Pega 10-Q: Q3 Profit Down 68%, Credit Line Doubled to $200M, Appian Royalty Claim Revived
PEGA sits 39% above its 52-week low of $25.1 on elevated volume (3.5× avg).
Summary
Pega's Q3 10-Q confirms the 3% revenue growth and 68% GAAP profit drop already reported, and adds two things the 8-K did not: a revolver upsized to $200M through 2031, and a revived Appian royalty claim worth up to $1.36B ahead of a January 2027 retrial.
Key Events · Earnings and Guidance · PEGA
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Q3 Revenue Up 3%, GAAP Profit Down 68%
Revenue of $393.4M versus $381.4M a year ago; GAAP net income fell to $14.1M ($0.08 diluted EPS) from $43.4M ($0.24), hit by a $16.0M litigation settlement charge and $13.3M of quarterly legal fees.
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Credit Facility Doubled to $200M
On October 16, 2026 Pega amended its PNC revolver, raising capacity from $100M to $200M, extending maturity to October 16, 2031, with an accordion to $300M. No cash borrowings outstanding; covenants compliant.
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Appian Royalty Theory Revived
On October 16, 2026 the court allowed Appian to present a reasonable royalty damages theory, seeking $284.6M for marketing/sales activities and $1.36B for Pega Platform revisions. Retrial set for January 11, 2027.
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Free Cash Flow Down 14%
Nine-month operating cash flow of $304.3M and free cash flow of $289.8M, versus $346.8M and $338.3M a year ago, as legal fees reached $32.9M and restructuring payments $15.4M.
Analysis · PEGA · Technology
The headline numbers match this morning's 8-K — revenue up 3% to $393.4M, GAAP net income down 68% to $14.1M on $16.0M of litigation settlement charges and heavy legal fees. What the 10-Q adds is the balance-sheet and legal detail behind the quarter. Pega doubled its PNC revolver to $200M and pushed maturity out to 2031, a modest but real liquidity cushion as free cash flow fell 14% to $289.8M year to date. More consequential: on October 16 the Appian court let Appian pursue a reasonable royalty theory it was barred from at the first trial, with claims of $284.6M plus $1.36B — a retrial is set for January 11, 2027, so the litigation overhang is not going away. The opt-out securities suits are now settled and dismissed, removing one legal front.
How filings like this one have moved
In the 30 days to Oct 20, 2026, 29.2% of the 1466 measured filings Wiseek scored 7 moved their stock by 5% or more by the next session's close. The median move was -0.57%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, PEGA was trading at $34.82 on NASDAQ in the Technology sector, with a market capitalization of approximately $6B. The 52-week trading range was $25.10 to $68.10. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.