Pegasystems Inc.
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ITEM 1. BUSINESS
Our Business
We develop, market, license, host, and support enterprise software that helps organizations optimize decisions and processes in real-time so they can deliver outcomes that transform their business. Our powerful platform for enterprise artificial intelligence (“AI”) decisioning and workflow automation enables the world’s leading brands and government agencies to hyper-personalize customer experiences, automate customer service, and streamline operations, mission-critical business processes, and workflows, and transform legacy systems. Clients can leverage our AI technology and scalable architecture to accelerate their digital transformation. In addition, our sales and client success teams, world-class partners, and clients can leverage Pega BlueprintTM (“Blueprint”) to rapidly prototype and accelerate the development and deployment of applications quickly and collaboratively.
To grow our business, we intend to:
•Increase market share by developing and delivering a platform for enterprise AI decisioning and workflow automation for buyers in marketing, sales, service, operations, and IT that can work together seamlessly with maximum competitive differentiation;
•Deepen and expand our relationships with existing clients;
•Establish relationships with new clients;
•Continue to scale our marketing efforts to support how today’s buyers discover, evaluate, and choose products and services;
•Deepen partnerships with systems integrators and hyperscalers to drive sales and delivery of our products; and
•Leverage partner-branded Blueprints to extend our market reach with strategic partners.
Whether we are successful depends, in part, on our ability to:
•Execute our marketing and sales strategies;
•Manage our expenses appropriately as we grow our organization;
•Develop new products and enhance our existing products; and
•Incorporate acquired technologies into our solutions and the unified Pega Platform™.
Our Products
Pega Infinity
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Pega Infinity™, the latest version of our software portfolio, helps build agility into our clients’ organizations so they can work smarter, unify experiences, and adapt to meet changing requirements.
Our applications and low-code platform intersect with and encompass several software markets, including:
•Customer Engagement, including Customer Relationship Management (“CRM”);
•Business Orchestration and Automation Technologies (“BOAT”) and Digital Process Automation (“DPA”), including Business Process Management (“BPM”), Workflow, and Dynamic Case Management (“DCM”);
•Low-code application development platforms (“LCAP”), including Multi-experience Development Platforms (“MXDP”);
•Robotic Process Automation (“RPA”), and Task-Centric Process Automation;
•Business Rules Management Systems (“BRMS”);
•Decision Management, including predictive and adaptive analytics and Real-time Interaction Management (“RTIM”); and
•the Vertical-Specific Software (“VSS”) market of industry solutions and packaged applications.
1:1 Customer Engagement
Our omnichannel customer engagement applications are designed to maximize the lifetime value of customers and help reduce the costs of serving customers while ensuring a consistent, unified, and personalized customer experience. At the center of our customer engagement applications is the Pega Customer Decision Hub™ (“CDH”), our real-time, AI-powered decision engine, which can predict a customer’s behavior and recommend the “next best action” to take across channels in real-time. It is designed to enable enterprises to improve customer acquisition and experience across inbound, outbound, and paid media channels. It incorporates AI in the form of predictive and machine-learning analytics and business rules, and executes these decisions in real-time to evaluate the context of each customer interaction and dynamically deliver the most relevant action, offer, content, and channel. Recently, we introduced Pega Customer Engagement Blueprint™, a new GenAI powered collaboration tool that helps brands easily visualize customer journeys and quickly ideate and refine strategies for better engagement. It leverages our powerful AI framework so users can collaborate online, map their vision from data models to brand strategy, and create a comprehensive roadmap for customer-centric programs that drive results. This helps clients quickly visualize the value of Pega CDH for their marketing and data and analytics programs.
Customer Service
The Pega Customer Service™ application simplifies customer service. It is designed to anticipate customer needs, connect customers to the right people and systems, automate or intelligently guide customer interactions, rapidly and continuously evolve the customer service experience, and allow enterprises to deliver consistent interactions across channels and improve employee productivity. The application consists of a contact center desktop, case management for customer service, chat, knowledge management, mobile field service, omnichannel self-service, AI-powered virtual assistants, and industry-specific processes (“Microjourney®”) and data models. For clients who want to extend intelligence and automation into the early stages of the customer journey, Pega Sales Automation™ automates and manages the entire sales process, from prospecting to product fulfillment. It allows enterprises to capture best practices and leverage AI to guide sales teams through the sales and customer onboarding processes. Blueprint enables AI design agents to transform legacy systems, uncovering end-to-end customer journeys and centralizing processes across all channels.
Workflow Automation
Pega Platform™, our software for AI-powered workflow automation, boosts the efficiency of our clients’ processes and operational workflows. This technology allows organizations to take an end-to-end approach to transformation by using intelligence and design thinking to streamline processes and create better customer and employee experiences. With Blueprint, clients can leverage the power of AI to design best practice processes for any industry domain in minutes. Pega’s automation goes beyond traditional BPM to unify technologies such as RPA and AI to enable organization-wide digital transformation. With its workflow automation capabilities, the Pega Platform allows clients to break down silos, improve customer-centricity, add agility to legacy technology, and provide end-to-end automation to support the needs of customers and employees. Pega Platform and Blueprint, combined with industry best practices, provide the right structure and platform for clients to unlock automation for the agentic AI future.
Legacy Transformation
Our Legacy Transformation solution leverages Pega Platform and Blueprint to help organizations retire technical debt and modernize operations without disrupting business. It uses Blueprint to rapidly analyze existing systems and processes, uncovering end-to-end workflows and identifying opportunities for simplification. From there, the offering applies AI-powered design and low-code development to reimagine legacy applications, accelerating time-to-value while reducing risk. By insulating business logic from back-end complexity, it enables clients to preserve critical functionality while eliminating redundant systems and maintenance costs. Combined with workflow automation and decisioning capabilities, our Legacy Transformation solution delivers agility, scalability, and cost efficiency – empowering enterprises to move beyond outdated technology and embrace a future-ready architecture. This approach enables faster modernization, improved customer and employee experiences, and long-term flexibility to adapt to changing business needs.
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Our Capabilities
We drive better business outcomes for our clients in four ways:
•1:1 Customer Engagement: we enable clients to hyper-personalize interactions with their customers using our AI-powered decision engine, resulting in higher customer lifetime value.
•Customer Service: we enable clients to streamline customer service and deliver better service experiences for their customers and employees, resulting in higher customer satisfaction and loyalty with reduced costs.
•Workflow Automation: we enable clients to automate mission-critical workflows, resulting in improved operational efficiency, faster time to value, and lower cost.
•Legacy Transformation: we enable clients to retire technical debt faster, increase agility, and eliminate maintenance costs.
We deliver our solution through our Center-out® agent architecture, enabling clients to transcend channels and internal data silos to achieve quick wins and long-term transformation. This approach insulates business logic from back-end and front-end complexity, delivering consistent customer experiences and agility to the business.
The key aspects of this architecture are:
Centrally-managed AI-powered decisioning
Pega’s centrally-managed AI-powered decisioning ensures AI and business rules operate across all channels. Applications built on Pega’s low-code Platform leverage predictive and adaptive analytics to deliver personalized customer experiences and maximize business objectives. For example, Pega CDH, a centralized, always-on “customer brain,” unleashes the power of predictive analytics, machine learning, and real-time decisioning across our clients’ data, systems, and touchpoints — orchestrating engagement across customer interaction channels and optimizing processes for better efficiency.
End-to-end workflow automation aligned with business outcomes
We combine human-assisted robotic desktop automation and unattended robotic process automation with our unified workflow automation and case management capabilities. This combination provides our platform and applications the differentiated ability to automate customer-facing and back-office operational processes from “end to end,” connecting across organizational and system silos to connect customers and employees to outcomes seamlessly and efficiently.
Consistent omnichannel experiences
With centrally defined business and process logic, Pega provides dynamic, open APIs to align front-end channels and business logic for consistent customer experiences. By leveraging innovative user interface (“UI”) technology, Pega-powered processes and decisions can be easily embedded into existing front ends or used as the basis for new employee-facing applications.
Insulation of back-end complexity
Pega’s architecture insulates case and decision logic from the complexity of back-end systems. Our data virtualization automatically pulls in needed data in a common structure, regardless of source. This capability allows clients the agility to build new experiences on existing systems, modernizing legacy systems without breaking existing processes.
A layered approach to managing variation
Pega’s Situational Layer Cake™ organizes logic into layers that map to the unique dimensions of a client’s business – customer types, lines of business, geographies, etc. This layered approach lets organizations manage variations of their businesses without duplicating logic. This capability allows initial deployments into a single department or region to seamlessly scale to manage the complexity of a global, multi-line enterprise.
In addition to our Center-out agent architecture, Pega technology has been designed to be deployed rapidly, be easily changed, and scale across changing architecture needs.
Rapid, AI-enabled transformation with Blueprint
Pega's approach to digital transformation projects brings business, IT, and AI together to accelerate collaboration, development, and time-to-value. We and our customers can begin projects in Blueprint, which leverages generative AI to analyze business requirements and legacy documentation to generate a starting point template aligned with clients' strategic business outcomes. From there, Blueprint streamlines business and IT collaboration, providing guidance to teams through the end-to-end requirements gathering process – either through virtual collaboration or in a workshop setting.
Through use of Blueprint, our clients are able to generate a starting point application that gives developers a head start on deep configuration and integration. Through our low-code configuration and AI-powered assistance, developers in Pega are aided in quickly building out and adapting application functionality. We refer to this process as our Blueprint Delivered™ design and implementation. Blueprint Delivered uses an agile approach to assist in the acceleration of application build-out in alignment with client success criteria, emphasizing reusable components that ensure both immediate and long-term value creation.
Pega Predictable AI™
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NON-GAAP MEASURES
Our non-GAAP financial measures should only be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. We believe that these measures help investors understand our core operating results and prospects, which is consistent with how management measures and forecasts our performance without the effect of often one-time charges and other items outside our normal operations. Management uses these measures to assess the performance of the company's operations and establish operational goals and incentives. They are not a substitute for financial measures prepared under U.S. GAAP. A reconciliation of GAAP and non-GAAP measures is located with each non-GAAP measure.
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BUSINESS OVERVIEW
We develop, market, license, host, and support enterprise software that helps organizations optimize decisions and processes in real-time so they can deliver outcomes that transform their business. Our powerful platform for enterprise AI decisioning and workflow automation enables the world’s leading brands and government agencies to hyper-personalize customer experiences, automate customer service, and streamline operations, mission-critical business processes, and workflows, and transform legacy systems. Clients can leverage our AI technology and scalable architecture to accelerate their digital transformation. In addition, our sales and client success teams, world-class partners, and clients can leverage Blueprint to rapidly prototype and accelerate the development and deployment of applications quickly and collaboratively.
We focus on enterprise-scale businesses and government agencies that require advanced solutions to distinguish themselves in the competitive markets they serve. Our solutions achieve and facilitate differentiation by increasing business agility, driving growth and modernization, improving productivity, attracting and retaining customers, and reducing risk. Along with our partners, we deliver solutions tailored by industry.
Performance metrics
We use performance metrics to analyze and assess our overall performance, make operating decisions, and forecast and plan for future periods, including:
ACV represents the annualized value of our active contracts as of the measurement date. The contract's total value is divided by its duration in years to calculate ACV. ACV is a performance measure that we believe provides useful information to our management and investors.
| (Dollars in thousands) | December 31, 2024 | December 31, 2025 | Change | Constant Currency Change | |||||||||||||||||||
| Pega Cloud | $ | 652,443 | $ | 866,612 | $ | 214,169 | 33 | % | 28 | % | |||||||||||||
Maintenance | 291,807 | 288,873 | (2,934) | (1) | % | (4) | % | ||||||||||||||||
Subscription services | 944,250 | 1,155,485 | 211,235 | 22 | % | 18 | % | ||||||||||||||||
Subscription license | 427,268 | 452,902 | 25,634 | 6 | % | 4 | % | ||||||||||||||||
| $ | 1,371,518 | $ | 1,608,387 | $ | 236,869 | 17 | % | 14 | % | ||||||||||||||
Reconciliation of ACV and constant currency ACV
| (in millions, except percentages) | December 31, 2024 | December 31, 2025 | 1-Year Change | ||||||||||||
| ACV | $ | 1,372 | $ | 1,608 | 17 | % | |||||||||
| Impact of changes in foreign exchange rates | — | (46) | |||||||||||||
Constant currency ACV | $ | 1,372 | $ | 1,562 | 14 | % | |||||||||
Note: Constant currency ACV is calculated by applying the December 31, 2024 foreign exchange rates to current period shown.
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| (Dollars in thousands) | 2024 | 2025 | Change | ||||||||||||
| Cash provided by operating activities | $ | 345,926 | $ | 505,227 | 46 | % | |||||||||
| Investment in property and equipment | (7,712) | (14,504) | |||||||||||||
Free cash flow (1) | $ | 338,214 | $ | 490,723 | 45 | % | |||||||||
Supplemental information (2) | |||||||||||||||
| Litigation settlement, net of recoveries | $ | 32,403 | $ | — | |||||||||||
Legal fees | 16,197 | 35,484 | |||||||||||||
| Restructuring | 5,252 | 2,056 | |||||||||||||
| Interest paid on convertible senior notes | 3,810 | 1,754 | |||||||||||||
| Income taxes, net of refunds | 82,317 | 21,630 | |||||||||||||
| $ | 139,979 | $ | 60,924 | ||||||||||||
(1) Our non-GAAP free cash flow is defined as cash provided by operating activities less investment in property and equipment. Investment in property and equipment fluctuates in amount and frequency and is significantly affected by the timing and size of investments in our facilities and equipment. We provide information on free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings. This information is not a substitute for financial measures prepared under U.S. GAAP.
(2) The supplemental information discloses items that affect our cash flows and are considered by management not to be representative of our core business operations and ongoing operational performance.
◦Litigation settlement, net of recoveries: Cost to settle litigation, net of insurance recoveries, arising from proceedings outside the ordinary course of business. See "Note 20. Commitments And Contingencies" in Item 8 of this Annual Report for further information.
◦Legal fees: Legal and related fees arising from proceedings outside the ordinary course of business.
◦Restructuring: Restructuring fluctuates in amount and frequency and is significantly affected by the timing and size of our restructuring activities.
◦Interest paid on convertible senior notes: In February 2020, we issued the Notes, due March 1, 2025, in a private placement. The Notes accrued interest at an annual rate of 0.75%, paid semi-annually in arrears on March 1 and September 1.The outstanding Notes were repaid in their entirety at maturity.
◦Income taxes, net of refunds: Direct income taxes paid net of refunds received.
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Reconciliation of Backlog and Constant Currency Backlog (Non-GAAP)
| (in millions, except percentages) | December 31, 2024 | December 31, 2025 | 1-Year Growth Rate | ||||||||||||
| Backlog - GAAP | $ | 1,623 | $ | 2,074 | 28 | % | |||||||||
| Impact of changes in foreign exchange rates | — | (80) | |||||||||||||
| Constant currency backlog | $ | 1,623 | $ | 1,994 | 23 | % | |||||||||
RESULTS OF OPERATIONS
Revenue
| (Dollars in thousands) | 2025 | 2024 | Change | |||||||||||||||||||||
| Pega Cloud | $ | 695,902 | 40 | % | $ | 558,734 | 37 | % | $ | 137,168 | 25 | % | ||||||||||||
| Maintenance | 314,593 | 18 | % | 323,304 | 22 | % | (8,711) | (3) | % | |||||||||||||||
| Subscription services | 1,010,495 | 58 | % | 882,038 | 59 | % | 128,457 | 15 | % | |||||||||||||||
| Subscription license | 507,368 | 29 | % | 401,869 | 27 | % | 105,499 | 26 | % | |||||||||||||||
| Subscription | 1,517,863 | 87 | % | 1,283,907 | 86 | % | 233,956 | 18 | % | |||||||||||||||
| Consulting | 227,949 | 13 | % | 213,273 | 14 | % | 14,676 | 7 | % | |||||||||||||||
| $ | 1,745,812 | 100 | % | $ | 1,497,180 | 100 | % | $ | 248,632 | 17 | % | |||||||||||||
•The increase in Pega Cloud revenue in 2025 was primarily due to expanded adoption of Pega Cloud by our existing clients.
•The decrease in maintenance revenue in 2025 was primarily due to our clients’ shift to Pega Cloud-based offerings, which do not generally result in maintenance revenue.
•The increase in subscription license revenue in 2025 was primarily due to our clients’ shift to Pega Cloud-based offerings, and several large multi-year subscription license contracts recognized in revenue in 2025.
•The increase in consulting revenue in 2025 was primarily due to an increase in consultant billable hours in our International regions.
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Gross profit
| 2025 | 2024 | |||||||||||||||||||||||
| (Dollars in thousands) | Gross Profit % | Gross Profit % | Change | |||||||||||||||||||||
| Pega Cloud | $ | 548,523 | 79 | % | $ | 434,261 | 78 | % | $ | 114,262 | 26 | % | ||||||||||||
| Maintenance | 292,725 | 93 | % | 297,859 | 92 | % | (5,134) | (2) | % | |||||||||||||||
| Subscription services | 841,248 | 83 | % | 732,120 | 83 | % | 109,128 | 15 | % | |||||||||||||||
| Subscription license | 505,986 | 100 | % | 399,964 | 100 | % | 106,022 | 27 | % | |||||||||||||||
| Subscription | 1,347,234 | 89 | % | 1,132,084 | 88 | % | 215,150 | 19 | % | |||||||||||||||
| Consulting | (22,804) | (10) | % | (25,569) | (12) | % | 2,765 | 11 | % | |||||||||||||||
| $ | 1,324,430 | 76 | % | $ | 1,106,515 | 74 | % | $ | 217,915 | 20 | % | |||||||||||||
The gross profit change in 2025 was primarily due to a shift in the revenue mix. Also contributing to the change was:
•The increase in Pega Cloud gross profit percent in 2025 was primarily due to increased hosting cost efficiencies as Pega Cloud continues to grow and scale and a reallocation of certain headcount from Pega Cloud to Maintenance to align with the change in the nature of their responsibilities.
•The increase in consulting gross profit percent in 2025 was primarily due to an increase in consultant utilization rates offset by an increase in contracted services of $6.1 million.
Operating expenses
| 2025 | 2024 | Change | ||||||||||||||||||||||
| (Dollars in thousands) | % of Revenue | % of Revenue | ||||||||||||||||||||||
| Selling and marketing | $ | 578,637 | 33 | % | $ | 534,780 | 36 | % | $ | 43,857 | 8 | % | ||||||||||||
| Research and development | $ | 312,681 | 18 | % | $ | 298,074 | 20 | % | $ | 14,607 | 5 | % | ||||||||||||
| General and administrative | $ | 148,722 | 9 | % | $ | 112,848 | 8 | % | $ | 35,874 | 32 | % | ||||||||||||
Litigation settlement, net of recoveries | $ | 9,750 | 1 | % | $ | 32,403 | 2 | % | $ | (22,653) | * | |||||||||||||
| Restructuring | $ | 11,540 | 1 | % | $ | 4,528 | — | % | $ | 7,012 | 155 | % | ||||||||||||
* Not meaningful
•The increase in selling and marketing in 2025 was primarily due to an increase in compensation and benefits of $31.3 million attributable to increases in headcount and incentive compensation.
•The increase in research and development in 2025 was primarily due to an increase in compensation and benefits of $11.6 million attributable to increases in headcount and incentive compensation.
•The increase in general and administrative in 2025 was primarily due to an increase of $20.4 million in legal fees and related expenses arising from legal proceedings outside the ordinary course of business. We expect to continue to incur additional costs for these proceedings. For additional information, see "Note 20. Commitments And Contingencies" in Item 8 of this Annual Report. In 2025 we experienced an increase of $11.8 million in compensation and benefits attributable to equity compensation and a reallocation of certain headcount from research and development to general and administrative to align with the change in the nature of their responsibilities.
•The decrease in litigation settlement, net of recoveries in 2025 was primarily due to the estimated cost to settle ongoing litigation arising from proceedings outside the ordinary course of business. For additional information, see "Note 20. Commitments And Contingencies" in Item 8 of this Annual Report.
•During the fourth quarter of 2025, management committed to a restructuring plan, primarily within our 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. For additional information, see "Note 12. Restructuring" in Item 8 of this Annual Report.
Other income and expenses
| (Dollars in thousands) | 2025 | 2024 | Change | |||||||||||||||
| Foreign currency transaction (loss) | $ | (14,890) | $ | (912) | $ | (13,978) | * | |||||||||||
| Interest income | 13,641 | 25,779 | (12,138) | (47) | % | |||||||||||||
| Interest expense | (1,285) | (6,835) | 5,550 | 81 | % | |||||||||||||
| (Loss) on capped call transactions | (223) | (663) | 440 | 66 | % | |||||||||||||
| Other income, net | 20,284 | 1,385 | 18,899 | * | ||||||||||||||
| $ | 17,527 | $ | 18,754 | $ | (1,227) | (7) | % | |||||||||||
* Not meaningful
•The change in foreign currency transaction (loss) in 2025 was primarily due to the impact of fluctuations in foreign currency exchange rates associated with foreign currency-denominated receivables held by our subsidiary in the United Kingdom.
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•The decrease in interest income in 2025 was primarily due to lower investment balances as a result of the repayment of the Notes at maturity during the three months ended March 31, 2025.
•The change in (loss) on capped call transactions in 2025 was due to the expiration of the capped call transactions in the three months ended March 31, 2025.
•The increase in other income, net in 2025 was primarily due to the gain from the partial sale of a venture investment. For additional information, see "Note 13. Fair Value Measurements" in Item 8 of this Annual Report.
(Benefit from) provision for income taxes
| (Dollars in thousands) | 2025 | 2024 | ||||||||
| (Benefit from) provision for income taxes | $ | (112,810) | $ | 43,447 | ||||||
| Effective income tax rate | (40) | % | 30 | % | ||||||
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 Organization for Economic Co-operation and Development (“OECD”) has introduced new global minimum tax regulations, known as Pillar Two, that was supported by over 130 countries worldwide. Certain aspects of Pillar Two are effective for tax years beginning on or after January 1, 2024. Although the U.S. has not enacted legislation to adopt Pillar Two, certain countries in which we operate have already adopted, or are in the process of adopting, legislation to implement Pillar Two. We do not expect this legislation to have a material impact on our consolidated financial statements. We will continue to monitor and evaluate new legislation and guidance, which could change our current assessment.
LIQUIDITY AND CAPITAL RESOURCES
| (in thousands) | 2025 | 2024 | ||||||||
| Cash (used in) provided by | ||||||||||
| Operating activities | $ | 505,227 | $ | 345,926 | ||||||
| Investing activities | 197,246 | (202,576) | ||||||||
| Financing activities | (834,630) | (30,214) | ||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 6,988 | (4,434) | ||||||||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | $ | (125,169) | $ | 108,702 | ||||||
| December 31, | |||||||||||
(in thousands) | 2025 | 2024 | |||||||||
| Held in U.S. entities | $ | 157,449 | $ | 474,509 | |||||||
| Held in foreign entities | 268,350 | 265,464 | |||||||||
| Total cash, cash equivalents, and marketable securities | 425,799 | 739,973 | |||||||||
| Restricted cash included in other current assets | 1,577 | 98 | |||||||||
| Restricted cash included in other long-term assets | 2,336 | 4,328 | |||||||||
Total cash, cash equivalents, marketable securities, and restricted cash | $ | 429,712 | $ | 744,399 | |||||||
We believe that our current cash, marketable securities, cash flow provided by operations, borrowing capacity, and ability to engage in capital market transactions will be sufficient to fund our operations, stock repurchases, and quarterly cash dividends for at least the next 12 months and to meet our known long-term cash requirements. Whether these resources are adequate to meet our liquidity needs beyond that period will depend on our future growth, operating results, and the investments needed to support our operations. We may utilize available funds or seek external financing if we require additional capital resources.
If it becomes necessary or desirable to repatriate foreign funds, we may have to pay federal, state, and local income taxes as well as foreign withholding taxes upon repatriation. However, estimating the taxes we would have to pay on the amounts we consider indefinitely reinvested is impracticable due to the complexity of income tax laws and regulations. We have provided a deferred tax liability associated with the tax cost of repatriating unremitted earnings which we do not consider indefinitely reinvested. For additional information, see risk factor "If it becomes necessary or desirable to repatriate our foreign cash balances to the United States, we may be subject to increased taxes, other restrictions, and limitations" in Item 1A of this Annual Report.
Operating activities
The change in cash provided by operating activities in 2025 was primarily due to increase in client collections.
Investing activities
The change in cash provided by (used in) investing activities in 2025 was primarily due to scheduled maturities of our investments in financial instruments in anticipation of the repayment of the maturing Notes and the consideration received from the sale of a venture investment.
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Financing activities
Debt financing
In February 2020, we issued $600 million in aggregate principal amount of Notes, which matured on March 1, 2025. 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. For additional information, see "Note 11. Debt" in Item 8 of this Annual Report.
In November 2019, and as since amended, we entered into a five-year $100 million senior secured revolving credit agreement (the “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.
As of December 31, 2025 and December 31, 2024, we had letters of credit of $26.7 million and $27.3 million, respectively, under the Credit Facility, however we had no cash borrowings.
Stock repurchase program
Changes in the remaining stock repurchase authority:
(in thousands)(1) | 2025 | ||||
| December 31, 2024 | $ | 240,443 | |||
Authorizations (2) | 500,000 | ||||
Repurchases (3) | (498,189) | ||||
| December 31, 2025 | $ | 242,254 | |||
(1) Amounts presented are exclusive of the U.S. excise tax on share repurchases.
(2) On April 22, 2025, our 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, our 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.
(3) All purchases under this program have been made on the open market.
Common stock repurchases
| 2025 | 2024 | |||||||||||||||||||||
| (in thousands) | Shares | Amount | Shares | Amount | ||||||||||||||||||
| Repurchases paid | 10,659 | $ | 498,189 | 1,618 | $ | 68,057 | ||||||||||||||||
| Repurchases unpaid at period end | — | — | 32 | 1,500 | ||||||||||||||||||
Stock repurchase program (1) | 10,659 | 498,189 | 1,650 | 69,557 | ||||||||||||||||||
| Tax withholdings for net settlement of equity awards | 328 | 17,541 | 150 | |||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-16 | KOUNINIS EFSTATHIOS A | SVP, Chief Accounting Officer | Sell | -750 ×2 | $32.31 | -$24,235 |
| 2026-06-01 | KOUNINIS EFSTATHIOS A | SVP, Chief Accounting Officer | Sell | -750 | $36.99 | -$27,742 |
| 2026-05-29 | KOUNINIS EFSTATHIOS A | SVP, Chief Accounting Officer | Sell | -750 | $34.75 | -$26,062 |
| 2026-05-19 | Akgonul Rifat Kerim | Chief Product Officer | Sell | -4,545 | $33.35 | -$151,576 |
| 2026-05-05 | STILLWELL KENNETH | COO, CFO | Sell | -8,383 | $36.45 | -$305,560 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-10-20 10-Q expected by 2026-11-06 (in 86 days)
- ~2027-02-09 10-K expected by 2027-02-27 (in 198 days)
- ~2027-04-20 10-Q expected by 2027-05-07 (in 268 days)
- ~2027-07-20 10-Q expected by 2027-08-06 (in 359 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-07-21 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-21 10-Q Quarterly Report
- 2026-04-24 DEF 14A Proxy Statement
- 2026-04-21 10-Q Quarterly Report
- 2026-04-21 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-12 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-02-10 10-K Annual Report
- 2026-02-10 8-K Earnings Release; Other Events; Financial Statements and Exhibits
- 2026-01-12 8-K Costs Associated with Exit
- 2026-01-09 8-K Other Events; Financial Statements and Exhibits
- 2025-10-21 10-Q Quarterly Report
- 2025-10-21 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-22 10-Q Quarterly Report
- 2025-07-22 8-K Earnings Release; Financial Statements and Exhibits
- 2025-06-23 8-K Material Modification to Rights; Other Events; Financial Statements and Exhibits