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Pegasystems

Pegasystems (PEGA) Q2 2025 Earnings

Reported Jul 22, 2025 at 4:07 PM ET · SEC Source

Q2 25 EPS

$0.28

BEAT +12.95%

Est. $0.25

Q2 25 Revenue

$384.5M

BEAT +4.99%

Est. $366.2M

vs S&P Since Q2 25

-52.5%

TRAILING MARKET

PEGA -34.7% vs S&P +17.9%

Market Reaction

Did PEGA Beat Earnings? Q2 2025 Results

Pegasystems delivered a confident beat across both top and bottom lines in the second quarter of 2025, with the enterprise software maker posting non-GAAP diluted EPS of $0.28 against a consensus estimate of $0.25, a 12.95% beat, while revenue of $38… Read more Pegasystems delivered a confident beat across both top and bottom lines in the second quarter of 2025, with the enterprise software maker posting non-GAAP diluted EPS of $0.28 against a consensus estimate of $0.25, a 12.95% beat, while revenue of $384.51 million exceeded expectations by 4.99% and grew 9.5% year over year. The primary engine behind the outperformance was Pega Cloud, whose revenue surged 24% to $166.74 million, reflecting accelerating enterprise adoption of the company's AI-driven workflow platform. Annual Contract Value climbed 16% to $1.51 billion, and total backlog expanded 31% to $1.83 billion, signaling durable demand well beyond the current quarter. GAAP net income improved sharply to $30.08 million from $6.61 million a year ago, while first-half free cash flow reached $286.48 million, up 31%. Analysts have grown more optimistic following the results, raising price targets and EPS estimates, though some caution that revenue growth could moderate relative to broader industry peers in coming periods.

Key Takeaways

  • • ACV grew 16% year over year as reported and 14% in constant currency
  • • Pega Cloud ACV increased 28% year over year as reported and 25% in constant currency
  • • Pega Cloud backlog increased 30% year over year as reported and 26% in constant currency
  • • AI strategy centered on Pega Blueprint driving adoption
  • • Subscription services revenue grew 15% year over year
  • • Cash flow from operations and free cash flow grew over 30% year over year
24/7 Wall St

PEGA YoY Financials

Q2 2025 vs Q2 2024, source: SEC Filings

24/7 Wall St

PEGA Revenue by Segment

With YoY comparisons, source: SEC Filings

Q2 25 Q1 26

“Our unique approach to AI was a key driver of our strong first half results. 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.”

— Alan Trefler, Q2 2025 Earnings Press Release

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