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Investing.com -- Pegasystems Inc . (NASDAQ:PEGA) saw its stock surge 17.8% after the enterprise software company reported first quarter earnings and revenue that far exceeded analyst expectations.
The company posted adjusted earnings per share of $1.53, beating the consensus estimate of $0.54 by $0.99. Revenue for the quarter came in at $475.63 million, significantly above the $357.24 million analysts had projected and up 44% YoY.
Pegasystems’ strong performance was driven by robust growth in its subscription business. Subscription revenue jumped 50% YoY to $414.05 million, accounting for 87% of total revenue. Within that, subscription license revenue surged 195% to $186.56 million.
"Pega GenAI has dramatically transformed how we engage with our clients," said Alan Trefler, Pega founder and CEO. "Pega solutions and our approach to AI enables clients to accelerate progress in reaching their digital and legacy transformation goals."
The company reported that its Annual Contract Value (ACV) grew over 13% YoY, while Pega Cloud ACV increased 23% YoY. Operating cash flow rose to $204 million and free cash flow reached $202 million in Q1.
Ken Stillwell, Pega’s COO & CFO, noted, "We accelerated ACV growth and delivered record free cash flow in Q1 2025, reflecting the benefits of the subscription model."
Pegasystems did not provide specific guidance for upcoming quarters or the full year in the earnings release.
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