Pegasystems Announces Financial Results for First Quarter of 2011
CAMBRIDGE, Mass. – May 10, 2011 – Pegasystems Inc. (NASDAQ: PEGA) today announced financial results for the first quarter ended March 31, 2011. GAAP revenue for the first quarter of 2011 increased 36% to $102.4 million compared to the first quarter of 2010. Non-GAAP revenue for the first quarter of 2011 increased 38% to $103.9 million compared to the first quarter of 2010. GAAP net income for the first quarter of 2011 was $4.7 million, or $0.12 per diluted share, compared to GAAP net income of $3.9 million, or $0.10 per diluted share, for the first quarter of 2010. Non-GAAP net income for the first quarter of 2011 was $9.6 million, or $0.25 per diluted share, compared to Non-GAAP net income of $6.2 million, or $0.16 per diluted share, for the first quarter of 2010.
“In the first quarter of 2011, we continued to expand into new markets and apply our technology to help our clients’ organizations grow and save money,” said Alan Trefler, Founder and CEO of Pegasystems. “During the quarter, a leading analyst firm recognized Pega’s unified offering for dynamic case management as being best-in-class. We are proud to add this distinction to those we have earned in business rules, CRM, and BPM. In addition to enterprise case management, we continue to see enterprise contact center projects as a terrific opportunity as an increasing number of organizations look to replace or augment aging legacy systems.”
“Our cloud offering continues to grow significantly, and we are pleased to sign a global consumer goods company that will be using our Pega Cloud® for CRM. We also added life sciences, warranty management and healthcare provider solutions to our expansive industry-leading solution portfolio. At our annual PegaWORLD conference next month, more than 30 client organizations will be sharing the successes they have achieved with Pega’s solutions. We continue to measure our ability to innovate through the success our clients have with Pega solutions. For that reason, we are proud that a client was named ‘Model Insurer of the Year’ by a leading insurance industry analyst firm based on their use of Pega technology,” concluded Mr. Trefler.
Craig Dynes, Pegasystems’ CFO, added, “For the first time in our history, we have exceeded $100 million in quarterly revenue. The value of license arrangements executed in Q1, 2011 was approximately 85% higher than in Q1, 2010. Our activity level is very high and our pipeline continues to be strong. After having such a back-end loaded year in 2010, we are excited to get off to such a great start in 2011, but there is still much work to be done to achieve our annual objectives,” concluded Mr. Dynes.
Messrs. Trefler and Dynes will be hosting a conference call and live Webcast associated with this announcement at 6:00 p.m. EDT on May 10, 2011. Dial-in information is as follows: 1 (866) 393-1604 (domestic) or 1 (678) 809-1046 (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.
Discussion of Non-GAAP Measures
To supplement financial results presented on a GAAP basis, the Company provides Non-GAAP measures included in this release, including the tables contained herein. Pegasystems’ management utilizes a number of different financial measures, both GAAP and Non-GAAP, in analyzing and assessing the overall performance of the business, for making operating decisions, and for forecasting and planning for future periods. The Company’s annual financial plan is prepared both on a GAAP and Non-GAAP basis, and the Non-GAAP annual financial plan is approved by our board of directors. In addition and as a consequence of the importance of these measures in managing the business, the Company uses Non-GAAP measures and results in the evaluation process to establish management’s compensation.
The Non-GAAP measures exclude certain business combination accounting entries and expenses related to our acquisition of Chordiant, as well as other significant expenses including stock-based compensation. The Company believes that these Non-GAAP measures are helpful in understanding our past financial performance and our anticipated future results. These Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. A reconciliation of the Company’s GAAP measures to Non-GAAP measures is included in the financial schedules at the end of the release.
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, including those relating to our revenue, net income and earnings per share. The words “anticipate,” “project,” “expect,” “plan,” “intend,” “believe,” “estimate,” “should”, “target,” “forecast,” “could,” “preliminary,” “guidance” 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, among others, the Company’s ability to successfully integrate the operations of Chordiant Software, Inc., variation in demand for our products and services 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 weak global economy 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, 2010 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 May 10, 2011. 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 May 10, 2011.
Pegasystems, the leader in business process management and a leading provider of CRM solutions, helps organizations enhance customer loyalty, generate new business, and improve productivity. Our patented Build for Change® technology speeds the delivery of critical business solutions by directly capturing business objectives and eliminating manual programming. Pegasystems enables clients to quickly adapt to changing business conditions in order to outperform the competition. For more information, please visit us at www.pega.com.
For Information, contact:
Craig Dynes, Chief Financial Officer
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Pegasystems revolutionizes how leading organizations optimize customer experience and automate operations. Our patented Build for Change® technology empowers business people to create and evolve their critical business systems. Pegasystems is the recognized leader in business process management and is also ranked as a leader in customer relationship management software by leading industry analysts. For more information, please visit us at www.pega.com.
All trademarks are the property of their respective owners.
The information contained in this press release is not a commitment, promise, or legal obligation to deliver any material, code or functionality. The development, release and timing of any features or functionality described remains at the sole discretion of Pegasystems, Pegasystems specifically disclaims any liability with respect to this information.