On May 29, 2025, PagerDuty Inc (PD, Financial) released its 8-K filing for the first quarter of fiscal 2026, showcasing a robust performance with revenue reaching $119.8 million, surpassing the analyst estimate of $119.12 million. The company, a leader in digital operations management, focuses on managing urgent and mission-critical work for modern digital businesses through its AI-powered Operations Cloud platform.
Financial Performance and Challenges
PagerDuty Inc (PD, Financial) reported a year-over-year revenue increase of 7.8%, reaching $119.8 million for the first quarter. Despite this growth, the company faced a loss from operations amounting to $10.3 million, translating to a negative operating margin of 8.6%. However, on a non-GAAP basis, the company achieved an operating income of $24.4 million, with a non-GAAP operating margin of 20.3%.
The net loss per share attributable to common stockholders was $0.07, which is an improvement compared to the estimated loss of $0.15 per share. The non-GAAP net income per diluted share was $0.24, indicating a positive financial trajectory.
Key Financial Achievements
PagerDuty's annual recurring revenue (ARR) grew by 7% year-over-year to $496 million, reflecting the company's ability to maintain a steady stream of subscription-based revenue. The company also reported a net cash flow from operating activities of $30.7 million, with a free cash flow of $29.0 million, underscoring its strong cash generation capabilities.
“While purposefully driving our enterprise transformation, PagerDuty delivered revenue at the top of our guidance range and a non-GAAP operating margin exceeding our guidance by 500 basis points,” said Jennifer Tejada, Chairperson and CEO, PagerDuty.
Income Statement and Balance Sheet Insights
The income statement reveals a gross profit of $100.6 million, with operating expenses totaling $110.9 million. The balance sheet shows total assets of $926.8 million, with cash, cash equivalents, and investments amounting to $597.1 million as of April 30, 2025. The company's liabilities stood at $763.8 million, indicating a stable financial position.
Operational Metrics and Strategic Initiatives
PagerDuty's customer base continues to expand, with customers having ARR over $100 thousand growing by 5% to 848. The dollar-based net retention rate was 104%, slightly down from 106% the previous year, indicating a slight challenge in retaining existing customer revenue.
The company achieved FedRAMP Low Authorization, demonstrating its commitment to federal security standards. Additionally, PagerDuty announced a strategic collaboration with Amazon Web Services to enhance automation and operational resilience, further solidifying its market position.
Analysis and Outlook
PagerDuty's performance in the first quarter of fiscal 2026 highlights its ability to grow revenue and improve operational efficiency despite challenges. The company's focus on AI-driven solutions and strategic partnerships positions it well for future growth. However, maintaining customer retention and managing operational losses remain areas to watch.
For the second quarter of fiscal 2026, PagerDuty expects revenue between $122.5 million and $124.5 million, with a non-GAAP net income per diluted share of $0.19 to $0.20. The full fiscal year 2026 revenue is projected to be between $493.0 million and $499.0 million, reflecting a growth rate of 5% to 7% year-over-year.
Explore the complete 8-K earnings release (here) from PagerDuty Inc for further details.
