Progress Software Corporation (NASDAQ:PRGS) Q2 2023 Earnings Call Transcript

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, nicer, shinier, greater, right? They spent let’s just say north of $50 million over the last five years and they just decided that you know what enough is enough. The project is now — the project still has a similar time line going forward. They have as many years to go as they did when they started, right? So they haven’t made any progress in terms of trying to completion at this point which is bizarre, right? So anyway. 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 seven-figure expansion deal with us. 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 runs 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. I mean, when you look at Loadmaster. Loadmaster, it front ends things like Dell Cloud Storage and Dell OEMs sit 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 and 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? So we’re seeing this across the board. We’re seeing this across virtually every geography. Brent, I wish I could give 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 products. It’s an IT management, infrastructure management product. It is truly across the board. Anthony, you want to take the MarkLogic question?

Anthony Folger: Yeah, 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.

Brent Thill: Great. Thank you.

Operator: Thank you. One moment for our next question and that will come from the line of Anja Soderstrom with Sidoti. Your line is open.

Anja Soderstrom: Hi. Thank you for taking my question and congratulations on another great quarter and execution. You mentioned in a previous question that you expect expenses to creep up a bit due to inflation and wage inflation. Is there anything you can do to offset that?

Yogesh Gupta: So, thank you, Anja. We actually are looking to see like 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?