Pegasystems Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference Summary

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

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : <_ALACRA_META_ABSTRACT>Maybe I'll just start off with like we were just chatting right before this. I've been getting a lot of new inbounds of people saying like, look, what is Pega? I haven't looked at this in a while or I haven't heard of this company before but clearly, stock is doing. So maybe let's just start like an overview of current Pega, right? Like what's changed in the business? What's exciting? And especially as we think about the role that you play in this new AI world and new AI paradigm we're in, maybe let's start with that.

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Yes. Actually, maybe let's just dive right into Blueprint. I think there's still a little bit of maybe people's learning curve for people understanding exactly what Blueprint is. Maybe can you talk about like what are you seeing customers utilizing Blueprint for? Any like live examples you can give and how this manifests itself for your customers, whether it's like implementation time, ROI, LTV, whatever metric you want to use?

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Yes. And maybe when we think about Blueprint, I guess maybe two pieces there. Number one, how should we be thinking about monetization, understanding it's more through consumption rather than like a distinct SKU? But then the usage of Blueprint between first-party Pega for customers, your service partners because I know you've talked about the adoption there and then just internally by customers themselves.

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Yes. Awesome. So a major topic that's been coming up really over the past couple of months is really just around maybe enterprises dragging their feet on AI more because of concerns around security, privacy, governance, et cetera. What are you hearing in terms of concerns from your customer base in terms of fully going AI first, which is clearly the dream that we all want to happen? And what's -- either what's the tipping point to get them over the edge or what's in your control that you can do to kind of hold their hands and get them down that AI journey, just like you've done that with digital transformation?

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Yes. So I think that's a great segue to the next question, which is when we think about Pega AI, there's obviously the blueprint, and we could probably spend the entire session talking about Blueprint. But then there's the other angle, which is you're just introducing more complexity with all these AI agents that might be coming from other software vendors or internally built and things like MCP, A2A are still super, super nascent. What role do you think Pega can play in bringing together both multiple agents and adding that agent orchestration layer as well as getting AI agents that can connect with whether it's on-premise software, cloud software or even COBOL systems sitting on the mainframe?

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Yes. That makes a lot of sense. One thing that we've thought about with Blueprint is you've clearly had a lot of success expanding just within your existing customer base. Given now that Blueprint can lower barriers to entry, lower time to get up and running, how do we think about this as maybe being an accelerant to new logo activity, right, and having that -- unlocking that as a growth driver for Pega?

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : That makes sense. I want to maybe take this now to the model, right? If Blueprint continues to get greater traction, more success, et cetera, how should we be thinking about the impact of this on margins? And maybe I'll bring it a little bit closer, which is if we think about the product investment you have to make on the R&D side, the additional COGS from these LLMs, just how should we be thinking about the overall impact, both in the near term and long term? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 18, 2025 / 6:20PM, PEGA.OQ - Pegasystems Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Yes. And maybe let's take it now. I mean, look, you've talked about Rule of 40 since before any other public company CFO, at least in software, have been talking about it and give you tons of credit for that.

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : I had, actually, never heard of the Rule of 40 until you mentioned it like a decade ago, to be fair. But maybe walk us through. So you're basically knocking on Rule of 40 territory at this point. And you've done it with improving margins but also growth rates that are better than I think we expected. And you kind of hinted that there's maybe potentially room for further acceleration 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. NOVEMBER 18, 2025 / 6:20PM, PEGA.OQ - Pegasystems Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference So can you talk about, number one, what have you done internally to kind of get everyone at Pega aligned with this Rule of 40 mindset? And number two, as we look out over the next several years, if everything goes right, how do we think about your ability to go beyond the Rule of 40?

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Yes. That's why we have to think about long-term Rule of 40, not just like what it is in this --

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Love it. Love it, love it. All right. Then maybe I want to turn to the competitive landscape, right? So obviously, it's evolved tremendously over time, right? It used to be Oracle and IBM. And then you -- you've always had Appian there. You had the rise of like UiPath Automation anywhere. Maybe there's some potentially AI natives out there. Just maybe can you walk us through how you're thinking about the current competitive environment and like how that's evolved, especially during your time as CFO?

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Well, and we ended just on time. I think it's the first time we've done this in a fireside chat. So great time management here. Thanks, Ken. Thank you, everyone, for being here.