Progress Software Corp

NASDAQ:PRGS

Earnings Call Transcript 2019-Q1

[Operator]

Good day, and welcome to the Progress Software Corporation Q1 2019 Investor Relations Conference Call. At this time, I'd like to turn the conference over to Mr. Brian Flanagan, please go ahead, sir.

[Brian Flanagan, Vice President, Treasury and Investor Relations]

Thank you, Michael. Good afternoon, everyone, and thanks for joining us for Progress Software's fiscal first quarter 2019 earnings call. With me today is Yogesh Gupta, President and Chief Executive Officer; and Paul Jalbert, our Chief Financial Officer.

Before we get started, I'd like to remind you that during this call, we will discuss our outlook for future financial and operating performance, corporate strategies, product plans, cost initiatives and other information that might be considered forward-looking. We will also discuss our just announced acquisition of Ipswitch Inc. This forward-looking information represents Progress Software's outlook and guidance only as of today and is subject to risks and uncertainties. Please review our Safe Harbour statement regarding this information, which is available in today's press release and press release regarding Ipswitch as well as in the Investor Relations section of our website at progress.com.

Progress Software assumes no obligation to update the forward-looking statements included in this call whether as a result of new developments or otherwise. Additionally, on this call, the revenue, operating margin, diluted earnings per share and adjusted free cash flow amounts we will refer to are on a non-GAAP basis. You can find a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP numbers in our earnings release issued today. Today, we published our financial press release on our website. This document contains the full details of our financial results for the fiscal first quarter 2019, and I recommend you reference it for specific details. Today's conference call will be recorded in its entirety and will be available via replay on our website in the Investor Relations section.

And with that, I'll now turn it over to Yogesh.

[Yogesh Gupta, Chief Executive Officer]

Thank you, Brian, and good afternoon everyone. Welcome to our first quarter conference call. As you've seen in this afternoon’s press releases, we announced solid first quarter results as well as an exciting acquisition, which is what I will spend most of my time talking about today. We also recently announced OpenEdge 12, an important major release of our flagship product, and I'll also talk more about that. Before we turn to those two topics, however, let me first address a few highlights of our Q1 financial results.

We’re off to a good start for the year with revenue and EPS both well above the high end of our guidance ranges. Our revenue and EPS overachievement was primarily due to OpenEdge, which had better than expected license sales from both our ISV partners and direct enterprises during the quarter. OpenEdge also again achieved maintenance renewal rate well over 90% in Q1, a key indicator of the ongoing strength and stability of that business.

Our overall expenses were essentially flat to Q1 of last year reflecting our disciplined management approach as we continue to strive for operational efficiencies. We also continue to execute on our capital allocation strategy, returning $32 million to shareholders during the quarter through share buybacks and dividends. Paul will review our Q1 performance in more detail in his remarks.

I'm excited to now turn to the acquisition we announced earlier today. We've been saying for more than a year now that accretive M&A is an important part of our strategy. Ipswitch is exactly the type of acquisition we've been targeting and we'll continue to target going forward in order to deliver increased scale and cash flows. As stated, acquisitions must first be complementary to our business with similar products, audiences and growth profiles. From a financial standpoint, they must bolster our recurring revenue and be accretive with margins of at least 35% after cost synergies.

This acquisition will be immediately accretive to both non-GAAP EPS and cash flow and it meets all of our disciplined acquisition criteria. Like Progress, Ipswitch has been successful in providing software solutions to small and mid-sized businesses and enterprises, enabling them to solve mission-critical business challenges. Their data file transfer and network management products are easy to use and powerful, consistent with Progress’ product philosophy of making difficult tasks as easy as possible for both developers and IT professionals.

Ipswitch’s annual revenues are around $75 million with a growth profile and high levels of recurring revenue that are similar to those of Progress. It also has solid maintenance renewal rate. Importantly, we have identified areas where we can leverage our operating model and infrastructure to achieve approximately $15 million of annualized cost synergies within 12 months, while maintaining Ipswitch’s longstanding business and healthy renewal rate. By doing so, we expect Ipswitch to contribute over 40% operating margins post synergies well above the 35% margin target we’ve established. Ultimately, this acquisition will generate returns for our shareholders in excess of our weighted average cost of capital and beyond what we could achieve with other uses of our capital.

Let's review the financial terms of the deal. It's a $225 million all cash transaction funded with a combination of existing cash and $185 million of incremental term debt. Our leverage following the transaction will be approximately 1.8 times pro forma EBITDA well within our capacity and very manageable given our strong consistent cash flows. Pending required regulatory approvals, we expect to close the transaction in late April and begin operations with Ipswitch as part of Progress in May, now for some background on Ipswitch’s products, people and operations.

First of all, if Ipswitch employees listening on the call, I'd like to welcome you and tell you how excited we are to have you become part of Progress. I believe the cultures of our two companies are very similar and we look forward to meeting all of you in the coming weeks. Ipswitch is based in Burlington, Massachusetts, just five miles from our Bedford headquarters and has two core products: data file transfer and network management.

As I mentioned earlier, they generate approximately $75 million in revenue, 75% of it recurring, primarily through a perpetual license and maintenance model. They have over 24,000 customers in 170 countries with the vast majority of their revenue and expenses in U.S. dollars decreasing the impact of FX fluctuations in our combined results going forward. Their data file transfer products including their flagship MOVEit product represent a little more than half of Ipswitch’s overall revenue.

MOVEit allows customers to securely transfer critical business information between enterprises, locations and users, enabling easy and secure access. WhatsUp Gold, their primary network management product, represents over 40% of total revenue. Using WhatsUp Gold, customers can continuously monitor and manage their IT infrastructure and applications, assuring high levels of performance and availability.

Ipswitch has many high profile customers across the globe with around 70% of their revenue coming from the U.S., 20% from EMEA, and the remainder from Asia Pacific and Latin America. In the U.S. they sell their products through direct as well as indirect channels. Outside of the U.S., Ipswitch has built an impressive network of distributors and resellers, with most of its international revenue coming from indirect channels.

Like us, they have customers across all verticals including finance and banking, healthcare, insurance, retail, government and biotech. In sum, we are very excited to have the opportunity to add Ipswitch’s business and cash flows to our own.

We're confident that when completed our integration efforts will enable us to achieve our acquisition criteria and financial objectives while keeping Ipswitch’s business healthy. Ultimately, this acquisition will make us a stronger company for our customers, partners and employees and create real value for our shareholders.

While I'm very pleased with the Ipswitch acquisition, I'm also excited about our continuous product momentum at progress and want to highlight OpenEdge 12, the latest major release of the product that is the backbone of our company.

One of the reasons for the continued strength of OpenEdge is our ongoing focus on providing innovative technology to our ISV partners and customers. The enhancements we've made in OpenEdge 12 were based on direct feedback from our partners and customers. And this new version is packed with features they were looking for, making it the highest performing, highest quality, most secure and productive version of OpenEdge we have ever released.

OpenEdge 12 strengthens continuous availability and application security and increases developer productivity and efficiency by facilitating collaborative development. Most importantly, it features a 3X improvement in database performance an unheard-of increase in an area where even a 10% improvement would be considered impressive.

These new capabilities all add up to an even lower total cost of ownership for our customers, something OpenEdge has always been known for. We've also made adoption easier than ever as this new version requires no changes to applications written using prior versions of OpenEdge.

Feedback from partners and customers has been overwhelmingly positive and since it's so easy to upgrade and take advantage of the better performance and new features, we're looking forward to rapid and widespread adoption of OpenEdge 12. Having our partners and customers upgrade to the latest version will further strengthen retention, something that is critical for the ongoing health and strength of our OpenEdge business.

Turning now to our new initiatives, we continue to make progress in marketing our high productivity Kinvey platform. We saw steady pipeline growth continue in Q1 with new customer wins consistent with what we've seen over the past few quarters.

In addition, we continue to earn industry recognition for our modern application development platforms and we’re recently named a strong performer in the Forrester Wave for local development platforms.

Forrester noted that our platform is particularly well suited for mobile apps and web user experiences and also highlighted a strong user experience data and application integration and AI development tool. Providing a modern high-productivity app dev platform is an important element of our strategy and we look forward to providing more metrics for this area of our business as they become meaningful.

So, in summary, our business is off to a good start in 2019. Our investment in OpenEdge 12 will help keep our business stable and strong and the Ipswitch acquisition will increase our scale and profitability generating value for our shareholders.

I'm now going to turn things over to Paul to review our Q1 performance in more detail and to outline a financial expectations for Q2 and 2019. Paul?

[Paul Jalbert, Chief Financial Officer]

Thank you, Yogesh and good afternoon everyone. As a reminder, all financial results I'll be referring to in my remarks are on a non-GAAP basis. Also, please note that all 2018 amounts have been adjusted to reflect ASC 606 which we adopted effective December 1, 2018 using the full retrospective method.

Our first quarter total revenue was $89.5 million, $1.5 million above the high-end of our guidance range. The overachievement was primarily driven by better than expected license sales within our OpenEdge segment.

Our earnings per share was $0.50 for the quarter, $0.03 above the high-end of our guidance range due to the higher revenue. Looking at consolidated revenue for the quarter as compared to Q1 of last year total revenue of $89.5 million was 6% lower at actual exchange rates and 4% lower on a constant currency basis. The year-over-year impact of exchange rates on our first quarter revenue was a negative $2.3 million consistent with our expectations.

License revenue of $22.8 million decreased by 12% from a year ago at actual exchange rates and 10% on a constant currency basis. The expected decrease was primarily due to the timing of revenue recognition under ASC 606 from our DCI segment due to the higher number of multiyear term licenses that renewed in Q1 2018 as compared to this quarter.

Maintenance and services revenue was $66.7 million a decrease of 4% year-over-year at actual exchange rates and 2% on a constant currency basis. Turning now to our revenue by segment with all comparisons at constant currency OpenEdge revenue was $67.5 million for the first quarter up 1% versus Q1 2018. We had a particularly strong quarter from direct enterprises and our ISV partners also delivered better than expected results with some transactions closing earlier in the year than we had expected.

License sales from our partner channel continues to be solid including SaaS related billings of $6.6 million for the quarter, which represents a year-over-year growth of 3% now this is lower year-over-year growth in our recent trends in part due to the timing of reporting from our ISVs and also due to a difficult comparison to a strong Q1 2018 when we reported a 23% increase.

OpenEdge maintenance revenue was down slightly compared to last year on a constant currency basis. Despite the lower revenue, we once again achieved renewal rates of well over 90% for both ISV partners and our direct enterprise customers.

As expected, DCI revenue was $6 million for the quarter, a decrease of 37% compared to Q1 of last year. With the performance in Q1 that was on tract our view for the full year has not changed. During our Q4 conference call, we introduced the new metric for DCI to provide clarity on the underlying economics of this segment.

This metric is the annual contract value or ACD of the DCI maintenance contracts and the OEM term license contracts. We continue to expect ACV to be $32 million to $33 million for 2019, consistent with 2018. Since the value of our DCI OEM contracts is very steady and predictable, we do not expect ACV to fluctuate materially going forward.

Turning to our AD&D segment, revenue was $18.3 million for the quarter, down 5% compared to Q1 of 2018. The decrease was due to lower license sales, partially offset by a slight increase in maintenance. Total bookings were $16.9 million for the quarter, down 12% versus Q1 of last year. The bookings decrease was primarily due to lower license and new maintenance bookings for DevTools. We were encouraged by the momentum we had created for DevTools in the second half of last year so our Q1 bookings results are disappointing. Our opportunities for new and expansion license sales are not at the level we anticipated coming into the year, so we have also moderated our expectations for the full year.

That being said, we are watching our spending to protect margins and profitability. And as a result, the contribution margins for Q1 were slightly higher than last year, and we expect to preserve or improve the full year AD&D contribution margins as well.

Total revenue by geography with our international regions at constant currency: North America revenue was $46.5 million, down 11% versus Q1 2018. EMEA revenue was $34.9 million, up 5%. Latin America revenue was $4.9 million, down 1% and Asia Pacific revenue was $5.5 million, up 11%.

Total cost and operating expenses were $59.3 million for the quarter, essentially flat with last year's first quarter. Q1 2019 operating margin was 34%, a decrease of nearly 400 basis points from Q1 of last year and consistent with our expectations. The year-over-year decline is primarily due to the timing of revenue from our DCI segment, driven by adoption of ASC 606 as I've already mentioned.

Q1 EPS of $0.50 was $0.06 lower than last year as a result of lower operating income and the impact of exchange rates, which were partially offset by a lower tax rate and lower weighted shares. The year-over-year impact of exchange rate movements on our first quarter EPS was an unfavorable $0.02.

Moving on to a few balance sheet and cash flow metrics, the company ended the quarter with a strong balance sheet with cash, cash equivalents and short-term investments of $133 million. Our debt principal balance at the end of Q1 was $116 million. DSO for Q1 2019 was 56 days, up nine days sequentially and up five days from Q1 of last year due to the timing of billings and collections.

Deferred revenue was $141 million at the end of the first quarter, up $2 million versus Q1 of 2018 due primarily to an increase in OpenEdge deferred maintenance.

Adjusted free cash flow was $24 million for the quarter compared to $33 million in Q1 of last year. The decrease is primarily due to the timing of billings and collections, offset in part by lower CapEx.

During the first quarter, we repurchased 688,000 shares at a cost of $25 million. At the end of the quarter, we had $75 million remaining under our current repurchase authorization.

Now before turning to the business outlook and guidance for 2019 and Q2, I'd like to review the financial impact of the Ipswitch acquisition, which will be reported within our OpenEdge segment. This acquisition meets our strict criteria, and we are excited that it will generate strong returns for our shareholders. As Yogesh mentioned in his prepared remarks, the purchase price is $225 million, it's an all-cash transaction to be funded with $40 million of existing cash and $185 million of incremental term debt.

In conjunction with this transaction, we will also refinance the remaining principal balance of $116 million on our current term loan, resulting in total debt of $301 million to be repaid over five years. This new five-year facility is expected to have substantially similar terms, interest rates and covenants as our current credit facility, and our leverage ratio following this transaction will be approximately 1.8 times EBITDA. We have identified approximately $15 million of annualized cost synergies in connection with the acquisition and we expect to realize within the next 12 months.

Post-synergies, Ipswitch will contribute over 40% operating margins with this contribution taxed at a higher marginal rate than Progress' current effective tax rate. The return on this acquisition is substantially higher than on share repurchases, and in light of the expected returns, we are not planning on repurchasing additional shares during 2019. We expect to resume share repurchases in fiscal 2020 at a level consistent with our publicly stated capital allocation policy. Based on our targeted closing date of late April, Ipswitch will be part of our operations for approximately seven months in 2019 and is expected to contribute approximately $42 million of revenue during the partial year.

For EPS, we expect a net contribution of $0.13, which reflects the expected operating contribution from Ipswitch, net of increased interest expense, the higher Ipswitch marginal tax rate and higher weighted shares.

Now turning to our guidance, starting with the full year, we are increasing 2019 revenue and EPS expectations to reflect the addition of Ipswitch. We now expect 2019 revenue to be $422 million to $428 million, an increase of $42 million to both the low end and the high end of our guidance range. 2019 EPS is now expected to be $2.46 to $2.52, an increase of $0.13 from our prior guidance. While our overall revenue expectations to our core businesses have not changed, the mix of revenue from our segments will be somewhat different, primarily between OpenEdge and AD&D. We expect lower revenue from our AD&D segment offset by slightly higher revenue from our OpenEdge segment, which is not including the incremental revenue from Ipswitch.

Our expectations for DCI revenue have not changed, but following the addition of Ipswitch, DCI revenue will represent approximately 9% of our total revenue versus the 10% we previously reported. We expect operating margins of approximately 36% and a tax rate of approximately 19%, both unchanged from our prior guidance.

Adjusted free cash flow is expected to increase to $125 million to $130 million, with Ipswitch contributing approximately $10 million for the remainder of 2019. Based on current exchange rates, the total expected negative currency translation impact on our 2019 revenue is now $5.9 million, an increase of only $100,000 from the guidance we provided in January. The negative impact of exchange rates on our full year EPS is $0.04 unchanged from our prior guidance.

Turning to our guidance for Q2 2019. We expect revenue to be between $96 million and $99 million, compared to $93 million a year ago. This includes approximately $6 million of revenue from Ipswitch, reflecting only one month of revenue during the quarter based on a targeted closing date. In addition to the Ipswitch contribution, the step-up in revenue from Q1 to Q2 is due to DCI, which will represent approximately 10% of our Q2 revenue.

The total expected year-over-year currency translation impact on our Q2 revenue is expected to be negative $2.3 million. We expect earnings per share of $0.55 to $0.57 for the second quarter, compared to $0.55 in Q2 of last year, flat to an increase of 4%. This includes an expected EPS contribution of approximately $0.02 from Ipswitch, again net of increased interest expense, higher marginal tax rate for Ipswitch and higher weighted shares. Based on current exchange rates, the expected currency translation impact on our Q2 EPS is expected to be a negative $0.01.

In closing, we had a solid financial performance in Q1, we continue to execute on our 2019 plans, and we are pleased to be able to increase our revenue, EPS and cash flow expectations as a result of the Ipswitch acquisition. We will be focused on successfully integrating their products, people and operations as we move forward and on realizing financial benefits of the acquisition we've identified.

With that, I'd like to turn it back to Brian for Q&A.

[Brian Flanagan, Vice President, Treasury and Investor Relations]

Thank you, Paul. That concludes our formal remarks for today. So I'd now like to open up the call to your questions. I ask that you keep your remarks to your primary question and one follow-up. I will now hand over to the operator to conduct the Q&A session.

[Operator]

Thank you. [Operator Instructions] And we’ll take our first question from Steve Koenig [Wedbush]. Please go ahead.

[Steve Koenig, Wedbush]

Great, thank you very much. So congrats on completing the acquisition, I know you got some integration work ahead but looks like it will be accretive. I want to ask one question about the core business and then just come back to the acquisition. On OpenEdge on the outperformance there, was any of that due to those renewals, some of the slip deals that you had in Q3 and Q4? Did any of those come into play in terms of the Q1 outperformance or was it from a different set of customers?

[Yogesh Gupta, Chief Executive Officer]

Steve, this is Yogesh. Thank you. The outperformance came from a different set of customers. The deals that didn't happen last year, we explained last time that some of those people were not renewing, et cetera. So these were different deals. They – some of them came in a bit early and some of them came in a bit larger than expected.

[Steve Koenig, Wedbush]

Got it, okay. Great. Thank you, Yogesh. So then on the acquisition, if I may, one housekeeping and then more substantial question, I just want to make sure. Now on the revenue accounting, it doesn't sound like there's a write-down, you just – you'll be accounting for that at its normal run rate or will there be a write-down followed by more revenue coming in as contracts renew?

[Paul Jalbert, Chief Financial Officer]

Yes, Steve. It’s Paul. So as I mentioned at the beginning of my comments, right, all the financial results on a non-GAAP basis. So we have preliminary purchase price allocation, right. But there would be a, because 75% of the total revenue is maintenance, there would be deferred revenue haircut on that. So we will be reporting on a non-GAAP basis, which will have the add-back of the deferred revenue haircut.

[Steve Koenig, Wedbush]

Got it, okay. Thanks for that. And then if I may – one – my follow-up on the acquisition. It sounds like when I do the math in my head, the pre-acquisition operating margin was maybe on the order of 20%, which seems like there would be a target of opportunities if that’s kind of stable mature business. So with the $15 million in cost synergies, where are you finding those cost synergies? And do you anticipate – are there any revenue synergies or just predominantly more of a portfolio play?

[Yogesh Gupta, Chief Executive Officer]

So I think you are right, Steve, on the way you're looking at it from a cost synergies perspective. We are – our intention is to make sure that the product and the sales and marketing functions are kept stable so that we can continue to retain the customers and retain the healthiness of the business. That said, we are finding opportunities and expect to find opportunities basically on other aspects of the operations, including other functions as well as infrastructure and so on. So our synergies are coming from those functions that don't directly impact customers and product roadmaps.

[Steve Koenig, Wedbush]

Got it. And any opportunities for revenue synergy or should we think about it as more like an addition to your portfolio?

[Yogesh Gupta, Chief Executive Officer]

I think we should think about it at this point as an addition to the portfolio. There's always some possibility that we might be able to cross-sell and do get some additional revenues. There are obviously the OpenEdge customers and the core customers of ours can be candidates for the products from Ipswitch as well as the Ipswitch customers can potentially be prospects for our core products from Progress. But that said, I want to be very clear, none of our modeling, none of our expectation are based on any revenue synergies.

[Steve Koenig, Wedbush]

Got it, fantastic. Great. Well, thank you very much for the answers and good luck.

[Yogesh Gupta, Chief Executive Officer]

Thank you. Thanks Steve.

[Operator]

We'll take our next question from Mark Schappel with Benchmark.

[Mark Schappel, Benchmark]

Hi, thank you for taking my question. And a nice job on the quarter and congrats on the Ipswitch deal.

[Yogesh Gupta, Chief Executive Officer]

Thank you, Mark.

[Paul Jalbert, Chief Financial Officer]

Thanks Mark.

[Mark Schappel, Benchmark]

Let me just start with the existing business. Yogesh, could you just discuss a little bit about the ramp in your go-to-market activities with Kinvey and DataRPM this quarter? And I think the quarter before that, you were ramping up activities in those areas. Just wondering if you could just give us little more color?

[Yogesh Gupta, Chief Executive Officer]

Yes. So we ramped up – we are continuing to ramp and we ramped up, as you said, our sales and marketing efforts, and we continue to see steady pipeline growth and new customer wins in Q1. What consistent with that we’ve seen in the past few quarters. So as I’ve said previously, we will disclose bookings for our new business when they become meaningful which we’re hoping to be later this year.

[Mark Schappel, Benchmark]

Okay, great. Thanks. And then with respect to potential new metrics around Kinvey and DataRPM, are you getting any closer in your view to introducing new metrics for those businesses?

[Yogesh Gupta, Chief Executive Officer]

Yes. So as I said, we continue to see the customer activity and pipeline growth. And once bookings become meaningful, we will provide them. So I think bookings is the metric that we expect to provide first.

[Mark Schappel, Benchmark]

Okay, great. Thank you. And then moving on to the Ipswitch deal, Steve asked most of the questions I had, but I do have one. With respect to the 40% margin target that was called out on the call, how long do you think it’ll take to get to those gross margins?

[Yogesh Gupta, Chief Executive Officer]

Yes. So our expectations are one year, 12 months, so we expect to get there within 12 months from now – from when we close.

[Mark Schappel, Benchmark]

Okay, great. Thank you. That’s all I have. Thanks.

[Yogesh Gupta, Chief Executive Officer]

You’re welcome.

[Operator]

And our next question comes from Matthew Galinko, National Securities.

[Matthew Galinko, National Securities]

Hey, good afternoon guys. Thanks for taking my questions. Maybe just, I hate to beat the dead horse here but just back to Kinvey for a quick moment. And I think when we talked last quarter, the goal was to start seeing some acceleration and uptake in the pipeline in Q2. And so I guess, I’m just wondering if kind of the – it sounds like it was a more linear build and sort of a exponential build, let’s say, in the pipeline. But can you just maybe elaborate a little bit more on what you’re seeing there in terms of the pipeline build. Are you getting the traction that you are expecting? Are there delays around features that you need to rollout or you are still trying to find your foot in that just want to, I guess, little bit more color?

[Yogesh Gupta, Chief Executive Officer]

So Matt, we continue to see steady pipeline growth, right. And, the new customer wins in Q1 we’re very consistent with what we’ve seen over the past several quarters. So as I said previously, we will disclose our bookings for this business as they become meaningful. We’re hoping that, that will be later this year. So there is no more additional at this point to share.

[Matthew Galinko, National Securities]

Okay. And I guess then on to Ipswich a little bit – I guess, why – what does Ipswich, it sounds like it’s probably a flattish mature business. What’s their motivation for selling at this point? And, maybe as a follow-on to that, are you seeing that the tide turned a little bit in terms of converting more of your M&A pipeline to transactions. And do you have capacity to – or additional capacity to work and close on additional deals as you work to integrate this one? Thank you.

[Yogesh Gupta, Chief Executive Officer]

Yes. So Matt, I think that why the folks at Ipswitch wanted to sell is probably a question better answered by them. It is a mature business. It is a founder-owned and founder-led business. And so I think at some point people go, you know, it’s been awhile and maybe I ought to do something else. So I think, there are lots of different reasons why people do that. What is interesting to us is that we were able to source this internally, and we were able to do this deal with a company that was local to us, and I think it makes a lot of things much better for us in terms of integration and opportunities and bringing the people on board and so on.

In terms of future acquisitions and pipeline and so on, as you know, this is a sizable acquisition for us. And of course, until we get the integration done, also the focus for the remainder of 2019 and early 2020 will be on the successful integration of Ipswitch and realization of the financial goals that we’ve identified. So accretive acquisitions like Ipswitch are a key element of our corporate strategy, so we’ll continue to pursue them in 2020. But I don’t expect that we will do another one in 2019 given that we have the integration of Ipswitch ahead of us.

[Matthew Galinko, National Securities]

Got it. All right. Thank you.

[Operator]

This concludes our Question-and-Answer session. I’ll turn the conference back to you, Mr. Flanagan.

[Brian Flanagan, Vice President, Treasury and Investor Relations]

Thank you all for joining the call today. For your reference, we have also posted a slide presentation in the Investor Relations section of our website that provides an overview of the Ipswitch transaction. As a reminder, we plan on releasing financial results for our fiscal second quarter of 2019 on Thursday June 27th, 2019 after the financial markets close and holding the conference call at the same day at 5:00 p.m. Eastern Time. And I’ll now turn the call over to Yogesh for his closing remarks.

[Yogesh Gupta, Chief Executive Officer]

Thank you, Brian. And we’re off to a strong start in 2019 with solid Q1 results led by our OpenEdge segment. The Ipswitch acquisition is an important step for us, adding scale and cash flow and generating real value for our shareholders. As we integrate Ipswitch, we’ll continue to focus on keeping our business strong and running it efficiently and our bookings and pipeline growth for our high productivity platform. Thank you again for your continued support and for joining us on our call today. Thank you.

[Operator]

This concludes today’s conference. Thank you for your participation. You may now disconnect.