- Cash flow from operations and free cash flow both exceed
$200 million for first time in company history
- Annual contract value (ACV) grows 11% year over
year
- Pega Cloud gross margin jumps to 74% for 2023
Pegasystems Inc. (NASDAQ: PEGA), the leading enterprise AI
decisioning and workflow automation platform provider, released its
financial results for the fourth quarter and full-year 2023.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240214539360/en/
(Graphic: Business Wire)
“It’s awesome to see how well our team performed in 2023,” said
Alan Trefler, founder and CEO. “We delivered transformative
innovation to change the way the world builds software while
deepening and expanding our client relationships. I couldn’t be
more excited about the incredible opportunity ahead to leverage
GenAI and revolutionize the way clients use our technology to drive
success in 2024 and beyond.”
“Our team did an excellent job balancing growth and
profitability last year,” said Ken Stillwell, Pega COO and CFO. “We
delivered double-digit ACV growth and record free cash flow by
focusing on client success and by transforming our go-to-market
model. As we exited 2023, we hit our Rule of 30 target, a big
transformation for how we run the business. And, we’re on track to
achieve the Rule of 40 as we exit 2024.”
Financial and performance metrics (1)
Reconciliation of ACV and ACV (constant
currency)
(in millions, except percentages)
December 31, 2022
December 31, 2023
1-Year Change
ACV
$
1,126
$
1,255
11
%
Impact of changes in foreign exchange
rates
—
(11
)
ACV (constant currency)
$
1,126
$
1,244
11
%
Note: ACV (constant currency) is calculated by applying the
December 31, 2022 foreign exchange rates to all periods shown.
1 Refer to the schedules at the end of this release for
additional information, including a reconciliation of GAAP and
non-GAAP measures.
(Dollars in thousands,
except per share amounts)
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
Change
2023
2022
Change
Total revenue
$
474,233
$
396,470
20
%
$
1,432,616
$
1,317,845
9
%
Net income (loss) - GAAP
$
142,665
$
34,613
312
%
$
67,808
$
(345,582
)
*
Net income - non-GAAP
$
152,141
$
68,341
123
%
$
210,159
$
59,611
253
%
Diluted earnings (loss) per share -
GAAP
$
1.61
$
0.41
293
%
$
0.73
$
(4.22
)
*
Diluted earnings per share - non-GAAP
$
1.77
$
0.82
116
%
$
2.48
$
0.72
244
%
* not meaningful
(Dollars in thousands)
Three Months Ended
December 31,
Change
Year Ended
December 31,
Change
2023
2022
2023
2022
Pega Cloud
$
120,346
25
%
$
103,089
26
%
$
17,257
17
%
$
461,328
32
%
$
384,271
29
%
$
77,057
20
%
Maintenance
86,646
18
%
81,996
21
%
4,650
6
%
331,856
24
%
317,564
24
%
14,292
5
%
Subscription services
206,992
43
%
185,085
47
%
21,907
12
%
793,184
56
%
701,835
53
%
91,349
13
%
Subscription license
207,559
44
%
155,818
39
%
51,741
33
%
407,625
28
%
366,063
28
%
41,562
11
%
Subscription
414,551
87
%
340,903
86
%
73,648
22
%
1,200,809
84
%
1,067,898
81
%
132,911
12
%
Perpetual license
5,372
1
%
364
—
%
5,008
1376
%
10,101
1
%
19,293
1
%
(9,192
)
(48
)%
Consulting
54,310
12
%
55,203
14
%
(893
)
(2
)%
221,706
15
%
230,654
18
%
(8,948
)
(4
)%
$
474,233
100
%
$
396,470
100
%
$
77,763
20
%
$
1,432,616
100
%
$
1,317,845
100
%
$
114,771
9
%
2024 Guidance (1)
As of February 14, 2024, we are providing the following
guidance:
2024
Annual contract value growth
11%
2024
GAAP
Non-GAAP (1)
Revenue
$1.5 Billion
$1.5 Billion
Diluted earnings per share
$1.18
$2.75
2024
Cash provided by operating activities
$365 million
Free cash flow
$350 million
(1) A reconciliation of our GAAP and Non-GAAP guidance is
contained in the financial schedules at the end of this
release.
Quarterly conference call
A conference call and audio-only webcast will be conducted at
8:00 a.m. EST on Thursday, February 15, 2024. Members of the public
and investors are invited to join the call and participate in the
question-and-answer session by dialing 1 (888) 415-4305 (domestic),
1 (646) 960-0336 (international), or via
https://events.q4inc.com/attendee/543203270 by logging onto
www.pega.com at least five minutes prior to the event's broadcast
and clicking on the webcast icon in the Investors section.
Discussion of non-GAAP financial measures
Our non-GAAP financial measures should only be read in
conjunction with our consolidated financial statements prepared in
accordance with GAAP. We believe that these measures help investors
understand our core operating results and prospects, which is
consistent with how management measures and forecasts our
performance without the effect of often one-time charges and other
items outside our normal operations. They are not a substitute for
financial measures prepared under U.S. GAAP. Refer to the schedules
at the end of this release for additional information, including a
reconciliation of GAAP and non-GAAP measures.
Forward-looking statements
Certain statements in this press release may be "forward-looking
statements” as defined in the Private Securities Litigation Reform
Act of 1995.
Words such as expects, anticipates, intends, plans, believes,
will, could, should, estimates, may, targets, strategies, intends
to, projects, forecasts, guidance, likely, and usually or
variations of such words and other similar expressions, identify
forward-looking statements, which represent our views only as of
the date the statement was made and are based on current
expectations and assumptions.
Forward-looking statements deal with future events and are
subject to risks and uncertainties that are difficult to predict,
including, but not limited to:
- our future financial performance and business plans;
- the adequacy of our liquidity and capital resources;
- the continued payment of our quarterly dividends;
- the timing of revenue recognition;
- variation in demand for our products and services, including
among clients in the public sector;
- reliance on key personnel;
- reliance on third-party service providers, including hosting
providers;
- compliance with our debt obligations and covenants;
- the potential impact of our convertible senior notes and capped
call transactions;
- foreign currency exchange rates;
- the potential legal and financial liabilities and damage to our
reputation due to cyber-attacks;
- security breaches and security flaws;
- our ability to protect our intellectual property rights, costs
associated with defending such rights, intellectual property rights
claims, and other related claims by third parties against us,
including related costs, damages, and other relief that may be
granted against us;
- our ongoing litigation with Appian Corp.;
- our client retention rate; and
- management of our growth.
These risks and others that may cause actual results to differ
materially from those expressed in such forward-looking statements
are described further in Part I of our Annual Report on Form 10-K
for the year ended December 31, 2023, and other filings we make
with the U.S. Securities and Exchange Commission (“SEC”).
Investors are cautioned not to place undue reliance on such
forward-looking statements, and there are no assurances that the
results included in such statements will be achieved. Although
subsequent events may cause our view to change, except as required
by applicable law, we do not undertake and expressly disclaim any
obligation to publicly update or revise these forward-looking
statements, whether as the result of new information, future
events, or otherwise.
Any forward-looking statements in this press release represent
our views as of February 14, 2024.
About Pegasystems
Pega provides a powerful platform that empowers the world's
leading organizations to unlock business-transforming outcomes with
real-time optimization. Clients use our enterprise AI decisioning
and workflow automation to solve their most pressing business
challenges - from personalizing engagement to automating service to
streamlining operations. Since 1983, we've built our scalable and
flexible architecture to help enterprises meet today's customer
demands while continuously transforming for tomorrow. For more
information on how Pega (NASDAQ: PEGA) empowers its clients to
Build for Change®, visit 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
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Revenue
Subscription services
$
206,992
$
185,085
$
793,184
$
701,835
Subscription license
207,559
155,818
407,625
366,063
Consulting
54,310
55,203
221,706
230,654
Perpetual license
5,372
364
10,101
19,293
Total revenue
474,233
396,470
1,432,616
1,317,845
Cost of revenue
Subscription services
34,697
35,632
144,250
138,736
Subscription license
635
719
2,606
2,642
Consulting
55,298
55,920
231,560
227,082
Perpetual license
16
2
67
175
Total cost of revenue
90,646
92,273
378,483
368,635
Gross profit
383,587
304,197
1,054,133
949,210
Operating expenses
Selling and marketing
133,924
151,838
559,177
624,789
Research and development
71,250
73,176
295,512
294,349
General and administrative
22,850
23,204
96,743
117,734
Restructuring
297
21,743
21,747
21,743
Total operating expenses
228,321
269,961
973,179
1,058,615
Income (loss) from operations
155,266
34,236
80,954
(109,405
)
Foreign currency transaction (loss)
gain
(1,271
)
(3,855
)
(5,242
)
4,560
Interest income
3,428
607
9,259
1,643
Interest expense
(1,647
)
(1,910
)
(6,876
)
(7,792
)
(Loss) on capped call transactions
(899
)
(1,001
)
(1,348
)
(57,382
)
Other income, net
25
82
18,693
6,579
Income (loss) before provision for
(benefit from) income taxes
154,902
28,159
95,440
(161,797
)
Provision for (benefit from) income
taxes
12,237
(6,454
)
27,632
183,785
Net income (loss)
$
142,665
$
34,613
$
67,808
$
(345,582
)
Earnings (loss) per share
Basic
$
1.71
$
0.42
$
0.82
$
(4.22
)
Diluted
$
1.61
$
0.41
$
0.73
$
(4.22
)
Weighted-average number of common
shares outstanding
Basic
83,654
82,257
83,162
81,947
Diluted
89,447
87,339
84,914
81,947
PEGASYSTEMS INC. UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands)
December 31, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
229,902
$
145,054
Marketable securities
193,436
152,167
Total cash, cash equivalents, and
marketable securities
423,338
297,221
Accounts receivable, net
300,173
255,150
Unbilled receivables, net
237,379
213,719
Other current assets
68,137
80,388
Total current assets
1,029,027
846,478
Long-term unbilled receivables, net
85,402
95,806
Goodwill
81,611
81,399
Other long-term assets
314,696
333,989
Total assets
$
1,510,736
$
1,357,672
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
11,290
$
18,195
Accrued expenses
39,941
50,355
Accrued compensation and related
expenses
126,640
127,728
Deferred revenue
377,845
325,212
Other current liabilities
21,343
17,450
Total current liabilities
577,059
538,940
Long-term convertible senior notes,
net
499,368
593,609
Long-term operating lease liabilities
66,901
79,152
Other long-term liabilities
13,570
15,128
Total liabilities
1,156,898
1,226,829
Total stockholders’ equity
353,838
130,843
Total liabilities and stockholders’
equity
$
1,510,736
$
1,357,672
PEGASYSTEMS INC. UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Year Ended
December 31,
2023
2022
Net income (loss)
$
67,808
$
(345,582
)
Adjustments to reconcile net income (loss)
to cash provided by operating activities
Non-cash items
227,983
432,270
Change in operating assets and
liabilities, net
(78,006
)
(64,352
)
Cash provided by operating activities
217,785
22,336
Cash (used in) provided by investing
activities
(50,750
)
13,075
Cash (used in) financing activities
(81,963
)
(46,989
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
2,701
(3,333
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
87,773
(14,911
)
Cash, cash equivalents, and restricted
cash, beginning of period
145,054
159,965
Cash, cash equivalents, and restricted
cash, end of period
$
232,827
$
145,054
PEGASYSTEMS INC. RECONCILIATION OF
SELECTED GAAP AND NON-GAAP MEASURES (in thousands, except
percentages and per share amounts)
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
Change
2023
2022
Change
Net income (loss) - GAAP
$
142,665
$
34,613
312
%
$
67,808
$
(345,582
)
*
Stock-based compensation (1)
33,269
28,909
143,352
122,210
Restructuring
297
21,743
21,747
21,743
Legal fees
2,817
2,139
13,883
34,559
Amortization of intangible assets
963
1,048
3,940
4,093
Interest on convertible senior notes
615
725
2,603
2,888
Capped call transactions
899
1,001
1,348
57,382
Repurchases of convertible senior
notes
—
—
(7,855
)
—
Foreign currency transaction loss
(gain)
1,271
3,855
5,242
(4,560
)
Other
19
37
(10,266
)
(94
)
Income taxes (2)
(30,674
)
(25,729
)
(31,643
)
166,972
Net income - non-GAAP
$
152,141
$
68,341
123
%
$
210,159
$
59,611
253
%
Diluted earnings (loss) per share -
GAAP
$
1.61
$
0.41
293
%
$
0.73
$
(4.22
)
*
non-GAAP adjustments
0.16
0.41
1.75
4.94
Diluted earnings per share - non-GAAP
$
1.77
$
0.82
116
%
$
2.48
$
0.72
244
%
Diluted weighted-average number of
common shares outstanding - GAAP
89,447
87,339
2
%
84,914
81,947
4
%
Capped call transactions
(3,719
)
(4,443
)
(235
)
—
Stock-based compensation
—
—
—
1,405
Diluted weighted-average number of common
shares outstanding - non-GAAP
85,728
82,896
3
%
84,679
83,352
2
%
* not meaningful
Our non-GAAP financial measures reflect the following
adjustments:
- Stock-based compensation: We have
excluded stock-based compensation from our non-GAAP operating
expenses and profitability measures. Although stock-based
compensation is a key incentive offered to our employees, and we
believe such compensation contributed to our revenues recognized
during the periods presented and is expected to contribute to our
future revenues, we continue to evaluate our business performance,
excluding stock-based compensation.
- Restructuring: We have excluded
restructuring from our non-GAAP financial measures. Restructuring
fluctuates in amount and frequency and is significantly affected by
the timing and size of our restructuring activities. We believe
excluding these amounts from our non-GAAP financial measures is
useful to investors as these amounts are not representative of our
core business operations and ongoing operational performance.
- Legal fees: Legal and related fees
arising from proceedings outside the ordinary course of business.
We believe excluding these amounts from our non-GAAP financial
measures is useful to investors as the types of events giving rise
to them are not representative of our core business operations and
ongoing operational performance.
- Amortization of intangible assets:
We have excluded the amortization of intangible assets from our
non-GAAP operating expenses and profitability measures.
Amortization of intangible assets fluctuates in amount and
frequency and is significantly affected by the timing and size of
acquisitions. Investors should note that intangible assets
contributed to our revenues recognized during the periods presented
and are expected to contribute to future revenues. Amortization of
intangible assets is likely to recur in future periods. We believe
excluding these amounts provides a useful comparison of our
operational performance in different periods.
- Interest on convertible senior
notes: In February 2020, we issued convertible senior notes,
due March 1, 2025, in a private placement. We believe that
excluding the amortization of issuance costs provides a useful
comparison of our operational performance in different
periods.
- Capped call transactions: We have
excluded gains and losses related to our capped call transactions
held at fair value under U.S. GAAP. The capped call transactions
are expected to reduce common stock dilution and/or offset any
potential cash payments we must make, other than for principal and
interest, upon conversion of the convertible senior notes. We
believe excluding these amounts from our non-GAAP financial
measures is useful to investors as the types of events giving rise
to them are not representative of our core business operations and
ongoing operational performance.
- Repurchases of convertible senior
notes: We have excluded gains from the repurchases of
Convertible Senior Notes. We believe excluding these amounts from
our non-GAAP financial measures is useful to investors as the types
of events giving rise to them are not representative of our core
business operations and ongoing operational performance.
- Foreign currency transaction loss (gain): We have excluded
foreign currency transaction gains and losses from our non-GAAP
profitability measures. Foreign currency transaction gains and
losses fluctuate in amount and frequency and are significantly
affected by foreign exchange market rates. Foreign currency
transaction gains and losses are likely to recur in future periods.
We believe excluding these amounts provides a useful comparison of
our operational performance in different periods.
- Other: We have excluded gains and
losses from our venture investments, capital advisory expenses,
expenses incurred due to the cancellation of in-person sales and
marketing events, and incremental expenses incurred integrating
acquisitions. We believe excluding these amounts from our non-GAAP
financial measures is useful to investors as the types of events
giving rise to them are not representative of our core business
operations and ongoing operational performance.
- Diluted weighted-average number of common
shares outstanding:
- Capped call transactions: In
periods of GAAP income, the shares that would be issued if the
Company’s Convertible Senior Notes were fully converted to common
shares are included in the diluted weighted-average shares
outstanding. The capped call transactions are expected to reduce
common stock dilution and/or offset any potential cash payments the
Company must make, other than for principal and interest, upon
conversion of the convertible senior notes, with such reduction
and/or offset subject to a cap of $196.44. We believe that
including the expected impact of the capped call transactions in
our non-GAAP financial measures provides a useful comparison of our
operational performance in different periods.
- Stock-based compensation: In
periods of non-GAAP income, we have included the dilutive impact of
stock-based compensation in our non-GAAP weighted-average shares.
In periods of GAAP loss, these shares would have been excluded from
our GAAP results as they would be anti-dilutive for GAAP. We
believe including the dilutive effect of stock-based compensation
in our non-GAAP financial measures in periods of income is helpful
to investors as this provides a useful comparison of our
operational performance in different periods.
(1) Stock-based compensation:
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Cost of revenue
$
6,497
$
6,646
$
28,994
$
26,400
Selling and marketing
14,265
10,245
57,675
46,769
Research and development
6,753
6,841
31,039
29,266
General and administrative
5,754
5,177
25,644
19,775
$
33,269
$
28,909
$
143,352
$
122,210
Income tax benefit
$
(618
)
$
(376
)
$
(2,187
)
$
(1,881
)
(2) Effective income tax rates:
Year Ended
December 31,
2023
2022
GAAP
29
%
114
%
non-GAAP
22
%
22
%
Our GAAP effective income tax rate is subject to significant
fluctuations due to several factors, including our stock-based
compensation plans, research and development tax credits, gains and
losses on our capped call transactions, and the valuation allowance
on our deferred tax assets in the U.S. and U.K. We determine our
non-GAAP income tax rate using applicable rates in taxing
jurisdictions and assessing certain factors, including historical
and forecasted earnings by jurisdiction, discrete items, and
ability to realize tax assets. We believe it is beneficial for our
management to review our non-GAAP results consistent with our
annual plan's effective income tax rate as established at the
beginning of each year, given tax rate volatility.
PEGASYSTEMS INC. RECONCILIATION OF
FREE CASH FLOW (1) AND OTHER METRICS (in thousands, except
percentages)
Year Ended
December 31,
2023
2022
Growth
Growth
ACV (Constant Currency)
$
1,243,931
11
%
$
1,125,701
16
%
Margin (2)
Margin (2)
Cash provided by operating activities
$
217,785
15
%
$
22,336
2
%
Investment in property and equipment
(16,781
)
(35,379
)
Free cash flow
$
201,004
14
%
$
(13,043
)
(1
)%
Supplemental
information (3)
Restructuring
$
29,401
$
—
Legal fees
14,645
41,789
Interest on convertible senior notes
4,134
4,500
Other
601
6,805
Income taxes
11,664
7,645
$
60,445
$
60,739
Effect of supplemental information to Rule
of 40 achievement (4)
4
%
5
%
(1) Our non-GAAP free cash flow is defined as cash provided by
operating activities less investment in property and equipment.
Investment in property and equipment fluctuates in amount and
frequency and is significantly affected by the timing and size of
investments in our facilities. We provide information on free cash
flow to enable investors to assess our ability to generate cash
without incurring additional external financings. This information
is not a substitute for financial measures prepared under U.S.
GAAP. Starting in the third quarter of 2023, the Company calculated
free cash flow as cash provided by operating activities less
investments in property and equipment. To ensure comparability,
previously disclosed amounts have been updated. (2) Operating and
free cash flow margin are calculated by comparing the respective
cash flow to total revenue. (3) The supplemental information
discloses items that affect our cash flows and are considered by
management not to be representative of our core business operations
and ongoing operational performance.
- Restructuring: Restructuring
fluctuates in amount and frequency and is significantly affected by
the timing and size of our restructuring activities.
- Legal fees: Legal and related fees
arising from proceedings outside the ordinary course of
business.
- Interest on convertible senior
notes: In February 2020, we issued convertible senior notes,
due March 1, 2025, in a private placement. The convertible senior
notes accrue interest at an annual rate of 0.75%, payable
semi-annually in arrears on March 1 and September 1.
- Other: Fees related to capital
advisory services, canceled in-person sales and marketing events,
and incremental costs incurred integrating acquisitions.
- Income taxes: Direct income taxes
paid net of refunds received.
(4) Rule of 40: A performance
metric calculated by adding the annual contract value (“ACV”)
growth rate and the free cash flow margin. We also provide a table
of supplemental information of other items that affect our cash
flows and Rule of 40 achievement.
PEGASYSTEMS INC. ANNUAL CONTRACT
VALUE (in thousands, except percentages)
Annual contract value (“ACV”) - ACV represents the
annualized value of our active contracts as of the measurement
date. The contract's total value is divided by its duration in
years to calculate ACV. ACV is a performance measure that we
believe provides useful information to our management and
investors.
In 2023, the Company revised its ACV methodology for maintenance
and all contracts less than 12 months as its overall client renewal
rate exceeds 90%. The impact of the change was $3 million or 0.3%
of Total ACV or less for all quarters in 2022. Previously disclosed
ACV amounts have been updated to allow for comparability. This
simplification, made possible by improvements to the Company’s
financial systems, ensures that ACV for all contract types and
lengths is consistently calculated as the total contract value
divided by the duration in years. Previously, ACV for maintenance
was calculated as the maintenance revenue for the quarter then
ended, multiplied by four, and ACV for contracts less than 12
months was equal to the contract’s total value. The Company
believes the simplified methodology better represents the current
value of its contracts and better aligns its definition with
comparable companies.
December 31, 2023
December 31, 2022
Change
Pega Cloud
$
552,998
$
458,619
$
94,379
21
%
Maintenance
324,091
318,400
5,691
2
%
Subscription services
877,089
777,019
100,070
13
%
Subscription license
377,794
348,682
29,112
8
%
$
1,254,883
$
1,125,701
$
129,182
11
%
PEGASYSTEMS INC. BACKLOG (in
thousands, except percentages)
Remaining performance obligations (“Backlog”) - Expected
future revenue from existing non-cancellable contracts:
As of December 31, 2023:
Subscription services
Subscription license
Perpetual license
Consulting
Total
Maintenance
Pega Cloud
1 year or less
$
245,271
$
446,160
$
62,070
$
2,284
$
39,810
$
795,595
54%
1-2 years
67,720
279,474
9,138
443
2,020
358,795
25%
2-3 years
37,142
144,453
9,789
—
2,896
194,280
13%
Greater than 3 years
24,421
90,177
100
—
—
114,698
8%
$
374,554
$
960,264
$
81,097
$
2,727
$
44,726
$
1,463,368
100%
% of Total
25%
66%
6%
—%
3%
100%
Change since
December 31, 2022
$
23,926
$
74,576
$
9,636
$
(4,836)
$
4,334
$
107,636
7%
8%
13%
(64)%
11%
8%
As of December 31, 2022:
Subscription services
Subscription license
Perpetual license
Consulting
Total
Maintenance
Pega Cloud
1 year or less
$
242,073
$
379,648
$
60,668
$
5,310
$
32,374
$
720,073
53%
1-2 years
66,207
246,195
3,803
2,253
6,371
324,829
24%
2-3 years
26,746
143,901
1,707
—
1,647
174,001
13%
Greater than 3 years
15,602
115,944
5,283
—
—
136,829
10%
$
350,628
$
885,688
$
71,461
$
7,563
$
40,392
$
1,355,732
100%
% of Total
26%
65%
5%
1%
3%
100%
PEGASYSTEMS INC. RECONCILIATION OF
GAAP BACKLOG AND CONSTANT CURRENCY BACKLOG (in millions,
except percentages)
December 31, 2022
December 31, 2023
1 Year Growth Rate
Backlog - GAAP
$
1,356
$
1,463
8
%
Impact of changes in foreign exchange
rates
—
(16
)
Constant currency backlog
$
1,356
$
1,447
7
%
Note: Constant currency Backlog is calculated by applying the Q4
2022 foreign exchange rates to all periods shown.
PEGASYSTEMS INC. RECONCILIATION OF
FORWARD-LOOKING GUIDANCE (in millions, except percentages
and per share amounts)
2024
Annual contract value growth
11
%
Revenue (GAAP and Non-GAAP)
$
1,500
Net Income - GAAP
$
107
Stock-based compensation
143
Legal fees
15
Amortization of intangible assets
3
Interest on convertible senior notes
3
Incomes taxes
(32
)
Net Income - Non-GAAP
$
239
Diluted earnings per share -
GAAP
$
1.18
Non-GAAP adjustments
1.57
Diluted earnings per share - non-GAAP
$
2.75
Diluted weighted-average number of
common shares outstanding - GAAP
90.7
Non-GAAP adjustments
(3.7
)
Diluted weighted-average number of common
shares outstanding - non-GAAP
87.0
2024
Margin (2)
Cash provided by operating activities
$
365
24
%
Investment in property and equipment
(15
)
Free cash flow
$
350
23
%
Supplemental information
Restructuring
$
7
Legal fees
15
Interest on convertible senior notes
5
Income taxes (1)
26
$
53
Effect of supplemental information to Rule
of 40 achievement
4
%
(1) Evolving U.S. tax legislation may impact the amount of tax
payments. (2) Operating and free cash flow margin are calculated by
comparing the respective cash flow to total revenue.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214539360/en/
Press contact: Lisa Pintchman VP, Corporate
Communications lisapintchman.rogers@pega.com 617-866-6022 Twitter:
@pega
Investor contact: Peter Welburn VP, Corporate Development
& Investor Relations PegaInvestorRelations@pega.com
617-498-8968
Pegasystems (NASDAQ:PEGA)
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