Good day, and welcome to the Progress Software Corporation Q2, 2019 Investor Relations Call. At this time, I'd like to turn the conference over to Mr. Brian Flanagan, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Codey. Good afternoon, everyone, and thanks for joining us for Progress Software's fiscal second 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, initiatives and 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 Harbour statement regarding this information, which is available in today's earnings release, as well 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 second 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.

Thanks Brian. Good afternoon, everyone. And thank you for attending our second quarter earnings call. As you've seen in this afternoon's press release, we had a really strong Q2 performance. Both revenue and EPS were well above the high end of our guidance range and cash flows were very solid. Although, much of the revenue overachievement is due timing within our DCI segment, OpenEdge also achieved better-than-expected revenue, and I am encouraged by the overall momentum we've seen in our business.During the quarter, we completed our acquisition of Ipswitch. And I am very pleased with the strides we've made over the past two months in integrating their people, products and processes. I'll get into more details on Ipswitch later, but we are well on our way to realizing the synergies we’ve projected while keeping this business healthy and strong.Based on our performance in the first two quarters as well as our optimism of continued strong execution in the remainder of the year, we are increasing our annual guidance for both operating margin and EPS. Paul will provide more details during his remarks, but we've raised our EPS projection by $0.05 to $0.06 and now expect margins of 36% to 37% for the full year, an increase of 100 basis points on the high end. This is a great way to start the second half, and I am pleased to see our hard work reflected in our financial performance.Let's turn now to a few highlights for each of our segments, starting with OpenEdge. This is the third consecutive quarter that OpenEdge has over performed versus our expectations, this time driven primarily by increased revenue from direct enterprises. While much of this is due to deal timing, I am certainly encouraged by the overall trend we are seeing with our flagship product.…

Thank you, Yogesh and good afternoon, everyone. As a reminder, all financial results that 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.For our second quarter, total revenue was $103.5 million, $4.5 million above the high-end of our guidance range. The overachievement was primarily driven by the timing of several large OEM renewals within our DCI segment and by better than expected license sales to direct enterprises within our OpenEdge segment. Revenue from Ipswitch which was included in our results for month was consistent with our expectations.Our earnings per share were $0.65 for the quarter, $0.08 above the high-end of our guidance range due to the higher revenue. Looking at consolidated revenue for the quarter as compared to Q2 of last year, total revenue of $103.5 million was 11% higher than a year ago at actual exchange rates, and 48% higher on a constant currency basis. This includes a negative $2.5 million impact due to foreign exchange fluctuations which was consistent with our expectations.License revenue of $29.8 million increased by 32% from a year ago at actual exchange rates and 35% on a constant currency basis. The increase was primarily due to the renewal of a higher number of multiyear term OEM contracts in our DCI segment as compared to last year, as well as license revenue from Ipswitch for the month of May.Maintenance and services revenue was $73.7 million, an increase of 5% year-over-year at actual exchange rates and 7% on a constant currency basis. This increase is again primarily due to the addition of Ipswitch.Turning now to our revenue by segment with all comparisons at constant currency. OpenEdge revenue…

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'll now hand over to the operator to conduct the Q&A session.

[Operator Instructions]And we will take our first question from Matthew Galinko with National Securities. Please go ahead.

Hi, can you hear me now? How are you guys doing? So was there -- can you highlight any key feature in OpenEdge that brought your highlighting EMEA customer back on to maintenance or was there anything in particular that brought them back into the fold?

So, Matt, as you know over the last few years we've been making -- all of the enhancements within OpenEdge have been focused around what we are hearing back from our customers and partners as to what they want to see. So, a lot of the 12 is around both a combination of performance, availability, as well as readiness for large scale 100% uptime or 99.999% uptime for cloud type of environments. So, the improved application server that we released last year, the release 12.0 that we released this year, the ongoing effort around continuous availability, all of those things added to this and these guys are all trying to -- they are a retailer. They had not really thought of using us for their online presence and so on and now they basically say, hey, this is really great what you guys have done. So we would like to come back and move forward with you on how we modernize and go forward.

Got it, thanks. And I guess just as a follow-up for that one. Did you -- were you engaged with that customer while they were off maintenance? So you sort of had an exchange of understanding what they wanted and what does the pipeline look like for those sorts of -- the sorts of potential customers?

So we -- yes, so we -- Matt, we have some amount of engagement with our customers that have left on a periodic basis. I don't think it is clear-- clearly it is not the same as we do for our customers who are on maintenance and who are currently engaged with us. So we do, do that. As you know, Gary has put an emphasis in his team on account management and follow-up. And so therefore that has tremendously helped with our win back efforts that have been going on.

We will take our next question from Mark Schappel with Benchmark.

Hi, good afternoon. Thanks for taking my question and let me just say nice job on the quarter. Let me just start off, in your prepared remarks you called out a new multiyear DCI deal, and I think it was with US internet provider, couldn’t catch all of your remarks. I was wondering if you could just review your comments one more time.

Yes. So this is one of the well-known household names when it comes to an internet company. They are somebody who is considered one of the leaders in their field. And we signed a significant new DCI OEM deal with them during this quarter which is a six figure, multiyear deal, and we’ll have meaningful contribution to both revenue and ACV going forward. This is somebody that could easily spend lots of money and try to build something like this themselves. They clearly recognize that what we bring to the table is unique and differentiated. So, it was tremendously gratifying to us. And it is really the first win of a meaningful OEM, I don't know for a while. So, to us, it's a really exciting thing.

That's actually why I asked the question, because it was, to my attention, one of the first new meaningful OEM wins in a while as well. That's good. Congratulations on that. Real quick on Ipswitch. In your prepared remarks, I believe you stated that $15 million in synergies that you planned for that acquisition have already completed. Did I catch that correctly?

No, no. What we had -- what we specifically said was that the bulk of those $15 million of cost synergies already completed and we are slightly ahead of plan. So, no, we are not all completed but the bulk of them are. We are slightly ahead of plan and which is why we were comfortable increasing our EPS guidance for the full year.

Hey, great. Thanks for the clarification. And then very little, if any, commentary on the Kinvey and DataRPM products in the prepared remarks. Are these products still in pipeline building mode?

Yes. We continue to go to market with them. As I said before, the reaction from our customers and partners to our new initiatives continuous to be very positive, and we see quite a bit of demand in the HIPAA-compliant version of Kinvey within the healthcare vertical, but we also see some applicability in other verticals as well. So, we do see traction but we are not at a point where we are ready to disclose metrics, and we continue to manage our go-to-market activities and spend to be aligned with the demand we are seeing, Mark.End of Q&A

Thank you. And it does conclude today's question-and-answer session. I'd now like to turn the conference back over to Mr. Flanagan again for any additional or closing remarks.

Thank you and thank you all for joining the call today. As a reminder, we plan on releasing financial results for our fiscal third quarter of 2019 on Thursday, September 26, 2019 after the financial markets close and holding the conference call the same day at 5 PM Eastern Time. I'll now turn the call over to Yogesh for his closing remarks.

Thank you, Brian. We maintained our momentum in Q2 and are well positioned for a successful 2019 as we head into the second half of the year. There are lots of exciting things happening at Progress right now and I am enthusiastic about our future. And our ability to create real value for our shareholders. I thank you again for your continued support and for joining us on our call today. Thank you. Bye, bye.

Thank you. That does conclude today's conference. Thank you all for your participation. You may now disconnect.