Please standby we are about to begin. Good day and welcome to the Progress Software Corporation Q4 Investor Relations Conference. At this time, I would like to turn the conference over to Mr. Brian Flanagan. Please go ahead, sir.

Thank you, Shannon. Good afternoon everyone and thanks for joining us for Progress Software's fiscal fourth quarter 2015 earnings call. With me today is Phil Pead, President and Chief Executive Officer; Jerry Rulli, our Chief Operating Officer; and Chris Perkins, our Chief Financial Officer. Before we get started, I'd like to remind you that during this call we may discuss our outlook for future financial and operating performance, corporate strategies, product plans, cost initiatives, or other information that might be considered forward-looking. 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 Harbor statement regarding this information, which is available both in today's press release 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 we may refer to certain non-GAAP financial measures such as revenue, operating margin and diluted earnings per share. 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 and also furnished the information to the SEC in an 8-K filing. These documents contain the full details of our financial results for the fiscal fourth quarter 2015 and I recommend you reference these documents 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. With that, I'll now turn it over to Phil.

Thank you, Brian. Good afternoon everyone, and thank you for attending our fourth quarter earnings call. I am excited to report that our fourth quarter execution resulted in a strong performance across all key areas of our business. OpenEdge had a very solid fourth quarter capping off a year of consistent growth from our ISV partners, strong sales to enterprise customers and an uptick in our maintenance revenues. We achieved record bookings in the quarter for our Telerik products as a whole, including record bookings for Sitefinity and DevTools. A great finish to our first year following the acquisition which also positions us well for fiscal '16. Our Data products grew by more than 20% in the quarter and achieved double digit growth for the full year. Earnings exceeded our expectations even as we continue to invest in our future growth. We have a lot to be proud of in our fiscal year '15 performance and I attribute that to the incredibly talented team we have across the globe as well as to the strength of our technologies and services. Financially, we achieved revenue growth in all of our segments and finished the year at 98% of the currency adjusted revenue target we set at the beginning of the year. We significantly exceeded our beginning of year guidance for operating margin and EPS, and finished with higher than expected adjusted free cash flow as well. And finally through the acquisitions of Telerik and BravePoint we were able to add great people and products that make us stronger together solidifying our outlook for future profitable growth. We now turn our focus to the opportunities we see for fiscal year '16 and beyond. Our solutions are among the strongest in the industry and every day they enable developers to build powerful and…

Thank you, Phil, and good afternoon everyone. As Phil mentioned in his remarks, we are proud of our results and accomplishments during the fourth quarter and through all our 2015. Let's start by looking at each of our segments all on a constant currency basis. OpenEdge revenue was $87 million up 2% for the quarter compared to last year including revenues from our acquisition of BravePoint. Organic growth excluding BravePoint revenues was 1%. Licensed revenue was lower compared to a very strong fourth quarter performance at 2014. But this decline was more than offset by an increase in maintenance revenue driven by renewal rate of well over 90% in the quarter. A consistently strong renewal rate is a great indicator that customers are pleased with all of the new technology and product support we have to offer, which helps keep them committed to their relationship with Progress. Corticon also showed growth in both license and maintenance in the quarter. For the full year OpenEdge revenue was $320 million an increase of 8% compared to 2014. Excluding BravePoint revenues organic growth was 3% driven by strong license sales both to our ISV partners and direct end users, as well as moderate increases in maintenance and services revenues. Corticon revenues were essentially flat for the full year, but we continue to be positive about our strategy for this product going forward which concludes broadening our sales effort through partnerships with system integrators and consulting firms. As Phil mentioned part of our success depends on helping our partners sell more of their applications to new and existing customers and we continue to deliver on that promise by offering them additional solutions like Analytics360, which was released earlier this year. We will also soon launch OpenEdge academy for organizations in the U.S. and EMEA…

Thank you Jerry and good afternoon everyone. As Phil and Jerry mentioned I too am pleased with our financial performance as we achieved organic growth in all of our business segments on a currency adjusted basis and exceeded our earnings and cash flow guidance. For our fourth quarter total non-GAAP revenue was 115 million, an increase of 18% at actual exchange rates and 24% on a constant currency basis. Our fourth quarter non-GAAP EPS was $0.53, an increase of 13%. This was above the high end of our guidance range of $0.47 to $0.51 due to our strong operating performance as well as a lower non-GAAP tax rate of 31% for the quarter. Also reflected in our Q4 results is the year-over-year impact of currency translation due to the strengthening of the US dollar which was a 5.7 million decrease on revenues and $0.02 on earnings per share. For the full year non-GAAP revenue was 412 million, an increase of 24% at actual exchange rates and 31% on a constant currency basis. Full year non-GAAP earnings per share was $1.58, an increase of 5%. This was above the high end of our guidance range of $1.51 to $1.55. The year over year impact of exchange rates was negative 25 million on our 2015 revenues and $0.14 on our earnings per share. On a constant currency basis our EPS increased 14% over 2014. Non-GAAP revenue for the fourth quarter includes acquisition related revenue adjustments for Telerik totaling $3 million. As I discussed in our October guidance call and consistent with previous quarters GAAP rules require us to eliminate certain pre-acquisition revenue classified by Telerik as deferred revenue. But we include this revenue in our non-GAAP quarterly reporting to better reflect our true business performance on a normalized basis. On a year-to-date…

Thank you, Chris. That concludes our formal remarks for today. 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. And I will now hand it over to the operator to conduct the Q&A session.

[Operator Instructions]. And we’ll take our first question from Greg McDowell with JMP Securities.

Great. Thank you very much and it’s nice to see the return to solid execution in the business. My first question one theme I pulled out of your prepared remarks was just the uptick in maintenance and the strong renewal rates and I was hoping you could maybe spend a minute talking about what's changed in terms of approaching customers and getting them to renew and what exactly is driving that uptick and are we at a spot maybe where low 90s is going to be the sort of the perpetual growth or the perpetual renewal rate of that business, thanks -- of the maintenance business?

Hey, Greg. This is Phil. Well we've maintained that renewal rate I think ever since Chris and I came on board and really focused on the OpenEdge business, but I will say that the maintenance renewals for OpenEdge is a key metric that we have tracked every day that we’re here because it does I think reflect the health of the OpenEdge business and the fact that it -- we had an uptick in maintenance obviously we really like that, but the causes of that I will attribute to the fact that we have now delivered more new technology to our OpenEdge partners and our customers over the last three years than I think we've done in the last at least six or seven, and the modernization framework that we have now prescribed to our OpenEdge customers really encourages them to first of all upgrade to our latest versions and by upgrading to our latest versions they see even more functionality within the technology that they can make use of, this also enables them to move more to the cloud, I think in 2015 we saw a more than 30% of our partner license revenue move to SaaS. All of this technology that we’re delivering to them and the modernization framework plus the services that surround it all really encourage them especially on the win backs, when they start to see the things that we are doing that would really help their business this really encourages them to renew and that's why I think we're seeing that kind of uptick.

That’s helpful thank you and one quick follow-up and this is going back to your Analyst Day and I’m just sort of trying to reconcile your long-term targets and I'll specifically point to sort of the 10% to 15% growth in EPS and 10% to 15% free cash flow growth and I recognize those weren’t short term targets, those were sort of your long term targets, but how should we think about -- I know free cash flow looks like it's going to be pretty flat and as you stated the EPS guidance is 2% to 6% constant currency growth. But just how should we think about 2016 growth for your targets versus sort of your long term targets and how do we reconcile I guess the difference between what you laid out?

Sure. I will take that one. This is Chris. First I'll talk about the earnings per share growth. I guess I would say that we discussed on the call some of the opportunities that we see and accelerating the growth, long term -- the bookings growth and the long-term growth prospects for all of our segments, but particularly in the application development segment related to the digital business transformation market opportunities that we see. And we’ve -- as we've said in the call just a moment ago I spoke about the fact that we are continuing to invest in driving the growth opportunities. So those investments are included in our guidance for 2016. On the cash flow basis as you saw we significantly outperformed our free cash flow performance for the year, driven by a solid performance across the business and a very good performance in our DSOs, so I think there is an opportunity, we performed quite well, I think there's an opportunity to continue to maintain those level of DSOs and that level of cash flow, the Telerik business as we do continue to build growth in those bookings, be it being ratable revenue recognition that drives a high level of deferred revenue, that's a very positive cash flow model. So I’d say it's focused right now, if you just look at 2016, we are investing in the business, our earnings per share growth from an actual exchange rate basis is moderate because of the investments we're making in growth and I think again we had very strong performance for free cash flow and I want to make sure that we can continue to duplicate that kind of collections and driving the deferred revenue going forward. So as we grow, I think there is a great opportunity. This year we performed even better, when you think about the foreign exchange impact on our cash flows and the year over year performance we had, you know currency translation does also impact our foreign cash flows and again we’ve showed very nice growth on a full year basis even with those foreign exchange translation impacts on that. So I think we performed very well this year, we actually exceeded our performance, I think -- I’m pretty confident that we'll have a very strong performance and as we do get that growth in our application development business and continue to drive that deferred revenue it should be a positive driver for free cash flow going forward. So the investments we're making today, we see an opportunity to drive that 10% to 15% free cash flow growth target that we set for our long term objectives.

And we'll take our next question from Steve Koenig with WedBush Securities.

Want to start with the same question I asked last quarter which was, your application development and deployment revenue was flat again sequentially, I guess it was actually down a little bit last quarter on a tough comp in Q2, but it's been flat since the start of the year. Last quarter you told us a little bit about how the bookings out of the gate were a little weak as you were integrating, you've had two quarters now you've been reporting record bookings. Why don't we see growth yet in AD&D and how do you -- you guided, you gave us some guidance for next year, how does that guidance play out, is that more backend loaded?

Well again just to talk about the overall growth characteristics of the business and again we had talked about the fact that all the revenue is ratable. So the strong bookings of Q4 actually have very little impact on the revenue in Q4, it's mainly driving revenue growth that will be recognized in future periods. As we talked about and we updated today that our bookings for the Telerik business were, that Jerry mentioned were 83 million of bookings for the year, so a growth in year-over-year bookings of 16%. So again we think we've got an opportunity and our guidance reflects getting our App Dev revenue growth in the mid-teens for next year. I think as we see that trajectory continue going forward and growing our bookings year-over-year in 2016 by over 20% I think we'll have an opportunity to, one, provide information and tracking on a quarterly basis the growth in our deferred revenue, we’ll provide information on our quarterly bookings for the App Dev segment that should give an indication of when that growth will start to accelerate.

Okay, thanks Chris. For the follow up and I actually want to just toss in a house keeping question, we heard the multiyear numbers from Jerry, but I think that was just DCI, you have it for the full company, but then I don’t want to waste my question, I actually want to ask you about the guidance. The rev guidance looks more backend loaded than we would have expected even just factoring in currency and then I am wondering does that all come from the Telerik bookings cadence or is the DCI renewal cadence perhaps a bigger factor there, what's leading to the backend loaded sort of revenue guidance?

I think again you know because you said and you said even beyond currency, but just to reiterate you know the currency translation impact is primarily weighted and the impact will be in the first half of the year. So after factoring that in, you know we do typically have some seasonality to our business and I know it's a seasonal comparison. But we do expect as our bookings trends on the App Dev segment we did expect that growth trajectory to start to improve more as we get to the second half of the year. We do expect based on the timing of our data business bookings for that to be trajected more towards the second half of the year as well. Again we saw the trajectory be very strong for Q4, we expect that we will see year over year growth in Q1, but that will start to accelerate as we go through the year again as we did in 2015.

Got you, thanks Chris. Could you toss out the multiyear backlog numbers for the whole company?

For the whole company it’s 19.8 million and for the data business it was 17.7 million.

Perfect, great, thank you very much.

And we'll go next to Mark Schappel with Benchmark.

Chris, I believe last quarter Telerik's growth rate dipped below its 20% annual growth rate that you were shooting for and I was just curious if that product got back to the 20% plus growth rate in quarter?

On the full year base -- it wasn't at the 20% growth rate in the fourth quarter, no it wasn't. But on a full year we did realize 20% growth rate. So again as we were seeing that start to pick up as we go through, again from a sequential basis it will be a tough compare in the first half for the year, but we still -- we’ll see that start to grow sequentially towards a trajectory we are targeting in the back half for the year.

And I assume Chris that’s based on the bookings?

That’s right, it's based on the bookings growth that we saw, good growth and good performance in the fourth quarter and we expect to see bookings growth as we’re moving through 2016.

Okay great. And then moving over to OpenEdge, I didn’t catch the organic growth rate for OpenEdge in constant currency, so it would be at BravePoint?

OpenEdge growth in constant currency, I think it was, for the quarter it was 1% excluding -- again that excludes the impact of Telerik. Telerik we had two months in the fourth quarter of last year, we have -- BravePoint, I am sorry we had two months in the fourth quarter of last year. So it was 1% in the fourth quarter and 3% on a full year basis.

And we will take our next question from Stan Berenshteyn with Sidoti and Company.

I guess the first question is, if there is obviously continued FX pressures, I am wondering are you seeing any cracks in the sales cycle. By that I mean is there any increases in the amount of clients that are differing purchases?

Well I’ll -- it's Jerry. We are not seeing any significant -- the pressure we are seeing mainly really is in Latin America. They’ve had some pretty wild swings, so that’s -- if anything we’re seeing pressure in Latin America, mainly Brazil and Mexico, but mainly Brazil.

Okay. And also a follow up, now that you’ve had Telerik for a year can you talk a bit about the evolution and the level of interest existing OpenEdge clients towards utilizing the Telerik tool kits?

Yes, this is Jerry. I think I mentioned and Chris and Phil mentioned it also, part of our modernization framework that we have introduced this year, we’ve been talking modernization to our partners for many years, one of the key elements of that is the use of Telerik tools. Now the interesting thing about OpenEdge is the key thing, its open right, part of the OpenEdge applications track [ph] its open, so our partners can choose a multitude tools. We make it extremely easy with the way we’ve integrated our tools sets in 11.6, as I talked about in my discussion, 11.6 release of OpenEdge we also included very tight aggression to our mobile platform from Telerik platform. Though promise to our partners is that we’re going to continue to keep OpenEdge open, we will always make sure that our products are the best integrated products today. We are seeing tremendous uptick, as Phil mentioned as an example one of our partners. And I’ll say any anecdotally I have made many sales calls this year and over the last 12 months many of our OpenEdge partners and end users have already been using some different -- we talk about the development tool kit, there is probably 15 different products within the tool kit, so it’s a very broad term we use and so our customers have been using certain elements of the Telerik tool kit’s stack prior to our acquisition and because of acquisition we are seeing a really nice adoption in the OpenEdge base today. And again because of our modernization framework and the tooling we provide and the integration we provide, it is the tool kit of choice for the OpenEdge partners for modernization.

And we will take our next question from Glenn Mattson with Ladenburg.

Two quick ones. Just I guess Chris you mentioned that you are still making investments in 2016 and that’s perhaps why that your earnings growth isn’t at the target rate, would you be able to say what kind of do you think a normal non-GAAP operating margin is when you move past this period of investment?

I think there is an opportunity to expand it, with topline revenue growth making progress as far as growing the bookings it will deliver future earnings growth. I think there is an opportunity to get -- certainly get our operating margins above 30%, our guidance is to move from 29% to between 29% and 30%. So I think in the low 30% is a realistic target over the next couple of years.

Okay, I guess secondly I would ask, there doesn’t seem to be a lot of stock repurchase in the quarter though the stock, it's been for a few years now back and forth between low 20s to the high 20s or just above 30, so I wonder I mean I release you took on some debt with the acquisition, but it's only equivalent to about six quarters of free cash flows. So the balance sheet is going to get stronger quickly here and I wonder what was the decision behind that, perhaps purchasing more shares this quarter?

Yes, I think it was more impacted by the fact that with our Investor Day in late October. We felt it was appropriate to not open our window until we got through the Investor Day and then we were very late in the quarter, at that time near the point of closing our window. So we thought it was appropriate to again, not open the window. As you know there are factors and circumstances that from time-to-time we may make that decision not to open the window, but it was really driven by that. We see good value and we certainly acted on repurchasing stock, it was about $444 million worth of stock repurchased over the last three years. So we see that as an opportunity but I think it was more of a matter of circumstances that we didn't see an appropriate opportunity for the window to be open in the fourth quarter.

Okay. Great, thanks.

And with no further questions in the queue. I'd like to turn the call over to Mr. Flanagan for any additional or closing remarks.

Thank you all for joining the call today. As a reminder, we plan on releasing the financial results for our fiscal first quarter of 2016 on Wednesday, March 30, 2016 after the financial markets close, and holding the conference call the same day at 5:00 PM Eastern Time. We look forward to speaking with you again soon. Have a good day.