Slide 1: Pegasystems Investor Presentation Q2 2025
Pegasystems Investor Presentation Q2 2025 NASDAQ: PEGA pegainvestorrelations@pega.com July 22, 2025 © Pegasystems Inc.
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, including the size of the current and future market opportunity and growth of the business. Words such as expects, anticipates, intend
Slide 3: Pega Overview
Pega Overview © Pegasystems Inc. 3
Slide 4: To change the way the world builds software
OUR VISION To change the way the world builds software to unleash enterprise potential OUR SOFTWARE Enterprise AI decisioning and workflow automation platform WHAT WE DO Unlock business-transforming outcomes © Pegasystems Inc. 4
Slide 5: Unlock Business-Transforming Outcomes
What we do UNLOCK BUSINESS-TRANSFORMING OUTCOMES How we do it with a powerful LOW-CODE PLATFORM FOR WORKFLOW AUTOMATION AND AI-POWERED DECISIONING 1:1 Customer Customer Workflow Our Solutions are Engagement Service Automation organized into 3 AUTOMATE & SAVE TIME MAXIMIZE VALUE ADAPT WITH EASE Engag
Slide 6: The world's leading enterprise-scale organizations are using Pega
Personalize Automate Streamline Engagement Customer Service Operations The world’s leading enterprise-scale organizations are using Pega to connect workflows and interactions across the customer lifecycle: Communications Financial Government Healthcare Insurance Manufacturing service providers servi
Slide 7: Driving Growth and Free Cash Flow
Driving Growth and Free Cash Flow Founded: 1983 HQ: Waltham, MA Employees: 5,000+ Q2 2025 14% 25% ACV Growth Pega Cloud ACV Growth (1) (in constant currency) (1) (in constant currency) $286M Year-to-Date (YTD) (2) Free Cash Flow (1) Constant currency change since June 30, 2024. (2) Our non-GAAP free
Slide 8: Key Investment Highlights
Key Investment Highlights • Growing enterprise software company, with a view towards a $90B+ market opportunity • Large enterprise client base in key verticals: financial services, insurance, telecommunications, health care, manufacturing, and public sector • A proven technology leader in customer e
Slide 9: Solution Overview
Solution Overview 9 © Pegasystems Inc.
Slide 10: What are the Business Problems We Solve?
What are the Business Problems We Solve? Pega drives better business outcomes by… Making Decisions Delivering 1:1 customer engagement powered by real-time, omni-channel AI …and very often we do both Getting work done For example, in the context of Customer Making customer and employee-facing Service
Slide 11: Pega Infinity
Pega Infinity™ 1:1 Customer Engagement Customer Service Workflow Automation MAKE GET WORK DECISIONS DONE REAL-TIME, OMNI- END-TO-END MICROJOURNEY- SITUATIONAL SOFTWARE THAT CLOUD CHOICE ™ CHANNEL AI AUTOMATION & CENTRIC RAPID LAYER CAKE WRITES YOUR ROBOTICS DELIVERY SOFTWARE Industry-leading technol
Slide 12: Unlock Business-Transforming Outcomes
Unlock Business-Transforming Outcomes Solving the problems no one else can. Delivering value, fast. One-to-one customer Maximize customer lifetime value engagement Customer service Simplify service and reduce costs Intelligent automation Boost efficiency © Pegasystems Inc. 12
Slide 13: So How Do We Do It?
So How Do We Do It? Our software can handle quick fixes, lasting transformation, and everything in between Intelligent Scalable Rapid technology architecture innovation © Pegasystems Inc. 13
Slide 14: Pega's Technology Difference
Pega’s Technology Difference Architected differently to maximize revenue and efficiency at enterprise scale Put decisions and Build layers of reuse Personalize experiences workflow at the center and variation and optimize workflows With Pega’s Center-out With Pega’s patented With Pega’s real-time AI
Slide 15: Analysts recognize Pega as a leader
Gartner Magic Quadrant: #1 Enterprise Low-Code App Platforms, 2024 #1 The Forrester Wave: Real-Time Interaction Management, Q1, 2024 Analysts recognize Pega as a leader #1 The Forrester Wave: Task-Centric Automation Software, Q4, 2024 Gartner Magic Quadrant: for our enterprise AI #1 Process Mining P
Slide 16: Business Overview
Business Overview © Pegasystems Inc. 16
Slide 17: Why Pega Wins
WHY PEGA WINS Differentiated Ease of Depth of Platform Architecture Integration Functionality Strong Deep Vertical Robust Team Expertise ROI © Pegasystems Inc. 17
Slide 18: Selling High-Value Use Cases to Some of the World's Largest Companies
Selling High-Value Use Cases to Some of the World’s Largest Companies BUYER OFFERING VALUE PROPOSITION Robert 1:1 Customer Maximize top-line growth with a centralized, real-time Chief Customer Engagement AI-powered customer decision hub that delivers next- Officer best-actions at every customer inte
Slide 19: How Do Our Clients Drive Value Using Pega?
How Do Our Clients Drive Value Using Pega? ILLUSTRATIVE CLIENT USE CASE IMPACT AND RESULT • 50 million next best action conversations delivered 1:1 Customer Retain across 18 channels Engagement customers • +12 lead in NPS over the competition Read more | https://www.pega.com/customers/cba-marketing
Slide 20: Financial Details
Financial Details © Pegasystems Inc. 20
Slide 21: Financial Outlook
Financial Outlook Massive Market Opportunity Subscription Journey Recurring Model Margin Expansion Opportunities © Pegasystems Inc. 21
Slide 22: Pursuing a Massive Market Opportunity in Platform & CRM
Pursuing a Massive Market Opportunity in Platform & CRM FY 29 $150B+ FY 25 $90B+ Source: IDC Worldwide Semi-annual Software Tracker (May 2025) © Pegasystems Inc. 22
Slide 23: Evolution of our Subscription Journey
Evolution of our Subscription Journey From… To… Perpetual Recurring Less Predictable More Predictable Lagging Growth & Margins Rule of 40 Driven SUBSCRIPTION TRANSITION 2017 2023 TIMELINE © Pegasystems Inc. 23
Slide 24: Recurring Subscription Model
Recurring Subscription Model Annual Contract Value (ACV) as Reported Growth since June 30, 2024 ACV Reported: 16% 1,600M ACV Constant Currency: 14% $1,514M 1,400M $1,305M 1,200M 1,000M June 30, 2024 June 30, 2025 ACV represents the annualized value of our active contracts as of the measurement date.
Slide 25: Cash Flow Growth
Cash Flow Growth 1H 2022 to 1H 2025 Operating Cash Flow Free Cash Flow Growth Growth 400M 400M 300M $290M 300M $286M $220M $218M 200M 200M $114M $100M 100M 100M 0M 0M ($5M) ($17M) 1H 2022 1H 2023 1H 2024 1H 2025 1H 2022 1H 2023 1H 2024 1H 2025 Note: For additional information refer to explanatory no
Slide 26: What Does this All Mean?
What Does this All Mean? Strive to build a growing, recurring business to drive increased value With a view towards: • Continuing our technology • Driving ACV growth • Balancing growth & margin leadership • Leveraging Pega Cloud • Returning capital to shareholders • Improving sales productivity • Ru
Slide 27: Trademarks
Pegasystems, Pega, and other Pega products and services mentioned herein are trademarks of Pegasystems Inc. All other company, product, or service names are trademarks or service marks of their respective owners.
Slide 28: Corporate Social Responsibility at Pega
Corporate Social Responsibility at Pega E S G ENVIRONMENTAL SOCIAL GOVERNANCE We are committed to reducing the We strive to be a responsible We believe that corporate environmental impact of our corporate citizen and active governance is important to ensure operations on air, land, and water contrib
Slide 29: Reported ACV
Reported ACV Pega Cloud ACV Up 28% as Reported Growth since June 30, 2024 Total ACV: 16% (14% constant currency) $1,514M $1,305M Pega Cloud ACV: 28% (25% constant currency) $761M $594M Client Cloud ACV: 6% (4% constant currency) $711M $753M June 30, 2024 June 30, 2025 Pega Cloud Client Cloud ACV rep
Slide 30: Reported ACV
Reported ACV Pega Cloud, Maintenance, and Subscription License (Term) as Reported Growth since June 30, 2024 Total ACV: 16% (14% constant currency) $1,514M $1,305M Pega Cloud ACV: 28% (25% constant currency) $761M $594M $301M $311M Client Cloud ACV: 6% (4% constant currency) $400M $452M June 30, 202
Slide 31: 1H 2025 net ACV add is $99M
1H 2025 net ACV add is $99M, an increase of 60% over 1H 2024 Constant currency ACV using 6/30/2024 rates Growth since 1H 2024 Net ACV Add: 60% $99M $62M 1H 2024 1H 2025 ACV represents the annualized value of our active contracts as of the measurement date. The contract's total value is divided by it
Slide 32: Pega Cloud Revenue
Pega Cloud Revenue Trailing 12 Months $612M $579M $559M $529M $503M $484M $461M $444M $423M $402M $384M $363M $344M $323M $301M $281M $257M $233M $208M Cloud $186M Transition $167M Begins $149M $134M $119M $106M $95M $83M $64M $73M $51M $56M Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 33: Backlog
Backlog Growth since Total Backlog Up 31% as Reported June 30, 2024 $2,000M $1,835M $1,500M $1,406M 26% Current $927 $1,000M $733 $500M $908 35% Long-term $673 $0M June 30, 2024 June 30, 2025 Current Long-term © Pegasystems Inc. 33 33
Slide 34: Pega Cloud Gross Margin
Pega Cloud Gross Margin Pega Cloud gross margin has improved over time Pega Cloud Gross Margin (%) 78% 78% 74% 70% 67% 63% 51% 2019 2020 2021 2022 2023 2024 Trailing 12 Months* *As of June 30, 2025 © Pegasystems Inc. 34
Slide 35: Operating and Free Cash Flow Reconciliation
Operating and Free Cash Flow Reconciliation Six Months Ended June 30, (dollars in thousands) 2025 2024 2023 2022 Cash provided by operating activities $ 290,496 $ 220,243 $ 113,752 $ (5,069) Investment in property and equipment (4,015) (1,857) (13,933) (11,863) (1) Free cash flow $ 286,481 $ 218,386