PagerDuty reported QQ1 2026 revenue of $119.8 million, up 8% year over year, within guidance, and delivered a non-GAAP operating margin of 20%—well above the stated target by 500 basis points. Annual recurring revenue (ARR) grew to $496 million, up 7% YoY, with trailing twelve months billings of $492 million (+7% YoY) and RPO of $430 million (+11% YoY). Despite a stronger top-line, GAAP results showed an operating loss of $10.3 million and net income of -$6.5 million, reflecting ongoing investments to transform the go-to-market (GTM) motion and scale enterprise relationships. Management emphasized a deliberate enterprise sales transformation, including a shift to more strategic, cross-company customer relationships, deeper post-sale engagement, and a pricing evolution to reduce friction and broaden AI/automation capabilities across all incident-management plans.
Management framed the QQ1 2026 results as transitional in the GTM model, with execution gaps tied to rep transitions and territory realignment. The company highlighted meaningful progress in new logo generation, enterprise expansion, and strategic partnerships (notably AWS) that underpin a path to durable growth and GAAP profitability in FY2027. The near-term outlook calls for cautious optimism: Q2 revenue guidance of $122.5–$124.5 million (6–7% growth) and full-year 2026 revenue guidance of $493–$499 million (5–7% growth) with GAAP operating margins expected to reach 20–21%. PagerDuty also announced a $150 million share repurchase program to support capital allocation. Investors should monitor the pace of enterprise rep ramp, the realization of up-sell/expansion within high-ARPU accounts, and the ongoing monetization of AI-enabled platform capabilities.