Pegasystems Inc at JPMorgan Global Technology, Media and Communications Conference (Virtual) Transcript

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

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : But to start with, Ken, maybe we can start with your changing role. And congratulations on that. You are now both a CFO and a COO. So help us understand, what does the addition of the COO role mean to your work going forward? Is this kind of a major change in your roles or responsibilities or it is more of a recognition of the work that maybe you have already been doing?

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Yes. No, maybe I should have asked you this first. For a few people maybe who doesn't know Pega, I mean Pega has been in the landscape for quite some time. Maybe it's been 40 years around maybe, if not less. And it's incredible that it's still kind of growing that 20% ACV growth. Help us maybe, very briefly, the -- where was it, where are you today and where are you kind of growing as a business, as a solution?

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Yes. Now you obviously squarely kind of sit in the customer experience space, which has recently gotten a lot of boost after the pandemic in terms of budgets kind of flowing into that space. As we come out of the other end of COVID, I mean based on your customer conversations that you're REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 25, 2021 / 8:25PM, PEGA.OQ - Pegasystems Inc at JPMorgan Global Technology, Media and Communications Conference (Virtual) seeing, do you feel like -- my statement about people putting more weight on the CX category as such versus your low-code/no-code development platform, would you say there is a weight, higher indexing by customers towards that category that you might benefit from?

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : So that orchestration piece that you're talking about, it seems to me that's what is kind of morphing into this thing you call the Process Fabric, right, which is kind of tying the low-code side of the business with the CRM side of the business and external applications and kind of bringing it all together, it seems like. But I think what had helped probably -- if you are able to kind of make it more tangible in terms of maybe your customer use case, like how is somebody using it or would use it in the future or currently using right it now.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : That makes a lot of sense. And I'm not quite sure who's doing something like that at this point in time. But how are you monetizing? First of all, is that generally available? Or is it close to be -- or is it in a beta? Like where is the maturity of the product at this point in time? And how are you monetizing it? Or how are you thinking of monetizing it?

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Is that vision kind of what Gartner and IDC is basically talking about? They call it hyper automation, right? And I forgot the term that IDC uses. I think Gartner uses hyper automation. It sounds very similar to the vision that you're laying out about Process Fabric.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Yes. That's probably a good segue to talk about RPA because I have actually gotten a few questions from investors, not right now but in the last week and so, about RPA. And obviously, after UIPath being public, that's kind of a hot topic. And you, Pegasystems, actually have the vision to -- OpenSpan, I think you bought it 2016 or something, right? And that was a time when people were hardly talking about RPA. But we haven't heard much from Pega about RPA per se. It seems like it's kind of embedded within this Process Fabric vision. So help me understand. One, how integral is RPA? It seems to me like RPA is required for this automation of task in processes that may not be right to be integrated with API. If you have a process, there might be a portion of those processes, which are tasks that is ideal for an RPA. And you have the RPA piece, you obviously have the API piece. And so you can talk a broader game and seam it all together as Process Fabric, that kind of vision. But is that correct? Is that kind of very integral to the Process Fabric vision? And then one question I have gotten, since you're a CFO, I'll ask you that, how big is OpenSpan at this point in time, right? I don't know if you have attributed revenue like that or not. But people have, I think, tried to kind of look at a sum of the parts valuation. What can I say OpenSpan is? And maybe I'll give x multiple to it and look at the rest of the business as y. So help us unpack that level.

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : So just to double-click on that, the robotics part that you're talking about, the Qurious acquisition that you did, right? And I saw a demo in the user conference where somebody calls -- I think an agent picks up and the other person is talking. And I think the Qurious application is kind of auto-populating the agent desktop and kind of surfacing stuff which he needs to, to answer that call, right? Is that kind of a good example of basically robotics that you're talking about?

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Yes, that demo was pretty powerful, and I had no idea that Pega was doing that kind of thing. We don't have too much time, but I wanted to go touch upon the go-to-market changes that have kind of put in place this year. Maybe talk about how extensive they are. I think Hayden Stafford REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 25, 2021 / 8:25PM, PEGA.OQ - Pegasystems Inc at JPMorgan Global Technology, Media and Communications Conference (Virtual) seems like have made some changes. And I guess, with respect to that, do you expect any kind of -- typically, when there is a change, there is some kind of a turbulence -- or not turbulence, it's the wrong word probably, but some kind of a disruption is the word, right? We did see ACV growth tick down a bit from 20% on a constant currency basis. So help us understand the trajectory of ACV, that curve. Maybe it starts a little bit lower this

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Right. Okay. But your long-term goal about accelerating ACV, right? It seems like we'll probably hear more about it in the Investor Day next week. With all the changes that's happening, I mean, product-wise, it seems like it's really good differentiated changes that is happening. Go-to market seems like -- I keep on forgetting his name -- Hayden has brought a lot of changes, hopefully, that's very good, and then the partner program. I mean would you say that ACV growth acceleration, I mean could we see it in more near term? I mean I'm not saying 2021 but more near-term versus like 5 years out or something, right?

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : Yes. Yes. Understood. And lastly, well, I'll ask you this question, let me check at this. Let me ask you this, do you feel like there's any investor misperception? As you talk to investors, do you feel like there is any misperception that is worth pointing out?

Question: Pinjalim Bora - JPMorgan Chase & Co, Research Division - Analyst : All right. With that note, thank you so much, Ken, really appreciate it. And thank you for joining.