Pegasystems Announces Record Revenue for Fourth Quarter and Fiscal Year 2011
CAMBRIDGE, Mass. - February 29, 2012 - Pegasystems Inc. (NASDAQ: PEGA) today announced financial results for the fourth quarter and year ended December 31, 2011. GAAP revenue for 2011 increased 24% to $416.7 million compared to 2010. GAAP net income for 2011 was $10.1 million, or $0.26 per diluted share, compared to GAAP net loss of $5.9 million, or ($0.16) per diluted share, for 2010. Non-GAAP net income for 2011 was $28.4 million, or $0.72 per diluted share, compared to Non-GAAP net income of $22.5 million, or $0.57 per diluted share, for 2010.
"We had terrific results in Q4 highlighted by growth across geographies and within key industries, including financial services, insurance, communications, energy, warranty management, travel & hospitality, and healthcare," said Alan Trefler, Founder and CEO of Pegasystems. "Significant customer wins during the quarter included one of the largest global wireless carriers, one of the largest insurers in Western Europe, and a leading U.S. cable television provider. We also saw increased adoption of our solutions at a leading U.K bank, two of the largest global banks, and a leading online travel services provider. Our work with partners continues to bear fruit with most of these customer successes driven with partners who continue building significant Pega practices."
"We enter 2012 excited about recent and imminent additions to our product portfolio. We are broadening our product leadership focus in the areas of multi-channel customer service and next-best-action marketing. We are also extending our mobile, social media, and decisioning capabilities across our core platform and industry solutions. We are thrilled that our existing customers are seeing the value from their initial purchases, and are expanding their adoption of Pega technology," concluded Mr. Trefler.
Craig Dynes, Pegasystems' CFO, added, "Despite the challenging economy, we set new records for the value of license signings for both the year and Q4. We start 2012 with a great backlog and a strong pipeline. We estimate our 2012 revenue to exceed $500 million, with no material differences between GAAP and Non-GAAP revenue. Similar to last year, we expect 2012 will be back-end loaded, and therefore, revenue for the first half of 2012 is estimated to be about 45% of annual guidance."
"We believe that our record license signings are related to our investments in sales and R&D. These will be areas of continued investment to drive future growth. Accordingly, net income for 2012 is estimated to be $15 million, or $0.37 per diluted share, on a GAAP basis, or $36.5 million or $0.91 per diluted share on a Non-GAAP basis. Because of the back-ended nature of our revenue, as well as important planned expenditures in the first half of 2012 which include our annual sales kickoff in Q1 and our PegaWORLD user conference in Q2, we estimate the first half of 2012 to be break-even on a GAAP basis or earnings of $0.25 per diluted share on a Non GAAP basis."
Messrs. Trefler and Dynes will host a conference call and live Webcast associated with this announcement at 6:00 p.m. EST on February 29, 2012. Dial-in information is as follows: (877) 348-9349 (domestic) or (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, including in this release. 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 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, 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, our ability to develop new products and evolve existing ones, 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, 2011 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 February 29, 2012. 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 February 29, 2012.
For Information, contact:
Craig Dynes, Chief Financial Officer
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.
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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.