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Q4 2022 Results Highlight Improving Profitability

  • Annual contract value (ACV) grows 16% year over year (constant currency)
  • Pega Cloud gross margin reaches 70%
  • 2023 free cash flow expected to increase to $150 million

CAMBRIDGE, Mass. — February 15, 2023 — Pegasystems Inc., the low-code platform provider empowering the world’s leading enterprises to Build for Change®, released its financial results for the fourth quarter and full-year 2022.

“I’m pleased with our strong finish to 2022 and proud of our resilient team who performed so well in a year that included a number of major distractions and economic headwinds,” said Alan Trefler, Pega founder and CEO. “We have a tremendous opportunity in front of us as we move into 2023. We’re building a client-first business for the long-term, focused on a balance of growth and profitability.”

“Surpassing $1 billion in subscription revenue is a significant milestone in our multi-year journey to transform our business,” said Ken Stillwell, Pega COO and CFO. “As we complete the subscription transition in 2023, we’re focused on our Rule of 40 progress, which will lead to significantly improved operating leverage and cash generation.”

Financial and performance metrics (1)

Q4 2022 Pegasystems financial results

(1) See the Schedules at the end of this release for additional information, including a reconciliation of our non-GAAP and GAAP measures.

Q4 2022 Pegasystems financial resultsQ4 2022 Pegasystems financial results

Note: Constant currency measures are calculated by applying foreign exchange rates for the earliest period shown to all periods. The above constant currency measures reflect foreign exchange rates applicable as of Q4 2021.

2023 Guidance (1)

As of February 15, 2023, we are providing the following guidance:

Q4 2022 Pegasystems financial results

(1) A reconciliation of our GAAP and Non-GAAP guidance is contained in the financial schedules at the end of this release.

View full press release with financials

Quarterly conference call

A conference call and audio-only webcast will be conducted at 5:00 p.m. EST on Wednesday, February 15, 2023. Members of the public and investors are invited to join the call and participate in the question and answer session by dialing 1-888-394-8218 (domestic), 1-323-994-2093 (international), or via webcast ( by logging onto at least five minutes prior to the event's broadcast and clicking on the webcast icon in the Investors section.

Discussion of non-GAAP financial measures

We believe that non-GAAP financial measures help investors understand our core operating results and prospects, consistent with how management measures and forecasts our performance without the effect of often one-time charges and other items outside our normal operations. The supplementary non-GAAP financial measures are not meant to be superior to or a substitute for financial measures prepared under U.S. GAAP. Reconciliations of our non-GAAP and GAAP measures are at the end of this release.

Forward-looking statements

Certain statements in this press release may be "forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995.

Words such as expects, anticipates, intends, plans, believes, will, could, should, estimates, may, targets, strategies, projects, forecasts, guidance, likely, and usually, or variations of such words and other similar expressions identify forward-looking statements, which are based on current expectations and assumptions.

Forward-looking statements deal with future events and are subject to risks and uncertainties that are difficult to predict, including, but not limited to:

  • our future financial performance and business plans;
  • the adequacy of our liquidity and capital resources;
  • the continued payment of our quarterly dividends;
  • the timing of revenue recognition;
  • management of our transition to a more subscription-based business model;
  • variation in demand for our products and services, including among clients in the public sector;
  • reliance on key personnel;
  • global economic and political conditions and uncertainty, including impacts from public health emergencies and the war in Ukraine;
  • reliance on third-party service providers, including hosting providers;
  • compliance with our debt obligations and covenants;
  • the potential impact of our convertible senior notes and Capped Call Transactions;
  • foreign currency exchange rates;
  • the potential legal and financial liabilities and damage to our reputation due to cyber-attacks;
  • security breaches and security flaws;
  • our ability to protect our intellectual property rights, costs associated with defending such rights, intellectual property rights claims, and other related claims by third parties against us, including related costs, damages, and other relief that may be granted against us;
  • our ongoing litigation with Appian Corp.;
  • our client retention rate; and
  • management of our growth.

These risks and others that may cause actual results to differ materially from those expressed in such forward-looking statements are described further in Part I of our Annual Report on Form 10-K for the year ended December 31, 2022, and other filings we make with the U.S. Securities and Exchange Commission (“SEC”).

Except as required by applicable law, we do not undertake and expressly disclaim any obligation to update or revise these forward-looking statements publicly, whether due to new information, future events, or otherwise.

The forward-looking statements in this press release represent our views as of February 15, 2023.

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Lisa Pintchman
VP, Corporate Communications
[email protected]
+1 617-866-6022

North America

Sean Audet
Director, Corporate Communications
[email protected]
+1 617-528-5230

Ilena Ryan
Sr. Manager, Public Relations
[email protected]
+1 617-866-6722


Joanna Richardson
Director, Corporate Communications
[email protected]
+44 (0) 118 9651 660

Jon Brigden
PR & Communications Manager
[email protected]
+44 (0) 118 9398 584

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