Pegasystems today announced financial results for the first quarter ended March 31, 2010. Revenue for the first quarter of 2010 increased 20% to $75.1 million compared to the first quarter of 2009. Net income for the first quarter of 2010 was $3.9 million compared to $8.6 million for the first quarter of 2009. The Company generated $4.8 million in cash from operations and had $202.1 million in cash, cash equivalents, and marketable securities as of March 31, 2010. The first quarter 2010 results do not include the operating results of Chordiant as the acquisition was completed in April 2010.
“We continued to see strong demand for our patented Build for Change(R) technology during the first quarter of 2010,” said Alan Trefler, Founder and CEO of Pegasystems. “We have seen increased adoption across industries including insurance, financial services, healthcare, government agencies, airport management, and warranty management. Our new SmartBPM(R) 6 software release continues to raise the bar by delivering unparalleled power, ease of use, and collaboration. SmartBPM(R) is becoming the unifying force that bridges the gap between business and IT, while also bringing increased operational efficiency to our customers for rapid returns on investment. We continue to complement SmartBPM(R) with preconfigured industry solutions, such as the Individual Sales Process Manager for Healthcare(TM), which coincided with the new healthcare reform legislation in time to help insurers enroll millions of new individual participants in health plans.”
“The addition of Chordiant staff, technology, and clients strengthens our position in the growing customer experience management market. We are looking forward to showcasing our complementary solutions to over 1,000 Pegasystems clients and partners at our PegaWORLD conference in Philadelphia next week. This record setting event will highlight the power of BPM with over 30 client speakers attesting to the tremendous value that SmartBPM(R) drives,” concluded Mr. Trefler.
“We are executing well on our plan to invest in support of continued growth. Our operating expenses reflect our investment in sales, marketing, and R&D headcount, which made up the significant majority of the record 113 new employees in the quarter,” added Craig Dynes, Pegasystems’ CFO. “With the completion of the Chordiant acquisition, we are able to increase our 2010 revenue guidance to approximately $348 million on a GAAP basis, or $360 million on a non-GAAP basis. We don’t expect changes in the profitability of the core Pegasystems business in 2010 and expect the Chordiant acquisition to be accretive, but since the acquisition was just completed yesterday, we have not finished our purchase accounting, and thus are unable to provide updated 2010 earnings guidance. However, the new business combination rules are already impacting our financial statements; in Q1 we recorded $1.5 million of acquisition-related expenses, many of which are not tax deductible and caused our effective tax rate to jump up to almost 39%.These acquisition expenses, along with foreign currency issues in Europe, do not reflect any change in our business conditions, but impacted our earnings per share by about ten cents in the quarter.”
Messrs. Trefler and Dynes will be hosting a conference call and live Webcast associated with this announcement at 9:00 a.m. ET on April 23, 2010. Dial-in information is as follows: 1 (877) 348-9349 (domestic) or 1 (678) 809-1046 (international).
To listen to the Webcast log onto http://www.pega.com at least 5 minutes prior to the event’s broadcast and click on the Webcast icon in the Investor Relations section. A replay of the call will also be available on www.pega.com in the Investor Relations section Audio Archives link.