Pegasystems at Citi Conference: AI Blueprint Drives Growth

On Thursday, 04 September 2025, Pegasystems Inc (NASDAQ:PEGA) participated in Citi’s 2025 Global Technology, Media and Telecommunications Conference. The discussion, led by CEO Alan Trefler and Kenneth Stillwell, revolved around the strategic impact of their AI-driven Pega GenAI Blueprint. The executives highlighted both the transformative potential of Blueprint in modernizing legacy systems and the challenges of quantifying its direct impact on annual contract value (ACV) growth.

Key Takeaways

• Pega GenAI Blueprint is pivotal in transforming Pega’s go-to-market strategy.
• The company expects to meet or exceed ACV and free cash flow targets for the year.
• Blueprint’s adoption is accelerating sales campaigns and expanding the sales pipeline.
• Legacy transformation remains a significant priority for clients.
• New partnerships with Cognizant and EY are enhancing Blueprint’s reach.

Financial Results

Revenue Growth and ACV:

• Pega reported a 14% increase in ACV for the past quarter.
• The company anticipates benefiting from Section 174, potentially boosting cash flow by $20 million this year.
• Despite strong Q3 results last year, Q4 is expected to present easier comparisons.

Comparisons and Linearity:

• Enterprise deals show variability throughout the year, impacting linearity.
• Q3 of the previous year poses a challenging comparison for the current year’s Q3.

Operational Updates

Blueprint Adoption and Impact:

• Blueprint is altering the sales model by enabling immediate ideation sessions.
• Clients are integrating Blueprint into their software development lifecycles.
• Blueprint facilitates the uploading of various documents and automates backend connections.

Go-to-Market Strategy:

• The new strategy simplifies seller onboarding and targets new logos via partner channels.
• Partner blueprints allow partners to integrate their intellectual property privately.

Legacy Modernization:

• Clients are using Blueprint for legacy application transformation.
• Legacy transformation is now a universal discussion point with clients.

Future Outlook

Strategic Focus:

• Pegasystems plans to leverage Blueprint to enter new markets and verticals.
• Emphasis on partner education and collaboration is a priority.

Market Dynamics:

• The market showed resilience despite some uncertainty earlier in the year.
• Legacy transformation projects continue to drive market momentum.

Q&A Highlights

Blueprint Integration and Customer Success:

• Vodafone completed a project in two months using Blueprint, which would have taken a year otherwise.
• The motto "no sprint without a blueprint" underscores the tool’s importance.

Use Cases and Customer Feedback:

• Blueprint is being used to define RFP requirements.
• Customers expressed a desire for earlier access to Blueprint in their processes.

Conclusion

For a deeper understanding of Pegasystems’ strategic initiatives and financial performance, readers are encouraged to refer to the full transcript below.

Full transcript - Citi’s 2025 Global Technology, Media and Telecommunications Conference:

Steve Enders, Analyst, Citi: Can it go?

Alan Trefler, CEO, Pega: Take it.

Steve Enders, Analyst, Citi: All right. Awesome. Thanks everybody for joining us this afternoon at Day Two of Citi’s Global TMT Conference. Steve Enders is part of the software research team here, and I’m very pleased to have both Alan Trefler and Kenneth Stillwell with us today from Pega. I want to thank you both for being here.

Alan Trefler, CEO, Pega: Thanks, Steve.

Kenneth Stillwell, Pega: Yeah, good to see you.

Steve Enders, Analyst, Citi: Yeah, maybe just to start, I know I don’t even know how long you’ve been public at this point, but maybe for those who might be a little bit newer to, newer to Pegasystems, just what should they understand about your business and some of the key initiatives for Pegasystems?

Alan Trefler, CEO, Pega: Pegasystems has been in the business of trying to help organizations improve their processes, bring intelligence, automation, and now using AI to do that in whole new ways. We really feel like we have an opportunity to really help businesses get closer to their customers and save money and be more responsive. I think there’s no time like the present.

Steve Enders, Analyst, Citi: All right. All that sounds good. I think there’s been a big focus over the past couple of days around AI, around the death of SaaS, as I think people have been putting it, and the impact of low-code in the market. How do you see that impacting SaaS in general? How do you see it kind of impacting the future of Pega?

Alan Trefler, CEO, Pega: I think that SaaS is not one thing. There are lots of different species of SaaS products that are out there. I do think that the changes of AI are going to have a significant impact on some of them. In terms of how it’s going to affect Pegasystems, I think it’s really all for the good. First of all, this blueprint capability we’ve created, which is a way to have a customer interact with a very, very sophisticated AI engine, interact with our intellectual property in a language model structure, interact with the best practices drawn from the web to be able to redesign better than they would have imagined how their business should work, is exactly what you would today call a vibe solution. It’s not a programming solution.

You basically are interacting on your own terms with the software, and bang, out of it comes a design that I think would exceed your expectations. We’re actually continuing to add vibe-ish features to it so that some of the good things from the vibe software movement, like having somebody be able to describe what they want and then have the software go figure out how to do it, is exactly what Pegasystems is going to be able to do. The thing we have over the other vibe approaches is Pegasystems is the combination of this very rigorous AI layer, this blueprint layer that helps you rethink your business, coupled with an absolutely proven but state-of-the-art workflow and decisioning engine. What it means is that we use the AI to create, to define, to refine workflows.

Those workflows then can be seen, can be touched, can be tuned, can be verified, can be trusted, and are easy to navigate. It’s really well organized so that when you want to go back six months later, six days later, make changes, et cetera, you know what you’re changing, you know what the impact’s going to be. In a complicated system that’s just lots of generated code and lots of these vibe systems just vomit up code, if it’s a small system, it doesn’t really matter. You can probably get your head around it. If it’s anything meaningful, anything that we would typically do, there’s just no way you want to be looking at dozens or hundreds of code modules and trying to figure out what they do and figure out which one of them you have to change.

I really think that the whole vibe in code mission and approaches are really aimed at a very different class of problems and will probably do just fine for those problems. I think we can draw on some vibe concepts and use them effectively where it will make sense for ours and where we would never intersect with those really code generation players anyway.

Steve Enders, Analyst, Citi: I think that makes sense. I think one of the questions that I think we tend to get around Pega sometimes is, you know, I think there’s the view of like low code and you get the question of if you have these code generation solutions, is, you know, what does that mean for the adoption of low code from enterprise customers? Like, why would they pick to use a platform like Pega if they could try to build it themselves more efficiently? I guess, what’s your kind of perspective on that?

Alan Trefler, CEO, Pega: I know low code became a term used in the industry and we got tagged with it as well, inevitably just trying to explain. I’ve never thought of us as a low-code platform. I’ve thought of us as a model-driven platform because when we were originally coming up with the idea for Pega, when I was inventing it, the stimulus for it was CAD/CAM, computer-aided design, computer-aided manufacturing, where people use technology to design cars, piece parts, bottles, whatever they want to do. They use that to create a model of their objective, and from that model, they will then be able to actually even automate the manufacturing of what they do. Pega really operates not on low code. You don’t see any code in a Pega system ever.

What Pega really operates on is a model that describes, hey, here’s the work we do, here are the workflows, here are the personas, here’s the service levels we have, here’s the objectives, here’s what the customer’s trying to do. From that model, our workflow and decisioning engines know how to optimize, do machine learning based on what they discover from the work that’s being done, and try to continuously improve. I think that there are low-code players out there, but we’re certainly not one of them.

Kenneth Stillwell, Pega: Steve, I’ve talked to you in the past about how the phrase low code actually means two very different things, right? There is low code platforms, which is platforms that allow you to build relatively modest workflow type use cases without actually writing, like dropping in and writing code. Then there’s a concept of being scalable, which actually connects to low code, which is our model and the way we can configure and evolve our model is low code-ish, right? There’s a low code concept of how you actually iterate and design, develop, and improve and modernize and continue to keep an application healthy and new. Then there’s a low code platform. I think that people put us in a bucket that I’m not sure they necessarily know the difference between those two. As Alan mentioned, we wouldn’t consider ourselves an exchange for code.

We would actually consider ourselves a model-driven platform that allows a low code concept, meaning as you evolve, you’re not writing code, you’re actually configuring in the UI the changes that you want to make.

Steve Enders, Analyst, Citi: Okay, that makes sense. Let’s talk about blueprint because I think that’s been a really interesting area that I think definitely has separated you from others in the industry. Can we just talk about where blueprint is today and where we are in terms of the customer adoption cycle and their use of blueprints?

Alan Trefler, CEO, Pega: Sure. So Blueprint has completely changed our go-to-market model and is continuing to do so. Blueprint is a very sophisticated AI-powered engine for working with a business person or a group of business people, enabling them to collaborate, enabling them to take best practices from Pega, best practices from the internet, and their own intellectual property, mix them all together, and from that establish the model. The model looks, happily, the model looks exactly like the Pega model that you would have created by hand, you know, three years ago. We have been able to leverage the very rich and, I think, well-respected engines that people use to do enormous amounts of automation and enormous amounts of customer service. We have been able to now completely change the way that both people buy it and the way that people implement with it.

Candidly, I think that will greatly simplify adoption of the technology and should be terrific for our business and our customers.

Steve Enders, Analyst, Citi: As we think about what that means for the business model, is there anything that you can share on what it’s doing for deal velocity, maybe what it’s doing for new ACV, what it’s doing for the top line?

Kenneth Stillwell, Pega: I think there’s a few aspects to this that come to mind. One, Alan mentioned it changes the starting point of how an account executive begins a sales campaign. They don’t begin a sales campaign really trying to get the next meeting and the next meeting, and then you can bring a sales engineer in and then maybe you can build a demo. It’s changing that all to, we’re going to talk about that in the first meeting, right? We’re going to really use blueprint to get into an ideation session, really. Step one. Step two is it changes the mix of the team that we have in sales because now you’re not thinking about all these sequential or serial steps that actually happen around a sales campaign. You’re thinking about a team that’s really going from discussion, ideation, right into build, right into that actually getting something that’s working.

You think about how does that change the partner ecosystem on the go-to-market side and how that might create a really, a kind of a pull from the market where they wouldn’t have otherwise had an opportunity to do that. I think there’s a lot of different dimensions around how it changes the model. What we’ve seen early on is that we’ve seen a lot of excitement with our clients to engage with blueprint. I’ve got kind of story and quote after quote and story after story from our sales teams around how our clients are really embracing this concept of like, let’s not move forward without doing a blueprint, right? Let’s not, let’s make that part of our software development lifecycle, which is amazing.

I think it also helps us get to new organizations and to new workflows in a way that we struggled with quite frankly in the past because of that upfront time. The last point I would make, which I think is probably the most interesting, is clients are trying to do legacy transformation. We’re 10% to 20% of the way through that journey as an industry. 20% is probably very generous. 10% is probably more accurate. Our clients have tons of systems that need to be modernized and they can only go after a small number at a time. With blueprint, we can give them the ability to evaluate, to ideate, to maybe move the needle on more of them and faster. To me, that’s the most exciting, we can help our clients move faster on that journey.

Steve Enders, Analyst, Citi: Okay, that’s great to hear. Maybe that’s a good point to kind of then dig into just on, you know, what Pega GenAI Blueprint can enable, like what you’ve done recently from a product perspective that can kind of better enable that legacy modernization and kind of really go capture some of those use cases out there.

Alan Trefler, CEO, Pega: There’s quite a bit. One of the nice sets of features that have come in in the last six weeks has been the ability to upload many different types of documentation that an organization might have access to and use those to grind together and influence the blueprint. For example, an organization can upload a procedures manual or upload a user manual or upload a testing document or upload a set of laws and rules or upload the sort of data interfaces to their backend systems. What blueprint will do is it’s going to incorporate these as it does the design of the workflows. For example, it can actually create the bindings, the connections between what that system will be and the actual backend customer system or backend accounting system, which historically, that’s exactly the sort of thing that was both arduous and error-prone to do.

We’ve been able to use the power of generative AI coupled with the structure, more power of blueprint to really handle that automation. You know, it’s not just that it’s faster and cheaper, but it actually does it better.

Steve Enders, Analyst, Citi: That’s good to hear. Maybe I’ll ask it a little bit differently. If you think back to when you were coming into Citi, I think almost 40 years ago as customer number one for Pega, how would you have done that differently based on where Pega is today with the capabilities that you have now?

Alan Trefler, CEO, Pega: It’s interesting because in some ways, the way we would have done it 40 years ago is the way that we were doing it three years ago. We had a team, and I really did this with Citi, so I’ll tell you, it’s pretty typical. We had a team who were sort of experts or known as quote design thinkers. They’re the ones who kind of look at a business problem, try to figure out, hey, what’s a whole better way to do this? They use really sophisticated tools. Back in the eighties, we used real sophisticated tools like whiteboards and Post-it notes. I hate to say that those are still very much the tools that are used today.

People will sit in front of a whiteboard and a Post-it note, maybe they’ll post it with a Post-it note, maybe they’ll have a mural computer system to also type into and draw pictures, but it’s remarkably primitive, remarkably sort of hand-cranked. With Pega GenAI Blueprint, it’s completely different. You put your insights, you put your objectives, you put your, to use your term, vibe into it. Literally in two or three minutes, you are challenged with a, what about this? Does this describe the type of work you want to do? It’s not like when you put in 100 words, you get 200 words back. The system goes out and it will give you the fleshed out version of all the different aspects of the work that this particular application needs.

If it’s a system to onboard customers, it will have information about the different things that happen during onboarding. It will tell you kind of what the stages and steps are. It will propose some of the standards that you might want to follow. It will explain who are the people, the personas who are going to be involved in the onboarding. All of these will come even without you having put anything in. The ideation that happens is at a whole nother level of candidly quality, but it still enables collaboration because you can put changes in, you can say, no, no, I want this to be different.

The engines will keep firing and keep taking your differences and your recommendations in, but reconciling them with what’s there to create something that’s better than some of the parts and allows multiple parties to even come in and collaborate at the same time.

Steve Enders, Analyst, Citi: Okay.

Kenneth Stillwell, Pega: If you think, Steve, I mean, what Alan mentioned three years ago, certainly in the eighties, there’s a lot of rich content that companies have, clients have, prospects have around documenting how things should be done, process manuals. There’s actually even visuals like taking a picture, running a video to be able to, and because of the power of Gen AI and Pega GenAI Blueprint, you can ingest that information in. That information can really quickly tell you exactly what’s happening, or at least give you a framework of starting what it believes is happening. You have the ability to clean that up and tweak that and put your personal touches, as Alan mentioned, collaborate with other business owners to make sure, is this right? Are we doing?

I’m just thinking about the value of that because most legacy modernization, you’re coming from a system that is not easy to intelligently say, here’s what it needs to look like in a new modern platform. Getting things like visuals, screen videos, process manuals, documentation, even BPMN kind of documentation, if it happens, getting information from how the application functions even is just, is incredibly helpful to construct what it is that you need when you’re modernizing versus the whiteboard and Post-it notes.

Alan Trefler, CEO, Pega: For example, at Pega World, and this is on our Pega World website, our Kerim Akgonul, our Head of Product, did an amazing demonstration in which he found an IBM mainframe 3270 screen, you know, those green screens, which I hate to say it, there are a lot that exist in the backs of back offices at many organizations. It didn’t even have documentation. They attached a screen recording device to it. They had a woman go through for 15 minutes how she uses it and just talk about what she was doing. They then fed that into blueprint. What came out was just mind-blowing in terms of taking the concepts, taking the ideas of this credit card processing system, and instead of just replicating them, actually enhancing them and making it accessible and easier to use and easier to understand.

The ability to use AI to rethink the current technical landscape, to even be able to take input from more than one application and combine them, is exactly what the promise of this technology was and what got us so excited when we saw it a couple of years ago.

Steve Enders, Analyst, Citi: Yeah, no, that’s great to hear. I mean, I think Blueprint’s been pretty exciting. Where are we at maybe from, you know, utilizing blueprints, taking that into creating a production application with Pega and utilizing that blueprint on the Pega platform?

Alan Trefler, CEO, Pega: Yeah. The way it works is Pega GenAI Blueprint operates, it’s available once again for free. It’s on pega.com and it enables the collaboration, et cetera, for any Pegasystems customer, prospect, anybody who wants to, anybody who wants to use it. If you decide you want to operationalize the blueprint, you then need to export it and download it either to a Pega cloud system or to your own on-prem system if you’re one of our on-prem customers. At that point, it becomes able to be hooked into your real operational infrastructure. We had on the main stage of PegaWorld in June, Vodafone stood up and they talked about how they had done in a couple of months something that would have taken them a year before. It’s also on video too. They were waxing poetic about how great it was.

The guy stood up and said, we have a new motto, no sprint without a blueprint. They’re using this as a standard way to ideate and think about lots of the technical work they’re doing because let’s face it, banks, insurance companies, healthcare organizations, governments, they run on workflows. Being able to have an engine that can really facilitate and automate that, I think is very broad applicability.

Steve Enders, Analyst, Citi: Maybe that’s a good example to go off of, like for that Vodafone example you’re talking about of them, you know, using blueprint for that application. If they were to do that in a more traditional method or in the past, how long would it have taken them to get that released if they were using a, I guess, more like code approach versus using Pega? Just what would that look like from a, how would it be different?

Alan Trefler, CEO, Pega: They’re a pretty sophisticated group and have all the right tools and great engineers. What I recall they described was that something that would have taken them a year was done in less than two months.

Steve Enders, Analyst, Citi: Wow.

Alan Trefler, CEO, Pega: Into production. The thing about that is speed is great, cost reduction is great, but the quality is really what was exceptional here.

Kenneth Stillwell, Pega: What might get lost in that is the quality point is that lives with you forever. When you think about that application continuing to modernize or taking on when Pega actually releases new capabilities and you move to a new version, that becomes simpler, right? This is also an overhead that our clients have as well. We are really thinking about like, let’s get this done fast, best practice, quality, and also the kind of the future proofing of the application. That’s where, you know, variability for just sake of variability is not helpful. Variability for unique business value is different. We want to really try to help our clients get the best practice approach to how to execute a workflow.

Steve Enders, Analyst, Citi: Okay, that makes sense. Maybe shifting gears a little bit, talk about the go-to-market side a little bit more. I think for one, it seems like there has been more of a focus on driving new logos, driving by new customers, new opportunities. I guess what does Blueprint enable that allows you to maybe lean into that motion again? How do you kind of think about the opportunity with partners to also kind of augment that approach?

Alan Trefler, CEO, Pega: I would tell you that Blueprint has massively simplified the ability to onboard sellers and get them to a point of competence and confidence. We used to historically have multi-month onboarding for sellers. We would run them through as much as five or six months of education, training, and practice before we would put them into the field. We knew that was arduous, but we wanted to make sure that they were really well equipped to do a good job. We’re now in a position where after two weeks, we expect the seller to be able to go and have an interaction with a customer. It’s working, and it’s working well.

I think we’re also, now that we’ve created these, what we call partner blueprints, where for several of our really leading partners, we’ve created a branded version of Blueprint that has, for example, Cognizant or EY, memorialized right on the face of the Blueprint and allows those companies, those partners, to put their intellectual property into our language model database in a completely private way. We can’t even see it. If one of those employees works with one of their customers, if they were to start selling and pitching their work based on their expertise using Blueprint and this Blueprint capability as a collaboration and ideation facility, then they’ll be able to take full advantage of what Blueprint can do, but I think leverage it with their own capabilities.

One of the important things that we need to try to do between now and the end of the year is begin to educate those partners so that they can feel comfortable and hopefully be really motivated to go and bring their own stories to customers, and be able to hopefully win their own business outside of what we would have thought of as our traditional Pega practices. These would be legacy transformation projects, SAP replacement projects, other types of projects where there’s a significant role for what Pega can do. Historically, to train somebody to be able to sell one of those things has been frankly probably just too hard to really contemplate a broad distribution. I think we have a chance to start getting new logos through that.

We’ve told our partners, historically, we were reticent about adopting more than a very narrow group of customers and target customers. We grew up on large, sophisticated businesses. We’ve now told our partners that if it’s one of their customers, we want them to bring Pega to that customer. That obviously opens up lots of logos and also potentially even different size organizations as well.

Kenneth Stillwell, Pega: One additional thing to add on there is, in the past, when we went after new logos without Pega GenAI Blueprint, we didn’t just need to hire an account executive and then ramp them and that delay. We also had to hire all of the other positions to actually help that account executive on those new logos. With Pega GenAI Blueprint, as we mentioned earlier, the account executive is the one delivering the blueprint. It does actually shrink the number of seller helpers that exist across that and actually helps us. Hiring and finding talent and assigning to the organization, et cetera, are all things that take time. Minimizing the amount of touch points and the amount of people and then the speed of the account executive and productivity, that’s a big factor too.

Steve Enders, Analyst, Citi: Okay, that makes sense. I do want to talk a little bit about maybe how that translates to the top line again and what that means for ACV growth. I mean, I think I’ve had a few quarters now of kind of accelerating top line. Just how much of that is kind of driven by what’s going on with Pega GenAI Blueprint? How do you kind of think about the customer demand at this point for taking on these kinds of solutions, just given the uncertainty that’s out there? Maybe we can start from there and we’ll dig in a bit.

Kenneth Stillwell, Pega: I would say it’s hard because Pega GenAI Blueprint is so embedded in our selling process. It’s hard to break apart or parse out the pieces of how many deals were impacted by Blueprint or not. I would say Blueprint’s everywhere. It’s part of who we are, and I think it has helped us speed up, get more pipeline, speed up the sales campaigns, et cetera. That’s a fact. The interesting kind of dimension of how Blueprint might actually help us in the future is really around attacking the new markets, attacking new verticals, attacking new logos, et cetera. I think the key in terms of that translation of what has Blueprint done so far is it’s everywhere. It’s part of how we engage with our clients, and we have tremendous success in terms of what we’ve seen for the first six months.

The last point I make on the market, the market went from really humming to March, some uncertainty to Liberation Day to January, to April and May were a little questionable. The quarter finished pretty strong in Q2, and I would say if you look at where we are now, I think the market’s held up really well.

Steve Enders, Analyst, Citi: Okay.

Kenneth Stillwell, Pega: I mean, the consumer, consumer credit, interest rates, like, you know, even inflation, I think that, you know, maybe to many of our surprises, it’s actually held up through the year. I think we’re seeing, we’re seeing some good activity. The last point on that, legacy transformation used to be a here and there discussion. Now it’s everywhere. That’s all clients talk about, cloud, AI, security, and transformation. That’s like, those are the themes.

Steve Enders, Analyst, Citi: I guess maybe how are the use cases that you’re maybe seeing today different than maybe how it was a couple of years ago, maybe pre-Pega GenAI Blueprint?

Kenneth Stillwell, Pega: Alan, you want to give some thoughts on?

Alan Trefler, CEO, Pega: Yeah, I think we’re seeing a couple of interesting differences. One, we’re seeing existing customers who have, in some cases, created almost a set of sandboxes, looking to do this to go wipe out some of the legacy applications they have that they really wish they didn’t. Almost every large company has many more applications in various levels of decay than they would want. We have customers who are basically going and literally knocking off hundreds of applications and moving them through blueprint to Pega Cloud in some cases in a couple of weeks. That both gets rid of the possible risky, dangerous applications, but they’re also getting more value out of some of them. They’re also able to make that happen. I would describe those as just an ongoing stream of quick wins that can be pointed to.

We’re seeing organizations using blueprint to take, you know, one of the great meetings I was in, and an organization had issued an RFP that we had responded to and won and implemented. The salesperson came in and in the course of the meeting, when I was there, he actually fed that three-year-old RFP into blueprint. They sat for five, ten minutes while it ate it and chopped it up and did it. It was big. Then they looked at it and the customer said, "My God, I wish, I wish we had had that." When that happens, all of a sudden people get a completely different view. I mean, being able to move people from an RFP way of thinking through paper and the old traditional procurement processes to actually, I’ve got organizations that are using blueprint to define those RFP requirements.

I’m perfectly happy, by the way, if somebody wants to use blueprint and send it to my competitors as well as me, that’s fine. I think it’s probably going to turn out for me more to be good more often than not.

Steve Enders, Analyst, Citi: Sure.

Alan Trefler, CEO, Pega: It’s a really good way to design and define how you want your business to operate. I think it’s changing everything from the very simple and quick to the strategic and things that would have gone as multi-year RFPs. It’s almost hard for me to calibrate how large this has the potential of being, but I think it’s really a great application of AI.

Steve Enders, Analyst, Citi: That makes sense. I only have a couple of minutes left. I do want to ask on the model again. I think you grew 14% the past quarter in ACV. I think that’s been kind of above what you were targeting for the year. Just what should we be kind of keeping in, keeping into mind for the back part of the year to kind of bridge that gap? Or is there opportunity for us to kind of see growth above that level?

Kenneth Stillwell, Pega: Because we don’t have a model that is like a same-store sales model where it’s that consistent quarter to quarter, year to year, there are variabilities in the year. Two variabilities I would point to in the back half of the year: last year in Q3 was probably our strongest Q3 maybe ever. It was a very strong, very difficult compare in Q3, and we actually have an easier compare in Q4. I would just say the linearity of our business enterprise is not straight line, so just keep that in mind.

I would also say that because of where we are at the halfway point, and I’m talking in constant currency, everything I say is in constant currency, where I look at where we are at the midway point of the year, certainly it sets us up to meet or exceed the targets that we have for the year, both in ACV and in free cash flow, which are our two big measures, as you know, Steve. I would say just really the dynamic in the back half of the year is just remember Q3 tough compare, Q4 a little bit easier to compare, really well positioned at the midway point.

Steve Enders, Analyst, Citi: On the cash flow side, I know there’s the new tax bill that came out in the past couple of months. How should we think about the impact that maybe that has on the model for this year?

Kenneth Stillwell, Pega: Yeah, we’re going to get some benefit of increased cash flow over what we originally modeled for the year because of, specifically, the Section 174, which minimizes the requirement to capitalize R&D, and which then means we have a higher in-year deductibility. That’ll help us probably in the tune of, you know, $20 million or so for the year.

Steve Enders, Analyst, Citi: Okay. All right. I think we’re at time here. Alan, Ken, I want to thank you so much again for being here. I want to thank everybody in the room for being here as well. Thanks again.

Kenneth Stillwell, Pega: Thanks, Steve.

Alan Trefler, CEO, Pega: Thank you. Thanks, Steve.

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