Pegasystems Inc (PEGA)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	—	—	—	—
Days of sales outstanding (DSO)	days	134.79	142.32	129.86	127.11	192.36
Number of days of payables	days	5.82	10.89	18.02	16.58	28.21
Cash conversion cycle	days	128.97	131.43	111.85	110.53	164.16

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 134.79 – 5.82
= 128.97

The cash conversion cycle (CCC) of Pegasystems Inc. has demonstrated notable fluctuations over the analyzed period from December 31, 2020, to December 31, 2024. Starting at 164.16 days at the end of 2020, the CCC decreased significantly by approximately 53.63 days to 110.53 days at the end of 2021. This substantial reduction suggests improvements in operational efficiency, potentially attributable to shorter receivables collection periods, more effective inventory management, or extended payable periods.

However, the trend reversed slightly in subsequent years, with the CCC marginally increasing to 111.85 days by the end of 2022, indicating a stabilization but not a continued decline. Moving into 2023, the CCC rose again to 131.43 days, reflecting a reversal of recent efficiencies and suggesting potential delays in receivables, inventory, or changes in payable practices.

By the end of 2024, the CCC slightly decreased to 128.97 days, stabilizing at a higher level compared to the 2021 low but still below the 2020 figure. This indicates a relatively consistent cycle duration in recent years, with some short-term fluctuations. Overall, the data suggests that while Pegasystems Inc. achieved a significant reduction in its cash conversion cycle in 2021, subsequent years have seen a moderate elongation, reflecting potential shifts in operational efficiency or working capital management strategies.