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Jun 30
Pegasystems Q2 2025 Earnings Report
Pegasystems reported solid Q2 2025 results with strong ACV growth, higher net income, and improved cash flow.
Key Takeaways
Pegasystems delivered strong Q2 2025 results driven by its AI Blueprint strategy, with 16% ACV growth, 9% revenue increase, and significant improvements in profitability and cash flow.
Annual Contract Value (ACV) grew 16% year over year to $1.514 billion
Pega Cloud ACV surged 28% year over year to $761 million
GAAP net income increased to $30.1 million, up from $6.6 million a year ago
Free cash flow rose over 30% year over year to $286.5 million
Pegasystems
Pegasystems
Pegasystems Revenue by Segment
Revenue by Segment
Pega Cloud Revenue
CapyFin.comSubscription License Revenue
CapyFin.comConsulting Revenue
CapyFin.comPerpetual License Revenue
CapyFin.comMaintenance Revenue
CapyFin.com Forward Guidance
Pega expects continued momentum driven by AI Blueprint and Rule of 40 principles, focusing on growth and margin expansion.
Positive Outlook
- AI Blueprint drives enterprise transformation and execution consistency
- Strong alignment with Rule of 40 principles for balanced growth
- Operational consistency from Predictable AI approach
- Cloud ACV growth expected to remain strong
- Focus on innovation fueling margin expansion
Challenges Ahead
- Reliance on key personnel and third-party providers
- Potential impact from foreign currency fluctuations
- Ongoing litigation with Appian Corp. could pose risks
- Cybersecurity and data protection remain concerns
- Market demand variability, especially in the public sector
Revenue & Expenses
Visualization of income flow from segment revenue to net income