Science & Technology
Science and Technology
Science and Technology
Wed, November 4, 2009
Tue, November 3, 2009 Pegasystems Announces Record Revenue of $64.8 Million and Net Income of $6.0 Million for Third Quarter of 2009
CAMBRIDGE, MA--(Marketwire - November 3, 2009) - Pegasystems Inc. (
Total revenue for the first nine months of 2009 increased 25% to $191.1 million and net income increased to $25.9 million from $8.1 million compared to the same period last year. The Company generated $38.8 million in cash from operations during the first nine months of 2009 and had $198.4 million in cash, cash equivalents, and marketable securities as of September 30, 2009.
The following table presents selected financial information for the third quarter and first nine months of 2009 and 2008:
Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 --------- --------- --------- --------- (In thousands, except per share amounts) Software license $ 28,358 $ 17,910 $ 82,045 $ 51,214 Maintenance 12,489 10,045 36,608 29,027 Professional services 23,974 24,743 72,413 72,054 --------- --------- --------- --------- Total revenue $ 64,821 $ 52,698 $ 191,066 $ 152,295 Gross profit $ 40,761 $ 32,142 $ 124,883 $ 91,414 Income from operations $ 7,465 $ 3,441 $ 31,630 $ 8,191 Net income $ 6,001 $ 2,351 $ 25,884 $ 8,147 ========= ========= ========= ========= Earnings per share, basic $ 0.16 $ 0.06 $ 0.72 $ 0.23 ========= ========= ========= ========= Earnings per share, diluted $ 0.16 $ 0.06 $ 0.68 $ 0.22 ========= ========= ========= =========
Business Perspective
"Our 60% license revenue growth for the first nine months of 2009 was driven by the rapid benefits our clients are achieving in automating their customer acquisition, service, case management, and customer experience processes," said Alan Trefler, Chairman and CEO of Pegasystems. "Our ongoing investment in Build for Change® technology and industry frameworks continues to add capabilities that deliver pragmatic returns for clients in only a few months, an advantage in today's economic environment."
"Clients tell us that Pega's unique ability to directly capture business objectives into our software enables highly efficient collaboration between business and IT that yields exceptional quality, speed to market and continuous improvement of business processes. We are seeing increased investment and commitment from our alliance partners, as they are growing practices to address the increased market adoption of our Build for Change® technology in both new and traditional markets," concluded Mr. Trefler.
"In spite of the economy, we increased license signings and backlog," added Craig Dynes, Pegasystems' CFO. "This is the ninth consecutive quarter that we have set new records for quarterly revenue. We expect that in 2010 we will surpass another milestone with revenue in excess of $300 million. This is preliminary guidance that will be refined when we are able to evaluate business conditions at the end of 2009."
Messrs. Trefler and Dynes will be hosting a conference call and live Webcast associated with this announcement at 9:00 a.m. ET on November 4, 2009. Dial-in information is as follows: (866) 882-0470 (domestic) or (703) 639-1476 (international).
To listen to the [ Webcast ] log onto [ www.pega.com ] at least 5 minutes prior to the event's broadcast and click on the Webcast icon in the [ Investor Relations ] section. A replay of the call will also be available on [ www.pega.com ] in the Investor Relations section [ Audio Archives ] link.
Forward-Looking Statements
Certain statements contained in this press release may be construed as "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words "anticipate," "project," "expect," "plan," "intend," "believe," "estimate," "target," "forecast," "could" "preliminary" and similar expressions, among others, identify forward-looking statements, which speak only as of the date the statement was made. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause the Company's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties include, without limitation, variation in demand and the difficulty in predicting the completion of product acceptance and other factors affecting the timing of our license revenue recognition, the mix of perpetual and term licenses and the level of term license renewals, our ability to develop new products and evolve existing ones, the impact on our business of the recent financial crisis in the global capital markets, the negative global economic trends and the ongoing consolidation in the financial services and healthcare markets, our ability to attract and retain key personnel, reliance on key third party relationships, the potential loss of vendor specific objective evidence for our professional services, and management of the Company's growth. Further information regarding these and other factors which could cause the Company's actual results to differ materially from any forward-looking statements contained in this press release is contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2008 and other recent filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release represent the Company's views as of November 3, 2009. Investors are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved. Although subsequent events may cause the Company's view to change, the Company does not undertake and specifically disclaims any obligation to publicly update or revise these forward-looking statements whether as the result of new information, future events or otherwise. The statements should therefore not be relied upon as representing the Company's view as of any date subsequent to November 3, 2009.
About Pegasystems
Pegasystems (
Our patented SmartBPM® technology makes enterprise applications easy to build and change by directly capturing business objectives and eliminating manual programming. SmartBPM® unifies business rules and processes into composite applications that leverage existing systems -- empowering businesspeople and IT staff to Build for Change®, deliver value quickly and outperform their competitors.
Pegasystems' suite is complemented by best-practice frameworks designed for leaders in financial services, insurance, healthcare, government, life sciences, communications, manufacturing and other industries.
Headquartered in Cambridge, MA, Pegasystems has offices in North America, Europe and Asia Pacific. Visit us at [ www.pega.com ].
All trademarks are the property of their respective owners.
Pegasystems Inc. Unaudited Condensed Consolidated Balance Sheets As of As of September 30, December 31, 2009 2008 ------------- ------------- (in thousands) Current Assets: Cash and cash equivalents $ 56,419 $ 36,087 Marketable securities 141,936 131,142 ------------- ------------- Total cash, cash equivalents, and marketable securities 198,355 167,229 Trade accounts receivable, net 27,708 42,801 Short-term license installments 2,951 5,445 Deferred income taxes 4,338 4,351 Income taxes receivable and other current assets 10,729 4,151 ------------- ------------- Total current assets 244,081 223,977 Long-term license installments, net 3,321 5,413 Property and equipment, net 7,487 5,723 Long-term deferred income taxes and other assets 8,536 8,117 Intangible assets, net 372 479 Goodwill 2,391 2,141 ------------- ------------- Total assets $ 266,188 $ 245,850 ============= ============= Current liabilities: Accounts payable $ 5,333 $ 4,726 Accrued expenses 6,605 9,925 Accrued compensation and related expenses 18,123 18,015 Deferred revenue 27,818 32,231 ------------- ------------- Total current liabilities 57,879 64,897 Income taxes payable 5,274 5,665 Other long-term liabilities 1,909 2,174 ------------- ------------- Total liabilities 65,062 72,736 Stockholders' equity: 201,126 173,114 ------------- ------------- Total liabilities and stockholders' equity $ 266,188 $ 245,850 ============= ============= Pegasystems Inc. Unaudited Condensed Consolidated Statements of Income Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 2009 2008 2009 2008 --------- -------- --------- -------- (in thousands, except per share amounts) Revenue: Software license $ 28,358 $ 17,910 $ 82,045 $ 51,214 Maintenance 12,489 10,045 36,608 29,027 Professional services 23,974 24,743 72,413 72,054 --------- -------- --------- -------- Total Revenue 64,821 52,698 191,066 152,295 --------- -------- --------- -------- Cost of revenue: Cost of software license 28 30 90 64 Cost of maintenance 1,558 1,454 4,452 4,006 Cost of professional services 22,474 19,072 61,641 56,811 --------- -------- --------- -------- Total cost of revenue (1) 24,060 20,556 66,183 60,881 --------- -------- --------- -------- Gross Profit 40,761 32,142 124,883 91,414 --------- -------- --------- -------- Operating expenses: Selling and marketing 19,568 15,698 51,663 45,036 Research and development 9,930 7,936 28,198 22,832 General and administrative 3,798 5,067 13,392 15,355 --------- -------- --------- -------- Total operating expenses (1) 33,296 28,701 93,253 83,223 --------- -------- --------- -------- Income from operations 7,465 3,441 31,630 8,191 Installment receivable interest income 74 95 224 248 Other interest income, net 721 1,151 2,404 4,104 Foreign currency transaction gain (loss) 266 (2,010) 2,377 (1,759) Other income, net - 40 17 139 --------- -------- --------- -------- Income before provision for income taxes 8,526 2,717 36,652 10,923 Provision for income taxes 2,525 366 10,768 2,776 --------- -------- --------- -------- Net income $ 6,001 $ 2,351 $ 25,884 $ 8,147 ========= ======== ========= ======== Earnings per share Basic $ 0.16 $ 0.06 $ 0.72 $ 0.23 ========= ======== ========= ======== Diluted $ 0.16 $ 0.06 $ 0.68 $ 0.22 ========= ======== ========= ======== Weighted-average number of common shares outstanding Basic 36,462 36,419 36,035 36,201 Diluted 38,441 38,212 37,955 37,668 Cash dividends declared per share $ 0.03 $ 0.03 $ 0.09 $ 0.09 ========= ======== ========= ======== (1) Includes stock-based compensation as follows: Cost of revenue $ 250 $ 238 $ 884 $ 703 Operating expenses $ 715 $ 591 $ 2,639 $ 1,849 Pegasystems Inc. Unaudited Condensed Consolidated Statements of Cash Flows Nine Months Ended September 30, ------------------ 2009 2008 -------- -------- (in thousands) Operating activities: Net income $ 25,884 $ 8,147 Adjustments to reconcile net income to cash provided by operating activities: Excess tax benefit from stock options and deferred income taxes (15,310) (4,046) Depreciation, amortization, and other non-cash items 4,984 2,668 Stock-based compensation expense 3,523 2,552 Change in operating assets and liabilities, and other, net 19,758 23,550 -------- -------- Cash provided by operating activities 38,839 32,871 -------- -------- Cash used in investing activities (17,650) (12,318) -------- -------- Cash used in financing activities (2,071) (5,526) -------- -------- Effect of exchange rate on cash and cash equivalents 1,214 (560) -------- -------- Net increase in cash and cash equivalents 20,332 14,467 Cash and cash equivalents, beginning of period 36,087 26,710 -------- -------- Cash and cash equivalents, end of period $ 56,419 $ 41,177 ======== ========
