Pegasystems Inc. (PEGA) Earnings Call Transcript & Summary

All right. Welcome, guys. Thank you. We're here with the Pega team, have Ken with me. So Ken, we're going to kind of keep this conversation throughout, and we're going to try and hit a lot of topics. We have time to do it. So no issues on that.

Maybe just to start off, Pega has a long history, I think 40 years or so at this point. You've been with the company about a decade. So just kind of give us some flavor in terms of kind of the company's journey, the evolution and kind of what's gotten it to where it is.

Sure. It's interesting, like an investor said to me, like kind of half-jokingly, but it kind of like you think about he said, when you're at a company 10 years, you're kind of like a founder, right? Because like when executives are at a -- and I thought that's an interesting, like it kind of sounds funny, but because strategies do not last for decades, right? Like so you have to -- well-run companies have to adjust and change. And so the last 10 years has been an interesting journey for us because when I started, we were a perpetual business. And we decided, well, we saw what was happening in the market, and we knew what -- how clients wanted to buy, and we understood the economics of moving to a subscription business. Then right -- shortly after that decision, it really was obvious to us that the anxiety around cloud was reducing across the world in governments and regulated industries. And so we kind of very quickly then flipped into this cloud discussion of like one -- maybe one step further in that recurring model. And then we went through a cloud transition, and we kind of knew that we had to anchor ourselves on this Rule of 40. So the business model transition was a big part of my first probably 5 years of anchoring that. And then COVID hit. And then -- and now the whole environment around the way people interact with each other, interact with dramatically changed and didn't change just in the short term as even though we're back in the offices, it has fundamentally changed the expectation of like the available engagements where people are not in the same place. So that leveled the bar in terms of engagement software. And now we're at maybe this next kind of inflection point, which is the power that AI presents for us and how that can change the pace at which companies digitally transform, the ability for us to really make these systems more best practice hardened in terms of having less customization and freelancing around how enterprise applications are built so that we don't actually have the situation we have 50 years from now where we have to modernize all of the systems that we build because they're all custom. So I think that, that's -- like it's just been an interesting. In 10 years, it feels like we've seen a few evolutions in the business, but also driven by what was happening in the marketplace. So it's never boring.

I agree. And my takeaway from here is I'm going to now go present with my leaders from Morgan Stanley that actually viewed as a founder given that I've been 10-plus years in the seat. So we'll see how it goes.

I mean what have you waited for?

Okay. So just we unpack kind of Pega a bit here more specifically in terms of kind of the key products and key use cases that are being solved. Maybe just kind of give us a flavor of what those are and how that's unfolding.

Yes. So this is probably one of the areas where I would say many investors are not -- either not aware of maybe need to be reminded. Much of what Pega does is, all of what we do is deterministic workflow. Let's just start there. Why is deterministic workflow needed? Typically because there is a regulatory compliance internal control standard that needs to be met. Many of our systems with our clients, if you think about our client base, our clients are selling to consumers or they're governments supporting citizens. So you have a citizen or a consumer on the back end, which means lots of the use cases have either established laws or certainly standards about how that work needs to be done. So things like fair lending standards, credit card processing, the way we handle customer data. I mean you could just go HIPAA, PCI, all these things are standards that were built to protect consumers. That then requires the work to be done in a very, very deterministic way, predictable, reliable, zero tolerance for errors. That's what Pega does. Pega is the workflow that powers these processes and activities and transactions that have to go through a very deterministic set of steps to execute. It's not just get it done, has to be done in a very defined way. And that's the business. That's who we've been for 40 years.

Okay. And is it the reason you specifically called out deterministic versus nondeterministic just to really anchor in the points of, this is something that is known, repeatable, et cetera. And to your point, there's 0 margin for error. So I think we're probably leading into maybe why there's some protections or some moats here as it relates to your offerings and kind of what you're delivering. Is that?

Yes. So the connection to deterministic is that it needs to be decided on the front end. So the workflow has to be decided on the front end, has to adhere to that process. And if it doesn't, there's either regulatory or business brand or quite frankly, the legal risk for that. So that's the connection. So then when you think about, well, why couldn't I just say build a custom application that doesn't have workflow or use a coding tool to speed that? It's the main reason why people don't do that is not the cost of engineering. It's the inability to actually have a functioning workflow application that helps you stay regulatory compliant.

I got it. Okay. So let's now hit Blueprint. Blueprint is a big part of the company. It's evolved quite a bit from when it first was announced and kind of what you're doing with it. You all have said that it's core to how you operate. Maybe just kind of double-click on Blueprint for folks and maybe share some of the specific customer needs that drove the expansion of Blueprint's capabilities. And I think right now, more than anything, everyone is asking questions around AI at this conference, and obviously, there's a lot going in the world. But like why is this critical for enterprises right now and the needs that they have?

So one of the biggest challenges that Pega has had over decades is the cost of getting started and the cost of getting the transformation of the application. So if you've got a use case that is running on some legacy mainframe, COBOL application, whatever it is, and it works, but it's not modern. The first question that you would go through is, well, how much will it cost me to design, to redesign and to rebuild this on a platform like Pega. And the time frame and the cost is a pretty big investment. And so clients will be very picky on what they did. And they -- quite frankly, that cost of system integrators and hands on keyboards and even the front-end ideation, it just really was a -- it was a headwind to transformation. When we saw AI, we immediately connected what we saw with the models to how we could address that issue. So we built Blueprint specifically to attack that upfront design problem of clients not being able to visualize and design what they wanted the workflow to look like because it was just too costly and took too long. So that was our target that we went after. Blueprint started kind of more as a simple ideation tool, like you had a couple of screens and you can maybe produce a PDF, right? If you fast forward to where Blueprint is now, we're going to -- we'll be announcing tomorrow morning before the market that Blueprint has full vibe coding capabilities in it, right? It's not -- you're not just actually seeing the drop-downs, you're actually going to see the actual like kind of vibe coding experience where you don't -- you could -- if you wanted to use the kind of the UI and the drop-downs, you could or you could go right in and actually talk to the blueprint, tell it what you're looking to do, ask it for suggestions, ask it for -- have it ask you questions to help actually. So that's going to be -- that's the experience we envision how every Pega application will be built going forward. So we still have some work to do in terms of extending the capabilities of Blueprint to cover every configuration use case. So we're not there yet, but that's our next phase is really to make it so robust that when you interact with Pega, you will no longer drop down into an App Studio or Dev Studio experience where you're configuring inside Pega, everything will be done in a vibe coding front end of Blueprint. And you might say, well, why couldn't I use another AI tool if I wanted to do that? No AI tool is going to understand workflow like Pega does. There's no -- you can search the Internet, pull every piece of data, it's proprietary to us. Only we understand how to do those workflows, those deterministic workflows. So the differentiation is our moat is this is our thing.

So you've removed the friction, if you will, from people designing new systems. And obviously, the initial kind of headwinds were the complexity, the time and then obviously, the money you spend and more times than not, you get it wrong because you didn't do the upfront plan.

Right. And skill sets resources or...

Blueprint, you're taking this 40 years of history of you guys building system designs and schematics and understanding certain workflows and permutations. And therefore, you then have this now vibe coding element that can tap into all of that and give you this dynamically real time and get these systems out.

That's exactly right.

Okay. Perfect. Okay. So just maybe a bit more specificity. Can you maybe just share an example of a customer using Blueprint today to maybe drive AI transformation?

So do you mean to use Blueprint and AI to transform like a legacy application?

Yes. Beyond kind of like the divide cutting, is there anything specific that's happening?

So I'll use -- I'll keep the name because I don't know if we have the right to talk about what clients are doing and such. But we have a client that I talked to recently that is essentially reforming all of their customer experience so which means customer support, customer engagement, upsell, cross-sell, everything. There basically, there are a series of workflows that some of which are on -- are custom built, some of which are on a competitor of ours. And they're using Blueprint to redesign each one of those workflows and then using Blueprint to look at the collection of all those workflows across a life cycle and they'll use that to then deploy and transform that. So then when they're live, so now go to run time, you've designed the application, you're running the application, they'll use AI, our agents and other agents from other systems with our process fabric, which is our Agentic Process Fabric is -- think about it as like the connection of the orchestration where the agents can come and be directed to the workflow that they need to...

Kind of like [ ACV ] server issue.

Yes, like [ AAJ ] exactly, yes. So it's -- so that is like -- that is an example of that will -- is happening at multiple clients. And that would -- what would have happened pre-AI is they would have had to go workflow by workflow, whiteboard and you and I in a room and we design it and probably get it wrong and keep just -- will be 2 years, 3 years, 4-year projects.

And so we've been speaking a lot about Blueprint specifically focused on design. And you now are doing that phenomenally well. You have new capabilities that are released, et cetera. Maybe you could help me understand where else you feel you can now evolve potentially within the broader development process outside of design, whether it's kind of develop, test, deploy, et cetera. Just maybe where else can those capabilities accelerate customer deployments and implementations and deliver capability quicker?

So Blueprint is now extending into the build phase or the developed phase. It will also include all the automated testing as associated with that, that we'll be testing continuously. We have agents testing as we're actually designing and building. When you get to production and you're live, we'll actually use Blueprint in the future in the actual ongoing software development life cycle of improving the app of updating, of taking new capabilities of making changes. So really, Blueprint becomes that starting point for everything from design to build, to test, to operate.

That's awesome. And so it's fully living the infinite life cycle.

It's not there now. It's not there yet, but that's our strategy.

Okay. Got it. On your recent earnings call, you mentioned becoming more proactive and confident in pursuing new logos supported by kind of Blueprint experiential sales approach. Maybe just kind of shed some light on that and kind of the go-to-market motion, how it's changed and kind of productivity gains that you've seen?

Sure. So when we would hire a salesperson a few years ago, it was a -- we would not -- we would really not let a salesperson talk to a client until they went through a deep training of Pega. Typically get some level of certification. So let's just call that 6 months of lack of productivity. Then they start to get into the field. By the time it takes them to build some pipeline, they're not going to close a deal in the first year. They may not close a deal in the second year. You can imagine the cost of bringing on salespeople targeting a new logo that doesn't know Pega with this very manual labor-intensive front end. So we really felt uncomfortable scaling our account executives and new logos too fast because of that upfront cost. Now we use Blueprint. We don't -- there is no training required. Person comes right in, they could start immediately with Blueprint. It's self-explanatory in terms of how it's used. It's -- they can get in front of the client. They can be talking to a client in the first meeting and pull out Blueprint. So that, to me, is like transformational in terms of how we sold, which then gives us the confidence to start targeting new logos and to bring in more salespeople to try to further accelerate our growth.

Okay. That's awesome. Maybe just on this go-to-market motion as well. You've recently enabled partners to leverage Blueprint directly, like including embedding their own IP in the platform. Maybe how does this change your strategy with SIs? And kind of what does this mean for your ability to scale more quickly over time?

So similar to the ramping challenge with new AEs years ago, we did not sell through partners. Now contractually, a partner may have been the prime, but they weren't selling. We would sell and we would partner and they would implement. So we didn't really feel comfortable encouraging partners to sell because of that upfront training that was required. And if you think about like a system integrator like [ PwC ] and Accenture, their salespeople are not domain experts in any particular product. So you can't -- you're not -- you can't expect them to be experts. So now we actually have partner-branded Blueprints. So in the example of Accenture or Capgemini or Cognizant or others, they'll have their own proprietary blueprint. That blueprint is used in their selling motion with their sellers. Anything they do with their clients is only visible to them. We don't have access to it. No one else does. Then we want them to use that in terms of selling transformation to the clients. We have a 3-way partnership with AWS or Google where they're the hyperscaler. And so system integrator getting the transformation, AWS or Google helping augment and support some of the service credits. We get the platform deal, set it through the marketplace, it runs on that. So that's kind of the way the partnership is working. It's just -- it's brand new for 2026. So we will work out the kicks, but it's very new.

It sounds like win-win-win for all...

We believe it is.

Okay. Maybe shifting to market opportunity and a bit of differentiation here. Enterprise CIOs have been shifting from like AI experimentation to actually execution and deployment. Maybe just kind of perspective from you on your conversation with customers, kind of how would you characterize the IT spend environment today versus a year ago? And kind of where do you see the most durable demand?

So specifically for us, legacy transformation up until this past year was typically not in the top 5 initiatives. Maybe it was # 5, but it was not in the top 5 initiatives for our clients. Now if you look at that priority, it's in the top 3, right? It's typically cloud, AI and transformation. So -- and we think those all 3 fit together, right? They're very complementary to each other. So we feel the pressure from our clients to move faster, to move faster to leverage AI, to use AI almost as the catalyst to try to move faster with that transformation. And there's some great technology, AWS' transform tool, some of the COBOL interpretation stuff that Anthropic release. These are all great accelerants to actually bring transformation to a company like Pega.

Okay. And we touched on this a bit earlier, but just thinking about orchestration for a second as kind of one of the key bottlenecks to scaling some of these systems. But I think this kind of plays directly into some of the strengths that you all have. I think you mentioned a mesh or concept earlier. But maybe just kind of give us some perspective in terms of how this shift kind of plays to your strengths as kind of the AI adoption broadens and people become much more receptive?

So Pega is a workflow company, but much of what we do with those workflows is the integration of the workflows into their business processes and really helping orchestrate connection to all these systems. I mentioned before the Agentic Process Fabric, which is a way to create that orchestration with agents as well as those data integrations and process integrations. So I think the most -- one of the most exciting things that I'm seeing is that transformation, clients are thinking about transformation, I think, for real, right? I realize that change is hard and large organizations like yourself, I mean there's a lot of people and there's a lot of systems, and it takes a while. But I do think the leaders, the CIO leaders realize the value that is unlocked by actually transforming and modernizing these. And so I think that AI is a big catalyst for that. So that's like one of the most exciting things to see is this isn't tactical like trying to fix a screen. This is -- I think people are taking serious for the first time.

And obviously, this evolution has come about quickly. And I think, obviously, the -- getting the product and packaging right is essential for being able to push some of these software offerings. Maybe just help us better understand how you all are pricing your software. Is it seats? Is it outcomes? Is it something else? And maybe how does that look for this year as some of these products roll out?

So we made a decision 10, 15 years ago that has turned out to be the right one now. And the decision was that we wanted to move away from user models. And the reason why was we were going to clients and clients were saying, help us optimize our call center, for example. We've got too many people. We'd like to get more. So the result of optimization is they take down the number of CSRs, customer service representatives. And for that, Pega would get less revenue. That didn't really make sense, right? So we kind of -- we said, look, user models don't make sense. Activity models make sense. Cases. So we charge based on a unit of work, which we call case in our system. So as the client pushes more automation through the system, we share in that efficiency through a higher -- and then as they use more cases, there's naturally a volume discount curve to incent clients at scale to continue to use us more.

Okay. I got it. And maybe the ultimate validation of what you guys have is your retention metrics, right? I think your gross retention is in the high 90s and net is kind of 12-ish ZIP code. Maybe just better help us understand maybe the moat that you've developed, kind of how that helps you differentiate and maybe why that's durable? And then kind of when you're speaking about that, as people are evaluating platforms, maybe who is it that they're typically comparing you against? And kind of why is it that your moat is actually allowing you to win in this market that's becoming, I would say, increasingly competitive with the tools that people can deploy to help accelerate their specific technology offerings.

So we have a few differentiations that would be the reason why someone might scale more with Pega. We have this concept that we call the situational layer cake. And what that means is it's the concept of dimensionality and scalability. Many times, if you're using Pega for, say, 20 workflows, 30% of the types of steps and stages might be similar across those workflows. So once you build that one time, that's all repurposed across any of the applications. So you can really save a ton of time in terms of reuse. When you make a change one place, you can propagate that change through all of the different Pega workflows. So that's very differentiated. No one else actually takes that approach. Another differentiation we have is we have a kind of a very seamless way of integrating real time with other systems so that the data that you see, and it's the way that we cache and store the data and create those integrations that we can seamlessly grab that data, put it in the context of a case, containerize it. And it is -- essentially, it creates a real-time or near real-time kind of engagement where other systems tend to have lags, they tend to sometimes be batch transactions even today. So those are really powerful differentiations when you're doing things at scale. When you think about the competitive landscape, you say, well, why would somebody pick Pega over XYZ company? Nobody does workflow like we do workflow. I mean if you look at the new Gartner BOAT, business orchestration automation technology quadrant that just came out, Pega is top and to the right. We've been top and to the right every time Gartner or Forrester puts out intelligent automation, BOAT, whatever the quadrant looks like. So it's generally recognized that, that's what we do. We do workflow. And so if you're trying to do enterprise scale deterministic, regulated 0 error tolerance, real time, a lot of reuse, ability to evolve that system, that's Pega. Nobody else compares.

Okay. Perfect. Maybe shifting to financials. Strong quarter reported. Maybe just a bit before we dive into the numbers, I think you guys have been articulating ACV growth and net new ACV dollars is kind of the best KPIs for Pega right now. Maybe just kind of explain that lodging rationale in terms of if people are outside and looking at the performance of the business, why those are the best indicators?

Sure. So we started ACV when we were going through the transition because we knew that our revenue was going to convert to subscription for perpetual. So there was going to be a lot of noisiness in the revenue as lots of other companies have went through. So we knew that was going to happen. So the growth in the business was most represented with the growth in what we build clients, which is the annual contract value. So we established annual contract value as the best metric. It's analogous to ARR. So we -- I think that is the best measure for a subscription business is the increased spend with your clients. Then we kind of -- because of some of the noise in the revenue line, non-GAAP operating margin or EBITDA or something wasn't really a great representation for what was happening in the business. So most companies take EBITDA, subtract CapEx or come up with -- to try to get to free cash flow. And we just decided, let's just go right to free cash flow, right? There's no reason -- so we just said ACV, free cash flow, it's how much do you increase the billings every year and how much do you get back to be able to distribute to shareholders or use for other strategic investments. Then what we also look at is we also pay a lot of attention to our stock-based compensation, right, which is kind of the other lever. And we look at that percentage of stock-based compensation compared to our revenue, our market cap, our number of shares so that we really look at ACV, free cash flow and then also free cash flow less our stock-based compensation. And that's how we kind of measure whether we're generating value for our shareholders.

Okay. Perfect. In the quarter, I think it was about 14% constant currency growth. Pega Cloud ACV was 28%, exceeding expectations. You put out initial guidance, which is an acceleration of growth in the top line. And I think the margin expectations well exceeded kind of where people were at. Maybe just kind of help us understand what is the true driver of your performance on the top line? Is it kind of what maybe is Blueprint doing or not? And then kind of what gives you confidence in the '26 numbers and your ability to go out and compound that free cash flow growth that, I mean numbers that are quite actually impressive.

So I'll touch on the growth first. Blueprint has completely unlocked value in how we can scale new logos and go after new opportunities and help drive transformation faster with our existing clients and new ones. So we feel very confident making some strategic investments in sales and marketing to help to accelerate that. And we have a modest acceleration from 14% to 15%. That will come from new logos. So can we see -- our net retention rate, it might move around a little, but it's clustered in a pretty tight range over the last 5 to 10 years. So we feel pretty confident that that's a durable number. And then we're focusing on new logos kind of filling that gap to get acceleration in growth. When you go -- when you think about the operating margin, the operating leverage, the free cash flow piece, we have built -- and we're quite proud of the culture that we built around profitability, right? We were -- we never had free cash flow margins before the transition above 20% and probably more like 10% to 15%. And when we went on this journey, we, as a company, we put all of our bonus plans, all of our targets, everything on Rule of 40. And we said we're going to be a Rule of 40 company. And at the time we did this, we were like a Rule of 20 company. And we said we're going to become a Rule of 30, then we're going to become a Rule of 40, then we're going to get our cash flow. We're going to accelerate our growth. And we've done each one of those things. So I think the change that we've made in terms of people appreciating the value of being a profitable business is probably actually more impressive at Pega than actually the movement to subscription. So then you kind of flip over to -- so how are you going to continue to get operating leverage, right? So we're free...

I'm not coming off, what, 45% free cash flow growth last year?

Yes. We came -- we had -- 2 years ago, we had, I don't know, 1,000% free cash flow growth. And then we had like 60% and then we've got another 40-plus percent. And our free cash flow growth is about 17% right now, but we're still getting some operating leverage. The key for me is what is -- what can a well-run business drive in free cash flow as a percentage of kind of that subscription base. And until we get to the 35% to 40% range, I think we have room to get better. And we're kind of a little north of 30% right now, and that's an impressive number. So -- but I think we can do better. And like I said, the commitment to the value of that across Pega, it's not about being greedy. It's about running a good business and returning value to our shareholders and creating incredible stability for our customers. Because the more profitable you are, the more stability you have to deliver for your customers.

Sure. That's really quite impressive. And I think more importantly, your ability to kind of tailor the organization culturally that this is something that's now embedded in everyone's operating philosophy and the desire to want to go and kind of achieve these goals. Maybe just kind of one follow-up on the ACV targets for the year. I think last year, there were some renewals that I think were earlier in the year. Maybe just kind of help us understand the arc or trajectory that we should expect as it relates to kind of the hitting the ACV milestone?

Yes, I'm glad you mentioned that. So last year was a little bit of a different year where we did not have a back-end loaded renewal cycle. And so we ended up -- and we didn't in 2024. So it kind of rolled over into the first quarter of '25. So Q1 of 2025 was a very impressive quarter, but also not really a fair compared to 2026. 2026, the way our renewal cycle and the way our pipe build is to compelling events with our clients tends to be more second half loaded. Which means that our year will look more like a traditional enterprise software company where your Q4 tends to be your biggest quarter, whereas last year, Q1 was our biggest quarter. So you'll see some deceleration in our ACV growth in the first quarter just because of the tough compare, and then you'll build your way back up to the end of the year. That's the way we see it model.

I understand. So before I shift to capital allocation, any questions in the room? Okay. All right. So the Board recently approved, I think, an additional $1 billion share repurchase. Obviously, strong growth in the quarter, great guide on cash flow, generating a ton. I think you're trading low double digits on a cash flow basis, 11, 12 multiple. So maybe what's your strategy right now in terms of buyback? Is it let's lean into this because we know we have and we don't like the price? Or is it, hey, we want to lean in, but we don't want to over-index just in case there are things we want to invest in or companies we can acquire?

Yes. I think it's more of the latter. Like look, it's hard to justify an acquisition IRR when you're trading at sub-15x free cash flow and you're growing 15%. So like that's a hard argument to make. So we feel like we should use as much cash as practical to buy back shares. We feel like that's a great investment. That said, I've had some investors ask the question, like why don't you go out and get $1 billion or $2 billion of debt and buy back shares. I'm not saying that's a crazy idea, but it does put pressure on options. You don't give yourself options like options that something might come to the market. We might want to make an investment. So we don't want to put ourselves in a situation that we don't allow ourselves. We've worked so hard to get to the free cash flow generation that we have. We want to make sure that we use that as a powerful option of how we can drive our strategy. So we're going to be very aggressive with buybacks, which is why the Board approved an extra $1 billion, and we've run -- largely run through the first $800 million or so of what was approved. And we've got really the potential to buy back that $1 billion between now and the middle of next year. So we're going to be very thoughtful about accelerating those buybacks, but also careful to give ourselves options.

Okay. Maybe as we just start to wrap up here, we have a few minutes left. Post earnings, I'm sure your callbacks, maybe just a view on a general sentiment. And then perhaps what are the most misunderstood or underappreciated aspects of the story that kind of while we are up here on this platform, we can just use as a kind of mouthpiece to really get that story out there pretty clearly.

I think that investors that know Pega are pretty impressed with the results that we've put up and the progress we've made over the last few years. And the feedback we've got from investors, I think they're very appreciative of us doing what we said we were going to do, which I think should be -- I think that should be a given with public companies, but unfortunately, it's not. So like we're -- so we're proud to deliver for our shareholders. I think that they're very interested in Blueprint, very excited about the Agentic capabilities that we've released and how those fit into faster digital transformation. I think they're very excited about new logos and our ability to go after new logos. They're curious about this using system integrators and the autonomous partner selling to try to have a new sales channel. So I think those are all things that they're excited about. To hit the second part of that question, which is what's misunderstood? I think probably the -- I only realize this now because of the discussions around AI and kind of the SaaSpocalypse or whatever they're calling it these days. I think there is a deep misunderstanding with why Pega exists. Pega exists to build deterministic workflows for regulated industries, regulated workflows that have consumers or citizens on the other side. These are things that don't just go away. And so the reason why they use someone like Pega is because they need 0 error full predictability, scalability. And I think that we never really talked about that before because it was kind of almost assumed. But I think now it's much more relevant because it's really the reason why we have a moat, the reason why we're sticky, the reason why clients expand with us is because we are a known and dependable workflow platform for them to execute a lot of that work.

So it's [ 9,999,999 ] in terms of simple numbers.

It's -- I use the example of why did people use mainframe and still use mainframe because there's a high level of reliability, right? Pega is analogous to that in terms of reliability.

Okay. Last one, just on the Investor Day, you guys are PegaWorld this year and then perhaps dates and maybe rough agenda for people to just think about what's to come.

PegaWorld is -- we have PegaWorld in June. You can come to pega.com and get the dates. We have -- our Investor Day is on Monday of PegaWorld. And we will typically -- what we'll do is we'll have a discussion of some of our new capabilities at a little bit of a deeper level that we talk about on the main stage. We're going to actually have this year, we're targeting to have a customer actually come into the Investor Day and talk about their use of Blueprint across their organization, how it's changed their engineering organization and the efficiency. And then I'll typically wrap up with a financial update model of our -- we call it our long-term model, but typically over the next 3 years. I'll do that. Then we encourage all of our investors to go to our innovation hub and to go talk to clients and to kind of really use it as a -- learn more about Pega.

Okay. All right. Thank you, Ken, and thank you, guys, for being here. Appreciate it.

Awesome. Thanks.