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.
Blueprint and Infinity Studio Aim to Speed Development
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 different models through MCP connections and offers native models within Blueprint. He said building workflows through prompts and discussion represents a newer experience for many Pega customers, which historically used more drag-and-drop development methods.
Fixed AI Pricing and Model Selection
Pega has adopted a model in which it charges customers a fixed AI-enabled price for a unit of work rather than charging per token, Stillwell said. The approach is intended to provide customers with certainty around their costs while putting the responsibility for managing token consumption on Pega.
Stillwell said the company’s architecture helps manage that risk by determining where AI is needed and selecting an appropriate model for each task. Not every activity requires a frontier model, he said, citing automated customer-service call wrap-up as an example of work that could use a less resource-intensive model.
“Our job is to help our clients to only use AI when it is needed to be used, and then when it is used, to use the right model,” Stillwell said.
He compared the company’s approach to cloud pricing, where usage can vary but Pega can estimate costs when it understands a customer’s use cases and operating parameters. Tools involving throttling, governance and model selection also help the company manage potential cost variability, he said.
First-Half ACV Growth Fell Short of Expectations
Stillwell acknowledged that first-half 2026 ACV growth was “unimpressive” and disappointing. He attributed the performance to a combination of factors, including management complacency after a strong start to 2025, insufficient pipeline-building activity late last year and a slower-than-needed shift in the sales organization from a “farmer” mentality to a more proactive “hunter” approach.
He also said enterprise buyers were distracted by AI during the first half, as vendors broadly promoted AI offerings. Pega saw in March and April that its sales activity measures were not progressing sufficiently, he said.
Stillwell said the company’s pipeline entering the second half was significantly higher than it was a year earlier and exceeded the level needed to meet its back-half growth target. He also said many financial-services customers that had been focused on AI governance and compliance earlier in the year had since established AI gateways, control processes, model choices and, in some cases, token-spending budgets.
- Pega’s sales activity measures have improved “dramatically” over the prior six weeks, Stillwell said.
- The company is monitoring outbound sales activity closely alongside its forecasting process.
- Stillwell said Pega has a strong working set of opportunities for the second half.
Cash Flow Outlook and AI Governance Opportunity
Stillwell said Pega’s billing and collections are typically concentrated in the first and fourth quarters. Given lower bookings in the second quarter and the company’s normal seasonal pattern, he said the third quarter could produce slightly negative cash flow, while the fourth quarter is expected to be strong.
If Pega does not recapture its first-half ACV growth shortfall, the company could face pressure on its cash-flow target for the year, he said. He characterized full-year cash flow as likely to be relatively flat year over year. Stillwell nevertheless reaffirmed the framework behind Pega’s target of more than $700 million in free cash flow in 2028, which depends on double-digit ACV growth in 2027 and 2028 as well as operating leverage.
On AI agents, Stillwell said Pega’s workflow technology can provide structure and governance around how agents execute tasks, particularly in regulated activities where processes must be completed in a prescribed sequence. He said AI can be useful for testing, data analysis, extraction, analytics and tactical coding work, but companies remain cautious about allowing agents to generate code or take actions beyond what humans can effectively understand and supervise.
“Left unstructured and uncontrolled, AI will do varied things,” Stillwell said. “Some good, some very bad.”
About Pegasystems (NASDAQ:PEGA)
Pegasystems Inc is a software company specializing in customer engagement and digital process automation solutions. Headquartered in Cambridge, Massachusetts, Pegasystems develops enterprise applications designed to help organizations streamline operations, manage customer interactions and automate complex workflows. Its platform supports a wide range of use cases, from sales and marketing optimization to case management and robotic process automation.
The core of Pegasystems’ offering is the Pega Platform, a low-code development environment that enables businesses to build and deploy applications with minimal hand-coding.
