Pegasystems Inc.

pega.com

What Do They Do?

Sells business software that uses artificial intelligence to personalize customer interactions, improve customer service, and automate work for large businesses and government agencies.

How Do They Make Money?

Hosted software and maintenance are billed annually or more often during their service terms; term licenses are billed annually or more often during their license terms, and consulting is billed monthly for hourly work or at project milestones.

revenue

Segment	Share	How money arrives
Subscription services Recurring	58% FY2022: 53%	Recurring
Subscription license Licensed	29% FY2022: 28%	Licensed
Consulting	13% FY2022: 18%

Who Are Their Customers?

Sells to large businesses and government agencies through its direct sales force and partners; systems integrators and consulting firms can influence purchases and deliver implementation services.

Do Revenues Turn Into Profits?

Yes. It kept 23 cents of every revenue dollar as net income in FY2025 and turned 28 cents into free cash flow.

Operating income, FY2025

15% of revenue

▲ +112% vs FY2024 ($123.9M, 8%)

Net income, FY2025

23% of revenue

▲ +297% vs FY2024 ($99.2M, 7%)

Free cash flow, FY2025

28% of revenue

▲ +45% vs FY2024 ($338.2M, 23%)

How Are They Changing?

Since the FY2025 annual report

Latest quarter: Q3 FY2026, the three months to Sep 30, 2026

Revenue: ▲ +3%; vs $381.4M in Q3 FY2025
Net income: ▼ −68%; vs $43.4M in Q3 FY2025

Subscription services share of revenue vs 69.3% in Q3 FY2025

Growing. Revenue grew 44% in 4 years, from $1.2B in FY2021 to $1.7B in FY2025, about 10% a year.

AI-assisted application design The older report described Pega Express and visual low-code models for designing and deploying applications. The latest describes Blueprint, which uses generative AI to analyze requirements, create a starting template and application, and support collaborative design and implementation.

Revenue over time

Subscription services Subscription license Consulting Perpetual license

$2B$1B$0

FY2021 FY2022 FY2023 FY2024 FY2025

Who Do They Compete With?

Competes with International Business Machines, Microsoft, Oracle, Salesforce, SAP, and ServiceNow

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