Pegasystems Inc at Canaccord Genuity Growth Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : With that, let's hop right into it. Ken, thank you, as always, for being here. I assume we're going to have some investors tuning in who aren't perfectly familiar with Pega. So maybe just as a backdrop, give us a quick overview of the business, the problems you guys see, what you're doing to solve them and then we can dig in on some of the fundamentals.

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, yes. Obviously, lots happening on that front. Maybe that dovetails into kind of what you saw in Q2. Q2 looked like a really solid quarter to me. Can you just talk about kind of recent quarterly trends, what drove the momentum in the business?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. Lots of good signals in there. Let's take a step back and talk about kind of the license transition that's going on and kind of where we are there. I mean obviously, we're moving from perpetual to subscription. Subscription growth is obviously now kind of driving the onus of growth that's outpacing the overall business. Just talk about that, like where we are in terms of your progress and what's left to do.

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, yes. Makes sense. I mean everything troughs and then it's kind of a layered cake and you don't get back to cash flow until you almost -- you lap the term of your contract terms, right?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, yes. Totally. Okay. And then that explains why the key metrics of the business, obviously, are ACV and RPO now in terms of kind of a measuring stick of bookings momentum, and that explains a lot of the reason why you're paying attention to those. Let's talk about the resellers. It seems like they're playing an increasing role in your success. Why is that? Why are the partners so important to accelerating growth?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, yes. Makes sense. I want to unpack something you alluded to earlier in Q2, which was the large existing client renewal. I think it was a multiyear contract. As part of that, they expanded their use of Pega. They extended the terms of their agreement, I think it came earlier than you guys were anticipating. Just talk about how that impacted revenue results for the quarter. And how did that deal contribute to ACV?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, yes. Totally. So obviously, coming off a really strong Q2, well, how is it set up for the back half of the year? Like is it possible we see ACV growth accelerate from here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 12, 2021 / 7:00PM, PEGA.OQ - Pegasystems Inc at Canaccord Genuity Growth Conference (Virtual)

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, yes. You get paid to set a low bar, and Hayden gets paid to jump over it, right?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. Even better. All right. So let's take a step back, right? You've been at Pega for a few years now. I'm going to ask a backward-looking and then a forward-looking question. Like what have the biggest changes been since you joined Pega? And then looking forward, what do you think the biggest changes are going to be over the next couple of years?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, yes. Are there any like early data points or signals you can pull out of fnx activity that gives you confidence? Like how is it going so far?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, yes. And we hit on Hayden a couple of times throughout this in terms of some of the changes he's affected, et cetera. Can you just unpack those? Like what do you think have been the biggest things that he's brought to the go-to-market organization that maybe we were missing before?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, totally. So PegaWorld was virtual this year. How are you thinking about '22? And I guess just bigger picture, like when do you think you might

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. All right. Last one. As a golfer, I couldn't avoid putting this question into it. So you guys are sponsoring Leish. You got Mel Reid on the LPGA. You're sponsoring the Ryder Cup. Just talk about how that fits into the marketing strategy and the sponsorships that you're doing there.

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : All right. I'm going to hit you for tickets for Whistling Straits.

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, I think it will be good. Ken, thank you for doing this. Thanks for being here. Congrats on the continued success, and I look forward to keeping tabs on progress.