| Metric | Value ($ M) | Q1 FY26 | Q2 FY25 |
|---|---|---|---|
| Revenue | 420.72 | 2.1% | 9.4% |
| Total Income | 420.72 | 2.1% | 9.4% |
| Expenditure | 404.08 | 2.9% | 10.0% |
| PBT | 18.51 | 53.4% | 26.7% |
| Net Profit | 13.33 | 59.3% | 55.7% |
| OPM | 3.95% | 4.69pp | 0.54pp |
| NPM | 3.17% | 4.45pp | 4.65pp |
| EPS | 0.08 | 57.9% | 55.6% |
Pegasystems Reports Q2 2026 Results, Highlighting AI Innovation and Cash Flow
22 Jul 2026 · 22 Jul, 1:42 am
Summary
Pegasystems Inc. announced its financial results for the second quarter of 2026, reporting a 9% year-over-year increase in total revenue to $420.7 million. While GAAP net income saw a significant decrease, non-GAAP net income rose by 19% to $59.5 million. The company highlighted strong growth in Pega Cloud ACV (up 22% YoY) and overall ACV (up 7% YoY), alongside robust cash flow generation exceeding $285 million in the first half of the year. Management noted that unprecedented changes in the AI market caused clients to delay purchasing decisions, which may continue to adversely affect ACV growth.
Key Highlights
- 1
Pega Cloud ACV increased 22% year over year, reaching $926.3 million as of June 30, 2026.
- 2
Total ACV grew 7% year over year (8% in constant currency) to $1.62 billion.
- 3
Cash flow from operations and free cash flow both exceeded $285 million in the first half of 2026.
- 4
Total revenue for the three months ended June 30, 2026, was $420.7 million, a 9% increase year over year.
- 5
Net income on a GAAP basis decreased 56% to $13.3 million for the three months ended June 30, 2026, compared to $30.1 million in the prior year.
- 6
Non-GAAP net income for the three months ended June 30, 2026, increased 19% to $59.5 million.
- 7
Total backlog increased by 10% year over year to $2.02 billion as of June 30, 2026.
Management Comments
Alan Trefler
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®.
Ken Stillwell
Pega generated record first-half cash flow and returned substantial capital to shareholders. As the market shifts from AI experimentation to tokenomics and reliable business outcomes, that evolution plays directly to Pega’s strengths, and we remain confident in our strategy to capitalize on the opportunity ahead.
Informational and educational content only. Not investment advice.