Progress Software Corp. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Progress Software Corp. filed its 2023 10-K report detailing its financial performance and operations for the fiscal year ending November 30, 2023.</b>

AI Summary

PROGRESS SOFTWARE CORP /MA (PRGS) filed a Annual Report (10-K) with the SEC on January 26, 2024. Progress Software Corp. filed its 10-K report for the fiscal year ending November 30, 2023. The filing covers the period from December 1, 2022, to November 30, 2023. The company is incorporated in Delaware and headquartered in Burlington, MA. The filing references a November 2022 cyber incident and the Moveit vulnerability. Key financial segments include Software Licenses and Maintenance and Services.

Why It Matters

For investors and stakeholders tracking PROGRESS SOFTWARE CORP /MA, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Progress Software's financial health, operational activities, and strategic direction for the past fiscal year, crucial for investors to assess performance and future prospects. The inclusion of specific events like the November 2022 cyber incident and the Moveit vulnerability highlights potential risks and the company's response, which are important considerations for risk assessment.

Risk Assessment

Risk Level: medium — PROGRESS SOFTWARE CORP /MA shows moderate risk based on this filing. The company's filing mentions a November 2022 cyber incident and the Moveit vulnerability, indicating potential operational and security risks that could impact financial performance.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to understand the impact of recent cyber incidents and the company's strategies for future growth.

Key Numbers

• 2023-11-30 — Fiscal Year End (Reporting period)
• 2024-01-26 — Filing Date (Date of submission)
• 000-19417 — SEC File Number (Company's SEC file number)
• 781-280-4473 — Business Phone (Company contact number)

Key Players & Entities

• PROGRESS SOFTWARE CORP /MA (company) — Filer
• 0000876167 (company) — Central Index Key
• DE (jurisdiction) — State of Incorporation
• BURLINGTON (location) — Business Address City
• MA (location) — Business Address State
• prgs-20231130.htm (document) — Filing document name
• November 2022 Cyber Incident (event) — Mentioned in filing
• Moveit Vulnerability (event) — Mentioned in filing

Forward-Looking Statements

• Progress Software will likely incur increased cybersecurity expenses in the next fiscal year due to the disclosed incidents. (PROGRESS SOFTWARE CORP /MA) — medium confidence, target: 2024-11-30
• The MOVEit vulnerability could lead to customer attrition or legal challenges for Progress Software in the near future. (PROGRESS SOFTWARE CORP /MA) — medium confidence, target: 2024-05-31

FAQ

Risk Factors

• Cybersecurity Risks [high — operational]: The company has experienced cybersecurity incidents, including a November 2022 incident and the Moveit vulnerability, which could disrupt operations and impact reputation.

Industry Context

Progress Software Corp. operates in the prepackaged software industry, providing application development and deployment solutions.

Regulatory Implications

The filing is a standard 10-K annual report required by the SEC for publicly traded companies to disclose financial and operational information.

What Investors Should Do

1. Analyze the financial statements for revenue trends in Software Licenses and Maintenance and Services segments.
2. Review the risk factors section for detailed information on cybersecurity threats and mitigation strategies.
3. Assess the company's overall financial health and operational resilience based on the disclosed information.

Key Dates

• 2023-11-30: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-01-26: Filing Date — Date the 10-K was officially filed with the SEC.

Year-Over-Year Comparison

This is the initial 10-K filing analyzed for the fiscal year ending November 30, 2023. Previous filings would provide comparative data.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share PRGS The Nasdaq Sto

Filing Documents

• prgs-20231130.htm (10-K) — 2053KB
• q42023exhibit107.htm (EX-10.7) — 79KB
• q42023exhibit1015.htm (EX-10.15) — 57KB
• q42023exhibit211.htm (EX-21.1) — 34KB
• q42023exhibit231.htm (EX-23.1) — 2KB
• q42023exhibit311.htm (EX-31.1) — 8KB
• q42023exhibit312.htm (EX-31.2) — 8KB
• q42023exhibit321.htm (EX-32.1) — 5KB
• q42023exhibit97.htm (EX-97) — 25KB
• image_0.jpg (GRAPHIC) — 1KB
• prgs-20231130_g1.jpg (GRAPHIC) — 102KB
• 0000876167-24-000031.txt (&nbsp;) — 11939KB
• prgs-20231130.xsd (EX-101.SCH) — 76KB
• prgs-20231130_cal.xml (EX-101.CAL) — 124KB
• prgs-20231130_def.xml (EX-101.DEF) — 381KB
• prgs-20231130_lab.xml (EX-101.LAB) — 1068KB
• prgs-20231130_pre.xml (EX-101.PRE) — 698KB
• prgs-20231130_htm.xml (XML) — 1739KB

Risk Factors

Item 1A. Risk Factors 9

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 20

Cybersecurity

Item 1C. Cybersecurity 20

Properties

Item 2. Properties 20

Legal Proceedings

Item 3. Legal Proceedings 20

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 20 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 21

[Reserved]

Item 6. [Reserved] 22

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 22

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 37

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 75

Controls and Procedures

Item 9A. Controls and Procedures 75

Other Information

Item 9B. Other Information 77

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 77 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 77

Executive Compensation

Item 11. Executive Compensation 77

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 77

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 77

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 77 PART IV

Exhibits, Financial Statement Schedules

Item 15. Exhibits, Financial Statement Schedules 78

Form 10-K Summary

Item 16. Form 10-K Summary 80

Signatures

Signatures 81 3 CAUTIONARY STATEMENTS This Form 10-K, and other information provided by us or statements made by our directors, officers or employees from time to time, may contain information that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended; Section 21E of the Securities Exchange Act of 1934, as amended; and the Private Securities Litigation Reform Act of 1995. Whenever we use words such as "believe," "may," "could," "would," "might," "should," "expect," "intend," "plan," "estimate," "target," "anticipate" and negatives and derivatives of these or similar expressions, or when we make statements concerning future financial results, product offerings or other events that have not yet occurred, we are making forward-looking statements. These forward-looking statements are based upon our present intent, beliefs or expectations, but are not guaranteed to occur and may not occur. Actual future results may differ materially from those contained in or implied by our forward-looking statements due to various factors. Such factors are more fully described in Part I, Item 1A of this Form 10-K under the heading "Risk Factors". Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what extent, any of such risks may be realized. We also cannot assure you that we have identified all possible issues that we might face. We undertake no obligation to update any forward-looking statements that we make. PART I

Business

Item 1. Business Overview Progress Software Corporation ("Progress," the "Company," "we," "us," or "our") provides enterprise software products for the development, deployment and management of high-impact business applications. We operate in North America, Latin America, Europe, the Middle East and Africa ("EMEA"), and Asia and Australia ("Asia Pacific"), through local subsidiaries as well as independent distributors. Our products are generally sold as perpetual licenses, but certain products also use term licensing models and our cloud-based offerings use a subscription-based model. More than half of our worldwide license revenue is realized through relationships with indirect channel partners, principally independent software vendors, original equipment manufacturers, distributors and value-added resellers. Independent software vendors develop and market applications using our technology and resell our products in conjunction with sales of their own products that incorporate our technology. Original equipment manufacturers are companies that embed our products into their own software products or devices. Value-added resellers are companies that add features or services to our product, then resell it as an integrated product or complete "turn-key" solution. Our Products With Progress, businesses can automate and optimize the process by which applications are developed, deployed and managed. This makes critical data and content more accessible and secure and technology teams more productive. We have a deep commitment to the developer community, both open source and commercial alike. Described below are some of the products that make up our comprehensive product portfolio. Progress OpenEdge: An application development platform for running business-critical applications needing high-performance, high availability and flexible deployment options for extensibility, scalability, security and performance. Progress Chef: DevOps/DevSecOps automation software

Risk Factors

Item 1A. Risk Factors We operate in a rapidly changing environment that involves certain risks and uncertainties, some of which are beyond our control. The risks discussed below could materially affect our business, financial condition and future results. The risks described below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially adversely affect our business, financial condition or operating results in the future. Risks Related to Our Ability to Grow Our Business Technology and customer requirements evolve rapidly in our industry, and if we do not continue to develop new products and enhance our existing products in response to these changes, our business could be harmed. Ongoing enhancements to our product sets (both organically and through acquisitions) will be required to enable us to maintain our competitive position and the competitive position of our ISVs, distributors/resellers, and OEMs. We may not be successful in developing and marketing enhancements to our products on a timely basis, and any enhancements we develop may not adequately address the changing needs of the marketplace. Overlaying the risks associated with our existing products and enhancements are ongoing technological developments and rapid changes in customer and partner requirements. Our future success will depend upon our ability to develop, acquire and introduce new products in a timely manner that take advantage of technological advances and respond to new customer and partner requirements. We may not be successful in developing or acquiring new products incorporating new technology on a timely basis, and any new products we develop or acquire may not adequately address the

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