SOURCE: Pegasystems

Pegasystems

August 05, 2014 16:02 ET

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 - Aug 5, 2014) -  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.

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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

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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)
                                             
                                  % Increase
    Three Months Ended June 30,     (Decrease)
    2014         2014   2013         2013                
    GAAP   Adj.     Non-GAAP   GAAP   Adj.     Non-GAAP     GAAP     Non-GAAP    
TOTAL REVENUE   $ 142,985   $ 883     $ 143,868   $ 117,315   $ -     $ 117,315     22 %   23 %  
  Software license (2)     54,012     521       54,533     40,206     -       40,206     34 %   36 %  
  Maintenance (3)     45,393     153       45,546     37,937     -       37,937     20 %   20 %  
  Services (4)     43,580     209       43,789     39,172     -       39,172     11 %   12 %  
                                                         
TOTAL COST OF REVENUE   $ 46,691   $ (2,831 )   $ 43,860   $ 37,878   $ (2,555 )   $ 35,323     23 %   24 %  
  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 %   (37 ) bp (38 ) bp
                                                         
TOTAL OPERATING EXPENSES   $ 94,072   $ (5,908 )   $ 88,164   $ 72,384   $ (3,499 )   $ 68,885     30 %   28 %  
  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     (68 %)   (10 %)  
                                                         
OPERATING MARGIN %     2 %           8 %   6 %           11 %   (446 ) bp (294 ) bp
                                                         
INCOME TAX EFFECTS (7)   $ 883   $ 3,137     $ 4,020   $ 1,954   $ 2,217     $ 4,171     (55 %)   (4 %)  
                                                         
NET INCOME   $ 1,504   $ 6,485     $ 7,989   $ 4,703   $ 3,837     $ 8,540     (68 %)   (6 %)  
                                                         
DILUTED EARNINGS PER SHARE (8)   $ 0.02   $ 0.08     $ 0.10   $ 0.06   $ 0.05     $ 0.11     (67 %)   (9 %)  
                                                         
DILUTED WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING (8)     78,280     -       78,280     77,498     -       77,498     1 %   1 %  
                                                         
 
 
PEGASYSTEMS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in thousands, except per share data)
                                             
                                  % Increase
    Six Months Ended June 30,     (Decrease)
    2014         2014   2013         2013                
    GAAP   Adj.     Non-GAAP   GAAP   Adj.     Non-GAAP     GAAP     Non-GAAP    
TOTAL REVENUE   $ 283,449   $ 2,642     $ 286,091   $ 233,561   $ -     $ 233,561     21 %   22 %  
  Software license (2)     106,626     1,043       107,669     83,415     -       83,415     28 %   29 %  
  Maintenance (3)     90,274     375       90,649     74,259     -       74,259     22 %   22 %  
  Services (4)     86,549     1,224       87,773     75,887     -       75,887     14 %   16 %  
                                                         
TOTAL COST OF REVENUE   $ 92,604   $ (5,682 )   $ 86,922   $ 75,531   $ (5,269 )   $ 70,262     23 %   24 %  
  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 %   (33 ) bp (30 ) bp
                                                         
TOTAL OPERATING EXPENSES   $ 173,996   $ (10,314 )   $ 163,682   $ 138,026   $ (6,994 )   $ 131,032     26 %   25 %  
  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     (16 %)   10 %  
                                                         
OPERATING MARGIN %     6 %           12 %   9 %           14 %   (262 ) bp (141 ) bp
                                                         
INCOME TAX EFFECTS (7)   $ 5,659   $ 6,212     $ 11,871   $ 4,903   $ 4,602     $ 9,505     15 %   25 %  
                                                         
NET INCOME   $ 11,269   $ 12,426     $ 23,695   $ 13,772   $ 7,661     $ 21,433     (18 %)   11 %  
                                                         
DILUTED EARNINGS PER SHARE (8)   $ 0.14   $ 0.16     $ 0.30   $ 0.18   $ 0.10     $ 0.28     (22 %)   7 %  
                                                         
DILUTED WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING (8)     78,563     -       78,563     77,538     -       77,538     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

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