Pegasystems Inc. (PEGA) is a Technology stock trading at $33.62 (as of 2026-08-20), with a market capitalization of $5.53B and a trailing P/E of 45.2. Figures are sourced from first-party U.S. SEC EDGAR filings and market data.
Pegasystems Inc. develops, licenses, hosts, and supports enterprise software applications for organizations in multiple regions. Its offerings include the Pega Platform and Pega Infinity, along with customer engagement and sales, service, and decision management applications, and automation and cloud capabilities for developing, testing, and deploying applications.
Understand Pegasystems Inc.: how it makes money
Pegasystems develops and sells (and supports) enterprise software platforms for application development and for unifying customer engagement with digital process automation, earning revenue from cloud offerings, subscription services, and services.
The profit model is driven by contract growth in Annual Contract Value, supported by remaining performance obligations, which indicates future revenue tied to existing customer agreements.
Revenue by segment (latest quarter)
Cloud
$0.2B
Services
$0.2B
Business quality (Solid): Segment inputs provided appear to be incomplete or not clearly reconcilable to the latest-quarter total revenue figure, so the segment view is a simplified mapping based only on the available revenue candidates.
Valuation: Trades at 22× trailing earnings · $5B market cap.
Bull case
Strong customer contract momentum, with Net New Annual Contract Value Added of 0.04 USD_B and Remaining Performance Obligations of 1.34 USD_B: This suggests the company is adding contract value and maintains a sizable backlog of performance obligations that can support future revenue.
High gross profitability, with gross_margin_pct at 75.2 for the period shown: A high gross margin can help absorb operating expense swings if contract economics remain healthy.
Cloud contract growth participation, with Pega Cloud Annual Contract Value Added of 0.06 USD_B: This points to ongoing expansion within the companys cloud offering.
Net revenue retention expansion of 150.0 (ratio): This indicates existing customers are expanding, which can be an important contributor to Annual Contract Value growth.
Bear case
Operating margin is 8.6 for the period shown: This leaves less room for cost increases or slower contract growth to show up in earnings power.
New contract value added is 0.04 USD_B, while the company also shows limited contributions from some smaller revenue lines in the provided data (for example, Consulting Revenue 0.05 USD_B and License Revenue 0.05 USD_B): If Annual Contract Value Net Additions slow, overall growth could depend more heavily on retention and expansion than on new wins.
Pega Cloud Revenue is 0.2 USD_B in the provided set of candidates: If cloud demand or customer cloud contract value trends weaken, the portion tied to cloud could become a headwind even if services remain steady.