GlobeNewswire Inc | Jan 18, 2022 04:15PM EST

January 18, 2022

Q4 and FY21 Revenue and EPS Significantly Ahead of GuidanceIntegration of Kemp On Target as Acquisition Drives Projected Fiscal 2022 Revenue Growth

BEDFORD, Mass., Jan. 18, 2022 (GLOBE NEWSWIRE) -- Progress (NASDAQ: PRGS), the leading provider of products to develop, deploy and manage high-impact applications, today announced financial results for its fiscal fourth quarter and fiscal year ended November30, 2021.

Fourth Quarter 2021 Highlights:

-- Revenue of $140.1 million increased 14% year-over-year on an actual currency basis and 15% year-over-year on a constant currency basis. -- Non-GAAP revenue of $143.7 million increased 11% on both an actual currency basis and a constant currency basis. -- Annualized Recurring Revenue ("ARR") of $486 million increased 12% year-over-year on a constant currency basis. -- Operating margin was 15% and Non-GAAP operating margin was 36%. -- Diluted earnings per share was $0.33 compared to $0.39 in the same quarter last year, a decrease of 15%. -- Non-GAAP diluted earnings per share was $0.92 compared to $0.91 in the same quarter last year, an increase of 1%.

We're very pleased with our performance throughout 2021, and especially our Q4 results that significantly beat our guidance for revenue and earnings, said Yogesh Gupta, CEO at Progress. We're also thrilled with the customer response and rapid integration pace of Kemp, whose acquisition we completed in November. As a leader in the Application Experience ("AX") space, Kemp fits our total growth strategy perfectly, and the acquisition will enable us to drive significant value to our shareholders while bringing a very talented team to Progress that will contribute to our future success.

Additional financial highlights included(1)

Three Months Ended GAAP Non-GAAP(Inthousands,except November 30, November 30, % November 30, November 30, %percentages 2021 2020 Change 2021 2020 Changeand pershareamounts)Revenue $ 140,128 $ 122,385 14 % $ 143,725 $ 129,063 11 %Income from $ 20,358 $ 18,514 10 % $ 51,627 $ 48,081 7 %operationsOperating 15 % 15 % ? 36 % 37 % (100)margin bpsNet income $ 14,926 $ 17,661 (15) % $ 41,292 $ 41,118 ? %Dilutedearnings $ 0.33 $ 0.39 (15) % $ 0.92 $ 0.91 1 %per shareCash fromoperations(GAAP) /Adjusted $ 43,928 $ 42,762 3 % $ 42,447 $ 40,656 4 %free cashflow(Non-GAAP)

(1)See Legal Notice Regarding Non-GAAP Financial Information

Other fiscal fourth quarter 2021 metrics and recent results included:

-- Cash, cash equivalents and short-term investments were $157.4 million at the end of the quarter. -- DSO was 60 days compared to 54 days in the fiscal fourth quarter of 2020 and 54 days in the fiscal third quarter of 2021. -- On January 10, 2022, our Board of Directors declared a quarterly dividend of $0.175 per share of common stock that will be paid on March 15, 2022 to shareholders of record as of the close of business on March 1, 2022. -- On November 1, 2021, the company completed the acquisition of Kemp Technologies, Inc., a leader in the Application Experience space.

Q4 results were outstanding across every metric and we're very pleased with such a strong close to our fiscal 2021, said Anthony Folger, CFO at Progress. As we begin to realize synergies from the acquisition of Kemp, we are very well positioned to deliver strong financial results in 2022 and beyond. We exit 2021 having grown our ARR by 12%, while at the same time, achieving Non-GAAP operating margins of over 40% for the second year in a row.

Full Year Results

Fiscal Year Ended GAAP Non-GAAP(Inthousands,except November 30, November 30, % November 30, November 30, %percentages 2021 2020 Change 2021 2020 Changeand per shareamounts)Revenue $ 531,313 $ 442,150 20 % $ 557,304 $ 456,212 22 %Income from $ 116,102 $ 107,728 8 % $ 229,159 $ 182,761 25 %operationsOperating 22 % 24 % (200) 41 % 40 % 100 bpsmargin bpsNet income $ 78,420 $ 79,722 (2) % $ 172,886 $ 140,082 23 %Dilutedearnings per $ 1.76 $ 1.76 ? % $ 3.87 $ 3.09 25 %shareCash fromoperations(GAAP) / $ 178,530 $ 144,847 23 % $ 179,395 $ 142,453 26 %Adjusted freecash flow(Non-GAAP)

2022 Business Outlook

Progress provides the following guidance for the fiscal year ending November30, 2022 and the fiscal first quarter ending February28, 2022, together with actual results for the same periods in the fiscal year ending November30, 2021:

FY 2022 Guidance FY 2021 Actual(In millions, except percentages FY 2022 FY 2022 FY 2021 FY 2021and per share amounts) GAAP Non-GAAP GAAP Non-GAAPRevenue $597 - $605 - $ 531 $ 557 $607 $615Diluted earnings per share $1.93 - $3.95 - $ 1.76 $ 3.87 $2.03 $4.05Operating margin 21% 39% 22% 41%Cash from operations (GAAP) / $188 - $185 - $ 179 $ 179Adjusted free cash flow (Non-GAAP) $193 $190Effective tax rate 20 - 21% 20 - 21% 18% 20%

Q1 2022 Guidance Q1 2021 Actual(In millions, except per share Q1 2022 Q1 2022 Q1 2021 Q1 2021amounts) GAAP Non-GAAP GAAP Non-GAAPRevenue $136 - $139 - $ 121 $ 132 $139 $142Diluted earnings per share $0.32 - $0.83 - $ 0.42 $ 0.95 $0.34 $0.85

Based on current exchange rates, the expected negative currency translation impact on Progress' fiscal year 2022 business outlook compared to 2021 exchange rates is approximately $7.5 million on GAAP and non-GAAP revenue, and approximately $0.03 on GAAP and non-GAAP diluted earnings per share. The expected negative currency translation impact on Progress' fiscal Q1 2022 business outlook compared to 2021 exchange rates on GAAP and non-GAAP revenue is approximately $2.5 million. The expected negative currency translation impact on GAAP and non-GAAP diluted earnings per share for fiscal Q1 2022 is approximately $0.01. To the extent that there are changes in exchange rates versus the current environment, this may have an impact on Progress' business outlook.

Conference Call

Progress will hold a conference call to review its financial results for the fiscal fourth quarter of 2021 at 5:00 p.m. ET on Tuesday, January18, 2022. The call can be accessed on the investor relations section of the companys website, located at www.progress.com. Additionally, you can listen to the call by telephone by dialing 800-773-2954 or +1 847-413-3731, pass code 50242105. The conference call will include comments followed by questions and answers. An archived version of the conference call and supporting materials will be available on the Progress website within the investor relations section after the live conference call.

Legal Notice Regarding Non-GAAP Financial Information

Progress provides non-GAAP financial information as additional information for investors. These non-GAAP measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States ("GAAP"). Progress believes that the non-GAAP results described in this release are useful for an understanding of its ongoing operations and provide additional detail and an alternative method of assessing its operating results. A reconciliation of non-GAAP adjustments to the company's GAAP financial results is included in the tables below and is available on the Progress website at www.progress.comwithin the investor relations section. Additional information regarding the company's non-GAAP financial information is contained in the company's Current Report on Form 8-K furnished to the Securities and Exchange Commission in connection with this press release, which is also available on the Progress website within the investor relations section.

Note Regarding Forward-Looking Statements

This press release 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 press release include, but are not limited to, statements regarding Progress' business outlook 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:

(1) 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. (2) 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. (3) Our ability to successfully manage transitions to new business models and markets, including an increased emphasis on a cloud and subscription strategy, may not be successful. (4) If we are unable to develop new or sufficiently differentiated products and services, or to enhance and improve our existing products and services in a timely manner to meet market demand, partners and customers may not purchase new software licenses or subscriptions or purchase or renew support contracts. (5) We depend upon our extensive partner channel and we may not be successful in retaining or expanding our relationships with channel partners. (6) 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. (7) 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, we may experience reputational harm, legal claims and financial exposure. (8) We have made acquisitions, and may make acquisitions in the future, and those acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. (9) Delay or failure to realize the expected synergies and benefits of the Kemp acquisition could negatively impact our future results of operations and financial condition; and (10) The continuing impact of the coronavirus disease (COVID-19) outbreak on our employees, customers, partners, and the global financial markets could adversely affect our business, results of operations and financial condition.

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 November30, 2020 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended February 28, 2021, May 31, 2021 and August 31, 2021. Progress undertakes no obligation to update any forward-looking statements, which speak only as of the date of this press release.

About Progress

Progress(NASDAQ: PRGS) provides the best products to develop, deploy and manage high-impact applications. Our comprehensive product stack is designed to make technology teams more productive and we have a deep commitment to the developer community, both open source and commercial alike. With Progress, organizations can accelerate the creation and delivery of strategic business applications, automate the process by which apps are configured, deployed and scaled, and make critical data and content more accessible and secureleading to competitive differentiation and business success. Over 1,700 independent software vendors, 100,000 enterprise customers, and three million developers rely onProgressto power their applications. Learn aboutProgressatwww.progress.comor +1-800-477-6473.

Progress andProgress Softwareare trademarks or registered trademarks ofProgress Software Corporationand/or its subsidiaries or affiliates in theU.S.and other countries.Any other names contained herein may be trademarks of their respective owners.

Investor Contact: Press Contact:Michael Micciche Erica McShaneProgress Software Progress Software+1 781 850 8450 +1 781 280 4000Investor-Relations@progress.com PR@progress.com

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

Three Months Ended Fiscal Year Ended(In thousands, except November November % November November %per share data) 30, 2021 30, 2020 Change 30, 2021 30, 2020 ChangeRevenue: Software licenses $ 41,236 $ 37,443 10 % $ 156,590 $ 115,249 36 %Maintenance and 98,892 84,942 16 % 374,723 326,901 15 %servicesTotal revenue 140,128 122,385 14 % 531,313 442,150 20 %Costs of revenue: Cost of software 1,508 1,171 29 % 5,271 4,473 18 %licensesCost of maintenance and 15,355 14,137 9 % 58,242 49,744 17 %servicesAmortization of 4,217 2,923 44 % 14,936 7,897 89 %acquired intangiblesTotal costs of revenue 21,080 18,231 16 % 78,449 62,114 26 %Gross profit 119,048 104,154 14 % 452,864 380,036 19 %Operating expenses: Sales and marketing 37,422 32,013 17 % 125,890 100,113 26 %Product development 26,759 24,482 9 % 103,338 88,599 17 %General and 18,793 15,302 23 % 65,128 54,004 21 %administrativeAmortization of 9,160 7,565 21 % 31,996 20,049 60 %acquired intangiblesRestructuring expenses 5,175 4,080 27 % 6,308 5,906 7 %Acquisition-related 1,381 2,198 (37)% 4,102 3,637 13 %expensesTotal operating 98,690 85,640 15 % 336,762 272,308 24 %expensesIncome from operations 20,358 18,514 10 % 116,102 107,728 8 %Other expense, net (6,159 ) (1,887 ) (226)% (20,568 ) (11,093 ) (85)%Income before income 14,199 16,627 (15)% 95,534 96,635 (1)%taxes(Benefit) provision for (727 ) (1,034 ) (30)% 17,114 16,913 1 %income taxesNet income $ 14,926 $ 17,661 (15)% $ 78,420 $ 79,722 (2)% Earnings per share: Basic $ 0.34 $ 0.39 (13)% $ 1.79 $ 1.78 1 %Diluted $ 0.33 $ 0.39 (15)% $ 1.76 $ 1.76 ? %Weighted average shares outstanding:Basic 43,974 44,723 (2)% 43,916 44,886 (2)%Diluted 44,853 45,140 (1)% 44,620 45,321 (2)% Cash dividends declared $ 0.175 $ 0.175 ? % $ 0.700 $ 0.670 4 %per common share

Stock-based compensation is included in thecondensed consolidated statements of operations, as follows: Cost of $ 327 $ 357 (8) % $ 1,561 $ 1,336 17 %revenueSales and 1,376 1,267 9 % 6,055 4,462 36 %marketingProduct 1,925 1,768 9 % 8,104 7,286 11 %developmentGeneral and 4,111 2,731 51 % 14,004 10,398 35 %administrativeTotal $ 7,739 $ 6,123 26 % $ 29,724 $ 23,482 27 %

CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)

(In thousands) November 30, November 30, 2021 2020Assets Current assets: Cash, cash equivalents and short-term $ 157,373 $ 105,995investmentsAccounts receivable, net 99,815 84,040Unbilled receivables and contract assets 25,816 24,917Other current assets 39,549 23,983Assets held for sale 15,255 ?Total current assets 337,808 238,935Property and equipment, net 14,345 29,817Goodwill and intangible assets, net 958,337 704,473Right-of-use lease assets 25,253 30,635Long-term unbilled receivables and contract 17,464 17,133assetsOther assets 10,330 20,789Total assets $ 1,363,537 $ 1,041,782Liabilities and shareholders' equity Current liabilities: Accounts payable and other current $ 84,215 $ 70,899liabilitiesCurrent portion of long-term debt, net 25,767 18,242Short-term operating lease liabilities 7,926 7,015Short-term deferred revenue 205,021 166,387Total current liabilities 322,929 262,543Long-term debt, net 239,992 364,260Long-term operating lease liabilities 23,130 26,966Long-term deferred revenue 47,359 26,908Convertible senior notes, net 294,535 ?Other long-term liabilities 23,103 15,092Shareholders' equity: Common stock and additional paid-in capital 354,676 306,244Retained earnings 57,813 39,769Total shareholders' equity 412,489 346,013Total liabilities and shareholders' equity $ 1,363,537 $ 1,041,782

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

Three Months Ended Fiscal Year Ended(In thousands) November 30, November 30, November 30, November 30, 2021 2020 2021 2020Cash flows from operating activities:Net income $ 14,926 $ 17,661 $ 78,420 $ 79,722 Depreciation and 18,105 12,044 61,179 34,765 amortizationStock-based 7,739 6,123 29,724 23,482 compensationOther non-cash 5,631 (2,024 ) 9,763 6,287 adjustmentsChanges in operatingassets and (2,473 ) 8,958 (556 ) 591 liabilitiesNet cash flows from 43,928 42,762 178,530 144,847 operating activitiesCapital expenditures (1,913 ) (3,098 ) (4,654 ) (6,517 )Issuances of commonstock, net of 5,786 (37,927 ) (19,967 ) (48,901 )repurchasesDividend payments to (8,189 ) (7,542 ) (31,561 ) (29,900 )shareholdersPayments foracquisitions, net of (253,961 ) (213,057 ) (253,961 ) (213,057 )cash acquiredProceeds from theissuance of debt, net ? 98,500 ? 98,500 of payment ofissuance costsPayments of principal (5,644 ) (3,763 ) (117,313 ) (11,288 )on long-term debtProceeds fromissuance of Notes, ? ? 349,196 ? net of issuance costsPurchase of capped ? ? (43,056 ) ? callsProceeds from sale oflong-lived assets, ? 889 ? 889 netOther (6,311 ) (888 ) (5,836 ) (2,263 )Net change in cash,cash equivalents and (226,304 ) (124,124 ) 51,378 (67,690 )short-terminvestmentsCash, cashequivalents andshort-term 383,677 230,119 105,995 173,685 investments,beginning of periodCash, cashequivalents andshort-term $ 157,373 $ 105,995 $ 157,373 $ 105,995 investments, end ofperiod

RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES - FOURTH QUARTER(Unaudited)

Three Months Ended % Change(In thousands, except November 30, 2021 November 30, 2020 Non-GAAPper share data)Adjusted revenue: GAAP revenue $ 140,128 $ 122,385 Acquisition-related 3,597 6,678 revenue^(1)Non-GAAP revenue $ 143,725 100 % $ 129,063 100 % 11 % Adjusted income from operations:GAAP income from $ 20,358 15 % $ 18,514 15 % operationsAmortization of acquired 13,377 9 % 10,488 8 % intangiblesStock-based compensation 7,739 5 % 6,123 4 % Restructuring expenses 5,175 4 % 4,080 3 % and otherAcquisition-related 4,978 3 % 8,876 7 % revenue^(1) and expensesNon-GAAP income from $ 51,627 36 % $ 48,081 37 % 7 %operations Adjusted net income: GAAP net income $ 14,926 11 % $ 17,661 14 % Amortization of acquired 13,377 9 % 10,488 8 % intangiblesStock-based compensation 7,739 5 % 6,123 5 % Restructuring expenses 5,175 4 % 4,080 3 % and otherAcquisition-related 4,978 3 % 8,876 7 % revenue^(1) and expensesAmortization of discount 2,861 2 % ? ? % on NotesProvision for income (7,764 ) (5)% (6,110 ) (5)% taxesNon-GAAP net income $ 41,292 29 % $ 41,118 32 % ? % Adjusted diluted earnings per share:GAAP diluted earnings $ 0.33 $ 0.39 per shareAmortization of acquired 0.30 0.23 intangiblesStock-based compensation 0.17 0.14 Restructuring expenses 0.12 0.09 and otherAcquisition-related 0.11 0.20 revenue^(1) and expensesAmortization for 0.06 ? discount on NotesProvision for income (0.17 ) (0.14 ) taxesNon-GAAP diluted $ 0.92 $ 0.91 1 %earnings per share Non-GAAP weighted avgshares outstanding - 44,853 45,140 (1)%diluted ^(1)Acquisition-related revenue constitutes revenue reflected aspre-acquisition deferred revenue that would otherwise have been recognized butfor the purchase accounting treatment of acquisitions. Since GAAP accountingrequires the elimination of this revenue, GAAP results alone do not fullycapture all of our economic activities.

RECONCILIATIONS OF GAAP TO NON-GAAP SELECTED FINANCIAL MEASURES - FISCAL YEAR(Unaudited)

Fiscal Year Ended % Change(In thousands, except November 30, 2021 November 30, 2020 Non-GAAPper share data)Adjusted revenue: GAAP revenue $ 531,313 $ 442,150 Acquisition-related 25,991 14,062 revenue^(1)Non-GAAP revenue $ 557,304 100 % $ 456,212 100 % 22 % Adjusted income from operations:GAAP income from $ 116,102 22 % $ 107,728 24 % operationsAmortization of acquired 46,932 8 % 27,946 6 % intangiblesStock-based compensation 29,724 5 % 23,482 5 % Restructuring expenses 6,308 1 % 5,906 1 % and otherAcquisition-related 30,093 5 % 17,699 4 % revenue^(1) and expensesNon-GAAP income from $ 229,159 41 % $ 182,761 40 % 25 %operations Adjusted net income: GAAP net income $ 78,420 15 % $ 79,722 18 % Amortization of acquired 46,932 8 % 27,946 6 % intangiblesStock-based compensation 29,724 6 % 23,482 5 % Restructuring expenses 6,308 1 % 5,906 1 % and otherAcquisition-related 30,093 5 % 17,699 4 % revenue^(1) and expensesAmortization of discount 7,209 1 % ? ? % on NotesProvision for income (25,800 ) (5)% (14,673 ) (3)% taxesNon-GAAP net income $ 172,886 31 % $ 140,082 31 % 23 % Adjusted diluted earnings per share:GAAP diluted earnings $ 1.76 $ 1.76 per shareAmortization of acquired 1.05 0.62 intangiblesStock-based compensation 0.67 0.51 Restructuring expenses 0.14 0.13 and otherAcquisition-related 0.67 0.39 revenue^(1) and expensesAmortization of discount 0.16 ? on NotesProvision for income (0.58 ) (0.32 ) taxesNon-GAAP diluted $ 3.87 $ 3.09 25 %earnings per share Non-GAAP weighted avgshares outstanding - 44,620 45,321 (2)%diluted ^(1)Acquisition-related revenue constitutes revenue reflected aspre-acquisition deferred revenue that would otherwise have been recognized butfor the purchase accounting treatment of acquisitions. Since GAAP accountingrequires the elimination of this revenue, GAAP results alone do not fullycapture all of our economic activities.

OTHER NON-GAAP FINANCIAL MEASURES(Unaudited)

Quarter to Date Adjusted Free Cash Flow (In thousands) Q4 2021 Q4 2020 % ChangeCash flows from operations $ 43,928 $ 42,762 3 %Purchases of property and equipment (1,913 ) (3,098 ) (38)%Free cash flow 42,015 39,664 6 %Add back: restructuring payments 432 992 (56)%Adjusted free cash flow $ 42,447 $ 40,656 4 %

Year to Date Adjusted Free Cash Flow (In thousands) FY 2021 FY 2020 % ChangeCash flows from operations $ 178,530 $ 144,847 23 %Purchases of property and equipment (4,654 ) (6,517 ) (29)%Free cash flow 173,876 138,330 26 %Add back: restructuring payments 5,519 4,123 34 %Adjusted free cash flow $ 179,395 $ 142,453 26 %

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2022GUIDANCE(Unaudited)

Fiscal Year 2022 Revenue Guidance Fiscal Year Fiscal Year Ending Ended November November 30, 2022 30, 2021(In millions) Low % High % Change ChangeGAAP revenue $ 531.3 $ 596.5 12 % $ 606.5 14 %Acquisition-related 26.0 8.5 (67)% 8.5 (67)%adjustments - revenue^(1)Non-GAAP revenue $ 557.3 $ 605.0 9 % $ 615.0 10 % ^(1)Acquisition-related revenue constitutes revenue reflected aspre-acquisition deferred revenue that would otherwise have been recognized butfor the purchase accounting treatment of acquisitions. Since GAAP accountingrequires the elimination of this revenue, GAAP results alone do not fullycapture all of our economic activities. Acquisition-related revenue adjustmentsrelate to Ipswitch and Chef.

Fiscal Year 2022 Non-GAAP Operating Margin Guidance Fiscal Year Ending November 30, 2022(In millions) Low HighGAAP income from operations $ 125.0 $ 130.0 GAAP operating margin 21 % 21 %Acquisition-related revenue 8.5 8.5 Restructuring expense 1.2 1.2 Stock-based compensation 33.0 33.0 Acquisition-related expenses 0.8 0.8 Amortization of intangibles 69.3 69.3 Total adjustments 112.8 112.8 Non-GAAP income from operations $ 237.8 $ 242.8 Non-GAAP operating margin 39 % 39 %

Fiscal Year 2022 Non-GAAP Earnings per Share and Effective Tax Rate Guidance Fiscal Year Ending November 30, 2022(In millions, except per share data) Low HighGAAP net income $ 86.1 $ 90.6 Adjustments (from previous table) 112.8 112.8 Income tax adjustment^(2) (22.5 ) (22.5 )Non-GAAP net income $ 176.4 $ 180.9 GAAP diluted earnings per share $ 1.93 $ 2.03 Non-GAAP diluted earnings per share $ 3.95 $ 4.05 Diluted weighted average shares outstanding 44.7 44.7 ^(2)Tax adjustment is based on a non-GAAP effective tax rate of approximately21% for Low and 20% for High, calculated as follows:Non-GAAP income from operations $ 237.8 $ 242.8 Other (expense) income (15.7 ) (15.7 )Non-GAAP income from continuing operations before 222.1 227.1 income taxesNon-GAAP net income 176.4 180.9 Tax provision $ 45.7 $ 46.2 Non-GAAP tax rate 21 % 20 %

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR FISCAL YEAR 2022 GUIDANCE(Unaudited)

Fiscal Year 2022 Adjusted Free Cash Flow Guidance Fiscal Year Ending November 30, 2022(In millions) Low HighCash flows from operations (GAAP) $ 188 $ 193 Purchases of property and equipment (6 ) (6 )Add back: restructuring payments 3 3 Adjusted free cash flow (non-GAAP) $ 185 $ 190

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1 2022 GUIDANCE(Unaudited)

Q1 2022 Revenue Guidance Three Months Three Months Ending Ended February February 28, 2022 28, 2021(In millions) Low % High % Change ChangeGAAP revenue $ 121.3 $ 136.4 12 % $ 139.4 15 %Acquisition-related 10.5 2.6 (75)% 2.6 (75)%adjustments - revenue^(1)Non-GAAP revenue $ 131.8 $ 139.0 5 % $ 142.0 8 % ^(1)Acquisition-related revenue constitutes revenue reflected aspre-acquisition deferred revenue that would otherwise have been recognized butfor the purchase accounting treatment of acquisitions. Since GAAP accountingrequires the elimination of this revenue, GAAP results alone do not fullycapture all of our economic activities. Acquisition-related revenue adjustmentsrelate to Ipswitch and Chef.

Q1 2022 Non-GAAP Earnings per Share Guidance Three Months Ending February 28, 2022 Low HighGAAP diluted earnings per share $ 0.32 $ 0.34 Acquisition-related revenue 0.06 0.06 Acquisition-related expense 0.01 0.01 Stock-based compensation 0.17 0.17 Amortization of intangibles 0.38 0.38 Restructuring expense 0.02 0.02 Total adjustments 0.64 0.64 Income tax adjustment (0.13 ) (0.13 )Non-GAAP diluted earnings per share $ 0.83 $ 0.85