Pegasystems Inc. (NASDAQ: PEGA) experienced a significant 14.58% decline in the post-market session following the release of its second-quarter financial results, which fell short of analyst expectations on key metrics.
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 critically, the company's GAAP net income plummeted 56% year-over-year to $13.33 million, and its annual contract value (ACV) growth slowed substantially.
Management attributed the disappointing performance to "unprecedented changes in the AI market," which have caused clients to delay their purchasing decisions. The company further warned that these same factors may continue to adversely affect ACV growth and cash flow generation for the remainder of the year, contributing to heightened investor concern during the post-market session.