Pegasystems PEGA is set to report its first-quarter 2026 results on April 21.
The Zacks Consensus Estimate for first-quarter 2026 earnings is currently pegged at 81 cents per share, unchanged over the past 30 days. The figure indicates an increase of 6.58% from the year-ago quarter’s reported figure.
The consensus mark for first-quarter 2026 revenues is pegged at $486.69 million, suggesting an increase of 2.33% from the year-ago quarter’s reported figure.
PEGA’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 80.38%.
Pegasystems Inc. Price and EPS Surprise
Pegasystems Inc. price-eps-surprise | Pegasystems Inc. Quote
Let’s see how things have shaped up for the upcoming announcement.
Factors Likely to Have Influenced PEGA’s Q1 Performance
PEGA’s first-quarter 2026 performance is expected to have benefited from its strong Annual Contract Value momentum carrying into 2026. Total ACV grew 17% year over year (14% in constant currency) in 2025, whereas net new ACV surged 37% year over year in constant currency. Management guided approximately 15% ACV growth for 2026. As ACV is a leading indicator of revenues and strong bookings occurred in late 2025, revenue recognition is likely to have started flowing into the first quarter of 2026.
Pega Cloud Growth is the primary revenue driver, where Pega Cloud ACV grew 33% year over year and Cloud backlog registered strong year-over-year growth of 36%. The company expects Pega Cloud revenues to continue to accelerate above 30% in 2026.It has now crossed a tipping point where Pega Cloud ACV is greater than 50% of total ACV, indicating that subscription contracts convert into ratable revenue recognition. Even without large new deal closures, revenues are likely to have remained stable and visible in the first quarter of 2026, reducing volatility versus licence-heavy models.
The company has mentioned that its AI tool, Blueprint, is helping the sales process significantly. Blueprint helps teams create ideas and solutions quickly for customers. Management indicated that, with Pega Blueprint, sales deals are moving faster from start to finish. Deals initiated at the end of 2025 are expected to be closed in early 2026. This can lead to faster revenue growth in the first quarter of 2026. The company has mentioned that demand from enterprises for AI is increasing strongly, as clients seek AI integration into existing workflows and systems that can run operations automatically..
Revenue seasonality (weak H1 vs strong H2), deal timing delays and transition-related impacts remain a concern. The company faces competitive pressure from big tech companies like Microsoft, Salesforce and ServiceNow, which are aggressively investing in AI with strong ecosystems and customer bases. This is likely to result in pricing pressure, slower deal wins and market share competition. These factors are expected to have affected revenue growth in the to-be-reported quarter.
What Our Model Says About PEGA
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the exact case here.
PEGA has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some other companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:
Audioeye AEYE has an Earnings ESP of +5.88% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Audioeye shares have lost 30.4% in the year-to-date period. AEYE is scheduled to report its first-quarter 2026 results on May 5.
Ciena CIEN has an Earnings ESP of +4.67% and a Zacks Rank #1.
Ciena shares have soared 109.8% in the year-to-date period. CIEN is set to report fiscal second-quarter 2026 results on June 4.
Extreme Networks EXTR has an Earnings ESP of +1.41% and a Zacks Rank #2.
Extreme Networks shares have gained 5% in the year-to-date period. EXTR is set to report its third-quarter 2026 results on April 29.
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Ciena Corporation (CIEN): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).