Pegasystems Swings to 4th-Quarter Profit on Revenue, Margins

       By Debbie Cai 

    Pegasystems Inc. (PEGA) swung to a fourth-quarter profit as the business-software company saw strong revenue growth and improved margins.

    Shares jumped 18% to $29.85 after hours as results beat Wall Street's expectations and the company's full-year outlook easily surpassed estimates.

    For the new year, Pegasystems estimates per-share earnings of $1.20, above the 90 cents projected by analysts surveyed by Thomson Reuters.

    Pegasystems, which develops customer service management software, has reported revenue gains every quarter for several years. However, it has frequently dipped into the red as its expenses have also risen.

    For the latest quarter, the company reported a profit of $20.4 million, or 53 cents a share, compared with a year-earlier loss of $1.9 million, or five cents a share. Excluding stock-based compensation and other impacts, earnings in the latest quarter were 65 cents a share.

    Revenue rose 25% to $143.8 million.

    Analysts polled by Thomson Reuters expected a per-share profit of 33 cents on revenue of $122.6 million.

    Gross margin widened to 73.4% from 63.1%.

    Total operating expenses rose 13% to $77.8 million, including higher selling-and-marketing and research-and-development costs.

    Through the close, the stock is up 17% over the past three months.

    -Write to Debbie Cai at