Pegasystems Inc. · NASDAQ:PEGA

Pegasystems — Investor Day (June 2026)

29 slides from Pegasystems's investor day presentation, Jun 8, 2026

  1. Slide 1: Pega Investor Session, June 8, 2026

    fE& PEGA Al June 8, 2026 KEN STILLWELL PETER WELBURN COO & CFO VP, Corporate Development & Investor Relations

  2. Slide 2: Blueprint long-term momentum in free cash flow

    Blueprint long-term momentum in free cash flow © Pegasystems Inc. 2

  3. Slide 3: 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. Words such as expects, anticipates, intends, plans, believes, will, could, should, estimates, may, opportunities, targets, strategies,

  4. Slide 4: Raise your hand

    ? 1 Raise your hand in the 2 Wait for the microphone ROOM 3 Please state your name and the firm you are with To Ask a Question... on the PHONE Email pegainvestorrelations@pega.com ? peter.welburn@pega.com © Pegasystems Inc. 4

  5. Slide 5: We've Transformed Our Business Model

    We’ve Transformed Our Business Model Completed multi-year subscription transition & achieved Rule of 40 to balance growth & profit Subscription $1,622M Transition $1,255M ACV $570M ACV ACV 2018 2022 2023 2024 2025 Q1 2026 Rule of 40 1 ACV Growth (2) ~14% ~26% ~35% ~45% Free Cash Flow Margin (3) (1)

  6. Slide 6: ACV Growth Driven by Pega Cloud

    ACV Growth Driven by Pega Cloud As reported 29% Pega Cloud ACV Pega Cloud ACV Q1 26 Growth Accelerated 23% from 16% in Q1 of 2024 Pega Cloud to 29% in Q1 of 2026 year ACV over year Q1 25 16% Pega Cloud ACV Q1 24 © Pegasystems Inc 6

  7. Slide 7: We Have Several Levers to Deliver Durable ACV Growth

    Pega Blueprint AI Significant Expansion A Opportunity Cross-sell & upsell into the base We Have Several Levers to Deliver New Logos B Win new clients with Blueprint Durable ACV Growth Pega Cloud Growth C Acceleration Capturing new workloads & new logos © Pegasystems Inc 7

  8. Slide 8: Trending Pipeline Data

    Trending Pipeline Data Total New Logos # of New Logos Pipeline ($M) Pipeline ($M) with Pipeline +29% +65% +126% Year-over-year growth in Year-over-year growth in TOTAL PIPELINE NEW LOGOS Q1 2025 Q1 2026 © Pegasystems Inc. 8

  9. Slide 9: A Mission-Critical Platform with Competitive Advantages

    Superior Product Features A Mission-Critical Platform with Facilitating thousands of mission-critical 01 Competitive Advantages workflows, making replacement costly and risky Trust & Governance by Design Enables auditability and policy enforcement 02 required in regulated industries Built for Change

  10. Slide 10: And Our Margins Have Been Improving Over Time

    And Our Margins Have Been Improving Over Time Progress against long-term financial model % of revenue TARGETS for 2027/2028 Gross Margin 80% 74% 76% 76% 77% Sales & Marketing 30% 43% 35% 32% 30% Research & 17% 20% 18% 18% 16% Development Operating Margin 6% 19% 22% 28% LONG-TERM Targets announced 20

  11. Slide 11: A New Era of Free Cash Flow Growth and Durability

    A New Era of Free Cash Flow Growth and Durability ~15% to ~20% TARGET FREE CASH FLOW FREE CASH FLOW Growth Year Over Year $700+ ($M) $575 $491 $338 $201 $29 2019 2020 2021 2022 2023 2024 2025 2026G 2027T 2028T $(26) $(13) $(53) SUBSCRIPTION TRANSITION DURABLE CASH FLOW: Defining Pega’s Next Chapter

  12. Slide 12: Capital Allocation Strategy Focused on Increasing Returns to Shareholders

    Capital Allocation Strategy Focused on Increasing Returns to Shareholders BUY Pay a Optimize Repurchase Dividend Debt Shares Pay a consistent and Properly pay down Use a substantial portion growing dividend debt as needed of available free cash flow (currently debt free) for opportunistic buybacks ©

  13. Slide 13: Strong Cash Flow Supporting Meaningful Shareholder Returns

    Strong Cash Flow Supporting Meaningful Shareholder Returns Capital returned to shareholders increased materially with more than $600M returned from 2023-25 Capital Returned as a 105% $600M+ % of Free Cash Flow Returned to shareholders from 2023-2025 24% ~60% of cumulative free cash flow 5% ~80% of Q

  14. Slide 14: Opportunity to Drive Meaningful Per-Share Value Accretion

    Opportunity to Drive Meaningful Per-Share Value Accretion Shares Outstanding Potential to meaningfully reduce shares outstanding 2023 2024 2025 2026G 2027T 2028T FREE CASH FLOW Illustrative scenario based on sustained free cash flow generation and disciplined repurchase execution. Future repurchases

  15. Slide 15: Stock-Based Compensation Philosophy

    Stock-Based Compensation Philosophy Balancing talent investment with shareholder value protection Stock-Based Compensation as a Stock-Based Compensation as a Percentage of MARKET Percentage of ANNUAL REVENUE CAPITALIZATION 10% or lower 3.5% 1.5% to 2.5% 10.0% is disciplined for a mid-cap is a health

  16. Slide 16: Leading with Strength. Investing with Purpose. Delivering Value.

    PEGA 75%+ CLOUD Pega Cloud ACV growth will of total ACV in a $ drive overall ACV growth ACV timeless model OPERATING Outstanding momentum Continue has led to expanding MARGIN margin expansion Leading with Strength. operating margins Investing with Purpose. Delivering Value. FREE Robust ACV growth an

  17. Slide 17: Key Takeaways

    Key Takeaways 1 2 3 Completion of the Pega Blueprint AI, strong Strong free cash flow and subscription transition and existing client relationships, disciplined capital disciplined execution put and a large addressable allocation support Pega on a strong market create foundation for long-term valuat

  18. Slide 18: Q&A

    Q&A © Pegasystems Inc. 18

  19. Slide 19: Raise your hand

    ? 1 Raise your hand in the 2 Wait for the microphone ROOM 3 Please state your name and the firm you are with To Ask a Question... on the PHONE Email pegainvestorrelations@pega.com ? peter.welburn@pega.com © Pegasystems Inc. 19

  20. Slide 20: Innovation Hub Map

    novation Hub Map HOURS OPEN MONDAY TUESDAY June 8 June 9 11:00 AM - 6:00PM | 11:00AM - 6:30PM Blueprint Clusters Pega Meeting Rooms c cy poor CD TOP 5 MUST-SEE ATTRACTIONS sor n Faster Booths New: Infinity Studio 9 Test-drive the latest and smartest version of the Pega platform featuring new Bluepri

  21. Slide 21: Definitions & Non-GAAP Reconciliations

    Definitions & Non- GAAP Reconciliations © Pegasystems Inc. 21

  22. Slide 22: Appendix - Definitions

    Appendix - Definitions 1. Rule of 40: A performance metric calculated by adding the annual contract value (“ACV”) growth rate and the free cash flow margin. We also provide a table of Rule of 40 achievement within the appendix of this presentation. 2. Annual Contract Value (“ACV”): represents the an

  23. Slide 23: GAAP to Non-GAAP Margin Reconciliation

    GAAP to Non-GAAP Margin Reconciliation Year Ended December 31, Targets Announced in 2023 2022 2023 2024 2025 2027/2028 Gross Margin % - GAAP 72 % 74 % 74 % 76 % 77 % Stock-Based Compensation 2 % 2 % 2 % 1 % 3 % Gross Margin % - Non-GAAP 74 % 76 % 76 % 77 % 80 % Sales and Marketing % - GAAP 47 % 39 %

  24. Slide 24: GAAP to Non-GAAP Operating Income Reconciliation

    GAAP to Non-GAAP Operating Income Reconciliation Year Ended December 31, (in millions) 2022 2023 2024 2025 Income (loss) from operations - GAAP $ (109) $ 81 $ 124 $ 263 Stock-Based Compensation 122 143 143 155 Amortization of Intangible Assets 4 4 3 3 Restructuring 22 22 5 12 Litigation settlement,

  25. Slide 25: GAAP to Non-GAAP Operating Margin Reconciliation

    GAAP to Non-GAAP Operating Margin Reconciliation Year Ended December 31, 2022 2023 2024 2025 Operating Margin % - GAAP (8)% 6% 8% 15 % Stock-Based Compensation 9 % 10 % 10 % 9 % Restructuring 2 % 2 % — % 1 % Litigation settlement, net of recoveries — % — % 2 % 1 % Legal fees 3 % 1 % 2 % 2 % Operatin

  26. Slide 26: Free Cash Flow Reconciliation

    Free Cash Flow Reconciliation Three Months Year Ended Ended December 31, March 31, Guidance Target (in millions, except percentages) 2019 2020 2021 2022 2023 2024 2025 2026 2026 2028 Cash flows provided by operating activities $ (42) $ (1) $ 39 $ 22 $ 218 $ 346 $ 505 $ 212 $ 595 $ 715 Investment in

  27. Slide 27: Rule of 40 Reconciliation

    Rule of 40 Reconciliation Year Ended December 31, (in millions, except percentages) 2022 2023 2024 2025 Growth Growth Growth Growth ACV (Constant Currency) $ 1,127 15 % $ 1,245 10 % $ 1,385 11 % $ 1,578 14 % Margin Margin Margin Margin Free Cash Flow $ (13) (1) % $ 201 16 % $ 338 24 % $491 31 % Rule

  28. Slide 28: Reconciliation of Pega Cloud ACV and Pega Cloud ACV (Constant Currency)

    Reconciliation of Pega Cloud ACV and Pega Cloud ACV (Constant Currency) March 31, (in millions, except percentages) 2023 2024 2025 2026 Pega Cloud ACV (As Reported) $ 491 $ 570 $ 701 $ 907 Impact of changes in foreign exchange rates (1) 1 — (18) Pega Cloud ACV (Constant Currency) $ 490 $ 571 $ 701 $

  29. Slide 29: Reconciliation of ACV and ACV (Constant Currency)

    Reconciliation of ACV and ACV (Constant Currency) (in millions) December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 ACV (As Reported) $ 1,126 $ 1,255 $ 1,372 $ 1,608 Impact of changes in foreign exchange rates 1 (10) 13 (30) ACV (Constant Currency) $ 1,127 $ 1,245 $ 1,385 $ 1,578

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