Business
Q4 2022 Results Highlight Improving Profitability
Annual contract value (ACV) grows 16% year over year (constant currency)Pega Cloud gross margin reaches 70%2023 free cash flow expected to increase to $150
About this update from Pegasystems Inc.
[{"type":"text","content":"Annual contract value (ACV) grows 16% year over year (constant currency)Pega Cloud gross margin reaches 70%2023 free cash flow expected to increase to $150 millionCAMBRIDGE, Mass., Feb. 15, 2023 /PRNewswire/ -- Pegasystems Inc., the low-code platform provider empowering the world's leading enterprises to Build for Change®, released its financial results for the fourth quarter and full-year 2022.\n\"I'm pleased with our strong finish to 2022 and proud of our resilient team who performed so well in a year that included a number of major distractions and economic headwinds,\" said Alan Trefler, Pega founder and CEO. \"We have a tremendous opportunity in front of us as we move into 2023. We're building a client-first business for the long-term, focused on a balance of growth and profitability.\"\n\"Surpassing $1 billion in subscription revenue is a significant milestone in our multi-year journey to transform our business,\" said Ken Stillwell, Pega COO and CFO. \"As we complete the subscription transition in 2023, we're focused on our Rule of 40 progress, which will lead to significantly improved operating leverage and cash generation.\"\nFinancial and performance metrics (1)\n(Dollars in thousands,\nexcept per share amounts)\nThree Months Ended\nDecember 31,\nYear Ended\nDecember 31,\n2022\n2021\nChange\n2022\n2021\nChange\nTotal revenue\n$ 396,470\n$ 316,184\n25 %\n$ 1,317,845\n$ 1,211,653\n9 %\nNet income (loss) - GAAP\n$ 34,613\n$ (37,246)\n*\n$ (345,582)\n$ (63,040)\n(448) %\nNet income - non-GAAP\n$ 68,341\n$ 3,051\n2140 %\n$ 59,611\n$ 18,812\n217 %\nDiluted earnings (loss) per share - GAAP\n$ 0.41\n$ (0.46)\n*\n$ (4.22)\n$ (0.77)\n(448) %\nDiluted earnings per share - non-GAAP\n$ 0.82\n$ 0.04\n1950 %\n$ 0.72\n$ 0.22\n227 %\n* not meaningful\n \n(Dollars in thousands)\nThree Months Ended\nDecember 31,\nChange\nYear Ended\nDecember 31,\nChange\n2022\n2021\n2022\n2021\nPega Cloud\n$ 103,089\n26 %\n$ 81,446\n26 %\n$ 21,643\n27 %\n$ 384,271\n29 %\n$ 300,966\n25 %\n$ 83,305\n28 %\nMaintenance\n81,996\n21 %\n82,726\n26 %\n(730)\n(1) %\n317,564\n24 %\n320,257\n26 %\n(2,693)\n(1) %\nSubscription services\n185,085\n47 %\n164,172\n52 %\n20,913\n13 %\n701,835\n53 %\n621,223\n51 %\n80,612\n13 %\nSubscription license\n155,818\n39 %\n85,022\n27 %\n70,796\n83 %\n366,063\n28 %\n336,248\n28 %\n29,815\n9 %\nSubscription\n340,903\n86 %\n249,194\...