Pega’s AI Strategy Powers Continued Acceleration in Q2 2025

WALTHAM, Mass.--(BUSINESS WIRE)--Jul 22, 2025--

Pegasystems Inc. (NASDAQ: PEGA), the Enterprise Transformation Company™, released its financial results for the second quarter of 2025.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20250722695089/en/

“Our unique approach to AI was a key driver of our strong first half results,” said Alan Trefler, Pega founder and CEO. “Pega harnesses AI's creative potential where it can best drive transformation—during workflow design with Pega Blueprint. This drives consistent execution through our state-of-the-art Pega Infinity workflow engine, rather than through inherently unpredictable prompts. Pega’s Predictable AI approach gives enterprises both the innovation they crave and the operational consistency they require.”

“Our first half of 2025 results show what happens when strategy, innovation, and execution come together,” said Pega COO & CFO Ken Stillwell. “Pega Blueprint is a game-changer for AI-driven enterprise transformation. Our disciplined focus on Rule of 40 principles is fueling both accelerated growth and margin expansion. We are more aligned, more energized, and more effective than ever.”

Financial and performance metrics (1)

Reconciliation of ACV and Constant Currency ACV

Quarterly conference call

A conference call and audio-only webcast will be conducted at 8:00 a.m. EDT on Wednesday, July 23, 2025.

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 7346894, or via https://events.q4inc.com/attendee/586505740 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.

Words such as expects, anticipates, intends, plans, believes, will, could, should, estimates, may, targets, strategies, intends to, projects, 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:

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, 2024, 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 July 22, 2025.

About Pegasystems

Pega is The Enterprise Transformation Company TM that helps organizations Build for Change® with enterprise AI decisioning and workflow automation. Many of the world’s most influential businesses rely on our platform to solve their most pressing challenges, from personalizing engagement to automating service to streamlining operations. Since 1983, we’ve built our scalable and flexible architecture to help enterprises meet today’s customer demands while continuously transforming for tomorrow. For more information on Pega (NASDAQ: PEGA), www.pega.com.

All trademarks are the property of their respective owners.

Our non-GAAP financial measures reflect the following adjustments:

 

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.

(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.

 

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.

PEGASYSTEMS INC.
BACKLOG
(in thousands, except percentages)

Remaining performance obligations (“Backlog”) - Expected future revenue from existing non-cancellable contracts:

As of June 30, 2025:

As of June 30, 2024:

 

Total ACV Growth and Pega Cloud ACV Growth

DURHAM, N.C. (AP) — JuJu Watkins made the most of her brief trip to the USA Basketball senior national team camp.

While she wasn't able to participate in the on-court activities because the Southern California star is still recovering from an ACL injury she suffered last March, Watkins saw the invitation as an opportunity to grow her leadership abilities.

“It’s enough just being (here) and feeling the energy, that’s mostly what I’ve picked up on,” the reigning AP Player of the Year said. “Hearing everyone’s voices, the communications, the leadership, it’s something that you can see automatically. It brings up your standards, so I’ll definitely be taking some of these lessons back to USC to continue to grow as a leader and a player.”

Watkins was able to get up a few stationary shots with coaches after practice was over, which was a positive step in her rehab.

“Whatever I can do, I am trying to maximize that,” she said.

Watkins had announced in September that she would miss the entire college season to give her full attention to rehab. She said Friday that she had tried to put off the decision whether to play for as long as possible, but in the end she “had to come to terms with where I was at. Getting over that mental curve has been the biggest thing."

U.S. coach Kara Lawson said it was important that Watkins, who will be a vital part of the team in the future, to attend the camp.

“We wanted her here ... I think you can see that there’s a great deal of talent there, and that’s somebody that is going to be in the conversation, obviously, in the future,” Lawson said. “We were really intentional about inviting her here and having her be a part of it. I think there’s great value in having her observe and be around the group, and then just the connectivity."

Watkins was only around on Thursday and Friday because she returned to Los Angeles for the 16th-ranked Trojans' game against No. 1 UConn on Saturday.

Being at camp gave her a chance to connect in person with Paige Bueckers. Watkins said Bueckers has been great in helping her with her ACL rehab. Bueckers missed the 2022-23 season with her own ACL tear.

“She’s been checking on me every couple months. Great person,” Watkins said. "So to be here with her, and see her kill it, and see her on the other side of it, it’s very inspiring. She’s just helped me throughout the process of sending the texts, checking in on me, that’s meant a great deal.”

Watkins said she had always wanted to be part of the senior team. The Olympics are in her hometown of Los Angeles in 2028.

“It’s always been a dream of mine to be in this atmosphere, so to live out those dreams, even though it looks different, I’m still blessed to be here,” she said.

Get poll alerts and updates on the AP Top 25 throughout the season. Sign up here and here (AP mobile app). AP college basketball: https://apnews.com/hub/ap-top-25-college-basketball-poll and https://apnews.com/hub/college-basketball

Juju Watkins speaks to the media after a training camp for the U.S women's national basketball team, Friday, Dec. 12, 2025, in Durham, N.C. (AP Photo/Matt Kelley)