standard in from new free year. principal retrospective convertible The operations. of net the the up our last flow or standard debt effect GAAP carrying year. driven QX in value free of on million Adjusted cash $XX last primarily improved the and from quarter, XX% in flow

million and at authorization. our second current to As end now QX I during the QX remaining and we outlook would $XXX mentioned repurchased previously, of to for million quarter full $XX our the XXXX. for share year like the had stock in under repurchase turn

we between and $X.XX million per revenue million $X.XX. $XXX of expect and third and quarter of between the earnings For $XXX share XXXX,

to the largely is million. strength are be of remainder $XXX our year to full increase year. due and increasing $XXX the QX the and guidance million XXXX, For we revenue our in confidence The between

our guidance. approximately increase to XXX operating an raising basis XX%, are outlook We margin from be our points prior of

driven increase topline cash and of million, per and million our prior to strength flow increasing $XXX outlook. And million between million in be $XXX $X.XX We confidence the between manage and costs. $X.XX, $X to an to guidance increase share are our projecting by $X we are from for free our adjusted earnings continued be ability to with

additional to thrilled with repurchases shares Our XX% the million contemplates our for outstanding a QX share of and are results closing, approximately XX of has resurgence annual no XXXX. rate In XX% rest estimate that business our EPS tax the and with we demonstrated.

continue are open balance can XXXX of for total With We Q&A. positioned to for that, well great like would execute we I with to strategy our the the feel call results. and growth

Operator

[Operator Instructions].

with from Wang Guggenheim our We go question take will Please first Ken Securities. ahead.

Ken Wong

this either Chef highlighted my of question profitability. but first I more makes sure Great. Anthony, both you solid sense a guys, the Thanks quarter, taking on for and if and not I thing, for guys. am guess schedule of Yogesh ahead or you growth it tracking

wondering, growth the direction you have in great. and little of would steer be Just digging extracting color last in fueling potentially couple anything more maybe that of would potentially more seen the Any there quarters or you a in leverage?

Yogesh Gupta

fiscal we originally From of thank So would have we Anthony I the those with we start. by that our will I perspective, end the of Chef synergies And And year. you. have said, acquisition. get target expense this And we was will follow-up. accomplished that targeting actually Ken. to synergies course, were as the

you and the we do haul, better reason sometimes little point, change over worse perspective general, our we times From that's sooner. them at a to might business. way continues a than at business going I Like, And a But into that. do we it, know, bit got don't bit is than flat in to see we long this flat. overall we be right. come have think forward, have flattish it the flattish. least any our when We that characterize when Ken, little as

I like add? tremendously shaping of on you that about I of But something topic. year think up. And to say have the are all to know way whether rest We confident the Anthony, don't I the that's would is

Anthony Folger

No.

think right, I Yogesh. that's

of the which positive year Ipswich prefer side certainly we other kind our this OpenEdge flattish side. on been of have think some be to we as has certainly been products of have the some but and Chef that that products. And like a to on of I contributor

had It's really do deviating good say quality So I I necessarily to execute plan we to It's way profitability. originally got wouldn't in a set are think characteristic. any we on what growth that with are plan It's some there. out ahead Chef. we asset. with continuing of our

Ken Wong

Got it.

bit Super has revenue And net a quarter. just think XXX%, on lot Should then range think that's Okay that from the little for quite dive Seeing you that wanted last to on volatility? retention. above that a positive, nice that a of particular we number? helpful. perhaps coming step-up in Just color any of metric is kind what right

Anthony Folger

good a question, It's Yes. Ken.

would been say to bit hasn't over consistently, of years. Maybe We let's XXX%. volatility. the There pretty I say, been have a it's lot past a a improving XX% of couple been

way think we number. you is The it, trailing a I are XX-month calculate right. So it

So trend deliberate got before I apparent that invest will perspective, quarter-to-quarter of think volatility. do. to here changes, that since of lot some rates. better flip be a it's things from to think I a our of invest effort, the side, in the I retention are I in in numbers. been customer some a the be we as experience on and there But to seeing types won't business or results obviously terms very And investments are But even we continue slightly to think in going from those technology,

to So the we I where to is. don't feel the expect and good we it pretty wild about investments I get number have think in made the swings number

Ken Wong

of sort of a will there to normal Got particular half from the back basis, far that business to are see could the more year? product the would wondering one mic just that look lagging say kind then macro are we tailwind a a still and my the on areas if some return you to it. potentially any of we just I as peers And I then benefiting as could just the Yogesh, or in pass squeeze here. as segment

Yogesh Gupta

It got the out really in have board. this been forward of said, have looking as actually challenges we want as see their term head the started Ken, interesting of across half, they projects, to to to outperformance invest the product with we entire across to first right, two of quarters sort their and deal have businesses first year, the seen So benefit right. IT the we COVID-XX trying how seen the have longer of portfolio, really as that has

less. We more I are Obviously, biggest see our that. area that is confident think will continue there's to or OpenEdge any that particular we don't product. is

So it board, is But the seeing management we And the it product seeing Gold. been from network across interest an has we are whether individual interest. WhatsUp biggest actual contributor. overall, perspective, dollar then in are with our

right. As you of tailwinds challenges to know, market set the has a mobile And has I like up to first, move opened want there one of had applications. for products and so people security has products the modernizing I just other go cloud, been competitors some Anthony's the as it that are point, people ours. they reiterate as around their And our think

Over in we users the have it the that or products move benefit are are available and kept product all whether or five that we such really, in that we Ipswitch is customers do every that help investment, are Gold. forward, our challenges OpenEdge in the that and face. made our sort it products to year our that R&D those do with investments XX last WhatsUp pre-releases the and as products ready about pre-releases are when with MOVEit truly and current every forward. of so we we it year so our Chef. them move our years, demonstrating And address and that invest They want whether they customers now so our all fact have that in talked And ready to was things DevTools

the been good it's don't across area good there's would for our think I think us. products. demand and I conditions any for that I specific So board highlight

Ken Wong

Great. Thanks a guys. lot

Yogesh Gupta

you Ken. Thank

Operator

Please will our go We next Ives Wedbush. question take from with Daniel ahead.

Daniel Ives

great Yes. And guys. quarter, Thanks.

Yogesh Gupta

you. Thank

Daniel Ives

obviously, surprised is really even with you thought. So seems talk gate lot Chef, better mean so can of like I the you far? than it working Because you what things just out coming a about maybe

what just anecdotal, you of to what talking give from as us customers, hearing sort I mean, you are some the are you hearing? are So field?

Yogesh Gupta

Sure.

a highlight. open So couple one phenomenal positive open say want in of shouldn't the that positive acquires to think innovate an do a Chef, anecdotes continuing really developers Chef I to I there surprises. a large source of source ecosystem. product. I When Chef that is sort job of like community but of There's a surprises, company out really

community had Progress' of And Chef. and very so community, fronts, the one customers concerns And communities the we was to pleased taking source of how community those been the of both on of will Progress. have we react our embraced they over how open both that that those have would

the by that Some continue happy of they is are source profitable are invest that we to open who will invest that that I a that invest we to we know company, pleasure Chef really, with, traded had we they customers have the in a speaking R&D, the we really community that larger now business, publicly as of in all continue will software well. Chef and mean, backed in

And so, the, just way, really things. very of positive is the one SAP user of a think Chef. By large I phenomenally

I They own. plural And cloud imagine, are cloud, in put that think I mean say really says for you in SAP's assets there can the are XX that SAP. including when every cloud. they blog I a out million cloud publicly

five about acquired I and different are, million Chef. or six been managing so that really, And Progress assets clouds. the they They there fact think, have XX-plus excited are like really

that are open think event think community success. The positive. open source a So just I And to had has contributors about been continuing contribute ago, an month really we aggressively. me, to part I source phenomenal

our across as as the the side. know part that and side Progress it's quite the joint I team because So the want to Chef new in has of people them this ignored have is touch wonderful The product is done that over at job combined make has I that this is well teams, I working that I that on on last and the think, happen. the an both and happy Dan, the And often Chef sort we from amazingly on end customer-facing Progress with team the really at team am board. come that

So to both And to as get us as on things we a do well retention like just winning well positive so new experience do has for me, customer I the customers that synergies, think on. to it's very very, been to said, us. allowed and continue

Daniel Ives

Now let me I does this Is is and M&A one, pressure ask I I bar pretty set to Anthony team on the a the for one? feel feeling. the bar question, make they a a success high. match next the high next Anthony to continue the sure little on pretty team? the what for am and Because mean more like there that's

Anthony Folger

Dan, that fantastic. I Yes. The Jeremy leading Segal is, and news the is Jeremy good got M&A we group have think

is of around a what requirements the financial entire to team I deal. the and for sort us disciplined criteria what think are are close on

patient. And is so think we I the aligned will be around I company And it. think

pipeline. done And the find great has will right out team the the asset. job, We building a really

to so And past XX just of ability been the number our there's the dramatic over are in of improvement months. tracking, source that all companies we

is we got team to bar the over I So high, think certainly have it. get the but

Daniel Ives

again. Thanks Great.

Yogesh Gupta

Thank Dan. you

Daniel Ives

Dan. Thanks

Operator

question Anja Soderstrom & will with from take go We Sidoti Company. ahead. next our Please

Anja Soderstrom

rather follow-up before your than refined, I on you you being thank do great more Ad another done playbook And Chef a for other questions. How Chef? that much Hi. taking on Chef-specific of have drivers quarter. the acquisitions think having success. is attributed my to congratulations

Yogesh Gupta

are right. Anja, two there aspects, think, I

did is getting we and them did, with that. I as to side a synergy We competence. as really We mean, expense our the core job obviously Ipswitch. good that. On have refined that quickly we did

well do faster. refine it able and continued were have done to and we We to with get Chef it as since it

that's what to we think I bring table, right. So the

DevOps And I on team we core good they and That cloud and Chef the we good demand. growing. market, an a that marketing a job. have as is a itself also strong. Progress like a right. and areas their continued amazing to to I And remarkably is try market in market do Chef. cloud, a mean, is great And like interesting so at a and demand have deploy we systems I and competence think the they DevSecOps said, market really need done It there's mission-critical certain product. think forth. where so is gen it's around move where market is see the products people It in the how and

So of Anja. a things, it's combination I think

think you asset we, are at from Chef pride I take came happen can a the take it. I over that some think also an folks that to table. something things good that are some to to have Progress, bringing we pride And the bringing they And can in really market.

So think us. asset it's really an all-around for been good a I

Anja Soderstrom

environment affected past Okay. M&A like at M&A Thank pipeline of you. that And the that. all? over the the couple Has also how with a in things months? terms has inflationary the of and that environment, changed Like sort of more about warning

Yogesh Gupta

part the not of the question, am understood part of Anja. I I sure What last your environment?

Anja Soderstrom

No.

it pipeline going all? if affecting sustainable your evolved last a couple be has And months? to So inflationary more at that environment, M&A of there's is the over how

Yogesh Gupta

Yes.

continue be said high, to So right, valuations the I right. earlier, think as we

right. why This right. kind And is is it's to of about we means one interesting thing, And disciplined, we continue that an that our so be strategy. what feel the of reasons confident

continuing key. and at a our returns really us, investors deliver the we expect and sure around that we amount team have think we We doing stick shareholder nurture pipeline And same pipeline. the right. have that great disciplined making that leadership grow the criteria from to as that's is of we that and our a that truly And I a mentioned, team Anthony deal have a flow is time, to that strong and

will we So continue be to patient.

we for that the execute We with when before sure and right right with assets will rigor that. the level make and Ipswitch that same we of on that find had look the lately it we Chef will we asset

Anja Soderstrom

serving? Okay. Thank you Is last the regions are different there just of terms then you. can one. terms the in performance you in of geographic And anything call out

Yogesh Gupta

Yes.

performance So again, geographies. across strong we saw

probably in actually about it the comes think moving U.S. to beyond if is think it, best I shape when right, COVID. the

I is think coming along. Europe

challenges of bit slowest are I But everyone right. for think we probably is across Asia-Pacific I terms improvements see the market of a single we the in timing. America the am I happening think Brazil still look everywhere. think mean, America in I recover sure in board, has I Brazil, little if think because technology to I overall, the largest Latin Progress. And behind parts Latin heard is And

Anja Soderstrom

me. you. Okay. Thank all That was for

Yogesh Gupta

Anja. you Thank

Operator

Schappel take with our Mark Benchmark. go will from next We question Please ahead.

Mark Schappel

Hi guys.

Yogesh Gupta

Hi Mark.

Mark Schappel

the nice Yogesh, to on job driven for With it respect strength quarter, question with again the Thanks in the my starting business? ISV of side you. quarter. principally was and the taking on the OpenEdge

Yogesh Gupta

both even business. on It's right. what the had is strength an interesting Mark, ISVs of the Again, as Mark, direct continued happening, but side of course, sides, thing, well

are have I have cost lowest the and think keep mission-critical most to efficient applications a platform, they platform on continued recognizing businesses a a platform we is sitting platform and their that that that truly modern. evolve

maybe I more their it delivering investments some so look we and made seeing And you have we sort is should at think that what a I are and little people bit truly think that say, with degree, to that. COVID actually of are do great is, results where investments

both and direct seeing are ISVs. we So

Of are doing ISVs course, well.

in direct. always wonderful. But seeing also we strength that's So are

Mark Schappel

to on And to XQ Okay. assume Great. rate? to recall results, Thanks. was that that it And least fair it was continues when correctly, Chef, is a mid single shifting Chef based good grow I at then acquired, digit the if grower. it

Yogesh Gupta

ahead, Mark. know, you As Go Anthony.

Anthony Folger

perform But to hasn't we going would don't just was changed. well. out separately. say, say I break line yes, the continues I trend Chef to No. really it

I And so think the we line don't change on a there. basis, trend seen have in year-over-year a

Mark Schappel

Very to commentary little that Any gears on the at about that shifting example, in business maybe add? as you then all, for DataDirect, color in And DataDirect. Super. prepared if remarks. renewals Okay. planned? could coming So

Yogesh Gupta

Absolutely. as Yes. Business planned. is very performing much

As you that of multiyear with lumpy are there ISVs, right. the know, large contracts Mark, because with quarters are the fact DataDirect,

the direct couple quarter. side, direct in QX, to new had quiet the the sense, customers the we in highlight enterprise way, on relatively It a By right, of so other. did nothing And won actually this on DataDirect. way that or straightforward sort But a for of customers one was well.

and a we about was positive that talked surprise So it.

the a just quarter, normal middle. quarter was straightforward pretty This down

Mark Schappel

Okay. me. Good Great. all again. job That's Thanks. from

Yogesh Gupta

Thank you again, Mark. Appreciate it.

Operator

go our from Kidron question Please ahead. with take will Ittai Oppenheimer. next We

Ittai Kidron

quarter. Great nice free performance your the on Anthony, here Thanks and just year. but cash guidance of annual question suggests one quarter for there. you, had flow. deceleration great guys. second half the Great performance there, the in big Very I a

think flow me takes help annual and your about guide? So cash free the of puts

Anthony Folger

little And we The delivered in strong. Yes. about a for of that Hi lot flow bit. office the And That's we out we look cash quarter further get collection really half probably we the bit half back is a year, year, back great to of back we obviously, sort $XXX in little get better of and free is like a the be. free million than of to heck a assuming thought little And of which that a Ittai. question. travel would first flow, the have the was when the along into bit activity. may a cash more think I are things cautious we

guide much up back. holding to comes how little of travel and also operating but expenses in-office probably back come back, taking a see wanting comfortable that felt just bit, a the of little much the how we So bit

that, So that's with or if why. think really sort not move linear reason the of I it's maybe margin a something like

Ittai Kidron

Got it.

the you like XX%. on margins sounds I to, it guess, you to outlook actually expecting, up your So use margin actually raised are for

decline as your assumptions doesn't in year. margin you sound half in it operating like the of So second modeling in much the are a

Anthony Folger

where where of the XXXX perhaps Yes. to margins back No, not little now, out. half shook bit relative are a we from

Ittai Kidron

good. it. Got Very Thanks.

Anthony Folger

Thank you.

Operator

additional like back today's would for session. Gupta Yogesh this turn the to closing At question-and-answer and this conclude to I conference gentlemen, any time, does or Ladies remarks.

Yogesh Gupta

the rest Thank especially to Thank for really in you hard our continued work, with to QX which you. well to today. Thanks confidence and look share you. us performance you and our dedication and continue our am excited the total our am proud I of all again positions I goodbye. call soon. for of growth pleased the joining talking as their strategy. about outlook I organization entire to forward am execute our XXXX genuinely of in I we

Operator

participation. conference. appreciate gentlemen, today's Ladies does conclude and We your this

disconnect. You may now

Progress Software (PRGS) 25 Jun 212021 Q2 Earnings call transcript