Welcome!

@ThingsExpo Authors: Steve Latham, Pat Romanski, Christopher Harrold, Liz McMillan, Elizabeth White

News Feed Item

Pegasystems Announces Financial Results for Second Quarter and First Six Months of 2014

GAAP License Revenue Increases 28% in the First Six Months of 2014; YTD GAAP EPS of $0.14; YTD Non-GAAP EPS of $0.30

CAMBRIDGE, MA -- (Marketwired) -- 08/05/14 -- Pegasystems Inc. (NASDAQ: PEGA), the software company powering the digital enterprise with Better Business Software®, today announced results for its second quarter and six months ended June 30, 2014.

"We are pleased with our strong performance in the first half of 2014," said Alan Trefler, Founder and CEO of Pegasystems. "License revenue growth was 28% for the first half, and in addition we have seen a substantial build in license backlog. We continue to focus on delivering the critical capabilities our clients need, including the ability to leverage social data; support any mobile device; incorporate predictive analytics across multiple data sources; enable cloud deployment; and leverage the emerging internet of things."

"On the heels of the largest-ever gathering of our global customers at PegaWORLD 2014, it's more apparent than ever that our message is resonating, and our clients are leveraging Pega to achieve transformational results," continued Mr. Trefler. "From digitally native companies like PayPal and Expedia to more traditional banks and insurance companies, our clients are using Pega technology to create agile systems that meet the evolving needs of their customers."


                   SELECTED GAAP & NON-GAAP RESULTS (1)

                          Three Months Ended June 30,         % Increase
                    ---------------------------------------
                       2014      2014      2013      2013     (Decrease)
                                                            --------------
($ in '000s)           GAAP    Non-GAAP    GAAP    Non-GAAP GAAP  Non-GAAP
------------------- --------- --------- --------- --------- ----  --------
Total Revenue       $ 142,985 $ 143,868 $ 117,315 $ 117,315   22%       23%
License Revenue     $  54,012 $  54,533 $  40,206 $  40,206   34%       36%
Net Income          $   1,504 $   7,989 $   4,703 $   8,540  (68%)      (6%)
Diluted Earnings
 per share (2)      $    0.02 $    0.10 $    0.06 $    0.11  (67%)      (9%)

                           Six Months Ended June 30,          % Increase
                    ---------------------------------------
                       2014      2014      2013      2013     (Decrease)
                                                            --------------
($ in '000s)           GAAP    Non-GAAP    GAAP    Non-GAAP GAAP  Non-GAAP
------------------- --------- --------- --------- --------- ----  --------
Total Revenue       $ 283,449 $ 286,091 $ 233,561 $ 233,561   21%       22%
License Revenue     $ 106,626 $ 107,669 $  83,415 $  83,415   28%       29%
Net Income          $  11,269 $  23,695 $  13,772 $  21,433  (18%)      11%
Diluted Earnings
 per share (2)      $    0.14 $    0.30 $    0.18 $    0.28  (22%)       7%

(1) See a reconciliation of our GAAP to Non-GAAP measures contained in the
 financial schedules at the end of this release.
(2) The number of common shares and per share amounts have been
 retroactively restated for all prior periods to reflect the Company's two-
 for-one common stock split effected in the form of a common stock dividend
 distributed on April 1, 2014.

Cash: Total cash, cash equivalents, and marketable securities at the end of the quarter was $216 million, up 38% from 2013 year-end.

Cash generated from operations for the first six months of 2014 was $73.9 million, an increase of 15% on a year-over-year basis. Free Cash Flow, which we define as operating cash flow less Cap Ex, was $71.1 million, an increase of 14% on a year-over-year basis.

License and Cloud Backlog: The Company computes license backlog by adding billed deferred license and cloud revenue and off-balance sheet license and cloud commitments, which is business that is contracted, unbilled and not recorded on the Company's balance sheet.


                       License and Cloud Backlog (1)

                                                      June 30,
($ in millions)                                     2014    2013   Increase
                                                   ------  ------  --------
  Total billed deferred license and cloud revenue    54.9    37.3        47%
  Total off-balance sheet license and cloud
   commitments                                      298.7   246.8        21%
TOTAL LICENSE AND CLOUD BACKLOG                     353.6   284.1        24%

(1) See historical license backlog amounts including cloud in a separate
 schedule at the end of this release.

"As a result of our strong performance in the first half of 2014 and the increased visibility of having built backlog, we believe we will modestly exceed our previously issued non-GAAP revenue guidance of approximately $580 million for the full year 2014," said Rafe Brown, Pegasystems CFO. "The additional visibility we have on the year allows us to accelerate our investment in product, cloud, and distribution resources while maintaining our non-GAAP EPS guidance for the year of approximately 78 cents per share."

Quarterly Conference Call

Pegasystems will host a conference call and live 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 Web site at www.pega.com/about-us/investors. Dial-in information is as follows: 1 (877) 407-3982 (domestic) or 1 (201) 493-6780 (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 Investors section. A replay of the call will also be available on www.pega.com in the Investors section Audio Archives link.

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 costs, and restructuring costs. 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, including our guidance regarding 2014 non-GAAP revenue and earnings per share. The words "anticipate," "project," "expect," "plan," "intend," "believe," "estimate," "should," "target," "forecast," "could," "preliminary," "guidance" 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 and healthcare markets, reliance on third party relationships, the potential loss of vendor specific objective evidence for our professional services, the financial impact of the Antenna acquisition, 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, 2013 and other recent filings with the Securities and Exchange Commission. These documents are available on the Company's website at www.pega.com/about-us/investors/sec-filings. The forward-looking statements contained in this press release represent the Company's views as of August 5, 2014. 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 5, 2014.

RSS Feeds for Pegasystems Press Releases, Pegasystems Media Coverage and Pegasystems Events

About Pegasystems
Pegasystems Build for Change® Platform is the heart of Better Business Software®. It delivers business agility and empowers leading organizations to rapidly close execution gaps and seize new opportunities. Pegasystems leverages its recognized leadership in Business Process Management (BPM), Multi-Channel Customer Relationship Management (CRM), Business Rules, and Adaptive Analytics to uniquely give its clients the power to engage customers, simplify operations and Build For Change®. 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,
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------
Revenue:
  Software license               $  54,012  $  40,206  $ 106,626  $  83,415
  Maintenance                       45,393     37,937     90,274     74,259
  Services                          43,580     39,172     86,549     75,887
                                 ---------  ---------  ---------  ---------
    Total revenue                  142,985    117,315    283,449    233,561
                                 ---------  ---------  ---------  ---------
Cost of revenue:
  Software license                   1,177      1,576      2,756      3,159
  Maintenance                        5,044      3,772      9,708      7,507
  Services                          40,470     32,530     80,140     64,865
                                 ---------  ---------  ---------  ---------
    Total cost of revenue (1)       46,691     37,878     92,604     75,531
                                 ---------  ---------  ---------  ---------
Gross profit                        96,294     79,437    190,845    158,030
                                 ---------  ---------  ---------  ---------
Operating expenses:
  Selling and marketing             56,342     45,346    102,149     84,616
  Research and development          27,323     19,761     51,932     39,337
  General and administrative        10,250      7,277     19,552     14,073
  Acquisition-related costs            157          -        363          -
                                 ---------  ---------  ---------  ---------
    Total operating expenses (1)    94,072     72,384    173,996    138,026
                                 ---------  ---------  ---------  ---------
Income from operations               2,222      7,053     16,849     20,004
Foreign currency transaction
 gain (loss)                            (4)      (437)       318     (2,327)
Interest income, net                   163        135        287        253
Other (expense), income net              6        (94)      (526)       745
                                 ---------  ---------  ---------  ---------
Income before provision for
 income taxes                        2,387      6,657     16,928     18,675
Provision for income taxes             883      1,954      5,659      4,903
                                 ---------  ---------  ---------  ---------
    Net income                   $   1,504  $   4,703  $  11,269  $  13,772
                                 =========  =========  =========  =========
Earnings per share (2):
Basic                            $    0.02  $    0.06  $    0.15  $    0.18
                                 =========  =========  =========  =========
Diluted                          $    0.02  $    0.06  $    0.14  $    0.18
                                 =========  =========  =========  =========

Weighted-average number of
 common shares outstanding (2):
Basic                               76,286     75,898     76,385     75,896
Diluted                             78,280     77,498     78,563     77,538

Dividends declared per share (2) $   0.030  $   0.015  $   0.045  $   0.030
                                 =========  =========  =========  =========

(1) Includes stock-based
 compensation as follows:
Cost of revenue                  $   1,387  $   1,014  $   2,398  $   2,187
Operating expenses               $   3,771  $   2,267  $   6,055  $   4,526

(2) The number of common shares and per share amounts have been
 retroactively restated for all prior periods to reflect the Company's two-
 for-one common stock split effected in the form of a common stock dividend
 distributed on April 1, 2014



                              PEGASYSTEMS INC.
      RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
                   ($ in thousands, except per share data)


                                   Three Months Ended June 30,
                      -----------------------------------------------------
                        2014              2014     2013              2013
                        GAAP     Adj.   Non-GAAP   GAAP     Adj.   Non-GAAP
                      -------- -------  -------- -------- -------  --------
TOTAL REVENUE         $142,985 $   883  $143,868 $117,315 $     -  $117,315
  Software license
   (2)                  54,012     521    54,533   40,206       -    40,206
  Maintenance (3)       45,393     153    45,546   37,937       -    37,937
  Services (4)          43,580     209    43,789   39,172       -    39,172

TOTAL COST OF REVENUE $ 46,691 $(2,831) $ 43,860 $ 37,878 $(2,555) $ 35,323
  Amortization of
   intangible assets
   (5) (6)               1,444  (1,444)        -    1,541  (1,541)        -
  Stock-based
   compensation (6)      1,387  (1,387)        -    1,014  (1,014)        -

GROSS MARGIN %              67%               70%      68%               70%

TOTAL OPERATING
 EXPENSES             $ 94,072 $(5,908) $ 88,164 $ 72,384 $(3,499) $ 68,885
  Amortization of
   intangible assets
   (5) (6)               1,980  (1,980)        -    1,232  (1,232)        -
  Stock-based
   compensation (6)      3,771  (3,771)        -    2,267  (2,267)        -
  Acquisition-related
   costs                   157    (157)        -        -       -         -

INCOME FROM
 OPERATIONS           $  2,222 $ 9,622  $ 11,844 $  7,053 $ 6,054  $ 13,107

OPERATING MARGIN %           2%                8%       6%               11%

INCOME TAX EFFECTS
 (7)                  $    883 $ 3,137  $  4,020 $  1,954 $ 2,217  $  4,171

NET INCOME            $  1,504 $ 6,485  $  7,989 $  4,703 $ 3,837  $  8,540

DILUTED EARNINGS PER
 SHARE (8)            $   0.02 $  0.08  $   0.10 $   0.06 $  0.05  $   0.11

DILUTED WEIGHTED-
 AVERAGE COMMON
 SHARES OUTSTANDING
 (8)                    78,280       -    78,280   77,498       -    77,498



                              % Increase
                              (Decrease)
                       ------------------------

                         GAAP      Non-GAAP
                       --------  ----------  --
TOTAL REVENUE                22%         23%
  Software license
   (2)                       34%         36%
  Maintenance (3)            20%         20%
  Services (4)               11%         12%

TOTAL COST OF REVENUE        23%         24%
  Amortization of
   intangible assets
   (5) (6)
  Stock-based
   compensation (6)

GROSS MARGIN %              (37) bp     (38) bp

TOTAL OPERATING
 EXPENSES                    30%         28%
  Amortization of
   intangible assets
   (5) (6)
  Stock-based
   compensation (6)
  Acquisition-related
   costs

INCOME FROM
 OPERATIONS                 (68%)       (10%)

OPERATING MARGIN %         (446) bp    (294) bp

INCOME TAX EFFECTS
 (7)                        (55%)        (4%)

NET INCOME                  (68%)        (6%)

DILUTED EARNINGS PER
 SHARE (8)                  (67%)        (9%)

DILUTED WEIGHTED-
 AVERAGE COMMON
 SHARES OUTSTANDING
 (8)                          1%          1%



                              PEGASYSTEMS INC.
      RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
                   ($ in thousands, except per share data)


                                    Six Months Ended June 30,
                     ------------------------------------------------------
                       2014               2014     2013              2013
                       GAAP     Adj.    Non-GAAP   GAAP     Adj.   Non-GAAP
                     -------- --------  -------- -------- -------  --------
TOTAL REVENUE        $283,449 $  2,642  $286,091 $233,561 $     -  $233,561
  Software license
   (2)                106,626    1,043   107,669   83,415       -    83,415
  Maintenance (3)      90,274      375    90,649   74,259       -    74,259
  Services (4)         86,549    1,224    87,773   75,887       -    75,887

TOTAL COST OF
 REVENUE             $ 92,604 $ (5,682) $ 86,922 $ 75,531 $(5,269) $ 70,262
  Amortization of
   intangible assets
   (5) (6)              3,284   (3,284)        -    3,082  (3,082)        -
  Stock-based
   compensation (6)     2,398   (2,398)        -    2,187  (2,187)        -

GROSS MARGIN %             67%                70%      68%               70%

TOTAL OPERATING
 EXPENSES            $173,996 $(10,314) $163,682 $138,026 $(6,994) $131,032
  Amortization of
   intangible assets
   (5) (6)              3,896   (3,896)        -    2,468  (2,468)        -
  Stock-based
   compensation (6)     6,055   (6,055)        -    4,526  (4,526)        -
  Acquisition-
   related costs          363     (363)        -        -       -         -

INCOME FROM
 OPERATIONS          $ 16,849 $ 18,638  $ 35,487 $ 20,004 $12,263  $ 32,267

OPERATING MARGIN %          6%                12%       9%               14%

INCOME TAX EFFECTS
 (7)                 $  5,659 $  6,212  $ 11,871 $  4,903 $ 4,602  $  9,505

NET INCOME           $ 11,269 $ 12,426  $ 23,695 $ 13,772 $ 7,661  $ 21,433

DILUTED EARNINGS PER
 SHARE (8)           $   0.14 $   0.16  $   0.30 $   0.18 $  0.10  $   0.28

DILUTED WEIGHTED-
 AVERAGE COMMON
 SHARES OUTSTANDING
 (8)                   78,563        -    78,563   77,538       -    77,538



                             % Increase
                             (Decrease)
                      ------------------------

                        GAAP      Non-GAAP
                      --------  ----------  --
TOTAL REVENUE               21%         22%
  Software license
   (2)                      28%         29%
  Maintenance (3)           22%         22%
  Services (4)              14%         16%

TOTAL COST OF
 REVENUE                    23%         24%
  Amortization of
   intangible assets
   (5) (6)
  Stock-based
   compensation (6)

GROSS MARGIN %             (33) bp     (30) bp

TOTAL OPERATING
 EXPENSES                   26%         25%
  Amortization of
   intangible assets
   (5) (6)
  Stock-based
   compensation (6)
  Acquisition-
   related costs

INCOME FROM
 OPERATIONS                (16%)        10%

OPERATING MARGIN %        (262) bp    (141) bp

INCOME TAX EFFECTS
 (7)                        15%         25%

NET INCOME                 (18%)        11%

DILUTED EARNINGS PER
 SHARE (8)                 (22%)         7%

DILUTED WEIGHTED-
 AVERAGE COMMON
 SHARES OUTSTANDING
 (8)                         1%          1%


                              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 from Antenna. 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 Antenna 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.

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 expenses: 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 that it will contribute to the generation of future period revenues, we continue to evaluate our business performance excluding stock-based compensation expense.

Acquisition-related costs and restructuring costs: We have excluded the effect of acquisition-related costs and restructuring costs from our non-GAAP operating expenses and net earnings measures. We incurred direct and incremental costs associated with the Antenna acquisition. These acquisition-related costs were primarily professional fees to affect the acquisition. We have also incurred restructuring costs related to the integration of the acquisition, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. Restructuring costs consist primarily of lease exit costs. We believe it is useful for investors to understand the effects of these items on our total operating expenses.

(2) As of June 30, 2014, approximately $0.5 million in estimated revenues related to assumed software license contracts will not be recognized in fiscal 2014 due to business combination accounting rules.

(3) As of June 30, 2014, approximately $0.2 million in estimated revenues related to assumed software support contracts will not be recognized in fiscal 2014 due to business combination accounting rules.

(4) As of June 30, 2014, approximately $0.5 million in estimated revenues related to assumed hosting and services contracts will not be recognized in fiscal 2014 due to business combination accounting rules.

(5) Estimated future annual amortization expense related to intangible assets as of June 30, 2014 is as follows:


       Fiscal 2014                                         $     6,209
       Fiscal 2015                                              11,557
       Fiscal 2016                                              11,145
       Fiscal 2017                                               9,564
       Fiscal 2018 and thereafter                               11,585
                                                           -----------
         Total intangible assets subject to amortization   $    50,060
                                                           ===========

(6) Below is a reconciliation of Non-GAAP operating expenses:


                                   Three Months Ended June 30,
                     -------------------------------------------------------
                       2014               2014     2013               2013
(in '000s)             GAAP     Adj.    Non-GAAP   GAAP     Adj.    Non-GAAP
                     -------- --------  -------- -------- --------  --------
Selling and
 marketing           $ 56,342 $ (2,971) $ 53,371 $ 45,346 $ (2,055) $ 43,291
  Amortization of
   intangible assets    1,499   (1,499)        -    1,232   (1,232)        -
  Stock-based
   compensation         1,472   (1,472)        -      823     (823)        -
Research and
 development         $ 27,323 $ (1,106) $ 26,217 $ 19,761 $   (604) $ 19,157
  Stock-based
   compensation         1,106   (1,106)        -      604     (604)        -
General and
 administrative      $ 10,250 $ (1,674) $  8,576 $  7,277 $   (840) $  6,437
  Amortization of
   intangible assets      481     (481)        -        -        -         -
  Stock-based
   compensation         1,193   (1,193)        -      840     (840)        -
Acquisition-related
 costs                    157     (157)        -        -        -         -
TOTAL OPERATING
 EXPENSES            $ 94,072 $ (5,908) $ 88,164 $ 72,384 $ (3,499) $ 68,885

                                    Six Months Ended June 30,
                     -------------------------------------------------------
                       2014               2014     2013               2013
(in '000s)             GAAP     Adj.    Non-GAAP   GAAP     Adj.    Non-GAAP
                     -------- --------  -------- -------- --------  --------
Selling and
 marketing           $102,149 $ (5,431) $ 96,718 $ 84,616 $ (4,407) $ 80,209
  Amortization of
   intangible assets    2,995   (2,995)        -    2,464   (2,464)        -
  Stock-based
   compensation         2,436   (2,436)        -    1,943   (1,943)        -
Research and
 development         $ 51,932 $ (1,749) $ 50,183 $ 39,337 $ (1,267) $ 38,070
  Stock-based
   compensation         1,749   (1,749)        -    1,267   (1,267)        -
General and
 administrative      $ 19,552 $ (2,771) $ 16,781 $ 14,073 $ (1,320) $ 12,753
  Amortization of
   intangible assets      901     (901)        -        4       (4)        -
  Stock-based
   compensation         1,870   (1,870)        -    1,316   (1,316)        -
Acquisition-related
 costs                    363     (363)        -        -        -         -
TOTAL OPERATING
 EXPENSES            $173,996 $(10,314) $163,682 $138,026 $ (6,994) $131,032

(7) The GAAP income tax effects were calculated using an effective tax rate of 37% and 33.4% in the second quarter and first six months of 2014, respectively, and 29.4% and 26.3% in the second quarter and first six months of 2013, respectively. The non-GAAP income tax effects were calculated using an effective tax rate of 33.5% and 33.4% in the second quarter and first six months of 2014, respectively, and 32.8% and 30.7% in the second quarter and first six months of 2013, respectively.

The differences between our GAAP and non-GAAP effective tax rates in 2014 and 2013 primarily relates to the impact of higher non-GAAP income subjected to tax in higher tax rate jurisdictions.

(8) The number of common shares and per share amounts have been retroactively restated for all prior periods to reflect the Company's two-for-one common stock split effected in the form of a common stock dividend distributed on April 1, 2014.


                              Pegasystems Inc.
               Unaudited Condensed Consolidated Balance Sheets


                                              As of              As of
                                          June 30, 2014    December 31, 2013
                                        -----------------  -----------------
                                                   (in thousands)
Current Assets:
  Cash and cash equivalents             $         127,111  $          80,231
  Marketable securities                            89,102             76,461
                                        -----------------  -----------------
    Total cash, cash equivalents, and
     marketable securities                        216,213            156,692
  Trade accounts receivable, net                  114,642            165,628
  Deferred income taxes                            12,052             12,014
  Income taxes receivable                          11,690              4,708
  Other current assets                              8,982              9,148
                                        -----------------  -----------------
    Total current assets                          363,579            348,190
Property and equipment, net                        27,223             28,957
Long-term deferred income taxes                    61,264             60,291
Other assets                                        2,998              2,526
Intangible assets, net                             50,060             56,574
Goodwill                                           40,463             40,329
                                        -----------------  -----------------
    Total assets                        $         545,587  $         536,867
                                        =================  =================

Current liabilities:
  Accounts payable                      $           6,827  $           3,678
  Accrued expenses                                 31,609             31,814
  Accrued compensation and related
   expenses                                        42,397             44,399
  Deferred revenue                                120,501            110,882
                                        -----------------  -----------------
    Total current liabilities                     201,334            190,773
Income taxes payable                               21,469             21,269
Long-term deferred revenue                         24,535             34,196
Other long-term liabilities                        17,693             18,841
                                        -----------------  -----------------
    Total liabilities                             265,031            265,079
Stockholders' equity:                             280,556            271,788
                                        -----------------  -----------------
    Total liabilities and
     stockholders' equity               $         545,587  $         536,867
                                        -----------------  -----------------



                              Pegasystems Inc.
         Unaudited Condensed Consolidated Statements of Cash Flows

                                                       Six Months Ended
                                                           June 30,
                                                      2014          2013
                                                  -----------   -----------
                                                        (in thousands)
Operating activities:
  Net income                                      $    11,269   $    13,772
  Adjustments to reconcile net income to cash
   provided by operating activities:
    Excess tax benefit from equity awards and
     deferred income taxes                             (3,425)       (1,991)
    Depreciation, amortization, foreign currency
     transaction loss (gain), and other non-cash
     items                                             11,589        13,996
    Stock-based compensation expense                    8,453         6,713
    Change in operating assets and liabilities,
     and other, net                                    46,049        31,790
                                                  -----------   -----------
  Cash provided by operating activities                73,935        64,280
                                                  -----------   -----------
  Cash used in investing activities                   (18,008)      (26,122)
                                                  -----------   -----------
  Cash used in financing activities                   (11,287)       (8,678)
                                                  -----------   -----------
Effect of exchange rate changes on cash and cash
 equivalents                                            2,240        (3,160)
                                                  -----------   -----------
Net increase in cash and cash equivalents              46,880        26,320
Cash and cash equivalents, beginning of period         80,231        77,525
                                                  -----------   -----------
Cash and cash equivalents, end of period          $   127,111   $   103,845
                                                  -----------   -----------



                              PEGASYSTEMS INC.
                    Historical License and Cloud Backlog
                              ($ in thousands)

              -------- -----------------------------------------------------
                2014     2014     2013     2013     2013     2013     2012
                 Q2       Q1       Q4       Q3       Q2       Q1       Q4
              -------- -------- -------- -------- -------- -------- --------
 Total billed
  deferred
  license and
  cloud
  revenue       54,938   62,741   64,459   34,644   37,312   31,765   40,262
              -------- -------- -------- -------- -------- -------- --------
 Total off-
  balance
  sheet
  license and
  cloud
  commitments  298,658  270,243  283,099  248,403  246,821  253,623  265,222
              -------- -------- -------- -------- -------- -------- --------
TOTAL LICENSE
 AND CLOUD
 BACKLOG      $353,596 $332,984 $347,558 $283,047 $284,133 $285,388 $305,484
              -------- -------- -------- -------- -------- -------- --------

Press Contacts:
Lisa Pintchman
Pegasystems Inc.
[email protected]
(617) 866-6022
Twitter: @pega

Rosemarie Esposito
Hotwire PR
[email protected]
(646) 738-8964

Investor Contact:
Sheila Ennis
ICR for Pegasystems
[email protected]
617-866-6077

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
A critical component of any IoT project is what to do with all the data being generated. This data needs to be captured, processed, structured, and stored in a way to facilitate different kinds of queries. Traditional data warehouse and analytical systems are mature technologies that can be used to handle certain kinds of queries, but they are not always well suited to many problems, particularly when there is a need for real-time insights.
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus o...
Providing secure, mobile access to sensitive data sets is a critical element in realizing the full potential of cloud computing. However, large data caches remain inaccessible to edge devices for reasons of security, size, format or limited viewing capabilities. Medical imaging, computer aided design and seismic interpretation are just a few examples of industries facing this challenge. Rather than fighting for incremental gains by pulling these datasets to edge devices, we need to embrace the i...
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
SYS-CON Events announced today that Catchpoint, a leading digital experience intelligence company, has been named “Silver Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Catchpoint Systems is a leading Digital Performance Analytics company that provides unparalleled insight into your customer-critical services to help you consistently deliver an amazing customer experience. Designed for digital business, C...
@ThingsExpo has been named the ‘Top WebRTC Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @ThingsExpo ranked as the number one ‘WebRTC Influencer' followed by @DevOpsSummit at 55th.
"There's a growing demand from users for things to be faster. When you think about all the transactions or interactions users will have with your product and everything that is between those transactions and interactions - what drives us at Catchpoint Systems is the idea to measure that and to analyze it," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York Ci...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
SYS-CON Events announced today that Linux Academy, the foremost online Linux and cloud training platform and community, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Linux Academy was founded on the belief that providing high-quality, in-depth training should be available at an affordable price. Industry leaders in quality training, provided services, and student certification passes, its goal is to c...
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
"What is the next step in the evolution of IoT systems? The answer is data, information, which is a radical shift from assets, from things to input for decision making," stated Michael Minkevich, VP of Technology Services at Luxoft, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions with...
WebRTC sits at the intersection between VoIP and the Web. As such, it poses some interesting challenges for those developing services on top of it, but also for those who need to test and monitor these services. In his session at WebRTC Summit, Tsahi Levent-Levi, co-founder of testRTC, reviewed the various challenges posed by WebRTC when it comes to testing and monitoring and on ways to overcome them.
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, discussed the best practices that will ensure a successful smart city journey.