PagerDuty 2026 Q3 Earnings Remarkable Turnaround with 2734% Net Income Surge

PagerDuty (PD) reported Q3 2026 earnings on Nov 26, 2025, with revenue rising 4.7% to $124.55M and net income surging 2734% to $161.40M, driven by GAAP profitability. The company guided Q4 revenue to $122–124M (0–2% growth) and full-year revenue to $490–492M (5% growth), below recent guidance.

Revenue

Total revenue increased to $124.55 million in Q3 2026, up 4.7% year-over-year from $118.95 million in Q3 2025.

Earnings/Net Income

PagerDuty returned to profitability with EPS of $1.72, reversing from a $0.07 loss in the prior year. Net income reached $161.40 million, a 2734.3% improvement from a $6.13 million loss. This extraordinary turnaround underscores the company’s operational discipline and margin expansion. The EPS performance was exceptionally positive, with a 2557.1% year-over-year gain.

Post-Earnings Price Action Review

The strategy of buying PD when earnings beat expectations and selling after 30 days resulted in a -20.17% return, significantly underperforming the benchmark return of 80.85%. This approach had a maximum drawdown of 0.00%, a Sharpe ratio of -0.13, and a volatility of 33.52%, highlighting the stock’s high-risk profile.

CEO Commentary

Jennifer Tejada, CEO, highlighted $125M revenue (up 5% YoY), 29% non-GAAP operating margin (up 750 bps YoY), and GAAP profitability for the second quarter. She emphasized challenges with seat license compression in large enterprises but noted growth in new customer acquisition (284 net new customers YoY) and high-value customer expansion. Strategic priorities include operational efficiency, AIOps, and go-to-market transformation with multiyear agreements.

Guidance

Howard Wilson, CFO, guided Q4 2026 revenue to $122–124M (0–2% growth) and net income per share of $0.24–0.25 (21% operating margin). Full-year 2026 revenue is expected at $490–492M (5% growth), with net income per share of $1.11–1.12 (24% operating margin). Wilson noted margin expansion from operational efficiency and GAAP profitability for FY2026.

Additional News

Recent developments include CFO Howard Wilson’s retirement, announced during the Q3 earnings call, and a downgrade from Craig-Hallum to “Hold” with a $15 price target from $20, citing concerns over forward revenue projections. RBC Capital also reduced its price target, reflecting mixed market sentiment. Additionally, PagerDuty introduced 150 platform enhancements, including agentic end-to-end incident management, and launched usage-based pricing models to align with customer outcomes.