Pega Cloud Revenue Growth
Pega Cloud revenue increased from $151M to $205M in Q1 2026, a +35.8% year-over-year increase; trailing 12-month Pega Cloud revenue growth was ~30%.
Pegasystems
· PEGA
April 21st, 2026
Summary
- Earnings Call Date:
- 2026-04-21
- Change Since:
- -23.85%
- Next Earnings Date:
- 2026-07-29
Earnings Call Sentiment
PositiveOverall the call conveyed a positive operational and financial trajectory driven by strong Pega Cloud revenue and ACV growth, robust free cash flow and clear product momentum (Blueprint, new AI tooling and awards). Management acknowledged near-term headwinds — a tough prior-year comp, timing-driven revenue variability, pressure on term/maintenance revenue as cloud mix shifts, and macro/government/geopolitical risks — but expects pipeline conversion and renewals to accelerate in the back half of 2026.
Company Guidance
Management reiterated full‑year guidance issued at the start of 2026 (no quarterly updates) and said Q1 was a seasonal, tougher comp to the $60M net ACV add in Q1 2025; they highlighted strong Pega Cloud momentum — Q1 Pega Cloud revenue rose from $151M to $205M (≈30% TTM growth), Pega Cloud ACV grew 29% YoY (27% in constant currency) to just over $900M (an increase of >$200M) and now represents ~56% of total ACV (with a long‑term goal of ~75%+ cloud mix); they expect term license revenue and renewals to be back‑end weighted with Blueprint‑driven pipeline converting in H2; cash generation was strong with Q1 free cash flow of $207M, >80% of FCF returned via repurchases (3.5M shares for $167M) and $5M of dividends, and shares outstanding down ~1.6M since year‑end 2025.
Pega Cloud ACV Expansion
Pega Cloud ACV grew 29% year-over-year (27% in constant currency) to just over $900M — an increase of more than $200M — and now represents ~56% of total ACV, approaching the $1B mark.
Strong Free Cash Flow and Capital Return
Free cash flow was $207M in Q1 2026. The company returned >80% of FCF to shareholders in the quarter, repurchasing 3.5M shares for $167M and paying $5M in dividends; shares outstanding decreased by 1.6M since year-end.
Product and AI Momentum (Blueprint & Agentic)
Blueprint AI and new 'vibe' coding tooling launched, with early customer feedback positive. Blueprint is driving faster design-to-production examples (prototype in 15 minutes; applications live in weeks; two apps in 92 and 70 days). Agentic engineering approach expected to accelerate R&D.
Sales Pipeline & New Logo Momentum
Management reports unusually high new-logo pipeline growth driven by Blueprint, with expectation that pipeline will begin converting to ACV in H2 2026; almost all new pipeline growth is connected to Blueprint-led engagements.
Industry Recognition and Customer Wins
Forrester named Pega a leader in customer service; the company received 4 AI-related innovation awards including Product of the Year; notable customer successes include Proximus, NHS Scotland, Vodafone, National Australia Bank, MetLife, Unum and Wells Fargo.
Operator
Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to Pegasystems 1Q 2026 Earnings Call and webcast. [Operator Instructions] I would now like to turn the call over to Peter Welburn, Vice President of Corporate Development and Investor Relations. Please go ahead.
Peter Welburn
Thank you, Carly. Good morning, everyone, and welcome to Pegasystems' Q1 2026 Earnings Call. Before we begin, I'd like to read our 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, forecasts and similar expressions are intended to identify these forward-looking statements. These statements speak only as of the date the statement was made and are based on current expectations and assumptions. Because these statements relate to future events, they're subject to certain risks and uncertainties that could cause actual results to differ materially from our current expectations for fiscal year 2026 and beyond. Factors that could cause such differences are described in the company's press release announcing our Q1 2026 results and our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2025, as well as other recent SEC filings.
Investors are cautioned not to place undue reliance on these forward-looking statements as there can be no...
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