What changed in this filing

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Item 1. Business

2025-02-12 compared with 2024-02-14 · 66 added, 66 removed, 124 unchanged (52% of the section changed)

We develop, market, license, host, and support enterprise software that helps organizations build agility into their business so they can adapt to change.

Our powerful, low-code platform for workflow automation and artificial intelligence-powered decisioning enables the world’s leading brands and government agencies to hyper-personalize customer experiences, streamline customer service, and automate mission-critical business processes and workflows.

With Pega, our clients can leverage our artificial intelligence (“AI”) technology and scalable architecture to accelerate their digital transformation.

In addition, our client success teams, world-class partners, and clients leverage our Pega Express™ methodology to design and deploy mission-critical applications quickly and collaboratively.

We develop, market, license, host, and support enterprise software that helps organizations optimize decisions and processes in real-time so they can deliver outcomes that transform their business.

Our powerful platform for enterprise artificial intelligence (“AI”) decisioning and workflow automation enables the world’s leading brands and government agencies to hyper-personalize customer experiences, automate customer service, and streamline operations, mission-critical business processes, and workflows.

With Pega, our clients can leverage our AI technology and scalable architecture to accelerate their digital transformation.

In addition, our sales and client success teams, world-class partners, and clients are able to leverage Pega GenAI Blueprint TM (“Blueprint”) to rapidly prototype and accelerate the development and deployment of applications quickly and collaboratively.

To grow our business, we intend to:

• Increase market share by developing and delivering a low-code platform for workflow automation and AI-powered decisioning for buyers in marketing, sales, service, operations, and IT that can work together seamlessly with maximum competitive differentiation;

• Increase market share by developing and delivering a platform for enterprise AI decisioning and workflow automation for buyers in marketing, sales, service, operations, and IT that can work together seamlessly with maximum competitive differentiation;

• Deepen and expand our relationships with existing clients;

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• Customer Engagement, including Customer Relationship Management (“CRM”);

• Digital Process Automation (“DPA”), including Business Process Management (“BPM”), Workflow, and Dynamic Case Management (“DCM”);

• Digital Process Automation (“DPA”), including Business Process Management (“BPM”), Workflow, and Dynamic Case Management (“DCM”), and Business Orchestration and Automation Technologies (“BOAT”);

• Low-code application development platforms (“LCAP”), including Multi-experience Development Platforms (“MXDP”);

• Robotic Process Automation (“RPA”);

• Robotic Process Automation (“RPA”), and Task-Centric Process Automation;

• Business Rules Management Systems (“BRMS”);

• Decision Management, including predictive and adaptive analytics;

• Decision Management, including predictive and adaptive analytics and Real-time Interaction Management (“RTIM”);

• the Vertical-Specific Software (“VSS”) market of industry solutions and packaged applications.

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It is designed to enable enterprises to improve customer acquisition and experience across inbound, outbound, and paid media channels.

It incorporates artificial intelligence (“AI”) in the form of predictive and machine-learning analytics and business rules and executes these decisions in real-time to evaluate the context of each customer interaction and dynamically deliver the most relevant action, offer, content, and channel.

It incorporates AI in the form of predictive and machine-learning analytics and business rules and executes these decisions in real-time to evaluate the context of each customer interaction and dynamically deliver the most relevant action, offer, content, and channel.

Customer Service

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It allows enterprises to capture best practices and leverage AI to guide sales teams through the sales and customer onboarding processes.

Intelligent Automation

Pega Platform, our software for Intelligent Automation, boosts the efficiency of our clients’ processes and workflows.

Workflow Automation

Pega Platform™, our software for AI-powered workflow automation, boosts the efficiency of our clients’ processes and operational workflows.

This technology allows organizations to take an end-to-end approach to transformation by using intelligence and design thinking to streamline processes and create better customer and employee experiences.

Intelligent automation goes beyond traditional Business Process Management (BPM) to unify technologies such as Robotic Process Automation (“RPA”) and AI and enable organization-wide digital transformation.

With its Intelligent Automation capabilities, the Pega Platform allows clients to break down silos, improve customer-centricity, add agility to legacy technology, and provide end-to-end automation to support the needs of customers and employees.

With Blueprint, clients can leverage the power of AI to design best practice processes for any industry domain in minutes.

Pega’s automation goes beyond traditional Business Process Management (“BPM”) to unify technologies such as Robotic Process Automation (“RPA”) and AI and enable organization-wide digital transformation.

With its workflow automation capabilities, the Pega Platform allows clients to break down silos, improve customer-centricity, add agility to legacy technology, and provide end-to-end automation to support the needs of customers and employees.

Our Capabilities

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we enable clients to streamline customer service and deliver better service experiences for their customers and employees, resulting in higher customer satisfaction and loyalty with reduced costs.

• Intelligent Automation :

• Workflow Automation :

we enable clients to automate mission-critical workflows, resulting in improved operational efficiency, faster time to value, and lower cost.

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We combine human-assisted robotic desktop automation and unattended robotic process automation with our unified workflow automation and case management capabilities.

This combination provides our platform and applications the differentiated ability to automate customer-facing and back-office operational processes from “end to end,” connecting across organizational and system silos to connect customers and employees to outcomes seamlessly and easily.

Consistent omnichannel experiences

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In addition to our Center-out Business Architecture, Pega technology has been designed to be deployed rapidly, be easily changed, and scale across changing architecture needs.

Pega Express™ Methodology and low code

Our solutions are designed to quickly improve targeted customer outcomes with out-of-the-box functionality that connects enterprise data and systems to customer experience channels.

From there, organizations can scale one customer experience at a time to realize greater value while delivering increasingly consistent and personalized customer experiences.

We prescribe a “Microjourney” approach to delivery that breaks customer journeys into discrete processes that drive meaningful outcomes, such as “inquiring about a bill” or “updating an insurance policy,” allowing us to combine design-thinking and out-of-the-box functionality to deliver rapid results and ensure the ability to enhance applications in the future.

Our approach leverages low-code to improve business and IT collaboration and bypass the error-prone and time-consuming process of manually translating requirements into code.

Users design software in low-code visual models that reflect the needs of the business.

The software application is created and optimized automatically and directly from the model, helping to close the costly gap between vision and execution.

Changes to the code are made by altering the model, and application documentation is generated directly from the model.

Rapid, AI-enabled transformation

Pega's approach to digital transformation projects brings business, IT, and AI together to accelerate collaboration, development, and time-to-value.

We and our customers are able to begin projects in Blueprint, which leverages generative AI to analyze business requirements and legacy documentation to generate a starting point template aligned with clients' strategic business outcomes.

From there, Blueprint streamlines business and IT collaboration, providing guidance to teams through the end-to-end requirements gathering process – either through virtual collaboration or in a workshop setting.

Through use of Blueprint, our clients are able to generate a starting point application that gives developers a head start on deep configuration and integration.

Through our low-code configuration and AI-powered assistance, developers in Pega are aided in quickly building out and adapting application functionality.

We refer to this process as our Pega Express™ design and implementation.

Pega Express assists in the acceleration of application build out in alignment with client success criteria, emphasizing reusable components that ensure both immediate and long-term value creation, and uses an agile approach.

Pega Cloud ® allows clients to develop, test, and deploy, on an accelerated basis, our applications and the Pega Platform using a secure, flexible internet-based infrastructure, minimizing cost while focusing on core revenue-generating competencies.

Clients can also manage the Pega deployment themselves using the cloud architecture they prefer.

This multi-cloud approach of both Pega Cloud and client-managed cloud gives our clients the ability to select and change, as needed, the best cloud architecture for the security, data access, speed-to-market, and budget requirements of each application they deploy.

Some clients will choose to manage the Pega deployment themselves using the cloud architecture they prefer.

This multi-cloud approach, which includes both Pega Cloud and client-managed cloud, gives our clients the ability to select and change, as needed, the best cloud architecture for the security, data access, speed-to-market, and budget requirements of each application they deploy.

Our Services and Support

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Lastly, engagement is an important part of our strategy to create a broad ecosystem passionate about Pega technology to further increase our advocates across our clients and other key stakeholders.

We collaborate with global systems integrators and technology consulting firms that provide consulting services to our clients, as well as Independent Software Vendors (“ISVs”) and technology partners that extend clients’ investments with integrated solutions .

We collaborate with global systems integrators and technology consulting firms that provide consulting services to our clients, as well as Independent Software Vendors (“ISVs”), cloud hyperscalers, and technology partners that extend clients’ investments with integrated solutions .

In addition, Authorized Training Partners (“ATPs”) support Pega customers in local languages, while our Workforce Development Partners let clients outsource their recruiting .

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These partners may deliver strategic business planning, consulting, project management, training, and implementation services to our clients.

Our partners include well-respected major firms, such as Accenture PLC, Amazon.com, Inc., Areteans, Capgemini SA, Coforge, Cognizant Technology Solutions Corporation, EY, Google, HCL Infosys, Merkle, PwC, Tata Consultancy Services Limited, Tech Mahindra Limited, Virtusa Corporation, and Wipro Limited.

Our partners are recognized through our Pega partner program, helping those organizations differentiate themselves in the market place.

They do so by achieving distinctions in industries or across specific solutions areas and geographies.

Pega’s largest partners include Aaseya, Accenture, Areteans, Capgemini, Coforge, Cognizant Technology Solutions, Evonsys Inc, Ernst & Young, HCL Tech, Infosys, LTIMindtree, Tata Consultancy Services, and Virtusa.

Target Clients

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Our solutions achieve and facilitate differentiation by increasing business agility, driving growth, improving productivity, attracting and retaining customers, and reducing risk.

Along with our partners, we deliver solutions tailored to the specific industry needs of our clients.

Along with our partners, we deliver solutions tailored by industry.

Our clients represent many industries, including:

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Our platform enables clients to modernize legacy systems and processes to meet the growing demands for improved constituent service, lower costs, reduced fraud, and greater transparency.

• Healthcare – Pega’s software for AI-powered decisioning and workflow automation is used by healthcare organizations for Consumer Engagement, Onboarding and Enrollment, Customer Service, Care Management Services and Claims/Core Admin.

Our platform enables clients to improve member and patient outcomes, loyalty, and retention, simplify experiences with reduced time and effort, resolve service requests faster and easier across channels, advance efficient flexible healthcare coordination, and deliver streamlined, modern experiences for members, providers, and employees.

• Communications and media – Pega’s software for AI-powered decisioning and workflow automation is used by communications and media organizations for Customer Engagement, Order Management, Customer Service, Service Assurance, Network Operations, and Shared Services.

Our platform enables clients to increase loyalty and wallet share, simplify experiences while accelerating revenues and processes, resolve service requests across channels more quickly with less effort, drive a faster, simpler repair experience, and boost the efficiency of 5G, fiber, and cloud processes.

• Insurance – Pega’s software for AI-powered decisioning and workflow automation is used by insurance companies for Customer Engagement, Sales, Distribution, Underwriting, Policy Holder Service, and Claims.

Our platform enables clients to nurture and grow their book of business, increase agent sales effectiveness, power better partner performance and loyalty, automate application intake and processing with intelligence, personalize seamless policy lifecycle experiences, and improve claims handling efficiencies with more modern customer and employee experiences.

• Consumer services – Pega’s software for AI-powered decisioning and workflow automation is used by consumer services organizations for Customer Engagement, Supplier Onboarding, Customer Service, and Enterprise Operations in industries such as transportation, utilities, internet providers, retail, hospitality, and entertainment.

Our platform enables clients to enable more personalized real-time next best action, accelerate onboarding with simplified experiences, automate the resolution of customer requests across channels with increased digital self-servicing, and streamline operations to rapidly reduce cost, time, and risks while increasing customer satisfaction.

• Manufacturing and high tech – Pega’s software for AI-powered decisioning and workflow automation is used by manufacturers to streamline their complex global operations and create more value for their customers, dealers, distributors, and suppliers while directly managing the performance, uptime, and impact of their connected products, equipment, and experiences.

Our platform enables clients to reduce the complexity of enterprise operations in domains like supply chain, order management, quality management, shared services, customer service, and aftermarket services, including warranty management and captive finance, while minimizing the constraints on digital transformation caused by legacy systems.

The markets for our offerings are intensely competitive, rapidly changing, and highly fragmented as current competitors expand their product offerings and new companies enter the market.

We compete in the CRM, including marketing, sales, and customer service, and DPA, including BPM, case management, decision management, robotic automation, co-browsing, social engagement, low-code application development, and mobile application development platform software markets, as well as in markets for the vertical applications we provide (e.g., Pega Know Your Customer TM for Financial Services, Pega Care Management™).

We compete in the CRM, including marketing, sales, and customer service, and DPA, including BPM, case management, decision management, robotic automation, low-code application development, and mobile application development platform software markets, as well as in markets for the vertical applications we provide (e.g., Pega Know Your Customer TM for Financial Services, Pega Smart Dispute™).

We also compete with clients’ internal information systems departments that seek to modify their existing systems or develop their own proprietary systems and professional service organizations that develop their own products or create custom software in conjunction with rendering consulting services.

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To protect our proprietary rights, we also control access to and ownership of software, services, documentation, and other information.

We also purchase or license technology that we incorporate into our products and services.

We also purchase or license third-party technology, including open-source software and large language models, that we incorporate into our products and services.

Sales and Marketing

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We also partner with technology providers and application developers.

To support our sales efforts, we conduct a broad range of marketing programs, including awareness advertising, client and industry-targeted solution campaigns, trade shows, including our PegaWorld ® iNspire user conference, solution seminars and webinars, industry analyst and press relations, web and digital marketing, community development, social media presence, and other direct and indirect marketing efforts.

To support our sales efforts, we conduct a broad range of marketing programs, including awareness advertising, client and industry-targeted solution campaigns, trade shows, including our PegaWorld ® user conference, solution seminars and webinars, industry analyst and press relations, web and digital marketing, community development, social media presence, and other direct and indirect marketing efforts.

In addition, our consulting employees, business partners, and other third parties also conduct joint and separate marketing campaigns that generate sales leads.

Our sales and marketing efforts are premised on the strength of our products, both as they exist currently and as they will continue to develop in the future through our research and development efforts.

Our sales and marketing efforts are premised on the strength of our products, and the success of our clients, both as our products exist currently and as our products will continue to develop in the future through our research and development efforts.

Research and Development

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As of December 31, 2024, we expected to recognize $1.6 billion in revenue from backlog on existing contracts in future periods.

For additional information, see "Remaining Performance Obligations ("Backlog")" in Item 7 of this Annual Report.

As of January 31, 2024, we had 5,406 employees, of which 1,998 were based in the Americas, 1,224 were based in Europe, 1,873 were based in India, and 311 were based elsewhere in Asia-Pacific.

Our people are critical to our success.

We strive to be a place where people build their career in an inclusive, equitable, and diverse culture.

We believe cultivating our talent is at the heart of engaging, motivating, and retaining our workforce to support our clients, partners, and business.

We evolve our corporate culture through various initiatives, including global equity, inclusion, and belonging initiatives, employee engagement, pay equity, and employee development.

Diversity, Equity, Inclusion, and Belonging (“DEIB”)

We celebrate, welcome, and foster diverse perspectives at Pega because we believe this will accelerate our ability to deliver innovative products and services to our clients.

It is critical for us to create an environment where all individuals are respected, valued, and supported, have access to opportunities, and feel that they belong.

Our commitment to DEIB includes inclusion and allyship programs, amongst other investments.

We are continuously expanding our sponsorship of formal employee resource groups and are proud to share our support for the following communities:

women, veterans, Black, LGBTQIA+, Asian, LatinX, and persons with disabilities.

Employee Engagement, Health, and Well-Being

Our efforts to retain and attract employees include providing competitive reward packages and encouraging active and transparent communication throughout the Company.

We regularly seek feedback to better understand and improve our employee experience, and we are committed to fostering an environment where everyone feels connected at Pega.

We share the responsibility to preserve, strengthen, and evolve our culture while continuously reviewing the way we do things to propel us forward together.

In addition to our employee engagement survey and continuous feedback tools, we host regular sessions led by the executive leadership team where any employee can ask questions.

We are committed to fostering an environment that supports our employees’ health and overall well-being, with an emphasis on physical, emotional, financial, and personal wellness.

PegaUp!, our employee wellness program, includes awareness campaigns, fitness classes, guided meditation, and health and wellness offerings.

In 2022, we also implemented global Wellness Days, where we encourage our people to take a break to recharge.

We compensate our employees for what they do and how they do it, regardless of their gender, race, or other characteristics.

To deliver on that commitment, we benchmark and set pay ranges based on market data and consider individual factors, such as an employee’s role and experience, location, and performance.

We regularly review our compensation practices, in terms of our overall workforce and individual employees, to ensure our pay is fair and equitable against local markets.

For additional information, see "Note 15.

Revenue" in Item 8 of this Annual Report.

People and Culture

As of January 31, 2025, we had 5,443 employees:

1,995 in the Americas, 1,223 in Europe, 1,904 in India, and 321 across Asia-Pacific.

Our people are the foundation of our success.

We foster an environment where employees feel valued, supported, and empowered to do their best work.

Collaboration and fresh thinking drive how we work together, ensuring that our people can contribute meaningfully while growing in their careers.

We believe that when all perspectives are considered, we make better decisions and create stronger outcomes.

By actively listening to our employees, and refining our people strategies, we build a workplace of connection, engagement, and performance.

Learning and Development

Engaging with different perspectives strengthens learning, sharpens thinking, and enhances problem-solving across teams.

We are committed to providing our people with meaningful opportunities to learn, develop skills and grow their careers.

Our people are encouraged to take ownership of their professional growth, leveraging mentorship, on-demand learning, and structured development programs.

Total Rewards

We offer a competitive and comprehensive total rewards package that drives performance, supports well-being, and emphasizes career growth.

Our compensation philosophy is designed to recognize performance and align with Pega’s success, with a mix of base pay, short term cash incentives, and long-term incentives.

Beyond compensation, we provide a market competitive benefits suite that promotes health and well-being.

We regularly assess and evolve our offerings to ensure they meet the needs of our workforce, recognizing that employees' priorities change over time.

Talent Cultivation

Talent Cultivation is at the foundation of our people strategy.

It is an ongoing, dynamic process that encourages our employees to focus on performance and development goals, receive continuous feedback, and drive their future path for growth.

We invest in our employees’ career growth and progression by providing a wide range of opportunities, including formal and informal development, mentoring, sponsorship, and coaching.

Pega Academy helps employees, clients, and partners gain and rapidly advance Pega software skills.

A series of leadership and management development programs equip our managers with the skills and knowledge to successfully build a culture of engagement and high performance.

Additionally, we provide educational resources and classes, career training, and education reimbursement programs.

Talent Cultivation is the cornerstone of our people strategy.

Our dynamic approach combines continuous feedback with development, enabling employees to thrive in an ever-evolving digital landscape.

We foster a culture of growth where every employee can navigate their career journey through our comprehensive learning and development, mentoring, and job shadowing offerings.

Our approach to development prioritizes professional growth and personal well-being.

Pega Academy helps accelerate skill development across our global community of employees, clients, and partners, focusing on emerging technologies and capabilities.

Our leadership development programs are designed to cultivate leaders who drive high performance while fostering inclusive team environments.

Our commitment to continuous learning is backed by education reimbursement programs and external partnerships, ensuring our workforce stays ahead of industry trends and technological advancements.

Corporate Information

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What changed 10-K

Item 1. Business