Pegasystems Inc. (PEGA) experienced a significant after-hours plunge of 10.70% following the release of its second-quarter 2026 financial results, which fell short of analyst expectations.

The enterprise software company reported adjusted earnings per share of $0.35, missing the consensus estimate of $0.43. Revenue for the quarter was $420.72 million, also below the expected $426.24 million. More notably, the company's GAAP net income dropped 56% year-over-year to $13.33 million.

Management attributed the disappointing results to "unprecedented changes in the AI market" that have led clients to delay purchasing decisions, slowing the company's overall annual contract value (ACV) growth. The company further warned that these AI market changes may continue to adversely affect ACV growth for the remainder of the year, contributing to investor concerns during the post-market session.