Shares of Pegasystems (PEGA) surged 12.18% in pre-market trading on Wednesday, following the release of its impressive third-quarter 2025 financial results. The customer relationship management (CRM) software provider significantly outperformed analyst expectations, demonstrating the success of its AI-driven strategy and robust cloud growth.

Pegasystems reported adjusted earnings per share of $0.30, surpassing the FactSet analyst consensus of $0.20 and marking a 50% increase from the same quarter last year. Revenue for the quarter reached $381.4 million, up 17.32% year-over-year and well above the analyst estimates of $351.5 million. The company's Annual Contract Value (ACV) grew by 14% compared to the previous year, with Pega Cloud ACV showing an even more impressive 27% increase.

CEO Alan Trefler attributed the strong performance to Pegasystems' "differentiated AI strategy," which he said continues to resonate with clients, prospects, and partners. The company's focus on enhancing speed, predictability, and scale in enterprise applications through AI-driven solutions appears to be paying off, contributing to its strong market position in the competitive CRM software industry. Additionally, the company reported a 38% year-over-year improvement in both cash flow from operations and free cash flow, demonstrating enhanced operational efficiency. The market's positive reaction to these results underscores investor confidence in Pegasystems' growth trajectory and its ability to capitalize on the increasing demand for AI-powered enterprise solutions.