Pegasystems Reports Q1 Earnings Miss, Stock Falls 14.4%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy PEGA?
Source: Fool
- Earnings Miss: Pegasystems reported Q1 adjusted earnings per share of $0.46 on revenue of $429.97 million, falling short of Wall Street's expectations of $0.69 and $467.16 million, indicating increased competitive pressure in the low-code software market.
- Significant Stock Decline: Despite a 0.5% gain in the S&P 500 and a 1.5% rise in the Nasdaq, Pegasystems' stock fell 14.4% this week, reflecting investor concerns about the company's growth prospects, leading to a cumulative decline of 37.5% in 2026.
- Sales Decrease: The company's Q1 sales dropped nearly 10% year-over-year, with adjusted net income per share down 39% compared to the prior year, suggesting underperformance that could impact future market share.
- Uncertain Outlook: While management indicated that contract renewals are weighted towards the second half of the year, the weak Q1 performance introduces uncertainty and creates pressure for improvement in the latter half of the year, potentially affecting investor confidence.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy PEGA?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on PEGA
Wall Street analysts forecast PEGA stock price to rise
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 36.550
Low
67.00
Averages
76.00
High
85.00
Current: 36.550
Low
67.00
Averages
76.00
High
85.00
About PEGA
Pegasystems Inc. is an enterprise transformation company that helps organizations Build for Change with enterprise artificial intelligence (AI) decisioning and workflow automation. It develops, markets, licenses, hosts and supports enterprise software that helps organizations make decisions and processes in real-time. Its platform for enterprise AI decisioning and workflow automation enables clients to personalize customer experiences, automate customer service, and streamline operations, business processes, and workflows. Its Pega Infinity is a software portfolio. Its applications and platform intersect with and encompass several software markets, including Customer Relationship Management, Digital Process Automation, Low-code application development platforms, Robotic Process Automation, Business Rules Management Systems, and Decision Management. Pega Platform, software for AI-powered workflow automation, boosts the efficiency of its clients’ processes and operational workflow.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Pegasystems Reports Weaker-Than-Expected Q1 Earnings
- Performance Decline: Pegasystems reported Q1 adjusted earnings per share of $0.46 on revenue of $429.97 million, both falling short of analyst expectations of $0.69 and $467.16 million, indicating significant performance pressure on the company.
- Sales Drop: The company's sales decreased nearly 10% year-over-year, with adjusted net income per share down 39% compared to the prior year, reflecting weakened market demand and intensified competition.
- Renewal Outlook: Despite the disappointing Q1 results, management indicated that contract renewals could be stronger in the second half of the year, suggesting potential for performance improvement but also increasing pressure for the latter half of the year.
- Stock Pullback: Following the latest earnings report, Pegasystems' stock fell 14.4% this week, and it is now down 37.5% year-to-date in 2026, highlighting investor concerns regarding the company's future performance.
See More
Pegasystems Reports Q1 Earnings Miss, Stock Falls 14.4%
- Earnings Miss: Pegasystems reported Q1 adjusted earnings per share of $0.46 on revenue of $429.97 million, falling short of Wall Street's expectations of $0.69 and $467.16 million, indicating increased competitive pressure in the low-code software market.
- Significant Stock Decline: Despite a 0.5% gain in the S&P 500 and a 1.5% rise in the Nasdaq, Pegasystems' stock fell 14.4% this week, reflecting investor concerns about the company's growth prospects, leading to a cumulative decline of 37.5% in 2026.
- Sales Decrease: The company's Q1 sales dropped nearly 10% year-over-year, with adjusted net income per share down 39% compared to the prior year, suggesting underperformance that could impact future market share.
- Uncertain Outlook: While management indicated that contract renewals are weighted towards the second half of the year, the weak Q1 performance introduces uncertainty and creates pressure for improvement in the latter half of the year, potentially affecting investor confidence.
See More
Pegasystems Shares Drop 6% After Disappointing Q1 2026 Results
- Disappointing Earnings: Pegasystems reported non-GAAP earnings of 46 cents per share for Q1 2026, significantly below the 68 cents expected by analysts, resulting in a 6% drop in stock price, indicating market concerns over profitability.
- Revenue Decline: The company generated $430 million in revenue, a 9.6% year-over-year decline that not only missed analyst forecasts but also highlights competitive pressures that could undermine future investor confidence.
- Narrowing Gross Margin: Pegasystems experienced a contraction in gross margin alongside a 16.2% increase in operating expenses, suggesting challenges in cost management that may impact long-term profitability and market positioning.
- Analyst Price Target Cut: Analysts at Rosenblatt lowered their price target for Pegasystems from $62 to $58, reflecting a cautious outlook on the company's future performance, which may further erode investor confidence in the stock.
See More
Pegasystems Q1 2026 Earnings Call Insights
- Cloud Revenue Growth: In Q1 2026, Pega Cloud revenue surged 36% year-over-year from $151 million to $205 million, indicating strong performance in cloud services that is expected to drive overall business growth.
- Free Cash Flow Performance: The company reported free cash flow of $207 million in Q1, with over 80% allocated to repurchasing 3.5 million shares and paying $5 million in quarterly dividends, reflecting a strong commitment to shareholder returns and financial health.
- Annual Outlook: Management anticipates a significant increase in business activity in the second half of 2026, particularly as the new pipeline converts, with a goal of achieving over 75% of total ACV from Pega Cloud in the long term.
- Market Risk Concerns: The management highlighted pressures from government shutdowns and geopolitical tensions on the business environment; nevertheless, Pega remains optimistic about cloud service growth, emphasizing resilience in uncertain markets.
See More
Pegasystems Q1 Earnings Miss Expectations
- Disappointing Earnings: Pegasystems reported a Q1 non-GAAP EPS of $0.46, missing expectations by $0.23, indicating pressure on profitability that could undermine investor confidence.
- Revenue Decline: The company generated $429.97 million in revenue for Q1, a 9.6% year-over-year decrease, falling short of market expectations by $37.19 million, reflecting challenges in competitive positioning.
- Future Growth Targets: Despite the current underperformance, Pegasystems aims for a 15% growth in ACV and revenue in 2026, planning to accelerate Pega Cloud adoption to achieve this, demonstrating confidence in future prospects.
- Market Reaction: Given the earnings miss, investors may react negatively to Pegasystems' stock price, potentially impacting its market position in the technology and cloud computing sectors.
See More
Pegasystems Q1 Earnings Announcement Scheduled
- Earnings Release Date: Pegasystems (PEGA) is set to announce its Q1 earnings on April 21 after market close, with consensus EPS estimate at $0.69, reflecting a 54.9% year-over-year decline, and revenue estimate at $467.16 million, down 1.8% year-over-year, indicating challenges ahead for the company.
- Historical Performance: Over the past two years, PEGA has beaten EPS estimates 100% of the time and revenue estimates 75% of the time, demonstrating reliability in financial forecasting despite current downward pressures.
- Estimate Revision Trends: In the last three months, EPS estimates have seen 8 upward revisions and 3 downward revisions, while revenue estimates have experienced 4 upward and 5 downward revisions, reflecting market uncertainty and differing views on the company's future performance.
- Long-term Growth Objectives: Pegasystems aims for 15% annual contract value (ACV) and revenue growth by 2026, with accelerating adoption of Pega Cloud, showcasing the company's confidence and strategic direction for future growth.
See More
Pegasystems Reports Weaker-Than-Expected Q1 Earnings
- Performance Decline: Pegasystems reported Q1 adjusted earnings per share of $0.46 on revenue of $429.97 million, both falling short of analyst expectations of $0.69 and $467.16 million, indicating significant performance pressure on the company.
- Sales Drop: The company's sales decreased nearly 10% year-over-year, with adjusted net income per share down 39% compared to the prior year, reflecting weakened market demand and intensified competition.
- Renewal Outlook: Despite the disappointing Q1 results, management indicated that contract renewals could be stronger in the second half of the year, suggesting potential for performance improvement but also increasing pressure for the latter half of the year.
- Stock Pullback: Following the latest earnings report, Pegasystems' stock fell 14.4% this week, and it is now down 37.5% year-to-date in 2026, highlighting investor concerns regarding the company's future performance.
See More
Pegasystems Reports Q1 Earnings Miss, Stock Falls 14.4%
- Earnings Miss: Pegasystems reported Q1 adjusted earnings per share of $0.46 on revenue of $429.97 million, falling short of Wall Street's expectations of $0.69 and $467.16 million, indicating increased competitive pressure in the low-code software market.
- Significant Stock Decline: Despite a 0.5% gain in the S&P 500 and a 1.5% rise in the Nasdaq, Pegasystems' stock fell 14.4% this week, reflecting investor concerns about the company's growth prospects, leading to a cumulative decline of 37.5% in 2026.
- Sales Decrease: The company's Q1 sales dropped nearly 10% year-over-year, with adjusted net income per share down 39% compared to the prior year, suggesting underperformance that could impact future market share.
- Uncertain Outlook: While management indicated that contract renewals are weighted towards the second half of the year, the weak Q1 performance introduces uncertainty and creates pressure for improvement in the latter half of the year, potentially affecting investor confidence.
See More
Pegasystems Shares Drop 6% After Disappointing Q1 2026 Results
- Disappointing Earnings: Pegasystems reported non-GAAP earnings of 46 cents per share for Q1 2026, significantly below the 68 cents expected by analysts, resulting in a 6% drop in stock price, indicating market concerns over profitability.
- Revenue Decline: The company generated $430 million in revenue, a 9.6% year-over-year decline that not only missed analyst forecasts but also highlights competitive pressures that could undermine future investor confidence.
- Narrowing Gross Margin: Pegasystems experienced a contraction in gross margin alongside a 16.2% increase in operating expenses, suggesting challenges in cost management that may impact long-term profitability and market positioning.
- Analyst Price Target Cut: Analysts at Rosenblatt lowered their price target for Pegasystems from $62 to $58, reflecting a cautious outlook on the company's future performance, which may further erode investor confidence in the stock.
See More
Pegasystems Q1 2026 Earnings Call Insights
- Cloud Revenue Growth: In Q1 2026, Pega Cloud revenue surged 36% year-over-year from $151 million to $205 million, indicating strong performance in cloud services that is expected to drive overall business growth.
- Free Cash Flow Performance: The company reported free cash flow of $207 million in Q1, with over 80% allocated to repurchasing 3.5 million shares and paying $5 million in quarterly dividends, reflecting a strong commitment to shareholder returns and financial health.
- Annual Outlook: Management anticipates a significant increase in business activity in the second half of 2026, particularly as the new pipeline converts, with a goal of achieving over 75% of total ACV from Pega Cloud in the long term.
- Market Risk Concerns: The management highlighted pressures from government shutdowns and geopolitical tensions on the business environment; nevertheless, Pega remains optimistic about cloud service growth, emphasizing resilience in uncertain markets.
See More
Pegasystems Q1 Earnings Miss Expectations
- Disappointing Earnings: Pegasystems reported a Q1 non-GAAP EPS of $0.46, missing expectations by $0.23, indicating pressure on profitability that could undermine investor confidence.
- Revenue Decline: The company generated $429.97 million in revenue for Q1, a 9.6% year-over-year decrease, falling short of market expectations by $37.19 million, reflecting challenges in competitive positioning.
- Future Growth Targets: Despite the current underperformance, Pegasystems aims for a 15% growth in ACV and revenue in 2026, planning to accelerate Pega Cloud adoption to achieve this, demonstrating confidence in future prospects.
- Market Reaction: Given the earnings miss, investors may react negatively to Pegasystems' stock price, potentially impacting its market position in the technology and cloud computing sectors.
See More
Pegasystems Q1 Earnings Announcement Scheduled
- Earnings Release Date: Pegasystems (PEGA) is set to announce its Q1 earnings on April 21 after market close, with consensus EPS estimate at $0.69, reflecting a 54.9% year-over-year decline, and revenue estimate at $467.16 million, down 1.8% year-over-year, indicating challenges ahead for the company.
- Historical Performance: Over the past two years, PEGA has beaten EPS estimates 100% of the time and revenue estimates 75% of the time, demonstrating reliability in financial forecasting despite current downward pressures.
- Estimate Revision Trends: In the last three months, EPS estimates have seen 8 upward revisions and 3 downward revisions, while revenue estimates have experienced 4 upward and 5 downward revisions, reflecting market uncertainty and differing views on the company's future performance.
- Long-term Growth Objectives: Pegasystems aims for 15% annual contract value (ACV) and revenue growth by 2026, with accelerating adoption of Pega Cloud, showcasing the company's confidence and strategic direction for future growth.
See More
