Good day, and welcome to the Progress Software Corporation Q1 Investor Relations Conference Call. At this time, I’d like to turn it over to Brian Flanagan, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Stephanie. Good afternoon, everyone, and thanks for joining us for Progress Software’s fiscal first quarter 2017 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 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, the revenue, operating margin and diluted earnings per share amounts we 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 2017, 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. With that, I’ll now turn it over to Yogesh.

Thank you, Brian, and good afternoon, everyone. Welcome to our first quarter earnings call and thank you all for attending. I’m pleased with our Q1 performance. Revenue was $91.2 million was well above the high-end of our guidance range due to the timing of revenue and from our OpenEdge segment. Our earnings per share of $0.34, also exceeds our guidance range, largely due to the higher revenue I just mentioned and partially due to the delays in some of our growth investments and other discretionary spending. And our adjusted free cash flow was $43 million, an excellent start to the year, attributable in large part to a very strong collection performance and to a lower cost profile as a result of our recent restructuring effort. While we are not changing our expectations for the full year, this is an encouraging start. Before continuing, I do want to mention that I am really pleased that Paul Jalbert has become a new CFO. Paul and I have worked very well together getting my first five months of CEO and his broad financial experience and knowledge of our business make him the ideal candidate to lead our finance function going forward. Welcome Paul. Paul will provide more detail on our financial results and guidance, but I would like to focus my remaining remarks on the efforts we have made to execute on our strategy since our last call. As I have mentioned previously, we have a two-pronged strategy. The first is to strengthen the core of our business which consists primarily of our OpenEdge, DCI and Dev Tools products. The second is to provide the platform of the future for developers to build cognitive business application. I’ll talk about our cognitive apps platform in a few minutes but first let me address our…

Thank you, Yogesh and good afternoon everyone. This is my first quarterly conference call as Progress’ CFO. So I look forward to meeting with many of you in person over the next few months. As Brian mentioned all the revenue, operating income, earnings per share amounts that I will be referring to in my remarks are on the non-GAAP basis. For our GAAP results, please refer to the earnings results. For the first quarter, total revenue was $91 million an increase of 1% at actual exchange rates and 2% on a constant currency basis. This was well above our guidance range primarily due to the timing of revenue from our OpenEdge segment. First quarter EPS was $0.34 an increase of 26% versus Q1 of 2016. This was also well above the high end of our guidance range due to some delays and some of the growth investments and the timing of our discretionary expenses. Also reflected in our Q1 results is the negative year-over-year impact from currency translation due to the strengthening of the U.S. dollar, which was about $800,000 on revenue and $0.01 on EPS. Licensed revenue was $24 million for the quarter, an increase of 1% at actual exchange rates and 2% on a constant currency basis. The increase in license revenue for Q1 was primarily due to strong performance from our OpenEdge ISDs [ph] in North America and Latin America. Maintenance revenue was $59 million for the quarter an increase of 1% at actual rates and 2% on a constant currency basis. The increase was primarily due to higher OpenEdge maintenance revenue in both Latin America and EMEA, as well as higher maintenance revenue from our Dev Tools and Sitefinity products. For our revenue by geography, North America was $51 million for the first quarter, up 2%…

Thank you, Paul. 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. I will now hand over to the operator to conduct the Q&A session.

Thank you. [Operator Instructions] And we will take our first question Steve Koenig of Wedbush Securities.

I’ve got a few questions, I will leave it -- I'll restrict it to two. I think my first one would be, you’ve done some good work in terms of beating on the cross-side keeping moderate on your pace of investments. I think it’s been maybe two quarters now that you’ve been a little bit more moderate on the growth investments than you have guided. Is that something we -- how should we think about continuing. So part of the question is near term, but part of it as well is how should we think about Progress’ long term margin potential and your trajectory in getting there?

At this point we in Q1 see we had -- we did not invest what we were planning to, we ended up some delays on our investments around both our core as well as Cognitive Apps. And so we expect that to change, we obviously don’t expect to sustain the same kind of deferment of investment that we’ve had historically. I think that’s what your question right? I want to make sure, I understood the question correctly.

Yeah, that helps on the near-term part. I think part B of the question, I still would love to ask a follow-up if I may.

Sure.

But part B is how should we think about your long-term margin potential, and is their more and how would you get there, what will get you there and what kind of -- how does the timing feel like in terms of getting that launch on potential?

Yeah, so Steve, this is Paul. So just looking at 2017 right, at this point we're not in any positioned to guide beyond 2017. I mean we are targeting for the full year operating margins to be approximately 32%.

Yeah, okay. I'll leave that one there, if I may as well, the other question I wanted to ask you is, your full year guidance constant currency is effectively a very slight reduction it looks like is this really risk reduction or has your outlook becomes slightly more cautious maybe what’s your thinking there?

I don’t think, our outlook has become any more cautious, I mean Steve, as you look in the back half of the year, there was a ramp there. But we feel, we’ve got some visibility. If you look at the first half of the year and what we expected to do in the back half of the year, we are expecting our DCI business as you’ve seen in the past two ramp up in Q3 and Q4.

Okay. Well, great. Thanks very much for taking my questions.

And we will take our next question from Mark Schappel of Benchmark.

Yogesh, starting with the acquisition of DataRPM here, are you comfortable that you have all the necessary building blocks, if you will, to move forward with your cognitive apps strategy?

So I think at this point Mark, we believe that we have a very, very strong machine learning capability that we’ve been able to pick-up with this. So, we will continue to feed the other things we need to bolster, but in general on the predictive analytic side DataRPM is a phenomenal company, it is a wonderful product. We have marque logos who are using it. So we were planning to attack the predictive maintenance market. We have the right company for that and the right technology sets for that.

Okay, great. And there is a follow-up, with respect to your cognitive apps strategy, what can we expect from the product front this year, a chance to sit down and -- go ahead.

Yes. So on the products, a few things, of course we will continue to enhance and extend the lead that DataRPM itself has. The team in Bangalore is hard at work on it. On the integration side, we have actually carved out a team from outside, from inside at OpenEdge team and other core products to work with the DataRPM team to do the integration so that we don’t slowdown the work that the DataRPM team needs to do to keep moving that technology forward. As I said in the earlier remarks, we expect to have our integration work done by the end of the year. The plan is to, along the way involve a couple of our lead partners, who may want to start working with us to make sure that the integration work we are doing meets their needs. So that they can also then, when we’re ready with our integrated offering, they can start building their capabilities around it. So that they can offer for example, a predictive maintenance module for their ERP, their manufacturing ERP or in that integration to their systems of record with inventory management and maintenance management and anything else that they might have. So to us, there is a two-part product approach on this whole cognitive apps; One is making sure that the DataRPM team continues to evolve and extent the technology lead that they have, while at the same time having a team that is partnering with them from inside our core organization that is doing all the integration work with our products. And I’m really excited, we’ve actually as part of due-diligence, done extensive analysis has to how much work that will be, that's why we're confident that by end of the year we should have the integration work done. To me that’s a really important thing to deliver, so that our partners can truly leverage this within their business application that they have built on top of OpenEdge and using our other technology.

[Operator Instruction] And we will take our next question from Matthew Galinko of Sidoti.

First one, just around the logos that DataRPM has under it's built already, are those actively contributing revenue or is there a point in time where you see converting those to revenue with DataRPM on its own?

They are subscription agreement, they are contributing very, very tiny revenue in terms of actual impact compared to what we do so. For us, for Q2 we expect zero revenue contribution from them. So -- but they are paying customers and I think that’s an important thing because to me unless the company has paying customers, it is not necessarily a good thing to just have logos, right. If you are delivering value, you ought to get paid for it. And so yes, these are paying customers. But because it is writable revenue, because it is a subscription model, really there is not much expectation on revenue contribution this year from DataRPM.

Okay and maybe just digging a little bit deeper on those contracts, are they --.

Sure.

Would you consider it a foot in the door where you can see expanding the scope or the debts that you have with those logos becoming more material contributors?

Yes Matt. So really the DataRPM approach, so DataRPM started off as a horizontal predictive analytics platform focusing on sort of broad, we can do anything type of an approach to go-to-market which for a startup was, let's just say not very effective, and about a year ago they decided, we recognize that we are beginning to see some interest in the predictive maintenance side and they had actually started talking to a couple of these larger guys in -- around the middle of last year. And so they basically pivoted to focus on predictive maintenance starting middle of last year and they signed up these customers over the last sort of three quarters. What they have done and what their approach is, is that what you said is exactly right. They go in, they do a paid proof-of-concept to demonstrate to the customer that what they are offering is something that does deliver value, that’s usually a 90 day proof of concepts. And then they convert it an annual subscription for one use case. And then the goal is overtime to expand the number of use cases and as they expand into additional use cases, they charge more for it. So that’s really sort of the -- it's a combination of used cases and scale of use that will drive growth. And so yes, we expect actually these individual logos to expand their contribution to us. It's a land and expand strategy that DataRPM has embarked upon and that we expect to continue.

Great thank you.

And with no further questions in the queue I would like to turn the call back over to Mr. Flanagan.

Thank you all for joining the call today. As a remainder, we plan on releasing financial results for our fiscal second quarter of 2017 on Wednesday June 28, 2017 after the financial market's close and holding the conference call, the same day at 5:00 PM Eastern Time. I’ll now turn the call back over to Yogesh for his closing remarks.

Thanks Brian. I would like to wrap up by reiterating that I am truly excited by the progress we have made in the last few months to transform ourselves into a much stronger and much more innovative company. And our Q1 results were solid, we substantially completed the restructuring of our operation and coupled with the acquisition of DataRPM, we are executing well on our goal of operating our business efficiently while also positioning ourselves for future growth. Thank you for your continued support and I look forward to continuing a dialog with each of you in the coming days and weeks. Thank you and have a great evening.

And ladies and gentlemen, this does conclude today's conference. We thank you for your participation. You may now disconnect.