Pegasystems Inc.

Thank you. I will now like to turn the conference over to Peter Welburn, Vice President of Corporate Development, Investor Relations. You may begin.

Thank you so much, Krista. Good morning, everyone, and welcome to Pegasystem's Q3 2024 earnings call. Before we begin, I would like to read our safe harbor statement. Certain statements contained in this presentation may be construed as forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The words expects, anticipates, intends, plans, believes, will, could, should, estimates, may, forecasts, and guidance or variations of such words and other similar expressions identify forward-looking statements which speak only as of the date the statement was made and are based on current expectations and assumptions. Because such statements deal with future events, they are subject to various risks and uncertainties, actual results for fiscal year 2024 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 Q3 2024 results and in the company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2023, and other recent filings with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved. Although subsequent events may cause our view to change, except as required by applicable law, we do not undertake and specifically disclaim any obligation to publicly update or revise these forward-looking statements, whether as the result of new information, future events, or otherwise. And with that, I turn the call over to Alan Treffler, founder and CEO of Pegasystems.

Thank you, Peter, and thanks to all who are joining today's call. I'm really pleased with our performance for the first nine months of 2024. The team is executing extraordinarily well, and I'm optimistic about the momentum that's evident in our results. The energy is palpable across the company and our sales teams are fired up. It's great to see that we're driving profitable and balanced growth across industries and geographies while delivering transformational innovation. The enormous excitement we're seeing from our AI offerings especially Pega Gen AI Blueprint, is fundamentally changing the way that we engage with prospects and clients. Our distinctive AI approach is showing clients how they can accelerate their digital transformation and move to become autonomous enterprises. Blueprint is now part of virtually every client and prospect discussion. It continues to inspire our prospects, our clients, and partners with possibilities. and they're continuing to evolve. It has profoundly changed how we engage, sell, deliver, and is helping us work to get in with clients more deeply and across bigger pieces of their business. The number of new blueprints continues to grow dramatically. It's helping us identify opportunities to accelerate growth and creating additional momentum for Pega Cloud, which is growing at a faster rate than even we predicted, and Ken will discuss in more detail. The tremendous engagement from clients and partners is also accelerating innovation, as together we're continuously discovering new ways to leverage and to improve Blueprint. For example, we've recently added support for many additional languages and added a new collaboration feature that summarizes who is making changes to the Blueprints to help our clients collaborate among themselves. As a reminder, you can experience Blueprint for free by going to Pega.com and searching on Blueprint. But I think perhaps most importantly, this is unique to Pega, and I don't think it can be easily, if ever, replicated by competitors without a major rework of what they do. This isn't just our opinion. We're getting that feedback from clients, partners, and industry experts who are also saying that Blueprint is one of the most compelling examples of actually putting AI to work that they see, something I heard last week when I was in EMEA and met with some of our largest clients. This changes how we operate and I think gives us a distinct competitive advantage and an approach to monetization of AI that is not dependent on product SKUs, but rather reflective of building and growing strategic long-term client relationships. For example, recently one of our large multinational financial services clients asked us to help improve their team's, quote, digital savviness. So we helped organize more than 40 Blueprint exploration sessions over four days, giving about 800 employees hands-on experience with Blueprint. The team was so impressed, they asked us to help programmatically put Blueprints into practice and included citizen developer training. broaden the people who can get access to this AI. A European client that provides healthcare services has given Blueprint to nurses, caregivers, and others from across 11 hospital networks. So they can directly design and rethink their workflows that they need to do better service for their citizens. Today, they've created more than 150 Blueprints. And recently, our team used Blueprint to identify and accelerate potential pipelines in new areas of business with a long-term insurance client. This level of excitement about Blueprint and the client engagement it's driving is candidly unprecedented in Pega's history and has the entire company and our partners stoked. I want to talk a few minutes about what we're hearing from clients and how we're responding. Clients are focused more than ever on digital transformation. It's been on their lips and it's become an imperative and thinking about what we're doing now and into the new year, we believe we're uniquely positioned to help our clients with this journey in three ways. First, support for rethinking and replacing legacy applications. It's common for our clients to have lists of the applications they hate, the ones they want to replace. And there's an increased urgency to modernize these apps so they can both leverage AI and also move to the cloud, which many of these are not able to do. We see a huge opportunity to help them rethink and replace this ever-growing technical debt. Blueprint deploys AI to eliminate the drag of legacy applications, and it connects the whole process of rethinking the app with the internet and with AI in a way that really helps drive both the right way to do things and faster outcomes. Clients can import information about applications and then use Blueprint to update, enhance, or completely reimagine their workflows, and then execute quickly and effectively. We'll continue to enhance our offerings to support clients in these efforts, and we'll be introducing new capabilities this year and next. I've been speaking with partners and clients about this over the past few weeks, and the response to this legacy transformation vision has been universally positive. The power of this approach is clients aren't just lifting and shifting applications. Blueprint allows them to rethink their workflows while moving them onto a modern cloud platform, which brings me to the second advantage we believe we have. We believe we are an ideal modern application platform for the types of business that involve workflows and involve getting work done. Recently, Gartner noted that, quote, Overlapping automation capabilities are driving market consolidation, unquote, and quote, prompting enterprise application leaders to search for platforms that can cater to the end-to-end needs of a wide range of automation use cases. They actually introduced a new concept to address this. They call it BOTE, Business Orchestration and Automation Technologies. This describes what we also see in the market, and it's really the convergence of robotic process automation, which we call RPA, business process automation, BPA or BPM, and low-code application platforms. Gartner describes both as a class of software technologies that allow enterprises to automate and orchestrate end-to-end business processes while connecting multiple enterprise systems of record through any applicable integration mechanism. Now, Pega, for much of its history, has been saying almost the exact same thing. And this is exactly how we think about our center-out business architecture, bringing together the process automation, orchestration, and using AI to have decisioning that helps make the right decisions at every moment, and making it work across front-end channels and across data sources. We believe we're perfectly positioned to be the business orchestration and automation technologies platform for our clients. And that platform sets our clients up for the third advantage Becker delivers, a path to what we refer to as the autonomous enterprise. Our mission to change the way the world builds software that starts with building the software around the outcomes that clients want to deliver. helps organizations maximize the potential for automation and AI. We have spoken before about this approach to building outcomes and workflows in a way that is center out. This is radically different from others who still build their software around user screens or around database structures. And we believe that those approaches are fundamentally ill-suited to a world that expects ubiquitous self-service and agentic automation. Sendaround is the right architecture for AI agents because it's built around outcomes. It's built not around the screens, not around the database tables, but in fact around what the organization is trying to deliver regardless of the screen it uses, regardless of the database that it has to go to to get the information. And it allows us to define things in ways that we can make really good decisions. We can drive optimized outcomes. and do it across the channels and the back ends. The approach not only allows for automation, it also helps ensure governance with agents following defined best practices in predictable ways and in ways that will be able to pull in a human for assistance when appropriate, however, doesn't assume that it's human driven. We've already seen the fruits of this approach in our email and message agents which have automatically processed hundreds of millions of emails and messages for our clients, all while adhering to best practices and regulations and reliable outcomes. And PegaGenAI KnowledgeBuddy, an agent that can retrieve and synthesize information from an enterprise knowledge base, is delivering answers with attributions that employees can trust. And PegaGenAI Coach, an agent that delivers the structure and data in a packet case to provide real-time guidance for users to help ensure that they're working in the most effective way when the system's not able to handle everything completely automatically. So our upcoming release, Packet Infinity 24-2, contains enhancements to Coach, KnowledgeBuddy, and our data virtualization architecture and more. You'll see that news next week. Now, there's nothing I love better than spending time with clients. While I was in Europe last week, I met with dozens of senior contacts and partners and with some of our most strategic customers. Those meetings were, frankly, all incredibly positive. And in every interaction, we talked about how Blueprint and our approach to AI could accelerate their digital transfer mission initiatives. And I would tell you, I see on their organizations. So in summary, I'm very pleased with how we performed the first nine months of the year. And I will tell you that the strong profitable growth has been coupled with levels of innovation in the way that we bring both intelligent automation and intelligent decisioning to market that I think put us with an innovation agenda that is top shelf. Pega GenAI Blueprint continues to generate excitement and has fundamentally changed how we engage prospects, clients, and partners in a very positive way. And I believe our approach to AI really focused on changing the heart of the business of our clients, that focusing on business outcomes rather than just coding faster is markedly different from what we see out there in the market. And I believe we can help our clients and prospects to understand that. And it's going to provide a competitive advantage and support long-term client relationships. We will continue to deliver tangible and I believe groundbreaking solutions focused on providing real value in a strategic and architectural manner. And given that our approach and architecture are unique, I think we have a tremendous long-term opportunity and engine for growth. With that, let me turn this over to Ken. Thanks, Alan.