PagerDuty Inc (PD) Q4 2025 Earnings Report

PagerDuty delivered a solid QQ4 2025 performance amid a transitional go-to-market environment and ongoing enterprise-focused platform transformation. Revenue of $121.446 million rose 9% year over year, with ARR exiting the quarter at $494 million, up 9% YoY. The company continued to sharpen its enterprise, top-down, multiproduct sales model, evidenced by multiproduct ARR now representing 65% of total ARR (up from 62% YoY) and 72 customers exceeding $1 million in ARR. Despite near-term growth moderation as PagerDuty accelerates the shift from a land-and-expand, product-led approach to a broader enterprise trend, management signaled durable demand for their Operations Cloud and AI-enabled capabilities. Q4 GAAP operating income was negative at -$11.7 million, yet non-GAAP operating margin expanded to 18% (vs. prior-year level), and free cash flow margin reached 24%. The company reaffirmed a constructive long-run growth path anchored by a TAM of roughly $50 billion and ongoing platform monetization initiatives, including AI agents and PD Advance, aimed at expanding ARRs across enterprise and commercial segments. Looking ahead, PagerDuty issued FY26 guidance of revenue $500–$507 million (7–8% growth) and non-GAAP EPS $0.90–$0.95, with an objective to lift long-term operating margin target to 30% and an FY26 operating margin of 19–20% in the near term. Management underscored three catalysts for ARR growth: (1) enterprise sales productivity, (2) platform monetization via AI capabilities and expanded packaging, and (3) Commercial segment momentum through digital acquisition and retention. The buyback program, a $150 million authorization, reinforces confidence in sustained free cash flow generation and balance-sheet strength.