Shares of Pegasystems Inc. were riding higher in after-hours trading today after the business process management software provider posted a strong earnings and revenue beat.
The company reported fourth-quarter earnings, adjusted for onetime gains and costs, of 82 cents per share, well ahead of Wall Street’s target of a nine-cent-per-share profit. Revenue for the period rose 25%, to $396.5 million, easily beating the consensus estimate of $334.9 million. All told, Pegasystems posted a net profit of $34.6 million for the quarter, reversing a $37.2 million net loss it posted one year ago.
Looking at the bigger picture, though, Pegasystems is still unprofitable, recording a net loss of $345.6 million for the full year, rising from a loss of $60 million one year earlier. Fiscal 2022 revenue came to $1.32 billion, up 9% from the previous year.
Pegasystems founder and Chief Executive Alan Trefler (pictured) said he was pleased with the company’s strong finish to the year. He added that he’s “proud of our resilient team, who performed so well in a year that included a number of major distractions and economic headwinds.”
The company provides low-code automation software that helps people who aren’t full-on programmers to automate manual tasks, unify business processes and customer journeys. Its software allows companies to overcome the proliferation of multiple business applications and systems. By creating a configurable platform that sits above those other systems, the Pega Platform provides businesses with a single view of their customers, cases and workflows, together with all of the associated data.
The company’s software rivals platforms offered by robotic process automation firms such as UiPath Inc. and Automation Anywhere Inc., but it’s generally seen as a more bespoke offering.
In its earnings release, Pegasystems offered some additional optimistic numbers, saying its annual contract value grew by 16% year-over-year, to $1.16 billion. ACV is a measure of how much the company’s customer contracts are worth, calculated by averaging and normalizing their value over a full year.
Pegasystems also reported total revenue backlog of $1.39 billion at the end of the quarter, up from $1.34 billion a year earlier. Revenue backlog is the sum of unrecognized revenue that the company is set to earn, based on contractual agreements already signed with customers. In other words, it’s a key indicator of future sales.
Looking forward, Pegasystems declined to offer guidance for the coming quarter but set full-year targets of $1.50 per share in earnings and $1.4 billion in revenue. That compares well with Wall Street’s forecast of a 62-cent full-year profit on revenue of $1.38 billion.
Investors liked what they saw, with Pegasystems stock rising more than 7% in the extended trading session, adding to a gain of almost 8% earlier in the day.