Pegasystems shares slipped 3.6% by 1:30 p.m. ET on Wednesday after the company reported Q3 results well below analyst forecasts. Analysts expected $0.49 per share on $421.8 million in sales, but Pegasystems earned $0.35 per share on a non-GAAP basis with sales below $393.4 million, and GAAP earnings were only $0.08 per share. Sales grew 3% year over year, GAAP profit fell 68%, and annual contract value rose 6%, which CEO Alan Trefler and CFO Ken Stillwell cited as grounds for confidence. The article argues free cash flow matters more to investors: the company generated $490 million last year and is running at about $438 million annualized, and Stillwell projects $700 million or more by 2028. The article calculates that this would imply near-term free cash flow growth north of 25%.
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