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Pega Drives Record Cash Flow Through Q3 2023

  • Operating cash flow reaches $138 million through Q3 2023 (free cash flow reaches $124 million)
  • Pega Cloud gross margin continues to improve, reaching 74% through Q3 2023
  • Annual contract value grows 12% year over year (10% in constant currency)

CAMBRIDGE, Mass. — October 25, 2023 — Pegasystems Inc., the low-code platform provider empowering the world’s leading enterprises to Build for Change®, released its financial results for the third quarter of 2023.

"In Q3, we launched Pega Infinity ’23, with highly advanced and practical GenAI capabilities," said Alan Trefler, Founder and CEO. "Our ability to create enterprise-class workflows in seconds using our GenAI capabilities is game-changing, and clients are amazed when they see what they can do with our technology."

"Balancing growth and free cash flow is critical to achieving lasting value, and I’m pleased with our momentum,” said Ken Stillwell, COO and CFO. "We drove record free cash flow in the first three quarters of 2023, and ACV grew by double digits."

Financial and performance metrics (1)

Q3 2023 earnings

1 Refer to the schedules at the end of this release for additional information, including a reconciliation of GAAP and non-GAAP measures.

Reconciliation of ACV and Constant Currency ACV

Q3 2023 earnings

Note: Constant currency ACV is calculated by applying the Q3 2022 foreign exchange rates to all periods shown.

Q3 2023 earnings

Note: Starting in the third quarter of 2023, the Company has calculated free cash flow as cash provided by (used in) operating activities less investments in property and equipment. To ensure comparability, previously disclosed amounts have been updated. For more information, please refer to the schedules included at the end of this release.

Q3 2023 earnings Q3 2023 earnings

View full press release with financials

Quarterly conference call

A conference call and audio-only webcast will be conducted the following day at 8:00 a.m. EDT on Thursday, October 26, 2023.

Members of the public and investors are invited to join the call and participate in the question and answer session by dialing 1-877-407-9039 (domestic), 1-201-689-8470 (international), or via webcast (https://viavid.webcasts.com/starthere.jsp?ei=1636774&tp_key=0bfa15da66) by logging onto www.pega.com 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

Our non-GAAP financial measures should only be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. We believe that these 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. They are not a substitute for financial measures prepared under U.S. GAAP. Refer to the schedules at the end of this release for additional information, including a reconciliation of GAAP and non-GAAP measures.

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, intends to, projects, forecasts, guidance, likely, and usually or variations of such words and other similar expressions identify forward-looking statements, which speak only as of the date the statement was made and 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”).

Investors are cautioned not to place undue reliance on such forward-looking statements, and there are no assurances that the results included in such statements will be achieved. Although subsequent events may cause our view to change, except as required by applicable law, we do not undertake and expressly disclaim any obligation to publicly update or revise these forward-looking statements whether as the result of new information, future events, or otherwise.

Any forward-looking statements in this press release represent our views as of October 25, 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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