Q2 26 EPS
$0.35
MISS 19.35%
Est. $0.43
Q2 26 Revenue
$420.7M
MISS 1.79%
Est. $428.4M
vs S&P Since Q2 26
-16.2%
TRAILING MARKET
PEGA -17.4% vs S&P -1.2%
Market Reaction
Did PEGA Beat Earnings? Q2 2026 Results
Pegasystems delivered a disappointing second quarter, missing on both the top and bottom lines as AI-driven client hesitation weighed on growth. The Cambridge-based enterprise software company posted non-GAAP diluted EPS of $0.35 for Q2 2026, falling… Read more Pegasystems delivered a disappointing second quarter, missing on both the top and bottom lines as AI-driven client hesitation weighed on growth. The Cambridge-based enterprise software company posted non-GAAP diluted EPS of $0.35 for Q2 2026, falling short of the $0.43 consensus estimate by 19.35%, while revenue of $420.72 million trailed the $428.40 million forecast by 1.79%, despite growing 9.4% year over year. The primary culprit was a meaningful slowdown in ACV momentum, with management directly attributing the shortfall to clients delaying purchasing decisions amid rapid shifts in the AI market, a dynamic that dragged total ACV growth to just 7% year over year, reaching $1.62 billion. Pega Cloud remained a relative bright spot, with its ACV climbing 22% to $926.29 million, but that strength was offset by declines in maintenance and subscription license ACV. Looking ahead, management warned these headwinds could persist through year-end, even as the company expressed confidence that its cost-efficient AI deployment approach, designed around predictable tokenomics rather than per-token runtime charges, positions it well as enterprise AI spending matures.
Key Takeaways
- • Pega Cloud ACV growth of 22% year over year driving subscription services revenue increase of 17%
- • Cloud migration continuing as Pega Cloud now represents 51% of total quarterly revenue
- • Strong first-half operating cash flow of $298M and free cash flow of $288M
PEGA Forward Guidance & Outlook
Management cautioned that unprecedented changes in the AI market caused clients to delay purchasing decisions, significantly slowing ACV growth during H1 2026. These factors may continue to adversely affect ACV growth rate and cash flow generation for the rest of the year. However, management expressed confidence in Pega's strategy as the market shifts from AI experimentation to tokenomics and reliable business outcomes, noting this evolution plays directly to Pega's strengths.
PEGA YoY Financials
Q2 2026 vs Q2 2025, source: SEC Filings
PEGA Revenue by Segment
With YoY comparisons, source: SEC Filings
“Pega Infinity™ 26 uniquely deploys the power of AI with predictable outcomes and predicable costs by applying agents at design time to optimize run-time token use. Letting language models do everything is risky and expensive, and using AI to write mountains of code creates significant barriers to the ongoing change that enterprise clients require. Pega structures business applications in a way that makes sense to business and IT to Build for Change®.”
— Alan Trefler, Q2 2026 Earnings Press Release
PEGA Earnings Trends
PEGA vs Market 30 Day Price Reactions
30-day stock return vs benchmark after each earnings
PEGA EPS Trend
Earnings per share: estimate vs actual
PEGA Revenue Trend
Quarterly revenue: estimate vs actual
PEGA Quarterly Results
5 quarters of earnings data
| Quarter | EPS Est. | EPS Act. | Surprise | Revenue | Rev. Surprise |
|---|---|---|---|---|---|
| Q2 26 MISS | $0.43 | $0.35 | -19.35% | $420.7M | -1.79% |
| Q1 26 MISS | $0.69 | $0.46 | -33.66% | $430.0M | -7.96% |
| Q4 25 BEAT FY | $0.73 | $0.76 | +3.51% | $504.3M | +2.17% |
| FY Full Year | — | $2.10 | — | $1.75B | — |
| Q3 25 BEAT | $0.20 | $0.30 | +50.75% | $381.4M | +8.69% |
| Q2 25 BEAT | $0.25 | $0.28 | +12.95% | $384.5M | +4.99% |