Monitor execution against the long-term FCF and margin targets, particularly Pega Cloud ACV growth trajectory and Rule of 40 achievement. No immediate catalyst; typical neutral investor day read-through.
Price Chart
Executive Summary
Pegasystems held an investor session on June 8, 2026, highlighting its completed subscription transition, strong Pega Cloud ACV growth (29% YoY in Q1 2026), expanding margins, and a long-term free cash flow target of $700M+ by 2028. The filing is a Regulation FD disclosure of an investor presentation with forward-looking projections, not a new financial event or earnings release.
Key Facts
- Pega Cloud ACV grew 29% YoY in Q1 2026 (as reported), up from 16% in Q1 2024.
- Total ACV (constant currency) reached $1,578M as of December 31, 2025, up 14% YoY.
- Free cash flow was $207M in Q1 2026 and is guided to $575M for FY 2026, with a 2028 target of $700M+.
- Non-GAAP operating margin improved to 28% in 2025, up from 6% in 2022; long-term target is 35-40%+.
- Rule of 40 achievement improved from 14% in 2022 to 45% in 2025.
- Company returned over $600M to shareholders from 2023-2025 via buybacks and dividends, representing ~60% of cumulative free cash flow.
- Stock-based compensation was 9.6% of revenue in 2025, within the 'discipline' range for mid-cap software.
- Long-term targets include 80% non-GAAP gross margin, 30% sales & marketing, 17% R&D, and 35-40%+ free cash flow margins by 2027/2028.
Financial Impact
Investor presentation with forward-looking financial targets: free cash flow guided to $575M in FY2026 (from $491M in 2025) and $700M+ by 2028; operating margin at 28% non-GAAP with long-term target of 35-40%+; no new quarterly financial results reported.
Risk Factors
- Forward-looking projections depend on sustained ACV growth and margin expansion which may not materialize.
- Competitive pressures and AI investment costs could pressure margins.
- Stock-based compensation remains elevated at ~10% of revenue, potentially diluting shareholders.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001013857-26-000039 |
| Document: pega-20260608.htm | 0001013857-26-000039 |
| Document: 0001013857-26-000039-index-headers.html | 0001013857-26-000039 |
| Document: 0001013857-26-000039-index.html | 0001013857-26-000039 |
| Document: 0001013857-26-000039.txt | 0001013857-26-000039 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 22, 2026 5d ago | Court Ruling | $36.42 | awaiting T+20 | — | $36.71 (+0.80%) |
Oct 21, 2026 6d ago | Court Ruling | $36.65 | awaiting T+20 | — | $36.71 (+0.16%) |
Oct 20, 2026 6d ago | 8-K | $35.18 | awaiting T+20 | — | $36.71 (−4.35%) |
Sep 17, 2026 5w ago | Insider Cluster | $35.02 $34.54 | ▼ −1.37% | ▼ −1.57% | $36.71 (+4.83%) |
Sep 15, 2026 5w ago | Insider Cluster | $36.84 $33.83 | ▼ −8.17% | ▼ −10.23% | $36.71 (−0.35%) |
Sep 15, 2026 6w ago | Insider Cluster | $36.84 $33.83 | ▲ +8.17% | ▲ +10.23% | $36.71 (+0.35%) |
Jun 8, 2026 20w ago | 8-K | $34.16 $32.21 | ▼ −5.71% | ▼ −7.15% | $36.71 (+7.46%) |
Apr 24, 2026 26w ago | DEFA14A | $36.77 $34.33 | ▼ −6.64% | ▼ −11.59% | $36.71 (−0.16%) |
Apr 21, 2026 26w ago | 8-K | $37.48 $33.50 | ▲ +10.62% | ▲ +13.78% | $36.71 (+2.05%) |
Mar 10, 2026 33w ago | Insider Cluster | $44.66 $41.20 | ▼ −7.74% | ▼ −7.59% | $36.71 (−17.80%) |
US Market Status
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