Pegasystems Inc (PEGA)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	390,665	378,483	368,635	336,363	310,913
Payables	US$ in thousands	6,226	11,290	18,195	15,281	24,028
Payables turnover		62.75	33.52	20.26	22.01	12.94

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $390,665K ÷ $6,226K
= 62.75

The payables turnover ratio for Pegasystems Inc. exhibits a notable upward trend over the analyzed period from December 31, 2020, to December 31, 2024. Specifically, the ratio increased from 12.94 in 2020 to 22.01 in 2021, reflecting an improvement in the company's ability to efficiently manage its trade payables. The ratio experienced a slight decline to 20.26 in 2022 but subsequently surged dramatically to 33.52 in 2023. The most significant change occurred between 2023 and 2024, when the ratio more than doubled, reaching 62.75.

This upward trajectory indicates a progressively faster turnover of accounts payable, implying that the company is settling its short-term obligations more quickly relative to its cost of goods sold or purchases. Such an increase may suggest improved payment policies or enhanced efficiency in managing payable balances, potentially freeing up working capital or reflecting strategic supplier negotiations. Conversely, it could also encompass a reduction in credit terms extended by suppliers, necessitating more frequent payments.

Overall, the trend demonstrates a clear shift toward more rapid payment cycles, which could have implications for the company's liquidity management and supplier relationships. Continuous monitoring of this ratio can further elucidate whether this acceleration correlates with operational efficiencies, changes in procurement strategies, or other financial management practices.