Pegasystems Inc (PEGA)

Operating profit margin

		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
Operating income (ttm)	US$ in thousands	271,918	124,517	137,091	137,936	83,045	81,251	-24,043	-90,448	-134,198	-93,372	-175,829	-163,945	-77,713	-94,732	-68,474	-64,969	-117,608	-143,527	-139,342	-124,277
Revenue (ttm)	US$ in thousands	1,642,666	1,497,180	1,480,583	1,490,176	1,437,291	1,432,616	1,354,853	1,290,941	1,267,010	1,317,845	1,237,559	1,223,096	1,274,461	1,211,653	1,194,069	1,163,752	1,065,425	1,017,517	995,459	986,211
Operating profit margin		16.55%	8.32%	9.26%	9.26%	5.78%	5.67%	-1.77%	-7.01%	-10.59%	-7.09%	-14.21%	-13.40%	-6.10%	-7.82%	-5.73%	-5.58%	-11.04%	-14.11%	-14.00%	-12.60%

March 31, 2025 calculation

Operating profit margin = Operating income (ttm) ÷ Revenue (ttm)
= $271,918K ÷ $1,642,666K
= 16.55%

The operating profit margin of Pegasystems Inc. has exhibited a significant improvement over the analyzed period. Initially, during the fiscal year ending June 30, 2020, the company recorded negative operating profit margins, with figures of -12.60% and subsequent quarters reflecting continued losses, including -14.00% for September 30, 2020, and -14.11% at the end of that year. This trend persisted into early 2021, with margins remaining negative at -11.04% (March 31, 2021), although there was a gradual improvement toward the latter part of 2021, with margins reaching -7.82% (December 31, 2021).

Throughout 2022, the operating profit margins continued to fluctuate within negative territory, with a notable peak of -6.10% in March 2022 but reverting to more negative values by the end of the year, such as -14.21% in September 2022 and -7.09% in December 2022. The subsequent quarters of 2023 also showed persistent negative margins, although there was a steady upward trend; the margin narrowed from -10.59% (March 2023) to -1.77% (September 2023).

A marked turning point is observed in the final quarter of 2023, when the operating profit margin shifted into positive territory, reaching 5.67% at December 31, 2023. This positive trend persisted into early 2024, with margins further improving to 5.78% (March 31, 2024) and rising to 9.26% in both June and September of 2024. The positive momentum continued into the next quarter, with the margin at 8.32% (December 31, 2024), and further expansion was evident by March 31, 2025, reaching 16.55%.

In summary, Pegasystems Inc. experienced a prolonged period of operating losses, evident through predominantly negative operating profit margins for nearly four years. However, starting in the fourth quarter of 2023, the company transitioned into profitability, with margins steadily increasing and reaching over 16% by the first quarter of 2025. This change signifies substantial improvements in operating efficiency and profitability, marking a notable turnaround in the company's financial performance over the observed period.