Progress Software Corp (PRGS) 2023 Q2 法說會逐字稿

Good day, and welcome to the Progress Software Corporation Q2 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. (Operator Instructions). Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Mike Micciche, Vice President of Investor Relations. Please go ahead.

美好的一天，歡迎參加 Progress Software Corporation 2023 年第二季度財報電話會議。此時，所有參與者都處於只聽模式。演講者演講結束後，將進行問答環節。 （操作員說明）。請注意，今天的會議正在錄製中。現在我想將會議交給您的演講者，投資者關係副總裁邁克·米奇奇 (Mike Micciche) 先生。請繼續。

Great. Thank you, Sheri. Good afternoon, everyone, and thanks for joining us for Progress Software's Second Fiscal Quarter 2023 Financial Results Conference Call. With us today is Yogesh Gupta, our President and Chief Executive Officer; and Anthony Folger, our Chief Financial Officer.

偉大的。謝謝你，雪莉。大家下午好，感謝您參加 Progress Software 2023 年第二財季財務業績電話會議。今天與我們在一起的是我們的總裁兼首席執行官 Yogesh Gupta；和我們的首席財務官安東尼福爾格。

Before we get started, let's go over our safe harbor statement. During this call, we will discuss our outlook for future financial and reporting performance, corporate strategies, product plans, cost initiatives, our integration of MarkLogic, and other information that must 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 section in our most recent Form 10-K.

在開始之前，讓我們回顧一下我們的安全港聲明。在本次電話會議中，我們將討論對未來財務和報告業績的展望、公司戰略、產品計劃、成本計劃、MarkLogic 的整合以及其他必須被視為前瞻性的信息。此類前瞻性信息僅代表 Progress Software 截至目前的展望和指導，並存在風險和不確定性。有關可能影響我們結果的風險因素的說明，請參閱我們最新的表格 10-K 中的風險因素部分。

Progress Software assumes no obligation to update the forward-looking statements included in this call. Additionally, on this call, all the financial figures we discuss are non-GAAP measures unless otherwise indicated. You can find a reconciliation of those non-GAAP financial measures to the most directly comparable GAAP numbers 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 second quarter of 2023, and I recommend you reference it for specific details. We have also prepared a presentation that contains supplemental data for our second quarter 2023 results, providing highlights and financial metrics.

Progress Software 不承擔更新本次電話會議中包含的前瞻性陳述的義務。此外，在本次電話會議上，除非另有說明，否則我們討論的所有財務數據均為非公認會計準則衡量標準。您可以在我們今天收盤後發布的財務業績新聞稿中找到這些非公認會計原則財務指標與最直接可比的公認會計原則數據的調節表。本文檔包含與我們 2023 年第二季度財務業績相關的其他信息，我建議您參考它以了解具體詳細信息。我們還準備了一份演示文稿，其中包含 2023 年第二季度業績的補充數據，提供亮點和財務指標。

Both the earnings release and the supplemental presentation are available in the Investor Relations section of our website at investors.progress.com. Today's conference will be recorded in its entirety and will be available via replay on the Investor Relations section of our website. And with that, I'll turn it over to Yogesh.

收益報告和補充演示文稿均可在我們網站的投資者關係部分獲取：investors.progress.com。今天的會議將被完整記錄，並將通過我們網站的投資者關係部分重播。有了這個，我會把它交給 Yogesh。

Thank you, Mike, and good afternoon, everyone. Welcome to our second quarter 2023 Earnings Conference Call. As you saw in our press release, Progress had another great quarter, with earnings, revenues, and operating margins, all ahead of estimates. As a result, we have raised our full-year 2023 outlook, which Anthony will detail for you in a few minutes.

謝謝邁克，大家下午好。歡迎參加我們的 2023 年第二季度收益電話會議。正如您在我們的新聞稿中看到的那樣，Progress 又度過了一個出色的季度，其盈利、收入和營業利潤率均超出了預期。因此，我們上調了 2023 年全年展望，安東尼將在幾分鐘內為您詳細介紹。

In the quarter, revenues were up 19% year-over-year to $179 million, thanks to continued strong demand for our products and a fantastic performance again from our teams in the field. Our customers and partners remain committed to using Progress products to run their businesses, especially in these more challenging economic times. And we remain committed to providing them with great value and ensuring their success. Earnings per share came in at $1.06, well ahead of estimates, driven by strong top-line revenue and helped by excellent execution on the MarkLogic integration as well as prudent expense management from all of our teams. Operating margins exceeded targets, ending the quarter at 38% versus consensus of around 35%.

由於對我們產品的持續強勁需求以及我們現場團隊的出色表現，本季度收入同比增長 19% 至 1.79 億美元。我們的客戶和合作夥伴仍然致力於使用 Progress 產品來運營他們的業務，特別是在這些更具挑戰性的經濟時期。我們仍然致力於為他們提供巨大的價值並確保他們的成功。每股收益達到 1.06 美元，遠高於預期，這得益於強勁的營收收入以及 MarkLogic 集成的出色執行力以及我們所有團隊審慎的費用管理。營業利潤率超出了目標，本季度結束時為 38%，而市場普遍預期為 35% 左右。

ARR grew in the second quarter to $569 million, an increase of 19% year-over-year and driven by the acquisition of MarkLogic and a net retention rate that was again above 101%. These outstanding results were achieved across virtually all product lines and geographies, with a strong contribution from MarkLogic, which I'll talk more about in a minute. Our product portfolio saw broad strength this quarter led by OpenEdge, Loadmaster, Chef, Hiponia Cloud, and MarkLogic offerings. Strength in OpenEdge was driven by customer win-backs as well as their need to modernize their applications, once again demonstrating the value that this platform provides for the mission-critical applications of the future.

在收購 MarkLogic 和再次高於 101% 的淨保留率的推動下，第二季度 ARR 增長至 5.69 億美元，同比增長 19%。這些出色的成果幾乎在所有產品線和地區都取得了，這得益於 MarkLogic 的巨大貢獻，我將在稍後詳細討論。我們的產品組合本季度表現強勁，其中以 OpenEdge、Loadmaster、Chef、Hiponia Cloud 和 MarkLogic 產品為首。 OpenEdge 的優勢是由客戶贏回以及他們對應用程序現代化的需求推動的，再次證明了該平台為未來關鍵任務應用程序提供的價值。

Loadmaster, which we acquired Tuchen, continues to see new customer wins through the Dell channel because our product bolsters Dell's cloud storage offerings. We also saw new wins as well as expansions with our Chef's line as customers continued to reap greater DevOps and detect benefits from our products. And our SisNet Cloud offering continues to grow as customers across the industry realize the value it delivers through ease of use, improved engagement, and marketing effectiveness. We saw new customer wins as well as expansions by existing SisNet Cloud customers.

我們收購了 Tuchen 的 Loadmaster 繼續通過戴爾渠道贏得新客戶，因為我們的產品增強了戴爾的雲存儲產品。隨著客戶不斷獲得更大的 DevOps 並從我們的產品中發現好處，我們還看到了新的勝利以及 Chef 系列的擴展。隨著整個行業的客戶認識到它通過易用性、提高參與度和營銷有效性所提供的價值，我們的 SisNet 雲產品不斷增長。我們看到了新客戶的贏得以及現有 SisNet Cloud 客戶的擴張。

And last but not least, our MarkLogic business also saw strength as we engaged with the customers and began to share our vision with them. As you know, the MarkLogic acquisition closed on February 7, a few weeks prior to the end of our fiscal first quarter. Since then, we have welcomed our MarkLogic colleagues, connected personally with customers around the globe, and made significant progress on integrating all facets of the company into progress. As with every acquisition we have done, we'll learn a few new things along the way, and our integration playbook is keeping us on track as we combine the 2 companies. We expect to achieve all our synergy goals by the end of this fiscal year.

最後但並非最不重要的一點是，當我們與客戶互動並開始與他們分享我們的願景時，我們的 MarkLogic 業務也看到了實力。如您所知，對 MarkLogic 的收購於 2 月 7 日完成，即第一財季結束前幾週。從那時起，我們迎來了 MarkLogic 同事，與全球各地的客戶進行了親自聯繫，並在將公司的各個方面整合到進步方面取得了重大進展。與我們所做的每一次收購一樣，我們將在此過程中學到一些新東西，我們的整合手冊使我們在合併兩家公司時保持正軌。我們預計到本財年末實現所有協同目標。

MarkLogic's financial contribution has been strong in FY '23, with a meaningful impact on our ARR evident in the most recent quarter. And as we shared in our Q1 earnings call, the full-year revenue contribution from MarkLogic will hit next year in fiscal 2024. So to sum up Q2, we couldn't be happier with the continued strong performance of our operations in the field as well as the integration of MarkLogic, and we're thrilled that we were able to roll these excellent Q2 results through our updated guidance for the remainder of this year. In addition to excellent financial results and the progress we have made with MarkLogic in Q2, we also held our first Investor Day in 7 years in early April. During my session, I provided an overview of the company and described the successes we've had with our total growth strategy. I also discussed our longer-term plan to create shareholder value and talked about our great products, employees, customers, and our culture.

MarkLogic 在 23 財年的財務貢獻強勁，對我們最近一個季度的 ARR 產生了重大影響。正如我們在第一季度財報電話會議中分享的那樣，MarkLogic 的全年收入貢獻將在明年 2024 財年達到。因此，總結第二季度，我們對該領域業務的持續強勁表現感到非常高興，因為以及MarkLogic 的整合，我們很高興能夠通過今年剩餘時間的更新指導來實現這些出色的第二季度業績。除了出色的財務業績以及我們與 MarkLogic 在第二季度取得的進展之外，我們還在 4 月初舉辦了 7 年來的第一個投資者日。在會議期間，我概述了公司並描述了我們在總體增長戰略方面取得的成功。我還討論了我們創造股東價值的長期計劃，並談到了我們出色的產品、員工、客戶和我們的文化。

Anthony provided a full financial review and gave metrics and details on a longer-term model. And he was followed by our Head of Corporate Development, Jeremy Siegel, who gave an extensive review of our M&A and integration strategies, which covered everything from how we source deep at the top of the funnel to the details of our integration methodology. If you haven't seen it yet, the website -- the webcast and slide deck are available on the Investor Relations section of the Progress website. The key theme in all our comments was our commitment to our total growth strategy, which is, number one, invest in our product system and processes to keep our products relevant and to be operationally efficient; two, to acquire and integrate great businesses that make us stronger and create sustained shareholder value; and three, an unrelenting focus on customer success to drive great retention rates.

安東尼提供了全面的財務審查，並提供了長期模型的指標和細節。接下來是我們的企業發展主管傑里米·西格爾（Jeremy Siegel），他對我們的併購和整合戰略進行了廣泛的審查，其中涵蓋了從我們如何在漏斗頂部深入採購到我們整合方法的細節的所有內容。如果您還沒有看過該網站，可以在 Progress 網站的投資者關係部分找到網絡廣播和幻燈片。我們所有評論的關鍵主題是我們對總體增長戰略的承諾，即第一，投資於我們的產品系統和流程，以保持我們的產品相關性並提高運營效率；第二，收購和整合偉大的企業，使我們變得更加強大並創造持續的股東價值；第三，堅持不懈地關注客戶成功，以提高客戶保留率。

All of this is supported by a prudent capital allocation strategy focused on maximizing shareholder return. Our acquisition model is highly disciplined yet simple. We find solid infrastructure companies with great complementary technology, the right size and scale with an excellent customer base, strong recurring revenues, and high retention rates, and achievable synergies to ensure that our return on invested capital is greater than our WACC. We then pay a reasonable price for it, improve customer retention, and maximize cash flows and margins to deliver sustained shareholder value. We shall repeatedly demonstrate our ability to execute M&A while following these disciplined criteria, and we will continue to do so.

所有這一切都得到了以股東回報最大化為重點的審慎資本配置策略的支持。我們的收購模式既嚴格又簡單。我們找到了實力雄厚的基礎設施公司，這些公司擁有強大的互補技術、適當的規模和規模、優秀的客戶群、強勁的經常性收入、高保留率以及可實現的協同效應，以確保我們的投資資本回報率高於我們的WACC。然後，我們為其支付合理的價格，提高客戶保留率，並最大限度地提高現金流和利潤，以提供持續的股東價值。我們將反复證明我們在遵循這些嚴格標準的同時執行併購的能力，並且我們將繼續這樣做。

From a broader M&A perspective, we've previously discussed how we believe that the M&A market is moving in our favor. We still believe this is true. As capital continues to get scarcer in the private market and unfavorable cyclical economic conditions prevail over the coming years, many more attractive companies will be looking for exit strategies and alternatives to go in public. Jeremy and his team are busy as ever, and the number of potential targets continues to be healthy while the competitive dynamics for completing a deal have become more constructive for us.

從更廣泛的併購角度來看，我們之前已經討論過我們如何相信併購市場正在朝著對我們有利的方向發展。我們仍然相信這是真的。隨著私募市場的資本繼續變得稀缺，並且未來幾年不利的周期性經濟狀況將普遍存在，許多更具吸引力的公司將尋求退出策略和上市替代方案。傑里米和他的團隊一如既往地忙碌，潛在目標的數量繼續保持健康，而完成交易的競爭動力對我們來說變得更具建設性。

Further, we have continued to institutionalize the learning process that comes with acquiring and integrating companies, and we are compounding our success to help make us better at it each time. While we remain very optimistic and excited about our ability to source and complete future acquisitions and that includes doing more than one deal in a year if the opportunity arises, we intend to remain as patient and disciplined as we have been since we embarked on our total growth strategy in 2019.

此外，我們繼續將收購和整合公司所帶來的學習過程製度化，並且我們正在不斷取得成功，以幫助我們每次都做得更好。雖然我們對我們尋找和完成未來收購的能力仍然非常樂觀和興奮，其中包括如果有機會在一年內進行不止一筆交易，但我們打算保持自我們開始全面收購以來的耐心和紀律。 2019年增長戰略。

Finally, I want to take a moment to address an issue that our team has been very focused on over the last few weeks. As many of you are aware, from the 8-K that Progress filed on June 7, we have identified and patched a 0-day exploit in the move transfer and move cloud product. We've been taking this issue very seriously. We have engaged with industry-leading cybersecurity experts and researchers. And together, our focus throughout this process has been on supporting our customers and securing their environment.

最後，我想花點時間解決我們團隊在過去幾週一直非常關注的問題。正如你們中許多人所知，從 Progress 於 6 月 7 日提交的 8-K 中，我們已經識別並修補了移動傳輸和移動雲產品中的 0day 漏洞。我們一直非常認真地對待這個問題。我們與業界領先的網絡安全專家和研究人員合作。總的來說，我們在整個過程中的重點是支持我們的客戶並保護他們的環境。

While working through an issue of this nature, it's important not to speculate broadly or prematurely but rather focus on the task at hand, doing what we can to protect our customers against the ongoing threat of side chemos. As you know, an unrelented focus on customer success across our entire product portfolio is a foundational pillar of our strategy and has led to our strong performance over the past few years, including the most recent quarter.

在解決此類性質的問題時，重要的是不要廣泛或過早地推測，而是專注於手頭的任務，盡我們所能保護我們的客戶免受副作用化療的持續威脅。如您所知，我們整個產品組合對客戶成功的不懈關注是我們戰略的基本支柱，並導致我們在過去幾年（包括最近一個季度）取得了強勁的業績。

So in summary, we delivered better-than-expected financial results across the board and are confident about the strength of our business to raise guidance for the rest of the year. The integration of MarkLogic is proceeding on plan, and MarkLogic is already making meaningful contributions to revenue, ARR, and profitability. Lastly, we still believe that the market for M&A is improving for us, while we continue to improve our internal capabilities to source, integrate, and complete deals. As always, I'm very proud of our teams for their excellent work and thank them for their dedication and commitment towards our success. With that, I'll turn it over to Anthony to provide the financial details and guidance. Anthony?

總而言之，我們全面交付了好於預期的財務業績，並對我們的業務實力充滿信心，可以提高今年剩餘時間的指導。 MarkLogic 的整合正在按計劃進行，MarkLogic 已經為收入、ARR 和盈利能力做出了有意義的貢獻。最後，我們仍然相信併購市場正在改善，同時我們將繼續提高我們的內部能力來尋找、整合和完成交易。一如既往，我為我們團隊的出色工作感到非常自豪，並感謝他們為我們的成功所做的奉獻和承諾。這樣，我會將其轉交給安東尼，以提供財務詳細信息和指導。安東尼？

Thank you, Yogesh. Good afternoon, everyone, and thanks for joining our call. As Yogesh mentioned, we're very pleased with our Q2 results, which again exceeded the high end of our guidance range on revenue and earnings per share. We're also very pleased to see some of this upside coming from MarkLogic, which is performing a bit better than our expectations thus far.

謝謝你，尤格甚。大家下午好，感謝您加入我們的通話。正如 Yogesh 提到的，我們對第二季度的業績非常滿意，該業績再次超出了我們收入和每股收益指導範圍的上限。我們也很高興看到 MarkLogic 帶來了一些好處，到目前為止，它的表現比我們的預期要好一些。

Turning to the numbers. We'll start on the top line with ARR. We closed the second quarter with ARR of $569 million, which represents approximately 19% growth on a year-over-year basis and 3% pro forma growth on a year-over-year basis. To be clear, the pro forma results include MarkLogic in both periods. As Yogesh mentioned, the growth in ARR was again driven by multiple products across our portfolio, including OpenEdge, MarkLogic, Sitefinity, and DataDirect. A trend that continues to fuel our ARR growth is strong net retention, with Q2 rates at just over 101%. In addition to our strong ARR growth, revenue for the quarter of $179 million was well above the high end of the guidance range we provided back in March and represents approximately 19% growth on a year-over-year basis. The better-than-expected revenue performance in the quarter was driven by stronger-than-expected demand for multiple products, including OpenEdge, Loadmaster, Chef, MarkLogic, and Sitefinity.

轉向數字。我們將從 ARR 的頂行開始。第二季度末，我們的 ARR 為 5.69 億美元，同比增長約 19%，預計同比增長 3%。需要明確的是，預計結果包括兩個時期的 MarkLogic。正如 Yogesh 提到的，ARR 的增長再次受到我們產品組合中多種產品的推動，包括 OpenEdge、MarkLogic、Sitefinity 和 DataDirect。持續推動我們的 ARR 增長的一個趨勢是強勁的淨留存率，第二季度的留存率略高於 101%。除了我們強勁的 ARR 增長之外，本季度的收入為 1.79 億美元，遠高於我們 3 月份提供的指導範圍的上限，同比增長約 19%。本季度收入表現好於預期，是由於對多種產品的需求強於預期，包括 OpenEdge、Loadmaster、Chef、MarkLogic 和 Sitefinity。

For those of you who listened to our Q1 earnings call, you'll recall that our Q1 performance was aided slightly by timing. In that, some revenue we expected to recognize in the second quarter actually came in early and was recognized in the first quarter. I mentioned this only to highlight our exceptional top-line performance in Q2, which punctuated a very strong first half of 2023. Turning now to expenses. Our total costs and operating expenses for the quarter were $112 million, up 25% compared to the prior year and in line with our expectations. The year-over-year increase was driven by the acquisition of MarkLogic and to a lesser extent, an expected increase in compensation and benefit costs across the rest of our business, which we've detailed on previous calls.

對於那些聽過我們第一季度財報電話會議的人來說，您會記得我們第一季度的業績因時機而略有幫助。因此，我們預計在第二季度確認的一些收入實際上提前到了，並在第一季度確認了。我提到這一點只是為了強調我們在第二季度的出色營收表現，這標誌著 2023 年上半年的強勁表現。現在轉向支出。本季度我們的總成本和運營費用為 1.12 億美元，比上年增長 25%，符合我們的預期。同比增長是由收購 MarkLogic 推動的，在較小程度上是由於我們其他業務的薪酬和福利成本的預期增長，我們在之前的電話會議中對此進行了詳細介紹。

Operating income was $67 million, up $6 million compared to the prior year quarter, and our operating margin was 38% compared to 41% in the second quarter of 2022. On the bottom line, earnings per share of $1.06 for the quarter is $0.14 above the high end of our guidance range. This overperformance relative to our expectations was driven by outstanding top-line performance, coupled with solid cost management across the business. Our outlook for the MarkLogic integration remains unchanged, and we continue to expect that we'll achieve all our synergy targets by the end of this fiscal year.

營業收入為6700 萬美元，比上年同期增加600 萬美元，營業利潤率為38%，而2022 年第二季度為41%。從根本上看，本季度每股收益1.06 美元，比去年同期高出0.14 美元我們指導範圍的高端。這種超出我們預期的表現是由出色的營收業績以及整個業務的可靠成本管理推動的。我們對 MarkLogic 整合的前景保持不變，我們仍然預計到本財年末我們將實現所有協同目標。

Moving on now to a few balance sheet and cash flow metrics. We ended the quarter with cash, cash equivalents, and short-term investments of $126 million and debt of $795 million for a net debt position of $669 million. This represents net leverage of roughly 2.5x using our forecasted fiscal year 2023 adjusted EBITDA. And if we pro forma that EBITDA to consider MarkLogic synergies, our net leverage drops even further. I'd also like to mention that during the second quarter, we paid down $25 million against the revolving line of credit that we drew down to partially fund the acquisition of MarkLogic, bringing the outstanding balance on our revolving line of credit to $170 million at the end of the quarter. DSO for the quarter was 44 days, which is generally consistent with last quarter and in line with our expectations.

現在轉向一些資產負債表和現金流量指標。截至本季度末，我們的現金、現金等價物和短期投資為 1.26 億美元，債務為 7.95 億美元，淨債務頭寸為 6.69 億美元。使用我們預測的 2023 財年調整後 EBITDA 計算，這意味著淨槓桿約為 2.5 倍。如果我們在計算 EBITDA 時考慮 MarkLogic 的協同效應，我們的淨槓桿率會進一步下降。我還想提一下，在第二季度，我們為收購 MarkLogic 提供部分資金而提取的循環信貸額度支付了 2500 萬美元，使我們的循環信貸額度的未償餘額達到 1.7 億美元。季度末。本季度的 DSO 為 44 天，與上季度基本一致，也符合我們的預期。

Adjusted free cash flow was $48 million for the quarter, an increase of $1 million from Q1 and generally in line with our expectations. During the second quarter, we repurchased $15 million of Progress stock. And at the end of the quarter, we had $198 million remaining under our current share repurchase authorization Okay. Now I'd like to turn to our outlook for Q3 and the full year 2023. When considering our outlook, we continue to see strength in the demand environment for our solutions despite the potential that the macro environment may become more challenging. With that, for the third quarter of 2023, we expect revenue between $172 million and $176 million and earnings per share of between $0.98 and $1.02.

本季度調整後自由現金流為 4800 萬美元，比第一季度增加 100 萬美元，總體符合我們的預期。第二季度，我們回購了 1500 萬美元的 Progress 股票。截至本季度末，我們當前的股票回購授權還剩 1.98 億美元。現在我想談談我們對第三季度和 2023 年全年的展望。在考慮我們的前景時，我們繼續看到我們的解決方案的需求環境強勁，儘管宏觀環境可能變得更具挑戰性。因此，我們預計 2023 年第三季度的收入將在 1.72 億美元至 1.76 億美元之間，每股收益將在 0.98 美元至 1.02 美元之間。

For the full year 2023, we expect revenue between $690 million and $698 million, an increase of $10 million from our prior guidance. We expect an operating margin of between 38% and 39%, generally consistent with our prior guidance. Adjusted free cash flow between $175 million and $185 million, again consistent with our prior guidance, and earnings per share of between $4.16 and $4.24, an increase of $0.07 from our prior guidance. Our annual EPS estimate contemplates a tax rate of 20% to 21%, approximately 44.7 million shares outstanding, the impact of $30 million of share repurchases, and the paydown of $85 million on our revolving line of credit, which we believe we can complete by the end of 2023.

對於 2023 年全年，我們預計收入在 6.9 億美元至 6.98 億美元之間，比我們之前的指導增加 1000 萬美元。我們預計營業利潤率在 38% 至 39% 之間，與我們之前的指導基本一致。調整後的自由現金流在 1.75 億美元到 1.85 億美元之間，再次與我們之前的指導一致，每股收益在 4.16 美元到 4.24 美元之間，比我們之前的指導增加了 0.07 美元。我們的年度每股收益預估考慮了 20% 至 21% 的稅率、約 4470 萬股已發行股票、3000 萬美元股票回購的影響以及我們循環信貸額度的 8500 萬美元償還，我們相信我們可以通過2023年底。

In closing, we're excited to deliver strong financial results across the board in the second quarter, a continuation of the trend that we saw from most of 2022 and the first quarter of 2023. We're thrilled to see the MarkLogic integration gaining momentum, and we believe we're very well-positioned to deliver strong results for the remainder of 2023 and well beyond. With that, I'd like to open the call for Q&A.

最後，我們很高興能夠在第二季度全面交付強勁的財務業績，這是我們在 2022 年大部分時間和 2023 年第一季度看到的趨勢的延續。我們很高興看到 MarkLogic 整合勢頭強勁，我們相信我們完全有能力在2023 年剩餘時間及以後的時間裡取得強勁的業績。至此，我想開始問答環節。

Thank you. (Operator Instructions) Our first question will come from the line of Ittai Kidron with Oppenheimer.

謝謝。 （操作員說明）我們的第一個問題將來自 Ittai Kidron 與 Oppenheimer 的關係。

And great execution. Maybe a couple of questions for you, Yogesh. First, on the MOVEit issuing this past quarter. Can you, first of all, quantify how big of a product line that is for you from a revenue standpoint? And what has been the feedback from customers? I know it's not easy to move on something like this quickly, but what is the risk here down the road that customers try to find alternatives to this situation?

以及出色的執行力。 Yogesh，也許有幾個問題要問你。首先，關於上個季度發行的 MOVEit。首先，您能否從收入的角度量化您的產品線有多大？客戶的反饋如何？我知道快速處理這樣的事情並不容易，但是客戶嘗試尋找這種情況的替代方案的風險是什麼？

Thank you, Ittai, for the nice feedback on the quarter. We had actually in our 8-K that we filed mentioned that the MOVEit file paper, move it transfer product, and MOVEit Cloud, which are the 2 products that were impacted, were less than 4% of our overall annual revenue. So it's a rather limited impact, so to speak. As far as customers are concerned, Ittai, we are continuing to engage with them. Our focus at this point is making sure that they get their environment secure and continue to get work done.

謝謝 Ittai 對本季度的良好反饋。實際上，我們在提交的 8-K 中提到，MOVEit 文件紙、Move it 傳輸產品和 MOVEit Cloud 這兩個受影響的產品占我們年度總收入的比例不到 4%。所以可以說，影響相當有限。就客戶而言，Ittai，我們將繼續與他們接觸。我們目前的重點是確保他們的環境安全並繼續完成工作。

We feel really good about the effort our team is putting in to help our customers. And at this point, it's really too early to speculate about potentially what kind of an impact we might have in terms of customers saying that they want to use something else. So right now, it's either just focused on making sure that our customers are back to running back to feeling that their environment is secured, applying the patches that we provided, et cetera.

我們對我們的團隊為幫助客戶而付出的努力感到非常滿意。在這一點上，現在推測我們可能會對客戶說他們想使用其他東西產生什麼樣的影響還為時過早。因此，現在，要么只是專注於確保我們的客戶重新感受到他們的環境是安全的，應用我們提供的補丁，等等。

Very good. And maybe a follow-up for you. I want to make sure I understand the commentary. Last quarter, clearly, there was some pull-forward element in some components. Help me understand to what degree do you have visibility, whether the product outperformance this quarter is also a pull forward from the third quarter perhaps or just pure expansion activity given the specific needs of customers. How do you get your hands around this?

非常好。也許還有你的後續行動。我想確保我理解評論。顯然，上個季度的某些組成部分存在一些前拉因素。請幫助我了解您的可見度如何，本季度的產品表現是否也是第三季度的拉動，或者只是考慮到客戶的特定需求的純粹擴張活動。你如何解決這個問題？

Yes. So go ahead

是的。所以請繼續

Yes, I was just going to jump in there and say yes, in Q1 of this year, we did have a couple of deals that came in earlier than we anticipated, and I think they came in earlier, and maybe they were a little bit bigger. In Q2, there really was none of that activity. So I don't think anything in this quarter, at least nothing material is something that should have been recognized in Q3. And that's why I made the comment in my remarks because I think we felt really good about the performance in the quarter. And I think in light of the fact that some of the revenue got booked in Q1, I think it just -- it makes an even stronger case for how good the performance was in Q2 on the top line. So it's continuing to acquire new customers, continuing to renew, continuing to expand with our existing customers. I think in a lot of areas, we are performing.

是的，我只是想跳出來說，是的，在今年第一季度，我們確實有幾筆交易比我們預期的要早，我認為它們來得更早，也許是有點大。在第二季度，確實沒有任何此類活動。因此，我認為本季度沒有任何事情，至少沒有任何實質性事情應該在第三季度得到認可。這就是我在講話中發表評論的原因，因為我認為我們對該季度的表現感到非常滿意。我認為，鑑於部分收入是在第一季度入賬的，我認為這更加有力地證明了第二季度的營收表現有多好。因此，它正在繼續獲取新客戶，繼續更新，繼續擴大我們現有的客戶。我認為我們在很多領域都表現出色。

Thank you. One moment for our next question. That will come from the line of Ray McDonough with Guggenheim Securities.

謝謝。請稍等一下我們的下一個問題。這將來自古根海姆證券公司的雷·麥克唐納 (Ray McDonough)。

Yogesh, maybe for you. You mentioned customer success is obviously core to your strategy, and you opened up with statements regarding customers remaining committed to using Progress products. But I was wondering how conversations went outside of the moving customer base regarding the vulnerability. Have customers outside of that installed base indicated any concern around using any other Progress products? Or just in general, how those conversations went?

約格甚，也許適合你。您提到客戶成功顯然是您戰略的核心，並且您以有關客戶仍然致力於使用 Progress 產品的聲明作為開場白。但我想知道移動客戶群之外關於該漏洞的對話是如何進行的。該安裝群之外的客戶是否對使用任何其他 Progress 產品表示擔憂？或者總的來說，這些談話進行得怎麼樣？

So at this point, the way the -- because the issue is limited to MOVEit, we really have not had other customers come to us and these concerns. One of the state of things in the software industry is that there are vulnerabilities that show up all the time. I think somebody was telling me that more than 10,000 vulnerabilities have been highlighted by software vendors in this last 6 months alone. So it is -- in some ways, unfortunately, it is the state of the world that basically you have cybercriminals going out there and doing what they do. So no, we've not had customers of other products raise an issue at this point.

所以在這一點上，因為問題僅限於 MOVEit，我們確實還沒有其他客戶來找我們並解決這些問題。軟件行業的現狀之一是漏洞不斷出現。我想有人告訴我，僅在過去 6 個月裡，軟件供應商就強調了 10,000 多個漏洞。不幸的是，從某些方面來說，世界的現狀就是網絡犯罪分子到處活動。因此，目前我們還沒有其他產品的客戶提出問題。

That makes sense. And then maybe a follow-up for you, Anthony. You guys give a non-GAAP operating margin guidance by a significant margin here, and you're maintaining your full-year guidance as it relates to margins. Do you expect to ramp spending in terms of OpEx in the back half of the year? And should we be thinking about incremental spending on cybersecurity, for instance, to move the needle in terms of OpEx spending? Any color there would be helpful.

這就說得通了。然後也許是你的後續行動，安東尼。你們在這裡給出了大幅的非公認會計準則營業利潤率指導，並且你們維持與利潤率相關的全年指導。您預計今年下半年會增加運營支出嗎？例如，我們是否應該考慮增加網絡安全支出，以推動運營支出支出？任何顏色都會有幫助。

Yes, sure. I don't think that we had, I would say, a pretty significant investment in cyber coming into the year, and we have for a couple of years ongoing now. And so I think with the top line beat, if there's an opportunity to invest more, where necessary, obviously, we would. But there are other costs in the business, wage inflation continues to run, and we talked about that from time to time and inflation generally seems to be pretty persistent. And so I think we are trying to give ourselves a little bit of latitude around the margin -- on the operating margin, as some of those costs may continue to escalate as the year goes on. I think that's really it.

是的，當然。我認為我們今年並沒有對網絡進行相當大的投資，而且我們已經持續了幾年了。因此，我認為，隨著營收的增長，如果有機會在必要時進行更多投資，顯然我們會這樣做。但企業還有其他成本，工資通脹仍在繼續，我們時不時地談到這一點，而且通脹通常似乎相當持久。因此，我認為我們正試圖在利潤率上給自己一點自由度——營業利潤率，因為隨著時間的推移，其中一些成本可能會繼續上升。我想確實如此。

Thank you. One moment for our next question. And that will come from the line of Pinjalim Bora with JPMorgan.

謝謝。請稍等一下我們的下一個問題。這將來自 Pinjalim Bora 與摩根大通的血統。

Great. Congrats on a great quarter. Yogesh, on the edit point or the issue, I guess, I'm wondering if you can actually take any proactive steps or are you taking any kind of proactive steps to look at the rest of the product portfolio, mainly the new acquisitions to kind of the customers from those -- using those products?

偉大的。恭喜您度過了一個出色的季度。 Yogesh，關於編輯點或問題，我想，我想知道您是否真的可以採取任何主動措施，或者您是否正在採取任何主動措施來查看產品組合的其餘部分，主要是新收購的產品那些使用這些產品的客戶？

So that is really a really good question, right? So we, of course, have had a very robust purity program at Progress. We take product security extremely seriously. I mean, I'm sure you can imagine being a provider of software to the wide range of customers that we are. We have -- we are basically investigating -- so right now, by the way, in the last 4 weeks, it has been all hands on deck for our customers, so I just -- I don't want to imply that we are going around doing other things, but we are looking to sort of see are there other areas of our products where we need to do better in the area of security.

所以這確實是一個非常好的問題，對吧？當然，我們在 Progress 制定了非常強大的純度計劃。我們非常重視產品安全。我的意思是，我相信您可以想像我們是一家為廣大客戶提供軟件的提供商。我們基本上正在調查，所以現在，順便說一句，在過去的 4 周里，我們已經全力以赴為我們的客戶服務，所以我只是 - 我不想暗示我們正在四處做其他事情，但我們希望看看我們的產品是否還有其他領域需要在安全方面做得更好。

We also, I think, maybe need to look at whether we are going to improve our M&A process around the security of the products we acquire. I think that was part of the comment that you made. This came to us through it switching 2019. So I think those things are all really important. But I don't want to imply that we've not taken security seriously all along. We actually do. We have -- we use industry-leading core scanning software to scan our code for vulnerabilities. We have hackers come in and test our software to find vulnerabilities if they can. It's a multifaceted approach, and we have a very strong response team in case something does go wrong. So I don't want you to think, Pinjalim, that now we will think about other product security. We've actually taken product security very, very seriously all along, but this also creates an opportunity for us to see if there are other things where we ought to improve.

我認為，我們也許還需要考慮是否要圍繞所收購產品的安全性改進我們的併購流程。我認為這是您發表的評論的一部分。這是我們通過 2019 年的轉變而來的。所以我認為這些事情都非常重要。但我不想暗示我們一直以來都沒有認真對待安全問題。我們確實這麼做了。我們使用行業領先的核心掃描軟件來掃描我們的代碼是否存在漏洞。如果可以的話，我們會讓黑客進來測試我們的軟件以發現漏洞。這是一種多方面的方法，我們擁有一支非常強大的響應團隊，以防出現問題。所以，Pinjalim，我不希望您認為我們現在會考慮其他產品安全性。實際上，我們一直非常非常重視產品安全，但這也為我們創造了一個機會，看看是否還有其他需要改進的地方。

Got it. And one question on just the M&A front. I'm wondering if the wave of investments in generative AI companies could be good for you maybe as VCs kind of reprioritize their portfolio, could that actually drag down the exit multiples for some traditional assets?

知道了。還有一個關於併購方面的問題。我想知道對生成型人工智能公司的投資浪潮是否對你有利，也許風投會重新調整其投資組合的優先順序，這實際上會拉低某些傳統資產的退出倍數嗎？

I think that the -- this has always been one of the fun things about being who we are, right? The VC usually moves to the next shiny object. And so the workhorse businesses that got created over the last decade that the -- over the last 15 years that become really, really strong. they then become not that interesting to the season, right? And when that happens, that basically means that their valuations do change. And you're absolutely correct. I think that it will create an opportunity for us to pick up vendors. I just pick up other companies. I'll give you a very interesting example I'm sure you noticed this, right? When cloud became really, really exciting, on-prem software company valuations came down even though we know that on-prem software companies are -- have greater -- better gross margins and all that good stuff. And so from the kind of business we won, I think we will find other companies that are really good companies in our industry, which are now less interesting to VCs who might say, you know what, the combination of capital being scarce and there's some hot stuff going on with generate AI, let's put our money to work there. So I think that's a really astute observation.

我認為——這一直是成為我們自己的有趣的事情之一，對嗎？ VC通常會移動到下一個閃亮的物體。因此，過去 10 年創建的主力企業在過去 15 年變得非常非常強大。然後他們對這個季節就變得不那麼有趣了，對吧？當這種情況發生時，基本上意味著他們的估值確實發生了變化。你是完全正確的。我認為這將為我們創造一個選擇供應商的機會。我只是選擇其他公司。我會給你一個非常有趣的例子，我相信你注意到了這一點，對吧？當云變得非常非常令人興奮時，本地軟件公司的估值就會下降，儘管我們知道本地軟件公司擁有更高的毛利率和所有這些好東西。因此，從我們贏得的業務來看，我認為我們會發現我們行業中真正優秀的其他公司，但風險投資家現在對這些公司不太感興趣，他們可能會說，你知道嗎，資本稀缺的組合，而且有一些生成人工智能正在發生熱門事情，讓我們把錢投入其中。所以我認為這是一個非常敏銳的觀察。

Thank you. One moment for our next question. And that will come from the line of Brent Thill with Jefferies.

謝謝。請稍等一下我們的下一個問題。這將來自布倫特·希爾（Brent Thill）和杰弗里斯（Jefferies）的血統。

I was curious if you could drive into the strength in the customer demand, and you had mentioned strength -- it sounded like it was no waiver in demand. Maybe if you can just unpack where you're seeing the strongest signals from your customers in excitement? And if you could also drill a little into MarkLogic, you mentioned that was a bit better. Can you remind us what revenue you recognized this quarter from MarkLogic and any other color that you could share?

我很好奇你是否能深入探討客戶需求的強度，而且你提到了強度——聽起來這並不是放棄需求。也許您可以在興奮地看到客戶發出最強烈信號的地方進行解包？如果您還可以深入了解 MarkLogic，您提到那就更好了。您能否提醒我們本季度從 MarkLogic 獲得的收入以及您可以分享的任何其他顏色？

I will let Anthony come in on the MarkLogic part and share numbers around that. But I will -- I think overall, in terms of demand, I mean, Brent, it's actually been really wonderful to see, as I mentioned, across the board as to us are looking to do things with products that they already know how to use, right? So that's one of the reasons why expansions are really sort of a big part of our business. Whether it is a product like OpenEdge, where customers are saying -- I'll give you an interesting example of what an OpenEdge customer, right? And I won't say names because sometimes it's a bit challenging, but I'll give you an example anyway.

我會讓 Anthony 參與 MarkLogic 部分並分享相關數據。但我會——我認為總體而言，就需求而言，我的意思是，布倫特，正如我提到的，看到我們全面地尋求用他們已經知道如何做的產品做事，這實際上真的很棒。使用，對嗎？這就是為什麼擴張確實是我們業務的重要組成部分的原因之一。無論是像 OpenEdge 這樣的產品，客戶都會說——我會給你一個有趣的例子來說明什麼是 OpenEdge 客戶，對嗎？我不會說出名字，因為有時這有點具有挑戰性，但無論如何我都會給你舉一個例子。

The customer has spent the last 5 years thinking that they needed to find a different platform, and they were sold by somebody saying, "Hey, if you use our platform, you will be able to modernize and have an application that replaces the application you're currently using on top of OpenEdge with something so much better micesinier, greater, right?" They spent, let's just say, north of $50 million over the last 5 years. And they just decided that you know what, enough is enough. The project is now -- the product still has a similar timeline going forward. They have as many years to go as they did when they started, right? They haven't made any progress in terms of going to completion at this point. This is bizarre, right? So anyways, so we -- basically, they recommitted to us, they expanded. They decided to modernize using OpenEdge. We shared with them what they could do with it. And they signed a 7-figure expansion deal with us.

在過去的5 年裡，客戶一直認為他們需要找到一個不同的平台，而有人向他們推銷說：“嘿，如果您使用我們的平台，您將能夠實現現代化並擁有一個應用程序來取代您的應用程序。”目前正在 OpenEdge 之上使用一些更好的鼠標，更好，對嗎？”可以這麼說，過去 5 年他們的花費超過 5000 萬美元。他們只是決定，你知道嗎，夠了。該項目現在 - 該產品仍然有類似的時間表。他們還有很多年要走，就像他們開始時一樣，對嗎？目前他們在完成方面還沒有取得任何進展。這很奇怪，對吧？所以無論如何，我們——基本上，他們重新向我們承諾，他們擴大了規模。他們決定使用 OpenEdge 進行現代化改造。我們與他們分享了他們可以用它做什麼。他們與我們簽署了一份 7 位數的擴張協議。

So I think to me, that's part of the trend. People are saying, am I wasting money somewhere where I should basically have something, and what can I do with it already? And that cuts once across the board. We're also seeing new customer wins with products like Loadmaster and Sitefinity Cloud because these products are addressing, again, the problems of efficiency, the problems of network performance availability. And we really look at Loadmaster. Loadmaster is front-end things like Dell cloud storage and Dell OEM set and sells it because it makes their environment much more reliable, much more resilient, much better performance and always on. And therefore, they basically do -- it's a growing channel for us for Loadmaster. Sitefinity Cloud, it's just -- it saves marketing dollars. It makes it easier for marketing folks to do their work. It is a great product at a great value. And I think right now, in the market, value sells, right? Are you selling a good product? Are you selling things that do the job? Do you have customers that you can point to?

所以我認為對我來說，這是趨勢的一部分。人們說，我是不是把錢浪費在了我本來應該擁有的東西上？我能用它做什麼呢？這一次是全面的。我們還看到 Loadmaster 和 Sitefinity Cloud 等產品贏得了新客戶，因為這些產品再次解決了效率問題、網絡性能可用性問題。我們真正關注的是 Loadmaster。 Loadmaster 是戴爾雲存儲等前端產品，戴爾 OEM 設置並銷售它，因為它使他們的環境更加可靠、更有彈性、更好的性能並且始終在線。因此，他們基本上是這麼做的——這對我們來說是一個不斷增長的 Loadmaster 渠道。 Sitefinity Cloud，它只是——它節省了營銷費用。它使營銷人員更容易地完成他們的工作。這是一款物超所值的優質產品。我認為現在在市場上，價值出售，對嗎？你賣的是好產品嗎？你在賣能完成工作的東西嗎？您有可以指出的客戶嗎？

So we're seeing this across the board, we're seeing this across virtually every geography, brand, I wish I could give you a thing further sort of insight into this. It's just broad. It's our application development products. It is our digital experience products with Sitefinity and others. It is our DevOps and SecOps product, it's our IT management, infrastructure management products. It is truly across the board. Anthony, you want to take the MarkLogic question?

因此，我們全面看到了這一點，我們幾乎在每個地區、每個品牌都看到了這一點，我希望我能為您提供對此的進一步了解。只是范圍很廣而已。這是我們的應用程序開發產品。這是我們與 Sitefinity 等合作的數字體驗產品。這是我們的 DevOps 和 SecOps 產品，是我們的 IT 管理、基礎設施管理產品。這確實是全面的。安東尼，你想回答 MarkLogic 的問題嗎？

Yes. Yes, sure. So we were right around $25 million for the quarter, Brent. And honestly, that was a bit ahead of our expectations, maybe a few million dollars ahead, to be honest. And there is a lot of seasonality in that business. We mentioned it on the last call, but we would probably expect Q2 and Q4 for this year to be the bigger quarters. I would expect Q3 to be seasonally a bit slower, and so it might step down a few million bucks during the third quarter because of just seasonality. But overall, we did come in a bit higher than expected, both top line and bottom line on MarkLogic this quarter. So that was really encouraging.

是的。是的，當然。所以布倫特，本季度我們的收入約為 2500 萬美元。老實說，這有點超出了我們的預期，說實話，可能提前了幾百萬美元。該業務有很多季節性。我們在上次電話會議中提到了這一點，但我們可能預計今年第二季度和第四季度將是更大的季度。我預計第三季度的季節性增長會慢一些，因此第三季度可能會因為季節性因素而減少數百萬美元。但總體而言，本季度 MarkLogic 的營收和淨利潤確實略高於預期。這確實令人鼓舞。

Thank you. One moment for our next question, and that will come from the line of Anja Soderstrom with Sidoti.

謝謝。請稍等一下，我們的下一個問題將來自 Anja Soderstrom 和 Sidoti。

Congratulations on another great quarter in execution. You mentioned in the previous question that you expect expenses to creep up a bit due to inflation and bridge inflation. Is there anything you can do to offset that?

祝賀又一個出色的季度執行力。您在上一個問題中提到，由於通貨膨脹和過渡性通貨膨脹，您預計支出會略有增加。你能做些什麼來抵消這一點嗎？

Thank you, Anja. We actually are looking to see, right, what we really can do. I mean, I'll let Anthony talk about this more around expenses. But from our perspective, we continue to look for opportunities where we can control costs and reduce spend. But at the same time, there are some market factors that are really out of our control. Anthony, do you want to expand?

謝謝你，安雅。我們實際上是想看看我們真正能做什麼。我的意思是，我會讓安東尼更多地談論費用方面的問題。但從我們的角度來看，我們將繼續尋找可以控製成本和減少支出的機會。但同時，也有一些市場因素確實是我們無法控制的。安東尼，你想擴張嗎？

Yes. No, I think that's right, Yogesh. And in past years, we have taken steps in other areas of the business where we could get a little bit leader -- selling our corporate headquarters last year was a pretty good example where we took some assets off the balance sheet, put some capital on the balance sheet and took down our operating spend. There are smaller opportunities that we're pursuing now.

是的。不，我認為這是對的，尤格甚。在過去的幾年裡，我們在業務的其他領域採取了一些措施，我們可以在這些領域獲得一點領先地位——去年出售我們的公司總部就是一個很好的例子，我們將一些資產從資產負債表上剝離，將一些資本投入到資產負債表中。資產負債表並減少了我們的運營支出。我們現在正在尋求一些較小的機會。

And I think it's just part of the progress DNA, where we're constantly doing that. So I think we have the ability to maintain and, over the long run, slightly improve our margins. And we've sort of talked about that a little bit during Investor Day. I think the inflation that we're seeing, wage inflation in particular, is something that's been a bit stubborn for maybe the past 2 years. I think up to this point, we've done a good job offsetting it. And I think we'll continue to do that. But it just takes -- it takes sort of a lot of work, and we need to be scrappy as we work through the back half of the year. So I guess I would probably leave it at that. But yes, there are areas we can look into, and I think that's been our history.

我認為這只是進步 DNA 的一部分，我們一直在這樣做。因此，我認為我們有能力維持並從長遠來看略微提高我們的利潤率。我們在投資者日期間對此進行了一些討論。我認為我們所看到的通貨膨脹，特別是工資通貨膨脹，在過去兩年中可能一直有點頑固。我認為到目前為止，我們在抵消這一點方面做得很好。我想我們會繼續這樣做。但這需要大量的工作，而且我們在下半年的工作中需要鬥志旺盛。所以我想我可能會就此罷休。但是，是的，有些領域我們可以研究，我認為這就是我們的歷史。

Thank you. As I'm showing no further questions in the queue at this time. At this time, I would like to turn the call back over to Mr. Yogesh Gupta for any closing remarks.

謝謝。因為此時我在隊列中沒有顯示任何其他問題。現在，我想將電話轉回 Yogesh Gupta 先生，請他發表結束語。

Well, thank you, everyone, for joining us. Once again, we're excited about where we're going in our second half of the year as well, in addition to what we have delivered in the first half. We look forward to talking to you again soon. Have a good night.

好的，謝謝大家加入我們。除了上半年所交付的成果之外，我們再次對下半年的發展感到興奮。我們期待很快再次與您交談。祝你晚安。

Thank you all for participating. This concludes today's program. You may now disconnect.

感謝大家的參與。今天的節目到此結束。您現在可以斷開連接。