Steve Koenig: Got it. Hey, thanks a lot. Congrats again.
Kenneth Stillwell: Thank you.
Operator: Next question, Joe Mearus with Truist Securities. Please go ahead.
Joe Mearus: Thanks so much, guys. Just have one question. Just about the whitespace within the current customer base. I think in the past, you’ve spoken to it being quite large. I am just curious if you could remind us of the size there. And then maybe just qualitatively, how that fits into different buckets whether it’s selling to different geographies, or new product cases, and then maybe just how task mining with ever flow might help kind of even broaden that opportunity? Thanks so much.
Kenneth Stillwell: So I’ll take the first part, then Alan may take the process mining part. So. we often think about this, we naturally Joe, we can never get this perfect, right because you’re speculating how big the market is, but we can use market data from third party companies that do this for a living, and we can we know our spend is, and we kind of have a directional idea of what we think would be a reasonable target. And when you look across our client base we are well below 10%, penetrated single digits, kind of mid single digits penetration. And when you go out and say, well, what would that look like after three to four years of growth with this client, we may be approached 10%. So I think even in our largest clients we’ve talked about maybe we’re 25%, 30% penetrated some of our largest clients in terms of what we might be able to get from them.
So I think the number is almost ridiculously high to talk about how much we could tackle that $100 billion market that we have out there. So I think we been in business for a long time, 40 year anniversary, actually, this month as a company, but I don’t think we should mistake that and the relationship we have for our clients, and the things that we are, we are deeply penetrated in those clients in terms of the opportunity set. Alan, you want to maybe talk about Everflow?
Alan Trefler: Yes. I can. That’s absolutely correct. And when I go talk to the government of , Last week, when I was in Germany, we have such a tiny fraction of what we’re able to do for those governments and same for the commercial enterprises as well where there’s really, in all that, a few cases, staggering upside. And candidly, the customers liked the attention, and they deserve the attention. So I think this is going to be a win win for everybody. Everflow is just a wonderful tool to help people just get a better understanding of what’s going on with their processes. And I think it’s less than Everflow itself generates large amounts of ACV. I think it’s more than the use of Everflow is part of the discovery of how you can do better automation, and how you can apply the Pega platform technology to be able to handle the things that Pega workflows are good at.
Joe Mearus: Awesome, thank you so much.
Operator: Next question, Vinod Srinivasaraghavan with Barclays. Please go ahead.
Vinod Srinivasaraghavan: Hi. Thank you for taking my question. Just one for me. You’ve talked about usage baseline before and you’ve talked about a little bit earlier. Can you talk about how did usage patterns with customers purchasing the product in this way trend throughout the quarter?
Kenneth Stillwell: So just to be clear, we think about the usage based contracts what we’re really talking about is the ability for our clients to bring on new use cases, new workloads to expand their footprint of Pega in a frictionless way. And as they do that, naturally the volume that they use where they see value from that we get a small fraction of that value that is created by the client. In terms of usage across the year, some clients haven’t very consistent because it’s a very predictable and repeatable process. Some have peaks and troughs through the year because of the nature of the business like loan originations might be bigger and the spring might be in other parts of the year for example but in terms of the quarter, there weren’t, I wouldn’t say that there’s trends that we’re tracking on usage.
What I would say is that the majority of our engagement with clients were engaging in this way so that we can actually help our clients have a frictionless way to adopt and not have to go back in kind of a traditional perpetual world, if you go back many years where they had to actually go through a sizing it up in a purchasing process and trying to identify the need and go through a very rigorous and overhead heavy internal process. We want our clients to be able to get value from Pega in a frictionless way. And that’s really a very important part of the usage base model.
Alan Trefler: And will often calculate the usage based on a trailing 12 month average so that individual quarters won’t bounce up and down and usage won’t vary month to month. Customers and, both customers and us, I think are happier when that’s a little smoother. And so that’s how we intent to do this.
Vinod Srinivasaraghavan: Got it. Thank you appreciate it.
Alan Trefler: So with that, let me thank everybody for attending. You were excited about where we are. We’re working hard. And I want you guys to know, particularly the ones who want to see brilliant generative AI capabilities that Pega world is going to be I think enormously exciting this year, the MGM Grand it’s June 11 through 13th, Investor Day on the 12th and look forward to seeing you on Vegas. Thank you very much.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time and thank you for your participation.
