Pegasystems Inc (PEGA)

Total asset turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	1,497,180	1,432,620	1,317,840	1,211,650	1,017,520
Total assets	US$ in thousands	1,768,270	1,510,740	1,357,670	1,593,530	1,604,260
Total asset turnover		0.85	0.95	0.97	0.76	0.63

December 31, 2024 calculation

Total asset turnover = Revenue ÷ Total assets
= $1,497,180K ÷ $1,768,270K
= 0.85

The analysis of Pegasystems Inc.'s total asset turnover ratio over the specified period reveals notable shifts in operational efficiency regarding asset utilization. As of December 31, 2020, the ratio stood at 0.63, indicating that for each dollar of assets, the company generated $0.63 in sales. This ratio experienced a steady increase through 2021 and 2022, reaching 0.76 and 0.97 respectively, signaling an improvement in asset utilization and operational efficiency. The peak of 0.97 in 2022 suggests that nearly one dollar of sales was generated for every dollar of assets, reflecting a period of enhanced asset efficiency.

However, there was a slight decline in 2023, with the ratio decreasing marginally to 0.95, indicating a slight reduction in the efficiency of asset utilization, though still remaining substantially high. In 2024, the ratio further decreased to 0.85, suggesting a continued, albeit moderate, decline in asset turnover. Despite this dip, the ratio for 2024 remains above the 2020 level, demonstrating an overall trend of improved asset utilization during the three-year span, albeit with some fluctuations.

Overall, the trend indicates that Pegasystems Inc. showed significant improvement in generating sales relative to its assets in the period leading up to 2022, followed by a modest decline in subsequent years. This pattern points to a period of operational efficiency gains that was somewhat tempered by recent reductions, likely attributable to changes in sales performance, asset base adjustments, or strategic shifts impacting asset productivity.