# PagerDuty (PD) Q2 2026 Financial Results Summary
On September 3, 2025, PagerDuty, Inc. (NYSE:PD), a leader in digital operations management, announced its financial results for the second quarter of fiscal 2026, which ended on July 31, 2025.
## Financial Highlights
– **Revenue**: $123.4 million, reflecting an increase of **6.4%** year over year.
– **Annual Recurring Revenue (ARR)**: Reached $499 million, an increase of **5%** year over year.
– **Operating Income**: Reported at $3.6 million with an operating margin of **2.9%**.
– **Non-GAAP Operating Income**: $31.4 million, resulting in a non-GAAP operating margin of **25.4%**.
– **Net Income per Diluted Share**: $0.10, a significant recovery from a net loss of $0.14 in the same quarter last year.
– **Non-GAAP Net Income per Diluted Share**: $0.30, compared to $0.21 from the prior year.
– **Net Cash Provided by Operating Activities**: $34.0 million; **Free Cash Flow**: $30.2 million.
– **Cash, Cash Equivalents, and Investments**: Totaled $567.9 million as of July 31, 2025.
## Key Metrics
– **Customers with ARR exceeding $100,000**: Increased to **868**, representing a **6%** increase from **820** in Q2 2024.
– **Dollar-Based Net Retention Rate**: Recorded at **102%**, down from **106%** the previous year.
– **Total Paid Customers**: Grew to **15,322** compared to **15,044** a year ago.
– **Total Customers**: More than **33,000**, indicating a growth of approximately **13%** year over year.
– **Remaining Performance Obligations**: Amounted to **$425 million**, with an expected revenue recognition of **69%** over the next 12 months.
## Corporate Updates
– PagerDuty appointed **Todd McNabb** as Chief Revenue Officer to lead global go-to-market strategy, effective September 29, 2025.
– Launched an **AI-powered chat-first integration** with Amazon Q Business.
– Noteworthy recognition includes:
– **Leader and Outperformer** status in the 2025 GigaOm Radar for Incident Response Platforms for the third consecutive year.
– **AIOps Platform of the Year** at the 2025 AI Breakthrough Awards.
## Financial Outlook
For the third quarter of fiscal 2026, PagerDuty anticipates:
– **Total Revenue**: Between **$124 million** and **$126 million**, indicating a growth rate of **4% – 6%** year over year.
– **Non-GAAP Net Income per Diluted Share**: Estimated between **$0.24** and **$0.25** based on approximately **94 million** diluted shares.
For the full fiscal year 2026, expected guidance:
– **Total Revenue**: Between **$493 million** and **$497 million**, maintaining a growth rate of **5% – 6%** year over year.
– **Non-GAAP Net Income per Diluted Share**: Estimated at **$1.00 – $1.04**, an increase from the previous guidance of **$0.95 – $1.00**.
## Dividend & Share Repurchase
– No quarterly dividend was declared during this period.
– PagerDuty did repurchase common stock, amounting to **$27.2 million** in preceding quarters, indicating active management of shareholder returns.
## Conclusion
PagerDuty’s Q2 fiscal 2026 results reflect continued growth and profitability strides, underscoring its position as a leader within the increasingly complex landscape of digital operations management. The company remains optimistic about future performance underpinned by strategic appointments and innovations in AI technology.
| Three months ended July 31, | Six months ended July 31, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Revenue | $123,411 | $115,935 | $243,216 | $227,107 |
| Cost of revenue(1) | 19,001 | 20,080 | 38,185 | 39,423 |
| Gross profit | 104,410 | 95,855 | 205,031 | 187,684 |
| Operating expenses: | ||||
| Research and development(1) | 30,897 | 35,088 | 64,945 | 72,611 |
| Sales and marketing(1) | 44,456 | 50,966 | 94,501 | 99,465 |
| General and administrative(1) | 25,491 | 25,828 | 52,346 | 53,368 |
| Total operating expenses | 100,844 | 111,882 | 211,792 | 225,444 |
| Income (loss) from operations | 3,566 | -16,027 | -6,761 | -37,760 |
| Interest income | 6,149 | 7,516 | 12,160 | 14,496 |
| Interest expense | -2,286 | -2,363 | -4,650 | -4,511 |
| Other income (expense), net | 120 | 117 | 234 | -134 |
| Income (loss) before provision for | 7,549 | -10,757 | 983 | -27,909 |
| income taxes | ||||
| (Benefit from) provision for | -1,865 | 427 | -1,052 | 620 |
| income taxes | ||||
| Net income (loss) | $9,414 | $-11,184 | $2,035 | $-28,529 |
| Net loss attributable to redeemable | -161 | -272 | -378 | -478 |
| non-controlling interest | ||||
| Net income (loss) attributable to | $9,575 | $-10,912 | $2,413 | $-28,051 |
| PagerDuty, Inc. | ||||
| Less: Adjustment attributable to | -202 | 2,330 | -867 | 9,247 |
| redeemable non-controlling interest | ||||
| Net income (loss) attributable to | $9,777 | $-13,242 | $3,280 | $-37,298 |
| PagerDuty, Inc. common stockholders | ||||
| Weighted-average shares used in | ||||
| calculating net income (loss) per | ||||
| share: | ||||
| Basic | 92,600 | 93,289 | 91,997 | 93,082 |
| Diluted | 94,198 | 93,289 | 93,895 | 93,082 |
| Net income (loss) per share | ||||
| attributable to PagerDuty, Inc. | ||||
| common stockholders | ||||
| Basic | $0.11 | $-0.14 | $0.04 | $-0.40 |
| Diluted | $0.10 | $-0.14 | $0.03 | $-0.40 |
| Three months ended July 31, | Six months ended July 31, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Cost of revenue | $1,213 | $1,508 | $2,310 | $3,264 |
| Research and development | 9,560 | 11,842 | 19,400 | 23,064 |
| Sales and marketing | 5,285 | 8,116 | 11,504 | 16,063 |
| General and administrative | 9,902 | 10,900 | 18,499 | 22,915 |
| Total | $25,960 | $32,366 | $51,713 | $65,306 |
| Assets | July 31, 2025 | January 31, 2025 |
|---|---|---|
| Current assets: | ||
| Cash and cash equivalents | $339,712 | $346,460 |
| Investments | 228,142 | 224,366 |
| Accounts receivable, net of allowance | ||
| for credit losses of $1,125 and $1,103 | 70,401 | 107,350 |
| as of July 31, 2025 and January 31, | ||
| 2025, respectively | ||
| Deferred contract costs, current | 19,004 | 19,787 |
| Prepaid expenses and other current | ||
| assets | 14,489 | 13,757 |
| Total current assets | 671,748 | 711,720 |
| Property and equipment, net | 25,211 | 21,335 |
| Deferred contract costs, non-current | 25,089 | 25,279 |
| Lease right-of-use assets | 8,266 | 6,806 |
| Goodwill | 137,401 | 137,401 |
| Intangible assets, net | 17,727 | 20,865 |
| Other assets | 6,089 | 3,860 |
| Total assets | $891,531 | $927,266 |
| Liabilities, redeemable non-controlling | ||
| interest, and stockholders’ equity | ||
| Current liabilities: | ||
| Accounts payable | $7,046 | $7,329 |
| Accrued expenses and other current | ||
| liabilities | 15,016 | 20,322 |
| Accrued compensation | 28,419 | 37,505 |
| Deferred revenue, current | 227,014 | 243,269 |
| Lease liabilities, current | 3,646 | 3,307 |
| Convertible senior notes, net, current | 57,426 | |
| Total current liabilities | 281, |
