PEGA(US:PEGA)2024-10-23 20:08Financial Performance - Annual Contract Value (ACV) increased by 16% year over year, reaching $1,360 million as of September 30, 2024[2] - Total revenue for the three months ended September 30, 2024, was $325,050 million, a decrease of 3% compared to $334,643 million in the same period of 2023[3] - Non-GAAP net income for the nine months ended September 30, 2024, was $122,589 million, an increase of 111% from $58,018 million in the prior year[3] - Pega Cloud revenue for the nine months ended September 30, 2024, was $409,096 million, reflecting a 20% increase from $340,982 million in the same period of 2023[4] - Total revenue for the nine months ended September 30, 2024, reached $1,006,350, compared to $958,383 for the same period in 2023, reflecting a year-over-year increase of 5.0%[13] - The net loss for the nine months ended September 30, 2024, was $(19,901), significantly improved from a net loss of $(74,857) in the same period of 2023[16] - Cash flow from operations for the first nine months of 2024 was $251 million, with free cash flow at $246 million[1] - Free cash flow for the nine months ended September 30, 2024, was $245,776 million, representing a 99% increase from $123,649 million in the same period last year[23] Revenue Breakdown - Pega Cloud ACV grew by 30% year over year, totaling $144,108 million for the three months ended September 30, 2024[1] - Subscription services revenue for the three months ended September 30, 2024, was $224,810 million, a 69% increase from $201,578 million in the same period of 2023[4] - Subscription services revenue for the nine months ended September 30, 2024, was $947,327 million, a 16% increase from $813,821 million in the same period last year[24] - Annual Contract Value (ACV) for Pega Cloud increased to $640,574 million, a 30% increase from $494,571 million year-over-year[24] Expenses and Losses - The company reported a GAAP net loss of $14,390 million for the three months ended September 30, 2024, compared to a loss of $7,279 million in the same period of 2023, representing a 98% increase in losses[3] - Total operating expenses for the nine months ended September 30, 2024, were $737,147, slightly lower than $744,858 in the same period last year, a decrease of 1.0%[13] - Selling and marketing expenses for the three months ended September 30, 2024, were $14,169 million, a 36% increase from $10,401 million year-over-year[21] - Research and development expenses for the three months ended September 30, 2024, were $7,308 million, slightly down from $7,375 million in the same period last year[21] Cash and Assets - Cash provided by operating activities for the nine months ended September 30, 2024, was $250,697, compared to $137,920 in the prior year, an increase of 81.5%[16] - Cash, cash equivalents, and restricted cash at the end of the period were $299,065, compared to $172,146 at the end of the previous year, an increase of 73.8%[16] - Total current assets as of September 30, 2024, amounted to $1,119,080, up from $1,029,027 at the end of 2023, representing an increase of 8.8%[15] - Total liabilities decreased to $1,106,209 as of September 30, 2024, from $1,156,898 at the end of 2023, a reduction of 4.4%[15] Backlog Information - As of September 30, 2024, total backlog is $1,475.3 million, reflecting a 17% growth rate year-over-year[28] - The backlog for subscription Pega Cloud is $495.6 million, representing 53% of the total backlog[26] - The backlog for services and maintenance is $297.9 million, accounting for 20% of the total backlog[26] - The backlog for subscription licenses is $51.0 million, which is 3% of the total backlog[26] - The total backlog as of September 30, 2023, was $1,265.4 million, with a year-over-year change of $209.9 million[28] - The constant currency backlog for September 30, 2024, is projected to be $1,432 million, indicating a 13% increase[28] - The backlog for 1 year or less is $779.2 million, which is 53% of the total backlog[26] - The backlog for 1-2 years is $386.8 million, representing 26% of the total backlog[26] - The backlog for 2-3 years is $178.4 million, accounting for 12% of the total backlog[26] - The backlog for greater than 3 years is $130.9 million, which is 9% of the total backlog[26] Earnings Per Share - Diluted earnings per share on a non-GAAP basis for the nine months ended September 30, 2024, was $1.38, a 100% increase from $0.69 in the prior year[3] - The diluted earnings per share - non-GAAP for the three months ended September 30, 2024, was $0.39, a decrease of 11% from $0.44 in the same period last year[18] Strategic Insights - Pega's distinctive AI approach is driving client engagement and digital transformation, as highlighted by CEO Alan Trefler[1]