COVER PAGE
COVER PAGE - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 05, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-11859 | ||
Entity Registrant Name | PEGASYSTEMS INC. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001013857 | ||
Entity Incorporation, State or Country Code | MA | ||
Entity Tax Identification Number | 04-2787865 | ||
Entity Address, Address Line One | One Rogers Street | ||
Entity Address, City or Town | Cambridge | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02142-1209 | ||
City Area Code | 617 | ||
Local Phone Number | 374-9600 | ||
Title of 12(b) Security | Common Stock, $.01 par value per share | ||
Trading Symbol | PEGA | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4 | ||
Entity Common Stock, Shares Outstanding | 80,900,637 | ||
Documents Incorporated by Reference | Portions of the Registrant’s definitive proxy statement related to its 2021 annual meeting of stockholders to be filed subsequently are incorporated by reference into Part III of this report. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 171,899 | $ 68,363 |
Marketable securities | 293,269 | 0 |
Total cash, cash equivalents, and marketable securities | 465,168 | 68,363 |
Accounts receivable | 215,827 | 199,720 |
Unbilled receivables | 207,155 | 180,219 |
Other current assets | 88,760 | 57,308 |
Total current assets | 976,910 | 505,610 |
Unbilled receivables | 113,278 | 121,736 |
Goodwill | 79,231 | 79,039 |
Other long-term assets | 434,843 | 278,427 |
Total assets | 1,604,262 | 984,812 |
Current liabilities: | ||
Accounts payable | 24,028 | 17,475 |
Accrued expenses | 59,261 | 48,001 |
Accrued compensation and related expenses | 123,012 | 104,126 |
Deferred revenue | 232,865 | 190,080 |
Other current liabilities | 20,969 | 18,273 |
Total current liabilities | 460,135 | 377,955 |
Convertible senior notes, net | 518,203 | 0 |
Operating lease liabilities | 59,053 | 52,610 |
Other long-term liabilities | 24,699 | 15,237 |
Total liabilities | 1,062,090 | 445,802 |
Commitments and Contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 1,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.01 par value, 200,000 shares authorized; 80,890 and 79,599 shares issued and outstanding at December 31, 2020 and 2019, respectively | 809 | 796 |
Additional paid-in capital | 204,432 | 140,523 |
Retained earnings | 339,879 | 410,919 |
Accumulated other comprehensive (loss) | ||
Net unrealized gain on available-for-sale marketable securities, net of tax | 46 | 0 |
Foreign currency translation adjustments | (2,994) | (13,228) |
Total stockholders’ equity | 542,172 | 539,010 |
Total liabilities and stockholders’ equity | $ 1,604,262 | $ 984,812 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (shares) | 80,890,000 | 79,599,000 |
Common stock, shares outstanding (shares) | 80,890,000 | 79,599,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | |||
Total revenue | $ 1,017,517 | $ 911,383 | $ 891,581 |
Cost of revenue | |||
Total cost of revenue | 310,913 | 310,022 | 301,765 |
Gross profit | 706,604 | 601,361 | 589,816 |
Operating expenses | |||
Selling and marketing | 545,693 | 474,459 | 373,495 |
Research and development | 236,986 | 205,210 | 181,710 |
General and administrative | 67,452 | 56,570 | 51,643 |
Total operating expenses | 850,131 | 736,239 | 606,848 |
(Loss) from operations | (143,527) | (134,878) | (17,032) |
Foreign currency transaction gain (loss) | 3,704 | (2,335) | 2,421 |
Interest income | 1,223 | 2,020 | 2,715 |
Interest expense | (19,356) | (212) | (10) |
Gain on capped call transactions | 31,697 | 0 | 0 |
Other income (loss), net | 1,370 | 559 | 363 |
(Loss) before (benefit from) income taxes | (124,889) | (134,846) | (11,543) |
(Benefit from) income taxes | (63,516) | (44,413) | (22,160) |
Net (loss) income | $ (61,373) | $ (90,433) | $ 10,617 |
(Loss) earnings per share | |||
Basic (dollars per share) | $ (0.76) | $ (1.14) | $ 0.14 |
Diluted (dollars per share) | $ (0.76) | $ (1.14) | $ 0.13 |
Weighted-average number of common shares outstanding | |||
Basic (shares) | 80,336 | 79,055 | 78,564 |
Diluted (shares) | 80,336 | 79,055 | 83,064 |
Software license | |||
Revenue | |||
Total revenue | $ 294,910 | $ 279,448 | $ 288,119 |
Cost of revenue | |||
Total cost of revenue | 2,928 | 3,656 | 5,169 |
Maintenance | |||
Revenue | |||
Total revenue | 296,709 | 280,580 | 263,875 |
Cost of revenue | |||
Total cost of revenue | 22,311 | 25,656 | 24,565 |
Pega Cloud | |||
Revenue | |||
Total revenue | 208,268 | 133,746 | 82,627 |
Cost of revenue | |||
Total cost of revenue | 76,575 | 65,828 | 37,409 |
Consulting | |||
Revenue | |||
Total revenue | 217,630 | 217,609 | 256,960 |
Cost of revenue | |||
Total cost of revenue | $ 209,099 | $ 214,882 | $ 234,622 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (61,373) | $ (90,433) | $ 10,617 |
Other comprehensive income (loss), net of tax | |||
Unrealized gain (loss) on available-for-sale securities | 46 | 249 | (17) |
Foreign currency translation adjustments | 10,234 | (155) | (6,600) |
Total other comprehensive income (loss), net of tax | 10,280 | 94 | (6,617) |
Comprehensive (loss) income | $ (51,093) | $ (90,339) | $ 4,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
Balance, beginning of period (in shares) at Dec. 31, 2017 | 78,081 | ||||
Balance, beginning of period at Dec. 31, 2017 | $ 655,870 | $ 781 | $ 152,097 | $ 509,697 | $ (6,705) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Repurchase of common stock (in shares) | (1,001) | ||||
Repurchase of common stock | (55,275) | $ (10) | (55,265) | ||
Issuance of common stock for stock compensation plans (in shares) | 1,413 | ||||
Issuance of common stock for stock compensation plans | (39,361) | $ 14 | (39,375) | ||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 33 | ||||
Issuance of common stock under the employee stock purchase plan | 1,767 | 1,767 | |||
Stock-based compensation | 63,981 | 63,981 | |||
Cash dividends declared | (9,451) | (9,451) | |||
Other comprehensive (loss) income | (6,617) | (6,617) | |||
Net (loss) income | 10,617 | 10,617 | |||
Balance, end of period (in shares) at Dec. 31, 2018 | 78,526 | ||||
Balance, end of period at Dec. 31, 2018 | 621,531 | $ 785 | 123,205 | 510,863 | (13,322) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Repurchase of common stock (in shares) | (333) | ||||
Repurchase of common stock | (21,136) | $ (3) | (21,133) | ||
Issuance of common stock for stock compensation plans (in shares) | 1,375 | ||||
Issuance of common stock for stock compensation plans | (44,839) | $ 14 | (44,853) | ||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 31 | ||||
Issuance of common stock under the employee stock purchase plan | 2,202 | 2,202 | |||
Stock-based compensation | 81,102 | 81,102 | |||
Cash dividends declared | (9,511) | (9,511) | |||
Other comprehensive (loss) income | 94 | 94 | |||
Net (loss) income | $ (90,433) | (90,433) | |||
Balance, end of period (in shares) at Dec. 31, 2019 | 79,599 | 79,599 | |||
Balance, end of period at Dec. 31, 2019 | $ 539,010 | $ 796 | 140,523 | 410,919 | (13,228) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity component of convertible senior notes, net | 61,604 | 61,604 | |||
Repurchase of common stock (in shares) | (278) | ||||
Repurchase of common stock | (28,274) | $ (3) | (28,271) | ||
Issuance of common stock for stock compensation plans (in shares) | 1,536 | ||||
Issuance of common stock for stock compensation plans | (75,562) | $ 16 | (75,578) | ||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 33 | ||||
Issuance of common stock under the employee stock purchase plan | 3,039 | 3,039 | |||
Stock-based compensation | 103,115 | 103,115 | |||
Cash dividends declared | (9,667) | (9,667) | |||
Other comprehensive (loss) income | 10,280 | 10,280 | |||
Net (loss) income | $ (61,373) | (61,373) | |||
Balance, end of period (in shares) at Dec. 31, 2020 | 80,890 | 80,890 | |||
Balance, end of period at Dec. 31, 2020 | $ 542,172 | $ 809 | $ 204,432 | $ 339,879 | $ (2,948) |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared (dollars per share) | $ 0.12 | $ 0.12 | $ 0.12 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | |||
Net (loss) income | $ (61,373) | $ (90,433) | $ 10,617 |
Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities | |||
Stock-based compensation | 103,068 | 80,909 | 63,862 |
(Gain) loss on capped call transactions | (31,697) | 0 | 0 |
Deferred income taxes | (59,777) | (49,317) | (30,898) |
Amortization of deferred commissions | 33,302 | 29,152 | 17,271 |
Lease expense | 16,248 | 14,497 | |
Amortization of debt discount and issuance costs | 14,813 | 0 | 0 |
Amortization of intangible assets and depreciation | 21,348 | 21,396 | 25,295 |
Amortization of investments | 1,073 | 800 | 1,596 |
Foreign currency transaction (gain) loss | (3,704) | 2,335 | (2,421) |
Other non-cash | (879) | (521) | (1,678) |
Change in operating assets and liabilities: | |||
Accounts receivable, unbilled receivables, and contract assets | (32,321) | 1,088 | 25,779 |
Other current assets | (12,959) | (6,344) | (6,068) |
Accounts payable, accrued compensation, and accrued expenses | 37,945 | 25,670 | 20,798 |
Deferred revenue | 43,661 | 1,937 | 28,951 |
Deferred commissions | (55,175) | (49,746) | (44,036) |
Other long-term assets and liabilities | (14,136) | (23,588) | (4,712) |
Cash (used in) provided by operating activities | (563) | (42,165) | 104,356 |
Investing activities | |||
Purchases of investments | (326,549) | (11,424) | (69,494) |
Proceeds from maturities and called investments | 28,811 | 13,634 | 33,991 |
Sales of investments | 1,424 | 89,406 | 0 |
Payments for acquisitions, net of cash acquired | 0 | (10,934) | (800) |
Investment in property and equipment | (25,369) | (10,608) | (11,893) |
Cash (used in) provided by investing activities | (321,683) | 70,074 | (48,196) |
Financing activities | |||
Proceeds from issuance of convertible senior notes | 600,000 | 0 | 0 |
Purchase of capped calls related to convertible senior notes | (51,900) | 0 | 0 |
Payment of debt issuance costs | (14,527) | 0 | 0 |
Dividend payments to stockholders | (9,628) | (9,486) | (9,432) |
Proceeds from revolving credit facility | 0 | 45,000 | 0 |
Payments on revolving credit facility | 0 | (45,000) | 0 |
Common stock repurchases for tax withholdings for net settlement of equity awards | (72,523) | (42,637) | (37,594) |
Common stock repurchases under stock repurchase program | (27,974) | (22,135) | (54,434) |
Cash provided by (used in) financing activities | 423,448 | (74,258) | (101,460) |
Effect of exchange rate changes on cash and cash equivalents | 2,334 | 290 | (2,557) |
Net increase (decrease) in cash and cash equivalents | 103,536 | (46,059) | (47,857) |
Cash and cash equivalents, beginning of period | 68,363 | 114,422 | 162,279 |
Cash and cash equivalents, end of period | 171,899 | 68,363 | 114,422 |
Supplemental disclosures | |||
Interest paid on convertible notes | 2,338 | 0 | 0 |
Income taxes paid | 3,377 | 4,745 | 6,630 |
Non-cash investing and financing activity: | |||
Dividends payable | $ 2,427 | $ 2,388 | $ 2,363 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION Business The Company develops, markets, licenses, and supports customer engagement and digital process automation software applications in addition to the Pega Platform™ for clients that wish to build and extend their own applications. The Company provides consulting, training, support, and hosting services to facilitate the use of its software. Management estimates and reporting The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates. Accounts with reported amounts based on significant estimates and judgments include, but are not limited to, revenue, unbilled receivables, deferred revenue, deferred income taxes, deferred commissions, income taxes payable, convertible senior notes, capped call transactions, intangible assets, and goodwill. Principles of consolidation The Company’s consolidated financial statements reflect Pegasystems Inc. and subsidiaries in which the Company holds a controlling financial interest. All intercompany accounts and transactions were eliminated in consolidation. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Revenue The Company’s revenue is primarily derived from: • software license revenue from sales of the Company’s Pega Platform and software applications. Software licenses represent functional intellectual property and are delivered separately from maintenance and services. • maintenance revenue from client support including software upgrades (on a when and if available basis), telephone support, and bug fixes or patches. • Pega Cloud revenue, which is sales of the Company’s hosted Pega Platform and software applications. • consulting revenue, which is primarily related to new software license implementations, training, and reimbursable costs. Performance Obligations The Company’s software license and Pega Cloud arrangements often contain multiple performance obligations. If a contract contains multiple performance obligations, the Company accounts for each distinct performance obligation separately. The transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. Any discounts or expected potential future price concessions are considered when determining the total transaction price. The Company’s policy is to exclude sales and similar taxes collected from clients from the determination of transaction price. The Company’s typical performance obligations are: Performance Obligation How Standalone Selling Price is Typically Determined When Performance Obligation is Typically Satisfied When Payment is Typically Due Perpetual license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Effective date of the license Term license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Annually, or more frequently, over the term of the license Maintenance Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1) Ratably over the term of the maintenance (over time) Annually, or more frequently, over the term of the maintenance Pega Cloud Residual approach Ratably over the term of the service (over time) Annually, or more frequently, over the term of the service Consulting Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes Based on hours incurred to date Monthly Consulting Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes multiplied by estimated hours for the project Based on hours incurred as a percentage of total estimated hours As contract milestones are achieved (1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client. The Company utilizes the residual approach for performance obligations since the selling price is highly variable and stand-alone selling price is not discernible from past transactions or other observable evidence. Periodically, the Company reevaluates whether the residual approach remains appropriate. As required, the Company evaluates its residual approach estimate compared to all available observable data in order to conclude the estimate is representative of its stand-alone selling price. If the contract grants the client the option to acquire additional products or services, the Company assesses whether the option represents a material right to the client that the client would not receive without entering into that contract. Discounts on options to purchase additional products and services greater than discounts available to similar clients are accounted for as an additional performance obligation. During most of each client contract term, the amount invoiced is generally less than the amount of revenue recognized to date, primarily because we transfer control of the performance obligation related to the software license at the inception of the contract term. A significant portion of the total contract consideration is typically allocated to the license performance obligation. Therefore, our contracts often result in the recording of unbilled receivables and contract assets throughout most of the contract term. The Company records an unbilled receivable or contract asset when revenue recognized on a contract exceeds the billings. The Company recognizes an impairment on receivables and contract assets if, after contract inception, it becomes probable that payment is not collectible. The Company reviews receivables and contract assets on an individual basis for impairment. Variable consideration The Company’s arrangements can include variable fees, such as the option to purchase additional usage of a previously delivered software license. The Company may also provide pricing concessions to clients, a business practice that also gives rise to variable fees in contracts. For variable fees arising from the client’s acquisition of additional usage of a previously delivered software license, the Company applies the sales and usage-based royalties guidance related to a license of intellectual property and recognizes the revenue in the period the underlying sale or usage occurs. The Company includes variable fees in the determination of total transaction price if it is not probable that a future significant reversal of revenue will occur. The Company uses the expected value or most likely value amount, whichever is more appropriate for specific circumstances, to estimate variable consideration, and the estimates are based on the level of historical price concessions offered to clients. The variable consideration related to pricing concessions and other forms of variable consideration, including usage-based fees, have not been material to the Company’s consolidated financial statements. Significant financing components The Company generally does not intend to provide financing to its clients, as financing arrangements are not contemplated as part of the negotiated terms of contracts between the Company and its clients. Although there may be instances with an intervening period between the delivery of the license and the payment, typically in term license arrangements, the purpose of that timing difference is to align the client’s payment with the timing of the use of the software license or service. In certain circumstances, however, there are instances where revenue recognition timing differs from the timing of payment due to extended payment terms or fees that are non-proportional to the associated usage of software licenses. In these instances, the Company evaluates whether a significant financing component exists. This evaluation includes determining the difference between the consideration the client would have paid at the time the performance obligation was satisfied and the amount of consideration actually paid. Contracts that include a significant financing component are adjusted for the time value of money at the rate inherent in the contract, the client’s borrowing rate, or the Company’s incremental borrowing rate, depending upon the recipient of the financing. During 2020, 2019, and 2018, significant financing components were not material. Contract modifications The Company assesses contract modifications to determine: • if the additional products and services are distinct from the products and services in the original arrangement; and • if the amount of consideration expected for the added products and services reflects the stand-alone selling price of those products and services. A contract modification meeting both criteria is accounted for as a separate contract. A contract modification not meeting both criteria is considered a change to the original contract and is accounted for on either: • a prospective basis as a termination of the existing contract and the creation of a new contract; or • a cumulative catch-up basis. Deferred commissions The Company recognizes an asset for the incremental costs of obtaining a client contract, primarily related to sales commissions. The Company expects to benefit from those costs for more than one year, as the Company primarily pays sales commissions on the initial contract. As a result, there are no commensurate commissions paid on contract renewals. Deferred commissions are allocated to each performance obligation within the contract and amortized according to the transfer of underlying goods and services within those contracts and expected renewals. The expected benefit period is determined based on the length of the client contracts, client attrition rates, the underlying technology life-cycle, and the competitive marketplace’s influence in which the products and services are sold. Deferred costs allocated to maintenance and deferred costs for Pega Cloud arrangements are amortized over an average expected benefit period of five years. Deferred costs allocated to software licenses, and any expected renewals of term software licenses within the five years expected benefit period, are amortized at the point in time control of the software license is transferred. Deferred costs allocated to consulting are amortized over a period consistent with the pattern of transfer of control for the related services. Financial instruments The principal financial instruments held by the Company consist of cash equivalents, marketable securities, receivables, capped call transactions, and accounts payable. The Company considers debt securities that are readily convertible to known amounts of cash with maturities of three months or less from the purchase date to be cash equivalents. Interest is recorded when earned. All of the Company’s investments are classified as available-for-sale and are carried at fair value. Unrealized gains and losses considered temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the investment cost is adjusted to fair value by recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated based upon the specific investment. See "Note 4. Receivables, Contract Assets, And Deferred Revenue", "Note 10. Debt", and "Note 12. Fair Value Measurements" for additional information. Property and equipment Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are three years for computer equipment and five years for furniture and fixtures. Leasehold improvements are amortized over the lesser of the lease’s term or the useful life of the asset. Repairs and maintenance costs are expensed as incurred. Leases All the Company’s leases are operating leases, primarily composed of office space leases. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its operating right of use assets and lease liabilities at the lease commencement date and thereafter if modified. Fixed lease costs are recognized on a straight-line basis over the term of the lease. Variable lease costs are recognized in the period in which the obligation for those payments is incurred. The Company combines lease and non-lease components in the determination of lease costs for its office space leases. The lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain it will exercise those options. The Company’s leases do not contain any material residual value guarantees or restrictive covenants. Internal-use software The Company capitalizes and amortizes certain direct costs associated with computer software developed or purchased for internal use incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. The Company amortizes capitalized software costs generally over three Goodwill Goodwill represents the residual purchase price paid in a business combination after the fair value of all identified assets and liabilities have been recorded. Goodwill is not amortized. The Company has a single reporting unit. The Company performed a qualitative assessment as of November 30, 2020, 2019, and 2018, and concluded that there was no impairment since it was not more likely than not that the fair value of its reporting unit was less than its carrying value. Intangible and long-lived assets All of the Company’s intangible assets are amortized using the straight-line method over their estimated useful life. The Company evaluates its long-lived tangible and intangible assets for impairment whenever events or changes in circumstances indicate that such assets’ carrying amount may not be recoverable. Impairment is assessed by comparing the undiscounted cash flows expected to be generated by the long-lived tangible or intangible assets to their carrying value. If impairment exists, the Company calculates the impairment by comparing the carrying value to its fair value as determined by discounted expected cash flows. Cash equivalents Cash equivalents include money market funds, time deposits and other investments with original maturities of three months or less. Business combinations The Company uses its best estimates and assumptions to assign a fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. Research and development and software development costs Research and development costs are expensed as incurred. Capitalization of computer software developed for resale begins upon the establishment of technological feasibility, generally demonstrated by a working model or an operative version of the computer software product. Such costs have not been material to date, as technological feasibility is established within a short time frame from the software’s general availability. As a result, no costs were capitalized in 2020, 2019, or 2018. Stock-based compensation The Company recognizes stock-based compensation expense associated with equity awards based on the award’s fair value at the grant date. Stock-based compensation is recognized over the requisite service period, which is generally the vesting period of the equity award and is adjusted each period for anticipated forfeitures. See "Note 14. Stock-Based Compensation" for discussion of the Company’s key assumptions included in determining the fair value of its equity awards at the grant date. Foreign currency translation and remeasurement The translation of assets and liabilities for the Company’s subsidiaries with functional currencies other than the U.S. dollar are made at period-end exchange rates. Revenue and expense accounts are translated at the average exchange rates during the period transactions occurred. The resulting translation adjustments are reflected in accumulated other comprehensive income. Realized and unrealized exchange gains or losses from transactions and remeasurement adjustments are reflected in foreign currency transaction gain (loss) in the accompanying consolidated statements of operations. Accounting for income taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. Future realization of the Company’s deferred tax assets ultimately depends on sufficient taxable income within the available carryback or carryforward periods. Taxable income sources include taxable income in prior carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income. The Company records a valuation allowance to reduce its deferred tax assets to an amount it believes is more-likely-than-not to be realized. Changes in the valuation allowance impacts income tax expense in the period of adjustment. The Company’s deferred tax valuation allowance requires significant judgment and uncertainties, including assumptions about future taxable income that are based on historical and projected information. The Company recognizes excess tax benefits when they are realized, as a reduction of the provision for income taxes. The Company assesses its income tax positions and records tax benefits based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. The Company classifies liabilities for uncertain tax positions as non-current liabilities unless the uncertainty is expected to be resolved within one year. The Company classifies interest and penalties on uncertain tax positions as income tax expense. As a global company, the Company uses significant judgment to calculate and provide for income taxes in each of the tax jurisdictions in which it operates. In the ordinary course of the Company’s business, there are transactions and calculations undertaken whose ultimate tax outcome cannot be certain. Some of these uncertainties arise as a consequence of transfer pricing for transactions with the Company’s subsidiaries and nexus and tax credit estimates. In addition, the calculation of acquired tax attributes and the associated limitations are complex. See "Note 16. Income Taxes" for additional information. Advertising expense Advertising costs are expensed as incurred. Advertising costs were $8.7 million, $6.7 million, and $6.9 million during 2020, 2019, and 2018, respectively. New Accounting Standards Convertible debt In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (ASU 2020-06), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The standard eliminates the liability and equity separation model for convertible instruments with a cash conversion feature. As a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Additionally, the embedded conversion feature will no longer be amortized into income as interest expense over the instrument’s life. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. Additionally, the standard requires applying the if-converted method to calculate convertible instruments’ impact on diluted earnings per share (“EPS”). The standard is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. It can be adopted on either a full retrospective or modified retrospective basis. The Company is currently evaluating the effect this ASU will have on its consolidated financial statements and related disclosures. The Company expects to elect to early adopt the new standard in the first quarter of 2021. |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | 3. MARKETABLE SECURITIES December 31, 2020 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Government debt $ 39,996 $ — $ (8) $ 39,988 Corporate debt 253,345 88 (152) 253,281 $ 293,341 $ 88 $ (160) $ 293,269 As of December 31, 2020, marketable securities maturities ranged from January 2021 to December 2023, with a weighted-average remaining maturity of 1.5 years. As of December 31, 2019, the Company did not hold any marketable securities. |
RECEIVABLES, CONTRACT ASSETS, A
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE | 4. RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE Receivables (in thousands) December 31, 2020 December 31, 2019 Accounts receivable $ 215,827 $ 199,720 Unbilled receivables 207,155 180,219 Long-term unbilled receivables 113,278 121,736 $ 536,260 $ 501,675 Unbilled receivables are client committed amounts for which revenue recognition precedes billing, and billing is solely subject to the passage of time. Unbilled receivables are expected to be billed in the future as follows: (Dollars in thousands) December 31, 2020 1 year or less $ 207,155 65 % 1-2 years 83,992 26 % 2-5 years 29,286 9 % $ 320,433 100 % Unbilled receivables based upon contract effective date: (Dollars in thousands) December 31, 2020 2020 $ 149,867 47 % 2019 87,941 27 % 2018 31,097 10 % 2017 31,668 10 % 2016 and prior 19,860 6 % $ 320,433 100 % Major clients No client represented 10% or more of the Company’s total accounts receivable and unbilled receivables as of December 31, 2020 or December 31, 2019. Contract assets and deferred revenue (in thousands) December 31, 2020 December 31, 2019 Contract assets (1) $ 15,296 $ 5,558 Long-term contract assets (2) 7,777 5,420 $ 23,073 $ 10,978 Deferred revenue $ 232,865 $ 190,080 Long-term deferred revenue (3) 8,991 5,407 $ 241,856 $ 195,487 (1) Included in other current assets. (2) Included in other long-term assets. (3) Included in other long-term liabilities. Contract assets are client committed amounts for which revenue recognized exceeds the amount billed to the client where the right to payment is subject to conditions other than the passage of time, such as completing a related performance obligation. Deferred revenue consists of billings and payments received in advance of revenue recognition. Contract assets and deferred revenue are netted at the contract level for each reporting period. The change in deferred revenue in the year ended December 31, 2020 was primarily due to new billings in advance of revenue recognition and $187.6 million of revenue recognized during the period that was included in deferred revenue on December 31, 2019. |
DEFERRED COMMISSIONS
DEFERRED COMMISSIONS | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
DEFERRED COMMISSIONS | 5. DEFERRED COMMISSIONS December 31, (in thousands) 2020 2019 Deferred commissions (1) $ 108,624 $ 85,314 (1) Included in other long-term assets. (in thousands) 2020 2019 2018 Amortization of deferred commissions (1) $ 33,302 $ 29,152 $ 17,271 (1) Included in selling and marketing expenses. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 6. PROPERTY AND EQUIPMENT (1) (in thousands) December 31, 2020 2019 Leasehold improvements $ 52,335 $ 42,162 Computer equipment 30,211 25,147 Furniture and fixtures 10,572 8,524 Computer software purchased 8,415 7,775 Computer software developed for internal use 18,542 17,606 Fixed assets in progress 2,077 4,044 122,152 105,258 Less: accumulated depreciation (81,754) (70,975) $ 40,398 $ 34,283 (1) Included in other long-term assets. (in thousands) 2020 2019 2018 Depreciation expense $ 17,378 $ 14,771 $ 13,875 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 7. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill (in thousands) 2020 2019 January 1, $ 79,039 $ 72,858 Acquisition — 6,179 Currency translation adjustments 192 2 December 31, $ 79,231 $ 79,039 Intangibles Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives as follows: December 31, 2020 (in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1) Client-related 4-10 years $ 63,168 $ (55,877) $ 7,291 Technology 2-10 years 64,843 (56,386) 8,457 Other 1-5 years 5,361 (5,361) — $ 133,372 $ (117,624) $ 15,748 (1) Included in other long-term assets. December 31, 2019 (in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1) Client-related 4-10 years $ 63,140 $ (54,368) $ 8,772 Technology 2-10 years 64,843 (53,898) 10,945 Other 1-5 years 5,361 (5,361) — $ 133,344 $ (113,627) $ 19,717 (1) Included in other long-term assets. Amortization of intangible assets was: (in thousands) 2020 2019 2018 Cost of revenue $ 2,487 $ 3,500 $ 5,027 Selling and marketing 1,483 3,125 6,416 $ 3,970 $ 6,625 $ 11,443 Future estimated amortization expense related to intangible assets: (in thousands) December 31, 2020 2021 $ 3,657 2022 3,557 2023 3,289 2024 2,520 2025 and after 2,725 $ 15,748 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 8. 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 in assessing 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 Chief Executive Officer, reviews financial information on a consolidated basis. Therefore, the Company determined it has one operating segment and one reporting unit. Long-lived assets related to the Company’s U.S. and international operations were: (Dollars in thousands) December 31, 2020 2019 U.S. $ 31,339 78 % $ 26,644 78 % International 9,059 22 % 7,639 22 % $ 40,398 100 % $ 34,283 100 % |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | 9. LEASES Expense (in thousands) 2020 2019 Fixed lease costs $ 20,235 $ 18,250 Short-term lease costs 1,669 1,291 Variable lease costs 4,470 5,554 $ 26,374 $ 25,095 Total rent expense under operating leases was $14.9 million for 2018. Right of use assets and lease liabilities (in thousands) December 31, 2020 December 31, 2019 Right of use assets (1) $ 67,651 $ 58,273 Lease liabilities (2) $ 18,541 $ 15,885 Long-term lease liabilities $ 59,053 $ 52,610 (1) Represents the Company’s right to use the leased asset during the lease term. Included in other long-term assets. (2) Included in other current liabilities. The weighted-average remaining lease term and discount rate for the Company’s leases were: December 31, 2020 December 31, 2019 Weighted-average remaining lease term 4.7 years 4.0 years Weighted-average discount rate (1) 5.4 % 5.8 % (1) The rates implicit in most of the Company’s leases are not readily determinable. Therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over the lease term in a similar economic environment. Maturities of lease liabilities are: (in thousands) December 31, 2020 1 year or less $ 22,164 1-2 years 21,747 2-3 years 21,599 3-4 years 7,683 > 4 years 14,431 Total lease payments 87,624 Less: imputed interest (1) (10,030) Total short and long-term lease liabilities $ 77,594 (1) Lease liabilities are measured at the present value of the remaining lease payments using a discount rate determined at lease commencement, unless the discount rate is updated due to a lease reassessment event. Cash flow information (in thousands) 2020 2019 Cash paid for leases $ 20,548 $ 19,727 Right of use assets recognized for new leases and amendments (non-cash) $ 24,276 $ 31,155 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | 10. DEBT Convertible senior notes and capped calls Convertible senior notes In February 2020, the Company issued Convertible Senior Notes (the "Notes") with an aggregate principal amount of $600 million, due March 1, 2025, in a private placement. The proceeds from the Notes were used or are anticipated to be used for the Capped Call Transactions (described below), working capital, and other general corporate purposes. There are no required principal payments until the maturity of the Notes. The Notes accrue interest at an annual rate of 0.75%, payable semi-annually in arrears on March 1 and September 1, beginning on September 1, 2020. Proceeds from the Notes and Capped Call Transactions: (in thousands) Amount Principal $ 600,000 Less: issuance costs (14,527) Less: Capped Call Transactions (51,900) $ 533,573 Conversion rights The conversion rate is 7.4045 shares of common stock per $1,000 principal amount of the Notes, representing an initial conversion price of $135.05 per share of common stock. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election, based on the applicable conversion rate. The conversion rate will be adjusted upon the occurrence of certain events, including spin-offs, tender offers, exchange offers, and certain stockholder distributions. Beginning on September 1, 2024, noteholders may convert their Notes at any time at their election. Before September 1, 2024, noteholders may convert their Notes in the following circumstances: • During any calendar quarter commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock exceeds one hundred and thirty percent (130%) of the conversion price for each of at least twenty (20) trading days (whether or not consecutive) during the thirty (30) consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. • During the five consecutive business days immediately after any five consecutive trading day period (the “Measurement Period”), if the trading price per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of common stock on such trading day and the conversion rate on such trading day. • Upon the occurrence of certain corporate events or distributions, or if the Company calls all or any Notes for redemption, then the noteholder of any Note may convert such Note at any time before the close of business on the business day immediately before the related redemption date (or if the Company fails to pay the redemption price due on such redemption date in full, at any time until the Company pays such redemption price in full). As of December 31, 2020, no Notes were eligible for conversion at the noteholders’ election. Repurchase rights On or after March 1, 2023 and on or before the 40th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the Notes at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest, if the last reported sale price of the Company’s common stock exceeded 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a redemption notice. If certain corporate events that constitute a “Fundamental Change” (as described below) occur at any time, each noteholder will have the right, at such noteholder’s option, to require the Company to repurchase for cash all of such noteholder’s Notes, or any portion of the principal thereof that is equal to $1,000 or an integral multiple of $1,000, at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest. A fundamental change relates to events such as mergers, changes in control of the Company, liquidation/dissolution of the Company, or the delisting of the Company’s common stock. Impact of the Notes In accounting for the transaction, the Notes have been separated into liability and equity components. • The initial carrying amount of the liability component was calculated by measuring a similar debt instrument’s fair value that does not have an associated conversion feature. The excess of the Notes’ principal amount over the initial carrying amount of the liability component, the debt discount, is amortized as interest expense over the Notes’ contractual term. • The equity component was recorded as an increase to additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Convertible Senior Notes. The Company incurred issuance costs of $14.5 million related to the Notes, allocated between the Notes’ liability and equity components proportionate to the initial carrying amount of the liability and equity components. • Issuance costs attributable to the liability component are recorded as an offset to the Notes’ principal balance. They are amortized as interest expense using the effective interest method over the contractual term of the Notes. • Issuance costs attributable to the equity component are recorded as an offset to the equity component in additional paid-in capital and are not amortized. Net carrying amount of the liability component: (in thousands) December 31, 2020 Principal $ 600,000 Unamortized debt discount (71,222) Unamortized issuance costs (10,575) $ 518,203 Net carrying amount of the equity component, included in additional paid-in capital: (in thousands) December 31, 2020 Conversion options (1) $ 61,604 (1) Net of issuance costs and taxes. Interest expense related to the Notes: (in thousands) 2020 Contractual interest expense (0.75% coupon) $ 3,825 Amortization of debt discount (1) 12,898 Amortization of issuance costs (1) 1,915 $ 18,638 (1) Amortized based upon an effective interest rate of 4.31%. Future payments of principal and contractual interest: December 31, 2020 (in thousands) Principal Interest Total 2021 — 4,500 4,500 2022 — 4,500 4,500 2023 — 4,500 4,500 2024 — 4,500 4,500 2025 600,000 1,488 601,488 $ 600,000 $ 19,488 $ 619,488 Capped Call Transactions In February 2020, the Company entered into privately negotiated capped call transactions (“Capped Call Transactions”) with certain financial institutions. The Capped Call Transactions cover 4.4 million shares (representing the number of shares for which the Notes are initially convertible) of the Company’s common stock. They are generally expected to reduce potential dilution to the common stock upon any conversion of Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the Capped Call Transactions is $196.44, subject to adjustment upon the occurrence of specified extraordinary events affecting the Company, including merger events and tender offers. The Capped Call Transactions are accounted for as derivative instruments. The Capped Call Transactions do not qualify for the Company’s own equity scope exception in ASC 815 since, in some cases of early settlement, the settlement value of the Capped Call Transactions, calculated in accordance with the governing documents, may not represent a fair value measurement. The Capped Call Transactions are classified as “other long-term assets” and remeasured to fair value at the end of each reporting period, resulting in a non-operating gain or loss. Change in value of Capped Call Transactions: (in thousands) Year Ended Value at issuance $ 51,900 Fair value adjustment 31,697 Balance as of December 31, $ 83,597 Credit facility In November 2019, and as amended as of February 2020, July 2020, and September 2020, the Company entered into a five-year $100 million senior secured revolving credit agreement (the “Credit Facility”) with PNC Bank, National Association (“PNC”). The Company may use borrowings to finance working capital needs and for general corporate purposes. Subject to specific conditions, the Credit Facility allows the Company to increase the aggregate commitment to $200 million. The commitments expire on November 4, 2024, and any outstanding loans will be payable on such date. The Credit Facility, as amended, contains customary covenants, including, but not limited to, those relating to additional indebtedness, liens, asset divestitures, and affiliate transactions. The Company is also required to comply with financial covenants, including: • Beginning with the fiscal quarter ended on September 30, 2020 and ending with the fiscal quarter ended December 31, 2021, at least $200 million in cash and investments held by Pegasystems Inc. • Beginning with the quarter ended on March 31, 2022, a maximum net consolidated leverage ratio of 3.5 to 1.0 (with a step-up in the event of certain acquisitions) and a minimum consolidated interest coverage ratio of 3.5 to 1.0. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 11. STOCKHOLDERS’ EQUITY Preferred stock The Company has 1 million authorized shares of preferred stock, $0.01 par value per share, of which none were issued and outstanding at December 31, 2020. The Board of Directors has the authority to issue the shares of preferred stock in one or more series, to establish the number of shares to be included in each series, and to determine the designation, powers, preferences, and rights of the shares of each series and the qualifications, limitations, or restrictions thereof, without any further vote or action by the stockholders. The issuance of preferred stock could decrease the earnings and assets available for distribution to holders of common stock and may have the effect of delaying, deferring, or defeating a change in control of the Company. The Company had not issued any shares of preferred stock through December 31, 2020. Common stock The Company has 200 million authorized shares of common stock, $0.01 par value per share, of which 80.9 million shares were issued and outstanding at December 31, 2020. Dividends declared 2020 2019 2018 Dividends declared (per share) $ 0.12 $ 0.12 $ 0.12 Dividend payments to stockholders (in thousands) $ 9,628 $ 9,486 $ 9,432 The Company’s paid a quarterly cash dividend of $0.03 per share in 2020, 2019, and 2018, however, the Board of Directors may terminate or modify the dividend program at any time without prior notice. Stock repurchases (in thousands) 2020 2019 2018 Shares Amount Shares Amount Shares Amount January 1, $ 45,484 $ 6,620 $ 34,892 Authorizations (1) $ 20,516 $ 60,000 $ 27,003 Repurchases (2) (278) $ (28,274) (333) $ (21,136) (1,001) $ (55,275) December 31, $ 37,726 $ 45,484 $ 6,620 (1) On June 15, 2020, the Company announced that the Board of Directors extended the current stock repurchase program’s expiration date to June 30, 2021 and increased the remaining stock repurchase authority to $60 million. (2) Purchases under this program have been made on the open market. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 12. FAIR VALUE MEASUREMENTS Assets and liabilities measured at fair value on a recurring basis The Company records its cash equivalents, marketable securities, Capped Call Transactions, and venture investments at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability. As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows: • Level 1 - observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2 - significant other inputs that are observable either directly or indirectly; and • Level 3 - significant unobservable inputs on which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and minimize unobservable inputs when determining fair value. The fair value of the Capped Call Transactions at the end of each reporting period is determined using a Black-Scholes option-pricing model. The valuation models use various market-based inputs, including stock price, remaining contractual term, expected volatility, risk-free interest rate, and expected dividend yield, as applicable. The Company applies judgment in its determination of expected volatility. The Company considers both historical and implied volatility levels of the underlying equity security and, to a lesser extent, historical peer group volatility levels. The Company’s venture investments are recorded at fair value based on valuation methods using the observable transaction price and other unobservable inputs, including the volatility, rights, and obligations of the securities the Company holds. The Company’s assets and liabilities measured at fair value on a recurring basis: December 31, 2020 December 31, 2019 (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents $ 42,339 $ 14,000 $ — $ 56,339 $ — $ — $ — $ — Marketable securities $ — $ 293,269 $ — $ 293,269 $ — $ — $ — $ — Capped Call Transactions (1) (2) $ — $ 83,597 $ — $ 83,597 $ — $ — $ — $ — Venture investments (1) (3) $ — $ — $ 8,345 $ 8,345 $ — $ — $ 4,871 $ 4,871 (1) Included in other long-term assets. (2) See "Note 10. Debt" for additional information. (3) Investments in privately-held companies. Change in venture investments: (in thousands) 2020 2019 January 1, $ 4,871 $ 3,390 New investments 3,306 1,444 Sales of investments (1,424) — Changes in foreign exchange rates 118 37 Fair value adjustment 1,474 — December 31, $ 8,345 $ 4,871 The carrying value of certain other financial instruments, including receivables and accounts payable, approximates fair value due to these items’ relatively short maturity. Fair value of the Notes The fair value of the Company’s Notes was recorded at $515.9 million upon issuance, which reflected the principal amount of the Notes less the fair value of the conversion feature. The fair value of the debt component was determined based on a discounted cash flow model. The discount rate used reflected both the time value of money and credit risk inherent in the Notes. The carrying value of the Notes will be accreted, over the remaining term to maturity, to their principal value of $600 million. The Notes’ fair value (inclusive of the conversion feature embedded in the Notes) was $706.5 million as of December 31, 2020. The fair value was determined based on the Notes’ quoted price in an over-the-counter market on the last trading day of the reporting period and classified within Level 2 in the fair value hierarchy. See "Note 10. Debt" for additional information. Credit risk In addition to receivables, the Company is potentially subject to concentrations of credit risk from the Company’s cash, cash equivalents, and marketable securities. The Company’s cash and cash equivalents are generally held with large, diverse financial institutions worldwide to reduce the Company’s credit risk exposure. Investment policies have been implemented that limit purchases of marketable debt securities to investment-grade securities. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 13. REVENUE Geographic revenue (Dollars in thousands) 2020 2019 2018 U.S. $ 613,844 61 % $ 525,191 57 % $ 469,987 52 % Other Americas 49,441 5 % 60,536 7 % 53,239 6 % United Kingdom (“U.K.”) 91,517 9 % 87,382 10 % 95,628 11 % Europe (excluding U.K.), Middle East, and Africa 156,056 15 % 137,946 15 % 147,248 17 % Asia-Pacific 106,659 10 % 100,328 11 % 125,479 14 % $ 1,017,517 100 % $ 911,383 100 % $ 891,581 100 % Revenue streams (in thousands) 2020 2019 2018 Perpetual license $ 28,558 $ 80,015 $ 109,863 Term license 266,352 199,433 178,256 Revenue recognized at a point in time 294,910 279,448 288,119 Maintenance 296,709 280,580 263,875 Pega Cloud 208,268 133,746 82,627 Consulting 217,630 217,609 256,960 Revenue recognized over time 722,607 631,935 603,462 $ 1,017,517 $ 911,383 $ 891,581 (in thousands) 2020 2019 2018 Pega Cloud 208,268 133,746 82,627 Maintenance 296,709 280,580 263,875 Term license $ 266,352 $ 199,433 $ 178,256 Subscription (1) 771,329 613,759 524,758 Perpetual license 28,558 80,015 109,863 Consulting 217,630 217,609 256,960 Total revenue $ 1,017,517 $ 911,383 $ 891,581 (1) Reflects client arrangements subject to renewal (Pega Cloud, maintenance, and term license). Remaining performance obligations ("Backlog") Expected future revenue on existing contracts: December 31, 2020 (Dollars in thousands) Perpetual license Term license Maintenance Pega Cloud Consulting Total 1 year or less $ 11,514 $ 105,920 $ 227,803 $ 248,223 $ 19,226 $ 612,686 57 % 1-2 years 395 7,962 54,509 193,064 346 256,276 24 % 2-3 years — 4,928 28,320 104,542 851 138,641 13 % Greater than 3 years — 4 19,283 44,308 1,189 64,784 6 % $ 11,909 $ 118,814 $ 329,915 $ 590,137 $ 21,612 $ 1,072,387 100 % December 31, 2019 (Dollars in thousands) Perpetual license Term license Maintenance Pega Cloud Consulting Total 1 year or less $ 2,305 $ 97,826 $ 206,882 $ 165,571 $ 20,798 $ 493,382 58 % 1-2 years 2,179 12,014 30,291 128,109 1,439 174,032 21 % 2-3 years — 3,132 17,844 84,788 132 105,896 13 % Greater than 3 years — 3,861 13,277 43,702 1,993 62,833 8 % $ 4,484 $ 116,833 $ 268,294 $ 422,170 $ 24,362 $ 836,143 100 % |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | 14. STOCK-BASED COMPENSATION The following table presents the stock-based compensation expense included in the Company’s consolidated statements of operations: (in thousands) 2020 2019 2018 Cost of revenue $ 20,796 $ 18,822 $ 16,862 Selling and marketing 46,283 32,665 23,237 Research and development 22,885 18,938 15,274 General and administrative 13,104 10,484 8,489 $ 103,068 $ 80,909 $ 63,862 Income tax benefit $ (20,464) $ (16,392) $ (13,383) The Company periodically grants stock options and restricted stock units (“RSUs”) for a fixed number of shares upon vesting to employees and non-employee Directors. Beginning in 2019, the Company granted Directors awards in the form of common stock and stock options. Most of the Company’s stock-based compensation arrangements vest over five years, with 20% vesting after one year and the remaining 80% vesting in equal quarterly installments over the remaining four years. The Company’s stock options have a term of ten years. The Company recognizes stock-based compensation using the accelerated attribution method, treating each vesting tranche as if it were an individual grant. The stock-based compensation expense recognized during a period is based on the value of the awards that are ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the Company recognizes the actual expense over the vesting period only for the shares that vest. Employees may elect to receive 50% of the employee’s target incentive compensation under the Company’s Corporate Incentive Compensation Plan (the “CICP”) in the form of RSUs instead of cash. If elected by an employee, the equity amount is equal in value on the date of grant to 50% of the employee’s target incentive opportunity, based on the employee’s base salary. The number of RSUs granted is determined by dividing 50% of the employee’s target incentive opportunity by 85% of the closing price of the Company’s common stock on the grant date, less the present value of expected dividends during the vesting period. If elected, the award vests 100% on the following year’s CICP payout date. Vesting is conditioned upon the performance conditions of the CICP and on continued employment; if threshold funding does not occur, the RSUs will not vest. The Company considers vesting to be probable on the grant date and recognizes the associated stock-based compensation expense over the requisite service period beginning on the grant date and ending on the vesting date. The Company grants awards that allow for the settlement of vested stock options and RSUs on a net share basis (“net settled awards”). With net settled awards, the employee does not surrender any cash or shares upon exercise. Instead, the Company withholds the number of shares to cover the exercise price (in the case of stock options) and the minimum statutory tax withholding obligations (in the case of stock options and RSUs) from the shares that would otherwise be issued upon exercise or settlement. The exercise of stock options and settlement of RSUs on a net share basis results in fewer shares issued by the Company. Share-based compensation plans 2004 Long-Term Incentive Plan (as amended and restated) In 2004, the Company adopted the 2004 Long-Term Incentive Plan (as amended and restated, the “2004 Plan”) to provide employees, non-employee Directors, and consultants with opportunities to purchase stock through incentive stock options and non-qualified stock options. Subsequent amendments to the plan increased the number of shares authorized for issuance under the plan to 36 million, extended the term of the plan to 2030, and limited annual compensation to any non-employee Director to $0.5 million. As of December 31, 2020, 9.9 million shares were subject to outstanding options and stock-based awards under the 2004 Plan. 2006 Employee Stock Purchase Plan In 2006, the Company adopted the 2006 Employee Stock Purchase Plan (the “2006 ESPP”) under which the Company’s employees are entitled to purchase up to an aggregate of one million shares of common stock, at a price equal to at least 85% of the fair market value of the Company’s common stock on the lesser of the commencement date or completion date for offerings under the plan, or such higher price as the Company’s Board of Directors may establish from time to time. Until the Company’s Board of Directors determines otherwise, the Board has set the purchase price at 95% of the fair market value on the completion date of the offering period. As a result, the 2006 ESPP is non-compensatory and is tax-qualified. Therefore, as of December 31, 2020, no compensation expense related to the plan had been recognized. In October 2012, the Company’s Board of Directors amended the term of the 2006 ESPP such that it will continue until there are no shares remaining under the plan or until the plan is terminated by the Board of Directors, whichever occurs first. As of December 31, 2020, 0.5 million shares had been issued thereunder. Shares issued and available for issuance During 2020, the Company issued 1.6 million shares to its employees and directors under the Company’s share-based compensation plans. As of December 31, 2020, there were 11.1 million shares available for issuance for future equity grants under the Company’s stock plans, consisting of 10.6 million shares under the 2004 Plan and 0.5 million shares under the 2006 ESPP. Grant activity Stock options The Company estimates the fair value of stock options using a Black-Scholes option-pricing model. Key inputs used to estimate the fair value of stock options include the exercise price of the award, expected term of the option, expected volatility of the Company’s common stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the Company’s expected annual dividend yield. The exercise price for stock options is greater than or equal to the shares’ fair market value at the grant date. The following table summarizes the Company’s fair value assumptions for stock options: 2020 2019 2018 Weighted-average grant-date fair value $ 24.16 $ 19.10 $ 18.03 Assumptions used in the Black-Scholes option-pricing model: Expected annual volatility (1) 31 % 32 % 34 % Expected term in years (2) 4.5 4.5 4.5 Risk-free interest rate (3) 0.7 % 2.4 % 2.6 % Expected annual dividend yield (4) 0.2 % 0.3 % 0.4 % (1) The expected annual volatility for each grant is determined based on the average of historic daily price changes of the Company’s common stock over a period, which approximates the expected option term. (2) The expected option term for each grant is determined based on the historical exercise behavior of employees and post-vesting employment termination behavior. (3) The risk-free interest rate is based on the yield of U.S. Treasury securities with a commensurate maturity with the expected option term at the time of grant. (4) The expected annual dividend yield is based on the weighted-average dividend yield assumptions used for options granted during the applicable period. The following table summarizes the combined stock option activity under the Company’s stock option plans for 2020: Shares Weighted-average Exercise Price Weighted-average Remaining Contractual Term (in years) Aggregate Intrinsic Value Options outstanding as of January 1, 2020 7,436 $ 44.76 Granted 2,018 92.81 Exercised (1,777) 33.52 Forfeited (286) 62.86 Options outstanding as of December 31, 2020 7,391 $ 59.88 Vested and expected to vest as of December 31, 2020 6,225 $ 57.85 7.1 $ 469,374 Exercisable as of December 31, 2020 2,935 $ 38.73 5.6 $ 277,450 The aggregate intrinsic value of stock options exercised (i.e., the difference between the market price at exercise and the price paid by the employee at exercise) in 2020, 2019, and 2018 was $126.8 million, $63.3 million, and $56.8 million, respectively. The aggregate intrinsic value of stock options outstanding and exercisable as of December 31, 2020 is based on the difference between the closing price of the Company’s stock of $133.26 and the exercise price of the applicable stock options. As of December 31, 2020, the Company had unrecognized stock-based compensation expense related to the unvested portion of stock options of $35.9 million that is expected to be recognized as expense over a weighted-average period of 2.3 years. RSUs RSUs deliver to the recipient a right to receive a specified number of shares of the Company’s common stock upon vesting. The Company values its RSUs at the fair value of its common stock on the grant date, which is the closing price of its common stock on the grant date less the present value of expected dividends during the vesting period, as the recipient is not entitled to dividends during the requisite service period. The weighted-average grant-date fair value for RSUs granted in 2020, 2019, and 2018 was $93.68, $66.21, and $58.52, respectively. The following table summarizes the combined RSU activity for all grants, including the CICP, under the 2004 Plan for 2020: Shares Weighted- Average Grant-Date Aggregate Intrinsic Value Nonvested as of January 1, 2020 2,565 $ 55.61 Granted 1,168 93.68 Vested (1,059) 51.11 Forfeited (212) 65.17 Nonvested as of December 31, 2020 2,462 $ 74.78 $ 328,023 Expected to vest as of December 31, 2020 1,841 $ 76.05 $ 245,339 The fair value of RSUs vested in 2020, 2019, and 2018 was $108.4 million, $77.0 million, and $66.5 million, respectively. The aggregate intrinsic value of RSUs outstanding and expected to vest as of December 31, 2020 is based on the closing price of the Company’s stock of $133.26 on December 31, 2020. As of December 31, 2020, the Company had $68.6 million of unrecognized stock-based compensation expense related to all unvested RSUs that is expected to be recognized as expense over a weighted-average period of 2.1 years. Common stock In 2020, the Company granted 0.01 million shares of common stock to Directors with a weighted-average grant-date fair value of $117.47 per share. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2020 | |
Postemployment Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | 15. EMPLOYEE BENEFIT PLANS The Company sponsors defined contribution plans for qualifying employees, including a 401(k) plan in the United States to which the Company makes discretionary matching contributions. The following expenses related to defined contribution plans were recorded in the Company’s consolidated statements of operations: (in thousands) 2020 2019 2018 U.S. 401(k) Plan $ 8,109 $ 6,676 $ 5,506 International plans 16,132 13,021 11,101 $ 24,241 $ 19,697 $ 16,607 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 16. INCOME TAXES The components of (loss) before (benefit from) income taxes are: (in thousands) 2020 2019 2018 Domestic $ (59,281) $ (51,396) $ (27,494) Foreign (65,608) (83,450) 15,951 $ (124,889) $ (134,846) $ (11,543) The components of (benefit from) income taxes are: (in thousands) 2020 2019 2018 Current: Federal $ (11,251) $ 1,050 $ (1,862) State 399 405 287 Foreign 7,113 3,449 10,313 Total current (benefit from) provision for (3,739) 4,904 8,738 Deferred: Federal (34,573) (25,356) (18,939) State (8,119) (5,143) (3,702) Foreign (17,085) (18,818) (8,257) Total deferred (benefit) (59,777) (49,317) (30,898) $ (63,516) $ (44,413) $ (22,160) A reconciliation of the U.S federal statutory tax rate and the Company’s effective tax rate, is as follows: (in thousands) 2020 2019 2018 U.S. federal income taxes at statutory rates $ (26,227) $ (28,318) $ (2,424) Valuation allowance (5,881) 727 510 State income taxes, net of federal benefit and tax credits (6,994) (4,450) (3,329) Permanent differences 1,773 2,606 1,302 GILTI, FDII, and BEAT (1) — — 399 Federal research and experimentation credits (5,716) (4,295) (6,991) Tax effects of foreign activities 3,050 3,056 (399) Tax-exempt income — (91) (137) Provision to return adjustments 3,416 (5,460) 253 Non-deductible compensation 1,806 1,716 1,025 Expiration of statutes and changes in estimates 55 2,420 (516) Excess tax benefits related to share-based compensation (25,797) (14,291) (13,541) Cares Act (10,576) — — Impact of change in tax law 7,489 1,908 1,636 Other 86 59 52 $ (63,516) $ (44,413) $ (22,160) (1) Global Intangible Low Taxed Income (“GILTI”), Foreign-Derived Intangible Income (“FDII”), and Base Erosion and Anti-abuse Tax (“BEAT”) Cares Act On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“Cares Act”) was enacted to address the economic impact of the COVID-19 pandemic in the United States. Among other things, the Cares Act allows a five-year carryback period for tax losses generated in 2019 through 2021. The Company carried back net operating losses generated in 2019, resulting in an income tax benefit of $5.7 million. The $5.7 million income tax benefit represents the Federal rate differential between 35% and 21%. In addition, the Company applied the carryback provisions of the Cares Act to its net operating losses generated in 2020, which resulted in the reclassification of $4.8 million net operating losses from a deferred income tax asset to refundable income taxes. The Company does not expect the other income tax provisions of the Cares Act to have a material impact on its financial statements. Deferred income taxes Significant components of net deferred tax assets and liabilities are: December 31, (in thousands) 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 88,129 $ 70,960 Accruals and reserves 26,309 24,902 Interest expense carryforward 3,464 — Depreciation 4,795 2,493 Tax credit carryforwards 31,556 15,307 Other 370 199 Total deferred tax assets 154,623 113,861 Valuation allowances (23,409) (28,007) Total net deferred tax assets 131,214 85,854 Deferred tax liabilities: Capped call transactions (20,858) — Convertible senior notes (6,473) — Software revenue (11,477) (23,859) Intangibles (4,338) (6,103) Total deferred tax liabilities (43,146) (29,962) $ 88,068 $ 55,892 The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realizing the deferred tax assets to determine, based on the weight of available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized. This determination requires significant judgment, including assumptions about future taxable income based on historical and projected information. In 2020, the change in valuation allowances was primarily due to the expiration of $5.9 million in acquisition-related net operating losses. There were no material changes in valuation allowances in 2019. As of December 31, 2020, the Company’s net operating losses and credit carryforwards are: (in thousands) Federal State Net operating losses (1) $ 124,115 $ 9,149 Net operating losses due to acquisitions (1) $ 76,826 $ 1,466 Credit carryforwards (2) $ 24,372 $ 1,895 Credit carryforwards due to acquisitions $ 640 $ 60 (1) Excludes federal and state net operating losses of $29.5 million and $0.8 million, respectively, from prior acquisitions that the Company expects will expire unutilized. (2) Excludes federal and state tax credits of $0.1 million and $9.0 million, respectively, that the Company expects will expire unutilized. Carryforward losses and credits expire between 2021 and 2038, except for the 2020 federal net operating loss of $47.3 million and $1.2 million of state credits, which both have unlimited carryforward periods. The Company’s India subsidiary is primarily located in Special Economic Zones (“SEZs”) and is entitled to a tax holiday in India. The tax holiday reduces or eliminates income tax in India. The tax holiday in the Hyderabad SEZ is scheduled to expire in 2024. The tax holiday in the Bangalore SEZ is scheduled to expire in 2022. For 2020, 2019, and 2018, the income tax holiday reduced the Company’s provision for income taxes by $1.7 million, $1.9 million, and $1.3 million, respectively. Uncertain tax benefits A rollforward of the Company’s gross unrecognized tax benefits is: (in thousands) 2020 2019 2018 Balance as of January 1, $ 23,271 $ 18,157 $ 19,150 Additions for tax positions related to the current year 653 510 978 Additions for tax positions of prior years 962 4,917 174 Reductions for tax positions of prior years (1,085) (313) (2,145) Balance as of December 31, $ 23,801 $ 23,271 $ 18,157 As of December 31, 2020, the Company had $23.8 million of total unrecognized tax benefits, which would decrease the Company’s effective tax rate if recognized. As of December 31, 2020 and December 31, 2019, the Company’s income tax receivable was $44.1 million and $25.9 million, respectively. Tax examinations The Company files federal and state income tax returns in the U.S. and in various foreign jurisdictions. In the ordinary course of business, the Company and its subsidiaries are examined by various tax authorities, including the Internal Revenue Service in the U.S. As of December 31, 2020, the Company’s U.S. federal tax returns for the years 2014 through 2017 were under examination by the Internal Revenue Service. In addition, certain foreign jurisdictions are auditing the Company’s income tax returns for periods ranging from 2010 through 2018. The Company does not expect the results of these audits to have a material effect on the Company’s financial condition, results of operations, or cash flows. With few exceptions, the statute of limitations remains open in all jurisdictions for the tax years 2014 to the present. |
(LOSS) EARNINGS PER SHARE
(LOSS) EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
(LOSS) EARNINGS PER SHARE | 17. (LOSS) EARNINGS PER SHARE Basic earnings per share is calculated using the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is calculated using the weighted-average number of common shares outstanding during the applicable period, plus the dilutive effect of outstanding stock options and RSUs, using the treasury stock method. In periods of loss, all stock options and RSUs are excluded from the weighted-average number of common shares, as their inclusion would be anti-dilutive. (in thousands, except per share amounts) 2020 2019 2018 Net (loss) income $ (61,373) $ (90,433) $ 10,617 Weighted-average common shares outstanding 80,336 79,055 78,564 (Loss) earnings per share, basic $ (0.76) $ (1.14) $ 0.14 Net (loss) income $ (61,373) $ (90,433) $ 10,617 Stock options — — 2,891 RSUs — — 1,609 Effect of dilutive securities — — 4,500 Weighted-average common shares outstanding, assuming dilution 80,336 79,055 83,064 (Loss) earnings per share, diluted $ (0.76) $ (1.14) $ 0.13 Outstanding anti-dilutive stock options and RSUs (1) 6,278 5,911 188 (1) Certain outstanding stock options and RSUs were excluded from the computation of diluted earnings per share because they were anti-dilutive in the period presented. These awards may be dilutive in the future. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 18. COMMITMENTS AND CONTINGENCIES Commitments See "Note 9. Leases" for additional information. Contingencies |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 19. SUBSEQUENT EVENTS Relocation of Corporate Headquarters On February 12, 2021, the Company executed the Lease Termination Agreement with Charles Park Owner LLC to accelerate the lease termination date for the Company’s corporate headquarters in Cambridge, Massachusetts to October 1, 2021. Under the terms of the Lease Termination Agreement, the Company will receive a payment of $18 million. The Company is obligated to make rent payments outlined in the existing lease agreements until October 1, 2021, the new lease termination date. Qurious.io acquisition In January 2021, the Company acquired Qurious.io, Inc., a cloud-based real time speech analytics solution for customer service teams. The acquisition was immaterial. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Management estimates and reporting | Management estimates and reporting The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates. Accounts with reported amounts based on significant estimates and judgments include, but are not limited to, revenue, unbilled receivables, deferred revenue, deferred income taxes, deferred commissions, income taxes payable, convertible senior notes, capped call transactions, intangible assets, and goodwill. |
Principles of consolidation | Principles of consolidationThe Company’s consolidated financial statements reflect Pegasystems Inc. and subsidiaries in which the Company holds a controlling financial interest. |
Revenue and deferred commissions | Revenue The Company’s revenue is primarily derived from: • software license revenue from sales of the Company’s Pega Platform and software applications. Software licenses represent functional intellectual property and are delivered separately from maintenance and services. • maintenance revenue from client support including software upgrades (on a when and if available basis), telephone support, and bug fixes or patches. • Pega Cloud revenue, which is sales of the Company’s hosted Pega Platform and software applications. • consulting revenue, which is primarily related to new software license implementations, training, and reimbursable costs. Performance Obligations The Company’s software license and Pega Cloud arrangements often contain multiple performance obligations. If a contract contains multiple performance obligations, the Company accounts for each distinct performance obligation separately. The transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. Any discounts or expected potential future price concessions are considered when determining the total transaction price. The Company’s policy is to exclude sales and similar taxes collected from clients from the determination of transaction price. The Company’s typical performance obligations are: Performance Obligation How Standalone Selling Price is Typically Determined When Performance Obligation is Typically Satisfied When Payment is Typically Due Perpetual license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Effective date of the license Term license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Annually, or more frequently, over the term of the license Maintenance Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1) Ratably over the term of the maintenance (over time) Annually, or more frequently, over the term of the maintenance Pega Cloud Residual approach Ratably over the term of the service (over time) Annually, or more frequently, over the term of the service Consulting Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes Based on hours incurred to date Monthly Consulting Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes multiplied by estimated hours for the project Based on hours incurred as a percentage of total estimated hours As contract milestones are achieved (1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client. The Company utilizes the residual approach for performance obligations since the selling price is highly variable and stand-alone selling price is not discernible from past transactions or other observable evidence. Periodically, the Company reevaluates whether the residual approach remains appropriate. As required, the Company evaluates its residual approach estimate compared to all available observable data in order to conclude the estimate is representative of its stand-alone selling price. If the contract grants the client the option to acquire additional products or services, the Company assesses whether the option represents a material right to the client that the client would not receive without entering into that contract. Discounts on options to purchase additional products and services greater than discounts available to similar clients are accounted for as an additional performance obligation. During most of each client contract term, the amount invoiced is generally less than the amount of revenue recognized to date, primarily because we transfer control of the performance obligation related to the software license at the inception of the contract term. A significant portion of the total contract consideration is typically allocated to the license performance obligation. Therefore, our contracts often result in the recording of unbilled receivables and contract assets throughout most of the contract term. The Company records an unbilled receivable or contract asset when revenue recognized on a contract exceeds the billings. The Company recognizes an impairment on receivables and contract assets if, after contract inception, it becomes probable that payment is not collectible. The Company reviews receivables and contract assets on an individual basis for impairment. Variable consideration The Company’s arrangements can include variable fees, such as the option to purchase additional usage of a previously delivered software license. The Company may also provide pricing concessions to clients, a business practice that also gives rise to variable fees in contracts. For variable fees arising from the client’s acquisition of additional usage of a previously delivered software license, the Company applies the sales and usage-based royalties guidance related to a license of intellectual property and recognizes the revenue in the period the underlying sale or usage occurs. The Company includes variable fees in the determination of total transaction price if it is not probable that a future significant reversal of revenue will occur. The Company uses the expected value or most likely value amount, whichever is more appropriate for specific circumstances, to estimate variable consideration, and the estimates are based on the level of historical price concessions offered to clients. The variable consideration related to pricing concessions and other forms of variable consideration, including usage-based fees, have not been material to the Company’s consolidated financial statements. Significant financing components The Company generally does not intend to provide financing to its clients, as financing arrangements are not contemplated as part of the negotiated terms of contracts between the Company and its clients. Although there may be instances with an intervening period between the delivery of the license and the payment, typically in term license arrangements, the purpose of that timing difference is to align the client’s payment with the timing of the use of the software license or service. In certain circumstances, however, there are instances where revenue recognition timing differs from the timing of payment due to extended payment terms or fees that are non-proportional to the associated usage of software licenses. In these instances, the Company evaluates whether a significant financing component exists. This evaluation includes determining the difference between the consideration the client would have paid at the time the performance obligation was satisfied and the amount of consideration actually paid. Contracts that include a significant financing component are adjusted for the time value of money at the rate inherent in the contract, the client’s borrowing rate, or the Company’s incremental borrowing rate, depending upon the recipient of the financing. During 2020, 2019, and 2018, significant financing components were not material. Contract modifications The Company assesses contract modifications to determine: • if the additional products and services are distinct from the products and services in the original arrangement; and • if the amount of consideration expected for the added products and services reflects the stand-alone selling price of those products and services. A contract modification meeting both criteria is accounted for as a separate contract. A contract modification not meeting both criteria is considered a change to the original contract and is accounted for on either: • a prospective basis as a termination of the existing contract and the creation of a new contract; or • a cumulative catch-up basis. Deferred commissions The Company recognizes an asset for the incremental costs of obtaining a client contract, primarily related to sales commissions. The Company expects to benefit from those costs for more than one year, as the Company primarily pays sales commissions on the initial contract. As a result, there are no commensurate commissions paid on contract renewals. Deferred commissions are allocated to each performance obligation within the contract and amortized according to the transfer of underlying goods and services within those contracts and expected renewals. The expected benefit period is determined based on the length of the client contracts, client attrition rates, the underlying technology life-cycle, and the competitive marketplace’s influence in which the products and services are sold. Deferred costs allocated to maintenance and deferred costs for Pega Cloud arrangements are amortized over an average expected benefit period of five years. Deferred costs allocated to software licenses, and any expected renewals of term software licenses within the five years expected benefit period, are amortized at the point in time control of the software license is transferred. Deferred costs allocated to consulting are amortized over a period consistent with the pattern of transfer of control for the related services. |
Financial instruments | Financial instruments The principal financial instruments held by the Company consist of cash equivalents, marketable securities, receivables, capped call transactions, and accounts payable. The Company considers debt securities that are readily convertible to known amounts of cash with maturities of three months or less from the purchase date to be cash equivalents. Interest is recorded when earned. All of the Company’s investments are classified as available-for-sale and are carried at fair value. Unrealized gains and losses considered temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the investment cost is adjusted to fair value by recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated based upon the specific investment. See "Note 4. Receivables, Contract Assets, And Deferred Revenue", "Note 10. Debt", and "Note 12. Fair Value Measurements" for additional information. |
Property and equipment | Property and equipment Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which are three years for computer equipment and five years for furniture and fixtures. Leasehold improvements are amortized over the lesser of the lease’s term or the useful life of the asset. Repairs and maintenance costs are expensed as incurred. |
Leases | LeasesAll the Company’s leases are operating leases, primarily composed of office space leases. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its operating right of use assets and lease liabilities at the lease commencement date and thereafter if modified. Fixed lease costs are recognized on a straight-line basis over the term of the lease. Variable lease costs are recognized in the period in which the obligation for those payments is incurred. The Company combines lease and non-lease components in the determination of lease costs for its office space leases. The lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain it will exercise those options. The Company’s leases do not contain any material residual value guarantees or restrictive covenants. |
Internal-use software | Internal-use software The Company capitalizes and amortizes certain direct costs associated with computer software developed or purchased for internal use incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. The Company amortizes capitalized software costs generally over three |
Goodwill | GoodwillGoodwill represents the residual purchase price paid in a business combination after the fair value of all identified assets and liabilities have been recorded. Goodwill is not amortized. The Company has a single reporting unit. The Company performed a qualitative assessment as of November 30, 2020, 2019, and 2018, and concluded that there was no impairment since it was not more likely than not that the fair value of its reporting unit was less than its carrying value. |
Intangible and long-lived assets | Intangible and long-lived assets All of the Company’s intangible assets are amortized using the straight-line method over their estimated useful life. The Company evaluates its long-lived tangible and intangible assets for impairment whenever events or changes in circumstances indicate that such assets’ carrying amount may not be recoverable. Impairment is assessed by comparing the undiscounted cash flows expected to be generated by the long-lived tangible or intangible assets to their carrying value. If impairment exists, the Company calculates the impairment by comparing the carrying value to its fair value as determined by discounted expected cash flows. |
Cash equivalents | Cash equivalents Cash equivalents include money market funds, time deposits and other investments with original maturities of three months or less. |
Business combinations | Business combinations The Company uses its best estimates and assumptions to assign a fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. |
Research and development and software development costs | Research and development and software development costs Research and development costs are expensed as incurred. Capitalization of computer software developed for resale begins upon the establishment of technological feasibility, generally demonstrated by a working model or an operative version of the computer software product. Such costs have not been material to date, as technological feasibility is established within a short time frame from the software’s general availability. As a result, no costs were capitalized in 2020, 2019, or 2018. |
Stock-based compensation | Stock-based compensationThe Company recognizes stock-based compensation expense associated with equity awards based on the award’s fair value at the grant date. Stock-based compensation is recognized over the requisite service period, which is generally the vesting period of the equity award and is adjusted each period for anticipated forfeitures. See "Note 14. Stock-Based Compensation" for discussion of the Company’s key assumptions included in determining the fair value of its equity awards at the grant date. |
Foreign currency translation and remeasurement | Foreign currency translation and remeasurement The translation of assets and liabilities for the Company’s subsidiaries with functional currencies other than the U.S. dollar are made at period-end exchange rates. Revenue and expense accounts are translated at the average exchange rates during the period transactions occurred. The resulting translation adjustments are reflected in accumulated other comprehensive income. Realized and unrealized exchange gains or losses from transactions and remeasurement adjustments are reflected in foreign currency transaction gain (loss) in the accompanying consolidated statements of operations. |
Accounting for income taxes | Accounting for income taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. Future realization of the Company’s deferred tax assets ultimately depends on sufficient taxable income within the available carryback or carryforward periods. Taxable income sources include taxable income in prior carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income. The Company records a valuation allowance to reduce its deferred tax assets to an amount it believes is more-likely-than-not to be realized. Changes in the valuation allowance impacts income tax expense in the period of adjustment. The Company’s deferred tax valuation allowance requires significant judgment and uncertainties, including assumptions about future taxable income that are based on historical and projected information. The Company recognizes excess tax benefits when they are realized, as a reduction of the provision for income taxes. The Company assesses its income tax positions and records tax benefits based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. The Company classifies liabilities for uncertain tax positions as non-current liabilities unless the uncertainty is expected to be resolved within one year. The Company classifies interest and penalties on uncertain tax positions as income tax expense. |
Advertising expense | Advertising expenseAdvertising costs are expensed as incurred. |
New Accounting Standards | New Accounting Standards Convertible debt In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (ASU 2020-06), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The standard eliminates the liability and equity separation model for convertible instruments with a cash conversion feature. As a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Additionally, the embedded conversion feature will no longer be amortized into income as interest expense over the instrument’s life. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. Additionally, the standard requires applying the if-converted method to calculate convertible instruments’ impact on diluted earnings per share (“EPS”). The standard is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. It can be adopted on either a full retrospective or modified retrospective basis. The Company is currently evaluating the effect this ASU will have on its consolidated financial statements and related disclosures. The Company expects to elect to early adopt the new standard in the first quarter of 2021. |
Assets and Liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis The Company records its cash equivalents, marketable securities, Capped Call Transactions, and venture investments at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability. As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows: • Level 1 - observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2 - significant other inputs that are observable either directly or indirectly; and • Level 3 - significant unobservable inputs on which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and minimize unobservable inputs when determining fair value. The fair value of the Capped Call Transactions at the end of each reporting period is determined using a Black-Scholes option-pricing model. The valuation models use various market-based inputs, including stock price, remaining contractual term, expected volatility, risk-free interest rate, and expected dividend yield, as applicable. The Company applies judgment in its determination of expected volatility. The Company considers both historical and implied volatility levels of the underlying equity security and, to a lesser extent, historical peer group volatility levels. The Company’s venture investments are recorded at fair value based on valuation methods using the observable transaction price and other unobservable inputs, including the volatility, rights, and obligations of the securities the Company holds. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Performance Obligations | The Company’s typical performance obligations are: Performance Obligation How Standalone Selling Price is Typically Determined When Performance Obligation is Typically Satisfied When Payment is Typically Due Perpetual license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Effective date of the license Term license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Annually, or more frequently, over the term of the license Maintenance Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1) Ratably over the term of the maintenance (over time) Annually, or more frequently, over the term of the maintenance Pega Cloud Residual approach Ratably over the term of the service (over time) Annually, or more frequently, over the term of the service Consulting Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes Based on hours incurred to date Monthly Consulting Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes multiplied by estimated hours for the project Based on hours incurred as a percentage of total estimated hours As contract milestones are achieved (1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client. Expected future revenue on existing contracts: December 31, 2020 (Dollars in thousands) Perpetual license Term license Maintenance Pega Cloud Consulting Total 1 year or less $ 11,514 $ 105,920 $ 227,803 $ 248,223 $ 19,226 $ 612,686 57 % 1-2 years 395 7,962 54,509 193,064 346 256,276 24 % 2-3 years — 4,928 28,320 104,542 851 138,641 13 % Greater than 3 years — 4 19,283 44,308 1,189 64,784 6 % $ 11,909 $ 118,814 $ 329,915 $ 590,137 $ 21,612 $ 1,072,387 100 % December 31, 2019 (Dollars in thousands) Perpetual license Term license Maintenance Pega Cloud Consulting Total 1 year or less $ 2,305 $ 97,826 $ 206,882 $ 165,571 $ 20,798 $ 493,382 58 % 1-2 years 2,179 12,014 30,291 128,109 1,439 174,032 21 % 2-3 years — 3,132 17,844 84,788 132 105,896 13 % Greater than 3 years — 3,861 13,277 43,702 1,993 62,833 8 % $ 4,484 $ 116,833 $ 268,294 $ 422,170 $ 24,362 $ 836,143 100 % |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Marketable Securities | December 31, 2020 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Government debt $ 39,996 $ — $ (8) $ 39,988 Corporate debt 253,345 88 (152) 253,281 $ 293,341 $ 88 $ (160) $ 293,269 |
RECEIVABLES, CONTRACT ASSETS,_2
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Summary of Accounts Receivable and Unbilled Receivable | Receivables (in thousands) December 31, 2020 December 31, 2019 Accounts receivable $ 215,827 $ 199,720 Unbilled receivables 207,155 180,219 Long-term unbilled receivables 113,278 121,736 $ 536,260 $ 501,675 |
Summary of Unbilled Receivables | Unbilled receivables are expected to be billed in the future as follows: (Dollars in thousands) December 31, 2020 1 year or less $ 207,155 65 % 1-2 years 83,992 26 % 2-5 years 29,286 9 % $ 320,433 100 % |
Summary of Unbilled Receivables Based Upon Contract Effective Date | Unbilled receivables based upon contract effective date: (Dollars in thousands) December 31, 2020 2020 $ 149,867 47 % 2019 87,941 27 % 2018 31,097 10 % 2017 31,668 10 % 2016 and prior 19,860 6 % $ 320,433 100 % |
Summary of Contract Assets and Deferred Revenue | Contract assets and deferred revenue (in thousands) December 31, 2020 December 31, 2019 Contract assets (1) $ 15,296 $ 5,558 Long-term contract assets (2) 7,777 5,420 $ 23,073 $ 10,978 Deferred revenue $ 232,865 $ 190,080 Long-term deferred revenue (3) 8,991 5,407 $ 241,856 $ 195,487 (1) Included in other current assets. (2) Included in other long-term assets. (3) Included in other long-term liabilities. |
DEFERRED COMMISSIONS (Tables)
DEFERRED COMMISSIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Impairment of Deferred Contract Costs | December 31, (in thousands) 2020 2019 Deferred commissions (1) $ 108,624 $ 85,314 (1) Included in other long-term assets. |
Schedule of Amortization of Deferred Contract Costs | (in thousands) 2020 2019 2018 Amortization of deferred commissions (1) $ 33,302 $ 29,152 $ 17,271 (1) Included in selling and marketing expenses. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | (in thousands) December 31, 2020 2019 Leasehold improvements $ 52,335 $ 42,162 Computer equipment 30,211 25,147 Furniture and fixtures 10,572 8,524 Computer software purchased 8,415 7,775 Computer software developed for internal use 18,542 17,606 Fixed assets in progress 2,077 4,044 122,152 105,258 Less: accumulated depreciation (81,754) (70,975) $ 40,398 $ 34,283 |
Depreciation Expense | (in thousands) 2020 2019 2018 Depreciation expense $ 17,378 $ 14,771 $ 13,875 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | (in thousands) 2020 2019 January 1, $ 79,039 $ 72,858 Acquisition — 6,179 Currency translation adjustments 192 2 December 31, $ 79,231 $ 79,039 |
Schedule of Amortizable Intangible Assets | Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives as follows: December 31, 2020 (in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1) Client-related 4-10 years $ 63,168 $ (55,877) $ 7,291 Technology 2-10 years 64,843 (56,386) 8,457 Other 1-5 years 5,361 (5,361) — $ 133,372 $ (117,624) $ 15,748 (1) Included in other long-term assets. December 31, 2019 (in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1) Client-related 4-10 years $ 63,140 $ (54,368) $ 8,772 Technology 2-10 years 64,843 (53,898) 10,945 Other 1-5 years 5,361 (5,361) — $ 133,344 $ (113,627) $ 19,717 (1) Included in other long-term assets. |
Amortization Expense of Acquired Intangibles | Amortization of intangible assets was: (in thousands) 2020 2019 2018 Cost of revenue $ 2,487 $ 3,500 $ 5,027 Selling and marketing 1,483 3,125 6,416 $ 3,970 $ 6,625 $ 11,443 |
Estimated Future Amortization Expense Related to Intangible Assets | Future estimated amortization expense related to intangible assets: (in thousands) December 31, 2020 2021 $ 3,657 2022 3,557 2023 3,289 2024 2,520 2025 and after 2,725 $ 15,748 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Long-Lived Assets by Geographic Area | Long-lived assets related to the Company’s U.S. and international operations were: (Dollars in thousands) December 31, 2020 2019 U.S. $ 31,339 78 % $ 26,644 78 % International 9,059 22 % 7,639 22 % $ 40,398 100 % $ 34,283 100 % |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Lease Expense | Expense (in thousands) 2020 2019 Fixed lease costs $ 20,235 $ 18,250 Short-term lease costs 1,669 1,291 Variable lease costs 4,470 5,554 $ 26,374 $ 25,095 Total rent expense under operating leases was $14.9 million for 2018. |
Schedule of Right of Use Asset and Lease Liabilities | Right of use assets and lease liabilities (in thousands) December 31, 2020 December 31, 2019 Right of use assets (1) $ 67,651 $ 58,273 Lease liabilities (2) $ 18,541 $ 15,885 Long-term lease liabilities $ 59,053 $ 52,610 (1) Represents the Company’s right to use the leased asset during the lease term. Included in other long-term assets. (2) Included in other current liabilities. |
Schedule of Weighted Average and Discount Rate | The weighted-average remaining lease term and discount rate for the Company’s leases were: December 31, 2020 December 31, 2019 Weighted-average remaining lease term 4.7 years 4.0 years Weighted-average discount rate (1) 5.4 % 5.8 % (1) The rates implicit in most of the Company’s leases are not readily determinable. Therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over the lease term in a similar economic environment. |
Schedule of Lease Maturities after Adoption of 842 | Maturities of lease liabilities are: (in thousands) December 31, 2020 1 year or less $ 22,164 1-2 years 21,747 2-3 years 21,599 3-4 years 7,683 > 4 years 14,431 Total lease payments 87,624 Less: imputed interest (1) (10,030) Total short and long-term lease liabilities $ 77,594 (1) Lease liabilities are measured at the present value of the remaining lease payments using a discount rate determined at lease commencement, unless the discount rate is updated due to a lease reassessment event. |
Schedule Of Supplemental Cash Flow Lease Information | Cash flow information (in thousands) 2020 2019 Cash paid for leases $ 20,548 $ 19,727 Right of use assets recognized for new leases and amendments (non-cash) $ 24,276 $ 31,155 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Proceeds from the Notes and Capped Call Transactions: (in thousands) Amount Principal $ 600,000 Less: issuance costs (14,527) Less: Capped Call Transactions (51,900) $ 533,573 |
Contractual Obligation, Fiscal Year Maturity Schedule | Net carrying amount of the liability component: (in thousands) December 31, 2020 Principal $ 600,000 Unamortized debt discount (71,222) Unamortized issuance costs (10,575) $ 518,203 Net carrying amount of the equity component, included in additional paid-in capital: (in thousands) December 31, 2020 Conversion options (1) $ 61,604 (1) Net of issuance costs and taxes. Interest expense related to the Notes: (in thousands) 2020 Contractual interest expense (0.75% coupon) $ 3,825 Amortization of debt discount (1) 12,898 Amortization of issuance costs (1) 1,915 $ 18,638 (1) Amortized based upon an effective interest rate of 4.31%. Future payments of principal and contractual interest: December 31, 2020 (in thousands) Principal Interest Total 2021 — 4,500 4,500 2022 — 4,500 4,500 2023 — 4,500 4,500 2024 — 4,500 4,500 2025 600,000 1,488 601,488 $ 600,000 $ 19,488 $ 619,488 |
Schedule of Derivative Instruments | Change in value of Capped Call Transactions: (in thousands) Year Ended Value at issuance $ 51,900 Fair value adjustment 31,697 Balance as of December 31, $ 83,597 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Summary of Dividends Declared and Dividend Payments | Dividends declared 2020 2019 2018 Dividends declared (per share) $ 0.12 $ 0.12 $ 0.12 Dividend payments to stockholders (in thousands) $ 9,628 $ 9,486 $ 9,432 |
Schedule of Treasury Stock | Stock repurchases (in thousands) 2020 2019 2018 Shares Amount Shares Amount Shares Amount January 1, $ 45,484 $ 6,620 $ 34,892 Authorizations (1) $ 20,516 $ 60,000 $ 27,003 Repurchases (2) (278) $ (28,274) (333) $ (21,136) (1,001) $ (55,275) December 31, $ 37,726 $ 45,484 $ 6,620 (1) On June 15, 2020, the Company announced that the Board of Directors extended the current stock repurchase program’s expiration date to June 30, 2021 and increased the remaining stock repurchase authority to $60 million. (2) Purchases under this program have been made on the open market. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The Company’s assets and liabilities measured at fair value on a recurring basis: December 31, 2020 December 31, 2019 (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents $ 42,339 $ 14,000 $ — $ 56,339 $ — $ — $ — $ — Marketable securities $ — $ 293,269 $ — $ 293,269 $ — $ — $ — $ — Capped Call Transactions (1) (2) $ — $ 83,597 $ — $ 83,597 $ — $ — $ — $ — Venture investments (1) (3) $ — $ — $ 8,345 $ 8,345 $ — $ — $ 4,871 $ 4,871 (1) Included in other long-term assets. (2) See "Note 10. Debt" for additional information. (3) Investments in privately-held companies. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Change in venture investments: (in thousands) 2020 2019 January 1, $ 4,871 $ 3,390 New investments 3,306 1,444 Sales of investments (1,424) — Changes in foreign exchange rates 118 37 Fair value adjustment 1,474 — December 31, $ 8,345 $ 4,871 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue by Geographic Area | Geographic revenue (Dollars in thousands) 2020 2019 2018 U.S. $ 613,844 61 % $ 525,191 57 % $ 469,987 52 % Other Americas 49,441 5 % 60,536 7 % 53,239 6 % United Kingdom (“U.K.”) 91,517 9 % 87,382 10 % 95,628 11 % Europe (excluding U.K.), Middle East, and Africa 156,056 15 % 137,946 15 % 147,248 17 % Asia-Pacific 106,659 10 % 100,328 11 % 125,479 14 % $ 1,017,517 100 % $ 911,383 100 % $ 891,581 100 % |
Disaggregation of Revenue | (in thousands) 2020 2019 2018 Perpetual license $ 28,558 $ 80,015 $ 109,863 Term license 266,352 199,433 178,256 Revenue recognized at a point in time 294,910 279,448 288,119 Maintenance 296,709 280,580 263,875 Pega Cloud 208,268 133,746 82,627 Consulting 217,630 217,609 256,960 Revenue recognized over time 722,607 631,935 603,462 $ 1,017,517 $ 911,383 $ 891,581 (in thousands) 2020 2019 2018 Pega Cloud 208,268 133,746 82,627 Maintenance 296,709 280,580 263,875 Term license $ 266,352 $ 199,433 $ 178,256 Subscription (1) 771,329 613,759 524,758 Perpetual license 28,558 80,015 109,863 Consulting 217,630 217,609 256,960 Total revenue $ 1,017,517 $ 911,383 $ 891,581 (1) Reflects client arrangements subject to renewal (Pega Cloud, maintenance, and term license). |
Remaining Performance Obligations on Existing Contracts | The Company’s typical performance obligations are: Performance Obligation How Standalone Selling Price is Typically Determined When Performance Obligation is Typically Satisfied When Payment is Typically Due Perpetual license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Effective date of the license Term license Residual approach Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time) Annually, or more frequently, over the term of the license Maintenance Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions (1) Ratably over the term of the maintenance (over time) Annually, or more frequently, over the term of the maintenance Pega Cloud Residual approach Ratably over the term of the service (over time) Annually, or more frequently, over the term of the service Consulting Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes Based on hours incurred to date Monthly Consulting Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes multiplied by estimated hours for the project Based on hours incurred as a percentage of total estimated hours As contract milestones are achieved (1) Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client. Expected future revenue on existing contracts: December 31, 2020 (Dollars in thousands) Perpetual license Term license Maintenance Pega Cloud Consulting Total 1 year or less $ 11,514 $ 105,920 $ 227,803 $ 248,223 $ 19,226 $ 612,686 57 % 1-2 years 395 7,962 54,509 193,064 346 256,276 24 % 2-3 years — 4,928 28,320 104,542 851 138,641 13 % Greater than 3 years — 4 19,283 44,308 1,189 64,784 6 % $ 11,909 $ 118,814 $ 329,915 $ 590,137 $ 21,612 $ 1,072,387 100 % December 31, 2019 (Dollars in thousands) Perpetual license Term license Maintenance Pega Cloud Consulting Total 1 year or less $ 2,305 $ 97,826 $ 206,882 $ 165,571 $ 20,798 $ 493,382 58 % 1-2 years 2,179 12,014 30,291 128,109 1,439 174,032 21 % 2-3 years — 3,132 17,844 84,788 132 105,896 13 % Greater than 3 years — 3,861 13,277 43,702 1,993 62,833 8 % $ 4,484 $ 116,833 $ 268,294 $ 422,170 $ 24,362 $ 836,143 100 % |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation Expense Included in Consolidated Statements of Operations | The following table presents the stock-based compensation expense included in the Company’s consolidated statements of operations: (in thousands) 2020 2019 2018 Cost of revenue $ 20,796 $ 18,822 $ 16,862 Selling and marketing 46,283 32,665 23,237 Research and development 22,885 18,938 15,274 General and administrative 13,104 10,484 8,489 $ 103,068 $ 80,909 $ 63,862 Income tax benefit $ (20,464) $ (16,392) $ (13,383) |
Weighted-Average Assumptions Used in Black-Scholes Option Valuation Model | The following table summarizes the Company’s fair value assumptions for stock options: 2020 2019 2018 Weighted-average grant-date fair value $ 24.16 $ 19.10 $ 18.03 Assumptions used in the Black-Scholes option-pricing model: Expected annual volatility (1) 31 % 32 % 34 % Expected term in years (2) 4.5 4.5 4.5 Risk-free interest rate (3) 0.7 % 2.4 % 2.6 % Expected annual dividend yield (4) 0.2 % 0.3 % 0.4 % (1) The expected annual volatility for each grant is determined based on the average of historic daily price changes of the Company’s common stock over a period, which approximates the expected option term. (2) The expected option term for each grant is determined based on the historical exercise behavior of employees and post-vesting employment termination behavior. (3) The risk-free interest rate is based on the yield of U.S. Treasury securities with a commensurate maturity with the expected option term at the time of grant. (4) The expected annual dividend yield is based on the weighted-average dividend yield assumptions used for options granted during the applicable period. |
Combined Stock Option Activity | The following table summarizes the combined stock option activity under the Company’s stock option plans for 2020: Shares Weighted-average Exercise Price Weighted-average Remaining Contractual Term (in years) Aggregate Intrinsic Value Options outstanding as of January 1, 2020 7,436 $ 44.76 Granted 2,018 92.81 Exercised (1,777) 33.52 Forfeited (286) 62.86 Options outstanding as of December 31, 2020 7,391 $ 59.88 Vested and expected to vest as of December 31, 2020 6,225 $ 57.85 7.1 $ 469,374 Exercisable as of December 31, 2020 2,935 $ 38.73 5.6 $ 277,450 |
Combined Restricted Stock Units Activity | The following table summarizes the combined RSU activity for all grants, including the CICP, under the 2004 Plan for 2020: Shares Weighted- Average Grant-Date Aggregate Intrinsic Value Nonvested as of January 1, 2020 2,565 $ 55.61 Granted 1,168 93.68 Vested (1,059) 51.11 Forfeited (212) 65.17 Nonvested as of December 31, 2020 2,462 $ 74.78 $ 328,023 Expected to vest as of December 31, 2020 1,841 $ 76.05 $ 245,339 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Postemployment Benefits [Abstract] | |
Summary of Defined Contribution Plans Expenses | The following expenses related to defined contribution plans were recorded in the Company’s consolidated statements of operations: (in thousands) 2020 2019 2018 U.S. 401(k) Plan $ 8,109 $ 6,676 $ 5,506 International plans 16,132 13,021 11,101 $ 24,241 $ 19,697 $ 16,607 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Components of (Loss) Income before (Benefit) Provision from Income Taxes | The components of (loss) before (benefit from) income taxes are: (in thousands) 2020 2019 2018 Domestic $ (59,281) $ (51,396) $ (27,494) Foreign (65,608) (83,450) 15,951 $ (124,889) $ (134,846) $ (11,543) |
Components of Provision for Income Taxes | The components of (benefit from) income taxes are: (in thousands) 2020 2019 2018 Current: Federal $ (11,251) $ 1,050 $ (1,862) State 399 405 287 Foreign 7,113 3,449 10,313 Total current (benefit from) provision for (3,739) 4,904 8,738 Deferred: Federal (34,573) (25,356) (18,939) State (8,119) (5,143) (3,702) Foreign (17,085) (18,818) (8,257) Total deferred (benefit) (59,777) (49,317) (30,898) $ (63,516) $ (44,413) $ (22,160) |
Reconciliation of Effective Income Tax Rate from Statutory Federal Income Tax Rate | A reconciliation of the U.S federal statutory tax rate and the Company’s effective tax rate, is as follows: (in thousands) 2020 2019 2018 U.S. federal income taxes at statutory rates $ (26,227) $ (28,318) $ (2,424) Valuation allowance (5,881) 727 510 State income taxes, net of federal benefit and tax credits (6,994) (4,450) (3,329) Permanent differences 1,773 2,606 1,302 GILTI, FDII, and BEAT (1) — — 399 Federal research and experimentation credits (5,716) (4,295) (6,991) Tax effects of foreign activities 3,050 3,056 (399) Tax-exempt income — (91) (137) Provision to return adjustments 3,416 (5,460) 253 Non-deductible compensation 1,806 1,716 1,025 Expiration of statutes and changes in estimates 55 2,420 (516) Excess tax benefits related to share-based compensation (25,797) (14,291) (13,541) Cares Act (10,576) — — Impact of change in tax law 7,489 1,908 1,636 Other 86 59 52 $ (63,516) $ (44,413) $ (22,160) (1) Global Intangible Low Taxed Income (“GILTI”), Foreign-Derived Intangible Income (“FDII”), and Base Erosion and Anti-abuse Tax (“BEAT”) |
Components of Net Deferred Tax Assets and Liabilities | Significant components of net deferred tax assets and liabilities are: December 31, (in thousands) 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 88,129 $ 70,960 Accruals and reserves 26,309 24,902 Interest expense carryforward 3,464 — Depreciation 4,795 2,493 Tax credit carryforwards 31,556 15,307 Other 370 199 Total deferred tax assets 154,623 113,861 Valuation allowances (23,409) (28,007) Total net deferred tax assets 131,214 85,854 Deferred tax liabilities: Capped call transactions (20,858) — Convertible senior notes (6,473) — Software revenue (11,477) (23,859) Intangibles (4,338) (6,103) Total deferred tax liabilities (43,146) (29,962) $ 88,068 $ 55,892 |
Summary of Operating Loss Carryforwards | As of December 31, 2020, the Company’s net operating losses and credit carryforwards are: (in thousands) Federal State Net operating losses (1) $ 124,115 $ 9,149 Net operating losses due to acquisitions (1) $ 76,826 $ 1,466 Credit carryforwards (2) $ 24,372 $ 1,895 Credit carryforwards due to acquisitions $ 640 $ 60 (1) Excludes federal and state net operating losses of $29.5 million and $0.8 million, respectively, from prior acquisitions that the Company expects will expire unutilized. |
Summary of Credit Carryforwards | As of December 31, 2020, the Company’s net operating losses and credit carryforwards are: (in thousands) Federal State Net operating losses (1) $ 124,115 $ 9,149 Net operating losses due to acquisitions (1) $ 76,826 $ 1,466 Credit carryforwards (2) $ 24,372 $ 1,895 Credit carryforwards due to acquisitions $ 640 $ 60 (1) Excludes federal and state net operating losses of $29.5 million and $0.8 million, respectively, from prior acquisitions that the Company expects will expire unutilized. |
Reconciliation of Beginning and Ending Balances of Gross Unrecognized Tax Benefits | A rollforward of the Company’s gross unrecognized tax benefits is: (in thousands) 2020 2019 2018 Balance as of January 1, $ 23,271 $ 18,157 $ 19,150 Additions for tax positions related to the current year 653 510 978 Additions for tax positions of prior years 962 4,917 174 Reductions for tax positions of prior years (1,085) (313) (2,145) Balance as of December 31, $ 23,801 $ 23,271 $ 18,157 |
(LOSS) EARNINGS PER SHARE (Tabl
(LOSS) EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Earnings Per Share | (in thousands, except per share amounts) 2020 2019 2018 Net (loss) income $ (61,373) $ (90,433) $ 10,617 Weighted-average common shares outstanding 80,336 79,055 78,564 (Loss) earnings per share, basic $ (0.76) $ (1.14) $ 0.14 Net (loss) income $ (61,373) $ (90,433) $ 10,617 Stock options — — 2,891 RSUs — — 1,609 Effect of dilutive securities — — 4,500 Weighted-average common shares outstanding, assuming dilution 80,336 79,055 83,064 (Loss) earnings per share, diluted $ (0.76) $ (1.14) $ 0.13 Outstanding anti-dilutive stock options and RSUs (1) 6,278 5,911 188 (1) Certain outstanding stock options and RSUs were excluded from the computation of diluted earnings per share because they were anti-dilutive in the period presented. These awards may be dilutive in the future. |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Nov. 30, 2020 | Nov. 30, 2019 | Nov. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||||||
Amortization period for deferred contract costs | 5 years | |||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | |||
More-likely-than-not benefit likelihood percentage being realized upon ultimate settlement with taxing authority resulting from sustainability of tax examination | 50.00% | |||||
Advertising costs | $ 8,700,000 | $ 6,700,000 | $ 6,900,000 | |||
Computer Equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment estimated useful lives | 3 years | |||||
Furniture and Fixtures | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment estimated useful lives | 5 years | |||||
Minimum | Internal Use Software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of capitalized software | 3 years | |||||
Maximum | Internal Use Software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of capitalized software | 5 years |
MARKETABLE SECURITIES (Details)
MARKETABLE SECURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 293,341 | |
Unrealized Gains | 88 | |
Unrealized Losses | (160) | |
Fair Value | 293,269 | $ 0 |
Government debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 39,996 | |
Unrealized Gains | 0 | |
Unrealized Losses | (8) | |
Fair Value | 39,988 | |
Corporate debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 253,345 | |
Unrealized Gains | 88 | |
Unrealized Losses | (152) | |
Fair Value | $ 253,281 |
MARKETABLE SECURITIES - Additio
MARKETABLE SECURITIES - Additional Information (Details) | Dec. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | |
Weighted-average remaining maturity | 1 year 6 months |
RECEIVABLES, CONTRACT ASSETS,_3
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable | $ 215,827 | $ 199,720 |
Unbilled receivables | 207,155 | 180,219 |
Long-term unbilled receivables | 113,278 | 121,736 |
Total receivables | $ 536,260 | $ 501,675 |
RECEIVABLES, CONTRACT ASSETS,_4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Unbilled Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
1 year or less | $ 207,155 | $ 180,219 |
1-2 years | 83,992 | |
2-5 years | 29,286 | |
Total | $ 320,433 | |
Percentage of unbilled receivables, 1 Year or Less | 65.00% | |
Percentage of unbilled receivables, 1-2 Years | 26.00% | |
Percentage of unbilled receivables, 2-5 Years | 9.00% | |
Total percentage of unbilled receivables | 100.00% |
RECEIVABLES, CONTRACT ASSETS,_5
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE- Contract Effective (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Receivables [Abstract] | |
2020 | $ 149,867 |
2019 | 87,941 |
2018 | 31,097 |
2017 | 31,668 |
2016 and prior | 19,860 |
Unbilled revenue total | $ 320,433 |
2020 | 47.00% |
2019 | 27.00% |
2018 | 10.00% |
2017 | 10.00% |
2016 and prior | 6.00% |
Total percentage of unbilled revenue | 100.00% |
RECEIVABLES, CONTRACT ASSETS,_6
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Contract Assets and Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Contract assets | $ 15,296 | $ 5,558 |
Long-term contract assets | 7,777 | 5,420 |
Total contract assets | 23,073 | 10,978 |
Deferred revenue | 232,865 | 190,080 |
Long-term deferred revenue | 8,991 | 5,407 |
Total deferred revenue | $ 241,856 | $ 195,487 |
RECEIVABLES, CONTRACT ASSETS,_7
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Receivables [Abstract] | |
Revenue recognized during the period that was included in deferred revenue | $ 187.6 |
DEFERRED COMMISSIONS - Schedule
DEFERRED COMMISSIONS - Schedule of Impairment of Deferred Commissions (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred commissions | $ 108,624 | $ 85,314 |
DEFERRED COMMISSIONS - Schedu_2
DEFERRED COMMISSIONS - Schedule of Amortization of Deferred Commissions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Amortization of deferred commissions | $ 33,302 | $ 29,152 | $ 17,271 |
PROPERTY AND EQUIPMENT - Compon
PROPERTY AND EQUIPMENT - Components of Property and Equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 122,152 | $ 105,258 |
Less: accumulated depreciation | (81,754) | (70,975) |
Property and equipment, net | 40,398 | 34,283 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 52,335 | 42,162 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,211 | 25,147 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,572 | 8,524 |
Computer software purchased | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8,415 | 7,775 |
Computer software developed for internal use | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 18,542 | 17,606 |
Fixed assets in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,077 | $ 4,044 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 17,378 | $ 14,771 | $ 13,875 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 79,039 | $ 72,858 |
Acquisition | 0 | 6,179 |
Currency translation adjustments | 192 | 2 |
Ending balance | $ 79,231 | $ 79,039 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | $ 133,372 | $ 133,344 |
Accumulated Amortization | (117,624) | (113,627) |
Net book value | 15,748 | 19,717 |
Client-related | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 63,168 | 63,140 |
Accumulated Amortization | (55,877) | (54,368) |
Net book value | 7,291 | 8,772 |
Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 64,843 | 64,843 |
Accumulated Amortization | (56,386) | (53,898) |
Net book value | 8,457 | 10,945 |
Other | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 5,361 | 5,361 |
Accumulated Amortization | (5,361) | (5,361) |
Net book value | $ 0 | $ 0 |
Minimum | Client-related | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 4 years | 4 years |
Minimum | Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 2 years | 2 years |
Minimum | Other | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 1 year | 1 year |
Maximum | Client-related | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 10 years | 10 years |
Maximum | Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 10 years | 10 years |
Maximum | Other | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 5 years | 5 years |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense of Acquired Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 3,970 | $ 6,625 | $ 11,443 |
Cost of revenue | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | 2,487 | 3,500 | 5,027 |
Selling and marketing | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 1,483 | $ 3,125 | $ 6,416 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated Future Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Future estimated amortization expense, 2021 | $ 3,657 | |
Future estimated amortization expense, 2022 | 3,557 | |
Future estimated amortization expense, 2023 | 3,289 | |
Future estimated amortization expense, 2024 | 2,520 | |
Future estimated amortization expense, 2025 and after | 2,725 | |
Net book value | $ 15,748 | $ 19,717 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2020unitsegment | |
Segment Reporting [Abstract] | |
Number of operating segments | segment | 1 |
Number of reporting units | unit | 1 |
SEGMENT INFORMATION - Long Live
SEGMENT INFORMATION - Long Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | $ 40,398 | $ 34,283 |
Long-lived assets percentage | 100.00% | 100.00% |
U.S. | ||
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | $ 31,339 | $ 26,644 |
Long-lived assets percentage | 78.00% | 78.00% |
International | ||
Geographic Areas, Long-Lived Assets [Abstract] | ||
Long-lived assets | $ 9,059 | $ 7,639 |
Long-lived assets percentage | 22.00% | 22.00% |
LEASES Operating Lease Expense
LEASES Operating Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
Fixed lease costs | $ 20,235 | $ 18,250 | |
Short-term lease costs | 1,669 | 1,291 | |
Variable lease costs | 4,470 | 5,554 | |
Lease, Cost | $ 26,374 | $ 25,095 | |
Operating lease rent expense | $ 14,900 |
LEASES Right of Use Assets (Det
LEASES Right of Use Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Right of use assets | $ 67,651 | $ 58,273 |
Lease liabilities | 18,541 | 15,885 |
Long-term lease liabilities | $ 59,053 | $ 52,610 |
Operating lease, right-of-use asset, statement of financial position | us-gaap:OtherAssetsNoncurrent | us-gaap:OtherAssetsNoncurrent |
Operating lease, liability, current, statement of financial position | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
LEASES Remaining Lease Term (De
LEASES Remaining Lease Term (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted-average remaining lease term | 4 years 8 months 12 days | 4 years |
Weighted-average discount rate | 5.40% | 5.80% |
LEASES Maturities after adoptio
LEASES Maturities after adoption of 842 (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
1 year or less | $ 22,164 |
1-2 years | 21,747 |
2-3 years | 21,599 |
3-4 years | 7,683 |
> 4 years | 14,431 |
Total lease payments | 87,624 |
Less: imputed interest | (10,030) |
Total short and long-term lease liabilities | $ 77,594 |
LEASES Cash Flow information (D
LEASES Cash Flow information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Cash paid for leases | $ 20,548 | $ 19,727 |
Right of use assets recognized for new leases and amendments (non-cash) | $ 24,276 | $ 31,155 |
DEBT - Convertible Senior Notes
DEBT - Convertible Senior Notes Narrative (Details) | 1 Months Ended |
Feb. 29, 2020USD ($)tradingDay$ / shares | |
Debt Instrument [Line Items] | |
Redemption percentage | 100.00% |
On or after March 1, 2023 | |
Debt Instrument [Line Items] | |
Redemption percentage | 100.00% |
Convertible debt | |
Debt Instrument [Line Items] | |
Face amount | $ | $ 600,000,000 |
Interest rate | 0.75% |
Initial conversion rate | 7.4045 |
Debt conversion amount | $ | $ 1,000 |
Initial conversion price (in dollars per share) | $ / shares | $ 135.05 |
Debt issuance costs | $ | $ (14,527,000) |
Convertible debt | After the calendar quarter ending on June 30, 2020 | |
Debt Instrument [Line Items] | |
Threshold percentage of stock price trigger | 130.00% |
Threshold trading days | 20 |
Threshold consecutive trading days | 30 |
Convertible debt | Measurement period | |
Debt Instrument [Line Items] | |
Threshold percentage of stock price trigger | 98.00% |
Threshold consecutive trading days | 5 |
Threshold consecutive business days | 5 |
Convertible debt | On or after March 1, 2023 | |
Debt Instrument [Line Items] | |
Threshold percentage of stock price trigger | 130.00% |
Threshold trading days | 20 |
Threshold consecutive trading days | 30 |
DEBT - Net Proceeds Amount (Det
DEBT - Net Proceeds Amount (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Feb. 29, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Less: Capped Call Transactions | $ (83,597) | $ 0 | |
Convertible debt | |||
Debt Instrument [Line Items] | |||
Principal | $ 600,000 | $ 600,000 | |
Less: issuance costs | (14,527) | ||
Less: Capped Call Transactions | (51,900) | ||
Net proceeds | $ 533,573 |
DEBT - Net Carrying Amount (Det
DEBT - Net Carrying Amount (Details) - Convertible debt - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Feb. 29, 2020 | |
Debt Instrument [Line Items] | ||
Principal | $ 600,000 | $ 600,000 |
Unamortized debt discount | (71,222) | |
Unamortized issuance costs | (10,575) | |
Principal, net | 518,203 | |
Conversion options | $ 61,604 |
DEBT - Interest Expense (Detail
DEBT - Interest Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Feb. 29, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Effective interest rate | 4.31% | 4.31% | |
Convertible debt | |||
Debt Instrument [Line Items] | |||
Interest rate | 0.75% | ||
Contractual interest expense (0.75% coupon) | $ 3,825 | ||
Amortization of debt discount | 12,898 | ||
Amortization of issuance costs | 1,915 | ||
Interest expense | $ 18,638 |
DEBT - Future Payments of Princ
DEBT - Future Payments of Principal and Contractual Interest (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Feb. 29, 2020 |
Interest | ||
Interest expense, total due | $ 19,488 | |
Convertible debt | ||
Principal | ||
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 600,000 | |
Principal, total due | 600,000 | $ 600,000 |
Interest | ||
2021 | 4,500 | |
2022 | 4,500 | |
2023 | 4,500 | |
2024 | 4,500 | |
2025 | 1,488 | |
Total | ||
2021 | 4,500 | |
2022 | 4,500 | |
2023 | 4,500 | |
2024 | 4,500 | |
2025 | 601,488 | |
Principal and interest, total due | $ 619,488 |
DEBT - Capped Call Transactions
DEBT - Capped Call Transactions (Details) $ in Thousands, shares in Millions | 1 Months Ended | 10 Months Ended |
Feb. 29, 2020USD ($)$ / derivativeshares | Dec. 31, 2020USD ($) | |
Debt Disclosure [Abstract] | ||
Number of shares issuable upon conversion | shares | 4.4 | |
Cap price | $ / derivative | 196.44 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Value at issuance | $ 51,900 | |
Fair value adjustment | 31,697 | |
Ending balance | $ 51,900 | $ 83,597 |
DEBT - Credit Facility (Details
DEBT - Credit Facility (Details) | 1 Months Ended | ||
Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |||
Remaining borrowing capacity | $ 0 | $ 0 | |
PNC Bank, National Association | |||
Debt Instrument [Line Items] | |||
Interest coverage ratio, minimum | 3.5 | ||
Credit Agreement | PNC Bank, National Association | |||
Debt Instrument [Line Items] | |||
Minimum required cash and investments held | $ 200,000,000 | ||
Consolidated leverage ratio, maximum | 3.5 | ||
Line of credit | PNC Bank, National Association | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Debt instrument term | 5 years | ||
Senior Notes | $ 100,000,000 | ||
Aggregate commitment | $ 200,000,000 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 |
Preferred stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (shares) | 80,890,000 | 79,599,000 |
Common stock, shares outstanding (shares) | 80,890,000 | 79,599,000 |
Quarterly cash dividend intended to pay (dollars per share) | $ 0.03 |
STOCKHOLDERS' EQUITY - Summary
STOCKHOLDERS' EQUITY - Summary of Dividends Declared and Paid (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | |||
Dividends declared (dollars per share) | $ 0.12 | $ 0.12 | $ 0.12 |
Dividend payments to stockholders | $ 9,628 | $ 9,486 | $ 9,432 |
STOCKHOLDERS' EQUITY - Stock Re
STOCKHOLDERS' EQUITY - Stock Repurchases (Details) - USD ($) shares in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 15, 2020 | |
Equity [Abstract] | ||||
Repurchases unsettled (in shares) | (278) | (333) | (1,001) | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount [Roll Forward] | ||||
Authorization remaining, beginning of period | $ 45,484,000 | $ 6,620,000 | $ 34,892,000 | |
Authorizations | 20,516,000 | 60,000,000 | 27,003,000 | |
Repurchases | (28,274,000) | (21,136,000) | (55,275,000) | |
Authorization remaining, end of period | $ 37,726,000 | $ 45,484,000 | $ 6,620,000 | |
Stock repurchase program, authorized amount | $ 60,000,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value Assets: | ||
Marketable securities | $ 293,269 | $ 0 |
Capped Call Transactions | 83,597 | 0 |
Level 1 | ||
Fair Value Assets: | ||
Marketable securities | 0 | 0 |
Capped Call Transactions | 0 | 0 |
Level 2 | ||
Fair Value Assets: | ||
Marketable securities | 293,269 | 0 |
Capped Call Transactions | 83,597 | 0 |
Level 3 | ||
Fair Value Assets: | ||
Marketable securities | 0 | 0 |
Capped Call Transactions | 0 | 0 |
Cash Equivalents | ||
Fair Value Assets: | ||
Cash equivalents | 56,339 | 0 |
Cash Equivalents | Level 1 | ||
Fair Value Assets: | ||
Cash equivalents | 42,339 | 0 |
Cash Equivalents | Level 2 | ||
Fair Value Assets: | ||
Cash equivalents | 14,000 | 0 |
Cash Equivalents | Level 3 | ||
Fair Value Assets: | ||
Cash equivalents | 0 | 0 |
Venture investments | ||
Fair Value Assets: | ||
Venture investments | 8,345 | 4,871 |
Venture investments | Level 1 | ||
Fair Value Assets: | ||
Venture investments | 0 | 0 |
Venture investments | Level 2 | ||
Fair Value Assets: | ||
Venture investments | 0 | 0 |
Venture investments | Level 3 | ||
Fair Value Assets: | ||
Venture investments | $ 8,345 | $ 4,871 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Change in Investment in Privately Held Companies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Feb. 29, 2020 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Convertible debt fair value | $ 706,500,000 | $ 515,900,000 | |
Convertible debt | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Face amount | $ 600,000,000 | ||
Privately held investment | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 4,871,000 | $ 3,390,000 | |
New investments | 3,306,000 | 1,444,000 | |
Sales of investments | (1,424,000) | 0 | |
Changes in foreign exchange rates | 118,000 | 37,000 | |
Fair value adjustment | 1,474,000 | 0 | |
Ending balance | $ 8,345,000 | $ 4,871,000 |
REVENUE - Revenue by Geographic
REVENUE - Revenue by Geographic Areas (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | $ 1,017,517 | $ 911,383 | $ 891,581 |
Concentration risk percentage | 100.00% | 100.00% | 100.00% |
U.S. | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | $ 613,844 | $ 525,191 | $ 469,987 |
Other Americas | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | 49,441 | 60,536 | 53,239 |
U.K. | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | 91,517 | 87,382 | 95,628 |
Other EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | 156,056 | 137,946 | 147,248 |
Asia-Pacific | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | $ 106,659 | $ 100,328 | $ 125,479 |
Sales Revenue, Net | U.S. | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk percentage | 61.00% | 57.00% | 52.00% |
Sales Revenue, Net | Other Americas | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk percentage | 5.00% | 7.00% | 6.00% |
Sales Revenue, Net | U.K. | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk percentage | 9.00% | 10.00% | 11.00% |
Sales Revenue, Net | Other EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk percentage | 15.00% | 15.00% | 17.00% |
Sales Revenue, Net | Asia-Pacific | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk percentage | 10.00% | 11.00% | 14.00% |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 1,017,517 | $ 911,383 | $ 891,581 |
Perpetual license | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 28,558 | 80,015 | 109,863 |
Term license | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 266,352 | 199,433 | 178,256 |
Maintenance | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 296,709 | 280,580 | 263,875 |
Subscription | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 771,329 | 613,759 | 524,758 |
Pega Cloud | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 208,268 | 133,746 | 82,627 |
Consulting | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 217,630 | 217,609 | 256,960 |
Revenue recognized at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 294,910 | 279,448 | 288,119 |
Revenue recognized at a point in time | Perpetual license | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 28,558 | 80,015 | 109,863 |
Revenue recognized at a point in time | Term license | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 266,352 | 199,433 | 178,256 |
Revenue recognized over time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 722,607 | 631,935 | 603,462 |
Revenue recognized over time | Maintenance | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 296,709 | 280,580 | 263,875 |
Revenue recognized over time | Pega Cloud | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 208,268 | 133,746 | 82,627 |
Revenue recognized over time | Consulting | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 217,630 | $ 217,609 | $ 256,960 |
REVENUE - Revenue for Remaining
REVENUE - Revenue for Remaining Performance Obligations Expected to be Recognized (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disaggregation of Revenue [Line Items] | ||
1 year or less | $ 612,686 | $ 493,382 |
1 year or less, percentage | 57.00% | 58.00% |
1-2 years | $ 256,276 | $ 174,032 |
1-2 years, percentage | 24.00% | 21.00% |
2-3 years | $ 138,641 | $ 105,896 |
2-3 years, percentage | 13.00% | 13.00% |
Greater than 3 years | $ 64,784 | $ 62,833 |
Greater than 3 years, percentage | 6.00% | 8.00% |
Total | $ 1,072,387 | $ 836,143 |
Total percentage | 100.00% | 100.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 2 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | 3 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected timing of satisfaction | ||
Perpetual license | ||
Disaggregation of Revenue [Line Items] | ||
1 year or less | $ 11,514 | $ 2,305 |
1-2 years | 395 | 2,179 |
2-3 years | 0 | 0 |
Greater than 3 years | 0 | 0 |
Total | 11,909 | 4,484 |
Term license | ||
Disaggregation of Revenue [Line Items] | ||
1 year or less | 105,920 | 97,826 |
1-2 years | 7,962 | 12,014 |
2-3 years | 4,928 | 3,132 |
Greater than 3 years | 4 | 3,861 |
Total | 118,814 | 116,833 |
Maintenance | ||
Disaggregation of Revenue [Line Items] | ||
1 year or less | 227,803 | 206,882 |
1-2 years | 54,509 | 30,291 |
2-3 years | 28,320 | 17,844 |
Greater than 3 years | 19,283 | 13,277 |
Total | 329,915 | 268,294 |
Pega Cloud | ||
Disaggregation of Revenue [Line Items] | ||
1 year or less | 248,223 | 165,571 |
1-2 years | 193,064 | 128,109 |
2-3 years | 104,542 | 84,788 |
Greater than 3 years | 44,308 | 43,702 |
Total | 590,137 | 422,170 |
Consulting | ||
Disaggregation of Revenue [Line Items] | ||
1 year or less | 19,226 | 20,798 |
1-2 years | 346 | 1,439 |
2-3 years | 851 | 132 |
Greater than 3 years | 1,189 | 1,993 |
Total | $ 21,612 | $ 24,362 |
STOCK-BASED COMPENSATION - Expe
STOCK-BASED COMPENSATION - Expense Included in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation before tax | $ 103,068 | $ 80,909 | $ 63,862 |
Income tax benefit | (20,464) | (16,392) | (13,383) |
Cost of revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation before tax | 20,796 | 18,822 | 16,862 |
Selling and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation before tax | 46,283 | 32,665 | 23,237 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation before tax | 22,885 | 18,938 | 15,274 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation before tax | $ 13,104 | $ 10,484 | $ 8,489 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2006 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 5 years | |||
Shares available for issuance (shares) | 11,100,000 | |||
Closing price of company stock (dollars per share) | $ 133.26 | |||
Shares exercised (shares) | 1,777,000 | |||
Vesting one year from the grant date | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 1 year | |||
Vesting rights percentage | 20.00% | |||
Vesting in quarterly installments over the remaining four years | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
Vesting rights percentage | 80.00% | |||
Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares exercised (shares) | 10,000 | |||
Weighted-average grant-date fair value (in dollars per share) | $ 117.47 | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 10 years | |||
Grants issued (in shares) | 1,600,000 | |||
Intrinsic value of stock options exercised | $ 126,800,000 | $ 63,300,000 | $ 56,800,000 | |
Unrecognized stock-based compensation expense, unvested stock options | $ 35,900,000 | |||
Weighted-average period of expense recognition | 2 years 3 months 18 days | |||
Weighted-average grant-date fair value (in dollars per share) | $ 24.16 | $ 19.10 | $ 18.03 | |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense, unvested stock options | $ 68,600,000 | |||
Weighted-average period of expense recognition | 2 years 1 month 6 days | |||
Weighted-average grant date fair value of shares granted (dollars per share) | $ 93.68 | $ 66.21 | $ 58.52 | |
Fair value of shares vested | $ 108,400,000 | $ 77,000,000 | $ 66,500,000 | |
Corporate Incentive Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rights percentage | 100.00% | |||
Percentage of closing price of common stock | 85.00% | |||
Corporate Incentive Compensation Plan | RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation percentage of target incentive compensation eligible to be elected and received by employees | 50.00% | |||
2004 Long-Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (shares) | 36,000,000 | |||
Number of shares subject to outstanding options and awards (shares) | 9,900,000 | |||
Shares available for issuance (shares) | 10,600,000 | |||
2004 Long-Term Incentive Plan | RSUs | Non-employee directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual limited compensation | $ 500,000 | |||
2006 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (shares) | 1,000,000,000,000 | |||
Percentage of fair market value of company stock | 85.00% | |||
Purchase price percentage of fair market value | 95.00% | |||
Compensation expense recognized | $ 0 | |||
Shares issued (shares) | 500,000 | |||
Shares available for issuance (shares) | 500,000 |
STOCK-BASED COMPENSATION - Weig
STOCK-BASED COMPENSATION - Weighted Average Assumptions used in Black Scholes Option Pricing Model (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected annual volatility | 31.00% | 32.00% | 34.00% |
Expected term in years | 4 years 6 months | 4 years 6 months | 4 years 6 months |
Risk-free interest rate | 0.70% | 2.40% | 2.60% |
Expected annual dividend yield | 0.20% | 0.30% | 0.40% |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant-date fair value (in dollars per share) | $ 24.16 | $ 19.10 | $ 18.03 |
STOCK-BASED COMPENSATION - Comb
STOCK-BASED COMPENSATION - Combined Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Shares | |
Options outstanding, beginning of period (shares) | shares | 7,436 |
Granted (shares) | shares | 2,018 |
Exercised (shares) | shares | (1,777) |
Forfeited (shares) | shares | (286) |
Options outstanding, end of period (shares) | shares | 7,391 |
Vested and expected to vest (shares) | shares | 6,225 |
Exercisable (shares) | shares | 2,935 |
Weighted-average Exercise Price | |
Options outstanding, beginning of period (dollars per share) | $ / shares | $ 44.76 |
Granted (dollars per share) | $ / shares | 92.81 |
Exercised (dollars per share) | $ / shares | 33.52 |
Forfeited (dollars per share) | $ / shares | 62.86 |
Options outstanding, end of period (dollars per share) | $ / shares | 59.88 |
Vested and expected to vest (dollars per share) | $ / shares | 57.85 |
Exercisable (dollars per share) | $ / shares | $ 38.73 |
Weighted-average remaining contractual term | |
Vested and expected to vest | 7 years 1 month 6 days |
Exercisable | 5 years 7 months 6 days |
Aggregate intrinsic value | |
Vested and expected to vest | $ | $ 469,374 |
Exercisable | $ | $ 277,450 |
STOCK-BASED COMPENSATION - Co_2
STOCK-BASED COMPENSATION - Combined Restricted Stock Units Activity (Details) - RSUs - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | |||
Nonvested, beginning of period (shares) | 2,565 | ||
Granted (shares) | 1,168 | ||
Vested (shares) | (1,059) | ||
Forfeited (shares) | (212) | ||
Nonvested, end of period (shares) | 2,462 | 2,565 | |
Expected to vest (shares) | 1,841 | ||
Weighted- Average Grant-Date Fair Value | |||
Nonvested, beginning of period (dollars per share) | $ 55.61 | ||
Granted (dollars per share) | 93.68 | $ 66.21 | $ 58.52 |
Vested (dollars per share) | 51.11 | ||
Forfeited (dollars per share) | 65.17 | ||
Nonvested, end of period (dollars per share) | 74.78 | $ 55.61 | |
Expected to vest (dollars per share) | $ 76.05 | ||
Aggregate Intrinsic Value | |||
Nonvested | $ 328,023 | ||
Expected to vest | $ 245,339 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, expense | $ 24,241 | $ 19,697 | $ 16,607 |
U.S. 401(k) Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, expense | 8,109 | 6,676 | 5,506 |
International plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, expense | $ 16,132 | $ 13,021 | $ 11,101 |
INCOME TAXES - Components of (L
INCOME TAXES - Components of (Loss) before (Benefit From) Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (59,281) | $ (51,396) | $ (27,494) |
Foreign | (65,608) | (83,450) | 15,951 |
(Loss) before (benefit from) income taxes | $ (124,889) | $ (134,846) | $ (11,543) |
INCOME TAXES - Components of th
INCOME TAXES - Components of the (Benefit From) Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
Federal | $ (11,251) | $ 1,050 | $ (1,862) |
State | 399 | 405 | 287 |
Foreign | 7,113 | 3,449 | 10,313 |
Total current (benefit from) provision for | (3,739) | 4,904 | 8,738 |
Deferred: | |||
Federal | (34,573) | (25,356) | (18,939) |
State | (8,119) | (5,143) | (3,702) |
Foreign | (17,085) | (18,818) | (8,257) |
Total deferred (benefit) | (59,777) | (49,317) | (30,898) |
Income tax expense (benefit), total | $ (63,516) | $ (44,413) | $ (22,160) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Effective Income Tax Rate from Statutory Federal Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal income taxes at statutory rates | $ (26,227) | $ (28,318) | $ (2,424) |
Valuation allowance | (5,881) | 727 | 510 |
State income taxes, net of federal benefit and tax credits | (6,994) | (4,450) | (3,329) |
Permanent differences | 1,773 | 2,606 | 1,302 |
GILTI, FDII, and BEAT (1) | 0 | 0 | 399 |
Federal research and experimentation credits | (5,716) | (4,295) | (6,991) |
Tax effects of foreign activities | 3,050 | 3,056 | (399) |
Tax-exempt income | 0 | (91) | (137) |
Provision to return adjustments | 3,416 | (5,460) | 253 |
Non-deductible compensation | 1,806 | 1,716 | 1,025 |
Expiration of statutes and changes in estimates | 55 | 2,420 | (516) |
Excess tax benefits related to share-based compensation | (25,797) | (14,291) | (13,541) |
Cares Act | (10,576) | ||
Impact of change in tax law | 7,489 | 1,908 | 1,636 |
Other | 86 | 59 | 52 |
Income tax expense (benefit), total | $ (63,516) | $ (44,413) | $ (22,160) |
INCOME TAXES - Components of Ne
INCOME TAXES - Components of Net Deferred Tax Asset and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 88,129 | $ 70,960 |
Accruals and reserves | 26,309 | 24,902 |
Interest expense carryforward | 3,464 | 0 |
Depreciation | 4,795 | 2,493 |
Tax credit carryforwards | 31,556 | 15,307 |
Other | 370 | 199 |
Total deferred tax assets | 154,623 | 113,861 |
Valuation allowances | (23,409) | (28,007) |
Total net deferred tax assets | 131,214 | 85,854 |
Deferred tax liabilities: | ||
Capped call transactions | (20,858) | 0 |
Convertible senior notes | (6,473) | 0 |
Software revenue | (11,477) | (23,859) |
Intangibles | (4,338) | (6,103) |
Total deferred tax liabilities | (43,146) | (29,962) |
Deferred tax assets, net | $ 88,068 | $ 55,892 |
INCOME TAXES - Net Operating Lo
INCOME TAXES - Net Operating Losses and Credit Carryforwards (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
Reduction of income tax provision due to tax holidays | $ 1,700 | $ 1,900 | $ 1,300 |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating losses | 124,115 | ||
Credit carryforwards | 24,372 | ||
Net operating losses expected to expire unused | 29,500 | ||
Tax credits expected to expire unused | 100 | ||
Carryforwards with unlimited carryforward period | 47,300 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating losses | 9,149 | ||
Credit carryforwards | 1,895 | ||
Net operating losses expected to expire unused | 800 | ||
Tax credits expected to expire unused | 9,000 | ||
Carryforwards with unlimited carryforward period | 1,200 | ||
OpenSpan, Inc. | Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating losses | 76,826 | ||
Credit carryforwards | 640 | ||
OpenSpan, Inc. | State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating losses | 1,466 | ||
Credit carryforwards | $ 60 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | ||||
Income tax benefit from change in tax rate | $ 5,700 | |||
Change in valuation allowances | $ 0 | |||
Reduction of income tax provision due to tax holidays | 1,700 | 1,900 | $ 1,300 | |
Unrecognized tax benefits | 23,801 | 23,271 | $ 18,157 | $ 19,150 |
Income taxes receivable | 44,100 | $ 25,900 | ||
Acquisition Related Net Operating Losses | ||||
Income Tax Contingency [Line Items] | ||||
Change in valuation allowances | 5,900 | |||
CARES Act | ||||
Income Tax Contingency [Line Items] | ||||
Net operating losses | 4,800 | |||
Federal | ||||
Income Tax Contingency [Line Items] | ||||
Net operating losses | 124,115 | |||
Tax credits expected to expire unused | 100 | |||
State | ||||
Income Tax Contingency [Line Items] | ||||
Net operating losses | 9,149 | |||
Tax credits expected to expire unused | $ 9,000 |
INCOME TAXES - Reconciliation_2
INCOME TAXES - Reconciliation of Beginning and Ending Balances of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of period | $ 23,271 | $ 18,157 | $ 19,150 |
Additions for tax positions related to the current year | 653 | 510 | 978 |
Additions for tax positions of prior years | 962 | 4,917 | 174 |
Reductions for tax positions of prior years | (1,085) | (313) | (2,145) |
Balance at end of period | $ 23,801 | $ 23,271 | $ 18,157 |
(LOSS) EARNINGS PER SHARE (Deta
(LOSS) EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net (loss) income | $ (61,373) | $ (90,433) | $ 10,617 |
Weighted-average common shares outstanding (shares) | 80,336 | 79,055 | 78,564 |
(Loss) earnings per share, basic (dollars per share) | $ (0.76) | $ (1.14) | $ 0.14 |
Effective of dilutive securities (shares) | 0 | 0 | 4,500 |
Weighted - average common shares outstanding, assuming dilution (shares) | 80,336 | 79,055 | 83,064 |
(Loss) earnings per share, diluted (dollars per share) | $ (0.76) | $ (1.14) | $ 0.13 |
Outstanding anti-dilutive stock options and RSUs (shares) | 6,278 | 5,911 | 188 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted-average effect of dilutive securities (shares) | 0 | 0 | 2,891 |
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted-average effect of dilutive securities (shares) | 0 | 0 | 1,609 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Feb. 12, 2021USD ($) |
Subsequent Event | |
Subsequent Event [Line Items] | |
Lease termination fee | $ 18 |