3 unchanged sentences
(in thousands)
−Removed: March 31, 2025 December 31, 2024
+Added: June 30, 2025 December 31, 2024
Current assets:
31 unchanged sentences
171,102 and 172,224 shares issued and outstanding at
−Removed: March 31, 2025 and December 31, 2024, respectively
+Added: June 30, 2025 and December 31, 2024, respectively
Additional paid-in capital 431,466 526,102
8 unchanged sentences
Three Months Ended
+Added: June 30, Six Months Ended
+Added: 2025 2024 2025 2024
Subscription services $ 246,014 $ 214,430 $ 473,505 $ 426,333
18 unchanged sentences
Income (loss) from operations 17,279 12,966 144,268 ( 7,446 )
−Removed: Foreign currency transaction (loss) ( 5,325 ) ( 3,262 )
+Added: Foreign currency transaction (loss) gain ( 14,008 ) 437 ( 19,333 ) ( 2,825 )
Interest income 3,248 6,785 8,583 12,066
Interest expense ( 1 ) ( 1,656 ) ( 1,028 ) ( 3,408 )
−Removed: (Loss) income on capped call transactions ( 223 ) 3,299
+Added: Gain (loss) on capped call transactions — ( 3,277 ) ( 223 ) 22
Other income, net 18,729 — 19,290 1,684
−Removed: Income (loss) before provision for (benefit from) income taxes 126,310 ( 15,162 )
−Removed: Provision for (benefit from) income taxes 40,888 ( 3,038 )
+Added: Income before (benefit from) provision for income taxes 25,247 15,255 151,557 93
+Added: (Benefit from) provision for income taxes ( 4,830 ) 8,642 36,058 5,604
Net income (loss) $ 30,077 $ 6,613 $ 115,499 $ ( 5,511 )
10 unchanged sentences
Three Months Ended
+Added: June 30, Six Months Ended
+Added: 2025 2024 2025 2024
Net income (loss) $ 30,077 $ 6,613 $ 115,499 $ ( 5,511 )
Other comprehensive income (loss), net of tax
−Removed: Unrealized (loss) on available-for-sale securities ( 262 ) ( 746 )
+Added: Unrealized gain (loss) on available-for-sale securities 184 ( 72 ) ( 78 ) ( 818 )
Foreign currency translation adjustments 17,201 ( 2,142 ) 26,011 ( 5,569 )
6 unchanged sentences
Common Stock Additional paid-in capital Retained earnings Accumulated other comprehensive (loss) Total stockholders’ equity
+Added: of shares Amount
December 31, 2023 167,680 $ 1,676 $ 378,746 $ ( 8,705 ) $ ( 17,879 ) $ 353,838
7 unchanged sentences
March 31, 2024 170,022 $ 1,700 $ 431,367 $ ( 20,829 ) $ ( 22,052 ) $ 390,186
+Added: Issuance of common stock for stock compensation plans 652 7 5,478 — — 5,485
+Added: Issuance of common stock under the employee stock purchase plan 64 1 1,668 — — 1,669
+Added: Stock-based compensation — — 36,224 — — 36,224
+Added: Cash dividends declared ($ 0.015 per share)
+Added: — — ( 2,561 ) — — ( 2,561 )
+Added: Other comprehensive (loss) — — — — ( 2,214 ) ( 2,214 )
+Added: Net income — — — 6,613 — 6,613
+Added: June 30, 2024 170,738 $ 1,708 $ 472,176 $ ( 14,216 ) $ ( 24,266 ) $ 435,402
December 31, 2024 172,224 $ 1,722 $ 526,102 $ 87,901 $ ( 30,245 ) $ 585,480
8 unchanged sentences
March 31, 2025 171,124 $ 1,712 $ 460,498 $ 170,756 $ ( 21,697 ) $ 611,269
+Added: Repurchase of common stock ( 3,147 ) ( 31 ) ( 132,454 ) — — ( 132,485 )
+Added: Issuance of common stock for stock compensation plans 3,086 30 64,876 — — 64,906
+Added: Issuance of common stock under the employee stock purchase plan 39 — 1,816 — — 1,816
+Added: Stock-based compensation — — 36,730 — — 36,730
+Added: Cash dividends declared ($ 0.03 per share)
+Added: — — — ( 5,156 ) — ( 5,156 )
+Added: Other comprehensive income — — — — 17,385 17,385
+Added: Net income — — — 30,077 — 30,077
+Added: June 30, 2025 171,102 $ 1,711 $ 431,466 $ 195,677 $ ( 4,312 ) $ 624,542
See notes to unaudited condensed consolidated financial statements.
2 unchanged sentences
(in thousands)
−Removed: Three Months Ended
+Added: Six Months Ended
Operating activities
41 unchanged sentences
Securities and Exchange Commission (“SEC”) regarding interim financial reporting.
−Removed: Accordingly, they do not include all the information required by accounting principles generally accepted in the United States of America (“U.S.”) for complete financial statements and should be read in conjunction with the Company’s audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2024.
+Added: Accordingly, they do not include all the information required by the generally accepted accounting principles (“GAAP”) in the United States of America (“U.S.”) for complete financial statements and should be read in conjunction with the Company’s audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2024.
In the opinion of management, the Company has prepared the accompanying unaudited condensed consolidated financial statements on the same basis as its audited financial statements, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented.
1 unchanged sentence
The operating results for the interim periods presented do not necessarily indicate the expected results for fiscal year 2025.
+Added: On February 12, 2025, the Company’s Board of Directors approved a two -for-one forward stock split (the “Stock Split”) of the Company’s common stock, par value $ 0.01 (“Common Stock”), to be effected as a stock dividend and a proportionate increase in the number of authorized shares of Common Stock from 200,000,000 to 400,000,000 (the “Authorized Share Increase”).
+Added: The Authorized Share Increase was subject to shareholder approval of an amendment to the Company’s Restated Articles of Organization.
+Added: The requisite shareholder approval was obtained on June 17, 2025.
+Added: On June 20, 2025, each shareholder of record at the close of business on June 10, 2025 (the “Record Date”) received one additional share of Common Stock for each share of Common Stock held on the Record Date.
+Added: All share, per share, and equity award information in the Company’s unaudited condensed consolidated financial statements and in the accompanying notes for all periods presented have been recast to reflect the effect of the Stock Split.
+Added: The shares of Common Stock retained a par value of $ 0.01 per share.
+Added: Accordingly, an amount equal to the par value of the increased shares resulting from the Stock Split was reclassified from additional paid-in capital to common stock.
NEW ACCOUNTING PRONOUNCEMENTS
12 unchanged sentences
MARKETABLE SECURITIES
−Removed: March 31, 2025 December 31, 2024
+Added: June 30, 2025 December 31, 2024
(in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Amortized Cost Unrealized Gains Unrealized Losses Fair Value
2 unchanged sentences
$ 209,649 $ 407 $ ( 54 ) $ 210,002 $ 402,948 $ 64 $ ( 142 ) $ 402,870
−Removed: As of March 31, 2025, marketable securities’ maturities ranged from April 2025 to March 2028, with a weighted-average remaining maturity of 1.4 years.
+Added: As of June 30, 2025, marketable securities’ maturities ranged from July 2025 to June 2028, with a weighted-average remaining maturity of 1.4 years.
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE
(in thousands)
−Removed: March 31, 2025 December 31, 2024
+Added: June 30, 2025 December 31, 2024
Accounts receivable, net $ 156,470 $ 305,468
3 unchanged sentences
$ 444,952 $ 539,960
+Added: PEGASYSTEMS INC.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Unbilled receivables
3 unchanged sentences
(Dollars in thousands)
−Removed: March 31, 2025
+Added: June 30, 2025
1 year or less $ 184,184 64 %
2 unchanged sentences
$ 288,482 100 %
−Removed: PEGASYSTEMS INC.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Unbilled receivables by contract effective date:
(Dollars in thousands)
−Removed: March 31, 2025
+Added: June 30, 2025
2025 $ 118,439 41 %
6 unchanged sentences
Clients that represented 10% or more of the Company’s total accounts receivable and unbilled receivables:
−Removed: March 31, 2025 December 31, 2024
+Added: June 30, 2025 December 31, 2024
Accounts receivable * 20 %
8 unchanged sentences
(in thousands)
−Removed: March 31, 2025 December 31, 2024
+Added: June 30, 2025 December 31, 2024
Contract assets (1)
8 unchanged sentences
(in thousands)
−Removed: March 31, 2025 December 31, 2024
+Added: June 30, 2025 December 31, 2024
Deferred revenue $ 418,931 $ 423,910
2 unchanged sentences
(1) Included in other long-term liabilities.
−Removed: The change in deferred revenue during the three months ended March 31, 2025 was primarily due to new billings in advance of revenue recognition and $ 190.2 million of revenue recognized during the period included in deferred revenue as of December 31, 2024 .
+Added: The change in deferred revenue during the six months ended June 30, 2025 was primarily due to new billings in advance of revenue recognition and $ 303.6 million of revenue recognized during the period included in deferred revenue as of December 31, 2024.
+Added: PEGASYSTEMS INC.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
DEFERRED COMMISSIONS
(in thousands)
−Removed: March 31, 2025 December 31, 2024
+Added: June 30, 2025 December 31, 2024
Deferred commissions (1)
2 unchanged sentences
Three Months Ended
+Added: June 30, Six Months Ended
(in thousands) 2025 2024 2025 2024
2 unchanged sentences
(1) Included in selling and marketing expenses.
−Removed: PEGASYSTEMS INC.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
GOODWILL AND OTHER INTANGIBLES
−Removed: Three Months Ended
+Added: Six Months Ended
(in thousands)
1 unchanged sentence
Currency translation adjustments 425 ( 201 )
−Removed: March 31, $ 81,186 $ 81,467
+Added: June 30, $ 81,538 $ 81,410
Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives.
−Removed: March 31, 2025
+Added: June 30, 2025
(in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1)
16 unchanged sentences
Future estimated amortization of intangible assets:
−Removed: (in thousands)
−Removed: March 31, 2025
+Added: (in thousands) June 30, 2025
Remainder of 2025 $ 1,254
1 unchanged sentence
Three Months Ended
+Added: June 30, Six Months Ended
(in thousands) 2025 2024 2025 2024
Cost of revenue
+Added: $ 333 $ 447 $ 691 $ 1,068
Selling and marketing
+Added: 342 342 685 685
+Added: $ 675 $ 789 $ 1,376 $ 1,753
+Added: PEGASYSTEMS INC.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
OTHER ASSETS AND LIABILITIES
Other current assets
−Removed: (in thousands) March 31, 2025 December 31, 2024
+Added: (in thousands) June 30, 2025 December 31, 2024
Prepaid expenses $ 45,877 $ 38,155
6 unchanged sentences
$ 93,403 $ 115,178
−Removed: PEGASYSTEMS INC.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Other long-term assets
−Removed: (in thousands) March 31, 2025 December 31, 2024
+Added: (in thousands) June 30, 2025 December 31, 2024
Deferred commissions $ 104,355 $ 105,405
10 unchanged sentences
Accrued expenses
−Removed: (in thousands) March 31, 2025 December 31, 2024
+Added: (in thousands) June 30, 2025 December 31, 2024
Cloud hosting $ 16,985 $ 1,802
7 unchanged sentences
Other current liabilities
−Removed: (in thousands) March 31, 2025 December 31, 2024
+Added: (in thousands) June 30, 2025 December 31, 2024
Operating lease liabilities $ 13,825 $ 14,551
3 unchanged sentences
Other long-term liabilities
−Removed: (in thousands) March 31, 2025 December 31, 2024
+Added: (in thousands) June 30, 2025 December 31, 2024
Deferred revenue $ 3,256 $ 2,121
2 unchanged sentences
$ 35,066 $ 29,088
+Added: PEGASYSTEMS INC.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
SEGMENT INFORMATION
6 unchanged sentences
The CODM uses consolidated net income (loss) to set financial performance targets, assess performance, and make expense allocation decisions.
−Removed: PEGASYSTEMS INC.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Three Months Ended
+Added: June 30, Six Months Ended
(in thousands) 2025 2024 2025 2024
6 unchanged sentences
Other segment items, net (1)
−Removed: Provision for (benefit from) income taxes 40,888 ( 3,038 )
+Added: ( 8,012 ) ( 1,654 ) ( 7,322 ) 25,662
+Added: (Benefit from) provision for income taxes ( 4,830 ) 8,642 36,058 5,604
Net income (loss) $ 30,077 $ 6,613 $ 115,499 $ ( 5,511 )
−Removed: (1) Includes Litigation settlement, net of recoveries, Restructuring, Foreign currency transaction (loss) gain, Interest income, Interest expense, (Loss) income on capped call transactions, and Other income, net.
+Added: (1) Includes Litigation settlement, net of recoveries, Restructuring, Foreign currency transaction (loss) gain, Interest income, Interest expense, Gain (loss) on capped call transactions, and Other income, net.
Long-lived assets related to the Company’s U.S.
1 unchanged sentence
(in thousands)
−Removed: March 31, 2025 December 31, 2024
+Added: June 30, 2025 December 31, 2024
$ 36,890 90 % $ 37,405 89 %
2 unchanged sentences
On January 1, 2025, the Company relocated its corporate headquarters to 225 Wyman Street, Waltham, Massachusetts.
−Removed: A copy of the lease is filed as Exhibit 10.30 to our Annual Report on Form 10-K for the year ended December 31, 2024.
Three Months Ended
+Added: June 30, Six Months Ended
(in thousands) 2025 2024 2025 2024
4 unchanged sentences
Right of use assets and lease liabilities
−Removed: (in thousands) March 31, 2025 December 31, 2024
+Added: (in thousands) June 30, 2025 December 31, 2024
Right of use assets (1)
5 unchanged sentences
(2) Included in other current liabilities.
+Added: PEGASYSTEMS INC.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Weighted-average remaining lease term and discount rate for the Company’s leases were:
−Removed: March 31, 2025 December 31, 2024
+Added: June 30, 2025 December 31, 2024
Weighted-average remaining lease term 5.9 years 6.2 years
3 unchanged sentences
The incremental borrowing rate represents an estimate of the interest rate the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over the lease term in a similar economic environment.
−Removed: PEGASYSTEMS INC.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Maturities of lease liabilities:
−Removed: (in thousands) March 31, 2025
+Added: (in thousands) June 30, 2025
Remainder of 2025 $ 9,007
4 unchanged sentences
Cash flow information
−Removed: Three Months Ended
+Added: Six Months Ended
(in thousands) 2025 2024
10 unchanged sentences
Carrying value of the Notes:
−Removed: (in thousands) March 31, 2025 December 31, 2024
+Added: (in thousands) June 30, 2025 December 31, 2024
Principal $ — $ 467,864
3 unchanged sentences
Three Months Ended
+Added: June 30, Six Months Ended
(in thousands) 2025 2024 2025 2024
Contractual interest expense ( 0.75 % coupon)
+Added: $ — $ 942 $ 595 $ 1,884
Amortization of issuance costs
— 619 394 1,236
+Added: $ — $ 1,561 $ 989 $ 3,120
PEGASYSTEMS INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
−Removed: The average interest rate on the Notes in the three months ended March 31, 2025 and 2024 was 1.2 %.
+Added: The average interest rate on the Notes during the three months ended March 31, 2025 and six months ended June 30, 2024 was 1.2 %.
Capped call transactions
2 unchanged sentences
As of December 31, 2024, Capped Call Transactions covering approximately 7.0 million shares were outstanding, and expired upon maturity of the Notes during the three months ended March 31, 2025.
−Removed: The Capped Call Transactions were expected to reduce common stock dilution and/or offset any potential cash payments the Company must make, other than for principal and interest, upon conversion of the Notes, with such reduction and/or offset subject to a cap of $ 196.44 .
−Removed: The cap price of the Capped Call Transactions was subject to adjustment upon specified extraordinary events affecting the Company, including mergers and tender offers.
−Removed: The Capped Call Transactions were accounted for as derivative instruments and did not qualify for the Company’s own equity scope exception in ASC 815 since, in some cases of early settlement, the settlement value calculated following the governing documents may not represent a fair value measurement.
−Removed: The Capped Call Transactions were remeasured to fair value each reporting period, resulting in a non-operating gain or loss.
Change in capped call transactions:
−Removed: Three Months Ended
+Added: Six Months Ended
(in thousands) 2025 2024
1 unchanged sentence
Fair value adjustment ( 223 ) 22
−Removed: March 31, $ — $ 4,192
+Added: June 30, $ — $ 915
Credit facility
5 unchanged sentences
Effective as of February 4, 2025, the Credit Facility was amended to extend the expiration date to February 4, 2027.
−Removed: As of March 31, 2025 and December 31, 2024, the Company had $ 27.3 million in outstanding letters of credit under the Credit Facility, reducing available borrowing capacity, but no outstanding cash borrowings.
+Added: As of June 30, 2025 and December 31, 2024, the Company had letters of credit of $ 26.7 million and $ 27.3 million, respectively, under the Credit Facility, however had no cash borrowings.
RESTRUCTURING
1 unchanged sentence
Three Months Ended
+Added: June 30, Six Months Ended
(in thousands) 2025 2024 2025 2024
−Removed: Employee severance and related benefits $ ( 3 ) $ 384
+Added: Employee (benefit) severance and related costs
+Added: $ ( 54 ) $ ( 622 ) $ ( 57 ) $ ( 238 )
Office space reductions (1)
−Removed: Restructuring expense $ 11 $ 163
+Added: 10 1,257 24 1,036
+Added: Restructuring
+Added: $ ( 44 ) $ 635 $ ( 33 ) $ 798
(1) These primarily relate to non-cash operating lease adjustments.
Restructuring activity:
−Removed: Accrued employee severance and related benefits:
−Removed: PEGASYSTEMS INC.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
−Removed: Three Months Ended
+Added: Accrued employee severance and related costs:
+Added: Six Months Ended
(in thousands) 2025 2024
3 unchanged sentences
Currency translation adjustments 117 ( 169 )
−Removed: March 31, (1)
$ 706 $ 3,836
(1) Included in accrued compensation and related expenses.
+Added: PEGASYSTEMS INC.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
FAIR VALUE MEASUREMENTS
14 unchanged sentences
Assets and liabilities measured at fair value on a recurring basis:
−Removed: March 31, 2025 December 31, 2024
+Added: June 30, 2025 December 31, 2024
(in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
5 unchanged sentences
Changes in venture investments:
−Removed: Three Months Ended
+Added: Six Months Ended
(in thousands) 2025 2024
1 unchanged sentence
New investments 11,529 350
+Added: Sales of investments ( 33,223 ) —
Changes in foreign exchange rates 166 ( 19 )
3 unchanged sentences
( 535 ) ( 362 )
−Removed: March 31, $ 21,715 $ 20,946
+Added: June 30, $ 18,651 $ 21,047
+Added: During the three months ended June 30, 2025, one of the Company’s investees was acquired by a privately held company.
+Added: As a result, the Company received $ 33.2 million in consideration for its equity interest in the investee, composed of $ 22.1 million cash and $ 11.1 million of an ownership interest in the privately held company, and recognized a $ 18.7 million gain in excess of cost in other income, net on the condensed consolidated statements of operations.
The carrying value of certain financial instruments, including receivables and accounts payable, approximates fair value due to their short maturities.
−Removed: PEGASYSTEMS INC.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Fair value of the Convertible Senior Notes
2 unchanged sentences
The fair value was determined based on the Notes’ quoted price in an over-the-counter market on the last trading day of the reporting period and classified within Level 2 in the fair value hierarchy.
+Added: PEGASYSTEMS INC.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Geographic revenue
1 unchanged sentence
Three Months Ended
+Added: June 30, Six Months Ended
(Dollars in thousands)
2025 2024 2025 2024
+Added: $ 208,116 54 % $ 189,214 54 % $ 477,308 56 % $ 370,197 55 %
Other Americas 19,632 5 % 21,314 6 % 53,373 6 % 43,100 6 %
5 unchanged sentences
Three Months Ended
+Added: June 30, Six Months Ended
(in thousands)
+Added: 2025 2024 2025 2024
Pega Cloud $ 166,743 $ 134,086 $ 317,866 $ 264,988
7 unchanged sentences
Three Months Ended
+Added: June 30, Six Months Ended
(in thousands) 2025 2024 2025 2024
11 unchanged sentences
Expected future revenue from existing non-cancellable contracts:
−Removed: As of March 31, 2025:
+Added: As of June 30, 2025:
(Dollars in thousands) Subscription services Subscription license Perpetual license Consulting Total
7 unchanged sentences
$ 1,321,198 $ 396,729 $ 74,133 $ 317 $ 42,952 $ 1,835,329 100 %
−Removed: As of March 31, 2024:
+Added: As of June 30, 2024:
(Dollars in thousands) Subscription services Subscription license Perpetual license Consulting Total
7 unchanged sentences
$ 1,014,762 $ 320,906 $ 36,990 $ 2,696 $ 30,895 $ 1,406,249 100 %
−Removed: Major Clients
−Removed: Clients accounting for 10% or more of the Company’s revenue:
−Removed: Three Months Ended
−Removed: (Dollars in thousands)
−Removed: Total revenue
−Removed: $ 475,633 $ 330,147
−Removed: *Client accounted for less than 10% of total revenues.
STOCKHOLDERS' EQUITY
1 unchanged sentence
Three Months Ended
+Added: June 30, Six Months Ended
(in thousands) 2025 2024 2025 2024
4 unchanged sentences
Research and development
+Added: 7,490 7,825 15,875 15,471
General and administrative
7,574 7,743 17,010 14,418
+Added: $ 36,730 $ 36,224 $ 78,155 $ 71,005
Income tax benefit
$ ( 566 ) $ ( 554 ) $ ( 1,153 ) $ ( 865 )
−Removed: As of March 31, 2025, the Company had $ 161.9 million of unrecognized stock-based compensation expense, net of estimated forfeitures, which is expected to be recognized over a weighted-average period of 1.8 years.
−Removed: Three Months Ended
−Removed: March 31, 2025
+Added: As of June 30, 2025, the Company had $ 134.4 million of unrecognized stock-based compensation expense, net of estimated forfeitures, which is expected to be recognized over a weighted-average period of 1.6 years.
+Added: Six Months Ended
+Added: June 30, 2025
(in thousands) Quantity
1 unchanged sentence
Restricted stock units (1)
+Added: 1,963 $ 76,969
Non-qualified stock options
3,152 $ 49,730
+Added: Performance stock options (2)
+Added: 1,346 $ 34,924
(1) Includes units issued when employees elect to receive 50 % of the employee’s target incentive compensation under the Company’s Corporate Incentive Compensation Plan (the “CICP”) in the form of RSUs instead of cash.
+Added: (2) Performance stock options allow the holder to purchase a specified number of Common Stock shares at an exercise price equal to or greater than the shares' fair market value at the grant date.
+Added: The performance stock options granted in the six months ended June 30, 2025 vest quarterly over two years , beginning after the achievement of specific performance conditions.
+Added: The options expire ten years from the grant date.
PEGASYSTEMS INC.
1 unchanged sentence
Stock repurchase program
−Removed: On October 22, 2024, the Company’s Board of Directors extended the expiration date of the share repurchase program from June 30, 2025 to December 31, 2025 and increased the authorized repurchase by $ 250 million to $ 310 million as of that date.
−Removed: During the three months ended March 31, 2025, the Company repurchased 1.5 million of its common stock for $ 118.7 million at an average price per share of $ 81.28 .
+Added: On April 22, 2025, the Company’s Board of Directors extended the expiration date of the share repurchase program from December 31, 2025 to June 30, 2026 and increased the authorized repurchase amount by $ 500 million, bringing the total repurchase authorization to $ 810 million, of which $ 489.3 million remains available as of June 30, 2025.
+Added: During the six months ended June 30, 2025, the Company repurchased 6.1 million of its common stock for $ 251.2 million at an average price per share of $ 41.39 .
All purchases under this program have been made on the open market.
−Removed: On April 22, 2025, the Company’s Board of Directors further extended the expiration date of the share repurchase program from December 31, 2025 to June 30, 2026 and increased the authorized repurchase by $ 500 million.
−Removed: Proposed Stock Split
−Removed: On February 12, 2025, the Company’s Board of Directors approved a two-for-one forward stock split of the Company’s common stock, to be effected as a stock dividend.
−Removed: Effectiveness of the stock split is subject to approval by the Company’s stockholders at the June 17, 2025 annual meeting of stockholders of a proportionate increase in the Company’s authorized shares of common stock.
−Removed: The Company’s financial results in this Quarterly Report do not include any impact of the stock split.
+Added: On June 20, 2025, the Company effected the Stock Split of the Company’s Common Stock described above in “Note 1.
+Added: Basis of Presentation”.
+Added: All share and per share amounts in the Company’s unaudited condensed consolidated financial statements and in the accompanying notes for all prior periods presented have been recast to reflect the effect of the Stock Split.
Effective income tax rate
−Removed: Three Months Ended
+Added: Six Months Ended
(Dollars in thousands) 2025 2024
−Removed: Provision for (benefit from) income taxes $ 40,888 $ ( 3,038 )
+Added: (Benefit from) provision for income taxes $ 36,058 $ 5,604
Effective income tax rate 24 % *
−Removed: The Company’s effective income tax rate for the three months ended March 31, 2025, is impacted by the valuation allowance on its deferred tax assets in the U.S.
−Removed: as well as the jurisdictional mix and timing of the actual compared to projected earnings.
+Added: * Not meaningful
+Added: The Company’s effective income tax rate for the six months ended June 30, 2025, is mainly attributable to the jurisdictional mix of earnings and is also impacted by excess tax benefits from stock-based compensation and the valuation allowance on its deferred tax assets in the U.S.
The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized.
7 unchanged sentences
Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.
+Added: On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law.
+Added: The OBBBA provides for significant U.S.
+Added: tax law changes.
+Added: ASC 740, Accounting for Income Taxes , provides that changes in tax rates and laws are recognized in the period of enactment.
+Added: As a result, the Company is assessing the impact of this new legislation and will record any impacts in the period of enactment.
PEGASYSTEMS INC.
5 unchanged sentences
Three Months Ended
+Added: June 30, Six Months Ended
(in thousands, except per share amounts) (1)
+Added: 2025 2024 2025 2024
Net income (loss) $ 30,077 $ 6,613 $ 115,499 $ ( 5,511 )
6 unchanged sentences
Stock options 8,190 4,328 8,400 —
+Added: RSUs 3,194 2,358 3,378 —
Effect of dilutive securities 11,384 6,686 14,190 —
3 unchanged sentences
Outstanding anti-dilutive stock options and RSUs (5)
−Removed: (1) All dilutive securities are excluded when their inclusion would be anti-dilutive.
+Added: 502 10 373 6,519
+Added: (1) The number of shares and per share amounts have been recast for all prior periods presented to reflect the effect of the Company’s Stock Split effected in the form of a stock dividend distributed on June 20, 2025.
+Added: (2) All securities are excluded when their inclusion would be anti-dilutive.
(3) The weighted-average shares underlying the conversion options in the Company’s Notes are included using the if-converted method, if dilutive in the period.
9 unchanged sentences
In addition, as the Company is a party to ongoing litigation, it is at least reasonably possible that the Company’s estimates will change in the near term, and the effect may be material.
−Removed: The Company had no accrued losses for litigation for the below matters as of March 31, 2025 and December 31, 2024.
+Added: The Company had no accrued losses for litigation for the below matters as of June 30, 2025 and December 31, 2024.
PEGASYSTEMS INC.
15 unchanged sentences
The Supreme Court of Virginia heard oral argument on February 11, 2025, and, on March 7, 2025, the Supreme Court of Virginia granted Appian’s petition for appeal and Pega’s assignments of cross-error.
−Removed: In the coming months, the parties will be filing briefs with the Supreme Court.
+Added: The parties have completed briefing before the Supreme Court of Virginia.
There is no date for oral argument.
15 unchanged sentences
The plaintiffs filed a brief in opposition to the motion to dismiss on April 10, 2025.
−Removed: The defendants’ reply brief in support of the motion to dismiss is due on April 24, 2025.
−Removed: The Court has scheduled a hearing on the motion to dismiss for April 28, 2025.
+Added: The defendants filed a reply brief in support of the motion to dismiss on April 10, 2025.
+Added: On May 21, 2025, the Court held a hearing on the motion to dismiss.
+Added: At the conclusion of the hearing, the Court (i) granted the motion to dismiss as to the plaintiffs’ scheme liability claims;
+Added: (ii) granted the motion to dismiss as to all claims against Ken Stillwell, except for the plaintiffs’ control person liability claims;
+Added: and (iii) took the motion to dismiss under advisement as to all other claims.
+Added: The parties are awaiting a written order ruling on the motion to dismiss as to the remaining claims.
On February 26, 2025, the same shareholders filed two lawsuits against the Company, the Company’s chief executive officer, and the Company’s chief operating and financial officer in Massachusetts Superior Court.
26 unchanged sentences
and the Class Action, described above.
−Removed: The defendants’ motion to dismiss is due on April 28, 2025.
+Added: The defendants filed motions to dismiss the complaint on April 28, 2025.
+Added: The plaintiffs filed a brief in opposition to the motions to dismiss on June 9, 2025, and the defendants filed a reply brief in support of their motions to dismiss on June 30, 2025.
+Added: The Court has scheduled a hearing on the motions to dismiss for July 21, 2025.
+Added: On June 6, 2025, the plaintiffs in the consolidated derivative matter currently pending in Massachusetts Superior Court, Case No.
+Added: 2484CV01734 (discussed below), moved to intervene in this matter and to stay it pending the resolution of the state derivative matter.
+Added: After briefing by the parties, the Court scheduled a hearing on the motions for July 21, 2025.
On June 28, 2024, a lawsuit was filed against members of the Company’s board of directors, certain employees of the Company and the Company in the Business Litigation Section of the Superior Court in Suffolk County, Massachusetts, captioned John Dwyer and Ray Gerber, Plaintiffs, v.
6 unchanged sentences
The parties agreed on November 26, 2024 to suspend indefinitely the deadlines for any response to the complaint pending resolution of whether this complaint and the other derivative actions would be consolidated in the Superior Court in Suffolk County, Massachusetts.
+Added: PEGASYSTEMS INC.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
On February 4, 2025, the parties to the Dwyer and Birch Actions filed a stipulation and proposed order in the Business Litigation Section of the Superior Court in Suffolk County, Massachusetts consolidating the two actions and setting a schedule for the filing of a consolidated complaint and any motion to dismiss.
2 unchanged sentences
The consolidated complaint generally alleges the defendants breached their fiduciary duties in connection with alleged misconduct by Company employees alleged in the litigation brought by Appian in the Circuit Court of Fairfax County, Virginia, described above, and in connection with the investigation conducted and the report issued by the Demand Review Committee of the Company’s board regarding the same.
−Removed: The defendants’ motion to dismiss is due on May 15, 2025.
+Added: The defendants served motions to dismiss the complaint on May 15, 2025, and the plaintiffs served a brief in opposition to the motions to dismiss on July 11, 2025.
+Added: Defendants’ reply briefs in support of their motions to dismiss are due on August 1, 2025.
The court scheduled a hearing on the motion to dismiss for September 4, 2025.
−Removed: PEGASYSTEMS INC.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Company is unable to reasonably estimate possible damages or a range of possible damages in these matters given the stage of the lawsuits and there being no specified quantum of damages sought in the complaints.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.