Pegasystems Inc (PEGA)

Gross profit margin

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Gross profit	US$ in thousands	1,106,520	1,054,130	949,210	875,290	706,604
Revenue	US$ in thousands	1,497,180	1,432,620	1,317,840	1,211,650	1,017,520
Gross profit margin		73.91%	73.58%	72.03%	72.24%	69.44%

December 31, 2024 calculation

Gross profit margin = Gross profit ÷ Revenue
= $1,106,520K ÷ $1,497,180K
= 73.91%

The gross profit margin of Pegasystems Inc. demonstrates a consistent upward trend over the analyzed period from December 31, 2020, to December 31, 2024. Specifically, the gross profit margin increased from 69.44% in 2020 to 73.91% in 2024, reflecting an overall improvement of approximately 4.47 percentage points.

Between December 31, 2020, and December 31, 2021, the gross profit margin rose from 69.44% to 72.24%, signifying a year-over-year increase of approximately 2.80 percentage points. This suggests an initial strengthening of gross profitability, potentially due to improvements in product pricing strategies, cost management, or both.

From 2021 to 2022, the margin slightly declined marginally to 72.03%, indicating that the rate of increase plateaued temporarily. Despite this slight decrease of 0.21 percentage points, the overall gross profit margin still remained substantially higher than in 2020, pointing to overall continued improvement in gross profitability.

Subsequently, the margin resumed its upward trajectory, rising to 73.58% by December 31, 2023. This increase of roughly 1.55 percentage points indicates ongoing efforts toward enhancing gross profitability. The margin further increased slightly to 73.91% in 2024, representing a modest annual growth of approximately 0.33 percentage points.

Overall, the steady increase in gross profit margin over this period underscores Pegasystems Inc.'s effective control over cost of goods sold relative to revenue and an ability to sustain or improve pricing power. This trend signals a positive outlook on the company's core profitability and operational efficiency, contributing to its financial robustness over the analyzed period.