PEGASYSTEMS INC, 10-Q filed on 26 Oct 22
 | XBRL Documents
v3.22.2.2
COVER PAGE - shares
 9 Months Ended
Sep. 30, 2022
Oct. 19, 2022
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2022  
Document Transition Report false  
Entity File Number 1-11859  
Entity Registrant Name PEGASYSTEMS INC.  
Entity Incorporation, State or Country Code MA  
Entity Tax Identification Number 04-2787865  
Entity Address, Address Line One One Main Street  
Entity Address, City or Town Cambridge  
Entity Address, State or Province MA  
Entity Address, Postal Zip Code 02142  
City Area Code 617  
Local Phone Number 374-9600  
Title of 12(b) Security Common Stock, $.01 par value per share  
Trading Symbol PEGA  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   82,190,957
Amendment Flag false  
Entity Central Index Key 0001013857  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q3  
Current Fiscal Year End Date --12-31  
v3.22.2.2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Current assets:    
Cash and cash equivalents $ 107,626 $ 159,965
Marketable securities 168,085 202,814
Total cash, cash equivalents, and marketable securities 275,711 362,779
Accounts receivable 139,670 182,717
Unbilled receivables 182,403 226,714
Other current assets 62,457 68,008
Total current assets 660,241 840,218
Unbilled receivables 108,285 129,789
Goodwill 81,201 81,923
Other long-term assets 316,731 541,601
Total assets 1,166,458 1,593,531
Current liabilities:    
Accounts payable 13,562 15,281
Accrued expenses 61,012 63,890
Accrued compensation and related expenses 85,999 120,946
Deferred revenue 245,146 275,844
Other current liabilities 8,253 9,443
Total current liabilities 413,972 485,404
Convertible senior notes, net 592,884 590,722
Operating lease liabilities 82,705 87,818
Other long-term liabilities 11,936 13,499
Total liabilities 1,101,497 1,177,443
Commitments and contingencies (Note 14)
Stockholders’ equity:    
Preferred stock, 1,000 shares authorized; none issued 0 0
Common stock, 200,000 shares authorized; 82,164 and 81,712 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively 822 817
Additional paid-in capital 204,189 145,810
(Accumulated deficit) retained earnings (111,126) 276,449
Accumulated other comprehensive (loss) (28,924) (6,988)
Total stockholders’ equity 64,961 416,088
Total liabilities and stockholders’ equity $ 1,166,458 $ 1,593,531
v3.22.2.2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares
shares in Thousands
Sep. 30, 2022
Dec. 31, 2021
Stockholders’ equity:    
Preferred stock, shares authorized (in shares) 1,000 1,000
Preferred stock, shares issued (in shares) 0 0
Common stock, shares authorized (in shares) 200,000 200,000
Common stock, shares issued (in shares) 82,164 81,712
Common stock, shares outstanding (in shares) 82,164 81,712
v3.22.2.2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Revenue        
Total revenue $ 270,731 $ 256,268 $ 921,375 $ 895,469
Cost of revenue        
Total cost of revenue 93,050 84,222 276,362 251,200
Gross profit 177,681 172,046 645,013 644,269
Operating expenses        
Selling and marketing 153,517 152,479 472,951 457,641
Research and development 75,342 64,728 221,173 191,565
General and administrative 26,043 20,176 94,530 57,607
Total operating expenses 254,902 237,383 788,654 706,813
(Loss) from operations (77,221) (65,337) (143,641) (62,544)
Foreign currency transaction gain (loss) 3,826 518 8,415 (4,983)
Interest income 520 166 1,036 555
Interest expense (1,992) (1,908) (5,882) (5,747)
(Loss) on capped call transactions (6,876) (14,735) (56,381) (7,543)
Other (loss) income, net (29) 2 6,497 108
(Loss) before provision for (benefit from) income taxes (81,772) (81,294) (189,956) (80,154)
Provision for (benefit from) income taxes 11,748 (24,826) 190,239 (54,360)
Net (loss) $ (93,520) $ (56,468) $ (380,195) $ (25,794)
(Loss) per share        
Basic (in dollars per share) $ (1.14) $ (0.69) $ (4.65) $ (0.32)
Diluted (in dollars per share) $ (1.14) $ (0.69) $ (4.65) $ (0.32)
Weighted-average number of common shares outstanding        
Basic (in shares) 81,996 81,526 81,842 81,284
Diluted (in shares) 81,996 81,526 81,842 81,284
Subscription services        
Revenue        
Total revenue $ 174,885 $ 161,557 $ 516,750 $ 457,051
Cost of revenue        
Total cost of revenue 34,541 30,817 103,104 88,206
Subscription license        
Revenue        
Total revenue 31,112 35,421 210,245 251,226
Cost of revenue        
Total cost of revenue 628 606 1,923 1,811
Perpetual license        
Revenue        
Total revenue 9,223 2,874 18,929 20,922
Cost of revenue        
Total cost of revenue 103 50 173 151
Consulting        
Revenue        
Total revenue 55,511 56,416 175,451 166,270
Cost of revenue        
Total cost of revenue $ 57,778 $ 52,749 $ 171,162 $ 161,032
v3.22.2.2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Statement of Comprehensive Income [Abstract]        
Net (loss) $ (93,520) $ (56,468) $ (380,195) $ (25,794)
Other comprehensive (loss), net of tax        
Unrealized (loss) gain on available-for-sale securities (73) 53 (1,000) 1,184
Foreign currency translation adjustments (6,700) (4,400) (20,936) (3,669)
Total other comprehensive (loss), net of tax (6,773) (4,347) (21,936) (2,485)
Comprehensive (loss) $ (100,293) $ (60,815) $ (402,131) $ (28,279)
v3.22.2.2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
shares in Thousands, $ in Thousands
Total
Cumulative Effect, Period of Adoption, Adjustment
Common Stock
Additional Paid-In Capital
Additional Paid-In Capital
Cumulative Effect, Period of Adoption, Adjustment
Retained Earnings (Accumulated Deficit)
Retained Earnings (Accumulated Deficit)
Cumulative Effect, Period of Adoption, Adjustment
Accumulated Other Comprehensive (Loss)
Balance, beginning of period (in shares) at Dec. 31, 2020     80,890          
Balance, beginning of period at Dec. 31, 2020 $ 542,172 $ (52,205) $ 809 $ 204,432 $ (61,604) $ 339,879 $ 9,399 $ (2,948)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Repurchase of common stock (in shares)     (70)          
Repurchase of common stock (9,146)   $ (1) (9,145)        
Issuance of common stock for share-based compensation plans (in shares)     402          
Issuance of common stock for stock compensation plans (25,509)   $ 4 (25,513)        
Issuance of common stock under the employee stock purchase plan (in shares)     24          
Issuance of common stock under the employee stock purchase plan 2,288     2,288        
Stock-based compensation 30,100     30,100        
Cash dividends declared ($0.03 per share) (2,438)         (2,438)    
Other comprehensive income (loss) 280             280
Net income (loss) (6,617)         (6,617)    
Balance, end of period (in shares) at Mar. 31, 2021     81,246          
Balance, end of period at Mar. 31, 2021 478,925   $ 812 140,558   340,223   (2,668)
Balance, beginning of period (in shares) at Dec. 31, 2020     80,890          
Balance, beginning of period at Dec. 31, 2020 542,172 $ (52,205) $ 809 204,432 $ (61,604) 339,879 $ 9,399 (2,948)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Other comprehensive income (loss) (2,485)              
Net income (loss) (25,794)              
Balance, end of period (in shares) at Sep. 30, 2021     81,670          
Balance, end of period at Sep. 30, 2021 459,632   $ 817 148,098   316,150   (5,433)
Balance, beginning of period (in shares) at Mar. 31, 2021     81,246          
Balance, beginning of period at Mar. 31, 2021 478,925   $ 812 140,558   340,223   (2,668)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Repurchase of common stock (in shares)     (81)          
Repurchase of common stock (10,246)   $ (1) (10,245)        
Issuance of common stock for share-based compensation plans (in shares)     267          
Issuance of common stock for stock compensation plans (16,196)   $ 3 (16,199)        
Issuance of common stock under the employee stock purchase plan (in shares)     24          
Issuance of common stock under the employee stock purchase plan 2,859   $ 1 2,858        
Stock-based compensation 30,698     30,698        
Cash dividends declared ($0.03 per share) (2,445)         (2,445)    
Other comprehensive income (loss) 1,582             1,582
Net income (loss) 37,291         37,291    
Balance, end of period (in shares) at Jun. 30, 2021     81,456          
Balance, end of period at Jun. 30, 2021 522,468   $ 815 147,670   375,069   (1,086)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Repurchase of common stock (in shares)     (96)          
Repurchase of common stock (12,796)   $ (1) (12,795)        
Issuance of common stock for share-based compensation plans (in shares)     286          
Issuance of common stock for stock compensation plans (18,114)   $ 3 (18,117)        
Issuance of common stock under the employee stock purchase plan (in shares)     24          
Issuance of common stock under the employee stock purchase plan 2,639     2,639        
Stock-based compensation 28,701     28,701        
Cash dividends declared ($0.03 per share) (2,451)         (2,451)    
Other comprehensive income (loss) (4,347)             (4,347)
Net income (loss) (56,468)         (56,468)    
Balance, end of period (in shares) at Sep. 30, 2021     81,670          
Balance, end of period at Sep. 30, 2021 $ 459,632   $ 817 148,098   316,150   (5,433)
Balance, beginning of period (in shares) at Dec. 31, 2021 81,712   81,712          
Balance, beginning of period at Dec. 31, 2021 $ 416,088   $ 817 145,810   276,449   (6,988)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Repurchase of common stock (in shares)     (242)          
Repurchase of common stock (22,583)   $ (2) (22,581)        
Issuance of common stock for share-based compensation plans (in shares)     297          
Issuance of common stock for stock compensation plans (12,128)   $ 3 (12,131)        
Issuance of common stock under the employee stock purchase plan (in shares)     35          
Issuance of common stock under the employee stock purchase plan 2,446     2,446        
Stock-based compensation 28,227     28,227        
Cash dividends declared ($0.03 per share) (2,455)         (2,455)    
Other comprehensive income (loss) (2,548)             (2,548)
Net income (loss) (379)         (379)    
Balance, end of period (in shares) at Mar. 31, 2022     81,802          
Balance, end of period at Mar. 31, 2022 $ 406,668   $ 818 141,771   273,615   (9,536)
Balance, beginning of period (in shares) at Dec. 31, 2021 81,712   81,712          
Balance, beginning of period at Dec. 31, 2021 $ 416,088   $ 817 145,810   276,449   (6,988)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Other comprehensive income (loss) (21,936)              
Net income (loss) $ (380,195)              
Balance, end of period (in shares) at Sep. 30, 2022 82,164   82,164          
Balance, end of period at Sep. 30, 2022 $ 64,961   $ 822 204,189   (111,126)   (28,924)
Balance, beginning of period (in shares) at Mar. 31, 2022     81,802          
Balance, beginning of period at Mar. 31, 2022 406,668   $ 818 141,771   273,615   (9,536)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Repurchase of common stock (in shares)     (38)          
Repurchase of common stock (1,925)     (1,925)        
Issuance of common stock for share-based compensation plans (in shares)     117          
Issuance of common stock for stock compensation plans (3,251)   $ 1 (3,252)        
Issuance of common stock under the employee stock purchase plan (in shares)     59          
Issuance of common stock under the employee stock purchase plan 2,357     2,357        
Stock-based compensation 31,300     31,300        
Cash dividends declared ($0.03 per share) (2,459)         (2,459)    
Other comprehensive income (loss) (12,615)             (12,615)
Net income (loss) (286,296)         (286,296)    
Balance, end of period (in shares) at Jun. 30, 2022     81,940          
Balance, end of period at Jun. 30, 2022 133,779   $ 819 170,251   (15,140)   (22,151)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock for share-based compensation plans (in shares)     138          
Issuance of common stock for stock compensation plans (2,196)   $ 2 (2,198)        
Issuance of common stock under the employee stock purchase plan (in shares)     86          
Issuance of common stock under the employee stock purchase plan 2,363   $ 1 2,362        
Stock-based compensation 33,774     33,774        
Cash dividends declared ($0.03 per share) (2,466)         (2,466)    
Other comprehensive income (loss) (6,773)             (6,773)
Net income (loss) $ (93,520)         (93,520)    
Balance, end of period (in shares) at Sep. 30, 2022 82,164   82,164          
Balance, end of period at Sep. 30, 2022 $ 64,961   $ 822 $ 204,189   $ (111,126)   $ (28,924)
v3.22.2.2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares
 3 Months Ended
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Statement of Stockholders' Equity [Abstract]            
Cash dividend declared (in dollars per share) $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03
v3.22.2.2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Operating activities        
Net (loss) $ (93,520) $ (56,468) $ (380,195) $ (25,794)
Adjustments to reconcile net (loss) to cash (used in) operating activities        
Stock-based compensation 33,774 28,695 93,301 89,483
Deferred income taxes     169,489 (53,638)
Loss on capped call transactions 6,876 14,735 56,381 7,543
Amortization of deferred commissions 11,597 10,186 39,752 31,388
Lease expense     11,500 9,274
Amortization of intangible assets and depreciation     12,381 24,030
Foreign currency transaction (gain) loss (3,826) (518) (8,415) 4,983
Other non-cash     (1,705) 5,246
Change in operating assets and liabilities, net     (5,935) (97,836)
Cash (used in) operating activities     (13,446) (5,321)
Investing activities        
Purchases of investments     (39,056) (67,170)
Proceeds from maturities and called investments     53,952 96,859
Sales of investments     18,415 25,123
Payments for acquisitions, net of cash acquired     (922) (4,993)
Investment in property and equipment     (22,285) (7,089)
Cash provided by investing activities     10,104 42,730
Financing activities        
Proceeds from employee stock purchase plan     7,166 7,786
Dividend payments to stockholders     (7,368) (7,310)
Common stock repurchases     (43,282) (91,907)
Cash (used in) financing activities     (43,484) (91,431)
Effect of exchange rate changes on cash and cash equivalents     (5,513) (1,466)
Net (decrease) in cash and cash equivalents     (52,339) (55,488)
Cash and cash equivalents, beginning of period     159,965 171,899
Cash and cash equivalents, end of period $ 107,626 $ 116,411 $ 107,626 $ 116,411
v3.22.2.2
BASIS OF PRESENTATION
 9 Months Ended
Sep. 30, 2022
Accounting Policies [Abstract]  
BASIS OF PRESENTATION
NOTE 1. BASIS OF PRESENTATION
Pegasystems Inc. (together with its subsidiaries, “the Company”) has prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. 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, 2021.
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.
All intercompany transactions and balances were eliminated in consolidation. The operating results for the interim periods presented do not necessarily indicate the expected results for the full year 2022.
Certain prior period amounts reported in our condensed consolidated financial statements and notes thereto have been reclassified to conform to the current year’s presentation. Such reclassifications did not affect total revenues, operating income, or net income.
v3.22.2.2
MARKETABLE SECURITIES
 9 Months Ended
Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]  
MARKETABLE SECURITIES
NOTE 2. MARKETABLE SECURITIES
September 30, 2022December 31, 2021
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair ValueAmortized CostUnrealized GainsUnrealized LossesFair Value
Government debt$2,992 $— $(67)$2,925 $2,000 $— $(10)$1,990 
Corporate debt168,894 — (3,734)165,160 201,659 2 (837)200,824 
$171,886 $— $(3,801)$168,085 $203,659 $2 $(847)$202,814 
As of September 30, 2022, marketable securities’ maturities ranged from November 2022 to November 2024, with a weighted-average remaining maturity of 0.7 years.
v3.22.2.2
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE
 9 Months Ended
Sep. 30, 2022
Receivables [Abstract]  
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE
NOTE 3. RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE
Receivables
(in thousands)
September 30, 2022December 31, 2021
Accounts receivable$139,670 $182,717 
Unbilled receivables182,403 226,714 
Long-term unbilled receivables108,285 129,789 
$430,358 $539,220 
Unbilled receivables
Unbilled receivables are client-committed amounts for which revenue recognition precedes billing, and billing is solely subject to the passage of time.
Unbilled receivables by expected billing date:
(Dollars in thousands)
September 30, 2022
1 year or less$182,403 63 %
1-2 years78,893 27 %
2-5 years29,392 10 %
$290,688 100 %
Unbilled receivables by contract effective date:
(Dollars in thousands)
September 30, 2022
2022$87,874 30 %
2021130,196 45 %
202045,589 16 %
201915,747 5 %
2018 and prior11,282 4 %
$290,688 100 %
Major clients
Clients accounting for 10% or more of the Company’s total receivables:
September 30, 2022December 31, 2021
Client A
Accounts receivable*1 %
Unbilled receivables*15 %
Total receivables*10 %
* Client accounted for less than 10% of receivables.
Contract assets
Contract assets are client-committed amounts for which revenue recognized exceeds the amount billed to the client, and billing is subject to conditions other than the passage of time, such as the completion of a related performance obligation.
(in thousands)
September 30, 2022December 31, 2021
Contract assets (1)
$12,429 $12,530 
Long-term contract assets (2)
10,541 10,643 
$22,970 $23,173 
(1) Included in other current assets. (2) Included in other long-term assets.
Deferred revenue
Deferred revenue consists of billings and payments received in advance of revenue recognition.
(in thousands)
September 30, 2022December 31, 2021
Deferred revenue$245,146 $275,844 
Long-term deferred revenue (1)
3,949 5,655 
$249,095 $281,499 
(1) Included in other long-term liabilities.
The change in deferred revenue in the nine months ended September 30, 2022 was primarily due to new billings in advance of revenue recognition offset by $252.8 million of revenue recognized during the period that was included in deferred revenue as of December 31, 2021.
v3.22.2.2
DEFERRED COMMISSIONS
 9 Months Ended
Sep. 30, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
DEFERRED COMMISSIONS
NOTE 4. DEFERRED COMMISSIONS
(in thousands)
September 30, 2022December 31, 2021
Deferred commissions (1)
$122,673 $135,911 
(1) Included in other long-term assets.
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Amortization of deferred commissions (1)
$11,597 $10,186 $39,752 $31,388 
(1) Included in selling and marketing expense.
v3.22.2.2
GOODWILL AND OTHER INTANGIBLES
 9 Months Ended
Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLES
NOTE 5. GOODWILL AND OTHER INTANGIBLES
Goodwill
Change in goodwill:
Nine Months Ended
September 30,
(in thousands)
20222021
January 1,$81,923 $79,231 
Acquisition— 2,701 
Currency translation adjustments(722)22 
September 30,$81,201 $81,954 
Intangibles
Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives.
September 30, 2022
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,007 $(58,211)$4,796 
Technology
2-10 years
68,038 (60,913)7,125 
Other
1-5 years
5,361 (5,361)— 
$136,406 $(124,485)$11,921 
(1) Included in other long-term assets.
December 31, 2021
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,165 $(57,342)$5,823 
Technology
2-10 years
67,142 (58,902)8,240 
Other
1-5 years
5,361 (5,361)— 
$135,668 $(121,605)$14,063 
(1) Included in other long-term assets.
Amortization of intangible assets:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Cost of revenue
$705 $629 $2,017 $1,887 
Selling and marketing
343 373 1,028 1,119 
$1,048 $1,002 $3,045 $3,006 
Future estimated intangibles assets amortization:
(in thousands)
September 30, 2022
Remainder of 2022$1,048 
20233,917 
20243,147 
20252,608 
2026874 
2027327 
$11,921 
v3.22.2.2
OTHER ASSETS AND LIABILITIES
 9 Months Ended
Sep. 30, 2022
Other Assets and Liabilities [Abstract]  
OTHER ASSETS AND LIABILITIES
NOTE 6. OTHER ASSETS AND LIABILITIES
Other current assets
(in thousands)September 30, 2022December 31, 2021
Income tax receivables$11,948 $25,691 
Contract assets12,429 12,530 
Other38,080 29,787 
$62,457 $68,008 
Other long-term assets
(in thousands)September 30, 2022December 31, 2021
Deferred income taxes$6,041 $180,656 
Deferred commissions122,673 135,911 
Right of use assets80,163 87,521 
Capped call transactions3,583 59,964 
Property and equipment45,350 26,837 
Venture investments11,910 7,648 
Intangible assets11,921 14,063 
Contract assets10,541 10,643 
Other24,549 18,358 
$316,731 $541,601 
Other current liabilities
(in thousands)September 30, 2022December 31, 2021
Operating lease liabilities$5,787 $6,989 
Dividends payable2,466 2,454 
$8,253 $9,443 
Other long-term liabilities
(in thousands)September 30, 2022December 31, 2021
Deferred revenue$3,949 $5,655 
Other7,987 7,844 
$11,936 $13,499 
v3.22.2.2
LEASES
 9 Months Ended
Sep. 30, 2022
Leases [Abstract]  
LEASES
NOTE 7. LEASES
Corporate headquarters
In February 2021, the Company agreed to accelerate its exit from its previous corporate headquarters to October 1, 2021, in exchange for a one-time payment from its landlord of $18 million, which was amortized over the remaining lease term. The exit accelerated depreciation on the related leasehold improvements and reduced the Company’s future lease liabilities by $21.1 million and right of use assets by $20.3 million. On March 31, 2021, the Company leased office space at One Main Street, Cambridge, Massachusetts, to serve as its corporate headquarters. The 4.5 year lease includes a base rent of $2 million per year.
New Waltham office
On July 6, 2021, the Company entered into an office space lease for 131 thousand square feet in Waltham, Massachusetts. The lease term of 11 years began on August 1, 2021. The annual rent equals the base rent plus a portion of building operating costs and real estate taxes. Rent first became payable on August 1, 2022. Base rent for the first year is approximately $6 million and will increase by 3% annually. In addition, the Company will receive an improvement allowance from the landlord of up to $11.8 million. This lease increased the Company’s lease liabilities and lease-related right of use assets by $42.1 million on August 1, 2021.
Expense
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Fixed lease costs (1)
$4,688 $(3,108)$14,747 $(6,780)
Short-term lease costs916 542 2,510 1,516 
Variable lease costs905 1,099 2,395 3,826 
$6,509 $(1,467)$19,652 $(1,438)
(1) The lower fixed lease costs in the nine months ended September 30, 2021 was due to the modification of the corporate headquarters lease.
Right of use assets and lease liabilities
(in thousands)September 30, 2022December 31, 2021
Right of use assets (1)
$80,163 $87,521 
Operating lease liabilities (2)
$5,787 $6,989 
Long-term operating lease liabilities$82,705 $87,818 

(1) Represents the Company’s right to use the leased asset during the lease term. Included in other long-term assets.
(2) Included in other current liabilities.
Weighted-average remaining lease term and discount rate for the Company’s leases were:
September 30, 2022December 31, 2021
Weighted-average remaining lease term7.4 years7.7 years
Weighted-average discount rate (1)
4.2 %4.4 %
(1) The rates implicit in most of the Company’s leases are not readily determinable. Therefore, the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. 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.
Maturities of lease liabilities:
(in thousands)September 30, 2022
Remainder of 2022$(4,717)
202318,804 
202416,841 
202514,778 
202611,257 
2027 and thereafter48,397 
Total lease payments105,360 
Less: imputed interest (1)
(16,868)
$88,492 
(1) Lease liabilities are measured at the present value of the remaining lease payments using a discount rate determined at lease commencement unless the discount rate is updated due to a lease reassessment event.
Cash flow information
Nine Months Ended
September 30,
(in thousands)20222021
Cash paid for leases$11,628 $14,403 
Right of use assets recognized for new leases and amendments (non-cash)$6,618 $54,716 
v3.22.2.2
DEBT
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
DEBT
NOTE 8. DEBT
Convertible senior notes and capped calls
Convertible senior notes
In February 2020, the Company issued Convertible Senior Notes (the "Notes") with an aggregate principal of $600 million, due March 1, 2025, in a private placement. No principal payments are due before maturity. The Notes accrue interest at an annual rate of 0.75%, payable semi-annually in arrears on March 1 and September 1, beginning on September 1, 2020.
Conversion rights
The conversion rate is 7.4045 shares of common stock per $1,000 principal amount of the Notes, representing an initial conversion price of $135.05 per share of common stock. The Company will settle conversions by paying or delivering cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election, based on the applicable conversion rate. The conversion rate will be adjusted upon certain events, including spin-offs, tender offers, exchange offers, and certain stockholder distributions.
Beginning on September 1, 2024, noteholders may convert their Notes at any time at their election.
Before September 1, 2024, noteholders may convert their Notes in the following circumstances:
•During any calendar quarter beginning after June 30, 2020 (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter.
•During the five consecutive business days immediately after any five consecutive trading day period (the “Measurement Period”), if the trading price per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of common stock on such trading day and the conversion rate on such trading day.
•Upon certain corporate events or distributions or if the Company calls any Notes for redemption, noteholders may convert before the close of business on the business day immediately before the related redemption date (or, if the Company fails to pay the redemption price in full on the redemption date, until the Company pays the redemption price).
As of September 30, 2022, the Notes were not eligible for conversion.
Repurchase rights
On or after March 1, 2023 and on or before the 40th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the Notes at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest, if the last reported sale price of the Company’s common stock exceeded 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a redemption notice.
If certain corporate events that constitute a “Fundamental Change” occur, each noteholder will have the right to require the Company to repurchase for cash all of such noteholder’s Notes, or any portion of the principal thereof that is equal to $1,000 or a multiple of $1,000, at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest. A Fundamental Change relates to mergers, changes in control of the Company, liquidation/dissolution of the Company, or the delisting of the Company’s common stock.
Carrying value of the Notes:
(in thousands)September 30, 2022December 31, 2021
Principal$600,000 $600,000 
Unamortized issuance costs(7,116)(9,278)
Convertible senior notes, net$592,884 $590,722 

Interest expense related to the Notes:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Contractual interest expense (0.75% coupon)
$1,125 $1,125 $3,375 $3,375 
Amortization of issuance costs
724 677 2,163 2,025 
$1,849 $1,802 $5,538 $5,400 
The effective interest rate for the Notes:
Nine Months Ended
September 30,
20222021
Weighted-average effective interest rate1.2 %1.2 %
Future payments of principal and contractual interest:
September 30, 2022
(in thousands)PrincipalInterestTotal
2023$— $4,500 $4,500 
2024— 4,500 4,500 
2025600,000 2,250 602,250 
$600,000 $11,250 $611,250 
Capped call transactions
In February 2020, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions. The Capped Call Transactions cover approximately 4.4 million shares (representing the number of shares for which the Notes are initially convertible) of the Company’s common stock. The Capped Call Transactions are 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. The cap price of the Capped Call Transactions is subject to adjustment upon specified extraordinary events affecting the Company, including mergers and tender offers.
The Capped Call Transactions are accounted for as derivative instruments and do not qualify for the Company’s own equity scope exception in ASC 815 since, in some cases of early settlement, the settlement value of the Capped Call Transactions, calculated following the governing documents, may not represent a fair value measurement. The Capped Call Transactions are classified as other long-term assets and remeasured to fair value each reporting period, resulting in a non-operating gain or loss.
Change in capped call transactions:
Nine Months Ended
September 30,
(in thousands)20222021
January 1,$59,964 $83,597 
Fair value adjustment(56,381)(7,543)
September 30,$3,583 $76,054 
Credit facility
In November 2019, and as since amended, the Company entered into a five-year $100 million senior secured revolving credit agreement (the “Credit Facility”) with PNC Bank, National Association. The Company may use borrowings for general corporate purposes and to finance working capital needs. Subject to specific conditions, the Credit Facility allows the Company to increase the aggregate commitment to $200 million. The commitments expire on November 4, 2024, and any outstanding loans will be payable on such date. The Credit Facility, as amended, contains customary covenants, including, but not limited to, those relating to additional indebtedness, liens, asset divestitures, and affiliate transactions.
The Company is required to comply with financial covenants, including:
•Beginning with the fiscal quarter ended March 31, 2022 and ending with the fiscal quarter ended December 31, 2022, Pegasystems Inc. must maintain at least $200 million in cash, investments, and availability under the Revolving Credit Loan.
•Beginning with the fiscal quarter ended March 31, 2023, a maximum net consolidated leverage ratio of 3.5 to 1.0 (with a step-up for certain acquisitions) and a minimum consolidated interest coverage ratio of 3.5 to 1.0.
As of September 30, 2022 and December 31, 2021, the Company had no outstanding cash borrowings under the Credit Facility.
As of September 30, 2022, the Company had $27.3 million in outstanding letters of credit which reduce the available borrowing capacity under the Credit Facility.
v3.22.2.2
FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
NOTE 9. FAIR VALUE MEASUREMENTS
Assets and liabilities measured at fair value on a recurring basis
The Company records its cash equivalents, marketable securities, Capped Call Transactions, and venture investments at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability.
As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows:
•Level 1 - observable inputs, such as quoted prices in active markets for identical assets or liabilities;
•Level 2 - significant other inputs that are observable either directly or indirectly; and
•Level 3 - significant unobservable inputs on which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and minimize unobservable inputs when determining fair value.
The fair value of the Capped Call Transactions at the end of each reporting period is determined using a Black-Scholes option-pricing model. The valuation model uses various market-based inputs, including stock price, remaining contractual term, expected volatility, risk-free interest rate, and expected dividend yield. The Company applies judgment when determining expected volatility. The Company considers both historical and implied volatility levels of the underlying equity security. The Company’s venture investments are recorded at fair value based on multiple valuation methods, including observable public companies and transaction prices and unobservable inputs, including the volatility, rights, and obligations of the securities the Company holds.
Assets and liabilities measured at fair value on a recurring basis:
September 30, 2022December 31, 2021
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash equivalents$20,899 $— $— $20,899 $3,216 $— $— $3,216 
Marketable securities $— $168,085 $— $168,085 $— $202,814 $— $202,814 
Capped Call Transactions (1)
$— $3,583 $— $3,583 $— $59,964 $— $59,964 
Venture investments (1) (2)
$— $— $11,910 $11,910 $— $— $7,648 $7,648 
(1) Included in other long-term assets. (2) Investments in privately-held companies.
Changes in venture investments:
Nine Months Ended
September 30,
(in thousands)20222021
January 1,$7,648 $8,345 
New investments400 500 
Sales of investments(3,954)(400)
Changes in foreign exchange rates(675)(52)
Changes in fair value:
included in other income5,989 100 
included in other comprehensive income2,502 1,220 
September 30,$11,910 $9,713 
The carrying value of certain other financial instruments, including receivables and accounts payable, approximates fair value due to these items’ short maturities.
Fair value of the Notes
The Notes’ fair value (including the conversion feature embedded in the Notes) was $488.3 million as of September 30, 2022 and $642.0 million as of December 31, 2021. 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.
v3.22.2.2
REVENUE
 9 Months Ended
Sep. 30, 2022
Revenue from Contract with Customer [Abstract]  
REVENUE
NOTE 10. REVENUE
Geographic revenue
Three Months Ended
September 30,		Nine Months Ended
September 30,
(Dollars in thousands)
2022202120222021
U.S.$148,200 55 %$132,016 52 %$513,197 56 %$515,881 58 %
Other Americas18,546 7 %17,510 7 %80,558 9 %43,469 5 %
United Kingdom (“U.K.”)24,074 9 %25,982 10 %83,837 9 %86,747 10 %
Europe (excluding U.K.), Middle East, and Africa 46,212 17 %46,306 18 %140,586 15 %143,763 15 %
Asia-Pacific33,699 12 %34,454 13 %103,197 11 %105,609 12 %
$270,731 100 %$256,268 100 %$921,375 100 %$895,469 100 %
Revenue streams
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)
2022202120222021
Perpetual license$9,223 $2,874 $18,929 $20,922 
Subscription license31,112 35,421 210,245 251,226 
Revenue recognized at a point in time40,335 38,295 229,174 272,148 
Maintenance77,526 83,188 235,568 237,531 
Pega Cloud97,359 78,369 281,182 219,520 
Consulting55,511 56,416 175,451 166,270 
Revenue recognized over time230,396 217,973 692,201 623,321 
Total revenue$270,731 $256,268 $921,375 $895,469 
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Pega Cloud$97,359 $78,369 $281,182 $219,520 
Maintenance77,526 83,188 235,568 237,531 
Subscription services174,885 161,557 516,750 457,051 
Subscription license31,112 35,421 210,245 251,226 
Subscription205,997 196,978 726,995 708,277 
Perpetual license9,223 2,874 18,929 20,922 
Consulting55,511 56,416 175,451 166,270 
$270,731 $256,268 $921,375 $895,469 
Remaining performance obligations ("Backlog")
Expected future revenue from existing non-cancellable contracts:
As of September 30, 2022:
(Dollars in thousands)Subscription servicesSubscription licensePerpetual licenseConsultingTotal
MaintenancePega Cloud
1 year or less
$191,045 $328,111 $69,753 $814 $27,968 $617,691 53 %
1-2 years
55,141 213,304 4,113 4,505 6,699 283,762 25 %
2-3 years
24,496 115,416 1,420 2,252 1,648 145,232 13 %
Greater than 3 years
16,198 82,807 1,734 — 508 101,247 9 %
$286,880 $739,638 $77,020 $7,571 $36,823 $1,147,932 100 %
As of September 30, 2021:
(Dollars in thousands)Subscription servicesSubscription licensePerpetual licenseConsultingTotal
MaintenancePega Cloud
1 year or less
$196,667 $284,359 $49,265 $15,686 $31,673 $577,650 56 %
1-2 years
59,360 177,214 16,872 1,064 6,561 261,071 25 %
2-3 years
37,734 79,775 420 4,094 5,165 127,188 12 %
Greater than 3 years
33,935 30,113 245 2,127 1,697 68,117 7 %
$327,696 $571,461 $66,802 $22,971 $45,096 $1,034,026 100 %
v3.22.2.2
STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION
NOTE 11. STOCK-BASED COMPENSATION
Expense
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Cost of revenue
$6,797 $5,114 $19,754 $16,889 
Selling and marketing
12,933 13,376 36,524 41,844 
Research and development
7,724 6,231 22,425 19,343 
General and administrative
6,320 3,974 14,598 11,407 
$33,774 $28,695 $93,301 $89,483 
Income tax benefit
$(600)$(5,845)$(1,505)$(18,028)
As of September 30, 2022, the Company had $161.0 million of unrecognized stock-based compensation expense, net of estimated forfeitures, which is expected to be recognized over a weighted-average period of 2.1 years.
Grants
Nine Months Ended
September 30, 2022
(in thousands)SharesTotal Fair Value
Restricted stock units
1,436 $112,303 
Non-qualified stock options
4,529 $102,332 
Common stock14 $600 
v3.22.2.2
INCOME TAXES
 9 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES
NOTE 12. INCOME TAXES
Effective income tax rate
Three Months Ended
September 30,		Nine Months Ended
September 30,
(Dollars in thousands)2022202120222021
Provision for (benefit from) income taxes$11,748 $(24,826)$190,239 $(54,360)
Effective income tax rate (benefit rate)100 %(68)%
The change in the effective income tax rate (benefit rate) in the nine months ended September 30, 2022 was primarily due to the recognition of a $191.9 million valuation allowance recognized at June 30, 2022, on the Company’s U.S. and U.K deferred tax assets. As a result of recording the valuation allowance, the Company is no longer recording any income tax benefit on its U.S and U.K losses. The $11.7 million provision for (benefit from) income taxes for the three months ended September 30, 2022 primarily represents non-U.K. foreign income taxes.
The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. Future realization of deferred tax assets ultimately depends on sufficient taxable income within the available carryback or carryforward periods. The Company’s deferred tax valuation allowance requires significant judgment and uncertainties, including assumptions about future taxable income based on historical and projected information. On a quarterly basis, the Company reassesses the need for a valuation allowance on its existing net deferred tax assets by tax-paying jurisdiction, weighing positive and negative evidence to assess its recoverability. In making such a determination, the Company considers all available and objectively verifiable negative and positive evidence, including future reversals of existing taxable temporary differences, committed contractual backlog (“Backlog”), projected future taxable income inclusive of the impact of enacted legislation, tax-planning strategies, and results of recent operations. The weight given to the potential effect of negative and positive evidence is commensurate with the extent to which it can be objectively verified.
As of June 30, 2022, the Company’s Backlog balance was not sufficient to recover our net deferred tax assets. The Backlog balance and other unsettled circumstances, impacting the Company’s operations, reduced the Backlog’s weight as objectively verifiable positive evidence to generate sufficient taxable income to recover its net deferred tax assets. These unsettled circumstances include growing and extended geopolitical turmoil, increasing inflation, and an uncertain global economic outlook.
As of June 30, 2022, the combination of the above factors caused the Company to conclude there is not sufficient objectively verifiable positive evidence to support that it is more likely than not the Company will generate sufficient future taxable income to recover the Company’s U.S. and U.K. net deferred tax assets. Accordingly, the Company recorded a valuation allowance of $191.9 million in income tax expense during the three months ended June 30, 2022.
The Company intends to continue maintaining a full valuation allowance on our U.S and U.K deferred tax assets until there is sufficient evidence to support the realization of these deferred tax assets.
v3.22.2.2
(LOSS) PER SHARE
 9 Months Ended
Sep. 30, 2022
Earnings Per Share [Abstract]  
(LOSS) PER SHARE
NOTE 13. (LOSS) PER SHARE
Basic (loss) per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted (loss) per share is calculated using the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding stock options, RSUs, and convertible senior notes.
Calculation of (loss) per share:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share amounts)2022202120222021
Net (loss)$(93,520)$(56,468)$(380,195)$(25,794)
Weighted-average common shares outstanding81,996 81,526 81,842 81,284 
(Loss) per share, basic$(1.14)$(0.69)$(4.65)$(0.32)
Net (loss)$(93,520)$(56,468)$(380,195)$(25,794)
Weighted-average common shares outstanding, assuming dilution (1) (2) (3)
81,996 81,526 81,842 81,284 
(Loss) per share, diluted$(1.14)$(0.69)$(4.65)$(0.32)
Outstanding anti-dilutive stock options and RSUs (4)
3,019 5,815 3,589 6,136 
(1) In periods of loss, all dilutive securities are excluded as their inclusion would be anti-dilutive.
(2) The shares underlying the conversion options in the Company’s Notes are included using the if-converted method, if dilutive in the period. If the outstanding conversion options were fully exercised, the Company would issue an additional approximately 4.4 million shares.
(3) The Company’s Capped Call Transactions represent the equivalent of approximately 4.4 million shares of the Company’s common stock (representing the number of shares for which the Notes are initially convertible). The Capped Call Transactions are 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. The Capped Call Transactions are excluded from weighted-average common shares outstanding, assuming dilution, in all periods as their effect would be anti-dilutive.
(4) Outstanding stock options and RSUs that were anti-dilutive under the treasury stock method in the period were excluded from the computation of diluted (loss) per share. These awards may be dilutive in the future.
v3.22.2.2
COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES
NOTE 14. COMMITMENTS AND CONTINGENCIES
Commitments
See "Note 7. Leases" for additional information.
Legal proceedings
In addition to the matters below, the Company is, or may become, involved in a variety of claims, demands, suits, investigations, and proceedings that arise from time to time relating to matters incidental to the ordinary course of the Company’s business, including actions concerning contracts, intellectual property, employment, benefits, and securities matters. Regardless of the outcome, legal disputes can have a material effect on the Company because of defense and settlement costs, diversion of management resources, and other factors.
In addition, as the Company is a party to ongoing litigation, it is at least reasonably possible that our estimates will change in the near term and the effect may be material.
As of September 30, 2022 and December 31, 2021, the Company has no accrued losses for litigation.
Pegasystems Inc. v. Appian Corp. & Business Process Management Inc.
On July 3, 2019, the Company filed suit in Massachusetts federal court against Appian Corp. (“Appian”) and Business Process Management, Inc. (“BPM”) relating to a BPM “Market Report” that Appian had used to promote itself against the Company. Pegasystems Inc. v. Appian Corp. & Business Process Management Inc., No. 1:19-cv-11461 (D. Mass). On April 15, 2022, each of the parties filed motions for summary judgment with the court. On September 30, 2022, the court entered an order allowing in part and denying in part each party’s motion for summary judgment, thereby narrowing the potential issues for trial. On October 24, 2022, the court entered an order setting a trial date of January 3, 2023. The Company continues to believe the counterclaims brought by Appian against the Company are without merit, and the Company intends to vigorously pursue its claims against Appian and defend against the counterclaims brought against the Company in this matter. The Company is unable to reasonably estimate possible damages or a range of possible damages in this matter given the Company’s belief that the damages claimed by Appian fail to satisfy the required legal standard, the status of the proceeding, and due to the uncertainty as to how a jury may rule if this ultimately proceeds to trial.
Appian Corp. v. Pegasystems Inc. & Youyong Zou
As previously reported, the Company is a defendant in litigation brought by Appian in the Circuit Court of Fairfax County, Virginia (the “Court”) titled Appian Corp. v. Pegasystems Inc. & Youyong Zou, No. 2020-07216 (Fairfax Cty. Ct.). On May 9, 2022, the jury rendered its verdict finding that the Company had misappropriated one or more of Appian’s trade secrets, that the Company had violated the Virginia Computer Crimes Act, and that the trade secret misappropriation was willful and malicious. The jury awarded damages in the amount of $2,036,860,045 for trade secret misappropriation and $1.00 for the violation of the Virginia Computer Crimes Act. On September 15, 2022, the circuit court of Fairfax County entered judgment in the amount of $2,060,479,287, consisting of the damages previously awarded by the jury plus attorneys’ fees and costs, and stating that the judgment is subject to post-judgment interest at a rate of 6.0% per annum, from the date of the jury verdict (May 9, 2022) as to the amount of the jury verdict and from September 15, 2022 as to the amount of the award of attorneys’ fees and costs. On September 15, 2022, the Company filed a notice of appeal from the judgment. On September 29, 2022, the circuit court of Fairfax County approved a $25,000,000 letter of credit obtained by the Company to secure the judgment and entered an order suspending the judgment during the pendency of the Company’s appeal. This appeals process could potentially take years to complete. The Company continues to believe that it did not misappropriate any alleged trade secrets and that its sales of the Company’s products at issue were not caused by, or the result of, any alleged misappropriation of trade secrets. The Company is unable to reasonably estimate possible damages because of, among other things, uncertainty as to the outcome of appellate proceedings and/or any potential new trial resulting from the appellate proceedings.
City of Fort Lauderdale Police and Firefighters’ Retirement System, Individually and on Behalf of All Others Similarly Situated v. Pegasystems Inc., Alan Trefler, and Kenneth Stillwell
On May 19, 2022, a lawsuit was filed against the Company, the Company’s chief executive officer and the Company’s chief operating and financial officer in the United States District Court for the Eastern District of Virginia Alexandria Division, captioned City of Fort Lauderdale Police and Firefighters’ Retirement System, Individually and on Behalf of All Others Similarly Situated v. Pegasystems Inc., Alan Trefler, and Kenneth Stillwell (Case 1:22-cv-00578-LMB-IDD). The complaint generally alleges, among other things, that the defendants violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder and that the individual defendants violated Section 20(a) of the Exchange Act, in each case by allegedly making materially false and/or misleading statements, as well as allegedly failing to disclose material adverse facts about the Company’s business, operations, and prospects, which caused the Company’s securities to trade at artificially inflated prices. The complaint seeks unspecified damages on behalf of a class of purchasers of the Company’s securities between May 29, 2020 and May 9, 2022. The litigation has since been transferred to the United States District Court for the District of Massachusetts (Case 1:22-cv-11220-WGY), and lead plaintiff class representatives—Central Pennsylvania Teamsters Pension Fund - Defined Benefit Plan, Central Pennsylvania Teamsters Pension Fund - Retirement Income Plan 1987, and Construction Industry Laborers Pension Fund—have been appointed. On October 18, 2022, a consolidated amended complaint was filed that does not add any new parties or legal claims, is based upon the same general factual allegations as the original complaint, and now seeks unspecified damages on behalf of a class of purchasers of the Company’s securities between June 16, 2020 and May 9, 2022. The Company believes the claims brought against the defendants are without merit, and intends to vigorously defend against these claims. The Company is unable to reasonably estimate possible damages or a range of possible damages in this matter given the stage of the lawsuit, the Company’s belief that the claims are without merit, and there being no specified quantum of damages sought in the complaint.
v3.22.2.2
BASIS OF PRESENTATION (Policies)
 9 Months Ended
Sep. 30, 2022
Accounting Policies [Abstract]  
Basis of presentation
Pegasystems Inc. (together with its subsidiaries, “the Company”) has prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. 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, 2021.
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.
All intercompany transactions and balances were eliminated in consolidation. The operating results for the interim periods presented do not necessarily indicate the expected results for the full year 2022.
Certain prior period amounts reported in our condensed consolidated financial statements and notes thereto have been reclassified to conform to the current year’s presentation. Such reclassifications did not affect total revenues, operating income, or net income.
Assets and liabilities measured at fair value on a recurring basis
Assets and liabilities measured at fair value on a recurring basis
The Company records its cash equivalents, marketable securities, Capped Call Transactions, and venture investments at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability.
As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows:
•Level 1 - observable inputs, such as quoted prices in active markets for identical assets or liabilities;
•Level 2 - significant other inputs that are observable either directly or indirectly; and
•Level 3 - significant unobservable inputs on which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and minimize unobservable inputs when determining fair value.
The fair value of the Capped Call Transactions at the end of each reporting period is determined using a Black-Scholes option-pricing model. The valuation model uses various market-based inputs, including stock price, remaining contractual term, expected volatility, risk-free interest rate, and expected dividend yield. The Company applies judgment when determining expected volatility. The Company considers both historical and implied volatility levels of the underlying equity security. The Company’s venture investments are recorded at fair value based on multiple valuation methods, including observable public companies and transaction prices and unobservable inputs, including the volatility, rights, and obligations of the securities the Company holds.
v3.22.2.2
MARKETABLE SECURITIES (Tables)
 9 Months Ended
Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]  
Schedule of marketable securities
September 30, 2022December 31, 2021
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair ValueAmortized CostUnrealized GainsUnrealized LossesFair Value
Government debt$2,992 $— $(67)$2,925 $2,000 $— $(10)$1,990 
Corporate debt168,894 — (3,734)165,160 201,659 2 (837)200,824 
$171,886 $— $(3,801)$168,085 $203,659 $2 $(847)$202,814 
v3.22.2.2
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE (Tables)
 9 Months Ended
Sep. 30, 2022
Receivables [Abstract]  
Summary of receivables Receivables
(in thousands)
September 30, 2022December 31, 2021
Accounts receivable$139,670 $182,717 
Unbilled receivables182,403 226,714 
Long-term unbilled receivables108,285 129,789 
$430,358 $539,220 
Summary of unbilled receivables Unbilled receivables by expected billing date:
(Dollars in thousands)
September 30, 2022
1 year or less$182,403 63 %
1-2 years78,893 27 %
2-5 years29,392 10 %
$290,688 100 %
Summary of unbilled receivables by contract effective date Unbilled receivables by contract effective date:
(Dollars in thousands)
September 30, 2022
2022$87,874 30 %
2021130,196 45 %
202045,589 16 %
201915,747 5 %
2018 and prior11,282 4 %
$290,688 100 %
Schedules of clients accounting for 10% or more of the total receivables
Clients accounting for 10% or more of the Company’s total receivables:
September 30, 2022December 31, 2021
Client A
Accounts receivable*1 %
Unbilled receivables*15 %
Total receivables*10 %
* Client accounted for less than 10% of receivables.
Summary of contract assets and deferred revenue
Contract assets
Contract assets are client-committed amounts for which revenue recognized exceeds the amount billed to the client, and billing is subject to conditions other than the passage of time, such as the completion of a related performance obligation.
(in thousands)
September 30, 2022December 31, 2021
Contract assets (1)
$12,429 $12,530 
Long-term contract assets (2)
10,541 10,643 
$22,970 $23,173 
(1) Included in other current assets. (2) Included in other long-term assets.
Deferred revenue
Deferred revenue consists of billings and payments received in advance of revenue recognition.
(in thousands)
September 30, 2022December 31, 2021
Deferred revenue$245,146 $275,844 
Long-term deferred revenue (1)
3,949 5,655 
$249,095 $281,499 
(1) Included in other long-term liabilities.
v3.22.2.2
DEFERRED COMMISSIONS (Tables)
 9 Months Ended
Sep. 30, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of impairment of deferred contract costs
(in thousands)
September 30, 2022December 31, 2021
Deferred commissions (1)
$122,673 $135,911 
(1) Included in other long-term assets.
Schedule of amortization of deferred contract costs
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Amortization of deferred commissions (1)
$11,597 $10,186 $39,752 $31,388 
(1) Included in selling and marketing expense
v3.22.2.2
GOODWILL AND OTHER INTANGIBLES (Tables)
 9 Months Ended
Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Changes in carrying amount of goodwill Change in goodwill:
Nine Months Ended
September 30,
(in thousands)
20222021
January 1,$81,923 $79,231 
Acquisition— 2,701 
Currency translation adjustments(722)22 
September 30,$81,201 $81,954 
Schedule of amortizable intangible assets
Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives.
September 30, 2022
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,007 $(58,211)$4,796 
Technology
2-10 years
68,038 (60,913)7,125 
Other
1-5 years
5,361 (5,361)— 
$136,406 $(124,485)$11,921 
(1) Included in other long-term assets.
December 31, 2021
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,165 $(57,342)$5,823 
Technology
2-10 years
67,142 (58,902)8,240 
Other
1-5 years
5,361 (5,361)— 
$135,668 $(121,605)$14,063 
(1) Included in other long-term assets.
Amortization expense of acquired intangibles
Amortization of intangible assets:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Cost of revenue
$705 $629 $2,017 $1,887 
Selling and marketing
343 373 1,028 1,119 
$1,048 $1,002 $3,045 $3,006 
Estimated future amortization expense related to intangible assets Future estimated intangibles assets amortization:
(in thousands)
September 30, 2022
Remainder of 2022$1,048 
20233,917 
20243,147 
20252,608 
2026874 
2027327 
$11,921 
v3.22.2.2
OTHER ASSETS AND LIABILITIES (Tables)
 9 Months Ended
Sep. 30, 2022
Other Assets and Liabilities [Abstract]  
Schedule of other assets and other liabilities
Other current assets
(in thousands)September 30, 2022December 31, 2021
Income tax receivables$11,948 $25,691 
Contract assets12,429 12,530 
Other38,080 29,787 
$62,457 $68,008 
Other long-term assets
(in thousands)September 30, 2022December 31, 2021
Deferred income taxes$6,041 $180,656 
Deferred commissions122,673 135,911 
Right of use assets80,163 87,521 
Capped call transactions3,583 59,964 
Property and equipment45,350 26,837 
Venture investments11,910 7,648 
Intangible assets11,921 14,063 
Contract assets10,541 10,643 
Other24,549 18,358 
$316,731 $541,601 
Other current liabilities
(in thousands)September 30, 2022December 31, 2021
Operating lease liabilities$5,787 $6,989 
Dividends payable2,466 2,454 
$8,253 $9,443 
Other long-term liabilities
(in thousands)September 30, 2022December 31, 2021
Deferred revenue$3,949 $5,655 
Other7,987 7,844 
$11,936 $13,499 
v3.22.2.2
LEASES (Tables)
 9 Months Ended
Sep. 30, 2022
Leases [Abstract]  
Schedule of lease expense
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Fixed lease costs (1)
$4,688 $(3,108)$14,747 $(6,780)
Short-term lease costs916 542 2,510 1,516 
Variable lease costs905 1,099 2,395 3,826 
$6,509 $(1,467)$19,652 $(1,438)
(1) The lower fixed lease costs in the nine months ended September 30, 2021 was due to the modification of the corporate headquarters lease.
Schedule of right of use asset and lease liabilities
(in thousands)September 30, 2022December 31, 2021
Right of use assets (1)
$80,163 $87,521 
Operating lease liabilities (2)
$5,787 $6,989 
Long-term operating lease liabilities$82,705 $87,818 
(1) Represents the Company’s right to use the leased asset during the lease term. Included in other long-term assets.
(2) Included in other current liabilities.
Schedule of weighted average and discount rate
Weighted-average remaining lease term and discount rate for the Company’s leases were:
September 30, 2022December 31, 2021
Weighted-average remaining lease term7.4 years7.7 years
Weighted-average discount rate (1)
4.2 %4.4 %
(1) The rates implicit in most of the Company’s leases are not readily determinable. Therefore, the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over the lease term in a similar economic environment.
Schedule of lease maturities
Maturities of lease liabilities:
(in thousands)September 30, 2022
Remainder of 2022$(4,717)
202318,804 
202416,841 
202514,778 
202611,257 
2027 and thereafter48,397 
Total lease payments105,360 
Less: imputed interest (1)
(16,868)
$88,492 
(1) Lease liabilities are measured at the present value of the remaining lease payments using a discount rate determined at lease commencement unless the discount rate is updated due to a lease reassessment event.
Schedule of supplemental cash flow lease information
Nine Months Ended
September 30,
(in thousands)20222021
Cash paid for leases$11,628 $14,403 
Right of use assets recognized for new leases and amendments (non-cash)$6,618 $54,716 
v3.22.2.2
DEBT (Tables)
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Carrying value, interest expense, and effective interest rate for the notes
Carrying value of the Notes:
(in thousands)September 30, 2022December 31, 2021
Principal$600,000 $600,000 
Unamortized issuance costs(7,116)(9,278)
Convertible senior notes, net$592,884 $590,722 

Interest expense related to the Notes:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Contractual interest expense (0.75% coupon)
$1,125 $1,125 $3,375 $3,375 
Amortization of issuance costs
724 677 2,163 2,025 
$1,849 $1,802 $5,538 $5,400 
The effective interest rate for the Notes:
Nine Months Ended
September 30,
20222021
Weighted-average effective interest rate1.2 %1.2 %
Schedule of future payments of principal and contractual interest Future payments of principal and contractual interest:
September 30, 2022
(in thousands)PrincipalInterestTotal
2023$— $4,500 $4,500 
2024— 4,500 4,500 
2025600,000 2,250 602,250 
$600,000 $11,250 $611,250 
Schedule of change in capped call transactions Change in capped call transactions:
Nine Months Ended
September 30,
(in thousands)20222021
January 1,$59,964 $83,597 
Fair value adjustment(56,381)(7,543)
September 30,$3,583 $76,054 
v3.22.2.2
FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Assets and liabilities measured at fair value
Assets and liabilities measured at fair value on a recurring basis:
September 30, 2022December 31, 2021
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash equivalents$20,899 $— $— $20,899 $3,216 $— $— $3,216 
Marketable securities $— $168,085 $— $168,085 $— $202,814 $— $202,814 
Capped Call Transactions (1)
$— $3,583 $— $3,583 $— $59,964 $— $59,964 
Venture investments (1) (2)
$— $— $11,910 $11,910 $— $— $7,648 $7,648 
(1) Included in other long-term assets. (2) Investments in privately-held companies.
Changes in venture investments Changes in venture investments:
Nine Months Ended
September 30,
(in thousands)20222021
January 1,$7,648 $8,345 
New investments400 500 
Sales of investments(3,954)(400)
Changes in foreign exchange rates(675)(52)
Changes in fair value:
included in other income5,989 100 
included in other comprehensive income2,502 1,220 
September 30,$11,910 $9,713 
v3.22.2.2
REVENUE (Tables)
 9 Months Ended
Sep. 30, 2022
Revenue from Contract with Customer [Abstract]  
Schedule of revenue by geographic location Geographic revenue
Three Months Ended
September 30,		Nine Months Ended
September 30,
(Dollars in thousands)
2022202120222021
U.S.$148,200 55 %$132,016 52 %$513,197 56 %$515,881 58 %
Other Americas18,546 7 %17,510 7 %80,558 9 %43,469 5 %
United Kingdom (“U.K.”)24,074 9 %25,982 10 %83,837 9 %86,747 10 %
Europe (excluding U.K.), Middle East, and Africa 46,212 17 %46,306 18 %140,586 15 %143,763 15 %
Asia-Pacific33,699 12 %34,454 13 %103,197 11 %105,609 12 %
$270,731 100 %$256,268 100 %$921,375 100 %$895,469 100 %
Schedule of revenue streams
Revenue streams
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)
2022202120222021
Perpetual license$9,223 $2,874 $18,929 $20,922 
Subscription license31,112 35,421 210,245 251,226 
Revenue recognized at a point in time40,335 38,295 229,174 272,148 
Maintenance77,526 83,188 235,568 237,531 
Pega Cloud97,359 78,369 281,182 219,520 
Consulting55,511 56,416 175,451 166,270 
Revenue recognized over time230,396 217,973 692,201 623,321 
Total revenue$270,731 $256,268 $921,375 $895,469 
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Pega Cloud$97,359 $78,369 $281,182 $219,520 
Maintenance77,526 83,188 235,568 237,531 
Subscription services174,885 161,557 516,750 457,051 
Subscription license31,112 35,421 210,245 251,226 
Subscription205,997 196,978 726,995 708,277 
Perpetual license9,223 2,874 18,929 20,922 
Consulting55,511 56,416 175,451 166,270 
$270,731 $256,268 $921,375 $895,469 
Revenue for remaining performance obligations expected to be recognized
Expected future revenue from existing non-cancellable contracts:
As of September 30, 2022:
(Dollars in thousands)Subscription servicesSubscription licensePerpetual licenseConsultingTotal
MaintenancePega Cloud
1 year or less
$191,045 $328,111 $69,753 $814 $27,968 $617,691 53 %
1-2 years
55,141 213,304 4,113 4,505 6,699 283,762 25 %
2-3 years
24,496 115,416 1,420 2,252 1,648 145,232 13 %
Greater than 3 years
16,198 82,807 1,734 — 508 101,247 9 %
$286,880 $739,638 $77,020 $7,571 $36,823 $1,147,932 100 %
As of September 30, 2021:
(Dollars in thousands)Subscription servicesSubscription licensePerpetual licenseConsultingTotal
MaintenancePega Cloud
1 year or less
$196,667 $284,359 $49,265 $15,686 $31,673 $577,650 56 %
1-2 years
59,360 177,214 16,872 1,064 6,561 261,071 25 %
2-3 years
37,734 79,775 420 4,094 5,165 127,188 12 %
Greater than 3 years
33,935 30,113 245 2,127 1,697 68,117 7 %
$327,696 $571,461 $66,802 $22,971 $45,096 $1,034,026 100 %
v3.22.2.2
STOCK-BASED COMPENSATION (Tables)
 9 Months Ended
Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Summary of stock based compensation expense
Expense
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2022202120222021
Cost of revenue
$6,797 $5,114 $19,754 $16,889 
Selling and marketing
12,933 13,376 36,524 41,844 
Research and development
7,724 6,231 22,425 19,343 
General and administrative
6,320 3,974 14,598 11,407 
$33,774 $28,695 $93,301 $89,483 
Income tax benefit
$(600)$(5,845)$(1,505)$(18,028)
Summary of stock based compensation award granted Grants
Nine Months Ended
September 30, 2022
(in thousands)SharesTotal Fair Value
Restricted stock units
1,436 $112,303 
Non-qualified stock options
4,529 $102,332 
Common stock14 $600 
v3.22.2.2
INCOME TAXES (Tables)
 9 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
Summary of effective income tax rate
Effective income tax rate
Three Months Ended
September 30,		Nine Months Ended
September 30,
(Dollars in thousands)2022202120222021
Provision for (benefit from) income taxes$11,748 $(24,826)$190,239 $(54,360)
Effective income tax rate (benefit rate)100 %(68)%
v3.22.2.2
(LOSS) PER SHARE (Tables)
 9 Months Ended
Sep. 30, 2022
Earnings Per Share [Abstract]  
Calculation of (loss) per share
Calculation of (loss) per share:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share amounts)2022202120222021
Net (loss)$(93,520)$(56,468)$(380,195)$(25,794)
Weighted-average common shares outstanding81,996 81,526 81,842 81,284 
(Loss) per share, basic$(1.14)$(0.69)$(4.65)$(0.32)
Net (loss)$(93,520)$(56,468)$(380,195)$(25,794)
Weighted-average common shares outstanding, assuming dilution (1) (2) (3)
81,996 81,526 81,842 81,284 
(Loss) per share, diluted$(1.14)$(0.69)$(4.65)$(0.32)
Outstanding anti-dilutive stock options and RSUs (4)
3,019 5,815 3,589 6,136 
(1) In periods of loss, all dilutive securities are excluded as their inclusion would be anti-dilutive.
(2) The shares underlying the conversion options in the Company’s Notes are included using the if-converted method, if dilutive in the period. If the outstanding conversion options were fully exercised, the Company would issue an additional approximately 4.4 million shares.
(3) The Company’s Capped Call Transactions represent the equivalent of approximately 4.4 million shares of the Company’s common stock (representing the number of shares for which the Notes are initially convertible). The Capped Call Transactions are 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 $196.44. The Capped Call Transactions are excluded from weighted-average common shares outstanding, assuming dilution, in all periods as their effect would be anti-dilutive.
(4) Outstanding stock options and RSUs that were anti-dilutive under the treasury stock method in the period were excluded from the computation of diluted (loss) per share. These awards may be dilutive in the future.
v3.22.2.2
MARKETABLE SECURITIES - Schedule of Marketable Securities (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Marketable Securities [Line Items]    
Amortized Cost $ 171,886 $ 203,659
Unrealized Gains 0 2
Unrealized Losses (3,801) (847)
Fair Value 168,085 202,814
Government debt    
Marketable Securities [Line Items]    
Amortized Cost 2,992 2,000
Unrealized Gains 0 0
Unrealized Losses (67) (10)
Fair Value 2,925 1,990
Corporate debt    
Marketable Securities [Line Items]    
Amortized Cost 168,894 201,659
Unrealized Gains 0 2
Unrealized Losses (3,734) (837)
Fair Value $ 165,160 $ 200,824
v3.22.2.2
MARKETABLE SECURITIES - Narrative (Details)
Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]  
Marketable debt security weighted-average remaining maturity 8 months 12 days
v3.22.2.2
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Receivable (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Receivables [Abstract]    
Accounts receivable $ 139,670 $ 182,717
Unbilled receivables 182,403 226,714
Long-term unbilled receivables 108,285 129,789
Total receivables $ 430,358 $ 539,220
v3.22.2.2
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Unbilled Receivables (Details)
$ in Thousands
Sep. 30, 2022
USD ($)
Receivables [Abstract]  
1 year or less $ 182,403
1-2 years 78,893
2-5 years 29,392
Total $ 290,688
Percentage of unbilled receivables, 1 year or less 63.00%
Percentage of unbilled receivables, 1-2 years 27.00%
Percentage of unbilled receivables, 2-5 years 10.00%
Total percentage of unbilled receivables 100.00%
v3.22.2.2
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE- Contract Effective (Details)
$ in Thousands
Sep. 30, 2022
USD ($)
Receivables [Abstract]  
2022 $ 87,874
2021 130,196
2020 45,589
2019 15,747
2018 and prior 11,282
Unbilled revenue total $ 290,688
2022 30.00%
2021 45.00%
2020 16.00%
2019 5.00%
2018 and prior 4.00%
Total percentage of unbilled revenue 100.00%
v3.22.2.2
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Major Clients (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Concentration Risk [Line Items]          
Percent of total revenue 100.00% 100.00% 100.00% 100.00%  
Client A | Credit concentration risk | Account receivable and unbilled receivables          
Concentration Risk [Line Items]          
Percent of total revenue         10.00%
Client A | Credit concentration risk | Accounts receivable          
Concentration Risk [Line Items]          
Percent of total revenue         1.00%
Client A | Credit concentration risk | Unbilled receivables          
Concentration Risk [Line Items]          
Percent of total revenue         15.00%
v3.22.2.2
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Contract Assets and Deferred Revenue (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Receivables [Abstract]    
Contract assets $ 12,429 $ 12,530
Contract assets 10,541 10,643
Total contract assets 22,970 23,173
Deferred revenue 245,146 275,844
Long-term deferred revenue 3,949 5,655
Total deferred revenue 249,095 $ 281,499
Revenue recognized during the period that was included in deferred revenue $ 252,800  
v3.22.2.2
DEFERRED COMMISSIONS - Schedule of Impairment of Deferred Commissions (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Deferred commissions $ 122,673 $ 135,911
v3.22.2.2
DEFERRED COMMISSIONS - Schedule of Amortization of Deferred Commissions (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]        
Amortization of deferred commissions $ 11,597 $ 10,186 $ 39,752 $ 31,388
v3.22.2.2
GOODWILL AND OTHER INTANGIBLES - Changes in Carrying Amount of Goodwill (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Goodwill [Roll Forward]    
Beginning balance $ 81,923 $ 79,231
Acquisition 0 2,701
Currency translation adjustments (722) 22
Ending balance $ 81,201 $ 81,954
v3.22.2.2
GOODWILL AND OTHER INTANGIBLES - Schedule of Amortizable Intangible Assets (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Goodwill and Other Intangible Assets [Line Items]    
Cost $ 136,406 $ 135,668
Accumulated Amortization (124,485) (121,605)
Total 11,921 14,063
Client-related    
Goodwill and Other Intangible Assets [Line Items]    
Cost 63,007 63,165
Accumulated Amortization (58,211) (57,342)
Total 4,796 5,823
Technology    
Goodwill and Other Intangible Assets [Line Items]    
Cost 68,038 67,142
Accumulated Amortization (60,913) (58,902)
Total 7,125 8,240
Other    
Goodwill and Other Intangible Assets [Line Items]    
Cost 5,361 5,361
Accumulated Amortization (5,361) (5,361)
Total $ 0 $ 0
Minimum | Client-related    
Goodwill and Other Intangible Assets [Line Items]    
Useful Lives 4 years 4 years
Minimum | Technology    
Goodwill and Other Intangible Assets [Line Items]    
Useful Lives 2 years 2 years
Minimum | Other    
Goodwill and Other Intangible Assets [Line Items]    
Useful Lives 1 year 1 year
Maximum | Client-related    
Goodwill and Other Intangible Assets [Line Items]    
Useful Lives 10 years 10 years
Maximum | Technology    
Goodwill and Other Intangible Assets [Line Items]    
Useful Lives 10 years 10 years
Maximum | Other    
Goodwill and Other Intangible Assets [Line Items]    
Useful Lives 5 years 5 years
v3.22.2.2
GOODWILL AND OTHER INTANGIBLES - Amortization Expense of Acquired Intangibles (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Acquired Finite-Lived Intangible Assets [Line Items]        
Amortization of intangible assets $ 1,048 $ 1,002 $ 3,045 $ 3,006
Cost of revenue        
Acquired Finite-Lived Intangible Assets [Line Items]        
Amortization of intangible assets 705 629 2,017 1,887
Selling and marketing        
Acquired Finite-Lived Intangible Assets [Line Items]        
Amortization of intangible assets $ 343 $ 373 $ 1,028 $ 1,119
v3.22.2.2
GOODWILL AND OTHER INTANGIBLES - Estimated Future Amortization Expense Related to Intangible Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]    
Remainder of 2022 $ 1,048  
2023 3,917  
2024 3,147  
2025 2,608  
2026 874  
2027 327  
Total $ 11,921 $ 14,063
v3.22.2.2
OTHER ASSETS AND LIABILITIES (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Sep. 30, 2021
Dec. 31, 2020
Other Assets and Liabilities [Abstract]        
Income tax receivables $ 11,948 $ 25,691    
Contract assets 12,429 12,530    
Other 38,080 29,787    
Other current assets 62,457 68,008    
Deferred income taxes 6,041 180,656    
Deferred commissions 122,673 135,911    
Right of use assets 80,163 87,521    
Capped call transactions 3,583 59,964 $ 76,054 $ 83,597
Property and equipment 45,350 26,837    
Venture investments 11,910 7,648    
Intangible assets 11,921 14,063    
Contract assets 10,541 10,643    
Other 24,549 18,358    
Other long-term assets 316,731 541,601    
Operating lease liabilities 5,787 6,989    
Dividends payable 2,466 2,454    
Other current liabilities 8,253 9,443    
Deferred revenue 3,949 5,655    
Other 7,987 7,844    
Other long-term liabilities $ 11,936 $ 13,499    
v3.22.2.2
LEASES - Narrative (Details)
ft² in Thousands, $ in Thousands
 1 Months Ended
Jul. 06, 2021
USD ($)
ft²
Mar. 31, 2021
USD ($)
Feb. 28, 2021
USD ($)
Sep. 30, 2022
USD ($)
Dec. 31, 2021
USD ($)
Aug. 01, 2021
USD ($)
Lessee, Lease, Description [Line Items]            
Gain lease termination     $ 18,000      
Decrease in lease liabilities     21,100      
Decrease in operating assets     $ 20,300      
Base rent       $ 18,804    
Lease liabilities       88,492    
Right of use assets       $ 80,163 $ 87,521  
Building            
Lessee, Lease, Description [Line Items]            
Term of contract 11 years 4 years 6 months        
Based rent to paid (annually per year)   $ 2,000        
Area of office space lease (in square feet) | ft² 131          
Base rent $ 6,000          
Base rent increase percentage 0.03          
Improvement allowance $ 11,800          
Lease liabilities           $ 42,100
Right of use assets           $ 42,100
v3.22.2.2
LEASES - Operating Lease Expenses (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Leases [Abstract]        
Fixed lease costs $ 4,688 $ (3,108) $ 14,747 $ (6,780)
Short-term lease costs 916 542 2,510 1,516
Variable lease costs 905 1,099 2,395 3,826
Operating lease expenses $ 6,509 $ (1,467) $ 19,652 $ (1,438)
v3.22.2.2
LEASES - Right of Use Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Leases [Abstract]    
Operating lease, right-of-use asset, statement of financial position Other long-term assets Other long-term assets
Right of use assets $ 80,163 $ 87,521
Operating lease, liability, current, statement of financial position Other current liabilities Other current liabilities
Operating lease liabilities $ 5,787 $ 6,989
Long-term operating lease liabilities $ 82,705 $ 87,818
v3.22.2.2
LEASES - Remaining Lease Term (Details)
Sep. 30, 2022
Dec. 31, 2021
Leases [Abstract]    
Weighted-average remaining lease term 7 years 4 months 24 days 7 years 8 months 12 days
Weighted-average discount rate 4.20% 4.40%
v3.22.2.2
LEASES - Maturities after Adoption of 842 (Details)
$ in Thousands
Sep. 30, 2022
USD ($)
Leases [Abstract]  
Remainder of 2022 $ (4,717)
2023 18,804
2024 16,841
2025 14,778
2026 11,257
2027 and thereafter 48,397
Total lease payments 105,360
Less: imputed interest (16,868)
Total lease liability $ 88,492
v3.22.2.2
LEASES - Cash Flow Information (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Leases [Abstract]    
Cash paid for leases $ 11,628 $ 14,403
Right of use assets recognized for new leases and amendments (non-cash) $ 6,618 $ 54,716
v3.22.2.2
DEBT - Convertible Senior Notes Narrative (Details)
 1 Months Ended 3 Months Ended 9 Months Ended
Feb. 29, 2020
USD ($)
day
$ / shares
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Debt Instrument [Line Items]          
Redemption percentage 100.00%        
On or after March 1, 2023          
Debt Instrument [Line Items]          
Redemption percentage 100.00%        
Convertible debt          
Debt Instrument [Line Items]          
Face amount | $ $ 600,000,000        
Interest rate 0.75% 0.75% 0.75% 0.75% 0.75%
Initial conversion rate 0.0074045        
Initial conversion price (in dollars per share) | $ / shares $ 135.05        
Convertible debt | After the calendar quarter ending on June 30, 2020          
Debt Instrument [Line Items]          
Threshold percentage of stock price trigger 130.00%        
Threshold trading days 20        
Threshold consecutive trading days 30        
Convertible debt | Measurement period          
Debt Instrument [Line Items]          
Threshold percentage of stock price trigger 98.00%        
Threshold consecutive trading days 5        
Threshold consecutive business days 5        
Convertible debt | On or after March 1, 2023          
Debt Instrument [Line Items]          
Threshold percentage of stock price trigger 130.00%        
Threshold trading days 20        
Threshold consecutive trading days 30        
v3.22.2.2
DEBT - Net Carrying Amount (Details) - Convertible debt - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Debt Instrument [Line Items]    
Principal $ 600,000 $ 600,000
Unamortized issuance costs (7,116) (9,278)
Convertible senior notes, net $ 592,884 $ 590,722
v3.22.2.2
DEBT - Interest Expense (Details) - Convertible debt - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended
Feb. 29, 2020
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Debt Instrument [Line Items]          
Interest rate 0.75% 0.75% 0.75% 0.75% 0.75%
Contractual interest expense (0.75% coupon)   $ 1,125 $ 1,125 $ 3,375 $ 3,375
Amortization of issuance costs   724 677 2,163 2,025
Interest expense   $ 1,849 $ 1,802 $ 5,538 $ 5,400
Weighted-average effective interest rate   1.20% 1.20% 1.20% 1.20%
v3.22.2.2
DEBT - Future Payments of Principal and Contractual Interest (Details) - Convertible debt - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Principal    
2023 $ 0  
2024 0  
2025 600,000  
Principal, total due 600,000 $ 600,000
Interest    
2023 4,500  
2024 4,500  
2025 2,250  
Interest expense, total due 11,250  
Total    
2023 4,500  
2024 4,500  
2025 602,250  
Principal and interest, total due $ 611,250  
v3.22.2.2
DEBT - Capped Call Transactions (Details)
$ in Thousands, shares in Millions
 1 Months Ended 3 Months Ended 9 Months Ended
Feb. 29, 2020
$ / derivative
shares
Sep. 30, 2022
USD ($)
$ / derivative
shares
Sep. 30, 2021
USD ($)
$ / derivative
shares
Sep. 30, 2022
USD ($)
$ / derivative
shares
Sep. 30, 2021
USD ($)
$ / derivative
shares
Debt Disclosure [Abstract]          
Number of shares issuable upon conversion (in shares) | shares 4.4 4.4 4.4 4.4 4.4
Cap price (in dollars per share) | $ / derivative 196.44 196.44 196.44 196.44 196.44
Capped Call Transaction [Roll Forward]          
Beginning balance       $ 59,964 $ 83,597
Fair value adjustment       (56,381) (7,543)
Ending balance   $ 3,583 $ 76,054 $ 3,583 $ 76,054
v3.22.2.2
DEBT - Credit Facility (Details)
 12 Months Ended
Nov. 30, 2019
USD ($)
Dec. 31, 2022
USD ($)
Mar. 31, 2023
Sep. 30, 2022
USD ($)
Dec. 31, 2021
USD ($)
Debt Instrument [Line Items]          
Remaining borrowing capacity       $ 0 $ 0
Outstanding letters of credit       $ 27,300,000  
PNC bank, national association | Forecast          
Debt Instrument [Line Items]          
Minimum consolidated coverage ratio     3.5    
Credit agreement | PNC bank, national association | Forecast          
Debt Instrument [Line Items]          
Maximum consolidated net leverage ratio     3.5    
Credit agreement | PNC bank, national association | Subsequent Event          
Debt Instrument [Line Items]          
Minimum required cash and investments held   $ 200,000,000      
Line of Credit | PNC bank, national association | Revolving credit facility          
Debt Instrument [Line Items]          
Revolving credit agreement term 5 years        
Senior notes $ 100,000,000        
Increase in aggregate commitment amount $ 200,000,000        
v3.22.2.2
FAIR VALUE MEASUREMENTS (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Fair Value Assets    
Marketable securities $ 168,085 $ 202,814
Capped call transactions 3,583 59,964
Cash equivalents    
Fair Value Assets    
Cash equivalents 20,899 3,216
Venture investments    
Fair Value Assets    
Venture investments 11,910 7,648
Level 1    
Fair Value Assets    
Marketable securities 0 0
Capped call transactions 0 0
Level 1 | Cash equivalents    
Fair Value Assets    
Cash equivalents 20,899 3,216
Level 1 | Venture investments    
Fair Value Assets    
Venture investments 0 0
Level 2    
Fair Value Assets    
Marketable securities 168,085 202,814
Capped call transactions 3,583 59,964
Level 2 | Cash equivalents    
Fair Value Assets    
Cash equivalents 0 0
Level 2 | Venture investments    
Fair Value Assets    
Venture investments 0 0
Level 3    
Fair Value Assets    
Marketable securities 0 0
Capped call transactions 0 0
Level 3 | Cash equivalents    
Fair Value Assets    
Cash equivalents 0 0
Level 3 | Venture investments    
Fair Value Assets    
Venture investments $ 11,910 $ 7,648
v3.22.2.2
FAIR VALUE MEASUREMENTS - Change in Investment in Privately Held Companies (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]      
Beginning balance $ 7,648    
Ending balance 11,910    
Convertible debt fair value 488,300   $ 642,000
Privately held investment      
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]      
Beginning balance 7,648 $ 8,345  
New investments 400 500  
Sales of investments (3,954) (400)  
Changes in foreign exchange rates (675) (52)  
Changes in fair value included in other income 5,989 100  
Changes in fair value included in other comprehensive income 2,502 1,220  
Ending balance $ 11,910 $ 9,713  
v3.22.2.2
REVENUE - Geographic Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Disaggregation of Revenue [Line Items]        
Revenue $ 270,731 $ 256,268 $ 921,375 $ 895,469
Percent of total revenue 100.00% 100.00% 100.00% 100.00%
U.S.        
Disaggregation of Revenue [Line Items]        
Revenue $ 148,200 $ 132,016 $ 513,197 $ 515,881
Other Americas        
Disaggregation of Revenue [Line Items]        
Revenue 18,546 17,510 80,558 43,469
United Kingdom (“U.K.”)        
Disaggregation of Revenue [Line Items]        
Revenue 24,074 25,982 83,837 86,747
Europe (excluding U.K.), Middle East, and Africa        
Disaggregation of Revenue [Line Items]        
Revenue 46,212 46,306 140,586 143,763
Asia-Pacific        
Disaggregation of Revenue [Line Items]        
Revenue $ 33,699 $ 34,454 $ 103,197 $ 105,609
Total revenue | U.S. | Geographic Concentration Risk        
Disaggregation of Revenue [Line Items]        
Percent of total revenue 55.00% 52.00% 56.00% 58.00%
Total revenue | Other Americas | Geographic Concentration Risk        
Disaggregation of Revenue [Line Items]        
Percent of total revenue 7.00% 7.00% 9.00% 5.00%
Total revenue | United Kingdom (“U.K.”) | Geographic Concentration Risk        
Disaggregation of Revenue [Line Items]        
Percent of total revenue 9.00% 10.00% 9.00% 10.00%
Total revenue | Europe (excluding U.K.), Middle East, and Africa | Geographic Concentration Risk        
Disaggregation of Revenue [Line Items]        
Percent of total revenue 17.00% 18.00% 15.00% 15.00%
Total revenue | Asia-Pacific | Geographic Concentration Risk        
Disaggregation of Revenue [Line Items]        
Percent of total revenue 12.00% 13.00% 11.00% 12.00%
v3.22.2.2
REVENUE - Revenue Stream (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Disaggregation of Revenue [Line Items]        
Revenue $ 270,731 $ 256,268 $ 921,375 $ 895,469
Perpetual license        
Disaggregation of Revenue [Line Items]        
Revenue 9,223 2,874 18,929 20,922
Subscription license        
Disaggregation of Revenue [Line Items]        
Revenue 31,112 35,421 210,245 251,226
Subscription services        
Disaggregation of Revenue [Line Items]        
Revenue 174,885 161,557 516,750 457,051
Subscription        
Disaggregation of Revenue [Line Items]        
Revenue 205,997 196,978 726,995 708,277
Consulting        
Disaggregation of Revenue [Line Items]        
Revenue 55,511 56,416 175,451 166,270
Revenue recognized at a point in time        
Disaggregation of Revenue [Line Items]        
Revenue 40,335 38,295 229,174 272,148
Revenue recognized at a point in time | Perpetual license        
Disaggregation of Revenue [Line Items]        
Revenue 9,223 2,874 18,929 20,922
Revenue recognized at a point in time | Subscription license        
Disaggregation of Revenue [Line Items]        
Revenue 31,112 35,421 210,245 251,226
Revenue recognized over time        
Disaggregation of Revenue [Line Items]        
Revenue 230,396 217,973 692,201 623,321
Revenue recognized over time | Maintenance        
Disaggregation of Revenue [Line Items]        
Revenue 77,526 83,188 235,568 237,531
Revenue recognized over time | Pega Cloud        
Disaggregation of Revenue [Line Items]        
Revenue 97,359 78,369 281,182 219,520
Revenue recognized over time | Consulting        
Disaggregation of Revenue [Line Items]        
Revenue $ 55,511 $ 56,416 $ 175,451 $ 166,270
v3.22.2.2
REVENUE - Performance Obligations (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Sep. 30, 2021
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 1,147,932 $ 1,034,026
Revenue remaining performance obligation (in percent) 100.00% 100.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation   $ 577,650
Revenue remaining performance obligation (in percent)   56.00%
Expected timing of satisfaction   1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 617,691 $ 261,071
Revenue remaining performance obligation (in percent) 53.00% 25.00%
Expected timing of satisfaction 1 year 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 283,762 $ 127,188
Revenue remaining performance obligation (in percent) 25.00% 12.00%
Expected timing of satisfaction 1 year 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 145,232 $ 68,117
Revenue remaining performance obligation (in percent) 13.00% 7.00%
Expected timing of satisfaction 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 101,247  
Revenue remaining performance obligation (in percent) 9.00%  
Expected timing of satisfaction  
Maintenance    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 286,880 $ 327,696
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation   196,667
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 191,045 59,360
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 55,141 37,734
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 24,496 33,935
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 16,198  
Pega Cloud    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 739,638 571,461
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation   284,359
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 328,111 177,214
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 213,304 79,775
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 115,416 30,113
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 82,807  
Subscription license    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 77,020 66,802
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation   49,265
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 69,753 16,872
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 4,113 420
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 1,420 245
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 1,734  
Perpetual license    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 7,571 22,971
Perpetual license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation   15,686
Perpetual license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 814 1,064
Perpetual license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 4,505 4,094
Perpetual license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 2,252 2,127
Perpetual license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 0  
Consulting    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 36,823 45,096
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation   31,673
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 27,968 6,561
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 6,699 5,165
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 1,648 $ 1,697
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 508  
v3.22.2.2
STOCK-BASED COMPENSATION - Summary of Stock-Based Compensation Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Total stock-based compensation before tax $ 33,774 $ 28,695 $ 93,301 $ 89,483
Income tax benefit (600) (5,845) (1,505) (18,028)
Cost of revenue        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Total stock-based compensation before tax 6,797 5,114 19,754 16,889
Selling and marketing        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Total stock-based compensation before tax 12,933 13,376 36,524 41,844
Research and development        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Total stock-based compensation before tax 7,724 6,231 22,425 19,343
General and administrative        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Total stock-based compensation before tax $ 6,320 $ 3,974 $ 14,598 $ 11,407
v3.22.2.2
STOCK-BASED COMPENSATION - Narrative (Details)
$ in Millions
 9 Months Ended
Sep. 30, 2022
USD ($)
Share-Based Payment Arrangement [Abstract]  
Unrecognized stock-based compensation expense $ 161.0
Weighted-average period of recognition of unrecognized stock-based compensation expense (in years) 2 years 1 month 6 days
v3.22.2.2
STOCK-BASED COMPENSATION - Summary of Stock-Based Compensation Awards Granted (Details)
shares in Thousands, $ in Thousands
 9 Months Ended
Sep. 30, 2022
USD ($)
shares
Restricted stock units  
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]  
Grants in period (in shares) | shares 1,436
Total Fair Value | $ $ 112,303
Non-qualified stock options  
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]  
Options granted in period (in shares) | shares 4,529
Total Fair Value | $ $ 102,332
Common Stock  
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]  
Grants in period (in shares) | shares 14
Total Fair Value | $ $ 600
v3.22.2.2
INCOME TAXES - Summary of benefit from income taxes and discrete tax items (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Income Tax Disclosure [Abstract]        
Provision for (benefit from) income taxes $ 11,748 $ (24,826) $ 190,239 $ (54,360)
Effective income tax rate (benefit rate) 100.00% (68.00%)
v3.22.2.2
INCOME TAXES - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Jun. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Income Tax Disclosure [Abstract]          
Deferred tax assets, valuation allowance   $ 191,900      
Tax provision related to foreign income $ 11,700        
Provision for (benefit from) income taxes $ 11,748   $ (24,826) $ 190,239 $ (54,360)
Recognition of valuation allowance on deferred tax assets   $ 191,900      
v3.22.2.2
(LOSS) PER SHARE (Details)
$ / shares in Units, shares in Thousands, $ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended
Feb. 29, 2020
$ / derivative
shares
Sep. 30, 2022
USD ($)
$ / shares
$ / derivative
shares
Jun. 30, 2022
USD ($)
Mar. 31, 2022
USD ($)
Sep. 30, 2021
USD ($)
$ / shares
$ / derivative
shares
Jun. 30, 2021
USD ($)
Mar. 31, 2021
USD ($)
Sep. 30, 2022
USD ($)
$ / shares
$ / derivative
shares
Sep. 30, 2021
USD ($)
$ / shares
$ / derivative
shares
Earnings Per Share [Abstract]                  
Net (loss) | $   $ (93,520) $ (286,296) $ (379) $ (56,468) $ 37,291 $ (6,617) $ (380,195) $ (25,794)
Weighted-average common shares outstanding (in shares)   81,996     81,526     81,842 81,284
(Loss) per share, basic (in dollars per share) | $ / shares   $ (1.14)     $ (0.69)     $ (4.65) $ (0.32)
Weighted-average common shares outstanding, assuming dilution (in shares)   81,996     81,526     81,842 81,284
(Loss) per share, diluted (in dollars per share) | $ / shares   $ (1.14)     $ (0.69)     $ (4.65) $ (0.32)
Outstanding anti-dilutive stock options and RSUs (in shares)   3,019     5,815     3,589 6,136
Convertible debt (in shares)   4,400     4,400     4,400 4,400
Number of shares issuable upon conversion (in shares) 4,400 4,400     4,400     4,400 4,400
Cap price (in dollars per share) | $ / derivative 196.44 196.44     196.44     196.44 196.44
v3.22.2.2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)
 4 Months Ended
May 09, 2022
Sep. 15, 2022
Sep. 30, 2022
Loss Contingencies [Line Items]      
Outstanding letters of credit     $ 27,300,000
Appian Corp. v. Pegasystems Inc. & Youyong Zou      
Loss Contingencies [Line Items]      
Outstanding letters of credit   $ 25,000,000  
Appian Corp. v. Pegasystems Inc. & Youyong Zou | Judicial Ruling      
Loss Contingencies [Line Items]      
Loss contingency, damages awarded, value   $ 2,060,479,287  
Trade Secret Misappropriation | Appian Corp. v. Pegasystems Inc. & Youyong Zou      
Loss Contingencies [Line Items]      
Legal fees, post-judgement interest rate, percentage   6.00%  
Trade Secret Misappropriation | Appian Corp. v. Pegasystems Inc. & Youyong Zou | Judicial Ruling      
Loss Contingencies [Line Items]      
Loss contingency, damages awarded, value $ 2,036,860,045    
Violation of the Virginia Computer Crimes Act | Appian Corp. v. Pegasystems Inc. & Youyong Zou | Judicial Ruling      
Loss Contingencies [Line Items]      
Loss contingency, damages awarded, value $ 1.00    
v3.22.2.2
Label Element Value
Accounting Standards Update [Extensible Enumeration] us-gaap_AccountingStandardsUpdateExtensibleList Accounting Standards Update 2020-06 [Member]