Pagerduty Stock Earnings Reports

PagerDuty reported Q2 FY2026 revenue of $123M (up 6% YoY) and ARR of $499M (up 5% YoY). The company achieved GAAP profitability for the first time and delivered a 25% non-GAAP operating margin. Dollar-based net retention was 102%, pressured by seat-optimization downgrades, while platform usage grew >25% YoY, supporting a strategic shift toward usage-based pricing and AI-led monetization. New and expansion bookings rose >15% sequentially, and net new customer adds in H1 totaled ~208 (nearly 3x FY25). Customers spending >$100k ARR increased to 868. PagerDuty is commercializing four AI agents (Shift, Scribe, Insights, SRE) with usage-based pricing, and highlighted ecosystem integrations (notably Amazon Q). International performance outpaced targets; North America GTM underperformed leading to a new North America sales leader and hire of Todd McNabb as CRO. Cash, cash equivalents, and investments totaled $568M; the board expanded the share repurchase program to $200M and the company retired remaining convertible debt. Guidance: Q3 revenue $124M–$126M (4%–6% growth), Q3 EPS $0.24–$0.25; FY26 revenue $493M–$497M (5%–6% growth), FY26 EPS $1.00–$1.04 and implied operating margin ~21%–22%. Management expects higher incremental ARR in H2 and aims for full-year GAAP profitability in FY2027. Key investor considerations: profitable operating leverage and strong cash generation vs. near-term growth headwinds from seat-based downgrades and the multi-quarter transition to usage-based pricing; improving enterprise GTM execution and AI-driven product adoption are primary growth levers.