PEGA Nasdaq Russell 1000 Earnings call
Pegasystems (PEGA) · Q2 2026 results and valuation
Share price: $31.39 · 2026-11-11
Results Q2 2026 vs Q1 2026 · previous quarter · published 22 Jul 2026 and 22 Apr 2026
Net income down 59.3% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
−59.3%
Net income vs Q1 2026
Outlook given
Net income 13.3M vs 32.8M
Revenue −2.2%
Against the same quarter last year (Q2 2025) it is −55.7%, so it is not just seasonal.
2 · How management spoke
Typical
Less upbeat than 64% of company calls
Answers to analysts: restrained, in line with the script.
Similar to last call.
3 · What stood out
Figure
Pega Cloud ACV increased by $165 million year-over-year, growing 22% as reported and in constant currency.
Valuation
Is Pegasystems undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 9.8% growth a year (3-year revenue growth), the model's fair value is $71.95 a share — the stock trades 56% below it. Today's price assumes −2.2% growth a year.
Current price
$31.39
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
-2.2% for 10 yrs
Fair value / share
$71.95
Buy below
$53.96
Price vs fair value
Undervalued 56%
Price vs buy-below price
Undervalued 42%
Read between the lines
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Key theme
The company intends to continue delivering shareholder value by focusing on the Rule of 40 and utilizing free cash flow as an important lever in value creation.
Source quote
“And we believe Rule of 40 and certainly free cash flow is an important lever in that value creation. That's really what you should hear from us is that we're going to continue to run a good business, investing in the right areas and make sure that we're delivering value for shareholders.”
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Guidance
Pega expects Pega Cloud ACV to increase as a percentage of total ACV over time, with a target of reaching approximately 75% of the total.
Source quote
“We expect Pega Cloud ACV to continue increasing as a percentage of total ACV over time and still believe it can ultimately reach approximately 75% of the total.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“As part of that effort, we are increasing prospecting activity, expanding executive level engagement, identifying new workflow and legacy transformation opportunities with not only existing clients but also strengthening our...”
“Annual contract value growth or ACV growth, is one of the most important metrics and in our view the best indicator of underlying execution.”
“Because a meaningful portion of our net new ACV comes from cross-selling and upselling into our existing client base, fewer renewal opportunities naturally result in fewer expansion opportunities.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-30)
| Metric | Q2 2026period end 2026-06-30 | Q1 2026period end 2026-03-31 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 420.7M | 430.0M | −2.2% | 384.5M | +9.4% |
| Gross profit | 312.7M | 323.2M | −3.3% | 274.9M | +13.7% |
| Operating income | 16.6M | 37.1M | −55.2% | 17.3M | −3.7% |
| Net income | 13.3M | 32.8M | −59.3% | 30.1M | −55.7% |
| EPS | 0.08 | 0.18 | −55.6% | 0.17 | −52.9% |
| P/E today 19.6 | 17.0 | 23.0 | −6.0 | 44.7 | −27.7 |
Topics
Most discussed now
- New The fact that Pegasystems translates that into a no token cost model has gotten a lot...
- New Pegasystems' engagement around Blueprint has been a real big difference maker for it in building that.
- Pegasystems believes that is a tremendous value unlock even in a confused market because there is...
- They're still kind of engaging with it in very healthy conversations around how Pegasystems can help their transformation needs.
- Pegasystems has seen a lot of technology change, it has seen a lot of market changes, a lot of market shifts.
Faded since Q1 2026
- Dropped When Pegasystems thinks and it talks about how it wants to go from the like 850-ish companies that it would...
- Fading Pega Cloud ACV grew 29% year-over-year as reported, and 27% in constant currency to just over $900 million, an over...
- Fading It's just that Blueprint completely changes the dynamic of how fast Pegasystems can engage with a new logo and the...
Latest announcements
Official filings, newest first.
- Results of operations · SEC 8-K
- Shareholder vote results · SEC 8-K
- Regulation FD disclosure · SEC 8-K
- Results of operations · SEC 8-K
- Director or officer change · SEC 8-K
- Results of operations; Other events · SEC 8-K
- Restructuring costs · SEC 8-K
- Other events · SEC 8-K