Pegasystems Inc (PEGA)

Payables turnover

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020
Cost of revenue (ttm)	US$ in thousands	398,799	391,007	379,640	376,697	375,549	378,825	380,110	379,397	378,372	368,635	361,525	352,697	342,113	336,363	328,095	321,672	313,832	310,913	311,625	314,724
Payables	US$ in thousands	16,649	6,226	20,103	16,682	6,353	11,290	20,541	8,438	12,565	18,195	13,562	21,465	18,628	15,281	25,604	22,931	24,426	24,028	20,443	18,426
Payables turnover		23.95	62.80	18.88	22.58	59.11	33.55	18.50	44.96	30.11	20.26	26.66	16.43	18.37	22.01	12.81	14.03	12.85	12.94	15.24	17.08

March 31, 2025 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $398,799K ÷ $16,649K
= 23.95

The payables turnover ratio for Pegasystems Inc demonstrates considerable variation over the analyzed period, reflecting fluctuations in the company's management of trade payables relative to its cost of goods sold. Initial figures in mid-2020 show a relatively high ratio, with a value of 17.08 as of June 30, 2020, indicating that the company was efficiently settling its accounts payable, typically within a period equivalent to approximately 21-22 days (assuming 365 days in a year).

From mid-2020 through the end of 2021, the ratio experienced declines, reaching a low point of 12.81 in September 2021. This suggests a lengthening of the payable settlement period, potentially indicative of delayed payments or strategic stretching of payables to optimize cash flow. Conversely, at end-2021, the ratio sharply increased to 22.01, suggesting a quicker turnover of payables.

The subsequent period from early 2022 to mid-2023 reveals increased volatility; the ratio climbs significantly, with a peak of 59.11 recorded in March 2024. Such a substantial increase signifies that the company was paying its suppliers much more rapidly relative to its cost of goods sold during this period, reducing the days payable outstanding considerably and possibly reflecting improved liquidity management or changes in supplier payment terms.

Conversely, the ratio dropped again to 22.58 by June 2024 and further to 18.88 in September 2024 before rising sharply to 62.80 in December 2024. The extreme movements in late 2024 point to dynamic changes in payment policies or cash flow management strategies.

Overall, the payables turnover ratio indicates periods of both extended and accelerated payment cycles, which could be driven by internal strategic decisions, supplier negotiations, or broader economic conditions affecting liquidity. The recent high ratio at the end of 2024 suggests a period of rapid payables settlement, whereas the fluctuations earlier in the timeline reflect a lack of a consistent pattern, possibly pointing to reactive management of short-term liabilities according to operational needs.