Pegasystems Inc (PEGA)
Profitability ratios
Return on sales
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 75.72% | 73.88% | 74.36% | 74.72% | 73.87% | 73.56% | 71.94% | 70.61% | 70.14% | 72.03% | 70.79% | 71.16% | 73.16% | 72.24% | 72.52% | 72.36% | 70.54% | 69.44% | 68.70% | 68.09% |
| 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% |
| 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% |
| Net profit margin | 11.98% | 6.63% | 8.29% | 8.72% | 5.32% | 4.73% | -2.97% | -9.80% | -28.89% | -26.22% | -33.73% | -31.10% | -4.46% | -5.20% | -1.82% | 1.32% | -4.00% | -6.03% | -6.48% | -7.66% |
The profitability ratios of Pegasystems Inc. from June 30, 2020, through March 31, 2025, exhibit a noteworthy transformation in the company’s financial performance over the analyzed period.
Starting with the gross profit margin, Pegasystems demonstrated consistent improvement, rising from approximately 68.09% in June 2020 to approximately 75.72% in March 2025. This upward trend indicates an enhanced ability to retain more revenue from sales after covering direct costs, reflecting favorable supply chain management, pricing strategies, or product mix.
In contrast, the operating profit margin initially showed significant challenges, being negative throughout the period, indicative of losses at the operating level. Starting from -12.60% in June 2020 and deepening to -14.21% by September 2022, the margin reflected operational difficulties or higher operational expenses. Nevertheless, from the latter part of 2022 onwards, a gradual turnaround is evident, with the margin reaching positive territory at 5.67% by December 2023. This positive shift suggests successful operational restructuring, cost management, or increased efficiencies, culminating in an operating profit margin of approximately 16.55% by March 2025.
Pre-tax margins followed a similar trajectory, remaining negative until late 2022, with figures improving markedly in late 2023. The pre-tax margin transitioned from around -13.23% in June 2020 to positive territory, reaching approximately 17.30% in March 2025. This reversal underscores the company's ability to generate profits before income tax, reflecting improved overall profitability and potentially more favorable non-operating items or tax strategies.
Net profit margins reveal a particularly dramatic turnaround. Initially, the company faced losses, with margins as low as -7.66% in June 2020 and reaching as low as -33.73% in September 2022. However, starting in late 2022, a significant recovery occurred, with the net profit margin turning positive at 4.73% in December 2023 and continuing its upward trend to approximately 11.98% by March 2025. These dynamics signify not only operational improvements but also enhanced tax management, investment income, or other non-operational factors contributing to profitability.
Overall, Pegasystems Inc.'s profitability profile illustrates a period of substantial initial losses transitioning into sustained profitability by early 2024. The upward movements in gross, operating, pre-tax, and net profit margins collectively indicate effective strategic restructuring, operational efficiencies, and revenue enhancement, positioning the company toward a more profitable trajectory in the near future.
Return on investment
| 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 return on assets (Operating ROA) | 20.57% | 7.04% | 8.68% | 8.98% | 5.49% | 5.38% | -1.97% | -7.59% | -10.47% | -6.88% | -15.07% | -13.03% | -5.05% | -5.94% | -4.40% | -4.05% | -7.69% | -8.95% | -9.37% | -8.31% |
| Return on assets (ROA) | 14.88% | 5.61% | 7.77% | 8.45% | 5.06% | 4.49% | -3.29% | -10.61% | -28.55% | -25.45% | -35.79% | -30.23% | -3.69% | -3.96% | -1.40% | 0.96% | -2.79% | -3.83% | -4.33% | -5.05% |
| Return on total capital | 46.94% | 24.96% | 30.82% | 35.27% | 26.02% | 28.64% | -14.41% | -70.40% | -104.93% | -118.17% | -360.70% | -174.40% | -32.93% | -36.09% | -23.17% | -11.73% | -17.96% | -19.68% | -14.08% | -18.02% |
| Return on equity (ROE) | 32.18% | 16.94% | 25.95% | 29.83% | 19.60% | 19.16% | -24.01% | -86.99% | -236.88% | -264.12% | -642.60% | -284.34% | -13.97% | -15.15% | -4.74% | 2.95% | -8.90% | -11.32% | -12.18% | -13.58% |
The profitability ratios of Pegasystems Inc. over the analyzed period reveal a complex trajectory marked by significant fluctuations between negative and positive values. The Operating Return on Assets (Operating ROA) consistently exhibited negative figures from June 2020 through March 2024, indicating operational challenges and unprofitable operations during this timeframe. Notably, a turning point occurs in December 2023, when Operating ROA transitions into positive territory at 5.38%, suggesting improved operational efficiency or revenue generation capacity. This positive trend continues through 2024, culminating in an impressive 20.57% in March 2025, signaling a substantial enhancement in operational profitability.
Similarly, the standard Return on Assets (ROA) demonstrates a largely negative trend from June 2020 to March 2024, with the exception of the last quarter of 2023, where it turns positive at 4.49%. The most remarkable achievement occurs in March 2025 with a ROA of 14.88%, reflecting an effective utilization of assets to generate net income. This suggests a significant turnaround in overall asset profitability.
Return on Total Capital (ROTC) highlights a volatile pattern, with severe negative values, reaching as low as -360.70% in September 2022. Such extreme negative figures indicate periods where the company's returns on total invested capital were profoundly unprofitable, possibly due to high costs, losses, or extraordinary events. Post-2022, ROTC shows recovery, with positive figures starting in December 2023 at 28.64% and promising upward momentum through 2024 and into the first quarter of 2025, reaching approximately 46.94%. This improvement indicates robust gains in the company's ability to generate returns relative to its capital base.
Return on Equity (ROE) similarly reflects substantial volatility and deterioration, with extreme negative values—most notably reaching -642.60% in September 2022—implying significant losses relative to shareholders' equity. The extreme negative ROE values in late 2022 and early 2023 likely resulted from extraordinary losses or a substantial erosion of equity base. However, a notable recovery is observed starting at the end of 2023, when ROE turns positive at 19.16% in December 2023, maintaining positive momentum into 2024 and 2025, with the latest figures reaching approximately 32.18%. This signifies a restored ability to generate profits attributable to shareholders' equity.
In summary, while Pegasystems Inc. experienced a prolonged period of negative profitability ratios from 2020 through early 2024, recent data indicates a marked turnaround. The company has moved into positive territory across all key profitability metrics, especially from late 2023 onward, suggesting a significant improvement in operational efficiency, asset utilization, and shareholder profitability. This pattern reflects a possible strategic turnaround, operational restructuring, or market recovery, positioning Pegasystems Inc. toward improved financial performance in the nearer term.