Pegasystems today announced its first quarter 2002 earnings results, reporting revenues of $24.2 million, an increase of 3% from the first quarter of 2001. The Company achieved earnings per share of $0.10 for the quarter, up from $0.03 in the first quarter of 2001.
“Despite a difficult economic environment, we are proud to deliver our fifth consecutive quarter of profitability and growth,” said Rick Jones, president and COO, Pegasystems. “Our financial performance this quarter is a result of the quality of our customer relationships. We signed significant extensions with several clients during the quarter, including an important sale to First Data, which accounted for $7.0 million in incremental revenue this quarter and will positively impact quarters through 2003. Additionally, our healthcare initiative gained momentum through the acquisition of 1mind Corporation and client successes at BUPA and HealthNow.”
Pegasystems reported sequential growth in revenues, posting net profits of $3.4 million and $8.5 million in positive cash flow from operations for the quarter. Total cash and cash equivalents increased to $41.3 million at March 31, 2002, up 25% sequentially and 105% year-over-year.
Added Jones, “We reorganised our applications business and created industry-specific business groups that focus on our target markets of financial services, healthcare and insurance. We appointed leaders of these business units who each possess a deep, functional knowledge of their respective markets and who will drive the integration of our product capabilities with our industry-specific expertise.”
Concluded Jones, “As previously mentioned, we are pleased to have signed an agreement extending our relationship with the card issuing services subsidiary of First Data Corp. (NYSE: FDC). This non-exclusive agreement reaffirms our strength and position in the credit card services market. We believe the extended license is a testament to the technical and business value of our 19-year history and expertise in financial services and business rules.”
Pegasystems reports that the value of the agreement with First Data is expected to provide approximately $34 million of license revenue between Q1 2002 and Q3 2003. “Our ability to successfully conclude this license agreement this quarter helped offset the general weakness in software spending we, and others in the industry, have been experiencing,” commented Chris Sullivan, CFO, Pegasystems.
“We continue to invest in our rules technology to develop and market new products that will help deliver a measurable ROI for our customers and partners,” said Alan Trefler, founder and CEO, Pegasystems. “Our technical strength and rules-driven approach continue to gain industry recognition and validation. We were recently listed in the “leader” quadrant in Gartner’s Business Rule Engine Market Magic Quadrant* report and in the “challenger” quadrant in Gartner’s CSS Magic Quadrant report – testaments to both our core applications business and emerging PegaRULES technology. Our technology initiatives are also driving increased interest with partners and we expect to announce new relationships in the second quarter.”
Continued Trefler, “We would like to share that Rick Jones will transition from his role as president and COO, to the role of vice-chairman of our board of directors by the end of 2002. I am delighted with Rick’s contribution to our operational turnaround and we remain committed to maintaining the level of accountability and business discipline that he brought to the organisation. Upon his transition to vice-chairman, we will have the opportunity to add another experienced executive to our management team, while benefiting from Rick’s continued involvement in company strategy and customer interactions.”
“Family priorities in Florida have influenced my decision in this regard,” commented Jones. “I will be pleased to serve as vice-chairman, which enables me to remain actively engaged with Pegasystems, while attending to personal obligations. I am proud to be part of this company and the excellent momentum we have built during the past few years. During the search for my successor, I will remain fully involved in my operational responsibilities and will work to ensure a smooth transition.”