Pegasystems Q4 Earnings: Revenue Beats Expectations, EPS Guidance Disappoints

Key Metrics Q4 CY2024:

* Revenue: $490.8 million (3.5% YoY growth, 4.4% beat)
* Adjusted EPS: $1.61 (9.8% beat)

Financial Guidance for FY2025:

* Revenue: $1.6 billion (1.1% above analyst estimates)
* Adjusted EPS: $3.10 (4.4% below analyst estimates)

Company Overview:

Pegasystems (PEGA) provides SaaS solutions for automating and optimizing customer service and engagement workflows.

Sales Growth:

Pegasystems' revenue grew 3.5% YoY in Q4, meeting analyst expectations. Over the past three years, sales have grown at a CAGR of 7.3%. Analysts project 5.6% revenue growth over the next 12 months.

Cash Flow:

Pegasystems' free cash flow margin averaged 22.6% over the past year, driven by its cost-effective customer acquisition strategy. Analysts expect its free cash flow margin to improve to 25.1% over the next year.

Stock Performance:

Despite the revenue beat, PEGA stock dropped 5.1% after the earnings release due to the EPS guidance miss.

Key Takeaways:

* Pegasystems' Q4 revenue outperformed expectations.
* EPS guidance missed estimates, highlighting concerns about demand challenges.
* Strong cash flow position provides growth and shareholder return potential.
* Investors should consider the long-term fundamentals and valuation before making investment decisions.