Revenue growth remains inconsistent due to the cloud transition, with quarterly operating margins fluctuating significantly from a 32.7% peak in 2023Q4 to 8.6% in 2026Q1.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Sales/Revenue | 1.7B | 1.75B | 1.5B | 1.43B | 1.32B | 1.21B | 1.02B | 911.38M | 891.58M | 840.58M | 750.27M | 682.7M | 590M | 508.95M | 461.71M | 416.68M | 336.6M | 264.01M | 211.65M | 161.95M | 126.02M | 102.01M | 96.46M | 99.31M | 97.41M | 92.29M | 80.81M | 76.6M | 60.4M | 44.4M | 33.5M |
| Revenue Growth % | 3.5% | 16.61% | 4.51% | 8.71% | 8.76% | 19.08% | 11.65% | 2.22% | 6.07% | 12.04% | 9.9% | 15.71% | 15.92% | 10.23% | 10.81% | 23.79% | 27.49% | 24.74% | 30.69% | 28.51% | 23.54% | 5.75% | -2.87% | 1.96% | 5.55% | 14.21% | 5.49% | 26.82% | 36.04% | 32.54% | 50.9% |
| Cost of Goods Sold | 425.69M | 421.38M | 390.67M | 378.48M | 368.63M | 336.36M | 310.91M | 310.02M | 301.76M | 279.67M | 239.26M | 213.45M | 185.09M | 157.41M | 157.38M | 164.8M | 128.73M | 90.94M | 81.76M | 65.2M | 53.76M | 33.34M | 33.09M | 27.42M | 31.87M | 40.4M | 44.06M | 28.1M | 24.5M | 8.8M | 5.9M |
| COGS % of Revenue | - | 24.14% | 26.09% | 26.42% | 27.97% | 27.76% | 30.56% | 34.02% | 33.85% | 33.27% | 31.89% | 31.27% | 31.37% | 30.93% | 34.09% | 39.55% | 38.25% | 34.44% | 38.63% | 40.26% | 42.66% | 32.68% | 34.31% | 27.61% | 32.72% | 43.77% | 54.53% | 36.68% | 40.56% | 19.82% | 17.61% |
| Gross Profit | 1.27B | 1.32B | 1.11B | 1.05B | 949.21M | 875.29M | 706.6M | 601.36M | 589.82M | 608.79M | 522.97M | 469.25M | 404.91M | 351.55M | 304.33M | 251.88M | 207.87M | 173.08M | 129.89M | 96.75M | 72.26M | 66.87M | 70.2M | 71.89M | 65.54M | 54.67M | 39.42M | 48.5M | 37.3M | 35.6M | 27.6M |
| Gross Margin % | 74.96% | 75.86% | 73.91% | 73.58% | 72.03% | 72.24% | 69.44% | 65.98% | 66.15% | 72.43% | 69.7% | 68.73% | 68.63% | 69.07% | 65.91% | 60.45% | 61.75% | 65.56% | 61.37% | 59.74% | 57.34% | 65.55% | 72.78% | 72.39% | 67.28% | 59.23% | 48.78% | 63.32% | 61.76% | 80.18% | 82.39% |
| Gross Profit Growth % | - | 19.69% | 4.97% | 11.05% | 8.45% | 23.87% | 17.5% | 1.96% | -3.12% | 16.41% | 11.45% | 15.89% | 15.18% | 15.52% | 20.82% | 21.17% | 20.1% | 33.25% | 34.26% | 33.89% | 8.06% | -4.75% | -2.36% | 9.69% | 19.89% | 38.68% | -18.73% | 30.03% | 4.78% | 28.99% | 63.31% |
| Operating Expenses | 1.1B | 1.06B | 982.63M | 973.18M | 1.06B | 970.02M | 850.13M | 736.24M | 606.85M | 515.62M | 472.33M | 404.59M | 353.37M | 293.45M | 272.9M | 241.38M | 210.44M | 131.26M | 115.41M | 94.8M | 79.37M | 65.65M | 64.43M | 57.22M | 54.06M | 48.13M | 65.37M | 54.4M | 60.1M | 38.9M | 17.7M |
| OpEx % of Revenue | - | 60.79% | 65.63% | 67.93% | 80.33% | 80.06% | 83.55% | 80.78% | 68.06% | 61.34% | 62.95% | 59.26% | 59.89% | 57.66% | 59.11% | 57.93% | 62.52% | 49.72% | 54.53% | 58.53% | 62.98% | 64.36% | 66.79% | 57.62% | 55.5% | 52.15% | 80.9% | 71.02% | 99.5% | 87.61% | 52.84% |
| Selling, General & Admin | 759.64M | 727.36M | 647.63M | 655.92M | 742.52M | 709.39M | 613.14M | 531.03M | 425.14M | 352.73M | 323.88M | 278.13M | 244.1M | 210.69M | 196.18M | 175.66M | 141.26M | 92.39M | 83.94M | 68.6M | 56.67M | 46.19M | 44.49M | 35.63M | 32.78M | 27.32M | 34.48M | 27.8M | 30.7M | 20.6M | 7.9M |
| SG&A % of Revenue | - | 41.66% | 43.26% | 45.78% | 56.34% | 58.55% | 60.26% | 58.27% | 47.68% | 41.96% | 43.17% | 40.74% | 41.37% | 41.4% | 42.49% | 42.16% | 41.97% | 35% | 39.66% | 42.36% | 44.97% | 45.28% | 46.13% | 35.87% | 33.65% | 29.6% | 42.67% | 36.29% | 50.83% | 46.4% | 23.58% |
| Research & Development | 320.44M | 312.68M | 298.07M | 295.51M | 294.35M | 260.63M | 236.99M | 205.21M | 181.71M | 162.89M | 145.55M | 126.37M | 108.59M | 79.73M | 76.73M | 65.31M | 55.19M | 38.86M | 31.47M | 26.2M | 22.71M | 19.51M | 19.88M | 21.59M | 21.28M | 20.81M | 15.07M | 19.8M | 23.4M | 15.1M | 8.2M |
| R&D % of Revenue | - | 17.91% | 19.91% | 20.63% | 22.34% | 21.51% | 23.29% | 22.52% | 20.38% | 19.38% | 19.4% | 18.51% | 18.41% | 15.66% | 16.62% | 15.67% | 16.4% | 14.72% | 14.87% | 16.18% | 18.02% | 19.13% | 20.61% | 21.74% | 21.85% | 22.55% | 18.65% | 25.85% | 38.74% | 34.01% | 24.48% |
| Other Operating Expenses | 798K | 21.29M | 36.93M | 21.75M | 21.74M | 0 | 0 | 0 | 0 | 0 | 2.9M | 89K | 680K | 3.04M | 0 | 420K | 13.99M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 15.82M | 6.8M | 5.6M | 3.2M | 1.6M |
| Operating Income | 173.26M | 263.1M | 123.88M | 80.95M | -109.41M | -94.73M | -143.53M | -134.88M | -17.03M | 93.18M | 50.64M | 64.66M | 51.54M | 58.1M | 31.43M | 10.49M | -2.58M | 41.82M | 14.48M | 1.95M | -7.11M | 1.22M | 5.77M | 14.67M | 11.48M | 6.53M | -25.95M | -5.9M | -22.8M | -3.3M | 9.9M |
| Operating Margin % | 10.19% | 15.07% | 8.27% | 5.65% | -8.3% | -7.82% | -14.11% | -14.8% | -1.91% | 11.08% | 6.75% | 9.47% | 8.74% | 11.42% | 6.81% | 2.52% | -0.77% | 15.84% | 6.84% | 1.2% | -5.64% | 1.19% | 5.98% | 14.78% | 11.78% | 7.08% | -32.12% | -7.7% | -37.75% | -7.43% | 29.55% |
| Operating Income Growth % | - | 112.38% | 53.03% | 173.99% | -15.49% | 34% | -6.41% | -691.91% | -118.28% | 83.98% | -21.68% | 25.46% | -11.29% | 84.87% | 199.47% | 506.74% | -106.17% | 188.83% | 642.13% | 127.42% | -684.07% | -78.89% | -60.67% | 27.87% | 75.64% | 125.18% | -339.86% | 74.12% | -590.91% | -133.33% | 209.38% |
| EBITDA | 193.25M | 289.01M | 159.31M | 115.61M | -74.69M | -66.14M | -122.18M | -113.48M | 8.26M | 117.89M | 74.78M | 87.75M | 74.89M | 78.13M | 49.99M | 27.96M | 9.41M | 44.62M | 16.63M | 3.86M | -4.83M | 2.94M | 7.19M | 16.17M | 16.47M | 12.76M | -19.32M | 900K | -17.2M | -100K | 11.5M |
| EBITDA Margin % | 11.37% | 16.55% | 10.64% | 8.07% | -5.67% | -5.46% | -12.01% | -12.45% | 0.93% | 14.02% | 9.97% | 12.85% | 12.69% | 15.35% | 10.83% | 6.71% | 2.79% | 16.9% | 7.86% | 2.39% | -3.83% | 2.89% | 7.45% | 16.28% | 16.91% | 13.83% | -23.91% | 1.17% | -28.48% | -0.23% | 34.33% |
| EBITDA Growth % | -38.22% | 81.42% | 37.8% | 254.8% | -12.92% | 45.87% | -7.66% | -1473.38% | -92.99% | 57.65% | -14.78% | 17.18% | -4.15% | 56.29% | 78.82% | 197.15% | -78.92% | 168.28% | 330.55% | 179.98% | -264.12% | -59.06% | -55.55% | -1.81% | 29.04% | 166.05% | -2246.78% | 105.23% | -17100% | -100.87% | 144.68% |
| D&A (Non-Cash Add-back) | 19.99M | 25.91M | 35.43M | 34.66M | 34.72M | 28.59M | 21.35M | 21.4M | 25.3M | 24.71M | 24.14M | 23.09M | 23.35M | 20.04M | 18.57M | 17.46M | 11.99M | 2.8M | 2.15M | 1.91M | 2.28M | 1.73M | 1.42M | 1.5M | 4.99M | 6.23M | 6.63M | 6.8M | 5.6M | 3.2M | 1.6M |
| EBIT | 194.24M | 281.91M | 149.47M | 102.32M | -154M | -124.03M | -105.53M | -134.63M | -11.53M | 93.18M | 53.55M | 64.75M | 52.22M | 61.13M | 31.43M | 10.91M | 11.41M | 41.82M | 14.48M | 1.95M | -7.11M | 1.22M | 5.77M | 14.67M | 11.48M | 6.53M | -25.95M | -5.9M | -22.8M | -3.3M | 9.9M |
| Net Interest Income | 10.96M | 12.36M | 18.94M | 2.38M | -6.15M | -7.25M | -18.13M | 1.81M | 2.71M | 862K | 911K | 1.06M | 683K | 524K | 419K | 398K | 1.14M | 3.14M | 5.63M | 7.96M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 11.26M | 13.64M | 25.78M | 9.26M | 1.64M | 704K | 1.22M | 1.81M | 2.71M | 862K | 911K | 1.06M | 683K | 524K | 419K | 398K | 883K | 3.49M | 5.63M | 7.96M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 302K | 1.28M | 6.83M | 6.88M | 7.79M | 7.96M | 19.36M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | 20.76M | 17.53M | 18.75M | 14.49M | -52.39M | -37.26M | 18.64M | 32K | 5.49M | -6.94M | -2.56M | -4.16M | -3.54M | -1.7M | -481K | 319K | -3.62M | 5.6M | 1.19M | 7.99M | 8.3M | 4.1M | 5.38M | 7.16M | 5.72M | 7M | -10.43M | 5M | 4.8M | 5.1M | 2.2M |
| Pretax Income | 194.02M | 280.63M | 142.64M | 95.44M | -161.8M | -131.99M | -124.89M | -134.85M | -11.54M | 37.1M | 35.2M | 60.51M | 47.99M | 56.39M | 30.95M | 10.81M | -6.2M | 47.41M | 15.67M | 9.94M | 1.19M | 4.61M | 11.13M | 21.83M | 17.2M | 13.53M | -20.56M | -900K | -19.5M | 1.8M | 12.1M |
| Pretax Margin % | 11.41% | 16.07% | 9.53% | 6.66% | -12.28% | -10.89% | -12.27% | -14.8% | -1.29% | 4.41% | 4.69% | 8.86% | 8.13% | 11.08% | 6.7% | 2.6% | -1.84% | 17.96% | 7.4% | 6.14% | 0.94% | 4.52% | 11.54% | 21.98% | 17.65% | 14.67% | -25.44% | -1.17% | -32.28% | 4.05% | 36.12% |
| Income Tax | -146.76M | -112.81M | 43.45M | 27.63M | 183.78M | -68.95M | -63.52M | -44.41M | -22.16M | 4.17M | 8.22M | 24.18M | 14.74M | 18.35M | 9.08M | 705K | -306K | 15.2M | 4.7M | 3.35M | -655K | -106K | 3.58M | 4.15M | 1.9M | 1M | 300K | 1.5M | -6.4M | 700K | 4.6M |
| Effective Tax Rate % | -75.64% | -40.2% | 30.46% | 28.95% | -113.59% | 52.24% | 50.86% | 32.94% | 191.98% | 11.23% | 23.34% | 39.97% | 30.71% | 32.54% | 29.33% | 6.52% | 4.94% | 32.06% | 29.96% | 33.67% | -55.18% | -2.3% | 32.12% | 19.01% | 11.05% | 7.39% | -1.46% | -166.67% | 32.82% | 38.89% | 38.02% |
| Net Income | 340.78M | 393.44M | 99.19M | 67.81M | -345.58M | -63.04M | -61.37M | -90.43M | 10.62M | 32.93M | 26.99M | 36.32M | 33.26M | 38.04M | 21.87M | 10.11M | -5.89M | 32.21M | 10.98M | 6.59M | 1.84M | 4.72M | 7.55M | 17.68M | 15.3M | 12.53M | -20.86M | -2.4M | -13.1M | 1.1M | 7.5M |
| Net Margin % | 20.04% | 22.54% | 6.63% | 4.73% | -26.22% | -5.2% | -6.03% | -9.92% | 1.19% | 3.92% | 3.6% | 5.32% | 5.64% | 7.47% | 4.74% | 2.43% | -1.75% | 12.2% | 5.19% | 4.07% | 1.46% | 4.63% | 7.83% | 17.8% | 15.7% | 13.58% | -25.81% | -3.13% | -21.69% | 2.48% | 22.39% |
| Net Income Growth % | 73.22% | 296.65% | 46.28% | 119.62% | -448.19% | -2.72% | 32.13% | -951.78% | -67.76% | 22.04% | -25.7% | 9.22% | -12.59% | 73.97% | 116.34% | 271.58% | -118.29% | 193.45% | 66.44% | 258.03% | -60.96% | -37.54% | -57.28% | 15.58% | 22.04% | 160.1% | -769% | 81.68% | -1290.91% | -85.33% | 158.62% |
| Net Income (Continuing) | 340.78M | 393.44M | 99.19M | 67.81M | -345.58M | -63.04M | -61.37M | -90.43M | 10.62M | 98.55M | 26.99M | 36.32M | 33.26M | 38.04M | 21.87M | 10.11M | -5.89M | 32.21M | 10.98M | 6.59M | 1.84M | 5.19M | 8.21M | 17.68M | 15.3M | 12.53M | -20.86M | -2.4M | -11.6M | 1.1M | 7.5M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 1.91 | 2.13 | 0.55 | 0.40 | -2.11 | -0.39 | -0.38 | -0.57 | 0.06 | 0.59 | 0.17 | 0.23 | 0.21 | 0.25 | 0.14 | 0.07 | -0.04 | 0.21 | 0.07 | 0.05 | 0.01 | 0.04 | 0.10 | 0.12 | 0.12 | 0.10 | -0.18 | -0.02 | -0.12 | 0.01 | 0.07 |
| EPS Growth % | 81.75% | 287.27% | 37.5% | 118.96% | -441.03% | -2.63% | 33.33% | -992.02% | -89.26% | 249.94% | -26.09% | 9.52% | -14.29% | 75% | 115.38% | 262.5% | -118.82% | 193.1% | 61.11% | 260% | -64.29% | -65% | -16.67% | 0% | 26.32% | 152.78% | -860% | 83.7% | -1250% | -85.71% | 133.33% |
| EPS (Basic) | - | 2.30 | 0.58 | 0.41 | -2.11 | -0.39 | -0.38 | -0.57 | 0.07 | 0.64 | 0.18 | 0.24 | 0.22 | 0.25 | 0.15 | 0.07 | -0.04 | 0.22 | 0.08 | 0.05 | 0.01 | 0.04 | 0.11 | 0.12 | 0.13 | 0.10 | -0.18 | -0.02 | -0.12 | 0.01 | 0.07 |
| Diluted Shares Outstanding | 178.84M | 184.79M | 179.27M | 169.83M | 163.89M | 162.77M | 160.67M | 158.11M | 166.13M | 165.66M | 159.46M | 158.09M | 157.06M | 155.95M | 155.44M | 157.62M | 148.12M | 152.45M | 150.42M | 149.73M | 148.54M | 145.85M | 74.09M | 143.03M | 143.92M | 133.74M | 116.82M | 128M | 114.42M | 110M | 110.77M |
| Basic Shares Outstanding | 168.82M | 170.78M | 170.53M | 166.32M | 163.89M | 162.77M | 160.67M | 158.11M | 157.13M | 154.86M | 152.69M | 153.01M | 152.65M | 151.89M | 151.41M | 149.98M | 148.12M | 144.83M | 144.58M | 143.5M | 140.92M | 143.1M | 71.38M | 138.07M | 135.34M | 130.71M | 116.82M | 115.79M | 114.42M | 110M | 105.59M |
| Dividend Payout Ratio | - | 3.92% | 10.28% | 14.69% | - | - | - | - | 88.84% | 28.17% | 34% | 25.31% | 20.67% | 8.99% | 25.97% | 44.47% | - | 13.49% | 39.79% | 65.31% | 115.2% | - | - | - | - | - | - | - | - | - | - |
Cloud transition revenue volatility
As indicated by the quarterly income statement data, PEGA's revenue exhibits significant seasonal volatility, with a 9.6% year-over-year decline in 2026Q1 following a 2.7% growth in 2025Q4, reflecting the ongoing transition toward ratable cloud revenue recognition models that complicate short-term performance comparisons for investors.
The revenue trajectory appears heavily influenced by the timing of multi-year term license renewals, which creates lumpy recognition patterns under ASC 606. While the company shows periodic growth spikes, the underlying trend suggests a transition phase where legacy upfront recognition is being replaced by more predictable, yet slower-to-recognize, cloud subscription streams.
According to the provided financial statements, PEGA's gross margins have fluctuated between 70.2% and 80.9% over the last ten quarters, suggesting that the mix between professional services and high-margin software subscriptions remains a primary driver of profitability variance across different reporting periods.
The volatility in gross margins implies that the company has not yet fully optimized its service-to-software ratio. Investors should monitor whether the company can sustain margins above the 75% threshold as the cloud business scales, as this will be critical for demonstrating long-term operating leverage.
Based on reported figures, PEGA's operating income has shown extreme sensitivity to revenue fluctuations, swinging from a $155.3 million profit in 2023Q4 to a $20.4 million loss in 2024Q1, highlighting that SG&A expenses remain a significant fixed burden that limits consistent operating margin expansion.
The data suggests that SG&A costs are not scaling efficiently with revenue growth, as evidenced by the persistent high levels of spending relative to operating income. This lack of operating leverage indicates that the company is still in an investment phase, prioritizing market share and cloud adoption over immediate bottom-line profitability.
As documented in the income statement, PEGA consistently records significant stock-based compensation expenses, often exceeding $35 million per quarter, which serves to mask the true cash cost of operations and complicates the assessment of normalized earnings power for long-term shareholders.
The high level of stock-based compensation relative to net income suggests that reported EPS may overstate the company's actual profitability. Investors should focus on cash-based metrics to better understand the underlying economic performance, as the current reliance on equity-based incentives may continue to exert downward pressure on diluted EPS.
Quick answers to the most common questions about buying PEGA stock.
For fiscal year 2025, Pegasystems Inc. (PEGA) reported total revenue of $1.75B. This represents a 5111.4% increase compared to $33.5M in 1996.
Pegasystems Inc. (PEGA) is profitable, generating $393.4M in net income for the fiscal year ending 2025 with a net profit margin of 22.5%.
Pegasystems Inc. (PEGA) reported an operating income of $263.1M, resulting in an operating profit margin of 15.1%. This margin reflects the operational efficiency of the business before interest and taxes.
Pegasystems Inc. (PEGA) generated $1.32B in gross profit for the year, representing a gross profit margin of 75.9%. This demonstrates the company's core pricing power and production efficiency.