Pegasystems (PEGA)

Low-code business process automation (BPM) + AI decisioning — process workflows & next-best-action

AI exposure 10% — derived from reported segment revenue, not asserted.

Where it sits

Software Stack → Enterprise & Business Software · figures rebased to Q2 2026, reported 2026-07-22

Pega Cloud — low-code BPM platform + customer decision hub + Pega GenAI Blueprint (cloud) leads 3 businesses in this sub-tier that together are 100% of revenue, so Enterprise & Business Software is effectively the whole company rather than one leg of it.

Reported segments

• Pega Cloud (subscription) — 50.8% of revenue
• Term licence + maintenance — 37.2% of revenue
• Consulting — 11.9% of revenue

Pegasystems ($420.7M Q2 2026, +9% YoY; shares fell sharply on the print). Subscription was 88% of revenue, of which Pega Cloud 50.8% ($213.9M, +28% — the growth engine) = primary B5 Enterprise & Business Software; term licence and maintenance 37.2%; Consulting 11.9% ($50.23M, -13%). The cloud transition is working while consulting shrinks.

How the 10% is built

• Pega Cloud (subscription) — 50.8% of revenue × 15% AI-driven (disclosed). Pega GenAI and agentic workflow features are embedded in the platform, on a base of conventional business-process automation
• Term licence + maintenance — 37.2% of revenue × 5% AI-driven (estimate). Self-managed deployments on older licence terms
• Consulting — 11.9% of revenue × 5% AI-driven (disclosed). Implementation services

Investment read

Moat. Low-code BPM and real-time decisioning built into bank, insurer, telco and government workflows — genuinely hard to rip out, and the installed base is not churning. What is contested is the category itself: ServiceNow, Salesforce Agentforce and in-house LLM tooling now compete for the same net-new budget.

Bottleneck / pricing power. Switching costs are intact — Pega Cloud ACV +22% to $926M, now 57% of total ACV, with record H1 2026 free cash flow of $288M — but new-logo pricing power is not: total ACV grew just 7% (+8% cc) against a ~15% full-year ambition, a second consecutive shortfall.

Role in the AI stack. The low-code BPM + AI-decisioning layer.

Connected companies

• ServiceNow (NOW) — PEGA competes with: workflow/BPM — ServiceNow vs Pega
• UiPath (PATH) — PEGA competes with: process automation — Pega (BPM) vs UiPath (RPA)

Others in Enterprise & Business Software

• ServiceNow (NOW)
• Salesforce (CRM)
• SAP SE (SAP)
• Workday (WDAY)
• Oracle (ORCL)
• Intuit (INTU)
• HubSpot (HUBS)
• Twilio (TWLO)
• UiPath (PATH)
• Veeva Systems (VEEV)
• Adobe (ADBE)
• Accenture (ACN)

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