Pegasystems Reports 9.5% Revenue Growth to $384.5 Million in Q2 2025

Pegasystems Inc. reported significant financial performance in its latest 10-Q filing for the quarter ending June 30, 2025, with total revenue reaching $384.5 million, a 9.5% increase from $351.2 million in the same period last year. For the first half of 2025, revenue totaled $860.1 million, up 26.4% from $681.3 million in the first half of 2024. The company achieved a net income of $30.1 million for the quarter, compared to $6.6 million in the prior year, and a net income of $115.5 million for the six-month period, a substantial recovery from a loss of $5.5 million in the same timeframe last year.

The financial results reflect a strategic shift towards subscription services, which saw a 14.7% increase year-over-year, contributing $246 million in the second quarter. The company also noted a rise in subscription license revenue, which totaled $80 million, although this represented a slight decline from the previous year due to the recognition of several large contracts in 2024. Consulting revenue also increased, reaching $57.8 million for the quarter, driven by higher billable hours. The overall gross profit for the quarter was $274.9 million, marking a 8.2% increase from $254.2 million in the prior year.

Operationally, Pegasystems has made notable changes, including a stock split that took effect on June 20, 2025, which doubled the number of shares outstanding. The company also repurchased approximately 6.1 million shares for $251.2 million during the first half of 2025, reflecting its commitment to returning value to shareholders. The total cash, cash equivalents, and marketable securities decreased to $411.6 million from $740 million at the end of 2024, primarily due to the repayment of convertible senior notes and increased operational expenditures.

In terms of customer engagement, Pegasystems reported a significant increase in annual contract value (ACV), which rose to $1.5 billion, a 16% increase year-over-year. The company continues to expand its geographic footprint, with notable revenue contributions from the U.S. and the U.K., which accounted for 54% and 11% of total revenue, respectively. The company’s focus on enhancing its Pega Cloud offerings has led to increased adoption rates, further solidifying its market position.

Looking ahead, Pegasystems expressed optimism about its growth trajectory, driven by ongoing investments in artificial intelligence and cloud-based solutions. The company anticipates continued demand for its products and services, particularly in the public sector, and expects to maintain its dividend payments, which have been set at $0.03 per share following the stock split. However, management acknowledged potential risks, including market conditions and ongoing litigation, which could impact future performance.