PEGA - Earnings call transcript Q4 2021

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Operator

Good day, and welcome to the Pegasystems Fourth quarter and Full Year 2021 Earnings Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ken Stillwell, Chief Operating Officer. Go ahead, sir.

Kenneth Stillwell

Thank you. gentlemen, to and earnings QX ladies call. evening, and Pegasystems welcome XXXX Good

I identify words read expects, and may, was which to be forecasts, forward-looking could matters XX-K for with like statements, and XXXX, there including annual on for the or subject in statement. we on reliance various are of such should, forward-looking year cautioned statements undue expectations. expressions the differ would of cause assumptions. other likely from 'XX and in XXXX, materially Before deal contained begin, on earnings Securities the the the estimates, release report such achieved. made Commission, Reform statement such differ the year Litigation other those to not company's ended from plans, company's materially events, statements defined contained company's current are company's statements and December Because results Act are its assurances the QX guidance, based believes, the statements, XX, this with Private such recent in press filings Investors could, expressed Securities only and forward-looking the or the The are Certain fiscal in and risks XXXX of usually its Form are projects, Exchange as will current forward-looking and and the our SEC. with filings contained to be could speak intends, that that presentation results beyond place targets, expectations announcing no they Factors Actual in as may to words strategies, future construed XXXX. as statements in anticipates, similar statements variations harbor safe date and uncertainties. will,

otherwise. revise these Although the to Alan required whether and forward-looking undertake applicable or events will any publicly new result we And Trefler, specifically or of obligation disclaim with view as call to except of and Pegasystems. information, as by that, a cause change, to Founder do update may CEO our I events over subsequent law, not statements, future turn

Alan Trefler

call. Thank to we Contract results you, strengths. and Annual year leveraging that joining the ended by today's Ken, and We solid pleased grew with staying everyone I'm who's Value. you focused thank our ACV,

Our first time most billion the important metric over to for $X ever.

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for outcomes We Forrester meaningful from continue consistently clients. the and firms technology, receives like ratings of innovative highest possible Gartner, drive our significant which enhance leading some and to this analyst and

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our our partners element essential adoption Our ensuring on to focus and clients. by in continue successful delivery excellence

dedicated, Corporate we proud a Equality is giving passionate people out Rights accountability, culture me our forward a team X,XXX of collaboration, making This this around have on importantly, And that proud I'm who things. Campaign day. of resilient make all have we doing represents and and built XXX more and members are and coming every recently Index. the make in our right who than Foundation's benchmark recognized really to excellence, that communities. possible a team inclusivity, innovation globally on the XX scored We of committed the Human a and difference and world, back XXXX

And enterprise on and by that central in to dynamics to in market focus digital continued spending, every we're now grow predicting through the XXXX. seeking XX% pandemic, continue, great growth business. to that to trend our in let differentiation, of to terms successes initially driving represents just transformation flexibility software the for upgrading their be clients and stack Gartner and year predicting investment continues it's and largely for today continued by ability say competitive to to transformation digital will driven from position this both opportunity problems capitalize help software accelerated me market organizations terrific me years Though software significantly tomorrow. our industry is and about a Software-as-a-Service and is about and this in to come. solve energized is clear for I'm us, Now our agility. clients' IDC

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profound impact they're results health including the able many reach our our communications, financial XXXX, our client in verticals, positive insurance services, and we clients for outstanding and how expanded deep Now continue of key in clients. drive to care, We and see to relationships, government. over

We services also opportunities like that continue consumer growth to technology inroads into represent organizations manufacturing, services. new make in places and

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To we you to I opportunities. our especially And growth, that believe will You what the base growth to of measure. we with excited now Stillwell. software this unmatched we I've continues look Ken the provide the have on let business position in And that growth support and need have like transformation me significance to the the now and the year said, see We're over our on to deliver on COO solutions opportunity this Ken client to about team the in significant our great Pega's beyond. right we're and CFO, really this industry. capitalize And these see provide excited transition which, think revenue to which for more Ken? digital turn I a you'd as is our results, color critical view in and financial year in grow. from results, closely through financial as which enterprise more full I'm shortly. more aligned subscription-driven a take expect much can initiatives ACV

Kenneth Stillwell

Alan. a ACV few hit Thanks, top our as our highlights on ACV Alan at negatively Currency Contract surpassing grew just XX% by of Value, X%. $X the about growth affected To mentioned. Annual billion, business, year-over-year, over

So full year. in the been currency, our XX% would significant license $X.XX reached for Revenue range. if even of would Total revenue term have backlog. for higher XX% constant not of we in growth been in billion kind the have

our As under cloud have lumpiness you not revenue as quarters and many of it some can -- revenue is our recognition. know, as between the predictable Pega model not Cloud of it's the timing client

highest $X.XX. that Remaining XXXX. So it's get of tells as year it's made RPO, XX% profitability or in revenue billion, we've story. of XX% grew and year-over-year. We up gross non-GAAP because reached almost delivered to Obligation, Subscription increase at $X.X complete and revenue to great an at total and XX% it our year-over-year And us the backlog backlog back margin revenue XX%. important to reached full see or total EPS look reported a Performance

are we Now business in And software this in was our are at largely end the into our this, XXXX subscription of of transition with business. almost the let schedule. beginning finishing I talked year another transformation going we transition. Remember, our complete we're XXXX the context. I now we're me important still of about subscription put in XXXX. a all on as about When that us first the talked financial transition. And model

in Now XXXX, evolve up it XXXX the as about talked transition subscription that planned. let's would everyone refresh we've we back about go execute and of if how wrapped what I

the sold perpetual licenses. step was way software away to change from moving we The selling first

And transition for the over XX% commitments couple commitments XXXX, started of of in our subscription arrangements. were client we late new are new our last client Before now XXX% almost perpetual of back the arrangements. years,

change where over reverse the of selling to happened. closer perpetual sales transition. team great And clients revenue very as that buying Our get moved in to and It's converged a about annual is also growth revenue rate and -- XXXX, ACV selling normalize and the perpetual Pega's to closely. those the both as growth clearly growth dramatic in subscription the and revenue a subscription recognized growth rate flat I ACV only XXXX, XX% of subscription model, from we license a was annual in grew which our upfront, is our licenses begins to talked from a example, see of moved rate really away in ratable just and the in exit you largely the model, you years. for growing and by have X% was is a years. but have transition, as we which to few When declining revenue the what early transition, our started growth our years exactly move

fast in XXXX. Now grew when revenue Pega's you XX% XXXX, forward to

Our XX%. XXXX, and subscription over ACV just in grew grew XX% revenue

largely progress operating which where you and normalization of the begin have transition. flow very this also the to So of retention should cash normalize and and is see we complete cloud significantly gross as cash business expansion XXXX we playing leverage like and of you the out. margin in increase to a in generation exit out rates envision phase in We've expect high of to transition, we flow Pega, that with The margins, a you as would made high when final cloud lot normalization profitability.

year delivered margin since mentioned, as improvement gross strong was the XX%. I powered started we Pega which highest the increasing reached XX% by we In full That XXXX, an of transition, margin, fact, this in gross at XXXX. Cloud for

that margins EPS cash flow is XXXX the to non-GAAP people of I business our same cash retention now We're we year, even last return back our getting out inherent see to subscription process confident ACV flow Pega. just generation. perfect full free transition like and rates believe to growth at continue can $X.XX, flow in cash upwards over the of a a will to achieve and inflecting cash the subscription really significant further in free a in is time accelerate the and time. increase that starting year, For step was improvement of high we're generation beyond. flow significant and remind targets potential operating the Coming the to to with but

We space. digital continue see to market tremendous opportunity us for a in the transformation

our So we will growth. continue to invest in sales and marketing to help ACV accelerate

a we to but Our and declining have sales there drive as of we continue improvements we do total We're know know and productivity going marketing to are progress. We're making XXXX are revenue, not we beyond. to yet, slightly there. quite expenses in still but sales percentage work

or use vendors. In cloud that us more reported is our We by clients' IT clearly one differentiation. XX% January, trend. critical. or excited is XX% than software Choice offering Cloud cloud from Amazon giving clear our that on for in purchase another very Choice. is Investment to that XX% use X And of Cloud of more firms channel. use available RBC September a decision-makers Choice And X real now that cloud subscription more the while reported way, the Moving Gartner marketplace, provider, us distribution we're benefited Cloud to It's Bank multi-cloud vendors,

very ACV us, Pega Client of Cloud incremental you the a we to or largest and topic to for of the our consistent client as of are on important When While that is Cloud, cross long-term Choice, remind $X the organizations. Cloud incremental it's economics ACV. $X upsell purchases

year future clients. represents our our existing $X.X increase over expected from or obligation with billion, reached also backlog. backlog is performance remaining contracts backlog performance for evident revenue Total solid the year-over-year. an of Total in Our XX%

are company's we've backlog $XXX closer subscription these growth well growth million ACV should our that Our and in is software backlog Ultimately, XXXX, in almost fact metrics closer evidence much on growth add converging X incremental XXXX growth align. our rate that year-over-year. was transition. and subscription beyond a our even rate and all rate, revenue The executed

you the reflect revenue may over Total mentioned think is billion, of when how of it's earlier, performance. categories group growth business. of for business, in of Cloud ratable. look streams evolution subscription revenue to I new not revenue representing at notice strategy offerings One as our line our we've These $X.X items challenge the highlighting the year-over-year. XX% Choice compelling RPO why and revenue recognition fundamentals important our financial our more statements our better to and our the together evaluating And we of trajectory updated very clearly. Given always is revenue growth our reached revenue

into As XX% expect growth license unusually we year-over-year, which for future XXXX, other. in revenue in greater services XX% total made our or revenue grew term those it's and mentioned, of the revenue is XXXX excess year-over-year the of XXXX. XX% Cloud add growth subscription metrics and the higher we to than term and XX% of license our XXXX. $XX in that out revenue, in strong revenue shows in of was Normally, growth just visibility our in I increased you When as backlog RPO line up each the higher revenue. revenue you have with term looking know, professional XX% But license subscription would significantly see in you more years. million

guidance. remind year not the unless the I annual to our guidance to guidance you fiscal do the during do We Turning provide we year. acquisition. at our beginning to it's of that XXXX material want year a practice annual update

level of the for XXXX. provides we to as on the providing range, growth and revenue total that the and From which of non-GAAP a step which, time, to to first a visibility inherent of the that and increase guidance, growth number, very improvement plan model, our to billion scales the way the you ACV to in hard expect $X.XX solid XX% percentage operating XX% an And $X, to larger. of business created expect leverage without to year-over-year. We XX. grow XX% $X.XX in $X.XX we exhibit business of which an direction leverage between XX% and tremendous predictability some as We've a do. grows and the billion, unnecessary we expect business know, XXXX the EPS We the there profitability is in perspective, is to we realized believe of we're of exact right guessing year-over-year a Rule

We continue transformation to continues both and differentiated front the to capabilities. and our see solid in digital with for be demand product best-in-class back the office

Before I Conference, reiterate in each PegaWorld our opening for want May. Client Annual to the invitation to you to call questions, Alan's of iNspire

be plan also live, sometime but that, let's the call questions. open that. investor conference to hold an investor hoping June. operator, crossed. that, with We And More to conference follow details fingers in can to annual maybe on We're that

Operator

our [Operator Rishi question Instructions]. RBC. And we'll take Jaluria first from with

Rishi Jaluria

a and drill maybe I little sales for guidance. business, acceleration wanted the appreciate of a to shout bit survey. Nice down I in into the the to out recent our bit see more little

for So expansion, margin revenue and growth great obviously combination is software a land. you're rare in that guiding accelerating which

drill that. X see things table. that So on great really But to into wanted I the to

let that transition you puts you're is margin XXX expansion the we on margin cloud us how about build appreciate dramatic the the be should and of would And thinking with definitely pretty in XX, -- the call I ACV that. XXXX. But really maybe expansion model. guiding Rule table? XXX that expansion. on can there's some in hitting help and assuming, the targets of you basis obviously know We First side. then Is all margin Because for it, points will laid us to table our be prior then That about to takes still operating the guidance XXXX. the let's think,

are then a got Just into sort in of I've tell that? And baked us FX anything can that assumptions terms follow-up. of what you

Alan Trefler

a So let of couple touch on back. okay, let those. maybe go me touch me -- I'll

the -- we're year not are impact. terms full So muted of relatively assumptions in our FX

impact, a bigger slight Rishi, we're FX, we a movement tremendous making but or predictions headwind other. the of the see So of significant direction one amount don't on amount dollar any on bold not FX of

year the But bit know, the a moved in the you the the going dollar the of on it's overall, of in currency. little around As at was end currency weaker year-over-year and be that beginning year. stronger a to the of was year, headwind the

we be can In margin it's just be business expansion, of de-investing terms by probably we in to want the business. make that we I the margin frankly, -- think of what quite worth the it highlighting

the well 'XX. of and know in rule But on increase noticeable in you're in be we're we. our there proposing nor not in increased will I a that an the I think be XX expansion of we Now the not. in improvement XXXX margin and margin are that 'XX way that balance? show show trajectory we Will XXXX? on Will at Absolutely. terms Probably will

fast think seen one that kick little as I that's XX certainly that. And hoped. in wasn't And drug bit. as helpful think Rule standpoint, our that we sales probably of out from had COVID I haven't the achievement probably a the say the we thing I So in -- that's productivity would

Rishi Jaluria

call let it, wonky you XXXX? that about going just we kind number maybe rec? be in for the look, and that on thinking revenue slog But Pega competitive That's know Can rev side Cloud like make does a we side us And all bit next terms to Pega even of helpful. for especially how or CRPO. on, there's of potential cloud on Cloud of Any it. Cloud year the should appreciate what's look advantage Choice, accelerate, maybe, specifically, that's the on? then that. little a Got factors it a And major understand growth cloud I just the let's you. obviously a

Kenneth Stillwell

Sure.

started which much our of in throughout clients really that our you actually we their XXXX, Cloud XXXX. obvious proficient at or all how growth own it that important to year mean buying the cloud, Pega. to are us are Client When has vendors like aware be So I -- don't more think managing from they're of XXXX, able manage as it clients is even for was solutions started many the the that strengthened to I

So positive -- we that embracing -- because really certainly difference few as is that's we that clients. one with view is it buy last client in years one that the a into

Pega your isn't In unique there There's very terms rec specifically, revenue model. question a subscription any rev going Cloud Cloud about of issues. is nothing SaaS Pega traditional recognition on.

nothing unusual of little So growth converge relatively ACV And Cloud solutions as on side. think rates as for But steady, the the that really it stayed there Cloud a to of of has their on Client wouldn't higher Pega Pega and that's cloud bit seeing percentage own stayed growth a I our at bit. relatively you're steady, manage rate pace. what be a clients and little has happen

Rishi Jaluria

it, there. XX% for thinking plus. cloud been I Got always gross for cloud the course XXXX. me, flat How on into about And since margins, about a bit SaaS-like a gross past, drag be more to transition. going here? dramatically call the this it. the started you've one understandably, relatively I'll I improved should expansion in talked obviously, last jump totally the margin queue. architecture and understand. back margins, of getting But know is from it's we And throughout you gross they've be of potential the little a single-tenant Cloud

Kenneth Stillwell

for year expect You expansion cloud few should margin the a few points years. hundred next probably basis each of gross

Alan Trefler

of a years. that types work, say in of other I would things Kubernetes, We've been lot technology called to relative I coming And think architecture. doing provide

Some pretty the really to of things reliable in talking Ken good achieve about types way. opportunities a is

Kenneth Stillwell

this. Just to and confirm arise one because others it's have a thing might probably question

reduced. of Our model the I something us goal in would improvement, improve mentioned timeless to Alan anything, gross for give not that been margins Cloud architectural think kind Pega have them. in opportunity If

we of Pega have scale plenty of Cloud. So

years. Pega So we over few the that gross our Cloud margin worried not we're about about talked last targets

Operator

our Next, KeyBanc. we'll Steve question next Enders take with from

Steven Enders

at Great. and from want the been top function where digital what toleration in causing 'XX bit funnel to activity think there's a seeing 'XX. market a into I ask I in demand guess concerns a of on and point stands? you're little the demand this pull-forward potentially I around

So and here? on demand the 'XX into front top funnel how just activity looks today seeing the calendar what wondering and you're of

Alan Trefler

So take can I that.

at engagement you and the a is organization first year of what's lead demand or on, much broad as organization. think more described we kind enterprise have we are the a needs of bushes what the still robust. going As and the look lead-gen sort than of half profound real a People I beat

So to get on describe target way on have are that, focused model. like would pretty we just be really as companies is a I organization reliable compared a what companies which to And think, exclusively leads, I for some demand do. trying pulsing

industry to to And activity seeing don't frankly, focus tremendous interest the improving base. of I in and better transformation So going on that and ways persist. that's we're to their resignation, deliver which pressure great customers customer take is granted, think want on and efficiencies our amount of I And the to anything some for find but systems. think putting I

good early have year. actually the as well these long-term of of us some think as promise part this I for

Steven Enders

the leadership front partner then you're helpful. front be And on, the That's and does that to on just and in guess, any partially on go-to-market Hayden that has I with I and Okay. thinking bigger going the of focus area go-to-market the kind a there how -- guess on change strategy? Great. forward? Is moving about been channel on organization the change? leaving. How that

Alan Trefler

is some take some it and we're and believe, some us able the year. did for pleased to a work new have the to the we that of grow some insights continue the he good to Hayden be strategy The continue as and talent strategy to be I year we strong capabilities new able, deep brought and with that it. new and drive I'm pursuing going No. entered team to that's

we believe in I to going that's to we're execute be what place have this able a deliver So team on. to and planning that's year,

Operator

to We'll on Steve SMBC with Nikko. move Koenig

Steven Koenig

Great.

a role you the of It's then the Steve's of And and on with his organizations to back the building financial lot just within geo-focused the guys. Are bit go-to-market? departure. a together follow-up. side. And more on that single replace a go Hayden's then you one functionally-focused little a organization to activities one geography-focused or looking for So follow-up got of function I've organization to brought all question I've more on got

Alan Trefler

clients sales a having global singular that, that of happy some the off particularly in services since are as and customer thought we're to deployed we go that And to of and our global a going to back are continue call between to going split folks obviously, having go and regional have single No, sales know. partners the this a also that's is context. for would back used a sort success going I and brought to things the with not didn't in who what say moving hard time We're us, or year but for Americas of foreseeable are not and organization of highly We lot international. not any service and well to what pretty people -- we to absolutely organization regions, organization, be bifurcated a future. we have are management

good, that's we're So structured a and way I going think we're continue. to in

Steven Koenig

the term give chance to Ken, you then And activity this a I'll it change XX%. can like big. And actually compute impacted on then the color we heavy commentary I how whopping backlog in on really a revenue, cloud here. total from follow-up if throw bookings grew can explain in cloud as give rev of you mix It Great. have the your any negatively rec? was a just us there, bookings. cloud out Ken And

longer-term cloud big out cloud some there. there's where So contracts

that's and -- it. So

Kenneth Stillwell

Sure, Steve.

me order there and go let if those right. So can get I see in

question thing mean of make have goes you on a period, where backlog. into the the it really -- is don't crisp. first commits arrangements you goes it in the difficult get good course, to the when in is So period, client But in script the this it revenue that to but the I backlog,

the is that of So backlog. 'XX the what of of the selling into go at arrangements and always nature we just happened live. go end enterprise It's timing when clients term have

dates when or effective So start. they that's are kind -- of

case. the end first revenue 'XX that must be such because oh, of in period. you the when revenue the had current grows, to really So of to less say question have a would of if impacted you the But means jump see that end that's you always big is, 'XX, from kind backlog going the

that's in I would the that been deals Ford in will making come periods. revenue backlog future into into there, revenue So was bigger have that is which connection then but QX, going

So your that's on of piece first question. the the connection

the last then Yes, say actually, business The slightly of more you know, second the growth, mix. terms in is was Cloud robust that's a kind mix business more that our of QX consistent Cloud. are than amount because few And to is cloud typically mix Client have slightly I've like XX typically QX about Client bit Pega terms a is Cloud the percentage XX, And talked Pega the around strong fairly years, quarter. activity. in Pega of one growth. little over Cloud of Pega I'd And of didn't the activity. Cloud as each quarters. of Cloud not QX But everyone, have as remind

but to also talk value, in have weaker, and and change careful, you you renewal know when RPO, well. a calculating seasonality in strong, going RPO, which quarters contract dynamic on, of that total I about the just unusually that have about be could -- revenue includes as you as just So talked like that in look may it might I look quarter renewals poor be quarters you're

factor that well. So a just remember as is

'XX QX 'XX QX versus of But Although, of have there. you Pega sure. Cloud in timing some was do stronger for renewals also in of

hits that questions that you So hopefully, asked. the

Operator

on we'll next, to Pinjalim JPMorgan. with Bora And move

Pinjalim Bora

head the organization change, you I to you sales with to in given already the then end sales drive where focus the as leadership you're year motion? new market, now it is in as the where able the year ask Have the at capacity? of made I into plan about into you kind wanted mean organization well. the this tweaks to sales any point? labor I to of be tight terms mean, And rep want

Alan Trefler

But building with where probably do structured I we We people January, would wanted to to off end organizations and of don't kickoff goals were can people both here. in relationships salespeople And year in robust of for always the we some we already as view. don't know have not up as There's tuning, to. so the to want the numbers, sales tremendous course, a goes we these would hiring. we as often quite expect. get a the get would didn't we had expect. sustaining our exactly did, year. can as point very already of we the work their are start who into they sort there's them. But you Most focus, we of amount January good done for a adjustments, -- sales change see -- we say that introduction some that some So staffing our entered from year, you setup you pick I be as set entered XXXX,

there view strategy strategic strategy concerning. not surprising we're year as what the result the change, and that. on, I good that as But about this that's that of executing a the we anything The no kind So is. into is that is feel really or change, of coming I would one worked of restructuring out no

Pinjalim Bora

in highlighted -- to that there, you like it's on obviously, XX% what can I continuation right? we get One guidance XX% was the you levels it's IDC or you more What years? it thank it. Got doing, kind follow-up of a that. to of is providing are that of growth next the couple what XX%, of and XX%, tapped there number but but guess, takes quantification, below And right? for of the my higher? question -- the I takes So a it's you're what ACV that number seems of ACV

Kenneth Stillwell

Alan, you So maybe I'll start, jump then can in. and

our the I lever solution One, you straightforward. think the productive capacity two, -- primary how not be and selling not really an worried really we're solution the able and three, dimensions. improve working much our of productivity. growth; what's really our about, it opportunity market selling sales cannibalize the on has certainly strength it what worried the easy And I to actually I'm been on is to third increase not in you think knock and there. good about market. hard productivity I'm and linear pretty to focusing -- as positioned market, in process right? the about we're And that's share; is where get sales ramp market the capture level how X wood, and we and so that to is market some grow your So about trying way for one. but of have to on It's is what the able be us,

have but to So that, Alan, of about that's yes, to thoughts how other it. I think add you kind if

Alan Trefler

is I and aspire that of productive effectiveness bring It of the do become think marketing sales the that there a sort be the about and those all has our think up of to ongoing It new to our elements an is talked to part business frankly, productive It productivity of to successful engines It kind are relates And to to and relates being the use clients I as provide relates us wanting messages. enabled we enable curve. cadence ability elements. opportunity think growth. of a for And to as our staff And key of manage company. more company on relates, I to themselves lots that and to that. we reinforcement. and basis of are every being

goals So there. that's margins the increasing of some from around where come

talk we've they we're become people. we to sure -- improve of effective. market, We need need going to we doing hired we -- lot increasingly can the be to always how that, make that I and We to a As think too.

Operator

Loop on with Capital. Mark Schappel move we to Next,

Mark Schappel

in renewals year, have more in starting is to year? prior the coming going Ken, renewals XXXX the with you, with respect to

Kenneth Stillwell

which -- think, really, other, big average in X than so like about but interesting just our between -- When it's it of another. difference actually a 'XX is deviation is that point you in at be like old. look in year. really the material Mark, big X general, won't you the we like XX% a which this is But I is X difference where Back you difference deviation of year the don't if it's year, not the subscription have point year That for ago, the the think as healthy an terms renewal we between have, year lower said, fundamental versus asking means kind certainly now years have of renewal the standard could or size opportunities you're we not X% at might a XXXX it really, a the material. X are there years transition, thing, at a XX%, is there's difference. have renewal now, it's or

Mark Schappel

then What a a or was now And And over past that's Great. of the us it partners? give initiative of building responsibilities one deals partner was, up a so. Hayden's been sense your are say, your and where year big X percent programs, of maybe by ago? year just or influenced

Alan Trefler

partner right? partners at And in stat that's think my team I the is completely the we say want bought this is deals to The north nature great path. most partner our partner supported. that of so done We're talk is going it's XX% are the that to involved. committed with would And me, high. us, that. No, and of reality relationship I influential to say level front deepening a point, our have has our has team largest the And into leadership of engaged, are partners, just I of job and engagement involved continue. is to deals think important. that don't whole and customers our We actively the grown would partner of I very but really of very XX%, with

Kenneth Stillwell

that, maybe involved an them selling we're -- distribution to. in that And that's healthy for the partner but especially what very many mentioned, of just efficient and which organizations that with not involved, deals certainly companies. partners closing sending additional I'll to you deals, is and will one we our model influence, just someday But think and and closing to XX% are -- that's to is XX% booking that's mean, be are Mark, add I the paperwork the clear, which to flavor be us case. partners have

Operator

we'll Next, Macquarie. to move Fred Havemeyer on with

Frederick Havemeyer

have of questions. a I couple

another on asked are that ones think some take have that them I been of many the of already.

what I Analyst generally, just want with Day, described go-to-market relative XXXX departure. at was to Hayden's philosophy firstly, with your begin So to your just

be So that recent there any was there out of changes? could that with that here. or Or number offering different to map? that just changes Day, go-to-market on products off of any the items the focus or want of solutions was on about these things your road Is talking still to shelf change is Analyst map offered strategy a we road more of during prebuilt back understand more a initiatives. the I side the laid productization and

Alan Trefler

to he Ken the defer at Well, end there. I'm going because literally of to this was

look So the you think a horizon. last couple I you a change we've can had sort in going, tell any anything. years. is, not for strategic me we're of at if There's right I missed -- of terms where The if strategy the of reality

those not shift specific? want know I'm you were I revision overall sessions. And execution. around big something more yes, that picture much very Because in or is this Ken, any think do you to say I strategy. in expecting

Kenneth Stillwell

Yes.

Certainly, core, you're to one very strategy, same aspect is so, is complete for think our go-to-market. service, of Those a more we solutions intelligent And off of and years engagement -- us I which from No. what how ago. we Fred, automation the finish. way customer which they a it, in terms was years build customer still think I areas one-to-one scratch. call platform referring are have a the I certainly, are engagement, of BPM not and mean

change strategy standpoint, from So no all. that at

That's solutions of is anything. absolutely one so engagement do for use of faster and the consistent. communicated Day. maybe strategies deployment, actually click that you'll to Microsoft our really we that clarify strategy is like have -- being -- much that ready not nor common, are in think kind we the kind speak, for our clients and kind a I graft or more value Office at being is shrink Investor isn't finished, to through, just cases of software that not of what we But terms thing, time to not and

Alan Trefler

Commonwealth decisions you for of you concept. at hear if and like us existing sort talking me customer when talk and I very talk think Bank engine about of look Well, making engagement the Australia, consistently

engagement on what that a around customer that call products segments, an customer to engagement the still of what and that of focusing things built automation the next stuff, unique holistic really of specific strategy, the -- like been different being about areas, driving and you work which we're partners low-code of I to done to workflow generation That's that ability getting referring work kind able cake really the that's around some involve a for very talk customers in, on. apply working the across and that, across channels, what we way clients much, differentiatedly which are our to the work layer And X, clients their customers, central. Ken Those and we're we -- a very you to architecture their places the think one core engagement. then traditional it's strength. in customers clients' with give with leverage those do to intelligent that You almost can done. things and products, create And how has I be of but our get to. and really strategies It's about customer and our what terms think think approach been with how call have their very, those are those has was to organization we create we

Frederick Havemeyer

again, the low-code certainly, Around landscape things. number that. on the like pure-play on really focus for of there. out their a you ask And strategies. and those ability point, go-to-market this about and we're that competitive course, are of wanted to there's I low-code also, side companies context At ServiceNow engagement workflows to seeing on no-code of vendors Thank talk enterprise facilitate

generally head are going going landscape? to sort against in are any seeing your ask, deals? Who to or of adopting against wanted changes that I in in And speaking, typically any customers for? cases you're use shift head So competitive you Pega

Alan Trefler

needs. now. of people good all do you Very things. of are been all The that things, is so the terms They in to something our in mean, So where There's long fast. to it can to think, market, do competitors need be in an But simple call to grow and that's our cetera, able to have storied But this way think a get competitors programming programming There to et of enterprise the we XX be got really alternative shortage market. talking differently different the has able stuff the competitor, evolution. find have what something I that's to there be deliver of this we going do, is special the no than be soon. I candid, from the what ServiceNow they that. kind like deliver companies area. we, its have given ranging during ones a very to are from ironic, which to that called competitors. and months to evolve way history and And I things of that competitors. they to anything ultimate as and I workflows, in They would ranging in last traditional we or do part lots about support customers understand AppSheet are at uniquely we been

And That's going broader is important to continue that's important these having market. strategy force build strong the enterprise reason really know been enormously we're world. key leverage one the to to evolving our message. we're strategy. to customers, is to why an forward. And and think with competitive going that's to have an That's are which sales engaged think this I excited why have that the way how us We deeper And in I and I'm going the clients. who it's what relationships help partners

there, to competitors our long as differentiated. as So make difference the visible. It's being that out it's nice job

Frederick Havemeyer

side I think for then of on final things. question Ken one And the financial

essentially there's timing recognized generally, helpful. deals provide whether any would than term in just to wanted these could say into for is to about license the the commentary or backlog of earlier. the to you ask revenue you just as I context Or rather commentary on QX XXXX understand be deals if Thank the You around timing just of deals context read in seasonality line? to being how shifted any revenue. these relative that

Kenneth Stillwell

good Fred. a Yes. question, It's

I'm So in there -- are quarter, these that growth, between one net That is impact some give in can impact, would when on next some like, high not positive let's are always possible some have things -- exactly the going it's that predict unusually quarters. some the to it's to said, grew positive things way. move or there to -- so so quarter it a because that backlog and -- in have say you you

a one to growth quarter or there's being between So next correlation definitely in slower X. backlog or the faster quarter

I -- to the should some backlog want better too suggest term but So certainly, precise on don't the to have strong a impact don't QX we of think probably there. will bit, impact at little a and variables we'll robust end get a year, on are XXXX, because it I there that

time have one more quick we maybe think I for question.

Operator

today take question last We'll our with Lenschow Barclays. from Raimo

Vinod Srinivasaraghavan

for Vinod on is Raimo. This

quick two Just follow-ups.

move just opportunity relationships secondly, little a on the as just bit was the companies? you of your think market under a down where partners, your your maybe I now? sales an then [indiscernible] instead And fully is XXX focus of your XX%. X,XXX to with is of percentage give year, or is Can to expand there top you last ramp force said that us that you sense

Kenneth Stillwell

the one. second maybe you I'll Alan, first Sure. one, take could take the

is under of word. say XX%. salespeople is just -- I are would know percentage a reasonable but ramped, what slightly I'll before, it reasonably tough just our still as fully So ramped that way I've used in I call

would to but want say the going last partners? higher, year would Naturally, or consistent fairly the Alan, take So And I one with on down you more number consistent. I the market is say fairly through so. do

Alan Trefler

to for I'm buying very to looking fully there in for I Yes, doing to, market. is and actually just that customers right we're people where -- with, but of the our I see the keep that a going so we a advantage And this on much very our I the that, take of comfortable all at and our about they're beneficial large is good with cases, the continuing with the the little are the us the thinking have where more in partners both. doing we all haven't We takes who a in well think everyone to year. course, boom ones massive know But what's do But sure upside And things was massive, at time, partners to for what think, think, bad least the less of really that's fraction that mean, in strategy been and have have that and is work more we're when year area one are selling meaningful view. when I relationships. way, of we're relationships of this in and a broadly, our economy long times focus idea, particularly is partners think what particularly capable and many a around existing and this highly with of I I going productive times, they're very it us. that's, unpredictability -- for

or up focused of the I thus unchanged joining I've good saying our what Fed made we we the those performance with happen conference makes year. feel some wrap everyone me the we And the for decisions than XXXX. a that going today. this delivered analyst And Analyst just focus this that's in me call Day other terms you in So about solid a stuff of of were on thanks really probably by We've what far at and talked seen right way. year, just let the last year, into some think

awesome leadership in the terms that billion across both and in of product I to $X financially extending think the in our just market mark.

for look strong in well you. positioned think XXXX, I updating and to year we're another forward

all for we're guys all know hard working should you. You that

evening. be much, knows, and look Have forward very someday person who in meeting you thank soon. So maybe well to great a talking

Operator

your That does appreciate teleconference. participation. conclude today's do We

You may disconnect. now

Pegasystems (PEGA) 17 Feb 222021 Q4 Earnings call transcript