Q2 2024 Progress Software Corp Earnings Call Transcript
Key Points
- Progress Software Corp (PRGS) posted solid Q2 2024 results with revenues and earnings exceeding the high end of guidance.
- Total revenue reached $175 million, driven by steady demand and solid execution.
- Operating margins were above 38%, and earnings per share at $1.09 exceeded guidance by $0.12.
- Annual Recurring Revenue (ARR) grew 1% to $579 million, with a net retention rate of 99%.
- Strong cash flows and solid collections resulted in $190 million in cash and a reduction in Days Sales Outstanding (DSO) from 50 to 41 days.
- ARR growth was modest at 1%, indicating limited expansion in recurring revenue.
- Despite strong performance, the overall market environment remains cautious, impacting future growth potential.
- The integration of MarkLogic presented unexpected complexities, particularly with federal government contracts.
- The company faces challenges in determining the best pricing models for AI capabilities, which could impact future revenue.
- Free cash flow guidance for the second half of the year implies a step down, partly due to seasonality and tax payments.
Good day and welcome to the Progress Software Corporation Q2 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.
Thank you, Shuri. Thanks for your help. Always good to hear your voice.
Good afternoon, everyone, and thanks for joining us for Progress' second-quarter 2024 financial results conference call. On the line with me this afternoon is Yogesh Gupta, our President and CEO; and Anthony Folger, our Chief Financial Officer.
Before we get started, let's go over the Safe Harbor Statement. During this call, we will discuss our outlook for future financial and operating performance, corporate strategies, product plans, cost initiatives, and other information that might be considered forward looking. Such forward-looking information represents Progress
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