GAAP profitability for the first time in our company's history while our non-GAAP operating margin reached 25%, exceeding both guidance and year-over-year expansion by 800 points.
— Jennifer Tejada
03Detailed Report
PD
Company PD
Period
Q2 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 17, 2026
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Executive Summary
PagerDuty delivered a pivotal QQ2 2026 quarter with tangible profitability improvements, disciplined cash flow, and meaningful progress on its strategic pivot to usage-based monetization and AI-native platform adoption. Revenue reached $123.4 million, up 6% year over year, while GAAP profitability was achieved for the first time in the company’s history and non-GAAP operating margins expanded to 25%—an 800 basis point year-over-year gain. ARR rose to $499 million (up 5% YoY) and the dollar-based net retention rate stood at 102%, signaling durable top-line expansion even as churn-related downgrades weighed on net retention. Management framed this as evidence of a structurally stronger business model that aligns monetization with customer value through usage-driven pricing and AI-enabled capabilities.
Key Performance Indicators
Revenue
Increasing
123.41M
QoQ: 3.01% | YoY: 6.45%
Gross Profit
Increasing
104.41M
84.60% margin
QoQ: 3.77% | YoY: 8.92%
Operating Income
Increasing
3.57M
QoQ: 134.53% | YoY: 122.25%
Net Income
Increasing
9.78M
QoQ: 250.48% | YoY: 189.60%
EPS
Increasing
0.11
QoQ: 254.71% | YoY: 178.57%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability: QQ2 revenue of $123.411 million, +6% YoY; gross profit $104.41 million; gross margin 86.0% (within 84–86% target); operating income $3.566 million, operating margin 2.89%; EBITDA $12.957 million, EBITDA margin ~10.5%; net income $9.778 million, net margin 7.92%; basic/diluted EPS $0.11 / $0.10. ARR: $499 million, +5% YoY; DBNR: 102% (lower gross retention driven by downgrades); new and expansion bookings up >15% sequentially; high-value (> $100k ARR) customers at 868 (up 20 QoQ); paid customers: 15,302 (net adds +75). Mix and monetization: >75% ARR from enterprise (> $500 million) customers; usage-based pricing growth >60% for relevant products; platform usage up >25% YoY; international revenue +12% YoY (29% of total). Efficiency and cash flow: Q2 cash from operations $33.97 million (28% of revenue), free cash flow $33.1 million (24% of revenue); cash balance and investments end-Q2: $568 million; debt retirement: $58 million convertible debt fully retired; share repurchase authorization expanded to $200 million. Liquidity and balance sheet: total assets $891.5 million; total liabilities $693.9 million; total stockholders’ equity $180.7 million; net debt ~$68.7 million. Guidance and cash flow visibility: trailing twelve months billings $496 million, up 6% YoY; Q3 revenue guidance $124–$126 million (4–6% growth); full-year 2026 revenue $493–$497 million (5–6% growth); trailing ARR acceleration and margin expansion remain core focus.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
123.41M
6.45%
3.01%
Gross Profit
104.41M
8.92%
3.77%
Operating Income
3.57M
122.25%
134.53%
Net Income
9.78M
189.60%
250.48%
EPS
0.11
178.57%
254.71%
Key Financial Ratios
Management Insights Available for Members
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