Pegasystems Inc (PEGA)

Pretax 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
Earnings before tax but after interest (EBT) (ttm) US$ in thousands 284,108 142,636 143,370 151,261 95,803 95,440 -31,303 -109,341 -169,260 -161,797 -241,789 -241,311 -115,814 -131,987 -78,482 -41,508 -99,942 -124,889 -126,898 -130,436
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
Pretax margin 17.30% 9.53% 9.68% 10.15% 6.67% 6.66% -2.31% -8.47% -13.36% -12.28% -19.54% -19.73% -9.09% -10.89% -6.57% -3.57% -9.38% -12.27% -12.75% -13.23%

March 31, 2025 calculation

Pretax margin = EBT (ttm) ÷ Revenue (ttm)
= $284,108K ÷ $1,642,666K
= 17.30%

The pretax margin of Pegasystems Inc. has demonstrated significant fluctuations over the specified periods, transitioning from consistent losses into profitability. From June 30, 2020, through March 31, 2023, the company experienced persistent negative pretax margins, indicating ongoing pre-tax losses. The margins hovered roughly between -19% and -3.5%, with some improvement noted in the latter part of 2021 and early 2022, though overall losses persisted.

A notable turning point occurs beginning in December 2022, when the pretax margin moves into positive territory for the first time in the given timeframe. By December 31, 2022, the margin reached +6.66%, and this positive trend continues, with margins rising to approximately 17.30% by March 31, 2025. The trajectory indicates a substantial turnaround, with the company shifting from losses to generating pre-tax profits. The progressive increase in pretax margin suggests improvements in operational efficiency, cost management, or revenue growth that have contributed to enhanced profitability over time.

Overall, the progression from extensive negative margins to positive margins reflects a significant change in the company's financial health, potentially driven by strategic initiatives, expansion, or favorable market conditions. The consistency of profit in the most recent periods underscores a positive shift in Pegasystems Inc.'s profitability outlook.