On October 25, 2023, Pegasystems Inc (PEGA, Financial), a leading low-code platform provider, released its financial results for the third quarter of 2023. The company reported a record operating cash flow of $138 million and a free cash flow of $124 million. The Pega Cloud gross margin also continued to improve, reaching 74% in Q3 2023. Despite a net loss, the company saw a 24% increase in total revenue compared to the same period in 2022.
Financial Performance and Highlights
In Q3 2023, Pegasystems Inc (PEGA, Financial) launched Pega Infinity ’23, featuring advanced GenAI capabilities. The company's ability to create enterprise-class workflows in seconds using GenAI capabilities has been described as game-changing by CEO Alan Trefler. The company's COO and CFO, Ken Stillwell, highlighted the importance of balancing growth and free cash flow for achieving lasting value and expressed satisfaction with the company's momentum.
Financial Metrics and Performance
The company's annual contract value (ACV) grew by 12% year over year, or 10% in constant currency. The total revenue for Q3 2023 was $334,643, a 24% increase from $270,731 in Q3 2022. Despite a net loss of $7,279 in Q3 2023, this represented a 92% improvement from the net loss of $93,520 in Q3 2022.
Financial Tables Summary
The company's subscription services revenue increased by 15% to $201,578 in Q3 2023, while the subscription license revenue saw a significant increase of 139% to $74,342. The total revenue from subscriptions accounted for 82% of the total revenue in Q3 2023. The company's consulting revenue remained relatively stable, with a slight increase of 1% to $55,976.
Company's Outlook
Despite the challenges, Pegasystems Inc (PEGA, Financial) continues to drive growth and improve its financial performance. The company's focus on enhancing its product offerings and improving its gross margin indicates a positive outlook for future performance. However, investors should remain aware of the potential risks and uncertainties that may impact the company's financial results.
Explore the complete 8-K earnings release (here) from Pegasystems Inc for further details.
