06:29 AM EDT, 03/27/2024 (MT Newswires) -- Progress Software ( PRGS ) shares declined early Wednesday after outlining a downbeat fiscal second-quarter outlook, while the software company said it's evaluating a potential deal to purchase database server firm MariaDB ( MRDB ) .

Adjusted earnings are set to come in between $0.93 and $0.97 per share for the ongoing three-month period, while revenue is pegged at $166 million to $170 million. The consensus on Capital IQ was for normalized EPS of $1.15 and revenue of $181.5 million before the guidance was given, and later reduced to $1.02 and $168.6 million. The stock was down nearly 2% in premarket trading.

The timings of multi-year contract renewals can impact the company's revenue in "any given quarter skewing results higher or lower," Chief Financial Officer Anthony Folger said during a late Tuesday earnings call, according to a Capital IQ transcript. "Despite this potential for volatility in quarterly revenue, we would expect (annualized recurring revenue) to be a good reflection of our fundamental top line performance."

For the quarter ended Feb. 29, Progress Software ( PRGS ) reported adjusted EPS of $1.25, up from $1.19 the year before and ahead of the Street's view for $1.14. Revenue climbed 12% to $184.7 million, topping analysts' $181.6 million estimate.

Maintenance and services revenue advanced 13% to $120.6 million, while software licenses grew to $64.1 million from $57.6 million in the prior-year quarter. Annual recurring revenue increased on a "modest" basis to $571 million annually, driven by "steady demand" for several products across the firm's portfolio, especially OpenEdge, Folger told analysts.

For fiscal 2024, the company now expects per-share adjusted earnings to be in a range of $4.65 to $4.75, up from its previous forecast of $4.58 to $4.68. It continues to anticipate revenue of $722 million to $732 million for the year. The Street is looking for normalized EPS of $4.68 on revenue of $727.2 million.

"We significantly fortified our balance sheet with a new revolving credit facility and a convertible notes offering," Chief Executive Yogesh Gupta said in a statement. "These new arrangements lower our costs and provide Progress with significant capital and flexibility for accretive (merger and acquisition) for the coming years."

In a separate statement, Progress Software ( PRGS ) said it's considering a $0.60 per-share acquisition offer for MariaDB ( MRDB ), joining K1 Investment Management as being interested in the company. Progress Software ( PRGS ) said its potential proposal reflects a 9% premium to the unsolicited non-binding offer made by K1 in February.

The company is willing to engage with MariaDB's ( MRDB ) board to complete due diligence and move forward with its bid. However, there is no guarantee the proposal will be made, Progress Software ( PRGS ) added. The firm's offer values MariaDB ( MRDB ) at about $40.6 million, according to MT Newswires' calculations.