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August 6, 2009

Pegasystems shines through recession

BPM vendor unveils impressive revenue growth

By Steve Evans

Business Process Management (BPM) firm Pegasystems has posted recession-busting revenue figures for Q2 2009. The company has increased guidance for the year in response to its impressive results.

For the quarter ended June 30, Pegasystems recorded a 25% jump in revenue from $51.1m (£30.3m) to $63.9m (£38m). This was helped by an increase in revenue from software licences, which rose from $15.8m (£9.4m) a year ago to $25.6m (£15.2m). Over the first six months of 2009, software licence revenue rose 61%, from $33.3m (£19.8m) to $53.7m (£32m).

The company turned in net income of $11.2m (£6.66m), up from $2.8m (£1.6m) a year ago.

Greg Dynes, CFO at Pegasystems, said that a more careful approach to spending helped the company achieve the impressive figures. He said. “Given the state of the economy, we have been cautious with our spending during the first half of the year.”

“These outstanding financial results, along with a strong pipeline, provide us the opportunity to accelerate our investment in sales, marketing and R&D; investments which we expect will drive further growth in 2010,” Dynes said. “Accordingly, we expect net income for 2009 to surpass $25m and 2009 cash flow from operations to be approximately $35m.”

CEO Alan Trefler is confident that the company is in a good position to continue its success. “We continue to both lead the industry in BPM innovation and grow faster than the market. In Q2 we released new frameworks that make project and test management a seamless complement to our BPM suite. These unique capabilities significantly improve time to market and lower costs. We also released an enhanced Customer Relationship Management framework” he said.

“Clients are increasingly adopting our customer-centric, intent-driven approach to improve customer experience at a lower cost of service. Our results show our customers are achieving significant business success through the use of Pegasystems software: and client success remains the central mission of our company,” Trefler said.

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Competition for Pegasystems in the BPM space include Cordys, Lombardi and TIBCO as well as offerings from Software AG, IBM and Oracle.

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