Pegasystems Inc (PEGA)

Operating profit margin

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	123,882	80,954	-87,662	-94,732	-143,527
Revenue	US$ in thousands	1,497,180	1,432,620	1,317,840	1,211,650	1,017,520
Operating profit margin		8.27%	5.65%	-6.65%	-7.82%	-14.11%

December 31, 2024 calculation

Operating profit margin = Operating income ÷ Revenue
= $123,882K ÷ $1,497,180K
= 8.27%

The operating profit margin of Pegasystems Inc. demonstrates a notable transformation over the analyzed period from December 31, 2020, to December 31, 2024. In 2020, the company reported a negative operating profit margin of -14.11%, indicating that operating expenses exceeded operating revenues, which is typical for a company in a challenging phase or in the process of restructuring. Over the subsequent years, there was a consistent improvement: the margin narrowed to -7.82% in 2021 and further to -6.65% in 2022, reflecting ongoing efforts to enhance operational efficiency or increase revenue streams.

By the end of 2023, Pegasystems achieved a turnaround with a positive operating profit margin of 5.65%, marking a significant milestone that suggests the company moved into profitability at the operating level. The upward trajectory continued into 2024, with the margin increasing further to 8.27%. This sustained improvement indicates not only successful operational restructuring but also the potential for higher profitability and better cost control measures.

Overall, the progression from negative to positive operating profit margins over these five years reflects a constructive trend in Pegasystems Inc.'s core operations, possibly driven by strategic initiatives aimed at cost management, revenue growth, and operational efficiencies. This shift signifies a transition from a period of losses to a phase of consistent profitability, which could positively influence investor confidence and financial stability.