Forensic Analysis · Software & SaaS · as of Nov 9, 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.
C · Mixed — selective
Forensic grade
Safe
Financial health
4.0
Distress distance
Clean
Earnings quality
4
Forensic signals
57.3%
ROE
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 (auditor quality, say on pay, board independence, going concern). 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 C (Mixed — selective) forensic quality grade, and its balance-sheet distress test reads 4.0, 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.Accruals ratio: the year-over-year change in net operating assets, relative to their own average.NOA (net operating assets): the money tied up in running the business, operating assets minus operating liabilities.
+4.3%/yr
FY2023–FY2025
Share-count dilution.Diluted share count changed +9% over the last 2 years to FY2025 (+4.3%/yr). The count is growing — 169.8M shares in FY2023, 184.8M in FY2025: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~4.3% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2023 has been diluted ~8%.
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 4.3% a year across FY2023–FY2025, and the rate is falling. 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.
105% of FCF
FY2025
Shareholder returns.Returned $515M to shareholders (buybacks + dividends) in FY2025 — 105% of free cash flow. That is $24M (5%) more than free cash flow covered, and more than operating cash flow as well. It came out of the balance sheet's own liquid holdings, not new debt: cash and short-term investments fell $314M over FY2025. That ratio has been CLIMBING past free cash flow — 5% of free cash flow two years back — not just sitting there. Counting the $155M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 137%.
Key fundamentals
Latest Revenue$1.75B
Revenue Growth YoY+16.6%
Revenue CAGR (2yr)+10.4%
Net Margin22.5%
Free Cash Flow$490.7M
Return on Equity57.3%
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?