Forensic Analysis · Technology / Software · as of Sep 16, 2026
Pegasystems Inc (PEGA)
A forensic read on Pegasystems Inc built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Safe
Financial health
10.7
Distress distance
Clean
Earnings quality
4
Forensic signals
17.8
P / E (ttm)
50.0%
ROE
$5.8B
Market cap
0.23%
Dividend yield
16.6%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence, going concern, valuation). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Pegasystems Inc earns a D (Weak — demands caution) forensic quality grade, and its balance-sheet distress test reads 10.7, placing it in the Safe zone. 4 forensic signals were flagged in its latest SEC filings, led by accruals ratio (% of noa).
What the filings flag
+79.3%
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets grew +79.3% relative to their own average in FY2025 — scaled by NOA itself, not by total assets, which is what the Forensic Screens card's own accrual row divides by. Accruals are building sharply — a large slice of profit sits in operating assets, not cash. An accrual is a claim that still has to be collected or written down, so the gap resolves in a later period whichever way it goes. A cash-flow measure on the same base disagrees: reported earnings ran behind operating cash by 27% of net operating assets, against an accruals ratio of 79.3%. The two are computed differently: the accruals ratio is the change in net operating assets over average net operating assets, while the cash-flow figure is net income less operating cash flow over that same average. Read them as two results, not one.
9% of rev
FY2025
Stock-based comp load.Stock-based compensation ran 9% of revenue and 32% of free cash flow in FY2025 — about $0.84 per diluted share. No cash left the business to pay it, which is why operating cash flow adds it back. Net of repurchases the diluted count still rose about 3.1% a year and that rate is not falling, so total profit has to grow by that much annually before any of it reaches a share. Stock compensation is one source of that issuance; acquisition consideration, equity raises, convertibles and other employee plans also net into the count, and these figures do not separate them.
n/m (stock split)
FY2022–FY2025
Share count (stock split).Diluted share count changed +125% over the last 3 years to FY2025, but that includes a large one-time change around FY2023 consistent with a stock split or reverse split, not gradual buybacks or issuance — a split changes the count with NO effect on any holder's proportional ownership, so the raw +31.1%/yr figure isn't a real buyback/dilution read here.
Key fundamentals
Latest Revenue$1.75B
Revenue Growth YoY+16.6%
Revenue CAGR (3yr)+9.8%
Net Margin22.5%
Free Cash Flow$490.7M
Return on Equity50.0%
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Pegasystems Inc's actual 10-K/10-Q/8-K filings?
Data from SEC EDGAR public filings · metrics as of Sep 16, 2026. Forensic signals flag probability, not certainty.
105% of FCF
FY2025
Shareholder returns.Returned $515M to shareholders (buybacks + dividends) in FY2025 — 105% of free cash flow. Right at the limit of what free cash flow covers — little room before it's funded by debt or the balance sheet. That ratio has actually been EASING, not tightening further — down from ~218% of free cash flow a few years back. Counting the $155M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 137%.