Pegasystems (PEGA) reported strong fiscal Q2 results, driven by strong demand for its Pega Cloud platform and continued momentum from its Blueprint go-to-market strategy, Wedbush said in a report Thursday.

Total annual contract value reached $1.51 billion, up 16%, with Pega Cloud ACV growing 28% to $761.1 million, Wedbush said. "Pega Cloud ACV story revolves around the success of Blueprint," which is leading to "increased strategic wins," it added.

Total revenue rose 9% year-over-year to $384.5 million, exceeding Wall Street's estimate of $361.9 million, while earnings per share beat expectations at $0.28 and free cash flow for the first half of fiscal 2025 climbed to $286.5 million from $218.4 million a year earlier, the report said.

Subscription revenue rose to $326 million, and total remaining performance obligations grew 31% to $1.84 billion. Despite a slight miss in Pega Cloud revenue, the company reaffirmed its fiscal 2025 revenue guidance of about $1.7 billion and EPS of $1.97.

Following the results, Wedbush maintained an outperform rating on Pegasystems and raised the price target to $70 from $68.

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