Pegasystems Inc.
PEGA Technology Software Application
Pegasystems Inc.’s revenue for fiscal 2025 (year ended December 2025) was $1.7 billion, up 16.6% from fiscal 2024. In the quarter to June 2026, revenue grew 9.42%, EPS fell 55.6% and free cash flow fell 2.85%, each against the same quarter a year earlier. Revenue growth for ten consecutive years, operating cash flow growth for three.
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Pegasystems Inc. (PEGA) Altman Z-score
Pegasystems Inc.'s Altman Z-score for fiscal 2025 is 9.42, in the safe zone (above 2.99).
Altman Z-score, annual
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Annual newest first
| Period | Altman Z-score | Change (points) |
|---|---|---|
| FY2025 | 9.42 | 4.08 |
| FY2024 | 5.35 | 1.76 |
| FY2023 | 3.58 | 1.31 |
| FY2022 | 2.27 | (3.44) |
| FY2021 | 5.71 | (1.36) |
| FY2020 | 7.07 | (2.62) |
| FY2019 | 9.69 | 1.52 |
| FY2018 | 8.16 | (0.28) |
| FY2017 | 8.44 | 1.17 |
| FY2016 | 7.27 | 0.96 |
How fiscal 2025’s score is made up
| Component | This year | Year before | Result | Points |
|---|---|---|---|---|
| Working capital / total assets | 0.15 | — | 0.18 | |
| Retained earnings / total assets | 0.28 | — | 0.40 | |
| EBIT / total assets | 0.16 | — | 0.53 | |
| Market value of equity / total liabilities | 12.08 | — | 7.25 | |
| Sales / total assets | 1.07 | — | 1.07 | |
| Altman Z-score | Safe zone | 9.42 | ||
| Z″ Variant for non-manufacturing and asset-light companies (drops the sales/assets term, uses book equity) | Safe zone | 3.96 | ||
How the Altman Z-score works
Z = 1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets (Altman, 1968). The market value of equity is the close on the last trading day of the fiscal year times weighted basic shares.
Z″ = 6.56 × working capital ÷ total assets + 3.26 × retained earnings ÷ total assets + 6.72 × EBIT ÷ total assets + 1.05 × book equity ÷ total liabilities (Altman, Hartzell and Peck, 1995), the variant for non-manufacturing and asset-light companies.
| Zone | Z | Z″ |
|---|---|---|
| Safe zone | above 2.99 | above 2.60 |
| Grey zone | 1.81–2.99 | 1.10–2.60 |
| Distress zone | below 1.81 | below 1.10 |
Not worked out for banks, insurers and REITs, whose balance sheets the model does not describe, nor when a figure is missing or there is no share price in the week to the fiscal year end.
Altman Z-score against peers
| Company | Altman Z-score |
|---|---|
| KVYO Klaviyo, Inc. compare | 15.3× |
| PEGA Pegasystems Inc. | 9.4× |
| NICE Nice compare | 5.5× |
| YOU CLEAR Secure, Inc. compare | 3.1× |
| CVLT CommVault Systems, Inc. compare | 1.2× |
| RNG Ringcentral, Inc. compare | 0.7× |
| NIQ NIQ Global Intelligence plc compare | 0.7× |
| NAVN Navan, Inc. compare | 0.4× |
| LYFT Lyft, Inc. compare | 0.1× |
What Altman Z-score is
The Altman Z-Score weighs working capital, retained earnings, operating profit, market value and sales against assets and debts to gauge the risk of distress.
1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets