PagerDuty (PD) investor relations material

Executive summary

• Achieved first-ever GAAP profitability in Q2 with net income of $9.8M and operating income of $3.6M, alongside a non-GAAP operating margin of 25.4% and revenue of $123.4M, up 6.4% year-over-year.

• Annual recurring revenue (ARR) reached $499M, up 5% year-over-year, with a dollar-based net retention rate of 102%.

• Total paid customers increased to 15,322, with 868 customers generating over $100K in ARR, and free and paid companies exceeding 33,000, up 13% year-over-year.

• Platform usage increased over 25% year-over-year, driven by adoption of AI-powered and automation features.

• Appointed Todd McNabb as Chief Revenue Officer to accelerate enterprise transformation and global go-to-market strategy.

Financial highlights

• Q2 revenue: $123.4M (+6.4% YoY); international revenue up 12% YoY, now 29% of total.

• Gross margin: 84.6% (GAAP), 86.1% (non-GAAP), at the high end of the 84–86% target range.

• Non-GAAP operating income: $31.4M (25.4% margin); GAAP operating margin: 2.9%.

• Cash from operations: $34M (28% of revenue); free cash flow: $30.2M (24.5%).

• Ended Q2 with $567.9M in cash, cash equivalents, and investments.

Outlook and guidance

• Q3 revenue guidance: $124M–$126M (4–6% growth); net income per diluted share: $0.24–$0.25; operating margin: 21%.

• FY26 revenue guidance: $493M–$497M (5–6% growth); non-GAAP net income per diluted share: $1.00–$1.04; operating margin: 21–22%.

• Expects to maintain GAAP profitability for the full year FY27.

• Management expects existing cash and cash equivalents, investments, and net cash from operations to be sufficient for at least the next 12 months.

• Targeting long-term non-GAAP operating margin of 30%.