PEGA - Pegasystems Message Board

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Technology Stocks : PEGA - Pegasystems

PEGA 59.57

-2.4%

Nov 5 3:59 PM EST

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To: Geof Hollingsworth who wrote (259)	11/11/1997 3:55:00 PM
From: Clam Clam	Read Replies (1) of 504

Geof, why not just treat the lease revenue for what it really is. Other companies sell perpetual licenses and then do upgrades to sell into their installed base. Just treat it like an upgrade. The fact that PEGA's license runs out in 3-5 years is nice but, IMO, isn't enough to warrant throwing out the entire issue of timing. I say just be conservative and treat it like a perpetual license. IMO, the income statement should relate to a period of time and should represent what happened over that 3-month period, not the simple math of $50 million / 20 quarters (or whatever the length of the contract). Booking revenues on non-current receivables completely ignores the issue of timing. I understand the argument for "guaranteed minimum revenues," I just have a problem with it given the nature of contracts (legalese, footnotes etc...).

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