What happened

Pegasystems' (NASDAQ:PEGA) stock gained 27% last month, according to data provided by S&P Global Market Intelligence.

PEGA Chart

PEGA data by YCharts.

The surge sent shares to new record highs and contributed to a near-80% jump so far this year.

So what

May's spike came after the business management software specialist posted first-quarter results that were highlighted by robust sales and profit growth. In sharp contrast to the prior quarter's slight decline, revenue bounced 25% higher, to $223 million. Pegasystems, at the same time, managed hefty improvements in gross and operating profit margins and in operating cash flow.

Financial charts.

Image source: Getty Images.

"We got off to a strong start in 2017," CEO Alan Trefler said in a press release. "We are especially pleased with our revenue growth of 25%," Chief Financial Officer Ken Stillwell added, "coupled with improvement in our operating margins."

Net income rose by 160% as operating income more than doubled, to $31 million.

Now what

Pegasystems' operating results can be lumpy from quarter to quarter due to the timing of a few major contracts. That's why investors should focus on longer-term results and not place too much emphasis on one quarter's numbers. In fact, the company's full-year forecast still targets sales growth of 15% to imply a general slowdown from the first quarter's rapid 25% pace.

Still, Pegasystems' backlog -- which represents contracted, but not yet booked, sales -- indicates solid sales growth ahead. That figure improved 32%, to $513 million, this quarter. Term licenses and cloud-based offerings comprise 87% of that figure, up from 79% a year ago. That's good news for the business since the higher proportion of recurring revenue gives management increased visibility into future demand.

Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Pegasystems. The Motley Fool has a disclosure policy.