US Market News
2月前
Blueprint AI Drives Pega Cloud Momentum in Q1 2026April 21, 2026 4:05 PM
Business Wire
Pega Cloud Annual Contract Value (ACV) increases 29% year over year (27% in constant currency)
ACV grows 12% year over year (11% in constant currency)
Cash flow from operations and free cash flow both exceed $200M
Pegasystems Inc. (NASDAQ: PEGA), the Enterprise Transformation Company™, released its financial results for the first quarter of 2026.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260421891107/en/Total ACV Growth and Pega Cloud ACV Growth
“Pega’s Blueprint AI helps enterprises reimagine their businesses while Pega’s powerful workflow engine provides the harness that ensures predictable outcomes,” said Alan Trefler, founder and CEO, Pegasystems. “We continue to be differentiated in the market and of great value as enterprises recognize the need for a sustainable AI architecture.”
“As enterprises move past the experimental phase of AI and demand real ROI, Pega's proven ability to generate measurable value allows us to showcase the financial impact we provide to our clients," said Ken Stillwell, COO and CFO, Pegasystems. "This positions us well to drive ACV growth and expand cash flow margins.”
Financial and performance metrics (1)
Reconciliation of ACV and Constant Currency ACV
(in millions, except percentages)
March 31, 2025
March 31, 2026
1-Year Change
ACV
$
1,445
$
1,622
12
%
Impact of changes in foreign exchange rates
—
(24
)
Constant currency ACV
$
1,445
$
1,598
11
%
Note: Constant currency ACV is calculated by applying the March 31, 2025 foreign exchange rates to current period shown.
Cash Flow Growth
(Dollars in thousands,
except per share amounts)
Three Months Ended
March 31,
2026
2025
Change
Total revenue
$
429,973
$
475,633
(10
)%
Net income - GAAP
$
32,764
$
85,422
(62
)%
Net income - non-GAAP
$
83,068
$
140,542
(41
)%
Diluted earnings per share - GAAP
$
0.18
$
0.46
(61
)%
Diluted earnings per share - non-GAAP
$
0.46
$
0.76
(39
)%
(Dollars in thousands)
Three Months Ended
March 31,
Change
2026
2025
Pega Cloud
$
205,031
48
%
$
151,123
32
%
$
53,908
36
%
Maintenance
75,317
17
%
76,368
16
%
(1,051
)
(1
)%
Subscription services
280,348
65
%
227,491
48
%
52,857
23
%
Subscription license
94,852
22
%
187,721
39
%
(92,869
)
(49
)%
Subscription
375,200
87
%
415,212
87
%
(40,012
)
(10
)%
Consulting
54,773
13
%
60,421
13
%
(5,648
)
(9
)%
Total revenue
$
429,973
100
%
$
475,633
100
%
$
(45,660
)
(10
)%
Quarterly conference call
A conference call and audio-only webcast will be conducted at 8:00 a.m. EDT on Wednesday, April 22, 2026.
Members of the public and investors are invited to join the call and participate in the question and answer session by dialing 1 (800) 715-9871 (domestic) or 1 (646) 307-1963 (international) and using Conference ID 9410633, or via https://events.q4inc.com/attendee/156449953 by logging onto www.pega.com at least five minutes prior to the event's broadcast and clicking on the webcast icon in the Investors section.
Discussion of non-GAAP financial measures
Our non-GAAP financial measures should only be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. We believe that these measures help investors understand our core operating results and prospects, which is consistent with how management measures and forecasts our performance without the effect of often one-time charges and other items outside our normal operations. Management uses these measures to assess the performance of the company's operations and establish operational goals and incentives. They are not a substitute for financial measures prepared under U.S. GAAP. Refer to the schedules at the end of this release for additional information, including a reconciliation of GAAP and non-GAAP measures.
Forward-looking statements
Certain statements in this press release may be "forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, including statements about the growth and development of our business and market.
Words such as expects, anticipates, intends, plans, believes, will, could, should, estimates, may, targets, strategies, intends to, projects, positions, forecasts, guidance, likely, and usually or variations of such words and other similar expressions identify forward-looking statements. These statements represent our views only as of the date the statement was made and are based on current expectations and assumptions.
Forward-looking statements deal with future events and are subject to risks and uncertainties that are difficult to predict, including, but not limited to:
our future financial performance and business plans;
the adequacy of our liquidity and capital resources;
the successful execution of investments in artificial intelligence;
the timing of revenue recognition;
variation in demand for our products and services;
reliance on key personnel;
potential legal and financial liabilities, as well as damage to our reputation, due to cyber-attacks;
security breaches and security flaws;
our ability to protect our intellectual property rights, costs associated with defending such rights, intellectual property rights claims, and other related claims by third parties against us, including related costs, damages, and other relief that may be granted against us;
our ongoing litigation with Appian Corp. and associated legal proceedings;
our client retention rate; and
management of our growth.
These risks and others that may cause actual results to differ materially from those expressed in such forward-looking statements are described further in Part I of our Annual Report on Form 10-K for the year ended December 31, 2025, and other filings we make with the SEC.
Investors are cautioned not to place undue reliance on such forward-looking statements, and there are no assurances that the results included in such statements will be achieved. Although subsequent events may cause our view to change, except as required by applicable law, we do not undertake and expressly disclaim any obligation to publicly update or revise these forward-looking statements, whether as the result of new information, future events, or otherwise.
Any forward-looking statements in this press release represent our views as of April 21, 2026.
About Pegasystems
Pega provides the leading AI-powered platform for enterprise transformation. The world’s most influential organizations trust our technology to reimagine how work gets done by automating workflows, personalizing customer experiences, and modernizing legacy systems. Since 1983, our scalable, flexible architecture has fueled continuous innovation, helping clients accelerate their path to the autonomous enterprise. Ready to Build for Change®? Visit www.pega.com.
All trademarks are the property of their respective owners.
(1) Refer to the schedules at the end of this release for additional information, including a reconciliation of GAAP and non-GAAP measures.
PEGASYSTEMS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended
March 31,
2026
2025
Revenue
Subscription services
$
280,348
$
227,491
Subscription license
94,852
187,721
Consulting
54,773
60,421
Total revenue
429,973
475,633
Cost of revenue
Subscription services
49,449
38,128
Subscription license
471
388
Consulting
56,834
63,934
Total cost of revenue
106,754
102,450
Gross profit
323,219
373,183
Operating expenses
Selling and marketing
155,603
138,069
Research and development
82,047
74,286
General and administrative
48,573
33,828
Restructuring
(153
)
11
Total operating expenses
286,070
246,194
Income from operations
37,149
126,989
Foreign currency transaction gain (loss)
1,850
(5,325
)
Interest income
2,954
5,335
Interest expense
(44
)
(1,027
)
(Loss) on capped call transactions
—
(223
)
Other (loss) income, net
(2,204
)
561
Income before provision for income taxes
39,705
126,310
Provision for income taxes
6,941
40,888
Net income
$
32,764
$
85,422
Earnings per share
Basic
$
0.19
$
0.50
Diluted
$
0.18
$
0.46
Weighted-average number of common shares outstanding
Basic
168,817
171,804
Diluted
178,841
188,826
PEGASYSTEMS INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31,
2026
December 31,
2025
Assets
Current assets:
Cash and cash equivalents
$
269,962
$
212,447
Marketable securities
203,992
213,352
Total cash, cash equivalents, and marketable securities
473,954
425,799
Accounts receivable, net
173,856
264,713
Unbilled receivables, net
142,057
166,478
Other current assets
114,010
121,305
Total current assets
903,877
978,295
Long-term unbilled receivables, net
87,459
102,544
Goodwill
81,380
81,506
Long-term deferred income taxes
174,251
175,472
Other long-term assets
304,031
294,027
Total assets
$
1,550,998
$
1,631,844
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
14,206
$
12,924
Accrued expenses
79,464
44,847
Accrued compensation and related expenses
67,222
148,797
Deferred revenue
557,449
509,275
Other current liabilities
25,061
21,935
Total current liabilities
743,402
737,778
Long-term operating lease liabilities
57,075
60,825
Other long-term liabilities
44,606
45,860
Total liabilities
845,083
844,463
Total stockholders’ equity
705,915
787,381
Total liabilities and stockholders’ equity
$
1,550,998
$
1,631,844
PEGASYSTEMS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
2026
2025
Net income
$
32,764
$
85,422
Adjustments to reconcile net income to cash provided by operating activities
Non-cash items
68,681
70,409
Change in operating assets and liabilities, net
110,806
48,397
Cash provided by operating activities
212,251
204,228
Cash provided by investing activities
2,760
261,895
Cash (used in) financing activities
(154,163
)
(575,986
)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(2,898
)
3,570
Net increase (decrease) in cash, cash equivalents, and restricted cash
57,950
(106,293
)
Cash, cash equivalents, and restricted cash, beginning of period
216,360
341,529
Cash, cash equivalents, and restricted cash, end of period
$
274,310
$
235,236
PEGASYSTEMS INC.
RECONCILIATION OF SELECTED GAAP AND NON-GAAP MEASURES
(in thousands, except percentages and per share amounts)
Three Months Ended
March 31,
2026
2025
Change
Net income - GAAP
$
32,764
$
85,422
(62
)%
Stock-based compensation (1)
45,815
41,425
Legal fees
19,964
6,544
Amortization of intangible assets
783
701
Restructuring
(153
)
11
Foreign currency transaction (gain) loss
(1,850
)
5,325
Interest on convertible senior notes
—
394
Capped call transactions
—
223
Other
2,233
(751
)
Income taxes (2)
(16,488
)
1,248
Net income - non-GAAP
$
83,068
$
140,542
(41
)%
Diluted earnings per share - GAAP
$
0.18
$
0.46
(61
)%
non-GAAP adjustments
0.28
0.30
Diluted earnings per share - non-GAAP
$
0.46
$
0.76
(39
)%
Diluted weighted-average number of common shares outstanding - GAAP
178,841
188,826
(5
)%
Capped call transactions
—
(4,850
)
Diluted weighted-average number of common shares outstanding - non-GAAP
178,841
183,976
(3
)%
Our non-GAAP financial measures reflect the following adjustments:
Stock-based compensation: We have excluded stock-based compensation from our non-GAAP operating expenses and profitability measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to our revenues recognized during the periods presented and is expected to contribute to our future revenues, we continue to evaluate our business performance, excluding stock-based compensation.
Legal fees: Legal and related fees arising from proceedings outside the ordinary course of business. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.
Amortization of intangible assets: We have excluded the amortization of intangible assets from our non-GAAP operating expenses and profitability measures. Amortization of intangible assets fluctuates in amount and frequency and is significantly affected by the timing and size of acquisitions. Investors should note that intangible assets contributed to our revenues recognized during the periods presented and are expected to contribute to future revenues. Amortization of intangible assets is likely to recur in future periods. We believe excluding these amounts provides a useful comparison of our operational performance in different periods.
Restructuring: We have excluded restructuring from our non-GAAP financial measures. Restructuring fluctuates in amount and frequency and is significantly affected by the timing and size of our restructuring activities. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as these amounts are not representative of our core business operations and ongoing operational performance.
Foreign currency transaction (gain) loss: We have excluded foreign currency transaction gains and losses from our non-GAAP profitability measures. Foreign currency transaction gains and losses fluctuate in amount and frequency and are significantly affected by foreign exchange market rates. Foreign currency transaction gains and losses are likely to recur in future periods. We believe excluding these amounts provides a useful comparison of our operational performance in different periods.
Interest on convertible senior notes: In February 2020, we issued convertible senior notes (the “Notes”), due March 1, 2025, in a private placement. The Notes accrued interest at an annual rate of 0.75%, paid semi-annually in arrears on March 1 and September 1. The outstanding Notes were repaid in their entirety at maturity. We believe that excluding the amortization of issuance costs provides a useful comparison of our operational performance in different periods.
Capped call transactions: We have excluded gains and losses related to our capped call transactions held at fair value under U.S. GAAP. The capped call transactions were expected to reduce common stock dilution and/or offset any potential cash payments we must make, other than for principal and interest, upon conversion of the Notes. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.
Other: We have excluded gains and losses from our venture investments. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.
Diluted weighted-average number of common shares outstanding:
Capped call transactions: In periods of GAAP net income, the shares calculated by applying the if-converted method related to our Notes are included in the diluted weighted-average shares outstanding if they are dilutive. The capped call transactions were expected to reduce common stock dilution and/or offset any potential cash payments we must make, other than for principal and interest, upon conversion of the Notes. We believe that including the expected impact of the capped call transactions in our non-GAAP financial measures provides a useful comparison of our operational performance in different periods.
(1) Stock-based compensation:
Three Months Ended
March 31,
(Dollars in thousands)
2026
2025
Cost of revenue
$
7,876
$
7,823
Selling and marketing
18,454
15,781
Research and development
10,019
8,385
General and administrative
9,466
9,436
$
45,815
$
41,425
Income tax benefit
$
(9,164
)
$
(587
)
(2) Effective income tax rates:
Three Months Ended
March 31,
2026
2025
GAAP
17
%
32
%
non-GAAP
22
%
22
%
Our GAAP effective income tax rate is subject to significant fluctuations due to several factors, including our stock-based compensation plans, research and development tax credits, and the valuation allowance on our deferred tax assets in the U.S. and U.K. We determine our non-GAAP income tax rate using applicable rates in taxing jurisdictions and assessing certain factors, including historical and forecasted earnings by jurisdiction, discrete items, and ability to realize tax assets. We believe it is beneficial for our management to review our non-GAAP results consistent with our annual plan’s effective income tax rate as established at the beginning of each year, given tax rate volatility.
PEGASYSTEMS INC.
RECONCILIATION OF FREE CASH FLOW (1) AND OTHER METRICS
(in thousands, except percentages)
Three Months Ended
March 31,
Change
2026
2025
Cash provided by operating activities
$
212,251
204,228
4
%
Investment in property and equipment
(5,726
)
(1,880
)
Free cash flow (1)
$
206,525
$
202,348
2
%
Supplemental information (2)
Legal fees
$
2,801
$
2,413
Restructuring
6,711
1,184
Interest paid on convertible senior notes
—
1,754
Income taxes, net of refunds
5,233
4,102
$
14,745
$
9,453
(1)
Our non-GAAP free cash flow is defined as cash provided by operating activities less investment in property and equipment. Investment in property and equipment fluctuates in amount and frequency and is significantly affected by the timing and size of investments in our facilities and equipment. We provide information on free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings. This information is not a substitute for financial measures prepared under U.S. GAAP.
(2)
The supplemental information discloses items that affect our cash flows and are considered by management not to be representative of our core business operations and ongoing operational performance.
Legal fees: Legal and related fees arising from proceedings outside the ordinary course of business.
Restructuring: Restructuring fluctuates in amount and frequency and is significantly affected by the timing and size of our restructuring activities.
Interest paid on convertible senior notes: In February 2020, we issued the Notes, due March 1, 2025, in a private placement. The Notes accrued interest at an annual rate of 0.75%, paid semi-annually in arrears on March 1 and September 1. The outstanding Notes were repaid in their entirety at maturity.
Income taxes, net of refunds: Direct income taxes paid net of refunds received.
PEGASYSTEMS INC.
ANNUAL CONTRACT VALUE
(in thousands, except percentages)
Annual contract value (“ACV”) - ACV represents the annualized value of our active contracts as of the measurement date. The contract's total value is divided by its duration in years to calculate ACV. ACV is a performance measure that we believe provides useful information to our management and investors.
March 31, 2026
March 31, 2025
Change
Constant Currency Change
Pega Cloud
$
906,652
$
701,311
$
205,341
29
%
27
%
Maintenance
276,834
298,422
(21,588
)
(7
)%
(8
)%
Subscription services
1,183,486
999,733
183,753
18
%
16
%
Subscription license
438,514
445,677
(7,163
)
(2
)%
(2
)%
$
1,622,000
$
1,445,410
$
176,590
12
%
11
%
PEGASYSTEMS INC.
BACKLOG
(in thousands, except percentages)
Remaining performance obligations (“Backlog”) - Expected future revenue from existing non-cancellable contracts:
As of March 31, 2026:
Subscription services
Subscription license
Consulting
Total
Pega Cloud
Maintenance
1 year or less
$
709,105
$
212,262
$
64,878
$
42,884
$
1,029,129
51
%
1-2 years
384,966
77,207
1,402
3,758
467,333
23
%
2-3 years
213,496
53,806
11,150
1,378
279,830
14
%
Greater than 3 years
204,057
28,945
1,013
430
234,445
12
%
$
1,511,624
$
372,220
$
78,443
$
48,450
$
2,010,737
100
%
% of Total
75
%
19
%
4
%
2
%
100
%
Change since March 31, 2025
$
260,513
$
(12,178
)
$
33,260
$
643
$
282,238
21
%
(3
)%
74
%
1
%
16
%
As of March 31, 2025:
Subscription services
Subscription license
Consulting
Total
Pega Cloud
Maintenance
1 year or less
$
572,341
$
229,180
$
33,519
$
45,320
$
880,360
50
%
1-2 years
331,572
73,500
3,718
2,291
411,081
24
%
2-3 years
161,259
37,779
731
144
199,913
12
%
Greater than 3 years
185,939
43,939
7,215
52
237,145
14
%
$
1,251,111
$
384,398
$
45,183
$
47,807
$
1,728,499
100
%
% of Total
72
%
22
%
3
%
3
%
100
%
PEGASYSTEMS INC.
RECONCILIATION OF GAAP BACKLOG AND CONSTANT CURRENCY BACKLOG
(in millions, except percentages)
March 31, 2025
March 31, 2026
1 Year Growth Rate
Backlog - GAAP
$
1,728
$
2,011
16
%
Impact of changes in foreign exchange rates
—
(38
)
Constant currency backlog
$
1,728
$
1,973
14
%
Note: Constant currency backlog is calculated by applying the March 31, 2025 foreign exchange rates to current period shown.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260421891107/en/
Press contact:
Lisa Pintchman
VP, Corporate Communications
lisapintchman.rogers@pega.com
617-866-6022
Investor contact:
Peter Welburn
VP, Corporate Development & Investor Relations
PegaInvestorRelations@pega.com
617-498-8968
Original: Blueprint AI Drives Pega Cloud Momentum in Q1 2026
US Market News
3月前
Pega Named a Leader in Customer Service Solutions by Independent Research FirmMarch 13, 2026 5:24 PM
Business Wire
Pega Customer Service, Pega Blueprint, and Pega Process Mining recognized for automation and agentic capabilities
Pegasystems Inc. (NASDAQ: PEGA), The Enterprise Transformation CompanyTM, today announced Forrester Research named Pega a Leader in The Forrester WaveTM: Customer Service Solutions, Q1 2026 (1). Pega received the highest scores possible in 16 of the 31 total evaluation criteria.
The report explains, “Pegasystems offers all the building blocks for autonomous service. Its superior case management orchestrates workflows across channels and across the enterprise. Self-service resolves less complex inquiries, while complex cases are managed through the desktop, displaying journey, context, and guidance. Real-time AI coaching, knowledge, and next best actions adapt dynamically.”
Forrester goes on to state, “Pega Blueprint accelerates workflow design by accepting process inputs via natural language, BPMN diagrams, documentation, etc. Pega Process Mining discovers and optimizes processes, while Blueprint uses outputs to reimagine processes. Pega supports AI agents across all channels: It combines workflow automation and AI to act as predictably as necessary, and it offers tools to define, deploy, orchestrate, and optimize AI agents.”
According to the report, Pega clients “appreciate that Blueprint measurably speeds development, and they find the process mining tools to be excellent.” Ultimately, the Forrester evaluation concluded Pega’s profile with, “Pegasystems best suits large enterprises with complex, industry regulated processes where customer value management is a top priority.”
Pega was among the twelve most significant customer service providers evaluated for the report and received the highest scores possible in the following ‘Current Offering’ criteria: customer service desktop, case management and contextual guidance, AI assist tools for CSRs, customer service management, customer service operations, coaching and learning, conversational AI, self-service portals, conversation intelligence, process management and automation, answer management, AI agents, support for global deployments, and vertical customer service offerings. Pega also received the highest scores possible in the vision and innovation criteria within the ‘Strategy’ category.
Forrester evaluated Pega Customer Service™, an AI-powered service automation platform that unifies enterprise workflows to deliver personalized, end-to-end customer service while accelerating resolutions across channels. The report also evaluated Pega BlueprintTM, Pega’s groundbreaking AI for designing, building, and optimizing workflows to quickly create reliable and predictable enterprise apps, as well as Pega Process MiningTM, which uncovers and optimizes service processes by revealing inefficiencies and bottlenecks across service journeys. Combined, these capabilities help enterprises modernize and confidently automate service operations.
This report is among Pega's recent analyst recognition for its enterprise AI and automation capabilities. Pega was recognized as a Leader in the The Forrester WaveTM: Real-Time Interaction Management Software (RTIMS), Q4 2025 report (2), the Gartner® Magic Quadrant for Business Orchestration and Automation Technologies (3), The Forrester Wave™ for Digital Process Automation, Q3 2025 report (4), and the Gartner® Magic Quadrant for Process Mining Platforms 2025 (5). It was also named a Leader in The Forrester Wave™: AI Decisioning Platforms, Q2 2025 (6) and The Forrester WaveTM: Customer Relationship Management Software, Q1 2025 (7). For more background and additional analyst reports, visit www.pega.com/analyst-reports.
Quotes & Commentary:
“Autonomous service represents the next evolution of customer service – a pivotal opportunity for brands to engage more meaningfully with their customers while driving greater efficiency,” said Kerim Akgonul, chief product officer, Pega. “This evolution requires more than AI in isolation – it demands orchestration, governance, and the ability to continuously adapt. We believe this Forrester recognition underscores how Pega is helping organizations move beyond reactive service models to deliver service experiences that are predictive, resilient, and built for the future.”
Supporting Resources:
Report complimentary access: The Forrester WaveTM: Customer Service Solutions, Q1 2026
Solution background: Pega Customer Service
Solution background: Pega Blueprint
Solution background: Pega Process Mining
Forrester Research, “The Forrester Wave™: Customer Service Solutions, Q1 2026,” by Kate Leggett, with contributors Linda Ivy-Rosser, Rich Saunders, and Angela Lozada, March 11, 2026
Forrester Research, “The Forrester Wave™: Real-Time Interaction Management (RTIM) Software, Q4 2025” by Rusty Warner, with contributors Martin Gill, Emily Doherty, and Christine Turley, November 17, 2025
Gartner, Inc.,” Magic Quadrant for Business Orchestration and Automation Technology, Q3 2025,” by Saikat Ray, Tushar Srivastava, Marc Kerremans, Arthur Villa, Cathy Tornbohm, Sachin Joshi, October 15, 2025
Forrester Research, “The Forrester Wave™: Digital Process Automation Software, Q3 2025,” by Crair Le Clair, with contributions from Chris Gardner, Renee Taylor – Huot, Faith Born, and Kara Hartig, October 2025
Gartner, Inc., “Magic Quadrant for Process Mining Platforms, Q1, 2025,” by Tushar Srivastava, Marc Kerremans, David Sugden, April 16, 2025
Forrester Research, “The Forrester Wave™: AI Decisioning Platforms, Q2 2025,” by Mike Gualtieri with contributions from Sudha Maheshwari, Bardia Razzaghi, and Jen Barton, June 10, 2025
Forrester Research, “The Forrester Wave™: Customer Relationship Management Software, Q1 2025,” by Kate Leggett, with contributions from Linda Ivy-Rosser and Faith Born, March 21, 2025
Forrester does not endorse any company, product, brand, or service included in its research publications and does not advise any person to select the products or services of any company or brand based on the ratings included in such publications. Information is based on the best available resources. Opinions reflect judgment at the time and are subject to change. For more information, read about Forrester’s objectivity here.
About Pegasystems
Pega provides the leading AI-powered platform for enterprise transformation. The world’s most influential organizations trust our technology to reimagine how work gets done by automating workflows, personalizing customer experiences, and modernizing legacy systems. Since 1983, our scalable, flexible architecture has fueled continuous innovation, helping clients accelerate their path to the autonomous enterprise. Ready to Build for Change®? Visit www.pega.com.
All trademarks are the property of their respective owners.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260311855219/en/
Press Contact:
Ilena Ryan
Pegasystems
ilena.ryan@pega.com
Original: Pega Named a Leader in Customer Service Solutions by Independent Research Firm
US Market News
3月前
Pega Named a Leader in Customer Service Solutions by Independent Research FirmMarch 11, 2026 11:17 AM
Business Wire
Pega Customer Service, Pega Blueprint, and Pega Process Mining recognized for automation and agentic capabilities
Pegasystems Inc. (NASDAQ: PEGA), The Enterprise Transformation CompanyTM, today announced Forrester Research named Pega a Leader in The Forrester WaveTM: Customer Service Solutions, Q1 2026 (1). Pega received the highest scores possible in 16 of the 31 total evaluation criteria.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260311855219/en/The Forrester Wave™: Customer Service Solutions, Q1 2026
The report explains, “Pegasystems offers all the building blocks for autonomous service. Its superior case management orchestrates workflows across channels and across the enterprise. Self-service resolves less complex inquiries, while complex cases are managed through the desktop, displaying journey, context, and guidance. Real-time AI coaching, knowledge, and next best actions adapt dynamically.”
Forrester goes on to state, “Pega Blueprint accelerates workflow design by accepting process inputs via natural language, BPMN diagrams, documentation, etc. Pega Process Mining discovers and optimizes processes, while Blueprint uses outputs to reimagine processes. Pega supports AI agents across all channels: It combines workflow automation and AI to act as predictably as necessary, and it offers tools to define, deploy, orchestrate, and optimize AI agents.”
According to the report, Pega clients “appreciate that Blueprint measurably speeds development, and they find the process mining tools to be excellent.” Ultimately, the Forrester evaluation concluded Pega’s profile with, “Pegasystems best suits large enterprises with complex, industry regulated processes where customer value management is a top priority.”
Pega was among the twelve most significant customer service providers evaluated for the report and received the highest scores possible in the following ‘Current Offering’ criteria: customer service desktop, case management and contextual guidance, AI assist tools for CSRs, customer service management, customer service operations, coaching and learning, conversational AI, self-service portals, conversation intelligence, process management and automation, answer management, AI agents, support for global deployments, and vertical customer service offerings. Pega also received the highest scores possible in the vision and innovation criteria within the ‘Strategy’ category.
Forrester evaluated Pega Customer Service™, an AI-powered service automation platform that unifies enterprise workflows to deliver personalized, end-to-end customer service while accelerating resolutions across channels. The report also evaluated Pega BlueprintTM, Pega’s groundbreaking AI for designing, building, and optimizing workflows to quickly create reliable and predictable enterprise apps, as well as Pega Process MiningTM, which uncovers and optimizes service processes by revealing inefficiencies and bottlenecks across service journeys. Combined, these capabilities help enterprises modernize and confidently automate service operations.
This report is among Pega's recent analyst recognition for its enterprise AI and automation capabilities. Pega was recognized as a Leader in the The Forrester WaveTM: Real-Time Interaction Management Software (RTIMS), Q4 2025 report (2), the Gartner® Magic Quadrant for Business Orchestration and Automation Technologies (3), The Forrester Wave™ for Digital Process Automation, Q3 2025 report (4), and the Gartner® Magic Quadrant for Process Mining Platforms 2025 (5). It was also named a Leader in The Forrester Wave™: AI Decisioning Platforms, Q2 2025 (6). The Forrester WaveTM: Customer Relationship Management Software, Q1 2025 (7). For more background and additional analyst reports, visit www.pega.com/analyst-reports.
Quotes & Commentary:
“Autonomous service represents the next evolution of customer service – a pivotal opportunity for brands to engage more meaningfully with their customers while driving greater efficiency,” said Kerim Akgonul, chief product officer, Pega. “This evolution requires more than AI in isolation – it demands orchestration, governance, and the ability to continuously adapt. We believe this Forrester recognition underscores how Pega is helping organizations move beyond reactive service models to deliver service experiences that are predictive, resilient, and built for the future.”
Supporting Resources:
Report complimentary access: The Forrester WaveTM: Customer Service Solutions, Q1 2026
Solution background: Pega Customer Service
Solution background: Pega Blueprint
Solution background: Pega Process Mining
Forrester Research, “The Forrester Wave™: Customer Service Solutions, Q1 2026,” by Kate Leggett, with contributors Linda Ivy-Rosser, Rich Saunders, and Angela Lozada, March 11, 2026
Forrester Research, “The Forrester Wave™: Real-Time Interaction Management (RTIM) Software, Q4 2025” by Rusty Warner, with contributors Martin Gill, Emily Doherty, and Christine Turley, November 17, 2025
Gartner, Inc.,” Magic Quadrant for Business Orchestration and Automation Technology, Q3 2025,” by Saikat Ray, Tushar Srivastava, Marc Kerremans, Arthur Villa, Cathy Tornbohm, Sachin Joshi, October 15, 2025
Forrester Research, “The Forrester Wave™: Digital Process Automation Software, Q3 2025,” by Crair Le Clair, with contributions from Chris Gardner, Renee Taylor – Huot, Faith Born, and Kara Hartig, October 2025
Gartner, Inc., “Magic Quadrant for Process Mining Platforms, Q1, 2025,” by Tushar Srivastava, Marc Kerremans, David Sugden, April 16, 2025
Forrester Research, “The Forrester Wave™: AI Decisioning Platforms, Q2 2025,” by Mike Gualtieri with contributions from Sudha Maheshwari, Bardia Razzaghi, and Jen Barton, June 10, 2025
Forrester Research, “The Forrester Wave™: Customer Relationship Management Software, Q1 2025,” by Kate Leggett, with contributions from Linda Ivy-Rosser and Faith Born, March 21, 2025
Forrester does not endorse any company, product, brand, or service included in its research publications and does not advise any person to select the products or services of any company or brand based on the ratings included in such publications. Information is based on the best available resources. Opinions reflect judgment at the time and are subject to change. For more information, read about Forrester’s objectivity here.
About Pegasystems
Pega provides the leading AI-powered platform for enterprise transformation. The world’s most influential organizations trust our technology to reimagine how work gets done by automating workflows, personalizing customer experiences, and modernizing legacy systems. Since 1983, our scalable, flexible architecture has fueled continuous innovation, helping clients accelerate their path to the autonomous enterprise. Ready to Build for Change®? Visit www.pega.com.
All trademarks are the property of their respective owners.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260311855219/en/
Press Contact:
Ilena Ryan
Pegasystems
ilena.ryan@pega.com
Original: Pega Named a Leader in Customer Service Solutions by Independent Research Firm
US Market News
4月前
Innovation Accelerates Pega’s Q4 2025 GrowthFebruary 10, 2026 4:05 PM
Business Wire
Annual Contract Value (ACV) grows 17% year over year (14% in constant currency)
Pega Cloud ACV increases 33% year over year (28% in constant currency)
Cash flow from operations and free cash flow grow 45% year over year
2026 guidance of 15% ACV growth, $595M in cash flow from operations, and $575M in free cash flow
Increases share repurchase authorization by $1B
Pegasystems Inc. (NASDAQ: PEGA), the Enterprise Transformation Company™, released its financial results for the fourth quarter and full-year 2025.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260210969541/en/Total ACV Growth and Pega Cloud ACV Growth
“2025 was an extraordinary year of progress and execution,” said Alan Trefler, founder and CEO, Pega. “We’re entering a transformative era with bold ideas and compelling innovation. Our approach positions us to lead the industry, deliver extraordinary value to clients, and enable clients to overcome legacy system limitations.”
“Our 2025 results reflect strong financial discipline, with top and bottom-line beats of our guidance and exceeding the Rule of 40,” Pega COO & CFO, Ken Stillwell, said. “Our recurring business model and our technology leadership position us to continue to accelerate ACV growth, expand margins, and increase free cash flow.”
Financial and performance metrics (1)
____________________
(1) Refer to the schedules at the end of this release for additional information, including a reconciliation of GAAP and non-GAAP measures.
Reconciliation of ACV and Constant Currency ACV
(in millions, except percentages)
December 31, 2024
December 31, 2025
1-Year Change
ACV
$
1,372
$
1,608
17
%
Impact of changes in foreign exchange rates
—
(46
)
Constant currency ACV
$
1,372
$
1,562
14
%
Note: Constant currency ACV is calculated by applying the December 31, 2024 foreign exchange rates to current period shown.
Cash Flow Growth
(Dollars in thousands,
except per share amounts) (1)
Three Months Ended
December 31,
Year Ended
December 31,
2025
2024
Change
2025
2024
Change
Total revenue
$
504,317
$
490,830
3
%
$
1,745,812
$
1,497,180
17
%
Net income - GAAP
$
234,574
$
119,090
97
%
$
393,437
$
99,189
297
%
Net income - non-GAAP
$
139,554
$
147,953
(6
)%
$
385,411
$
270,542
42
%
Diluted earnings per share - GAAP
$
1.27
$
0.63
102
%
$
2.13
$
0.55
287
%
Diluted earnings per share - non-GAAP
$
0.76
$
0.80
(5
)%
$
2.10
$
1.51
39
%
(1) Per share amounts have been recast for all prior periods to reflect the effect of the Company’s two-for-one forward common stock split effected in the form of a stock dividend distributed on June 20, 2025.
Three Months Ended
December 31,
Year Ended
December 31,
(Dollars in thousands) (2)
2025
2024
Change
2025
2024
Change
Pega Cloud
$
193,487
38
%
$
149,638
30
%
$
43,849
29
%
$
695,902
40
%
$
558,734
37
%
$
137,168
25
%
Maintenance
79,305
16
%
81,257
17
%
(1,952
)
(2
)%
314,593
18
%
323,304
22
%
(8,711
)
(3
)%
Subscription services
272,792
54
%
230,895
47
%
41,897
18
%
1,010,495
58
%
882,038
59
%
128,457
15
%
Subscription license
178,215
35
%
207,113
42
%
(28,898
)
(14
)%
507,368
29
%
401,869
27
%
105,499
26
%
Subscription
451,007
89
%
438,008
89
%
12,999
3
%
1,517,863
87
%
1,283,907
86
%
233,956
18
%
Consulting
53,310
11
%
52,822
11
%
488
1
%
227,949
13
%
213,273
14
%
14,676
7
%
Total revenue
$
504,317
100
%
$
490,830
100
%
$
13,487
3
%
$
1,745,812
100
%
$
1,497,180
100
%
$
248,632
17
%
(2) Perpetual license revenue has been combined within Subscription license revenue for all periods presented.
2026 Guidance (1)
As of February 10, 2026, we are providing the following guidance:
2026
Annual contract value growth
15%
2026
GAAP
Non-GAAP (1)
Revenue
$2.0 Billion
$2.0 Billion
Diluted earnings per share
$1.87
$2.75
2026
Cash provided by operating activities
$595 million
Free cash flow
$575 million
(1) A reconciliation of our GAAP and Non-GAAP guidance is contained in the financial schedules at the end of this release.
Quarterly conference call
A conference call and audio-only webcast will be conducted at 8:00 a.m. EST on Wednesday, February 11, 2026.
Members of the public and investors are invited to join the call and participate in the question and answer session by dialing 1 (800) 715-9871 (domestic) or 1 (646) 307-1963 (international) and using Conference ID 6226958, or via https://events.q4inc.com/attendee/958808765by logging onto www.pega.com at least five minutes prior to the event's broadcast and clicking on the webcast icon in the Investors section.
Discussion of non-GAAP financial measures
Our non-GAAP financial measures should only be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. We believe that these measures help investors understand our core operating results and prospects, which is consistent with how management measures and forecasts our performance without the effect of often one-time charges and other items outside our normal operations. Management uses these measures to assess the performance of the company's operations and establish operational goals and incentives. They are not a substitute for financial measures prepared under U.S. GAAP. Refer to the schedules at the end of this release for additional information, including a reconciliation of GAAP and non-GAAP measures.
Forward-looking statements
Certain statements in this press release may be "forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, including our 2026 Guidance and the anticipated growth and development of our business.
Words such as expects, anticipates, intends, plans, believes, will, could, should, estimates, may, targets, strategies, intends to, projects, positions, forecasts, guidance, likely, and usually or variations of such words and other similar expressions identify forward-looking statements. These statements represent our views only as of the date the statement was made and are based on current expectations and assumptions.
Forward-looking statements deal with future events and are subject to risks and uncertainties that are difficult to predict, including, but not limited to:
our future financial performance and business plans;
the adequacy of our liquidity and capital resources;
the successful execution of investments in artificial intelligence;
the timing of revenue recognition;
variation in demand for our products and services;
reliance on key personnel;
potential legal and financial liabilities, as well as damage to our reputation, due to cyber-attacks;
security breaches and security flaws;
our ability to protect our intellectual property rights, costs associated with defending such rights, intellectual property rights claims, and other related claims by third parties against us, including related costs, damages, and other relief that may be granted against us;
our ongoing litigation with Appian Corp. and associated legal proceedings;
our client retention rate; and
management of our growth.
These risks and others that may cause actual results to differ materially from those expressed in such forward-looking statements are described further in Part I of our Annual Report on Form 10-K for the year ended December 31, 2025, and other filings we make with the SEC.
Investors are cautioned not to place undue reliance on such forward-looking statements, and there are no assurances that the results included in such statements will be achieved. Although subsequent events may cause our view to change, except as required by applicable law, we do not undertake and expressly disclaim any obligation to publicly update or revise these forward-looking statements, whether as the result of new information, future events, or otherwise.
Any forward-looking statements in this press release represent our views as of February 10, 2026.
About Pegasystems
Pega provides the leading AI-powered platform for enterprise transformation. The world’s most influential organizations trust our technology to reimagine how work gets done by automating workflows, personalizing customer experiences, and modernizing legacy systems. Since 1983, our scalable, flexible architecture has fueled continuous innovation, helping clients accelerate their path to the autonomous enterprise. Ready to Build for Change®? Visit www.pega.com.
All trademarks are the property of their respective owners.
PEGASYSTEMS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1) (2)
(in thousands, except per share amounts)
Three Months Ended
December 31,
Year Ended
December 31,
2025
2024
2025
2024
Revenue
Subscription services
$
272,792
$
230,895
$
1,010,495
$
882,038
Subscription license
178,215
207,113
507,368
401,869
Consulting
53,310
52,822
227,949
213,273
Total revenue
504,317
490,830
1,745,812
1,497,180
Cost of revenue
Subscription services
46,631
40,988
169,247
149,918
Subscription license
316
389
1,382
1,905
Consulting
56,518
60,978
250,753
238,842
Total cost of revenue
103,465
102,355
421,382
390,665
Gross profit
400,852
388,475
1,324,430
1,106,515
Operating expenses
Selling and marketing
153,308
139,655
578,637
534,780
Research and development
80,855
76,379
312,681
298,074
General and administrative
40,998
28,207
148,722
112,848
Litigation settlement, net of recoveries
9,750
—
9,750
32,403
Restructuring
11,578
1,245
11,540
4,528
Total operating expenses
296,489
245,486
1,061,330
982,633
Income from operations
104,363
142,989
263,100
123,882
Foreign currency transaction (loss) gain
(2,711
)
6,318
(14,890
)
(912
)
Interest income
2,398
6,944
13,641
25,779
Interest expense
(113
)
(1,788
)
(1,285
)
(6,835
)
(Loss) income on capped call transactions
—
4
(223
)
(663
)
Other income (loss), net
1,037
(299
)
20,284
1,385
Income before (benefit from) provision for income taxes
104,974
154,168
280,627
142,636
(Benefit from) provision for income taxes
(129,600
)
35,078
(112,810
)
43,447
Net income
$
234,574
$
119,090
$
393,437
$
99,189
Earnings per share
Basic
$
1.38
$
0.69
$
2.30
$
0.58
Diluted
$
1.27
$
0.63
$
2.13
$
0.55
Weighted-average number of common shares outstanding
Basic
170,001
172,000
170,782
170,530
Diluted
184,165
191,272
184,790
179,268
(1) The number of common shares and per share amounts have been recast for all prior periods to reflect the effect of the Company’s two-for-one forward common stock split effected in the form of a stock dividend distributed on June 20, 2025.
(2) Perpetual license revenue and related cost of revenue have been combined within Subscription license revenue and cost of revenue for all periods presented.
PEGASYSTEMS INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, 2025
December 31, 2024
Assets
Current assets:
Cash and cash equivalents
$
212,447
$
337,103
Marketable securities
213,352
402,870
Total cash, cash equivalents, and marketable securities
425,799
739,973
Accounts receivable, net
264,713
305,468
Unbilled receivables, net
166,478
173,085
Other current assets
121,305
115,178
Total current assets
978,295
1,333,704
Long-term unbilled receivables, net
102,544
61,407
Goodwill
81,506
81,113
Other long-term assets
469,499
292,049
Total assets
$
1,631,844
$
1,768,273
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
12,924
$
6,226
Accrued expenses
44,847
31,544
Accrued compensation and related expenses
148,797
138,042
Deferred revenue
509,275
423,910
Convertible senior notes, net
—
467,470
Other current liabilities
21,935
18,866
Total current liabilities
737,778
1,086,058
Long-term operating lease liabilities
60,825
67,647
Other long-term liabilities
45,860
29,088
Total liabilities
844,463
1,182,793
Total stockholders’ equity
787,381
585,480
Total liabilities and stockholders’ equity
$
1,631,844
$
1,768,273
PEGASYSTEMS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended
December 31,
2025
2024
Net income
$
393,437
$
99,189
Adjustments to reconcile net income to cash provided by operating activities
Non-cash items
72,362
227,582
Change in operating assets and liabilities, net
39,428
19,155
Cash provided by operating activities
505,227
345,926
Cash provided by (used in) investing activities
197,246
(202,576
)
Cash (used in) financing activities
(834,630
)
(30,214
)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
6,988
(4,434
)
Net (decrease) increase in cash, cash equivalents, and restricted cash
(125,169
)
108,702
Cash, cash equivalents, and restricted cash, beginning of period
341,529
232,827
Cash, cash equivalents, and restricted cash, end of period
$
216,360
$
341,529
PEGASYSTEMS INC.
RECONCILIATION OF SELECTED GAAP AND NON-GAAP MEASURES (1)
(in thousands, except percentages and per share amounts)
Three Months Ended
December 31,
Year Ended
December 31,
2025
2024
Change
2025
2024
Change
Net income - GAAP
$
234,574
$
119,090
97
%
$
393,437
$
99,189
297
%
Stock-based compensation (2)
34,043
34,500
155,239
142,718
Restructuring
11,578
1,245
11,540
4,528
Legal fees
16,174
4,499
39,151
18,713
Litigation settlement, net of recoveries
9,750
—
9,750
32,403
Amortization of intangible assets
627
700
2,630
3,153
Interest on convertible senior notes
—
594
394
2,451
Capped call transactions
—
(4
)
223
663
Repurchases of convertible senior notes
—
(459
)
—
(459
)
Foreign currency transaction loss (gain)
2,711
(6,318
)
14,890
912
Other
(941
)
759
(20,327
)
(869
)
Income taxes (3)
(168,962
)
(6,653
)
(221,516
)
(32,860
)
Net income - non-GAAP
$
139,554
$
147,953
(6
)%
$
385,411
$
270,542
42
%
Diluted earnings per share - GAAP
$
1.27
$
0.63
102
%
$
2.13
$
0.55
287
%
non-GAAP adjustments
(0.51
)
0.17
(0.03
)
0.96
Diluted earnings per share - non-GAAP
$
0.76
$
0.80
(5
)%
$
2.10
$
1.51
39
%
Diluted weighted-average number of common shares outstanding - GAAP
184,165
191,272
(4
)%
184,790
179,268
3
%
Capped call transactions
—
(7,106
)
(1,196
)
(428
)
Diluted weighted-average number of common shares outstanding - non-GAAP
184,165
184,166
—
%
183,594
178,840
3
%
Our non-GAAP financial measures reflect the following adjustments:
Stock-based compensation: We have excluded stock-based compensation from our non-GAAP operating expenses and profitability measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to our revenues recognized during the periods presented and is expected to contribute to our future revenues, we continue to evaluate our business performance, excluding stock-based compensation.
Restructuring: We have excluded restructuring from our non-GAAP financial measures. Restructuring fluctuates in amount and frequency and is significantly affected by the timing and size of our restructuring activities. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as these amounts are not representative of our core business operations and ongoing operational performance.
Legal fees: Legal and related fees arising from proceedings outside the ordinary course of business. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.
Litigation settlement, net of recoveries: Cost to settle litigation, net of insurance recoveries, arising from proceedings outside the ordinary course of business. See "Note 20. Commitments And Contingencies" in Item 8 of our Annual Report filed on Form 10-K for the year ended December 31, 2025 and prior filings for further information. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.
Amortization of intangible assets: We have excluded the amortization of intangible assets from our non-GAAP operating expenses and profitability measures. Amortization of intangible assets fluctuates in amount and frequency and is significantly affected by the timing and size of acquisitions. Investors should note that intangible assets contributed to our revenues recognized during the periods presented and are expected to contribute to future revenues. Amortization of intangible assets is likely to recur in future periods. We believe excluding these amounts provides a useful comparison of our operational performance in different periods.
Interest on convertible senior notes: In February 2020, we issued convertible senior notes (the “Notes”), due March 1, 2025, in a private placement. The Notes accrued interest at an annual rate of 0.75%, paid semi-annually in arrears on March 1 and September 1. The outstanding Notes were repaid in their entirety at maturity. We believe that excluding the amortization of issuance costs provides a useful comparison of our operational performance in different periods.
Capped call transactions: We have excluded gains and losses related to our capped call transactions held at fair value under U.S. GAAP. The capped call transactions were expected to reduce common stock dilution and/or offset any potential cash payments we must make, other than for principal and interest, upon conversion of the Notes. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.
Repurchases of convertible senior notes: We have excluded gains from the repurchases of the Notes. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.
Foreign currency transaction loss (gain): We have excluded foreign currency transaction gains and losses from our non-GAAP profitability measures. Foreign currency transaction gains and losses fluctuate in amount and frequency and are significantly affected by foreign exchange market rates. Foreign currency transaction gains and losses are likely to recur in future periods. We believe excluding these amounts provides a useful comparison of our operational performance in different periods.
Other: We have excluded gains and losses from our venture investments. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.
Diluted weighted-average number of common shares outstanding:
Capped call transactions: In periods of GAAP net income, the shares calculated by applying the if-converted method related to the Company’s Notes are included in the diluted weighted-average shares outstanding if they are dilutive. The capped call transactions were expected to reduce common stock dilution and/or offset any potential cash payments the Company must make, other than for principal and interest, upon conversion of the Notes. We believe that including the expected impact of the capped call transactions in our non-GAAP financial measures provides a useful comparison of our operational performance in different periods.
(1) Per share amounts have been recast for all prior periods to reflect the effect of the Company’s two-for-one forward common stock split effected in the form of a stock dividend distributed on June 20, 2025.
(2) Stock-based compensation:
Three Months Ended
December 31,
Year Ended
December 31,
(Dollars in thousands)
2025
2024
2025
2024
Cost of revenue
$
4,909
$
6,795
$
26,646
$
27,353
Selling and marketing
15,553
13,463
60,721
55,084
Research and development
7,895
7,059
31,684
29,838
General and administrative
5,686
7,183
36,188
30,443
$
34,043
$
34,500
$
155,239
$
142,718
Income tax benefit
$
(6,417
)
$
(422
)
$
(31,043
)
$
(1,799
)
(3) Effective income tax rates:
Year Ended
December 31,
2025
2024
GAAP
(40
)%
30
%
non-GAAP
22
%
22
%
Our GAAP effective income tax rate is subject to significant fluctuations due to several factors, including our stock-based compensation plans, research and development tax credits, and the valuation allowance on our deferred tax assets in the U.S. and U.K. We determine our non-GAAP income tax rate using applicable rates in taxing jurisdictions and assessing certain factors, including historical and forecasted earnings by jurisdiction, discrete items, and ability to realize tax assets. Under GAAP we recorded a release of our valuation allowance on our net deferred tax assets in the U.S. federal and state and U.K during the fourth quarter of 2025, resulting in a $175 million non-cash tax benefit. See "Note 18. Income Taxes" in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information. We believe it is beneficial for our management to review our non-GAAP results consistent with our annual plan’s effective income tax rate as established at the beginning of each year, given tax rate volatility.
PEGASYSTEMS INC.
RECONCILIATION OF FREE CASH FLOW (1) AND OTHER METRICS
(in thousands, except percentages)
Year Ended
December 31,
Change
2025
2024
Cash provided by operating activities
$
505,227
345,926
46
%
Investment in property and equipment
(14,504
)
(7,712
)
Free cash flow (1)
$
490,723
$
338,214
45
%
Supplemental information (2)
Litigation settlement, net of recoveries
$
—
$
32,403
Legal fees
35,484
16,197
Restructuring
2,056
5,252
Interest paid on convertible senior notes
1,754
3,810
Income taxes, net of refunds
21,630
82,317
$
60,924
$
139,979
(1) Our non-GAAP free cash flow is defined as cash provided by operating activities less investment in property and equipment. Investment in property and equipment fluctuates in amount and frequency and is significantly affected by the timing and size of investments in our facilities and equipment. We provide information on free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings. This information is not a substitute for financial measures prepared under U.S. GAAP.
(2) The supplemental information discloses items that affect our cash flows and are considered by management not to be representative of our core business operations and ongoing operational performance.
Litigation settlement, net of recoveries: Cost to settle litigation, net of insurance recoveries, arising from proceedings outside the ordinary course of business. See "Note 20. Commitments And Contingencies" in Item 8 of our Annual Report filed on Form 10-K for the year ended December 31, 2025 and prior filings for further information.
Legal fees: Legal and related fees arising from proceedings outside the ordinary course of business.
Restructuring: Restructuring fluctuates in amount and frequency and is significantly affected by the timing and size of our restructuring activities.
Interest paid on convertible senior notes: In February 2020, we issued the Notes, due March 1, 2025, in a private placement. The Notes accrued interest at an annual rate of 0.75%, paid semi-annually in arrears on March 1 and September 1. The outstanding Notes were repaid in their entirety at maturity.
Income taxes, net of refunds: Direct income taxes paid net of refunds received.
PEGASYSTEMS INC.
ANNUAL CONTRACT VALUE
(in thousands, except percentages)
Annual contract value (“ACV”) - ACV represents the annualized value of our active contracts as of the measurement date. The contract's total value is divided by its duration in years to calculate ACV. ACV is a performance measure that we believe provides useful information to our management and investors.
December 31, 2025
December 31, 2024
Change
Constant Currency Change
Pega Cloud
$
866,612
$
652,443
$
214,169
33
%
28
%
Maintenance
288,873
291,807
(2,934
)
(1
)%
(4
)%
Subscription services
1,155,485
944,250
211,235
22
%
18
%
Subscription license
452,902
427,268
25,634
6
%
4
%
$
1,608,387
$
1,371,518
$
236,869
17
%
14
%
PEGASYSTEMS INC.
BACKLOG
(in thousands, except percentages)
Remaining performance obligations (“Backlog”) - Expected future revenue from existing non-cancellable contracts:
As of December 31, 2025:
Subscription services
Subscription license
Consulting
Total
Pega Cloud
Maintenance
1 year or less
$
709,190
$
235,152
$
77,528
$
53,353
$
1,075,223
52
%
1-2 years
400,926
73,895
2,636
854
478,311
23
%
2-3 years
213,259
51,327
2,101
28
266,715
13
%
Greater than 3 years
214,189
32,325
7,331
88
253,933
12
%
$
1,537,564
$
392,699
$
89,596
$
54,323
$
2,074,182
100
%
% of Total
74
%
19
%
4
%
3
%
100
%
Change since December 31, 2024
$
410,405
$
51,839
$
(11,886
)
$
332
$
450,690
36
%
15
%
(12
)%
1
%
28
%
As of December 31, 2024:
Subscription services
Subscription license
Consulting
Total
Pega Cloud
Maintenance
1 year or less
$
525,133
$
230,866
$
89,197
$
50,519
$
895,715
56
%
1-2 years
328,234
65,461
10,874
3,297
407,866
25
%
2-3 years
159,536
24,598
733
125
184,992
11
%
Greater than 3 years
114,256
19,935
678
50
134,919
8
%
$
1,127,159
$
340,860
$
101,482
$
53,991
$
1,623,492
100
%
% of Total
70
%
21
%
6
%
3
%
100
%
PEGASYSTEMS INC.
RECONCILIATION OF GAAP BACKLOG AND CONSTANT CURRENCY BACKLOG
(in millions, except percentages)
December 31, 2024
December 31, 2025
1 Year Growth Rate
Backlog - GAAP
$
1,623
$
2,074
28
%
Impact of changes in foreign exchange rates
—
(80
)
Constant currency backlog
$
1,623
$
1,994
23
%
Note: Constant currency backlog is calculated by applying the December 31, 2024 foreign exchange rates to current period shown.
PEGASYSTEMS INC.
RECONCILIATION OF FORWARD-LOOKING GUIDANCE
(in millions, except percentages and per share amounts)
2026
Annual contract value growth
15
%
Revenue (GAAP and Non-GAAP)
$
2,000
Net Income - GAAP
$
344
Stock-based compensation
158
Legal fees
30
Incomes taxes
(26
)
Net Income - Non-GAAP
$
506
Diluted earnings per share - GAAP
$
1.87
Non-GAAP adjustments
0.88
Diluted earnings per share - non-GAAP
$
2.75
Diluted weighted-average number of common shares outstanding - GAAP
184
2026
Cash provided by operating activities
$
595
Investment in property and equipment
(20
)
Free cash flow
$
575
Supplemental information
Legal fees
$
30
Restructuring
12
Litigation settlement, net of recoveries
10
Income taxes (1)
63
$
115
(1) Evolving U.S. tax legislation may impact the amount of tax payments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260210969541/en/
Press contact:
Lisa Pintchman
VP, Corporate Communications
lisapintchman.rogers@pega.com
617-866-6022
Investor contact:
Peter Welburn
VP, Corporate Development & Investor Relations
PegaInvestorRelations@pega.com
617-498-8968
Original: Innovation Accelerates Pega’s Q4 2025 Growth
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