Pegasystems Inc (PEGA)
Interest coverage
| 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 interest and tax (EBIT) (ttm) | US$ in thousands | 286,908 | 146,161 | 145,768 | 153,553 | 101,527 | 101,330 | -24,164 | -102,361 | -162,114 | -154,623 | -234,316 | -233,304 | -133,934 | -150,173 | -106,479 | -61,279 | -86,034 | -106,703 | -74,534 | -100,268 |
| Interest expense (ttm) | US$ in thousands | 6,110 | 6,835 | 6,694 | 6,588 | 6,710 | 6,876 | 7,139 | 7,598 | 7,764 | 7,792 | 8,091 | 8,007 | 8,022 | 7,956 | 11,312 | 15,360 | 18,930 | 19,356 | 13,806 | 7,865 |
| Interest coverage | 46.96 | 21.38 | 21.78 | 23.31 | 15.13 | 14.74 | -3.38 | -13.47 | -20.88 | -19.84 | -28.96 | -29.14 | -16.70 | -18.88 | -9.41 | -3.99 | -4.54 | -5.51 | -5.40 | -12.75 |
March 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $286,908K ÷ $6,110K
= 46.96
The interest coverage ratio of Pegasystems Inc. demonstrates significant variability over the analyzed period. From June 30, 2020, to March 31, 2023, the ratio remained consistently negative, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses, thus signaling prolonged periods of potential financial distress. The ratios during this timeframe ranged from approximately -29.14 to -3.38, with notable fluctuations including a peak negative value of -29.14 on June 30, 2022, and a less severe negative figure of -3.38 on September 30, 2023.
A marked turnaround occurs starting with December 31, 2023, when the ratio shifts to a positive value of 14.74, suggesting that the company's EBIT has begun to adequately cover its interest obligations. This positive trend continues into the subsequent quarters, with interest coverage ratios rising to 15.13 on March 31, 2024, and further improving in the following periods, reaching 46.96 by March 31, 2025.
This trajectory indicates a significant enhancement in the company's ability to meet its interest expenses, transitioning from a period of consistent underperformance to a phase reflecting healthier operational earnings relative to interest commitments. The shift to positive interest coverage ratios marks a notable change in the company's financial health, signaling improved profitability and potentially reduced credit risk moving forward.
Peer comparison
Mar 31, 2025