Slide 1: Pegasystems Investor Presentation Q3 2020
Pegasystems Investor Presentation Q3 2020 10/28/20
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this presentation may be construed as “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, targets, str
Slide 3: Pega Overview
Pega Overview 3
Slide 4: Our Mission: Digital Transformation
OUR MISSION Change the way the world builds software to create unprecedented business outcomes in customer engagement and operational excellence Digital Transformation Build for Change® © Pegasystems Inc. 4
Slide 5: Leading Digital Transformation
Leading Digital Transformation Customer Engagement Intelligent Automation Pega Customer Decision Hub™ Pega Robotic Automation™ Pega Customer Service™ Pega Platform™ Pega Sales Automation™ Founded: 1983 HQ: Cambridge, MA Over 5,700 staff $995M 75% 21% 55% Trailing 12 Months Revenue Subscription Reven
Slide 6: Every day, Pega powers...
Every day, Pega powers… MILLIONS of automated processes BILLIONS of customer interactions TRILLIONS of dollars of business If you’ve driven a car, used your credit card, called a company for service, opened an account, applied for a loan, accepted an offer, flown on an airplane, paid a bill, submitt
Slide 7: Key Investment Highlights
Key Investment Highlights • Rapidly growing enterprise software company, with a view towards a $50B+ digital transformation market opportunity • Large enterprise client base in key verticals: financial services, insurance, telecommunications, health care, manufacturing, and public sector • A proven
Slide 8: Solution Overview
Solution Overview 8
Slide 9: 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 Making customer and employee- Customer Service or KY
Slide 10: Pega Infinity
Pega Infinity™ 1:1 Customer Engagement Customer Service Intelligent Automation MAKE GET WORK DECISIONS DONE REAL-TIME, END-TO-END MICROJOURNEY- SITUATIONAL SOFTWARE THAT CLOUD OMNI-CHANNEL AUTOMATION & CENTRIC RAPID LAYER CAKE™ WRITES YOUR CHOICE AI ROBOTICS DELIVERY SOFTWARE™ Industry-leading techn
Slide 11: Unified architecture for digital transformation
Intelligent automation Digital process automation Unified architecture for digital transformation Real-time decisions & AI Customer engagement “The highest reference customer rating for customer usability. The best ability to build, maintain, and change complex cases. The highest overall product sat
Slide 12: Business Overview
Business Overview 12
Slide 13: Why Pega Wins
Why Pega Wins Differentiated Architecture Ease of Integration Depth of Platform Functionality Strong Team Deep Vertical Expertise Robust ROI Financial Healthcare Services Manufacturing Insurance Public Sector Telecommunications © Pegasystems Inc. 13
Slide 14: 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 Maximize top-line growth with a centralized, real- Chief time AI-powered customer decision hub that delivers Customer 1:1 Customer next-best-actions at every customer interaction, across Off
Slide 15: How Do Our Clients Drive Value Using Pega?
How Do Our Clients Drive Value Using Pega? Client Illustrative Use Case Impact and Result • 50 million next best action conversations Retain customers delivered across 18 channels 1:1 Customer Engagement https://www.pega.com/customers/cba-marketing • +12 lead in NPS over the competition • Tripled cu
Slide 16: Financial Details
Financial Details 16
Slide 17: Financial Highlights
Financial Highlights Massive Market Opportunity Transition to Cloud Underway High Growth, Recurring Revenue Model Scale to Drive Margin Expansion © Pegasystems Inc. 17
Slide 18: Pursuing a Massive Market Opportunity in Platform & CRM
Pursuing a Massive Market Opportunity in Platform & CRM Complementary to Other Major Players FY 23 $80B+ FY 19 $50B+ CRM remains BOTH the largest and fastest growing enterprise application software category, according to Gartner* Source: IDC Worldwide ICT Spending Guide: Industry and Company Size (2
Slide 19: Transition to Cloud Underway
Transition to Cloud Underway From… To… Perpetual Recurring Less Predictable More Predictable Lagging Growth & Rule of 40 Margins 2017 CLOUD TRANSITION TIMELINE 2022 TODAY © Pegasystems Inc. 19
Slide 20: High Growth, Recurring Revenue Model
High Growth, Recurring Revenue Model Pega Cloud Client Cloud ACV Growth is the Best Indicator of Growth During the Cloud Transition $30M increase Q3 2020 Growth vs Q3 2019 $28M increase Total ACV: $777M $747M 21% $720M $696M $643M $232 Pega Cloud $615M $186 $214 $592M $171 ACV: 57% $572M $148 $530M
Slide 21: Fastest Growing Revenue Stream is Pega Cloud
Fastest Growing Revenue Stream is Pega Cloud Trailing 12 Months Pega GAAP Cloud Revenue Increased by 125% since Q4 2018 200 $186 $167 $149 150 $134 $119 $106 $100 Cloud Transition $95 Begins $83 $73 $64 $56 $51 50 $0 ($M) Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 © Pega
Slide 22: Remaining Performance Obligation (RPO) / Backlog is Growing
Remaining Performance Obligation (RPO) / Backlog is Growing Pega Cloud RPO/Backlog up 39%, Total RPO/Backlog Up 38% (in millions) +38% $838M $609M $381 39% $507M $270 $363M $295 $229 $457 $339 $212 $134 9/30/2019 9/30/2020 9/30/2019 9/30/2020 >1 Year ≤1 Year >1 Year ≤1 Year Pega Cloud RPO/Backlog To
Slide 23: What Does this All Mean?
What Does this All Mean? Strive to build a growing, recurring business to drive increased value Sustain higher Through transition To drive growth to recurring shareholder value With a view towards: • Capitalizing on high-growth markets • Driving ACV growth • Balancing growth & margin • Continuing ou
Slide 24: Pegasystems trademarks notice
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. 24