Pegasystems Stock Falls After Q2 Earnings Miss on Revenue and Profit
Shares of Pegasystems (NASDAQ: PEGA) dropped 13.6% on July 22, 2026, after the company reported second-quarter earnings that missed analyst expectations on both revenue and adjusted earnings per share. Revenue rose 9% year-over-year to $420.7 million, below the $426.6 million consensus estimate. Adjusted EPS increased from $0.28 to $0.35, but fell short of the $0.43 forecast. The company cited 'unprecedented changes in the AI market' causing clients to delay purchasing decisions, leading to slower annual contract value (ACV) growth of 7% overall, though Pega Cloud ACV grew 22%. This marks the second consecutive quarterly miss for Pegasystems, echoing similar headwinds faced by IBM in the enterprise automation software sector. Despite the stock appearing cheap on adjusted earnings, the sell-off reflects concerns about AI disruption to traditional cloud software demand.
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