Weak Results By PEGA Attributed To Seasonality, Big-Deal Lumpiness, Tough Comparisons

Analysts at William Blair & Co reiterate their "outperform" rating on Pegasystems Inc

. William Blair & Co says, “During the second quarter Software licenses were $28.2 million, below our forecast of $33.8 million. This represents growth of 10%, which is greater than last period’s 8% increase but below the year-ago quarter’s 62% growth (last year’s result created a difficult comparison that analysts should have been more cognizant of in their modeling).” “We believe that the shortfall could be attributed to several factors: seasonality, big-deal lumpiness, and tough comparisons. The company tends to have better bookings as it moves through the year, particularly in the second half. One difficulty in forecasting any given quarter is the lumpiness of its large multimillion-dollar deals. Management runs the company from a long-term perspective and will not be pressured by end-of-quarter buying tactics—it will let a deal slip from one quarter to the next,” the analysts add.