Download - Pegasystems Q2/FY 2016 Investor Deck
1
Pegasystems
Q2/FY 2016 Investor Deck
2
Safe Harbor Statement Certain statements contained in this presentation including, but not limited to, statements related to future
earnings, bookings, revenue, and mix of license revenue, may be construed as forward-looking statements
as defined by the Private Securities Litigation Reform Act of 1995.
The words expects, anticipates, intends, plans, believes, could, estimates, may, targets, strategies, intends
to, projects, forecasts, and guidance, and other similar expressions identify forward-looking statements,
which speak only as of the date the statement was made. Because such statements deal with future events,
they are subject to various risks and uncertainties. Actual results for fiscal year 2016 and beyond could differ
materially from the Company’s current expectations.
Factors that could cause the Company’s results to differ materially from those expressed in forward-looking
statements are contained in the Company’s press release announcing its Q2 2016 earnings, and in the
Company’s filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-
Q for the quarter ended June 30, 2016, its Annual Report on Form 10-K for the year ended December 31,
2015, and other recent filings with the SEC. Although subsequent events may cause the Company’s view to
change, the company undertakes no obligation to revise or update forward-looking statements whether as a
result of new information, future events, or otherwise, since these statements may no longer be accurate or
timely.
3
THE MARKET OPPORTUNITY 1
PEGA VALUE PROPOSTION 2
CUSTOMER SUCCESS 4
FINANCIAL DETAILS 5
3 OUR STRATEGY
4
Customer Expectations VS. Business Challenges Unprecedented Volatile Business Environment
Business Challenges Customer
Expectations Seamless
Relevant
Immediate
Coherent
Personal
New Channels
Legacy Systems
Market Change
Economic Pressure
Regulations
Silos
Strategic
Applications
5
Unified Platform Engineered for Evolution
LEADER IN CRM CASE MANAGEMENT #1
“Pegasystems has the strongest ability in, and received the highest scores
from reference customers for, modeling and predicting customers'
behavior, and for communicating the next action to agents.”
Gartner* *Magic Quadrant for the CRM Customer Engagement Center, 2016
+
REAL-TIME
DECISIONS #1
2015
IBM
Appian
Pegasystems
2015
BPM #1
2015
Pegasystems Appian
IBM
2016
Salesforce
Pegasystems
Microsoft
Oracle SAP
+
6
Growth Strategy
Low
R
ela
tio
nsh
ip
H
igh
Low Vision & Conceptual Match High
Robust Digital Engagement
supports awareness, consideration, & buying
Content
Outreach
Community
Test-drive
Strong Apps & Engagement Maps
Complement target model,
making key solutions (particularly CRM) easier to
understand,
explain and implement
$30B Strategic
Applications Market
Original BPM
Target
$3B
Execution Initiatives
Extend Leadership with the Pega 7 Platform
Deepen CRM Applications
World Class Digital Marketing
Expand Market Coverage
8
Pega 7 Unified Platform – differentiator
• Model Driven Development
• Customer Decision Hub
• Mobile
• BPM and Case Management
• Data and Integration
• Cloud and On-Premises
• Pega 7 Express
Enterprise-wide transformation. One unified platform
that is 6.4X faster to build, 8X faster to change and
40X faster to mobile.
9
Strategic Applications Driving the end-to-end customer journey
MARKETING SALES &
ONBOARDING
CUSTOMER
SERVICE OPERATIONS
PLATFORM
10
From Relationship Selling to Digital Marketing
Pega.com
Digital Content
Awareness Campaigns
Lead Generation Campaigns
Significant Increases in:
• Marketing sourced opportunities
• Contacts
• Organic search
• Site visits
• Engagement
• Video views
• Content downloads
• Social media community
11
Broader Coverage
Corporate Markets
Applications Selling
GLOBAL 3,000
ENTERPRISE ACCOUNTS
Relationship Selling
Global 600
Financial Services
Insurance
Healthcare
Comms and Media
Life Sciences
Manufacturing
Energy
Public Sector
Shorter Sales Cycle Cloud First Digital Buying
12
Expanding the Ecosystem
30% growth in 2015
200 + interactive, self-paced online courses 2.8+ million lessons to date 35,000 global students to date
13
8 of the Top 10 Credit Card Issuers
8 of the Top 10 Global Banks
6 of the Top 10 Communication Service Providers
10 of the Top 10 Largest Healthcare Payers
7 of the Top 10 Insurance Companies
8 of the Top 10 Life Science Companies
300M Serviced Constituents a Day
14
REDUCING CHURN
Using Pega Marketing, Sprint is
seeing more than double the
acceptance of retention offers.
15
Pega Marketing provides
real-time, contextual cross and
up-sell offers to increase offer
acceptance by 300%
CONTEXTUAL SELLING
16
CUSTOMER RESPONSE
Dramatically improving customer
response time, first touch resolution
and card dispute resolution time by
consolidating 14 applications into
one Pega 7-based application.
17
DIGITAL BANKING
Powering ME’s transformation to
Australia’s best digital bank with
Pega 7.
18
CONNECTING GLOBAL
EXPERIENCES
12,000 service advisors across
12 countries use Pega Customer
Service providing a 3X increase
in customer satisfaction for
American Express
19
MAKING THE BEST
DECISIONS RBS uses Pega Marketing to
engage customers with relevant
offers across all channels
improving response rates by 25%
20
GETTING YOU THERE
Pega’s Operations Applications
helps increase Heathrow’s
on-time departures from 68%
to 85%
21
PICKING UP THE
PIECES Pega’s Customer Service and
Operations Applications allow
AIG to consolidate 55 claims
systems across 60 countries into
one global system
22
SAVING THE DAY
Improving Safelite’s NPS from
73% to 87% and driving greater
operational efficiency across
the organization with Pega Mobile
FINANCIAL DETAILS
24
Go To Market Model
• Industry Leading Platform
• Strategic Applications
• Land, Expand, Transform
• Growing Ecosystem
• Digital Enablement 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
$126 $162
$212
$264
$337*
$417*
$462
$509*
$590*
$683
$800**
GAAP Revenue
(in millions)
20% CAGR
*Non-GAAP revenue was $348 in 2010, $421 in 2011, $511 in 2013 and $593 in 2014. The differences
are due to the fair value adjustments for acquired deferred revenue.
25
Revenue Growth GAAP ( in mi l l ions except %)
17% Growth
Q2'15 Q2'16
$162
$189*
YTD Q2'15 YTD Q2'16
$316 $368*
*The difference between GAAP and Non-GAAP is $1M and is due to the fair value adjustment for
acquired deferred revenue.
16% Growth
26
License and Cloud Revenue Growth GAAP ( in mi l l ions except %)
16% Growth
Q2'15 Q2'16
$71
$82
18% Growth
YTD Q2'15 YTD Q2'16
$135
$159
27
Revenue Mix Reflecting the continued strength of our software business GAAP
43%
30%
27%
YTD Q2 2016
SoftwareLicense &Cloud
Maintenance
ProfessionalServices andTraining
55% 45%
YTD Q2 2016
Recurring
Non-Recurring
54% 46%
YTD Q2 2015
28
Geographic Revenue GAAP ( in mi l l ions except %)
U.S.A. $178 56% U.S.A. $197 53% ***
Americas Int'l $40 13%
Americas Int'l $42 12%
EMEA $76 24% *
EMEA $99 27% **
Asia Pacific $22 7%
Asia Pacific $30 8%
YTD Q2'15 YTD Q2'16
35%
65%
31%
69%
*Approx. 13% of total revenue is generated from UK **Approx. 15% of total revenue is generated from UK
***The difference between GAAP and Non-GAAP is
$1M and is due to the fair value adjustment for
acquired deferred revenue.
29
Maintaining Backlog Levels ( in mi l l ions)
$374 $391 $380
$420 $390 $393
$200
$250
$300
$350
$400
$450
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
License backlog is computed by adding billed deferred license and cloud revenue as detailed in Note 10 “Deferred Revenue” and
off-balance sheet license and cloud commitments as detailed in the “Future Cash Receipts from License and Cloud
Arrangements” in the 10-Q.
30
Cash, Cash Equivalents and Marketable Securities (in millions)
Q4'15 Q2'16
$219
$138
$49M –paid for
OpenSpan, net of cash
$19M of repurchases
under stock buyback
program
$8M of stock
repurchases for tax
withholding payments on
net settled shares
$4M quarterly dividend
payments
$11M in property and
equipment investments
31
twitter.com/pega
linkedin.com/company/pegasystems