Does God use the lives of the family members to test devotees?
[Smt. Chhanda Chandra asked: Swami, one of the purposes of human incarnation is to test the devotees. From the lives of many devotees, we know that this test may be in the form of lives of the family members also or more correctly, the strongest attachments of the devotees. The family members may or may not be devoted to God. Then how can their lives, who are not in spiritual path be used? It is definitely beneficial for the devotee to pass the test but what about the others? Probably I am not able to put the question properly but what I mean to say must be clear to the omniscient You. I strongly believe there cannot be anything wrong in God’s administration. If my question does not have any sense, kindly excuse me. At Your divine lotus feet Chhanda.]
Swami replied:- First, you must learn thoroughly the process of swimming and then only you can train others or even protect others from drowning in the process of swimming. If you are not efficient in swimming, don’t try to save others due to your blind fascination of the worldly bonds. In such case, not only the other person, but also, you will be drowned. Even while you are learning swimming, these worldly bonds try to hinder your progress. The reason is that every worldly bond loves you for its happiness and not for your happiness. These worldly bonds are also infected with ego based jealousy and will not allow you to progress in art of swimming. You must always fix your attention on God alone and not on these worldly bonds, which neither progress by themselves nor allow you to progress. You can think of protecting them after perfectly learning the art of swimming.
Open rooms as study centres, small classrooms with a student-teacher ratio of 1:8, and “bottle-shaped” bazaars and shopping arcades for students — a mere 12 km from the ruins of Nalanda, this soaring idea of a learning space has been taking shape over the last four years in Rajgir, a town that’s over a 100 km from Patna.
Now, as the new campus of Nalanda University prepares for a formal inauguration, the focus is on how best it can retain the cultural and architectural ethos of Nalanda Mahavihara, the 5th-12th Century AD university that is considered to be one of the greatest centres of learning in ancient India.
Nalanda University (NU) Vice Chancellor Professor Sunaina Singh is all set to announce the launch of full-fledged operations on Monday. “As NU is re-purposing its vibrant past with its academic architecture, we announce commencement of the academic year 2022-23, functioning of hostels from the new campus and recent placements of the first batch of MBA students by top recruiters. Besides, various specialised short-term programmes have been launched by the university,” a university official told The Indian Express.
What started in 2014 as two schools housed at the Rajgir Convention Centre — with then President of India APJ Abdul Kalam as its first Visitor and Nobel Laureate Amartya Sen its first Chancellor — is today spread across over 455 acres, complete with academic and administrative blocks, teachers and students’ living quarters, laboratories and libraries.
The university has 800 students, including 150 international students from 31 countries. Once all the construction is completed, it can accommodate about 7,500 teachers and students. At present, hostel accommodation for 1,250 students is ready, with about 100 students having already moved in.
In line with Nalanda Mahavira’s multidisciplinary tradition, when students are said to have learnt mathematics, astronomy, grammar, logic and defence studies at a time when the concept of a university was almost unheard of, the present university’s six schools teach Historical Studies, Ecology and Environmental Studies, Buddhist Studies, Philosophy and Comparative Religion, Languages and Literature/ Humanities, Management Studies and International Relations.
In 2021, it started global PhD programmes and introduced two Master’s courses in World Literature and Hindu Studies (Sanatan). It has also started two centres of study — the BIMSTEC-Centre for Bay of Bengal Studies and another on Conflict Resolution and Peace Studies.
To supply it a “gurukul” feel, the university aims to achieve a teacher-student ratio of 1:8 ratio – Nalanda Mahavira is said to have had 2,000 teachers for its 10,000 students.
Vice Chancellor Singh, who was VC of the English and Foreign Languages University (EFLU) in Hyderabad until 2017, said, “The idea may be to recreate Nalanda but it is impossible to recreate that kind of ethos… Rather, we are looking at it as the university of the future that will establish civilisational outreach. What is most outstanding about Nalanda is that it stayed in the cumulative consciousness as a vishwa guru (world leader) even 1,000 years after it ceased to exist.”
University officials said the new campus, designed by Vastu Shilpa Consultants, has deliberately used only eight per cent of the total area for building construction to “match the architectural and geographical setting the ancient Nalanda University would have provided”.
The campus, around two km from the main entrance, is a no-vehicle zone, and visitors, students and faculty will have to walk or use bicycles to get around.
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The iconic exposed brick architecture, along with the elevated staircase — a signature image of the Nalanda ruins — finds a replica in the Administrative Block or the Wing-1 building that has the VC’s office along with other offices.
The campus is a mix of the modern and the traditional — from classrooms with natural light streaming in to white boards and electronic podiums for teachers. Though the eight-foot-wide walls of ancient Nalanda cannot be replicated, the main wall is made up of two parallel walls with a cavity in the middle that works to trap heat. Among the other energy conservation ideas is a plan to use the heat emitted from air-conditioners to generate warm water in bathrooms.
At the academic spine, which will eventually house all the schools and centres of study, are open rooms resembling the cells of students at Nalanda Mahavihara. Students will have the option of using these as study spaces, said a university official.
The centre of the campus will feature the Kamal Sagar, or the lotus pond, on one side of which will feature a horizontal chain of arcades or bottle-shaped bazaars where students can shop for everything from stationery to eatables.
With 17 countries, apart from India, signing bilateral or multilateral agreements for the setting up of the university, the VC said the institution goes beyond the confines of geography and religion. “Unless we learn to collaborate, we will not exist; unitary existence is nothing…The very idea of Nalanda was approved by 17 East Asian member countries because history, culture and spiritualism connected us,” she said.
As of August 2016, India had contributed Rs 684.74 crore, and China and Australia had contributed $1 million each, besides contributions from Thailand and Laos. According to the university’s annual report of 2019-20, it has utilised Rs 493 crore. Officials declined to divulge the estimated cost of the entire project.
The VC said: “Our mandate is to create a new generation think tank… We now have a centre of peace and conflict… Old certitudes are missing and we need to embark on a new pathway of compassion (and) peace. That’s the strength of Indian culture… that we can fight back with letters and knowledge.”
Chandigarh, Punjab, India – Business Wire India Education Excellence Awards 2022 was organized by Kiteskraft Productions on August 6th, 2022. The Conference was graced by the amazing Speakers Dr. C. Shalini, Dr. Archana Ainapure, Prof Sanjeeb Pal, Ms. FaiziKhan and Mr. Khalid Wani. It was an amazing session recognizing all the award winners at Education Excellence Awards 2022. Team Kiteskraft congratulates all the deserving ones and wish them lot of success in their future Endeavors. Kiteskraft Productions took this opportunity to bring together leaders from the education industry and assists in building a strong community. The award aims to recognize excellence in the education industry and felicitated individuals and organizations for their exceptional contributions and services to the industry, by rewarding those who have played a significant role in increasing the efficiency as well as performance of the industry as a whole. Award Winner List – Education Excellence Awards 2022 • Dr. JOHN SAMUEL KENNEDY • Dr. Preeti Padmanabhan • Janvi Nitin Gavandalkar • Dr. TAN KWAN HONG (Tan Kwan Hong &Associates ) • Dr. Sandeep Kataria • RAVIAN LIFE SCIENCE PVT. LTD • Vikas Arora • SujinOommen Philip • Dr. SANIPINA JAYALAKSHMI RAO • Dr. SANIPINA JAYALAKSHMI RAO • Dr. Chandrashekhar SitaramjiKhumbare • Dr. BUSHRA FIZA • Deepak Rana • Guneet Kaur • Gayathri R • Dr. Sandip Gun • Dr. James Morely • Dr. Samarendra Nath Panda • MAHFUJ ALAM • Arzoo Vijay Kumar Kale • Dr. Deepa Sundareswaran • Poonam Madhukar Patil • LKR GLOBAL SCHOOL • Central Academy Education Society, Ajmer • Shilpa Khandelwal • Dr. Gyanendra Singh ( PhD ) • Devasheesh Pant • Dr. Srividhya Srinivasan • Dr. Kartavi Bhatt • Dr. ASHISH KUMAR RAI • ABID ALI KHAN • Sardana Education Consultancy Pvt Ltd • JAYOTI VIDYAPEETH WOMEN"S UNIVERSITY, JAIPUR • Akhtar Fazel • Prof. (Dr.) Raj Mishra • Dr. Jaseela Jayaprakash • M PRAHALLADA • SANJAY HAZRA • Dr. Kaushik Prakash • Dr. Ashaq Hussain Nengroo • Abhishek Singh • Arun Karthick • Bhup Singh Gaur • Prof. (Dr.) Sukanta Kumar Baral • Kids World Education Consultant • Jasmeet Arora • Dr. C Shalini • Dr. Subhash M Vadgule • Dr. S. Arun Karthik • Prof. Pradipta Kumar Mishra • MSN EM HIGH SCHOOL • P. SARAVANAN • Saroja Kumar Singh • Dr. Jayendra Narang • Dr. Shoukat Ara • Vedant Parashar • Gargi Ghosh Kansabanik • Tushar Saluja • S. Priyadharshini • Dr. S.S. ONYX NATHANAEL NIRMAL RAJ (Assistant Professor and Research Supervisor, Vels University, Pallavaram, Chennai) • Rinku Bose • N. Venkata Naga Jyothi • Dr. Kandarpa Kanti Hajra • Dr. Dilip Nath • Dr. Shiddappa Shivappa Bhoomannavar • Dr. Preeti Bhadoriya • Dr. Satyanaarayana Naupada • Shankar Kumar • Dr. P EBBY DARNEY • Dr. A ANTONIDOSS • Krishnadeo Roy • Dr. SUBHABRATA GHOSH ( Assistant Professor of Zoology, University of Kalyani ) • Dr. AneetBedi • P. Suguna • VARDHMAN INTERNATIONAL SCHOOL • Rajeev Gandhi College of Management Studies, Ghansoli, Navi Mumbai • PRAKASH SHIVRAM KHOCHIKAR • Prof. Ashish Kumar • Prof. Dr. Hariharan Ramakrishnan • SANTHI.C • Prof. Dr. TANIA GUPTA • Dr. Rajeev Ranjan • Dr. SANJEEV KUMAR TYAGI • VINAY KUMAR HEGDE • DR. RASHMI GAUTAM • Dr. Sanjeev S Tonni • Ascent International School • Sister Nivedita University • Yusaf.I • Harpreet Kaur Chana • Dr. NAVPRABHAKAR LAL GOSWAMI • Dr. Abdul Nasir • Mrs. Mitali Mukherjee • Syed Ahad Hussain • Catking Educare • Yash Pal • Tavikumar SP • Dr. Ghanshyam Thakur • The Millennium School, Bathinda • Dr. Vishal Mehrotra ( Organizing Chairman ) National OMR Consortium Season II • Shantha Karnic • Dr. ROBERT BELLARMIN V • Dr. Laxmi Rani • ABDUS SAMAD • Prof. Meena Bardia • Kidz Kingdom Preschool and Activity Center • Sheetal Jethy • Dr. Heena Tabassum • Dr. J. Nagaraj • DAV Centenary Public School, Tohana • Mewar University, Chittorgarh • Jitendra Vaswani • Prof. Dr. Sarvottam Dixit • ARENA ANIMATION FC ROAD PUNE CAMPUS (Director Nikhil Halli) • Dr Rajesh Kumar Phor • Poonam Gulati • Yogesh Vishnu Kauthankar • Abhishyant Mehta • N JOHN SUKUMAR • Chandrasekhara Sarma (RS Research Center) • Dr. Vandana S. Daulatabad • Dr. Yogesh Prasad • Vidya Mathews • ARADHANA BOSE (Aradhana Bose Institute) • KanduriPrameela • Leap Kidz Playschool • Mohammed Shihab P S • Shivanand Bande • Dr. M JAHIR PASHA • CBA INFOTECH, GURDASPUR • Sanchita Banerjee • Godson Public School • APEX INSTITUTE • Dr. M Sunil Kumar • Anand ManajiTambe • Fatima Sattar • Prof. Laxmi Shankar Awasthi • The Shikshiyan School • The Shikshiyan School • Pharm Dart Consulting Pvt Ltd • Dr. Basant Kumar Verma • Ram Rajeev Kumar • R Beena Pillai (ShishuVihar High School) • Siddharth Kumar Dixit • Dr. P. KALAISELVI • Prof. Khuraijam Mohon Singh • BANDI SMART ED TECH PVT LTD • Equitas Gurukul Group of Schools • AARTI SUJIT SURWADE • Dr. SURENDRA KAPOOR • Dr. Atul Arthur • Dr. BhargabjyotiSaikia • Avinash Singh • Dr. DHRUV ARORA • Dr. Bhavana Arthur • Regency Public School • Inmakes Infotech Pvt Ltd • Dr. Jagmohan Singh Negi • Dr. LAKSHMI V • Prof. Dr. Nirmal Kumar, J I • Angelene Nesta Vaz A • ARNAV NIGAM • Surya Basara School • MANCHUKONDA FOUNDATION • Dr. ElavenilPaneerselvam • Jawahar Art"s Science & Commerce College, Anadur, Dist- Osmanabad (MS) • Seth AnandramJaipuria School, Nanpara • Dr. SatyabrataBhanja • Lotus Lap Public Schools, Dilsukhnagar Hyderabad • OMVEER SHARMA • Nidhi Nitin Kambli • Dr. Manasi Milind Wakankar • Poonam Singh • MAHIUDDIN ZIAUL HOQUE • Mrs. Namrata Abhaysingh Gaur • R. R. Public School • Chandni Aggarwal • Sanjay Prabhakar Saitwal • Dilip Kanwaria • N VISWACHANDAN REDDY • R. K. Meena Devi • Dr. Rakesh Kumar Verma • Dr. Ripon Bhattacharjee, Associate Professor, Department of Law, University of Engineering and Management, Kolkata • Prof. K PRABHU SAHAI • S PRASANTH • Sonika Dogra Babbar • Dr. Swati Srivastava • Hari Priya P • Sonali Dawar • Sagar Jagtap • Zas Learning Solutions • Sameera V. K • Parshotam Bhatti ( Vishwas Groups ) • Dr. Yaser Qureshi • CBCE SKILL DEVELOPMENT PRIVATE LIMITED • Dr. JAGADEESHWARAN A.• Shine for India English Medium School, Ghutas • Manoj Kumar Bairwa • Archana Kekre • Dr. AMITABH SATSANGI • Dr. V. Sasikala • Krishan Raghav • Bai Navajbai TATA English Medium School • Vivekananda Memorial Educational Institute • G Sudha Elizabath • Dr. Rohit Kumar • Dr. Preeti Gaur • Subhadra Sahoo • Sanjeev Singh • Dr. Ashok Kumar Sonkar • Sumon Acharjee • Nisha Balani • Mona Mulchandani • Dr. Mathew Joseph • ALOKE KUMAR MITRA • Chaitra Ravi • DARSSHAN PRAJAPATI • Mr. Ankit Paul • Sudarshan Sabat • Nikhil Rajesh Narode • Dr. Pankaj Kumar BhavraoNimbalkar (Nootan Medical College & Research Centre, Visnagar) • Roshni Paramedical Institution • Dr. Neelam Daware • ROCKFORD CONVENT HIGH SCHOOL • Dr. Vijay Vitore • Mr. Paramjeet Singh • Dr. N Satish Reddy • Aditya Engineering College • ADITYA COLLEGE OF ENGINEERING • ADITYA COLLEGE OF ENGINEERING & TECHNOLOGY • Aditya Pharmacy College • ADITYA COLLEGE OF PHARMACY • K. SATHISH • Principal Prof. Dr. Mrs. Ajay Sareen (Hans Raj MahilaMaha Vidyalaya, Jalandhar) • NORTH CAMPUS INTERNATIONAL SCHOOL • Imperial International School Najibabad (Disclaimer: The above press release comes to you under an arrangement with Business Wire India and PTI takes no editorial responsibility for the same.). PTI PWR PWR
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The freshman season of HBO's The White Lotus was met with rave reviews from both fans and critics alike, landing the satire a whopping 20 (!) nominations at the September 12 Primetime Emmy Awards. Now, the Mike White-created series is returning for a highly anticipated second season with a whole new cast and location of Sicily, Italy, but the same ironic take on white privilege and upperclass entitlement.
Jennifer Coolidge, who is nominated for an Emmy for her performance as resort guest Tanya McQuoid, will be the only original cast member reprising her role. A newly minted, star-studded cast will be joining the fray and playing the vacationers and staffers. Read on for everything we know so far about season 2 of the hit show, White Lotus: Sicily.
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HBO hasn't yet released the plot, but the sophomore installment will presumably loosely follow the same premise of season 1 and feature a group of wealthy guests dropped into a luxe resort. This time, though, instead of Hawaii, the crew will be checking into a hotel in Sicily, Italy, according to Variety.
The first season had a stacked cast (many of whom received Emmy nominations for their roles), including Connie Britton, Murray Bartlett, Sydney Sweeney, Coolidge, Steven Zahn, Jake Lacy, and Alexandra Daddario. While Coolidge is the only original member who will be returning, the next season will see more big names stepping into the roles of guests and staff.
According to Deadline, F. Murray Abraham, Michael Imperioli, and Adam DiMarco are playing a three-generational, grandfather-son-grandson trio named Bert Di Grasso, Dominic De Grasso, and Elbie Di Grasso. Tom Hollander will play an English man, Quentin, traveling with his friends and nephew, and Haley Lu Richardson will portray a young woman named Portia who is on a trip with her boss. Theo James and Meghann Fahy are a couple named Cameron and Daphne Babcock vacationing alongside another duo, Ethan and Harper Spiller, played by Will Sharpe and Aubrey Plaza. Leo Woodall rounds out the cast as an enthralling guest traveling alone.
Season 1 was filmed at a Four Seasons resort in Maui, and this season was similarly filmed on-site in Sicily, Italy.
The seven-episode arc (one more than last season) can be streamed on HBO Max.
While an exact date has not been released, Variety confirmed that the new season will drop sometime in October 2022.
Perhaps the best thing about the Four Seasons Resort Maui at Wailea, in Wailea, Hawaii, is how familiar it feels. And I’m not just talking about the fact that it’s been featured in countless campaigns, films and television shows, the latest of which, HBO’s Emmy-nominated The White Lotus, featured almost every aspect of the resort intimately throughout its eight-episode run. The resort genuinely, truly feels like home—in the sense that everyone you meet, from the front-of-house staff to the caretakers, feel like family. There’s a distinct sense of coming home, even if you’ve never been to Hawaii before.
A lot has been written about Hawaiian hospitality, but nothing beats experiencing it in real life. I spent a relaxed three quarters of an hour talking to the concierge about the best driving routes around Maui for the motion sickness-afflicted among us who can’t do windy roads; our servers went out of their way to find us the best—and I mean the best—table they could, each and every night we dined on the property, at one point even allowing me to borrow some sunglasses when I’d left mine behind in the room so I could still enjoy the magnificent sunset; and my masseuse and I spent the better part of my hourlong beach side massage swapping stories about the strangest things that guests leave behind in hotel rooms.
But nothing beat the way the resort took care of its younger guests. Our eight-year-old, Violet, felt seen, maybe for the first time on a trip like this: there was a special kid-sized plush bath robe in the closet just for her, alongside a pair of mini flip-flops; her name was spelled out in colored pieces of sponge above the bath tub; every time we sat down somewhere—be it one of the resort’s restaurants, or by the pool—someone would pop over, ask how she was, ask her if she wanted anything. “Can we seriously come back here, like, every month?” she asked after only a couple of hours at the resort.
This attitude of respect extends beyond the resort’s interactions with its guests. Take, for example, the resort’s comprehensive art program, which promotes and celebrates Hawaiian artists through an extensive in-house collection that pays respect to the island’s culture and history—all courtesy of the property’s resident art director, Rosina Potter.
The resort houses more than 2,000 original works by Hawaii-influenced artists including Jun Kaneko’s soothing ceramic Colossal Heads that guard the resort entry and Robert Kushner’s gorgeous Night Blooming Cereus Series. The resort’s two presidential suites (the Maile and the Lokelani) are galleries in and of themselves, featuring works by Ron Kent, Pete Cabrinha, Carol Bennett, and Mary Mitsuda.
The property also celebrates local artists, designers, and creatives through its long-running daily Artists Showcase, which is a familiar sight to anyone who has stayed here: every morning, the elevator doors open on the lower level to a visual feast: painters, jewelry-makers, ceramicists, and more, lining the leafy corridor and shepherding guests into another glorious day in paradise.
At the adults-only serenity pool on property, Four Seasons worked with fine art photographer Gray Malin, who is known for his aerial photographs of the world’s most iconic destinations. The partnership saw Malin creating a series of images to capture the natural allure of each Hawaiian island, featuring ethereal shots of each Four Seasons resort in Hawaii taken by Malin from a doorless helicopter. At the Four Seasons in Maui, the photographs are inspiration for the luxury pool-side cabanas by the serenity pool, alongside custom furnishings, decorative pillows, acrylic trays, and poolside games.
To find out more about the property’s art program, I spoke with Four Seasons Maui’s resident art director, Rosina Potter.
Tell me a little about your background. How did you become involved with Four Seasons as an art director, and what path brought you to work at the Maui property?
I’ve lived on Maui for almost 20 years now and have mostly worked in gallery management and community development. About five years ago, Four Seasons Resort Maui contacted me to see if I was interested in managing the Artists Showcase, the resort’s very well-respected daily open-air art gallery. They had a few artists in the program who recommended me as a good fit for the position, as they knew I looking for a role solely focused in the arts. After starting at the resort in the summer of 2017, my role and responsibilities quickly expanded and I was named Art Director in 2018.
Tell me more about the art program at the property and how it works, including your permanent collection and how it was sourced. How many artists do you work with locally, and how do you usually source works?
The permanent collection, which is open to the public for viewing, was originally curated in 2005 by Julie Cline with the intent of presenting Hawaii-related contemporary art created since statehood. She built an amazing museum quality collection with incredible pieces from Toshiko Takaezu, Jun Kaneko, Yvonne Cheng, Robert Kushner, Joyce Kozloff, and many others—a skillful mix of works from the islands alongside those created by artists while visiting the islands.
I’ve been slowly adding to the collection through various renovations. Since the majority of the works have been hanging for almost 20 years, I monitor their condition. Facilitating the preservation of some of these pieces has become important, which has created some recent movement and new acquisitions in our public areas.
I love to learn about how art curators work with the culture, history, and people to bring a destination to life through art. Hawaii has such a rich culture and history. How do you even start to bring some of that to life in the resort? Where did you start?
I feel a deep responsibility to the people of Hawaiʻi and the ‘āina. When I think of my own love for this place, the native Hawaiian people and their culture comes to mind before the beautiful beaches and amazing vistas.
The Hawaiian culture is incredible: the use of celestial navigation to find these islands, the beautiful ahupuaʻa land management practices, the vast collections of chants, ideologies and belief systems chronicled by what was once the most literate country in the world and the far reach of the Hawaiian monarchy as the first non-European kingdom recognized by major powers before the overthrow in 1893.
The history is so beautiful, and sometimes painful. I believe that great art communicates something to the viewer. My hope is that I am able to select works that garner interest and each piece invites you to learn more about this place and our host culture, sparking curiosity and respect for both the history and issues that affect residents today.
Through my work, it is my intent to further elevate the voices of kanaka artists and highlight the many ways our host culture exists in this place and in others. I feel the art of Hawaiʻi has been largely overlooked by the global market, and displaying so many incredible pieces here feels like an incredible opportunity for its recognition and acceptance.
What are some of the parallels you drew when putting together the property’s Artists Showcase and permanent collection? Are there particular themes you stuck to?
There are many parallels between the Artists Showcase and the permanent collection, namely that each requires excellence in their work to reflect the Four Seasons brand.
Storytelling is so important in both cases: within the showcase, you get to meet the artist creating the works, learning about their life and inspiration. Within the permanent collection, I look for pieces that request a deeper investigation—the antithesis of normal “hotel art”.
A lot of times, I think properties struggle to tell a rich, emotional story because very often there really isn’t one to tell. How do you think Four Seasons Maui manages to tell its own rich cultural story through the permanent collection? (Examples of specific works from the collection would be great!)
There are so many stories to tell!
Ekolu (A Partnership of Three) by Paulette Kahalepuna, a revered feather lei maker, shows the substrate of a Hawaiian feather cloak (ʻAhuʻula), worn by the aliʻi. In this piece, she has only sewn one layer of feathers revealing the intricate construction that lies beneath the feather work. Located by the concierge desk, the piece feels very modern while presenting ancient techniques treasured by Hawaiian royalty.
A Silken Thread Series, six views by Jason Teraoka in located in our lobby. When he was approached about being in the permanent collection, he decided to paint portraits of his family, three generations from Kauai, with his grandparents at top, his parents in the middle and his sisters and and a self portrait at the bottom. I understand that he felt it was important for those visiting Maui to consider the many generations of people that have made the islands their home, that it isn’t just a place to visit.
Mauna Kea Snowchains (All Access I & All Access II), from Keith Tallet’s Flying Hawaiians series was recently installed in the Lobby adjacent to the Lobby Bar. With linear patterns reminiscent of kapa watermark (Hawaiian barkcloth) patterns, they are marks made by various tire patterns, with Tallett sharing an amalgam of inspiration for this ongoing series, offering space for reflection on land, ownership, and indigenous rights. Working in shiny enamel paint and polished surfboard materials, the tire-tread patterns reference the emphasis on car culture as a means for identity in contemporary Hawaiʻi, but also are an ode to Polynesian tattoo design, which historically has been a way to share genealogy and identity.
What is your personal favorite piece of art in the property’s collection?
I feel very lucky to have #23 & #24 Medium Closed Form Series of 2 by Toshiko Takaezu in our collection. Takaezu was born in Pepeekeo on Hawai’i Island in 1922 and was instrumental in the post war reconceptualization of ceramics from the functional craft tradition to the realm of fine art. I love thinking about her path in life, a woman born in a very rural Big Island town in the 1920s that went on to become one of the twentieth century’s greatest abstract artists with work in many major museum collections. Her work is currently being exhibited at the Venice Biennale’s Main Exhibition.
One of the things I loved doing every morning was strolling through the daily Artist Showcase in the lobby. Tell me a bit more about that initiative and what drove its inception? Do you curate the showcase via themes, etc?
From what I understand, artists began selling their work at the resort over 25 years ago, with artists selling their wares on the lawn to today when it has evolved into being the premier open air gallery on Maui featuring some of the island’s most notable artists. In about the year 2000, the resort formalized the program due to its success with the guests. My role is in making sure the quality is very high within the showcase.
It’s an interesting selection process as the artists must have a very unique combination of talents: they must create the very finest artwork, be able to display the work in a very physically demanding location, be able to provide a stellar guest experience, and sell the work to our visitors and guests. It’s an extremely complex group of attributes, and I’m so proud of the artists and how well they do.
What has the feedback from guests and artists been like in regards to the daily Artist Showcase? Do a lot of guests make purchases from the showcase?
Just a few weeks ago, I met a guest who said she had been visiting an artist each year for the past 20 years, and that the artist feels like family—that they have their work in their homes and a visit to Maui is incomplete without seeing them. The sentiment is repeated again and again and the relationships built between artists and guests is the most important aspect of the program. It would be much easier operationally to build a traditional gallery, but the guest experience of meeting the artist is what makes the Artists Showcase so accomplished.
In addition, the Artists Showcase is extremely successful in regards to sales. I am so grateful for this unique opportunity that the resort provides to working artists. It is so rare to find venues for artists to do so well, and I value my role at the resort greatly because of its support of the local arts community.
Tell me more about the Gray Malin partnership — how that came about and its importance culturally to the property. (If you can include some guest reactions/feedback to this in your response that would be great! Always curious to see how people respond to art.)
The Gray Malin collaboration is a Four Seasons Resorts Hawaii Collection initiative and shines a light on how each resort and island have their own special allure, as photographed through the lens of one of today’s most popular photographers. The Serenity Pool Luxury Cabanas that feature his work and home goods are very popular with our guests, many of whom are familiar with his work.
Can you talk to us about any exciting new plans, projects, or initiatives currently in the works for the art program at Four Season Maui?
I really love our ongoing partnership with Noah Harders, who has been creating floral installations around the resort. He is an incredible artist in many mediums with a museum show opening this fall at the Honolulu Museum of Art. Noah’s talent is incredible, and I feel so lucky to work with such a beautiful vision and impeccable execution.
This spring we launched START: a Student Artist Immersion, which allowed us to connect two local high school students to our Artists Showcase, create a mentorship program, let them display their work at the resort and provide two $3,000 scholarships to continue their development. It’s been such an amazing process and I’m thrilled to have that opportunity.
It has long been my dream to create a residency program here at the resort, so hopefully I’ll have an opportunity to pursue that in the future.
Anything else you’d like readers to know about the art program?
If anything, I would urge your readers to ask more of their surroundings. Sometimes slowing down and admiring a piece of artwork or having a conversation can completely change the way you perceive the world around you. I hope that by developing that experience here at the resort has a positive impact on our guests and visitors.
Pegasystems Inc. (NASDAQ:PEGA) Q2 2022 Earnings Conference Call July 27, 2022 5:00 PM ET
Alan Trefler - Founder and CEO
Kenneth Stillwell - CFO
Conference Call Participants
Rishi Jaluria - RBC
Steve Koenig - SMBC Nikko
Vinod Srinivasaraghavan - Barclays
Kevin Kumar - Goldman Sachs
Joseph Meares - Truist
Mark Schappel - Loop Capital
Joey Marincek - JMP Securities
Good day, and welcome to the Pega Earnings Call. Today's conference is being recorded.
At this time, I would like to turn the conference over to Mr. Kenneth Stillwell, CFO. Please go ahead, sir.
Thank you. Good evening, ladies and gentlemen, and welcome to Pegasystems Q2 2022 Earnings Call. Before we begin, I'd like to read our 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. The words expects, anticipates, intends, plans, believes, will, could, should, estimates, may, targets, strategies, projects, forecasts, guidance, likely and usually or variations of such words and other similar expressions identify forward-looking statements, which speak only as of the date the statement was made and are based on current expectations and assumptions. Because such statements deal with future events, they are subject to various risks and uncertainties. actual results for fiscal year 2022 and beyond could differ materially from the company's current expectations. 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 Q2 2022 earnings 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, 2021, 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 our view to change, except as required by applicable law, we do not undertake and specifically disclaim any obligation to publicly update or revise these forward-looking statements whether as a result of new information, future events or otherwise.
And with that, I'll turn the call over to Alan Trefler, Founder and CEO of Pegasystems.
Thank you, Ken, and thank you to everyone who has joined today's call.
This year has turned out to be an extremely volatile business environment. Our clients faced challenges related to the pandemic, labor shortages, the war in Europe, everything is causing global disruptions as well as, of course, rising inflation, high oil prices, supply chain challenges, economic and security and most recently, currency exchange headwinds.
Some of these trends actually make the need for our software even more pronounced. In fact, we believe Pega is uniquely suited to help enterprises manage through such uncertainty. However, it does impact the market. And with the threat of recession looming, we've pivoted to lean more heavily on our Build for Change messaging.
We've been updating our marketing and sales positioning, which you can see on pega.com. In an environment where efficiency and productivity of paramount our low-code software platform for AI power decisioning and workflow automation helps demanding enterprises work smarter, unify experiences and adapt instantly. So they can tackle what's next.
At Pega, we're taking the volatility in macroeconomic environment seriously. We're making cost management as much of a priority for us as it is for our clients with us having a focus on operational efficiency and limiting increases to our cost structure. We've paid and staffs to make sure we're staying close to our clients by removing some of the layers that have crept in over the last few years. And by ensuring our talent is directly connected to clients, we believe will both Excellerate outcomes and our long-term relationships.
At the same time, we continue to focus on innovation to ensure we're able to provide the most advanced technology platform for our clients' needs today and into tomorrow. Ken will talk about some of the financial impacts on our business in a few moments.
Now I'll turn to some highlights. Since we last spoke, we've continued to enhance our software and drive strategic partnerships to make it easier for clients to be productive and address their customers' needs with our market-leading Pega Infinity software. For example, we launched an updated component that makes it easy to embed Pega into sales force environments to further automate customer service workflow. Called Pega Process extended for salesforce, it's now available on the Salesforce app exchange and allows organizations an easy way to drag and drop Pega Infinity workflow automation and AI-powered decisioning directly into existing salesforce lighting deployments.
That makes the whole of experience operate within users' familiar Salesforce desktop even as Pega drives the business logic and workflows .And we're also very excited about the low-code app factory concept. We're pleased to see our clients adopt our governed approach to low-code development. The goal is to have clients get the benefit of speed and collaboration capabilities of our development platform, while at the same time, ensuring they're building apps that can evolve scale and deliver value well into the future. It's very important that the governance capabilities because over the years, people have often tried to drop in little systems to do an improvement here, an improvement there. And frankly, large sophisticated organizations realize that, that leads to just the next generation of technical debt, and they find themselves trying to rip out all the LOTUS notes apps or all the SharePoint apps.
By us having a governed approach, we can share best practices and make sure that the right capabilities are baked into every low-code project and have them all hang together with this Pega app factory concept that brings business and IT together in support of organization-wide deployments. This is coupled with our Pega Process Fabric that makes distributed workflow applications tie together to create a single view of work that might be done for a specific purpose or that might be related to a specific customer relationship.
The case study that Ford Motor Company presented at our recent Pega world is a great example of this approach. They have embraced best practices to deploy the Pega has factory, which enables is developers to create applications while following governance guidelines with support from an IT coach. Ports created a center of excellence and shared platform teams have joined forces to deploy the factory apps while working with Pega to develop best practices and alleviate IT backlog.
Now another exciting development is that we've extended our cloud choice offering by expanding our multifaceted partnership with Google Cloud to help our joint customers accelerate their digital transformation. And we've also made the Google cloud environment available on Pega Cloud as a fully managed as a service offering. We acquired Everflow, an innovative process mining software company whose intuitive software will enable pet clients to uncover and finish in process inefficiencies. These can often back down organizations and making them visible is key to improvement, combined with Pega's market-leading AI power decisioning and workflow automation capabilities, this will involve process mining beyond traditional static modeling to deliver real-time process optimization, what we sometimes refer to as true hyperautomation on an enterprise scale that will Excellerate operational efficiency and customer experiences.
And finally, we continue to really receive industry recognition from leading analyst firms. In late May, Forrester named Pega a leader in the Forrester Wave for real-time interaction management. This is how you use AI to make decisions to provide the next best action to the customers and one of our clients. Out of 14 of the most significant players in this fraud category, Pega received top scores in the current offering and strategy categories and the highest score possible in 25 or 28 criteria, including the highest possible score in the market presence categories.
Pega sets the gold standard for sophisticated enterprise deployments, its value-based approach and innovation track record burn Pega near-perfect marks across our strategy criteria. I'm also really pleased that just today, Forrester released its core CRM solutions report in which Pega receives the top score in the current offering category as well as our highest score possible in 16 of 35 criteria.
Out of four companies that were considered leaders Pega received top scores in categories, including CRM user productivity, assistance, guidance, next best action, digital sales, customer success, actionable insights and omnichannel engagement. The report states, Pegasystems offers exceptional automation and process management within the CRM. Pegasystems Vision is one of an autonomous CRM, where automation offloads were petite work and AI assist users, increasing their efficiency and the customer experience.
Pega uses real-time customer context and journey data to anticipate customer needs and proactively even pre-emptively engage. Reference clients stated that Pega provided "a one-shop stop for our frontline team and praise the products configurability. " Really pleased to hear that sort of assessment.
I'm also very proud of the work our team continues to do to ensure Pega's creating and maintaining a diverse and equitable culture. Most recently, we were recognized as the best place to work for disability inclusion, scoring the highest possible score of 100 on the disability of Quality Index, which is recognized as one of the most robust disability inclusion assessment to tools.
Very proud of this recognition, Row Pega supports its people and communities by providing a safe and inclusive work environment. Congratulations to the many in Pega and around the world responsible for this recognition.
Now you may have noticed that we put out a second press release and I'll just talk for a moment about it. When you've noted interest in our technology over the years. From organizations interested in leveraging our workflow capabilities to launch their own workflow-based applications into the market.
And to address this need, we today we announced a new product called Pega [indiscernible], a cloud-based, low-code application development platform that won't power anyone to efficiently build and launch B2B software as a software-as-a-service application for commercialization. This is a long-term strategy that will be run as a separate commercialization unit giving Pega new routes to market through an expanded third-party ecosystem and without requiring the involvement of our sales force.
We'll be working with a select group of early adopters for the remainder of 2022 as we prepare to roll out more generally in 2023. Once application providers are ready to bring new products to market, we'll work together through a revenue-sharing model that we expect.
Now, I'm going to circle back to Pega Wolf for a moment. I hope you're able to join Pega Wolf in May. If you missed it live, I encourage you to watch the replay on pega.com. And there are terrific sessions available, especially the inspiring client stories hold in their own words.
Through our virtual PegaWorld amounts, we have been successful over the last several years. And nonetheless, I'm very excited to bring our live event in Las Vegas back in play next year as we get back to a more normal cadence of in-person meetings with clients and prospects. There's been a lot of change on that front.
I attended Davos this past May in-person was able to see many of our most senior client contacts in person. And I mentioned a new briefing center being built on our last call. It's now -- some of you saw that on Investor Day, it's now fully open and has been booked with client and prospect meetings and has gotten a great reception and we're excited about the customers coming to visit us.
So, in summary, we're operating in an environment of significant volatility. One that our software is uniquely suited to address but one that obviously -- that's lots of pressure on. We continue to structure our business and evolve our software to both address the needs of our clients to maximize our ability to respond quickly to changes in the market.
Our transition to a subscription business and our loyal and stable client base are meaningful contributors to our ability to remain successful in today's business climate. And we continue to be very excited about the significant opportunity in front of us. and confident in our team to deliver on that opportunity.
To provide more color on the financial results, let me turn it over to Ken Stillwell.
Thanks, Alan. To begin a few reflections on our first half results and our outlook for the rest of the year. Pega Cloud mix and the strengthening of the U.S. dollar are negatively impacted our reported revenue and earnings per share. As a result, I'll speak a little more about currency this call than usual.
As the U.S. dollar gets stronger, our recurring annual contract value, ACV and our back balance denominated in other currencies, decreases in value and translated into U.S. dollars and revenue from other countries become smaller as well.
A very big highlight for the quarter is Pega Cloud. Pega Cloud continues to be extremely popular. As a result, the Pega Cloud mix was much higher than planned, impacting our reported revenue and our earnings per share. Pega Cloud mix in the first half of 2022 was the highest it's ever been.
For the first half of the year, Pega Cloud was 70% of new client commitments. We're focusing on operating leverage with an even greater amount of discipline to ensure our rule of 40 target is achieved in 2024. As you review our financial results, you'll see that we've clearly been making progress on operating leverage primarily by slowing overall headcount growth in 2022.
Although our constant currency ACV growth was 19% in Q2, we expect economic headwinds and crosswinds to negatively impact ACV growth for the full year. During our subscription transition, the most important metric to measure our success continues to be growth in ACV. ACV grew 19% in constant currency and 14% as reported year-over-year to $1.028 billion.
The strength of the U.S. dollar significantly impacted year-over-year ACV growth as reported from Q2 2021 to Q2 2022. The currency impact of that year-over-year strengthening of the dollar on our ACV was approximately $40 million, with the majority of that impact hitting in Q2 of 2022.
In fact, as dollar strengthened so much that our recurring ACV balance decreased from Q1 2022 to 2000 -- Q2 2022 on an as-reported basis solely due to the strengthening U.S. dollar. It's important when measuring our business to look at a longer time horizon than one quarter.
We've said we focus on total ACV growth for a full year and we're really in the 2022 cycle. That said, to date, our team has demonstrated over our history that it can produce ACV growth during difficult and uncertain times. It's important to point out that we do see economic uncertainty which could reduce incremental ACV growth in 2022, and we're managing the business accordingly.
More on that later. Moving to backlog. We ended the quarter with $1.126 billion of backlog. The strength of the U.S. dollar was approximately a $57 million impact on our total backlog balance when looking at year-over-year growth.
Turning to revenue. Revenue for the first half of 2022 reached $651 million. Total subscription revenue reached $521 million. Subscription revenue is about 80% of our total revenue for the first half of 2022. Pega Cloud revenue is our fastest grower and reached just under $184 million for the first half of 2022.
Total revenue growth in the first half of '22 does face a tough compare, as many of you are aware. You may recall that we recognized over $30 million of revenue from one large deal in the first half of 2021. And the Pega Cloud mix was 15 percentage points lower. Therefore, year-over-year revenue comparisons are not as meaningful for the first half of 2022 because of those two items.
We are currently in the final phase of our subscription transition, which we expect to complete in 2023 with the financial results normalizing for the full year 2024. Our Q2 results, like our Q1 results showed additional signs of improving operating leverage and management of cost.
Total gross margin was 72% for the first half of 2022. As I mentioned a few minutes ago, we plan to focus on cost management, ensuring that we reach the Rule 40 target in 2024. Like all enterprise software companies, we're navigating through a high inflation environment, a global pandemic or in Europe and growing concerns of a global recession.
In the face of these challenges, we've continued to grow ACV at a respectable pace to date. However, given the significant and unpredictable macroeconomic factors that I just outlined, we're going to provide a little more clarity on our view for the second half of 2022.
We believe ACV growth for the full year will slow to around 16% in constant currency, about 5% less than we had planned for the full year. We want to make it clear this adjustment is to our 2022 outlook only.
Moving to our revenue outlook. We see 3 three key factors negatively impacting our revenue growth for the full year 2022. First, as we described in our investor session in June, our plan assumed Pega Cloud would represent a little more than half of our new client commitments in 2022. However, Pega Cloud has represented 70% of new client commitments in the first half of 2022.
I know many of you will view this mix shift positively but as we've said, a 20% or so increase in Pega Cloud could lower 2022 revenue by $80 million. And a higher-than-expected Pega Cloud mix would also cause ACV growth and revenue growth to diverge in 2022. That's because Pega Cloud revenue is recognized ratably typically over the contract period, which approximates 3 years.
Second, the strength of the U.S. dollar is expected to negatively impact our full year revenue results. And third, we anticipate that the increasing economic uncertainty may license sales cycles and pushed some deals into 2023.
If ACV growth slows as a result of this dynamic to the 16%, as I mentioned, in constant currency in 2022, that would have an impact on total revenue as well. In total, we believe these three factors taken together could negatively impact full year revenue by approximately $120 million to $130 million.
We do not expect a proportionate impact on earnings per share due to the cost-saving initiatives that I spoke about, where we expect to mitigate the revenue impact of -- by over $100 million of that revenue shortfall by achieving significant cost savings.
Naturally, there are a lot of moving parts in what I just said, which make it hard to forecast precisely. So, what are we doing to respond through all this? We will manage the business in a way to address the potential ACV growth slowdown and make up for more than half of the impact of our Pega Cloud mix shift.
And that's -- I think that's a pretty impressive statement that we're making that we actually are going to end up being more efficient with the business based on the revenue and the ACV that we will achieve.
Let me explain what I mean. We don't need to grow the size of the organization at the pace that we have in the last few years. We've added some pretty significant go-to-market capacity in 2020, 2021 and 2022.
And we're going to focus the rest of 2022 on execution. We think this is the right time for us to reap the benefits of the significant investments we've made in hiring over the last few years. To remind everyone, we're targeting the rule 40 in 2024, and we will attempt to achieve the highest growth rate possible in getting the rule 40.
Our business is resilient, and I remain confident in our ability to deliver on our long-term strategy to be the leader in digital transformation. Let me remind you of some of the reasons that I feel that way. First, about 80% of our revenue is now subscription, thanks to our successful execution of the ongoing and near completion of the subscription transition.
Our recurring revenue is supported by very high net retention rates. Second, if you look back to 2000, Pega has grown through every recession before, including some tough ones. And we've seen what clients stick with and what they invest in. Third, we serve the world's largest clients in core verticals such as financial services, insurance, health care, telecommunications and government.
In challenging economic times, unfortunately, small and medium-sized businesses are often the ones that struggle the most in the near term when compared to larger enterprises that have strong financial profiles to withstand short-term shocks. Last, our digital transformation solutions feature unique capabilities and provide benefits that are critical to our clients going through transformation.
Our core value proposition has proven important to our clients and it helps Pega to grow through uncertain economic times. In summary, we've built a resilient business, and we will continue to provide best-in-class solutions to the world's largest clients even during tougher times.
Despite the uncertain global economic outlook, it's an exciting time in Pega's history. We're wrapping up our subscription transition that we started in late 2017 and we're entering our next phase of growth as a company.
As we wrap up the transition in the next year or so, we're confident that we will exit the transition as a much stronger business with more predictable revenue and back to cash flow levels that are even in excess of what we achieved before the transition. And as a rule of 40 company, we'll be capable of generating free cash flow each and every year because of the dependency and the reliability of the relationships that we have with our clients.
Winning companies invest time and resources into reimagining their business model to unlock higher growth and greater profitability. The best companies successfully execute to make that imagination reality.
Now I'm really proud of the work our team and our over 6,000 employees have done over the last 5 years to transform Pega's business and unlock the company's potential. Thank you to everyone at Pega. As always, I'll be on the road and excited to see everyone face-to-face at a number of conferences over the next 45 days or so. I hope to get a chance to see many of you during the upcoming events.
And one additional point, very excited to reiterate what Alan said, which is I can't wait to see everyone at PegaWorld live next year. It's been too long. And with that, operator, please open the call for questions.
[Operator Instructions] We'll now take our first question from Rishi Jaluria from RBC. Your line is open. Please go ahead.
Well, wonderful. I'm here again, thanks very much for taking my question. Maybe a few here to clarify and then you know, appreciate all the details, especially around and what you're seeing. Maybe I want to start by talking about macro and a two-parter here. Number one, we would love to know what are you assuming Ken, when you're talking about getting to 16% ACV growth exiting the year you know, are you assuming macro stable with what you're seeing right now? Or are you assuming some level of deterioration further from what things you're seeing?
And then maybe the second part of that, there's obviously a macro impact numbers already of constant currency from Q1 to Q2 on the ACV side. Some of your large cap peers that have already kind of reported and talked about –
Could you repeat your last like 10 seconds because you --
Because you broke up a little bit, Rishi.
I apologize. Let me get off that. Okay. So yes, I was just -- maybe just starting with the macro side, right? What do you see -- what are you assuming in terms of further macro deterioration or is it going to be stable? And the second part, given the detail we've seen on the ACV side in constant currency as a result of macro that you've seen so far. Can you maybe be a little bit more specific about how it's manifested itself be that in longer sales cycles, smaller ACV lands, pushed out deals, anything like that? And then I've got a follow-up.
Sure. I'll take the first part of that, and then Alan, you can add some color to that. So, we are not assuming that the market will stay exactly as we've seen in the first half. We are assuming that sales cycles will elongate from where they are, that the buying cycles will be tighter.
We are assuming that as you get closer to the end of the year that companies will be responding to cost management initiatives, some of which will help us because we can be a solution, some of which may put pressure on just general buying patterns.
So, I wouldn't suggest that we think everything is going to stay as it is now. We do see that there's some further decline and the economic landscape between now and the end of the year. We're also not seeing this as an elongated process, but we don't know what to expect through the end of the year as people start budgeting for next year.
So that's why we thought about providing a little bit more clarity around what we think is a risk, which is our ACV growth for the full year. ACV growth dropping from one last point that ACV growth declining from 21% to 16%. Just to kind of supply you directionally what that means. It kind of means that our AC -- our incremental ACV growth year-over-year in dollars would be somewhat flat year-over-year, meaning the growth in incremental ACV dollars would be relatively consistent with what we grew in 2021. Still growth, but as you can imagine, growth on a bigger number is a slightly smaller percentage. So that's kind of how we see it manifesting itself through the year.
Alan thoughts on some of the discussions that you mentioned about customer buying.
Yes. So, I think Ken's right, there is some elongation of sales cycle. But also, I think a lot of this -- the impact, I believe, is and will continue to be significantly related to the companies you're dealing with and the types of companies you're dealing with.
The large sophisticated traditional buyers that for many years, were our only buyers and let us grow at a 20% ACV growth rate. I think that those are much less susceptible to the many pressures and a willingness to go forward than companies you think of as midsized or certainly smaller.
And so, we have an opportunity and we are recalibrating our energies to really focus on those deep and really important relationships with organizations who based on everything I've seen are going to be looking to themselves save money, Excellerate their workflows, continue to invest.
And I think that focus makes it easier for us to operate within some of the spend envelopes that Ken is talking about, which we're taking very, very seriously then frankly, when we were trying to really jump up our growth rate to some degree, regardless of cost.
We're not in that business with the second half of this year and going forward because frankly, I think the market will respond exactly what we're doing. We have a big chance to influence what happens. We're not just subject to what's going on in the back growth market.
All right. Great. That's really helpful. And then on the business. Maybe, I wanted to drill specifically into cloud CRPO. So, we saw that decelerate from 31% growth in Q1 to 14% into and even if we add back in six points of FX, that still gets us from a decel of 31% to 20%. Maybe can you walk us through what's going typically on cloud CRPO and maybe why we shouldn't be panic about that too much as a leading indicator of future cloud growth slowing down? And then one more follow-up, and I promise that's it.
Sure. So, the one thing that we are seeing and we've seen it probably for a couple of quarters, but I think it's -- we're starting to realize that clients really are transitioning into more leaning more towards consumption-based buying patterns, right, which means that they're looking at like kind of almost we like a minimum commit with variable usage as they drive additional usage.
And what that does lead to is it does lead to -- the net effect of that is a slight decline in the duration of our cloud RPO. Just a slight, not like going from say, three years to maybe 2.75. Some of the optics of RPO is driven by that. You can kind of see that if you look over the last few quarters.
Also, to add to that, we -- in 2022, the first half of the year was not a big renewal year, right, in terms of Pega Cloud contract renewals, it tends to be towards the back end of the year in general. Every once in a while, you'll have a quarter where you may have a few clients.
So, those two factors, I think, make the optics look a little bit confusing to your question. Some of it is just buying patterns. People clients are not committing necessarily a three or five year contracts all the time they might be committing to a three year contract with a with a slightly lower minimum and then having consumption buying patterns above that. And that results in less going into RPO in some of those contracts, if you follow me.
Got it. Helpful. And then last one, just on cloud gross margins. obviously been on a nice upward trajectory for the past really two years. But this is the first time we've seen a decline like this sequential in a meaningful way into Q2, right, going from 70% to a little bit up 7%. I guess, was that FX? Or were there other factors that led to cloud gross margin declining sequentially? And how should we think about that going forward? Thank you.
Yes, that's a great question. That's because the majority of our costs for Pega Cloud are in the U.S. in U.S. dollars. And so there is -- so you do have currency -- more currency impact on the top line than you do on the bottom line. In a lot of the other aspects of our business, we have natural hedges because we have the cost in the currency where the dollars are. We are more -- we are -- our costs are more skewed to the U.S. because our AWS contract is in U.S. dollars.
We'll take our next question from Steve Koenig from SMBC Nikko. Your line is open. Please go ahead.
Thanks for taking my questions. I'll stick to one question and one follow-up here. I wanted to -- by the way, congratulate you on the Forrester evaluation. It sounds like a great validation of the technology leadership. So first question is on the financial side. A couple of moving parts here. And maybe it relates to your prior answer. But on Pega Cloud revenue, the sequential revenue growth in cloud was very light. And so I'm wondering if you can square that with the higher cloud mix. And then maybe also related to that, more broadly, RPO bookings were down pretty hard year-on-year. And I'm wondering like how much of that was a surprise in terms of weakness in new client commitments relative to your internal expectations? And how much of that was a lighter renewal schedule if you could just parse that out? And then just one follow-up for Alan. Thanks.
Yes, Q2 was a very light renewal schedule and Pega Cloud -- the mix of Pega Cloud was impacted by currency by approximately the same as our overall revenue. So the mix of revenue by geography isn't exact, but directionally close to our overall revenue in terms of the currency impact. The RPO -- currency impact for a lower renewal quarter in Q2 in the first half, but also our net ACV growth in Q2 was not as strong as well. So the combination of our ACV growth in Q2 was not as strong as Q1, not a big renewal quarter plus currency. That's kind of what's happening in RPO.
Okay. Sounds good. Maybe we'll follow up a little bit more on the call back. Alan, Pega launch pad. So that's really interesting. I know you've been you've been working on a lot of the stuff for some time as part of the Phoenix initiative. I'm wondering if you could supply us some color on -- what are kind of the milestones, both maybe technically and business-wise on establishing a vibrant third-party marketplace. Any thoughts on monetization, does Pega pricing need to become more transparent? Are there any early alpha customers or partners you can talk about? Thanks very much and that concludes my questions.
Sure. So, we have been working on a lot of these pieces for some time as part of the Phoenix initiative, which obviously feeds a lot of the technology that we bring forward and bring to market here. The launch pad concept is that we know that there are organizations that themselves want to develop IP, bring it to market that have sort of a workflow flavor to them. And to be candid, the platforms that we saw out there were not remotely well suited to being able to do that we thought. And we've talked to a number of people and companies about that.
We wanted to begin having discussions on this. And thought the best way to do that was to just publicly say, yes, we got this. We're going to begin talking with early adopters, but I'll be able to answer those questions with much greater clarity and specificity after we're another 90 or 120 days into this. So I'm going to put -- take up a little pass on that, but it's not the lack of enthusiasm. I think this is a very exciting place to be.
We will now take the next question from Pinjalim Bora from JPMorgan.
This is Noah on for Pinjalim. Thank you for taking the question. Can you explain what you're seeing in terms of demand from public sector customers? And just any color on the rate of new IT engagements within public sector would be helpful. Thanks.
Yes, I can talk to that. I think that public sector has been pretty shaken by the pandemic. And a lot of the solutions that have gone into public sector to just make them work, particularly at some of the large organizations, governmental organizations we do business with. We are widely seeing to be scotch tape and bailing wire. So there is a, I think, a healthy appetite in large agencies to continue and even accelerate the workflow automation that we already do for a number of them going forward.
So I think the demand in public sector will continue to be strong. Having said that, as we all know, public sector is not a place that tends to buy rapidly, and they tend to want to buy very much on a consumption cell basis.
So you don't get the big multiyear deals with lots of things sort of on the come based on expectations. It really is a line of business that I described it as sort of building an engine of success that as you go when you -- as you develop greater confidence and a greater footprint, it builds on itself.
But the market opportunity there is huge, we are very much going to focus on what I would describe as federal and large states here. I think that plays to our strength and that also plays to the people will be buying.
We will now take the next question from Vinod Srinivasaraghavan from Barclays. Your line is open. Please go ahead.
Thanks for taking my questions. I just want to -- maybe look to the past a little bit, talk about buying patterns going into the COVID period and the second quarter 2020. I just want to get a sense of are things kind of similar than right now or back then? And kind of at what point did you see sales cycles Excellerate and customers reengage more meaningfully then? And are you seeing any early signals of that where maybe a similar pattern might play out? Thanks.
So I can start on that one. So because unfortunately remember those days well. I think the difference between Q2 2020 and Q2 2022 is noticeable because of the following. When we were in Q2 of 2020, we didn't know what future look like. I think there was a question about was this going to be like the shutdown of world economies. We're going to -- people couldn't get food and paper towel with tiller. I mean, it was we were scrambling. We didn't know how long it was going to be. And it was -- I think there was a lot of angst about just what was this thing we were dealing with.
So I think the level of uncertainty and confusion and stress was high. I remember looking at the unemployment drop of -- or increased, excuse me, I don't know, whatever it was, like x million people that went into that filed claims in one week. In today's environment, what I see is people more going through a typical economic reset, right? They're saying we know what's coming. We've got to manage our budgets. We need to slow hiring. We need to think about projects that will help us optimize our business. This happens every whatever, five to 10 years, whatever the recession cycle happens to be I don't view it as being comparative to Q2 because of the level of just general mass confusion in the market that happened for a few months in the middle of 2020. That's my perspective. I think this is much more -- I do feel like people know what's coming. They may not know how bad it's going to be or how long it's going to last, but we've been through recessions before. So I kind of -- that's my perspective. Alan?
Yes, I would agree that the atmosphere back then was much more of confusion, who knows what's going to be, how long it's going to be for, we'll be able to get the right staff to support the business at all. There were a little burst of, Oh, my God, we've got to automate something, but there was an incentive to it that people said, I've got to do it in 10 days. or a week.
And by the way, we've delivered some pretty amazing systems in that time to support things like the paycheck, the Paycheck Protection Act. I was just talking to one of our very large banking customers who said that they'll never forget what they were able to do in a week with our system when they were just trying to hold on there. The time now is just a lot more rational, right? People expect dimensions are going to fall into just how long is it going to be tight. People are extremely interested in the low-code piece is Eric very valuable because people are extremely interested in being able to continue to run their systems without necessarily the same, frankly, depth of engineering talent that some of those end companies have been able to depend on or in some cases, not even, depending on what's happening with the cost.
So I would describe this as a much more, frankly, reassuring time than if you go back to the point where every week was a new terror.
Got it. I appreciate some of the color on that. And then just one follow-up for me. Can you maybe speak to just kind of the sales execution during the quarter, how you kind of feel about that? And also, are you seeing any customers ask for like more pricing concessions or more flexible payment terms given kind of the macro environment? Thank you.
So I'll answer the second one first. Our bread and butter customers are the ones that we're particularly focused on going forward are not the ones who need payment concessions, candidly. Now people always like to ask for things, but they're just not. That's not the part of the market that we are going to focus on go through.
From a sales execution point of view, as I think a lot of you know, we've undergone a lot of change from a go-to-market management perspective. And a lot of that change happened during Q2. We're right in the middle of it all. And I'm sure that didn't help us getting things together. I believe we're now largely through the -- what I describe as Phase 1 of change management, which is understanding what we want to do from a structure and a positioning point of view, et cetera, we still have a lot of work to do. as we go through the next couple of quarters.
But the reset, I would say, of our business to being a cost-effective grower, really worrying about cost, et cetera, that is, I think, taken whole of the psyche of the organization as a whole and in the go-to-market organization. And now I believe we have a plan that we can execute on a strategy that makes enormous sense having done this for a long time. And we know that there is the demand there in our customers. There's no doubt that customers appreciate, particularly the ones we're talking about, the way our software can really uniquely help them deal with their own pressures and their own confusion.
So I'm feeling good about that. Obviously, the first half of this year was pretty volatile. I mean we know that there were some management changes that were quite significant that happened -- all of that happened in the last five months. So unquestionably, that would have some impact on Q2. And by the way, we're not happy with what the outcomes were. We're committed to changing it, and we're not happy that 16% is a good number going forward. It just might be the realistic one to think in terms of from where we are this year.
I'll add one piece of color. Clients, I have not seen -- I see a lot of the client interactions, as you might imagine. I don't see clients deciding to try to get the same amount of value out of Pega for a lower amount. I do see clients trying to manage cost increases as a result of inflation. Right? Like naturally, CPI is a much higher number. And there's an expectation in the market that technology companies will receive some increase in the annual clients are more focusing on trying to manage that as we are trying to manage that as well because we expect to get increases to help offset our cost increases of our team members, et cetera. That, I think, is a focus area, but not general spend reduction. That's not something we've seen.
We will now take the next questions from Kevin Kumar from Goldman Sachs. Your line is open. Please go ahead.
Hi, thanks for taking my questions. Alan, given the macro environment, are there any changes in the types of use cases across the customer base whether that's customer engagement or customer service, other areas of automation, curious where you're seeing the most appetite.
Yes. So in the real-time interaction management space, which is -- think about as AI-powered decisioning. There is -- when the economy goes to the sort of change we've seen in the last 90 days, we shift our emphasis from cross-sell upsell to retention. And we have and we do a lot of very, I think, effective work in the areas of retention. Certain use cases, sometimes referred to as compassionate, hopefully, collections, which is where you try to figure out how to be the smartest about if you're a business getting paid. Those are examples of use cases that accompany the sort of recessionary push that, once again, we've seen before, we see the same thing happening now. Those discussions get a lot of a lot of attention as well.
On the workflow space, automation and transparency, being able to handle a workforce that's distributed and not likely to ever come together again, but you want to be able to manage them. those once again are the apps what we sometimes refer to, and you'll hear us talking more and more about what we call the process fabric as a way to leave an organization together. Those are the types of use cases that go with these times.
And the other thing I'll say about all of those is those systems tend to be pretty big systems, not all at once necessarily, but over time, those become very, very meaningful.
That's helpful. Thank you. And then as you integrate the Everflow acquisition, how has customer traction been there? And how should we think about ACV uplift on deals where process mining is used?
I think process mining is primarily a vehicle to be able to make the customer more effective at deploying your software. I think that more than a very significant increase in ACV on the deal, I think you will see an acceleration of consumption and use. And that leads to, in effect, larger parts of the business being in a position to cost justify and rationalize the purchase. So I view it as contributing to ACV, more by helping promote volume than by kicking the prices up 20%, right? It's discovering the opportunity and optimizing the opportunity, which lets you go bigger, particularly these big companies.
And just to clarify, just to make sure that's crystal clear, we are not in the business of selling user-based licenses as our exclusive go-to-market where you keep price up ticking every single feature function. What Alan is talking about is clients put get more value by putting more automated transactions through our system, and that's the way the ACV goes up because they're paying on kind of a consumption type model. That's kind of the connection there just to make sure that's clear.
Yes. Per user pricing, we think, in this world is sort of an anachronism because everybody wants to move from one form or another of nonuser activity right, whether it's customers doing work themselves, whether it's parts of the system landscape actually doing fully autonomous work, that's a hyper automation.
So our standard approaches tend to talk about how many units of work get done by the customer. And that's where process mining can accelerate as opposed to like a more user model. So I know some other people do that. I don't think that's a very forward-looking model for companies that do automation.
We will now take the next question from Joseph Meares from Truist. Your line is open. Please go ahead.
Thanks for taking my question. The first question, I was if you had already said this in the prepared remarks, but could you just supply us some clarity on the cost initiatives that you're talking about? I think you said it would be more than half of the decline caused by the Pega Cloud. But could you just clarify that?
Yes, sure. So I know, Mike, the wording is tough sometimes to get through clearly. So we're -- we anticipate that the combination of the three factors, Pega Cloud mix currency, which is the smallest of the three. And the impact of our ACV target will reduce revenue from where we kind of initially thought it would be by about $120 million to $130 million.
We might say, Oh, well, that means there's an impact to EPS by that same amount? No. To the contrary, we're actually maintaining, we believe we have the staff that we need to get through 2022 and quite frankly, to hit our 2023 objectives well. And that efficiency that we would get by maintaining our cost structure consistent with where we are now, will get us over $100 million of that $120 million to $130 million revenue decline.
So we won't get all the way there. We might, but we're signaling that we think we can get all the way there, but we will get almost all the way there. When I was saying, Joe, as I was saying, we'll make up the ACV, drop or make up the currency and we'll get more than half of the way there on the cloud mix. And that's the -- all of those three add up to over the $100 million of mitigation.
That's perfect. Super helpful, Ken. I appreciate it. And then just as a follow-up. Last quarter, you spoke about several new products, including enhancements to the Pega Customer Decision Hub and voice AI and messaging solutions for customer service. Just curious if you have any early customer feedback on those? Any positive stuff you can point to there? Thanks so much for taking the questions.
Yes. So we continue to get excellent feedback on the Customer Decision Hub, that's the real-time interaction management piece that I was talking about that Forrester just landed. And that continues, I would say, to be by far the industry-leading product in that segment. And the new capabilities are used in being I think being widely enjoyed.
The voice AI is rolling out slowly. We've got some pilot work that we've been doing. I think it's enormously exciting. But to be candid, I think that a lot of organizations are just trying to stabilize that part of their business. And they're -- if things get a little more normal, I think that's going to pick up. But right now, there's just an enormous amount of what I described as contact center exhaustion, where people have just -- who are running those things are just trying to deal with making sure they've got the staff and that they're able to just keep them running. So it's probably going a little slower than I'd like, but that was never going to be a big part of a number of ours for this year.
We will now do the next question from Mark Schappel from Loop Capital. Your line is open. Please go ahead.
Hi, thanks for taking my question. Ken, starting with you, with respect to the macro, just to be clear here, are you saying you're seeing lengthening sales cycles and project delays in your business today? Or are you just trying to get ahead of the curve with your comments?
question. I would say I am a little bit of lengthening sales cycles, but nothing I would say material to lead me to a an absolute conclusion. I am more trying to get ahead of where I think the market will be for the rest of the year.
Okay, great. And then, you know, with respect to the sales cycles, are you seeing that in any particular geography more so than others?
Europe, I can get out and speak to but certainly Europe is much closer to the frontlines of the conflict. And in Ukraine, Russia, Ukraine, and that they are seeing things like energy or resources, food, they are much more disrupted than certainly the United States is and even a bit even APJ. So I personally I think Europe is in a tough place right now.
I just going to say customer mood and some of those countries just hard to get their attention.
I understand. And then Alan final question here. It's around the launch pad. I believe in your prepared remarks, you mentioned that the product would be run as a separate commercialization effort. I was wondering if you just go into a little bit more details of what exactly that means?
Well, it means that we were able to take a couple of very entrepreneurial people who we already had on staff. And we're going to create a largely virtual team, but we're not going to commingle that at all, with the kind of go-to-market and the current messaging, you know, we see that as a separate product, using experience, obviously, that we've had for many, many years to inform it, that will go to market through a separate channel as a partner sold channel -- sold by actual organizations that have the IP that they want to sell.
So I'm really, really looking to insulate the core business from any sort of disruption. So we can really focus on doing as well as we collectively can do this here on.
We will take the next question from Joey Marincek from JMP Securities. Your line is open. Please go ahead.
Thanks so much for the question. Alan, would love to hear more about Google Cloud? I know it's early. But how is that partnership progressing thus far? And maybe what are your early learning? And then one for Ken? Can you supply us an update on net retention. How is that metric trended? And maybe how would you think about it on a go forward basis? Thank you so much.
Sure. So the Google relationship, I would say is terrific. You know, we work with them. And we've been able to work with them to stand up this capability, I think, and just being able to offer customers the ability to use Amazon credits or Google credits, up that they may have committed to also I think, at certain customers, get customers excited.
So that relationship is deep and very, very positive. And, you know, I'm also pleased to say that Google is a client, which is wonderful when a company like that decides that they want to use your stuff and internally, so now, I believe it's going to work out very, very well.
You know, Amazon has been a terrific partner, and we love working with them also. But the reality is, as they move into, say, the medical field as they recently have done in a greater quantity, and as they move into, or they obviously deep in retail, that means that certain of the very large clients that we want to sell to have, well, less attraction to using them as a platform, it doesn't actually impact visible to a customer, whether they're running the Pega Cloud on Amazon, or on Google, but some companies have their own standards and their objectives in that regard. And now we're just in a position to supply that extra dimension of client choice, which is always good. Ken want to talk about --
So our net retention so, that's a really good finish to the questions, because it's one that we haven't really touched on. Directionally, I've always talked about, if we have 20% ACV growth that 15% of that 20% would be with existing clients and the other 5% would be net new logos, that is a directional number. But that is not far off.
When you think about us, our ACV growth declining by some percentage, the majority of that decline would be our expectation of getting ACV from net new logos, right? Because so I think our net retention number is not going to decline much of our overall ACV declines, because that is our bread and butter. That is actually where we're going to put our capacity. That's where we've always got the majority of our bookings. And so our focus is going to be really heavy there, especially in any type of less than certain economic environment, you should always stay close to your clients, because they're going to deepen their relationship with existing vendors, that is just the trend.
So I think our net retention rate will hold pretty steady to what it's historically been maybe like dropped by a percent or so. But not much. And what will happen is we will probably, you know, just being pragmatic, we will chase new logos less.
And with that, I think we're at time, I'd like to thank all the folks who participated or listened to the call. You should know that we're working very hard. We're taking the needs of our shareholders very seriously. And I'm hopeful that we'll be able to report some good things in a quarter. Thank you very much.
This concludes today's call. Thank you for your participation. You may now disconnect.
How often in history does one live to see the impact of their legacy? As human beings with lifetimes that stand as just a drop in the ocean of time, one rarely sees the fruits of their labor moving toward a better world for future generations. Nichelle Nichols, who died July 30 at the age of 89, serves as an incomparable exception to that notion.
Born Dec. 28, 1932, five years after the invention of the TV itself, Nichols was imbued with a love for the stage. She quickly racked up credits in a series of productions, but it was not until her iconic role as Lt. Nyota Uhura on Star Trek that her star truly ascended. Acting opportunities for Black women in the mid-20th century were often limited to maids, housekeepers, nannies and the enslaved. Lt. Uhura was simply unparalleled. Few today fully understand how groundbreaking her character was for its time. In pre-civil rights 1960s America, she was simply “the woman who answered the phone” on the USS Enterprise. But to those with the 20/20 vision of hindsight, she was the woman poised to become the author of a new chapter in the history of Black women in entertainment. Nichols once recounted Whoopi Goldberg telling her that on seeing Lt. Uhura onscreen for the first time, Goldberg ran through her house screaming, “Come quick! I just saw a Black woman on television, and she ain’t no maid!”
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As a chief officer on the flagship of Starfleet, Lt. Uhura was the cool, unflappable presence who oversaw connections between species, playing it with a beauty and grace that made her stand out in an otherwise predominantly white and male world. In the ’60s, a Black woman in a position of power was an anomaly. Nichols’ portrayal of Nyota Uhura symbolized that Black people merited a position of importance, equality and respect in the future. Martin Luther King Jr. himself knew the importance of Lt. Uhura in representing the contributions of Black people; Nichols recalled the civil rights icon telling her, “For the first time on television, we will be seen as we should be seen every day, as intelligent, quality, beautiful people who can sing, dance and who can go to space, who are professors, lawyers.”
Lt. Uhura quenched the thirst of Black Americans everywhere who yearned for a future in which they could see themselves living, learning and loving in a world where the color of their skin didn’t limit their future — the world that freedom fighters were grappling for in real time. She opened the doors for Black women in entertainment to be viewed as powerful, capable, beautiful and intelligent. She collaborated on NASA initiatives to recruit more women and people of color. She went above and beyond, not only playing an important Black woman in the future of space programs, but also paving the way for other astronauts, doctors and scientists to excel in their respective fields, further cementing the role of women and people of color in the scientific advancement of the present day.
To say that I would not be playing Cadet Uhura if it weren’t for Nichols’ brilliant portrayal of the lieutenant my young cadet would become is, quite literally, the truth. It would fail to encapsulate how I probably wouldn’t have a career without Nichelle’s devotion to making room for strong-willed, intelligent, opinionated, graceful Black women in entertainment. I’ve been very lucky to have a career in playing confident activists, driven bookstore owners, and performers with a lust for all there is to offer in life and beyond, but I didn’t always believe that the life I live now was possible for someone like me. As a young Black girl, I grew up wishing on stars to be seen and accepted in my fullness — to be represented beyond the loveless best friend, comedic relief, or simply someone secondary to the life of my other, often whiter, peers. In my youth, I didn’t understand that I was craving the very representation that Nichols’ Lt. Uhura provided.
There is still a very long way to go in the representation of Black women and femmes on modern-day screens and stages, but Nichelle played a pivotal role in shifting our stories out of the lives of servants and sidekicks. She didn’t just teach us to reach for the lucky stars we wished upon — she brought those very stars to us, to our homes and the forefront of our minds. She made the wildest dreams of Black Americans, especially Black women, a reality. She taught us to dream big, wake up and follow those dreams with all our hearts because there is space for every different type of Black woman in the future. She taught us we all deserved to have our dreams come true because our dreams mattered, whether we were officers with a hand in protecting the future, space explorers, dancers who bring smiles to their spectators, or those of us with songs in our hearts we must set free. And she taught us we deserved representation and the preservation of our futures not only because of what we could do for the world, but simply because it was our God-given right.
I’ve embraced the role of Cadet Nyota Uhura, understanding and grateful for the role Nichols played in paving the way, and the work she did to establish a proud tradition of Black women carving out a place for others to fill. I never had the chance to meet her, but I feel her presence on set every day and see her legacy reflected in the lives she touched. On the TV screen and beyond, Nichols’ legacy lives on in all of us, myself included, who are grateful for and benefit from her perseverance, talent and grace.
Celia Rose Gooding stars as Nyota Uhura on Star Trek: Strange New Worlds.
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