Pegasystems (PEGA) is set to report its second-quarter 2025 results on July 22. The Zacks Consensus Estimate for second-quarter revenues is $368.77 million, with earnings expected at 24 cents per share, down 7.69% from the year-ago quarter. PEGA’s Cloud ACV is expected to grow in Q2, driven by strong demand for its AI-enabled offerings.

PEGA is expected to benefit from record free cash flow in Q2, which will support capital returns and investor confidence. In Q1, the company generated $202 million in free cash flow, surpassing the previous year. However, unfavorable forex is likely to impact PEGA’s Q2 performance, along with competition from Salesforce and Microsoft.

PEGA’s long-term prospects are driven by its GenAI strategy, particularly the adoption of its AI-powered, low-code tool, Pega Blueprint. The company’s collaboration with Amazon Web Services is expected to accelerate growth by modernizing legacy systems. PEGA shares are trailing the Computer and Technology sector but outperforming Amazon. The stock is currently trading at a premium valuation.

Pegasystems is expected to benefit from strong Cloud ACV growth, robust free cash flow, and rising GenAI Blueprint adoption in Q2. However, challenges from unfavorable forex, cautious European spending, and competition may temper growth. With a Zacks Rank #1 (Strong Buy), investors may consider accumulating PEGA shares. Download Atomic Opportunity: Nuclear Energy’s Comeback free today for more insights.

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