Developer tools maker Progress Software slips as Q1 outlook misses expectations

CEO Yogesh Gupta said the company is pleased with how customers are responding to its acquisition last year of Chef Software.

Shares of application performance management software tools maker Progress Software slipped in late trading after the company beat fourth-quarter revenue and profit expectations, but forecast this quarter's results below Wall Street's estimates. 

CEO Yogesh Gupta said in prepared remarks that he was "thrilled with our results both for the fourth quarter and the full year 2020 and believe they reflect the durability of our business and our success in executing our total growth strategy."

Revenue in the three months ended in November rose 5%, year over year, to $129 million, yielding EPS of 91 cents, excluding some costs. Analysts had been modeling $128 million and 78 cents.

Gupta commented on the company's acquisition of Chef Software, completed in October for $220 million. The software, saying the company is "very pleased with the customer response and the rapid pace of the integration."

Added Gupta, "The investments we've made to bolster our M&A capabilities, combined with the large, fragmented and growing DevOps market opportunity, position us well to execute on our total growth strategy for years to come, enabling us to deliver sustained shareholder value."

For the current quarter, the company sees revenue in a range of $119 million to $123 million, below the average Wall Street estimate for $130.8 million. EPS is seen in a range of 72 cents to 76 cents, lower than the average estimate of 81 cents per share. 

For the full year, the company sees revenue in a range of $513 million to $521 million, roughly in line with the consensus for $516 million. EPS is seen in a range of $3.22 to $3.28, above consensus for $3.23 per share.

Shares of Progress declined 2% to $47.79 in after-hours trading.