• October, 24 2001

Pegasystems Net Income Up 50 Percent From Q2, Revenue Steady

Small-cap service and support solutions provider Pegasystems (NASDAQ: PEGA) claimed a third consecutive quarter of increased revenue and profit in its earnings report for the third quarter of 2001.

The Cambridge, Mass.-based company, which provides rules-based business process automation solutions, reported $23.1 million in total revenue for the quarter ended September 30, up from just under $23 million the previous quarter and $22.7 million one year earlier.

Net income increased nearly 50 percent sequentially to $3.9 million, or $0.12 per share diluted, from the $2.6 million earned in Q201. One year earlier Pegasystems posted a net loss of $(0.2) million.

The company also reported a sequential gain in license revenue, reporting $10.6 million compared to $8.7 million the previous quarter. Licensing revenue was higher in the second quarter of 2000, however, at nearly $13 million.

"Pegasystems achieved a third consecutive quarter of profits and growth,
delivering positive results in a difficult economic environment," said Rick
Jones, president and COO. "We continue to see a solid stream
of revenue from our customer base, which consists of blue-chip,
industry-leading companies."

Chris
Sullivan, chief financial officer and treasurer, attributed the quarter's financial success to its focus on performance management and accountability. "While the current economic uncertainty has caused
some customers and prospects to delay or defer IT investments, we continue
to plan for growth."

www.pegasystems.com

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