Hot Tech Stock to Watch: Progress Software Corp (NASDAQ: PRGS)

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Progress Software Corp (NASDAQ: PRGS) stock rose over 5.7% on March 26th, 2021 (as of 10:36:16 UTC-4 · USD; Source: Google finance) after the company posted better than expected results for the first quarter of FY 21. Q1 ending ARR was $432 million, which represents an increase of 22% on a year-over-year basis with the increase mainly driven by the acquisition of Chef. The company ended the quarter with cash, cash equivalents, and short-term investments of $114 million and debt of $366 million.

DSO for the first quarter was 53 days, an improvement of 1 day when compared to the fourth quarter of 2020 and an increase of 4 days from 49 days in the year-ago quarter. Adjusted free cash flow was $47 million for the quarter, up almost $14 million or 40% from the $33 million the company had achieved in Q1 of last year.

PRGS in the first quarter of FY 21 has reported the adjusted earnings per share of 95 cents, beating the analysts’ estimates for the adjusted earnings per share of 75 cents, according to analysts polled by Capital IQ. The company had reported the adjusted revenue growth of 16 percent to $131.28 million in the first quarter of FY 21, beating the analysts’ estimates for revenue of $121.4 billion. The top line results in the fourth quarter were driven by better than expected performance across all of the product lines but much of the outperformance came from OpenEdge, the Ipswitch products, WhatsUp Gold, and MOVEit and finally Chef. The total costs and operating expenses for the first quarter were $75.1 million, up 14% compared to the prior year quarter. Operating income was $56.7 million, up 18% compared to the first quarter of 2020. And the operating margin expanded to 43% compared to 42% in the prior year quarter.

The company also raised its FY21 earnings and revenue forecast to a new range expecting a $3.38 to $3.42 per share non-GAAP profit this year on $493 million to $501 million in GAAP revenue, up from its prior forecast projecting adjusted FY21 earnings of $3.22 to $3.28 per share and $487 million to $495 million in revenue. The Street is projecting earnings at $3.25 per share and revenue at $517.6 million, respectively.

Progress has also reiterated its Q2 outlook expecting to earn $0.72 to $0.74 per share, excluding one-time items, on $112 million to $116 million in revenue. Analysts are expecting a $0.77 per share adjusted profit on $124 million in revenue.

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