PRGS Progress Software Corporation

Progress (Nasdaq: PRGS), the trusted provider of AI-powered digital experiences and infrastructure software, today announced financial results for its fiscal fourth quarter and fiscal year ended November 30, 2024.

Fourth Quarter 2024 Highlights¹:

• Revenue and non-GAAP revenue of $215 million increased 21% year-over-year both on an actual and a constant currency basis.

• Annualized Recurring Revenue ("ARR") of $842 million increased 46% year-over-year on a constant currency basis.

• Operating margin was 10% and non-GAAP operating margin was 37%.

• Diluted earnings per share was $0.03 compared to $0.34 in the same quarter last year, a decrease of 91%.

• Non-GAAP diluted earnings per share was $1.33 compared to $1.02 in the same quarter last year, an increase of 30%.

"2024 was a strong year for Progress as we continue to execute on our long-term strategy to invest and innovate, acquire and integrate, and drive customer success to deliver Total Growth," said Yogesh Gupta, CEO at Progress. "Mission-critical business applications at more than a hundred thousand businesses are powered by Progress products, and I’m grateful to our employees who are building great products, serving our customers’ evolving needs, and making them successful. We are particularly excited about our recent acquisition of ShareFile, which adds an AI-powered SaaS content-centric collaboration platform to our portfolio and will contribute meaningfully to our top- and bottom-line."

Additional financial highlights included:

	Three Months Ended
	GAAP								Non-GAAP¹
(In thousands, except percentages and per share amounts)	November 30, 2024			November 30, 2023			% Change		November 30, 2024			November 30, 2023			% Change
Revenue	$	214,961		$	176,970		21%		$	214,961		$	177,523		21%
Income from operations	$	21,500		$	22,537		(5)%		$	80,510		$	62,515		29%
Operating margin		10%			13%		(300) bps			37%			35%		200 bps
Net income	$	1,147		$	15,335		(93)%		$	59,977		$	45,769		31%
Diluted earnings per share	$	0.03		$	0.34		(91)%	(2)	$	1.33		$	1.02		30%
Cash from operations (GAAP) /Adjusted free cash flow (non-GAAP)	$	19,651		$	33,161		(41)%		$	18,087		$	32,893		(45)%

Other fiscal fourth quarter 2024 metrics and recent results included:

• Cash and cash equivalents were $118 million at the end of the quarter.

• Days sales outstanding was 67 days compared to 62 days in the fiscal fourth quarter of 2023, and 45 days in the fiscal third quarter of 2024.

• On October 31, 2024, we completed the acquisition of ShareFile, which provides a SaaS-native, AI-powered, document-centric collaboration platform, from Cloud Software Group, Inc.

• During the fiscal fourth quarter of 2024, our Board of Directors suspended our quarterly dividend in connection with the ShareFile acquisition and plans to redirect such capital toward the repayment of debt to increase liquidity for future M&A and for share repurchases, both of which are prioritized in our capital allocation policy.

"We are extremely pleased with our fiscal fourth quarter and full-year results," said Anthony Folger, CFO at Progress. "NRR closed the year above 100%, we delivered exceptionally strong operating margins and adjusted free cash flow and ShareFile delivered results in line with our expectations. We look forward to carrying this momentum into Fiscal 2025 as we work to complete the integration of ShareFile and realize meaningful synergies from the deal."

Full Year Results

	Fiscal Year Ended
	GAAP								Non-GAAP¹
(In thousands, except percentages and per share amounts)	November 30, 2024			November 30, 2023			% Change		November 30, 2024			November 30, 2023			% Change
Revenue	$	753,409		$	694,439		8%		$	753,409		$	698,150		8%
Income from operations	$	124,003		$	110,523		12%		$	298,475		$	270,637		10%
Operating margin		16%			16%		0 bps			40%			39%		100 bps
Net income	$	68,438		$	70,197		(3)%		$	219,020		$	194,214		13%
Diluted earnings per share	$	1.54		$	1.57		(2)%		$	4.93		$	4.35		13%
Cash from operations (GAAP)	$	211,494		$	173,920		22%		$	211,889		$	175,453		21%
/Adjusted free cash flow (non-
GAAP) / Unlevered free cash flow									$	237,979		$	200,385		19%
(non-GAAP)

2025 Business Outlook

Progress provides the following guidance for the fiscal year ending November 30, 2025 and the fiscal first quarter ending February 28, 2025, together with actual results for the same periods in the fiscal year ending November 30, 2024:

	FY 2025 Guidance				FY 2024 Actual
(In millions, except percentages and per share amounts)	FY 2025GAAP		FY 2025Non-GAAP¹		FY 2024GAAP			FY 2024Non-GAAP¹
Revenue	$958 - $970		$958 - $970		$	753		$	753
Diluted earnings per share	$1.08 - $1.23		$5.00 - $5.12		$	1.54		$	4.93
Operating margin	14% - 15%		37% - 38%			16%			40%
Cash from operations (GAAP) / Adjusted free	$216 - $228		$225 - $237		$	211		$	212
cash flow (non-GAAP) / Unlevered free cashflow (non-GAAP)			$282 - $294					$	238
Effective tax rate	21%		20%			27%			19%

	Q1 2025 Guidance				Q1 2024 Actual
(In millions, except per share amounts)	Q1 2025GAAP		Q1 2025Non-GAAP¹		Q1 2024GAAP			Q1 2024Non-GAAP¹
Revenue	$232 - $238		$232 - $238		$	185		$	185
Diluted (loss) earnings per share	$(0.01) - $0.05		$1.02 - $1.08		$	0.51		$	1.25

Based on current exchange rates, the expected negative currency translation impact on our:

• Fiscal year 2025 business outlook compared to 2024 exchange rates is approximately $5.6 million on revenue.

• GAAP and non-GAAP diluted earnings per share for fiscal year 2025 is approximately $0.03.

• Fiscal Q1 2025 business outlook compared to 2024 exchange rates is approximately $1.8 million on revenue.

• GAAP and non-GAAP diluted (loss) earnings per share for fiscal Q1 2025 is approximately $0.01.

To the extent that there are changes in exchange rates versus the current environment and/or our expectations, 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 2024 at 5:00 p.m. ET on Tuesday, January 21, 2025. Participants must register for the conference call here: https://register.vevent.com/register/BI14e62bc5ab3f4885a358aaef36f1684e. The webcast can be accessed at: https://edge.media-server.com/mmc/p/5i6yaf23. The conference call will include comments followed by questions and answers. Attendees must register for the webcast and 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.

Important Information Regarding Non-GAAP Financial Information

Progress furnishes certain non-GAAP supplemental information to our financial results. We use such non-GAAP financial measures to evaluate our period-over-period operating performance because our management team believes that by excluding the effects of certain GAAP-related items that in their opinion do not reflect the ordinary earnings of our operations, such information helps to illustrate underlying trends in our business and provides us with a more comparable measure of our continuing business, as well as greater understanding of the results from the primary operations of our business. Management also uses such non-GAAP financial measures to establish budgets and operational goals, evaluate performance, and allocate resources. In addition, the compensation of our executives and non-executive employees is based in part on the performance of our business as evaluated by such non-GAAP financial measures. We believe these non-GAAP financial measures enhance investors’ overall understanding of our current financial performance and our prospects for the future by: (i) providing more transparency for certain financial measures, (ii) presenting disclosure that helps investors understand how we plan and measure the performance of our business, (iii) affords a view of our operating results that may be more easily compared to our peer companies, and (iv) enables investors to consider our operating results on both a GAAP and non-GAAP basis (including following the integration period of our prior and proposed acquisitions). However, this non-GAAP information is not in accordance with, or an alternative to, generally accepted accounting principles in the United States ("GAAP") and should be considered in conjunction with our GAAP results as the items excluded from the non-GAAP information may have a material impact on Progress’ financial results. A reconciliation of non-GAAP adjustments to Progress' GAAP financial results is included in the tables at the end of this press release.

In the noted fiscal periods, we adjusted for the following items from our GAAP financial results to arrive at our non-GAAP financial measures:

• Acquisition-related revenue - We include acquisition-related revenue, which constitutes revenue reflected as pre-acquisition deferred revenue that would have been recognized prior to our adoption of Accounting Standards Update No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08") during the fourth quarter of fiscal year 2021. The acquisition-related revenue in our prior period results relates to Chef Software, Inc. which we acquired on October 5, 2020. Since GAAP accounting required the elimination of this revenue prior to the adoption of ASU 2021-08, GAAP results alone do not fully capture all of our economic activities. We believe these adjustments are useful to management and investors as a measure of the ongoing performance of the business because, although we cannot be certain that customers will renew their contracts, we have historically experienced high renewal rates on maintenance and support agreements and other customer contracts. Upon our adoption of ASU 2021-08, this adjustment is no longer applicable to subsequent acquisitions.

• Amortization of acquired intangibles - We exclude amortization of acquired intangibles because those expenses are unrelated to our core operating performance and the intangible assets acquired vary significantly based on the timing and magnitude of our acquisition transactions and the maturities of the businesses acquired. Adjustments include preliminary estimates relating to the valuation of intangible assets from ShareFile. The final amounts will not be available until the Company's internal procedures and reviews are completed.

• Stock-based compensation - We exclude stock-based compensation to be consistent with the way management and, in our view, the overall financial community evaluates our performance and the methods used by analysts to calculate consensus estimates. The expense related to stock-based awards is generally not controllable in the short-term and can vary significantly based on the timing, size and nature of awards granted. As such, we do not include these charges in operating plans.

• Restructuring expenses and other - In all periods presented, we exclude restructuring expenses incurred because those expenses distort trends and are not part of our core operating results. Adjustments include preliminary estimates relating to restructuring expenses from ShareFile. The final amounts will not be available until the Company's internal procedures and reviews are completed.

• Acquisition-related expenses - We exclude acquisition-related expenses in order to provide a more meaningful comparison of the financial results to our historical operations and forward-looking guidance and the financial results of less acquisitive peer companies. We consider these types of costs and adjustments, to a great extent, to be unpredictable and dependent on a significant number of factors that are outside of our control. Furthermore, we do not consider these acquisition-related costs and adjustments to be related to the organic continuing operations of the acquired businesses and are generally not relevant to assessing or estimating the long-term performance of the acquired assets. In addition, the size, complexity and/or volume of past acquisitions, which often drives the magnitude of acquisition-related costs, may not be indicative of the size, complexity and/or volume of future acquisitions.

• Cyber incident and vulnerability response expenses, net
  • November 2022 Cyber Incident - We exclude certain expenses resulting from the detection of irregular activity on certain portions of our corporate network, as more thoroughly described in the Current Report on Form 8-K that we filed with the Securities and Exchange Commission on December 19, 2022.
  • MOVEit Vulnerability - We exclude certain expenses resulting from the zero-day MOVEit Vulnerability, as more thoroughly described in our filings with the Securities and Exchange Commission since June 5, 2023.

Expenses include costs to investigate and remediate these cyber related matters, as well as legal and other professional services related thereto. Expenses related to such cyber matters are provided net of expected insurance recoveries, although the timing of recognizing insurance recoveries may differ from the timing of recognizing the associated expenses. Costs associated with the enhancement of our cybersecurity program are not included within this adjustment. We expect to continue to incur legal and other professional services expenses in future periods associated with the MOVEit vulnerability. We do not expect to incur additional costs associated with the November 2022 Cyber Incident as the investigation is closed. Expenses related to such cyber matters are expected to result in operating expenses that would not have otherwise been incurred in the normal course of business operations. We believe that excluding these costs facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance.

• Income tax adjustment - We adjust our income tax provision by excluding the tax impact of the non-GAAP adjustments discussed above.

• Constant Currency - Revenue from our international operations has historically represented a substantial portion of our total revenue. As a result, our revenue results have been impacted, and we expect will continue to be impacted, by fluctuations in foreign currency exchange rates. As exchange rates are an important factor in understanding period-to-period comparisons, we present revenue growth rates on a constant currency basis, which helps improve the understanding of our revenue results and our performance in comparison to prior periods. The constant currency information presented is calculated by translating current period results using prior period weighted average foreign currency exchange rates.

• Annualized Recurring Revenue ("ARR") - We disclose ARR as a performance metric to help investors better understand and assess the performance of our business because our mix of revenue generated from recurring sources currently represents the substantial majority of our revenues and is expected to continue in the future. We define ARR as the annualized revenue of all active and contractually binding term-based contracts from all customers at a point in time. ARR includes revenue from maintenance, software upgrade rights, public cloud, and on-premises subscription-based transactions and managed services. ARR mitigates fluctuations in revenue due to seasonality, contract term and the sales mix of subscriptions for term-based licenses and SaaS. Management uses ARR to understand customer trends and the overall health of the Company’s business, helping it to formulate strategic business decisions.We calculate the annualized value of annual and multi-year contracts, and contracts with terms less than one year, by dividing the total contract value of each contract by the number of months in the term and then multiplying by 12. Annualizing contracts with terms less than one-year results in amounts being included in our ARR that are in excess of the total contract value for those contracts at the end of the reporting period. We generally do not sell non-SaaS-based contracts with a term of less than one year unless a customer is purchasing additional licenses under an existing annual or multi-year contract. The expectation is that at the time of renewal, such contracts with a term less than one year will renew with the same term as the existing contracts being renewed, such that both contracts are co-termed. Historically, such contracts with a term of less than one year renew at rates equal to or better than annual or multi-year contracts.For SaaS-based contracts, there is a meaningful percentage of monthly auto-renewing contracts for which annualizing the contracts results in amounts being included in our ARR that are in excess of the total contract value for those contracts at the end of the reporting period.Revenue from term-based license and on-premises subscription arrangements include a portion of the arrangement consideration that is allocated to the software license that is recognized up-front at the point in time control is transferred under ASC 606 revenue recognition principles. ARR for these arrangements is calculated as described above. The expectation is that the total contract value, inclusive of revenue recognized as software license, will be renewed at the end of the contract term.The calculation is done at constant currency using the current year budgeted exchange rates for all periods presented.ARR is not defined in GAAP and is not derived from a GAAP measure. Rather, ARR generally aligns to billings (as opposed to GAAP revenue which aligns to the transfer of control of each performance obligation). ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

• Net Retention Rate ("NRR") - We calculate net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period end ("Prior Period ARR"). We then calculate the ARR from these same customers as of the current period end ("Current Period ARR"). Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the net retention rate. Net retention rate is not calculated in accordance with GAAP.

We also provide guidance on adjusted free cash flow ("AFCF") and unlevered free cash flow ("Unlevered FCF"). AFCF is equal to cash flows from operating activities less purchases of property and equipment, plus restructuring payments. Unlevered FCF is AFCF plus tax-effected interest expense on outstanding debt.

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 (including future acquisition activity) 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: (i) 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; (ii) 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; (iii) 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; (iv) 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 or zero-day vulnerabilities, we may experience reputational harm, legal claims and financial exposure; and the results of inquiries, investigations and legal claims regarding the MOVEit Vulnerability remain uncertain, while the ultimate resolution of these matters could result in losses that may be material to our financial results for a particular period; and (v) future acquisitions may not be successful or may involve unanticipated costs or other integration issues that could disrupt our existing operations; and (vi) expected synergies and benefits of the ShareFile acquisition may not be realized which could negatively impact our future 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, 2024 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended February 29, 2024, May 31, 2024 and August 31, 2024. 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) empowers organizations to achieve transformational success in the face of disruptive change. Our software enables our customers to develop, deploy and manage responsible AI-powered applications and digital experiences with agility and ease. Customers get a trusted provider in Progress, with the products, expertise and vision they need to succeed. Over 4 million developers and technologists at hundreds of thousands of enterprises depend on Progress. Learn more at www.progress.com.

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:
Michael Micciche	Jeff Young
Progress Software	Progress Software
+1 781 850 8450	+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, 2024			November 30, 2023			% Change		November 30, 2024			November 30, 2023			% Change
Revenue:
Software licenses	$	73,402		$	56,270		30%		$	249,331		$	220,789		13%
Maintenance and services		141,559			120,700		17%			504,078			473,650		6%
Total revenue		214,961			176,970		21%			753,409			694,439		8%
Costs of revenue:
Cost of software licenses		3,014			3,155		(4)%			10,942			11,153		(2)%
Cost of maintenance and services		25,866			22,592		14%			90,318			85,255		6%
Amortization of acquired intangibles		7,658			7,916		(3)%			29,222			30,169		(3)%
Total costs of revenue		36,538			33,663		9%			130,482			126,577		3%
Gross profit		178,423			143,307		25%			622,927			567,862		10%
Operating expenses:
Sales and marketing		50,429			43,563		16%			164,570			156,076		5%
Product development		41,199			34,005		21%			146,342			132,401		11%
General and administrative		25,688			22,111		16%			89,518			83,157		8%
Amortization of acquired intangibles		17,775			17,605		1%			65,290			66,430		(2)%
Restructuring expenses		7,146			2,177		228%			10,454			8,407		24%
Acquisition-related expenses		13,995			271		*			17,109			4,704		264%
Cyber incident and vulnerability response expenses, net		691			1,038		(33)%			5,641			6,164		(8)%
Total operating expenses		156,923			120,770		30%			498,924			457,339		9%
Income from operations		21,500			22,537		(5)%			124,003			110,523		12%
Other expense, net		(9,250)			(8,365)		(11)%			(29,739)			(30,866)		4%
Income before income taxes		12,250			14,172		(14)%			94,264			79,657		18%
Provision (benefit) for income taxes		11,103			(1,163)		*			25,826			9,460		173%
Net income	$	1,147		$	15,335		(93)%		$	68,438		$	70,197		(3)%
Earnings per share:
Basic	$	0.03		$	0.35		(91)%		$	1.58		$	1.62		(2)%
Diluted	$	0.03		$	0.34		(91)%		$	1.54		$	1.57		(2)%
Weighted average shares outstanding:
Basic		43,183			43,729		(1)%			43,268			43,456		—%
Diluted		45,208			44,829		1%			44,427			44,658		(1)%
Cash dividends declared per common share	$	—		$	0.175		(100)%		$	0.525		$	0.700		(25)%

*not meaningful

Stock-based compensation is included in the condensed consolidated statements of operations, as follows:
Cost of revenue	$	808		$	830		(3)%		$	3,540		$	2,976		19%
Sales and marketing		2,025			1,770		14%			8,964			6,797		32%
Product development		3,296			3,102		6%			13,551			12,214		11%
General and administrative		5,616			4,716		19%			20,701			18,542		12%
Total	$	11,745		$	10,418		13%		$	46,756		$	40,529		15%

CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)

(In thousands)	November 30, 2024			November 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	118,077		$	126,958
Accounts receivable, net		163,575			125,825
Unbilled receivables		34,672			29,965
Other current assets		52,489			48,040
Total current assets		368,813			330,788
Property and equipment, net		13,746			15,225
Goodwill and intangible assets, net		2,015,748			1,186,379
Right-of-use lease assets		30,894			18,711
Long-term unbilled receivables		28,893			28,373
Other assets		68,872			23,307
Total assets	$	2,526,966		$	1,602,783
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and other current liabilities	$	113,801		$	92,805
Current portion of long-term debt, net		—			13,109
Short-term operating lease liabilities		9,202			10,114
Short-term deferred revenue, net		332,142			236,090
Total current liabilities		455,145			352,118
Long-term debt, net		730,000			356,111
Long-term operating lease liabilities		26,259			13,000
Long-term deferred revenue, net		72,270			58,946
Convertible senior notes, net		796,267			354,772
Other long-term liabilities		8,237			8,121
Stockholders' equity:
Common stock and additional paid-in capital		354,592			371,017
Retained earnings		84,196			88,698
Total stockholders' equity		438,788			459,715
Total liabilities and stockholders' equity	$	2,526,966		$	1,602,783

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)  

	Three Months Ended						Fiscal Year Ended
(In thousands)	November 30, 2024			November 30, 2023			November 30, 2024			November 30, 2023
Cash flows from operating activities:
Net income	$	1,147		$	15,335		$	68,438		$	70,197
Depreciation and amortization		28,388			27,862			106,569			105,294
Stock-based compensation		11,745			10,418			46,756			40,529
Other non-cash adjustments		10,130			(7,669)			4,517			(18,760)
Changes in operating assets and liabilities		(31,759)			(12,785)			(14,786)			(23,340)
Net cash flows from operating activities		19,651			33,161			211,494			173,920
Capital expenditures		(2,878)			(2,389)			(5,206)			(5,570)
Issuances of common stock, net of repurchases		10,287			1,621			(59,016)			(8,006)
Dividend payments to stockholders		(7,646)			(7,885)			(31,460)			(31,554)
Payments for acquisitions, net of cash acquired		(852,702)			—			(852,702)			(355,250)
Proceeds from the issuance of debt, net of payment of issuance costs		730,000			—			1,161,929			195,000
Principal payment on term loan and repayment of revolving line of credit		—			(31,718)			(371,250)			(91,875)
Purchase of capped calls		—			—			(42,210)			—
Other		(11,348)			(3,831)			(20,460)			(5,984)
Net change in cash and cash equivalents		(114,636)			(11,041)			(8,881)			(129,319)
Cash and cash equivalents, beginning of period		232,713			137,999			126,958			256,277
Cash and cash equivalents, end of period	$	118,077		$	126,958		$	118,077		$	126,958

RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES¹(Unaudited)

	Three Months Ended						Fiscal Year Ended
(In thousands, except per share data)	November 30, 2024			November 30, 2023			November 30, 2024			November 30, 2023
Adjusted revenue:
GAAP revenue	$	214,961		$	176,970		$	753,409		$	694,439
Acquisition-related revenue		—			553			—			3,711
Non-GAAP revenue	$	214,961		$	177,523		$	753,409		$	698,150
Adjusted income from operations:
GAAP income from operations	$	21,500		$	22,537		$	124,003		$	110,523
Amortization of acquired intangibles		25,433			25,521			94,512			96,599
Stock-based compensation		11,745			10,418			46,756			40,529
Restructuring expenses and other		7,146			2,177			10,454			8,407
Acquisition-related revenue and expenses		13,995			824			17,109			8,415
Cyber incident and vulnerability response expenses, net		691			1,038			5,641			6,164
Non-GAAP income from operations	$	80,510		$	62,515		$	298,475		$	270,637
Adjusted net income:
GAAP net income	$	1,147		$	15,335		$	68,438		$	70,197
Amortization of acquired intangibles		25,433			25,521			94,512			96,599
Stock-based compensation		11,745			10,418			46,756			40,529
Restructuring expenses and other		7,146			2,177			10,454			8,407
Acquisition-related revenue and expenses		13,995			824			17,109			8,415
Cyber incident and vulnerability response expenses, net		691			1,038			5,641			6,164
Provision for income taxes		(180)			(9,544)			(23,890)			(36,097)
Non-GAAP net income	$	59,977		$	45,769		$	219,020		$	194,214
Adjusted diluted earnings per share:
GAAP diluted earnings per share	$	0.03		$	0.34		$	1.54		$	1.57
Amortization of acquired intangibles		0.56			0.57			2.13			2.16
Stock-based compensation		0.25			0.23			1.04			0.91
Restructuring expenses and other		0.16			0.05			0.24			0.19
Acquisition-related revenue and expenses		0.31			0.02			0.39			0.19
Cyber incident and vulnerability response expenses, net		0.02			0.02			0.13			0.14
Provision for income taxes		—			(0.21)			(0.54)			(0.81)
Non-GAAP diluted earnings per share	$	1.33		$	1.02		$	4.93		$	4.35
Non-GAAP weighted avg shares outstanding - diluted		45,208			44,829			44,427			44,658

OTHER NON-GAAP FINANCIAL MEASURES¹(Unaudited)

Adjusted Free Cash Flow and Unlevered Free Cash Flow
	Three Months Ended								Fiscal Year Ended
(In thousands)	November 30, 2024			November 30, 2023			% Change		November 30, 2024			November 30, 2023			% Change
Cash flows from operations	$	19,651		$	33,161		(41)%		$	211,494		$	173,920		22%
Purchases of property and equipment		(2,878)			(2,389)		20%			(5,206)			(5,570)		(7)%
Free cash flow		16,773			30,772		(45)%			206,288			168,350		23%
Add back: restructuring payments		1,314			2,121		(38)%			5,601			7,103		(21)%
Adjusted free cash flow	$	18,087		$	32,893		(45)%		$	211,889		$	175,453		21%
Add back: tax-effected interest expense										26,090			24,932		5%
Unlevered free cash flow									$	237,979		$	200,385		19%

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2025 GUIDANCE¹(Unaudited)

Fiscal Year 2025 Non-GAAP Operating Margin Guidance
	Fiscal Year Ending November 30, 2025
(In millions)	Low			High
GAAP income from operations	$	134.5		$	143.0
GAAP operating margin		14%			15%
Restructuring expense and other		8.2			8.2
Stock-based compensation		61.3			61.3
Acquisition-related expenses		6.0			6.0
Amortization of intangibles		144.9			144.9
Cyber incident and vulnerability response expenses, net		4.2			4.2
Total adjustments(3)		224.6			224.6
Non-GAAP income from operations	$	359.1		$	367.6
Non-GAAP operating margin		37%			38%

(3) Total adjustments include preliminary estimates relating to the valuation of intangible assets acquired from ShareFile and restructuring expenses. The final amounts will not be available until the Company's internal procedures and reviews are completed.

Fiscal Year 2025 Non-GAAP Earnings per Share and Effective Tax Rate Guidance
	Fiscal Year Ending November 30, 2025
(In millions, except per share data)	Low			High
GAAP net income	$	49.4		$	56.9
Adjustments (from previous table)		224.6			224.6
Income tax adjustment(4)		(44.3)			(44.2)
Non-GAAP net income	$	229.7		$	237.3
GAAP diluted earnings per share	$	1.08		$	1.23
Non-GAAP diluted earnings per share	$	5.00		$	5.12
Diluted weighted average shares outstanding		46.0			46.4

⁴ Tax adjustment is based on a non-GAAP effective tax rate of approximately 20%, calculated as follows:
Non-GAAP income from operations		$	359.1		$	367.6
Other (expense) income			(71.9)			(70.9)
Non-GAAP income from continuing operations before income taxes			287.2			296.7
Non-GAAP net income			229.7			237.3
Tax provision		$	57.5		$	59.4
Non-GAAP tax rate			20%			20%

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2025 GUIDANCE¹(Unaudited)

Fiscal Year 2025 Adjusted Free Cash Flow and Unlevered Free Cash Flow Guidance
	Fiscal Year Ending November 30, 2025
(In millions)	Low			High
Cash flows from operations (GAAP)	$	216		$	228
Purchases of property and equipment		(7)			(7)
Add back: restructuring payments		16			16
Adjusted free cash flow (non-GAAP)		225			237
Add back: tax-effected interest expense		57			57
Unlevered free cash flow (non-GAAP)	$	282		$	294

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1 2025 GUIDANCE1(Unaudited)

Q1 2025 Non-GAAP Earnings per Share Guidance
	Three Months Ending February 28, 2025
	Low			High
GAAP diluted (loss) earnings per share	$	(0.01)		$	0.05
Acquisition-related expense		0.06			0.06
Stock-based compensation		0.31			0.31
Amortization of intangibles		0.79			0.79
Restructuring expense and other		0.12			0.12
Cyber incident and vulnerability response expenses, net		0.01			0.01
Total adjustments(3)		1.29			1.29
Income tax adjustment		(0.26)			(0.26)
Non-GAAP diluted earnings per share	$	1.02		$	1.08

(3) Total adjustments include preliminary estimates relating to the valuation of intangible assets acquired from ShareFile and restructuring expenses. The final amounts will not be available until the Company's internal procedures and reviews are completed.

_________________________________________¹ See Important Information Regarding Non-GAAP Financial Information and a reconciliation of non-GAAP adjustments to Progress' GAAP financial results at the end of this press release.² During the fourth quarter of fiscal year 2024, we made the determination that a substantial portion of unremitted foreign earnings are no longer indefinitely reinvested and recorded a deferred tax liability of $14 million for the U.S. federal, state and foreign withholding taxes expected to be imposed upon the repatriation of such earnings.