The Top 5 Analyst Questions From Pegasystems's Q1 Earnings Call

Pegasystems delivered a strong first quarter, highlighted by substantial year-on-year revenue and non-GAAP profit growth that surpassed Wall Street expectations. Management credited this performance to the rapid adoption of Pega GenAI Blueprint, which has become central in client engagements and accelerated deal cycles. CEO Alan Trefler noted that, “over 1,000 new Blueprints are now created each week, more than double from just months ago,” underscoring increased client interest in AI-driven workflow design. The company also reported improved free cash flow and operating margins, which management attributed to both higher annual contract value (ACV) growth and disciplined expense management.

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

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 Pegasystems’s Q1 Earnings Call

• Raimo Lenschow (Barclays) asked about the strong term license performance and timing differences in Pega Cloud revenue. CFO Ken Stillwell explained that term license revenue is inherently seasonal, and ACV takes several quarters to convert into cloud revenue due to normal contract lags and some currency impact.

• Pinjalim Bora (JPMorgan) inquired about macro uncertainty and customer behavior changes post-March. CEO Alan Trefler acknowledged increased anxiety in certain regions but emphasized that digital and legacy transformation remain high priorities, and sales cycles have not materially changed.

• Steve Enders (Citi) wanted details on the impact of foreign exchange and federal sector deal flow. Stillwell clarified that ACV growth was robust even on a constant currency basis, and public sector demand for digital modernization aligns well with Pega’s capabilities.

• Devin Au (KeyBanc) asked about the influence of Blueprint on deal pipeline and recent backlog growth. Trefler responded that Blueprint now influences every piece of business, facilitating faster and more collaborative solutioning. Peter Welburn, VP of Corporate Development, advised monitoring current RPO as a better signal of business momentum than total RPO.

• Mark Schappel (Loop Capital) questioned the relative impact of sales process changes versus product innovation like Blueprint. Stillwell highlighted that both contributed, with improved sales discipline broadening deal activity and Blueprint enabling more compelling client demonstrations and discussions.

Catalysts in Upcoming Quarters

In the quarters ahead, the StockStory team will monitor (1) the pace at which Pega Cloud ACV growth translates into higher recurring revenue, (2) evidence of sustained client adoption and expansion of GenAI Blueprint and related AI offerings, and (3) Pegasystems’ ability to preserve profitability while scaling sales and marketing investments. Updates from the upcoming PegaWorld event and new product demonstrations could also be pivotal in gauging forward momentum.

Pegasystems currently trades at $100, up from $68.81 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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