Pegasystems Inc. (PEGA) has reported a 58.25 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $8.75 million, or $0.11 a share in the quarter, compared with $20.96 million, or $0.26 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $15.56 million, or $0.20 a share compared with $29.58 million or $0.37 a share, a year ago.
Revenue during the quarter went down marginally by 2.32 percent to $199.61 million from $204.36 million in the previous year period. Gross margin for the quarter contracted 515 basis points over the previous year period to 68.83 percent. Total expenses were 94.10 percent of quarterly revenues, up from 82 percent for the same period last year. That has resulted in a contraction of 1210 basis points in operating margin to 5.90 percent.
Operating income for the quarter was $11.78 million, compared with $36.79 million in the previous year period.
However, the adjusted operating income for the quarter stood at $25.77 million compared to $46.53 million in the prior year period. At the same time, adjusted operating margin contracted 986 basis points in the quarter to 12.91 percent from 22.77 percent in the last year period.
"We're pleased with the solid results we delivered in 2016," said Alan Trefler, founder and chief executive officer, Pegasystems. "To remain competitive, enterprises need to think differently about how to deliver always-on personalized customer engagement and achieve increasing levels of operational excellence. Our solutions are unique in their ability to empower our clients to not just manage these challenges but to leverage them for competitive advantage."
For the financial year 2017, Pegasystems Inc. projects revenue to be $860 million and expects adjusted revenue to be $860 million. The company expects net income to be $33.61 million and forecasts adjusted net income to be $78.61 million. It forecasts diluted earnings per share to be $0.43 and forecasts diluted earnings per share to be $1 on adjusted basis.
Operating cash flow drops significantly
Pegasystems Inc. has generated cash of $39.87 million from operating activities during the year, down 41.19 percent or $27.93 million, when compared with the last year.
The company has spent $7.17 million cash to meet investing activities during the year as against cash outgo of $44.45 million in the last year.
The company has spent $51.72 million cash to carry out financing activities during the year as against cash outgo of $40.66 million in the last year period.
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