“More than 60% of our enterprise reps will have been in their role for at least a full year by the end of Q2.”
— Howard Wilson, CFO
03Detailed Report
PD
Company PD
Period
Q1 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 17, 2026
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Executive Summary
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.
Key Performance Indicators
Revenue
Increasing
119.81M
QoQ: -1.35% | YoY: 7.77%
Gross Profit
Increasing
100.62M
83.99% margin
QoQ: -0.84% | YoY: 9.57%
Operating Income
Increasing
-10.33M
QoQ: 11.88% | YoY: 51.88%
Net Income
Increasing
-6.50M
QoQ: 38.73% | YoY: 72.99%
EPS
Increasing
-0.07
QoQ: 40.75% | YoY: 72.65%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: QQ1 2026 revenue of $119.805 million, YoY growth of 7.8% (reported as 8% in earnings call). QoQ not disclosed in available data.
Gross margin: 86% in QQ1 2026 (high end of guidance range 84–86%); GAAP gross margin implied by income statement of ~83.99% based on segment data provided, but management stated 86% on the call.
Operating income: QQ1 2026 GAAP operating loss of $10.327 million, operating margin -8.62%; Non-GAAP operating income not disclosed in the dataset, but management highlighted non-GAAP operating margin of 20% for the quarter.
ebitda: QQ1 2026 EBITDA of -$2.36 million (~-2.0% of revenue).
ebitdaratio: -0.20%
Net income: QQ1 2026 net income of -$6.497 million, net income margin -5.42%.
eps: GAAP EPS -$0.0711; Diluted EPS -$0.0711.
Weighted average shares: 91.374 million (basic and diluted).
ARR: $496 million exiting Q1 2026, up 7% YoY.
Dollar-based net retention (DBNR): 104% (guidance range 103–105% for FY2026).
Paid customers: 15,247 in Q1 2026, net adds +27 (strongest quarterly paid customer additions in eight quarters).
Hedge: International revenue contributed 28% of total revenue, with international revenue growing 11% YoY.
Bookings/Billings: Trailing twelve months billings of $492 million, up 7% YoY; Q2 trailing billings expected ~7% growth; back-half improvement anticipated as GTM ramps.
RPO: ~ $430 million, up 11% YoY, with ~70% ($302 million) expected to be recognized in the next 12 months.
Cash flow: Operating cash flow $31 million (26% of revenue); free cash flow $29 million (24% of revenue). Cash and investments totaled approximately $597 million at quarter-end (cash & cash equivalents $371.8 million; short-term investments $225.3 million).
Liquidity/Capital allocation: Ended QQ1 with ~ $597 million in cash and investments; repurchase program of up to $150 million announced.
Roadmap/AI: Three AI agents to be launched in the current quarter; AI-enabled products including AI Scribe and Teams/Zoom integration to accelerate incident resolution and organizational learning. AWS collaboration expanded to include Q-led services (Amazon Q, Bedrock, AWS Incident Manager) with nearly 6,000 joint customers.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
119.81M
7.77%
-1.35%
Gross Profit
100.62M
9.57%
-0.84%
Operating Income
-10.33M
51.88%
11.88%
Net Income
-6.50M
72.99%
38.73%
EPS
-0.07
72.65%
40.75%
Key Financial Ratios
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