PRGS - Earnings call transcript Q4 2024 | Progress Software Corporation

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Operator

Good day, and welcome to the Progress Software Corporation Q4 2024 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Mike Micciche, Senior Vice President of Investor Relations. Please go ahead.

Michael Micciche

Sherri. you, Thank to great your hands. capable It's be always in Thank you.

started we're we go over Before to our here, going get statement. safe harbor

and this as other strategies, information outlook discuss subject and During and which Such closed is our will forward-looking for XX, ShareFile of might we financial XXXX and uncertainties. be October future forward-looking. and acquisition our of Software's operating that risks plans, guidance represents product outlook corporate today Progress on only cost information initiatives, to performance, call, considered

this For a Exchange risk our factors risk affect statements assumes may call. filings refer that in to Progress in Commission. please to description of obligation factors and the our forward-looking no results, Securities Software with the update the included

that referenced Additionally, non-GAAP all call are indicated. figures unless the this financial measures in otherwise please note

these You This quarter to results our financial results fourth non-GAAP and measures can specific to recommend release, in for year and that for our the full press closed I reconciliation which details. after a reference most figures you information XXXX, financial the related comparable contains issued additional it market find GAAP of financial directly fiscal the document was today.

metrics. investors.progress.com. available fourth are presentation our the supplemental presentation that of financial also Investor results, We've a earnings at provided full supplemental data quarter for release the the all fiscal highlights additional Both contains highlights Relations financial additional provides website and our and and and provides XXXX year on section -- and

I'll it our finish. the be replay and over Investor section Today's to website should of turn recorded that, Yogesh. call be on entirety we its after With shortly for will Relations in available

Yogesh Gupta

year OpenEdge Good and you Results published in profits, products. for another our everyone, our for afternoon, XXXX outstanding network as 'XX AIOps Fiscal for data Mike. DataDirect registered MarkLogic, management strong performance portfolio, Financial joining especially and was can continued QX, our our you from platform thank another across by you, see product Thank our Conference products Call. We marked results. QX demand and

Our are responsible mission-critical world living for foundation applications. data is for important at and a we businesses, where platform products over business increasingly are AI XXX,XXX data the in applications

of We the and by ARR earnings end in high flow, guidance constant free on exceeded grew cash currency. XX% and

XXX%, million. net in Our We our retention close results. end ShareFile unlevered true revenues when million, $XXX $XXX high in rates on exclude million came you holds above completely to even which cash the of $XXX generated flow of guidance free from

month reminder, contributed of X QX. As revenues a in only ShareFile

to line proud expense earnings the top provide our But 'XX strong Anthony the performance, to relentless I'd excellence. excellence flow. shortly. our some coupled Our with like share will management of excellent I'm meantime, cash and guidance detail commitment FY more in results free go dedication their of extremely and in through their for highlights to significant in team led FY 'XX. and outperformance

year, concluded several the their received As without good with no the privacy MOVEit closed Earlier recommended. investigation also in recall, actions from vulnerability its investigations international which we the SEC, you might into in August data regulators news action.

of by and heartened MOVEit focus are right on happy are the addressing ]. We attack the on conformations did thing that Progress in these business to [ the our business

Group recall you excellent process. integration October Cloud we of course, the an of closed start or highlight our to not company, with and operating under Because are the carve-out that was we in agreement on year, will had XX, and a a of stand-alone was a ShareFile we've transition that biggest The acquisition CSG. the Software services ShareFile

employees more from reliance or rapid the already as immediate are We've well some our closing. transition completed the on our and ShareFile CSG we and all ending into a transitioning initiate services towards systems, infrastructure, other the of partners upon manner. smooth in a and activities eliminating transition customarily with collaboration and synergies HR to duplicate working diligently ensure customers working such We're to timely

FY very expect is XX% of ShareFile as the and when to integration still QX track, time full acquired results. announced end business we the operating is deal, integration the the we While for believe margins attainable on the we complete XX-month frame we when for we our early, within it's indicated we provided 'XX. And by the our of announced threshold

total add to it 'XX, Progress's We also adds recurring will top raising million to It XX% line the in revenue, meaningfully the percentage $XXX Anthony be which increases revenue. this. revenue about to to SaaS XX%. to getting revenue. close the more This expect FY significantly overall our XXX% by over our SaaS excellent well of have of ShareFile visibility line stability of top will on and recurring share

benefit SaaS the ShareFile at-scale proven expertise importantly, acquisition, SaaS more XX% with joined our accelerate to Perhaps this will platform gross ShareFile's foundation is margins SaaS platform, technologists of own journey. a and with deliveries. in us of provides product the the our own excess with that native us combined SaaS

our proof acquisition easier also additional and potential to integrating include the universe point large to integrate of any expands it SaaS will in businesses now other acquire for the SaaS What's of with future. we may company, as business more, us this SaaS a evaluating, It companies into make that demonstrable buying well.

of total disciplined. M&A, to continues one strategy, be the pillars to our which approach growth Our is three of

Our price, and at M&A improving acquire a on simple: have rapidly businesses great integrate retention. laser-like focus discipline the is right customer

excellent relevant with today them us that A future base that products impressive an relies customer to great by exceptional relevance, mean Acquiring keep talented and and have employees and loves fit Let Progress those business has products future. a such culture their heavily on is into me run define what business well will own. the us to and businesses. well businesses strengthens we with that one great our

secure us Ipswitch and observability has momentum. gain us continues provider brought MarkLogic enabled SaaS AIOps us market ShareFile center market has left And enter reliable while for capabilities AI-powered made Kemp latest AI chef platform example, DevSecOps business-centric at-scale trend a offering. the and and the our to in shift a Gen meaningful For an acquisition, as to collaboration. content the application is with

address accelerate broader progress products. modern us offerings needs. our employees and set of to of these And enable the a all to companies by brought of customers' All the evolutions these skills acquired our the technological expertise

ShareFile and Importantly, enterprise combined strength, Kemp go-to-market channels, their MarkLogic enable Chef our go-to-market open respective model to acquisitions and U.S. And existing channels, scale with also and with source sales small significantly OEM our efficiently and complements broadened Ipswitch have high-velocity ISV the These ShareFile's at-scale role. contractors. with large with federal at around government and X-tier us serve and world. channels, our businesses our

to businesses X each such demonstrated completed Acquiring acquisitions the away we've as right of the excellent as patient disciplined, walked in price, us requires from. in to for have deals all the be well we have which date, and we

and our will when of doing such deals. to comes discipline track We it patience continue record

increasing our and The other success. strategy value in pillars invest Growth and systems to customers. two deliver focus ensure innovate equally continue to people important innovation We in go-to-market to our to efforts, products, that Total are customer on our to

customers solutions experiences. product enable and we that deploy In digital within FY portfolio several applications innovative our delivered our develop, responsible and to 'XX, AI-powered manage

now vector augmented products, language For use retrieval platform securely to example, MarkLogic and to generation -- augment to customers data enable models. Semaphore automated and our leverage capabilities generational and retrieval the large Gen capabilities proprietary AI content data our of

with AI responses relevant Gen leads the easily accurate the and to and verify so traceability data, users original proprietary own based material are contextually supplemented and responses source results. This that a to business' links on can these

data which why that reliability effectively serves of a large capabilities and to meet and to use with platform new their extend needs. its of citizens confidently, their such recently need tens is agency U.S. to Businesses of GenAI accuracy, use decided millions GenAI variability government our

In to make developer marketers for and it rate embed Digital automating and to AI in products enabling to AI content UI experiences end easy users. deliver another by And leverage personalization, developers example, our the AI-powered creation tools our are of optimizations. Experience conversion applications AI-powered to job simplify Gen now

their level make and are easier products predictive in always analytics to to AI our productive now leveraging enhance use, and advanced capabilities. management some technology But Our AI incorporated core more products we even infrastructure their have of architecture. to

to For 'XX, into detection events Flowmon AI-powered in threat specific actionable advanced experts the threats. time example, launched reducing pinpoint of we thousands spent with cybersecurity that by network drastically and effort intelligence, distills

protect brings and guidance automated ShareFile user include AI document new workflows. also leverages capabilities AI summarization sensitive automated which portfolio, also information. acquisition our It to on to Our

user the the sensitive share security information, to and example, share ways For within secure detects AI-powered the more document a information, ShareFile's user a contains their sensitive alert's if tries that suggests workflow. to their user for document

we addition customer to us, which retention to ensure rates. In high leads also net a innovation, they success on an focus have that stay unrelenting to with

that efforts with focus churning FY 'XX success to customers sales rate marketing 'XX. margins It deliver early generate high of few be and in and high is on allows and cash. to NRR this a FY XXX% despite, resulted and us efficient might us as operating in Keeping our to our and continue also you retention over in a customer 'XX large net recall, late customers enables happy

about like capital our strategy. I'd talk Speaking of cash, allocation to briefly

in finance of QX million when deal. $XXX a facility. As million credit of ending a $XXX our facility new with bond the We up reminder, ShareFile $XXX sheet we facilities, XXXX consolidated convertible to we balance a and million our revolving prior credit strengthened used that issued single

cash our our our pay expect quickly outstanding for next With and and to strong debt revenues acquisition. recurring we down generation, prepare

greater on efficient to is capital. want a our time. capital to effective most goal allocate over cost invested shareholder in to consistently of capital value generate return way the create we that And and exceeds Our

we our reiterate I call. want what to QX said earnings in

efforts development corporate are ongoing. Our

the And for We price, to right comes act. right at will great continue look hesitate if one not we along the businesses. to

one integrate We we acquisition are than parallel. can in confident that more

place a we our even employees. to the highlight of final year, work Lastly, for progress continue an as make better to

is Boston engagement addition which Progress key reflect Business were exceptional our In employees, awards Journal. to culture, Work a These Boston and to we numerous the again success. awards by work the our a for related to our and Globe earned strength and employee the Place of the Best environment to selected to

Our are of Promoter show the for. work low companies outstanding turnover Net technology employee to Scores continue best that to employee and our one we

get year, benefit and knowledge. people experience do We better have at expertise, each who from what their institutional good they and we

I norm. this We differentiators progress strategic our industry, having and their thank work. of we expenses. and have turnover, an their for lower low can't strongly talented competitive one and hiring commitment a hard where and is training highly believe to in our of is that engaged high turnover a enough Because the the deep significantly for success employees advantage

'XX our to So wrap FY FY are we with execution up, about 'XX. and excited thrilled in

weeks we and organization quick offerings, XXX ready than few FY 'XX. got learn start the sales people December, early Just targets. ]. their our ground new to in to a global ago, more a The off field about kickoff gathered [ and in person team our has to We energized where held running our hit place to returned

to 'XX, growth. FY demand solid continued expect for drive In meaningful products our ARR we

improvement look aggressively growth business unlevered next flow, use operating debt margin we also resulting the cash for throughout We acquire. in ShareFile significant will pay expect while to free year, to down the we continued the which the in in

to now additional provide and me our over Anthony? to results guidance. it around details Let turn Anthony

Anthony Folger

Good afternoon, joining for you our Yogesh. thank you, everyone, and Thank call.

from in close we're I'll start the to by Yogesh and metric, were our quarter to fourth our such our fiscal acquisition across XXXX results strong ShareFile of which solid As deliver included a means X-month at got contribution full-year a mentioning end the year. of October, and close thrilled results. we've every quarter fourth mentioned, of ShareFile

run which Please numbers. view mind keep we we believe start of ARR, speaking best the provides line our in the let's top And as with that through performance. into numbers, the

XX% basis a approximately year-over-year on and ARR growth We on $XXX represents basis. almost growth with X% forma closed a million, QX pro of year-over-year which

For forma pro ShareFile's include clarity, both periods. ARR the results in

products, LoadMaster Our in DevTools ARR our Sitefinity. was by growth multiple including driven products, and ShareFile, OpenEdge,

you we mentioned if Yogesh quarter, the results, rate in retention as all our its of rate rate our And in with net and over completely calls, net year XXX%. as XXX% when previous his over also net the upward again retention ShareFile's are over Also, mentioned XXX% results retention on fourth remarks, included and ShareFile's a move exclude in is it's closed periods. continued

increasing and an end million a the approximately and guidance to high close of retention in September quarter in growth very QX provided the addition In $XXX back the net year-over-year growth XX% of rate, ARR on range we revenue to for basis. represents was

in $XX performed performance a expectations. products, better OpenEdge, growth quarter with of which ShareFile, includes DataDirect Our from including our strong other and in MarkLogic, than all revenue the million internal our contribution DevTools coupled products,

For the combined products. contributions growth our over was full top million $XX in of of million MarkLogic growth with year. $XXX X% and the the This our products, notably, most prior line year, revenue and grew ShareFile, driven by other DevTools OpenEdge or

a With growth year. top customer for we're demand consistent line retention fueling performance and our for thrilled the rates with improving throughout environment XXXX products, our

Turning now to expenses.

XXXX. the the fiscal full the The over and increase quarter, up costs full-year up a year-ago XX% was driven aforementioned in by the and compared acquisition the the for entirely for quarter $XXX expense the quarter; of year-over-year by for X% million in total $XXX were ShareFile. year to MarkLogic of million expense year, of driven and the of inclusion Our ShareFile, and operating for expenses was almost our acquisition activity increase full

exceeding $XX quarter to on XX%, income for while managing operating of performance operating was expectations. handily This was the result expenses better-than-expected our an internal million overperforming line our Operating the of for top plan. the margin

across line solid business. share strong line, range. the $X.XX with to of earnings was the management the per overperformance cost coupled the $X.XX of by On high our quarter driven our relative end were bottom expectations above This guidance top again performance, for

right. All

Turning to balance sheet few and flow cash metrics. a now

price start me whereby of was details $XXX asset and million, with The million purchase Let credit. of acquisition liabilities the ShareFile. and was purchase, a an were acquired on assets few a working to capital acquisition it a certain for subject $XX base

credit receivable fact capital compensate was not ShareFile acquired. accounts were working the for to This negotiated that

close Progress net price a the of While from the in $XXX date. credit receivable collect before purchase of acquisition results accounts any million, won't ShareFile's

So cash said price future an for some equivalent purchase simply, inflows we swapped reduction.

$XXX fund running a drawing of combination X.X%. existing has To purchase, million we a the credit, rate interest from debt, variable of currently line our at used and approximately which cash revolving

debt we've aggressively down in to mentioned, intend previously XXXX. begin first we paying As the of half

net billion. the closing the year position cash and we of of debt After debt ended with for $XXX equivalents of cash $X.XX million and acquisition, billion a $X.XX

to in We in to a of expect the On integration so, basis, throughout realize the expect ratio doing X.Xx. synergies to meaningful ShareFile we post-synergy year. complete our And XXXX. leverage we expect net be approximately

DSO $XX the the performance reflecting And for the days million of to in acquisition. deferred XX days, was end quarter, quarter up revenue million was X the top fourth the on quarter, line sequential quarter. $XXX with our fourth the ago approximately revenue addition deferred compared a basis, of coupled million year $XXX in from up the at strong ShareFile

year. for million was over annual increase prior Adjusted an the our million, flow XX% quarter, $XXX of free to total $XX cash bringing

quarter, stock. the Progress did we During any fourth not repurchase

an total price than Our share. million repurchase $XX fiscal $XX our And less XXXX was at current $XXX we authorization. of our under share repurchase for year million average fiscal with ended remaining per annual

Okay.

outlook. Now is turning to in When considering to outlook, following. important our our keep the it

ShareFile's revenue our to SaaS, entirely is approximately mix will the First, revenue model and increase acquisition recurring XX%.

fiscal and going on continue our focus in single we digits. consistent we XXXX grow ARR as are a to metric, low last message with So to will ARR key continue to year, the expect in

fiscal acquisition. Second, of repay $XXX million partially the acquisitions, in that revolving used We've repayments credit modeled we finance XXXX. expect absent any aggressively the during year was to to ShareFile line

interest further XXXX by of affected and our amount and XXXX, of increase this, it expense compared timing will be meaningfully our As the will to XXXX repayments. a result

to changes These share distort of earnings both and future the periods. the free have per prior comparability flow in potential and cash

free unlevered key As year-over-year a result, comparisons. metric to as we assist provide a flow with will cash

share notes price our earnings the calculating when because Finally, above considered share, price. our we've XXXX XXXX convertible our from fiscal dilution is conversion well per

spread call recognize dilution from to up us for impact that this when we've outlook outstanding. approximately purchase for nuance, do covers the the number that we benefit regulations will $XX of allow provide any we you a accounting the did provide dilution an assumed Because shares call economic shares calculating each per the spread of time EPS. not Though share, added with our we of to

the of growth XX% representing million, All for $XXX year we right. between for XXXX. and $XXX With between $X.XX. million all And $XXX said, $XXX that quarter XXXX, the revenue per earnings we of and between between share revenue expect XX% first and expect and over and XXXX, million full million $X.XX of

XX% an anticipate of operating margin We year XX%. for the to

We of million, $XXX between flow we're cash projecting million flow million. $XXX adjusted of between million cash and projecting free $XXX and free are $XXX and unlevered

be expect and earnings to between $X per We $X.XX. share

guidance of assumes shares XXXX progress million and a rate notes. the outstanding, Our $XX on with our million of EPS for in repurchase convertible X.X approximately dilution shares full-year shares tax associated includes XX%, which XX the million

closing, excited XXXX. against for and and We're positioned XXXX beyond. integration a the delivery for and thrilled early our great we're some to milestones, we think acquisition In we're deliver fiscal result ShareFile with well

questions. the I'd up open With that, like for to call

Operator

come from [Operator Boolani Instructions] with And of first Citi. the question Fatima line our will

Fatima Boolani

side regards question performance to my business. channel Yogesh, of in with the you first and to focus entirely to I wanted the organic the

like You saw ton MarkLogic. in your and now OpenEdge, of a DataDirect momentum flagship solution

And quick in wanted you're geography bifurcate if seeing please. maybe I then as market is and can of from well, end and end a really I if us some markets, differences help perspective? demand driving any you of what follow-up so and/or organic unearth And a almost revitalization to way that by performance, distribution by have that even

Yogesh Gupta

to New Year Thank you, as you happy well. Fatima. A

be we large these upfront, a X the be large lumpy businesses, is are, deals businesses, know case and relatively the to enterprises as well. large MarkLogic just So all with OEM to OpenEdge, case they DataDirect, of you as in customers are businesses in the honest, enterprise ISV know, solution of that large and

] perspective, saw is, whether Europe. primarily business we So products first drove Europe, have strength products. There do what America all, and footprint and where APJ than are for global of Latin we So America of Most America these the better -- these their these? though really from a did North in even [ the North across globe. customers wasn't

think I is sits is -- These data OpenEdge critical the it the using to products ] the [ this are importance mission-critical is businesses. whole data of to MarkLogic connected data where of becoming or case in either and DataDirect.

So I this. of business. think see. I the this movement that to lumpy an interesting the data is It's is part I a kind whole, important as But of think, said,

And Anthony, something if you like to this? to add

Anthony Folger

I No, with all that, Yes. agree Yogesh. of

And be there more think think another I more to is our more that I opportunity. our base. lot of installed at least bolstering our opportunities to platform continue that's upsell a AI the us and giving aspects lot and a I think element in leverage of

just felt it like a geographies, quarter across good number across channels of across products. a So and strong

Fatima Boolani

just focusing especially have ]? And both on increased about a you and on Appreciate retention the job of so rate your of thinking good very Anthony, because direct are core pretty historically, solutions, as a [ some you product that. of your specifically consequence maybe products, surgically siloing around how core done your of the criticality investment

more thinking cross-sell more incremental rate solutions But just have out it And to wondering, the the about into for upsell, power really territory? on that's to net investment help retention potentially you're break me. new how organic

Anthony Folger

not mentioned, material AI be historically, we're in investment lot the in then some of lot data add And the that to in portfolio has that we a AI of I -- on capabilities there's I we've and products through got the a been a Yes. have lot platform as acquisition, Thank budget with say -- Fatima. a Yogesh capabilities, to think not our of especially done The enhanced terms envelope you, a to lot of side. change our have. we of have going and envelope. -- would really

continuing to customers. for solutions it's our think focus and and the I those just about less investment envelope enhance so more And about

I think in to we're some area. to get well continue traction positioned that

Operator

come the Securities. with And from that will of Guggenheim line John DiFucci

John DiFucci

question for Yogesh. First is

don't higher spoke stay strategy? guys your strategy? sort rates words, and How you a strategy. even perhaps your pause You at if should know, have where acquisition we job, longer in guys you does in that commendable interest other And -- affect observation. administration assume the more least for rates they about a In I our are, new done importantly, of,

Yogesh Gupta

John, But a no slightly kind you give longer answer words. no, you for I'll is So But now the pause. answer. thank those short

you couple a There I if right, I of a competitive are It they've think for buyers advantage lot now. interest relatively rate, been creates actually for notice, mean years in a of buy high of to their is businesses interest approach high sort to them kind we doesn't environment. the look high who an to lever to which And of a degree, look buy. work extremely us.

I I of that think will therefore, competitive an in So we edge. we situation, find think have terms

was a I much look right? competitive mean have interest here could at I you lever that's potentially, it us. advantage therefore, So if and one you itself, can said, pay lower somebody had much think potentially else for mean more I "Oh, up more." that I business rates, ShareFile

firepower in left We today. have of bit a capital even our little still

frees relatively as for as to intend off can, we debt, $XXX our do transaction. up I Anthony could to that this us we creates a So additional mentioned we modest-sized which go capital But additional pay down acquisitions. mean, do that million as the year; rapidly we

landscape the getting paying combination going, competitive I the think the us that of to like buyers combination So is fact down of of the be going debt, combination for the favorable. ShareFile synergies

John, also longer, right? last say, think just means, least, more probably, but valuations, for not reasonable let's I higher

software for X multiples. buy I've that all there that increased tremendous are, going play I companies mean infrastructure rate follow years, periods to seen those the kind in historically, think, X this at opportunity I reasonable to favor. years, great so enterprise to they interest things is And our next the of few

excited deals. we're doing about more so And

John DiFucci

Yogesh, thank you.

forecast makes for think lot guess because that -- come It I a Anthony, And us, of follow-up afterwards your sense. Street, expense but we you does. of after. back range. the within Anthony. about the including -- to has a it I'm ended going talk your like that our the right? like got like for margin, we'll And to even the operating be But ask because All revenue, We year, got got actually, I right, interest off

guess of I model want you helping as question different you lot to have I a ask a within us Progress. know, models because --

it if So makes times, so we several it you tried try hard. -- to it's hard really it's you to model it, and do

ShareFile, But of break close it's the be point Since going at Is services his in something remarks, do -- with Yogesh just this think it we it's business, ahead, SaaS it material, could this you in but think you would that to can model. to us? quarter, I it's for you prepared put Go like seems total revenue. sorry. out going forward? XX% said I

Anthony Folger

think because is all of as think good we'll services our will in Solutions, little our I up No, we services that's which I because effectively a you're mark, are other bit professional this that us likely of offerings we XX% ShareFile And SaaS may it that close a have to well. Yes. include a right, year, P&L going that SaaS push to question. move John, line be material, as XXXX, is through have

will understanding the revenue folks think a it for and the within I maybe maybe go better itself I line elements as different of -- to to sort some But -- working. just able modeling of tighter we lend how be are think you'll

year. that So as is move come to yes, through I quarters think we this the

John DiFucci

help and will understanding will It the a your the lot to benefit. business I think me that help.

So thank you.

Operator

and from question, come of Kidron line next with your the will for Oppenheimer. Ittai moment One that

Ittai Kidron

congrats It's do guess with deal. with start you, closing three I others. one, full have it maybe a as big done I two, a year. you financial for the you've Guys, questions. just Maybe make with impact you I can for on have I Anthony, but on the quantify want there the the interest guide basis? Is I and understand a way next EPA on to side, sure convert the the year-over-year to on confidence

think have have factor I'm last guide this have they -- been wouldn't a been to trying EPS just the a not factor those what would two about year. year if been as

get an to a of apples-to-apples trying more bit EPS. just So little

if So you that, be will great. do on that could the work

Anthony Folger

Yes, sure.

the from about $X.XX for expense dilution think I incremental our the expense $X.XX, perspective, about an and the converts the is interest interest -- year $X.XX. from is

together, talking So under year-over-year the share on EPS. those both you're $X of just basis. per on impact a That's

Ittai Kidron

than range, to XX% your and to back business more included to and the with ShareFile within bring here Okay. to not ShareFile, XX% then the if guided at Why operating more that and work or helpful. you I that right, fully And got than is is guide on improve wrong, That's that margin. level? honest, baseline very if annual closer understand that because if is this I'm already But correct I which you've XX% guide, one within by bit number be this you me why XX%? I little thing a included it that month. only XX%, range, surprised to that rather for you've To already XX% right, delivered X integrate was quarter, than

Anthony Folger

where for in an quarter. around in of with acquisition And contribution fourth came that's fourth Keep business the Yes. in only the mind, margin that, over in right And teens. think before high of that this ShareFile we landed I I framing sort operating X the so sort the below quarter was were month. when it think XX%, mentioned XXXX we the

improvement on. be so in And goes a as that there'll the margin gradual year

to that XX%. the I that able I think size about being with coming of deliver the feel at -- acquisition, think level knowing that good pretty and it's we XX% to on

Ittai Kidron

to So way through this note, getting low, starting the and about I of the is kind on think that linearity of year, if ending think about a high this? better the improving

Anthony Folger

I Yes. think so.

Ittai Kidron

Yogesh. go-to-market from of multiple for your rather on-premise that lastly infrastructure be just software, reminded I Okay. forth. us right, a also so interesting and the all or you that not with you've all business source an be business motions, through but is It highlighted you, guess, of of review open was And OEMs, to in evolving legacy whether it on cloud-based kind

in one in I is efficient. is, How our do my meetings focused motions? the having in you the of risk guess my always where you past when question running emphasized And have the go-to-market guess question maintain things multiple and I of multiple go-to-market is, is motions? your you've efficiency the business importance

I'm of think executing is the higher the the wondering is we on businesses kind risk other a churn it that, in there also And just purchase? -- shouldn't Is typically you of the that ShareFile, nature by what here. than business

Yogesh Gupta

Multiple the -- that's questions. start first of I'll no, okay. with

focused So so all part, channels right, place acquired of with at basically staying on the -- we one the we demonstrated Progress. right, things ShareFile, have that were that in even before Ittai, the

high Ipswitch, had model and we've with model, We've velocity had a model had with channel we've a Chef. an source go-to-market Kemp open

enterprise So we've selling that we course, Progress. since and and can -- always to demonstrated early an we've had of of days much the model ISVs pretty

efficient for We We have things there's put can and So work in because margins a lot very of a lot our run we channel a that commonality efforts, a already model. I with do. in operation that lean partners high lot think we of deliver automation of a we high-velocity demonstrated a go-to-market in way.

this motions. think are having kinds go-to-market all there I of benefits of of range wide

and like businesses who the sales are enterprises, only the large very do and us are but nearly is the of efficient so, really, allows all, there businesses right? After address smaller and now we actually XXX,XXX -- impact doing very have on X,XXXs, us things midsized world. our actually as use we also around who have And a X,XXX products global we in them. how not so on. just It online businesses. to reach So And rely large number channels

at -- end. partner lot see actually very of manage I channel a it's the their of completely lot that or automated meaningful folks all revenue sales do who either high-velocity the deals, management, costs. channels basically as then So impacting or inside in lower-sized stuff, I very, don't do that's it margins. -- our of lot our our lot A a see of being them helping a channel, the effective us

it's Ittai, efficient. So tremendously actually,

Ittai Kidron

churn Very good. And then on on ShareFile? the

Yogesh Gupta

the competencies. think net as That we retention Progress our net a practically improve retention have that we ShareFile FY core 'XX. you is that one I of the when always of business. to And looked as in of know, was actually, acquire same So

so close And well. to goal it's that as to is get extremely And plus XXX our that. to

Anthony Folger

portfolio. And not churn of just or other raw in raw would some in that But like sort a ShareFile. I the have the Yes. might you're gross slightly lower the add, our Ittai, be different it's retention of we products business than right,

of have we have We've got products. a DX Sitefinity. we DevTools, So group

where I pretty with Products and been I And our share ShareFile with those and would the has portfolio. ShareFile out. like we're of say, those products churn velocity how terms in attributes that, think sort common relative of rest be it play and can products where the of the comfortable in to

Operator

for with next that question, moment Brent will Thill line One come Jefferies. the and our from of

Bo Yin

ask to Thill. the for Brent environment. Yogesh, one a high-level demand on This wanted is I Bo Yin on

trends So year guess the are of that And question XXXX guide? full-year what we're demand spending around into time you're And the my in versus into new sort looks, the more heading X embedding is assumptions customer this appetite, how last now. year? weeks I

Yogesh Gupta

in we demand as really, continue So similar 'XX. we've see, had

great in mean why 'XX, actually, expected progressed. So the I that's continued has again, well I do the year solid. we reasons of one demand demand. to has as 'XX throughout have mean, we been not such

our sustained portfolio. We across are expecting product demand

feel make anything not to So seeing right now -- and otherwise. we're us

there happen. are all see stage, will And solid of at lots Of least course, knows this as forward. know. But going demand out we what we there, who at uncertainties

Bo Yin

maybe Got of of or just your you're pipeline that there funnel the share state today? seeing on top could you metrics like it. Is anything

Yogesh Gupta

specific I don't that different. think is anything there's

Our top of robust. funnel continues to be

continues pipeline business Our customers, In our customers. you general, business to vast, the existing majority robust. of our vast, vast know, vast of be is the majority existing is as

We a So know upon. predictable. that expand advance to maybe coming when up. in renewals advance us, contracts can is when very we customers well their that in very, well we have are And know

digits that as over was know, you and XXX%. the we low -- -- our single XXX% is growth, business Our very NRR, small, think So new so which as but last ARR I in year right? is

new just couple a see can you So of points. that

have and And pipelines, good we so amount, small that's for pipeline to a so speak, robust relatively that.

We to So a their that really customer we really -- very and the sure it's our pipeline, pipeline -- base of think don't existing of us, vast for goes. differently. making more we the where us, That's understand cycles. of majority energy

Operator

next JPMorgan. the for of line with will that Bora our come moment One from question, Pinjalim and

Pinjalim Bora

vector that of of that is on on government I using? that is What being about to of a usage? I vector agency AI want MarkLogic to, is the said you customer think, down kind What thing as Gen MarkLogic, one the double Semaphore sold it using database? U.S. the Is the Great, kind workload. a Yogesh,

use in case marketing if traction maybe the to trying could that help think on understand And and that from us to want a around just use line standpoint, you're business start more case. leaning seeing accelerating.? if you customer I understand are

Yogesh Gupta

to. happy Yes,

MarkLogic Semaphore this customers. is existing Pinjalim, So an

so their business using for right? data let primary business for So of me And well start in have is their data They as all structured. there, the -- been they as unstructured MarkLogic. So right? MarkLogic that store database,

the And [ ] LLM. has the delivered so is augmented from ability capabilities to as RAG information we the and retrieval that happened coming to corporate generation do against augment answers have back what vector

of that longer host than These -- MarkLogic much can how the they the customers a rather an to near see are who have -- rather they of purposes. term already users use Semaphore opportunity for MarkLogic, than already, term whole

we'll LLM and and internal And Semaphore it then goes use use is with AI initial there. use their internal the for So internal is users. MarkLogic for see initial or from use Gen how

-- so for project new So just they this go-to-market this is a plan just us. started

looking entire bring as as both other how are get them customer what MarkLogic looking recognize than base well to Semaphore and seeing of and to customers we some our well. that We at broader can as the we can -- at

Pinjalim Bora

for what Anthony. One that of follow-up ShareFile? 'XX revenue contribution And assumption fiscal the Understood. Anthony, what is from us for is growing Yes. at? can you business remind

Anthony Folger

it -- it's low Pinjalim. with digits. single around I the it's say sort would of consistent we're $XXX to going to we're be expecting business million of And year, the rest to going say for our Yes, be

Pinjalim Bora

at to in up, million said -- Just I'm follow to you the guidance. million $XXX looking just $XXX addition.

the -- adding fiscal I last up, something be think you'd the like guidance $XXX year million. last or versus came million $XXX to

acquisition, So how you're a this I'm little trying if -- business million bit looks adding understand is weak -- organic $XXX the weak. to from

the is to understand. I to understand million, piece, that $XXX So ratable lower? piece. revenue, But ARR trying the ratable I'm

Anthony Folger

Yes. mind X thing keep Well, in month 'XX. to in one ShareFile from is there's contribution

So the $XXX -- $XXX contribution. a there's incremental million million, maybe

license in on the particular way is in deal we've And revenue renewals that as would and we yes, -- OpenEdge get contract lumpy the renewals multiyear have why the before, which focus talked of for DataDirect timing like the to with base or can revenue we're a and continue expecting we I either which about ARR, even business come on term year, to in extent one don't we things or pure another, this ARR. perspective, growth a say

by be. a ahead of look probably at would 'XX, ShareFile, which probably little even it was you around And we ARR if thought where without grew X%,

I growth. expecting with we're ShareFile, ARR year continued think next

to million, impact incremental year. things -- from the you there's And unwrap, contract variability DataDirect. have FX for timing So maybe yes, share let's of you on million renewals $XXX file say, in of do the million, then be your like can for an you million $X sort of if 'XX, little $XXX going a revenue $X

Operator

I'm Yogesh showing closing now to to queue at turn further questions Mr. I time. in this remarks. over like the no would any call for the Gupta back

Yogesh Gupta

FY joining delighted Sherri. Have Thank a everyone. an day. are good close, FY 'XX, in to looking we're for exciting 'XX. with us, To performance you, forward our we and Thanks again

Operator

concludes Thank program. participating. today's This you all for

You now disconnect. may

Progress Software (PRGS) 21 Jan 252024 Q4 Earnings call transcript