Pegasystems Reports YTD Q2 12 Revenue of $216.2 million, a 5% increase compared to YTD Q2 11
CAMBRIDGE, Mass. – August 9, 2012 – Pegasystems Inc. (NASDAQ: PEGA), the leader in Business Process Management (BPM) and a leading provider of Customer Relationship Management (CRM) solutions, today announced financial results for the second quarter and first six months of 2012. Revenue for the second quarter of 2012 was slightly higher compared to the second quarter of 2011. Net loss for the second quarter of 2012 was $(2.3) million, or $(0.06) per diluted share, compared to net income of $2.3 million, or $0.06 per diluted share, for the second quarter of 2011. Revenue for the first six months of 2012 increased 5% to $216.2 million compared to the first six months of 2011. Net income for the first six months of 2012 was $1.8 million, or $0.05 per diluted share, compared to net income of $7 million, or $0.18 per diluted share for the first six months of 2011.
“We continue to find exciting and innovative ways to deliver accelerated value for our clients. They are leveraging Pega technology to optimize the customer experience and rapidly automate operations to save money,” said Alan Trefler, Founder and CEO of Pegasystems. “Our record-setting PegaWORLD 2012 customer conference demonstrated this with numerous transformational keynotes from some of the world's leading brands. We are also seeing increased demand for training, and are launching Pega Academy, an online source for self-paced, video-based training. Pega Academy slashes training time and can scale to accommodate exponentially more students than traditional classroom instruction.”
“During Q2, client wins were well represented across all verticals and included a number of new global brands in telecommunications, manufacturing, and financial services. We are pleased that Pega technology continues to lead the pack. A leading industry analyst firm recently recognized Pega as having the #1 platform and architecture for enterprise CRM Suites for large organizations, which is great news for customers wanting a future-proof alternative to legacy approaches,” concluded Mr. Trefler.
Craig Dynes, Pegasystems' CFO, added, “Economic uncertainty, especially in Europe, is delaying many customers from executing new license agreements. Some larger deals are being split into smaller projects, which, while still planned, are being pushed into future quarters. Even though we are still working hard to hit our bookings targets, the delays we've seen in executing licenses, along with our seeing a greater proportion of term licenses, makes our goal to surpass $500 million of revenue in 2012 very challenging. Accordingly, though we are continuing to selectively invest, we are managing expenses to keep our earnings targets in sight even at 95% of our $500 million revenue goal, which we believe represents a more appropriate objective in this economic environment.”
Messrs. Trefler and Dynes will host a conference call and live Webcast associated with this announcement at 6:00 p.m. EDT on August 9, 2012. Dial-in information is as follows: 1 (877) 348-9349 (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, 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 2010 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 future financial performance, including our revenue and expenses. 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, the ongoing uncertainty and volatility in the global financial markets related to the European sovereign debt crisis, the ongoing consolidation in the financial services and healthcare markets, reliance on 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, the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012 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 August 9, 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 August 9, 2012.
For Information, contact:
Craig Dynes, Chief Financial Officer
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.