Pegasystems (PEA) Q3 2026 Earnings Report
DE:PEA Q3 2026 EPS Results
- Actual EPS
- EUR 0.31
- Consensus EPS
- EUR 0.41
- Beat/Miss
- Missed by -EUR 0.09
- One Year Ago EPS
- EUR 0.27
DE:PEA Q3 2026 Revenue Results
- Actual Revenue
- EUR 352.12M
- Expected Revenue
- EUR 376.92M
- Beat/Miss
- Missed by -EUR 24.80M
- YoY Revenue Growth
- +3.15%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/20/2026
- Time
- After Close
- Conference Call
- Tuesday, October 20, 2026
Pegasystems's next earnings date is estimated for February 17, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
The call presented a strong long-term strategic and product opportunity, supported by Pega Cloud growth, expanding backlog, improving pipeline maturity, customer AI outcomes, industry recognition, and a maintained long-term free cash flow target. However, these positives were tempered by acknowledged execution shortcomings, ACV growth below plan, longer sales cycles, deployment challenges, lower 2026 cash flow, and less predictable purchasing behavior. Management was confident in the opportunity but cautious about near-term execution and 2026 results.
Management expects an acceleration of growth in Q4 but does not believe it will achieve its full plan for the second half; ACV growth is expected to be up from here but not above 10% for the 2026 year, with ACV growth somewhere between where we are now and 10%. The company expects to grow from where it is now in Q3 and Q4 and into 2027, and would not anticipate it being as back-end loaded at this early stage as what 2026 looks like it is going to play out to be. The execution changes are expected to produce improvements in the early to mid part of 2027, with headcount expected to be approximately 5,000 employees during the first quarter of 2027, down a few hundred from where we sit today. Adjusted free cash flow is expected to be above $600 million next year and on to a $700 million path in 2028, while the company continues to target $700 million or more of free cash flow in 2028; Pega Cloud backlog typically comes into revenue over the next two to three quarters, and Pega Cloud current RPO should be assumed to come in a couple of quarters after it enters.
- Differentiated AI Workflow StrategyManagement emphasized Pega's approach of combining workflows, decisioning, governance, and AI models to deliver predictable outcomes and predictable costs. Blueprint and Pega Infinity are designed to structure AI at design time, control agent activity at runtime, reduce token usage, and support fixed case pricing with no token charge.
- Industry Recognition for AI and AutomationPega was named a leader in the Forrester Wave for AI platforms and again named a leader in Gartner's Magic Quadrant for Business Orchestration and Automation Technologies. Management said Pega was the only company named as a leader in both.
- Customer AI OutcomesAt a large government agency, Pega workflow is turning unstructured information into structured work, automatically processing documents and surfacing exceptions for human judgment. At a major U.S. bank, governed workflows and specialized AI agents cut complaint resolution times from 10 days to 10 minutes, while employees reported higher productivity and enthusiasm.
- ACV Growth and Strongest Quarterly ACV AddAnnual contract value grew 7% year-over-year in constant currency to $1.66 billion. Pega added $32 million in net new ACV in constant currency during Q3, its strongest quarterly performance of the year and a step forward in rebuilding growth momentum.
- Pega Cloud MomentumPega Cloud ACV grew 20% year-over-year and represented 59% of total ACV. Pega Cloud backlog increased 25% year-over-year in constant currency, while total backlog exceeded $2 billion and current backlog stood at just around $1 billion.
- Improving Pipeline and Opportunity MaturityPipeline volume strengthened during the quarter, Blueprint engagement continued to expand, and more opportunities progressed toward the decision process. Management said the pipeline entering Q4 was the strongest it had ever had for a Q4, and that opportunity maturity was meaningfully better than at any other time in 2026.
- New Logo Activity and Consistent Win RatesManagement reported strong activity and pipeline build among new-logo prospects, with growth coming from new logos as well as workflow expansion within the existing install base. Win rates remained generally consistent with prior periods, and management said it was not seeing a meaningful shift in competitive dynamics.
- Accelerating Infinity AdoptionCustomers responded with enthusiasm to Blueprint capabilities in Infinity Studio. More than twice as many clients had moved to Infinity 2026 at the comparable point after release than had moved to Infinity 2025, reflecting more aggressive customer adoption.
- Execution and Go-to-Market ReorganizationPega is implementing a regional go-to-market model, a unified marketing organization, a dedicated organization focused on accelerating AI adoption, and centralized go-to-market and consulting operations. The new adoption organization will include forward-deployed Lighthouse engineers, early-adopter programs, engineering, and delivery excellence.
- Expected Margin and Operating Leverage BenefitsManagement expects the organizational changes and other actions to contribute to margin improvement and increased operating leverage over time. The company expects approximately 5,000 employees in the first quarter of 2027, down a few hundred from current levels, as it streamlines the organization and improves execution.
- Share Repurchases and Financial FlexibilityPega repurchased just under 11 million shares for around $430 million in the first nine months of 2026, reducing total common shares by 6.8 million shares. The company remains debt-free, ended Q3 with approximately $300 million in cash and marketable securities, and intends to maintain a consistent and increasing dividend while preserving strategic flexibility.
- Long-Term Free Cash Flow Ambition MaintainedManagement maintained its target of $700 million or more of free cash flow in 2028 and described a path for adjusted free cash flow to exceed $600 million next year before reaching the 2028 target.
- Committed Cloud Backlog and Public Sector StabilityManagement said Pega Cloud backlog typically converts into revenue over the next two to three quarters and reflects clients' long-term commitment to Pega. U.S. government business was described as steady across quarters, and public-sector customers were not seen as having distracted budgets to the same extent as certain commercial customers.
DE:PEA Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 17, 2027 | 2026 (Q4) | 0.82- | 0.68 | ― | ― |
| Oct 20, 2026 | 2026 (Q3) | 0.410.31 | 0.27 | 16.67% (+0.04) | |
| Jul 21, 2026 | 2026 (Q2) | 0.390.31 | 0.25 | 25.00% (+0.06) | |
| Apr 21, 2026 | 2026 (Q1) | 0.580.41 | 0.68 | -39.87% (-0.27) | |
| Feb 10, 2026 | 2025 (Q4) | 0.660.68 | 0.72 | -5.59% (-0.04) | |
| Oct 21, 2025 | 2025 (Q3) | 0.180.27 | 0.17 | 53.85% (+0.09) | |
| Jul 22, 2025 | 2025 (Q2) | 0.220.25 | 0.23 | 7.69% (+0.02) | |
| Apr 22, 2025 | 2025 (Q1) | 0.220.68 | 0.21 | 218.75% (+0.47) | |
| Feb 12, 2025 | 2024 (Q4) | 0.660.72 | 0.79 | -9.04% (-0.07) | |
| Oct 23, 2024 | 2024 (Q3) | 0.150.17 | 0.2 | -11.36% (-0.02) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
