Pegasystems Q1 Earnings Miss: Revenue and Key Metrics Fall Short
Enterprise workflow software provider Pegasystems (NASDAQ: PEGA) reported its Q1 CY2024 results on [date], falling short of analysts’ expectations. The company’s revenue declined by 1.4% year on year to $330.1 million, missing analyst estimates of $337.3 million. Key metrics such as annual contract value (ACV) and remaining performance obligations (RPO) also missed estimates, with ACV at $1.17 billion (7.2% miss) and RPO at $1.42 billion (2.1% miss).
Despite the revenue miss, Pegasystems reported a non-GAAP profit of $0.48 per share, improving from its profit of $0.23 per share in the same quarter last year. This beat analyst estimates of $0.45 per share. The company’s gross margin (GAAP) also improved, rising from 69.9% in the same quarter last year to 71.3%. Pegasystems generated an impressive $179.5 million in free cash flow in Q1, up 132% from the previous quarter and representing 22.5% of revenue over the last 12 months.
However, the underwhelming revenue and key metric performance have dampened the outlook for the company. Pegasystems shares fell 3.2% on the results and currently trade at $56.97 per share. Analysts covering the company had been expecting sales to grow 6.6% over the next 12 months before the earnings results announcement. The company’s guidance for a further revenue drop in the next quarter has also raised concerns.
Overall, Pegasystems’ Q1 results were mediocre. The company faces challenges in meeting revenue expectations and improving key metrics. Investors will be closely monitoring the company’s progress in the coming quarters to assess whether it can regain momentum and deliver on its growth potential.
