Pegasystems Highlights AI Push, Sales Reset After Soft ACV Growth

Pegasystems is expanding its AI capabilities through Pega Blueprint and Infinity Studio, which aim to accelerate workflow design and application deployment. The company uses fixed pricing for AI-enabled work and selects models based on task requirements to provide cost predictability. First-half 2026 annual contract value growth was weaker than expected, which management attributed to insufficient pipeline building, a slow shift toward proactive selling and customer distractions around AI. Pega says its pipeline and sales activity have improved significantly entering the second half. Lower bookings could pressure near-term cash flow, with possible slightly negative cash flow in the third quarter and full-year cash flow likely flat year over year. Management maintained its framework for achieving more than $700 million in free cash flow in 2028, dependent on renewed double-digit ACV growth and operating leverage.

Pegasystems NASDAQ: PEGA CFO Ken Stillwell outlined the company’s position as a workflow platform for large enterprises, its expanding AI product capabilities and its plans to improve sales execution following a softer first half for annual contract value growth. Speaking at a Canaccord fireside chat, Stillwell said Pega serves organizations that need to manage structured, often regulated workflows that cannot readily be addressed with commercial off-the-shelf software. These use cases can include functions such as dispute management, loan origination and other processes requiring specific controls, integrations and customer-facing touch points.

Rather than relying on custom-built applications, which can create technical debt and complicate change management, customers can use Pega’s platform to configure applications and workflow structures, Stillwell said. He characterized the company’s competitive set as including platform providers such as Salesforce, Microsoft and Adobe in certain use cases, along with internally developed software.

Stillwell said Pega Blueprint was designed to reduce the lengthy front-end process involved in helping customers identify and visualize applications they want to modernize. Blueprint allows users to identify their industry and problem, define user personas and fields, and map potential integrations to produce a visual representation of a proposed workflow application.

He said customers previously needed extensive meetings, demonstrations, screen mockups and whiteboarding before reaching a prototype stage. In some cases over the past 12 months, customers using Blueprint have created a use-case template and configured an application for deployment in fewer than 90 days, according to Stillwell.

However, he said Blueprint initially did not provide a simple path from the design environment to a production build environment. Pega recently made generally available Pega Infinity 2026, including Pega Infinity Studio, which enables customers to import a Blueprint design into a development environment and use AI to help complete the application. Infinity Studio had been generally available for about two weeks at the time of the discussion. Stillwell said Pega had previously given a beta version to roughly 20 customers for about three months, using their feedback to refine the product and identify areas for future updates. Customers are also interested in connecting AI models to Blueprint, Stillwell said. The company supports connections to diffe...