Sign in

    PEGASYSTEMS (PEGA)

    PEGA Q3 2024: Blueprint Drives Accelerated ACV Growth Across Regions

    Reported on Jul 7, 2025
    Pre-Earnings PriceN/ADate unavailable
    Post-Earnings PriceN/ADate unavailable
    Price ChangeN/A
    • Blueprint Technology Driving Customer Engagement: Q&A participants highlighted that Blueprint is fundamentally transforming Pega’s selling process by enabling client-specific demos in the first meeting, which accelerates deal execution and increases overall sales momentum.
    • Accelerated and Diversified ACV Growth: Management emphasized that ACV growth is accelerating across all regions and customer segments—from new logos to legacy system migrations—demonstrating robust and diversified revenue drivers regardless of macro challenges.
    • Strengthening Partner and Ecosystem Support: The call noted strong partner enthusiasm, with over 70 Blueprints already developed by partners and deeper strategic discussions with hyperscalers, reinforcing Pega’s market positioning and future expansion potential.
    • Macro uncertainty impacting client spending: Ongoing geopolitical conflicts, elections, and inflation concerns may lead clients to delay or reduce IT budgets, resulting in a muted Q4 budget flush and slower quarterly revenue growth.
    • Lagging cloud migration: While legacy transformation is a key part of the strategy, current migrations to Pega Cloud remain minimal, posing a risk if the pace of conversion does not increase as expected.
    • Overreliance on Blueprint adoption: The company’s reliance on the success of its AI-driven Blueprint to transform client engagements is critical; if client adoption or its impact on deal acceleration falls short, growth could be adversely affected.
    1. Blueprint Impact
      Q: How is Blueprint boosting ACV and pipeline?
      A: Management explained that Blueprint is transforming early client engagements by enabling client-specific demos in initial meetings, which is accelerating ACV growth and strengthening the pipeline across regions.

    2. ACV Drivers
      Q: What’s driving global ACV acceleration?
      A: Leaders attributed accelerated ACV to balanced growth across geographies with strong new-logo wins, expanded workflows, and some early Pega Cloud migrations reinforcing overall momentum.

    3. TAM Expansion
      Q: How does GenAI Blueprint broaden market reach?
      A: Management noted that GenAI Blueprint drives legacy system replacement and cloud migration, effectively expanding the total addressable market without relying on additional product SKUs.

    4. Market Pulse
      Q: How strong is client excitement for Blueprints?
      A: Executives reported high client enthusiasm, with live, client-specific Blueprint demos becoming routine and shortening engagement cycles, thereby enhancing the near-term pipeline.

    5. Budget Flush
      Q: Will a Q4 budget flush boost results?
      A: While some in the market predict end-of-year budget spend, management remains cautious and is not counting on a significant flush due to prevailing cost-saving mandates.

    6. Maintenance Migration
      Q: How will cloud migration affect maintenance revenue?
      A: Management acknowledged that declining maintenance ACV is expected to accelerate as more customers migrate to Pega Cloud, with a steeper decline anticipated in 2025 and beyond.

    7. Competitive Edge
      Q: How do you gain an edge over Salesforce?
      A: Leaders emphasized that Pega’s unique center-out, workflow-driven architecture integrated with AI provides a comprehensive solution, offering a clear advantage over competitors that focus solely on front-end solutions.

    8. Partner Strategy
      Q: How are hyperscaler partners supporting Pega Cloud?
      A: Executives highlighted growing partner enthusiasm with stronger engagements from AWS and Google Cloud, which are jointly pursuing opportunities as Pega Cloud adoption increases.

    9. $2B Verdict
      Q: Did the verdict reversal improve sales cycles?
      A: Management welcomed the reversal of the $2 billion verdict, noting it alleviated client concerns and normalized the sales process for larger accounts.

    10. Agentic AI
      Q: What sets your agentic AI approach apart?
      A: The team stressed a managed, workflow-based strategy where AI augments clearly defined processes, ensuring reliability and compliance rather than relying on full autonomy.

    11. Product Roadmap
      Q: What’s next for Blueprint enhancements?
      A: Future plans include enhancing Blueprint’s integration with open architecture databases and leveraging process mining capabilities to further modernize legacy systems.

    12. GTM vs Demand
      Q: Is growth from GTM changes or market demand?
      A: Management attributed current momentum mainly to a focused selling transformation rather than an overall change in market fundamentals, reinforcing disciplined execution.

    13. Federal Business
      Q: How did FedRAMP impact U.S. federal business?
      A: Although achieving FedRAMP High is positive, federal deals in Q3 remained steady without a marked spike, reflecting a consistent rather than a flush-driven performance.

    14. Verticals’ Performance
      Q: Were any verticals outperforming noticeably this quarter?
      A: Leaders noted a balanced performance across all segments with no specific vertical significantly outperforming the others during Q3.

    Research analysts covering PEGASYSTEMS.