PagerDuty (PD) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue reached $116 million, up 8% year-over-year, with non-GAAP operating margin at 17% and ARR up 10% to $474 million.

• Enterprise segment momentum continued, with 820 customers generating over $100K in ARR and multi-year deals expanding.

• Dollar-based net retention rate was 106%, supported by improved new and expansion bookings, but down from 114% a year ago.

• Free cash flow was $33.3 million, and cash, cash equivalents, and investments totaled $599.3 million at quarter end.

• Net loss per share was $0.14, while non-GAAP net income per diluted share was $0.21.

Financial highlights

• Q2 revenue was $116 million, up 8% year-over-year, with non-GAAP operating margin at 17%.

• Non-GAAP gross margin was 86%, and free cash flow margin improved to 28.7%.

• Operating income was $20 million (17% of revenue), up from $14 million (13%) a year ago.

• Cash from operations was $36 million (31% of revenue); free cash flow was $33 million (29%).

• Ended Q2 with $599 million in cash, cash equivalents, and investments.

Outlook and guidance

• Q3 FY25 revenue expected between $115.5-$117.5 million (6%-8% growth); non-GAAP net income per diluted share $0.16-$0.17.

• FY25 revenue guidance lowered to $463-$467 million (7%-8% growth); non-GAAP net income per diluted share $0.67-$0.72.

• ARR growth expected to accelerate above 10% by year-end; DBNR to reach 107%.

• Guidance reduction attributed to timing of large, multi-year deals and delayed professional services revenue.

• Management expects existing cash and investments to support working capital and capital expenditures for at least the next 12 months.