PEGA(US:PEGA)2020-04-30 13:22Financial Data and Key Metrics Changes - Total Annual Contract Value (ACV) increased by 21% year-over-year, reaching $711 million, up from $588 million in Q1 2019 [40] - Pega Cloud ACV grew by 43%, from $127 million to $182 million [40] - Total revenue for Q1 2020 was $266 million, a 25% increase from $213 million in Q1 2019, driven by a 57% increase in cloud revenue [42] - Non-GAAP net income was $0.05 per share compared to a net loss of $0.12 per share a year ago [43] - Total cash and marketable securities at the end of Q1 2020 was $538 million [44] Business Line Data and Key Metrics Changes - Approximately 95% of new client commitments were either Pega or client cloud, with about 5% being perpetual licenses [42] - Pega Cloud backlog increased by 18% from $351 million to $414 million [41] - Total backlog increased by 19% from $633 million to $754 million [41] Market Data and Key Metrics Changes - Core verticals such as financial services, insurance, healthcare, telecommunications, and government are less exposed to the pandemic's short-term impacts compared to industries like airlines and retail [37] - The company has a strong customer base consisting of large enterprises and federal government clients, which helps mitigate exposure to economic downturns [37] Company Strategy and Development Direction - The company is focused on a shift to a recurring revenue model, which has increased from about 50% to 75% [35] - The introduction of new industry-specific solutions to help clients adapt to COVID-19 while supporting long-term business transformation initiatives [12] - The company is positioning its core architecture for future needs through Project Phoenix, anticipating increased demand for digital transformation solutions [25][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the pandemic's impact but remains confident in the company's resilience and ability to navigate challenges [32][36] - There is an expectation for increased demand for intelligent automation and digital transformation solutions in a post-COVID-19 world [47] - The company is monitoring client spending priorities and is prepared to offer flexibility in payment terms [49] Other Important Information - The company announced the appointment of Hayden Stafford as President of Global Client Engagement, effective June 1, 2020 [21] - The first virtual customer engagement summit had over 4,700 registered participants, indicating strong interest in the company's offerings [23] Q&A Session Summary Question: Thoughts on ACV growth despite potential booking declines - Management indicated that while there may be short-term impacts on professional services, the recurring revenue model provides insulation against immediate revenue declines [60][62] Question: Impact of bookings on ACV growth - Management stated that even with a reduction in bookings, ACV could still grow, but significant reductions would hinder achieving the long-term target of 20% growth [65] Question: Customer requests for extended payment terms - Management noted that while some customers may request delayed payment terms, it is not widespread among their traditional clients [71] Question: Pipeline generation and deal delays - Management reported a significant increase in new pipeline generation year-over-year, despite some deals being delayed [85] Question: Key initiatives for new leadership - The new President is expected to accelerate the company's go-to-market strategy and leverage his experience in growing businesses [88]