PagerDuty Inc. (NYSE:PD) is one of the best tech stocks to buy, according to Cathie Wood. On September 4, Goldman Sachs reiterated its Neutral rating on the stock and $16 price target. The stance follows the company’s second-quarter results, as it achieved significant milestones in profitability and growth across international markets. PagerDuty’s (PD) Q2 Results Impress amid Heightened AI Adoption Revenue in the quarter increased 6% year over year to $123 million, in line with expectations, as earnings ...

[Music] My name is Tola Fab. I'm a senior software engineer at Peduty. Pedi helps organizations transform critical operations with an enterprisegrade AI powered incident management solution.So we help customers build operation resilience and get ahead of incidents before they even happen. We're building an AI agent that helps teams understand their incident through chat. So like through Slack or MS Teams, instead of digging through dashboards, early access users can simply ask questions like how many incide ...

PagerDuty, Inc. PD reported mixed second-quarter results and issued third-quarter EPS guidance below estimates on Wednesday.PagerDuty posted adjusted earnings of 30 cents per share, beating market estimates of 21 cents per share. The company's sales came in at $123.411 million missing expectations of $123.639 million.PagerDuty said it sees third-quarter adjusted EPS of 24 cents to 25 cents and expects sales of $124.000 million to $126.000 million.“PagerDuty achieved important milestones in Q2, including GAA ...

PagerDuty (PD) came out with quarterly earnings of $0.3 per share, beating the Zacks Consensus Estimate of $0.2 per share. This compares to earnings of $0.21 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +50.00%. A quarter ago, it was expected that this software developer would post earnings of $0.19 per share when it actually produced earnings of $0.24, delivering a surprise of +26.32%.Over the last four quarters, the compa ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents PagerDuty's unaudited condensed consolidated financial statements for the period ended July 31, 2025, covering balance sheets, operations, comprehensive loss, equity, and cash flows, with detailed notes [Condensed Consolidated Balance Sheets (unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) Condensed Consolidated Balance Sheets (in thousands) | Metric | July 31, 2025 | January 31, 2025 | | :----------------------------------- | :------------ | :--------------- | | **Assets** | | | | Total current assets | $671,748 | $711,720 | | Total assets | $891,531 | $927,266 | | **Liabilities & Equity** | | | | Total current liabilities | $281,141 | $369,158 | | Total liabilities | $693,850 | $779,221 | | Total stockholders' equity | $180,709 | $129,828 | - Total assets decreased from **$927.3 million** as of January 31, 2025, to **$891.5 million** as of July 31, 2025[15](index=15&type=chunk) - Total liabilities decreased from **$779.2 million** to **$693.9 million**, primarily due to the repayment of current convertible senior notes[15](index=15&type=chunk) - Total stockholders' equity increased from **$129.8 million** to **$180.7 million**[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations (unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(unaudited)) Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $123,411 | $115,935 | $243,216 | $227,107 | | Gross profit | $104,410 | $95,855 | $205,031 | $187,684 | | Income (loss) from operations | $3,566 | $(16,027) | $(6,761) | $(37,760) | | Net income (loss) attributable to PagerDuty, Inc. | $9,575 | $(10,912) | $2,413 | $(28,051) | | Basic EPS | $0.11 | $(0.14) | $0.04 | $(0.40) | | Diluted EPS | $0.10 | $(0.14) | $0.03 | $(0.40) | - Revenue increased by **6.4%** for the three months ended July 31, 2025, and by **7.1%** for the six months ended July 31, 2025, compared to the prior year periods[17](index=17&type=chunk) - The company reported net income attributable to PagerDuty, Inc. of **$9.575 million** for the three months ended July 31, 2025, a significant improvement from a net loss of **$10.912 million** in the prior year period[17](index=17&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss (unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20(unaudited)) Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $9,414 | $(11,184) | $2,035 | $(28,529) | | Total comprehensive income (loss) | $9,083 | $(10,679) | $1,847 | $(28,526) | | Comprehensive income (loss) attributable to PagerDuty, Inc. | $9,244 | $(10,407) | $2,225 | $(28,048) | - Total comprehensive income attributable to PagerDuty, Inc. improved significantly to **$9.244 million** for the three months ended July 31, 2025, from a loss of **$10.407 million** in the same period last year[19](index=19&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity (unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(unaudited)) Condensed Consolidated Statements of Stockholders' Equity (in thousands, except share data) | Metric | Balance as of January 31, 2025 | Balance as of July 31, 2025 | | :----------------------------------- | :--------------------------- | :-------------------------- | | Total Stockholders' Equity | $129,828 | $180,709 | | Additional Paid-in Capital | $725,483 | $774,139 | | Accumulated Deficit | $(595,170) | $(592,757) | | Shares Outstanding | 91,082,604 | 93,238,538 | - Stockholders' equity increased by **$50.881 million** from January 31, 2025, to July 31, 2025, primarily driven by net income and stock-based compensation[22](index=22&type=chunk) - Additional paid-in capital increased by **$48.656 million**, reflecting stock option exercises, ESPP issuances, and stock-based compensation[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows (unaudited)](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $64,644 | $64,416 | | Net cash used in investing activities | $(8,860) | $(6,621) | | Net cash used in financing activities | $(63,040) | $(35,205) | | Net change in cash, cash equivalents, and restricted cash | $(7,143) | $22,567 | | Cash, cash equivalents, and restricted cash at end of period | $341,185 | $389,234 | - Net cash provided by operating activities remained stable at **$64.644 million** for the six months ended July 31, 2025, compared to **$64.416 million** in the prior year[27](index=27&type=chunk) - Net cash used in financing activities significantly increased to **$63.040 million**, primarily due to the repayment of **$57.5 million** in 2025 Convertible Senior Notes[27](index=27&type=chunk)[71](index=71&type=chunk) [Notes to Condensed Consolidated Financial Statements (unaudited)](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) [Note 1. Description of Business and Basis of Presentation](index=14&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) - PagerDuty, Inc. provides a digital operations management platform that leverages machine learning for incident response, event management, and automation[32](index=32&type=chunk) - The financial statements are prepared in accordance with U.S. GAAP and SEC interim reporting rules, and should be read with the Annual Report on Form 10-K for the year ended January 31, 2025[33](index=33&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=15&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) - The Company manages its operations as one operating segment, with the CEO as the chief operating decision maker[40](index=40&type=chunk) - No single customer accounted for **10%** or more of total accounts receivable or revenue for the periods presented[39](index=39&type=chunk) - Restricted cash, primarily collateral for office facility leases, was **$1.5 million** as of July 31, 2025, and **$1.9 million** as of January 31, 2025[43](index=43&type=chunk) [Note 3. Redeemable Non-Controlling Interest](index=16&type=section&id=Note%203.%20Redeemable%20Non-Controlling%20Interest) - PagerDuty established a joint venture, PagerDuty K.K., in May 2022, holding a **51%** controlling interest[47](index=47&type=chunk) Redeemable Non-Controlling Interest Activity (in thousands) | Metric | Three months ended July 31, 2025 | Six months ended July 31, 2025 | | :------------------------------------------ | :------------------------------- | :----------------------------- | | Balance at beginning of period | $17,335 | $18,217 | | Net loss attributable to redeemable non-controlling interest | $(161) | $(378) | | Adjustments to redeemable non-controlling interest | $(202) | $(867) | | Balance at end of period | $16,972 | $16,972 | [Note 4. Cash, Cash Equivalents, and Investments](index=17&type=section&id=Note%204.%20Cash,%20Cash%20Equivalents,%20and%20Investments) Cash, Cash Equivalents, and Investments (in thousands) | Category | July 31, 2025 | January 31, 2025 | | :----------------------------- | :------------ | :--------------- | | Cash and cash equivalents | $339,712 | $346,460 | | Available-for-sale investments | $228,142 | $224,366 | | Total | $567,854 | $570,826 | - Total cash, cash equivalents, and investments decreased slightly from **$570.8 million** to **$567.9 million**[50](index=50&type=chunk) - As of July 31, 2025, **95 securities** were in an unrealized loss position with an aggregate fair value of **$166.8 million**, none continuously for more than **12 months**[52](index=52&type=chunk) [Note 5. Fair Value Measurements](index=18&type=section&id=Note%205.%20Fair%20Value%20Measurements) Fair Value Measurements (in thousands) as of July 31, 2025 | Category | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | | Money market funds | $290,107 | $— | $— | $290,107 | | U.S. Treasury securities | $— | $58,919 | $— | $58,919 | | Commercial paper | $— | $6,011 | $— | $6,011 | | Corporate debt securities | $— | $132,511 | $— | $132,511 | | U.S. Government agency securities | $— | $30,701 | $— | $30,701 | | Total | $290,107 | $228,142 | $— | $518,249 | - The estimated fair value of the 2028 Convertible Senior Notes was approximately **$386.9 million** as of July 31, 2025, classified as Level 2[60](index=60&type=chunk) [Note 6. Property and Equipment, Net](index=20&type=section&id=Note%206.%20Property%20and%20Equipment,%20Net) Property and Equipment, Net (in thousands) | Category | July 31, 2025 | January 31, 2025 | | :-------------------------------- | :------------ | :--------------- | | Gross property and equipment | $54,473 | $47,010 | | Accumulated depreciation and amortization | $(29,262) | $(25,675) | | Property and equipment, net | $25,211 | $21,335 | - Net property and equipment increased by **$3.876 million** from January 31, 2025, to July 31, 2025[61](index=61&type=chunk) - Depreciation and amortization expense was **$1.8 million** for the three months ended July 31, 2025, and **$3.9 million** for the six months ended July 31, 2025[62](index=62&type=chunk) [Note 7. Deferred Contract Costs](index=20&type=section&id=Note%207.%20Deferred%20Contract%20Costs) - Deferred contract costs, primarily sales commissions, were **$44.1 million** as of July 31, 2025, down from **$45.1 million** as of January 31, 2025[63](index=63&type=chunk) - Amortization expense for deferred contract costs was **$5.7 million** for the three months ended July 31, 2025, and **$11.2 million** for the six months ended July 31, 2025[63](index=63&type=chunk) [Note 8. Leases](index=20&type=section&id=Note%208.%20Leases) Lease Information (in thousands) | Category | July 31, 2025 | January 31, 2025 | | :------------------------ | :------------ | :--------------- | | Lease right-of-use assets | $8,266 | $6,806 | | Lease liabilities, current | $3,646 | $3,307 | | Lease liabilities, non-current | $10,186 | $9,637 | - As of July 31, 2025, the weighted average remaining lease term was **3.7 years**, and the weighted average discount rate was **5.6%**[69](index=69&type=chunk) - Operating lease expense for the six months ended July 31, 2025, was **$1.4 million**, down from **$1.7 million** in the prior year[70](index=70&type=chunk) [Note 9. Debt and Financing Arrangements](index=21&type=section&id=Note%209.%20Debt%20and%20Financing%20Arrangements) - The Company repaid **$57.5 million** of its 2025 Convertible Senior Notes in cash during the three months ended July 31, 2025[71](index=71&type=chunk) Net Carrying Amount of Convertible Notes (in thousands) | Note Type | July 31, 2025 | January 31, 2025 | | :---------- | :------------ | :--------------- | | 2025 Notes | $— | $57,426 | | 2028 Notes | $394,541 | $393,282 | | Total | $394,541 | $450,708 | - Interest expense related to the Notes was **$2.286 million** for the three months ended July 31, 2025, and **$4.650 million** for the six months ended July 31, 2025[75](index=75&type=chunk) - The 2025 Capped Calls expired in connection with the repayment of the 2025 Notes, while the 2028 Capped Calls remain outstanding[77](index=77&type=chunk)[78](index=78&type=chunk) [Note 10. Commitments and Contingencies](index=23&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) - The Company is not currently a party to any material legal proceedings and has not incurred significant liabilities related to service-level agreements[79](index=79&type=chunk)[80](index=80&type=chunk) [Note 11. Deferred Revenue and Performance Obligations](index=23&type=section&id=Note%2011.%20Deferred%20Revenue%20and%20Performance%20Obligations) Deferred Revenue (in thousands) | Metric | Three months ended July 31, 2025 | Six months ended July 31, 2025 | | :-------------------------- | :------------------------------- | :----------------------------- | | Deferred revenue, beginning of period | $239,712 | $245,752 | | Billings | $113,613 | $227,378 | | Revenue recognized | $(123,411) | $(243,216) | | Deferred revenue, end of period | $229,914 | $229,914 | - As of July 31, 2025, total transaction price allocated to remaining non-cancelable performance obligations was approximately **$425 million**[85](index=85&type=chunk) - The Company expects to recognize approximately **$295 million (69%)** of remaining performance obligations over the next **12 months**[85](index=85&type=chunk) [Note 12. Common Stock and Stockholders' Equity](index=24&type=section&id=Note%2012.%20Common%20Stock%20and%20Stockholders'%20Equity) - The Board authorized a new **$150.0 million** share repurchase program in March 2025, with no shares repurchased as of July 31, 2025[87](index=87&type=chunk) - As of July 31, 2025, **$161.2 million** of unrecognized stock-based compensation expense related to unvested RSUs is expected to be recognized over a weighted average period of **2.2 years**[93](index=93&type=chunk) Total Stock-Based Compensation Expense (in thousands) | Period | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total stock-based compensation expense | $25,960 | $32,366 | $51,713 | $65,306 | [Note 13. Net Income (Loss) per Share](index=26&type=section&id=Note%2013.%20Net%20Income%20(Loss)%20per%20Share) Net Income (Loss) per Share Attributable to PagerDuty, Inc. Common Stockholders | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to PagerDuty, Inc. common stockholders | $9,777 | $(13,242) | $3,280 | $(37,298) | | Basic EPS | $0.11 | $(0.14) | $0.04 | $(0.40) | | Diluted EPS | $0.10 | $(0.14) | $0.03 | $(0.40) | - Diluted EPS improved to **$0.10** for the three months ended July 31, 2025, from a loss of **$0.14** in the prior year period[104](index=104&type=chunk) [Note 14. Income Taxes](index=27&type=section&id=Note%2014.%20Income%20Taxes) - The Company recorded an income tax benefit of **$1.9 million** for the three months ended July 31, 2025, compared to a provision of **$0.4 million** in the prior year[108](index=108&type=chunk) - The U.S. enacted tax reform legislation (OBBBA) on July 4, 2025, effective fiscal 2026, which management does not expect to have a material impact[109](index=109&type=chunk) - The Company maintains a valuation allowance for its net U.S. deferred tax assets but believes there is a reasonable possibility that it may no longer be needed within the next **12 months**[110](index=110&type=chunk) [Note 15. Geographic Information](index=28&type=section&id=Note%2015.%20Geographic%20Information) Revenue by Geographic Area (in thousands) | Region | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $88,081 | $84,315 | $174,112 | $165,107 | | International | $35,330 | $31,620 | $69,104 | $62,000 | | Total | $123,411 | $115,935 | $243,216 | $227,107 | - International revenue grew by **11.7%** for the three months ended July 31, 2025, and by **11.5%** for the six months ended July 31, 2025[111](index=111&type=chunk) - As of July 31, 2025, **72%** of long-lived assets were in the United States, **15%** in Canada, and **11%** in Portugal[112](index=112&type=chunk) [Note 16. Subsequent Events](index=29&type=section&id=Note%2016.%20Subsequent%20Events) - In August 2025, the Board of Directors authorized an additional **$50.0 million** for the 2025 Share Repurchase Program, increasing the total to **$200.0 million**[114](index=114&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses PagerDuty's financial condition and operational results, covering business model, key metrics, financial performance for Q2 and H1 2025 vs 2024, non-GAAP measures, and liquidity [Overview and Business Model](index=30&type=section&id=Overview%20and%20Business%20Model) - PagerDuty is a global leader in digital operations management, offering the PagerDuty Operations Cloud which combines AIOps, automation, customer service operations, and incident management with a generative AI assistant[117](index=117&type=chunk) - The platform collects data from over **700 direct integrations**, leveraging AI and machine learning to predict and resolve incidents[119](index=119&type=chunk)[120](index=120&type=chunk) - Revenue is primarily generated from cloud-hosted software subscription fees, with a 'land-and-expand' business model focused on enterprise customers[121](index=121&type=chunk)[122](index=122&type=chunk) [Macroeconomic Environment](index=31&type=section&id=Macroeconomic%20Environment) - The company's business and financial performance are subject to global macroeconomic conditions, including inflation, interest rates, and economic uncertainty[123](index=123&type=chunk) [Key Business Metrics](index=31&type=section&id=Key%20Business%20Metrics) Key Business Metrics | Metric | As of July 31, 2025 | As of July 31, 2024 | | :----------------------------------- | :------------------ | :------------------ | | Annual Recurring Revenue (ARR) | $498.9 million | $474.0 million | | Number of Customers | 15,322 | 15,044 | | Customers with >$100.0k ARR | 868 | 820 | | Dollar-based Net Retention Rate (LTM) | 102 % | 106 % | - ARR increased by **5.25%** year-over-year to **$498.9 million** as of July 31, 2025[128](index=128&type=chunk) - The number of customers with greater than **$100.0 thousand** in ARR increased by **5.85%** to **868**[129](index=129&type=chunk) - Dollar-based net retention rate decreased to **102%** for the last **12 months** ended July 31, 2025, from **106%** in the prior year[131](index=131&type=chunk) [Results of Operations (Three months ended July 31, 2025 compared to three months ended July 31, 2024)](index=33&type=section&id=Results%20of%20Operations) Key Financial Highlights (Three months ended July 31, in thousands, except percentages) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :------- | :------- | :--------- | :--------- | | Revenue | $123,411 | $115,935 | $7,476 | 6.4 % | | Gross profit | $104,410 | $95,855 | $8,555 | 8.9 % | | Income (loss) from operations | $3,566 | $(16,027) | $19,593 | 122.2 % | | Net income (loss) | $9,414 | $(11,184) | $20,598 | 184.2 % | - Revenue growth was primarily driven by existing customers, increasing users, and upsell of additional products[136](index=136&type=chunk) - Gross margin improved to **84.6%** in Q2 2025 from **82.7%** in Q2 2024, due to decreased amortization of acquired intangible assets and lower outside services spend[139](index=139&type=chunk) - Total operating expenses decreased by **9.9%** to **$100.844 million**, primarily due to lower personnel costs and stock-based compensation in R&D and S&M[141](index=141&type=chunk)[142](index=142&type=chunk)[144](index=144&type=chunk) [Revenue](index=34&type=section&id=Revenue) - Revenue increased by **$7.476 million**, or **6.4%**, to **$123.411 million** for the three months ended July 31, 2025, compared to **$115.935 million** for the three months ended July 31, 2024[136](index=136&type=chunk) [Cost of Revenue and Gross Margin](index=34&type=section&id=Cost%20of%20Revenue%20and%20Gross%20Margin) - Cost of revenue decreased by **$1.079 million**, or **5.4%**, to **$19.001 million** for the three months ended July 31, 2025[139](index=139&type=chunk) - Gross margin increased to **84.6%** for the three months ended July 31, 2025, from **82.7%** in the prior year[139](index=139&type=chunk) [Operating Expenses](index=35&type=section&id=Operating%20Expenses) Operating Expenses (Three months ended July 31, in thousands) | Expense Category | 2025 | 2024 | Change ($) | Change (%) | | :------------------------ | :------- | :------- | :--------- | :--------- | | Research and development | $30,897 | $35,088 | $(4,191) | (11.9)% | | Sales and marketing | $44,456 | $50,966 | $(6,510) | (12.8)% | | General and administrative | $25,491 | $25,828 | $(337) | (1.3)% | | Total operating expenses | $100,844 | $111,882 | $(11,038) | (9.9)% | - Research and development expenses decreased by **$4.1 million** due to lower personnel costs and stock-based compensation[142](index=142&type=chunk) - Sales and marketing expenses decreased by **$6.5 million**, driven by reduced personnel costs, outside services, and training/travel[144](index=144&type=chunk) [Non-Operating Expenses](index=36&type=section&id=Non-Operating%20Expenses) Non-Operating Income (Expenses) (Three months ended July 31, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------ | :------- | :------- | :--------- | :--------- | | Interest income | $6,149 | $7,516 | $(1,367) | (18.2)% | | Interest expense | $(2,286) | $(2,363) | $77 | (3.3)% | | Other income, net | $120 | $117 | $3 | 2.6 % | | (Benefit from) provision for income taxes | $(1,865) | $427 | $(2,292) | (536.8)% | - Interest income decreased by **18.2%** due to lower interest-earning cash balances[148](index=148&type=chunk) - The company recorded an income tax benefit of **$1.865 million**, a significant change from a provision of **$0.427 million** in the prior year[153](index=153&type=chunk) [Results of Operations (Six months ended July 31, 2025 compared to six months ended July 31, 2024)](index=37&type=section&id=Results%20of%20Operations%20(Six%20months%20ended%20July%2031,%202025%20compared%20to%20six%20months%20ended%20July%2031,%202024)) Key Financial Highlights (Six months ended July 31, in thousands, except percentages) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :------- | :------- | :--------- | :--------- | | Revenue | $243,216 | $227,107 | $16,109 | 7.1 % | | Gross profit | $205,031 | $187,684 | $17,347 | 9.2 % | | Loss from operations | $(6,761) | $(37,760) | $30,999 | 82.1 % | | Net income (loss) | $2,035 | $(28,529) | $30,564 | 107.1 % | - Revenue increased by **7.1%** to **$243.216 million** for the six months ended July 31, 2025[156](index=156&type=chunk) - Operating loss significantly narrowed by **82.1%** to **$(6.761) million**, reflecting improved operational efficiency[155](index=155&type=chunk) - Net income for the six months ended July 31, 2025, was **$2.035 million**, a substantial improvement from a net loss of **$28.529 million** in the prior year[155](index=155&type=chunk) [Revenue](index=37&type=section&id=Revenue_SixMonths) - Revenue increased by **$16.109 million**, or **7.1%**, to **$243.216 million** for the six months ended July 31, 2025, compared to **$227.107 million** for the six months ended July 31, 2024[156](index=156&type=chunk) [Cost of Revenue and Gross Margin](index=39&type=section&id=Cost%20of%20Revenue%20and%20Gross%20Margin_SixMonths) - Cost of revenue decreased by **$1.238 million**, or **3.1%**, to **$38.185 million** for the six months ended July 31, 2025[160](index=160&type=chunk) - Gross margin increased to **84.3%** for the six months ended July 31, 2025, from **82.6%** in the prior year[160](index=160&type=chunk) [Operating Expenses](index=39&type=section&id=Operating%20Expenses_SixMonths) Operating Expenses (Six months ended July 31, in thousands) | Expense Category | 2025 | 2024 | Change ($) | Change (%) | | :------------------------ | :------- | :------- | :--------- | :--------- | | Research and development | $64,945 | $72,611 | $(7,666) | (10.6)% | | Sales and marketing | $94,501 | $99,465 | $(4,964) | (5.0)% | | General and administrative | $52,346 | $53,368 | $(1,022) | (1.9)% | | Total operating expenses | $211,792 | $225,444 | $(13,652) | (6.1)% | - Research and development expenses decreased by **$7.1 million** due to lower personnel costs and stock-based compensation[161](index=161&type=chunk) - Sales and marketing expenses decreased by **$4.964 million**, primarily from reduced outside services and personnel costs[162](index=162&type=chunk) [Non-Operating Expenses](index=40&type=section&id=Non-Operating%20Expenses_SixMonths) Non-Operating Income (Expenses) (Six months ended July 31, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------ | :------- | :------- | :--------- | :--------- | | Interest income | $12,160 | $14,496 | $(2,336) | (16.1)% | | Interest expense | $(4,650) | $(4,511) | $(139) | 3.1 % | | Other income (expense), net | $234 | $(134) | $368 | (274.6)% | | (Benefit from) provision for income taxes | $(1,052) | $620 | $(1,672) | (269.7)% | - Interest income decreased by **16.1%** due to lower interest-earning cash balances[164](index=164&type=chunk) - The company reported an income tax benefit of **$1.052 million**, a significant improvement from a provision of **$0.620 million** in the prior year[166](index=166&type=chunk) [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) - PagerDuty uses non-GAAP financial measures (excluding stock-based compensation, employer taxes, amortization of acquired intangibles, acquisition-related expenses, debt issuance costs, restructuring costs, shareholder matters, and non-controlling interest adjustments) to evaluate operating performance and for internal planning[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) [Non-GAAP gross profit and non-GAAP gross margin](index=41&type=section&id=Non-GAAP%20gross%20profit%20and%20non-GAAP%20gross%20margin) Non-GAAP Gross Profit and Margin (in thousands) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Non-GAAP gross profit | $106,254 | $99,668 | $209,283 | $195,704 | | Non-GAAP gross margin | 86.1 % | 86.0 % | 86.0 % | 86.2 % | - Non-GAAP gross margin remained stable at approximately **86%** for both the three and six months ended July 31, 2025 and 2024[178](index=178&type=chunk) [Non-GAAP operating income and non-GAAP operating margin](index=42&type=section&id=Non-GAAP%20operating%20income%20and%20non-GAAP%20operating%20margin) Non-GAAP Operating Income and Margin (in thousands) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Non-GAAP operating income | $31,407 | $20,111 | $55,766 | $35,440 | | Non-GAAP operating margin | 25.4 % | 17.3 % | 22.9 % | 15.6 % | - Non-GAAP operating margin significantly improved to **25.4%** for the three months ended July 31, 2025, from **17.3%** in the prior year[180](index=180&type=chunk) [Non-GAAP net income attributable to PagerDuty, Inc. common stockholders](index=43&type=section&id=Non-GAAP%20net%20income%20attributable%20to%20PagerDuty,%20Inc.%20common%20stockholders) Non-GAAP Net Income Attributable to PagerDuty, Inc. Common Stockholders (in thousands) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Non-GAAP net income attributable to PagerDuty, Inc. common stockholders | $28,276 | $20,331 | $50,955 | $36,336 | - Non-GAAP net income increased by **39.1%** to **$28.276 million** for the three months ended July 31, 2025[182](index=182&type=chunk) [Free cash flow](index=43&type=section&id=Free%20cash%20flow) Free Cash Flow (in thousands) | Metric | Three months ended July 31, 2025 | Three months ended July 31, 2024 | Six months ended July 31, 2025 | Six months ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $33,974 | $35,769 | $64,644 | $64,416 | | Free cash flow | $30,207 | $33,283 | $59,193 | $60,381 | - Free cash flow for the six months ended July 31, 2025, was **$59.193 million**, a slight decrease from **$60.381 million** in the prior year[184](index=184&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) - As of July 31, 2025, principal sources of liquidity were cash, cash equivalents, and investments totaling **$567.9 million**[185](index=185&type=chunk) - The company believes existing liquidity and operating cash flows will be sufficient for working capital and capital expenditures for at least the next **12 months**[185](index=185&type=chunk) - Deferred revenue was **$229.9 million** as of July 31, 2025, with **$227.0 million** expected to be recognized as current revenue[187](index=187&type=chunk) - The 2025 Convertible Notes (**$57.5 million** principal) were repaid in cash during the three months ended July 31, 2025[186](index=186&type=chunk) - In August 2025, the Board authorized an additional **$50.0 million** for the 2025 Share Repurchase Program, increasing the total to **$200.0 million**[190](index=190&type=chunk) [Sources and Uses of Liquidity](index=44&type=section&id=Sources%20and%20Uses%20of%20Liquidity) - As of July 31, 2025, the Company's liquidity sources included **$567.9 million** in cash, cash equivalents, and investments[185](index=185&type=chunk) [Debt and Financing Arrangements](index=44&type=section&id=Debt%20and%20Financing%20Arrangements_Liquidity) - The **$57.5 million** principal of the 2025 Notes was repaid in cash at maturity during the three months ended July 31, 2025[186](index=186&type=chunk) [Deferred Revenue](index=44&type=section&id=Deferred%20Revenue_Liquidity) - Deferred revenue totaled **$229.9 million** as of July 31, 2025, with **$227.0 million** classified as current liability[187](index=187&type=chunk) [Share Repurchase Programs](index=45&type=section&id=Share%20Repurchase%20Programs_Liquidity) - The 2025 Share Repurchase Program was increased to **$200.0 million** in August 2025, with no shares repurchased as of July 31, 2025[189](index=189&type=chunk)[190](index=190&type=chunk) [Future Contractual Obligations](index=45&type=section&id=Future%20Contractual%20Obligations) - Total debt obligations are **$394.5 million** (long-term), and operating lease obligations include **$3.6 million** current and **$10.2 million** long-term[192](index=192&type=chunk) [Effect of Exchange Rates](index=45&type=section&id=Effect%20of%20Exchange%20Rates) - Foreign exchange rates had a positive effect of **$0.1 million** on cash in the six months ended July 31, 2025, compared to a negative effect of **$23.0 thousand** in the prior year[193](index=193&type=chunk) [Cash Flow Information](index=45&type=section&id=Cash%20Flow%20Information) Cash Flow Summary (Six months ended July 31, in thousands) | Category | 2025 | 2024 | Change ($) | | :---------------------------------------------------------- | :------- | :------- | :--------- | | Net cash provided by operating activities | $64,644 | $64,416 | $228 | | Net cash used in investing activities | $(8,860) | $(6,621) | $(2,239) | | Net cash used in financing activities | $(63,040) | $(35,205) | $(27,835) | | Net change in cash, cash equivalents, and restricted cash | $(7,143) | $22,567 | $(29,710) | - Net cash used in financing activities increased significantly due to the repayment of the 2025 Convertible Notes[197](index=197&type=chunk) [Off-Balance Sheet Arrangements](index=46&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company had **$1.4 million** of irrevocable standby letters of credit outstanding as of July 31, 2025, fully collateralized by restricted cash[199](index=199&type=chunk) [Critical Accounting Estimates](index=46&type=section&id=Critical%20Accounting%20Estimates) - There have been no material changes to critical accounting policies and estimates since the Annual Report on Form 10-K for the year ended January 31, 2025[200](index=200&type=chunk) [Recent Accounting Pronouncements](index=46&type=section&id=Recent%20Accounting%20Pronouncements) - The Company is evaluating the impact of new FASB ASUs on income tax disclosures (ASU 2023-09), income statement expense disaggregation (ASU 2024-03), and induced conversion of convertible debt (ASU 2024-04)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[201](index=201&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there have been no material changes in the company's market risk since its last Annual Report on Form 10-K - No material changes in market risk have occurred since the Annual Report on Form 10-K for the year ended January 31, 2025[202](index=202&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, with CEO and CFO, concluded disclosure controls and procedures were effective as of July 31, 2025, with no material changes to internal controls over financial reporting - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of July 31, 2025[204](index=204&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended July 31, 2025[206](index=206&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=46&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The CEO and CFO concluded that disclosure controls and procedures were effective as of July 31, 2025[204](index=204&type=chunk) [Limitations on the Effectiveness of Controls](index=47&type=section&id=Limitations%20on%20the%20Ef%20ectiveness%20of%20Controls) - The effectiveness of any internal control system is subject to inherent limitations, providing reasonable, not absolute, assurance[205](index=205&type=chunk) [Changes in Internal Controls Over Financial Reporting](index=47&type=section&id=Changes%20in%20Internal%20Controls%20Over%20Financial%20Reporting) - No material changes to internal control over financial reporting were identified during the quarter ended July 31, 2025[206](index=206&type=chunk) [PART II - OTHER INFORMATION](index=48&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material pending legal proceedings - The Company is not a party to any material pending legal proceedings[208](index=208&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This section reiterates that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes from the risk factors described in the Annual Report on Form 10-K for the year ended January 31, 2025, or the Quarterly Report on Form 10-Q for the quarter ended April 30, 2025[210](index=210&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company reported no unregistered sales of equity securities or use of proceeds. No shares were repurchased under the 2025 Share Repurchase Program during the three months ended July 31, 2025 - No unregistered sales of equity securities or use of proceeds were reported[211](index=211&type=chunk)[212](index=212&type=chunk) - No shares were repurchased under the 2025 Share Repurchase Program during the three months ended July 31, 2025[213](index=213&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[214](index=214&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[215](index=215&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) This section notes the termination of a Rule 10b5-1 trading plan by a former Senior Vice President - Shelley Webb, former SVP, Chief Legal and People Officer, terminated a Rule 10b5-1 trading plan on May 14, 2025[216](index=216&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of this report, including certifications, XBRL documents, and other corporate governance documents - Exhibits include certifications of the CEO and CFO (31.1, 31.2, 32.1) and XBRL taxonomy documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[218](index=218&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) The report is duly signed on behalf of PagerDuty, Inc. by its Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer - The report was signed by Jennifer G. Tejada (CEO), Owen Howard Wilson (CFO), and Paul Underwood (Chief Accounting Officer) on September 3, 2025[222](index=222&type=chunk)

Financial Data and Key Metrics Changes - PagerDuty reported revenue of $123 million, representing a 6% year-over-year growth [3][20] - Achieved GAAP profitability for the first time in company history, with a non-GAAP operating margin of 25%, exceeding guidance and showing an 800 basis point year-over-year expansion [3][20] - Annual recurring revenue (ARR) increased to $499 million, reflecting a 5% year-over-year growth [4][20] - Gross margin for Q2 was 86%, at the high end of the target range of 84% to 86% [22] - Cash from operations was $34 million, or 28% of revenue, with free cash flow at $30 million, or 24% of revenue [22] Business Line Data and Key Metrics Changes - New and expansion bookings increased by over 15% sequentially [4] - High-value customer base (spending over $100,000) grew to 868 customers, an increase of 20 customers sequentially and 48 year-over-year [5] - Dollar-based net retention (DBNR) was 102%, down from 104% in Q1, impacted by elevated churn and downgrades [20] Market Data and Key Metrics Changes - International revenue increased by 12% year-over-year, contributing 29% of total revenue [20] - Total paid customers grew to 15,322, adding 75 net new customers in Q2 [21] - Free and paid companies on the platform exceeded 33,000, marking a 13% increase compared to Q2 of the previous year [21] Company Strategy and Development Direction - The company is focusing on a strategic shift towards usage-based pricing models to better align revenue with customer value realization [5][35] - Continued investment in product innovation, including the launch of four new AI agents, which will be released with usage-based pricing models [9][10] - The appointment of a new Chief Revenue Officer aims to accelerate enterprise transformation and improve sales performance [17][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of new and expansion revenue, with strong performance in international markets [34] - The transition to usage-based pricing is expected to enhance customer retention and align monetization with customer value [35][62] - Management anticipates significant incremental ARR growth in the second half of the fiscal year, supported by a maturing enterprise sales motion [20][25] Other Important Information - The company retired $58 million of convertible debt issued in June 2020, enhancing its financial position [23] - PagerDuty was recognized as the AIOps platform of the year in the 2025 AI Breakthrough Awards [16] - The Board expanded the share repurchase program to $200 million, providing flexibility for opportunistic share buybacks [23] Q&A Session Summary Question: What is the outlook for profitability and growth in the IT operations category? - Management noted that new and expansion revenue is showing recovery, with a 15% sequential increase and strong new customer additions [34] Question: What are the priorities for the new Chief Revenue Officer in the upcoming months? - The focus will be on accelerating enterprise transformation, improving sales consistency, and enhancing customer retention [37] Question: How does the company view the quality of its ARR? - The company has shifted towards large, long-term, profitable customers, with over 75% of ARR coming from enterprise companies [47] Question: What is the expected impact of the transition to usage-based pricing? - Management indicated that customers are open to the transition, and early feedback has been positive, with 60% of new products already utilizing this model [58] Question: How is the company addressing the challenges of seat optimization and downgrades? - Management is focused on improving account management and customer success to mitigate downgrades while also seeing growth in platform usage [62]

Investor Presentation Q2 FY 2026 Period ended July 31, 2025 Safe Harbor This presentation contains forward-looking statements. All statements other than statements of historical fact contained in this presentation, are forward-looking statements, including but not limited to: statements regarding the future financial and operational performance and outlook, and strategies, objectives, opportunity, expectations and market positioning of PagerDuty, Inc. ("PagerDuty" or the "Company"). In some cases, you can i ...

Second Quarter Fiscal 2026 Financial Highlights The section titled "Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures and reconciliations between GAAP and non-GAAP financial information. 1 • Revenue was $123.4 million, an increase of 6.4% year over year. • Operating income was $3.6 million; operating margin was 2.9%. • Non-GAAP operating income was $31.4 million; non-GAAP operating margin was 25.4%. • Net income per diluted share attributable to PagerDuty, Inc. com ...

Core Viewpoint - Precision Drilling Corporation reported stronger than anticipated financial and operational results for the second quarter of 2025, driven by excellent free cash flow, new contracts, and strong demand for its Super Series rig fleet [2][5][21]. Financial Highlights - Revenue for Q2 2025 was $407 million, a decrease of 5.3% from $429 million in Q2 2024, primarily due to lower U.S. and international activity [6][14]. - Adjusted EBITDA was $108 million, down 6.1% from $115 million in the same quarter last year, with a consistent EBITDA margin of 27% [6][21]. - Net earnings attributable to shareholders were $16 million or $1.21 per share, compared to $21 million or $1.44 per share in Q2 2024, marking the 12th consecutive quarter of positive earnings [5][21]. - Cash provided by operations was $147 million, allowing the company to repay $74 million of debt and repurchase $14 million of common shares [7][21]. Operational Highlights - The average number of active drilling rigs in Canada was 50, slightly up from 49 in Q2 2024, while U.S. active rigs averaged 33, down from 36 [8][16]. - Canadian revenue per utilization day increased to $37,725 from $36,075 year-over-year, driven by customer-funded rig upgrades [6][21]. - U.S. revenue per utilization day decreased to $31,113 from $33,227, reflecting lower industry activity [6][21]. - International operations generated $36 million in revenue with seven active rigs, down from eight in Q2 2024 [10][21]. Strategic Initiatives - The company revised its 2025 capital budget to $240 million from $200 million to support upgrades of 22 Super Series rigs, responding to increased customer demand [12][26]. - Precision aims to maximize free cash flow through disciplined capital deployment and enhance shareholder returns via debt reduction and share repurchases [22][26]. - The company is positioned to further adjust capital spending based on evolving customer demand, with a focus on technological advancements in its rig fleet [12][22]. Market Outlook - In Canada, increased takeaway capacity from the Trans Mountain pipeline expansion is expected to support heavy oil activity, while LNG Canada’s first shipment is anticipated to drive demand for Super Triple rigs [27][30]. - In the U.S., natural gas drilling is expected to increase as customers become more optimistic about LNG off-take and AI demand, with a focus on natural gas basins like Haynesville and Marcellus [28][30]. - Internationally, the company maintains a steady level of activity with five rigs in Kuwait and two in Saudi Arabia, under long-term contracts extending into 2027 and 2028 [10][29].

Company Overview - PagerDuty (PD) shares increased by 6.9% to $15.72 in the last trading session, with a higher-than-average trading volume, contrasting with a 1.3% loss over the past four weeks [1] - The company is experiencing strong demand for its AI-enhanced incident management, AIOps, and automation solutions, particularly in managing AI infrastructure and operations [1] Earnings Expectations - PagerDuty is expected to report quarterly earnings of $0.22 per share, reflecting a year-over-year increase of 4.8%, with revenues projected at $123.59 million, up 6.6% from the previous year [2] - However, the consensus EPS estimate for the quarter has been revised down by 33.3% over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [3] Industry Context - PagerDuty is part of the Zacks Internet - Software industry, where another company, Phunware (PHUN), saw its shares decrease by 1.2% to $3.21, despite a 6.9% return over the past month [3] - Phunware's consensus EPS estimate remains unchanged at -$0.15, representing a year-over-year change of 53.1%, and it currently holds a Zacks Rank of 3 (Hold) [4]