Shares of Pegasystems Inc. (NASDAQ: PEGA) surged 13.76% to $64.90 in pre-market trading on Wednesday after the low-code automation software company reported better-than-expected third-quarter results for calendar year 2025.
The company posted revenue of $381.4 million, up 17.3% year-on-year, exceeding analyst expectations of $351.6 million. Its adjusted EPS came in at $0.30, a 50.1% beat over the consensus estimate of $0.20. Adjusted operating income stood at $55.16 million, surpassing forecasts by nearly 40%, while operating margin improved sharply to 3.8%, compared with a -3.6% loss in the same quarter last year.
Despite a sequential decline in free cash flow margin to 13.6% from 21.9%, the results signal improved profitability and operational efficiency. Pegasystems’ market capitalization now stands at $9.37 billion.
The company’s growth is driven by its Center-out Business Architecture, which helps enterprises automate workflows and integrate AI into customer service and operations. Revenue growth over the past five years has averaged 11.7% annually, with a recent two-year trend of 13.1%, indicating continued expansion.
However, analysts project slower growth of about 2.7% over the next year, suggesting near-term headwinds in demand despite the strong quarterly performance.
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