Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 8-K

_________________________________

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 24, 2024

____________________

PEGASYSTEMS INC.

(Exact name of Registrant as specified in its charter)

_________________________________


Massachusetts	1-11859	04-2787865
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Main Street, Cambridge, MA 02142

(Address of principal executive offices, including zip code)

(617) 374-9600

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value per share	PEGA	NASDAQ Global Select Market

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 24, 2024, Pegasystems Inc. issued a press release announcing its financial results for the second quarter of 2024. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference in its entirety.

The information in this Item 2.02 and the Exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS


Exhibit No.						Description
99.1						Press release issued by Pegasystems Inc.
104						Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Pegasystems Inc.

Dated:	July 24, 2024	By:	/s/ KENNETH STILLWELL
			Kenneth Stillwell
			Chief Operating Officer and Chief Financial Officer
			(Principal Financial Officer)

EXHIBIT 99.1

Pega GenAI Excitement Accelerates Growth in Q2 2024

•Annual contract value (ACV) grows 13% year over year in constant currency

•Cash flow from operations reaches $220 million and free cash flow hits $218 million in the first half of 2024

•Pega Cloud backlog exceeds $1 billion for the first time

CAMBRIDGE, Mass. — July 24, 2024 — Pegasystems Inc. (NASDAQ: PEGA), the leading enterprise AI decisioning and workflow automation platform provider, released its financial results for the second quarter of 2024.

“Our approach to statistical AI and generative AI continues to be a significant differentiator,” said Alan Trefler, founder and CEO. “The offerings we’ve introduced, especially Pega GenAI Blueprint™, have captured the imagination of clients, prospects, and partners, allowing them to identify new possibilities and helping us drive deeper engagement. With tens of thousands of blueprints created over the last few months, we’re identifying opportunities to accelerate growth and creating additional momentum for Pega Cloud®.”

"I'm really proud to see how our team is improving profitability while driving ACV growth,” said Ken Stillwell, COO and CFO. “Our strong execution and our AI innovation put us in a fantastic position to pursue the massive digital transformation opportunity in front of us.”

Financial and performance metrics (1)

1 Refer to the schedules at the end of this release for additional information, including a reconciliation of GAAP and non-GAAP measures.

EXHIBIT 99.1

(continued)

Reconciliation of ACV and Constant Currency ACV


(in millions, except percentages)	June 30, 2023		June 30, 2024		1-Year Change
ACV	$	1,164	$	1,305	12	%
Impact of changes in foreign exchange rates	—		5
Constant currency ACV	$	1,164	$	1,310	13	%

Note: Constant currency ACV is calculated by applying the June 30, 2023 foreign exchange rates to all periods shown.

Cash Flow Growth

EXHIBIT 99.1

(continued)


(Dollars in thousands, except per share amounts)	Three Months Ended June 30,						Six Months Ended June 30,
	2024		2023		Change		2024		2023		Change
Total revenue	$	351,153	$	298,268	18	%	$	681,300	$	623,740	9	%
Net income (loss) - GAAP	$	6,613	$	(46,804)	*		$	(5,511)	$	(67,578)	92	%
Net income - non-GAAP	$	45,841	$	1,203	3711	%	$	87,995	$	20,423	331	%
Diluted earnings (loss) per share - GAAP	$	0.07	$	(0.56)	*		$	(0.07)	$	(0.82)	91	%
Diluted earnings per share - non-GAAP	$	0.52	$	0.01	5100	%	$	1.00	$	0.24	317	%


(Dollars in thousands)	Three Months Ended June 30,								Change				Six Months Ended June 30,								Change
	2024				2023								2024				2023
Pega Cloud	$	134,086	38	%	$	115,063	39	%	$	19,023	17	%	$	264,988	39	%	$	222,942	36	%	$	42,046	19	%
Maintenance	80,344		23	%	82,042		27	%	(1,698)		(2)	%	161,345		23	%	161,672		26	%	(327)		—	%
Subscription services	214,430		61	%	197,105		66	%	17,325		9	%	426,333		62	%	384,614		62	%	41,719		11	%
Subscription license	84,647		24	%	41,197		14	%	43,450		105	%	147,985		22	%	125,724		20	%	22,261		18	%
Subscription	299,077		85	%	238,302		80	%	60,775		26	%	574,318		84	%	510,338		82	%	63,980		13	%
Consulting	52,040		15	%	58,387		19	%	(6,347)		(11)	%	106,087		16	%	111,420		18	%	(5,333)		(5)	%
Perpetual license	36		—	%	1,579		1	%	(1,543)		(98)	%	895		—	%	1,982		—	%	(1,087)		(55)	%
	$	351,153	100	%	$	298,268	100	%	$	52,885	18	%	$	681,300	100	%	$	623,740	100	%	$	57,560	9	%

Quarterly conference call

A conference call and audio-only webcast will be conducted at 8:00 a.m. EDT on Thursday, July 25, 2024.

Members of the public and investors are invited to join the call and participate in the question and answer session by dialing 1 (888) 415-4305 (domestic) or 1 (646) 960-0336 (international) and using Conference ID 1559653, or via https://events.q4inc.com/attendee/610142887 by logging onto www.pega.com at least five minutes prior to the event's broadcast and clicking on the webcast icon in the Investors section.

Discussion of non-GAAP financial measures

Our non-GAAP financial measures should only be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. We believe that these measures help investors understand our core operating results and prospects, which is consistent with how management measures and forecasts our performance without the effect of often one-time charges and other items outside our normal operations. Management uses these measures to assess the performance of the company's operations and establish operational goals and incentives. They are not a substitute for financial measures prepared under U.S. GAAP. Refer to the schedules at the end of this release for additional information, including a reconciliation of GAAP and non-GAAP measures.

Forward-looking statements

Certain statements in this press release may be "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, targets, strategies, intends to, projects, forecasts, guidance, likely, and usually or variations of such words and other similar expressions identify forward-looking statements. These statements represent our views only as of the date the statement was made and are based on current expectations and assumptions.

Forward-looking statements deal with future events and are subject to risks and uncertainties that are difficult to predict, including, but not limited to:

•our future financial performance and business plans;

•the adequacy of our liquidity and capital resources;

•the continued payment of our quarterly dividends;

•the timing of revenue recognition;

•variation in demand for our products and services, including among clients in the public sector;

•reliance on key personnel;

•reliance on third-party service providers, including hosting providers;

•compliance with our debt obligations and covenants;

•the potential impact of our convertible senior notes and Capped Call Transactions;

•foreign currency exchange rates;

•potential legal and financial liabilities, as well as damage to our reputation, due to cyber-attacks;

•security breaches and security flaws;

•our ability to protect our intellectual property rights, costs associated with defending such rights, intellectual property rights claims, and other related claims by third parties against us, including related costs, damages, and other relief that may be granted against us;

•our ongoing litigation with Appian Corp.;

•our client retention rate; and

•management of our growth.

These risks and others that may cause actual results to differ materially from those expressed in such forward-looking statements are described further in Part I of our Annual Report on Form 10-K for the year ended December 31, 2023, and other filings we make with the U.S. Securities and Exchange Commission (“SEC”).

Investors are cautioned not to place undue reliance on such forward-looking statements, and there are no assurances that the results included in such statements will be achieved. Although subsequent events may cause our view to change, except as required by applicable law, we do not undertake and expressly disclaim any obligation to publicly update or revise these forward-looking statements, whether as the result of new information, future events, or otherwise.

Any forward-looking statements in this press release represent our views as of July 24, 2024.

About Pegasystems

Pega provides a powerful platform that empowers the world's leading organizations to unlock business-transforming outcomes with real-time optimization. Clients use our enterprise AI decisioning and workflow automation to solve their most pressing business challenges - from personalizing engagement to automating service to streamlining operations. Since 1983, we've built our scalable and flexible architecture to help enterprises meet today's customer demands while continuously transforming for tomorrow. For more information on how Pega (NASDAQ: PEGA) empowers its clients to Build for Change®, visit www.pega.com.

Press contact:

Lisa Pintchman

VP, Corporate Communications

lisapintchman.rogers@pega.com

617-866-6022

Twitter: @pega

Investor contact:

Peter Welburn

VP, Corporate Development & Investor Relations

PegaInvestorRelations@pega.com

617-498-8968

All trademarks are the property of their respective owners.

PEGASYSTEMS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue
Subscription services	$	214,430	$	197,105	$	426,333	$	384,614
Subscription license	84,647		41,197		147,985		125,724
Consulting	52,040		58,387		106,087		111,420
Perpetual license	36		1,579		895		1,982
Total revenue	351,153		298,268		681,300		623,740
Cost of revenue
Subscription services	36,238		36,783		72,062		73,647
Subscription license	477		623		1,120		1,342
Consulting	60,231		58,710		118,413		119,058
Perpetual license	—		24		9		27
Total cost of revenue	96,946		96,140		191,604		194,074
Gross profit	254,207		202,128		489,696		429,666
Operating expenses
Selling and marketing	139,761		143,858		267,456		293,655
Research and development	75,425		73,931		147,538		149,307
General and administrative	25,420		23,462		48,947		46,572
Litigation settlement, net of recoveries	—		—		32,403		—
Restructuring	635		2,167		798		3,628
Total operating expenses	241,241		243,418		497,142		493,162
Income (loss) from operations	12,966		(41,290)		(7,446)		(63,496)
Foreign currency transaction gain (loss)	437		(3,290)		(2,825)		(5,965)
Interest income	6,785		1,814		12,066		3,299
Interest expense	(1,656)		(1,778)		(3,408)		(3,696)
(Loss) income on capped call transactions	(3,277)		(1,361)		22		1,845
Other income, net	—		5,702		1,684		12,285
Income (loss) before provision for income taxes	15,255		(40,203)		93		(55,728)
Provision for income taxes	8,642		6,601		5,604		11,850
Net income (loss)	$	6,613	$	(46,804)	$	(5,511)	$	(67,578)
Earnings (loss) per share
Basic	$	0.08	$	(0.56)	$	(0.07)	$	(0.82)
Diluted	$	0.07	$	(0.56)	$	(0.07)	$	(0.82)
Weighted-average number of common shares outstanding
Basic	85,157		83,039		84,712		82,823
Diluted	88,500		83,039		84,712		82,823

PEGASYSTEMS INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)


	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	258,257	$	229,902
Marketable securities	406,819		193,436
Total cash, cash equivalents, and marketable securities	665,076		423,338
Accounts receivable, net	165,723		300,173
Unbilled receivables, net	164,533		237,379
Other current assets	76,323		68,137
Total current assets	1,071,655		1,029,027
Long-term unbilled receivables, net	81,218		85,402
Goodwill	81,410		81,611
Other long-term assets	302,249		314,696
Total assets	$	1,536,532	$	1,510,736
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	16,682	$	11,290
Accrued expenses	44,875		39,941
Accrued compensation and related expenses	81,110		126,640
Deferred revenue	352,618		377,845
Convertible senior notes, net	500,604		—
Other current liabilities	20,677		21,343
Total current liabilities	1,016,566		577,059
Long-term convertible senior notes, net	—		499,368
Long-term operating lease liabilities	70,202		66,901
Other long-term liabilities	14,362		13,570
Total liabilities	1,101,130		1,156,898






Total stockholders’ equity	435,402		353,838
Total liabilities and stockholders’ equity	$	1,536,532	$	1,510,736

PEGASYSTEMS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Six Months Ended June 30,
	2024		2023
Net (loss)	$	(5,511)	$	(67,578)
Adjustments to reconcile net (loss) to cash provided by operating activities
Non-cash items	116,288		119,371
Change in operating assets and liabilities, net	109,466		61,959
Cash provided by operating activities	220,243		113,752
Cash (used in) provided by investing activities	(209,700)		15,979
Cash provided by (used in) financing activities	22,503		(86,988)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(2,842)		1,010
Net increase in cash, cash equivalents, and restricted cash	30,204		43,753
Cash, cash equivalents, and restricted cash, beginning of period	232,827		145,054
Cash, cash equivalents, and restricted cash, end of period	$	263,031	$	188,807

PEGASYSTEMS INC.

RECONCILIATION OF SELECTED GAAP AND NON-GAAP MEASURES

(in thousands, except percentages and per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024		2023		Change		2024		2023		Change
Net income (loss) - GAAP	$	6,613	$	(46,804)	*		$	(5,511)	$	(67,578)	92	%
Stock-based compensation (1)	36,224		36,227				71,005		78,784
Restructuring	635		2,167				798		3,628
Legal fees	2,409		2,842				4,351		4,318
Litigation settlement, net of recoveries	—		—				32,403		—
Amortization of intangible assets	789		963				1,753		2,012
Interest on convertible senior notes	619		647				1,236		1,375
Capped call transactions	3,277		1,361				(22)		(1,845)
Repurchases of convertible senior notes	—		(5,074)				—		(7,855)
Foreign currency transaction (gain) loss	(437)		3,290				2,825		5,965
Other	—		(678)				(1,628)		(4,471)
Income taxes (2)	(4,288)		6,262				(19,215)		6,090
Net income - non-GAAP	$	45,841	$	1,203	3,711	%	$	87,995	$	20,423	331	%

Diluted earnings (loss) per share - GAAP	$	0.07	$	(0.56)	*		$	(0.07)	$	(0.82)	91	%
non-GAAP adjustments	0.45		0.57				1.07		1.06
Diluted earnings per share - non-GAAP	$	0.52	$	0.01	5,100	%	$	1.00	$	0.24	317	%

Diluted weighted-average number of common shares outstanding - GAAP	88,500		83,039		7	%	84,712		82,823		2	%

Stock-based compensation	—		1,289				3,218		1,026
Diluted weighted-average number of common shares outstanding - non-GAAP	88,500		84,328		5	%	87,930		83,849		5	%

* not meaningful

Our non-GAAP financial measures reflect the following adjustments:

•Stock-based compensation: We have excluded stock-based compensation from our non-GAAP operating expenses and profitability measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to our revenues recognized during the periods presented and is expected to contribute to our future revenues, we continue to evaluate our business performance, excluding stock-based compensation.

•Restructuring: We have excluded restructuring from our non-GAAP financial measures. Restructuring fluctuates in amount and frequency and is significantly affected by the timing and size of our restructuring activities. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as these amounts are not representative of our core business operations and ongoing operational performance.

•Legal fees: Legal and related fees arising from proceedings outside the ordinary course of business. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.

•Litigation settlement, net of recoveries: Cost to settle litigation, net of insurance recoveries, arising from proceedings outside the ordinary course of business. See Note 15. Commitments and Contingencies in our Quarterly Report for the three months ended June 30, 2024 for additional information. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.

•Amortization of intangible assets: We have excluded the amortization of intangible assets from our non-GAAP operating expenses and profitability measures. Amortization of intangible assets fluctuates in amount and frequency and is significantly affected by the timing and size of acquisitions. Investors should note that intangible assets contributed to our revenues recognized during the periods presented and are expected to contribute to future revenues. Amortization of intangible assets is likely to recur in future periods. We believe excluding these amounts provides a useful comparison of our operational performance in different periods.

•Interest on convertible senior notes: In February 2020, we issued convertible senior notes, due March 1, 2025, in a private placement. We believe that excluding the amortization of issuance costs provides a useful comparison of our operational performance in different periods.

•Capped call transactions: We have excluded gains and losses related to our capped call transactions held at fair value under U.S. GAAP. The capped call transactions are expected to reduce common stock dilution and/or offset any potential cash payments we must make, other than for principal and interest, upon conversion of the convertible senior notes. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.

•Repurchases of convertible senior notes: We have excluded gains from the repurchases of Convertible Senior Notes. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.

•Foreign currency transaction (gain) loss: We have excluded foreign currency transaction gains and losses from our non-GAAP profitability measures. Foreign currency transaction gains and losses fluctuate in amount and frequency and are significantly affected by foreign exchange market rates. Foreign currency transaction gains and losses are likely to recur in future periods. We believe excluding these amounts provides a useful comparison of our operational performance in different periods.

•Other: We have excluded gains and losses from our venture investments, and incremental expenses incurred integrating acquisitions. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations and ongoing operational performance.

•Diluted weighted-average number of common shares outstanding:

•Stock-based compensation: In periods of non-GAAP income, we have included the dilutive impact of stock-based compensation in our non-GAAP weighted-average shares. In periods of GAAP loss, these shares would have been excluded from our GAAP results as they would be anti-dilutive for GAAP. We believe including the dilutive effect of stock-based compensation in our non-GAAP financial measures in periods of income is helpful to investors as this provides a useful comparison of our operational performance in different periods.

(1) Stock-based compensation:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	7,092	$	7,174	$	13,664	$	16,087
Selling and marketing	13,564		15,349		27,452		33,009
Research and development	7,825		7,851		15,471		16,911
General and administrative	7,743		5,853		14,418		12,777
	$	36,224	$	36,227	$	71,005	$	78,784
Income tax benefit	$	(554)	$	(581)	$	(865)	$	(1,253)

(2) Effective income tax rates:


	Six Months Ended June 30,
	2024		2023
GAAP	*		(21)	%
non-GAAP	22	%	22	%

* not meaningful.

Our GAAP effective income tax rate is subject to significant fluctuations due to several factors, including our stock-based compensation plans, research and development tax credits, gains and losses on our capped call transactions, and the valuation allowance on our deferred tax assets in the U.S. and U.K. We determine our non-GAAP income tax rate using applicable rates in taxing jurisdictions and assessing certain factors, including historical and forecasted earnings by jurisdiction, discrete items, and ability to realize tax assets. We believe it is beneficial for our management to review our non-GAAP results consistent with our annual plan's effective income tax rate as established at the beginning of each year, given tax rate volatility. See Note 13. Income Taxes in our Quarterly Report for the three months ended June 30, 2024 for additional information.

PEGASYSTEMS INC.

RECONCILIATION OF FREE CASH FLOW (1) AND OTHER METRICS

(in thousands, except percentages)


	Six Months Ended June 30,				Change
	2024		2023
Cash provided by operating activities	$	220,243	$	113,752	94	%
Investment in property and equipment	(1,857)		(13,933)
Free cash flow (1)	$	218,386	$	99,819	119	%

Supplemental information (2)
Litigation settlement, net of recoveries	$	32,403	$	—
Legal fees	2,701		2,950
Restructuring	3,852		17,521
Interest on convertible senior notes	1,884		2,250

Income taxes	25,560		6,627
	$	66,400	$	29,348

(1) Our non-GAAP free cash flow is defined as cash provided by operating activities less investment in property and equipment. Investment in property and equipment fluctuates in amount and frequency and is significantly affected by the timing and size of investments in our facilities. We provide information on free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings. This information is not a substitute for financial measures prepared under U.S. GAAP.

(2) The supplemental information discloses items that affect our cash flows and are considered by management not to be representative of our core business operations and ongoing operational performance.

•Legal fees: Legal and related fees arising from proceedings outside the ordinary course of business.

•Restructuring: Restructuring fluctuates in amount and frequency and is significantly affected by the timing and size of our restructuring activities.

•Interest on convertible senior notes: In February 2020, we issued convertible senior notes, due March 1, 2025, in a private placement. The convertible senior notes accrue interest at an annual rate of 0.75%, payable semi-annually in arrears on March 1 and September 1.

•Income taxes: Direct income taxes paid net of refunds received.

PEGASYSTEMS INC.

ANNUAL CONTRACT VALUE

(in thousands, except percentages)

Annual contract value (“ACV”) - ACV represents the annualized value of our active contracts as of the measurement date. The contract's total value is divided by its duration in years to calculate ACV. ACV is a performance measure that we believe provides useful information to our management and investors.


	June 30, 2024		June 30, 2023		Change
Pega Cloud	$	593,752	$	498,860	$	94,892	19	%
Maintenance	310,608		315,231		(4,623)		(1)	%
Subscription services	904,360		814,091		90,269		11	%
Subscription license	400,949		349,713		51,236		15	%
	$	1,305,309	$	1,163,804	$	141,505	12	%

PEGASYSTEMS INC.

BACKLOG

(in thousands, except percentages)

Remaining performance obligations (“Backlog”) - Expected future revenue from existing non-cancellable contracts:

As of June 30, 2024:


	Subscription services						Subscription license			Perpetual license			Consulting			Total
	Pega Cloud			Maintenance
1 year or less	$	470,379		$	209,655		$	23,931		$	2,696		$	25,953		$	732,614		52	%
1-2 years	301,070			63,266			10,078			—			2,469			376,883			27	%
2-3 years	152,839			30,032			2,884			—			2,473			188,228			13	%
Greater than 3 years	90,474			17,953			97			—			—			108,524			8	%
	$	1,014,762		$	320,906		$	36,990		$	2,696		$	30,895		$	1,406,249		100	%
% of Total	72		%	23		%	3		%	—		%	2		%	100		%
Change since June 30, 2023
	$	152,778		$	15,081		$	(8,416)		$	(4,535)		$	(14,755)		$	140,153
	18		%	5		%	(19)		%	(63)		%	(32)		%	11		%

As of June 30, 2023:


	Subscription services						Subscription license			Perpetual license			Consulting			Total
	Pega Cloud			Maintenance
1 year or less	$	397,183		$	214,579		$	35,616		$	4,979		$	37,355		$	689,712		55	%
1-2 years	238,691			58,551			3,026			2,252			6,772			309,292			24	%
2-3 years	124,616			25,103			6,764			—			1,523			158,006			12	%
Greater than 3 years	101,494			7,592			—			—			—			109,086			9	%
	$	861,984		$	305,825		$	45,406		$	7,231		$	45,650		$	1,266,096		100	%
% of Total	67		%	24		%	4		%	1		%	4		%	100		%

PEGASYSTEMS INC.

RECONCILIATION OF GAAP BACKLOG AND CONSTANT CURRENCY BACKLOG

(in millions, except percentages)


	June 30, 2023		June 30, 2024		1 Year Growth Rate
Backlog - GAAP	$	1,266	$	1,406	11	%
Impact of changes in foreign exchange rates	—		7
Constant currency backlog	$	1,266	$	1,413	12	%

Note: Constant currency Backlog is calculated by applying the June 30, 2023 foreign exchange rates to all periods shown.

COVER PAGE	Jul. 24, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 24, 2024
Entity Registrant Name	PEGASYSTEMS INC.
Entity Incorporation, State or Country Code	MA
Entity File Number	1-11859
Entity Tax Identification Number	04-2787865
Entity Address, Address Line One	One Main Street
Entity Address, City or Town	Cambridge
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02142
City Area Code	617
Local Phone Number	374-9600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $.01 par value per share
Trading Symbol	PEGA
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Central Index Key	0001013857