SOURCE: Pegasystems

Pegasystems

August 03, 2016 16:05 ET

Pegasystems Announces Financial Results for Second Quarter and First Six Months of 2016

Total Revenue Growth Exceeds 16% for First Half 2016

CAMBRIDGE, MA--(Marketwired - August 03, 2016) - 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 share amounts)GAAP Non-GAAP GAAP Non-GAAP GAAP  Non-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
Operating expenses   $7,967   $6,364   $14,222   $10,680
             
             
PEGASYSTEMS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($in thousands, except per share amounts)
                            
   Three Months Ended June 30,   % Increase
   2016       2016   2015       2015               
   GAAP   Adj.   Non-GAAP   GAAP   Adj.   Non-GAAP   GAAP      Non-GAAP    
TOTAL REVENUE  $188,996   $850   $189,846   $162,019   $-   $162,019   17 %    17 %  
 Software license   70,671    14    70,685    63,497    -    63,497   11 %    11 %  
 Maintenance   55,161    729    55,890    49,329    -    49,329   12 %    13 %  
 Services   63,164    107    63,271    49,193    -    49,193   28 %    29 %  
                                             
TOTAL COST OF REVENUE  $60,100   $(4,552 ) $55,548   $54,781   $(3,628 ) $51,153   10 %    9 %  
 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 % 201   bp  231   bp
                                             
TOTAL OPERATING EXPENSES (3)   122,536    (11,013 )  111,523    101,988    (8,149 )  93,839   20 %    19 %  
 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   21 %    34 %  
                                             
OPERATING MARGIN %   3 %       12 %  3 %       11 % 12   bp  149   bp
                                             
INCOME TAX EFFECTS (4)  $1,851   $5,418   $7,269   $1,397   $3,936   $5,333   32 %    36 %  
                                             
NET INCOME  $3,647   $10,997   $14,644   $3,104   $7,841   $10,945   17 %    34 %  
                                             
DILUTED EARNINGS PER SHARE  $0.05   $0.14   $0.19   $0.04   $0.10   $0.14   25 %    36 %  
                                             
DILUTED WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING   78,969    -    78,969    78,950    -    78,950   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,   % Increase
   2016       2016   2015       2015               
   GAAP   Adj.   Non-GAAP   GAAP   Adj.   Non-GAAP   GAAP      Non-GAAP    
TOTAL REVENUE  $367,854   $850   $368,704   $315,937   $-   $315,937   16 %    17 %  
 Software license   139,016    14    139,030    121,472    -    121,472   14 %    14 %  
 Maintenance   108,136    729    108,865    98,081    -    98,081   10 %    11 %  
 Services   120,702    107    120,809    96,384    -    96,384   25 %    25 %  
                                             
TOTAL COST OF REVENUE  $116,610   $(8,578 ) $108,032   $104,840   $(6,849 ) $97,991   11 %    10 %  
 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 % 148   bp  172   bp
                                             
TOTAL OPERATING EXPENSES (3)  $230,759   $(20,064 ) $210,695   $193,938   $(10,431 ) $183,507   19 %    15 %  
 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   19 %    45 %  
                                             
OPERATING MARGIN %   6 %       14 %  5 %       11 % 14   bp  265   bp
                                             
INCOME TAX EFFECTS (4)  $6,339   $9,697   $16,036   $4,722   $5,188   $9,910   34 %    62 %  
                                             
NET INCOME  $12,652   $19,795   $32,447   $9,039   $12,092   $21,131   40 %    54 %  
                                             
DILUTED EARNINGS PER SHARE  $0.16   $0.25   $0.41   $0.11   $0.16   $0.27   45 %    52 %  
                                             
DILUTED WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING   78,924    -    78,924    78,771    -    78,771   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, 2016  December 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   2015  2015  2014  2014
   Q2  Q1  Q4  Q3   Q2  Q1  Q4  Q3
 Total deferred license and cloud revenue   51,855   57,790   63,412   55,370    61,339   79,639   63,048   68,561
 Total license and cloud commitments not on the balance sheet   340,777   331,870   356,388   324,340    330,043   294,412   301,409   265,309
TOTAL LICENSE AND CLOUD BACKLOG  $392,632  $389,660  $419,800  $379,710   $391,382  $374,051  $364,457  $333,870
                                  
                                  

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