PEGASYSTEMS INC, 10-Q filed on 25 Oct 23
 | XBRL Documents
v3.23.3
Cover - shares
 9 Months Ended
Sep. 30, 2023
Oct. 17, 2023
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2023  
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, $.01 par value per share  
Trading Symbol PEGA  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   83,555,919
Amendment Flag false  
Entity Central Index Key 0001013857  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q3  
Current Fiscal Year End Date --12-31  
v3.23.3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 169,023 $ 145,054
Marketable securities 167,286 152,167
Total cash, cash equivalents, and marketable securities 336,309 297,221
Accounts receivable, net 168,795 255,150
Unbilled receivables, net 199,948 213,719
Other current assets 71,438 80,388
Total current assets 776,490 846,478
Unbilled receivables, net 73,795 95,806
Goodwill 81,437 81,399
Other long-term assets 290,807 333,989
Total assets 1,222,529 1,357,672
Current liabilities:    
Accounts payable 20,541 18,195
Accrued expenses 43,624 50,355
Accrued compensation and related expenses 93,511 127,728
Deferred revenue 297,067 325,212
Other current liabilities 18,038 17,450
Total current liabilities 472,781 538,940
Convertible senior notes, net 498,753 593,609
Operating lease liabilities 68,874 79,152
Other long-term liabilities 14,485 15,128
Total liabilities 1,054,893 1,226,829
Commitments and contingencies (Note 15)
Stockholders’ equity:    
Preferred stock, 1,000 shares authorized; none issued 0 0
Common stock, 200,000 shares authorized; 83,523 and 82,436 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively 835 824
Additional paid-in capital 343,259 229,602
Accumulated deficit (151,370) (76,513)
Accumulated other comprehensive (loss) (25,088) (23,070)
Total stockholders’ equity 167,636 130,843
Total liabilities and stockholders’ equity $ 1,222,529 $ 1,357,672
v3.23.3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares
shares in Thousands
Sep. 30, 2023
Dec. 31, 2022
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) 83,523 82,436
Common stock, shares outstanding (in shares) 83,523 82,436
v3.23.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Revenue        
Total revenue $ 334,643 $ 270,731 $ 958,383 $ 921,375
Cost of revenue        
Total cost of revenue 93,763 93,050 287,837 276,362
Gross profit 240,880 177,681 670,546 645,013
Operating expenses        
Selling and marketing 131,598 153,517 425,253 472,951
Research and development 74,955 75,342 224,262 221,173
General and administrative 27,321 26,043 73,893 94,530
Restructuring 17,822 0 21,450 0
Total operating expenses 251,696 254,902 744,858 788,654
(Loss) from operations (10,816) (77,221) (74,312) (143,641)
Foreign currency transaction gain (loss) 1,994 3,826 (3,971) 8,415
Interest income 2,532 520 5,831 1,036
Interest expense (1,533) (1,992) (5,229) (5,882)
(Loss) on capped call transactions (2,294) (6,876) (449) (56,381)
Other income (loss), net 6,383 (29) 18,668 6,497
(Loss) before provision for income taxes (3,734) (81,772) (59,462) (189,956)
Provision for income taxes 3,545 11,748 15,395 190,239
Net (loss) $ (7,279) $ (93,520) $ (74,857) $ (380,195)
(Loss) per share        
Basic (in dollars per share) $ (0.09) $ (1.14) $ (0.90) $ (4.65)
Diluted (in dollars per share) $ (0.09) $ (1.14) $ (0.90) $ (4.65)
Weighted-average number of common shares outstanding        
Basic (in shares) 83,336 81,996 82,996 81,842
Diluted (in shares) 83,336 81,996 82,996 81,842
Subscription services        
Revenue        
Total revenue $ 201,578 $ 174,885 $ 586,192 $ 516,750
Cost of revenue        
Total cost of revenue 35,906 34,541 109,553 103,104
Subscription license        
Revenue        
Total revenue 74,342 31,112 200,066 210,245
Cost of revenue        
Total cost of revenue 629 628 1,971 1,923
Consulting        
Revenue        
Total revenue 55,976 55,511 167,396 175,451
Cost of revenue        
Total cost of revenue 57,204 57,778 176,262 171,162
Perpetual license        
Revenue        
Total revenue 2,747 9,223 4,729 18,929
Cost of revenue        
Total cost of revenue $ 24 $ 103 $ 51 $ 173
v3.23.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Statement of Comprehensive Income [Abstract]        
Net (loss) $ (7,279) $ (93,520) $ (74,857) $ (380,195)
Other comprehensive (loss), net of tax        
Unrealized (loss) on available-for-sale securities (40) (73) (281) (1,000)
Foreign currency translation adjustments (3,687) (6,700) (1,737) (20,936)
Total other comprehensive (loss), net of tax (3,727) (6,773) (2,018) (21,936)
Comprehensive (loss) $ (11,006) $ (100,293) $ (76,875) $ (402,131)
v3.23.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Additional Paid-In Capital
Retained Earnings (Accumulated Deficit)
Accumulated Other Comprehensive (Loss)
Balance, beginning of period (in shares) at Dec. 31, 2021   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 stock 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 (2,455)     (2,455)  
Other comprehensive (loss) income (2,548)       (2,548)
Net (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      
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 (loss) income (21,936)        
Net (loss) (380,195)        
Balance, end of period (in shares) at Sep. 30, 2022   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 stock 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 (2,459)     (2,459)  
Other comprehensive (loss) income (12,615)       (12,615)
Net (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 stock 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 (2,466)     (2,466)  
Other comprehensive (loss) income (6,773)       (6,773)
Net (loss) (93,520)     (93,520)  
Balance, end of period (in shares) at Sep. 30, 2022   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 Dec. 31, 2022 82,436 82,436      
Balance, beginning of period at Dec. 31, 2022 $ 130,843 $ 824 229,602 (76,513) (23,070)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock for stock compensation plans (in shares)   452      
Issuance of common stock for stock compensation plans 672 $ 4 668    
Issuance of common stock under the employee stock purchase plan (in shares)   52      
Issuance of common stock under the employee stock purchase plan 2,143 $ 1 2,142    
Stock-based compensation 42,557   42,557    
Cash dividends declared (2,488)   (2,488)    
Other comprehensive (loss) income 1,543       1,543
Net (loss) (20,774)     (20,774)  
Balance, end of period (in shares) at Mar. 31, 2023   82,940      
Balance, end of period at Mar. 31, 2023 $ 154,496 $ 829 272,481 (97,287) (21,527)
Balance, beginning of period (in shares) at Dec. 31, 2022 82,436 82,436      
Balance, beginning of period at Dec. 31, 2022 $ 130,843 $ 824 229,602 (76,513) (23,070)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Other comprehensive (loss) income (2,018)        
Net (loss) $ (74,857)        
Balance, end of period (in shares) at Sep. 30, 2023 83,523 83,523      
Balance, end of period at Sep. 30, 2023 $ 167,636 $ 835 343,259 (151,370) (25,088)
Balance, beginning of period (in shares) at Mar. 31, 2023   82,940      
Balance, beginning of period at Mar. 31, 2023 154,496 $ 829 272,481 (97,287) (21,527)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock for stock compensation plans (in shares)   225      
Issuance of common stock for stock compensation plans 1,826 $ 2 1,824    
Issuance of common stock under the employee stock purchase plan (in shares)   47      
Issuance of common stock under the employee stock purchase plan 1,981 $ 1 1,980    
Stock-based compensation 36,227   36,227    
Cash dividends declared (2,496)   (2,496)    
Other comprehensive (loss) income 166       166
Net (loss) (46,804)     (46,804)  
Balance, end of period (in shares) at Jun. 30, 2023   83,212      
Balance, end of period at Jun. 30, 2023 145,396 $ 832 310,016 (144,091) (21,361)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock for stock compensation plans (in shares)   257      
Issuance of common stock for stock compensation plans 2,450 $ 3 2,447    
Issuance of common stock under the employee stock purchase plan (in shares)   54      
Issuance of common stock under the employee stock purchase plan 2,003   2,003    
Stock-based compensation 31,299   31,299    
Cash dividends declared (2,506)   (2,506)    
Other comprehensive (loss) income (3,727)       (3,727)
Net (loss) $ (7,279)     (7,279)  
Balance, end of period (in shares) at Sep. 30, 2023 83,523 83,523      
Balance, end of period at Sep. 30, 2023 $ 167,636 $ 835 $ 343,259 $ (151,370) $ (25,088)
v3.23.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares
 3 Months Ended
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Statement of Stockholders' Equity [Abstract]            
Cash dividend declared $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03
v3.23.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Operating activities        
Net (loss) $ (7,279) $ (93,520) $ (74,857) $ (380,195)
Adjustments to reconcile net (loss) to cash provided by (used in) operating activities        
Stock-based compensation 31,299 33,774 110,083 93,301
Deferred income taxes     (188) 169,489
Loss on capped call transactions 2,294 6,876 449 56,381
Amortization of deferred commissions 14,947 11,597 43,974 39,752
Lease expense     12,018 11,500
Amortization of intangible assets and depreciation     14,181 12,381
Foreign currency transaction loss (gain) (1,994) (3,826) 3,971 (8,415)
Other non-cash     (16,487) (1,705)
Change in operating assets and liabilities, net     44,776 (5,935)
Cash provided by (used in) operating activities     137,920 (13,446)
Investing activities        
Purchases of investments     (190,466) (39,056)
Proceeds from maturities and called investments     169,836 53,952
Sales of investments     10,725 18,415
Payments for acquisitions, net of cash acquired     0 (922)
Investment in property and equipment     (14,271) (22,285)
Cash (used in) provided by investing activities     (24,176) 10,104
Financing activities        
Repurchases of convertible senior notes     (88,989) 0
Dividend payments to stockholders     (7,458) (7,368)
Proceeds from employee stock purchase plan     6,127 7,166
Proceeds from stock option exercises     6,602 0
Common stock repurchases     (1,654) (43,282)
Other     341 0
Cash (used in) financing activities     (85,031) (43,484)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash     (1,621) (5,513)
Net increase (decrease) in cash, cash equivalents, and restricted cash     27,092 (52,339)
Cash, cash equivalents, and restricted cash, beginning of period     145,054 159,965
Cash, cash equivalents, and restricted cash, end of period 172,146 107,626 172,146 107,626
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract]        
Cash and cash equivalents 169,023 107,626 169,023 107,626
Restricted cash included in other long-term assets 3,123 0 3,123 0
Total cash, cash equivalents, and restricted cash $ 172,146 $ 107,626 $ 172,146 $ 107,626
v3.23.3
BASIS OF PRESENTATION
 9 Months Ended
Sep. 30, 2023
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, 2022.
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 2023.
v3.23.3
MARKETABLE SECURITIES
 9 Months Ended
Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
MARKETABLE SECURITIES
NOTE 2. MARKETABLE SECURITIES
September 30, 2023December 31, 2022
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair ValueAmortized CostUnrealized GainsUnrealized LossesFair Value
Government debt$17,931 $— $(18)$17,913 $2,960 $— $(52)$2,908 
Corporate debt149,927 — (554)149,373 151,906 — (2,647)149,259 
$167,858 $— $(572)$167,286 $154,866 $— $(2,699)$152,167 
As of September 30, 2023, marketable securities’ maturities ranged from October 2023 to January 2026, with a weighted average remaining maturity of 0.5 years.
v3.23.3
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE
 9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE
NOTE 3. RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE
Receivables
(in thousands)
September 30, 2023December 31, 2022
Accounts receivable, net$168,795 $255,150 
Unbilled receivables, net199,948 213,719 
Long-term unbilled receivables, net
73,795 95,806 
$442,538 $564,675 
Unbilled receivables
Unbilled receivables are client-committed amounts for which revenue recognition precedes billing. Billing is solely subject to the passage of time.
Unbilled receivables by expected collection date:
(Dollars in thousands)
September 30, 2023
1 year or less$199,948 73 %
1-2 years58,604 21 %
2-5 years15,191 6 %
$273,743 100 %
Unbilled receivables by contract effective date:
(Dollars in thousands)
September 30, 2023
2023$90,227 33 %
202292,065 34 %
202162,729 23 %
202019,820 7 %
2019 and prior8,902 3 %
$273,743 100 %
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, 2023December 31, 2022
Contract assets (1)
$13,263 $17,546 
Long-term contract assets (2)
10,732 16,470 
$23,995 $34,016 
(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, 2023December 31, 2022
Deferred revenue$297,067 $325,212 
Long-term deferred revenue (1)
2,605 3,552 
$299,672 $328,764 
(1) Included in other long-term liabilities.
Deferred revenue decreased in the nine months ended September 30, 2023, primarily due to $292.3 million of revenue recognized during the period included in deferred revenue as of December 31, 2022 exceeded new billings in advance of revenue recognition.
v3.23.3
DEFERRED COMMISSIONS
 9 Months Ended
Sep. 30, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
DEFERRED COMMISSIONS
NOTE 4. DEFERRED COMMISSIONS
(in thousands)
September 30, 2023December 31, 2022
Deferred commissions (1)
$107,399 $130,195 
(1) Included in other long-term assets.
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Amortization of deferred commissions (1)
$14,947 $11,597 $43,974 $39,752 
(1) Included in selling and marketing.
v3.23.3
GOODWILL AND OTHER INTANGIBLES
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLES
NOTE 5. GOODWILL AND OTHER INTANGIBLES
Goodwill
Nine Months Ended
September 30,
(in thousands)
20232022
January 1,$81,399 $81,923 
Currency translation adjustments38 (722)
September 30,$81,437 $81,201 
Intangibles
Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives.
September 30, 2023
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,086 $(59,661)$3,425 
Technology
2-10 years
68,103 (63,579)4,524 
Other
1-5 years
5,361 (5,361)— 
$136,550 $(128,601)$7,949 
(1) Included in other long-term assets.
December 31, 2022
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,076 $(58,623)$4,453 
Technology
2-10 years
68,056 (61,621)6,435 
Other
1-5 years
5,361 (5,361)— 
$136,493 $(125,605)$10,888 
(1) Included in other long-term assets.
Future estimated intangibles assets amortization:
(in thousands)
September 30, 2023
Remainder of 2023$964 
20243,169 
20252,615 
2026874 
2027327 
$7,949 
Amortization of intangible assets:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Cost of revenue
$622 $705 $1,949 $2,017 
Selling and marketing
343 343 1,028 1,028 
$965 $1,048 $2,977 $3,045 
v3.23.3
OTHER ASSETS AND LIABILITIES
 9 Months Ended
Sep. 30, 2023
Other Assets and Liabilities [Abstract]  
OTHER ASSETS AND LIABILITIES
NOTE 6. OTHER ASSETS AND LIABILITIES
Other current assets
(in thousands)September 30, 2023December 31, 2022
Income tax receivables$19,663 $25,354 
Contract assets13,263 17,546 
Other38,512 37,488 
$71,438 $80,388 
Other long-term assets
(in thousands)September 30, 2023December 31, 2022
Deferred commissions$107,399 $130,195 
Right of use assets65,871 76,114 
Property and equipment49,481 55,056 
Venture investments19,348 13,069 
Contract assets10,732 16,470 
Intangible assets7,949 10,888 
Capped call transactions1,792 2,582 
Deferred income taxes5,046 4,795 
Restricted cash3,123 — 
Other20,066 24,820 
$290,807 $333,989 
Other current liabilities
(in thousands)September 30, 2023December 31, 2022
Operating lease liabilities$15,532 $14,976 
Dividends payable2,506 2,474 
$18,038 $17,450 
Other long-term liabilities
(in thousands)September 30, 2023December 31, 2022
Deferred revenue$2,605 $3,552 
Income taxes payable2,017 3,207 
Other9,863 8,369 
$14,485 $15,128 
v3.23.3
LEASES
 9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
LEASES
NOTE 7. LEASES
Expense
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Fixed lease costs$4,718 $4,688 $14,979 $14,747 
Short-term lease costs660 916 2,137 2,510 
Variable lease costs2,254 905 6,414 2,395 
$7,632 $6,509 $23,530 $19,652 
Right of use assets and lease liabilities
(in thousands)September 30, 2023December 31, 2022
Right of use assets (1)
$65,871 $76,114 
Operating lease liabilities (2)
$15,532 $14,976 
Long-term operating lease liabilities$68,874 $79,152 

(1) 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, 2023December 31, 2022
Weighted-average remaining lease term7.0 years7.5 years
Weighted-average discount rate (1)
4.0 %4.1 %
(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, 2023
Remainder of 2023$4,775 
202417,976 
202514,870 
202610,853 
20279,808 
20289,245 
Thereafter30,054 
Total lease payments97,581 
Less: imputed interest (1)
(13,175)
$84,406 
(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)20232022
Cash paid for operating leases, net of tenant improvement allowances$14,378 $11,628 
Right of use assets recognized for new leases and amendments (non-cash)$1,782 $6,618 
v3.23.3
DEBT
 9 Months Ended
Sep. 30, 2023
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 September 1, 2020.
In the nine months ended September 30, 2023, the Company recognized a gain of $7.9 million in other income (loss), net from repurchases of Notes representing $97.7 million in aggregate principal amount.
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 conversion rate will be adjusted upon certain events, including spin-offs, tender offers, exchange offers, and certain stockholder distributions. 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.
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, 2023, 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, 2023December 31, 2022
Principal$502,270 $600,000 
Unamortized issuance costs(3,517)(6,391)
Convertible senior notes, net$498,753 $593,609 

Interest expense related to the Notes:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Contractual interest expense (0.75% coupon)
$827 $1,125 $2,949 $3,375 
Amortization of issuance costs
613 724 1,988 2,163 
$1,440 $1,849 $4,937 $5,538 
The average interest rate on the Notes in the nine months ended September 30, 2023 and 2022 was 1.2%.
Future payments:
September 30, 2023
(in thousands)PrincipalInterestTotal
2024$— $3,767 $3,767 
2025502,270 1,884 504,154 
$502,270 $5,651 $507,921 
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 covered approximately 4.4 million shares (representing the number of shares for which the Notes were initially convertible) of the Company’s common stock.
In the nine months ended September 30, 2023, Capped Call Transactions covering approximately 0.7 million shares were settled for proceeds of $0.3 million. As of September 30, 2023, Capped Call Transactions covering approximately 3.7 million shares were outstanding.
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 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)20232022
January 1,$2,582 $59,964 
Settlements(341)— 
Fair value adjustment(449)(56,381)
September 30,$1,792 $3,583 
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 and the agreement of the financial institutions lending the additional amount, the aggregate commitment may be increased 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:
•Through December 31, 2023, the parent company must maintain at least $200 million in cash, investments, and availability under the Credit Facility and the Company must maintain:
Year to Date
(in thousands)March 31, 2023June 30, 2023September 30, 2023December 31, 2023
Minimum Consolidated EBITDA (as defined in the Credit Facility)$38,862 $59,894 $95,597 $214,590 
•Beginning with the fiscal quarter ended March 31, 2024, 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, 2023 and December 31, 2022, the Company had $27.3 million in outstanding letters of credit, which reduced the Company’s available borrowing capacity under the Credit Facility and no outstanding cash borrowings under the Credit Facility.
v3.23.3
RESTRUCTURING
 9 Months Ended
Sep. 30, 2023
Restructuring and Related Activities [Abstract]  
RESTRUCTURING
NOTE 9. RESTRUCTURING
The Company has undertaken the following restructuring activities as it optimizes its go-to-market strategy and reassesses its office space needs:
Three months endedExpense
Employee severance and related benefits and closure of a US officeDecember 31, 2022$21,743 
Office space reduction March 31, 2023$1,241 
Employee severance and related benefitsJune 30, 2023$1,581 
Employee severance and related benefits and closure of a foreign officeSeptember 30, 2023$17,236 
Accrued employee severance and related benefits:
Change for all restructuring actions:
Nine Months Ended
September 30,
(in thousands)2023
January 1,$18,573 
Costs incurred19,921 
Cash disbursements(21,576)
Currency translation adjustments(203)
September 30,$16,715 
Note: Accrued employee severance and related benefits is included in accrued compensation and related expenses.
v3.23.3
FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
NOTE 10. 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 with 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 the underlying equity security’s historical and implied volatility levels. 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, 2023December 31, 2022
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash equivalents$22,686 $— $— $22,686 $2,526 $— $— $2,526 
Marketable securities $— $167,286 $— $167,286 $— $152,167 $— $152,167 
Capped Call Transactions (1)
$— $1,792 $— $1,792 $— $2,582 $— $2,582 
Venture investments (1) (2)
$— $— $19,348 $19,348 $— $— $13,069 $13,069 
(1) Included in other long-term assets.
(2) Investments in privately-held companies.
Changes in venture investments:
Nine Months Ended
September 30,
(in thousands)20232022
January 1,$13,069 $7,648 
New investments400 400 
Sales of investments(2,773)(3,954)
Changes in foreign exchange rates27 (675)
Changes in fair value:
included in other income (loss), net
10,886 5,989 
included in other comprehensive (loss)
(2,261)2,502 
September 30,$19,348 $11,910 
The carrying value of certain financial instruments, including receivables and accounts payable, approximates fair value due to their short maturities.
Fair value of the Notes
The fair value of the Notes outstanding (including the embedded conversion feature) was $460.3 million as of September 30, 2023 and $521.1 million as of December 31, 2022. In the nine months ended September 30, 2023 the Company repurchased Notes representing $97.7 million in aggregate principal amount.
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.
v3.23.3
REVENUE
 9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
REVENUE
NOTE 11. REVENUE
Geographic revenue
Three Months Ended
September 30,		Nine Months Ended
September 30,
(Dollars in thousands)
2023202220232022
U.S.$154,741 47 %$148,200 55 %$489,645 51 %$513,197 56 %
Other Americas23,497 7 %18,546 7 %58,013 6 %80,558 9 %
United Kingdom (“U.K.”)41,622 12 %24,074 9 %112,751 12 %83,837 9 %
Europe (excluding U.K.), Middle East, and Africa 67,880 20 %46,212 17 %173,551 18 %140,586 15 %
Asia-Pacific46,903 14 %33,699 12 %124,423 13 %103,197 11 %
$334,643 100 %$270,731 100 %$958,383 100 %$921,375 100 %
Revenue streams
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)
2023202220232022
Perpetual license$2,747 $9,223 $4,729 $18,929 
Subscription license74,342 31,112 200,066 210,245 
Revenue recognized at a point in time77,089 40,335 204,795 229,174 
Maintenance83,538 77,526 245,210 235,568 
Pega Cloud118,040 97,359 340,982 281,182 
Consulting55,976 55,511 167,396 175,451 
Revenue recognized over time257,554 230,396 753,588 692,201 
Total revenue$334,643 $270,731 $958,383 $921,375 
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Pega Cloud$118,040 $97,359 $340,982 $281,182 
Maintenance83,538 77,526 245,210 235,568 
Subscription services201,578 174,885 586,192 516,750 
Subscription license74,342 31,112 200,066 210,245 
Subscription275,920 205,997 786,258 726,995 
Consulting55,976 55,511 167,396 175,451 
Perpetual license2,747 9,223 4,729 18,929 
$334,643 $270,731 $958,383 $921,375 
Remaining performance obligations ("Backlog")
Expected future revenue from existing non-cancellable contracts:
As of September 30, 2023:
(Dollars in thousands)Subscription servicesSubscription licensePerpetual licenseConsultingTotal
MaintenancePega Cloud
1 year or less
$202,610 $391,324 $48,427 $4,567 $39,335 $686,263 54 %
1-2 years
58,610 239,787 4,356 2,696 3,662 309,111 24 %
2-3 years
28,585 121,778 8,518 — 1,100 159,981 13 %
Greater than 3 years
17,478 89,870 2,664 — — 110,012 9 %
$307,283 $842,759 $63,965 $7,263 $44,097 $1,265,367 100 %
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 %
v3.23.3
STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION
NOTE 12. STOCK-BASED COMPENSATION
Expense
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Cost of revenue
$6,410 $6,797 $22,497 $19,754 
Selling and marketing
10,401 12,933 43,410 36,524 
Research and development
7,375 7,724 24,286 22,425 
General and administrative
7,113 6,320 19,890 14,598 
$31,299 $33,774 $110,083 $93,301 
Income tax benefit
$(316)$(600)$(1,569)$(1,505)
As of September 30, 2023, the Company had $137.5 million of unrecognized stock-based compensation expense, net of estimated forfeitures, which is expected to be recognized over a weighted-average period of 1.8 years.
Grants
Nine Months Ended
September 30, 2023
(in thousands)SharesTotal Fair Value
Restricted stock units
1,514 $70,962 
Non-qualified stock options
911 $19,142 
Performance stock options (1)
906 $18,265 
Common stock
13 $600 
(1) Performance stock options allow the holder to purchase a specified number of common stock shares at an exercise price equal to or greater than the shares' fair market value at the grant date. The options usually vest over two years and expire ten years from the grant date, subject to specific performance conditions.
v3.23.3
INCOME TAXES
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES
NOTE 13. INCOME TAXES
Effective income tax rate
Three Months Ended
September 30,		Nine Months Ended
September 30,
(Dollars in thousands)2023202220232022
Provision for income taxes$3,545 $11,748 $15,395 $190,239 
Effective income tax rate(26)%(100)%
The Company’s effective income tax rate in the nine months ended September 30, 2023 was primarily driven by the valuation allowance on the Company’s deferred tax assets in the U.S. and U.K. and projected taxable income in the U.S., partially offset by available tax credits and losses in the U.S.
The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. A deferred tax valuation allowance requires significant judgment and uncertainties, including assumptions about future taxable income. Quarterly, the Company reassesses the need for a valuation allowance on its net deferred tax assets by weighting all available and objectively verifiable negative and positive evidence, including projected future reversals of existing taxable temporary differences, committed contractual backlog (“Backlog”), projected future taxable income, including the impact of enacted legislation, tax-planning strategies, and recent operating results.
The Company intends to maintain a valuation allowance on the Company’s U.S. and U.K. net deferred tax assets until sufficient evidence exists to support the realization of these deferred tax assets.
v3.23.3
(LOSS) PER SHARE
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
(LOSS) PER SHARE
NOTE 14. (LOSS) PER SHARE
Basic (loss) per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted (loss) per share is calculated using the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding stock options, RSUs, and convertible senior notes.
Calculation of (loss) per share:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share amounts)2023202220232022
Net (loss)$(7,279)$(93,520)$(74,857)$(380,195)
Weighted-average common shares outstanding83,336 81,996 82,996 81,842 
(Loss) per share, basic$(0.09)$(1.14)$(0.90)$(4.65)
Net (loss)$(7,279)$(93,520)$(74,857)$(380,195)
Weighted-average common shares outstanding, assuming dilution (1) (2) (3)
83,336 81,996 82,996 81,842 
(Loss) per share, diluted$(0.09)$(1.14)$(0.90)$(4.65)
Outstanding anti-dilutive stock options and RSUs (4)
2,255 3,019 1,652 3,589 
(1) All dilutive securities are excluded in periods of loss 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 approximately 3.7 million shares as of September 30, 2023.
(3) The Company’s Capped Call Transactions represent the equivalent of approximately 3.7 million shares of the Company’s common stock (representing the number of shares for which the Notes are convertible) as of September 30, 2023. 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.
v3.23.3
COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES
NOTE 15. 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 the Company’s estimates will change in the near term, and the effect may be material.
The Company had no accrued losses for litigation as of September 30, 2023 and December 31, 2022.
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 of $2,036,860,045 for trade secret misappropriation and $1.00 for violating the Virginia Computer Crimes Act. On September 15, 2022, the circuit court of Fairfax County entered judgment 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. Appellate briefing in the Court of Appeals of Virginia is completed. The Court of Appeals of Virginia has set November 15, 2023 as the date for oral arguments in the appeal. Although it is not possible to predict timing, 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 moved to dismiss the consolidated amended complaint on December 19, 2022. The hearing on the Company’s motion to dismiss took place on May 17, 2023. After hearing argument from both sides, the Court denied the Company’s motion from the bench and stated that a written opinion would follow. On June 30, 2023, the Company filed its Answer to the complaint. On July 24, 2023, the Court issued its written opinion denying the motion to dismiss as to the Company and Defendant Trefler but granting the motion without prejudice as to Mr. Stillwell. The Company believes it has strong defenses to the claims brought against the defendants and intends to defend against these claims vigorously. 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 it has strong defenses to the claims asserted, its intent to defend against these claims, and there being no specified quantum of damages sought in the complaint.
In re Pegasystems Inc., Derivative Litigation
On November 21, 2022, a lawsuit was filed against the members of the Company’s board of directors, the Company’s chief operating and financial officer and the Company in the United States District Court for the District of Massachusetts, captioned Mary Larkin, derivatively on behalf of nominal defendant Pegasystems Inc. v. Peter Gyenes, Richard Jones, Christopher Lafond, Dianne Ledingham, Sharon Rowlands, Alan Trefler, Larry Weber, and Kenneth Stillwell, defendants, and Pegasystems Inc., nominal defendant (Case 1:22-cv-11985). The complaint generally alleges the defendants sold shares of the Company while in possession of material nonpublic information relating to (i) the litigation brought by Appian in the Circuit Court of Fairfax County, Virginia, described above, and (ii) alleged misconduct by Company employees alleged in that litigation. On April 28, 2023, a lawsuit was filed in the United States District Court for the District of Massachusetts by Dag Sagfors, derivatively on behalf of nominal defendant Pegasystems Inc. asserting breach of fiduciary duty and related claims relating to the Virginia Appian litigation against the same defendants as the Larkin lawsuit. On May 17, 2023, the Larkin and Sagfors cases were consolidated and a joint motion to stay the consolidated case is pending before the Court. The Company also has received confidential demand letters raising substantially the same allegations set forth in the foregoing derivative complaints. On April 12, 2023, the Company’s board of directors (other than Mr. Trefler, who recused himself), formed a committee consisting solely of independent directors, to review, analyze, and investigate the matters raised in the demands and to determine in good faith what actions (if any) are reasonably believed to be appropriate under similar circumstances and reasonably believed to be in the best interests of the Company in response to the demand letters. The Company is unable to reasonably estimate possible damages or a range of possible damages in this matter given the stage of the lawsuit and there being no specified quantum of damages sought in the complaint.
SEC Inquiry
Beginning in March 2023, the U.S. Securities and Exchange Commission (“SEC”) has requested certain information relating to, among other things, the accounting treatment of the Company’s above-described litigation with Appian Corporation. The Company is fully cooperating with the SEC’s requests.
v3.23.3
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Sep. 30, 2023
Sep. 30, 2022
Pay vs Performance Disclosure                
Net (loss) $ (7,279) $ (46,804) $ (20,774) $ (93,520) $ (286,296) $ (379) $ (74,857) $ (380,195)
v3.23.3
Insider Trading Arrangements
 3 Months Ended
Sep. 30, 2023
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.23.3
BASIS OF PRESENTATION (Policies)
 9 Months Ended
Sep. 30, 2023
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, 2022.
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 2023.
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 with 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 the underlying equity security’s historical and implied volatility levels. 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.
v3.23.3
MARKETABLE SECURITIES (Tables)
 9 Months Ended
Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
Schedule of Marketable Securities
September 30, 2023December 31, 2022
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair ValueAmortized CostUnrealized GainsUnrealized LossesFair Value
Government debt$17,931 $— $(18)$17,913 $2,960 $— $(52)$2,908 
Corporate debt149,927 — (554)149,373 151,906 — (2,647)149,259 
$167,858 $— $(572)$167,286 $154,866 $— $(2,699)$152,167 
v3.23.3
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE (Tables)
 9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
Schedule of Receivables Receivables
(in thousands)
September 30, 2023December 31, 2022
Accounts receivable, net$168,795 $255,150 
Unbilled receivables, net199,948 213,719 
Long-term unbilled receivables, net
73,795 95,806 
$442,538 $564,675 
Schedule of Unbilled Receivables Unbilled receivables by expected collection date:
(Dollars in thousands)
September 30, 2023
1 year or less$199,948 73 %
1-2 years58,604 21 %
2-5 years15,191 6 %
$273,743 100 %
Schedule of Unbilled Receivables by Contract Effective Date Unbilled receivables by contract effective date:
(Dollars in thousands)
September 30, 2023
2023$90,227 33 %
202292,065 34 %
202162,729 23 %
202019,820 7 %
2019 and prior8,902 3 %
$273,743 100 %
Schedule 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, 2023December 31, 2022
Contract assets (1)
$13,263 $17,546 
Long-term contract assets (2)
10,732 16,470 
$23,995 $34,016 
(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, 2023December 31, 2022
Deferred revenue$297,067 $325,212 
Long-term deferred revenue (1)
2,605 3,552 
$299,672 $328,764 
(1) Included in other long-term liabilities.
v3.23.3
DEFERRED COMMISSIONS (Tables)
 9 Months Ended
Sep. 30, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of Impairment of Deferred Contract Costs
(in thousands)
September 30, 2023December 31, 2022
Deferred commissions (1)
$107,399 $130,195 
(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)2023202220232022
Amortization of deferred commissions (1)
$14,947 $11,597 $43,974 $39,752 
(1) Included in selling and marketing.
v3.23.3
GOODWILL AND OTHER INTANGIBLES (Tables)
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
Nine Months Ended
September 30,
(in thousands)
20232022
January 1,$81,399 $81,923 
Currency translation adjustments38 (722)
September 30,$81,437 $81,201 
Schedule of Intangibles
Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives.
September 30, 2023
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,086 $(59,661)$3,425 
Technology
2-10 years
68,103 (63,579)4,524 
Other
1-5 years
5,361 (5,361)— 
$136,550 $(128,601)$7,949 
(1) Included in other long-term assets.
December 31, 2022
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,076 $(58,623)$4,453 
Technology
2-10 years
68,056 (61,621)6,435 
Other
1-5 years
5,361 (5,361)— 
$136,493 $(125,605)$10,888 
(1) Included in other long-term assets.
Schedule of Future Estimated Intangibles Assets Amortization Future estimated intangibles assets amortization:
(in thousands)
September 30, 2023
Remainder of 2023$964 
20243,169 
20252,615 
2026874 
2027327 
$7,949 
Schedule of Amortization of Intangible Assets Amortization of intangible assets:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Cost of revenue
$622 $705 $1,949 $2,017 
Selling and marketing
343 343 1,028 1,028 
$965 $1,048 $2,977 $3,045 
v3.23.3
OTHER ASSETS AND LIABILITIES (Tables)
 9 Months Ended
Sep. 30, 2023
Other Assets and Liabilities [Abstract]  
Schedule of Other Assets and Other Liabilities
Other current assets
(in thousands)September 30, 2023December 31, 2022
Income tax receivables$19,663 $25,354 
Contract assets13,263 17,546 
Other38,512 37,488 
$71,438 $80,388 
Other long-term assets
(in thousands)September 30, 2023December 31, 2022
Deferred commissions$107,399 $130,195 
Right of use assets65,871 76,114 
Property and equipment49,481 55,056 
Venture investments19,348 13,069 
Contract assets10,732 16,470 
Intangible assets7,949 10,888 
Capped call transactions1,792 2,582 
Deferred income taxes5,046 4,795 
Restricted cash3,123 — 
Other20,066 24,820 
$290,807 $333,989 
Other current liabilities
(in thousands)September 30, 2023December 31, 2022
Operating lease liabilities$15,532 $14,976 
Dividends payable2,506 2,474 
$18,038 $17,450 
Other long-term liabilities
(in thousands)September 30, 2023December 31, 2022
Deferred revenue$2,605 $3,552 
Income taxes payable2,017 3,207 
Other9,863 8,369 
$14,485 $15,128 
v3.23.3
LEASES (Tables)
 9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
Schedule of Expense
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Fixed lease costs$4,718 $4,688 $14,979 $14,747 
Short-term lease costs660 916 2,137 2,510 
Variable lease costs2,254 905 6,414 2,395 
$7,632 $6,509 $23,530 $19,652 
Schedule of Right of Use Asset and Lease Liabilities
(in thousands)September 30, 2023December 31, 2022
Right of use assets (1)
$65,871 $76,114 
Operating lease liabilities (2)
$15,532 $14,976 
Long-term operating lease liabilities$68,874 $79,152 
(1) 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, 2023December 31, 2022
Weighted-average remaining lease term7.0 years7.5 years
Weighted-average discount rate (1)
4.0 %4.1 %
(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 Maturities of Lease Liabilities
Maturities of lease liabilities:
(in thousands)September 30, 2023
Remainder of 2023$4,775 
202417,976 
202514,870 
202610,853 
20279,808 
20289,245 
Thereafter30,054 
Total lease payments97,581 
Less: imputed interest (1)
(13,175)
$84,406 
(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 Cash Flow Lease Information
Nine Months Ended
September 30,
(in thousands)20232022
Cash paid for operating leases, net of tenant improvement allowances$14,378 $11,628 
Right of use assets recognized for new leases and amendments (non-cash)$1,782 $6,618 
v3.23.3
DEBT (Tables)
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Schedule of Carrying Value and Interest Expense Related to the Notes
Carrying value of the Notes:
(in thousands)September 30, 2023December 31, 2022
Principal$502,270 $600,000 
Unamortized issuance costs(3,517)(6,391)
Convertible senior notes, net$498,753 $593,609 

Interest expense related to the Notes:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Contractual interest expense (0.75% coupon)
$827 $1,125 $2,949 $3,375 
Amortization of issuance costs
613 724 1,988 2,163 
$1,440 $1,849 $4,937 $5,538 
Schedule of Future Payments Future payments:
September 30, 2023
(in thousands)PrincipalInterestTotal
2024$— $3,767 $3,767 
2025502,270 1,884 504,154 
$502,270 $5,651 $507,921 
Schedule of Change in Capped Call Transactions Change in capped call transactions:
Nine Months Ended
September 30,
(in thousands)20232022
January 1,$2,582 $59,964 
Settlements(341)— 
Fair value adjustment(449)(56,381)
September 30,$1,792 $3,583 
Schedule of Minimum Consolidated EBITDA
Year to Date
(in thousands)March 31, 2023June 30, 2023September 30, 2023December 31, 2023
Minimum Consolidated EBITDA (as defined in the Credit Facility)$38,862 $59,894 $95,597 $214,590 
v3.23.3
RESTRUCTURING (Tables)
 9 Months Ended
Sep. 30, 2023
Restructuring and Related Activities [Abstract]  
Schedule of Restructuring Activities and Accrued Employee Severance and Related Benefit
The Company has undertaken the following restructuring activities as it optimizes its go-to-market strategy and reassesses its office space needs:
Three months endedExpense
Employee severance and related benefits and closure of a US officeDecember 31, 2022$21,743 
Office space reduction March 31, 2023$1,241 
Employee severance and related benefitsJune 30, 2023$1,581 
Employee severance and related benefits and closure of a foreign officeSeptember 30, 2023$17,236 
Accrued employee severance and related benefits:
Change for all restructuring actions:
Nine Months Ended
September 30,
(in thousands)2023
January 1,$18,573 
Costs incurred19,921 
Cash disbursements(21,576)
Currency translation adjustments(203)
September 30,$16,715 
Note: Accrued employee severance and related benefits is included in accrued compensation and related expenses.
v3.23.3
FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Schedule of Assets and Liabilities Measured at Fair Value
Assets and liabilities measured at fair value on a recurring basis:
September 30, 2023December 31, 2022
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash equivalents$22,686 $— $— $22,686 $2,526 $— $— $2,526 
Marketable securities $— $167,286 $— $167,286 $— $152,167 $— $152,167 
Capped Call Transactions (1)
$— $1,792 $— $1,792 $— $2,582 $— $2,582 
Venture investments (1) (2)
$— $— $19,348 $19,348 $— $— $13,069 $13,069 
(1) Included in other long-term assets.
(2) Investments in privately-held companies.
Schedule of Changes in Venture Investments Changes in venture investments:
Nine Months Ended
September 30,
(in thousands)20232022
January 1,$13,069 $7,648 
New investments400 400 
Sales of investments(2,773)(3,954)
Changes in foreign exchange rates27 (675)
Changes in fair value:
included in other income (loss), net
10,886 5,989 
included in other comprehensive (loss)
(2,261)2,502 
September 30,$19,348 $11,910 
v3.23.3
REVENUE (Tables)
 9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
Schedule of Geographic Revenue Geographic revenue
Three Months Ended
September 30,		Nine Months Ended
September 30,
(Dollars in thousands)
2023202220232022
U.S.$154,741 47 %$148,200 55 %$489,645 51 %$513,197 56 %
Other Americas23,497 7 %18,546 7 %58,013 6 %80,558 9 %
United Kingdom (“U.K.”)41,622 12 %24,074 9 %112,751 12 %83,837 9 %
Europe (excluding U.K.), Middle East, and Africa 67,880 20 %46,212 17 %173,551 18 %140,586 15 %
Asia-Pacific46,903 14 %33,699 12 %124,423 13 %103,197 11 %
$334,643 100 %$270,731 100 %$958,383 100 %$921,375 100 %
Schedule of Revenue Streams
Revenue streams
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)
2023202220232022
Perpetual license$2,747 $9,223 $4,729 $18,929 
Subscription license74,342 31,112 200,066 210,245 
Revenue recognized at a point in time77,089 40,335 204,795 229,174 
Maintenance83,538 77,526 245,210 235,568 
Pega Cloud118,040 97,359 340,982 281,182 
Consulting55,976 55,511 167,396 175,451 
Revenue recognized over time257,554 230,396 753,588 692,201 
Total revenue$334,643 $270,731 $958,383 $921,375 
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Pega Cloud$118,040 $97,359 $340,982 $281,182 
Maintenance83,538 77,526 245,210 235,568 
Subscription services201,578 174,885 586,192 516,750 
Subscription license74,342 31,112 200,066 210,245 
Subscription275,920 205,997 786,258 726,995 
Consulting55,976 55,511 167,396 175,451 
Perpetual license2,747 9,223 4,729 18,929 
$334,643 $270,731 $958,383 $921,375 
Schedule of Remaining Performance Obligations
Expected future revenue from existing non-cancellable contracts:
As of September 30, 2023:
(Dollars in thousands)Subscription servicesSubscription licensePerpetual licenseConsultingTotal
MaintenancePega Cloud
1 year or less
$202,610 $391,324 $48,427 $4,567 $39,335 $686,263 54 %
1-2 years
58,610 239,787 4,356 2,696 3,662 309,111 24 %
2-3 years
28,585 121,778 8,518 — 1,100 159,981 13 %
Greater than 3 years
17,478 89,870 2,664 — — 110,012 9 %
$307,283 $842,759 $63,965 $7,263 $44,097 $1,265,367 100 %
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 %
v3.23.3
STOCK-BASED COMPENSATION (Tables)
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Schedule of Stock Based Compensation Expense
Expense
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2023202220232022
Cost of revenue
$6,410 $6,797 $22,497 $19,754 
Selling and marketing
10,401 12,933 43,410 36,524 
Research and development
7,375 7,724 24,286 22,425 
General and administrative
7,113 6,320 19,890 14,598 
$31,299 $33,774 $110,083 $93,301 
Income tax benefit
$(316)$(600)$(1,569)$(1,505)
Schedule of Stock Based Compensation Award Granted
Grants
Nine Months Ended
September 30, 2023
(in thousands)SharesTotal Fair Value
Restricted stock units
1,514 $70,962 
Non-qualified stock options
911 $19,142 
Performance stock options (1)
906 $18,265 
Common stock
13 $600 
(1) Performance stock options allow the holder to purchase a specified number of common stock shares at an exercise price equal to or greater than the shares' fair market value at the grant date. The options usually vest over two years and expire ten years from the grant date, subject to specific performance conditions.
v3.23.3
INCOME TAXES (Tables)
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Schedule of Effective Income Tax Rate
Effective income tax rate
Three Months Ended
September 30,		Nine Months Ended
September 30,
(Dollars in thousands)2023202220232022
Provision for income taxes$3,545 $11,748 $15,395 $190,239 
Effective income tax rate(26)%(100)%
v3.23.3
(LOSS) PER SHARE (Tables)
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
Schedule of Calculation of (Loss) Per Share
Calculation of (loss) per share:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share amounts)2023202220232022
Net (loss)$(7,279)$(93,520)$(74,857)$(380,195)
Weighted-average common shares outstanding83,336 81,996 82,996 81,842 
(Loss) per share, basic$(0.09)$(1.14)$(0.90)$(4.65)
Net (loss)$(7,279)$(93,520)$(74,857)$(380,195)
Weighted-average common shares outstanding, assuming dilution (1) (2) (3)
83,336 81,996 82,996 81,842 
(Loss) per share, diluted$(0.09)$(1.14)$(0.90)$(4.65)
Outstanding anti-dilutive stock options and RSUs (4)
2,255 3,019 1,652 3,589 
(1) All dilutive securities are excluded in periods of loss 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 approximately 3.7 million shares as of September 30, 2023.
(3) The Company’s Capped Call Transactions represent the equivalent of approximately 3.7 million shares of the Company’s common stock (representing the number of shares for which the Notes are convertible) as of September 30, 2023. 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 $196.44. The Capped Call Transactions are excluded from weighted-average common shares outstanding, assuming dilution, in all periods as their effect would be anti-dilutive.
(4) Outstanding stock options and RSUs that were anti-dilutive under the treasury stock method in the period were excluded from the computation of diluted (loss) per share. These awards may be dilutive in the future.
v3.23.3
MARKETABLE SECURITIES - Schedule of Marketable Securities (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Marketable Securities [Line Items]    
Amortized Cost $ 167,858 $ 154,866
Unrealized Gains 0 0
Unrealized Losses (572) (2,699)
Fair Value 167,286 152,167
Government debt    
Marketable Securities [Line Items]    
Amortized Cost 17,931 2,960
Unrealized Gains 0 0
Unrealized Losses (18) (52)
Fair Value 17,913 2,908
Corporate debt    
Marketable Securities [Line Items]    
Amortized Cost 149,927 151,906
Unrealized Gains 0 0
Unrealized Losses (554) (2,647)
Fair Value $ 149,373 $ 149,259
v3.23.3
MARKETABLE SECURITIES - Narrative (Details)
Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
Marketable debt security weighted-average remaining maturity 6 months
v3.23.3
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Schedule of Receivables (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Receivables [Abstract]    
Accounts receivable, net $ 168,795 $ 255,150
Unbilled receivables, net 199,948 213,719
Long-term unbilled receivables, net 73,795 95,806
Total receivables $ 442,538 $ 564,675
v3.23.3
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Schedule of Unbilled Receivables (Details)
$ in Thousands
Sep. 30, 2023
USD ($)
Receivables [Abstract]  
1 year or less $ 199,948
1-2 years 58,604
2-5 years 15,191
Total $ 273,743
Percentage of unbilled receivables, 1 year or less 73.00%
Percentage of unbilled receivables, 1-2 years 21.00%
Percentage of unbilled receivables, 2-5 years 6.00%
Total percentage of unbilled receivables 100.00%
v3.23.3
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE- Schedule of Unbilled Receivables by Contract Effective Date (Details)
$ in Thousands
Sep. 30, 2023
USD ($)
Receivables [Abstract]  
2023 $ 90,227
2022 92,065
2021 62,729
2020 19,820
2019 and prior 8,902
Unbilled revenue total $ 273,743
2023 33.00%
2022 34.00%
2021 23.00%
2020 7.00%
2019 and prior 3.00%
Total percentage of unbilled revenue 100.00%
v3.23.3
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Schedule of Contract Assets and Deferred Revenue (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Receivables [Abstract]    
Contract assets $ 13,263 $ 17,546
Long-term contract assets 10,732 16,470
Total contract assets 23,995 34,016
Deferred revenue 297,067 325,212
Long-term deferred revenue 2,605 3,552
Total deferred revenue 299,672 $ 328,764
Revenue recognized during the period that was included in deferred revenue $ 292,300  
v3.23.3
DEFERRED COMMISSIONS - Schedule of Impairment of Deferred Commissions (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Deferred commissions $ 107,399 $ 130,195
v3.23.3
DEFERRED COMMISSIONS - Schedule of Amortization of Deferred Commissions (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]        
Amortization of deferred commissions $ 14,947 $ 11,597 $ 43,974 $ 39,752
v3.23.3
GOODWILL AND OTHER INTANGIBLES - Schedule of Goodwill (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Goodwill [Roll Forward]    
Beginning balance $ 81,399 $ 81,923
Currency translation adjustments 38 (722)
Ending balance $ 81,437 $ 81,201
v3.23.3
GOODWILL AND OTHER INTANGIBLES - Schedule of Intangibles (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Goodwill and Other Intangible Assets [Line Items]    
Cost $ 136,550 $ 136,493
Accumulated Amortization (128,601) (125,605)
Net Book Value 7,949 10,888
Client-related    
Goodwill and Other Intangible Assets [Line Items]    
Cost 63,086 63,076
Accumulated Amortization (59,661) (58,623)
Net Book Value 3,425 4,453
Technology    
Goodwill and Other Intangible Assets [Line Items]    
Cost 68,103 68,056
Accumulated Amortization (63,579) (61,621)
Net Book Value 4,524 6,435
Other    
Goodwill and Other Intangible Assets [Line Items]    
Cost 5,361 5,361
Accumulated Amortization (5,361) (5,361)
Net Book Value $ 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
v3.23.3
GOODWILL AND OTHER INTANGIBLES - Schedule of Future Estimated Intangibles Assets Amortization (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]    
Remainder of 2023 $ 964  
2024 3,169  
2025 2,615  
2026 874  
2027 327  
Net Book Value $ 7,949 $ 10,888
v3.23.3
GOODWILL AND OTHER INTANGIBLES - Schedule of Amortization of Intangible Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Acquired Finite-Lived Intangible Assets [Line Items]        
Amortization of intangible assets $ 965 $ 1,048 $ 2,977 $ 3,045
Cost of revenue        
Acquired Finite-Lived Intangible Assets [Line Items]        
Amortization of intangible assets 622 705 1,949 2,017
Selling and marketing        
Acquired Finite-Lived Intangible Assets [Line Items]        
Amortization of intangible assets $ 343 $ 343 $ 1,028 $ 1,028
v3.23.3
OTHER ASSETS AND LIABILITIES (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Other Assets and Liabilities [Abstract]    
Income tax receivables $ 19,663 $ 25,354
Contract assets 13,263 17,546
Other 38,512 37,488
Other current assets 71,438 80,388
Deferred commissions 107,399 130,195
Right of use assets 65,871 76,114
Property and equipment 49,481 55,056
Venture investments 19,348 13,069
Contract assets 10,732 16,470
Intangible assets 7,949 10,888
Capped call transactions 1,792 2,582
Deferred income taxes 5,046 4,795
Restricted cash 3,123 0
Other 20,066 24,820
Other long-term assets 290,807 333,989
Operating lease liabilities 15,532 14,976
Dividends payable 2,506 2,474
Other current liabilities 18,038 17,450
Deferred revenue 2,605 3,552
Income taxes payable 2,017 3,207
Other 9,863 8,369
Other long-term liabilities $ 14,485 $ 15,128
v3.23.3
LEASES - Schedule of Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Leases [Abstract]        
Fixed lease costs $ 4,718 $ 4,688 $ 14,979 $ 14,747
Short-term lease costs 660 916 2,137 2,510
Variable lease costs 2,254 905 6,414 2,395
Operating lease expenses $ 7,632 $ 6,509 $ 23,530 $ 19,652
v3.23.3
LEASES - Schedule of Right of Use Asset and Lease Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Leases [Abstract]    
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Other long-term assets Other long-term assets
Right of use assets $ 65,871 $ 76,114
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Other current liabilities Other current liabilities
Operating lease liabilities $ 15,532 $ 14,976
Long-term operating lease liabilities $ 68,874 $ 79,152
v3.23.3
LEASES - Schedule of Weighted Average and Discount Rate (Details)
Sep. 30, 2023
Dec. 31, 2022
Leases [Abstract]    
Weighted-average remaining lease term 7 years 7 years 6 months
Weighted-average discount rate 4.00% 4.10%
v3.23.3
LEASES - Schedule of Maturities of Lease Liabilities (Details)
$ in Thousands
Sep. 30, 2023
USD ($)
Leases [Abstract]  
Remainder of 2023 $ 4,775
2024 17,976
2025 14,870
2026 10,853
2027 9,808
2028 9,245
Thereafter 30,054
Total lease payments 97,581
Less: imputed interest (13,175)
Total lease liability $ 84,406
v3.23.3
LEASES - Schedule of Cash Flow Lease Information (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Leases [Abstract]    
Cash paid for operating leases, net of tenant improvement allowances $ 14,378 $ 11,628
Right of use assets recognized for new leases and amendments (non-cash) $ 1,782 $ 6,618
v3.23.3
DEBT - Convertible senior notes and capped calls (Details)
 1 Months Ended 3 Months Ended 9 Months Ended
Feb. 29, 2020
USD ($)
day
$ / shares
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
USD ($)
Sep. 30, 2022
Debt Instrument [Line Items]          
Gain (loss) on repurchase of convertible debt | $       $ 7,900,000  
Principal amount repurchased | $       $ 97,700,000  
Redemption percentage 100.00%        
On or After March 1, 2023          
Debt Instrument [Line Items]          
Redemption threshold trading days 40        
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        
Average interest rate       1.20% 1.20%
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        
v3.23.3
DEBT - Schedule of Carrying value of the Notes (Details) - Convertible debt - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Debt Instrument [Line Items]    
Principal $ 502,270 $ 600,000
Unamortized issuance costs (3,517) (6,391)
Convertible senior notes, net $ 498,753 $ 593,609
v3.23.3
DEBT - Schedule of Interest Expense Related to the Notes (Details) - Convertible debt - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended
Feb. 29, 2020
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Debt Instrument [Line Items]          
Interest rate 0.75% 0.75% 0.75% 0.75% 0.75%
Contractual interest expense (0.75% coupon)   $ 827 $ 1,125 $ 2,949 $ 3,375
Amortization of issuance costs   613 724 1,988 2,163
Interest expense   $ 1,440 $ 1,849 $ 4,937 $ 5,538
v3.23.3
DEBT - Schedule of Future Payments (Details) - Convertible debt - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Principal    
2024 $ 0  
2025 502,270  
Principal, total due 502,270 $ 600,000
Interest    
2024 3,767  
2025 1,884  
Interest expense, total due 5,651  
Total    
2024 3,767  
2025 504,154  
Principal and interest, total due $ 507,921  
v3.23.3
DEBT - Capped call transactions (Details)
shares in Millions, $ in Millions
 1 Months Ended 9 Months Ended
Feb. 29, 2020
$ / derivative
shares
Sep. 30, 2023
USD ($)
$ / derivative
shares
Debt Disclosure [Abstract]    
Number of shares issuable upon conversion (in shares) 4.4 0.7
Proceeds from settlement of capped calls transactions | $   $ 0.3
Number of shares issuable upon conversion (in shares)   3.7
Cap price (in dollars per share) | $ / derivative 196.44 196.44
v3.23.3
DEBT - Schedule of Change in Capped Call Transactions (Details) - Capped Call Transactions - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Beginning balance $ 2,582 $ 59,964
Settlements (341) 0
Fair value adjustment (449) (56,381)
Ending balance $ 1,792 $ 3,583
v3.23.3
DEBT - Credit Facility (Details)
 9 Months Ended
Nov. 30, 2019
USD ($)
Sep. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
Debt Instrument [Line Items]      
Outstanding letters of credit   $ 27,300,000 $ 27,300,000
Remaining borrowing capacity   $ 0 $ 0
PNC Bank, National Association | Next Fiscal Year      
Debt Instrument [Line Items]      
Minimum consolidated coverage ratio   3.5  
Credit Agreement | PNC Bank, National Association      
Debt Instrument [Line Items]      
Minimum required cash and investments held   $ 200,000,000  
Credit Agreement | PNC Bank, National Association | Next Fiscal Year      
Debt Instrument [Line Items]      
Maximum consolidated net leverage ratio   3.5  
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    
v3.23.3
DEBT - Schedule of Minimum Consolidated EBITDA (Details) - Revolving Credit Facility - Credit Agreement - PNC Bank, National Association - Line of Credit
$ in Thousands
 9 Months Ended
Sep. 30, 2023
USD ($)
First Fiscal Quarter  
Debt Instrument [Line Items]  
Minimum Consolidated EBITDA (as defined in the Credit Facility) $ 38,862
Second Fiscal Quarter  
Debt Instrument [Line Items]  
Minimum Consolidated EBITDA (as defined in the Credit Facility) 59,894
Third Fiscal Quarter  
Debt Instrument [Line Items]  
Minimum Consolidated EBITDA (as defined in the Credit Facility) 95,597
Fourth Fiscal Quarter  
Debt Instrument [Line Items]  
Minimum Consolidated EBITDA (as defined in the Credit Facility) $ 214,590
v3.23.3
RESTRUCTURING - Schedule of Restructuring Activities (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Restructuring Cost and Reserve [Line Items]              
Expense $ 17,822       $ 0 $ 21,450 $ 0
Employee Severance              
Restructuring Cost and Reserve [Line Items]              
Expense $ 17,236 $ 1,581   $ 21,743      
Office space reduction              
Restructuring Cost and Reserve [Line Items]              
Expense     $ 1,241        
v3.23.3
RESTRUCTURING - Schedule of Accrued Employee Severance and Related Benefit (Details)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
USD ($)
Restructuring Reserve [Roll Forward]  
Restructuring Reserve, Beginning Balance $ 18,573
Costs incurred 19,921
Cash disbursements (21,576)
Currency translation adjustments (203)
Restructuring Reserve, Ending Balance $ 16,715
v3.23.3
FAIR VALUE MEASUREMENTS - Schedule of Assets and Liabilities Measured at Fair Value (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Fair Value Assets    
Marketable securities $ 167,286 $ 152,167
Capped call transactions 1,792 2,582
Cash equivalents    
Fair Value Assets    
Cash equivalents 22,686 2,526
Venture investments    
Fair Value Assets    
Venture investments 19,348 13,069
Level 1    
Fair Value Assets    
Marketable securities 0 0
Capped call transactions 0 0
Level 1 | Cash equivalents    
Fair Value Assets    
Cash equivalents 22,686 2,526
Level 1 | Venture investments    
Fair Value Assets    
Venture investments 0 0
Level 2    
Fair Value Assets    
Marketable securities 167,286 152,167
Capped call transactions 1,792 2,582
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 $ 19,348 $ 13,069
v3.23.3
FAIR VALUE MEASUREMENTS - Schedule of Changes in Venture Investments (Details) - Privately Held Investment - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Beginning balance $ 13,069 $ 7,648
New investments 400 400
Sales of investments (2,773) (3,954)
Changes in foreign exchange rates 27 (675)
Changes in fair value:    
Changes in fair value included in other income (loss), net 10,886 5,989
Changes in fair value included in other comprehensive (loss) (2,261) 2,502
Ending balance $ 19,348 $ 11,910
v3.23.3
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Fair Value Disclosures [Abstract]    
Convertible debt fair value $ 460.3 $ 521.1
Principal amount repurchased $ 97.7  
v3.23.3
REVENUE - Schedule of Geographic Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Disaggregation of Revenue [Line Items]        
Revenue $ 334,643 $ 270,731 $ 958,383 $ 921,375
Percent of total revenue 100.00% 100.00% 100.00% 100.00%
U.S.        
Disaggregation of Revenue [Line Items]        
Revenue $ 154,741 $ 148,200 $ 489,645 $ 513,197
Other Americas        
Disaggregation of Revenue [Line Items]        
Revenue 23,497 18,546 58,013 80,558
United Kingdom (“U.K.”)        
Disaggregation of Revenue [Line Items]        
Revenue 41,622 24,074 112,751 83,837
Europe (excluding U.K.), Middle East, and Africa        
Disaggregation of Revenue [Line Items]        
Revenue 67,880 46,212 173,551 140,586
Asia-Pacific        
Disaggregation of Revenue [Line Items]        
Revenue $ 46,903 $ 33,699 $ 124,423 $ 103,197
Total Revenue | U.S. | Geographic Concentration Risk        
Disaggregation of Revenue [Line Items]        
Percent of total revenue 47.00% 55.00% 51.00% 56.00%
Total Revenue | Other Americas | Geographic Concentration Risk        
Disaggregation of Revenue [Line Items]        
Percent of total revenue 7.00% 7.00% 6.00% 9.00%
Total Revenue | United Kingdom (“U.K.”) | Geographic Concentration Risk        
Disaggregation of Revenue [Line Items]        
Percent of total revenue 12.00% 9.00% 12.00% 9.00%
Total Revenue | Europe (excluding U.K.), Middle East, and Africa | Geographic Concentration Risk        
Disaggregation of Revenue [Line Items]        
Percent of total revenue 20.00% 17.00% 18.00% 15.00%
Total Revenue | Asia-Pacific | Geographic Concentration Risk        
Disaggregation of Revenue [Line Items]        
Percent of total revenue 14.00% 12.00% 13.00% 11.00%
v3.23.3
REVENUE - Schedule of Revenue Streams (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Disaggregation of Revenue [Line Items]        
Revenue $ 334,643 $ 270,731 $ 958,383 $ 921,375
Perpetual license        
Disaggregation of Revenue [Line Items]        
Revenue 2,747 9,223 4,729 18,929
Subscription license        
Disaggregation of Revenue [Line Items]        
Revenue 74,342 31,112 200,066 210,245
Consulting        
Disaggregation of Revenue [Line Items]        
Revenue 55,976 55,511 167,396 175,451
Subscription services        
Disaggregation of Revenue [Line Items]        
Revenue 201,578 174,885 586,192 516,750
Subscription        
Disaggregation of Revenue [Line Items]        
Revenue 275,920 205,997 786,258 726,995
Revenue recognized at a point in time        
Disaggregation of Revenue [Line Items]        
Revenue 77,089 40,335 204,795 229,174
Revenue recognized at a point in time | Perpetual license        
Disaggregation of Revenue [Line Items]        
Revenue 2,747 9,223 4,729 18,929
Revenue recognized at a point in time | Subscription license        
Disaggregation of Revenue [Line Items]        
Revenue 74,342 31,112 200,066 210,245
Revenue recognized over time        
Disaggregation of Revenue [Line Items]        
Revenue 257,554 230,396 753,588 692,201
Revenue recognized over time | Maintenance        
Disaggregation of Revenue [Line Items]        
Revenue 83,538 77,526 245,210 235,568
Revenue recognized over time | Pega Cloud        
Disaggregation of Revenue [Line Items]        
Revenue 118,040 97,359 340,982 281,182
Revenue recognized over time | Consulting        
Disaggregation of Revenue [Line Items]        
Revenue $ 55,976 $ 55,511 $ 167,396 $ 175,451
v3.23.3
REVENUE - Schedule of Remaining Performance Obligations (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Sep. 30, 2022
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 1,265,367 $ 1,147,932
Revenue remaining performance obligation (in percent) 100.00% 100.00%
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
Revenue remaining performance obligation (in percent)   53.00%
Expected timing of satisfaction   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 $ 686,263 $ 283,762
Revenue remaining performance obligation (in percent) 54.00% 25.00%
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 $ 309,111 $ 145,232
Revenue remaining performance obligation (in percent) 24.00% 13.00%
Expected timing of satisfaction 1 year 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 $ 159,981 $ 101,247
Revenue remaining performance obligation (in percent) 13.00% 9.00%
Expected timing of satisfaction 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 110,012  
Revenue remaining performance obligation (in percent) 9.00%  
Expected timing of satisfaction  
Maintenance    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 307,283 $ 286,880
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
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 202,610 55,141
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 58,610 24,496
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 28,585 16,198
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 17,478  
Pega Cloud    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 842,759 739,638
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
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 391,324 213,304
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 239,787 115,416
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 121,778 82,807
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 89,870  
Subscription license    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 63,965 77,020
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
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 48,427 4,113
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 4,356 1,420
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 8,518 1,734
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 2,664  
Perpetual license    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 7,263 7,571
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
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 4,567 4,505
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 2,696 2,252
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 0
Perpetual license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 0  
Consulting    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 44,097 36,823
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
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 39,335 6,699
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 3,662 1,648
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation 1,100 $ 508
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-10-01    
Disaggregation of Revenue [Line Items]    
Revenue remaining performance obligation $ 0  
v3.23.3
STOCK-BASED COMPENSATION - Schedule of Stock Based Compensation Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Total stock-based compensation before tax $ 31,299 $ 33,774 $ 110,083 $ 93,301
Income tax benefit (316) (600) (1,569) (1,505)
Cost of revenue        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Total stock-based compensation before tax 6,410 6,797 22,497 19,754
Selling and marketing        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Total stock-based compensation before tax 10,401 12,933 43,410 36,524
Research and development        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Total stock-based compensation before tax 7,375 7,724 24,286 22,425
General and administrative        
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]        
Total stock-based compensation before tax $ 7,113 $ 6,320 $ 19,890 $ 14,598
v3.23.3
STOCK-BASED COMPENSATION - Narrative (Details)
$ in Millions
 9 Months Ended
Sep. 30, 2023
USD ($)
Share-Based Payment Arrangement [Abstract]  
Unrecognized stock-based compensation expense $ 137.5
Weighted-average period of recognition of unrecognized stock-based compensation expense 1 year 9 months 18 days
v3.23.3
STOCK-BASED COMPENSATION - Schedule of Stock Based Compensation Award Granted (Details)
shares in Thousands, $ in Thousands
 9 Months Ended
Sep. 30, 2023
USD ($)
shares
Restricted stock units  
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]  
Restricted stock units (in shares) | shares 1,514
Total Fair Value | $ $ 70,962
Non-qualified stock options  
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]  
Non-qualified stock options (in shares) | shares 911
Total Fair Value | $ $ 19,142
Performance stock options  
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]  
Restricted stock units (in shares) | shares 906
Total Fair Value | $ $ 18,265
Vesting period 2 years
Expiration period 10 years
Common Stock  
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]  
Restricted stock units (in shares) | shares 13
Total Fair Value | $ $ 600
v3.23.3
INCOME TAXES (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Tax Disclosure [Abstract]        
Provision for income taxes $ 3,545 $ 11,748 $ 15,395 $ 190,239
Effective income tax rate (26.00%) (100.00%)
v3.23.3
(LOSS) PER SHARE (Details)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
USD ($)
$ / shares
$ / derivative
shares
Jun. 30, 2023
USD ($)
Mar. 31, 2023
USD ($)
Sep. 30, 2022
USD ($)
$ / shares
shares
Jun. 30, 2022
USD ($)
Mar. 31, 2022
USD ($)
Sep. 30, 2023
USD ($)
$ / shares
$ / derivative
shares
Sep. 30, 2022
USD ($)
$ / shares
shares
Feb. 29, 2020
$ / derivative
Earnings Per Share [Abstract]                  
Net (loss) | $ $ (7,279) $ (46,804) $ (20,774) $ (93,520) $ (286,296) $ (379) $ (74,857) $ (380,195)  
Weighted-average common shares outstanding 83,336     81,996     82,996 81,842  
(Loss) per share, basic (in dollars per share) | $ / shares $ (0.09)     $ (1.14)     $ (0.90) $ (4.65)  
Weighted-average common shares outstanding, assuming dilution 83,336     81,996     82,996 81,842  
(Loss) per share, diluted (in dollars per share) | $ / shares $ (0.09)     $ (1.14)     $ (0.90) $ (4.65)  
Outstanding anti-dilutive stock options and RSUs 2,255     3,019     1,652 3,589  
Dilutive effect of conversion of debt securities             3,700    
Number of shares issuable upon conversion 3,700           3,700    
Cap price (in dollars per share) | $ / derivative 196.44           196.44   196.44
v3.23.3
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)
Sep. 15, 2022
May 09, 2022
Sep. 30, 2023
Dec. 31, 2022
Sep. 29, 2022
Loss Contingencies [Line Items]          
Outstanding letters of credit     $ 27,300,000 $ 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