$PEGA

PEGASYSTEMS INC

CIK:0001013857|SEC Filings

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025
Revenue
Total revenue	$ 420,716	$ 384,512	$ 850,689	$ 860,145
Cost of revenue
Total cost of revenue	108,029	109,574	214,783	212,024
Gross profit	312,687	274,938	635,906	648,121
Operating expenses
Selling and marketing	165,408	147,131	321,011	285,200
Research and development	84,168	78,784	166,215	153,070
General and administrative	43,740	31,788	92,313	65,616
Restructuring	2,735	(44)	2,582	(33)
Total operating expenses	296,051	257,659	582,121	503,853
Income from operations	16,636	17,279	53,785	144,268
Foreign currency transaction (loss) gain	(1,364)	(14,008)	486	(19,333)
Interest income	2,500	3,248	5,454	8,583
Interest expense	(45)	(1)	(89)	(1,028)
(Loss) on capped call transactions	0	0	0	(223)
Other income (loss), net	786	18,729	(1,418)	19,290
Income before provision for (benefit from) income taxes	18,513	25,247	58,218	151,557
Provision for (benefit from) income taxes	5,179	(4,830)	12,120	36,058
Net income	$ 13,334	$ 30,077	$ 46,098	$ 115,499
Earnings per share
Basic (in dollars per share)	$ 0.08	$ 0.18	$ 0.28	$ 0.67
Diluted (in dollars per share)	$ 0.08	$ 0.17	$ 0.26	$ 0.63
Weighted-average number of common shares outstanding
Basic (in shares)	165,613	170,776	167,206	171,287
Diluted (in shares)	171,765	182,160	175,294	185,477
Subscription services
Revenue
Total revenue	$ 288,462	$ 246,014	$ 568,810	$ 473,505
Cost of revenue
Total cost of revenue	53,941	41,510	103,390	79,638
Subscription license
Revenue
Total revenue	82,028	80,674	176,880	268,395
Cost of revenue
Total cost of revenue	267	364	738	752
Consulting
Revenue
Total revenue	50,226	57,824	104,999	118,245
Cost of revenue
Total cost of revenue	$ 53,821	$ 67,700	$ 110,655	$ 131,634

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025
Operating activities
Net income	$ 13,334	$ 30,077	$ 46,098	$ 115,499
Adjustments to reconcile net income to cash provided by operating activities
Stock-based compensation	36,226	36,730	82,041	78,155
Amortization of deferred commissions	15,846	15,074	31,947	33,578
Amortization of intangible assets and depreciation			5,799	6,319
Amortization of right-of-use lease assets			6,889	5,803
Foreign currency transaction (gain) loss	1,364	14,008	(486)	19,333
Loss on capped call transactions	0	0	0	223
Deferred income taxes			(2,267)	282
(Accretion) of investments			(524)	(2,110)
Loss (gain) on investments			2,168	(19,480)
Other non-cash			68	1,067
Change in operating assets and liabilities, net			126,492	51,827
Cash provided by operating activities			298,225	290,496
Investing activities
Purchases of investments			(33,295)	(158,703)
Proceeds from maturities and called investments			52,415	345,166
Sales of investments			16,679	30,547
Investment in property and equipment			(9,967)	(4,015)
Cash provided by investing activities			25,832	212,995
Financing activities
Repurchases of convertible senior notes			0	(467,864)
Dividend payments to stockholders			(10,173)	(5,150)
Proceeds from employee stock plans			31,746	84,987
Common stock repurchases for tax withholdings for net settlement of equity awards			(2,902)	(6,600)
Common stock repurchases under stock repurchase program			(367,701)	(251,689)
Cash (used in) financing activities			(349,030)	(646,316)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(2,299)	7,407
Net (decrease) in cash, cash equivalents, and restricted cash			(27,272)	(135,418)
Cash, cash equivalents, and restricted cash, beginning of period			216,360	341,529
Cash, cash equivalents, and restricted cash, end of period	189,088	206,111	189,088	206,111
Cash, Cash Equivalent, Restricted Cash, and Restricted Cash Equivalent, Continuing Operation [Abstract]
Cash and cash equivalents	185,110	201,565	185,110	201,565
Restricted cash included in other current assets	2,448	0	2,448	0
Restricted cash included in other long-term assets	1,530	4,546	1,530	4,546
Total cash, cash equivalents, and restricted cash	189,088	206,111	189,088	206,111
Non-cash investing and financing activity:
Investment in property and equipment included in accounts payable and accrued liabilities			3,707	1,661
Dividends payable	4,931	5,156	4,931	5,156
Right of use assets obtained in exchange for operating lease obligations			2,664	3,077
U.S. excise tax payable on net stock repurchase	$ 2,462	$ 0	$ 2,462	$ 0

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Current assets:
Cash and cash equivalents	$ 185,110	$ 212,447
Marketable securities	176,797	213,352
Total cash, cash equivalents, and marketable securities	361,907	425,799
Accounts receivable, net	143,213	264,713
Unbilled receivables, net	154,029	166,478
Other current assets	102,559	121,305
Total current assets	761,708	978,295
Long-term unbilled receivables, net	77,947	102,544
Goodwill	81,265	81,506
Long-term deferred income taxes	176,903	175,472
Other long-term assets	286,220	294,027
Total assets	1,384,043	1,631,844
Current liabilities:
Accounts payable	52,964	12,924
Accrued expenses	92,295	44,847
Accrued compensation and related expenses	87,583	148,797
Deferred revenue	462,532	509,275
Other current liabilities	23,886	21,935
Total current liabilities	719,260	737,778
Long-term operating lease liabilities	56,996	60,825
Other long-term liabilities	47,403	45,860
Total liabilities	823,659	844,463
Commitments and contingencies (Note 16)
Stockholders’ equity:
Preferred stock, 1,000 shares authorized; none issued	0	0
Common stock, 400,000 shares authorized; 164,358 and 170,347 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively	1,644	1,703
Additional paid-in capital	72,300	330,926
Retained earnings	499,493	463,389
Accumulated other comprehensive (loss)	(13,053)	(8,637)
Total stockholders’ equity	560,384	787,381
Total liabilities and stockholders’ equity	$ 1,384,043	$ 1,631,844