Progress Software (PRGS) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 delivered strong results, with Q4 revenue of $215 million, up 21% year-over-year, and ARR up 46% to $842 million, reflecting robust subscription momentum and exceeding guidance.

• ShareFile acquisition closed October 31, 2024, contributing $21 million in Q4 and expected to add $250 million in FY 2025, all as SaaS recurring revenue; integration is progressing as planned.

• Net retention rates remained above 100% for FY 2024, indicating strong customer retention and expansion.

• Cash flow from operations for 2024 was $212 million, up 22% year-over-year.

• The company continues to focus on disciplined M&A, innovation, and customer success as pillars of its growth strategy.

Financial highlights

• Q4 2024 non-GAAP operating margin was 37%, with non-GAAP EPS of $1.33, up 30% year-over-year and above guidance; GAAP EPS was $0.03.

• Full-year revenue was $753 million, an 8% increase over the prior year.

• Adjusted free cash flow for the year was $212 million, up 21% year-over-year.

• Deferred revenue at year-end was $404 million, up $119 million sequentially.

• Cash and cash equivalents at year-end were $118 million.

Outlook and guidance

• FY 2025 revenue expected between $958 million and $970 million, representing 27%-29% growth; non-GAAP EPS guidance is $5.00-$5.12, with a 20% tax rate.

• Operating margin projected at 37%-38% for FY 2025.

• Adjusted free cash flow guidance is $225 million-$237 million; unlevered free cash flow $282 million-$294 million.

• Q1 2025 revenue guidance: $232 million-$238 million; non-GAAP EPS: $1.02-$1.08.

• ShareFile expected to contribute $250 million in revenue, with recurring revenue mix rising to 87%.