5 Must-Read Analyst Questions From Pegasystems's Q4 Earnings Call

Pegasystems’ fourth quarter saw revenue and profit metrics exceed Wall Street expectations, but the market responded negatively as operating margin contracted significantly year over year. Management attributed the growth in sales to accelerated adoption of its cloud-first strategy and the increased use of Blueprint, the company’s AI-powered design agent. However, COO and CFO Ken Stillwell noted that while total annual contract value (ACV) rose and cloud-related backlog expanded, near-term profit margins were affected by ongoing investments in innovation and a shift in the business mix toward subscription revenues. CEO Alan Trefler acknowledged that, despite notable top-line performance, the company remains focused on balancing growth and operational efficiency.

Is now the time to buy PEGA? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Pegasystems’s Q4 Earnings Call

• Steve Enders (Citigroup) asked about the pace and reliability of deal closures as the market for AI and Blueprint-driven solutions expands. CEO Alan Trefler described early pipeline engagement as “excitingly advanced,” but acknowledged that final deal execution remains subject to client risk tolerance and macro conditions.

• Rishi Jaluria (RBC Capital Markets) inquired about the quantifiable impact of Blueprint on sales cycles and time to deployment. COO and CFO Ken Stillwell stated that early data shows “faster pipeline build, progression, and close times,” but more precise metrics will be provided after a full year of adoption.

• Raimo Lenschow (Barclays) asked about progress in app modernization and the split between cloud migration and new business. Trefler highlighted strong client interest in Blueprint-driven modernization, while Stillwell clarified that most cloud growth is from new activity, with migration occurring at a steady pace.

• Devin Oh (KeyBanc Capital Markets) requested clarification on ACV growth guidance and net retention trends. Stillwell confirmed guidance is on a constant currency basis and noted an improvement of 150 basis points in net revenue retention year over year.

• Mark Chappell (Loop Capital Markets) sought details on investment priorities and AI-first delivery changes. Stillwell explained ongoing investments in R&D and partnership expansion, and Trefler described Blueprint as central to Pegasystems’ AI-first approach, enhancing delivery speed and quality.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be tracking (1) the pace of cloud ACV growth and client migrations, (2) measurable improvements in sales cycle duration and partner-led deal velocity using Blueprint, and (3) the ability of Pegasystems’ AI-powered solutions to deliver tangible operational efficiencies for enterprise and mid-market clients. Execution on these fronts will serve as key indicators of progress toward the company’s growth and margin improvement goals.

Pegasystems currently trades at $44.09, up from $43.03 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.