Summary
Progress reported GAAP revenue of $175.1 million for its fiscal 2024 second quarter, down 1.8% from $178.3 million in the same quarter a year earlier. The six-month view reads better. Revenue for the year to date reached $359.8 million, up 5.0% from $342.5 million, helped by a full six months of MarkLogic activity against only part of the prior-year period. Annualized recurring revenue, a non-GAAP metric, was $579 million, up 1% year over year on a constant currency basis, and the net retention rate came in at 99%. Recurring contracts still carry most of the top line, which is why the quarterly decline stayed shallow. CEO Yogesh Gupta pointed to steady demand and said the company is focused on acquisitions while its sales teams execute in the field.
Profitability improved faster than revenue. Gross profit was $143.0 million in the quarter, down 1.0% from $144.5 million, yet gross margin rose to 81.7% from 81.1%, a gain of 0.6 percentage points. Operating income climbed 17.9% to $27.1 million, and operating margin widened to 15.5% from 12.9%, up 2.6 percentage points. Net income rose 33.9% to $16.2 million. Diluted earnings per share of $0.37 was up 37% from $0.27. The non-GAAP figures point the same way, with a 38% operating margin and diluted earnings per share of $1.09, up 3% from $1.06. Year to date, gross profit of $294.9 million was up 4.4% while gross margin of 82.0% slipped 0.5 percentage points. Operating income of $62.2 million was up 6.0% and operating margin of 17.3% was up 0.2 percentage points. Net income of $38.8 million was up 8.6%, and diluted earnings per share of $0.87 was up 7.4% from $0.81.
Cash generation carried the quarter. Operating cash flow was $63.7 million, up 32.8% from $48.0 million, and it reached $134.2 million for the first six months, up 41.7% from $94.7 million. Capital expenditures fell to $1.0 million from $1.6 million in the quarter and to $1.3 million from $2.0 million for the year to date. Adjusted free cash flow, a non-GAAP measure, was $64.1 million for the quarter, up 33%, and free cash flow was $62.7 million, up 35%. Deferred revenue ended the period at $291.6 million, up 2.8%. Remaining performance obligations were $344.0 million, up 19.4% from $288.0 million. Days sales outstanding improved to 41 days from 44 days a year earlier and 50 days in the first quarter, and net leverage stood at 2.2 times.
Capital allocation stayed active. Progress repurchased 1.0 million shares for $49.9 million during the quarter and had $121.5 million left under its authorization. The board declared a quarterly dividend of $0.175 per share, payable September 16, 2024 to holders of record on September 2, 2024.
Guidance moved higher. For the full fiscal year ending November 30, 2024, the company guides to non-GAAP revenue of $725 million to $735 million, above the $722 million to $732 million range given in March, with non-GAAP diluted earnings per share of $4.70 to $4.80 and a non-GAAP operating margin of 39% to 40%. For the fiscal third quarter ending August 31, 2024, guidance is non-GAAP revenue of $174 million to $178 million and non-GAAP diluted earnings per share of $1.11 to $1.15.
The MOVEit Vulnerability remains the clearest overhang. Cyber incident and vulnerability response costs are still running through the income statement, and management says the results of related inquiries, investigations and legal claims are uncertain, with the ultimate resolution potentially producing losses that are material to results in a particular period. Other risks named in the filing include delays or smaller transactions, fewer large deals in a given quarter, foreign currency swings, and renewal rates that could decline. Acquisitions carry their own risk, since the company acknowledges that deals may not succeed or may bring unanticipated integration costs that disrupt existing operations. A strong cash quarter does not make any of those items disappear.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $175.1M | $184.7M | -5.2% | $178.3M | -1.8% |
| Gross profit | $143.0M | $151.9M | -5.8% | $144.5M | -1.0% |
| Gross margin | 81.7% | 82.2% | -0.6 pp | 81.0% | +0.6 pp |
| Sales & marketing | $37.9M | $39.1M | -3.1% | $40.1M | -5.6% |
| General & administrative | $22.0M | $21.3M | +3.0% | $21.5M | +2.4% |
| Total operating expenses | $115.9M | $116.9M | -0.9% | $121.4M | -4.6% |
| Operating income (loss) | $27.1M | $35.0M | -22.4% | $23.0M | +17.9% |
| Operating margin | 15.5% | 18.9% | -3.4 pp | 12.9% | +2.6 pp |
| Net income (loss) | $16.2M | $22.6M | -28.5% | $12.1M | +33.9% |
| Net margin | 9.3% | 12.3% | -3.0 pp | 6.8% | +2.5 pp |
| Diluted EPS | $0.37 | $0.51 | -$0.14 | $0.27 | +$0.10 |
| Net retention rate | 99.0% | 99.0% | ±0.0 pp | 101.0% | -2.0 pp |
Risks
The company remains subject to litigation and governmental investigations related to the MOVEit Vulnerability, and it expects future costs though insurance may reduce exposure. Cyber incident and vulnerability response expenses, net increased 105% to $3.0 million in the current quarter versus the prior-year quarter, while year-to-date expenses decreased 4% to $4.0 million.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Adjusted Free Cash Flow
Annualized Recurring Revenue
Net Revenue Retention (NRR)
Summary, forecast, risks and KPIs are extracted from PROGRESS SOFTWARE CORP /MA's SEC filings for Q2 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.