Pega Continues Strong First-Half Momentum Through Q2 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,

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

2021

2020

2021

2020

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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