Q2 2026 PagerDuty Inc Earnings Call Transcript
Key Points
- PagerDuty Inc (PD) achieved GAAP profitability for the first time in its history, with a non-GAAP operating margin reaching 25%, exceeding guidance by 800 basis points.
- Annual recurring revenue (ARR) increased to $499 million, representing 5% year-over-year growth, with new and expansion bookings increasing by more than 15% sequentially.
- The high-value customer base spending over $100,000 expanded to 868 customers, increasing by 20 customers sequentially and 48 year-over-year.
- PagerDuty Inc (PD) is seeing strong traction with native AI companies, which now contribute 2% of total ARR and are growing rapidly.
- The company was named AIOps Platform of the Year in the 2025 AI Breakthrough Awards and was shortlisted for the 2025 SaaS Awards in multiple categories.
- Dollar-based net retention (DBNR) declined to 102% from 104% in Q1, impacted by elevated churn and downgrades due to customer seat optimization and cost containment initiatives.
- The Americas sales leader performance has been inconsistent, prompting organizational changes and the appointment of a new leader in North America sales.
- Revenue growth has been tempered by seat optimization initiatives across the customer base, affecting the overall growth rate.
- The transition to usage-based pricing models is gradual and may take time to fully implement across the customer base.
- Despite improvements, the North American market has shown slower progress compared to international regions, requiring further focus and strategic adjustments.
Good afternoon, and thank you for joining us to discuss PagerDuty's second quarter fiscal year 2026 results. With me on today's call are Jennifer Tejada, PagerDuty's Chairperson and Chief Executive Officer; and Howard Wilson, our 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
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