Pegasystems Q1 Earnings: 44% YoY Revenue Surge, 195% Subscription License Sales Growth, and 21% Backlog Increase

Pegasystems (PEGA) surged over 30% after Q1 revenue jumped 44% YoY to $475.63 million, driven by a 195% surge in subscription license sales. The company swung to a net profit of $85.42 million, with annual contract value up 13% to $1.445 billion and cloud contract value up 23% to $701 million. Operating cash flow and free cash flow also rose 13% from a year ago.

Pegasystems Inc. (NASDAQ: PEGA) has reported robust financial performance for the first quarter of 2025, with revenue jumping 44% year over year (YoY) to $475.63 million. The company swung to a net profit of $85.42 million, driven by a significant 195% surge in subscription license sales. The annual contract value (ACV) grew by 13% to $1.445 billion, while Pega Cloud ACV increased by 23% to $701 million. Operating cash flow and free cash flow also rose 13% from a year ago.

The company's CEO, Alan Trefler, attributed the strong performance to the transformative impact of Pega GenAI, which has enabled clients to accelerate their digital and legacy transformation goals. COO and CFO Ken Stillwell highlighted the benefits of the subscription model, noting that it has contributed to the company's record free cash flow.

Pegasystems also reported a 21% year-over-year growth in its backlog, reflecting strong demand for its products and services. The company's operating expenses increased by 3% to $246.19 million, but this was more than offset by the significant growth in revenue and the increase in net income.

Looking ahead, Pegasystems expects to continue its strong performance, driven by the increasing adoption of enterprise AI decisioning and workflow automation. The company's forward-looking statements, however, come with the usual risks and uncertainties, including the potential impact of foreign currency exchange rates and the successful execution of investments in artificial intelligence.

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[1] https://www.stocktitan.net/news/PEGA/pega-gen-ai-powers-accelerated-q1-2025-9g00z57htqdj.html