Companies /Technology

Pegasystems Inc

NASDAQ: PEGA Software - Application
$38.31
▲ $0.99 (+2.65%) today
Markets open · 10:07am ET

Q4 2025 Earnings

Reported Feb 10, 2026, 4:11pm ET · SEC source
$0.76
Beat +3.51%
EPS · est. $0.73
$504.3M
Beat +2.17%
Revenue · est. $493.6M
+16.3%
Beating market
PEGA vs S&P since report
2 quarters
Consecutive EPS misses

Market Reaction

% change · around the report
−18%−12%−6%0Feb 10Feb 11report 4:11pm ETearnings−0.0%−11.9%
−18%−12%−6%0Feb 10Feb 11earnings−0.0%−11.9%
PEGA −11.9%S&P 500 −0.0%
−18%−12%−6%0Feb 10Feb 11report 4:11pm ETearnings+0.2%−11.9%
−18%−12%−6%0Feb 10Feb 11earnings+0.2%−11.9%
PEGA −11.9%NASDAQ +0.2%
−7%0+7%Feb 9Feb 18report 4:11pm ETearnings−1.0%+10.4%
−7%0+7%Feb 9Feb 18earnings−1.0%+10.4%
PEGA +10.4%S&P 500 −1.0%
−7%0+7%Feb 9Feb 18report 4:11pm ETearnings−1.1%+10.4%
−7%0+7%Feb 9Feb 18earnings−1.1%+10.4%
PEGA +10.4%NASDAQ −1.1%
−11.85%
Day of report
+7.01%
Next session
+18.01%
One week
+12.97%
30 days

S&P 500 over the same 30 days: −3.31%.

Did PEGA Beat Earnings? Q4 2025 Results

Pegasystems closed out fiscal 2025 on a solid footing, posting fourth-quarter revenue of $504.32 million, up 2.8% year over year and ahead of the $493.63 million consensus estimate by 2.17%, while non-GAAP diluted EPS of $0.76 beat the $0.73 analyst forecast by 3.51%. The clearest driver of the quarter's strength was the company's accelerating cloud transition, with Pega Cloud revenue surging 29% year over year to $193.49 million and cloud Annual Contract Value growing 33% to $866.61 million, helping lift total ACV to $1.61 billion. A Barclays upgrade citing cloud and AI momentum, along with the removal of a major legal overhang, added further investor confidence around the print. GAAP net income nearly doubled, though that figure was substantially inflated by a $175 million non-cash tax benefit. Looking ahead, management guided 2026 revenue to $2.00 billion with 15% ACV growth and non-GAAP diluted EPS of $2.75, while a newly authorized $1.00 billion share repurchase program underscored confidence in the company's cash generation trajectory.

Key Takeaways
  • Pega Cloud ACV grew 33% year over year (28% in constant currency)
  • Total ACV grew 17% year over year to $1.608 billion
  • Subscription services revenue grew 18% year over year in Q4
  • Cash flow from operations and free cash flow grew 45% year over year
  • Non-cash tax benefit of $175 million from release of deferred tax asset valuation allowances

“2025 was an extraordinary year of progress and execution. We're entering a transformative era with bold ideas and compelling innovation. Our approach positions us to lead the industry, deliver extraordinary value to clients, and enable clients to overcome legacy system limitations.”

Pegasystems CEO, on the earnings call

Forward Guidance & Outlook

For 2026, Pega guides to 15% ACV growth, $2.0 billion in revenue (both GAAP and non-GAAP), GAAP diluted EPS of $1.87 and non-GAAP diluted EPS of $2.75, $595 million in cash from operating activities, and $575 million in free cash flow. The company notes evolving U.S. tax legislation may impact tax payments.

PEGA YoY Financials

Q4 2025 vs Q4 2024 · SEC filings Q4 2024 Q4 2025
$0$200.0M$400.0M$490.8M$504.3MRevenue$388.5M$400.9MGross Profit$143.0M$104.4MOperating Income$119.1M$234.6MNet Income
$0$200.0M$400.0MRevenueGross ProfitOperating IncomeNet Income

PEGA Revenue by Segment

Pega Cloud$193.5M+29.0%
Subscription License$178.2M−14.0%
Maintenance$79.3M−2.0%
Consulting$53.3M+1.0%
Perpetual License

Figures from SEC filings and company reports. Not investment advice.