The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: David Hynes - Canaccord Genuity Corp - Analyst
: Yeah, perfect. Typically we dig in on Q2 results. I'm going to skip that question for now. Q2 is another nice quarter. I want to ask you
a bigger picture question. If we zoom out, like how are you positioning the Pega story for investors these days? And how do you see
it kind of evolving over the next few years?
Question: David Hynes - Canaccord Genuity Corp - Analyst
: Yeah. Maybe I could ask you a non-Pega specific question, but we've been doing a ton of these fireside chats with software companies.
We've all seen how the space has traded off of Q2 earnings where I felt like results were generally pretty good and the stocks struggled.
I think there's the narrative that's bubbling up, whether it's tied to GPT-5 or whatever, that AI is going to kill the SaaS category. What's
your perspective? What do you make of that?
Question: David Hynes - Canaccord Genuity Corp - Analyst
: Yeah, good. My wife will be thrilled to hear that SaaS is not going away. I may still have a job in a couple of years. That's a good thing.
Question: David Hynes - Canaccord Genuity Corp - Analyst
: Yeah. That's right. That's right.
Question: David Hynes - Canaccord Genuity Corp - Analyst
: Let's double click on AI specifically, Pega's AI Blueprint and kind of how you're working with customers and how you're seeing them
incorporate AI to change the way they build applications and workflow.
Question: David Hynes - Canaccord Genuity Corp - Analyst
: Are you seeing an acceleration in legacy application replacement, would you say, or is it just kind of steady? And I guess what are
the triggers inside of a customer that kind of catalyzes that step?
Question: David Hynes - Canaccord Genuity Corp - Analyst
: Yeah. Let's maybe bridge some of these business tailwinds into the business model a little bit. Maybe this one's for you, Ken. But I
feel like over the last few years, first it was kind of the focus on the move to subscription, then it was the focus on rule of 40. Talk
about kind of progress against those initiatives and where we are today.
Question: David Hynes - Canaccord Genuity Corp - Analyst
: Yeah, maybe while we're talking about margins. You do have some intermediate-term goals out there for '28. I think you've talked
Question: David Hynes - Canaccord Genuity Corp - Analyst
: That's breaking news at the Canaccord conference, buyback. No, I'm joking. Okay, Alan, to you. You recently announced a partnership
with AWS.
I'd love to talk a little bit around how Pega and AWS, maybe some of the large SIs, can work together on modernization programs
for your customers.
Question: David Hynes - Canaccord Genuity Corp - Analyst
: It's a good segue way to what I was going to ask next, which is, we've talked about the established categories and the verticals where
you have a strong presence and you've been there for a long, long time. Where should you be that you're not today? Like, where
can you take this?
Question: David Hynes - Canaccord Genuity Corp - Analyst
: We've covered a lot of ground. Our meter's running out on us, but maybe just as a concluding thought. You look out two to three
years, and what excites you most about the opportunity for Pega, the market, and what do you want investors to leave here with
today?
Question: David Hynes - Canaccord Genuity Corp - Analyst
: Yeah, excellent. That's probably a great spot to leave it. Thank you to the Pega team for being here. Obviously the business continues
to perform well, march towards those cash flow goals, and everyone will be very happy.
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