PagerDuty(PD) - 2026 Q2 - Quarterly Results

Executive Summary PagerDuty achieved GAAP profitability, solid international growth, and increased paid customer additions, appointing a new CRO Q2 FY26 Performance Overview PagerDuty achieved GAAP profitability with $123 million revenue and $499 million ARR, driven by international growth and customer additions - PagerDuty achieved GAAP profitability in Q2 FY26[2] - Solid growth observed across international markets and paid customer additions outpaced last year's full-year performance[2] - New Chief Revenue Officer appointed to lead global go-to-market strategy and drive revenue growth[1][2] | Metric | Q2 FY26 Performance | | :-------------------------------- | :------------------ | | Revenue | $123 million (+6% YoY) | | Annual Recurring Revenue (ARR) | $499 million (+5% YoY) | | Operating Income (GAAP) | Nearly $4 million | | Operating Income (Non-GAAP) | $31 million | Second Quarter Fiscal 2026 Financial Highlights This section details PagerDuty's GAAP and non-GAAP financial performance, including revenue, operating income, and cash flow GAAP Financial Performance PagerDuty reported GAAP revenue of $123.4 million (+6.4% YoY) and achieved a positive operating income of $3.6 million | Metric (GAAP) | Q2 FY26 (3 months) | Q2 FY25 (3 months) | YoY Change | | :--------------------------- | :----------------- | :----------------- | :--------- | | Revenue | $123.4 million | $115.9 million | +6.4% | | Operating Income | $3.6 million | $(16.0) million | N/A | | Operating Margin | 2.9% | (13.8)% | +16.7 pp | | Net Income per Diluted Share | $0.10 | $(0.14) | N/A | Non-GAAP Financial Performance PagerDuty reported non-GAAP operating income of $31.4 million (25.4% margin) and diluted EPS of $0.30 | Metric (Non-GAAP) | Q2 FY26 (3 months) | Q2 FY25 (3 months) | YoY Change | | :-------------------------- | :----------------- | :----------------- | :--------- | | Operating Income | $31.4 million | $20.1 million | +56.2% | | Operating Margin | 25.4% | 17.3% | +8.1 pp | | Net Income per Diluted Share | $0.30 | $0.21 | +42.9% | Cash Flow and Liquidity PagerDuty generated $34.0 million in operating cash and $30.2 million in free cash flow, maintaining a strong cash position | Metric | Q2 FY26 (3 months) | Q2 FY25 (3 months) | | :---------------------------------------- | :----------------- | :----------------- | | Net cash provided by operating activities | $34.0 million | $35.8 million | | Free cash flow | $30.2 million | $33.3 million | | Cash, cash equivalents, and investments (as of July 31, 2025) | $567.9 million | N/A | Second Quarter and Recent Highlights This section covers key business metrics, product innovations, industry recognition, and leadership changes Key Business Metrics PagerDuty experienced continued growth in its customer base and ARR, despite a slight decrease in net retention rate | Metric | As of July 31, 2025 | As of July 31, 2024 | YoY Change | | :------------------------------ | :------------------ | :------------------ | :--------- | | ARR | $499 million | N/A | +5% | | Customers with ARR over $100k | 868 | 820 | +6% | | Dollar-based net retention rate | 102% | 106% | -4 pp | | Total paid customers | 15,322 | 15,044 | +1.8% | | Total free and paid customers | >33,000 | N/A | +13% | Product Innovations and Industry Recognition PagerDuty launched new AI-powered integrations and received multiple industry accolades, reinforcing its AIOps leadership - Released AI-powered, chat-first integration between PagerDuty Advance and Amazon Q Business[8] - Recognized as a Leader and Outperformer in the 2025 GigaOm Radar for Incident Response Platforms Report for a third consecutive year[8] - Named a leader in GigaOm Radar for AIOps for the fourth year and awarded as the AIOps Platform of the Year in the 2025 AI Breakthrough Awards[8] Leadership and Customer Engagements PagerDuty appointed Todd McNabb as Chief Revenue Officer and reported new customer acquisitions and expansions - Todd McNabb appointed as Chief Revenue Officer, effective September 29, 2025, to lead global go-to-market strategy and drive revenue growth and retention[8] - New customer lands and expansions include Bupa Limited, ChainLink Labs Inc., The Lego Group, Shopify, and Starhub Ltd[8] Financial Outlook This section provides PagerDuty's financial guidance for the upcoming third quarter and the full fiscal year 2026 Third Quarter Fiscal 2026 Guidance PagerDuty expects Q3 FY26 total revenue between $124.0 million and $126.0 million, with non-GAAP diluted EPS of $0.24 to $0.25 | Metric | Q3 FY26 Guidance | YoY Growth | | :---------------------------------------- | :--------------- | :--------- | | Total revenue | $124.0M - $126.0M | 4% - 6% | | Non-GAAP net income per diluted share | $0.24 - $0.25 | N/A | Full Fiscal Year 2026 Guidance PagerDuty updated its FY26 guidance, expecting total revenue between $493.0 million and $497.0 million, and diluted EPS of $1.00 to $1.04 | Metric | FY26 Guidance | Previous Guidance | YoY Growth | | :---------------------------------------- | :------------ | :---------------- | :--------- | | Total revenue | $493.0M - $497.0M | $493.0M - $499.0M | 5% - 6% | | Non-GAAP net income per diluted share | $1.00 - $1.04 | $0.95 - $1.00 | N/A | About PagerDuty, Inc. This section provides an overview of PagerDuty as a company and its core AI-powered digital operations management platform Company Overview PagerDuty, Inc. is a global leader in digital operations management, offering an AI-powered platform for business resilience - PagerDuty, Inc. (NYSE:PD) is a global leader in digital operations management[16] - The PagerDuty Operations Cloud is an AI-powered platform that empowers business resilience and drives operational efficiency[16] - Trusted by nearly half of both the Fortune 500 and the Forbes AI 50, and approximately two-thirds of the Fortune 100[16] The PagerDuty Operations Cloud The PagerDuty Operations Cloud is an AI-powered platform that automates and orchestrates the entire incident management lifecycle - The PagerDuty Operations Cloud is an AI-powered platform that automates and orchestrates the entire incident management lifecycle[17] - Empowers teams to identify and diagnose disruptions in real time and mobilize the right teams to quickly streamline workflows[17] - Essential for delivering flawless, always-on digital experiences that organizations and consumers expect today[17] Condensed Consolidated Financial Statements (GAAP) This section presents PagerDuty's GAAP financial statements, including statements of operations, balance sheets, and cash flows Statements of Operations The statements of operations detail PagerDuty's GAAP financial performance, including revenue, gross profit, operating expenses, and net income | Metric | 3 months ended July 31, 2025 | 3 months ended July 31, 2024 | 6 months ended July 31, 2025 | 6 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. common stockholders | $9,777 | $(13,242) | $3,280 | $(37,298) | | Diluted EPS | $0.10 | $(0.14) | $0.03 | $(0.40) | Balance Sheets The balance sheets provide a snapshot of PagerDuty's financial position, detailing assets, liabilities, and stockholders' equity | Metric | July 31, 2025 | January 31, 2025 | | :--------------------------- | :------------ | :--------------- | | Total assets | $891,531 | $927,266 | | Total liabilities | $693,850 | $779,221 | | Total stockholders' equity | $180,709 | $129,828 | | Cash and cash equivalents | $339,712 | $346,460 | | Investments | $228,142 | $224,366 | Statements of Cash Flows The statements of cash flows detail the sources and uses of cash for operating, investing, and financing activities | Metric | 3 months ended July 31, 2025 | 3 months ended July 31, 2024 | 6 months ended July 31, 2025 | 6 months ended July 31, 2024 | | :------------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $33,974 | $35,769 | $64,644 | $64,416 | | Net cash used in investing activities | $(7,178) | $(3,800) | $(8,860) | $(6,621) | | Net cash used in financing activities | $(59,085) | $(28,944) | $(63,040) | $(35,205) | | Net change in cash, cash equivalents, and restricted cash | $(32,511) | $3,117 | $(7,143) | $22,567 | Non-GAAP Financial Measures and Reconciliations This section defines PagerDuty's non-GAAP financial measures and provides reconciliations to their GAAP equivalents Explanation of Non-GAAP Measures This section defines PagerDuty's non-GAAP financial measures and explains the rationale for excluding certain GAAP expenses - Non-GAAP financial measures are presented to provide consistency and comparability with past financial performance and assist in comparisons with other companies[26] - Key exclusions from non-GAAP measures include stock-based compensation, employer taxes related to employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses, amortization of debt issuance costs, restructuring costs, shareholder matters, adjustment attributable to redeemable non-controlling interest, and income tax effects[28][30][36] - Free cash flow is defined as net cash provided by operating activities, less cash used for purchases of property and equipment and capitalization of internal-use software costs[42] Reconciliation of Gross Profit and Operating Expenses This section reconciles GAAP gross profit and operating expenses to their non-GAAP counterparts for specified periods | Metric | 3 months ended July 31, 2025 | 3 months ended July 31, 2024 | | :--------------------------- | :--------------------------- | :--------------------------- | | GAAP Gross profit | $104,410 | $95,855 | | Non-GAAP Gross profit | $106,254 | $99,668 | | GAAP Research and development | $30,897 | $35,088 | | Non-GAAP Research and development | $21,119 | $22,755 | | GAAP Sales and marketing | $44,456 | $50,966 | | Non-GAAP Sales and marketing | $38,396 | $42,082 | | GAAP General and administrative | $25,491 | $25,828 | | Non-GAAP General and administrative | $15,332 | $14,720 | Reconciliation of Operating Income and Net Income This section reconciles GAAP operating income and net income to their non-GAAP equivalents, detailing the impact of adjustments | Metric | 3 months ended July 31, 2025 | 3 months ended July 31, 2024 | | :------------------------------------------------------- | :--------------------------- | :--------------------------- | | GAAP Income (loss) from operations | $3,566 | $(16,027) | | Non-GAAP Operating income | $31,407 | $20,111 | | GAAP Net income (loss) attributable to PagerDuty, Inc. common stockholders | $9,777 | $(13,242) | | Non-GAAP Net income attributable to PagerDuty, Inc. common stockholders | $28,276 | $20,331 | | GAAP Diluted EPS | $0.10 | $(0.14) | | Non-GAAP Diluted EPS | $0.30 | $0.21 | Reconciliation of Free Cash Flow This section reconciles net cash from operating activities to free cash flow, detailing deductions for capital expenditures | Metric | 3 months ended July 31, 2025 | 3 months ended July 31, 2024 | | :---------------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $33,974 | $35,769 | | Purchases of property and equipment | $(874) | $(637) | | Capitalization of software costs | $(2,893) | $(1,849) | | Free cash flow | $30,207 | $33,283 | Additional Information This section includes important disclaimers regarding forward-looking statements and details for accessing supplemental information Forward-Looking Statements This section provides a standard disclaimer regarding forward-looking statements, outlining associated risks and uncertainties - Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances beyond the company's control[14] - Factors that could cause actual results to differ materially include the ability to achieve and maintain future profitability, sustain and manage growth, attract and retain customers, compete effectively, adapt to technology, and the impact of global economic conditions[14] - The company undertakes no intention or obligation to update or revise any forward-looking statements[15] Conference Call and Supplemental Information PagerDuty provided details for its Q2 FY26 conference call and webcast, and information on accessing supplemental financial data - PagerDuty hosted a conference call and live webcast for analysts and investors on September 3, 2025, at 2:00 p.m. Pacific Time[11] - Supplemental financial and other information can be accessed through PagerDuty's investor relations website at investor.pagerduty.com[12] - PagerDuty uses its investor relations website as the means of complying with its disclosure obligations under Regulation FD[12]