Development tools pioneer Progress Software this afternoon reported fiscal Q3 revenue and profit that easily surpassed Wall Street's expectations, and raised its year outlook for revenue and profit above consensus as well.
The report sent Progress shares higher by 8% in late trading.
CEO Yogesh Gupta said the company was "very pleased to announce Q3 results that significantly beat our previous guidance for revenue and earnings," adding, "and we're raising 2021 guidance for the third time this year."
Added Gupta, "We also announced the signing of a definitive agreement to acquire Kemp, a leader in the Application Experience ('AX') space. Kemp meets all our acquisition criteria, fits perfectly with our total growth strategy, and brings a very talented team to Progress."
In a separate release, Progress said it will acquire privately held Kemp Technologies, a maker of application experience management software, for $258 million in cash.
Kemp, founded in 2000, is based in New York City.
As Progress describes the company's products,
Kemp Loadmaster and Flowmon Network Visibility products monitor application performance, and distribute and balance traffic and workloads across servers, in the cloud or on premise, ensuring high performance and availability. They do this by leveraging machine learning to identify anomalies and alert IT professionals before end-users are impacted. These capabilities complement Progress offerings, such as WhatsUp Gold, a market leader in easy-to-use network management. Combined, they will offer the best application experience solution in the market.
Revenue in the three months ended in August rose 40%, year over year, to $152.6 million, yielding a net profit of $1.18 a share.
Analysts had been modeling $131 million and 82 cents per share.
The company's annualized recurring revenue rose by 25% to $444 million, Progress said.
For the current quarter, the company sees revenue of $134 million to $138 million, and EPS in a range of 73 cents to 75 cents. That compares to consensus for $141 million and an 86-cent profit per share.
For the full year, the company now sees revenue in a range of $548 million to $552 million, and EPS of $3.68 to $3.70. That compares to consensus of $533 million and a $3.47 per share.