Pegasystems today announced its 2005 third quarter results, reporting revenue of $26.8 million, pre-tax profits of $3.1 million and earnings per share of $0.04.
Alan Trefler, CEO, commented, "Leading corporations are recognizing that Pegasystems' SmartBPM software brings rapid value by better aligning their business systems with their business objectives. Thirteen customers in the third quarter chose our business process management (BPM) software to support a broad variety of processes ranging from enhanced call center customer service to more efficient billing.
"Four new customers selected Pegasystems included a leading North American insurer who will be using Pegasystems SmartBPM software to broadly manage business processes; a global insurance broker to support customer billing; and a provider of employee benefits to support the company's sales and service throughout the U.S."
Mr. Trefler continued, "Equally important were the nine existing customers who extended their relationships with Pegasystems, including two who bought their initial PegaRULES Process Commander (PRPC) licenses less than six months ago. One of the world's largest banking organizations, and a long-time customer, selected Pegasystems' PRPC platform as its global BPM standard. These sales are evidence that PRPC and our PRPC-based frameworks provide true business enablement with 'build for change' agility, function and scale.
"This quarter's 13 license signings brings to 32 the number secured this year, compared to 22 through this time last year. We are delighted with this success and look forward to continuing to provide real value for our customers."
Chris Sullivan, CFO, commented, "The value of our license signings during the third quarter was significantly higher than the previously reported weak license signings in the first and second quarters of 2005. While this included one large transaction, we are also encouraged by the number of new and existing customers who purchased licenses.
"We have increased our investment in expanding our pool of trained services personnel, including new Pegasystems staff and partners, to better meet anticipated demand associated with new license signings. This has resulted in lower service gross margins in the third quarter.
"We now expect 2005 full-year revenue to be between $97 and $105 million. The broad range of our revenue estimate is attributable to a small number of large value license opportunities in the fourth quarter. We continue to expect services revenue to be above 50% of total revenue for 2005. We are committed to being the leader in BPM software and have continued to invest in services delivery capacity as well as sales and marketing during the first three quarters of 2005. We expect to continue this investment during the fourth quarter of 2005 and believe this will better position Pegasystems to achieve accelerated growth in future years, but we also anticipate it will continue to result in lower profit before tax in 2005 compared to 2004.
As a result, we now expect full-year 2005 earnings per diluted share to be between $0.03 and $0.15. Cash flow from operations in 2005 is now expected to be in the range of $18 to $22 million."» Download the document now 39.7 kb (Adobe Acrobat Document)