Progress Software (NASDAQ:PRGS) Corporation reported its third-quarter 2024 earnings, surpassing analysts' expectations with an EPS of $1.33 against a forecast of $1.21. Revenue also exceeded projections, reaching $215 million compared to the anticipated $211.7 million. Despite the positive earnings report, the stock fell 5.13% in after-hours trading, closing at $60.26.
Key Takeaways
- EPS of $1.33 beat the forecast of $1.21, marking a significant earnings surprise.
- Revenue exceeded expectations at $215 million, against a forecast of $211.7 million.
- Stock declined by 5.13% in after-hours trading despite strong earnings.
- Acquisition of ShareFile expected to boost future revenue and ARR.
- Operating margin increased by 200 basis points to 41%.
Company Performance
Progress Software demonstrated robust performance in Q3 2024, with a 2% year-over-year increase in revenue to $179 million and a 17% rise in earnings per share. The company maintained a strong net retention rate of 99%, reflecting high customer loyalty and stable recurring revenue. The acquisition of ShareFile is anticipated to enhance Progress's product offerings and revenue stream significantly.
Financial Highlights
- Revenue: $215 million (exceeded forecast)
- Earnings per share: $1.33 (up from forecast of $1.21)
- Operating margin: 41% (up 200 basis points year-over-year)
- Cash and equivalents: $233 million
- Net debt: $577 million
Earnings vs. Forecast
Progress Software's EPS of $1.33 outperformed the forecast of $1.21 by approximately 9.9%. Revenue also surpassed expectations, achieving $215 million against the projected $211.7 million. This marks a continuation of the company's trend of exceeding financial expectations, driven by its strategic growth initiatives and disciplined cost management.
Market Reaction
Despite the earnings beat, Progress Software's stock fell by 5.13% in after-hours trading, closing at $60.26. This decline may reflect investor concerns over broader market conditions or the company's future integration of ShareFile. The stock remains within its 52-week range, with a high of $70.56 and a low of $48.
Outlook & Guidance
Progress Software provided a revenue guidance of $207-217 million for Q4 2024 and a full-year revenue projection of $745-755 million. The company expects the ShareFile acquisition to contribute an additional $240 million in annual revenue and ARR, supporting its long-term growth strategy.
Executive Commentary
CEO Yogesh Gupta emphasized the company's commitment to its total growth strategy, stating, "Our goal is to make Progress more valuable, while making us stronger and larger." He also highlighted the disciplined approach to mergers and acquisitions, noting, "We're far more willing to say no than yes, when it comes to finding the right fit and paying the right price."
Q&A
During the earnings call, analysts inquired about the integration strategy for ShareFile and the company's plans for cross-selling opportunities. Management confirmed no immediate plans for cross-selling but expressed confidence in the acquisition's potential to enhance Progress's market position.
Risks and Challenges
- Integration of ShareFile may face operational challenges.
- Market volatility could impact stock performance despite strong earnings.
- Economic uncertainties may affect customer spending and retention.
- Competition in the tech sector remains intense, requiring continuous innovation.
- The suspension of dividends may concern income-focused investors.
Full transcript - Progress Software Corporation (PRGS) Q3 2024:
Conference Operator: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Mike Michiquay, Senior Vice President, Investor Relations.
Please go ahead, sir.
Mike Michiquay, Senior Vice President, Investor Relations, Progress Software: Okay. Thank you, Sherry. It's always a pleasure to have you with us. Good afternoon, everybody. Thanks for joining us for Progress Software's Q3 2024 Financial Results Conference Call.
On the line with me today are Yogesh Gupta, President and CEO and Anthony Folger, our Chief Financial Officer. Before we get started, let's go over our Safe Harbor statement. During this call, we will discuss our outlook for future financial and operating performance, corporate strategies, product plans, cost initiatives, our proposed acquisition of ShareFile, which we announced on September 9th, and other information that might be considered forward looking. Such forward looking information represents Progress Software's outlook and guidance only as of today and is subject to risks and uncertainties. For a description of the risk factors that may affect our results, please refer to the Risk Factors in our filings with the Securities and Exchange Commission.
Progress Software assumes no obligation to update the forward looking statements included in this call. Additionally, please note that all the financial figures referenced on this call are non GAAP measures unless otherwise indicated. You can find a reconciliation of these non GAAP financial measures to the most directly comparable GAAP figures in our financial results press release, which was issued after the market closed today. This document contains additional information related to our financial results for the Q3 of fiscal year 2024, and I recommend that you reference it for specific details. We also have prepared a presentation that contains supplemental data for our Q3 2024 results, provides highlights and additional financial metrics.
Both the earnings release and the supplemental presentation, along with a copy of our press release and a supplemental slide presentation announcing the ShareFile acquisition on September 9, 2024, are all available in the Investor Relations section of our website at investors. Progress.com. Today's call will be recorded in its entirety and should be available for replay on the Investor Relations section of our website shortly after we finish. With that, let me turn it over to Yogesh.
Yogesh Gupta, President and CEO, Progress Software: Thank you, Mike. Good afternoon, everyone, and thank you for joining us as we share the results of our 3rd fiscal quarter. The last few months have been busy and exciting, and I'm glad to be here this afternoon to talk about all the great things happening here at Progress right now. To begin with, let's talk about the 3rd quarter, which was ahead of the high end of our guidance on both the top and bottom lines. Revenue grew by 2% year over year to $179,000,000 and EPS grew 17% year over year, reflecting continued expense management.
We ended the quarter with $582,000,000 in ARR, up sequentially 1% and net retention rate held steady at 99% as some churn from late last year which we've previously discussed works through the trailing 12 month calculation. We generated excellent cash flows with DSOs at 45 days and our balance sheet remained healthy and strong ending the quarter with over $230,000,000 in cash. So on just about every metric, we had a strong quarter. I'm very pleased with our Q3 results and Anthony will provide more details on the financial metrics and dynamics in his remarks. In another important news, during the Q3, the SEC notified us that it has concluded its investigation into the Move It vulnerability with no enforcement action recommended.
This news from the SEC in August was in addition to clearance decisions by data privacy regulators in the UK, Australia and Spain over the past year. We view all these decisions as positive indicators of how we've handled the Move It vulnerability from our rapid initial response and reporting transparency to our foresight cooperation with all regulatory inquiries and investigation. The 3rd piece of exciting news which we announced 2 weeks ago is our signing of the agreement to acquire ShareFile, which is the latest step in our total growth strategy and our largest acquisition yet. We intend to make an all cash purchase of ShareFile of $875,000,000 and expect to close the transaction before the end of fiscal 2024 subject to regulatory approvals and customary closing conditions. Immediately after closing, we will begin the integration process and we look forward to welcoming the ShareFile team to progress.
We expect full integration to be completed within 12 months. I'm really excited about this acquisition and let me share some of the reasons why. ShareFile, which we're acquiring from the Cloud Software (ETR:SOWGn) Group, is a leading provider of collaboration software for document centric use cases. It is a modern SaaS native platform with AI powered document centric collaboration and automated workflows, client portals, secure file sync and share and e signature capabilities. Any company whose business workflows are document centric and compliance heavy where several internal and external parties collaborate on documents and require various levels of editing and approval through a secure auditable solution can benefit from using ShareFile.
This is why ShareFile will complement and fit in perfectly with our existing digital experience offerings and will enable us to offer greater value to users. ShareFile's 86,000 strong customer base is large and loyal and spans industries such as accounting, financial and legal services, healthcare, construction and real estate. 100% of its revenue is recurring with a net retention rate of over 100%. Integration with our existing digital experience sales, go to market, engineering, support and operating infrastructure will provide us a clear path to our operating margin target for the acquired business of 40%. When the deal closes, we expect ShareFile to add over $240,000,000 in both annual revenue and ARR, which will bring our total annual revenue to nearly $1,000,000,000 and our ARR to well over $800,000,000 In terms of financing deal, we will use a combination of cash on hand and our existing revolving credit facility.
We expect pro form a net leverage to be around 3.6 at the time of closing and we intend to delever quickly as we have with our prior acquisitions. Speaking of delevering, let me spend a few minutes on why we also announced our intention to suspend our quarterly cash dividend once the deal closes. This decision was made with significant deliberations as part of our total growth strategy. So it's worth examining our commitment to executing our plan in a little more detail. Our goal with the total growth strategy is to make progress more valuable, while making us stronger and larger.
Our goal is to provide more value to our customers and create more value for our shareholders. I'm extremely enthusiastic and passionate about our technology and our products and how they help our customers succeed and thrive in this ever changing technology driven world. Our fanatical focus on customer success is one of the 3 key pillars of our strategy, as is our commitment to investing in and innovating our products to grow and adapt to the needs of our customers. Updating and modernizing our offerings is essential for the continued success of our customers and for retaining them well into the future. This strong foundation of great technology and sustained customer success are the bedrock of our business and the reason why all products generate significant free cash flow.
And that free cash flow in turn needs to be guided by a prudent capital allocation policy to continue driving the success of our total growth strategy. We've always placed the highest priority on M and A, followed by share buybacks. So our game plan for growing shareholder value is simple. 1st, achieve greater revenues, earnings and cash flows by acquiring highly accretive businesses with characteristics similar to ours, businesses with excellent products and loyal customer bases. 2nd, pay the right price, integrate them quickly and efficiently, while focusing on customer success and retention.
And finally, aggressively reduce leverage to prime our liquidity for the next deal. In the meantime, we minimize dilution and return capital to shareholders in the form of well timed buybacks. When it comes to executing on M and A, we will continue to remain disciplined and patient as we search for new opportunities and then act decisively. Oftentimes, as you've seen, acting decisively means walking away from a potential acquisition that we don't think will work. We are far more willing to say no than yes, when it comes to finding the right fit and paying the right price.
And we're very comfortable walking away because in the absence of an acquisition, we focus on continuously improving our processes and systems. We put great effort into upgrading and optimizing our internal technology and business practices to continue to make us more integration ready and efficient. And of course, we're always trying to incorporate the lessons learned from any mistakes we make. Just as important, we keep progress a great place to work for our employees. Our voluntary turnover remains well below that of the overall software industry and has hovered around 6% over the past 2 years.
Keeping a talented stable workforce is essential to the effective execution of our total growth strategy from innovation and customer success to acquisition and integration. Our front office and back office teams all get better with each deal and its subsequent integration. I feel proud of how we have continued to mature and grow our ability to execute on our strategy and create more value for our customers, our shareholders and of course our employees. So to wrap up, the Q3 was excellent on several fronts. We had another great performance on the top and bottom line.
We received more good news about Moove It and we are getting ready to close on a meaningful acquisition that would provide us recurring revenues at scale. As always, I want to acknowledge all the people on the progress team who worked hard to produce these great results. Their work is extraordinary and I'm grateful for their talent, dedication and desire to succeed. Now, let me turn it over to Anthony to provide more financial detail around our Q3. Anthony?
Mike Michiquay, Senior Vice President, Investor Relations, Progress Software: Great. Thanks, Yogesh, and good afternoon, everyone. Thanks for joining our call. As Yogesh mentioned, we're very pleased with our 3rd quarter results, which once again exceeded the high end of our previously issued guidance ranges. We're also thrilled that on September 9, we announced the signing of a definitive agreement to acquire ShareFile from Cloud Software Group.
I'll talk more about ShareFile and the acquisition in a bit. But first, let's get into the numbers. Starting with ARR, which came in at $582,000,000 and represented slight growth on a year over year basis and approximately 1% sequential growth over the 2nd quarter. Although no single product drove material growth in our total ARR, the increase that we delivered was the result of modest growth in multiple products across our portfolio including OpenEdge, DevTools, Sitefinity, Loadmaster, Flowmon and MoveIt. We also had another strong quarter for net retention with our Q3 rates coming in at 99%.
In addition to our solid ARR performance in the quarter, quarterly revenue of $179,000,000 slightly exceeded the high end of the Q3 guidance range we provided in June and represents approximately 2% year over year growth. Our strong revenue performance in the quarter was driven by stronger than expected demand for multiple products in our portfolio, including OpenEdge. Turning now to expenses. Our total costs and operating expenses were $105,000,000 for the quarter, a decrease of $3,000,000 compared to Q3 of last year. This year over year decrease was driven by 2 factors.
First is tight cost management across the business as our teams again executed well during the quarter. 2nd is the timing of certain expenses between the 3rd 4th quarters. Operating income for the quarter was $74,000,000 an increase of $6,000,000 compared to the same quarter last year with an operating margin of 41%, up 200 basis points year over year. Earnings per share for the quarter were $1.26 $0.11 above the high end of our guidance range and compared to the prior year, earnings per share were up $0.18 or 17% with the increase being comprised of an improved operating margin and lower interest coupled with higher interest income for the quarter, both resulting from the convertible notes issuance and credit facility refinancing we completed earlier in the year. Moving on to a few balance sheet and cash flow metrics.
We ended the quarter with cash, cash equivalents and short term investments totaling $233,000,000 and debt of $810,000,000 resulting in a net debt position of $577,000,000 This represents net leverage of approximately 2 times using our trailing 12 months adjusted EBITDA. DSO for the quarter was 45 days, down 4 days compared to the year ago quarter. Deferred revenue was $285,000,000 at the end of the 3rd quarter, down slightly from the 2nd quarter, reflecting normal seasonality in our business. Adjusted free cash flow was $58,000,000 for the quarter, an increase of $10,000,000 or 21 percent from the year ago quarter. In the Q3, we repurchased $14,000,000 of Progress stock, bringing our year to date total to $87,000,000 And at the end of Q3, we have $107,000,000 remaining under our current share repurchase authorization.
On September 9, in conjunction with the share file announcement, we also announced our intent to suspend our quarterly cash dividend upon closing the ShareFile acquisition. We believe we can generate higher returns on capital through M and A as part of our total growth strategy and will therefore prioritize debt repayment to free up capacity for future M and A. We expect that we will continue to repurchase shares to offset dilution from our equity plans and on occasion repurchase shares opportunistically. Now let's discuss our outlook starting with ShareFile. We expect ShareFile to contribute approximately 1 month of results to our fiscal Q4 with revenue of $18,000,000 to $20,000,000 and operating margin of 15% to 20% and negative adjusted free cash flow of approximately $15,000,000 to $20,000,000 I'd like to emphasize that the negative cash flow is due to the proposed deal structure of the ShareFile acquisition.
The acquisition is structured as an asset purchase and share files accounts receivable at the time of closing are not included in the assets that are being acquired. To compensate for this structural point, Progress will receive a $25,000,000 working capital adjustment, which will net against the $875,000,000 purchase price at close. After our first billing cycle with ShareFile, we will begin generating cash inflows and expect ShareFile's adjusted free cash flow to be increasingly positive throughout 2025. With that context for ShareFile in mind, for the Q4 of 2024, we expect revenue between $207,000,000 217,000,000 dollars and earnings per share of between $1.15 $1.25 For the full year 2024, we expect revenue to be between $745,000,000 755,000,000 dollars and operating margin for the year of approximately 39 percent, free cash flow between $195,000,000 $205,000,000 this includes the negative contribution from ShareFile and earnings per share between $4.75 $4.85 Our guidance for full year EPS assumes a tax rate of approximately 19% and approximately 44,000,000 shares outstanding. In closing, we're really excited to deliver another strong quarter of results and we're thrilled with the announced ShareFile acquisition, both of which position us very well for 2025 and beyond.
With that, Sherry, I'd like to open the call for Q and A.
Conference Operator: Thank And our first question will come from the line of John DiFucci with Guggenheim. Your line is open.
John DiFucci, Analyst, Guggenheim: Thank you for taking my questions. First one, I think a question for Anthony and then I'd like to ask a follow-up to Yogesh. So Anthony, really nice cash flow in the quarter and you reduced annual guidance by $10,000,000 even though share file impact was negative $15,000,000 to 20 dollars So I'm just I just want to make sure my math is right, it's easy math, but that implies excluding share file effects, you would have raised it $5,000,000 to $10,000,000 the cash flow guidance. And I just want to make sure, is that correct? And then I know you've talked about this and you're talking about profit and getting things up to normal levels, but and you've proven yourself in M and A.
You progress has your team has done that. But can you go through some of the detail of why you're confident in bringing ShareFile profit metrics? And I'm really focused with free cash flow to your level, to your normalized level over the next 12 months. The reason I ask on this one, I know you've said you're going to do that and you had done in the past, but this is a big one, right? And it's a little different regarding the core bit customer base relative to a lot of your other acquisitions.
Sorry for the long winded.
Mike Michiquay, Senior Vice President, Investor Relations, Progress Software: No, that's great, John. Thank you. And you're correct. The first question about free cash flow, yes, there's an implied increase to our cash flow guide for the year that gets netted down by the ShareFile impact in Q4. So your math there is correct.
When it comes to our confidence in the ShareFile integration, You're right, it's a larger acquisition, but as our business has grown, ShareFile is about a third of our revenue. And so it's really not that far out of what we would normally target. It feels like it's manageable to us. The business already is profitable. It's running, let's say, between 15% 20% operating margins.
And they already have one of the things that was attractive to us is it's a cloud platform operating at scale. They've had gross margins better than 80%, at least in terms of the diligence we were able to dig into. And all of those things, I think having already an ability to operate cloud infrastructure at scale like that to do it at a solid gross margin, and the fact that this is an asset deal and it's really a carve out from Cloud Software Group. We have a sizable DX business already, digital experience business. I think there's a lot of resources that we will bring to bear.
I think our DX business is used to a transactional type of heavy volume business. So there's an element within progress that ShareFile looks very familiar to. And I think bringing it over with really strong gross margins and very good net retention rates gives us a lot of confidence that we're going to be able to drive margins where we would expect to in our model and to maintain similar cash flow conversion metrics in this business.
John DiFucci, Analyst, Guggenheim: Okay. Okay. Thank you. And then Yogesh, to that point about the digital experience business you have, ShareFile, a lot of exposure to the SMB, the similar customer base here, right? And I but we're starting to see at least indications of in the market a little a bit of a rollover.
The SMB has been really strong, right? And I just starting to see a little bit of weakness out of that cohort in the market. Can you comment on your thoughts regarding this and your recent experience regarding your businesses that do sell into sort of SMB customer base?
Yogesh Gupta, President and CEO, Progress Software: Happy to, John. So in our digital experience business, right, we also have a very, very large number of customers. I mean, I think it's quite often not well known that we have more than 20,000 customers in our digital experience business ourselves. It also is a high velocity, small repeatable deals business. We continue to see strength there.
We continue to see the business doing well. John, from our perspective, business has been solid is the way I would characterize it. I know that some folks were seeing really, really meaningful upside with the SMB side. We saw just a steady solid business and we are not seeing changes there in what we do. The ShareFile business is a very interesting one, right.
It targets really a business user that is using it for the core part of their business, which is collaborating with their clients and making sure that their business functions, If you're an accountant, if you're a lawyer, if you're a doctor, if you're a any of the business services people that use this, they are using it to exchange mission critical from their perspective business critical information in a secure reliable way, do workflow on it, make sure that multiple people can work on it in a secure way, make sure that there's versioning and ability to audit and track who did what. And many of these industries are highly regulated. So it is a very stable business. The business has had a track record of stability, right. So we know that from looking at what has been shared with us.
So we feel good. It isn't just that suddenly the business was doing well over the last couple of years. So we thought it was a good time to buy, John. So that's that. I also want to sort of add a little bit to Anthony's earlier comment about operating margins.
One additional point to share, when you have a business, the scale that this is, which is really nice, if you think about it, right, the R and D expense doesn't linearly grow with scale, right? If I had instead of 86, if ShareFile had instead of 86,000 customers, they had 75,000 customers or 60,000 customers. They would still have to do the same R and D, right? So often as you scale up beyond a certain level, the R and D costs don't grow up linearly. So that's one of the reasons why we actually feel really good about our ability to and that's just one example, but I think the scale gives you added benefit.
The only other single product we have at Progress that is of similar scale is OpenEdge. And so obviously this is a cloud offering. Obviously this is an offering in which we need to continue to invest quite aggressively to stay competitive. So the gross margins aren't the same as an on prem product, but we are extremely comfortable with the fact that we see line of sight to that 40% operating margin target.
John DiFucci, Analyst, Guggenheim: Well, you guys have done it every time. So thanks for all this. Thanks.
Yogesh Gupta, President and CEO, Progress Software: Thank you, John. Thank you.
Conference Operator: Thank you. One moment for our next question. And that will come from the line of Lucky Schreiner with D. A. Davidson.
Your line is open.
Lucky Schreiner, Analyst, D.A. Davidson: Hi. Awesome. Thanks for taking my question. I know you guys probably don't like this question, but since you mentioned ShareFile and MoveIT IT or sorry, MoveIT, have similar customer bases, some of them both use the product. Is there a cross sell opportunity here that you see?
Yes, any color there would be helpful.
Yogesh Gupta, President and CEO, Progress Software: So there are some common customers of MoveIt and ShareFile, Lucky. From our perspective, whenever we do these transactions and look at these acquisitions, our business model is all done based on assuming no cross sell because we believe that cross sell is often much, much harder than it looks on the surface. We will see what happens over time. And if obviously if there is an opportunity and if we do see some traction, we will share with you transparently. But our plan at least at this point does not contemplate any cross sell.
And it just makes it for a to be honest, a more conservative realistic plan, so that we get to the targets we need to get to, the way we want to. Yes.
Lucky Schreiner, Analyst, D.A. Davidson: I appreciate that. That makes sense. Maybe then on any additional color you can give on the average contract length for a share file and maybe what the renewal process will look like here in the future?
Yogesh Gupta, President and CEO, Progress Software: Sorry, your line was a little scratchy. Were you asking about average contract size?
Lucky Schreiner, Analyst, D.A. Davidson: Average contract length, the duration of the contract for share following and how renewals might trend here in the future?
Yogesh Gupta, President and CEO, Progress Software: Yes. So they have so they do both the vast majority of them are annual. And Anthony, please correct it if I'm wrong. They also have credit card based auto renewals of their contracts. They some of their billings are annual, some of their billings are monthly, I believe.
That's right. So it is a mix, Lucky, as to the contract length as well as the billing cycle. But nothing is multiyear build upfront. So it is either build or maybe de minimis. Yes.
Right. Okay. So de minimis is multi year buildup. So there isn't in terms of the kind of lumpiness you see year over year for our billings in our other products, you won't see that here.
Lucky Schreiner, Analyst, D.A. Davidson: Yes. Perfect. Appreciate taking the questions.
Yogesh Gupta, President and CEO, Progress Software: You're welcome, Mike.
Conference Operator: Thank you. One moment for our next question. And that will come from the line of Brent Thill with Jefferies. Your line is open.
Bo, Analyst, Jefferies: Hey guys, this is Bo on for Brent. Thanks for taking the question. You guys typically you guys have acquired businesses in the 15% to 25% of your rev base, like that range. But clearly, ShareFile was much bigger. And so what gives you the confidence in your ability to integrate that deal in the same timeframe as previous smaller acquisitions?
And should we be looking at this as an indicator that perhaps going forward, the M and A pool could be beyond that 25% range? Thanks.
Yogesh Gupta, President and CEO, Progress Software: Yes. So, Bo, good question. So first of all, right, you are correct that we've historically done deals that have been 15% to 25% of our size and revenue. That is our sweet spot. But we've also said, if the right opportunity comes along, we might go a little smaller, we might go a little bit bigger.
As you know, it wasn't that long ago that we were looking at a business that was not even quite 10% of our size, right, which became public because of the way because of the way Irish stuff works. But so really from our perspective, being about a third of our revenue is not that far off. The integration challenge is really not on revenue, right? When you think about it, the integration challenge is around people, it's around systems, it is around processes. That's fundamentally what is the challenge.
And when it comes to scale, the biggest scale challenge can be people. So one of the things that we always look for is what is the headcount ratio between our company and the acquired business because if that is, as I like to say, it's 4 of us and we're bringing in 1 new for every 4 we have, which is what approximately this is the ratio between ShareFile employees and Progress employees. It's about 4 of us to 1 of ShareFile. That makes it easier to sustain our culture, that makes it easier for the people to be brought on board and integrated into our organization. It allows for much easier go forward success.
And that's why we feel that bringing in 25 percent additional folks in our organization is really very doable. So both integration effort or integration complexity, people are probably the single biggest, always the single biggest thing to watch for. And we're really excited about bringing in the ShareFile people. The people we have met have been all delightfully wonderful and I can't wait to welcome them and to welcome the ShareFile customers into the Progress family.
Bo, Analyst, Jefferies: Thanks, Ria. And maybe a quick one on international. It looks like EMEA was a little softer this quarter and you had some outperformance in Asia Pacific. Just anything to call out there in terms of productivity levels from sales reps between the different regions?
Mike Michiquay, Senior Vice President, Investor Relations, Progress Software: No, I don't think so, Bo. I think it was probably generally in line with what we expected. I don't think anything unusual to speak of.
Bo, Analyst, Jefferies: Great. Thank you.
Conference Operator: Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Yogesh Gupta for any closing remarks.
Yogesh Gupta, President and CEO, Progress Software: Thank you, Sherry. Thank you everyone for joining us for this call. We're excited about what lies ahead and we look forward to speaking with you soon. Thank you very much and have a wonderful evening.
Conference Operator: This concludes today's program. Thank you all for participating. You may now disconnect.
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