Pegasystems Inc (PEGA)

Operating return on assets (Operating ROA)

		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
Total assets	US$ in thousands	1,768,270	1,510,740	1,357,670	1,593,530	1,604,260
Operating ROA		7.01%	5.36%	-6.46%	-5.94%	-8.95%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $123,882K ÷ $1,768,270K
= 7.01%

The operating return on assets (ROA) for Pegasystems Inc. demonstrates a notable turnaround over the specified period. At the close of December 2020, the company reported an operating ROA of -8.95%, indicating that it was experiencing operational inefficiencies or challenges in generating positive returns from its assets during that year. The negative figure persisted into the following year, with a slight improvement to -5.94% as of December 2021, suggesting some progress in operational performance, though still indicating that the company was not yet achieving profitable asset utilization.

In 2022, the operating ROA slightly declined to -6.46%, reflecting a minor setback or continued operational hurdles, yet the negative trend was less severe compared to 2020. This period of continued negative profitability highlights ongoing difficulties in converting assets into operating profits effectively.

A significant inversion in this trend is observed by the end of December 2023, when the operating ROA turns positive at 5.36%. This shift marks a pivotal point, indicating that the company's operations began generating a meaningful return from its assets after a prolonged period of negative performance. The positive figure reflects improved operational efficiency, profitability, or both.

The upward trajectory persists into December 2024, with the operating ROA further increasing to 7.01%. This continued positive development suggests that Pegasystems Inc. has gained operational momentum, achieving higher returns relative to its asset base. Overall, the data illustrates a transition from a period of operational losses to sustained positive returns, highlighting significant improvement in asset utilization and operational performance over the examined timeframe.