Pegasystems Inc at Rosenblatt Securities Technology Summit (Virtual) Transcript

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

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Don, maybe just for starters here for some of the people listening in this morning, just give us a bit of a background or an overview on Pega and a bit of a background on your role at Pega. That would be helpful.

Question: Blair Abernethy - Rosenblatt Securities - Analyst : That's great, Don. And you've been in your role as CTO for a number of years now, I believe.

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Great. For sure, Chief Translation Officer, I think that's perfect, especially with the amount of change and innovation that's happening across the board with AI, which has really been around for a long time, but it certainly stepped on the accelerator in terms of profile in the last two years.

Question: Blair Abernethy - Rosenblatt Securities - Analyst : So maybe give us a little bit of a background on just prior to GenAI, what was sort of the Pega's experience? And what had you been doing in AI? And then maybe bring us up to date as to where you are today? Because you guys have -- with your Infinity 24.1, have a number of new capabilities that have been rolled out that were, well, previously unimaginable a couple of years ago.

Question: Blair Abernethy - Rosenblatt Securities - Analyst : That's great. And there's a lot of concerns or questions around monetization of AI, whether you're adding it into your products or creating new products. What's Pega sort of approach to monetization?

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Maybe take us back to Blueprint a little bit, because I think that's the one that I think is one of the more interesting ones that you guys have brought to market. it is a way to really accelerate overall digital transformation within your customer.

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Easiest way to understand it.

Question: Blair Abernethy - Rosenblatt Securities - Analyst : So this saves a huge amount of time for customers building new projects or working on new projects. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 13, 2024 / 3:00PM, PEGA.OQ - Pegasystems Inc at Rosenblatt Securities Technology Summit (Virtual)

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Sure. And is that -- Don, is that -- I mean, you've been talking about this for a couple of months. Is this in the market for customers now, or?

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Right, right. And presumably once customers start to use Blueprint and connect it into their existing systems, it becomes easier and easier to build the next process.

Question: Blair Abernethy - Rosenblatt Securities - Analyst : So if we look at your end market, your existing customers as an example, how far in do you think they are into their digital transformations at this stage? And just how much more work needs to be done? So I guess, -- and therefore, how excited are they about this kind of automation?

Question: Blair Abernethy - Rosenblatt Securities - Analyst : That's great, Don. Maybe you just help us understand a little better the competitive landscape for Pega kind of at the moment, and how this -- how some of these technologies are changing things or enabling you to differentiate in any way?

Question: Blair Abernethy - Rosenblatt Securities - Analyst : And the robotic process automation is an area you guys have been in for a long time. I know it's not a huge part of your business, but what's happening in that area? Is there any impact from AI in that area?

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Right, right. Okay, so excellent. (Event Instructions) Something else that you guys introduced last year was Pega Launchpad, which is really an app development platform. Maybe just to tell us how that's going? And are you continuing to innovate around that?

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Great. Great. Another area we were talking about in a prior call was around fraud detection for a lot of your banking customers in particular, I guess. Maybe give us a sense of what's the state of the art for you guys there and what's the opportunity can AI help you here as well.

Question: Blair Abernethy - Rosenblatt Securities - Analyst : You touched on compliance and governance. How does Pega approach that? How are you helping your clients with that? And the other side of the equation is there's been an uptick in regulatory legislation in Europe, in particular, their AI Act, which has just come into being any impact on you guys and a potential potential follow on in the US.

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Great, great. How about -- how do you get this to customers some of these new functions -- functionality like Blueprint, Knowledge Buddy coach, some of this new technology you guys have introduced. What's the go-to-market approach here? And how are your partners reacting? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 13, 2024 / 3:00PM, PEGA.OQ - Pegasystems Inc at Rosenblatt Securities Technology Summit (Virtual)

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Great, great. Excellent. Well, I've got a question that's just come in here, and it's kind of more of a Peter question, so I'm just going to read it off directly. Peter, can you describe your capital allocation strategy? It appears that you have been repurchasing shares and issuing dividends. How do you trade this off with your investment in your business?

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Okay. And investing in the business, maybe just highlight your current view on your R&D investment level, and your go-to-market investment levels. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 13, 2024 / 3:00PM, PEGA.OQ - Pegasystems Inc at Rosenblatt Securities Technology Summit (Virtual)

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Okay, great. Thank you. Don, we've just got a couple minutes left here, but I wanted to ask you another product area question really around process mining, and maybe you can just describe a little bit about sort of the state of the technology and process mining at Pega. And I don't know if there's any opportunities or implications with AI in this area that longer-term could help with this problem.

Question: Blair Abernethy - Rosenblatt Securities - Analyst : Really interesting, Don. It's definitely taking steps towards what you guys have coined as the autonomous enterprise where you're continually monitoring and then also adjusting using technology. Listen, this has been really great. Great to see the innovation that's come out of you guys in the last year and the customer response seems to be very positive. So that's great. So appreciate your time and we'll catch up with you again soon.