Pegasystems Q3/FY 2017 Investor Deck

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. These forward-looking statements are based on current expectations, estimates, forecasts, and projections about the industry and markets in which we operate, and management’s beliefs and assumptions. In addition, other written or oralstatements that constitute forward-looking statements may be made by us or on our behalf. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “estimate,” “may,” “target,” “strategy,” “is intended to,” “project,” “guidance,” “likely,” “usually,” or variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict.

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 2017 earnings 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, 2016 and other recent filings with the SEC. 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 the Company’s view to change, except as required by applicable law, the Company does not undertake and specifically disclaims any obligation to publicly update or revise these forward-looking statements whether as the result of new information, future events or otherwise.

Non-GAAP Financial Measures

This presentation includes non-GAAP financial measures. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why managementuses these measures, the usefulness of these measures, and the material limitations on the usefulness of these measures, see the disclosures included with the Company’s press release announcing its Q3 2017 earnings available on our investor relations website at http://www.pega.com/about/investors.

ASC 606 “Revenue from Contracts with Customers”

Please note that, unless explicitly stated, this presentation does not take into consideration the impact of the new revenue recognition standard (ASC 606), which the Company will adopt effective January 1, 2018.

Agenda

• Pega value proposition

• Our strategy

• Customer success

• Financial Details

3

Customer Expectations vs. Business ChallengesUnprecedented Volatile Business Environment

BusinessChallengesCustomer

ExpectationsSeamless

Relevant

Immediate

Coherent

Personal

New Channels

Legacy Systems

Market Change

Economic Pressure

Regulations

Silos

CUSTOMER ENGAGEMENT

OPERATIONAL EXCELLENCE

Best Of Breed Technology In A Unified Architecture

5

+

“The best cost to value rating of any solution.”Gartner

Magic Quadrant for the CRM Customer Engagement Center, 2017

LEADER DIGITAL AUTOMATION

THE REALCRM ALTERNATIVE

LEADER IN END-TO-END WORK

MANAGEMENT

+

LEADER IN REAL-TIME

DECISIONS & AI

Driving the End-to-End CRM Customer Journey

PEGA®

CUSTOMER DECISION

HUB

PEGA®

MARKETINGPEGA® SALES AUTOMATION

PEGA®

PLATFORM PEGA®

CUSTOMERSERVICE

Customer Managed Partner Managed

Cloud Choice

• No Code

• Omni-channel UX

• Case Lifecycle Management

• Next-Best-Action

• Directly Capture Objectives

• Situational Layer Cake

Enterprise-wide transformation. One unified platform that is 6.4X faster to build, 8X faster to change and 40X faster to mobile.

Key Differentiator: Unified Pega® Platform

30%+ YoYEcosystem members

Expanding the Ecosystem

All of the Top 8 Largest Healthcare Insurers

All of the Top 5 Global Card Issuers

7 of the Top 10 Insurance Companies

6 of the Top 10 Global Banks

6 of the Top 10 Global Communications Services Providers

6 of the Top 10 Automotive Manufacturers

71% of Total Blue Cross Blue Shield Coverage

7 of the 10 Largest US Federal Departments

REDUCING CHURN

Using Pega Marketing, Sprint is seeing more than double the acceptance of retention offers.

Pega Marketing provides real-time, contextual cross and up-sell offers to increase offer acceptance by 300%

CONTEXTUAL SELLING

12,000 service advisors across 12 countries use Pega Customer Service providing a 3X increase in customer satisfaction for American Express

CONNECTING GLOBAL EXPERIENCES

RBS uses Pega Marketing to engage customers with relevant offers across all channels improving response rates by 25%

MAKING THE BEST DECISIONS

Pega’s Customer Service and Operations Applications allow AIG to consolidate 55 claims systems across 60 countries into one global system

PICKING UP THE PIECES

Financial Details

• Industry-leading Platform

• Strategic applications

• Land, expand, transform

• Growing ecosystem

• Digital engagement

$100 $126

$162

$212

$264

$337

$417

$462

$509

$590

$683

$750

Guidance

$860

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GAAP Revenue (in Millions)

Long-term growth

17

Total Term License and Cloud

*Adjusting for the year to date shift toward term and cloud, 2017 revenue would have been $641 million, Non-GAAP Operating Margin 17% and Non-GAAP diluted EPS would have been $0.92.

Annual Contract Value(in millions)

ACV is the sum of the following two components: A. Term and Cloud contract value divided by the number of committed contract years B. Quarterly Maintenance revenue reported for the current three months ended period multiplied by 4.

License and Cloud Backlog(in millions)

20

The amounts shown may not be recognized in revenue in future periods as a result of the adoption of the new revenue recognition standard (ASC 606). The Company will adopt ASC 606 effective January 1, 2018

Increasing Shareholder Value

Cash returned to shareholders(in millions)

Cash provided by operating activities(in millions)