Progress acquires Ipswitch for $225 million, tops first quarter targets

Progress delivered a strong fiscal first quarter and acquired Ipswitch. Progress said the deal highlights its M&A strategy.

Progress, which specializes in application development, said it will acquire Ipswitch for $225 million in cash.

Ipswitch makes data file transfer and network management software. Progress said the deal will add to non-GAAP earnings and cash flow as well as boost its small and medium-sized businesses products.

Separately, Progress reported fiscal first quarter net income of $9.4 million, or 21 cents a share, on revenue of $89.55 million, down 6 percent from a year ago. Non-GAAP earnings for the first quarter were 50 cents a share.

Wall Street was looking for non-GAAP earnings of 47 cents a share on revenue $87.6 million.

CEO Yogesh Gupta said the first quarter was solid and topped the company's guidance. Gupta added that its OpenEdge product saw strong demand.

For the second quarter, Progress projected revenue between $93 million and $96 million with non-GAAP earnings of 55 cents a share to 57 cents a share. For fiscal 2019, Progress projected revenue of $403 million to $409 million with non-GAAP earnings of $2.46 a share to $2.52 a share. The outlook includes Ipswitch.

Here's a look at Progress' product stack and what it will get when the Ipswitch deal closes in April. 

progress-products.png

ipswitch-products.png