Pegasystems reports 16% ACV growth in Q2 2025 driven by cloud momentum

Pegasystems Inc. (NASDAQ: PEGA) reported annual contract value growth of 16% year-over-year in the second quarter ended June 30, 2025, reaching $1.51 billion compared to $1.31 billion in the prior year period. In constant currency terms, ACV increased 14%.

The enterprise software company's cloud business showed stronger momentum, with Pega Cloud ACV rising 28% year-over-year to $761 million, or 25% in constant currency. Pega Cloud backlog increased 30% year-over-year to $1.32 billion, representing 26% growth in constant currency.

Total revenue for the quarter reached $384.5 million, up 9% from $351.2 million in the second quarter of 2024. For the six-month period, revenue grew 26% to $860.1 million from $681.3 million in the prior year.

The company reported net income of $30.1 million, or $0.17 per diluted share, compared to $6.6 million, or $0.04 per diluted share, in the year-ago quarter. For the six-month period, net income was $115.5 million versus a net loss of $5.5 million in the prior year.

Cash flow from operations and free cash flow both increased by more than 30% year-over-year for the six-month period, reaching $290.5 million and $286.5 million respectively.

Non-GAAP net income for the quarter was $50.2 million, or $0.28 per diluted share, compared to $45.8 million, or $0.26 per diluted share, in the prior year quarter.

The company completed a two-for-one stock split in June 2025, with all per-share amounts adjusted to reflect this change.

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