Pega Continues Strong First-Half Momentum Through Q2 2021

TechnologyCustomer Experience Management

By PRNewswire On Jul 29, 2021

Pegasystems Inc. , the software company that crushes business complexity, released its financial results for the second quarter of 2021.

“As parts of the world begin to emerge from the acute conditions of the pandemic, we continue to see digital transformation at the forefront of our clients’ priorities,” said Alan Trefler, Founder and CEO, Pegasystems. “Clients understand the need for agility is more important than ever if they are going to thrive in an increasingly unpredictable world. Pega’s low-code platform and outcome-centric approach to workflow maximizes flexibility while delivering tremendous value.”

“I’m excited that annual contract value grew 22 percent year-over-year in the first half of 2021,” said COO and CFO Ken Stillwell. “Pega Cloud continued to be the biggest contributor to ACV growth for the third consecutive year. Equally exciting, we grew sequential backlog and delivered the strongest revenue quarter in the company’s history.”

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Financial and performance metrics ⁽¹⁾

(Dollars in thousands, except per share amounts)	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands, except per share amounts)	2021		2020		Change		2021		2020		Change
Total revenue	$	325,702	$	227,375	43	%	$	639,201	$	492,966	30	%
Net income (loss) – GAAP	$	37,291	$	(20,740)	*		$	30,674	$	(46,112)	*
Net income (loss) – Non-GAAP	$	19,943	$	(22,236)	*		$	42,056	$	(18,204)	*
Diluted earnings (loss) per share – GAAP	$	0.43	$	(0.26)	*		$	0.36	$	(0.58)	*
Diluted earnings (loss) per share – Non-GAAP	$	0.23	$	(0.28)	*		$	0.49	$	(0.23)	*

* not meaningful.

¹ For additional information, including a reconciliation of our Non-GAAP and GAAP measures, see the Schedules at the end of this release.

(Dollars in thousands)	Three Months Ended June 30,								Change				Six Months Ended June 30,								Change
(Dollars in thousands)	2021				2020				Change				2021				2020				Change
Pega Cloud	$	73,293	23	%	$	48,838	21	%	$	24,455	50	%	$	141,151	22	%	$	92,304	19	%	$	48,847	53	%
Client Cloud	183,078		56	%	116,488		52	%	66,590		57	%	370,148		58	%	280,440		57	%	89,708		32	%
Subscription	$	256,371	79	%	$	165,326	73	%	91,045		55	%	$	511,299	80	%	$	372,744	76	%	138,555		37	%
Perpetual license	12,596		4	%	9,057		4	%	3,539		39	%	18,048		3	%	12,716		3	%	5,332		42	%
Consulting	56,735		17	%	52,992		23	%	3,743		7	%	109,854		17	%	107,506		21	%	2,348		2	%
Total revenue	$	325,702	100	%	$	227,375	100	%	$	98,327	43	%	$	639,201	100	%	$	492,966	100	%	$	146,235	30	%

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 the Company’s 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, results of operations prepared under U.S. GAAP.

A reconciliation of our Non-GAAP and GAAP measures is at the end of this release.

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Forward-looking statements

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;
the impact of actual or threatened public health emergencies, such as the Coronavirus (“COVID-19”);
reliance on third-party service providers;
compliance with our debt obligations and covenants;
the potential impact of our convertible senior notes and Capped Call Transactions;
reliance on key personnel;
the relocation of our corporate headquarters;
the continued uncertainties in the global economy;
foreign currency exchange rates;
the potential legal and financial liabilities and reputation damage due to cyber-attacks;
security breaches and security flaws;
our ability to protect our intellectual property rights and costs associated with defending such rights;
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, 2020, 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 from new information, future events, or otherwise.

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