Pegasystems Inc (PEGA)

Return on assets (ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	99,189	67,808	-345,582	-63,040	-61,373
Total assets	US$ in thousands	1,768,270	1,510,740	1,357,670	1,593,530	1,604,260
ROA		5.61%	4.49%	-25.45%	-3.96%	-3.83%

December 31, 2024 calculation

ROA = Net income ÷ Total assets
= $99,189K ÷ $1,768,270K
= 5.61%

Pegasystems Inc.'s return on assets (ROA) has shown significant fluctuations over the period from December 31, 2020, to December 31, 2024. As of December 31, 2020, the company's ROA was recorded at -3.83%, indicating a loss generated from its assets during that fiscal year. This negative value persisted into December 31, 2021, with a slightly increased deficit of -3.96%, suggesting continued challenges in generating sufficient earnings relative to asset levels.

By the end of 2022, the company's ROA experienced a substantial deterioration, declining sharply to -25.45%, which reflects a significant decline in profitability and indicates that the company was generating markedly less net income from its asset base, likely due to operational difficulties or adverse market conditions.

However, a notable turnaround is observed in the subsequent years. By December 31, 2023, Pegasystems Inc. achieved a positive ROA of 4.49%, marking a shift from losses to profitability and suggesting improvements in operational efficiency, revenue generation, or both. This positive trajectory was further enhanced by December 31, 2024, when the ROA increased to 5.61%, indicating continued accumulation of net income relative to total assets.

The overall trend indicates that after experiencing sustained periods of negative ROA, the company managed a significant recovery, transitioning into profitability and demonstrating an improved ability to utilize its assets effectively to generate earnings. The positive and increasing ROA figures in the most recent years suggest a strengthening of financial performance, potentially supported by strategic initiatives, cost management, or revenue growth.

In conclusion, Pegasystems Inc.'s ROA evolved from persistent negative values in 2020-2022 to positive and improving figures in 2023 and 2024, reflecting a noteworthy turnaround in the company’s profitability relative to its asset base over this period.