Q3 2025 PagerDuty Inc Earnings Call Transcript
Key Points
- PagerDuty Inc (PD) delivered a solid quarter with revenue and non-GAAP operating income exceeding guidance ranges.
- Revenue growth increased to 9% and non-GAAP operating margin expanded to 21%.
- Total annual recurring revenue (ARR) increased to $483 million, growing 10% year over year for the fourth consecutive quarter.
- The company saw improvements in key indicators such as dollar-based net retention, multiproduct adoption, and enterprise contract duration.
- PagerDuty Inc (PD) closed its first paid customers for its generative AI offering, PagerDuty Advance, indicating early adoption and potential for future growth.
- There was an unusual number of large deal opportunities deferred, delaying ARR acceleration into FY26.
- The company anticipates a similar growth rate in Q4, slightly below the 11% rate they have been tracking toward.
- Total paid customers remained relatively flat year over year, with growth in enterprise offset by a modest decline in commercial accounts.
- The company is facing challenges in large deal conversions, which could impact future growth acceleration.
- Despite improvements, there is still room for growth reacceleration, particularly in converting large deals.
(audio in progress) Chief Executive Officer; and Howard Wilson Chief Financial Officer.
Before we begin, let me remind everyone that statements made on this call include forward-looking statements based on the environment as we currently see it, which involve known and unknown risks and uncertainties that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements.
These forward-looking statements include our growth prospects, future revenue, operating margins, net income, cash balance, and total addressable market, among others, and represent our management's belief and assumptions only as of the date such statements are made, and we make -- and we undertake no obligation to update these.
During today's call, we will discuss non-GAAP financial measures, which are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and
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