Pegasystems Announces Financial Results for First Quarter of 2015
Exceeds Revenue Targets and Builds Backlog in a Strong Start to 2015
CAMBRIDGE, Mass. – May 6, 2015 – Pegasystems Inc. (NASDAQ: PEGA), the software company empowering the world's leading enterprises with strategic business applications, today announced results for its first quarter ended March 31, 2015.
"We're very pleased with this strong start to 2015," said Alan Trefler, Founder and CEO of Pegasystems. "While first-quarters have often required us to consume backlog to achieve our license goals, this quarter's sales performance yielded both strong license revenue and increased backlog. Our Strategic Applications are being well received by an increasing set of clients, and our unified platform, once again lauded this quarter by leading industry analysts, continues as a powerful competitive differentiator."
Cash: Total cash, cash equivalents, and marketable securities at March 31, 2015 was $225.4 million, up 7% from 2014 year-end.
Cash generated from operations for the quarter was $27.5 million. Free Cash Flow, which we define as operating cash flow less Cap Ex, was $24.2 million for the quarter.
License and Cloud Backlog: The Company computes license and cloud backlog by adding billed deferred license and cloud revenue and off-balance sheet license and cloud commitments, which is business that is contracted, unbilled, and not recorded on the Company's balance sheet.
"Q1 was a strong start to 2015, with license and cloud revenue growth as well as a significant build in backlog," said Rafe Brown, Pegasystems CFO. "This fast start to the year, coupled with our strategy to expand the number of clients we serve and the product enhancements we will be announcing at Pegaworld, is truly exciting. Pega's approach to delivering strategic applications to the enterprise is setting Pega apart from the competition."
Quarterly Conference Call
Pegasystems will host a conference call and live Webcast associated with this announcement at 5:00 p.m. EDT today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the Company's Website at www.pega.com/about/investors. Dial-in information is as follows: 1-877-407-3982 (domestic) or 1-201-493-6780 (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 Investors section. A replay of the call will also be available on www.pega.com in the Investors section Earnings Call Archive link.
Discussion of Non-GAAP Financial Measures
To supplement financial results presented in accordance with Generally Accepted Accounting Principles in the U.S. ("GAAP"), 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 both are 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 financial performance results in the evaluation process to establish management's compensation.
The non-GAAP measures exclude the effects of certain business combination accounting entries, stock-based compensation expense, amortization of acquired intangibles, acquisition-related expenses, and the benefit associated with favorable settlements of certain indemnification claims and indirect tax liabilities. The Company believes that these non-GAAP measures are helpful in understanding its past financial performance and its 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 the Company's 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 this release.
"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995: 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 "expect," "anticipate," "intend," "plan," "believe," "could," "estimate," "may," "target," "strategy," "is intended to," "project," "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 consolidation in the financial services, insurance, healthcare, and communications markets, reliance on third party relationships, the potential loss of vendor specific objective evidence for our time and materials professional services arrangements, the inherent risks associated with international operations and the continued weakness in international economies, foreign currency exchange rates, the financial impact of the Company's past acquisitions and any future acquisitions, 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, 2014 and other recent filings with the Securities and Exchange Commission. These documents are available on the Company's website at https://www.pega.com/about/investors. The forward-looking statements contained in this press release represent the Company's views as of May 6, 2015. 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, except as required by applicable law, 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 6, 2015.
Pegasystems Inc. is the leader in software for customer engagement and operational excellence. Pega’s adaptive, cloud-architected software – built on its unified Pega® Platform – empowers people to rapidly deploy, and easily extend and change applications to meet strategic business needs. Over its 30-year history, Pega has delivered award-winning capabilities in CRM and BPM, powered by advanced artificial intelligence and robotic automation, to help the world’s leading brands achieve breakthrough business results. For more information on Pegasystems (NASDAQ: PEGA) visit 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.
Lisa Pintchman Rogers
VP, Corporate Communications
Director, Corporate Communications
Sr. Manager, Public Relations
Director, Corporate Communications
+44 (0) 118 9651 660
PR & Communications Manager
+44 (0) 118 9398 584
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Cambridge, MA 02142
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