Pegasystems Announces Financial Results for Second Quarter and First Six Months of 2016
CAMBRIDGE, MA -- (Marketwired) -- 08/03/16 --
Pegasystems Inc. (NASDAQ: PEGA), the software company empowering the world's leading enterprises with strategic applications for customer engagement, today announced results for its second quarter and six months ended June 30, 2016.
"We are pleased with our results for the first half of 2016," said Alan Trefler, Founder and CEO of Pegasystems. "An increasing number of organizations are choosing Pega® applications to improve their business outcomes by combining the power of insight, action, and evolution to enhance customer experiences. We continue to see the world's leading organizations and governments adopt the Pega® 7 Platform as the engine to drive their digital transformation."
SELECTED GAAP & NON-GAAP RESULTS (1)
Three Months Ended June 30,
-------------------------------------------
2016 2016 2015 2015 % Increase
------------------
($ in thousands
except per Non-
share amounts) GAAP Non-GAAP GAAP Non-GAAP GAAP GAAP
----------------------------------------------------------------------------
Total Revenue $ 188,996 $ 189,846 $ 162,019 $ 162,019 17% 17%
License Revenue $ 70,671 $ 70,685 $ 63,497 $ 63,497 11% 11%
Cloud Revenue $ 11,269 $ 11,364 $ 7,279 $ 7,279 55% 56%
Net Income $ 3,647 $ 14,644 $ 3,104 $ 10,945 17% 34%
Diluted
Earnings per
share $ 0.05 $ 0.19 $ 0.04 $ 0.14 25% 36%
Six Months Ended June 30,
----------------------------------------
2016 2016 2015 2015 % Increase
--------------------
($ in thousands
except per
share amounts) GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP
----------------------------------------------------------------------------
Total Revenue $ 367,854 $ 368,704 $ 315,937 $ 315,937 16% 17%
License Revenue $ 139,016 $ 139,030 $ 121,472 $ 121,472 14% 14%
Cloud Revenue $ 19,767 $ 19,862 $ 13,456 $ 13,456 47% 48%
Net Income $ 12,652 $ 32,447 $ 9,039 $ 21,131 40% 54%
Diluted Earnings
per share $ 0.16 $ 0.41 $ 0.11 $ 0.27 45% 52%
(1) See a reconciliation of our GAAP to Non-GAAP measures contained in the financial schedules at the end of this release.
"It was good to see strength in the first half of 2016 despite global volatility and adverse currency shifts," said Ken Stillwell, Pegasystems CFO. "We continue to drive long-term, strategic value for our new and existing clients who select us as their key strategic partner. While our openness to licensing to clients through term, cloud, or perpetual can lead to quarterly variations, we are excited by our long-term growth trend as a true value measure."
Cash: Total cash, cash equivalents, and marketable securities at June 30, 2016 was $137.6 million, down 37% from 2015 year-end, primarily due to the cash payment of $48.8 million to acquire OpenSpan Inc. ("OpenSpan"), net of cash acquired.
Cash generated from operations for the first six months of 2016 was $9.3 million.
License and Cloud Backlog: The Company computes license and cloud backlog by adding deferred license and cloud revenue as recorded on the Company's balance sheet and license and cloud commitments, which are not billed and not recorded on its balance sheet.
License and Cloud Backlog (1)
June 30,
($ in thousands) 2016 2015 % Change
----------------------------------------------------------------------------
Total deferred license and cloud revenue 51,855 61,339 (15%)
Total license and cloud commitments not on
the balance sheet (2) 340,777 330,043 3%
TOTAL LICENSE AND CLOUD BACKLOG $ 392,632 $ 391,382 0%
(1) See historical quarterly license and cloud backlog amounts in a separate schedule at the end of this release.
(2) See the "Future Cash Receipts from License and Cloud Arrangements" table on page 24 of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016.
Quarterly Conference Call
Pegasystems will host a conference call and audio-only 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: 1-877-705-6003 (domestic) or 1-201-493-6725 (international). To listen to the Webcast, log onto www.pega.com at least five 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 by clicking the Earnings Calls link in the Investors section.
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 and restructuring expenses, and certain other adjustments. 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.
Forward-Looking Statements
"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", or variations of such words 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, including the OpenSpan acquisition, and any future acquisitions; the potential legal and financial liabilities and reputation damage due to cyber-attacks and security breaches; 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, 2015 and other recent filings with the Securities and Exchange Commission. These documents are available on the Company's website at http://www.pega.com/about/investors. The forward-looking statements contained in this press release represent the Company's views as of August 3, 2016. 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 August 3, 2016.
About Pegasystems
Pegasystems Inc. (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® software 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.
All trademarks are the property of their respective owners.
Pegasystems Inc.
Unaudited Condensed Consolidated Statements of Operations
($ in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2016 2015 2016 2015
---------- ---------- ---------- ----------
Revenue:
Software license $ 70,671 $ 63,497 $ 139,016 $ 121,472
Maintenance 55,161 49,329 108,136 98,081
Services 63,164 49,193 120,702 96,384
---------- ---------- ---------- ----------
Total revenue 188,996 162,019 367,854 315,937
---------- ---------- ---------- ----------
Cost of revenue:
Software license 1,312 1,030 2,333 2,106
Maintenance 6,315 5,476 12,230 10,656
Services 52,473 48,275 102,047 92,078
Total cost of revenue (1) 60,100 54,781 116,610 104,840
---------- ---------- ---------- ----------
Gross profit 128,896 107,238 251,244 211,097
---------- ---------- ---------- ----------
Operating expenses:
Selling and marketing 74,016 60,389 135,094 116,124
Research and development 35,574 31,372 70,494 61,216
General and administrative 11,294 10,214 22,342 16,559
Acquisition-related 1,623 13 2,542 39
Restructuring 29 - 287 -
---------- ---------- ---------- ----------
Total operating expenses (1) 122,536 101,988 230,759 193,938
---------- ---------- ---------- ----------
Income from operations 6,360 5,250 20,485 17,159
Foreign currency transaction
gain (loss) 306 (968) 1,682 (3,930)
Interest income, net 188 216 478 529
Other (expense) income, net (1,356) 3 (3,654) 3
---------- ---------- ---------- ----------
Income before provision for
income taxes 5,498 4,501 18,991 13,761
Provision for income taxes 1,851 1,397 6,339 4,722
---------- ---------- ---------- ----------
Net income $ 3,647 $ 3,104 $ 12,652 $ 9,039
========== ========== ========== ==========
Earnings per share :
Basic $ 0.05 $ 0.04 $ 0.17 $ 0.12
========== ========== ========== ==========
Diluted $ 0.05 $ 0.04 $ 0.16 $ 0.11
========== ========== ========== ==========
Weighted-average number of
common shares outstanding:
Basic 76,318 76,626 76,347 76,514
Diluted 78,969 78,950 78,924 78,771
Dividends declared per share $ 0.03 $ 0.03 $ 0.06 $ 0.06
========== ========== ========== ==========
(1) Includes stock-based
compensation as follows:
Cost of revenue $ 2,914 $ 2,281 $ 5,594 $ 4,234
10,680
Operating expenses $ 7,967 $ 6,364 $ 14,222 $
PEGASYSTEMS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($in thousands, except per share amounts)
Three Months Ended June 30,
---------------------------------------------------------
2016 2016 2015 2015
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
----------------------------------------------------------------------------
TOTAL REVENUE $188,996 $ 850 $189,846 $162,019 $ - $162,019
Software
license 70,671 14 70,685 63,497 - 63,497
Maintenance 55,161 729 55,890 49,329 - 49,329
Services 63,164 107 63,271 49,193 - 49,193
TOTAL COST OF
REVENUE $ 60,100 $ (4,552) $ 55,548 $ 54,781 $(3,628) $ 51,153
Amortization of
intangible
assets (2) 1,638 (1,638) - 1,347 (1,347) -
Stock-based
compensation 2,914 (2,914) - 2,281 (2,281) -
GROSS MARGIN % 68% 71% 66% 68%
TOTAL OPERATING
EXPENSES (3) 122,536 (11,013) 111,523 101,988 (8,149) 93,839
Amortization of
intangible
assets (2) 1,966 (1,966) - 1,772 (1,772) -
Stock-based
compensation 7,967 (7,967) - 6,364 (6,364) -
Other
adjustments (220) 220 - - - -
Acquisition-
related 1,271 (1,271) - 13 (13) -
Restructuring 29 (29) - - - -
INCOME FROM
OPERATIONS $ 6,360 $ 16,415 $ 22,775 $ 5,250 $11,777 17,027
OPERATING MARGIN
% 3% 12% 3% 11%
INCOME TAX
EFFECTS (4) $ 1,851 $ 5,418 $ 7,269 $ 1,397 $ 3,936 $ 5,333
NET INCOME $ 3,647 $ 10,997 $ 14,644 $ 3,104 $ 7,841 $ 10,945
DILUTED EARNINGS
PER SHARE $ 0.05 $ 0.14 $ 0.19 $ 0.04 $ 0.10 $ 0.14
DILUTED WEIGHTED-
AVERAGE COMMON
SHARES
OUTSTANDING 78,969 - 78,969 78,950 - 78,950
% Increase
--------------------
Non-
GAAP GAAP
--------------------------------------
TOTAL REVENUE 17% 17%
Software
license 11% 11%
Maintenance 12% 13%
Services 28% 29%
TOTAL COST OF
REVENUE 10% 9%
Amortization of
intangible
assets (2)
Stock-based
compensation
GROSS MARGIN % 201 bp 231 bp
TOTAL OPERATING
EXPENSES (3) 20% 19%
Amortization of
intangible
assets (2)
Stock-based
compensation
Other
adjustments
Acquisition-
related
Restructuring
INCOME FROM
OPERATIONS 21% 34%
OPERATING MARGIN
% 12 bp 149 bp
INCOME TAX
EFFECTS (4) 32% 36%
NET INCOME 17% 34%
DILUTED EARNINGS
PER SHARE 25% 36%
DILUTED WEIGHTED-
AVERAGE COMMON
SHARES
OUTSTANDING 0% 0%
PEGASYSTEMS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($in thousands, except per share amounts)
Six Months Ended June 30,
------------------------------------------------------------
2016 2016 2015 2015
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
----------------------------------------------------------------------------
TOTAL REVENUE $367,854 $ 850 $ 368,704 $315,937 $ - $ 315,937
Software
license 139,016 14 139,030 121,472 - 121,472
Maintenance 108,136 729 108,865 98,081 - 98,081
Services 120,702 107 120,809 96,384 - 96,384
TOTAL COST OF
REVENUE $116,610 $ (8,578) $ 108,032 $104,840 $ (6,849) $ 97,991
Amortization
of
intangible
assets (2) 2,984 (2,984) - 2,690 (2,690) -
Stock-based
compensation 5,594 (5,594) - 4,234 (4,234) -
Other
adjustments - - - (75) 75 -
GROSS MARGIN % 68% 71% 67% 69%
TOTAL
OPERATING
EXPENSES (3) $230,759 $(20,064) $ 210,695 $193,938 $(10,431) $ 183,507
Amortization
of
intangible
assets (2) 3,585 (3,585) - 3,567 (3,567) -
Stock-based
compensation 14,222 (14,222) - 10,680 (10,680) -
Other
adjustments (220) 220 - (3,855) 3,855 -
Acquisition-
related 2,190 (2,190) - 39 (39) -
Restructuring 287 (287) - - - -
INCOME FROM
OPERATIONS $ 20,485 $ 29,492 $ 49,977 $ 17,159 $ 17,280 $ 34,439
OPERATING
MARGIN % 6% 14% 5% 11%
INCOME TAX
EFFECTS (4) $ 6,339 $ 9,697 $ 16,036 $ 4,722 $ 5,188 $ 9,910
NET INCOME $ 12,652 $ 19,795 $ 32,447 $ 9,039 $ 12,092 $ 21,131
DILUTED
EARNINGS PER
SHARE $ 0.16 $ 0.25 $ 0.41 $ 0.11 $ 0.16 $ 0.27
DILUTED
WEIGHTED-
AVERAGE
COMMON SHARES
OUTSTANDING 78,924 - 78,924 78,771 - 78,771
% Increase
-------------------------
GAAP Non-GAAP
----------------------------------------
TOTAL REVENUE 16% 17%
Software
license 14% 14%
Maintenance 10% 11%
Services 25% 25%
TOTAL COST OF
REVENUE 11% 10%
Amortization
of
intangible
assets (2)
Stock-based
compensation
Other
adjustments
GROSS MARGIN % 148 bp 172 bp
TOTAL
OPERATING
EXPENSES (3) 19% 15%
Amortization
of
intangible
assets (2)
Stock-based
compensation
Other
adjustments
Acquisition-
related
Restructuring
INCOME FROM
OPERATIONS 19% 45%
OPERATING
MARGIN % 14 bp 265 bp
INCOME TAX
EFFECTS (4) 34% 62%
NET INCOME 40% 54%
DILUTED
EARNINGS PER
SHARE 45% 52%
DILUTED
WEIGHTED-
AVERAGE
COMMON SHARES
OUTSTANDING 0% 0%
PEGASYSTEMS INC.
FOOTNOTES FOR RECONCILIATON OF
SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(1) This presentation includes non-GAAP measures. Our non-GAAP 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
our consolidated financial statements prepared in accordance with GAAP.
For a detailed explanation of the adjustments made to comparable GAAP
measures, the reasons why management uses these measures, the
usefulness of these measures, and the material limitations on the
usefulness of these measures see disclosure under Discussion of Non-
GAAP Financial Measures included earlier in this release and below. Our
non-GAAP financial measures reflect adjustments based on the following
items, as well as the related income tax effects:
Revenue: Business combination accounting rules require that we
determine the fair value of the deferred revenue liability for
contractual obligations assumed primarily from our acquisition of
OpenSpan in April 2016. In post-acquisition reporting periods, we
recognize revenue for the fair value of these contracts, when all the
revenue recognition criteria are satisfied, instead of the revenue that
would have been recognized by OpenSpan as an independent company. We
add back the effect of the deferred revenue fair value adjustment in
non-GAAP revenue to reflect the full amount of these revenues to
provide a more complete comparison of the revenue guidance to peer
companies. No adjustments were made to revenue for 2015.
Amortization of intangible assets: We have excluded the amortization
expense of intangible assets from our non-GAAP operating expenses and
net earnings measures. Amortization of intangible assets is
inconsistent in amount and frequency and is significantly affected by
the timing and size of our acquisitions. Investors should note that the
use of intangible assets contributed to our revenues earned during the
periods presented and will contribute to our future period revenues as
well. Amortization of intangible assets will recur in future periods.
Stock-based compensation expense: We have excluded stock-based
compensation expense from our non-GAAP operating expenses and net
earnings measures. Although stock-based compensation is a key incentive
offered to our employees, and we believe such compensation contributed
to the revenues earned during the periods presented and will contribute
to the generation of future period revenues, we continue to evaluate
our business performance excluding stock-based compensation expense.
Acquisition-related and restructuring expenses: We have excluded the
effect of acquisition-related and restructuring expenses from our non-
GAAP operating expenses and net earnings measures. We incurred direct
and incremental expenses associated primarily with the OpenSpan
acquisition. These acquisition-related expenses were primarily
professional fees to affect the acquisition. We have also incurred
restructuring expenses for one-time employee termination benefits
related to the closure of one of our domestic offices, which we
generally would not have otherwise incurred in the periods presented as
a part of our continuing operations. We believe it is useful for
investors to understand the effects of these items on our total
operating expenses.
Other adjustments: We reached an agreement with the former shareholders
of Antenna Software, Inc., which we acquired in October 2013
("Antenna"), to release a portion of the funds held in escrow as
security for their indemnification obligations to us in settlement of
the outstanding indemnification claims. The settlement resulted in a
benefit to cost of revenue and operating expenses in the first quarter
of 2015. In addition, we favorably settled indirect tax liabilities
related to the Antenna acquisition, which resulted in a benefit to
operating expenses in the first quarter of 2015. In the second quarter
of 2016, we reduced our estimate of the additional cash consideration
payable to the selling shareholders of one of the three companies
acquired in 2014 based on the achievement of certain milestones. We
believe the benefits associated with these items are not representative
of our ongoing business, and we have excluded the effects of these
items from our non-GAAP operating results and net earnings measures.
(2) Estimated future annual amortization expense related to intangible
assets as of June 30, 2016 is as follows:
(in thousands)
Remainder of 2016 $ 6,679
2017 12,359
2018 11,359
2019 5,567
2020 2,672
2021 and thereafter 12,444
-------------
Total intangible assets subject to amortization $ 51,080
=============
(3) Below is a reconciliation of non-GAAP operating expenses:
Three Months Ended June 30,
----------------------------------------------------------
2016 2016 2015 2015
(in thousands) GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
----------------- -------- -------- --------- -------- -------- --------
Selling and
marketing $ 74,016 $ (4,698) $ 69,318 $ 60,389 $ (3,866) $ 56,523
Amortization of
intangible
assets 1,877 (1,877) - 1,534 (1,534) -
Stock-based
compensation 3,041 (3,041) - 2,332 (2,332) -
Other
adjustments (220) 220 - - - -
Research and
development $ 35,574 $ (2,828) $ 32,746 $ 31,372 $ (2,265) $ 29,107
Stock-based
compensation 2,828 (2,828) - 2,265 (2,265) -
General and
administrative $ 11,294 $ (1,835) $ 9,459 $ 10,214 $ (2,005) $ 8,209
Amortization of
intangible
assets 89 (89) - 238 (238) -
Stock-based
compensation 1,746 (1,746) - 1,767 (1,767) -
Acquisition-
related $ 1,623 $ (1,623) $ - $ 13 $ (13) $ -
Stock-based
compensation 352 (352) - - - -
Acquisition-
related 1,271 (1,271) - - - -
Restructuring $ 29 $ (29) $ - $ - $ - $ -
TOTAL OPERATING
EXPENSES $122,536 $(11,013) $ 111,523 $101,988 $ (8,149) $ 93,839
Six Months Ended June 30,
----------------------------------------------------------
2016 2016 2015 2015
(in thousands) GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
----------------- -------- -------- --------- -------- -------- --------
Selling and
marketing $135,094 $ (9,114) $ 125,980 $116,124 $ (6,936) $109,188
Amortization of
intangible
assets 3,407 (3,407) - 3,065 (3,065) -
Stock-based
compensation 5,927 (5,927) - 3,878 (3,878) -
Other
adjustments (220) 220 - (7) 7 -
Research and
development $ 70,494 $ (5,220) $ 65,274 $ 61,216 $ (3,691) $ 57,525
Stock-based
compensation 5,220 (5,220) - 4,131 (4,131) -
Other
adjustments - - - (440) 440 -
General and
administrative $ 22,342 $ (2,901) $ 19,441 $ 16,559 $ 235 $ 16,794
Amortization of
intangible
assets 178 (178) - 502 (502) -
Stock-based
compensation 2,723 (2,723) - 2,671 (2,671) -
Other
adjustments - - - (3,408) 3,408 -
Acquisition-
related $ 2,542 $ (2,542) $ - $ 39 $ (39) $ -
Stock-based
compensation 352 (352) - - - -
Acquisition-
related 2,190 (2,190) - - - -
Restructuring $ 287 $ (287) $ - $ - $ - $ -
TOTAL OPERATING
EXPENSES $230,759 $(20,064) $ 210,695 $193,938 $(10,431) $183,507
(4) The GAAP income tax effects were calculated using an effective GAAP tax
rate of 33.7% and 31% for the second quarter of 2016 and 2015,
respectively. The non-GAAP income tax effects were calculated using an
effective non-GAAP tax rate of 33.2% and 32.8% for the second quarter
of 2016 and 2015, respectively.
The GAAP income tax effects were calculated using an effective GAAP tax
rate of 33.4% and 34.3% for the first six months of 2016 and 2015,
respectively. The non-GAAP income tax effects were calculated using an
effective non-GAAP tax rate of 33.1% and 31.9% for the first six months
of 2016 and 2015, respectively.
The difference between our GAAP and non-GAAP effective tax rates in
second quarter of 2016 primarily relates to the impact of unfavorable
foreign stock compensation adjustments on our GAAP effective tax rate,
partially offset by higher non-GAAP income subjected to tax in higher
tax jurisdictions. The difference between our GAAP and non-GAAP
effective tax rates in the second quarter of 2015 primarily relates to
the impact of non-GAAP income subjected to tax in higher tax rate
jurisdictions during the period.
The difference between our GAAP and non-GAAP effective tax rates in the
first six months of 2016 and 2015 primarily relates to the impact of
higher non-GAAP income subjected to tax in lower tax rate
jurisdictions.
Pegasystems Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
As of As of
June 30, December
2016 31, 2015
----------- -----------
Assets:
Cash, cash equivalents, and marketable securities $ 137,569 $ 219,078
Trade accounts receivable, net 198,893 211,846
Property and equipment, net 37,736 31,319
Long-term deferred income taxes 52,041 53,350
Goodwill and Intangible assets, net 125,465 80,194
Other assets 51,651 31,971
----------- -----------
Total assets $ 603,355 $ 627,758
=========== ===========
Liabilities and Stockholders' Equity:
Accrued expenses, including compensation and
related expenses 87,322 98,640
Deferred revenue 157,848 171,678
Other liabilities 33,391 34,581
Stockholders' equity 324,794 322,859
----------- -----------
Total liabilities and stockholders' equity $ 603,355 $ 627,758
=========== ===========
Pegasystems Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended
June 30,
2016 2015
----------- -----------
Operating activities:
Net income $ 12,652 $ 9,039
Adjustments to reconcile net income to cash
provided by operating activities:
Excess tax benefits from equity awards and
deferred income taxes (3,460) (3,805)
Depreciation, amortization, foreign currency
transaction (gain) loss, and other non-cash
items 14,569 15,738
Stock-based compensation expense 19,816 14,914
Change in operating assets and liabilities,
net (34,278) 3,513
----------- -----------
Cash provided by operating activities 9,299 39,399
----------- -----------
Cash used in investing activities (7,930) (18,212)
Cash used in financing activities (29,396) (13,234)
----------- -----------
Effect of exchange rates on cash and cash
equivalents (738) (1,674)
----------- -----------
Net (decrease) increase in cash and cash
equivalents (28,765) 6,279
Cash and cash equivalents, beginning of period 93,026 114,585
----------- -----------
Cash and cash equivalents, end of period $ 64,261 $ 120,864
=========== ===========
Pegasystems Inc.
Historical License and Cloud Backlog
(in thousands)
---------------------------------------------------------------------------
2016 2016 2015 2015
Q2 Q1 Q4 Q3
-----------------------------------
Total deferred license and cloud
revenue 51,855 57,790 63,412 55,370
-----------------------------------
Total license and cloud commitments
not on the balance sheet 340,777 331,870 356,388 324,340
-----------------------------------
TOTAL LICENSE AND CLOUD BACKLOG $392,632 $389,660 $419,800 $379,710
===================================
---------------------------------------------------------------------------
2015 2015 2014 2014
Q2 Q1 Q4 Q3
------------------------------------
Total deferred license and cloud
revenue 61,339 79,639 63,048 68,561
------------------------------------
Total license and cloud commitments
not on the balance sheet 330,043 294,412 301,409 265,309
------------------------------------
TOTAL LICENSE AND CLOUD BACKLOG $391,382 $374,051 $364,457 $333,870
====================================
Press Contacts:Lisa Pintchman Pegasystems Inc. [email protected] (617) 866-6022 Twitter: @pega Investor Contact: Sheila Ennis ICR for Pegasystems [email protected] 617-866-6077
Source: Pegasystems