pega-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 10-Q

_____________________________________


☒			Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2026


☐			Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 1-11859

____________________________

PEGASYSTEMS INC.

(Exact name of Registrant as specified in its charter)

____________________________


Massachusetts			04-2787865
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)

225 Wyman Street, Waltham, MA 02451

(Address of principal executive offices, including zip code)

(617) 374-9600

(Registrant’s telephone number, including area code)

____________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value per share	PEGA	NASDAQ Global Select Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 167,657,568 shares of the Registrant’s common stock, $0.01 par value per share, outstanding on April 13, 2026.

Table of Contents

PEGASYSTEMS INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


			Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025			3
Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025			4
Unaudited Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2026 and 2025			5
Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025			6
Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025			7
Notes to Unaudited Condensed Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures About Market Risk			28
Item 4. Controls and Procedures			29

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			30
Item 1A. Risk Factors			30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			30
Item 5. Other Information			30
Item 6. Exhibits			31

Signatures			32

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


PEGASYSTEMS INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
	March 31, 2026		December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	269,962	$	212,447
Marketable securities	203,992		213,352
Total cash, cash equivalents, and marketable securities	473,954		425,799
Accounts receivable, net	173,856		264,713
Unbilled receivables, net	142,057		166,478
Other current assets	114,010		121,305
Total current assets	903,877		978,295
Long-term unbilled receivables, net	87,459		102,544
Goodwill	81,380		81,506
Long-term deferred income taxes	174,251		175,472
Other long-term assets	304,031		294,027
Total assets	$	1,550,998	$	1,631,844
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	14,206	$	12,924
Accrued expenses	79,464		44,847
Accrued compensation and related expenses	67,222		148,797
Deferred revenue	557,449		509,275

Other current liabilities	25,061		21,935
Total current liabilities	743,402		737,778

Long-term operating lease liabilities	57,075		60,825
Other long-term liabilities	44,606		45,860
Total liabilities	845,083		844,463
Commitments and contingencies (Note 17)
Stockholders’ equity:
Preferred stock, 1,000 shares authorized; none issued	—		—
Common stock, 400,000 shares authorized; 168,768 and 170,347 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively	1,688		1,703
Additional paid-in capital	227,005		330,926
Retained earnings	491,090		463,389
Accumulated other comprehensive (loss)	(13,868)		(8,637)
Total stockholders’ equity	705,915		787,381
Total liabilities and stockholders’ equity	$	1,550,998	$	1,631,844

See notes to unaudited condensed consolidated financial statements.


PEGASYSTEMS INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)
	Three Months Ended March 31,
		2026		2025
Revenue
Subscription services		$	280,348	$	227,491
Subscription license		94,852		187,721
Consulting		54,773		60,421
Total revenue		429,973		475,633
Cost of revenue
Subscription services		49,449		38,128
Subscription license		471		388
Consulting		56,834		63,934
Total cost of revenue		106,754		102,450
Gross profit		323,219		373,183
Operating expenses
Selling and marketing		155,603		138,069
Research and development		82,047		74,286
General and administrative		48,573		33,828

Restructuring		(153)		11
Total operating expenses		286,070		246,194
Income from operations		37,149		126,989
Foreign currency transaction gain (loss)		1,850		(5,325)
Interest income		2,954		5,335
Interest expense		(44)		(1,027)
(Loss) on capped call transactions		—		(223)
Other (loss) income, net		(2,204)		561
Income before provision for income taxes		39,705		126,310
Provision for income taxes		6,941		40,888
Net income		$	32,764	$	85,422
Earnings per share
Basic		$	0.19	$	0.50
Diluted		$	0.18	$	0.46
Weighted-average number of common shares outstanding
Basic		168,817		171,804
Diluted		178,841		188,826

See notes to unaudited condensed consolidated financial statements.


PEGASYSTEMS INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands)
	Three Months Ended March 31,
		2026		2025
Net income		$	32,764	$	85,422
Other comprehensive (loss) income, net of tax
Unrealized (loss) on available-for-sale securities		(739)		(262)
Foreign currency translation adjustments		(4,492)		8,810
Total other comprehensive (loss) income, net of tax		(5,231)		8,548
Comprehensive income		$	27,533	$	93,970

See notes to unaudited condensed consolidated financial statements.


PEGASYSTEMS INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except per share amounts)

	Common Stock			Additional paid-in capital		Retained earnings		Accumulated other comprehensive (loss)		Total stockholders’ equity
	Number of shares	Amount
December 31, 2024	172,224	$	1,722	$	526,102	$	87,901	$	(30,245)	$	585,480
Repurchase of common stock	(2,920)	(30)		(118,674)		—		—		(118,704)
Issuance of common stock for stock compensation plans	1,756	18		9,736		—		—		9,754
Issuance of common stock under the employee stock purchase plan	64	2		1,909		—		—		1,911
Stock-based compensation	—	—		41,425		—		—		41,425
Cash dividends declared ($0.015 per share)	—	—		—		(2,567)		—		(2,567)
Other comprehensive income	—	—		—		—		8,548		8,548
Net income	—	—		—		85,422		—		85,422
March 31, 2025	171,124	$	1,712	$	460,498	$	170,756	$	(21,697)	$

SEC Form 10-Q filed by Pegasystems Inc.