Pegasystems chief executive Alan Trefler is “shipping up” jobs to Boston — hundreds of them.
Trefler’s software company added 275 positions in Massachusetts in 2020, and another 30 so far this year, bringing the company’s Boston-area workforce to 1,035.
The big reason? A surge in demand for the firm’s AI-based software that helps clients anticipate their customers’ needs.
Revenue at the Cambridge company grew 12 percent last year, enabling it to clear the $1 billion threshold for the first time. Pega, as it’s widely known as now, celebrated the milestone with a ceremonial “bell ringing” to open the Nasdaq market on Monday. There’s no actual bell anymore, and the event took place online for obvious reasons, although it was also broadcast on the Nasdaq’s jumbo screen in New York’s Times Square.
The move to remote work driven by the COVID-19 pandemic played to Pega’s strengths, because its software helps clients shift business online and improve customer engagement without needing face-to-face interactions. (Trefler prefers to call it “augmented intelligence,” rather than the broadly used “artificial intelligence.”)
Investors certainly noticed: The stock rose 67 percent last year, and the company has a market value of about $12 billion today.
Pega might be best known to some music fans as the company that bankrolled the virtual Dropkick Murphys concert for St. Patrick’s Day last March, just after the pandemic wiped calendars of live events. More than 10 million people tuned in to hear the Celtic punk band mix a few Irish tunes with its anthems such as “The State of Massachusetts,” “Worker’s Song,” and, of course, “I’m Shipping Up to Boston.”
The company subsequently agreed to a three-year sponsorship of the band. That partnership included a show last year filmed at Fenway Park, with a cameo by Bruce Springsteen on the ball field’s jumbotron screen.
In his brief remarks during the Nasdaq event, Trefler made it clear the $1 billion threshold is already in “the rearview mirror.” The company has told Wall Street it expects $1.25 billion in revenue in 2021.
“While we want to shoot way past that, crossing the billion-dollar milestone is a big deal,” Trefler said afterward. “We didn’t do it by buying dozens of companies. We did it the old-fashioned way: We ground it out.”
That 20-percent-plus growth in revenue anticipated for 2021 means more hiring. A spokeswoman said Pega expects to add more than 1,000 jobs to its current global workforce of about 5,700 by year’s end. Several hundred are likely to be added in Massachusetts this year.
Where those workers will report to the office remains unclear. In an annual filing with the Securities and Exchange Commission last week, Pega said it’s vacating its Rogers Street office Oct. 1. It’s looking for a new headquarters in Cambridge, the spokeswoman said, but will also add a second space outside of the city to be more convenient for suburban workers.
“We expect another year of solid staff growth,” Trefler said. “The business is growing, and we’re looking to bring more home.”
Trefler said fewer than 5 percent of his employees are going into the office on a typical day. He said he hopes to be “in a different place” by the fall, in terms of the local workforce.
Like many other software companies, Pega has shifted steadily from a one-time sales approach to a subscription model, which provides for a more reliable revenue stream. In 2017, more than 60 percent of its new business came from subscriptions to Pega software. By last year, that number had risen to 95 percent. Subscriptions represented 76 percent of the company’s $1 billion in total revenue last year.
The remote-work trend has also helped Pega on another front: finding talent. Trefler said Pega just hired a new head of customer success management in London. Normally, he said, that position would be based here. But Trefler is still hiring much of his workforce locally. “Massachusetts has a lot of talent,” he said.
That talent spills over into the music world. The company’s unofficial rock group, The Layer Cakes, recently won a virtual “battle of the bands” contest that pitted employees at Pega against those at other tech companies, including Oracle and SAP. And with St. Patrick’s Day looming, Pega is gearing up for another Dropkick Murphys livestream on March 17.
“We don’t just have good engineers and salespeople,” Trefler said. “We’ve also got some remarkable musicians.”