Progress Software : Q1 2024 Earnings Call Supplement

Progress Financial Results

Q1 2024 Supplemental Data

March 26, 2024

Forward Looking Statements

This presentation contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Progress has identified some of these forward-looking statements with words like "believe," "may," "could," "would,"

"might," "should," "expect," "intend," "plan," "target," "anticipate" and "continue," the negative of these words, other terms of similar meaning or the use of future dates. Forward-looking statements in this presentation include, but are not limited to, statements regarding Progress's business outlook (including future acquisition activity)

and financial guidance. There are a number of factors that could cause actual results or future events to differ materially from those anticipated by the forward-looking statements, including, without limitation: (i) economic, geopolitical and market conditions can adversely affect our business, results of operations and financial condition, including our revenue growth and profitability, which in turn could adversely affect our stock price; (ii) our international sales and operations subject us to additional risks that can adversely affect our operating results, including risks relating to foreign currency gains and losses; (iii) we may fail to achieve our financial forecasts due to such factors as delays or size reductions in transactions, fewer large transactions in a particular quarter, fluctuations in currency exchange rates, or a decline in our renewal rates for contracts; (iv) if the security measures for our software, services, other offerings or our internal information technology infrastructure are compromised or subject to a successful cyber-attack, or if our software offerings contain significant coding or configuration errors or zero-day vulnerabilities, we may experience reputational harm, legal claims and financial exposure; (v) the results of inquiries, investigations and legal claims regarding the MOVEit Vulnerability remain uncertain and the ultimate resolution of these matters could result in losses that may be material to our financial results for a particular period; and (vi) our acquisitions may not be successful or may involve unanticipated costs or other integration issues that could disrupt our existing operations. For further information regarding risks and uncertainties associated with Progress' business, please refer to Progress' filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended November 30, 2023. Progress undertakes no obligation to update any forward-looking statements, which speak only as of the date of this presentation.

Non-GAAP Financial Measures

We refer to certain non-GAAP financial measures in this presentation, including but not limited to, non-GAAP revenue, non-GAAP income from operations and operating margin, adjusted free cash flow, annual recurring revenue ("ARR"), Net Retention Rate ("NRR"), and non-GAAP diluted earnings per share. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles ("GAAP"). Please see "Important Information Regarding Non-GAAP Financial Information" below for additional information. A reconciliation between non-GAAP measures and the most directly comparable GAAP measures appears in our earnings press release for the fiscal quarter ended February 29, 2024, which is furnished on a Form 8-K concurrently with this presentation and is available in the Investor Relations section of our website.

Conference Call Details

What: Progress Fiscal Q1 2024 Financial Results

When: Tuesday, March 26, 2024

Time: 5:00 p.m. ET

To register for the Live Call:https://register.vevent.com/register/BI87e8a75fdf654aaf8e91ad2419ee7625

Live / Recorded Webcast:https://edge.media-server.com/mmc/p/agraecam

Please note: Webcast is listen-only.

Summary Highlights Q1 2024

Revenue above guidance; EPS ahead of estimates; Strong AFCF and Balance Sheet

• • Revenues of $185M, up 11% (y/y, constant currency), above high end of guidance.

• • ARR: $571M, up 0.2% (y/y, constant currency); NRR 99%.

• • Operating margins strong at 42%; adjusted Free Cash Flow $72M.

• • EPS: $1.25, above high end of guidance of $1.12 - $1.16.

• • Strong Balance Sheet: DSO 50; net leverage ~2.0x, $900M untapped revolver*

• • FY24 guidance:

  • • Revenue of $722M - $732M

  • • EPS of $4.65 - $4.75 (up from $4.58 -$4.68)

• • 2Q'24 guidance:

  • • Revenue $166M - $170M

  • • EPS $0.93 - $0.97.

All figures presented are non-GAAP. Definitions of non-GAAP financial measures (including ARR and NRR) can be found in "Important Information Regarding Non-GAAP Financial Information".

* New amended credit facility closed in early March.

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Annualized Recurring Revenue Trend

ARR growth = 0.2% year-over-year

+

Net Retention Rate between 99%-102%

=

Predictable and durable top line performance

** Q1 2023 includes an adjustment to eliminate approximately $4 million of ARR associated with contracts booked by MarkLogic prior to the acquisition. This adjustment was previously reported in Q2 2023.

All periods reported in constant currency, using current year budgeted exchange rates

Driving Total Growth

Growing Profitability

Operating Income

CAGR of 12% 2019 - 2024(F)*

Best-in-class non-GAAP operating

margins consistently above

35%

* Represents the mid-point of our FY'24 guidance range

Unlevered Free Cash Flow

Unlevered AFCF CAGR of 11%

2019 - 2024(F)*

* Adjusted free cash flow represents the mid-point of our

FY'24 guidance range

CapitalAllocation Strategy

PRIMARYFOCUS

Continue to prioritize accretive M&A opportunities that meet our disciplined criteria to create the strongest returns.

Repurchase shares to offset dilution from our equity programs.

• • Management has flexibility to increase, reduce, or suspend repurchasesdepending on market conditions and other considerations includingsizeandtiming of proposed M&A.

We currently have $171M remaining under oursharerepurchaseauthorization.

Continue returning capital to shareholdersintheformofdividends.

Well Defined M&A Framework

End Market		Cast a wide net across infrastructure software
and all aspects of the development lifecycle
Alignment
	Tight alignment increases synergy potential
Appropriate		~10-25% of current Progress revenues
Sizing
	Can be financed and integrated efficiently
Financial		High recurring revenue and customer retention
Characteristics		Potential to achieve operational efficiency
ROIC > WACC		Focused on sustained returns, accretive

10