Companies /Technology

Pegasystems Inc

NASDAQ: PEGA Software - Application
$37.32
▲ $0.64 (+1.74%) today
Markets closed · 6:48am ET

Q1 2026 Earnings

Reported Apr 21, 2026, 4:10pm ET · SEC source
$0.46
Miss −33.66%
EPS · est. $0.69
$430.0M
Miss −7.96%
Revenue · est. $467.2M
−13.2%
Trailing market
PEGA vs S&P since report
2 quarters
Consecutive EPS misses

Market Reaction

% change · around the report
−8%−4%0+4%Apr 21Apr 22report 4:10pm ETearnings+0.6%−8.0%
−8%−4%0+4%Apr 21Apr 22earnings+0.6%−8.0%
PEGA −8.0%S&P 500 +0.6%
−6%−3%0Apr 21Apr 22report 4:10pm ETearnings+1.4%−8.0%
−6%−3%0Apr 21Apr 22earnings+1.4%−8.0%
PEGA −8.0%NASDAQ +1.4%
−14%−7%0+7%Apr 20Apr 29report 4:10pm ETearnings+0.6%−11.9%
−14%−7%0+7%Apr 20Apr 29earnings+0.6%−11.9%
PEGA −11.9%S&P 500 +0.6%
−14%−7%0+7%Apr 20Apr 29report 4:10pm ETearnings+2.2%−11.9%
−14%−7%0+7%Apr 20Apr 29earnings+2.2%−11.9%
PEGA −11.9%NASDAQ +2.2%
−4.61%
Day of report
−5.95%
Next session
−4.83%
One week
−8.35%
30 days

S&P 500 over the same 30 days: +4.84%.

Did PEGA Beat Earnings? Q1 2026 Results

Pegasystems delivered a disappointing first quarter for fiscal 2026, missing Wall Street expectations on both the top and bottom lines as its ongoing cloud transition continued to weigh on reported financials. Revenue fell 9.6% year over year to $429.97 million, coming in 7.96% below the $467.16 million consensus, while non-GAAP diluted EPS of $0.46 trailed the $0.69 estimate by 33.66%, dragged lower in part by $19.96 million in legal fees tied to the Appian litigation, nearly triple the year-ago figure. The headline declines, however, mask a meaningful structural shift: Pega Cloud revenue surged 36% to $205.03 million and now represents 48% of total revenue, up from 32% a year ago, as customers accelerate migration away from on-premise licenses. Annual Contract Value grew 12% to $1.62 billion, and operating cash flow held firm at $212.25 million, signaling underlying business health. With growing traction for its AI-native Blueprint architecture expected to shorten sales cycles, CFO Ken Stillwell expressed confidence that the company is well-positioned to expand ACV growth and cash flow margins as enterprises move beyond AI experimentation toward measurable returns.

Key Takeaways
  • Pega Cloud ACV grew 29% year over year, driving cloud revenue up 36%
  • Subscription services revenue increased 23% to $280.3 million
  • Cash flow from operations and free cash flow both exceeded $200 million
  • Total ACV grew 12% year over year to $1.622 billion

“Pega's Blueprint AI helps enterprises reimagine their businesses while Pega's powerful workflow engine provides the harness that ensures predictable outcomes. We continue to be differentiated in the market and of great value as enterprises recognize the need for a sustainable AI architecture.”

Pegasystems CEO, on the earnings call

Forward Guidance & Outlook

COO and CFO Ken Stillwell stated that as enterprises move past the experimental phase of AI and demand real ROI, Pega's proven ability to generate measurable value positions the company well to drive ACV growth and expand cash flow margins.

PEGA YoY Financials

Q1 2026 vs Q1 2025 · SEC filings Q1 2025 Q1 2026
$0$200.0M$400.0M$475.6M$430.0MRevenue$373.2M$323.2MGross Profit$127.0M$37.1MOperating Income$85.4M$32.8MNet Income
$0$200.0M$400.0MRevenueGross ProfitOperating IncomeNet Income

PEGA Revenue by Segment

Pega Cloud$205.0M+36.0%
Subscription License$94.9M−49.0%
Maintenance$75.3M−1.0%
Consulting$54.8M−9.0%
Perpetual License

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