PEGA » Topics » 2008 Compared to 2007

These excerpts taken from the PEGA 10-K filed Mar 9, 2009.

2008 Compared to 2007

 

(Dollars in thousands)    Year Ended December 31,       
         2008            2007        Increase  

Total revenue

   $ 211,647    $ 161,949    $ 49,698    31 %

Gross profit

     129,890      96,747      33,143    34 %

Total operating expenses

     115,411      94,796      20,615    22 %

Income before provision for income taxes

     15,672      9,942      5,730    58 %

 

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The increase in our total revenue during 2008 compared to 2007 was attributable to an increase in the demand for our software products and related services due to growth in the BPM sector and our position as leader in this market space. We believe the demand for our software solutions in the current economic crisis is primarily due to the strong value proposition and flexible licensing terms we offer our customers. The increase in gross profit for 2008 compared to 2007 was due to the increase in both license and maintenance revenue despite a decrease in the professional services gross profit.

The increase in income before provision for income taxes during 2008 compared to 2007 was primarily due to our license and maintenance revenue growth. These increases in revenue offset the higher expenses associated with our continued investment in expanding our sales and marketing personnel, professional services infrastructure, and research and development. During 2008, due to credit market turmoil and adverse changes in the economy, we changed the mix of our investment portfolio to increase our holdings of pre-refunded municipal bonds, which resulted in $1.7 million of lower interest income. Our income before provision for income taxes was also negatively impacted by $4.5 million of foreign currency transaction losses included in other income (expense), net.

Historically, our revenues have fluctuated quarter to quarter and have been higher in the second half of the year. Furthermore, the revenue growth rate achieved in any historical period is not necessarily indicative of the results expected for future periods.

2008 Compared to 2007

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(Dollars in thousands)  Year Ended December 31,    
       2008          2007      Increase 

Total revenue

  $211,647  $161,949  $49,698  31%

Gross profit

   129,890   96,747   33,143  34%

Total operating expenses

   115,411   94,796   20,615  22%

Income before provision for income taxes

   15,672   9,942   5,730  58%

 


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Table of Contents


The increase in our total revenue during 2008 compared to 2007 was attributable to an increase in the
demand for our software products and related services due to growth in the BPM sector and our position as leader in this market space. We believe the demand for our software solutions in the current economic crisis is primarily due to the strong
value proposition and flexible licensing terms we offer our customers. The increase in gross profit for 2008 compared to 2007 was due to the increase in both license and maintenance revenue despite a decrease in the professional services gross
profit.

The increase in income before provision for income taxes during 2008 compared to 2007 was primarily due to our license and
maintenance revenue growth. These increases in revenue offset the higher expenses associated with our continued investment in expanding our sales and marketing personnel, professional services infrastructure, and research and development. During
2008, due to credit market turmoil and adverse changes in the economy, we changed the mix of our investment portfolio to increase our holdings of pre-refunded municipal bonds, which resulted in $1.7 million of lower interest income. Our income
before provision for income taxes was also negatively impacted by $4.5 million of foreign currency transaction losses included in other income (expense), net.

FACE="Times New Roman" SIZE="2">Historically, our revenues have fluctuated quarter to quarter and have been higher in the second half of the year. Furthermore, the revenue growth rate achieved in any historical period is not necessarily indicative
of the results expected for future periods.

EXCERPTS ON THIS PAGE:

10-K (2 sections)
Mar 9, 2009
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