That naturally lends itself to agents and automation, as do add new workflows. Also, for call center agents, to the extent that a little bit of your question I’m thinking of that, we just rolled out, in Q4, really exciting voice AI capabilities, which you can read about on pega.com also, where we are listening to the conversation, actually filling in fields on the screen, allowing the operator to validate them, and then using that information in the wrap up and in the other sort of elements and summarization. And we now have that in production at initial clients. So very, very exciting.
Operator: Your next question comes from the line of Blair Abernethy with Rosenblatt Securities.
Blair Abernethy: As you have discussed AI, Gen AI becoming more strategic to your customers and how you’re going to market, what is the impact or how are you looking at your consulting and channel partners over the next couple of years? Is this an area you will be investing more in? Or do you think you’re going to be taking more of this back into your control because, obviously, you guys will be the experts in this area?
Alan Trefler: We will only be successful if our application of AI makes everyone more expert. This whole idea of reducing the barriers to entry is also going to be very helpful not just for our clients and not just for our own staff, but our partners. I do not see that Pega is going to be taking over the work of our partners. In fact, to the contrary, Kerim, over the last two weeks, has done what’s probably more than a dozen [indiscernible] with exclusively partners to give them a head start on Blueprint. And one of the most exciting things is that he’s building in the ability for our partners to create their own blueprints, which when they go to a customer, they will be able to bring their best practice blueprint on a particular topic to the client, will then add in what on practices are, the best practices from the internet, Gen AI pulls that all together and gives you a consolidated blueprint that I think is going to be really good for partners to come in with more packaged IP.
So I think this is going to be terrific for partners. It’s also going to make it easier for them to learn. But let’s face it, Gen AI is going to change all the businesses that we’re in. And that’s true for our partner businesses as well.
Operator: Your next question comes from the line of Mark Schappel was Loop Capital Markets.
Mark Schappel: Nice finish to the year. Alan, just a question for you. There’s little discussion – not much discussion about Launchpad in your prepared remarks this quarter. Just wonder if you’d just give us a quick update on the solution mainly around the status of your early adopter program.
Alan Trefler: I’m very excited about Launchpad. But we have a massive business here to run and to grow, and I want to make sure that people know we’re taking care of that and we’re spending money wisely on that and we’re growing that business. So Launchpad, I’m thrilled to say that, in Q4, we got our initial couple of clients live. And it’s going well. This interest, we’re working with partners in particular to get them to capture their IP because that seems to be something that our partners are very, very interested in, to use Launchpad as a way to bring their intellectual property and their practices to market. And I’m hoping we will have some nice exciting things to talk about by the time we get to PegaWorld when it comes to Launchpad as well.
So you’re also going to see that we’re updating those pages on our website and going to make it a lot easier for people to see, understand, and get involved in Launchpad as the year goes along. So I think that’s going to be a terrific augmentation to our business, and very good for our partners as well.
Operator: Your next question comes from the line of Anthony Hong with KeyBanc Capital Markets.
Anthony Hong: I just wanted to ask, provided an improving free cash flow position and a strengthening balance sheet, could you provide an update on Pega’s view regarding its debt, including debt retirement or refinancing given the current interest rate environment?
Ken Stillwell: As you can see with the cash that we have on the balance sheet and the free cash flow we’re going to generate in 2024, we’ll be in a net positive cash position very soon. Certainly well before the end of the year. And with our convert coming due in the first quarter of 2025, we’ll have more than enough cash on the balance sheet to fully satisfy that convert retirement if we so choose to do so. So I’d say, point one, we certainly have no concern about being able to retire that convert as scheduled. Second point is that that provides lots of flexibility in terms of how we want to think about capital allocation and the leverage of things like convertible or traditional debt on the balance sheet. So I would say we are evaluating how we want to think about that as we now are becoming a multi 100 million dollar consistent and predictable free cash flow generator.
But right now, with respect to the existing convert, we have plenty of cash to satisfy that if we choose to do so.
Operator: There are no further questions at this time. I will now turn the call back over to Alan Trefler, Founder and CEO of Pegasystems for closing remarks.
Alan Trefler: Thank you very much everyone who joined the call, especially those of us who got up early on the West Coast. We definitely do appreciate that. We want you to know that we’re excited about where we are. The folks in the team are working extremely hard. And I think everyone who can should come to PegaWorld because I think what you see there is going to be really eye opening. So thank you very much all of you and I look forward to talking to you again next quarter.
Operator: This concludes today’s call. You may now disconnect.
