Pegasystems Announces Record Revenue of $63.9 Million and Net Income of $11.2 Million for Second Quarter of 2009; Increases Guidance for the Year

CAMBRIDGE,  Mass. – August 4, 2009 – Pegasystems  Inc. (NASDAQ:  PEGA), the leader in Business Process Management (BPM) software solutions,  today announced financial results for the second quarter and first six months of  2009. Total revenue for the second quarter of 2009 increased 25% to $63.9 million  compared to the second quarter of 2008. Net income for the second quarter of  2009 was $11.2 million compared to $2.9 million for the second quarter of 2008.

Total  revenue for the first six months of 2009 increased 27% to $126.2 million  compared to the same period last year. Net income for the first six months of  2009 was $19.9 million compared to $5.8 million for the same period last year.  The Company generated $29.4 million in cash from operations during the first  six months of 2009 and as of June 30, 2009 had $190.1 million in cash and  marketable securities.

The  following table presents selected financial information for the second quarter and  first six months of 2009 and 2008:

Selected Financial Information for the Second Quarter and First Six Months of 2009 and 2008
  Fig.1) Selected Financial Information for the Second Quarter and First Six Months of 2009 and 2008 (click for details)

Business  Perspective
"We have achieved remarkable results  through the first half of 2009, highlighted by a 61% increase in license  revenue," said Alan Trefler, Chairman and CEO of Pegasystems. "These results  are driven by the pragmatic benefits our patented Build for Change®  technology delivers in helping organizations increase market share, improve  customer experiences, and reduce operational costs."

"We continue to both lead the industry  in BPM innovation and grow faster than the market. In Q2 we released new  frameworks that make project and test management a seamless complement to our  BPM suite. These unique capabilities significantly improve time to market and  lower costs. We also released an enhanced Customer Relationship Management  framework, supporting our recent recognition as an 'industry visionary' by a  leading analyst firm. Clients are increasingly adopting our customer-centric,  intent-driven approach to improve customer experience at a lower cost of  service. Our results show our customers are achieving significant business  success through the use of Pegasystems software; and client success remains the  central mission of our company," concluded Mr. Trefler.

Craig Dynes, Pegasystems' CFO, added, "Given  the state of the economy, we have been cautious with our spending during the  first half of the year. These outstanding financial results, along with a  strong pipeline, provide us the opportunity to accelerate our investment in  sales, marketing and R&D; investments which we expect will drive further  growth in 2010. Accordingly, we expect net income for 2009 to surpass $25  million and 2009 cash flow from operations to be approximately $35 million."

Messrs. Trefler and Dynes will be  hosting a conference call and live Webcast associated with this announcement at  9:00 a.m. ET on August 5, 2009. Dial-in information is as follows: (877) 545-1491 (domestic) or (719) 325-4872 (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" 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 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 August 4,  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 August 4, 2009.

About Pegasystems

Pegasystems (NASDAQ: PEGA) develops strategic applications for marketing, sales, service, and operations. Pega’s applications streamline critical business operations, connect enterprises to their customers seamlessly in real-time across channels, and adapt to meet rapidly changing requirements. Pega’s Global 3000 customers include many of the world’s most sophisticated and successful enterprises. Pega’s applications, available in the cloud or on-premises, are built on its unified Pega 7 platform, which uses visual tools to easily extend and change applications to meet clients’ strategic business needs. Pega’s clients report that Pega gives them the fastest time to value, extremely rapid deployment, efficient re-use, and global scale. 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.

 

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Media Contacts

Lisa Pintchman Rogers
VP, Corporate Communications
[email protected]
+1 617-866-6022

North America:
Sean Audet
Director, Corporate Communications
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+1 617-528-5230

Ilena Ryan
Sr. Manager, Public Relations
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+1 617-866-6722

Europe:
Joanna Richardson
Director, Corporate Communications
[email protected]
+44 (0) 118 9651 660

Jon Brigden
PR & Communications Manager
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+44 (0) 118 9398 584

Pegasystems Inc.
One Rogers St.
Cambridge, MA 02142
U.S.A.
Phone +1 617-374-9600
Fax +1 617-374-9620