Latest news with #PegaGenAIBlueprint
Yahoo
5 days ago
- Business
- Yahoo
ServiceNow vs. Pegasystems: Which Workflow Automation Stock Leads Now?
ServiceNow NOW and Pegasystems PEGA are major players in the workflow automation sector, offering enterprise solutions that streamline business processes through automation and AI integration. While NOW's integration of AI into its platform has boosted adoption and performance, solidifying its role in digital transformation, PEGA has advanced its platform with tools like Pega Gen AI Blueprint to optimize application workflows and enhance customer the Mordor Intelligence report, the workflow automation market size is projected to be valued at $23.77 billion in 2025, and is expected to reach $37.45 billion by 2030, witnessing a CAGR of 9.52% during the forecast period from 2025 to 2030. NOW and PEGA are likely to benefit from the significant growth opportunity highlighted by the rapid pace of or PEGA — Which of these workflow automation stocks has the greater upside potential? Let's find out. ServiceNow has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.A strong and frequently updated portfolio is helping ServiceNow win customers on a regular basis. NOW had 72 transactions of more than $1 million in net new annual contract value (ACV) in the first quarter of 2025. The company expanded its customer relationships, reaching 508 customers with more than $5 million in ACV at the end of the reported quarter, which represents 20% year-over-year customer expanding portfolio has been noteworthy. In May 2025, ServiceNow introduced its Core Business Suite, an AI-powered solution designed to streamline and transform core business operations, including HR, finance, procurement, facilities, and legal, by unifying workflows and automating processes across departments to improve efficiency, reduce time to value, and enhance employee rich partner base, which includes the likes of Amazon, Microsoft, NVIDIA, Five9, Visa, Snowflake, Zoom, Siemens, Rimini Street, IBM, Genesys, Fujitsu, Equinix, Boomi and Infosys, is a key catalyst for future prospects. Pegasystems is benefiting from strong demand for its GenAI Blueprint solution, which is an agent that uses AI to combine the company's best practices, as well as clients' and partners' knowledge, to design enterprise workflow applications. More than 1,000 new Blueprints are being created every week, more than double from a few months on this momentum, PEGA recently expanded its PEGA Blueprint platform with advanced agentic AI capabilities to accelerate digital transformation by analyzing and converting legacy system assets into modern cloud-ready applications. The latest announcement streamlines legacy analysis, enabling faster, more informed application also announced Powered by Pega Blueprint, a solution enabling system integrators to integrate their own intellectual property and industry expertise into Pega's AI-driven workflow designer. This helps partners deliver faster, more customized enterprise transformation and drive greater client success. PEGA's Gen AI blueprint is being widely adopted by tech giants like Accenture, Cognizant, Infosys, Capgemini, TCS and Wipro for client engagements. In first-quarter 2025, PEGA saw a 13% year-over-year rise in ACV to $1.45 billion, driven by strong demand for Pega GenAI Blueprint. In the year-to-date period, NOW shares have lost 4.5% while PEGA shares have gained 4%. NOW's share price has declined due to increasing macroeconomic challenges and uncertainty attributed to higher tariffs. The increase in PEGA's shares can be attributed to its expanding portfolio and the growing popularity of its Gen AI Blueprint. Image Source: Zacks Investment Research Valuation-wise, NOW and PEGA shares are currently overvalued as suggested by a Value Score of F and D, terms of the forward 12-month Price/Sales, NOW shares are trading at 14.95X, which is higher than PEGA's 5.04X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for NOW's 2025 earnings is pegged at $16.51 per share, which has increased 0.18% over the past 30 days, indicating an 18.61% rise year over year. ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote The Zacks Consensus Estimate for PEGA's 2025 earnings is pegged at $3.30 per share, which has remained unchanged over the past 30 days, indicating an 8.91% increase year over year. Pegasystems Inc. price-consensus-chart | Pegasystems Inc. Quote NOW's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average surprise of 6.61%. PEGA's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average surprise of 94.01%. The average surprise of PEGA is higher than that of NOW. While both NOW and PEGA stand to benefit from the growing workflow automation sector, PEGA offers greater upside potential with its rising adoption of GenAI Blueprint, strong partner engagement, and higher earnings surprise history, driving impressive growth and client robust AI portfolio and strong partner base are expected to drive its clientele. However, unfavorable forex amid a challenging macroeconomic environment, stiff competition and lingering concerns related to tariffs are a PEGA carries a Zacks Rank #2 (Buy), making the stock a stronger pick than NOW, which has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ServiceNow, Inc. (NOW) : Free Stock Analysis Report Pegasystems Inc. (PEGA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
24-04-2025
- Business
- Yahoo
Pegasystems Inc (PEGA) Q1 2025 Earnings Call Highlights: Strong ACV Growth and Debt-Free Milestone
Annual Contract Value (ACV): Increased by $74 million, with a growth rate of over 13% year over year. Pega Cloud ACV: Grew by 23% to $700 million. Free Cash Flow: Generated $202 million in the first quarter. Share Repurchases: Approximately $1.5 million shares repurchased for $120 million, reducing outstanding shares by nearly 550,000. Debt Status: Fully repaid remaining convertible note balances of $468 million, achieving debt-free status. Warning! GuruFocus has detected 9 Warning Signs with VIRT. Release Date: April 23, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Pegasystems Inc (NASDAQ:PEGA) reported a strong start to 2025 with an impressive increase in annual contract value (ACV) by $74 million, marking a 13% year-over-year growth. The Pega GenAI Blueprint has significantly enhanced sales processes, allowing for faster and more effective client engagement, which has contributed to the company's strong performance. Pega Cloud ACV grew by 23% to $700 million, indicating successful cross-selling and upselling strategies and a strong focus on cloud transformation. The company achieved $202 million in free cash flow in Q1, surpassing the total free cash flow generated in the entire year of 2023, demonstrating efficient cash management. Pegasystems Inc (NASDAQ:PEGA) has become debt-free after fully repaying its convertible note balances, strengthening its balance sheet and financial position. Currency fluctuations have impacted Pega Cloud revenue, creating discrepancies between ACV growth and revenue realization. There is a noted lag in converting ACV and backlog into revenue, which may affect short-term financial performance visibility. The macroeconomic environment remains uncertain, particularly in Europe, which could influence customer buying behavior and sales cycles. Despite strong ACV growth, there is concern about the variability of term license revenue due to accounting practices, which may lead to inconsistent revenue recognition. The competitive landscape is crowded with numerous vendors offering similar AI-driven solutions, making it challenging for Pegasystems Inc (NASDAQ:PEGA) to differentiate its offerings in the market. Q: Can you explain the factors behind the strong performance in term licenses and the discrepancy between Pega Cloud ACV bookings and revenue? A: Kenneth Stillwell, CFO and COO, explained that term license revenue can fluctuate due to the nature of ASC 606 accounting, which causes variability in revenue recognition. Regarding Pega Cloud, the difference between ACV bookings and revenue is due to the time it takes for ACV and backlog to convert into revenue, typically a few quarters, along with currency impacts from the previous year. Q: How are customers responding to macroeconomic uncertainties, and have you noticed any changes in buying behavior or sales cycles? A: Alan Trefler, CEO, noted that while there is increased uncertainty, particularly in Europe, customer engagement remains high. The company tends to perform well in uncertain times, and there hasn't been a significant change in customer buying behavior or sales cycles. Q: What impact has Blueprint had on deal influence and pipeline generation? A: Alan Trefler stated that Blueprint has influenced every piece of business, breaking down barriers between business and technical teams and becoming a ubiquitous tool in client engagements. It has significantly changed the business by facilitating faster and more effective communication and solution visualization. Q: How do you view the competitive landscape with many vendors claiming to offer agentic solutions, and how does Pega differentiate itself? A: Alan Trefler highlighted that Pega's approach combines language models with workflows, providing a clear advantage over competitors who rely heavily on prompt engineering. Pega's solutions offer predictability and reliability, which are crucial for enterprise-scale applications, setting them apart from other vendors. Q: What are your thoughts on the Rule of 40 targets and the balance between ACV growth and free cash flow margins? A: Kenneth Stillwell emphasized that the company aims to accelerate growth while improving operating leverage. They are optimistic about expanding both growth rates and free cash flow margins, maintaining a focus on strategic growth without compromising profitability. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
24-03-2025
- Business
- Yahoo
Pega Named a Leader in Customer Relationship Management Software by Independent Research Firm
WALTHAM, Mass., March 24, 2025--(BUSINESS WIRE)--Pegasystems Inc. (NASDAQ: PEGA), The Enterprise Transformation CompanyTM, today announced Forrester Research has named Pega a Leader in The Forrester WaveTM: Customer Relationship Management (CRM) Software, Q1 2025 (1). Pega earned the highest possible scores in criteria such as AI (predictive, generative, agentic), vision, and roadmap. The report states: "Pegasystems AI anticipates customer intent and guides users on how best to engage. Robust self-service capabilities enable customers to complete real work, with seamless transfers to the front office. Process automation coupled with process mining tools focus the front office on work that matters and surface insights on process performance." On Pega's generative AI capabilities, the report states: "Gen AI is embedded throughout the CRM... Of particular note is Pega GenAI Blueprint, which uses genAI coupled with the vendor's industry knowledge to create CRM business processes. Together, these workflow automation and AI capabilities accelerate onboarding, ensure compliance, and pivot users to true value-added work." The report concludes that "Pegasystems is a trusted choice for large enterprises with complex environments and process-centric customer service where customer value management is a top objective." Pega was among the 12 most significant CRM providers evaluated for the report. Pega received the highest possible score in 15 of the 29 criteria, including lead management and digital sales engagement, customer success, sales execution, digital customer service, case management, customer service operations, coaching and learning, AI trust and security, and seven more. Forrester evaluated Pega Customer ServiceTM, Pega Sales AutomationTM, and Pega Customer Decision HubTM, part of the Pega InfinityTM suite of solutions that uses AI-powered decisioning and workflow automation to enhance customer engagement, improve customer service, increases sales efficacy, and automate business processes. Also mentioned in the report is Pega GenAI Blueprint™, Pega's app design-as-a-service tool, enabling users to go from app idea to functional app design exponentially faster and more completely than other workflow design tools. This report is among Pega's many recent analyst recognitions for its customer engagement, enterprise AI, and workflow automation capabilities. Recently, Pega was recognized as a Leader in the Gartner® Magic Quadrant for CRM Customer Engagement Center (CEC) 2024, as well as a Leader in The Forrester Wave: Real-Time Interaction Management, Q1 2024, The Forrester WaveTM: Customer Service Solutions, Q1 2024, The Forrester WaveTM: Task-Centric Automation Software, Q4 2024, and ranked highest across all Use Cases in the Gartner® Critical Capabilities for Sales Force Automation Platforms. For more background on these and additional analyst reports, visit Quotes & Commentary: "AI and automation are revolutionizing how brands across industries engage with their customers, ensuring they meet evolving expectations for fast and seamless service experiences," said Kerim Akgonul, chief product officer, Pega. "We believe this recognition further acknowledges that Pega's advanced generative AI, predictive AI, and workflow automation capabilities empower customer-facing teams to work smarter and more efficiently, allowing them to focus on delivering exceptional experiences during every interaction." Supporting Resources: Report access: The Forrester WaveTM: Customer Relationship Management Software, Q1 2025 Solution background: Pega Customer Service Solution background: Pega Customer Decision Hub Solution background: Pega Sales Automation Solution background: Pega GenAI Blueprint Forrester Research, "The Forrester Wave™: Customer Relationship Management Software, Q1 2025," by Kate Leggett, with contributions from Linda Ivy-Rosser and Faith Born, March 21, 2025 Gartner, Inc., "Magic Quadrant for the CRM Customer Engagement Center (CEC) 2024," by Pri Rathnayake, Wynn White, Drew Kraus, December 2024 Forrester Research, "The Forrester Wave™: Real-Time Interaction Management, Q1 2024" by Rusty Warner, February 26, 2024 Forrester Research, "The Forrester Wave™: Customer Service Solutions, Q1 2024" by Kate Leggett, March 6, 2024 Forrester Research, "The Forrester Wave™: Task-Centric Automation Software, Q4 2024" by Bernhard Schaffrik, Pascal Matzke, Faith Born, and Kara Hartig Gartner, Inc., "Critical Capabilities for Sales Force Automation Platforms," by Guy Wood, Adnan Zijadic, Steve Rietberg, and Varun Agarwal, August 2024 Forrester does not endorse any company, product, brand, or service included in its research publications and does not advise any person to select the products or services of any company or brand based on the ratings included in such publications. Information is based on the best available resources. Opinions reflect judgment at the time and are subject to change. For more information, read about Forrester's objectivity here. About Pegasystems Pega is The Enterprise Transformation CompanyTM that helps organizations Build for Change® with enterprise AI decisioning and workflow automation. Many of the world's most influential businesses rely on our platform to solve their most pressing 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 Pega (NASDAQ: PEGA), visit All trademarks are the property of their respective owners. View source version on Contacts Press Contact: Ilena Sign in to access your portfolio
Yahoo
14-02-2025
- Business
- Yahoo
Pegasystems Inc (PEGA) Q4 2024 Earnings Call Highlights: Strong Cloud Growth and Cash Flow ...
ACV Growth: Increased 11% year-over-year in constant currency. Pega Cloud ACV Growth: Increased 21% year-over-year in constant currency. Cash Flow from Operations: Grew 59% year-over-year to $346 million. Free Cash Flow: Grew 68% year-over-year to $338 million. Cash and Investments: $740 million as of December 31, 2024. Pega Cloud Non-GAAP Gross Margins: Increased by approximately 300 basis points year-over-year to 78%. Stock Repurchase: 884,000 shares repurchased for $73.5 million in 2024. 2025 ACV Growth Guidance: Expected to grow by 12% year-over-year. 2025 Free Cash Flow Guidance: $440 million, a 30% increase year-over-year. Warning! GuruFocus has detected 5 Warning Signs with GPN. Release Date: February 13, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Pegasystems Inc (NASDAQ:PEGA) achieved a Rule of 40 status, balancing growth and profitability, which is a testament to their strategic transition to a subscription cloud business. The company reported a significant increase in cash flow from operations, growing 59% year-over-year to $346 million, and free cash flow grew 68% year-over-year to $338 million. Pega Gen AI Blueprint is driving transformative change, with new capabilities that enhance legacy transformation and create new market opportunities. Pega Cloud ACV increased by 21% year-over-year in constant currency, indicating strong growth in their cloud offerings. The company has a strong cash and investment position of $740 million, providing financial flexibility to pay off convertible debt and repurchase shares. Currency headwinds impacted Pegasystems Inc (NASDAQ:PEGA)'s financial results, with a $40 million headwind in Q4 affecting Pega Cloud backlog and revenue growth. Maintenance revenue is expected to decline as the company transitions more clients to Pega Cloud, which could impact short-term revenue streams. Pega Cloud gross margins are expected to remain flat in 2025 due to investments in cloud migrations, limiting potential margin expansion. The company faces challenges in maintaining sales efficiency while increasing investment in sales and marketing to pursue new logos. There is uncertainty in the timing of client migrations from term licenses to cloud, which could affect revenue recognition and growth projections. Q: Can you discuss the investments in increasing sales coverage and how Blueprint is being used for net new opportunities? A: Alan Trefler, CEO, explained that Blueprint has transformed their sales approach by allowing demos specific to clients in the first meeting, reducing the need for extensive sales resources. This change enhances their ability to pursue new and existing opportunities more effectively and efficiently. Kenneth Stillwell, CFO, added that they now have a more targeted approach with better organizational coverage, reducing the need for a large sales team. Q: How should we think about the Rule of 40 mindset and potential for further optimization? A: Kenneth Stillwell, CFO, emphasized that there is no endpoint to improving the business. They aim to accelerate growth while maintaining margin discipline, potentially moving beyond the Rule of 40. Alan Trefler, CEO, added that they are focusing on opening the aperture for growth while maintaining discipline and sustainability. Q: Can you provide clarity on the linearity of ACV and the deal environment? A: Kenneth Stillwell, CFO, noted that currency impact was significant in Q4, affecting optics. The year was more balanced, with activity in the middle of the year. For 2025, they expect a strong year with Q1 and Q4 showing more activity in ACV growth. Q: What are the opportunities with legacy replacement using Blueprint? A: Alan Trefler, CEO, explained that Blueprint allows clients to rethink and replace legacy systems, not just wrap them. This capability enables clients to create cloud-native databases and integrate with existing systems, opening new opportunities for legacy transformation. Q: How is Blueprint impacting application go-lives and Pega platform consumption? A: Alan Trefler, CEO, stated that Blueprint is driving faster application go-lives and increasing platform consumption. Since its introduction, there have been over 70,000 Blueprint creations, with many being genuine systems that are starting to deploy into production. Q: How should we think about the financial impact of Blueprint on ACV growth? A: Kenneth Stillwell, CFO, highlighted two impacts: faster client engagement and sales efficiency. While client engagement is already impacting bookings, sales efficiency is still being rolled out. Blueprint is expected to drive scalability and efficiency in their go-to-market model. Q: What type of price uplift is seen with customers migrating to Pega Cloud? A: Kenneth Stillwell, CFO, noted that price uplift varies, typically ranging from 25% to over 100%, depending on the customer's previous contract and additional purchases during migration. Q: How is Pega Agent Experience being monetized? A: Alan Trefler, CEO, explained that Pega Agent Experience is integrated into the Infinity experience, with monetization based on the quantum of work done by customers, rather than user licenses. This approach aligns with the agentic universe and provides flexibility for customers. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
