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Technology Stocks : PEGA - Pegasystems -- Ignore unavailable to you. Want to Upgrade?

To: Trader Dave who wrote (258)	11/11/1997 1:23:00 PM
From: Geof Hollingsworth	Read Replies (2) \| Respond to of 504

>2) if pega recognized revenues like everyone else, they would be much smaller and probably not profitable.< This isn't at all clear to me. I suppose that if they were to continue leasing the software but were to switch to only recognizing the lease revenue due in 12 months, you might be correct, but why would anyone do that (and who do you know of who follows that business model/accounting policy combination?). If they switched business models to selling perpetual licenses (like everyone else), presumably at prices which would be several times the current annual lease payments, and then recognized those license revenues on shipment, installation, acceptance, whatever (like everyone else), they could well be identical in size and profitability to their recent reports-all depends on what they could get for a perpetual license and how much their sales are helped by the renewals of the previous software coming off lease. I see this more as a business model issue rather than an accounting policy issue. The big problem with the way they run the business is that it is hard (impossible?) for us to be sure of what's going on, and apparently it can even be difficult for them to keep it all straight.