PEGASYSTEMS INC, 10-K filed on 10 Feb 26
 | XBRL Documents
v3.25.4
Cover - USD ($)
$ in Billions
 12 Months Ended
Dec. 31, 2025
Jan. 30, 2026
Jun. 30, 2025
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2025    
Current Fiscal Year End Date --12-31    
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 225 Wyman Street    
Entity Address, City or Town Waltham    
Entity Address, State or Province MA    
Entity Address, Postal Zip Code 02451    
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 Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
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    
ICFR Auditor Attestation Flag true    
Document Financial Statement Error Correction Flag false    
Entity Shell Company false    
Entity Public Float     $ 5
Entity Common Stock, Shares Outstanding   169,043,716  
Documents Incorporated by Reference
Portions of the Registrant’s definitive proxy statement related to its 2026 annual meeting of stockholders to be filed subsequently are incorporated by reference into Part III of this report.
    
Amendment Flag false    
Document Fiscal Year Focus 2025    
Document Fiscal Period Focus FY    
Entity Central Index Key 0001013857    
v3.25.4
AUDIT INFORMATION
 12 Months Ended
Dec. 31, 2025
Audit Information [Abstract]  
Auditor firm ID 34
Auditor name Deloitte & Touche LLP
Auditor location Boston, Massachusetts
v3.25.4
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Current assets:    
Cash and cash equivalents $ 212,447 $ 337,103
Marketable securities 213,352 402,870
Total cash, cash equivalents, and marketable securities 425,799 739,973
Accounts receivable, net 264,713 305,468
Unbilled receivables, net 166,478 173,085
Other current assets 121,305 115,178
Total current assets 978,295 1,333,704
Long-term unbilled receivables, net 102,544 61,407
Goodwill 81,506 81,113
Other long-term assets 469,499 292,049
Total assets 1,631,844 1,768,273
Current liabilities:    
Accounts payable 12,924 6,226
Accrued expenses 44,847 31,544
Accrued compensation and related expenses 148,797 138,042
Deferred revenue 509,275 423,910
Convertible senior notes, net 0 467,470
Other current liabilities 21,935 18,866
Total current liabilities 737,778 1,086,058
Long-term operating lease liabilities 60,825 67,647
Other long-term liabilities 45,860 29,088
Total liabilities 844,463 1,182,793
Commitments and contingencies (Note 20)
Stockholders’ equity:    
Preferred stock, $0.01 par value, 1,000 shares authorized; none issued 0 0
Common stock, $0.01 par value, 400,000 shares authorized; 170,347 and 172,224 shares issued and outstanding as of December 31, 2025 and 2024, respectively 1,703 1,722
Additional paid-in capital 330,926 526,102
Retained earnings 463,389 87,901
Accumulated other comprehensive (loss)    
Net unrealized gain on available-for-sale securities, net of tax 127 230
Foreign currency translation adjustments (8,764) (30,475)
Total stockholders’ equity 787,381 585,480
Total liabilities and stockholders’ equity $ 1,631,844 $ 1,768,273
v3.25.4
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2025
Jun. 20, 2025
Feb. 12, 2025
Feb. 11, 2025
Dec. 31, 2024
Statement of Financial Position [Abstract]          
Preferred stock, par value (in dollars per share) $ 0.01       $ 0.01
Preferred stock, shares authorized (in shares) 1,000,000       1,000,000
Preferred stock, shares issued (in shares) 0       0
Common stock, par value (in dollars per share) $ 0.01 $ 0.01     $ 0.01
Common stock, shares authorized (in shares) 400,000,000   400,000,000 200,000,000 400,000,000
Common stock, shares issued (in shares) 170,347,000       172,224,000
Common stock, shares outstanding (in shares) 170,347,000       172,224,000
v3.25.4
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Revenue      
Total revenue $ 1,745,812 $ 1,497,180 $ 1,432,616
Cost of revenue      
Total cost of revenue 421,382 390,665 378,483
Gross profit 1,324,430 1,106,515 1,054,133
Operating expenses      
Selling and marketing 578,637 534,780 559,177
Research and development 312,681 298,074 295,512
General and administrative 148,722 112,848 96,743
Litigation settlement, net of recoveries 9,750 32,403 0
Restructuring 11,540 4,528 21,747
Total operating expenses 1,061,330 982,633 973,179
Income from operations 263,100 123,882 80,954
Foreign currency transaction (loss) (14,890) (912) (5,242)
Interest income 13,641 25,779 9,259
Interest expense (1,285) (6,835) (6,876)
(Loss) on capped call transactions (223) (663) (1,348)
Other income, net 20,284 1,385 18,693
Income before (benefit from) provision for income taxes 280,627 142,636 95,440
(Benefit from) provision for income taxes (112,810) 43,447 27,632
Net income $ 393,437 $ 99,189 $ 67,808
Earnings per share      
Basic (in dollars per share) $ 2.30 $ 0.58 $ 0.41
Diluted (in dollars per share) $ 2.13 $ 0.55 $ 0.37
Weighted-average number of common shares outstanding      
Basic (in shares) 170,782 170,530 166,324
Diluted (in shares) 184,790 179,268 169,828
Subscription services      
Revenue      
Total revenue $ 1,010,495 $ 882,038 $ 793,184
Cost of revenue      
Total cost of revenue 169,247 149,918 144,250
Subscription license      
Revenue      
Total revenue 507,368 401,869 417,726
Cost of revenue      
Total cost of revenue 1,382 1,905 2,673
Consulting      
Revenue      
Total revenue 227,949 213,273 221,706
Cost of revenue      
Total cost of revenue $ 250,753 $ 238,842 $ 231,560
v3.25.4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Statement of Comprehensive Income [Abstract]      
Net income $ 393,437 $ 99,189 $ 67,808
Other comprehensive income (loss), net of tax      
Unrealized (loss) gain on available-for-sale securities (103) (439) 152
Foreign currency translation adjustments 21,711 (11,927) 5,039
Total other comprehensive income (loss), net of tax 21,608 (12,366) 5,191
Comprehensive income $ 415,045 $ 86,823 $ 72,999
v3.25.4
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, 2022   164,872      
Balance, beginning of period at Dec. 31, 2022 $ 130,843 $ 1,648 $ 228,778 $ (76,513) $ (23,070)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock for stock compensation plans (in shares)   2,424      
Issuance of common stock for stock compensation plans 8,905 $ 24 8,881    
Issuance of common stock under the employee stock purchase plan (in shares)   384      
Issuance of common stock under the employee stock purchase plan 7,744 $ 4 7,740    
Stock-based compensation 143,352   143,352    
Cash dividends declared (10,005)   (10,005)    
Other Comprehensive income (loss) 5,191       5,191
Net income 67,808     67,808  
Balance, end of period (in shares) at Dec. 31, 2023   167,680      
Balance, end of period at Dec. 31, 2023 353,838 $ 1,676 378,746 (8,705) (17,879)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Repurchase of common stock (in shares)   (1,650)      
Repurchase of common stock (69,557) $ (16) (69,541)    
Issuance of common stock for stock compensation plans (in shares)   5,970      
Issuance of common stock for stock compensation plans 75,216 $ 60 75,156    
Issuance of common stock under the employee stock purchase plan (in shares)   224      
Issuance of common stock under the employee stock purchase plan 6,709 $ 2 6,707    
Stock-based compensation 142,718   142,718    
Cash dividends declared (10,267)   (7,684) (2,583)  
Other Comprehensive income (loss) (12,366)       (12,366)
Net income $ 99,189     99,189  
Balance, end of period (in shares) at Dec. 31, 2024 172,224 172,224      
Balance, end of period at Dec. 31, 2024 $ 585,480 $ 1,722 526,102 87,901 (30,245)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Repurchase of common stock (in shares)   (10,659)      
Repurchase of common stock (498,779) $ (107) (498,672)    
Issuance of common stock for stock compensation plans (in shares)   8,604      
Issuance of common stock for stock compensation plans 140,880 $ 86 140,794    
Issuance of common stock under the employee stock purchase plan (in shares)   178      
Issuance of common stock under the employee stock purchase plan 7,465 $ 2 7,463    
Stock-based compensation 155,239   155,239    
Cash dividends declared (17,949)     (17,949)  
Other Comprehensive income (loss) 21,608       21,608
Net income $ 393,437     393,437  
Balance, end of period (in shares) at Dec. 31, 2025 170,347 170,347      
Balance, end of period at Dec. 31, 2025 $ 787,381 $ 1,703 $ 330,926 $ 463,389 $ (8,637)
v3.25.4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Statement of Stockholders' Equity [Abstract]      
Cash dividends declared (in dollars per share) $ 0.105 $ 0.06 $ 0.06
v3.25.4
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Operating activities      
Net income $ 393,437 $ 99,189 $ 67,808
Adjustments to reconcile net income to cash provided by operating activities      
Stock-based compensation 155,239 142,718 143,352
Amortization of deferred commissions 68,573 62,269 59,461
Amortization of intangible assets and depreciation 13,699 17,585 18,746
Amortization of right-of-use lease assets 12,213 17,842 15,912
Foreign currency transaction loss 14,890 912 5,242
Loss on capped call transactions 223 663 1,348
Deferred income taxes (170,813) (1,544) 363
(Accretion) of investments (2,888) (15,263) (3,302)
(Gain) on investments (20,473) (869) (10,841)
(Gain) on repurchases of convertible senior notes 0 (459) (7,855)
Other non-cash 1,699 3,728 5,557
Change in operating assets and liabilities:      
Accounts receivable, unbilled receivables, and contract assets 19,191 79,034 (57,602)
Other current assets (1,253) (50,005) 11,360
Other current liabilities 24,635 (7,115) (8,777)
Deferred revenue 76,707 48,360 45,123
Deferred commissions (64,803) (57,628) (44,529)
Other long-term assets and liabilities (15,049) 6,509 (23,581)
Cash provided by operating activities 505,227 345,926 217,785
Investing activities      
Purchases of investments (348,642) (559,365) (287,287)
Proceeds from maturities and called investments 378,951 364,501 242,593
Sales of investments 181,441 0 10,725
Investment in property and equipment (14,504) (7,712) (16,781)
Cash provided by (used in) investing activities 197,246 (202,576) (50,750)
Financing activities      
Repurchases of convertible senior notes (467,864) (33,890) (88,989)
Dividend payments to stockholders (15,422) (10,199) (9,964)
Proceeds from employee stock purchase plan 7,465 6,709 7,744
Proceeds from stock option exercises 158,421 80,651 10,821
Common stock repurchases for tax withholdings for net settlement of equity awards (17,541) (5,435) (1,916)
Common stock repurchases under stock repurchase program (499,689) (68,057) 0
Other 0 7 341
Cash (used in) financing activities (834,630) (30,214) (81,963)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 6,988 (4,434) 2,701
Net (decrease) increase in cash, cash equivalents and restricted cash (125,169) 108,702 87,773
Cash, cash equivalents, and restricted cash, beginning of period 341,529 232,827 145,054
Cash, cash equivalents, and restricted cash, end of period 216,360 341,529 232,827
Cash and cash equivalents 212,447 337,103 229,902
Restricted cash included in other current assets 1,577 98 0
Restricted cash included in other long-term assets 2,336 4,328 2,925
Total cash, cash equivalents and restricted cash 216,360 341,529 232,827
Supplemental disclosures      
Interest paid on convertible notes 1,754 3,810 4,134
Income taxes paid, net 21,630 82,317 11,664
Non-cash investing and financing activity:      
Investment in property and equipment included in accounts payable and accrued liabilities 1,657 1,723 66
Dividends payable $ 5,110 $ 2,583 $ 2,515
v3.25.4
BASIS OF PRESENTATION
 12 Months Ended
Dec. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BASIS OF PRESENTATION
1. BASIS OF PRESENTATION
Business
The Company develops, markets, licenses, hosts, and supports enterprise software that helps organizations optimize decisions and processes in real-time. The Company’s platform for enterprise AI decisioning and workflow automation enables clients to personalize customer experiences, automate customer service, streamline operations, business processes, and workflows, and transform legacy systems. The Company provides consulting, training, support, and hosting services to facilitate the use of its software.
Management estimates and reporting
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates. Accounts with reported amounts based on significant estimates and judgments include, but are not limited to, revenue, unbilled receivables, deferred revenue, deferred income taxes, deferred commissions, income taxes payable, convertible senior notes, and goodwill.
Principles of consolidation
The Company’s consolidated financial statements reflect Pegasystems Inc. and subsidiaries in which the Company holds a controlling financial interest. All intercompany accounts and transactions were eliminated in consolidation.
Reclassifications
In the fourth quarter of 2025, we combined revenue and cost of revenue from Perpetual license into Subscription license within our Consolidated Statements of Operations and notes. Prior period amounts related to the components of net deferred tax assets and liabilities, revenue, and cost of revenue reported in our consolidated financial statements and notes have been reclassified to conform to the current year presentation. Such reclassifications did not affect total revenues, income from operations, or net income.
Stock Split
On February 12, 2025, the Company’s Board of Directors approved a Stock Split of the Company’s Common Stock, to be effected as a stock dividend and a proportionate increase in the number of authorized shares of Common Stock from 200,000,000 to 400,000,000. The Authorized Share Increase was subject to shareholder approval of an amendment to the Company’s Restated Articles of Organization. The requisite shareholder approval was obtained on June 17, 2025. On June 20, 2025, each shareholder of record at the close of business on the Record Date received one additional share of Common Stock for each share of Common Stock held on the Record Date. All share, per share, and equity award information in the Company’s consolidated financial statements and in the accompanying notes for all periods presented have been recast to reflect the effect of the Stock Split. The shares of Common Stock retained a par value of $0.01 per share. Accordingly, an amount equal to the par value of the increased shares resulting from the Stock Split was reclassified from additional paid-in capital to common stock.
v3.25.4
SIGNIFICANT ACCOUNTING POLICIES
 12 Months Ended
Dec. 31, 2025
Accounting Policies [Abstract]  
SIGNIFICANT ACCOUNTING POLICIES
2. SIGNIFICANT ACCOUNTING POLICIES
Revenue
The Company’s revenue is derived from:
•Subscription services, composed of revenue from Pega Cloud and maintenance. Pega Cloud is the Company’s hosted Pega Platform and software applications. Maintenance revenue is earned from providing client support, software upgrades, and bug fixes or patches.
•Subscription license, composed of revenue from term license arrangements for the Company’s Pega Platform and software applications. Term licenses represent functional intellectual property and are delivered separately from maintenance and services.
•Perpetual license, composed of revenue from perpetual license arrangements for the Company’s Pega Platform and software applications. Perpetual licenses represent functional intellectual property and are delivered separately from maintenance and services.
•Consulting, primarily related to new software license implementations, training, and reimbursable costs.
Performance obligations
The Company’s software license and Pega Cloud arrangements often contain multiple performance obligations. If a contract contains multiple performance obligations, the Company accounts for each distinct performance obligation separately. The transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. Any discounts or expected potential future price concessions are considered when determining the total transaction price. The Company’s policy is to exclude sales and similar taxes collected from clients from the determination of transaction price.
The Company’s typical performance obligations are:
Performance obligation
How stand-alone selling price is typically determined
When performance obligation is typically satisfied
When payment is typically due
Income statement line item
Pega CloudResidual approachRatably over the term of the service (over time)Annually, or more frequently, over the term of the service
Subscription services
Term licenseResidual approach
Upon transfer of control to the client, defined as when the client can use and benefit from the license (point in time)
Annually, or more frequently, over the term of the license
Subscription license
Maintenance
Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1)
Ratably over the term of the maintenance (over time)Annually, or more frequently, over the term of the maintenance
Subscription services
Perpetual licenseResidual approach
Upon transfer of control to the client, defined as when the client can use and benefit from the license (point in time)
Effective date of the license
Subscription license
Consulting
- time and materials
Observable hourly rate for time and materials-based services in similar geographies
Based on hours incurred to date (over time)
Monthly
Consulting
Consulting
- fixed price
Observable hourly rate for time and materials-based services in similar geographies multiplied by estimated hours for the project
Based on hours incurred as a percentage of total estimated hours (over time)
As contract milestones are achieved
Consulting
(1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client.
The Company utilizes the residual approach for software license and Pega Cloud performance obligations since the selling price is highly variable and the stand-alone selling price is not discernible from past transactions or other observable evidence. Periodically, the Company reevaluates whether the residual approach remains appropriate. As required, the Company evaluates its residual approach estimate compared to all available observable data before concluding the estimate represents its stand-alone selling price.
If the contract grants the client the option to acquire additional products or services, the Company assesses whether the option represents a material right to the client that the client would not receive without entering into that contract. Discounts on options to purchase additional products and services greater than discounts available to similar clients are accounted for as an additional performance obligation.
During most of each client contract term, the amount invoiced is generally less than the amount of revenue recognized to date, primarily because we transfer control of the performance obligation related to the software license at the inception of the contract term. A significant portion of the total contract consideration is typically allocated to the license performance obligation. Therefore, the Company’s contracts often result in the recording of unbilled receivables and contract assets throughout most of the contract term. The Company records an unbilled receivable or contract asset when revenue recognized on a contract exceeds the billings. The Company recognizes an impairment on receivables and contract assets if, after contract inception, it becomes probable that payment is not collectible. The Company reviews receivables and contract assets on an individual basis for impairment.
Variable consideration
The Company’s arrangements can include variable fees, such as the option to purchase additional usage of a previously delivered software license. The Company may also provide pricing concessions to clients, a business practice that gives rise to variable fees. For variable fees arising from the client’s acquisition of additional usage of a previously delivered software license, the Company applies the sales and usage-based royalties guidance related to a license of intellectual property and recognizes the revenue in the period the underlying sale or usage occurs. The Company includes variable fees in the determination of total transaction price if it is not probable that a significant future reversal of revenue will occur. The Company uses the expected value or most likely value amount, whichever is more appropriate for specific circumstances, to estimate variable consideration, and the estimates are based on the level of historical price concessions offered to clients. The variable consideration related to pricing concessions and other forms of variable consideration, including usage-based fees, have not been material to the Company’s consolidated financial statements.
Significant financing components
The Company generally does not intend to provide financing to its clients, as financing arrangements are not contemplated as part of the negotiated terms of contracts between the Company and its clients. Although there may be an intervening period between the delivery of the license and the payment, typically in term license arrangements, the purpose of that timing difference is to align the client’s payment with the timing of the use of the software license or service.
In certain circumstances, however, there are instances where revenue recognition timing differs from the timing of payment due to extended payment terms or fees that are non-proportional to the associated usage of software licenses. In these instances, the Company evaluates whether a significant financing component exists. This evaluation includes determining the difference between the consideration the client would have paid when the performance obligation was satisfied and the amount of consideration paid. Contracts that include a significant financing component are adjusted for the time value of money at the rate inherent in the contract, the client’s borrowing rate, or the Company’s incremental borrowing rate, depending upon the recipient of the financing.
During 2025, 2024, and 2023, significant financing components were not material.
Contract modifications
The Company assesses contract modifications to determine:
•if the additional products and services are distinct from the products and services in the original arrangement; and
•if the amount of consideration expected for the added products and services reflects the stand-alone selling price of those products and services.
A contract modification meeting both criteria is accounted for as a separate contract. If a contract modification does not meet both criteria, it is accounted for either:
•on a prospective basis as a termination of the existing contract and the creation of a new contract; or
•on a cumulative catch-up basis.
Deferred commissions
The Company recognizes an asset for the incremental costs of obtaining a client contract, primarily related to sales commissions. The Company expects to benefit from those costs for more than one year. Commissions earned upon the execution of initial contracts are allocated to each performance obligation within the contract and amortized according to the transfer of underlying goods and services within those contracts and expected renewals. The expected benefit period is determined based on the length of the client contracts, client attrition rates, the underlying technology lifecycle, and the competitive marketplace’s influence on the products and services sold. Deferred costs allocated to maintenance and deferred costs for Pega Cloud arrangements are amortized over an average expected benefit period of 4.5 years. Deferred costs allocated to software licenses, and any expected renewals of term software licenses within the 4.5 years expected benefit period, are amortized at the point in time control of the software license is transferred. Deferred costs allocated to consulting are amortized over a period consistent with the pattern of transfer of control for the related services. Commissions earned on contract amendments and renewals are allocated to each performance obligation within the contract and amortized over the contractual term.
Financial instruments
The principal financial instruments held by the Company consist of cash equivalents, marketable securities, receivables, and accounts payable. The Company considers debt securities readily convertible to known amounts of cash with maturities of three months or less from the purchase date to be cash equivalents. Interest is recorded when earned. The Company’s investments are classified as available-for-sale and are carried at fair value. Unrealized gains and losses from changes in fair value, excluding credit-related amounts are recorded as a component of accumulated other comprehensive (loss), net of related income taxes. The Company evaluates available‑for‑sale debt securities in an unrealized loss position to determine whether a credit loss exists. If a credit loss is identified, the Company records an allowance for credit losses, limited to the amount that fair value is below amortized cost. Gains and losses on investments are calculated based on the specific investment.
For additional information see "Note 4. Receivables, Contract Assets, And Deferred Revenue", "Note 11. Debt", and "Note 13. Fair Value Measurements".
Property and equipment
Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful life of each asset, which are three years for computer equipment and five years for furniture and fixtures. Leasehold improvements are amortized over the lesser of the lease’s term or the useful life of the asset. Repairs and maintenance costs are expensed as incurred.
Leases
All of the Company’s leases are operating leases, primarily composed of office space leases. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its operating right of use assets and lease liabilities at the lease commencement date and thereafter if modified. Fixed lease costs are recognized on a straight-line basis over the lease term. Variable lease costs include payments required under leases for common area maintenance, real estate taxes, utilities, service charges, and other variable costs that are not reflected in the measurement of right of use assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The Company combines lease and non-lease components when determining lease costs for its office space leases. The lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain it will exercise those options. For short-term leases, defined as leases with a term of twelve months or less, the Company does not recognize an associated lease liability and right of use asset. The Company’s leases do not contain material residual value guarantees or restrictive covenants.
Loss contingencies and legal costs
The Company accrues loss contingencies when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
Significant judgments are required to determine the probability and the range of the outcomes, and the estimates are based only on the information available to the Company at the time. Due to the inherent uncertainties involved in claims, legal proceedings, and in estimating the losses that may arise, actual outcomes may differ from the Company’s estimates. Contingencies deemed not probable, or for which losses were not estimable in one period, may become probable or losses may become estimable in later periods, which may have a material impact on the Company’s results of operations and financial position. As additional information becomes available, the Company reassesses the potential liability from pending claims and litigation and may revise its estimates. 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. Legal costs are expensed as incurred.
Internal-use software
The Company capitalizes and amortizes certain direct costs associated with computer software developed or purchased for internal use incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. The Company amortizes capitalized internal-use software on a straight-line basis over its estimated useful life, which is generally over three to five years, commencing on the date the software is placed into service.
Goodwill
Goodwill represents the residual purchase price paid in a business combination after the fair value of all identified assets and liabilities have been recorded. Goodwill is not amortized. The Company has a single reporting unit. The Company performed qualitative assessments as of November 30, 2025, 2024, and 2023, respectively, and concluded that there was no impairment since it was not more-likely-than-not that the fair value of its reporting unit was less than its carrying value.
Intangible and long-lived assets
The Company’s intangible assets are amortized using the straight-line method over their estimated useful life. The Company evaluates its long-lived tangible and intangible assets for impairment whenever events or changes in circumstances indicate that such assets’ carrying amount may not be recoverable. Impairment is assessed by comparing the undiscounted cash flows expected to be generated by the long-lived tangible or intangible assets to their carrying value. If impairment exists, the Company calculates the impairment by comparing the carrying value to its fair value as determined by discounted expected cash flows.
Cash equivalents
Cash equivalents include money market funds and other investments with original maturities of three months or less.
Restricted cash
The Company records restricted cash amounts as a current asset on the consolidated balance sheets if the restriction expires in less than 12 months, or as a non-current asset if the restriction is greater than 12 months. If there is no minimum time frame during which the cash must remain restricted, the nature of the transactions related to the restriction determine the classification. Restricted cash primarily relates to amounts deposited to secure customer guarantees and various letters of credit.
Business combinations
The Company uses its estimates and assumptions to assign a fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. The Company reevaluates these estimates and assumptions quarterly as new information arises and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations.
Research and development and software development costs
Research and development costs are expensed as incurred. Capitalization of computer software developed for resale begins upon the establishment of technological feasibility, generally demonstrated by a working model or an operative version of the computer software product. Such costs have not been material to date, as technological feasibility is established within a short time frame from the software’s general availability. As a result, no costs were capitalized in 2025, 2024, or 2023.
Stock-based compensation
The Company recognizes stock-based compensation expense associated with equity awards based on the award’s fair value at the grant date. Stock-based compensation expense is adjusted each period for anticipated forfeitures. For service-based awards, stock-based compensation is recognized over the requisite service period, which is generally the vesting period. For performance-based awards, stock-based compensation expense is recognized over the longer of (a) the implicit service period for performance-metric achievement or (b) the requisite service period. During each reporting period, stock-based compensation expense is recorded based on expected achievement of performance targets. Changes in estimates of the expected achievement of performance targets that result in a change in the number of shares that are expected to vest are recognized on a cumulative catch-up basis during the reporting period in which the estimate changed. See "Note 16. Stock-Based Compensation" for a discussion of the Company’s key assumptions when determining the fair value of its equity awards at the grant date.
Foreign currency translation and remeasurement
The translation of assets and liabilities for the Company’s subsidiaries with functional currencies other than the U.S. dollar are made at period-end exchange rates. Revenue and expense accounts are translated at the average exchange rates during the period transactions occur. The resulting translation adjustments are reflected in accumulated other comprehensive (loss). Realized and unrealized exchange gains or losses from transactions and remeasurement adjustments are reflected in foreign currency transaction gain (loss) in the accompanying consolidated statements of operations.
Accounting for income taxes
The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. Future realization of the Company’s deferred tax assets ultimately depends on sufficient taxable income within the available carryback or carryforward periods. Taxable income sources include taxable income in prior carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and projected future taxable income. The Company records a valuation allowance to reduce its deferred tax assets to an amount it believes is more-likely-than-not to be realized. Changes in the valuation allowance impact income tax expense in the period of adjustment. The Company recognizes excess tax benefits when realized, as a reduction of the provision for income taxes.
The Company assesses its income tax positions and records tax benefits based on management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. The Company classifies liabilities for uncertain tax positions as non-current liabilities unless the uncertainty is expected to be resolved within one year. The Company classifies interest and penalties on uncertain tax positions as income tax expense.
As a global company, significant judgment must be used to calculate and provide for income taxes in each of the tax jurisdictions in which it operates. In the ordinary course of the Company’s business, there are transactions and calculations undertaken whose ultimate tax outcome cannot be certain. Some of these uncertainties arise because of transfer pricing for transactions with the Company’s subsidiaries and nexus and tax credit estimates. In addition, the calculation of acquired tax attributes and the associated limitations are complex.
For additional information, see "Note 18. Income Taxes".
Advertising expense
Advertising costs are expensed as incurred. Advertising expenses were $6.1 million, $4.7 million, and $3.5 million during 2025, 2024, and 2023, respectively.
Newly adopted accounting pronouncements
Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 includes expanded income tax rate reconciliation disclosures, a disaggregation of income taxes paid, and other expanded disclosures. The Company adopted this standard on a prospective basis for the year ended December 31, 2025. For additional information, see "Note 18. Income Taxes".
Accounting pronouncements not yet effective
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). Among other items, the requirements include expanded disclosures around employee compensation and selling expenses. ASU 2024-03 will be effective for the Company for the year ending December 31, 2027. The Company is still evaluating the impact of this new guidance on its consolidated financial statements but expect the adoption to result in disclosure changes only.
Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, “Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”). ASU 2025-06 introduces a more principles-based framework to the capitalization of software intended for internal use focused on management’s authorization and commitment to fund a development project and the probability of whether the project will be completed and used for its intended function. ASU 2025-06 will be effective for the Company beginning January 1, 2028. The Company is currently evaluating the impact ASU 2025-06 will have on its consolidated financial statements.
v3.25.4
MARKETABLE SECURITIES
 12 Months Ended
Dec. 31, 2025
Investments, Debt and Equity Securities [Abstract]  
MARKETABLE SECURITIES
3. MARKETABLE SECURITIES
December 31, 2025December 31, 2024
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair ValueAmortized CostUnrealized GainsUnrealized LossesFair Value
Government debt$5,755 $3 $(4)$5,754 $11,851 $1 $(19)$11,833 
Corporate debt207,278 428 (108)207,598 391,097 63 (123)391,037 
$213,033 $431 $(112)$213,352 $402,948 $64 $(142)$402,870 
As of December 31, 2025, marketable securities’ maturities ranged from January 2026 to November 2028, with a weighted-average remaining maturity of 1.4 years.
v3.25.4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE
4. RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE
Receivables
(in thousands)
December 31, 2025December 31, 2024
Accounts receivable, net$264,713 $305,468 
Unbilled receivables, net166,478 173,085 
Long-term unbilled receivables, net102,544 61,407 
$533,735 $539,960 
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)
December 31, 2025
1 year or less$166,478 62 %
1-2 years69,482 26 %
2-5 years33,062 12 %
$269,022 100 %
Unbilled receivables by contract effective date:
(Dollars in thousands)
December 31, 2025
2025$179,995 67 %
202458,658 22 %
202327,754 10 %
20222,304 1 %
2021 and prior311 — %
$269,022 100 %
Major clients
Clients that represented 10% or more of the Company’s total accounts receivable and unbilled receivables:
December 31, 2025December 31, 2024
Client A
Accounts receivable*20 %
Unbilled receivables*— %
Total receivables*11 %
* Client accounted for less than 10% of receivables.
Contract assets
Contract assets are client-committed amounts for which revenue recognized exceeds the amount billed to the client, and billing is subject to conditions other than the passage of time, such as the completion of a related performance obligation. Contract assets as of December 31, 2023 were $36.9 million.
(in thousands)
December 31, 2025December 31, 2024
Contract assets (1)
$17,678 $13,498 
Long-term contract assets (2)
17,421 18,321 
$35,099 $31,819 
(1) Included in other current assets.
(2) Included in other long-term assets.
Deferred revenue
Deferred revenue consists of billings made and payments received in advance of revenue recognition. Deferred revenue as of December 31, 2023 was $380.3 million.
(in thousands)
December 31, 2025December 31, 2024
Deferred revenue$509,275 $423,910 
Long-term deferred revenue (1)
9,568 2,121 
$518,843 $426,031 
(1) Included in other long-term liabilities.
The change in deferred revenue in 2025 was primarily due to new billings in advance of revenue recognition and $420.1 million of revenue recognized during the period included in deferred revenue as of December 31, 2024.
v3.25.4
DEFERRED COMMISSIONS
 12 Months Ended
Dec. 31, 2025
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
DEFERRED COMMISSIONS
5. DEFERRED COMMISSIONS
December 31,
(in thousands)
20252024
Deferred commissions (1)
$104,574 $105,405 
(1) Included in other long-term assets.
(in thousands)202520242023
Amortization of deferred commissions (1)
$68,573 $62,269 $59,461 
(1) Included in selling and marketing expenses.
v3.25.4
PROPERTY AND EQUIPMENT
 12 Months Ended
Dec. 31, 2025
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT
6. PROPERTY AND EQUIPMENT (1)
(in thousands)December 31,
20252024
Leasehold improvements
$58,311 $51,932 
Computer equipment
29,686 29,817 
Furniture and fixtures
4,993 4,603 
Computer software purchased
9,439 9,918 
Computer software developed for internal use
19,872 19,776 
Fixed assets in progress
10,510 5,038 
132,811 121,084 
Less: accumulated depreciation
(87,571)(79,278)
$45,240 $41,806 
(1) Included in other long-term assets.
(in thousands)202520242023
Depreciation expense$11,069 $14,432 $14,806 
v3.25.4
GOODWILL AND OTHER INTANGIBLE ASSETS
 12 Months Ended
Dec. 31, 2025
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS
7. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
(in thousands)
20252024
January 1,$81,113 $81,611 
Currency translation adjustments393 (498)
December 31,$81,506 $81,113 
Intangibles
Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives:
December 31, 2025
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,164 $(62,822)$342 
Technology
2-10 years
68,115 (67,255)860 
Other
1-5 years
5,361 (5,361)— 
$136,640 $(135,438)$1,202 
(1) Included in other long-term assets.
December 31, 2024
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,107 $(61,395)$1,712 
Technology
2-10 years
68,115 (65,995)2,120 
Other
1-5 years
5,361 (5,361)— 
$136,583 $(132,751)$3,832 
(1) Included in other long-term assets.
Future estimated intangible assets amortization:
(in thousands)
December 31, 2025
2026$874 
2027328 
$1,202 
Amortization of intangible assets:
(in thousands)
202520242023
Cost of revenue$1,260 $1,783 $2,570 
Selling and marketing1,370 1,370 1,370 

$2,630 $3,153 $3,940 
v3.25.4
OTHER ASSETS AND LIABILITIES
 12 Months Ended
Dec. 31, 2025
Other Assets and Liabilities [Abstract]  
OTHER ASSETS AND LIABILITIES
8. OTHER ASSETS AND LIABILITIES
Other current assets
(in thousands)December 31, 2025December 31, 2024
Prepaid expenses
$65,293 $38,155 
Income tax receivables31,535 58,359 
Contract assets17,678 13,498 
Indirect tax receivable2,172 2,488 
Restricted cash
1,577 98 
Other3,050 2,580 
$121,305 $115,178 
Other long-term assets
(in thousands)December 31, 2025December 31, 2024
Deferred income taxes$175,472 $4,268 
Deferred commissions104,574 105,405 
Right of use assets60,574 62,429 
Property and equipment45,240 41,806 
Venture investments22,021 21,234 
Contract assets17,421 18,321 
Income tax receivables
15,459 13,299 
Intangible assets1,202 3,832 
Restricted cash2,336 4,328 
Other25,200 17,127 
$469,499 $292,049 
Accrued expenses
(in thousands)December 31, 2025December 31, 2024
Outside professional services
$15,233 $10,639 
Litigation settlements9,750 — 
Income and other taxes7,273 5,055 
Employee related
5,464 4,833 
Marketing and sales program
1,519 2,150 
Cloud hosting
1,064 1,802 
Repurchases of common stock unsettled— 1,500 
Other4,544 5,565 
$44,847 $31,544 
Other current liabilities
(in thousands)December 31, 2025December 31, 2024
Operating lease liabilities$15,142 $14,551 
Dividends payable5,110 2,583 
Other1,683 1,732 
$21,935 $18,866 
Other long-term liabilities
(in thousands)December 31, 2025December 31, 2024
Income taxes payable$23,331 $15,956 
Deferred revenue9,568 2,121 
Other12,961 11,011 
$45,860 $29,088 
v3.25.4
SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
SEGMENT INFORMATION
9. SEGMENT INFORMATION
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and assess performance.
The Company derives substantially all of its revenue from the sale and support of one group of similar products and services – software that provides case management, business process management, and real-time decisioning solutions to improve customer engagement and operational excellence in the enterprise applications market. To assess performance, the Company’s CODM, the CEO, reviews financial information on a consolidated basis. Therefore, the Company determined it has one operating segment and one reportable segment. The accounting policies of the Company’s operating segment are the same as those described in "Note 2. Significant Accounting Policies". The CODM uses consolidated net income to set financial performance targets, assess performance, and make expense allocation decisions.
(in thousands)202520242023
Total revenue$1,745,812 $1,497,180 $1,432,616 
Total cost of revenue421,382 390,665 378,483 
Selling
484,736 450,527 474,405 
Marketing
93,901 84,253 84,772 
Research and development312,681 298,074 295,512 
General and administrative148,722 112,848 96,743 
Other segment items, net (1)
3,763 18,177 7,261 
(Benefit from) provision for income taxes(112,810)43,447 27,632 
Net income$393,437 $99,189 $67,808 
(1) Includes Litigation settlement, net of recoveries, Restructuring, Foreign currency transaction (loss), Interest income, Interest expense, (Loss) on capped call transactions, and Other income, net.
Long-lived assets related to the Company’s U.S. and international operations consist of property and equipment, which are included in Other long-term assets in the Company’s consolidated balance sheet:
(in thousands)
December 31, 2025December 31, 2024
U.S.$40,060 89 %$37,405 89 %
International5,180 11 %4,401 11 %
$45,240 100 %$41,806 100 %
v3.25.4
LEASES
 12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
LEASES
10. LEASES
On January 1, 2025, the Company relocated its corporate headquarters to 225 Wyman Street, Waltham, Massachusetts.
Expense
(in thousands)202520242023
Fixed lease costs
$14,700 $21,422 $19,718 
Short-term lease costs1,715 1,746 2,884 
Variable lease costs
7,465 6,901 8,148 
$23,880 $30,069 $30,750 
Right of use assets and lease liabilities
(in thousands)December 31, 2025December 31, 2024
Right of use assets (1)
$60,574 $62,429 
Operating lease liabilities (2)
$15,142 $14,551 
Long-term operating lease liabilities$60,825 $67,647 
(1) Included in other long-term assets.
(2) Included in other current liabilities.
The weighted-average remaining lease term and discount rate for the Company’s leases were:
December 31, 2025December 31, 2024
Weighted-average remaining lease term5.4 years6.2 years
Weighted-average discount rate (1)
5.2 %4.8 %
(1) The rates implicit in 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)December 31, 2025
2026$18,275 
202716,635 
202814,879 
202912,046 
203010,356 
Thereafter14,907 
Total lease payments87,098 
Less: imputed interest (1)
(11,131)
$75,967 
(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
(in thousands)20252024
Cash paid for operating leases, net of tenant improvement allowances$19,302 $18,444 
Right of use assets obtained in exchange for operating lease obligations$9,146 $16,682 
v3.25.4
DEBT
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
DEBT
11. DEBT
Convertible senior notes and capped calls
Convertible senior notes
In February 2020, the Company issued Notes with an aggregate principal of $600 million, due March 1, 2025, in a private placement. No principal payments were due before maturity. The Notes accrued interest at an annual rate of 0.75%, paid semi-annually in arrears on March 1 and September 1, beginning September 1, 2020. The remaining outstanding principal balance on the Notes and accrued interest totaling $469.6 million was repaid in its entirety at maturity during the three months ended March 31, 2025.
Conversion rights
The conversion rate was 14.809 shares of common stock per $1,000 principal amount of the Notes, representing a conversion price of $67.53 per share of common stock.
Carrying value of the Notes:
(in thousands)December 31, 2025December 31, 2024
Principal$— $467,864 
Unamortized issuance costs— (394)
Convertible senior notes, net$— $467,470 

Interest expense related to the Notes:
(in thousands)20252024
Contractual interest expense (0.75% coupon)
$595 $3,725 
Amortization of issuance costs
394 2,451 
$989 $6,176 
The average interest rate on the Notes during the three months ended March 31, 2025 and year ended December 31, 2024 was 1.2%.
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 expired upon maturity of the Notes during the three months ended March 31, 2025.
Change in capped call transactions:
(in thousands)20252024
January 1,$223 $893 
Settlements— (7)
Fair value adjustment(223)(663)
December 31,$— $223 
Credit facility
In November 2019, and as since amended, the Company entered into a five-year $100 million Credit Facility with PNC Bank, National Association. Effective as of February 4, 2025, the Credit Facility was amended to extend the expiration date to February 4, 2027. 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 Credit Facility, as amended, contains customary covenants, including, but not limited to, those relating to additional indebtedness, liens, asset divestitures, and affiliate transactions. Beginning with the fiscal quarter ended March 31, 2024, the Company must maintain 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 December 31, 2025, the Company is compliant with all Credit Facility covenants.
As of December 31, 2025 and December 31, 2024, the Company had letters of credit of $26.7 million and $27.3 million, respectively, under the Credit Facility, however we had no cash borrowings.
v3.25.4
RESTRUCTURING
 12 Months Ended
Dec. 31, 2025
Restructuring and Related Activities [Abstract]  
RESTRUCTURING
12. RESTRUCTURING
During the fourth quarter of 2025, management committed to a restructuring plan, primarily within the Company’s consulting organization, intended to better align roles and capacity to an AI-first delivery model. The plan resulted in a restructuring expense of approximately $13 million in 2025, associated with severance and benefits for impacted employees.
Restructuring Expense
(in thousands)202520242023
Employee severance and related benefits$12,778 $(614)$18,721 
Office space reductions (1)
(1,238)5,142 3,026 
$11,540 $4,528 $21,747 
(1) These primarily relate to non-cash operating lease adjustments.
Restructuring activity
Accrued employee severance and related benefits:
(in thousands)2025
January 1,$2,000 
Costs incurred12,778 
Cash disbursements(2,056)
Currency translation adjustments136 
December 31, (1)
$12,858 
(1) Included in accrued compensation and related expenses.
v3.25.4
FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
13. 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 applied judgment when determining expected volatility. The Company considers the underlying equity security’s historical and implied volatility levels. The Capped Call Transactions expired upon maturity of the Notes during the three months ended March 31, 2025. 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:
December 31, 2025December 31, 2024
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash equivalents$33,043 $8,463 $— $41,506 $5,318 $148,926 $— $154,244 
Marketable securities $— $213,352 $— $213,352 $— $402,870 $— $402,870 
Capped Call Transactions
$— $— $— $— $— $223 $— $223 
Venture investments
$— $— $22,021 $22,021 $— $— $21,234 $21,234 
Changes in venture investments:
(in thousands)20252024
January 1,$21,234 $19,450 
New investments15,929 550 
Sales of investments(35,164)— 
Changes in foreign exchange rates136 (32)
Changes in fair value:
included in other income, net
20,421 1,628 
included in other comprehensive income
(535)(362)
December 31,$22,021 $21,234 
During the three months ended June 30, 2025, one of the Company’s investees was acquired by a privately held company. As a result, the Company received $33.2 million in consideration for its equity interest in the investee, composed of $22.1 million cash and $11.1 million of an ownership interest in the privately held company, and recognized a $18.7 million gain in excess of cost in other income, net on the consolidated statements of operations.
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 $463.9 million as of December 31, 2024. The Notes were repaid in full at maturity during the three months ended March 31, 2025.
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.
Credit risk
In addition to receivables, the Company is potentially subject to concentrations of credit risk from the Company’s cash, cash equivalents, and marketable securities. The Company’s cash and cash equivalents are generally held with large, diverse financial institutions worldwide to reduce the Company’s credit risk exposure. Investment policies have been implemented that limit purchases of marketable debt securities to investment-grade securities.
v3.25.4
STOCKHOLDERS' EQUITY
 12 Months Ended
Dec. 31, 2025
Equity [Abstract]  
STOCKHOLDERS' EQUITY
14. STOCKHOLDERS’ EQUITY
Preferred stock
The Company has 1 million authorized shares of preferred stock, $0.01 par value per share, of which none were issued and outstanding as of December 31, 2025.
The Board of Directors has the authority to issue the shares of preferred stock in one or more series, to establish the number of shares to be included in each series, and to determine the designation, powers, preferences, and rights of the shares of each series and the qualifications, limitations, or restrictions thereof, without any further vote or action by the stockholders. The issuance of preferred stock could decrease the earnings and assets available for distribution to holders of common stock and may have the effect of delaying, deferring, or defeating a change in control of the Company.
Common stock
The Company has 400 million authorized shares of common stock, $0.01 par value per share, of which 170.3 million were issued and outstanding as of December 31, 2025.
Stock split
On June 20, 2025, the Company effected the Stock Split of the Company’s Common Stock described above in "Note 1. Basis Of Presentation". All share and per share amounts in the Company’s consolidated financial statements and in the accompanying notes for all prior periods presented have been recast to reflect the effect of the Stock Split.
Dividends declared
202520242023
Dividends declared (per share)$0.105 $0.06 $0.06 
Dividend payments to stockholders (in thousands)$15,422 $10,199 $9,964 
Following the Stock Split, and commencing with the third quarter of 2025, the Company paid a quarterly cash dividend of $0.03 per share. Prior to the Stock Split, the Company paid a quarterly cash dividend of $0.015 per share. In the future, the Board of Directors may terminate or modify the dividend program without prior notice.
Stock repurchase program
On April 22, 2025, the Company’s Board of Directors extended the expiration date of the share repurchase program from December 31, 2025 to June 30, 2026 and increased the authorized repurchase amount by $500 million. On February 10, 2026, the Company’s Board of Directors further extended the expiration date of the share repurchase program from June 30, 2026 to June 30, 2027 and increased the authorized repurchase amount by $1 billion.
Stock repurchase authorization activity:
(in thousands)202520242023
SharesAmountSharesAmountSharesAmount
January 1,$240,443 $60,000 $58,075 
Authorizations (1)
500,000 250,000 1,925 
Repurchases paid (2) (3)
(10,659)(498,189)(1,618)(68,057)— — 
Repurchases unpaid at period end (2) (3)
— — (32)(1,500)— — 
December 31,$242,254 $240,443 $60,000 
(1) This represents increases in the repurchase authority made by the Board of Directors.
(2) Purchases under this program have been made on the open market.
(3) Amounts presented are exclusive of the U.S. excise tax on share repurchases.
v3.25.4
REVENUE
 12 Months Ended
Dec. 31, 2025
Revenue from Contract with Customer [Abstract]  
REVENUE
15. REVENUE
Geographic revenue
Revenues by geography are determined based on client location:
(Dollars in thousands)
202520242023
U.S.$956,296 54 %$828,332 55 %$785,029 55 %
Other Americas115,266 7 %95,698 6 %85,149 6 %
United Kingdom (“U.K.”)189,993 11 %157,830 11 %158,014 11 %
Europe (excluding U.K.), Middle East, and Africa 270,627 16 %249,325 17 %242,303 17 %
Asia-Pacific213,630 12 %165,995 11 %162,121 11 %
$1,745,812 100 %$1,497,180 100 %$1,432,616 100 %
Revenue streams
(in thousands)
202520242023
Pega Cloud$695,902 $558,734 $461,328 
Maintenance314,593 323,304 331,856 
Consulting227,949 213,273 221,706 
Revenue recognized over time1,238,444 1,095,311 1,014,890 
Subscription license507,368 401,869 417,726 
Revenue recognized at a point in time507,368 401,869 417,726 
$1,745,812 $1,497,180 $1,432,616 
(in thousands)202520242023
Pega Cloud$695,902 $558,734 $461,328 
Maintenance314,593 323,304 331,856 
Subscription services1,010,495 882,038 793,184 
Subscription license507,368 401,869 417,726 
Subscription1,517,863 1,283,907 1,210,910 
Consulting227,949 213,273 221,706 
$1,745,812 $1,497,180 $1,432,616 
Remaining performance obligations ("Backlog")
Expected future revenue from existing non-cancellable contracts:
As of December 31, 2025:
(Dollars in thousands)Subscription servicesSubscription licenseConsultingTotal
Pega CloudMaintenance
1 year or less
$709,190 $235,152 $77,528 $53,353 $1,075,223 52 %
1-2 years
400,926 73,895 2,636 854 478,311 23 %
2-3 years
213,259 51,327 2,101 28 266,715 13 %
Greater than 3 years
214,189 32,325 7,331 88 253,933 12 %
$1,537,564 $392,699 $89,596 $54,323 $2,074,182 100 %
As of December 31, 2024:
(Dollars in thousands)Subscription servicesSubscription licenseConsultingTotal
Pega CloudMaintenance
1 year or less
$525,133 $230,866 $89,197 $50,519 $895,715 56 %
1-2 years
328,234 65,461 10,874 3,297 407,866 25 %
2-3 years
159,536 24,598 733 125 184,992 11 %
Greater than 3 years
114,256 19,935 678 50 134,919 8 %
$1,127,159 $340,860 $101,482 $53,991 $1,623,492 100 %
v3.25.4
STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION
16. STOCK-BASED COMPENSATION
(in thousands)202520242023
Cost of revenue$26,646 $27,353 $28,994 
Selling and marketing60,721 55,084 57,675 
Research and development31,684 29,838 31,039 
General and administrative36,188 30,443 25,644 
$155,239 $142,718 $143,352 
Income tax benefit$(31,043)$(1,799)$(2,187)
The Company periodically grants employees stock options and restricted stock units (“RSUs”) and non-employee Directors common stock and stock options.
Prior to 2023, most of the Company’s stock based compensation arrangements vest over five years, with 20% vesting after one year and the remaining 80% vesting quarterly over the remaining four years. Beginning in 2023, most of the Company’s stock based compensation arrangements vest over four years, with 25% vesting after one year and the remaining 75% vesting quarterly over the remaining three years. The Company also granted performance stock options which vest based on the Company’s achievement of specific performance conditions. The Company’s stock options have a term of ten years.
The Company recognizes stock-based compensation using the accelerated attribution method, treating each vesting tranche as an individual grant. The stock-based compensation expense recognized during a period is based on the value of the awards that are expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the Company recognizes the actual expense over the vesting period only for the shares that vest.
Employees may elect to receive 50% of the employee’s target incentive compensation under the Company’s Corporate Incentive Compensation Plan (the “CICP”) in the form of RSUs instead of cash. If elected by an employee, the equity amount is equal in value on the grant date to 50% of the employee’s target incentive opportunity, based on the employee’s base salary. The number of RSUs granted is determined by dividing 50% of the employee’s target incentive opportunity by 85% of the closing price of the Company’s common stock on the grant date. If elected, the award vests 100% on the following year’s CICP payout date. Vesting is conditioned upon the performance conditions of the CICP and on continued employment; if threshold funding does not occur, the RSUs will not vest. The Company considers vesting probable on the grant date and recognizes the associated stock-based compensation expense over the requisite service period beginning on the grant date and ending on the vesting date.
Beginning in 2023, the Company utilized cashless settlement for most of its awards. Under cashless settlement, shares are automatically sold in the market at exercise (for stock options) or vest (for RSUs) to cover the exercise price (for stock options) and the minimum statutory tax withholding obligations (for stock options and RSUs).
Stock-based compensation plans
2004 Long-Term Incentive Plan (as amended and restated)
In 2004, the Company adopted the 2004 Long-Term Incentive Plan (as amended and restated, the “2004 Plan”) under which the Company may grant incentive and non-qualified stock options, RSUs, stock purchase rights, performance-based awards, and other stock-based awards to employees, non-employee Directors, and consultants. Subsequent amendments to the plan increased the number of shares authorized for issuance under the plan to 104 million, extended the term of the plan to 2035, and limited annual compensation to any non-employee Director to $0.5 million.
As of December 31, 2025, 30 million shares were subject to outstanding options and stock-based awards under the 2004 Plan.
2006 Employee Stock Purchase Plan
In 2006, the Company adopted the 2006 Employee Stock Purchase Plan (the “2006 ESPP”) under which employees may purchase common stock, at a price equal to at least 85% of the fair market value of the Company’s common stock on the lesser of the commencement date or completion date for offerings under the plan, or such higher price as the Company’s Board of Directors may establish from time to time. In October 2012, the Company’s Board of Directors amended the 2006 ESPP to continue until no shares remain. In 2023, the number of shares authorized for purchase under the 2006 ESPP was increased to 4 million. For 2025, 2024, and 2023, the Company’s Board of Directors set the purchase price at 85% of the fair market value on the completion date of the offering period.
(in thousands)202520242023
Compensation expense from 2006 ESPP$1,317 $1,184 $1,367 
As of December 31, 2025, 2.4 million shares had been issued under the plan.
Shares issued and available for issuance
In 2025, the Company issued 8.6 million shares to its employees and directors under the Company’s stock-based compensation plans.
As of December 31, 2025, there were 21.7 million shares available for issuance for future equity grants under the Company’s stock plans, consisting of 20.1 million shares under the 2004 Plan and 1.6 million shares under the 2006 ESPP.
Grant activity
Stock options
The Company estimates the fair value of stock options using a Black-Scholes option-pricing model. Key inputs used to estimate the fair value of stock options include the exercise price of the award, expected term of the option, expected volatility of the Company’s common stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the Company’s expected annual dividend yield. The exercise price for stock options is equal to the shares’ fair market value at the grant date.
The following table summarizes the Company’s fair value assumptions for stock options:
202520242023
Weighted-average grant-date fair value$19.07 $12.91 $10.28 
Assumptions used in the Black-Scholes option-pricing model:
Expected annual volatility (1)
50 %49 %48 %
Expected term in years (2)
3.93.93.5
Risk-free interest rate (3)
3.9 %4.2 %4.2 %
Expected annual dividend yield (4)
0.3 %0.2 %0.1 %
(1) The expected annual volatility for each grant is determined based on the average of historic daily price changes of the Company’s common stock over a period, which approximates the expected option term.
(2) The expected option term for each grant is determined based on the historical exercise behavior of employees and post-vesting employment termination behavior.
(3) The risk-free interest rate is based on the yield of U.S. Treasury securities with a commensurate maturity with the expected option term at the time of grant.
(4) The expected annual dividend yield is based on the weighted-average dividend yield assumptions used for options granted during the applicable period.
The following table summarizes the time-based vesting stock option activity under the Company’s stock option plans for 2025:
Shares
(in thousands)		Weighted-average Exercise PriceWeighted-average Remaining Contractual Term (in years)
Aggregate Intrinsic Value
(in thousands) (1)
Options outstanding as of January 1, 202525,948 $30.81 
Granted3,377 40.43 
Exercised(6,235)26.40 
Forfeited(829)29.64 
Expired(178)61.31 
Options outstanding as of December 31, 202522,083 $33.33 
Vested and expected to vest as of December 31, 202519,920 $33.49 6.3$531,166 
Exercisable as of December 31, 202513,765 $33.71 5.4$366,320 
(1) The aggregate intrinsic value of stock options as of December 31, 2025 is based on the difference between the closing price of the Company’s stock of $59.72 and the exercise price of the applicable stock options.
The aggregate intrinsic value of stock options exercised (i.e., the difference between the market price at exercise and the price paid by the employee at exercise) in 2025, 2024, and 2023 was $168.2 million, $58.7 million, and $6.2 million, respectively. As of December 31, 2025, the Company had unrecognized stock-based compensation expense related to the unvested portion of stock options of $33.7 million that is expected to be recognized as expense over a weighted-average period of 1.7 years.
Performance stock options
In 2023, the Company began awarding performance stock options. These performance stock options allow the holder to purchase a specified number of common stock shares at an exercise price equal to the shares' fair market value at the grant date. The performance stock options granted in 2025 vest quarterly over two years, with 50% beginning after the achievement of specific performance conditions for 2026 and 50% beginning after the achievement of specific performance conditions for 2027, including year over year growth in Annual Contract Value and Free Cash Flow Margin. The options expire ten years from the grant date. The performance stock options granted in 2025 have a total grant date fair value of $35.3 million.
The following table summarizes the Company’s performance stock option activity for 2025:
Shares
(in thousands)		Weighted-average Exercise PriceWeighted-average Remaining Contractual Term (in years)
Aggregate Intrinsic Value
(in thousands) (1)
Performance options outstanding as of January 1, 2025
2,780 $26.60 
Granted
1,362 39.40 
Exercised
(657)24.67 
Forfeited
(81)35.80 
Performance options outstanding as of December 31, 2025
3,404 $31.87 
Vested and expected to vest as of December 31, 20253,301 $31.01 8$94,779 
Exercisable as of December 31, 20251,289 $24.71 7.2$45,133 
(1) The aggregate intrinsic value of stock options as of December 31, 2025 is based on the difference between the closing price of the Company’s stock of $59.72 and the exercise price of the applicable stock options.
The aggregate intrinsic value of performance stock options exercised in 2025, 2024, and 2023 was $15.1 million, $1.5 million, and none, respectively. As of December 31, 2025, the Company had unrecognized stock-based compensation expense related to the unvested portion of performance stock options of $22.4 million that is expected to be recognized as expense over a weighted-average period of 2.3 years.
RSUs
RSUs provide the recipient a right to receive a specified number of shares of the Company’s common stock upon vesting. The Company values its RSUs at the fair value of its common stock on the grant date, which is the closing price of its common stock on the grant date less the present value of expected dividends during the vesting period, as the recipient is not entitled to dividends during the requisite service period. RSU grants include units issued when employees elect to receive 50% of the employee’s target incentive compensation under the Company’s Corporate Incentive Compensation Plan (the “CICP”) in the form of RSUs instead of cash.
The weighted-average grant-date fair value for RSUs granted in 2025, 2024, and 2023 was $40.62, $31.29, and $23.29, respectively.
The following table summarizes the combined RSU activity for all grants, including the CICP, under the 2004 Plan for 2025:
Shares
(in thousands)		Weighted- Average Grant-Date
Fair Value		Aggregate Intrinsic Value
(in thousands)
Nonvested as of January 1, 20255,226 $32.10 
Granted2,136 40.62 
Vested(2,429)46.97 
Forfeited(389)33.88 
Nonvested as of December 31, 20254,544 $35.34 $271,366 
Expected to vest as of December 31, 20253,422 $35.56 $204,382 
The fair value of RSUs vested in 2025, 2024, and 2023 was $114.1 million, $78.2 million, and $42.8 million, respectively. The aggregate intrinsic value of RSUs outstanding and expected to vest as of December 31, 2025 is based on the closing price of the Company’s stock of $59.72 as of December 31, 2025.
As of December 31, 2025, the Company had $46.9 million of unrecognized stock-based compensation expense related to all unvested RSUs that is expected to be recognized as expense over a weighted-average period of 1.6 years.
Common stock
In 2025, the Company granted 0.02 million shares of common stock to Directors with a weighted-average grant-date fair value of $52.58 per share.
v3.25.4
EMPLOYEE BENEFIT PLANS
 12 Months Ended
Dec. 31, 2025
Postemployment Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS
17. EMPLOYEE BENEFIT PLANS
The Company sponsors defined contribution plans for qualifying employees, including a 401(k) plan in the United States to which the Company makes discretionary matching contributions.
Employee benefit plan expenses:
(in thousands)202520242023
U.S. 401(k) Plan$8,230 $7,937 $8,169 
International plans21,825 20,303 21,256 
$30,055 $28,240 $29,425 
v3.25.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES
18. INCOME TAXES
The components of income before (benefit from) provision for income taxes are:
(in thousands)202520242023
Domestic$160,307 $51,966 $14,016 
Foreign120,320 90,670 81,424 
$280,627 $142,636 $95,440 
The components of (benefit from) provision for income taxes are:
(in thousands)202520242023
Current:
Federal$27,011 $22,941 $7,827 
State7,236 7,503 4,480 
Foreign23,756 14,547 14,962 
Total current provision58,003 44,991 27,269 
Deferred:
Federal(90,414)— — 
State(24,461)— — 
Foreign(55,938)(1,544)363 
Total deferred (benefit) provision(170,813)(1,544)363 
$(112,810)$43,447 $27,632 
Below is a reconciliation of the U.S federal statutory tax rate and the Company’s effective tax rate for 2025:
2025
(in thousands, except percentages)AmountPercent
U.S. federal statutory income tax$58,932 21 %
State and local income taxes, net of federal benefit(1)
(13,280)(5)%
United States:
Effect of cross-border tax laws:
Other(2,216)(1)%
Tax credits:
Research and development credits(3,935)(1)%
Changes in valuation allowances(97,682)(35)%
Non-taxable or non-deductible items:
Non deductible compensation10,914 4 %
Excess tax (benefits) related to share-based compensation(21,611)(8)%
Other65 — %
Other adjustments:
Attribute write-off4,870 2 %
Other1,816 1 %
Foreign tax effects:
United Kingdom:
Statutory tax rate difference3,215 1 %
Changes in valuation allowances (60,624)(22)%
Other(5,380)(2)%
India8,234 3 %
Other foreign jurisdictions 6,014 2 %
Changes in unrecognized tax benefits(2,142)(1)%
$(112,810)(40)%
(1) State and local taxes in District of Columbia, Virginia, Minnesota, Maryland, California, and Florida comprise the majority of this category.
The effective income tax rate and tax benefit recorded in 2025 was primarily driven by the release of the valuation allowance on our net deferred tax assets in the U.S. and U.K.
The One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. on July 4, 2025. The OBBBA provides for the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, including revisions to the international tax framework and the reinstatement of favorable tax treatment for certain business tax provisions. The OBBBA allows for the ability to immediately expense domestic research and experimental (“R&E”) expenditures starting in 2025 and provides an optional election to accelerate any unamortized domestic R&D expenditures over a one or two year period beginning with the 2025 tax year. In accordance with ASC 740, the impacts of the OBBBA are reflected in the Company’s results for 2025.

Below is a reconciliation of the U.S federal statutory tax rate and the Company’s effective tax rate for 2024 and 2023:
(in thousands)20242023
U.S. federal income taxes at statutory rates$29,954 $20,042 
Valuation allowance(1,504)(19,272)
State income taxes, net of federal benefit and tax credits1,297 4,117 
Permanent differences786 435 
Federal research and experimentation credits(4,888)(3,709)
Tax effects of foreign activities(7,817)658 
GILTI, FDII, and BEAT13,945 14,022 
Provision to return adjustments121 (3,728)
Non-deductible compensation10,933 6,818 
Tax Reserves5,917 1,850 
Excess tax (benefits)/ detriments related to share-based compensation(5,645)4,666 
Impact of change in tax law— 1,726 
Other348 7 
$43,447 $27,632 
Income Tax Payments
Below is a summary of income taxes paid, net of refunds received by jurisdiction:
(in thousands)2025
India$12,240 
United Kingdom 9,408 
United States - State and local 5,539 
Australia2,247 
United States - Federal(11,233)
Other3,429 
$21,630 
Deferred income taxes
Significant components of net deferred tax assets and liabilities are:
December 31,
(in thousands)20252024
Deferred tax assets:
Research and development capitalization$85,465 $75,289 
Net operating loss carryforwards62,471 72,089 
Stock based compensation48,681 42,114 
Accruals and reserves25,495 26,925 
Lease liabilities11,890 13,434 
Tax credit carryforwards10,742 10,441 
Total deferred tax assets244,744 240,292 
Valuation allowances(23,436)(195,252)
Total net deferred tax assets221,308 45,040 
Deferred tax liabilities:
Prepaid expenses(15,469)(8,924)
Deferred commissions(14,615)(16,237)
Lease liabilities(8,286)(8,440)
Other, net(5,842)(3,421)
Depreciation(1,624)(3,663)
Capped call transactions— (57)
Total deferred tax liabilities(45,836)(40,742)
$175,472 $4,298 
The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. Future realization of deferred tax assets ultimately depends on sufficient taxable income within the available carryback or carryforward periods. The Company’s deferred tax valuation allowance requires significant judgment and has uncertainties, including assumptions about future taxable income based on historical and projected information. In assessing the Company’s ability to realize its net deferred tax assets, the Company considered various factors including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial results to determine whether it is more likely than not that some portion or all of its net deferred tax assets will not be realized. Based on the positive evidence, including a sustained period of profitability and recent and expected future taxable earnings, management concluded that substantially all of its U.S. and UK deferred tax assets were more likely than not realizable as of December 31, 2025. As a result, the Company released substantially all of the valuation allowance previously maintained against its U.S. federal and state and U.K. deferred tax assets during the fourth quarter of 2025, resulting in a $175 million non‑cash tax benefit.
The Company had approximately $4 million and $5.4 million of post apportionment state net operating loss carryforwards, as of December 31, 2025 and 2024, respectively. The U.S. state losses expire at various times through 2045. Additionally, as of December 31, 2025, the Company had $10.7 million of state tax credit carryforwards.
The Company’s federal net operating loss carryforwards were approximately $7.5 million and $14.2 million at December 31, 2025 and 2024, respectively. These federal carryforward losses and state credits expire between 2026 and 2040, except for $1 million of federal net operating losses and $1 million of state credits, which have an unlimited carryforward period.
The Company’s UK net operating loss carryforwards were approximately $118 million and $147.9 million at December 31, 2025 and 2024, respectively, which have indefinite carryforward periods.
The Company records the applicable deferred taxes associated with the future remittance of undistributed foreign earnings that are not deemed indefinitely reinvested. For the portion of our undistributed foreign earnings for which we assert indefinite reinvestment we have not provided any taxes for these amounts, and it is not practicable to estimate the amount of deferred tax liability that would be incurred.
Uncertain tax benefits
A rollforward of the Company’s gross unrecognized tax benefits is:
(in thousands)
202520242023
Balance as of January 1,
$37,886 $30,655 $19,746 
Additions for tax positions related to the current year7,091 7,316 4,859 
Additions for tax positions of prior years1,671 2,941 7,921 
Reductions for tax positions of prior years(2,793)(3,026)(1,871)
Reductions to tax positions as a result of a lapse of the applicable statute of limitations(191)— — 
Balance as of December 31,
$43,664 $37,886 $30,655 
The total amount of accrued liabilities related to uncertain tax positions that would affect the Company's effective tax rate, if recognized, is $18.1 million as of December 31, 2025.
Tax examinations
The Company files federal and state income tax returns in the U.S. and various foreign jurisdictions. In the ordinary course of business, the Company and its subsidiaries are examined by various tax authorities, including the Internal Revenue Service in the U.S. As of December 31, 2025, the Company’s U.S. federal tax returns for the years 2015 through 2019 were under examination by the Internal Revenue Service. In addition, certain foreign jurisdictions are auditing the Company’s income tax returns for periods ranging from 2018 through 2024. The Company does not expect the results of these audits to have a material effect on the Company’s financial condition, results of operations, or cash flows. With few exceptions, the statute of limitations remains open in all jurisdictions for all tax years since 2019.
v3.25.4
EARNINGS PER SHARE
 12 Months Ended
Dec. 31, 2025
Earnings Per Share [Abstract]  
EARNINGS PER SHARE
19. EARNINGS PER SHARE
Basic earnings per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted earnings 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 Notes.
Calculation of earnings per share:
(in thousands, except per share amounts) (1)
202520242023
Net income$393,437 $99,189 $67,808 
Weighted-average common shares outstanding170,782 170,530 166,324 
Earnings per share, basic$2.30 $0.58 $0.41 
Net income$393,437 $99,189 $67,808 
Notes - interest expense, net of tax742 (76)(5,528)
Numerator for diluted EPS $394,179 $99,113 $62,280 
Weighted-average effect of dilutive securities:
Notes1,196 428 470 
Stock options9,362 5,420 1,588 
RSUs3,450 2,890 1,446 
Effect of dilutive securities14,008 8,738 3,504 
Weighted-average common shares outstanding, assuming dilution (2) (3) (4)
184,790 179,268 169,828 
Earnings per share, diluted$2.13 $0.55 $0.37 
Outstanding anti-dilutive stock options and RSUs (5)
212 296 500 
(1) The number of shares and per share amounts have been recast for all prior periods presented to reflect the effect of the Company’s Stock Split effected in the form of a stock dividend distributed on June 20, 2025.
(2) All dilutive securities are excluded when their inclusion would be anti-dilutive.
(3) The weighted-average shares underlying the conversion options in the Company’s Notes are included using the if-converted method, if dilutive in the period.
(4) The Company’s Capped Call Transactions represented the equivalent number of shares of the Company’s common stock (representing the number of shares for which the Notes were convertible). The Capped Call Transactions are excluded from weighted-average common shares outstanding, assuming dilution, in all periods as their effect would be anti-dilutive.
(5) Outstanding stock options and RSUs that were anti-dilutive under the treasury stock method in the period were excluded from the computation of diluted earnings per share. These awards may be dilutive in the future.
v3.25.4
COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Dec. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES
20. COMMITMENTS AND CONTINGENCIES
Commitments
For additional information, see "Note 10. Leases".
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. As of December 31, 2025, the Company recorded an estimated $9.75 million accrued loss related to an agreed in principle settlement of the In re Pegasystems Inc. Derivative Litigation matter, see additional discussion below. The Company had no accrued loss for litigation as of December 31, 2024.
Appian Corp. v. Pegasystems Inc. & Youyong Zou
The Company is a defendant in litigation brought by Appian in the Circuit Court of Fairfax County, Virginia 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 Virginia Uniform Trade Secrets Act 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. A panel of the Court of Appeals of Virginia heard oral arguments on November 15, 2023, and issued a written opinion on July 30, 2024. The Court of Appeals reversed the judgment and ordered a new trade secrets claim trial. Appian filed a petition for appeal with the Supreme Court of Virginia on August 29, 2024, and the Company filed a response to the petition on October 21, 2024. On March 7, 2025, the Supreme Court of Virginia granted Appian’s petition for appeal and Pega’s assignments of cross-error. The Supreme Court of Virginia heard appellate oral argument on October 28, 2025. On January 8, 2026, the Supreme Court of Virginia issued a written opinion unanimously affirming the ruling of the Court of Appeals of Virginia. On January 13, 2026, the Circuit Court of Fairfax County, Virginia notified the parties that this case has been reassigned to Judge David A. Oblon for further proceedings. On January 29, 2026, the Supreme Court of Virginia remanded Appian’s trade secret case to the Court of Appeals with direction to remand to the Circuit Court of Fairfax County for further proceedings in accordance with its written opinion. Also on January 29, Judge Oblon scheduled a first status conference for the remanded trial proceedings for May 7, 2026.
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 a new trial resulting from the appellate proceedings.
PS Lit Recovery, LLC v. Pegasystems Inc., Alan Trefler, and Kenneth Stillwell and Eminence Fund Long Master, Ltd., Eminence Fund Master, Ltd., Eminence Fund II Master, LP, Eminence Partners Long II, LP, Eminence Fund Leveraged Master, Ltd., Eminence Partners, L.P., Eminence Partners II, L.P. v. Pegasystems Inc., Alan Trefler, and Kenneth Stillwell
Federal court cases
On December 4, 2024, the shareholders representing approximately 3% of the settlement class that opted out of the court approved settlement in the class action matter 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 “Class Action”) filed two lawsuits 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 District of Massachusetts. The first is captioned Eminence Fund Long Master, Ltd., Eminence Fund Master, Ltd., Eminence Fund II Master, LP, Eminence Partners Long II, LP, Eminence Fund Leveraged Master, Ltd., Eminence Partners, L.P., and Eminence Partners II, L.P. v. Pegasystems Inc., Alan Trefler, and Kenneth Stillwell (Case 1:24-cv-12999-WGY); the second is captioned PS Lit Recovery, LLC v. Pegasystems Inc., Alan Trefler, and Kenneth Stillwell (Case 1:24-cv-11220-WGY).
The complaints, which are substantially similar, generally allege, 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 complaints also assert claims for common law fraud and negligent misrepresentation, and seek unspecified damages. The defendants moved to dismiss the complaints on March 13, 2025 and on May 21, 2025, the Court held a hearing on the motion to dismiss. At the conclusion of the hearing, the Court (i) granted the motion to dismiss as to the plaintiffs’ scheme liability claims; (ii) granted the motion to dismiss as to certain claims against Ken Stillwell; and (iii) took the motion to dismiss under advisement as to all other claims. On January 8, 2026, the Court issued a written order granting the motion to dismiss as to the Section 10(b) and common law fraud claims against Ken Stillwell and denying the motion to dismiss as to the remaining claims. The Court also entered a scheduling order setting trial for February 2027.
State court cases
On February 26, 2025, the same shareholders filed two lawsuits against the Company, the Company’s chief executive officer, and the Company’s chief operating and financial officer in Massachusetts Superior Court. The first is captioned Eminence Fund Long Master, Ltd., Eminence Fund Master, Ltd., Eminence Fund II Master, LP, Eminence Partners Long II, LP, Eminence Fund Leveraged Master, Ltd., Eminence Partners, L.P., and Eminence Partners II, L.P. v. Pegasystems Inc., Alan Trefler, and Kenneth Stillwell (Case No. 2584CV00541-BLS1); the second is captioned PS Lit Recovery, LLC v. Pegasystems, Inc., Alan Trefler, and Kenneth Stillwell (Case No. 2584CV00539-BLS1). The complaints, which are substantially similar, allege the same state law claims raised in the two federal lawsuits brought by the same plaintiffs in the United States District Court for the District of Massachusetts. On April 14, 2025, the court granted the parties’ joint stipulations to stay both cases pending the resolution of the parallel federal actions and ordered the plaintiffs to file periodic status reports regarding the federal cases showing cause why the state cases should remain open.
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 these matters given the stage of the lawsuits.
In re Pegasystems Inc. Derivative Litigation
Federal court cases
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). 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 (the “Consolidated Action”) and, after defendants moved to dismiss the complaint in the Consolidated Action on December 4, 2024, the plaintiffs moved to voluntarily dismiss the Consolidated Action, and the Court granted the motion to dismiss on December 18, 2024.
The Company separately received confidential demand letters raising substantially the same allegations set forth in the Consolidated Action. 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) were 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 “Demand Review Committee”). The Demand Review Committee, with the assistance of independent legal counsel, conducted an extensive investigation of the allegations raised in the demand letters and on October 7, 2024 issued a report concluding that there are no valid claims against the Company’s directors and officers with respect to the matters raised in the demands and that it would not be in the Company’s best interests to pursue litigation against them.
On February 7, 2025, the plaintiffs in the Consolidated Action filed a new complaint against the members of the Company’s board of directors, certain employees of the Company, and the Company in the United States District Court for the District of Massachusetts, captioned Mary Larkin and Dag Sagfors, derivatively on behalf of nominal defendant Pegasystems Inc. v. Alan Trefler, Peter Gyenes, Richard Jones, Christopher Lafond, Dianne Ledingham, Sharon Rowlands, Leon Trefler, Larry Weber, Kenneth Stillwell, Don Schuerman, Kerim Akgonul, and Benjamin Baril, (the “Defendants”), and Pegasystems Inc., nominal defendant (Case 1:25-cv-10303). The complaint asserts against Defendants claims for breach of fiduciary duty, unjust enrichment, and violations of the Exchange Act relating to (i) the litigation brought by Appian in the Circuit Court of Fairfax County, Virginia, described above; (ii) alleged misconduct by Company employees alleged in that litigation; and the Class Action, described above. The Defendants filed motions to dismiss the complaint on April 28, 2025. On June 6, 2025, the plaintiffs in the consolidated derivative matter currently pending in Massachusetts Superior Court, Case No. 2484CV01734 (discussed below), moved to intervene in this matter and to stay it pending the resolution of the state derivative matter. The Court held a hearing on defendants’ motions to dismiss and state court plaintiffs’ motion to intervene on July 21, 2025. Following argument, the Court took the motions under advisement.
On October 14, 2025, the parties jointly notified the Court that on October 2, 2025 the Massachusetts Superior Court granted defendants’ motion to dismiss the related state court derivative action (see below) and proposed that the Court refrain from issuing a decision on the motions to dismiss pending a joint submission by the parties of their respective positions on the impact of the state court dismissal on the federal court case within thirty (30) days. On December 17, 2025, the court entered an order administratively closing this action in light of the developments in the State court cases, described below.
On January 7, 2026, the Collective Plaintiffs agreed in principle to a proposed settlement of the litigation. See discussion below within the “State court cases” subsection.
State court cases
On June 28, 2024, a lawsuit was filed against members of the Company’s board of directors, certain employees of the Company and the Company in the Business Litigation Section of the Superior Court in Suffolk County, Massachusetts, captioned John Dwyer and Ray Gerber, Plaintiffs, v. Alan Trefler, Peter Gyenes, Richard Jones, Christopher Lafond, Dianne Ledingham, Sharon Rowlands, Larry Weber, Leon Trefler, Don Schuerman, Kerim Akgonul, and Benjamin Baril, (“Defendants”), and Pegasystems Inc., Nominal Defendant (Case 2484CV01734) (“Dwyer Action”). The complaint generally alleges the Defendants breached their fiduciary duties in connection with alleged misconduct by Company employees alleged in the litigation brought by Appian in the Circuit Court of Fairfax County, Virginia, described above, and alleges damages from the approximately $2 billion verdict in the litigation brought by Appian in the Circuit Court of Fairfax County, Virginia, described above, the settlement of the Class Action, and litigation costs from various proceedings.
On November 22, 2024, a lawsuit was filed against members of the Company’s board of directors, certain employees of the Company and the Company in the Business Litigation Section of the Superior Court in Suffolk County, Massachusetts, captioned Jayne Birch and Robert Garfield, Plaintiffs, v. Alan Trefler, Peter Gyenes, Richard Jones, Christopher Lafond, Dianne Ledingham, Sharon Rowlands, Larry Weber, Kerim Akgonul, Don Schuerman, Leon Trefler, Douglas Kim, John Petronio, Benjamin Baril, and Kenneth Stillwell, (“Defendants”), and Pegasystems Inc., Nominal Defendant (Case 2484CV03076-BLS-1) (“Birch Action”). The complaint generally asserts the same claims asserted in the Dwyer Action.
On February 12, 2025, after submission by the parties of a stipulation and proposed order, an order was entered consolidating the Dwyer and Birch Actions and approving the schedule for the filing of a consolidated complaint and a motion to dismiss. On March 14, 2025, the plaintiffs filed a consolidated complaint in Case No. 2484CV01734. The consolidated complaint generally alleges the Defendants breached their fiduciary duties in connection with alleged misconduct by Company employees alleged in the litigation brought by Appian in the Circuit Court of Fairfax County, Virginia, described above, and in connection with the investigation conducted and the report issued by the Demand Review Committee of the Company’s board regarding the same. The Defendants moved to dismiss the complaint and after briefing by the parties, the Court held a hearing on defendants’ motion on September 4, 2025. On October 2, 2025, the Court granted Defendants’ motion to dismiss. On January 13, 2026, the court entered final judgment in defendants’ favor.
On January 7, 2026, the parties to the federal and state court cases agreed in principle to a proposed settlement of the litigation. Under the terms of the proposed settlement, the plaintiffs in the federal and state court cases (“Collective Plaintiffs”) agreed to the dismissal of all claims upon the Company adopting certain governance reforms and payment of an estimated aggregate sum of $9.75 million inclusive of a $7 million special dividend to shareholders (excluding defendants) and Collective Plaintiffs’ attorney fees. Although the outcome of the litigation is not certain until final court approval, the Company has recorded an estimated $9.75 million accrued loss as of December 31, 2025. However, it is possible that actual future losses related to the litigation could exceed the accrual amount if and to the extent that the court does not approve the proposed settlement.
On January 23, 2026, the parties jointly moved the court for relief from the final judgment in this action for the sole purpose of permitting the parties to seek Court approval of the proposed settlement.
v3.25.4
Insider Trading Arrangements
 3 Months Ended
Dec. 31, 2025
shares
Trading Arrangements, by Individual  
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
Alan Trefler [Member]  
Trading Arrangements, by Individual  
Material Terms of Trading Arrangement
On November 11, 2025, Alan Trefler, our CEO, entered into a Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K) that provides for the sale of 1,500,000 shares of our common stock. The arrangement will terminate on January 13, 2027, subject to early termination for certain specified events set forth in the arrangement.
Name Alan Trefler
Title CEO
Rule 10b5-1 Arrangement Adopted true
Adoption Date November 11, 2025
Expiration Date January 13, 2027
Arrangement Duration 428 days
Aggregate Available 1,500,000
v3.25.4
Insider Trading Policies and Procedures
 12 Months Ended
Dec. 31, 2025
Insider Trading Policies and Procedures [Line Items]  
Insider Trading Policies and Procedures Adopted true
v3.25.4
Cybersecurity Risk Management and Strategy Disclosure
 12 Months Ended
Dec. 31, 2025
Cybersecurity Risk Management, Strategy, and Governance [Line Items]  
Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block]
We recognize the critical importance of maintaining the safety and security of our systems and data and have a comprehensive approach to overseeing and managing cybersecurity and related risks. Our Board of Directors (the “Board”), the Risk Subcommittee of the Audit Committee of the Board (the “Risk Subcommittee”), and our management are actively involved in the oversight of our risk management program, of which cybersecurity represents an important component. We have established policies, standards, processes, and practices for assessing, identifying, and managing material risks from cybersecurity threats. A key component of this is our standing Security and Quality Steering Group (“SQSG”), whose members include, among others, our Chief Information Security Officer (“CISO”), Chief Product Officer, and Vice President of Cloud Technology. We have devoted significant financial and personnel resources to implement and maintain security measures to meet regulatory requirements and customer expectations, and we intend to continue to make significant investments to maintain the security of our data and cybersecurity infrastructure. There can be no guarantee that our policies, standards, processes, and practices will be properly followed in every instance or that they will be effective.
Although we are not aware of having experienced any prior material data breaches, regulatory non-compliance incidents, or cyber security incidents, we may in the future be impacted by such an event, exposing our clients and us to the risk of someone obtaining access to our information, to the information of our clients or their customers, or to our intellectual property, disabling or degrading service, or sabotaging systems or information. Any such security incident could result in a loss of confidence in the security of our services, damage our reputation, disrupt our business, require us to incur significant costs of investigation, remediation, and/or payment of a ransom, lead to legal liability, negatively impact our future sales, and result in a substantial financial loss. For additional information, see "Item 1A. Risk Factors" of this Annual Report.
Risk Management and Strategy
Our policies, standards, processes, and practices for assessing, identifying, and managing material risks from cybersecurity threats are integrated into our overall risk management program and are based on frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization, and certain other applicable industry standards.
Our cybersecurity program focuses on the following key areas:
Collaboration
We have implemented a governance structure and processes to aggregate reported cybersecurity risks on behalf of Pega Cloud, Pega’s software products, and the corporate environment. Our SQSG is responsible for providing strategic direction for implementing and maintaining our cyber risk management program.
Risk Assessment
Our cyber risk management program is designed to follow the ISO 31000, NIST SP 800-37, and NIST SP 800-53 frameworks and is within the scope of our ISO 27001 certifications.
At least annually, we conduct cybersecurity risk assessments that consider information from internal stakeholders, known information security vulnerabilities, and information from external sources, such as reported security incidents that have impacted other companies, industry trends, and evaluations by third parties and consultants. The results of the assessments are provided to our SQSG and are used to drive alignment on, and prioritization of, initiatives to enhance our security controls, make recommendations to improve processes, and inform our broader enterprise-level risk assessment. Key findings of these assessments are periodically presented to the Board and the Risk Subcommittee.
Technical Safeguards
We regularly assess and deploy technical safeguards designed to protect our information systems from cybersecurity threats. Such safeguards are regularly evaluated and improved based on vulnerability assessments, cybersecurity threat intelligence, and incident response experience.
Incident Response and Recovery Planning
We have implemented Cyber Incident Response Programs, which are within the scope of our ISO 27001 certifications. We have also implemented Business Continuity Programs, which are within the scope of our ISO 22301 certification. We have established comprehensive incident response and recovery plans and test and evaluate the effectiveness of those plans regularly.
Third-Party Risk Management
We have implemented a Vendor Cybersecurity Risk Management Program (“VCRMP”), which is within the scope of our ISO 27001 certifications. The VCRMP controls are designed to identify and mitigate cybersecurity threats associated with our use of third-party service providers. These providers are subject to security risk assessments at the time of onboarding, contract renewal, and upon detection of an increase in risk profile. We use a variety of inputs in making these risk assessments, including information supplied by providers and third parties. In addition, we require our providers to meet appropriate security requirements, controls and responsibilities, and investigate security incidents that have impacted our third-party providers, as appropriate.
Education and Awareness
We require all employees to participate in security awareness training, including frequent phishing tests. Currently, our mandatory employee training courses include Security Awareness, Physical Security Awareness, Mobile Device Security, Business Continuity and Phishing, Work From Home, and AI Use. In addition, all of our employee software developers are required to take additional security awareness training, currently including Secure Development. We periodically adjust the list of mandatory and optional courses.
Corporate Security Posture
We periodically conduct independent security assessments to assess our corporate environment’s security posture and inform where cyber security investments should be made. For systems in our corporate environment where our cloud certifications have an operational dependency, we also maintain ISO/IEC 27001 certifications relating to overall IT processes and controls and ISO 22301 certification relating to business continuity.
Product Security Posture
To facilitate identification of security vulnerabilities in our products, we periodically conduct third party penetration tests and participate in the independent Verified By Veracode program. We also generate a monthly software bill of materials that identifies open source included in certain of our product offerings and periodically have an independent security assessment firm evaluate the security risks linked to suppliers we use, including source code repositories, the infrastructure employed for software development, and the mechanisms used for software delivery, such as Amazon Web Services (“AWS”), Google Cloud, and Microsoft Azure. Our Chief Product Officer reviews these findings and provides updates to our SQSG.
Our AI products maintain an ISO/IEC 42001:2023 certification, an international standard for establishing, implementing, maintaining, and improving an Artificial Intelligence Management System (AIMS) to ensure responsible, ethical, and trustworthy AI use. Certification helps to validate our commitment to managing AI risks (like bias, privacy, and security), enhances stakeholder trust, and provides a structured framework for AI governance.
We make Software Bill of Materials (“SBOM”) for products under standard support available to clients, listing the components of our software, providing clients transparency into open-source risk.
We regularly release new versions of our products to address identified security vulnerabilities, enabling clients to stay updated with the latest product releases. However, even after we make these updates available, it is possible that clients do not implement these updates or use products on extended support that do not include security updates.
Pega Cloud Security Posture
Pega Cloud undergoes several security assessments a year. Redacted versions of these reports are made available to our clients. Pega Cloud also maintains several security, quality, and industry certifications, which are listed at https://pega.com/trust, which is included as an inactive reference and the content of which is not incorporated by reference into this Annual Report.
Pega Cloud for Government is rated FedRAMP High and undergoes several security assessments a year as part of the FedRAMP certification process.
Our Vice President of Cloud Technology reviews these assessments and provides updates to our SQSG.
Cybersecurity Risk Management Processes Integrated [Flag] true
Cybersecurity Risk Management Processes Integrated [Text Block] Our policies, standards, processes, and practices for assessing, identifying, and managing material risks from cybersecurity threats are integrated into our overall risk management program and are based on frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization, and certain other applicable industry standards.
Cybersecurity Risk Management Third Party Engaged [Flag] true
Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] true
Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] false
Cybersecurity Risk Board of Directors Oversight [Text Block]
As part of our corporate governance process, the Board, along with the Risk Subcommittee, oversee our risk management process, which includes cybersecurity and related risks. Our CISO periodically meets with the Board and Risk Subcommittee to inform and update them on our cybersecurity program.
Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block]
As part of our corporate governance process, the Board, along with the Risk Subcommittee, oversee our risk management process, which includes cybersecurity and related risks. Our CISO periodically meets with the Board and Risk Subcommittee to inform and update them on our cybersecurity program.
Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block]
As part of our corporate governance process, the Board, along with the Risk Subcommittee, oversee our risk management process, which includes cybersecurity and related risks. Our CISO periodically meets with the Board and Risk Subcommittee to inform and update them on our cybersecurity program.
Cybersecurity Risk Role of Management [Text Block]
As part of our corporate governance process, the Board, along with the Risk Subcommittee, oversee our risk management process, which includes cybersecurity and related risks. Our CISO periodically meets with the Board and Risk Subcommittee to inform and update them on our cybersecurity program.
SQSG and Key Personnel
We have a standing SQSG whose members include, among others, our CISO, Chief Product Officer, and Vice President of Cloud Technology. The SQSG is charged with providing strategic direction for the implementation and ongoing operation of our cyber security program. The SQSG meets at least quarterly. Our CISO chairs the SQSG and decisions and recommendations are based on a consensus of the members.
Our CISO has over twenty years of professional experience, with thirteen years in information security roles. He has been with Pega for over six years and has a Master of Science degree from Northwestern University.
Our Chief Product Officer has been with Pega for over thirty years, has extensive experience in software development, and has a Bachelor of Science from the Indiana University of Pennsylvania.
Our Vice President of Cloud Technology has been with Pega for over eight years and has twenty-six years of networking and security management experience, with eighteen years of leadership roles in cloud services and related information security issues.
Cybersecurity Risk Management Positions or Committees Responsible [Flag] true
Cybersecurity Risk Management Positions or Committees Responsible [Text Block]
We have a standing SQSG whose members include, among others, our CISO, Chief Product Officer, and Vice President of Cloud Technology. The SQSG is charged with providing strategic direction for the implementation and ongoing operation of our cyber security program. The SQSG meets at least quarterly. Our CISO chairs the SQSG and decisions and recommendations are based on a consensus of the members.
Cybersecurity Risk Management Expertise of Management Responsible [Text Block]
Our CISO has over twenty years of professional experience, with thirteen years in information security roles. He has been with Pega for over six years and has a Master of Science degree from Northwestern University.
Our Chief Product Officer has been with Pega for over thirty years, has extensive experience in software development, and has a Bachelor of Science from the Indiana University of Pennsylvania.
Our Vice President of Cloud Technology has been with Pega for over eight years and has twenty-six years of networking and security management experience, with eighteen years of leadership roles in cloud services and related information security issues.
Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block]
We have a standing SQSG whose members include, among others, our CISO, Chief Product Officer, and Vice President of Cloud Technology. The SQSG is charged with providing strategic direction for the implementation and ongoing operation of our cyber security program. The SQSG meets at least quarterly. Our CISO chairs the SQSG and decisions and recommendations are based on a consensus of the members.
Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] true
v3.25.4
SIGNIFICANT ACCOUNTING POLICIES (Policies)
 12 Months Ended
Dec. 31, 2025
Accounting Policies [Abstract]  
Management estimates and reporting
Management estimates and reporting
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates. Accounts with reported amounts based on significant estimates and judgments include, but are not limited to, revenue, unbilled receivables, deferred revenue, deferred income taxes, deferred commissions, income taxes payable, convertible senior notes, and goodwill.
Principles of consolidation
Principles of consolidation
The Company’s consolidated financial statements reflect Pegasystems Inc. and subsidiaries in which the Company holds a controlling financial interest. All intercompany accounts and transactions were eliminated in consolidation.
Reclassifications
Reclassifications
In the fourth quarter of 2025, we combined revenue and cost of revenue from Perpetual license into Subscription license within our Consolidated Statements of Operations and notes. Prior period amounts related to the components of net deferred tax assets and liabilities, revenue, and cost of revenue reported in our consolidated financial statements and notes have been reclassified to conform to the current year presentation. Such reclassifications did not affect total revenues, income from operations, or net income.
Revenue and deferred commissions
Revenue
The Company’s revenue is derived from:
•Subscription services, composed of revenue from Pega Cloud and maintenance. Pega Cloud is the Company’s hosted Pega Platform and software applications. Maintenance revenue is earned from providing client support, software upgrades, and bug fixes or patches.
•Subscription license, composed of revenue from term license arrangements for the Company’s Pega Platform and software applications. Term licenses represent functional intellectual property and are delivered separately from maintenance and services.
•Perpetual license, composed of revenue from perpetual license arrangements for the Company’s Pega Platform and software applications. Perpetual licenses represent functional intellectual property and are delivered separately from maintenance and services.
•Consulting, primarily related to new software license implementations, training, and reimbursable costs.
Performance obligations
The Company’s software license and Pega Cloud arrangements often contain multiple performance obligations. If a contract contains multiple performance obligations, the Company accounts for each distinct performance obligation separately. The transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. Any discounts or expected potential future price concessions are considered when determining the total transaction price. The Company’s policy is to exclude sales and similar taxes collected from clients from the determination of transaction price.
The Company’s typical performance obligations are:
Performance obligation
How stand-alone selling price is typically determined
When performance obligation is typically satisfied
When payment is typically due
Income statement line item
Pega CloudResidual approachRatably over the term of the service (over time)Annually, or more frequently, over the term of the service
Subscription services
Term licenseResidual approach
Upon transfer of control to the client, defined as when the client can use and benefit from the license (point in time)
Annually, or more frequently, over the term of the license
Subscription license
Maintenance
Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1)
Ratably over the term of the maintenance (over time)Annually, or more frequently, over the term of the maintenance
Subscription services
Perpetual licenseResidual approach
Upon transfer of control to the client, defined as when the client can use and benefit from the license (point in time)
Effective date of the license
Subscription license
Consulting
- time and materials
Observable hourly rate for time and materials-based services in similar geographies
Based on hours incurred to date (over time)
Monthly
Consulting
Consulting
- fixed price
Observable hourly rate for time and materials-based services in similar geographies multiplied by estimated hours for the project
Based on hours incurred as a percentage of total estimated hours (over time)
As contract milestones are achieved
Consulting
(1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client.
The Company utilizes the residual approach for software license and Pega Cloud performance obligations since the selling price is highly variable and the stand-alone selling price is not discernible from past transactions or other observable evidence. Periodically, the Company reevaluates whether the residual approach remains appropriate. As required, the Company evaluates its residual approach estimate compared to all available observable data before concluding the estimate represents its stand-alone selling price.
If the contract grants the client the option to acquire additional products or services, the Company assesses whether the option represents a material right to the client that the client would not receive without entering into that contract. Discounts on options to purchase additional products and services greater than discounts available to similar clients are accounted for as an additional performance obligation.
During most of each client contract term, the amount invoiced is generally less than the amount of revenue recognized to date, primarily because we transfer control of the performance obligation related to the software license at the inception of the contract term. A significant portion of the total contract consideration is typically allocated to the license performance obligation. Therefore, the Company’s contracts often result in the recording of unbilled receivables and contract assets throughout most of the contract term. The Company records an unbilled receivable or contract asset when revenue recognized on a contract exceeds the billings. The Company recognizes an impairment on receivables and contract assets if, after contract inception, it becomes probable that payment is not collectible. The Company reviews receivables and contract assets on an individual basis for impairment.
Variable consideration
The Company’s arrangements can include variable fees, such as the option to purchase additional usage of a previously delivered software license. The Company may also provide pricing concessions to clients, a business practice that gives rise to variable fees. For variable fees arising from the client’s acquisition of additional usage of a previously delivered software license, the Company applies the sales and usage-based royalties guidance related to a license of intellectual property and recognizes the revenue in the period the underlying sale or usage occurs. The Company includes variable fees in the determination of total transaction price if it is not probable that a significant future reversal of revenue will occur. The Company uses the expected value or most likely value amount, whichever is more appropriate for specific circumstances, to estimate variable consideration, and the estimates are based on the level of historical price concessions offered to clients. The variable consideration related to pricing concessions and other forms of variable consideration, including usage-based fees, have not been material to the Company’s consolidated financial statements.
Significant financing components
The Company generally does not intend to provide financing to its clients, as financing arrangements are not contemplated as part of the negotiated terms of contracts between the Company and its clients. Although there may be an intervening period between the delivery of the license and the payment, typically in term license arrangements, the purpose of that timing difference is to align the client’s payment with the timing of the use of the software license or service.
In certain circumstances, however, there are instances where revenue recognition timing differs from the timing of payment due to extended payment terms or fees that are non-proportional to the associated usage of software licenses. In these instances, the Company evaluates whether a significant financing component exists. This evaluation includes determining the difference between the consideration the client would have paid when the performance obligation was satisfied and the amount of consideration paid. Contracts that include a significant financing component are adjusted for the time value of money at the rate inherent in the contract, the client’s borrowing rate, or the Company’s incremental borrowing rate, depending upon the recipient of the financing.
During 2025, 2024, and 2023, significant financing components were not material.
Contract modifications
The Company assesses contract modifications to determine:
•if the additional products and services are distinct from the products and services in the original arrangement; and
•if the amount of consideration expected for the added products and services reflects the stand-alone selling price of those products and services.
A contract modification meeting both criteria is accounted for as a separate contract. If a contract modification does not meet both criteria, it is accounted for either:
•on a prospective basis as a termination of the existing contract and the creation of a new contract; or
•on a cumulative catch-up basis.
Deferred commissions
The Company recognizes an asset for the incremental costs of obtaining a client contract, primarily related to sales commissions. The Company expects to benefit from those costs for more than one year. Commissions earned upon the execution of initial contracts are allocated to each performance obligation within the contract and amortized according to the transfer of underlying goods and services within those contracts and expected renewals. The expected benefit period is determined based on the length of the client contracts, client attrition rates, the underlying technology lifecycle, and the competitive marketplace’s influence on the products and services sold. Deferred costs allocated to maintenance and deferred costs for Pega Cloud arrangements are amortized over an average expected benefit period of 4.5 years. Deferred costs allocated to software licenses, and any expected renewals of term software licenses within the 4.5 years expected benefit period, are amortized at the point in time control of the software license is transferred. Deferred costs allocated to consulting are amortized over a period consistent with the pattern of transfer of control for the related services. Commissions earned on contract amendments and renewals are allocated to each performance obligation within the contract and amortized over the contractual term.
Financial instruments
Financial instruments
The principal financial instruments held by the Company consist of cash equivalents, marketable securities, receivables, and accounts payable. The Company considers debt securities readily convertible to known amounts of cash with maturities of three months or less from the purchase date to be cash equivalents. Interest is recorded when earned. The Company’s investments are classified as available-for-sale and are carried at fair value. Unrealized gains and losses from changes in fair value, excluding credit-related amounts are recorded as a component of accumulated other comprehensive (loss), net of related income taxes. The Company evaluates available‑for‑sale debt securities in an unrealized loss position to determine whether a credit loss exists. If a credit loss is identified, the Company records an allowance for credit losses, limited to the amount that fair value is below amortized cost. Gains and losses on investments are calculated based on the specific investment.
Property and equipment
Property and equipment
Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful life of each asset, which are three years for computer equipment and five years for furniture and fixtures. Leasehold improvements are amortized over the lesser of the lease’s term or the useful life of the asset. Repairs and maintenance costs are expensed as incurred.
Leases
Leases
All of the Company’s leases are operating leases, primarily composed of office space leases. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its operating right of use assets and lease liabilities at the lease commencement date and thereafter if modified. Fixed lease costs are recognized on a straight-line basis over the lease term. Variable lease costs include payments required under leases for common area maintenance, real estate taxes, utilities, service charges, and other variable costs that are not reflected in the measurement of right of use assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The Company combines lease and non-lease components when determining lease costs for its office space leases. The lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain it will exercise those options. For short-term leases, defined as leases with a term of twelve months or less, the Company does not recognize an associated lease liability and right of use asset. The Company’s leases do not contain material residual value guarantees or restrictive covenants.
Loss contingencies and legal costs
Loss contingencies and legal costs
The Company accrues loss contingencies when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
Significant judgments are required to determine the probability and the range of the outcomes, and the estimates are based only on the information available to the Company at the time. Due to the inherent uncertainties involved in claims, legal proceedings, and in estimating the losses that may arise, actual outcomes may differ from the Company’s estimates. Contingencies deemed not probable, or for which losses were not estimable in one period, may become probable or losses may become estimable in later periods, which may have a material impact on the Company’s results of operations and financial position. As additional information becomes available, the Company reassesses the potential liability from pending claims and litigation and may revise its estimates. 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. Legal costs are expensed as incurred.
Internal-use software
Internal-use software
The Company capitalizes and amortizes certain direct costs associated with computer software developed or purchased for internal use incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. The Company amortizes capitalized internal-use software on a straight-line basis over its estimated useful life, which is generally over three to five years, commencing on the date the software is placed into service.
Goodwill
Goodwill
Goodwill represents the residual purchase price paid in a business combination after the fair value of all identified assets and liabilities have been recorded. Goodwill is not amortized. The Company has a single reporting unit.
Intangible and long-lived assets
Intangible and long-lived assets
The Company’s intangible assets are amortized using the straight-line method over their estimated useful life. The Company evaluates its long-lived tangible and intangible assets for impairment whenever events or changes in circumstances indicate that such assets’ carrying amount may not be recoverable. Impairment is assessed by comparing the undiscounted cash flows expected to be generated by the long-lived tangible or intangible assets to their carrying value. If impairment exists, the Company calculates the impairment by comparing the carrying value to its fair value as determined by discounted expected cash flows.
Cash equivalents
Cash equivalents
Cash equivalents include money market funds and other investments with original maturities of three months or less.
Restricted cash
Restricted cash
The Company records restricted cash amounts as a current asset on the consolidated balance sheets if the restriction expires in less than 12 months, or as a non-current asset if the restriction is greater than 12 months. If there is no minimum time frame during which the cash must remain restricted, the nature of the transactions related to the restriction determine the classification. Restricted cash primarily relates to amounts deposited to secure customer guarantees and various letters of credit.
Business combinations
Business combinations
The Company uses its estimates and assumptions to assign a fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. The Company reevaluates these estimates and assumptions quarterly as new information arises and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations.
Research and development and software development costs
Research and development and software development costs
Research and development costs are expensed as incurred. Capitalization of computer software developed for resale begins upon the establishment of technological feasibility, generally demonstrated by a working model or an operative version of the computer software product. Such costs have not been material to date, as technological feasibility is established within a short time frame from the software’s general availability.
Stock-based compensation
Stock-based compensation
The Company recognizes stock-based compensation expense associated with equity awards based on the award’s fair value at the grant date. Stock-based compensation expense is adjusted each period for anticipated forfeitures. For service-based awards, stock-based compensation is recognized over the requisite service period, which is generally the vesting period. For performance-based awards, stock-based compensation expense is recognized over the longer of (a) the implicit service period for performance-metric achievement or (b) the requisite service period. During each reporting period, stock-based compensation expense is recorded based on expected achievement of performance targets. Changes in estimates of the expected achievement of performance targets that result in a change in the number of shares that are expected to vest are recognized on a cumulative catch-up basis during the reporting period in which the estimate changed.
Foreign currency translation and remeasurement
Foreign currency translation and remeasurement
The translation of assets and liabilities for the Company’s subsidiaries with functional currencies other than the U.S. dollar are made at period-end exchange rates. Revenue and expense accounts are translated at the average exchange rates during the period transactions occur. The resulting translation adjustments are reflected in accumulated other comprehensive (loss). Realized and unrealized exchange gains or losses from transactions and remeasurement adjustments are reflected in foreign currency transaction gain (loss) in the accompanying consolidated statements of operations.
Accounting for income taxes
Accounting for income taxes
The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. Future realization of the Company’s deferred tax assets ultimately depends on sufficient taxable income within the available carryback or carryforward periods. Taxable income sources include taxable income in prior carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and projected future taxable income. The Company records a valuation allowance to reduce its deferred tax assets to an amount it believes is more-likely-than-not to be realized. Changes in the valuation allowance impact income tax expense in the period of adjustment. The Company recognizes excess tax benefits when realized, as a reduction of the provision for income taxes.
The Company assesses its income tax positions and records tax benefits based on management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. The Company classifies liabilities for uncertain tax positions as non-current liabilities unless the uncertainty is expected to be resolved within one year. The Company classifies interest and penalties on uncertain tax positions as income tax expense.
As a global company, significant judgment must be used to calculate and provide for income taxes in each of the tax jurisdictions in which it operates. In the ordinary course of the Company’s business, there are transactions and calculations undertaken whose ultimate tax outcome cannot be certain. Some of these uncertainties arise because of transfer pricing for transactions with the Company’s subsidiaries and nexus and tax credit estimates. In addition, the calculation of acquired tax attributes and the associated limitations are complex.
Advertising expense
Advertising expense
Advertising costs are expensed as incurred.
Newly adopted accounting pronouncements and Accounting pronouncements not yet effective
Newly adopted accounting pronouncements
Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 includes expanded income tax rate reconciliation disclosures, a disaggregation of income taxes paid, and other expanded disclosures. The Company adopted this standard on a prospective basis for the year ended December 31, 2025. For additional information, see "Note 18. Income Taxes".
Accounting pronouncements not yet effective
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). Among other items, the requirements include expanded disclosures around employee compensation and selling expenses. ASU 2024-03 will be effective for the Company for the year ending December 31, 2027. The Company is still evaluating the impact of this new guidance on its consolidated financial statements but expect the adoption to result in disclosure changes only.
Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, “Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”). ASU 2025-06 introduces a more principles-based framework to the capitalization of software intended for internal use focused on management’s authorization and commitment to fund a development project and the probability of whether the project will be completed and used for its intended function. ASU 2025-06 will be effective for the Company beginning January 1, 2028. The Company is currently evaluating the impact ASU 2025-06 will have on its consolidated financial statements.
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 applied judgment when determining expected volatility. The Company considers the underlying equity security’s historical and implied volatility levels. The Capped Call Transactions expired upon maturity of the Notes during the three months ended March 31, 2025. 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.
v3.25.4
SIGNIFICANT ACCOUNTING POLICIES (Tables)
 12 Months Ended
Dec. 31, 2025
Accounting Policies [Abstract]  
Schedule of Performance Obligations
The Company’s typical performance obligations are:
Performance obligation
How stand-alone selling price is typically determined
When performance obligation is typically satisfied
When payment is typically due
Income statement line item
Pega CloudResidual approachRatably over the term of the service (over time)Annually, or more frequently, over the term of the service
Subscription services
Term licenseResidual approach
Upon transfer of control to the client, defined as when the client can use and benefit from the license (point in time)
Annually, or more frequently, over the term of the license
Subscription license
Maintenance
Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1)
Ratably over the term of the maintenance (over time)Annually, or more frequently, over the term of the maintenance
Subscription services
Perpetual licenseResidual approach
Upon transfer of control to the client, defined as when the client can use and benefit from the license (point in time)
Effective date of the license
Subscription license
Consulting
- time and materials
Observable hourly rate for time and materials-based services in similar geographies
Based on hours incurred to date (over time)
Monthly
Consulting
Consulting
- fixed price
Observable hourly rate for time and materials-based services in similar geographies multiplied by estimated hours for the project
Based on hours incurred as a percentage of total estimated hours (over time)
As contract milestones are achieved
Consulting
(1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client.
Expected future revenue from existing non-cancellable contracts:
As of December 31, 2025:
(Dollars in thousands)Subscription servicesSubscription licenseConsultingTotal
Pega CloudMaintenance
1 year or less
$709,190 $235,152 $77,528 $53,353 $1,075,223 52 %
1-2 years
400,926 73,895 2,636 854 478,311 23 %
2-3 years
213,259 51,327 2,101 28 266,715 13 %
Greater than 3 years
214,189 32,325 7,331 88 253,933 12 %
$1,537,564 $392,699 $89,596 $54,323 $2,074,182 100 %
As of December 31, 2024:
(Dollars in thousands)Subscription servicesSubscription licenseConsultingTotal
Pega CloudMaintenance
1 year or less
$525,133 $230,866 $89,197 $50,519 $895,715 56 %
1-2 years
328,234 65,461 10,874 3,297 407,866 25 %
2-3 years
159,536 24,598 733 125 184,992 11 %
Greater than 3 years
114,256 19,935 678 50 134,919 8 %
$1,127,159 $340,860 $101,482 $53,991 $1,623,492 100 %
v3.25.4
MARKETABLE SECURITIES (Tables)
 12 Months Ended
Dec. 31, 2025
Investments, Debt and Equity Securities [Abstract]  
Schedule of Marketable Securities
December 31, 2025December 31, 2024
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair ValueAmortized CostUnrealized GainsUnrealized LossesFair Value
Government debt$5,755 $3 $(4)$5,754 $11,851 $1 $(19)$11,833 
Corporate debt207,278 428 (108)207,598 391,097 63 (123)391,037 
$213,033 $431 $(112)$213,352 $402,948 $64 $(142)$402,870 
v3.25.4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE (Tables)
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Schedule of Receivables
Receivables
(in thousands)
December 31, 2025December 31, 2024
Accounts receivable, net$264,713 $305,468 
Unbilled receivables, net166,478 173,085 
Long-term unbilled receivables, net102,544 61,407 
$533,735 $539,960 
Schedule of Unbilled Receivables
Unbilled receivables by expected collection date:
(Dollars in thousands)
December 31, 2025
1 year or less$166,478 62 %
1-2 years69,482 26 %
2-5 years33,062 12 %
$269,022 100 %
Schedule of Unbilled Receivables by Contract Effective Date
Unbilled receivables by contract effective date:
(Dollars in thousands)
December 31, 2025
2025$179,995 67 %
202458,658 22 %
202327,754 10 %
20222,304 1 %
2021 and prior311 — %
$269,022 100 %
Schedule of Major Clients
Clients that represented 10% or more of the Company’s total accounts receivable and unbilled receivables:
December 31, 2025December 31, 2024
Client A
Accounts receivable*20 %
Unbilled receivables*— %
Total receivables*11 %
* Client accounted for less than 10% of receivables.
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. Contract assets as of December 31, 2023 were $36.9 million.
(in thousands)
December 31, 2025December 31, 2024
Contract assets (1)
$17,678 $13,498 
Long-term contract assets (2)
17,421 18,321 
$35,099 $31,819 
(1) Included in other current assets.
(2) Included in other long-term assets.
Deferred revenue
Deferred revenue consists of billings made and payments received in advance of revenue recognition. Deferred revenue as of December 31, 2023 was $380.3 million.
(in thousands)
December 31, 2025December 31, 2024
Deferred revenue$509,275 $423,910 
Long-term deferred revenue (1)
9,568 2,121 
$518,843 $426,031 
(1) Included in other long-term liabilities.
v3.25.4
DEFERRED COMMISSIONS (Tables)
 12 Months Ended
Dec. 31, 2025
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of Impairment of Deferred Commissions
December 31,
(in thousands)
20252024
Deferred commissions (1)
$104,574 $105,405 
(1) Included in other long-term assets.
Schedule of Amortization of Deferred Commissions
(in thousands)202520242023
Amortization of deferred commissions (1)
$68,573 $62,269 $59,461 
(1) Included in selling and marketing expenses.
v3.25.4
PROPERTY AND EQUIPMENT (Tables)
 12 Months Ended
Dec. 31, 2025
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment
(in thousands)December 31,
20252024
Leasehold improvements
$58,311 $51,932 
Computer equipment
29,686 29,817 
Furniture and fixtures
4,993 4,603 
Computer software purchased
9,439 9,918 
Computer software developed for internal use
19,872 19,776 
Fixed assets in progress
10,510 5,038 
132,811 121,084 
Less: accumulated depreciation
(87,571)(79,278)
$45,240 $41,806 
(1) Included in other long-term assets.
Schedule of Depreciation Expense
(in thousands)202520242023
Depreciation expense$11,069 $14,432 $14,806 
v3.25.4
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)
 12 Months Ended
Dec. 31, 2025
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
(in thousands)
20252024
January 1,$81,113 $81,611 
Currency translation adjustments393 (498)
December 31,$81,506 $81,113 
Schedule of Intangibles
Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives:
December 31, 2025
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,164 $(62,822)$342 
Technology
2-10 years
68,115 (67,255)860 
Other
1-5 years
5,361 (5,361)— 
$136,640 $(135,438)$1,202 
(1) Included in other long-term assets.
December 31, 2024
(in thousands)Useful LivesCostAccumulated Amortization
Net Book Value (1)
Client-related
4-10 years
$63,107 $(61,395)$1,712 
Technology
2-10 years
68,115 (65,995)2,120 
Other
1-5 years
5,361 (5,361)— 
$136,583 $(132,751)$3,832 
(1) Included in other long-term assets.
Schedule of Future Estimated Intangibles Assets Amortization
Future estimated intangible assets amortization:
(in thousands)
December 31, 2025
2026$874 
2027328 
$1,202 
Schedule of Amortization of Intangible Assets
Amortization of intangible assets:
(in thousands)
202520242023
Cost of revenue$1,260 $1,783 $2,570 
Selling and marketing1,370 1,370 1,370 

$2,630 $3,153 $3,940 
v3.25.4
OTHER ASSETS AND LIABILITIES (Tables)
 12 Months Ended
Dec. 31, 2025
Other Assets and Liabilities [Abstract]  
Schedule of Other Assets and Liabilities
Other current assets
(in thousands)December 31, 2025December 31, 2024
Prepaid expenses
$65,293 $38,155 
Income tax receivables31,535 58,359 
Contract assets17,678 13,498 
Indirect tax receivable2,172 2,488 
Restricted cash
1,577 98 
Other3,050 2,580 
$121,305 $115,178 
Other long-term assets
(in thousands)December 31, 2025December 31, 2024
Deferred income taxes$175,472 $4,268 
Deferred commissions104,574 105,405 
Right of use assets60,574 62,429 
Property and equipment45,240 41,806 
Venture investments22,021 21,234 
Contract assets17,421 18,321 
Income tax receivables
15,459 13,299 
Intangible assets1,202 3,832 
Restricted cash2,336 4,328 
Other25,200 17,127 
$469,499 $292,049 
Accrued expenses
(in thousands)December 31, 2025December 31, 2024
Outside professional services
$15,233 $10,639 
Litigation settlements9,750 — 
Income and other taxes7,273 5,055 
Employee related
5,464 4,833 
Marketing and sales program
1,519 2,150 
Cloud hosting
1,064 1,802 
Repurchases of common stock unsettled— 1,500 
Other4,544 5,565 
$44,847 $31,544 
Other current liabilities
(in thousands)December 31, 2025December 31, 2024
Operating lease liabilities$15,142 $14,551 
Dividends payable5,110 2,583 
Other1,683 1,732 
$21,935 $18,866 
Other long-term liabilities
(in thousands)December 31, 2025December 31, 2024
Income taxes payable$23,331 $15,956 
Deferred revenue9,568 2,121 
Other12,961 11,011 
$45,860 $29,088 
v3.25.4
SEGMENT INFORMATION (Tables)
 12 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
Schedule of Information of Operation Income (Expense)
(in thousands)202520242023
Total revenue$1,745,812 $1,497,180 $1,432,616 
Total cost of revenue421,382 390,665 378,483 
Selling
484,736 450,527 474,405 
Marketing
93,901 84,253 84,772 
Research and development312,681 298,074 295,512 
General and administrative148,722 112,848 96,743 
Other segment items, net (1)
3,763 18,177 7,261 
(Benefit from) provision for income taxes(112,810)43,447 27,632 
Net income$393,437 $99,189 $67,808 
(1) Includes Litigation settlement, net of recoveries, Restructuring, Foreign currency transaction (loss), Interest income, Interest expense, (Loss) on capped call transactions, and Other income, net.
Schedule of Long-Lived Assets by Geographic Area
Long-lived assets related to the Company’s U.S. and international operations consist of property and equipment, which are included in Other long-term assets in the Company’s consolidated balance sheet:
(in thousands)
December 31, 2025December 31, 2024
U.S.$40,060 89 %$37,405 89 %
International5,180 11 %4,401 11 %
$45,240 100 %$41,806 100 %
v3.25.4
LEASES (Tables)
 12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
Schedule of Expense
(in thousands)202520242023
Fixed lease costs
$14,700 $21,422 $19,718 
Short-term lease costs1,715 1,746 2,884 
Variable lease costs
7,465 6,901 8,148 
$23,880 $30,069 $30,750 
Schedule of Right of Use Asset and Lease Liabilities
(in thousands)December 31, 2025December 31, 2024
Right of use assets (1)
$60,574 $62,429 
Operating lease liabilities (2)
$15,142 $14,551 
Long-term operating lease liabilities$60,825 $67,647 
(1) Included in other long-term assets.
(2) Included in other current liabilities.
Schedule of Weighted Average and Discount Rate
The weighted-average remaining lease term and discount rate for the Company’s leases were:
December 31, 2025December 31, 2024
Weighted-average remaining lease term5.4 years6.2 years
Weighted-average discount rate (1)
5.2 %4.8 %
(1) The rates implicit in 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)December 31, 2025
2026$18,275 
202716,635 
202814,879 
202912,046 
203010,356 
Thereafter14,907 
Total lease payments87,098 
Less: imputed interest (1)
(11,131)
$75,967 
(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 Information
(in thousands)20252024
Cash paid for operating leases, net of tenant improvement allowances$19,302 $18,444 
Right of use assets obtained in exchange for operating lease obligations$9,146 $16,682 
v3.25.4
DEBT (Tables)
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Schedule of Carrying Value and Interest Expense Related to the Notes
Carrying value of the Notes:
(in thousands)December 31, 2025December 31, 2024
Principal$— $467,864 
Unamortized issuance costs— (394)
Convertible senior notes, net$— $467,470 

Interest expense related to the Notes:
(in thousands)20252024
Contractual interest expense (0.75% coupon)
$595 $3,725 
Amortization of issuance costs
394 2,451 
$989 $6,176 
Schedule of Change in Capped Call Transactions
Change in capped call transactions:
(in thousands)20252024
January 1,$223 $893 
Settlements— (7)
Fair value adjustment(223)(663)
December 31,$— $223 
v3.25.4
RESTRUCTURING (Tables)
 12 Months Ended
Dec. 31, 2025
Restructuring and Related Activities [Abstract]  
Schedule of Restructuring Activities and Accrued Employee Severance and Related Benefits
Restructuring Expense
(in thousands)202520242023
Employee severance and related benefits$12,778 $(614)$18,721 
Office space reductions (1)
(1,238)5,142 3,026 
$11,540 $4,528 $21,747 
(1) These primarily relate to non-cash operating lease adjustments.
Restructuring activity
Accrued employee severance and related benefits:
(in thousands)2025
January 1,$2,000 
Costs incurred12,778 
Cash disbursements(2,056)
Currency translation adjustments136 
December 31, (1)
$12,858 
(1) Included in accrued compensation and related expenses.
v3.25.4
FAIR VALUE MEASUREMENTS (Tables)
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Schedule of Assets and Liabilities Measured at Fair Value
Assets and liabilities measured at fair value on a recurring basis:
December 31, 2025December 31, 2024
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash equivalents$33,043 $8,463 $— $41,506 $5,318 $148,926 $— $154,244 
Marketable securities $— $213,352 $— $213,352 $— $402,870 $— $402,870 
Capped Call Transactions
$— $— $— $— $— $223 $— $223 
Venture investments
$— $— $22,021 $22,021 $— $— $21,234 $21,234 
Schedule of Changes in Venture Investments
Changes in venture investments:
(in thousands)20252024
January 1,$21,234 $19,450 
New investments15,929 550 
Sales of investments(35,164)— 
Changes in foreign exchange rates136 (32)
Changes in fair value:
included in other income, net
20,421 1,628 
included in other comprehensive income
(535)(362)
December 31,$22,021 $21,234 
v3.25.4
STOCKHOLDERS' EQUITY (Tables)
 12 Months Ended
Dec. 31, 2025
Equity [Abstract]  
Schedule of Dividends Declared
Dividends declared
202520242023
Dividends declared (per share)$0.105 $0.06 $0.06 
Dividend payments to stockholders (in thousands)$15,422 $10,199 $9,964 
Schedule of Stock Repurchase Authorization Activity
Stock repurchase authorization activity:
(in thousands)202520242023
SharesAmountSharesAmountSharesAmount
January 1,$240,443 $60,000 $58,075 
Authorizations (1)
500,000 250,000 1,925 
Repurchases paid (2) (3)
(10,659)(498,189)(1,618)(68,057)— — 
Repurchases unpaid at period end (2) (3)
— — (32)(1,500)— — 
December 31,$242,254 $240,443 $60,000 
(1) This represents increases in the repurchase authority made by the Board of Directors.
(2) Purchases under this program have been made on the open market.
(3) Amounts presented are exclusive of the U.S. excise tax on share repurchases.
v3.25.4
REVENUE (Tables)
 12 Months Ended
Dec. 31, 2025
Revenue from Contract with Customer [Abstract]  
Schedule of Geographic Revenue
Revenues by geography are determined based on client location:
(Dollars in thousands)
202520242023
U.S.$956,296 54 %$828,332 55 %$785,029 55 %
Other Americas115,266 7 %95,698 6 %85,149 6 %
United Kingdom (“U.K.”)189,993 11 %157,830 11 %158,014 11 %
Europe (excluding U.K.), Middle East, and Africa 270,627 16 %249,325 17 %242,303 17 %
Asia-Pacific213,630 12 %165,995 11 %162,121 11 %
$1,745,812 100 %$1,497,180 100 %$1,432,616 100 %
Schedule of Revenue Streams
Revenue streams
(in thousands)
202520242023
Pega Cloud$695,902 $558,734 $461,328 
Maintenance314,593 323,304 331,856 
Consulting227,949 213,273 221,706 
Revenue recognized over time1,238,444 1,095,311 1,014,890 
Subscription license507,368 401,869 417,726 
Revenue recognized at a point in time507,368 401,869 417,726 
$1,745,812 $1,497,180 $1,432,616 
(in thousands)202520242023
Pega Cloud$695,902 $558,734 $461,328 
Maintenance314,593 323,304 331,856 
Subscription services1,010,495 882,038 793,184 
Subscription license507,368 401,869 417,726 
Subscription1,517,863 1,283,907 1,210,910 
Consulting227,949 213,273 221,706 
$1,745,812 $1,497,180 $1,432,616 
Schedule of Remaining Performance Obligations
The Company’s typical performance obligations are:
Performance obligation
How stand-alone selling price is typically determined
When performance obligation is typically satisfied
When payment is typically due
Income statement line item
Pega CloudResidual approachRatably over the term of the service (over time)Annually, or more frequently, over the term of the service
Subscription services
Term licenseResidual approach
Upon transfer of control to the client, defined as when the client can use and benefit from the license (point in time)
Annually, or more frequently, over the term of the license
Subscription license
Maintenance
Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1)
Ratably over the term of the maintenance (over time)Annually, or more frequently, over the term of the maintenance
Subscription services
Perpetual licenseResidual approach
Upon transfer of control to the client, defined as when the client can use and benefit from the license (point in time)
Effective date of the license
Subscription license
Consulting
- time and materials
Observable hourly rate for time and materials-based services in similar geographies
Based on hours incurred to date (over time)
Monthly
Consulting
Consulting
- fixed price
Observable hourly rate for time and materials-based services in similar geographies multiplied by estimated hours for the project
Based on hours incurred as a percentage of total estimated hours (over time)
As contract milestones are achieved
Consulting
(1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client.
Expected future revenue from existing non-cancellable contracts:
As of December 31, 2025:
(Dollars in thousands)Subscription servicesSubscription licenseConsultingTotal
Pega CloudMaintenance
1 year or less
$709,190 $235,152 $77,528 $53,353 $1,075,223 52 %
1-2 years
400,926 73,895 2,636 854 478,311 23 %
2-3 years
213,259 51,327 2,101 28 266,715 13 %
Greater than 3 years
214,189 32,325 7,331 88 253,933 12 %
$1,537,564 $392,699 $89,596 $54,323 $2,074,182 100 %
As of December 31, 2024:
(Dollars in thousands)Subscription servicesSubscription licenseConsultingTotal
Pega CloudMaintenance
1 year or less
$525,133 $230,866 $89,197 $50,519 $895,715 56 %
1-2 years
328,234 65,461 10,874 3,297 407,866 25 %
2-3 years
159,536 24,598 733 125 184,992 11 %
Greater than 3 years
114,256 19,935 678 50 134,919 8 %
$1,127,159 $340,860 $101,482 $53,991 $1,623,492 100 %
v3.25.4
STOCK-BASED COMPENSATION (Tables)
 12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Schedule of Stock Based Compensation Expense
(in thousands)202520242023
Cost of revenue$26,646 $27,353 $28,994 
Selling and marketing60,721 55,084 57,675 
Research and development31,684 29,838 31,039 
General and administrative36,188 30,443 25,644 
$155,239 $142,718 $143,352 
Income tax benefit$(31,043)$(1,799)$(2,187)
Schedule of Compensation Expense
(in thousands)202520242023
Compensation expense from 2006 ESPP$1,317 $1,184 $1,367 
Schedule of Weighted-Average Assumptions Used in Black-Scholes Option Valuation Model
The following table summarizes the Company’s fair value assumptions for stock options:
202520242023
Weighted-average grant-date fair value$19.07 $12.91 $10.28 
Assumptions used in the Black-Scholes option-pricing model:
Expected annual volatility (1)
50 %49 %48 %
Expected term in years (2)
3.93.93.5
Risk-free interest rate (3)
3.9 %4.2 %4.2 %
Expected annual dividend yield (4)
0.3 %0.2 %0.1 %
(1) The expected annual volatility for each grant is determined based on the average of historic daily price changes of the Company’s common stock over a period, which approximates the expected option term.
(2) The expected option term for each grant is determined based on the historical exercise behavior of employees and post-vesting employment termination behavior.
(3) The risk-free interest rate is based on the yield of U.S. Treasury securities with a commensurate maturity with the expected option term at the time of grant.
(4) The expected annual dividend yield is based on the weighted-average dividend yield assumptions used for options granted during the applicable period.
Schedule of Time-Based Vesting Stock Option and Performance Stock Option Activity
The following table summarizes the time-based vesting stock option activity under the Company’s stock option plans for 2025:
Shares
(in thousands)		Weighted-average Exercise PriceWeighted-average Remaining Contractual Term (in years)
Aggregate Intrinsic Value
(in thousands) (1)
Options outstanding as of January 1, 202525,948 $30.81 
Granted3,377 40.43 
Exercised(6,235)26.40 
Forfeited(829)29.64 
Expired(178)61.31 
Options outstanding as of December 31, 202522,083 $33.33 
Vested and expected to vest as of December 31, 202519,920 $33.49 6.3$531,166 
Exercisable as of December 31, 202513,765 $33.71 5.4$366,320 
(1) The aggregate intrinsic value of stock options as of December 31, 2025 is based on the difference between the closing price of the Company’s stock of $59.72 and the exercise price of the applicable stock options.
The following table summarizes the Company’s performance stock option activity for 2025:
Shares
(in thousands)		Weighted-average Exercise PriceWeighted-average Remaining Contractual Term (in years)
Aggregate Intrinsic Value
(in thousands) (1)
Performance options outstanding as of January 1, 2025
2,780 $26.60 
Granted
1,362 39.40 
Exercised
(657)24.67 
Forfeited
(81)35.80 
Performance options outstanding as of December 31, 2025
3,404 $31.87 
Vested and expected to vest as of December 31, 20253,301 $31.01 8$94,779 
Exercisable as of December 31, 20251,289 $24.71 7.2$45,133 
(1) The aggregate intrinsic value of stock options as of December 31, 2025 is based on the difference between the closing price of the Company’s stock of $59.72 and the exercise price of the applicable stock options.
Schedule of Combined RSU Activity
The following table summarizes the combined RSU activity for all grants, including the CICP, under the 2004 Plan for 2025:
Shares
(in thousands)		Weighted- Average Grant-Date
Fair Value		Aggregate Intrinsic Value
(in thousands)
Nonvested as of January 1, 20255,226 $32.10 
Granted2,136 40.62 
Vested(2,429)46.97 
Forfeited(389)33.88 
Nonvested as of December 31, 20254,544 $35.34 $271,366 
Expected to vest as of December 31, 20253,422 $35.56 $204,382 
v3.25.4
EMPLOYEE BENEFIT PLANS (Tables)
 12 Months Ended
Dec. 31, 2025
Postemployment Benefits [Abstract]  
Schedule of Employee Benefit Plan Expenses
Employee benefit plan expenses:
(in thousands)202520242023
U.S. 401(k) Plan$8,230 $7,937 $8,169 
International plans21,825 20,303 21,256 
$30,055 $28,240 $29,425 
v3.25.4
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Before (Benefit From) Provision For Income Taxes
The components of income before (benefit from) provision for income taxes are:
(in thousands)202520242023
Domestic$160,307 $51,966 $14,016 
Foreign120,320 90,670 81,424 
$280,627 $142,636 $95,440 
Schedule of Components of (Benefit From) Provision For Income Taxes
The components of (benefit from) provision for income taxes are:
(in thousands)202520242023
Current:
Federal$27,011 $22,941 $7,827 
State7,236 7,503 4,480 
Foreign23,756 14,547 14,962 
Total current provision58,003 44,991 27,269 
Deferred:
Federal(90,414)— — 
State(24,461)— — 
Foreign(55,938)(1,544)363 
Total deferred (benefit) provision(170,813)(1,544)363 
$(112,810)$43,447 $27,632 
Schedule of Reconciliation of Statutory Federal Income Tax Rate to the Effective Income Tax Rate
Below is a reconciliation of the U.S federal statutory tax rate and the Company’s effective tax rate for 2025:
2025
(in thousands, except percentages)AmountPercent
U.S. federal statutory income tax$58,932 21 %
State and local income taxes, net of federal benefit(1)
(13,280)(5)%
United States:
Effect of cross-border tax laws:
Other(2,216)(1)%
Tax credits:
Research and development credits(3,935)(1)%
Changes in valuation allowances(97,682)(35)%
Non-taxable or non-deductible items:
Non deductible compensation10,914 4 %
Excess tax (benefits) related to share-based compensation(21,611)(8)%
Other65 — %
Other adjustments:
Attribute write-off4,870 2 %
Other1,816 1 %
Foreign tax effects:
United Kingdom:
Statutory tax rate difference3,215 1 %
Changes in valuation allowances (60,624)(22)%
Other(5,380)(2)%
India8,234 3 %
Other foreign jurisdictions 6,014 2 %
Changes in unrecognized tax benefits(2,142)(1)%
$(112,810)(40)%
(1) State and local taxes in District of Columbia, Virginia, Minnesota, Maryland, California, and Florida comprise the majority of this category.
Below is a reconciliation of the U.S federal statutory tax rate and the Company’s effective tax rate for 2024 and 2023:
(in thousands)20242023
U.S. federal income taxes at statutory rates$29,954 $20,042 
Valuation allowance(1,504)(19,272)
State income taxes, net of federal benefit and tax credits1,297 4,117 
Permanent differences786 435 
Federal research and experimentation credits(4,888)(3,709)
Tax effects of foreign activities(7,817)658 
GILTI, FDII, and BEAT13,945 14,022 
Provision to return adjustments121 (3,728)
Non-deductible compensation10,933 6,818 
Tax Reserves5,917 1,850 
Excess tax (benefits)/ detriments related to share-based compensation(5,645)4,666 
Impact of change in tax law— 1,726 
Other348 7 
$43,447 $27,632 
Schedule of Income Tax Payments
Below is a summary of income taxes paid, net of refunds received by jurisdiction:
(in thousands)2025
India$12,240 
United Kingdom 9,408 
United States - State and local 5,539 
Australia2,247 
United States - Federal(11,233)
Other3,429 
$21,630 
Schedule of Components of Net Deferred Tax Assets and Liabilities
Significant components of net deferred tax assets and liabilities are:
December 31,
(in thousands)20252024
Deferred tax assets:
Research and development capitalization$85,465 $75,289 
Net operating loss carryforwards62,471 72,089 
Stock based compensation48,681 42,114 
Accruals and reserves25,495 26,925 
Lease liabilities11,890 13,434 
Tax credit carryforwards10,742 10,441 
Total deferred tax assets244,744 240,292 
Valuation allowances(23,436)(195,252)
Total net deferred tax assets221,308 45,040 
Deferred tax liabilities:
Prepaid expenses(15,469)(8,924)
Deferred commissions(14,615)(16,237)
Lease liabilities(8,286)(8,440)
Other, net(5,842)(3,421)
Depreciation(1,624)(3,663)
Capped call transactions— (57)
Total deferred tax liabilities(45,836)(40,742)
$175,472 $4,298 
Schedule of Gross Unrecognized Tax Benefits
A rollforward of the Company’s gross unrecognized tax benefits is:
(in thousands)
202520242023
Balance as of January 1,
$37,886 $30,655 $19,746 
Additions for tax positions related to the current year7,091 7,316 4,859 
Additions for tax positions of prior years1,671 2,941 7,921 
Reductions for tax positions of prior years(2,793)(3,026)(1,871)
Reductions to tax positions as a result of a lapse of the applicable statute of limitations(191)— — 
Balance as of December 31,
$43,664 $37,886 $30,655 
v3.25.4
EARNINGS PER SHARE (Tables)
 12 Months Ended
Dec. 31, 2025
Earnings Per Share [Abstract]  
Schedule of Calculation of Earnings Per Share
Calculation of earnings per share:
(in thousands, except per share amounts) (1)
202520242023
Net income$393,437 $99,189 $67,808 
Weighted-average common shares outstanding170,782 170,530 166,324 
Earnings per share, basic$2.30 $0.58 $0.41 
Net income$393,437 $99,189 $67,808 
Notes - interest expense, net of tax742 (76)(5,528)
Numerator for diluted EPS $394,179 $99,113 $62,280 
Weighted-average effect of dilutive securities:
Notes1,196 428 470 
Stock options9,362 5,420 1,588 
RSUs3,450 2,890 1,446 
Effect of dilutive securities14,008 8,738 3,504 
Weighted-average common shares outstanding, assuming dilution (2) (3) (4)
184,790 179,268 169,828 
Earnings per share, diluted$2.13 $0.55 $0.37 
Outstanding anti-dilutive stock options and RSUs (5)
212 296 500 
(1) The number of shares and per share amounts have been recast for all prior periods presented to reflect the effect of the Company’s Stock Split effected in the form of a stock dividend distributed on June 20, 2025.
(2) All dilutive securities are excluded when their inclusion would be anti-dilutive.
(3) The weighted-average shares underlying the conversion options in the Company’s Notes are included using the if-converted method, if dilutive in the period.
(4) The Company’s Capped Call Transactions represented the equivalent number of shares of the Company’s common stock (representing the number of shares for which the Notes were convertible). The Capped Call Transactions are excluded from weighted-average common shares outstanding, assuming dilution, in all periods as their effect would be anti-dilutive.
(5) Outstanding stock options and RSUs that were anti-dilutive under the treasury stock method in the period were excluded from the computation of diluted earnings per share. These awards may be dilutive in the future.
v3.25.4
BASIS OF PRESENTATION (Details) - $ / shares
Dec. 31, 2025
Jun. 20, 2025
Feb. 12, 2025
Feb. 11, 2025
Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]          
Common stock, shares authorized (in shares) 400,000,000   400,000,000 200,000,000 400,000,000
Additional shares issued for each share held (in shares)   1      
Common stock, par value (in dollars per share) $ 0.01 $ 0.01     $ 0.01
v3.25.4
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Property, Plant and Equipment [Line Items]      
Amortization period for deferred contract costs 4 years 6 months    
Capitalized computer software cost $ 0 $ 0 $ 0
Advertising expenses $ 6,100,000 $ 4,700,000 $ 3,500,000
Computer Equipment      
Property, Plant and Equipment [Line Items]      
Property and equipment estimated useful lives 3 years    
Furniture and Fixtures      
Property, Plant and Equipment [Line Items]      
Property and equipment estimated useful lives 5 years    
Minimum | Internal Use Software      
Property, Plant and Equipment [Line Items]      
Useful life of capitalized software 3 years    
Maximum | Internal Use Software      
Property, Plant and Equipment [Line Items]      
Useful life of capitalized software 5 years    
v3.25.4
MARKETABLE SECURITIES - Schedule of Marketable Securities (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost $ 213,033 $ 402,948
Unrealized Gains 431 64
Unrealized Losses (112) (142)
Fair Value 213,352 402,870
Government debt    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 5,755 11,851
Unrealized Gains 3 1
Unrealized Losses (4) (19)
Fair Value 5,754 11,833
Corporate debt    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 207,278 391,097
Unrealized Gains 428 63
Unrealized Losses (108) (123)
Fair Value $ 207,598 $ 391,037
v3.25.4
MARKETABLE SECURITIES - Narrative (Details)
Dec. 31, 2025
Investments, Debt and Equity Securities [Abstract]  
Marketable debt security weighted-average remaining maturity 1 year 4 months 24 days
v3.25.4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Schedule of Receivables (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Receivables [Abstract]    
Accounts receivable, net $ 264,713 $ 305,468
Unbilled receivables, net 166,478 173,085
Long-term unbilled receivables, net 102,544 61,407
Total receivables $ 533,735 $ 539,960
v3.25.4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Schedule of Unbilled Receivables (Details)
$ in Thousands
Dec. 31, 2025
USD ($)
Receivables [Abstract]  
1 year or less $ 166,478
1-2 years 69,482
2-5 years 33,062
Total $ 269,022
1 year or less 62.00%
1-2 years 26.00%
2-5 years 12.00%
Total percentage of unbilled receivables 100.00%
v3.25.4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE- Schedule of Unbilled Receivables by Contract Effective Date (Details)
$ in Thousands
Dec. 31, 2025
USD ($)
Receivables [Abstract]  
2025 $ 179,995
2024 58,658
2023 27,754
2022 2,304
2021 and prior 311
Unbilled revenue total $ 269,022
2025 67.00%
2024 22.00%
2023 10.00%
2022 1.00%
2021 and prior 0.00%
Total percentage of unbilled revenue 100.00%
v3.25.4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Schedule of Major Clients (Details) - Client A - Credit concentration risk
 12 Months Ended
Dec. 31, 2024
Accounts receivable  
Concentration Risk [Line Items]  
Total receivables 20.00%
Unbilled receivables  
Concentration Risk [Line Items]  
Total receivables 0.00%
Total receivables  
Concentration Risk [Line Items]  
Total receivables 11.00%
v3.25.4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Schedule of Contract Assets and Deferred Revenue (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Receivables [Abstract]      
Contract assets $ 17,678 $ 13,498 $ 36,900
Long-term contract assets 17,421 18,321  
Total contract assets 35,099 31,819  
Deferred revenue 509,275 423,910 $ 380,300
Long-term deferred revenue 9,568 2,121  
Total deferred revenue $ 518,843 $ 426,031  
v3.25.4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Narrative (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2025
USD ($)
Receivables [Abstract]  
Revenue recognized during the period that was included in deferred revenue $ 420.1
v3.25.4
DEFERRED COMMISSIONS - Schedule of Impairment of Deferred Commissions (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Deferred commissions $ 104,574 $ 105,405
v3.25.4
DEFERRED COMMISSIONS - Schedule of Amortization of Deferred Commissions (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]      
Amortization of deferred commissions $ 68,573 $ 62,269 $ 59,461
v3.25.4
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 132,811 $ 121,084
Less: accumulated depreciation (87,571) (79,278)
Property and equipment, net 45,240 41,806
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 58,311 51,932
Computer equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 29,686 29,817
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 4,993 4,603
Computer software purchased    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 9,439 9,918
Computer software developed for internal use    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 19,872 19,776
Fixed assets in progress    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 10,510 $ 5,038
v3.25.4
PROPERTY AND EQUIPMENT - Schedule of Depreciation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Property, Plant and Equipment [Abstract]      
Depreciation expense $ 11,069 $ 14,432 $ 14,806
v3.25.4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Goodwill [Roll Forward]    
Beginning balance $ 81,113 $ 81,611
Currency translation adjustments 393 (498)
Ending balance $ 81,506 $ 81,113
v3.25.4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Intangibles (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Goodwill and Other Intangible Assets [Line Items]    
Cost $ 136,640 $ 136,583
Accumulated Amortization (135,438) (132,751)
Net book value 1,202 3,832
Client-related    
Goodwill and Other Intangible Assets [Line Items]    
Cost 63,164 63,107
Accumulated Amortization (62,822) (61,395)
Net book value 342 1,712
Technology    
Goodwill and Other Intangible Assets [Line Items]    
Cost 68,115 68,115
Accumulated Amortization (67,255) (65,995)
Net book value 860 2,120
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
v3.25.4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Future Estimated Intangibles Assets Amortization (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]    
2026 $ 874  
2027 328  
Net book value $ 1,202 $ 3,832
v3.25.4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Amortization of Intangible Assets (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Intangible Asset, Acquired, Finite-Lived [Line Items]      
Amortization of intangible assets $ 2,630 $ 3,153 $ 3,940
Cost of revenue      
Intangible Asset, Acquired, Finite-Lived [Line Items]      
Amortization of intangible assets 1,260 1,783 2,570
Selling and marketing      
Intangible Asset, Acquired, Finite-Lived [Line Items]      
Amortization of intangible assets $ 1,370 $ 1,370 $ 1,370
v3.25.4
OTHER ASSETS AND LIABILITIES (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Other current assets      
Prepaid expenses $ 65,293 $ 38,155  
Income tax receivables 31,535 58,359  
Contract assets 17,678 13,498 $ 36,900
Indirect tax receivable 2,172 2,488  
Restricted cash 1,577 98 0
Other 3,050 2,580  
Other current assets 121,305 115,178  
Other long-term assets      
Deferred income taxes 175,472 4,268  
Deferred commissions 104,574 105,405  
Right of use assets 60,574 62,429  
Property and equipment 45,240 41,806  
Venture investments 22,021 21,234  
Contract assets 17,421 18,321  
Income tax receivables 15,459 13,299  
Intangible assets 1,202 3,832  
Restricted cash 2,336 4,328 2,925
Other 25,200 17,127  
Other long-term assets 469,499 292,049  
Accrued expenses      
Outside professional services 15,233 10,639  
Litigation settlements 9,750 0  
Income and other taxes 7,273 5,055  
Employee related 5,464 4,833  
Marketing and sales program 1,519 2,150  
Cloud hosting 1,064 1,802  
Repurchases of common stock unsettled 0 1,500  
Other 4,544 5,565  
Accrued expenses 44,847 31,544  
Other current liabilities      
Operating lease liabilities 15,142 14,551  
Dividends payable 5,110 2,583 $ 2,515
Other 1,683 1,732  
Other current liabilities 21,935 18,866  
Other long-term liabilities      
Income taxes payable 23,331 15,956  
Deferred revenue 9,568 2,121  
Other 12,961 11,011  
Other long-term liabilities $ 45,860 $ 29,088  
v3.25.4
SEGMENT INFORMATION - Narrative (Details)
 12 Months Ended
Dec. 31, 2025
segment
Segment Reporting [Abstract]  
Number of operating segments 1
Number of reportable segments 1
v3.25.4
SEGMENT INFORMATION - Schedule of Information of Operation Income (Expense) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Segment Reporting Information [Line Items]      
Total revenue $ 1,745,812 $ 1,497,180 $ 1,432,616
Total cost of revenue 421,382 390,665 378,483
Research and development 312,681 298,074 295,512
General and administrative 148,722 112,848 96,743
(Benefit from) provision for income taxes (112,810) 43,447 27,632
Net income 393,437 99,189 67,808
Reportable Segment      
Segment Reporting Information [Line Items]      
Total revenue 1,745,812 1,497,180 1,432,616
Total cost of revenue 421,382 390,665 378,483
Selling 484,736 450,527 474,405
Marketing 93,901 84,253 84,772
Research and development 312,681 298,074 295,512
General and administrative 148,722 112,848 96,743
Other segment items, net 3,763 18,177 7,261
(Benefit from) provision for income taxes (112,810) 43,447 27,632
Net income $ 393,437 $ 99,189 $ 67,808
v3.25.4
SEGMENT INFORMATION - Schedule of Long-Lived Assets by Geographic Area (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Geographic Areas, Long-Lived Assets [Abstract]    
Long-lived assets $ 45,240 $ 41,806
Long-lived assets percentage 100.00% 100.00%
U.S.    
Geographic Areas, Long-Lived Assets [Abstract]    
Long-lived assets $ 40,060 $ 37,405
Long-lived assets percentage 89.00% 89.00%
International    
Geographic Areas, Long-Lived Assets [Abstract]    
Long-lived assets $ 5,180 $ 4,401
Long-lived assets percentage 11.00% 11.00%
v3.25.4
LEASES - Schedule of Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Leases [Abstract]      
Fixed lease costs $ 14,700 $ 21,422 $ 19,718
Short-term lease costs 1,715 1,746 2,884
Variable lease costs 7,465 6,901 8,148
Lease, cost $ 23,880 $ 30,069 $ 30,750
v3.25.4
LEASES - Schedule of Right of Use Asset and Lease Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Leases [Abstract]    
Right of use assets $ 60,574 $ 62,429
Operating lease liabilities 15,142 14,551
Long-term operating lease liabilities $ 60,825 $ 67,647
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Other long-term assets Other long-term assets
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Other current liabilities Other current liabilities
v3.25.4
LEASES - Schedule of Weighted Average and Discount Rate (Details)
Dec. 31, 2025
Dec. 31, 2024
Leases [Abstract]    
Weighted-average remaining lease term 5 years 4 months 24 days 6 years 2 months 12 days
Weighted-average discount rate 5.20% 4.80%
v3.25.4
LEASES - Schedule of Maturities of Lease Liabilities (Details)
$ in Thousands
Dec. 31, 2025
USD ($)
Leases [Abstract]  
2026 $ 18,275
2027 16,635
2028 14,879
2029 12,046
2030 10,356
Thereafter 14,907
Total lease payments 87,098
Less: imputed interest (11,131)
Total lease liability $ 75,967
v3.25.4
LEASES - Schedule of Cash Flow Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Leases [Abstract]    
Cash paid for operating leases, net of tenant improvement allowances $ 19,302 $ 18,444
Right of use assets obtained in exchange for operating lease obligations $ 9,146 $ 16,682
v3.25.4
DEBT - Convertible Senior Notes and Capped Calls (Details) - Convertible debt
 1 Months Ended 3 Months Ended 12 Months Ended
Feb. 29, 2020
USD ($)
$ / shares
Mar. 31, 2025
USD ($)
Dec. 31, 2025
Dec. 31, 2024
Debt Instrument [Line Items]        
Face amount $ 600,000,000      
Interest rate 0.75%   0.75% 0.75%
Principal amount repurchased   $ 469,600,000    
Initial conversion rate 0.014809      
Initial conversion price (in dollars per share) | $ / shares $ 67.53      
Average interest rate   1.20%   1.20%
v3.25.4
DEBT - Schedule of Carrying Value of the Notes (Details) - Convertible debt - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Debt Instrument [Line Items]    
Principal $ 0 $ 467,864
Unamortized issuance costs 0 (394)
Convertible senior notes, net $ 0 $ 467,470
v3.25.4
DEBT - Schedule of Interest Expense Related to the Notes (Details) - Convertible debt - USD ($)
$ in Thousands
 1 Months Ended 12 Months Ended
Feb. 29, 2020
Dec. 31, 2025
Dec. 31, 2024
Debt Instrument [Line Items]      
Interest rate 0.75% 0.75% 0.75%
Contractual interest expense (0.75% coupon)   $ 595 $ 3,725
Amortization of issuance costs   394 2,451
Interest expense   $ 989 $ 6,176
v3.25.4
DEBT - Schedule of Change in Capped Call Transactions (Details) - Capped Call Transactions - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Beginning balance $ 223 $ 893
Settlements 0 (7)
Fair value adjustment (223) (663)
Ending balance $ 0 $ 223
v3.25.4
DEBT - Credit Facility (Details)
 1 Months Ended 12 Months Ended
Nov. 30, 2019
USD ($)
Dec. 31, 2025
USD ($)
Dec. 31, 2024
USD ($)
Debt Instrument [Line Items]      
Outstanding letters of credit   $ 26,700,000 $ 27,300,000
Letter of Credit      
Debt Instrument [Line Items]      
Cash borrowings   $ 0 $ 0
PNC Bank, National Association      
Debt Instrument [Line Items]      
Minimum consolidated coverage ratio   3.5  
Credit Agreement | PNC Bank, National Association      
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    
v3.25.4
RESTRUCTURING - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Restructuring Cost and Reserve [Line Items]      
Restructuring $ 11,540 $ 4,528 $ 21,747
Employee severance and related benefits      
Restructuring Cost and Reserve [Line Items]      
Restructuring $ 12,778 $ (614) $ 18,721
v3.25.4
RESTRUCTURING - Schedule of Restructuring Activities (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Restructuring Cost and Reserve [Line Items]      
Restructuring expense $ 11,540 $ 4,528 $ 21,747
Employee severance and related benefits      
Restructuring Cost and Reserve [Line Items]      
Restructuring expense 12,778 (614) 18,721
Office space reductions      
Restructuring Cost and Reserve [Line Items]      
Restructuring expense $ (1,238) $ 5,142 $ 3,026
v3.25.4
RESTRUCTURING - Schedule of Accrued Employee Severance and Related Benefits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Restructuring Reserve [Roll Forward]      
Costs incurred $ 11,540 $ 4,528 $ 21,747
Employee severance and related benefits      
Restructuring Reserve [Roll Forward]      
Beginning balance 2,000    
Costs incurred 12,778 (614) $ 18,721
Cash disbursements (2,056)    
Currency translation adjustments 136    
Ending balance $ 12,858 $ 2,000  
v3.25.4
FAIR VALUE MEASUREMENTS - Schedule of Assets and Liabilities Measured At Fair Value on a Recurring Basis (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Fair Value Assets:    
Marketable securities $ 213,352 $ 402,870
Capped Call Transactions $ 0 $ 223
Derivative Asset, Statement Of Financial Position, Extensible Enumeration, Not Disclosed Flag Capped Call Transactions Capped Call Transactions
Cash equivalents    
Fair Value Assets:    
Cash equivalents $ 41,506 $ 154,244
Venture investments    
Fair Value Assets:    
Venture investments 22,021 21,234
Level 1    
Fair Value Assets:    
Marketable securities 0 0
Capped Call Transactions 0 0
Level 1 | Cash equivalents    
Fair Value Assets:    
Cash equivalents 33,043 5,318
Level 1 | Venture investments    
Fair Value Assets:    
Venture investments 0 0
Level 2    
Fair Value Assets:    
Marketable securities 213,352 402,870
Capped Call Transactions 0 223
Level 2 | Cash equivalents    
Fair Value Assets:    
Cash equivalents 8,463 148,926
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 $ 22,021 $ 21,234
v3.25.4
FAIR VALUE MEASUREMENTS - Schedule of Changes in Venture Investments (Details) - Privately held investment - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Beginning balance $ 21,234 $ 19,450
New investments 15,929 550
Sales of investments (35,164) 0
Changes in foreign exchange rates 136 (32)
Changes in fair value:    
included in other income, net 20,421 1,628
included in other comprehensive income (535) (362)
Ending balance $ 22,021 $ 21,234
v3.25.4
FAIR VALUE MEASUREMENTS - Narrative (Details)
$ in Millions
 3 Months Ended
Jun. 30, 2025
USD ($)
investee
Dec. 31, 2024
USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Convertible debt fair value   $ 463.9
Privately held investment    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Number of investees sold | investee 1  
Gross consideration received upon sale of investee $ 33.2  
Cash proceeds from sale of investee 22.1  
Equity consideration from sale of investee 11.1  
Gain on sale of investee $ 18.7  
v3.25.4
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($)
 3 Months Ended
Sep. 30, 2025
Jun. 30, 2025
Feb. 10, 2026
Dec. 31, 2025
Jun. 20, 2025
Apr. 22, 2025
Feb. 12, 2025
Feb. 11, 2025
Dec. 31, 2024
Subsidiary or Equity Method Investee [Line Items]                  
Preferred stock, shares authorized (in shares)       1,000,000         1,000,000
Preferred stock, par value (in dollars per share)       $ 0.01         $ 0.01
Preferred stock, shares issued (in shares)       0         0
Preferred stock, shares outstanding (in shares)       0          
Common stock, shares authorized (in shares)       400,000,000     400,000,000 200,000,000 400,000,000
Common stock, par value (in dollars per share)       $ 0.01 $ 0.01       $ 0.01
Common stock, shares issued (in shares)       170,347,000         172,224,000
Common stock, shares outstanding (in shares)       170,347,000         172,224,000
Quarterly cash dividend paid (in dollars per share) $ 0.03 $ 0.015              
Share repurchase program, increase to authorized amount           $ 500,000,000      
Subsequent Event                  
Subsidiary or Equity Method Investee [Line Items]                  
Share repurchase program, increase to authorized amount     $ 1,000,000,000            
v3.25.4
STOCKHOLDERS' EQUITY - Schedule of Dividends Declared (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Equity [Abstract]      
Dividends declared (in dollars per share) $ 0.105 $ 0.06 $ 0.06
Dividend payments to stockholders (in thousands) $ 15,422 $ 10,199 $ 9,964
v3.25.4
STOCKHOLDERS' EQUITY - Schedule of Stock Repurchase Authorization Activity (Details) - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Equity [Abstract]      
Repurchases paid (in shares) (10,659) (1,618) 0
Repurchases unpaid (in shares) 0 (32) 0
Amount      
Authorization remaining, beginning of period $ 240,443 $ 60,000 $ 58,075
Authorizations 500,000 250,000 1,925
Repurchases paid (498,189) (68,057) 0
Repurchases unpaid at period end 0 (1,500) 0
Authorization remaining, end of period $ 242,254 $ 240,443 $ 60,000
v3.25.4
REVENUE - Schedule of Geographic Revenue (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total revenue $ 1,745,812 $ 1,497,180 $ 1,432,616
U.S.      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total revenue 956,296 828,332 785,029
Other Americas      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total revenue 115,266 95,698 85,149
United Kingdom (“U.K.”)      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total revenue 189,993 157,830 158,014
Europe (excluding U.K.), Middle East, and Africa      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total revenue 270,627 249,325 242,303
Asia-Pacific      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total revenue $ 213,630 $ 165,995 $ 162,121
Revenue Benchmark | Geographic Concentration Risk      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Percent of total revenue 100.00% 100.00% 100.00%
Revenue Benchmark | U.S. | Geographic Concentration Risk      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Percent of total revenue 54.00% 55.00% 55.00%
Revenue Benchmark | Other Americas | Geographic Concentration Risk      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Percent of total revenue 7.00% 6.00% 6.00%
Revenue Benchmark | United Kingdom (“U.K.”) | Geographic Concentration Risk      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Percent of total revenue 11.00% 11.00% 11.00%
Revenue Benchmark | Europe (excluding U.K.), Middle East, and Africa | Geographic Concentration Risk      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Percent of total revenue 16.00% 17.00% 17.00%
Revenue Benchmark | Asia-Pacific | Geographic Concentration Risk      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Percent of total revenue 12.00% 11.00% 11.00%
v3.25.4
REVENUE - Schedule of Revenue Streams (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Disaggregation of Revenue [Line Items]      
Total revenue $ 1,745,812 $ 1,497,180 $ 1,432,616
Pega Cloud      
Disaggregation of Revenue [Line Items]      
Total revenue 695,902 558,734 461,328
Maintenance      
Disaggregation of Revenue [Line Items]      
Total revenue 314,593 323,304 331,856
Consulting      
Disaggregation of Revenue [Line Items]      
Total revenue 227,949 213,273 221,706
Subscription license      
Disaggregation of Revenue [Line Items]      
Total revenue 507,368 401,869 417,726
Subscription services      
Disaggregation of Revenue [Line Items]      
Total revenue 1,010,495 882,038 793,184
Subscription      
Disaggregation of Revenue [Line Items]      
Total revenue 1,517,863 1,283,907 1,210,910
Revenue recognized over time      
Disaggregation of Revenue [Line Items]      
Total revenue 1,238,444 1,095,311 1,014,890
Revenue recognized over time | Pega Cloud      
Disaggregation of Revenue [Line Items]      
Total revenue 695,902 558,734 461,328
Revenue recognized over time | Maintenance      
Disaggregation of Revenue [Line Items]      
Total revenue 314,593 323,304 331,856
Revenue recognized over time | Consulting      
Disaggregation of Revenue [Line Items]      
Total revenue 227,949 213,273 221,706
Revenue recognized at a point in time      
Disaggregation of Revenue [Line Items]      
Total revenue 507,368 401,869 417,726
Revenue recognized at a point in time | Subscription license      
Disaggregation of Revenue [Line Items]      
Total revenue $ 507,368 $ 401,869 $ 417,726
v3.25.4
REVENUE - Schedule of Remaining Performance Obligations (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Disaggregation of Revenue [Line Items]    
Total $ 2,074,182 $ 1,623,492
Revenue remaining performance obligation, percentage 100.00% 100.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01    
Disaggregation of Revenue [Line Items]    
Total   $ 895,715
Revenue remaining performance obligation, percentage   56.00%
Expected timing of satisfaction   1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01    
Disaggregation of Revenue [Line Items]    
Total $ 1,075,223 $ 407,866
Revenue remaining performance obligation, percentage 52.00% 25.00%
Expected timing of satisfaction 1 year 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01    
Disaggregation of Revenue [Line Items]    
Total $ 478,311 $ 184,992
Revenue remaining performance obligation, percentage 23.00% 11.00%
Expected timing of satisfaction 1 year 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01    
Disaggregation of Revenue [Line Items]    
Total $ 266,715 $ 134,919
Revenue remaining performance obligation, percentage 13.00% 8.00%
Expected timing of satisfaction 1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01    
Disaggregation of Revenue [Line Items]    
Total $ 253,933  
Revenue remaining performance obligation, percentage 12.00%  
Expected timing of satisfaction  
Pega Cloud    
Disaggregation of Revenue [Line Items]    
Total $ 1,537,564 $ 1,127,159
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01    
Disaggregation of Revenue [Line Items]    
Total   525,133
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01    
Disaggregation of Revenue [Line Items]    
Total 709,190 328,234
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01    
Disaggregation of Revenue [Line Items]    
Total 400,926 159,536
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01    
Disaggregation of Revenue [Line Items]    
Total 213,259 114,256
Pega Cloud | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01    
Disaggregation of Revenue [Line Items]    
Total 214,189  
Maintenance    
Disaggregation of Revenue [Line Items]    
Total 392,699 340,860
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01    
Disaggregation of Revenue [Line Items]    
Total   230,866
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01    
Disaggregation of Revenue [Line Items]    
Total 235,152 65,461
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01    
Disaggregation of Revenue [Line Items]    
Total 73,895 24,598
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01    
Disaggregation of Revenue [Line Items]    
Total 51,327 19,935
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01    
Disaggregation of Revenue [Line Items]    
Total 32,325  
Subscription license    
Disaggregation of Revenue [Line Items]    
Total 89,596 101,482
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01    
Disaggregation of Revenue [Line Items]    
Total   89,197
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01    
Disaggregation of Revenue [Line Items]    
Total 77,528 10,874
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01    
Disaggregation of Revenue [Line Items]    
Total 2,636 733
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01    
Disaggregation of Revenue [Line Items]    
Total 2,101 678
Subscription license | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01    
Disaggregation of Revenue [Line Items]    
Total 7,331  
Consulting    
Disaggregation of Revenue [Line Items]    
Total 54,323 53,991
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01    
Disaggregation of Revenue [Line Items]    
Total   50,519
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01    
Disaggregation of Revenue [Line Items]    
Total 53,353 3,297
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01    
Disaggregation of Revenue [Line Items]    
Total 854 125
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01    
Disaggregation of Revenue [Line Items]    
Total 28 $ 50
Consulting | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01    
Disaggregation of Revenue [Line Items]    
Total $ 88  
v3.25.4
STOCK-BASED COMPENSATION - Schedule of Stock Based Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]      
Total stock-based compensation before tax $ 155,239 $ 142,718 $ 143,352
Income tax benefit (31,043) (1,799) (2,187)
Cost of revenue      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]      
Total stock-based compensation before tax 26,646 27,353 28,994
Selling and marketing      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]      
Total stock-based compensation before tax 60,721 55,084 57,675
Research and development      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]      
Total stock-based compensation before tax 31,684 29,838 31,039
General and administrative      
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]      
Total stock-based compensation before tax $ 36,188 $ 30,443 $ 25,644
v3.25.4
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($)
 12 Months Ended 24 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2006
Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting period         5 years
Shares available for issuance (in shares) 21,700,000        
Closing price of Company's stock (in dollars per share) $ 59.72        
Common Stock          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Granted (in shares) 20,000.00        
Weighted-average grant-date fair value (in dollars per share) $ 52.58        
Corporate Incentive Compensation Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting rights percentage 100.00%        
Percentage of closing price of common stock 85.00%        
2004 Long-Term Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Number of shares authorized (in shares) 104,000,000        
Number of shares subject to outstanding options and awards (in shares) 30,000,000        
Shares available for issuance (in shares) 20,100,000        
2006 Employee Stock Purchase Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares available for issuance (in shares) 1,600,000        
Stock options          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting period     10 years    
Granted (in shares) 8,600,000        
Intrinsic value of stock options exercised $ 168,200,000 $ 58,700,000 $ 6,200,000    
Unrecognized stock-based compensation expense, unvested stock options $ 33,700,000        
Weighted-average period of expense recognition 1 year 8 months 12 days        
Weighted-average grant-date fair value (in dollars per share) $ 19.07 $ 12.91 $ 10.28    
Performance Stock Options          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting period 2 years        
Intrinsic value of stock options exercised $ 15,100,000 $ 1,500,000 $ 0    
Unrecognized stock-based compensation expense, unvested stock options $ 22,400,000        
Weighted-average period of expense recognition 2 years 3 months 18 days        
Expiration term 10 years        
Grant date fair value $ 35,300,000        
RSUs          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unrecognized stock-based compensation expense, unvested stock options $ 46,900,000        
Weighted-average period of expense recognition 1 year 7 months 6 days        
Weighted-average grant date fair value of shares granted (in dollars per share) $ 40.62 $ 31.29 $ 23.29    
Fair value of shares vested $ 114,100,000 $ 78,200,000 $ 42,800,000    
RSUs | Corporate Incentive Compensation Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Employee’s target incentive compensation percentage 50.00%        
RSUs | 2004 Long-Term Incentive Plan | Non-employee directors          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Annual limited compensation $ 500,000        
Employee Stock | 2006 Employee Stock Purchase Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of closing price of common stock 85.00% 85.00% 85.00% 85.00%  
Number of shares authorized (in shares)     4,000,000    
Shares issued under the plan (in shares) 2,400,000        
Vesting after one year          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting period         1 year
Vesting rights percentage         20.00%
Vesting after remaining four years          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting period         4 years
Vesting rights percentage         80.00%
Vesting after one year in quarterly installments over the remaining four years          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting period     4 years    
Vesting rights percentage     25.00%    
Vesting in quarterly installments over the remaining three years          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting period     3 years    
Vesting rights percentage     75.00%    
Vesting upon achievement of 2026 performance conditions | Performance Stock Options          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting rights percentage 50.00%        
Vesting upon achievement of 2027 performance conditions | Performance Stock Options          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting rights percentage 50.00%        
v3.25.4
STOCK-BASED COMPENSATION - Schedule of Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Employee Stock      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Compensation expense from 2006 ESPP $ 1,317 $ 1,184 $ 1,367
v3.25.4
STOCK-BASED COMPENSATION - Schedule of Weighted Average Assumptions Used in Black Scholes Option Pricing Model (Details) - $ / shares
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected annual volatility 50.00% 49.00% 48.00%
Expected term in years 3 years 10 months 24 days 3 years 10 months 24 days 3 years 6 months
Risk-free interest rate 3.90% 4.20% 4.20%
Expected annual dividend yield 0.30% 0.20% 0.10%
Stock options      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Weighted-average grant-date fair value (in dollars per share) $ 19.07 $ 12.91 $ 10.28
v3.25.4
STOCK-BASED COMPENSATION - Schedule of Time-Based Vesting Stock Option Activity (Details) - Time-based vesting stock option
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2025
USD ($)
$ / shares
shares
Shares (in thousands)  
Options outstanding, beginning of period (in shares) | shares 25,948
Granted (in shares) | shares 3,377
Exercised (in shares) | shares (6,235)
Forfeited (in shares) | shares (829)
Expired (in shares) | shares (178)
Options outstanding, end of period (in shares) | shares 22,083
Vested and expected to vest (in shares) | shares 19,920
Exercisable (in shares) | shares 13,765
Weighted-average Exercise Price  
Options outstanding, beginning of period (in dollars per share) | $ / shares $ 30.81
Granted (in dollars per share) | $ / shares 40.43
Exercised (in dollars per share) | $ / shares 26.40
Forfeited (in dollars per share) | $ / shares 29.64
Expired (in dollars per share) | $ / shares 61.31
Options outstanding, end of period (in dollars per share) | $ / shares 33.33
Vested and expected to vest (in dollars per share) | $ / shares 33.49
Exercisable (in dollars per share) | $ / shares $ 33.71
Weighted-average Remaining Contractual Term (in years)  
Vested and expected to vest 6 years 3 months 18 days
Exercisable 5 years 4 months 24 days
Aggregate Intrinsic Value  
Vested and expected to vest | $ $ 531,166
Exercisable | $ $ 366,320
v3.25.4
STOCK-BASED COMPENSATION - Schedule of Performance Stock Option Activity (Details) - Performance Stock Options
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2025
USD ($)
$ / shares
shares
Shares (in thousands)  
Options outstanding, beginning of period (in shares) | shares 2,780
Granted (in shares) | shares 1,362
Exercised (in shares) | shares (657)
Forfeited (in shares) | shares (81)
Options outstanding, end of period (in shares) | shares 3,404
Vested and expected to vest (in shares) | shares 3,301
Exercisable (in shares) | shares 1,289
Weighted-average Exercise Price  
Options outstanding, beginning of period (in dollars per share) | $ / shares $ 26.60
Granted (in dollars per share) | $ / shares 39.40
Exercised (in dollars per share) | $ / shares 24.67
Forfeited (in dollars per share) | $ / shares 35.80
Options outstanding, end of period (in dollars per share) | $ / shares 31.87
Vested and expected to vest (in dollars per share) | $ / shares 31.01
Exercisable (in dollars per share) | $ / shares $ 24.71
Weighted-average Remaining Contractual Term (in years)  
Vested and expected to vest 8 years
Exercisable 7 years 2 months 12 days
Aggregate Intrinsic Value  
Vested and expected to vest | $ $ 94,779
Exercisable | $ $ 45,133
v3.25.4
STOCK-BASED COMPENSATION - Schedule of Combined RSU Activity (Details) - RSUs - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Shares (in thousands)      
Nonvested, beginning of period (in shares) 5,226    
Granted (in shares) 2,136    
Vested (in shares) (2,429)    
Forfeited (in shares) (389)    
Nonvested, end of period (in shares) 4,544 5,226  
Expected to vest (in shares) 3,422    
Weighted- Average Grant-Date Fair Value      
Nonvested, beginning of period (in dollars per share) $ 32.10    
Granted (in dollars per share) 40.62 $ 31.29 $ 23.29
Vested (in dollars per share) 46.97    
Forfeited (in dollars per share) 33.88    
Nonvested, end of period (in dollars per share) 35.34 $ 32.10  
Expected to vest (in dollars per share) $ 35.56    
Aggregate Intrinsic Value (in thousands)      
Nonvested $ 271,366    
Expected to vest $ 204,382    
v3.25.4
EMPLOYEE BENEFIT PLANS (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Defined Contribution Plan Disclosure [Line Items]      
Employee benefit plan expenses $ 30,055 $ 28,240 $ 29,425
U.S. 401(k) Plan      
Defined Contribution Plan Disclosure [Line Items]      
Employee benefit plan expenses 8,230 7,937 8,169
International plans      
Defined Contribution Plan Disclosure [Line Items]      
Employee benefit plan expenses $ 21,825 $ 20,303 $ 21,256
v3.25.4
INCOME TAXES - Schedule of Components of Income Before (Benefit From) Provision For Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Income Tax Disclosure [Abstract]      
Domestic $ 160,307 $ 51,966 $ 14,016
Foreign 120,320 90,670 81,424
Income before (benefit from) provision for income taxes $ 280,627 $ 142,636 $ 95,440
v3.25.4
INCOME TAXES - Schedule of Components of (Benefit From) Provision For Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Current:      
Federal $ 27,011 $ 22,941 $ 7,827
State 7,236 7,503 4,480
Foreign 23,756 14,547 14,962
Total current provision 58,003 44,991 27,269
Deferred:      
Federal (90,414) 0 0
State (24,461) 0 0
Foreign (55,938) (1,544) 363
Total deferred (benefit) provision (170,813) (1,544) 363
Income tax expense (benefit), total $ (112,810) $ 43,447 $ 27,632
v3.25.4
INCOME TAXES - Schedule of Reconciliation of Statutory Federal Income Tax Rate to the Effective Income Tax Rate (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Amount      
U.S. federal statutory income tax $ 58,932 $ 29,954 $ 20,042
State income taxes, net of federal benefit and tax credits (13,280) 1,297 4,117
Other (2,216)    
Permanent differences   786 435
Research and development credits (3,935) (4,888) (3,709)
Changes in valuation allowances (97,682) (1,504) (19,272)
Non deductible compensation 10,914 10,933 6,818
Excess tax (benefits) related to share-based compensation (21,611)    
Other 65    
Attribute write-off 4,870 348 7
Changes in unrecognized tax benefits (2,142)    
Other 1,816    
Tax effects of foreign activities   (7,817) 658
GILTI, FDII, and BEAT   13,945 14,022
Provision to return adjustments   121 (3,728)
Tax Reserves   5,917 1,850
Excess tax (benefits)/ detriments related to share-based compensation   (5,645) 4,666
Impact of change in tax law   0 1,726
Income tax expense (benefit), total $ (112,810) $ 43,447 $ 27,632
Percent      
U.S. federal statutory income tax 21.00%    
State and local income taxes, net of federal benefit (5.00%)    
Other (1.00%)    
Research and development credits (1.00%)    
Changes in valuation allowances (35.00%)    
Non deductible compensation 4.00%    
Excess tax (benefits) related to share-based compensation (8.00%)    
Other 0.00%    
Attribute write-off 2.00%    
Other 1.00%    
Changes in unrecognized tax benefits (1.00%)    
Effective income tax rate reconciliation, percent (40.00%)    
United Kingdom (“U.K.”)      
Amount      
Permanent differences $ 3,215    
Changes in valuation allowances (60,624)    
Attribute write-off $ (5,380)    
Percent      
Foreign tax effects 1.00%    
Changes in valuation allowances (22.00%)    
Attribute write-off (2.00%)    
India      
Amount      
Permanent differences $ 8,234    
Percent      
Foreign tax effects 3.00%    
Other foreign jurisdictions      
Amount      
Permanent differences $ 6,014    
Percent      
Foreign tax effects 2.00%    
v3.25.4
INCOME TAXES - Schedule of Income Tax Payments (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Effective Income Tax Rate Reconciliation [Line Items]      
United States - State and local $ 5,539    
United States - Federal (11,233)    
Income taxes paid, net 21,630 $ 82,317 $ 11,664
India      
Effective Income Tax Rate Reconciliation [Line Items]      
India, United Kingdom, Australia and Other 12,240    
United Kingdom      
Effective Income Tax Rate Reconciliation [Line Items]      
India, United Kingdom, Australia and Other 9,408    
Australia      
Effective Income Tax Rate Reconciliation [Line Items]      
India, United Kingdom, Australia and Other 2,247    
Other      
Effective Income Tax Rate Reconciliation [Line Items]      
India, United Kingdom, Australia and Other $ 3,429    
v3.25.4
INCOME TAXES - Schedule of Components of Net Deferred Tax Asset and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2025
Dec. 31, 2024
Deferred tax assets:    
Research and development capitalization $ 85,465 $ 75,289
Net operating loss carryforwards 62,471 72,089
Stock based compensation 48,681 42,114
Accruals and reserves 25,495 26,925
Lease liabilities 11,890 13,434
Tax credit carryforwards 10,742 10,441
Total deferred tax assets 244,744 240,292
Valuation allowances (23,436) (195,252)
Total net deferred tax assets 221,308 45,040
Deferred tax liabilities:    
Prepaid expenses (15,469) (8,924)
Deferred commissions (14,615) (16,237)
Lease liabilities 8,286 8,440
Other, net (5,842) (3,421)
Depreciation (1,624) (3,663)
Capped call transactions 0 (57)
Total deferred tax liabilities (45,836) (40,742)
Deferred tax assets, net $ 175,472 $ 4,298
v3.25.4
INCOME TAXES - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Income Tax Contingency [Line Items]    
Recognition of valuation allowance on deferred tax assets $ 175,000  
Tax credit carryforwards 10,742 $ 10,441
Accrued liabilities related to uncertain tax 18,100  
State Tax Jurisdiction    
Income Tax Contingency [Line Items]    
Net operating loss carryforwards 4,000 5,400
Tax credit carryforwards 10,700  
Carryforwards with unlimited carryforward period 1,000  
Federal Tax Jurisdiction    
Income Tax Contingency [Line Items]    
Net operating loss carryforwards 7,500 14,200
Carryforwards with unlimited carryforward period 1,000  
Foreign Tax Jurisdiction    
Income Tax Contingency [Line Items]    
Net operating loss carryforwards $ 118,000 $ 147,900
v3.25.4
INCOME TAXES - Schedule of Gross Unrecognized Tax Benefits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Unrecognized Tax Benefits [Roll Forward]      
Balance at beginning of period $ 37,886 $ 30,655 $ 19,746
Additions for tax positions related to the current year 7,091 7,316 4,859
Additions for tax positions of prior years 1,671 2,941 7,921
Reductions for tax positions of prior years (2,793) (3,026) (1,871)
Reductions to tax positions as a result of a lapse of the applicable statute of limitations (191) 0 0
Balance at end of period $ 43,664 $ 37,886 $ 30,655
v3.25.4
EARNINGS PER SHARE (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Basic      
Net income $ 393,437 $ 99,189 $ 67,808
Weighted-average common shares outstanding (in shares) 170,782 170,530 166,324
Earnings per share, basic (in dollars per share) $ 2.30 $ 0.58 $ 0.41
Diluted      
Net income $ 393,437 $ 99,189 $ 67,808
Notes - interest expense, net of tax 742 (76) (5,528)
Numerator for diluted EPS $ 394,179 $ 99,113 $ 62,280
Weighted-average effect of dilutive securities:      
Notes (in shares) 1,196 428 470
Effect of dilutive securities (in shares) 14,008 8,738 3,504
Weighted-average common shares outstanding, assuming dilution (in shares) 184,790 179,268 169,828
Earnings per share, diluted (in dollars per share) $ 2.13 $ 0.55 $ 0.37
Outstanding anti-dilutive stock options and RSUs (in shares) 212 296 500
Stock options      
Weighted-average effect of dilutive securities:      
Stock options and RSUs (in shares) 9,362 5,420 1,588
RSUs      
Weighted-average effect of dilutive securities:      
Stock options and RSUs (in shares) 3,450 2,890 1,446
v3.25.4
COMMITMENTS AND CONTINGENCIES (Details)
Dec. 31, 2025
USD ($)
Sep. 15, 2022
USD ($)
May 09, 2022
USD ($)
Feb. 26, 2025
lawsuit
Dec. 31, 2024
USD ($)
Dec. 04, 2024
lawsuit
Sep. 29, 2022
USD ($)
Loss Contingencies [Line Items]              
Accrued losses for litigation $ 9,750,000       $ 0    
Outstanding letters of credit 26,700,000       $ 27,300,000    
Pending Litigation              
Loss Contingencies [Line Items]              
Number of pending lawsuits | lawsuit       2      
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          
Appian Corp. v. Pegasystems Inc. & Youyong Zou | Pending Litigation              
Loss Contingencies [Line Items]              
Litigation settlement loss 9,750,000            
Loss contingency, accrual 9,750,000            
Appian Corp. v. Pegasystems Inc. & Youyong Zou | Pending Litigation | Special Dividend to Shareholders              
Loss Contingencies [Line Items]              
Litigation settlement loss $ 7,000,000            
Class Action, Case 12999 and Case 11220 | Pending Litigation              
Loss Contingencies [Line Items]              
Percentage of settlement class that opted out of court approved settlement           3.00%  
Number of pending lawsuits | lawsuit           2  
Case No. 2584CV00541-BLS1 and Case No. 2584CV00539-BLS1 | Pending Litigation              
Loss Contingencies [Line Items]              
Number of pending lawsuits | lawsuit       2      
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