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Pegasystems

Q1/FY 2016 Investor Deck

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Safe Harbor Statement Certain statements contained in this presentation including, but not limited to, statements related to future

earnings, bookings, revenue, and mix of license revenue, may be construed as forward-looking statements

as defined by the Private Securities Litigation Reform Act of 1995.

The words expects, anticipates, intends, plans, believes, could, estimates, may, targets, strategies, intends

to, projects, forecasts, and guidance, and other similar expressions identify forward-looking statements,

which speak only as of the date the statement was made. Because such statements deal with future events,

they are subject to various risks and uncertainties. Actual results for fiscal year 2016 and beyond could differ

materially from the Company’s current expectations.

Factors that could cause the Company’s results to differ materially from those expressed in forward-looking

statements are contained in the Company’s press release announcing its Q1 2016 earnings, and in the

Company’s filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-

Q for the quarter ended March 31, 2016, its Annual Report on Form 10-K for the year ended December 31,

2015, and other recent filings with the SEC. Although subsequent events may cause the Company’s view to

change, the Company undertakes no obligation to revise or update forward-looking statements whether as a

result of new information, future events, or otherwise, since these statements may no longer be accurate or

timely.

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THE MARKET OPPORTUNITY 1

PEGA VALUE PROPOSITION 2

CUSTOMER SUCCESS 4

FINANCIAL DETAILS 5

3 OUR STRATEGY

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Customer Expectations VS. Business Challenges Unprecedented Volatile Business Environment

Business Challenges Customer

Expectations Seamless

Relevant

Immediate

Coherent

Personal

New Channels

Legacy Systems

Market Change

Economic Pressure

Regulations

Silos

Strategic

Applications

5

Unified Platform Engineered for Evolution

LEADER IN CRM CASE MANAGEMENT #1

“Pegasystems has the strongest ability in, and received the highest scores

from reference customers for, modeling and predicting customers'

behavior, and for communicating the next action to agents.”

Gartner* *Magic Quadrant for the CRM Customer Engagement Center, 2016

+

REAL-TIME

DECISIONS #1

2015

IBM

Appian

Pegasystems

2015

BPM #1

2015

Pegasystems Appian

IBM

2016

Salesforce

Pegasystems

Microsoft

Oracle SAP

+

6

Growth Strategy

Low

R

ela

tio

nsh

ip

H

igh

Low Vision & Conceptual Match High

Robust Digital Engagement

supports awareness, consideration, & buying

Content

Outreach

Community

Test-drive

Strong Apps & Engagement Maps

Complement target model,

making key solutions (particularly CRM) easier to

understand,

explain and implement

$30B Strategic

Applications Market

Original BPM

Target

$3B

Execution Initiatives

Extend Leadership with the Pega 7 Platform

Deepen CRM Applications

World Class Digital Marketing

Expand Market Coverage

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Pega 7 Unified Platform – differentiator

• Model Driven Development

• Customer Decision Hub

• Mobile

• BPM and Case Management

• Data and Integration

• Cloud and On-Premises

• Pega 7 Express

Enterprise-wide transformation. One unified platform

that is 6.4X faster to build, 8X faster to change and

40X faster to mobile.

9

Key Products

Selected Customers

Acquisition Rationale

Business Description • Robotic Desktop Automation

• Robotic Process Automation (RPA)

• Workforce Intelligence

OpenSpan provides desktop automation, robotics and process discovery software to enterprises. The software reduces costs and improves productivity by automating desktop functions and providing deep visibility into application usage.

• Addresses a critical need by driving meaningful efficiency gains on the customer service desktop

• Creates differentiation in the CRM market by combining Pega 7 with leading desktop automation, robotics and workforce intelligence

• Highly synergistic customer base with a focus on large enterprises in key verticals (fin svcs, insurance, telco)

• Adds strong development and engineering team with deep expertise in client level application integration and big data analytics

OpenSpan – Leader in Robotics Automation

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Strategic Applications Driving the end-to-end customer journey

MARKETING SALES &

ONBOARDING

CUSTOMER

SERVICE OPERATIONS

PLATFORM

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From Relationship Selling to Digital Marketing

Pega.com

Digital Content

Awareness Campaigns

Lead Generation Campaigns

Significant Increases in:

• Marketing sourced opportunities

• Contacts

• Organic search

• Site visits

• Engagement

• Video views

• Content downloads

• Social media community

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Broader Coverage

Corporate Markets

Applications Selling

GLOBAL 3,000

ENTERPRISE ACCOUNTS

Relationship Selling

Global 600

Financial Services

Insurance

Healthcare

Comms and Media

Life Sciences

Manufacturing

Energy

Public Sector

Shorter Sales Cycle Cloud First Digital Buying

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Expanding the Ecosystem

30% growth

200 + interactive, self-paced online courses 2.8+ million lessons to date 35,000 global students to date

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8 of the Top 10 Credit Card Issuers

8 of the Top 10 Global Banks

6 of the Top 10 Communication Service Providers

10 of the Top 10 Largest Healthcare Payers

7 of the Top 10 Insurance Companies

8 of the Top 10 Life Science Companies

300M Serviced Constituents a Day

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REDUCING CHURN

Using Pega Marketing, Sprint is

seeing more than double the

acceptance of retention offers.

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Pega Marketing provides

real-time, contextual cross and

up-sell offers to increase offer

acceptance by 300%

CONTEXTUAL SELLING

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CUSTOMER RESPONSE

Dramatically improving customer

response time, first touch resolution

and card dispute resolution time by

consolidating 14 applications into

one Pega 7-based application.

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DIGITAL BANKING

Powering ME’s transformation to

Australia’s best digital bank with

Pega 7.

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CONNECTING GLOBAL

EXPERIENCES

12,000 service advisors across

12 countries use Pega Customer

Service providing a 3X increase

in customer satisfaction for

American Express

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MAKING THE BEST

DECISIONS RBS uses Pega Marketing to

engage customers with relevant

offers across all channels

improving response rates by 25%

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GETTING YOU THERE

Pega’s Operations Applications

helps increase Heathrow’s

on-time departures from 68%

to 85%

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PICKING UP THE

PIECES Pega’s Customer Service and

Operations Applications allow

AIG to consolidate 55 claims

systems across 60 countries into

one global system

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SAVING THE DAY

Improving Safelite’s NPS from

73% to 87% and driving greater

operational efficiency across

the organization with Pega Mobile

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Come to our world and see how to change yours

Tap into best practices and lessons learned in customer presentations

Engage directly with our products in the Tech Pavilion

Upgrade your skills in hands-on training courses & workshops

Access to the product experts to get your hardest questions answered

3,500+ attendees means 1,000s of potential networking conversations

June 5-8, 2016

Las Vegas, Nevada

Early Bird: $995

Use PWsave100 for $100 off

FINANCIAL DETAILS

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Go To Market Model

• Industry Leading Platform

• Strategic Applications

• Land, Expand, Transform

• Growing Ecosystem

• Digital Enablement 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$126 $162

$212

$264

$348

$421

$462

$511

$593

$683

$800

(000,000’s)

Non-GAAP

20% CAGR

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Revenue Growth Non-GAAP

16% Growth

Q1'15 Q1'16

$154

$179

(000,000’s) Non-GAAP Revenue

Revenue Mix: Software license,

Maintenance, and Services

Q1'15 Q1'16

$64

$77

(000,000’s) Non-GAAP Revenue

20% Growth

License Revenue Mix: Perpetual,

Term, Subscription, and Cloud

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Revenue Mix Reflecting the strength of our software business

41%

32%

27%

Q1 2015

43%

30%

27%

Q1 2016

Software License& Cloud

Maintenance

ProfessionalServices &Training

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Geographic Revenue Non-GAAP

Americas $119 66% Americas $103 67%

EMEA $46 26%

EMEA $39 25%

APAC $14 8%

APAC $12 8%

Q1’15 Q1’16

Total Revenue $154

Total Revenue $179 (000,000’s)

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Total Revenue Mix Non-GAAP

Q1’15

45% 55%

Q1’16

35% 65%

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Trend of First Quarter Backlog

$(20) $(14)

$10

$(30)

$(35)

$(30)

$(25)

$(20)

$(15)

$(10)

$(5)

$-

$5

$10

$15

Q1 2013 Q1 2014 Q1 2015 Q1 2016

License backlog is computed by adding billed deferred license and cloud revenue as detailed in Note 9 “Deferred Revenue” and

off-balance sheet license and cloud commitments as detailed in the “Future Cash Receipts from License and Cloud

Arrangements” in the 10-Q.

(6.6%)

2.6%

(7.2%)

(4.1%)

(000,000’s except %)

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Cash, Cash Equivalents and Marketable Securities

(000,000’s)

Q1'15 Q1'16

$225 $204*

* $10.1 million of marketable securities were sold in the quarter, which did not settle until April

2016 and are reflected in other current assets as of March 31, 2016 on the balance sheet.

$12M of repurchases under

stock buyback program

$6M of stock repurchases

for tax withholding

payments on net settled

shares

$2M quarterly dividend

$4M in property and

equipment investments

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2016 Guidance

Full Year Revenue increased to $800 million from $780

million

EPS $ .95 per share (non GAAP)

EPS $ .44 per share (GAAP)

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