Pegasystems sinks as Q2 results miss estimates by wide margin

Pegasystems (PEGA) shares fell nearly 6% in extended trading on Tuesday after the software company reported second-quarter results that missed Wall Street's estimates.

For the period ending June 30, Pegasystems said it earned an adjusted $0.35 per share as revenue rose 9.4% year-over-year to come in at $420.72M. Annual contract value grew 7% year over year, or 8% in constant currency.

Analysts had expected the company to earn an adjusted $0.43 per share on $428.4M in revenue.

“Pega Infinity™ 26 uniquely deploys the power of AI with predictable outcomes and predicable costs by applying agents at design time to optimize run-time token use,” said Alan Trefler, founder and CEO, Pega, in a statement. “Letting language models do everything is risky and expensive, and using AI to write mountains of code creates significant barriers to the ongoing change that enterprise clients require. Pega structures business applications in a way that makes sense to business and IT to Build for Change®.”

The company said “unprecedented changes” in the artificial intelligence market caused clients to delay purchasing decisions. As such, annual contract value growth rate slowed “significantly” during the six months ended June 30, when compared to the first half of 2025.

The company will host a conference call at 8 a.m. EST on Wednesday to discuss the results.