PEGASYSTEMS INCPEGA

PEGASYSTEMS INC Segments Disclosure

10-KFiled Feb 10, 20262 min read
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 %

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

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