Companies /Technology

Pegasystems Inc

NASDAQ: PEGA Software - Application
$37.32
▲ $0.64 (+1.74%) today
Markets closed · 6:43am ET

Q2 2025 Earnings

Reported Jul 22, 2025, 4:07pm ET · SEC source
$0.28
Beat +12.95%
EPS · est. $0.25
$384.5M
Beat +4.99%
Revenue · est. $366.2M
−10.5%
Trailing market
PEGA vs S&P since report
2 quarters
Consecutive EPS misses

Market Reaction

% change · around the report
0+20%+40%Jul 22Jul 23report 4:07pm ETearnings+0.9%+43.2%
0+20%+40%Jul 22Jul 23earnings+0.9%+43.2%
PEGA +43.2%S&P 500 +0.9%
0+20%+40%Jul 22Jul 23report 4:07pm ETearnings+0.8%+43.2%
0+20%+40%Jul 22Jul 23earnings+0.8%+43.2%
PEGA +43.2%NASDAQ +0.8%
0+9%+18%+27%Jul 21Jul 30report 4:07pm ETearnings+1.3%+29.5%
0+9%+18%+27%Jul 21Jul 30earnings+1.3%+29.5%
PEGA +29.5%S&P 500 +1.3%
0+9%+18%+27%Jul 21Jul 30report 4:07pm ETearnings+2.1%+29.5%
0+9%+18%+27%Jul 21Jul 30earnings+2.1%+29.5%
PEGA +29.5%NASDAQ +2.1%
+13.92%
Day of report
+0.12%
Next session
+3.07%
One week
−8.76%
30 days

S&P 500 over the same 30 days: +1.75%.

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 $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

“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.”

Pegasystems CEO, on the earnings call

PEGA YoY Financials

Q2 2025 vs Q2 2024 · SEC filings Q2 2024 Q2 2025
$0$200.0M$400.0M$351.2M$384.5MRevenue$254.2M$274.9MGross Profit$13.0M$17.3MOperating Income$6.6M$30.1MNet Income
$0$200.0M$400.0MRevenueGross ProfitOperating IncomeNet Income

PEGA Revenue by Segment

Pega Cloud$166.7M+24.0%
Subscription License$80.0M−6.0%
Maintenance$79.3M−1.0%
Consulting$57.8M+11.0%
Perpetual License$711,000+1,875.0%

Figures from SEC filings and company reports. Not investment advice.