Progress Software Corporation (PRGS)’s 4th Quarter 2014 Earnings Conference Call Transcript

Glenn Mattson, Ladenburg Thalmann

Okay. That’s encouraging, and then on the DataDirect, there has been somewhat lumpy historically, but do you envision that being this reemergence of growth being more sustainable, now that DataDirect cloud has kind of taken the reins?

Phil Pead, President and Chief Executive Officer

We had a really good 4th Quarter and the team did a fantastic job. I think going into 2015, pipelines are being strengthen to the point that the coverage is now at the level that we need in order for us to meet our numbers. If you remember, we had to fix a bunch of stuff on the marketing side – I won’t dredge up that. In Q-1, that caused us to have the miss but as we go into 15, I really love the focus of the team, having a separate business unit. They are very motivated with the opportunities they have in front of them.

DataDirect Cloud is really a superstar in the making here. It does obviously take our revenue ratable when we add it to our perpetual license revenue, which does have an impact, that Chris mentioned earlier – but to me that’s an accounting issue. We now are building great visibility in this business. That recurring revenue will pay dividends for us in future periods and actually should reduce the volatility in this business, because, as you know, we do sign very large contracts, which influences the quarter and then on a comparative basis, we see the lumpiness. So, I think that this will help us in the future by having more of this revenue become subscription, we will get greater visibility to it and the stability within each quarters I think will improve.

Glenn Mattson, Ladenburg Thalmann

Okay. Great. Thanks. Good luck in the 15.

Phil Pead, President and Chief Executive Officer

Thank you.

Operator

And with five minutes remaining in today’s conference, let’s take our last question from Scott Zeller with Needham & Co.

Scott Zeller, Needham & Co.

Hi. Thank you. I just wanted to go through some of the math, possibly around the contributed revenue from acquisitions. So, if I use your year-ending fiscal revenue and growing up by 6% or 7% for the out year, as you were suggesting guidance, it seems as if you’re contributing, about $75 million, being contributed by acquisitions, is that roughly accurate?

Phil Pead, President and Chief Executive Officer

Yeah. I think that’s right. It’s probably a little bit higher than that, if you include – again, we had the $3 million of revenue in 2014 from BravePoint. So, there will be incremental revenue from BravePoint year over year but then Telerik as well. I think it would be a little bit higher if you use those – higher than the figures that you just said.

Scott Zeller, Needham & Co.

Okay. And the growth, I believe the growth rate from Telerik, when it was announced, was roughly a 20% annual growth rate. Is that – should we think of the business running at roughly that same growth rate going forward?

Phil Pead, President and Chief Executive Officer

That’s correct, and our guidance for this year does include that growth trajectory continuing.

Scott Zeller, Needham & Co.

Okay. Thank you very much.

Operator

That does conclude our questions-and-answers session. I would like to turn things back to our speakers for any closing remarks.

Brian Flanagan, Senior Director Investor Relations

Thank you all for joining the call today. As a reminder, we plan on releasing financial results for our fiscal 1st Quarter of 2015 on Wednesday, April 1, 2015, after the financial markets close and holding the conference call the same day at 5 p.m. Eastern Time. We look forward to speaking with you again soon. Have a good day.

Operator

Thank you everyone. That does conclude today’s conference. We thank you for your participation.