QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | (Do not check if a smaller reporting company) | Smaller reporting company | |||||||||||||||||
Emerging growth company |
PART I | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
(in thousands, except share data) | May 31, 2024 | November 30, 2023 | |||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable (less allowances of $ | |||||||||||
Unbilled receivables | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Long-term unbilled receivables | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Right-of-use lease assets | |||||||||||
Deferred tax assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Short-term deferred revenue, net | |||||||||||
Current portion of long-term debt, net | |||||||||||
Accrued compensation and related taxes | |||||||||||
Dividends payable to stockholders | |||||||||||
Short-term operating lease liabilities | |||||||||||
Other accrued liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term deferred revenue, net | |||||||||||
Convertible senior notes, net | |||||||||||
Long-term debt, net | |||||||||||
Long-term operating lease liabilities | |||||||||||
Deferred tax liabilities | |||||||||||
Other noncurrent liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands, except per share data) | May 31, 2024 | May 31, 2023 | May 31, 2024 | May 31, 2023 | |||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Software licenses | $ | $ | $ | $ | |||||||||||||||||||
Maintenance and services | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Costs of revenue: | |||||||||||||||||||||||
Cost of software licenses | |||||||||||||||||||||||
Cost of maintenance and services | |||||||||||||||||||||||
Amortization of acquired intangibles | |||||||||||||||||||||||
Total costs of revenue | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
Product development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Amortization of acquired intangibles | |||||||||||||||||||||||
Cyber incident and vulnerability response expenses, net | |||||||||||||||||||||||
Restructuring expenses | |||||||||||||||||||||||
Acquisition-related expenses | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Other (expense) income: | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Interest income and other, net | |||||||||||||||||||||||
Foreign currency loss, net | ( | ( | ( | ( | |||||||||||||||||||
Total other expense, net | ( | ( | ( | ( | |||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Cash dividends declared per common share | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | May 31, 2024 | May 31, 2023 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ||||||||||||||||||||||
Unrealized loss on hedging activity, net of tax benefit of $ | ( | ( | ( | ( | |||||||||||||||||||
Unrealized loss on investments, net of tax benefit of $ | |||||||||||||||||||||||
Total other comprehensive (loss) income, net of tax | ( | ( | |||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
Six Months Ended May 31, 2024 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
(in thousands) | Number of Shares | Amount | |||||||||||||||||||||||||||||||||
Balance, December 1, 2023 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | — | — | |||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | |||||||||||||||||||||||||||||||||
Vesting of restricted stock units and release of deferred stock units | ( | — | — | ||||||||||||||||||||||||||||||||
Withholding tax payments related to net issuance of RSUs | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Purchase of capped calls, net of tax | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Treasury stock repurchases and retirements | ( | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance, May 31, 2024 | $ | $ | $ | $ | ( | $ |
Three Months Ended May 31, 2024 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
(in thousands) | Number of Shares | Amount | |||||||||||||||||||||||||||||||||
Balance, March 1, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | — | — | |||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
Vesting of restricted stock units and release of deferred stock units | ( | — | — | ||||||||||||||||||||||||||||||||
Withholding tax payments related to net issuance of RSUs | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Purchase of capped calls, net of tax | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Treasury stock repurchases and retirements | ( | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance, May 31, 2024 | $ | $ | $ | $ | ( | $ |
Six Months Ended May 31, 2023 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
(in thousands) | Number of Shares | Amount | |||||||||||||||||||||||||||||||||
Balance, December 1, 2022 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | — | — | |||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | |||||||||||||||||||||||||||||||||
Vesting of restricted stock units and release of deferred stock units | ( | — | — | ||||||||||||||||||||||||||||||||
Withholding tax payments related to net issuance of RSUs | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Treasury stock repurchases and retirements | ( | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Balance, May 31, 2023 | $ | $ | $ | $ | ( | $ |
Three Months Ended May 31, 2023 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
(in thousands) | Number of Shares | Amount | |||||||||||||||||||||||||||||||||
Balance, March 1, 2023 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | — | — | |||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | |||||||||||||||||||||||||||||||||
Vesting of restricted stock units and release of deferred stock units | ( | — | — | ||||||||||||||||||||||||||||||||
Withholding tax payments related to net issuance of RSUs | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Treasury stock repurchases and retirements | ( | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Balance, May 31, 2023 | $ | $ | $ | $ | ( | $ |
Six Months Ended | |||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization of property and equipment | |||||||||||
Amortization of acquired intangibles and other | |||||||||||
Amortization of debt discount and issuance costs on Notes | |||||||||||
Stock-based compensation | |||||||||||
Non-cash lease expense | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Credit losses and other sales allowances | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | |||||||||||
Other assets | |||||||||||
Inventories | |||||||||||
Accounts payable and accrued liabilities | ( | ( | |||||||||
Lease liabilities | ( | ( | |||||||||
Income taxes payable | ( | ||||||||||
Deferred revenue, net | ( | ( | |||||||||
Net cash flows from operating activities | |||||||||||
Cash flows used in investing activities: | |||||||||||
Purchases of investments | ( | ||||||||||
Sales and maturities of investments | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Payments for acquisitions, net of cash acquired | ( | ||||||||||
Net cash flows used in investing activities | ( | ( | |||||||||
Cash flows (used in) from financing activities: | |||||||||||
Proceeds from stock-based compensation plans | |||||||||||
Payments for taxes related to net share settlements of equity awards | ( | ( | |||||||||
Repurchases of common stock | ( | ( | |||||||||
Proceeds from issuance of senior convertible notes, net of issuance costs of $ | |||||||||||
Purchase of capped calls | ( | ||||||||||
Dividend payments to stockholders | ( | ( | |||||||||
Proceeds from the issuance of debt | |||||||||||
Repayment of revolving line of credit | ( | ( | |||||||||
Principal payment on term loan | ( | ( | |||||||||
Payment of credit facility debt issuance costs | ( | ||||||||||
Net cash flows (used in) from financing activities | ( | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ |
Six Months Ended | |||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | |||||||||
Supplemental disclosure: | |||||||||||
Cash paid for income taxes, net of refunds of $ | $ | $ | |||||||||
Cash paid for interest | $ | $ | |||||||||
Non-cash investing and financing activities: | |||||||||||
Total fair value of restricted stock awards, restricted stock units and deferred stock units on date vested | $ | $ | |||||||||
Dividends declared and unpaid | $ | $ |
(in thousands) | Amortized Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||
Cash | $ | $ | — | $ | — | $ | |||||||||||||||||
Money market funds | — | — | |||||||||||||||||||||
Total | $ | $ | — | $ | — | $ |
(in thousands) | Amortized Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||
Cash | $ | $ | — | $ | — | $ |
May 31, 2024 | November 30, 2023 | ||||||||||||||||||||||
(in thousands) | Notional Value | Fair Value | Notional Value | Fair Value | |||||||||||||||||||
Interest rate swap contracts designated as cash flow hedges | $ | $ | $ | $ |
May 31, 2024 | November 30, 2023 | ||||||||||||||||||||||
(in thousands) | Notional Value | Fair Value | Notional Value | Fair Value | |||||||||||||||||||
Forward contracts to sell U.S. dollars | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Forward contracts to purchase U.S. dollars | ( | ||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( |
Fair Value Measurements Using | |||||||||||||||||||||||
(in thousands) | Total Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Foreign exchange derivatives | $ | ( | $ | $ | ( | $ |
Fair Value Measurements Using | |||||||||||||||||||||||
(in thousands) | Total Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Interest rate swap | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Foreign exchange derivatives | $ | ( | $ | $ | ( | $ |
May 31, 2024 | November 30, 2023 | ||||||||||||||||||||||
(in thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||
Convertible senior notes due 2026(1) | $ | $ | $ | $ | |||||||||||||||||||
Convertible senior notes due 2030(2) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
May 31, 2024 | November 30, 2023 | ||||||||||||||||||||||||||||||||||
(in thousands) | Gross Carrying Amount | Accumulated Amortization | Net Book Value | Gross Carrying Amount | Accumulated Amortization | Net Book Value | |||||||||||||||||||||||||||||
Purchased technology | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Customer-related | ( | ( | |||||||||||||||||||||||||||||||||
Trademarks and trade names | ( | ( | |||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
(in thousands) | |||||
Remainder of 2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total | $ |
(in thousands) | |||||
Balance, December 1, 2023 | $ | ||||
Additions(1) | |||||
Translation adjustments | ( | ||||
Balance, May 31, 2024 | $ |
(in thousands) | Purchase Price Allocation | Life | |||||||||
Net working capital | $ | ||||||||||
Property, plant and equipment | |||||||||||
Purchased technology | |||||||||||
Trade name | |||||||||||
Customer relationships | |||||||||||
Other assets, including long-term unbilled receivables | |||||||||||
Deferred taxes | ( | ||||||||||
Deferred revenue | ( | ||||||||||
Goodwill | |||||||||||
Net assets acquired | $ |
(in thousands, except per share data) | Pro Forma Six Months Ended May 31, 2023 | ||||||||||
Revenue | $ | ||||||||||
Net income | $ | ||||||||||
Net income per basic share | $ | ||||||||||
Net income per diluted share | $ |
Three Months Ended | |||||
(in thousands) | May 31, 2024 | ||||
Contractual interest expense ( | $ | ||||
Amortization of debt discount and issuance costs(1) | |||||
$ | |||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | May 31, 2024 | May 31, 2023 | |||||||||||||||||||
Cost of maintenance and services | $ | $ | $ | $ | |||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
Product development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total stock-based compensation | $ | $ | $ | $ |
(in thousands) | Foreign Currency Translation Adjustment | Unrealized Gains (Losses) on Hedging Activity | Accumulated Other Comprehensive Loss | ||||||||||||||
Balance, December 1, 2023 | $ | ( | $ | $ | ( | ||||||||||||
Other comprehensive loss before reclassifications, net of tax | ( | ( | ( | ||||||||||||||
Amount of gain reclassified from accumulated other comprehensive loss into net income, net of tax | ( | ( | |||||||||||||||
Balance, May 31, 2024 | $ | ( | $ | $ | ( |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | May 31, 2024 | May 31, 2023 | |||||||||||||||||||
Performance obligations transferred at a point in time: | |||||||||||||||||||||||
Software licenses | $ | $ | $ | $ | |||||||||||||||||||
Performance obligations transferred over time: | |||||||||||||||||||||||
Maintenance | |||||||||||||||||||||||
Services | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | May 31, 2024 | May 31, 2023 | |||||||||||||||||||
North America | $ | $ | $ | $ | |||||||||||||||||||
EMEA | |||||||||||||||||||||||
Latin America | |||||||||||||||||||||||
Asia Pacific | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
(in thousands) | |||||
2025 | $ | ||||
2026 | |||||
2027 | |||||
Total | $ |
(in thousands) | |||||
Balance, December 1, 2023 | $ | ||||
Billings and other | |||||
Revenue recognized that was deferred in prior periods | ( | ||||
Revenue recognized from current period arrangements | ( | ||||
Balance, May 31, 2024 | $ |
(in thousands) | Excess Facilities and Other Costs | Employee Severance and Related Benefits | Total | ||||||||||||||
Balance, December 1, 2023 | $ | $ | $ | ||||||||||||||
Costs incurred | |||||||||||||||||
Cash disbursements | ( | ( | ( | ||||||||||||||
Translation and other adjustments | ( | ( | |||||||||||||||
Balance, May 31, 2024 | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands, except per share data) | May 31, 2024 | May 31, 2023 | May 31, 2024 | May 31, 2023 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Effect of dilution from common stock equivalents | |||||||||||||||||||||||
Diluted weighted average shares outstanding | |||||||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ |
Three Months Ended | % Change | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | As Reported | Constant Currency | |||||||||||||||||||
Revenue | $ | 175,077 | $ | 178,251 | (2) | % | (2) | % |
Six Months Ended | % Change | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | As Reported | Constant Currency | |||||||||||||||||||
Revenue | $ | 359,762 | $ | 342,477 | 5 | % | 5 | % |
Three Months Ended | % Change | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | As Reported | Constant Currency | |||||||||||||||||||
Software licenses | $ | 53,979 | $ | 56,407 | (4) | % | (4) | % | |||||||||||||||
As a percentage of total revenue | 31 | % | 32 | % |
Six Months Ended | % Change | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | As Reported | Constant Currency | |||||||||||||||||||
Software licenses | $ | 118,079 | $ | 113,975 | 4 | % | 3 | % | |||||||||||||||
As a percentage of total revenue | 33 | % | 33 | % |
Three Months Ended | % Change | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | As Reported | Constant Currency | |||||||||||||||||||
Maintenance | $ | 102,503 | $ | 102,240 | — | % | — | % | |||||||||||||||
As a percentage of total revenue | 59 | % | 57 | % | |||||||||||||||||||
Services | 18,595 | 19,604 | (5) | % | (5) | % | |||||||||||||||||
As a percentage of total revenue | 11 | % | 11 | % | |||||||||||||||||||
Total maintenance and services revenue | $ | 121,098 | $ | 121,844 | (1) | % | (1) | % | |||||||||||||||
As a percentage of total revenue | 69 | % | 68 | % |
Six Months Ended | % Change | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | As Reported | Constant Currency | |||||||||||||||||||
Maintenance | $ | 204,528 | $ | 194,753 | 5 | % | 5 | % | |||||||||||||||
As a percentage of total revenue | 57 | % | 57 | % | |||||||||||||||||||
Services | 37,155 | 33,749 | 10 | % | 10 | % | |||||||||||||||||
As a percentage of total revenue | 10 | % | 10 | % | |||||||||||||||||||
Total maintenance and services revenue | $ | 241,683 | $ | 228,502 | 6 | % | 5 | % | |||||||||||||||
As a percentage of total revenue | 67 | % | 67 | % |
Three Months Ended | % Change | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | As Reported | Constant Currency | |||||||||||||||||||
North America | $ | 102,902 | $ | 105,732 | (3) | % | (3) | % | |||||||||||||||
As a percentage of total revenue | 59 | % | 59 | % | |||||||||||||||||||
Europe, the Middle East and Africa ("EMEA") | $ | 57,538 | $ | 56,185 | 2 | % | 2 | % | |||||||||||||||
As a percentage of total revenue | 33 | % | 32 | % | |||||||||||||||||||
Latin America | $ | 4,599 | $ | 4,790 | (4) | % | (4) | % | |||||||||||||||
As a percentage of total revenue | 3 | % | 3 | % | |||||||||||||||||||
Asia Pacific | $ | 10,038 | $ | 11,544 | (13) | % | (12) | % | |||||||||||||||
As a percentage of total revenue | 5 | % | 6 | % |
Six Months Ended | % Change | ||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | As Reported | Constant Currency | |||||||||||||||||||
North America | $ | 210,184 | $ | 204,560 | 3 | % | 3 | % | |||||||||||||||
As a percentage of total revenue | 58 | % | 60 | % | |||||||||||||||||||
Europe, the Middle East and Africa ("EMEA") | $ | 120,625 | $ | 109,590 | 10 | % | 9 | % | |||||||||||||||
As a percentage of total revenue | 34 | % | 32 | % | |||||||||||||||||||
Latin America | $ | 9,267 | $ | 8,979 | 3 | % | 2 | % | |||||||||||||||
As a percentage of total revenue | 3 | % | 3 | % | |||||||||||||||||||
Asia Pacific | $ | 19,686 | $ | 19,348 | 2 | % | 3 | % | |||||||||||||||
As a percentage of total revenue | 5 | % | 5 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | Change | May 31, 2024 | May 31, 2023 | Change | |||||||||||||||||||||||||||||||||||||||||
Cost of software licenses | $ | 2,497 | $ | 2,814 | $ | (317) | (11) | % | $ | 5,228 | $ | 5,266 | $ | (38) | (1) | % | |||||||||||||||||||||||||||||||
As a percentage of software license revenue | 5 | % | 5 | % | 4 | % | 5 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | Change | May 31, 2024 | May 31, 2023 | Change | |||||||||||||||||||||||||||||||||||||||||
Cost of maintenance and services | $ | 22,176 | $ | 22,970 | $ | (794) | (3) | % | $ | 44,395 | $ | 40,471 | $ | 3,924 | 10 | % | |||||||||||||||||||||||||||||||
As a percentage of maintenance and services revenue | 18 | % | 19 | % | 18 | % | 18 | % | |||||||||||||||||||||||||||||||||||||||
Components of cost of maintenance and services: | |||||||||||||||||||||||||||||||||||||||||||||||
Personnel related costs | $ | 16,770 | $ | 16,646 | $ | 124 | 1 | % | $ | 33,814 | $ | 29,789 | $ | 4,025 | 14 | % | |||||||||||||||||||||||||||||||
Contractors and outside services | 3,502 | 4,117 | (615) | (15) | % | 6,911 | 6,817 | 94 | 1 | % | |||||||||||||||||||||||||||||||||||||
Hosting and other | 1,904 | 2,207 | (303) | (14) | % | 3,670 | 3,865 | (195) | (5) | % | |||||||||||||||||||||||||||||||||||||
Total cost of maintenance and services | $ | 22,176 | $ | 22,970 | $ | (794) | (3) | % | $ | 44,395 | $ | 40,471 | $ | 3,924 | 10 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | % Change | May 31, 2024 | May 31, 2023 | % Change | |||||||||||||||||||||||||||||
Amortization of intangibles | $ | 7,398 | $ | 7,994 | (7) | % | $ | 15,257 | $ | 14,258 | 7 | % | |||||||||||||||||||||||
As a percentage of total revenue | 4 | % | 4 | % | 4 | % | 4 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | % Change | May 31, 2024 | May 31, 2023 | % Change | |||||||||||||||||||||||||||||
Gross profit | $ | 143,006 | $ | 144,473 | (1) | % | $ | 294,882 | $ | 282,482 | 4 | % | |||||||||||||||||||||||
As a percentage of total revenue | 82 | % | 81 | % | 82 | % | 82 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | Change | May 31, 2024 | May 31, 2023 | Change | |||||||||||||||||||||||||||||||||||||||||
Sales and marketing | $ | 37,889 | $ | 40,147 | $ | (2,258) | (6) | % | $ | 77,000 | $ | 73,901 | $ | 3,099 | 4 | % | |||||||||||||||||||||||||||||||
As a percentage of total revenue | 22 | % | 23 | % | 21 | % | 22 | % | |||||||||||||||||||||||||||||||||||||||
Components of sales and marketing: | |||||||||||||||||||||||||||||||||||||||||||||||
Personnel related costs | $ | 33,241 | $ | 34,329 | $ | (1,088) | (3) | % | $ | 66,334 | $ | 64,324 | $ | 2,010 | 3 | % | |||||||||||||||||||||||||||||||
Contractors and outside services | 837 | 1,510 | (673) | (45) | % | 1,430 | 2,206 | (776) | (35) | % | |||||||||||||||||||||||||||||||||||||
Marketing programs and other | 3,811 | 4,308 | (497) | (12) | % | 9,236 | 7,371 | 1,865 | 25 | % | |||||||||||||||||||||||||||||||||||||
Total sales and marketing | $ | 37,889 | $ | 40,147 | $ | (2,258) | (6) | % | $ | 77,000 | $ | 73,901 | $ | 3,099 | 4 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | Change | May 31, 2024 | May 31, 2023 | Change | |||||||||||||||||||||||||||||||||||||||||
Product development costs | $ | 35,435 | $ | 34,820 | $ | 615 | 2 | % | $ | 70,423 | $ | 65,258 | $ | 5,165 | 8 | % | |||||||||||||||||||||||||||||||
As a percentage of total revenue | 20 | % | 20 | % | 20 | % | 19 | % | |||||||||||||||||||||||||||||||||||||||
Components of product development costs: | |||||||||||||||||||||||||||||||||||||||||||||||
Personnel related costs | $ | 34,151 | $ | 33,516 | $ | 635 | 2 | % | $ | 67,747 | $ | 63,119 | $ | 4,628 | 7 | % | |||||||||||||||||||||||||||||||
Contractors and outside services | 1,161 | 1,118 | 43 | 4 | % | 2,243 | 1,791 | 452 | 25 | % | |||||||||||||||||||||||||||||||||||||
Other product development costs | 123 | 186 | (63) | (34) | % | 433 | 348 | 85 | 24 | % | |||||||||||||||||||||||||||||||||||||
Total product development costs | $ | 35,435 | $ | 34,820 | $ | 615 | 2 | % | $ | 70,423 | $ | 65,258 | $ | 5,165 | 8 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | Change | May 31, 2024 | May 31, 2023 | Change | |||||||||||||||||||||||||||||||||||||||||
General and administrative | $ | 21,983 | $ | 21,469 | $ | 514 | 2 | % | $ | 43,327 | $ | 40,255 | $ | 3,072 | 8 | % | |||||||||||||||||||||||||||||||
As a percentage of total revenue | 13 | % | 12 | % | 12 | % | 12 | % | |||||||||||||||||||||||||||||||||||||||
Components of general and administrative: | |||||||||||||||||||||||||||||||||||||||||||||||
Personnel related costs | $ | 17,963 | $ | 17,142 | $ | 821 | 5 | % | $ | 35,926 | $ | 33,276 | $ | 2,650 | 8 | % | |||||||||||||||||||||||||||||||
Contractors and outside services | 2,602 | 3,292 | (690) | (21) | % | 5,177 | 5,679 | (502) | (9) | % | |||||||||||||||||||||||||||||||||||||
Other general and administrative costs | 1,418 | 1,035 | 383 | 37 | % | 2,224 | 1,300 | 924 | 71 | % | |||||||||||||||||||||||||||||||||||||
Total cost of general and administrative | $ | 21,983 | $ | 21,469 | $ | 514 | 2 | % | $ | 43,327 | $ | 40,255 | $ | 3,072 | 8 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | % Change | May 31, 2024 | May 31, 2023 | % Change | |||||||||||||||||||||||||||||
Amortization of intangibles | $ | 16,316 | $ | 17,546 | (7) | % | $ | 33,705 | $ | 31,157 | 8 | % | |||||||||||||||||||||||
As a percentage of total revenue | 9 | % | 10 | % | 9 | % | 9 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | % Change | May 31, 2024 | May 31, 2023 | % Change | |||||||||||||||||||||||||||||
Cyber incident and vulnerability response expenses, net | $ | 3,036 | $ | 1,483 | 105 | % | $ | 4,023 | $ | 4,175 | (4) | % | |||||||||||||||||||||||
As a percentage of total revenue | 2 | % | 1 | % | 1 | % | 1 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | % Change | May 31, 2024 | May 31, 2023 | % Change | |||||||||||||||||||||||||||||
Restructuring expenses | $ | 651 | $ | 3,990 | (84) | % | $ | 3,000 | $ | 5,387 | (44) | % | |||||||||||||||||||||||
As a percentage of total revenue | — | % | 2 | % | 1 | % | 2 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | % Change | May 31, 2024 | May 31, 2023 | % Change | |||||||||||||||||||||||||||||
Acquisition-related expenses | $ | 548 | $ | 1,991 | (72) | % | $ | 1,250 | $ | 3,734 | (67) | % | |||||||||||||||||||||||
As a percentage of total revenue | — | % | 1 | % | — | % | 1 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | % Change | May 31, 2024 | May 31, 2023 | % Change | |||||||||||||||||||||||||||||
Income from operations | $ | 27,148 | $ | 23,027 | 18 | % | $ | 62,154 | $ | 58,615 | 6 | % | |||||||||||||||||||||||
As a percentage of total revenue | 16 | % | 13 | % | 17 | % | 17 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | % Change | May 31, 2024 | May 31, 2023 | % Change | |||||||||||||||||||||||||||||
Interest expense | $ | (7,007) | $ | (8,514) | (18) | % | $ | (14,351) | $ | (14,362) | — | % | |||||||||||||||||||||||
Interest income and other, net | 928 | 592 | 57 | % | 1,552 | 1,107 | 40 | % | |||||||||||||||||||||||||||
Foreign currency loss, net | (941) | (496) | 90 | % | (1,620) | (827) | 96 | % | |||||||||||||||||||||||||||
Total other expense, net | $ | (7,020) | $ | (8,418) | (17) | % | $ | (14,419) | $ | (14,082) | 2 | % | |||||||||||||||||||||||
As a percentage of total revenue | (4) | % | (5) | % | (4) | % | (4) | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | % Change | May 31, 2024 | May 31, 2023 | % Change | |||||||||||||||||||||||||||||
Provision for income taxes | $ | 3,940 | $ | 2,519 | 56 | % | $ | 8,908 | $ | 8,769 | 2 | % | |||||||||||||||||||||||
As a percentage of income before income taxes | 20 | % | 17 | % | 19 | % | 20 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | % Change | May 31, 2024 | May 31, 2023 | % Change | |||||||||||||||||||||||||||||
Net income | $ | 16,188 | $ | 12,090 | 34 | % | $ | 38,827 | $ | 35,764 | 9 | % | |||||||||||||||||||||||
As a percentage of total revenue | 9 | % | 7 | % | 11 | % | 10 | % |
(in thousands) | May 31, 2024 | November 30, 2023 | |||||||||
Cash and cash equivalents | $ | 190,420 | $ | 126,958 |
Six Months Ended | |||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | |||||||||
Net income | $ | 38,827 | $ | 35,764 | |||||||
Non-cash reconciling items included in net income | 80,041 | 63,423 | |||||||||
Changes in operating assets and liabilities | 15,317 | (4,469) | |||||||||
Net cash flows from operating activities | $ | 134,185 | $ | 94,718 |
Six Months Ended | |||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | |||||||||
Net investment activity | $ | — | $ | 438 | |||||||
Purchases of property and equipment | (1,264) | (1,969) | |||||||||
Payments for acquisitions, net of cash acquired | — | (356,096) | |||||||||
Net cash flows used in investing activities | $ | (1,264) | $ | (357,627) |
Six Months Ended | |||||||||||
(in thousands) | May 31, 2024 | May 31, 2023 | |||||||||
Proceeds from stock-based compensation plans | $ | 12,896 | $ | 16,365 | |||||||
Repurchases of common stock | (72,449) | (30,000) | |||||||||
Proceeds from issuance of senior convertible notes, net of issuance costs of $11,200 | 438,750 | — | |||||||||
Purchase of capped calls | (42,210) | — | |||||||||
Proceeds from the issuance of debt | — | 195,000 | |||||||||
Repayment of revolving line of credit | (110,000) | (25,000) | |||||||||
Principal payment on term loan | (261,250) | (3,437) | |||||||||
Dividend payments to stockholders | (16,122) | (15,871) | |||||||||
Other financing activities | (10,592) | (8,101) | |||||||||
Payment of credit facility debt issuance costs | (6,821) | — | |||||||||
Net cash flows (used in) from financing activities | $ | (67,798) | $ | 128,956 |
(in thousands, except per share and share data) | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(1) | ||||||||||||||||||||||
Period | ||||||||||||||||||||||||||
March 2024 | 552,881 | $ | 52.95 | 552,881 | $ | 142,220 | ||||||||||||||||||||
April 2024 | 291,675 | 50.96 | 291,675 | 127,349 | ||||||||||||||||||||||
May 2024 | 116,473 | 49.79 | 116,473 | 121,548 | ||||||||||||||||||||||
Total | 961,029 | $ | 51.96 | 961,029 | $ | 121,548 |
Exhibit No. | Description | |||||||
4.1 | ||||||||
4.2 | ||||||||
10.2 | ||||||||
10.3 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
101* | The following materials from Progress Software Corporation’s Quarterly Report on Form 10-Q for the three and six months ended May 31, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of May 31, 2024 and November 30, 2023; (ii) Condensed Consolidated Statements of Income for the three and six months ended May 31, 2024 and 2023; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended May 31, 2024 and 2023; (iv) Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended May 31, 2024 and 2023; (v) Condensed Consolidated Statements of Cash Flows for the three and six months ended May 31, 2024 and 2023; and (vi) Notes to Condensed Consolidated Financial Statements. | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
(1) | Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on March 1, 2024. | ||||
(2) | Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed on March 1, 2024. | ||||
(3) | Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 1, 2024. | ||||
(4) | Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 8, 2024. | ||||
* | Filed herewith | ||||
** | Furnished herewith |
Dated: | July 8, 2024 | /s/ YOGESH K. GUPTA | |||||||||
Yogesh K. Gupta | |||||||||||
President and Chief Executive Officer | |||||||||||
(Principal Executive Officer) | |||||||||||
Dated: | July 8, 2024 | /s/ ANTHONY FOLGER | |||||||||
Anthony Folger | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
(Principal Financial Officer) | |||||||||||
Dated: | July 8, 2024 | /s/ DOMENIC LOCOCO | |||||||||
Domenic LoCoco | |||||||||||
Senior Vice President and Chief Accounting Officer | |||||||||||
(Principal Accounting Officer) |
/s/ YOGESH K. GUPTA | ||
Yogesh K. Gupta | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
/s/ ANTHONY FOLGER | ||
Anthony Folger | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |
/s/ YOGESH K. GUPTA | /s/ ANTHONY FOLGER | |||||||||||||
President and Chief Executive Officer | Executive Vice President and Chief Financial Officer | |||||||||||||
Date: | July 8, 2024 | Date: | July 8, 2024 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
May 31, 2024 |
Nov. 30, 2023 |
---|---|---|
Assets | ||
Allowance for accounts receivable | $ 928 | $ 851 |
Stockholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 43,062,914 | 43,795,955 |
Common stock, shares outstanding (in shares) | 43,062,914 | 43,795,955 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
|
Revenue: | ||||
Total revenue | $ 175,077 | $ 178,251 | $ 359,762 | $ 342,477 |
Costs of revenue: | ||||
Amortization of acquired intangibles | 7,398 | 7,994 | 15,257 | 14,258 |
Total costs of revenue | 32,071 | 33,778 | 64,880 | 59,995 |
Gross profit | 143,006 | 144,473 | 294,882 | 282,482 |
Operating expenses: | ||||
Sales and marketing | 37,889 | 40,147 | 77,000 | 73,901 |
Product development | 35,435 | 34,820 | 70,423 | 65,258 |
General and administrative | 21,983 | 21,469 | 43,327 | 40,255 |
Amortization of acquired intangibles | 16,316 | 17,546 | 33,705 | 31,157 |
Cyber incident and vulnerability response expenses, net | 3,036 | 1,483 | 4,023 | 4,175 |
Restructuring expenses | 651 | 3,990 | 3,000 | 5,387 |
Acquisition-related expenses | 548 | 1,991 | 1,250 | 3,734 |
Total operating expenses | 115,858 | 121,446 | 232,728 | 223,867 |
Income from operations | 27,148 | 23,027 | 62,154 | 58,615 |
Other (expense) income: | ||||
Interest expense | (7,007) | (8,514) | (14,351) | (14,362) |
Interest income and other, net | 928 | 592 | 1,552 | 1,107 |
Foreign currency loss, net | (941) | (496) | (1,620) | (827) |
Total other expense, net | (7,020) | (8,418) | (14,419) | (14,082) |
Income before income taxes | 20,128 | 14,609 | 47,735 | 44,533 |
Provision for income taxes | 3,940 | 2,519 | 8,908 | 8,769 |
Net income | $ 16,188 | $ 12,090 | $ 38,827 | $ 35,764 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.37 | $ 0.28 | $ 0.89 | $ 0.83 |
Diluted (in dollars per share) | $ 0.37 | $ 0.27 | $ 0.87 | $ 0.81 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 43,213 | 43,343 | 43,508 | 43,321 |
Diluted (in shares) | 43,964 | 44,470 | 44,395 | 44,411 |
Cash dividends declared per common share (in dollars per share) | $ 0.175 | $ 0.175 | $ 0.350 | $ 0.350 |
Software licenses | ||||
Revenue: | ||||
Total revenue | $ 53,979 | $ 56,407 | $ 118,079 | $ 113,975 |
Costs of revenue: | ||||
Cost of revenue | 2,497 | 2,814 | 5,228 | 5,266 |
Maintenance and services | ||||
Revenue: | ||||
Total revenue | 121,098 | 121,844 | 241,683 | 228,502 |
Costs of revenue: | ||||
Cost of revenue | $ 22,176 | $ 22,970 | $ 44,395 | $ 40,471 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 16,188 | $ 12,090 | $ 38,827 | $ 35,764 |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustments | 105 | 1,720 | (1,441) | 3,457 |
Unrealized loss on hedging activity, net of tax benefit of $142 and $360 for the three and six months ended May 31, 2024, respectively, and $250 and $295 for the three and six months ended May 31, 2023, respectively | (445) | (812) | (1,135) | (939) |
Unrealized loss on investments, net of tax benefit of $4 and $0 for the three and six months ended May 31, 2023, respectively | 0 | 21 | 0 | 0 |
Total other comprehensive (loss) income, net of tax | (340) | 929 | (2,576) | 2,518 |
Comprehensive income | $ 15,848 | $ 13,019 | $ 36,251 | $ 38,282 |
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||||
Tax benefit on accumulated unrealized gain on hedging activity | $ 142 | $ 250 | $ 360 | $ 295 |
Tax benefit on accumulated unrealized loss on investments | $ 4 | $ 0 |
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
May 31, 2024 |
May 31, 2023 |
|
Statement of Cash Flows [Abstract] | ||
Payments of debt issuance costs | $ 11,200 | |
Proceeds from income tax refunds | $ 1,028 | $ 841 |
Basis of Presentation |
6 Months Ended |
---|---|
May 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Company Overview - Progress Software Corporation ("Progress," the "Company," "we," "us," or "our") provides enterprise software products for the development, deployment and management of responsible, AI-powered applications and experiences. Our products are generally sold as perpetual licenses, but certain products also use term licensing models and our cloud-based offerings use a subscription-based model. More than half of our worldwide license revenue is realized through relationships with indirect channel partners, principally independent software vendors, original equipment manufacturers, distributors and value-added resellers. Independent software vendors develop and market applications using our technology and resell our products in conjunction with sales of their own products that incorporate our technology. Original equipment manufacturers are companies that embed our products into their own software products or devices. Value-added resellers are companies that add features or services to our product, then resell it as an integrated product or complete "turn-key" solution. We operate in North America, Latin America, Europe, the Middle East and Africa ("EMEA"), and Asia and Australia ("Asia Pacific"), through local subsidiaries as well as independent distributors. Basis of Presentation and Significant Accounting Policies - We prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements and these unaudited financial statements should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023, as filed with the SEC on January 26, 2024 (our "2023 Annual Report"). We made no material changes in the application of our significant accounting policies that were disclosed in our 2023 Annual Report. We have prepared the accompanying unaudited condensed consolidated financial statements on the same basis as the audited financial statements included in our 2023 Annual Report, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full fiscal year. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an on-going basis, management evaluates its estimates and records changes in estimates in the period in which they become known. These estimates are based on historical data and experience, as well as various other assumptions that management believes to be reasonable under the circumstances. The most significant estimates relate to revenue recognition, loss contingencies and the MOVEit Vulnerability, and business combinations. Actual results could differ from those estimates. Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (the "FASB") issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements. This update is effective for the Company in the consolidated financial statements for the year ending November 30, 2025, and interim periods beginning after December 1, 2025. The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 is intended to improve the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for the Company beginning with the annual period ending November 30, 2026, allowing for adoption on a prospective basis or a retrospective option. Early adoption is permitted. The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company's consolidated financial statements. In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports. The disclosure requirements will apply to the Company's fiscal year beginning December 1, 2025. The Company is currently evaluating the final rule to determine its impact on the Company's disclosures.
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Cash and Cash Equivalents |
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Investments and Cash [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents A summary of our cash and cash equivalents at May 31, 2024 is as follows:
A summary of our cash and cash equivalents at November 30, 2023 is as follows:
There were no debt securities by contractual maturity due after one year as of May 31, 2024.
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments Cash Flow Hedge Our interest rate swap contract with an initial notional amount of $150.0 million matured on April 30, 2024. We entered into the contract to manage the variability of cash flows associated with approximately one-half of our variable rate debt. The contract required periodic interest rate settlements, and we received a floating rate based on the greater of 1-month SOFR or 0.00% and paid a fixed rate of 1.855% on the outstanding notional amount. The interest rate swap was designated as a cash flow hedge and the effectiveness of the hedge was assessed both at the onset of the hedge and at regular intervals throughout the life of the derivative. As the interest rate swap was highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the derivative were included as a component of other comprehensive loss on our condensed consolidated balance sheets through the first quarter of fiscal year 2024. On March 1, 2024, we repaid our variable rate debt in full and reclassified an unrealized gain of $0.6 million from accumulated other comprehensive loss to interest expense in our condensed consolidated statements of operations. The net amount of accumulated other comprehensive loss reclassified to interest expense during the six months ended May 31, 2024 and May 31, 2023 was a decrease of $1.5 million and $1.6 million, respectively. The following table presents our interest rate swap contract where the notional amount was equal to approximately one-half of the corresponding reduction in the balance of our term loan. The fair value of the derivative represented the discounted value of the expected future discounted cash flows for the interest rate swap, based on the payment schedule and the current forward curve for the remaining term of the contract, as of the date of each reporting period:
Forward Contracts We use forward contracts that are not designated as hedging instruments to hedge economically the impact of the variability in exchange rates on intercompany accounts receivable and loans receivable denominated in certain foreign currencies. We generally do not hedge the net assets of our international subsidiaries. All forward contracts are recorded at fair value in other current assets, other assets, other accrued liabilities, or other noncurrent liabilities on the condensed consolidated balance sheets at the end of each reporting period and generally expire between thirty days and 3 years from the date the contract was entered. At May 31, 2024, $0.2 million and $0.3 million was recorded in other accrued liabilities and other noncurrent liabilities, respectively, on our condensed consolidated balance sheets. At November 30, 2023, $2.5 million was recorded in other accrued liabilities on our condensed consolidated balance sheets. In the three and six months ended May 31, 2024, realized and unrealized losses of $0.1 million and $0.7 million, respectively, from our forward contracts were recognized in foreign currency loss, net, on our condensed consolidated statements of operations. In the three and six months ended May 31, 2023, realized and unrealized gains of $1.1 million and $1.6 million, respectively, from our forward contracts were recognized in foreign currency loss, net, on our condensed consolidated statements of operations. These gains and losses were substantially offset by realized and unrealized gains and losses in the offsetting positions. The table below details outstanding foreign currency forward contracts where the notional amount is determined using contract exchange rates:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at May 31, 2024:
The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at November 30, 2023:
When developing fair value estimates, we maximize the use of observable inputs and minimize the use of unobservable inputs. When available, we use quoted market prices to measure fair value. The valuation technique used to measure fair value for our Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. Assets and Liabilities Not Carried at Fair Value Fair Value of the Convertible Senior Notes The following table details the fair value and carrying value of our Convertible Senior Notes due 2026 and 2030 (together referred to as “the Notes”):
(1) The carrying value of the convertible senior notes due 2026 (the "2026 Notes"), are reflected net of $4.1 million and $5.2 million of unamortized debt issuance costs as of May 31, 2024 and November 30, 2023, respectively. (2) The carrying value of the convertible senior notes due 2030 (the "2030 Notes"), are reflected net of $11.6 million of unamortized debt issuance costs as of May 31, 2024. The fair value of the Notes is based on quoted prices in an over-the-counter market on the last trading day of the reporting period and classified within Level 2 in the fair value hierarchy. Fair Value of Other Financial Assets and Liabilities The carrying amounts of other financial assets and liabilities including cash and cash equivalents, accounts receivable, unbilled accounts receivable, accounts payable, and accrued liabilities approximate their respective fair values because of the relatively short period of time between their origination and their expected realization or settlement.
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Intangible Assets and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets Intangible assets are comprised of the following significant classes:
In the three and six months ended May 31, 2024, amortization expense related to intangible assets was $23.7 million and $49.0 million, respectively. In the three and six months ended May 31, 2023, amortization expense related to intangible assets was $25.5 million and $45.4 million, respectively. Future amortization expense for intangible assets as of May 31, 2024, is as follows:
Goodwill Changes in the carrying amount of goodwill in the six months ended May 31, 2024 are as follows:
(1) The additions to goodwill during fiscal year 2024 represent measurement period adjustments related to the acquisition of MarkLogic Corporation ("MarkLogic") in February 2023. See Note 6: Business Combinations for additional information.
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Business Combinations |
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Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Business Combinations MarkLogic Acquisition On February 7, 2023, we completed the acquisition of the parent company of MarkLogic, pursuant to the Stock Purchase Agreement, dated as of January 3, 2023. The acquisition was completed for a base purchase price of $355.0 million, subject to certain customary adjustments, in cash. The acquisition consideration for MarkLogic has been allocated to MarkLogic’s tangible assets, identifiable intangible assets, and assumed liabilities based on their estimated fair values. The excess of total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities was recorded as goodwill. During the first fiscal quarter of 2024, the measurement period adjustments were completed, which resulted in a $0.7 million increase in goodwill. The purchase price allocation is now complete. The allocation of the purchase price is as follows:
The fair value of the intangible assets was estimated using the income approach in which the after-tax cash flows are discounted to present value. The cash flows are based on estimates used to value the acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model as well as the weighted average cost of capital. The valuation assumptions take into consideration our estimates of customer attrition, technology obsolescence, and revenue growth projections. Tangible assets acquired and assumed liabilities were recorded at fair value. We determined the acquisition date deferred revenue balances based on our assessment of the individual contracts acquired. A significant portion of the deferred revenue was recognized in the 12 months following the acquisition. We recorded the excess of the purchase price over the identified tangible and intangible assets as goodwill. We believe that the investment value of the future enhancement of our product and solution offerings created as a result of this acquisition has principally contributed to a purchase price that resulted in the recognition of $161.8 million of goodwill, which is not deductible for tax purposes. Acquisition-related transaction costs (e.g., legal, due diligence, valuation, and other professional fees) and certain acquisition restructuring and related charges are not included as a component of consideration transferred but are required to be expensed as incurred. We determined that disclosing the amount of MarkLogic related earnings included in the condensed consolidated statements of operations is impracticable, as certain operations of MarkLogic were integrated into the operations of the Company from the date of acquisition. Pro Forma Information The following pro forma financial information presents the combined results of operations of Progress and MarkLogic as if the acquisition had occurred on December 1, 2021, after giving effect to certain pro forma adjustments. The pro forma adjustments reflected herein include only those adjustments that are directly attributable to the MarkLogic acquisition and factually supportable. These pro forma adjustments include: (i) a net increase in amortization expense to record amortization expense relating to the $232.1 million of acquired identifiable intangible assets, (ii) an increase in interest expense to record interest for the period presented as a result of drawing down our revolving line of credit in connection with the acquisition, and (iii) the income tax effect of the adjustments made at the statutory tax rate of the U.S. (approximately 24.5%). The pro forma financial information does not reflect any adjustments for anticipated expense savings resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on December 1, 2021.
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Line of Credit Facility [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Debt | Debt In March of 2024, the Company refinanced its debt by issuing the 2030 Notes and used the proceeds to pay off the outstanding balance of the term loan and revolving line of credit under our previous credit agreement. We also entered into an amended and restated credit facility as described below. Notes Payable 2030 Convertible Senior Notes On March 1, 2024, the Company issued, in a private placement, convertible senior notes with an aggregate principal amount of $450 million, due March 1, 2030, unless earlier repurchased, redeemed or converted. The proceeds from the 2030 Notes were used in part to enter into the 2024 Capped Call Transactions, described below, for working capital, and for other general corporate purposes, including paying off the existing term loan and revolving line of credit. There are no required principal payments prior to the maturity of the 2030 Notes. The 2030 Notes bear interest at an annual rate of 3.5%, payable semi-annually in arrears on September 1 and March 1 of each year, beginning on September 1, 2024. The Company incurred approximately $12.0 million in issuance costs for the issuance of the 2030 Notes. Conversion Rights Before November 1, 2029, Noteholders may convert their 2030 Notes in the following circumstances: •During any fiscal quarter commencing after the fiscal quarter ending on May 31, 2024, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least twenty trading days (whether or not consecutive) during the thirty consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter; or •During the five consecutive business days immediately after any ten consecutive trading day period (the “Measurement Period”), if the trading price per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of Company’s common stock on such trading day and the conversion rate on such trading day; or •Upon the occurrence of distributions on the Company’s common stock, which distribution per share of common stock has a value exceeding 10% of the last reported sale price per share on the trading day immediately before the date such distribution is announced; or •Upon the occurrence of certain corporate events or if the Company calls such Notes for redemption, then the Noteholder of any Note may convert such Note. From and after November 1, 2029, Noteholders may convert their 2030 Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will satisfy its conversion obligations by paying cash up to the aggregate principal amount of 2030 Notes to be converted, by issuing shares of its common stock or a combination of cash and shares of its common stock, at its election. The initial conversion rate is 14.7622 shares of common stock per $1,000 principal amount of the 2030 Notes, representing an initial conversion price of approximately $67.74 per share of common stock. The conversion rate will be adjusted upon the occurrence of certain events, including spin-offs, tender offers, exchange offers, make-whole fundamental change and certain stockholder distributions. Repurchase Rights On or after March 5, 2027, and on or before the 60th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the 2030 Notes, subject to partial redemption limitation, at a repurchase price equal to the principal amount, plus accrued and unpaid interest, if the last reported sale price per share of the Company’s common stock exceeded 130% of the conversion price on (1) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a redemption notice and (2) the trading day immediately before the date the Company sends such notice. Pursuant to the partial redemption limitation, the Company may not elect to redeem less than all of the outstanding 2030 Notes unless at least $100.0 million aggregate principal amount of 2030 Notes are outstanding and not subject to redemption as of the time it sends the related redemption notice. If certain corporate events that constitute a fundamental change (e.g., events such as business combination transactions involving the Company, shareholder approval of liquidation or dissolution of the Company, and certain de-listing events with respect to the Company’s common stock) occur at any time, holders may, subject to certain exceptions, require the Company to purchase their 2030 Notes in whole or in part for cash at a price equal to the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid interest, to, but excluding, the fundamental change repurchase date. 2024 Capped Call Transactions On February 27, 2024, in connection with the pricing of the 2030 Notes, the Company entered into privately negotiated capped call transactions (“2024 Capped Call Transactions”). The 2024 Capped Call Transactions cover approximately 6.6 million shares of the Company’s common stock, which represent the number of shares of common stock initially underlying the 2030 Notes. The 2024 Capped Call Transactions are generally expected to reduce potential dilution to our common stock upon any conversion of the 2030 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the 2024 Capped Call Transactions will initially be $92.98 per share of common stock, which represents a premium of 75% over the last reported sale price of the common stock of $53.13 per share on February 27, 2024, and is subject to certain adjustments under the terms of the 2024 Capped Call Transactions. The cost of the purchased capped calls of $42.2 million was recorded as a reduction to additional paid-in-capital upon settlement in March 2024. Accounting for the 2030 Notes The 2030 Notes are classified as a non-current liability on our condensed consolidated balance sheets and the conversion option does not require bifurcation as an embedded derivative. Issuance costs of $12.0 million were recorded as a reduction to the principal balance of the 2030 Notes and will be amortized as interest expense using the effective interest method over the contractual term.
(1)Amortization based upon an effective interest rate of 4.0%. Credit Facility On March 7, 2024, the Company entered into an amended and restated credit agreement (the "Credit Agreement") with certain lenders, which provides a $900.0 million secured revolving credit facility ("revolving credit facility"). The revolving credit facility may be made available in U.S. Dollars and certain other currencies and may be increased, and new term loan commitments may be entered into, by up to an additional $260.0 million if the existing or additional lenders are willing to make such increased commitments. The revolving credit facility has sublimits for swing line loans up to $25.0 million and for the issuance of standby letters of credit in a face amount up to $25.0 million. We expect to use the revolving credit facility for general corporate purposes. Interest rates for the revolving credit facility are determined by reference to a Term Benchmark Rate or a base rate at our option and would range from 1.50% to 3.00% above the Term Benchmark Rate for Term Benchmark-based borrowings or from 0.50% to 2.00% above the defined base rate for base rate borrowings, in each case based upon our consolidated total net leverage ratio. Additionally, we may borrow certain foreign currencies at rates set in the same range above the respective Term Benchmark Rates for those currencies, based on our consolidated total net leverage ratio. A quarterly commitment fee on the undrawn portion of the revolving credit facility is required, ranging from 0.150% to 0.400% per annum, based upon our consolidated total net leverage ratio. The credit facility matures on March 7, 2029. The revolving credit facility does not require amortization of principal. Revolving loans may be borrowed, repaid and reborrowed until the maturity date, at which time all amounts outstanding must be repaid. Accrued interest on the loans is payable quarterly in arrears. As of May 31, 2024, the revolving credit facility was undrawn. Costs incurred to obtain our long-term debt of $6.0 million, along with $1.0 million of unamortized debt issuance costs related to the previous credit agreement, were recorded as debt issuance costs and will be amortized over the term of the debt agreement using the effective interest method. Unamortized debt issuance costs related to the repaid term loan were expensed. We are the sole borrower under the credit facility and our obligations under the Credit Agreement are guaranteed by each of our material domestic subsidiaries and are secured by substantially all of our assets and each of our material domestic subsidiaries. The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict our ability to, among other things, grant liens, make investments, make acquisitions, incur indebtedness, merge or consolidate, dispose of assets, pay dividends or make distributions, repurchase stock, change the nature of the business, enter into certain transactions with affiliates and enter into burdensome agreements, in each case subject to customary exceptions for a credit facility of this size and type. We are also required to maintain compliance with a consolidated interest charge coverage ratio, a consolidated senior secured net leverage ratio and a consolidated total net leverage ratio.
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Common Stock Repurchases |
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May 31, 2024 | |
Equity [Abstract] | |
Common Stock Repurchases | Common Stock Repurchases In January 2023, our Board of Directors increased the share repurchase authorization by $150.0 million to an aggregate authorization of $228.0 million. In the three months ended May 31, 2024 and May 31, 2023, we repurchased and retired 1.0 million shares for $49.9 million and 0.3 million shares for $15.0 million, respectively. In the six months ended May 31, 2024 and May 31, 2023, we repurchased and retired 1.4 million shares for $72.4 million and 0.5 million shares for $30.0 million, respectively. As of May 31, 2024, there was $121.5 million remaining under the current authorization.
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Stock-Based Compensation |
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Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date and recognized over the relevant service period. We estimate the fair value of each stock-based award on the measurement date using either the current market price of the stock, the Black-Scholes option valuation model, or the Monte Carlo Simulation valuation model. The Black-Scholes and Monte Carlo Simulation valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate, and dividend yield. We recognize stock-based compensation expense related to options and restricted stock units on a straight-line basis over the service period of the award, which is generally or five years for options and or four years for restricted stock units, and adjust the expense each period for actual forfeitures. We recognize stock-based compensation expense related to performance stock units and our employee stock purchase plan using an accelerated attribution. In 2022, 2023, and 2024, we granted performance-based restricted stock units that include two performance metrics under our Long-Term Incentive Plan ("LTIP") where the performance measurement period is three years. Vesting of the LTIP awards in the 2022, 2023, and 2024 plans are based on the following: (i) 75% is based on achievement of a three-year cumulative operating income, and (ii) 25% is based on our level of attainment of specified TSR targets relative to the percentage appreciation of a specified index of companies for the respective three-year periods. The vesting of LTIP awards is also subject to continued employment of the grantees through the performance period, except in the event of a qualifying termination. In order to estimate the fair value of such awards, we use a Monte Carlo Simulation valuation model for the market condition portion of the award, which uses the closing price of our common stock on the date of grant, less the present value of expected dividends when applicable, for the portion related to the performance condition. The following table provides the classification of stock-based compensation as reflected on our condensed consolidated statements of operations:
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Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated balances of other comprehensive loss during the six months ended May 31, 2024:
The tax effect on accumulated unrealized gains (losses) on our hedging activity and unrealized losses on investments was a tax provision of $0.1 million and $0.4 million as of May 31, 2024 and November 30, 2023, respectively.
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Revenue Recognition |
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Revenue Recognition | Revenue Recognition Timing of Revenue Recognition Our revenues are derived from licensing our products, and from related services, which consist of maintenance, hosting services, and consulting and education. Information relating to revenue from external customers by revenue type is as follows:
Geographic Revenue In the following table, revenue attributed to North America includes sales to customers in the U.S. and sales to certain multinational organizations. Revenue from EMEA, Latin America and the Asia Pacific region includes sales to customers in each region plus sales from the U.S. to distributors in these regions. Information relating to revenue from external customers from different geographical areas is as follows:
No single customer, partner, or country outside the U.S. accounted for more than 10% of our total revenue for the three and six months ended May 31, 2024 or May 31, 2023. Contract Balances Unbilled Receivables and Contract Assets As of May 31, 2024, billing of our long-term unbilled receivables is expected to occur as follows:
Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. We did not have any net contract assets as of May 31, 2024 or November 30, 2023. Deferred Revenue Deferred revenue expected to be recognized as revenue more than one year subsequent to the balance sheet date is included in long-term liabilities on the condensed consolidated balance sheets. Our deferred revenue balance is primarily made up of deferred maintenance. The changes in net deferred revenue for the six months ended May 31, 2024 were as follows:
As of May 31, 2024, transaction price allocated to remaining performance obligations was $344 million. We expect to recognize approximately 75% of the revenue within the next year and the remainder thereafter. Deferred Contract Costs Certain of our sales incentive programs meet the requirements to be capitalized. Depending upon the sales incentive program and the related revenue arrangement, such capitalized costs are amortized over the longer of (i) the product life, which is generally to five years; or (ii) the term of the related revenue contract. We determined that a to five year product life represents the period of benefit that we receive from these incremental costs based on both qualitative and quantitative factors, which include customer contracts, industry norms, and product upgrades. Total deferred contract costs were $6.6 million and $7.6 million as of May 31, 2024 and November 30, 2023, respectively, and are included in other current assets and other assets on our condensed consolidated balance sheets. Amortization of deferred contract costs is included in sales and marketing expense on our condensed consolidated statement of operations and was minimal in all periods presented.
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Restructuring Charges |
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Restructuring Charges | Restructuring Charges The following table provides a summary of activity for our restructuring actions:
Costs incurred during the three and six months ended May 31, 2024 are primarily related to a facility closure in connection with the restructuring action from the first fiscal quarter of 2023. We do not expect to incur additional material expenses as part of this action.
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Earnings per share |
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Earnings per share | Earnings per share We compute basic earnings per share using the weighted average number of common shares outstanding. We compute diluted earnings per share using the weighted average number of common shares outstanding plus the effect of outstanding dilutive stock options, restricted stock units, and deferred stock units, using the treasury stock method. The following table sets forth the calculation of basic and diluted earnings per share on an interim basis:
We excluded stock awards representing approximately 1,273,000 and 993,000 shares of common stock from the calculation of diluted earnings per share in the three and six months ended May 31, 2024, respectively, as these awards were anti-dilutive. We excluded stock awards representing approximately 268,000 and 304,000 shares of common stock from the calculation of diluted earnings per share in the three and six ended May 31, 2023, respectively, as these awards were anti-dilutive. The dilutive impact of the Notes on our calculation of diluted earnings per share is considered using the if-converted method. However, because the principal amount of the Notes must be settled in cash, the dilutive impact of applying the if-converted method is limited to the in-the-money portion, if any, of the Notes. During the three and six months ended May 31, 2024, we did not include the Notes in our diluted earnings per share calculation because the conversion feature in the Notes was out of the money.
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Segment Information |
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May 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Operating segments are components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. Our CODM is our Chief Executive Officer. We operate as one operating segment: software products to develop, deploy, and manage high-impact applications. Our CODM evaluates financial information on a consolidated basis. As we operate as one operating segment, the required financial segment information can be found in the condensed consolidated financial statements.
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Cyber Related Matters |
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May 31, 2024 | |
Health Care Organizations [Abstract] | |
Cyber Related Matters | Cyber Related Matters November 2022 Cyber Incident Following the detection of irregular activity on certain portions of our corporate network, we engaged outside cybersecurity experts and other incident response professionals to conduct a forensic investigation and assess the extent and scope of the incident. We did not incur costs related to this incident during fiscal year 2024 and do not expect to incur additional costs as the investigation is closed. We incurred net expenses of $1.5 million and $4.2 million related to this incident during the three and six months ended May 31, 2023. MOVEit Vulnerability As previously reported, on the evening of May 28, 2023, our MOVEit technical support team received an initial customer support call indicating unusual activity within their MOVEit Transfer instance. An investigative team was mobilized and, on May 30, 2023, the investigative team discovered a zero-day vulnerability in MOVEit Transfer (including our cloud-hosted version of MOVEit Transfer known as MOVEit Cloud). A "zero-day vulnerability" is a vulnerability that has been publicly disclosed and/or exploited (e.g., by an independent researcher or threat actor) before the software vendor has an opportunity to patch it. The investigative team determined that the zero-day vulnerability (the “MOVEit Vulnerability”) could provide for unauthorized escalated privileges and access to the customer’s underlying environment in both MOVEit Transfer (the on-premise version) and MOVEit Cloud (a cloud-hosted version of MOVEit Transfer that we deploy in both (i) a public cloud format, as well as (ii) for a small group of customers, in customer-dedicated cloud instances that are hosted, separate and apart from the public instances of our MOVEit Cloud platform). We promptly took down MOVEit Cloud for further investigation and notified all then-known current and former MOVEit Transfer and MOVEit Cloud customers in order to apprise them of the MOVEit Vulnerability and alert them to immediate remedial actions. In parallel, our team developed a patch for all supported versions of MOVEit Transfer and MOVEit Cloud, which was released on May 31, 2023, and allowed for the restoration of MOVEit Cloud that same day. We continue to assess the potential impact of the MOVEit Vulnerability on our business, operations, and financial results. MOVEit Transfer and MOVEit Cloud represented less than 4% in aggregate of our revenue for the six months ended May 31, 2024. Litigation and Governmental Investigations As of the date of the issuance of the financial statements, (i) we have received formal letters from 38 customers and others that claim to have been impacted by the MOVEit Vulnerability, some of which have indicated that they intend to seek indemnification from us related to the MOVEit Vulnerability, (ii) we have received a letter from an insurer providing for notice of a subrogation claim (where the insurer is seeking recovery for all expenses incurred in connection with the MOVEit Vulnerability), which resulted in the filing of a lawsuit in the District of Massachusetts that has since been joined with the MDL (defined below), and (iii) we are party to approximately 144 class action lawsuits filed by individuals who claim to have been impacted by the exfiltration of data from the environments of our MOVEit Transfer customers, which the Judicial Panel on Multidistrict Litigation transferred to the District of Massachusetts for coordinated and consolidated proceedings (the "MDL"). We have also been cooperating with the following inquires and investigations (some of which are further described hereafter): (i) several inquiries from domestic and foreign data privacy regulators; (ii) several inquiries and two formal investigations from state attorneys general; (iii) a formal investigation from a U.S. federal law enforcement agency (as of the date of the filing of this report, the law enforcement investigation that we are cooperating with is not an enforcement action or formal governmental investigation of which we have been told that we are a target); and (iv) a formal investigation from the SEC. On October 2, 2023, Progress received a subpoena from the SEC seeking various documents and information relating to the MOVEit Vulnerability. As described in the cover letter accompanying the subpoena, at this stage, the SEC investigation is a fact-finding inquiry, the investigation does not mean that Progress or anyone else has violated federal securities laws, and the investigation does not mean that the SEC has a negative opinion of any person, entity, or security. Progress is cooperating fully with the SEC in its investigation. On November 3, 2023, the United Kingdom’s Information Commissioner’s Office informed Progress that based upon the information provided, the Commissioner’s Office determined that regulatory action against Progress was not required in relation to the MOVEit Vulnerability. On December 21, 2023, Progress received a preservation notice from the Federal Trade Commission (the "FTC"), but has not otherwise received a request for information nor is Progress aware of any formal FTC investigation. On January 18, 2024, Progress received a subpoena from the Office of the Attorney General for the District of Columbia seeking various documents and information relating to the MOVEit Vulnerability. At this stage, the investigation is a fact-finding inquiry, and the investigation does not mean that Progress or anyone else has violated applicable laws. Progress is cooperating fully with the Office of the Attorney General for the District of Columbia in its investigation. On February 9, 2024, Progress received a subpoena from the Office of the Attorney General for the State of New Jersey seeking various documents and information relating to the MOVEit Vulnerability. At this stage, the investigation is a fact-finding inquiry, and the investigation does not mean that Progress or anyone else has violated applicable laws. Progress is cooperating fully with the Office of the Attorney General for the State of New Jersey in its investigation. On March 14, 2024, the Office of the Australian Information Commissioner’s Office informed Progress that based upon the information provided, the Commissioner’s Office determined that regulatory action against Progress was not required in relation to the MOVEit Vulnerability. On May 29, 2024, the Agencia Española de Protección de Datos (the Spanish data protection authority also known as the AEPD) informed Progress that based upon the information provided, the AEPD determined that regulatory action against Progress was not required in relation to the MOVEit Vulnerability. Expenses Incurred and Future Costs For the three and six months ended May 31, 2024, we incurred costs of $3.0 million and $4.0 million, respectively, related to the MOVEit Vulnerability. The costs recognized are net of insurance recoveries of $1.9 million. The timing of recognizing insurance recoveries may differ from the timing of recognizing the associated expenses. We expect to incur investigation, legal and professional services expenses associated with the MOVEit Vulnerability in future periods. We will recognize these expenses as services are received, net of insurance recoveries. While a loss from these matters is reasonably possible, we cannot reasonably estimate a range of possible losses at this time, particularly while the foregoing matters remain ongoing. Furthermore, with respect to the litigation, the proceedings remain in the early stages, alleged damages have not been specified, there is uncertainty as to the likelihood of a class or classes being certified or the ultimate size of any class if certified, and there are significant factual and legal issues to be resolved. Also, each of the governmental inquiries and investigations mentioned above could result in adverse judgements, settlements, fines, penalties, or other resolutions, the amount, scope and timing of which could be material, but which we are currently unable to predict. Therefore, we have not recorded a loss contingency liability for the MOVEit Vulnerability as of May 31, 2024. In addition, we may accelerate or make additional investments in our information technology systems, infrastructure, software products or networks following the MOVEit Vulnerability, however, we currently do not expect such amounts to be material to any fiscal period. Insurance Coverage During the period when the November 2022 cyber incident and the MOVEit Vulnerability occurred, we maintained $15.0 million of cybersecurity insurance coverage, which is expected to reduce our exposure to expenses and liabilities arising from these events. As of May 31, 2024, we have recorded approximately $7.0 million in insurance recoveries, of which $2.5 million was related to the November 2022 cyber incident and $4.5 million was related to the May 2023 MOVEit Vulnerability, providing us with approximately $8.0 million of additional cybersecurity insurance coverage under the applicable policy (which is subject to a $0.5 million retention per claim). We will pursue recoveries to the maximum extent available under our insurance policies.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
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Pay vs Performance Disclosure | ||||
Net income | $ 16,188 | $ 12,090 | $ 38,827 | $ 35,764 |
Insider Trading Arrangements |
3 Months Ended |
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May 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation (Policies) |
6 Months Ended |
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May 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies - We prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements and these unaudited financial statements should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023, as filed with the SEC on January 26, 2024 (our "2023 Annual Report"). We made no material changes in the application of our significant accounting policies that were disclosed in our 2023 Annual Report. We have prepared the accompanying unaudited condensed consolidated financial statements on the same basis as the audited financial statements included in our 2023 Annual Report, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full fiscal year.
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Use of Estimates | Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an on-going basis, management evaluates its estimates and records changes in estimates in the period in which they become known. These estimates are based on historical data and experience, as well as various other assumptions that management believes to be reasonable under the circumstances. The most significant estimates relate to revenue recognition, loss contingencies and the MOVEit Vulnerability, and business combinations. Actual results could differ from those estimates.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (the "FASB") issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements. This update is effective for the Company in the consolidated financial statements for the year ending November 30, 2025, and interim periods beginning after December 1, 2025. The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 is intended to improve the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for the Company beginning with the annual period ending November 30, 2026, allowing for adoption on a prospective basis or a retrospective option. Early adoption is permitted. The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company's consolidated financial statements. In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports. The disclosure requirements will apply to the Company's fiscal year beginning December 1, 2025. The Company is currently evaluating the final rule to determine its impact on the Company's disclosures.
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Cash and Cash Equivalents (Tables) |
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May 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments and Cash [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | A summary of our cash and cash equivalents at May 31, 2024 is as follows:
A summary of our cash and cash equivalents at November 30, 2023 is as follows:
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Derivative Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Foreign Currency Forward Contracts |
The table below details outstanding foreign currency forward contracts where the notional amount is determined using contract exchange rates:
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Fair Value Measurements (Tables) |
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May 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurements within the Fair Value Hierarchy of the Financial Assets | The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at May 31, 2024:
The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at November 30, 2023:
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Schedule of Fair Value Disclosure of Asset and Liability Not Measured at Fair Value | The following table details the fair value and carrying value of our Convertible Senior Notes due 2026 and 2030 (together referred to as “the Notes”):
(1) The carrying value of the convertible senior notes due 2026 (the "2026 Notes"), are reflected net of $4.1 million and $5.2 million of unamortized debt issuance costs as of May 31, 2024 and November 30, 2023, respectively. (2) The carrying value of the convertible senior notes due 2030 (the "2030 Notes"), are reflected net of $11.6 million of unamortized debt issuance costs as of May 31, 2024.
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Intangible Assets and Goodwill (Tables) |
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May 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets | Intangible assets are comprised of the following significant classes:
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Schedule of Future Amortization Expense From Intangible Assets Held | Future amortization expense for intangible assets as of May 31, 2024, is as follows:
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Schedule of Goodwill | Changes in the carrying amount of goodwill in the six months ended May 31, 2024 are as follows:
(1) The additions to goodwill during fiscal year 2024 represent measurement period adjustments related to the acquisition of MarkLogic Corporation ("MarkLogic") in February 2023. See Note 6: Business Combinations for additional information.
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Business Combinations (Tables) |
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Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allocation Of The Purchase Price | The allocation of the purchase price is as follows:
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Schedule of Business Acquisition, Pro Forma Information |
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Debt (Tables) |
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May 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Expense Related to Notes |
(1)Amortization based upon an effective interest rate of 4.0%.
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Stock-Based Compensation (Tables) |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Classification of Stock-Based Compensation | The following table provides the classification of stock-based compensation as reflected on our condensed consolidated statements of operations:
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Accumulated Other Comprehensive Loss (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | The following table summarizes the changes in accumulated balances of other comprehensive loss during the six months ended May 31, 2024:
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Revenue Recognition (Tables) |
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May 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue from External Customers by Revenue Type | Our revenues are derived from licensing our products, and from related services, which consist of maintenance, hosting services, and consulting and education. Information relating to revenue from external customers by revenue type is as follows:
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Schedule of Revenue from External Customers from Different Geographical Areas | In the following table, revenue attributed to North America includes sales to customers in the U.S. and sales to certain multinational organizations. Revenue from EMEA, Latin America and the Asia Pacific region includes sales to customers in each region plus sales from the U.S. to distributors in these regions. Information relating to revenue from external customers from different geographical areas is as follows:
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Schedule of Contract With Customer, Asset and Liability | As of May 31, 2024, billing of our long-term unbilled receivables is expected to occur as follows:
The changes in net deferred revenue for the six months ended May 31, 2024 were as follows:
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Restructuring Charges (Tables) |
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May 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Activity | The following table provides a summary of activity for our restructuring actions:
|
Earnings per share (Tables) |
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May 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculation of Basic and Diluted Earnings Per Share | The following table sets forth the calculation of basic and diluted earnings per share on an interim basis:
|
Cash and Cash Equivalents - Schedule Of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands |
May 31, 2024 |
Nov. 30, 2023 |
---|---|---|
Cash, Cash Equivalents and Investments [Line Items] | ||
Cash and cash equivalents | $ 190,420 | $ 126,958 |
Total amortized cost basis | 190,420 | |
Total Fair Value | 190,420 | |
Cash | ||
Cash, Cash Equivalents and Investments [Line Items] | ||
Cash and cash equivalents | 119,254 | $ 126,958 |
Money market funds | ||
Cash, Cash Equivalents and Investments [Line Items] | ||
Cash and cash equivalents | $ 71,166 |
Derivative Instruments - Schedule of Derivatives (Details) - USD ($) $ in Thousands |
May 31, 2024 |
Nov. 30, 2023 |
---|---|---|
Derivative [Line Items] | ||
Notional Value | $ 81,758 | $ 103,073 |
Fair Value | (476) | (2,530) |
Interest rate swap contracts designated as cash flow hedges | ||
Derivative [Line Items] | ||
Notional Value | 0 | 103,125 |
Fair Value | 0 | 1,495 |
Forward contracts to sell U.S. dollars | ||
Derivative [Line Items] | ||
Notional Value | 81,758 | 102,229 |
Fair Value | (476) | (2,526) |
Forward contracts to purchase U.S. dollars | ||
Derivative [Line Items] | ||
Notional Value | 0 | 844 |
Fair Value | $ 0 | $ (4) |
Intangible Assets and Goodwill - Schedule Of Intangible Assets (Details) - USD ($) $ in Thousands |
May 31, 2024 |
Nov. 30, 2023 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 788,719 | $ 788,719 |
Accumulated Amortization | (484,075) | (434,441) |
Net Book Value | 304,644 | 354,278 |
Purchased technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 280,000 | 280,000 |
Accumulated Amortization | (196,302) | (181,045) |
Net Book Value | 83,698 | 98,955 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 458,608 | 458,608 |
Accumulated Amortization | (252,772) | (221,362) |
Net Book Value | 205,836 | 237,246 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 50,111 | 50,111 |
Accumulated Amortization | (35,001) | (32,034) |
Net Book Value | $ 15,110 | $ 18,077 |
Intangible Assets and Goodwill - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible assets, amortization expense | $ 23.7 | $ 25.5 | $ 49.0 | $ 45.4 |
Intangible Assets and Goodwill - Schedule Of Future Amortization Expense (Details) - USD ($) $ in Thousands |
May 31, 2024 |
Nov. 30, 2023 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2024 | $ 40,113 | |
2025 | 78,759 | |
2026 | 69,086 | |
2027 | 44,740 | |
2028 | 33,157 | |
Thereafter | 38,789 | |
Net Book Value | $ 304,644 | $ 354,278 |
Intangible Assets and Goodwill - Schedule of Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
May 31, 2024
USD ($)
| |
Goodwill [Roll Forward] | |
Balance, December 1, 2023 | $ 832,101 |
Additions | 700 |
Translation adjustments | (18) |
Balance, May 31, 2024 | $ 832,783 |
Business Combinations - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Feb. 07, 2023 |
Feb. 29, 2024 |
May 31, 2024 |
Nov. 30, 2023 |
|
Business Acquisition [Line Items] | ||||
Goodwill | $ 832,783 | $ 832,101 | ||
MarkLogic Acquisition | ||||
Business Acquisition [Line Items] | ||||
Cash payments in business acquisition | $ 355,000 | |||
Goodwill, purchase accounting adjustments | $ 700 | |||
Goodwill | $ 161,770 | |||
Intangible assets | $ 232,100 |
Business Combinations - Schedule of Allocation of the Purchase Price (Details) - USD ($) $ in Thousands |
Feb. 07, 2023 |
May 31, 2024 |
Feb. 29, 2024 |
Nov. 30, 2023 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 832,783 | $ 832,101 | ||
MarkLogic Acquisition | ||||
Business Acquisition [Line Items] | ||||
Net working capital | $ 46,335 | |||
Property, plant and equipment | 723 | |||
Intangible assets | $ 232,100 | |||
Other assets, including long-term unbilled receivables | 4,477 | |||
Deferred taxes | (24,478) | |||
Deferred revenue | (32,418) | |||
Goodwill | 161,770 | |||
Net assets acquired | 388,509 | |||
MarkLogic Acquisition | Purchased technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 67,300 | |||
Finite-lived intangible assets, useful life | 7 years | |||
MarkLogic Acquisition | Trade name | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 12,500 | |||
Finite-lived intangible assets, useful life | 7 years | |||
MarkLogic Acquisition | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 152,300 | |||
Finite-lived intangible assets, useful life | 7 years |
Business Combinations - Schedule of Pro Forma Information (Details) - MarkLogic Acquisition $ / shares in Units, $ in Thousands |
6 Months Ended |
---|---|
May 31, 2023
USD ($)
$ / shares
| |
Business Acquisition [Line Items] | |
Revenue | $ | $ 381,327 |
Net income | $ | $ 44,996 |
Net income per basic share (in dollars per share) | $ / shares | $ 1.04 |
Net income per diluted share (in dollars per share) | $ / shares | $ 1.01 |
Debt - Schedule of Interest Expense Related To The Notes (Details) $ in Thousands |
6 Months Ended |
---|---|
May 31, 2024
USD ($)
| |
Debt Instrument [Line Items] | |
Contractual interest expense | $ 3,938 |
Amortization of debt discount and issuance costs | 446 |
Interest expense, debt | $ 4,384 |
Convertible Senior Notes | Convertible Debt | |
Debt Instrument [Line Items] | |
Annual interest rate | 3.50% |
Debt instrument, interest rate, effective percentage | 4.00% |
Common Stock Repurchases (Details) - USD ($) $ in Thousands, shares in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
Jan. 31, 2023 |
|
Equity [Abstract] | |||||
Stock repurchase program additional authorized amount | $ 150,000 | ||||
Stock repurchase authorization | $ 228,000 | ||||
Common stock repurchased and retired (in shares) | 1.0 | 0.3 | 1.4 | 0.5 | |
Common stock repurchased and retired | $ 49,949 | $ 15,000 | $ 72,449 | $ 30,000 | |
Remaining authorized repurchase amount | $ 121,500 | $ 121,500 |
Revenue Recognition - Timing of Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
|
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 175,077 | $ 178,251 | $ 359,762 | $ 342,477 |
Software licenses | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 53,979 | 56,407 | 118,079 | 113,975 |
Software licenses | Performance Obligations Transferred at a Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 53,979 | 56,407 | 118,079 | 113,975 |
Maintenance | Performance Obligations Transferred Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 102,503 | 102,240 | 204,528 | 194,753 |
Services | Performance Obligations Transferred Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 18,595 | $ 19,604 | $ 37,155 | $ 33,749 |
Revenue Recognition - Geographic Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
|
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 175,077 | $ 178,251 | $ 359,762 | $ 342,477 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 102,902 | 105,732 | 210,184 | 204,560 |
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 57,538 | 56,185 | 120,625 | 109,590 |
Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,599 | 4,790 | 9,267 | 8,979 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 10,038 | $ 11,544 | $ 19,686 | $ 19,348 |
Revenue Recognition - Unbilled Receivables and Contract Assets (Details) $ in Thousands |
May 31, 2024
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
2025 | $ 14,251 |
2026 | 15,825 |
2027 | 2,325 |
Total | $ 32,401 |
Revenue Recognition - Narrative (Details) - USD ($) |
May 31, 2024 |
Nov. 30, 2023 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Contract asset | $ 0 | $ 0 |
Deferred contract costs | $ 6,600,000 | $ 7,600,000 |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Capitalized contract cost, amortization period | 3 years | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Capitalized contract cost, amortization period | 5 years |
Revenue Recognition - Deferred Revenue (Details) $ in Thousands |
6 Months Ended |
---|---|
May 31, 2024
USD ($)
| |
Contract With Customer, Liability [Roll Forward] | |
Beginning balance | $ 295,036 |
Billings and other | 356,300 |
Revenue recognized that was deferred in prior periods | (180,966) |
Revenue recognized from current period arrangements | (178,796) |
Ending balance | $ 291,574 |
Restructuring Charges - Schedule of Restructuring Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
|
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | $ 5,187 | |||
Costs incurred | $ 651 | $ 3,990 | 3,000 | $ 5,387 |
Cash disbursements | (3,356) | |||
Translation and other adjustments | (3) | |||
Ending Balance | 4,828 | 4,828 | ||
Excess Facilities and Other Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 3,297 | |||
Costs incurred | 2,574 | |||
Cash disbursements | (1,369) | |||
Translation and other adjustments | 2 | |||
Ending Balance | 4,504 | 4,504 | ||
Employee Severance and Related Benefits | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 1,890 | |||
Costs incurred | 426 | |||
Cash disbursements | (1,987) | |||
Translation and other adjustments | (5) | |||
Ending Balance | $ 324 | $ 324 |
Earnings per share - Schedule of Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
|
Earnings Per Share [Abstract] | ||||
Net income | $ 16,188 | $ 12,090 | $ 38,827 | $ 35,764 |
Weighted average shares outstanding (in shares) | 43,213 | 43,343 | 43,508 | 43,321 |
Basic earnings per common share (in dollars per share) | $ 0.37 | $ 0.28 | $ 0.89 | $ 0.83 |
Diluted earnings per common share: | ||||
Net income | $ 16,188 | $ 12,090 | $ 38,827 | $ 35,764 |
Weighted average shares outstanding (in shares) | 43,213 | 43,343 | 43,508 | 43,321 |
Effect of dilution from common stock equivalents (in shares) | 751 | 1,127 | 887 | 1,090 |
Diluted weighted average shares outstanding (in shares) | 43,964 | 44,470 | 44,395 | 44,411 |
Diluted earnings per share (in dollars shares) | $ 0.37 | $ 0.27 | $ 0.87 | $ 0.81 |
Earnings per share - Narrative (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 31, 2024 |
May 31, 2023 |
May 31, 2024 |
May 31, 2023 |
|
Earnings Per Share [Abstract] | ||||
Number of shares excluded from the calculation of diluted earnings per share (in shares) | 1,273 | 268 | 993 | 304 |
Segment Information (Details) |
6 Months Ended |
---|---|
May 31, 2024
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Cyber Related Matters (Details) $ in Millions |
3 Months Ended | 6 Months Ended | 18 Months Ended | ||||
---|---|---|---|---|---|---|---|
Aug. 31, 2023
claim
plaintiff
|
May 31, 2024
USD ($)
|
May 31, 2023
USD ($)
|
May 31, 2024
USD ($)
|
May 31, 2023
USD ($)
|
May 31, 2024
USD ($)
|
Nov. 30, 2022
USD ($)
|
|
Business Interruption Loss [Line Items] | |||||||
Percentage of determined vulnerability in company’s MOVEit Transfer product, revenue | 4.00% | ||||||
Number of customers with a claim | plaintiff | 38 | ||||||
Number of class action lawsuits | claim | 144 | ||||||
Insurance recoveries | $ 7.0 | ||||||
Cybersecurity insurance, maximum amount | $ 15.0 | ||||||
Cybersecurity insurance, additional coverage | $ 8.0 | $ 8.0 | 8.0 | ||||
Cybersecurity insurance, per claim deductible | 0.5 | 0.5 | 0.5 | ||||
November 2022 Cyber Incident | |||||||
Business Interruption Loss [Line Items] | |||||||
Cyber incident costs | $ 1.5 | $ 4.2 | |||||
Insurance recoveries | 2.5 | ||||||
Moveit Vulnerability | |||||||
Business Interruption Loss [Line Items] | |||||||
Cyber incident costs | 3.0 | 4.0 | |||||
Insurance recoveries | $ 1.9 | $ 1.9 | $ 4.5 |
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