Shares of Pegasystems Inc. (NASDAQ:PEGA) rose 16.8% in the month of November, according to data provided by S&P Global Market Intelligence, after the developer of customer relationship and business process management software delivered solid third-quarter 2016 results.
More specifically, Pegasystems' quarterly revenue grew 13% year over year, to $183.5 million, including a 32% increase in cloud revenue, to $10.9 million, and a 17% growth in license revenue, to $68.8 million. That resulted in adjusted (non-GAAP) net income of $13.1 million, or $0.17 per share, a slight decline from adjusted net income in the same year-ago period of $13.2 million, or $0.17 per share.
To be fair, Pegasystems doesn't typically offer specific financial guidance. But analysts' consensus estimates predicted the company would achieve lower adjusted earnings of $0.16 per share on slightly higher revenue of $185.9 million.
Pegasystems founder and CEO Alan Trefler stated: "We continue to focus on delivering the industry's leading BPM and CRM applications to provide clients with dramatic business agility and positive business outcomes. We are delighted to see a growing number of leading organizations choosing our software to improve customer engagement and drive operational excellence." CFO Ken Stillwell added, "Our ability to grow GAAP and non-GAAP revenue by 15% in the face of currency headwinds and a significant shift to term license arrangements is a great indicator of our business momentum."
During the subsequent conference call, Trefler elaborated that one of the company's key strategies is to invest in broader market coverage, including the recent addition of sales forces focused on opportunities with companies in the Global 3000.
In the end, Pegasystems' quarterly results weren't jaw-droppingly good. And it probably helped that the broader market staged a modest rally in the weeks after the company's mostly positive news. But it's encouraging the company was able to achieve this growth despite continued currency pressure and the aforementioned shift toward short-term licenses. In the end, if Pegasystems is able to sustain this momentum as headwinds wane and its transition progresses, it should be better positioned to continue its upward march.