Progress Software Q2 Earnings Beat, Q3 Guidance Disappoints

Progress Software Corporation (NASDAQ: PRGS) reported mixed results for the second quarter. While exceeding analyst expectations for earnings, the company's guidance for the upcoming quarter fell short.

Q2 Beat on Earnings and Revenue:

• Progress Software surpassed analyst estimates for both earnings per share (EPS) and revenue in Q2.
• Adjusted EPS came in at $1.08, exceeding the consensus of $0.95.
• Revenue of $175 million was also above expectations of $168.42 million.
• Annual Recurring Revenue (ARR) witnessed a slight increase of 1% on a constant currency basis.

Lowered Guidance for Q3:

• Despite the positive Q2 results, Progress Software provided lower-than-anticipated guidance for Q3.
• EPS is projected to be between $1.11 and $1.15, falling short of the analyst consensus of $1.21.
• Revenue is also expected to range from $174 million to $178 million, missing the $183.52 million estimate.

Full-Year Outlook Remains Stable:

• While Q3 guidance is below expectations, Progress Software's full-year forecast remains largely unchanged.
• The company anticipates EPS to be between $4.70 and $4.80, narrowly edging past the analyst consensus of $4.69.
• Revenue guidance for the full year is set at $725 million to $735 million, essentially in line with the consensus of $726.5 million.

Market Reaction:

Progress Software's stock price experienced a modest increase following the earnings report. The market seems to be cautiously optimistic, acknowledging the Q2 beat but also wary of the lowered Q3 guidance.

FMP M&A Data and Analysis:

While not directly relevant to Progress Software's earnings report, you can explore M&A trends within the software sector using Financial Modeling Prep's (FMP) M&A data and analysis: link to FMP's M&A developer documentation.