Annual contract value grows 21 percent as profitability improves in Q1 2022
- Total revenue grows 20 percent to $376 million
- Gross margin improves to 77 percent
CAMBRIDGE, Mass. — April 28, 2022 — Pegasystems Inc. (NASDAQ: PEGA), the software company that crushes business complexity, released its financial results for the first quarter of 2022.
"Pega’s low-code platform for AI-powered decisioning and workflow automation continues to be chosen by the most demanding enterprises,” said Alan Trefler, founder and CEO, Pegasystems. “Our scalable architecture helps the world’s leading organizations work smarter, unify experiences, and adapt instantly – so they’re always ready for whatever is coming.”
"As we get closer to the completion of the subscription transition, we are placing a greater emphasis on managing growth and profitability to become a Rule of 40 company,” said Ken Stillwell, COO and CFO, Pegasystems. “This is more important than ever given the current economic environment, and I’m pleased to see the progress our team is making in maintaining our ACV growth rate while improving margins.”
Financial and performance metrics (1)
(1) See the Schedules at the end of this release for additional information, including a reconciliation of our Non-GAAP and GAAP measures.
Foreign currency exchange rate changes were a 1% to 2% headwind to ACV growth since March 31, 2021.
Quarterly conference call
A conference call and audio-only webcast will be conducted at 5:00 p.m. EDT on April 28, 2022. Members of the public and investors are invited to join the call and participate in the question and answer session by dialing 1-844-825-9789 (domestic), 1-412-317-5180 (international), or via webcast (https://viavid.webcasts.com/starthere.jsp?ei=1542115&tp_key=f6987abb7b) by logging onto www.pega.com at least five minutes prior to the event's broadcast and clicking on the webcast icon in the Investors section.
Discussion of non-GAAP financial measures
We believe that non-GAAP financial measures help investors understand our core operating results and prospects, consistent with how management measures and forecasts our performance without the effect of often one-time charges and other items outside our normal operations. The supplementary non-GAAP financial measures are not meant to be superior to or a substitute for financial measures prepared under U.S. GAAP.
A reconciliation of our non-GAAP and GAAP measures is at the end of this release.
Certain statements in this press release may be "forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995.
Words such as expects, anticipates, intends, plans, believes, will, could, should, estimates, may, targets, strategies, projects, forecasts, guidance, likely, and usually, or variations of such words and other similar expressions identify forward-looking statements, which are based on current expectations and assumptions.
Forward-looking statements deal with future events and are subject to risks and uncertainties that are difficult to predict, including, but not limited to:
- our future financial performance and business plans;
- the adequacy of our liquidity and capital resources;
- the continued payment of our quarterly dividends;
- the timing of revenue recognition;
- management of our transition to a more subscription-based business model;
- variation in demand for our products and services, including among clients in the public sector;
- reliance on key personnel;
- global economic and political conditions and uncertainty, including continued impacts from the ongoing COVID-19 pandemic and the war in Ukraine;
- reliance on third-party service providers, including hosting providers;
- compliance with our debt obligations and covenants;
- the potential impact of our convertible senior notes and Capped Call Transactions;
- foreign currency exchange rates;
- the potential legal and financial liabilities and damage to our reputation due to cyber-attacks;
- security breaches and security flaws;
- our ability to protect our intellectual property rights, costs associated with defending such rights, as well as intellectual property rights claims and other related claims by third parties;
- our client retention rate; and
- management of our growth.
These risks and others that may cause actual results to differ materially from those expressed in such forward-looking statements are described further in Part I of our Annual Report on Form 10-K for the year ended December 31, 2021, and other filings we make with the U.S. Securities and Exchange Commission (“SEC”).
Except as required by applicable law, we do not undertake and expressly disclaim any obligation to update or revise these forward-looking statements publicly, whether due to new information, future events, or otherwise.
The forward-looking statements in this press release represent our views as of April 28, 2022.
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