Pegasystems Inc at Goldman Sachs Communacopia & Technology Conference Summary

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

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : <_ALACRA_META_ABSTRACT>There might be some new investors in the room. Maybe just start with Pega as an equity and a little bit about what you guys do operationally, what makes you guys -- this is an important time for the company, which we talk about here, but how investors should think about Pega equity opportunity going forward?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : And that launched recently, Pega Blueprint?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Spend a minute on powered by Pega Blue -- powered by Pega Blueprint. And why you guys try to launch that? And why that's important?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : We spent a lot of time talking about AI, where we are in the journey. Obviously, early days. Where do you think -- like are we in the first inning? Are we in the second inning?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Where is a lot of hype?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : So the next 12, 18 months as these clients are really focused on use cases, that's going to be a good moment for Pega, right? Because that's basically you're going to be there, helping them --

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : I gave you over on the --

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Let's move to financial metrics because you guys are at an inflection point here, I think. Last quarter, ACV was up 12% in, I guess, constant currency. Are you seeing -- what's causing that acceleration in the business?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : What about cloud ACV?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Do you agree about the inflection point?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Remaining performance obligation, how important of a metric is that --

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : So let's talk about profitability and free cash flow. Margins in the mid-20s, free cash flow margins, right? 26% is your guidance. Where can those margins be over time? When you think about all these levers we're talking about --

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Which is then 10-plus points where you are today? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 08, 2025 / 6:30PM, PEGA.OQ - Pegasystems Inc at Goldman Sachs Communacopia & Technology Conference

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Capital allocation. So you've been buying back stock. You retired your convert, right? How do you think about -- you got -- we just talked about cash flow compounding here. How do you think about capital allocation going forward?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Good question. On the multiple, is it 16x?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Is that so?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : But if you think about all the metrics we just went through, you're obviously trending well ahead of plan through the first six months of the year. The upside on free cash flow margins, what's your sense on why you trade at 16x and not -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 08, 2025 / 6:30PM, PEGA.OQ - Pegasystems Inc at Goldman Sachs Communacopia & Technology Conference

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : When you think about peers, again, not the ones that are not performing as well as you, but what peers do you look at operationally or financially or trading-wise that --

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Right. But if you hit those mid-30s targets over time --

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Everything else should --

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : So recently, Forrester [in] Pega, a leader in digital process automation platforms. Talk a little bit of what that means for the company and how important that is to customers, prospective customers, et cetera. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 08, 2025 / 6:30PM, PEGA.OQ - Pegasystems Inc at Goldman Sachs Communacopia & Technology Conference

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : It's big deal.

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : It's a big deal. It's --

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : And I assume you get feedback from customers -- prospective customers in that regard?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : So you have a long-term free cash flow target. But I guess, 2028 of $700 million plus, is that right?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Think about deconstructing that into some of the pieces. So what are some of the other KPIs need to look like? Or what's the road map of how you think about --

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Speaking of Amazon, you recently announced a strategic collaboration with them. So let's talk a little bit about that.

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Talk a little bit how that relationship has evolved over time.

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Super exciting. How about macro? We spent a lot of time debating how strong the economy is. We saw kind of a mixed employment report last Sunday. What is -- you obviously have a pretty large, sophisticated customer base. What are you seeing amongst the large enterprises across the US in terms of even globally?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : I don't think we know yet, right? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 08, 2025 / 6:30PM, PEGA.OQ - Pegasystems Inc at Goldman Sachs Communacopia & Technology Conference

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : I think we'll know over time. Maybe to wrap it up, and thank you for your time, but maybe just to sum up, so what do you think the next 12 months look like for Pega, I think from a stock perspective?

Question: Kurt Simon - Goldman Sachs & Company, Inc. - Analyst : Great. Well, thank you. Thanks for being here.