Low-code automation software firm Pegasystems Inc. posted disappointing second-quarter financial results that saw it miss analyst’s targets on earnings, revenue and adjusted operating income.

The company reported a net loss for the period of $46.8 million, improving on the loss of $268.2 million it posted one year earlier. However, its earnings before certain costs such as stock compensation came to just a penny per share, below the forecast of five cents per share. Revenue rose 9%, to $298.3 million, but came in below the analyst’s target of $309.6 million.

Pegasystems is a provider of low-code automation software that helps people who aren’t programmers automate manual tasks, unify business processes and customer journeys. The software helps companies to get a better handle on the multiple business applications and systems they use. By creating a configurable platform that sits above those other systems, the Pega Platform provides businesses with a single view of their customers, cases and workflows, together with all of the associated data.

Although Pegasystems software is often compared with that of robotic process automation firms such as Automation Anywhere Inc. and UiPath Inc., it’s generally seen as a more bespoke offering.

In a statement, founder and Chief Executive Alan Trefler (pictured) spoke of an “uncertain and changing environment,” and said it’s more important than ever to focus on client success. “Our low-code platform for AI-powered decisioning and workflow automation uniquely empowers clients to embrace emerging trends like generative AI and, at the same time, reduce costs and improve customer engagement,” he said.

Trying to find a few bright spots from the quarter, Pegasystems pointed to annual contract value growth of 13% from the same period last year. It also said Pega Cloud’s gross margin expanded to 73%.

Though the results missed expectations, analyst Holger Mueller of Constellation Research Inc. said he sees evidence that Pegasystems might have turned the corner, so to speak, with revenue growth that almost reached double-digits. “It made progress on cost reductions and it showed good product execution, too,” the analyst said. “Now the onus is on Trefler and team to make better progress towards profitability by the end of the full year.”

Investors were simply not convinced, however, and Pegasystems’ stock fell more than 10% in the morning session after the report.

Prior to today’s drop, Pegasystems’ shares had gained more than 59% in the year to date, compared with the S&P 500’s average gain of just 19%.

Photo: SiliconANGLE