Q2 2026 Pegasystems Inc Earnings Call Transcript
Key Points
- Pegasystems Inc (PEGA) reported a 22% year-over-year growth in Pega Cloud ACV, reflecting the continued expansion of their cloud business.
- The company introduced Infinity Studio, which, along with Pega Blueprint, creates a more complete AI-powered lifecycle for clients, enhancing design, build, and operational capabilities.
- Pegasystems Inc (PEGA) generated $288 million in free cash flow in the first half of 2026, showcasing the strength of their subscription model.
- The company is committed to leveraging AI technology to improve operational efficiency and create additional operating leverage.
- Pegasystems Inc (PEGA) has a strong pipeline and late-stage pipeline, indicating potential for future growth despite current market confusion.
- The company experienced a slower-than-expected start to the first half of 2026, with challenges in executing go-to-market changes and driving deeper client engagement.
- Market confusion around AI and software development has led to elongated decision cycles and buyer uncertainty, impacting sales.
- Total ACV growth was below expectations, with a 7% increase as reported and 8% in constant currency year-over-year.
- There is pressure on maintenance and subscription license ACV growth due to the shift towards Pega Cloud, which may continue to affect future periods.
- The company faces challenges in recovering from the first half shortfall, with a significant portion of net new ACV expected in the second half of the year.
Hello, everyone. Thank you for joining us and welcome to the Pegasystems second-quarter 2026 earnings call and webcast. (Operator Instructions)
I will now hand the conference over to Peter Welburn, Vice President of Corporate Development and Investor Relations. Please go ahead.
Good morning, everyone, and welcome to Pegasystems Q2 '26 earnings call. Before we begin, I'd like to read our safe harbor statement. Certain statements contained in this presentation may be construed as forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, plans, believes, will, could, should, estimates, may, forecasts and similar expressions are intended to identify these forward-looking statements. These statements speak only as of the date the statement was made and are based on current expectations and assumptions.
Because these statements relate to future events, they are subject to
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